EXECUTION COPY
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GREENPOINT MORTGAGE SECURITIES INC.,
Sponsor,
GREENPOINT MORTGAGE FUNDING, INC.,
Servicer,
GREENPOINT HOME EQUITY LOAN TRUST 2000-2,
Issuer,
and
BANK ONE, NATIONAL ASSOCIATION,
Trustee
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SALE AND SERVICING AGREEMENT
Dated as of September 1, 2000
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Home Equity Loan Asset-Backed Securities
Series 2000-2
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.............................................................................................1
Section 1.01. Definitions..................................................................................1
Section 1.02. Other Definitional Provisions................................................................1
Section 1.03. Interest Calculations........................................................................2
ARTICLE II Conveyance of Mortgage Loans; Original Issuance of Securities; Tax Treatment...........................2
Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to Fund Advances Under Credit Line
Agreements..............................................................................2
Section 2.02. Further Encumbrance of Trust Property........................................................6
Section 2.03. Acceptance by Trustee; Certain Substitution of Mortgage Loans................................6
Section 2.04. Representations and Warranties Regarding the Servicer and the Sponsor........................8
Section 2.05. Representations and Warranties of the Sponsor Regarding the Mortgage Loans; Removal of
Certain Mortgage Loans.................................................................11
Section 2.06. Covenants of the Sponsor....................................................................23
Section 2.07. Removal of Mortgage Loans at Election of Issuer.............................................24
Section 2.08. Execution and Authentication of Securities..................................................25
Section 2.09. Tax Treatment...............................................................................25
ARTICLE III Administration and Servicing of Mortgage Loans.......................................................26
Section 3.01. The Servicer................................................................................26
Section 3.02. Collection of Certain Mortgage Loan Payments................................................27
Section 3.03. Withdrawals from the Collection Account.....................................................29
Section 3.04. Maintenance of Hazard Insurance; Property Protection Expenses...............................30
Section 3.05. Assumption and Modification Agreements......................................................30
Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage Loans.............31
Section 3.07. Trustee to Cooperate........................................................................32
Section 3.08. Servicing Compensation; Payment of Certain Expenses by Servicer.............................33
Section 3.09. Annual Statement as to Compliance...........................................................33
Section 3.10. Annual Servicing Report.....................................................................33
Section 3.11. Annual Opinion of Counsel...................................................................34
Section 3.12. Access to Certain Documentation and Information Regarding the Mortgage Loans................34
Section 3.13. Maintenance of Certain Servicing Insurance Policies.........................................34
Section 3.14. Reports to the Securities and Exchange Commission...........................................35
Section 3.15. Tax Returns.................................................................................35
Section 3.16. Information Required by the Internal Revenue Service Generally and Reports of Foreclosures
and Abandonments of Mortgaged Property.................................................35
Section 3.17. Inspection Rights; Miscellaneous............................................................36
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ARTICLE IV SERVICING CERTIFICATE.................................................................................37
Section 4.01. Servicing Certificate.......................................................................37
Section 4.02. Reserved....................................................................................38
Section 4.03. The Trustee Remittance Report...............................................................38
Section 4.04. Loan Data Remittance Report.................................................................39
Section 4.05. Reserve Fund................................................................................39
ARTICLE V The Servicer and the Sponsor...........................................................................40
Section 5.01. Liability of the Servicer and the Sponsor...................................................40
Section 5.02. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer or the
Sponsor................................................................................40
Section 5.03. Limitation on Liability of the Servicer and Others..........................................40
Section 5.04. Servicer Not to Resign......................................................................41
Section 5.05. Delegation of Duties........................................................................41
Section 5.06. Indemnification of the Trust by the Servicer................................................41
Section 5.07. Indemnification of the Trust by the Sponsor.................................................42
Section 5.08. Limitation on Liability of the Sponsor......................................................42
ARTICLE VI Servicing Termination.................................................................................43
Section 6.01. Events of Servicing Termination.............................................................43
Section 6.02. Trustee to Act; Appointment of Successor....................................................44
Section 6.03. Notification to Securityholders and Residual Certificateholders.............................45
ARTICLE VII Termination..........................................................................................46
Section 7.01. Termination.................................................................................46
ARTICLE VIII Administrative Duties of the Servicer...............................................................47
Section 8.01. Administrative Duties.......................................................................47
Section 8.02. Records.....................................................................................49
Section 8.03. Additional Information to be Furnished to the Issuer........................................49
ARTICLE IX Miscellaneous Provisions..............................................................................49
Section 9.01. Amendment...................................................................................49
Section 9.02. Recordation of Agreement....................................................................51
Section 9.03. Limitation on Rights of Securityholders.....................................................51
Section 9.04. Governing Law...............................................................................52
Section 9.05. Notices.....................................................................................52
Section 9.06. Severability of Provisions..................................................................53
Section 9.07. Assignment..................................................................................53
Section 9.08. Third-Party Beneficiaries...................................................................53
Section 9.09. Counterparts................................................................................53
Section 9.10. Effect of Headings and Table of Contents....................................................53
Section 9.11. Insurance Agreement.........................................................................53
Section 9.12. Nonpetition Covenant........................................................................53
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EXHIBITS
EXHIBIT A: MORTGAGE LOAN SCHEDULE.......................................A-1
EXHIBIT B: FORM OF OPINION OF COUNSEL...................................B-1
EXHIBIT C: OFFICER'S CERTIFICATES.......................................C-1
EXHIBIT D: FORM OF CREDIT LINE AGREEMENT................................D-1
EXHIBIT E: FORM OF MORTGAGE NOTE (SECOND LIEN)..........................E-1
EXHIBIT F: FORMS OF ▇▇▇▇▇▇▇ MAC CERTIFICATES ...........................F-1
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SALE AND SERVICING AGREEMENT, dated as of September 1, 2000, (the
"Agreement") among GREENPOINT HOME EQUITY LOAN TRUST 2000-2, a Delaware business
trust (the "Issuer" or "Trust"), GREENPOINT MORTGAGE SECURITIES INC., a Delaware
corporation (the "Sponsor"), GREENPOINT MORTGAGE FUNDING, INC., a New York
corporation (the "Servicer"), and BANK ONE, NATIONAL ASSOCIATION (the
"Trustee").
WHEREAS, the Issuer desires to purchase a portfolio of Mortgage Loans
arising in connection with Loan Agreements acquired by GreenPoint Mortgage
Funding, Inc.;
WHEREAS, the Sponsor has purchased such Mortgage Loans from GreenPoint
Mortgage Funding, Inc. and is willing to sell such Mortgage Loans to the Issuer;
WHEREAS, such Mortgage Loans consist of certain home equity revolving lines
of credit (the "HELOC Mortgage Loans") and certain second lien, closed-end
mortgage loans (the "Closed End Mortgage Loans");
WHEREAS, the Servicer is willing to service all such Mortgage Loans;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. All capitalized terms used in this Agreement and
not otherwise defined herein, shall have the meanings assigned thereto in Annex
A to the Pooling Agreement dated as of September 1, 2000, between the Issuer and
the Trustee, as the same may be amended and supplemented from time to time.
Section 1.02. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any instrument governed hereby and in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement, in any instrument governed hereby and in any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Agreement or in any such instrument,
certificate or other document, and accounting terms partly defined in this
Agreement or in any such instrument, certificate or other document to the extent
not defined, shall have the respective meanings given to them under generally
accepted accounting principles as in effect on the date of this Agreement or any
such instrument, certificate or other document, as applicable. To the extent
that the definitions of accounting terms in this Agreement or in any such
instrument, certificate or other document are inconsistent with the meanings of
such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such instrument, certificate
or other document shall control.
(c) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to
a Person are also to its permitted successors and assigns.
Section 1.03. Interest Calculations. All calculations of interest hereunder
that are made in respect of the Principal Balance of a Mortgage Loan shall be
made on a daily basis using a 365-day year. All calculations of interest on the
Securities shall be made on the basis of the actual number of days in an
Interest Period and a year assumed to consist of 360 days. The calculation of
the Servicing Fee shall be made on the basis of a 360-day year consisting of
twelve 30-day months. All dollar amounts calculated hereunder shall be rounded
to the nearest ▇▇▇▇▇ with one-half of one ▇▇▇▇▇ being rounded down.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF SECURITIES;
TAX TREATMENT
Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to Fund
Advances Under Credit Line Agreements. (a) In consideration of the Issuer's
delivery to or upon the order of the Sponsor on the Closing Date of the net
proceeds from the sale of the Securities and Residual Certificates and the other
amounts to be distributed from time to time to the Sponsor in accordance with
the terms of this Agreement, the Sponsor, concurrently with the execution and
delivery of this Agreement, hereby sells, transfers, assigns, sets over and
otherwise conveys to the Issuer, without recourse (subject to Sections 2.03 and
2.05), all of its right, title and interest in and to (i) each Mortgage Loan,
including its Principal Balance (including any Additional Balances related
thereto) and all collections in respect thereof received after the Cut-Off Date
(excluding Interest Collection due on or prior to the Cut-Off Date); (ii)
property that secured a Mortgage Loan that is acquired by foreclosure or deed in
lieu of foreclosure; (iii) all of the Sponsor's rights under the Purchase
Agreement (including all representations and warranties of the Servicer
contained therein); (iv) the Sponsor's rights under the hazard insurance
policies; (v) the Reserve Fund; (vi) the Policy; (vii) the Demand Note; and
(viii) any proceeds of the foregoing and all other assets included or to be
included in the Trust for the benefit of Securityholders and the Residual
Certificateholders, the Insurer and ▇▇▇▇▇▇▇ Mac; provided, however, neither the
Trustee nor the Trust assumes the obligation under any Credit Line Agreement
that provides for the funding of future advances to the Mortgagor thereunder,
and neither the Trust nor the Trustee shall be obligated or permitted to fund
any such future advances. With respect to the HELOC Mortgage Loans, Additional
Balances shall be part of the related Principal Balance and are hereby
transferred to the Trust on the Closing Date pursuant to this Section 2.01, and
therefore part of the Trust Property. On or prior to the Closing Date, the
Sponsor shall cause the Insurer to deliver the Policy to the Trustee for the
benefit of the Securityholders. It is the intention of the Sponsor that the
transfer and assignment contemplated
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by this Agreement shall constitute a sale of the Mortgage Loans and other Trust
Property from the Sponsor to the Issuer and that such sale should constitute a
valid transfer and assignment of the Mortgage Loans and other Trust Property to
the Issuer and the beneficial interest in and title to the Mortgage Loans and
the other Trust Property shall not be part of the Sponsor's estate in the event
of the filing of a bankruptcy petition by or against the Sponsor under any
bankruptcy law. In the event that, notwithstanding the intent of the Sponsor,
the transfer and assignment contemplated hereby is held not to be a sale, this
Agreement shall constitute a grant of a security interest in the property
referred to in this Section 2.01 for the benefit of the Securityholders, the
Residual Certificateholders, the Insurer and ▇▇▇▇▇▇▇ Mac. To the extent that the
fair market value of any Additional Balance is greater than the cash
consideration paid by the Issuer for such Additional Balance, the difference
between such fair market value and the amount of such cash consideration shall
be deemed to be a capital contribution made to the Issuer by the Sponsor.
(b) Each of the Servicer and the Sponsor agrees to take or cause to be
taken such actions and execute such documents (including, without limitation,
the filing of all necessary continuation statements for the UCC-1 financing
statements filed in the States of California and Delaware, respectively, which
shall have been filed on or as of the Closing Date) describing the Cut-Off Date
Principal Balances and Additional Balances and naming (i) the Servicer as debtor
and the Sponsor as secured party, and (ii) the Sponsor as debtor and the Issuer
as secured party and any amendments to UCC-1 financing statements required to
reflect a change in the name or corporate structure of the Servicer or the
Sponsor or the filing of any additional UCC-1 financing statements due to the
change in the principal office of the Servicer or the Sponsor (within 10 days of
any event necessitating such filing) as are necessary to perfect and protect the
Securityholders', Insurer's and ▇▇▇▇▇▇▇ Mac's interests in each Cut-Off Date
Principal Balance and Additional Balance and the proceeds thereof (other than
maintaining possession by the Trustee of the Mortgage Loans and the Mortgage
Files).
(c) In connection with such transfer and assignment, the Servicer shall
deliver to the Trustee the following documents or instruments (each a "Related
Document" and together for each Mortgage Loan, the "Mortgage File") with respect
to each Mortgage Loan on the Closing Date:
(i) with respect to any Closed-End Mortgage Loan, the original
Mortgage Note endorsed in blank or endorsed with the following: "Bank One
National Association as Trustee for the GreenPoint Home Equity Loan Trust
2000-2", and with respect to any HELOC Mortgage Loan, the original Credit
Line Agreement;
(ii) an original Assignment of Mortgage in blank in recordable form;
(iii) the original recorded Mortgage or, if, in connection with any
Mortgage Loan, the original recorded Mortgage with evidence of recording
thereon cannot be delivered on or prior to the Closing Date because of a
delay caused by the public recording office where such original Mortgage
has been delivered for recordation or because such original Mortgage has
been lost, the Sponsor shall deliver or cause to be delivered to the
Trustee, a true and correct copy of such Mortgage, together with (i) in the
case of a delay caused by the public recording office, an Officer's
Certificate of the Sponsor stating that such original Mortgage has been
dispatched to the appropriate public
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recording official or (ii) in the case of an original Mortgage that has
been lost, a certificate by the appropriate county recording office where
such Mortgage is recorded;
(iv) if applicable, the original intervening assignments, if any
("Intervening Assignments"), with evidence of recording thereon, showing a
complete chain of title to the Mortgage from the originator to the Trustee
or, if any such original Intervening Assignment has not been returned from
the applicable recording office or has been lost, a true and correct copy
thereof, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the Sponsor stating that such
original Intervening Assignment has been dispatched to the appropriate
public recording official for recordation or (ii) in the case of an
original Intervening Assignment that has been lost, a certificate by the
appropriate county recording office where such Mortgage is recorded;
(v) either a title policy, a title search or guaranty title with
respect to the related Mortgaged Property;
(vi) the original of any guaranty executed in connection with the
Mortgage Note;
(vii) the original of each assumption, modification, consolidation or
substitution agreement, if any, relating to the Mortgage Loans; and
(viii) any security agreement, chattel mortgage or equivalent
instrument executed in connection with the Mortgage.
The Sponsor hereby confirms to the Trustee that it has caused the portions
of the Electronic Ledgers relating to the Mortgage Loans as of the Closing Date
to be clearly and unambiguously marked, and has made, or will make, the
appropriate entries in its general accounting records to indicate that such
Mortgage Loans have been transferred to the Trust. The Servicer hereby confirms
to the Trustee that it has clearly and unambiguously made appropriate entries in
its general accounting records indicating that such Mortgage Loans constitute
part of the Trust and are serviced by it on behalf of the Trust in accordance
with the terms hereof.
(d) Notwithstanding the characterization of the Securities as debt for
Federal, state and local income and franchise tax purposes, the parties hereto
intend to treat the transfer of the Mortgage Loans to the Trust as provided
herein as a sale, for certain non-tax purposes, of all the Sponsor's right,
title and interest in and to the Mortgage Loans, whether now existing or
hereafter created, and the other property described above and all proceeds
thereof. In the event such transfer is deemed not to be a sale for such
purposes, the Sponsor grants to the Trust, a security interest in all of such
party's right, title and interest in, to and under the Mortgage Loans, whether
now existing or hereafter created, and the other property described above and
all proceeds thereof; and this Agreement shall constitute a security agreement
under applicable law.
(e) Within 90 days following delivery of the Mortgage Files to the Trustee
pursuant to this Section, the Trustee shall review each such Mortgage File to
ascertain that all required documents set forth in this Section 2.01 have been
executed and received, and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule and in so doing the Trustee may rely on
the purported due execution and genuineness of any signature
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thereon. If within such 90-day period the Trustee finds any document
constituting a part of a Mortgage File not to have been executed or received or
to be unrelated to the Mortgage Loans identified in said Mortgage Loan Schedule
or, if in the course of its review, the Trustee determines that such Mortgage
File is otherwise defective in any material respect, the Trustee shall promptly
upon the conclusion of its review notify the Sponsor, the Insurer and ▇▇▇▇▇▇▇
Mac, and the Sponsor shall have a period of 90 days after such notice within
which to correct or cure any such defect.
The Trustee shall have no responsibility for reviewing any Mortgage File
except as expressly provided in this Section 2.01. In reviewing any Mortgage
File pursuant to this Section, the Trustee shall have no responsibility for
determining whether any document is valid and binding, whether the text of any
assignment or endorsement is in proper or recordable form (except, if
applicable, to determine if the Trustee is the assignee or endorsee), whether
any document has been recorded in accordance with the requirements of any
applicable jurisdiction, or whether a blanket assignment is permitted in any
applicable jurisdiction, whether any Person executing any document is authorized
to do so or whether any signature thereon is genuine, but shall only be required
to determine whether a document has been executed, that it appears to be what it
purports to be, and, where applicable, that it purports to be recorded.
(f) The Sponsor shall take all necessary steps to prepare and submit for
recordation an Assignment or Mortgage in the name of the Trustee for each
Mortgage Loan within 30 days after the Closing Date.
(g) The Sponsor shall sell, assign, transfer, set over and otherwise convey
without recourse to the Trustee all right, title and interest of the Sponsor in
and to any Eligible Substitute Mortgage Loan delivered to the Trustee on behalf
of the Trust by the Sponsor pursuant to Section 2.03 or Section 2.05 hereof and
all its right, title and interest to principal collected and interest accruing
on such Eligible Substitute Mortgage Loan on and after the applicable Substitute
Cut-Off Date; provided, however, that the Sponsor shall reserve and retain all
right, title and interest in and to payments of interest due on such Eligible
Substitute Mortgage Loan prior to the applicable Substitute Cut-Off Date;
provided, further, that neither the Trust nor the Trustee shall be obligated to
fund any future advances to the related Mortgagor under such Eligible Substitute
Mortgage Loan.
In connection with any transfer and assignment of an Eligible Substitute
Mortgage Loan to the Trustee on behalf of the Trust, the Sponsor agrees to cause
to be delivered to the Trustee the items described in Section 2.01(c) on the
date of such transfer and assignment or, if a later delivery time is permitted
by Section 2.01(c), then no later than such later delivery time.
(h) Each Defective Mortgage Loan that is required to be repurchased or
substituted pursuant to the provisions this Agreement or the Purchase Agreement
shall, upon such repurchase or substitution in accordance with the provisions
hereof, be released from the Trust and from the lien created by the Pooling
Agreement. As to each Mortgage Loan released from the Trust in connection with
the repurchase thereof or the conveyance of an Eligible Substitute Mortgage Loan
therefor, the Trustee will transfer, assign, set over and otherwise convey
without recourse, to or upon the order of the Sponsor, all of its right, title
and interest in and to such released Mortgage Loan and all the Trust's right
title and interest to principal collected and
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interest accruing on such released Mortgage Loan on and after the first day of
the calendar month in which such Mortgage Loan is released; provided, however,
that the Trust shall reserve and retain all right, title and interest in and to
payments of principal and interest collected on such released Mortgage Loan
prior to such date.
Section 2.02. Further Encumbrance of Trust Property.
(a) Immediately upon the conveyance to the Trust by the Sponsor of any item
of the Trust Property pursuant to Section 2.01, all right, title and interest of
the Sponsor in and to such item of Trust Property shall terminate, and all such
right, title and interest shall vest in the Trust, in accordance with the Trust
Agreement and Sections 3802 and 3805 of the Delaware Business Trust Act (12 Del.
Code, ss. 3801 et seq.).
(b) Immediately upon the vesting of the Trust Property in the Trust, the
Trust shall have the sole right to pledge or otherwise encumber, such Trust
Property. Pursuant to the Pooling Agreement and contemporaneously with such
property vesting in the Trust pursuant to (a) above, the Trust shall grant a
security interest in the Trust Property to secure the repayment of the
Securities. The Residual Certificates shall represent the beneficial ownership
interest in the Trust Property, and the Residual Certificateholders shall be
entitled to receive distributions with respect thereto as set forth herein.
(c) Prior to the payment in full on the Securities, the payment of all
amounts due to the Insurer under the Insurance Agreement, the payment of all
amounts due ▇▇▇▇▇▇▇ Mac under the Pooling Agreement, the termination of the
Policy (as defined therein) and the surrender of the Policy by the Trustee to
the Insurer, the Trustee shall hold the Trust Property on behalf of the
Securityholders, the Insurer and ▇▇▇▇▇▇▇ Mac. Following the payment in full of
the Securities and the release and discharge of the Pooling Agreement, all
covenants of the Issuer under Article III of the Pooling Agreement shall, until
payment in full of the Residual Certificates, remain as covenants of the Issuer
for the benefit of the Residual Certificateholders, enforceable by the Residual
Certificateholders to the same extent as such covenants were enforceable by the
Securityholders prior to the discharge of the Pooling Agreement. Any rights of
the Trustee under Article III of the Pooling Agreement, following the discharge
of the Pooling Agreement, shall vest in the Residual Certificateholders.
Section 2.03. Acceptance by Trustee; Certain Substitution of Mortgage
Loans.
(a) The Trustee shall, at such time as there are no Securities outstanding
and all sums due to (i) the Trustee or any agent or counsel thereof pursuant to
the Pooling Agreement, (ii) the Trustee pursuant to this Agreement and (iii) the
Insurer pursuant to the Insurance Agreement and ▇▇▇▇▇▇▇ Mac pursuant to the
Pooling Agreement have been paid, release any remaining portion of the Trust
Property to the Sponsor; provided, that the release of the Reserve Fund is
subject to Section 2.05 of the Insurance Agreement.
(b) The Trust hereby acknowledges its receipt of the Policy and the
Mortgage Loans, and declares that the Trustee holds and will hold such
instrument, and to the extent that any documents are delivered to it pursuant to
Section 2.01, will hold such documents, and all amounts received by it
thereunder and hereunder, in trust, upon the terms herein set forth, for the
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use and benefit of all present and future Securityholders, the Insurer and
▇▇▇▇▇▇▇ Mac. If the time to cure any defect in respect of any Mortgage Loan of
which the Trustee has notified the Sponsor following the review pursuant to
Section 2.01 has expired or if at any time any loss is suffered by the Trustee
on behalf of the Securityholders, the Insurer or ▇▇▇▇▇▇▇ Mac, in respect of any
Mortgage Loan as a result of (i) a defect in any document constituting a part of
its Mortgage File or (ii) an Assignment of Mortgage to the Trustee not having
been recorded as required by Section 2.01, then on the next succeeding Business
Day, the Trustee shall (i) substitute in lieu of such Mortgage Loan all Eligible
Substitute Mortgage Loans and, deliver the Substitution Amount applicable
thereto to the Servicer for deposit in the Collection Account or (ii) purchase
such Mortgage Loan at a purchase price equal to the Loan Purchase Price thereof,
which purchase price shall be delivered to the Servicer for deposit in the
Collection Account. Upon receipt of any Mortgage Loan or of written notification
signed by a Servicing Officer to the effect that the Loan Purchase Price in
respect of a Defective Mortgage Loan has been deposited into the Collection
Account, then as promptly as practicable, the Trustee shall execute such
documents and instruments of transfer presented by the Sponsor, in each case
without recourse, representation or warranty, and take such other actions as
shall reasonably be requested by the Sponsor to effect such transfer by the
Trust of such Defective Mortgage Loan pursuant to this Section. It is understood
and agreed that the obligation of the Sponsor to accept a transfer of a
Defective Mortgage Loan and to either convey an Eligible Substitute Mortgage
Loan or to make a deposit of any related Loan Purchase Price into the Collection
Account shall constitute the sole remedy respecting such defect available to
Securityholders and the Trustee against the Sponsor.
(c) As to any Eligible Substitute Mortgage Loan, the Sponsor shall, if
required to deliver any such Eligible Substitute Mortgage Loan, deliver to the
Trustee with respect to such Eligible Substitute Mortgage Loan such documents
and agreements as are required to be held by the Trustee in accordance with
Section 2.01. For any Collection Period during which the Sponsor substitutes one
or more Eligible Substitute Mortgage Loan, the Servicer shall determine the
Substitution Amount which amount shall be deposited by the Sponsor in the
Collection Account at the time of substitution. All amounts received in respect
of the Eligible Substitute Mortgage Loan during the Collection Period in which
the circumstances giving rise to such substitution occur shall not be a part of
the Trust and shall not be deposited by the Servicer in the Collection Account.
All amounts received by the Servicer during the Collection Period in which the
circumstances giving rise to such substitution occur in respect of any Defective
Mortgage Loan so removed by the Trust shall be deposited by the Servicer in the
Collection Account. Upon such substitution, the Eligible Substitute Mortgage
Loan shall be subject to the terms of this Agreement in all respects, and the
Sponsor shall be deemed (i) to have made with respect to such Eligible
Substitute Mortgage Loan as of the date of substitution, the covenants,
representations and warranties set forth in Section 2.05 and (ii) to have
certified that such Mortgage Loan is an Eligible Substitute Mortgage Loan. The
procedures applied by the Sponsor in selecting each Eligible Substitute Mortgage
Loan shall not be materially adverse to the interests of the Trustee, the
Securityholders, the Insurer or ▇▇▇▇▇▇▇ Mac.
The Servicer, promptly following the transfer of a Defective Mortgage Loan
from, or an Eligible Substitute Mortgage Loan to, the Trust pursuant to this
Section, shall amend the Mortgage Loan Schedule and make appropriate entries in
its general account records to reflect such transfer. The Servicer shall,
following such transfer, appropriately ▇▇▇▇ its records to indicate that it is
no longer servicing such Mortgage Loan on behalf of the Trust. The Sponsor,
7
promptly following such transfer, shall appropriately ▇▇▇▇ its Electronic Ledger
and make appropriate entries in its general account records to reflect such
transfer.
(d) On or prior to 30 days from the Closing Date (the "Addition Date"),
the Sponsor may add or remove Mortgage Loans from Pool I or Pool II
provided that:
(i) the removal with respect to either Pool I or Pool II does not result
in a reduction in the Pool I Principal Balance as of the Cut-Off Date
below $273,100,000 or a reduction in the Pool II Principal Balance as
of the Cut-Off Date below $76,900,000;
(ii) each added Mortgage Loan is an Eligible Substitute Mortgage Loan;
(iii) such addition or removal does not result in a downgrade or withdrawal
of the rating of the Securities or the shadow rating with respect to
either Pool; and
(iv) ▇▇▇▇▇▇▇ Mac and the Insurer shall have approved each such addition or
removal.
In the event that on the Addition Date, the Pool I Balance on the Cut-off
Date is less than the Initial Pool I Balance, then on the Addition Date, the
Seller will deposit cash into the Collection Account on the Addition Date equal
to the deficiency.
Section 2.04. Representations and Warranties Regarding the Servicer and the
Sponsor.
(a) The Servicer represents and warrants to the Trustee, the Insurer and
▇▇▇▇▇▇▇ Mac that as of (i) the Closing Date and (ii) each date on which any
Mortgage Loans are transferred from the Sponsor to the Issuer pursuant to
Article II hereof (including transfers made pursuant to Section 2.03(d) hereof):
(i) The Servicer is a New York corporation, validly existing and in good
standing under the laws of the State of New York, and has the corporate
power to own its assets and to transact the business in which it is
currently engaged. The Servicer is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which
the character of the business transacted by it or any properties owned or
leased by it requires such qualification and in which the failure so to
qualify would have a material adverse effect on the business, properties,
assets, or condition (financial or other) of the Servicer;
(ii) The Servicer has the power and authority to make, execute, deliver
and perform this Agreement and all of the transactions contemplated under
this Agreement, and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement. When executed
and delivered, this Agreement will constitute the legal, valid and binding
obligation of the Servicer enforceable in accordance with its terms, except
as enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally and by the availability of equitable
remedies;
8
(iii) The Servicer is not required to obtain the consent of any other
party or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except for such consent, license,
approval or authorization, or registration or declaration, as shall have
been obtained or filed, as the case may be, prior to the Closing Date;
(iv) The execution, delivery and performance of this Agreement by the
Servicer will not violate any provision of any existing law or regulation
or any order or decree of any court applicable to the Servicer or any
provision of the Certificate of Incorporation or Bylaws of the Servicer, or
constitute a material breach of any mortgage, Pooling Agreement, contract
or other agreement to which the Servicer is a party or by which the
Servicer may be bound;
(v) No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending, or to the knowledge of
the Servicer threatened, against the Servicer or any of its properties or
with respect to this Agreement or the Securities; and
(vi) The Servicer is solvent and will not be rendered insolvent by the
transactions described herein and, after giving effect to the transactions
described herein, will not be left with an unreasonably small amount of
capital with which to engage in the ordinary course of its business and the
Servicer does not intend to incur, nor does the Servicer believe that it
has incurred, debts beyond its ability to pay as they mature. The Servicer
does not contemplate the commencement of insolvency, liquidation or
consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of the Servicer or any
of its respective assets.
The representations and warranties set forth in this Section 2.04(a) shall
survive the sale and assignment of the Mortgage Loans to the Trust. Upon
discovery of a breach of any representations and warranties which materially and
adversely affects the interests of the Securityholders, the Insurer or ▇▇▇▇▇▇▇
Mac, the person discovering such breach shall give written notice within five
(5) days of discovery to the other parties, the Insurer and ▇▇▇▇▇▇▇ Mac. Within
90 days of its discovery or its receipt of notice of breach, or, with the prior
written consent of a Responsible Officer of the Trustee and the Controlling
Party, such longer period specified in such consent, the Servicer shall cure
such breach in all material respects.
(b) The Sponsor represents and warrants to the Trustee, the Insurer and
▇▇▇▇▇▇▇ Mac that as of (i) the Closing Date and (ii) each date on which any
Mortgage Loans are transferred from the Sponsor to the Issuer pursuant to
Article II hereof (including transfers made pursuant to Section 2.03(d) hereof):
(i) The Sponsor is a Delaware corporation, validly existing and in good
standing under the laws of the State of Delaware, and has the statutory
power to own its assets and to transact the business in which it is
currently engaged. The Sponsor is duly qualified to do business as a
foreign limited liability company and is in good standing in each
jurisdiction in which the character of the business transacted by it or any
properties
9
owned or leased by it requires such qualification and in which the failure
so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Sponsor;
(ii) The Sponsor has the power and authority to make, execute, deliver
and perform this Agreement and all of the transactions contemplated under
this Agreement, and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement. When executed
and delivered, this Agreement will constitute the legal, valid and binding
obligation of the Sponsor enforceable in accordance with its terms, except
as enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally and by the availability of equitable
remedies;
(iii) The Sponsor is not required to obtain the consent of any other
party or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity
or enforceability of this Agreement;
(iv) The execution, delivery and performance of this Agreement by the
Sponsor will not violate any provision of any existing law or regulation or
any order or decree of any court applicable to the Sponsor or any provision
of the Certificate of Incorporation or bylaws of the Sponsor, or constitute
a material breach of any mortgage, Pooling Agreement, contract or other
agreement to which the Sponsor is a party or by which the Sponsor may be
bound;
(v) No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending, or to the knowledge of
the Sponsor threatened, against the Sponsor or any of its properties or
with respect to this Agreement or the Securities; and
(vi) The Sponsor is solvent and will not be rendered insolvent by the
transactions described herein and, after giving effect to the transactions
described herein, will not be left with an unreasonably small amount of
capital with which to engage in the ordinary course of its business and the
Sponsor does not intend to incur, nor does the Sponsor believe that it has
incurred, debts beyond its ability to pay as they mature. The Sponsor does
not contemplate the commencement of insolvency, liquidation or
consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of the Sponsor or any
of its respective assets..
The representations and warranties set forth in this Section 2.04(b) shall
survive the sale and assignment of the Mortgage Loans to the Trust. Upon
discovery of a breach of any representations and warranties which materially and
adversely affects the interests of the Securityholders, the Insurer or ▇▇▇▇▇▇▇
Mac, the person discovering such breach shall give prompt written notice to the
other parties, the Insurer, and ▇▇▇▇▇▇▇ Mac. Within 90 days of its discovery or
its receipt of notice of breach, or, with the prior written consent of a
Responsible Officer of the Trustee and the Controlling Party, such longer period
specified in such consent, the Sponsor shall cure such breach in all material
respects.
10
Section 2.05. Representations and Warranties of the Sponsor Regarding the
Mortgage Loans; Removal of Certain Mortgage Loans.
(a) The Sponsor hereby makes the following representations and warranties
on which the Issuer is deemed to have relied in acquiring the Mortgage Loans and
upon which the Insurer is deemed to rely in issuing the Policy, and upon which
▇▇▇▇▇▇▇ Mac is deemed to have relied as well. Such representations and
warranties speak as of the execution and delivery of this Agreement, as of the
Closing Date and as of the applicable Transfer Date with respect to the Mortgage
Loans, but shall survive the sale, transfer, and assignment of the Mortgage
Loans to the Issuer and the pledge thereof to the Trustee pursuant to the
Pooling Agreement,
(i) As of the Closing Date with respect to the Mortgage Loans and as of
the related Transfer Date with respect to any Eligible Substitute Mortgage
Loans and with respect to any HELOC Mortgage Loan, as of the date any
Additional Balance is created, the information set forth in the Mortgage
Loan Schedule for such Mortgage Loans is true and correct in all material
respects;
(ii) Each Mortgage Loan is being serviced by the Servicer;
(iii) The applicable Cut-Off Date Principal Balance has not been assigned
or pledged, and the Sponsor is the sole owner and holder of such Cut-Off
Date Principal Balance free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges or
security interests of any nature, and has full right and authority, under
all governmental and regulatory bodies having jurisdiction over the
ownership of the applicable Mortgage Loans, to sell, assign or transfer the
same pursuant to this Agreement, and upon its acquisition of the Mortgage
Loans, the Trust will be the sole owner of the Cut-Off Date Principal
Balance free and clear of any and all liens claims, encumbrances,
participating interests, equities, pledges, charges, or security interests
of any nature;
(iv) Except with respect to liens released immediately prior to the
transfer herein contemplated, each Credit Line Agreement and each Mortgage
Note and related Mortgage has not been assigned or pledged and immediately
prior to the transfer and assignment herein contemplated, the Sponsor held
good, marketable and indefeasible title to, and was the sole owner and
holder of, each Mortgage Loan subject to no liens, charges, mortgages,
claims, participation interests, equities, pledges or security interests of
any nature, encumbrances or rights of others (collectively, a "Lien"); the
Sponsor has full right and authority under all governmental and regulatory
bodies having jurisdiction over the Sponsor, subject to no interest or
participation of, or agreement with, any party, to sell and assign the same
pursuant to this Agreement; and immediately upon the transfers and
assignments herein contemplated, the Sponsor shall have transferred all of
its right, title and interest in and to each Mortgage Loan and the Trust
will hold good, marketable and indefeasible title, to, and be the sole
owner of, each Mortgage Loan subject to no Liens;
(v) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, the
11
related Mortgage is a valid and subsisting first or second lien, as set
forth on the Mortgage Loan Schedule with respect to each related Mortgaged
Property, and as of the applicable Cut-Off Date the related Mortgaged
Property is free and clear of all encumbrances and liens having priority
over the first or second lien, as applicable, of such Mortgage except for
liens for (i) real estate taxes and special assessments not yet delinquent;
(ii) any first mortgage loan secured by such Mortgaged Property and
specified on the Mortgage Loan Schedule; (iii) covenants, conditions and
restrictions, rights of way, easements and other matters of public record
as of the date of recording that are acceptable to mortgage lending
institutions generally or specifically reflected in the appraisals; and
(iv) 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 such Mortgage;
(vi) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, there is no valid right of rescission offset, defense (including the
defense of usury) or counterclaim of any obligor under any Loan Agreement
or Mortgage;
(vii) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, there is no delinquent recording or other tax or fee or assessment
lien against any related Mortgaged Property;
(viii) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, there is no proceeding pending or threatened for the total or
partial condemnation of any Mortgaged Property, nor is such a proceeding
currently occurring, and such property is in good repair and 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;
(ix) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, there are no mechanics' or similar liens or claims which have been
filed for work, labor or material affecting the related Mortgaged Property
which are, or may be, liens prior or equal to the lien of the related
Mortgage, except liens which are fully insured against by the title
insurance policy or other title protection referred to in clause (xiv);
(x) No Minimum Monthly Payment is more than 59 days delinquent (measured
on a contractual basis);
(xi) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, for each Mortgage Loan, the related Mortgage File contains each of
the documents and instruments specified to be included therein and such
Mortgage File has been delivered to the Trustee;
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(xii) The related Loan Agreement and the related Mortgage at origination
complied in all material respects with applicable state and federal laws
and regulations, including, without limitation, usury, truth-in-lending,
real estate settlement procedures, consumer credit protection, equal credit
opportunity, recording or disclosure laws applicable to the Mortgage Loans
and consummation of the transactions contemplated hereby, including without
limitation the receipt of interest, will not involve the violation or such
laws;
(xiii) On the Closing Date with respect to the Mortgage Loans and to the
extent not already included in such filing, on the applicable Transfer Date
with respect to any Eligible Substitute Mortgage Loans, the Sponsor has
filed UCC-1 financing statements with respect to such Mortgage Loans;
(xiv) A lender's policy of title insurance, ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ lender
master protection program (standard mortgage guaranty) or a commitment
(binder) to issue the same or an attorney's certificate or opinion of
title was effective on the date of the origination of each mortgage loan
and each such policy or certificate or opinion of title is valid and
remains in full force and effect;
(xv) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, none of the Mortgaged Properties is a mobile home or a manufactured
housing unit;
(xvi) As of the Cut-Off Date for the Mortgage Loans no more than (a)
0.83% of the Pool I Mortgage Loans (by Pool I Balance), or (b) 2.58% of the
Pool II Mortgage Loans (by Pool II Balance) are secured by Mortgaged
Properties located in one United States postal zip code;
(xvii) The Combined Loan-to-Value Ratio for each Pool I Mortgage Loan was
not in excess of 100% and the Combined Loan-to-Value Ratio for each Pool II
Mortgage Loan was not in excess of 100%;
(xviii) Each Pool I Mortgage Loan conforms to all applicable loan
origination standards with respect to loan balances as of the date of
origination set forth by ▇▇▇▇▇▇▇ Mac.
(xix) No selection procedure reasonably believed by the Sponsor to be
adverse to the interests of the Securityholders, the Insurer or ▇▇▇▇▇▇▇ Mac
was utilized in selecting the Mortgage Loans for sale to the Trust,
provided, however, that the Mortgage Loans were selected from the pool of
Mortgage Loans originated in connection with the Servicer's mortgage loan
origination program;
(xx) The Sponsor has not transferred the Mortgage Loans to the Trust with
any intent to hinder, delay or defraud any of its creditors;
(xxi) The Minimum Monthly Payment with respect to any Mortgage Loan is
not less than the interest accrued at the applicable Loan Rate on the
average daily
13
Principal Balance during the interest period relating to the date on which
such Minimum Monthly Payment is due;
(xxii) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, each Loan Agreement and each Mortgage Loan is genuine and is a
legal, valid and binding obligation and is an enforceable obligation of the
related Mortgagor, except as the enforceability thereof may be limited by
the bankruptcy, insolvency or similar laws affecting creditors' rights
generally;
(xxiii) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, there has been no default, breach, violation or event of
acceleration of any senior mortgage loan related to a Mortgaged Property
that has not been cured by a party other than the Servicer;
(xxiv) The terms of each Mortgage Note and each Mortgage have not been
impaired, altered or modified in any respect, except by a written
instrument which (if such instrument is secured by real property) has been
recorded, if necessary, to protect the interest of the Securityholders and
which has been delivered to the Trustee. The substance of any such
alteration or modification is reflected on the related Mortgage Loan
Schedule and has been approved by the primary mortgage guaranty insurer, if
any;
(xxv) The definition of "prime rate" in each Credit Line Agreement
relating to a HELOC Mortgage Loan does not differ materially from the
definition in the form of Credit Line Agreement in Exhibit D;
(xxvi) The weighted average remaining term to maturity of the Pool I
Mortgage Loans on a contractual basis as of the related Cut-Off Date is
approximately 205 months and for the Pool II Mortgage Loans is
approximately 203 months. On each date that the Loan Rates relating to
HELOC Mortgage Loans have been adjusted, interest rate adjustments on the
HELOC Mortgage Loans were made in compliance with the related Mortgages and
Credit Line Agreement and applicable law. Over the term of each HELOC
Mortgage Loan, the Loan Rate may not exceed the related Loan Rate Cap, if
any. With respect to the Pool I HELOC Mortgage Loans, the weighted average
Loan Rate Cap is approximately 18.00%. With respect to the Pool II HELOC
Mortgage Loans, the weighted average Loan Rate Cap is approximately 18.00%.
With respect to the Pool I HELOC Mortgage Loans, the margins range between
0.00% and 8.00% and the weighted average margin is approximately 2.96% as
of the related Cut-Off Date. With respect to the Pool II HELOC Mortgage
Loans, the margins range between 0.00% and 6.52% and the weighted average
margin is approximately 3.01% as of the related Cut-Off Date. The Loan
Rates on the Pool I Mortgage Loans range between 2.48% and 16.27%, the Loan
Rates on the Pool II Mortgage Loans range between 5.85% and 16.02% and the
weighted average Loan Rate is approximately 9.15% for Pool I and 9.95% for
Pool II;
(xxvii) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, each
14
Mortgaged Property consists of a single parcel of real property with a
one-to-four unit single family residence erected thereon, or an individual
condominium unit, planned unit development unit or townhouse;
(xxviii) No more than 27.91% (by Pool I Balance) of the Pool I Mortgage
Loans are secured by real property improved by individual condominium
units, planned development units or two-to-four family residences erected
thereon, and approximately 72.09% (by Pool I Balance) of the Pool I
Mortgage Loans are secured by real property with a one-family residence
erected thereon. No more than 28.89% (by Pool II Balance) of the Pool II
Mortgage Loans are secured by real property improved by individual
condominium units, planned development units or two-to-four family
residences erected thereon, and approximately 71.11% (by Pool II Balance)
of the Pool II Mortgage Loans are secured by real property with a
one-family residence erected thereon;
(xxix) Each Mortgage Note evidencing a Closed End Mortgage Loan is
comprised of one original promissory note and each such promissory note
constitutes an "instrument" for purposes of Section 9-105(1)(i) of the UCC.
There is no obligation on the part of the Sponsor or any other party to
make payments in addition to those made by the Mortgagor with respect to
the Closed End Mortgage Loans;
(xxx) The Credit Limits on the Pool I HELOC Mortgage Loans range between
$7,500.00 and $316,000.00 with an average of approximately $66,400.00. The
Credit Limits on the Pool II HELOC Mortgage Loans range between $3,800.00
and $700,000.00 with an average of approximately $99,760.00. The Principal
Balances on the Pool I HELOC Mortgage Loans range between $0 and
$280,197.00 with an average of approximately $50,800.00. The Principal
Balances on the Pool II HELOC Mortgage Loans range between $0 and
$700,000.00 with an average of approximately $63,000.00. The Principal
Balances on the Pool I Closed End Mortgage Loans range between $9,900.00
and $125,000.00 with an average of approximately $41,000.00. The average
Credit Limit Utilization Rate (weighted by credit line) of the Pool I HELOC
Mortgage Loans is approximately 76.96% and of the Pool II HELOC Mortgage
Loans is approximately 69.42%;
(xxxi) Substantially all of the Mortgage Loans are second liens, and
either (A) no consent for each Mortgage Loan was required by the holder of
the related senior lien, if any, prior to the making of such Mortgage Loan
or (B) such consent has been obtained and is contained in the related
Mortgage File;
(xxxii) This Agreement constitutes a valid transfer and assignment to the
Trust of all right, title and interest of the Sponsor in and to the Cut-Off
Date Principal Balances with respect to the applicable Mortgage Loans, all
monies due or to become due with respect thereto and all proceeds of such
Cut-Off Date Principal Balances with respect to the Mortgage Loans and such
funds as are from time to time deposited in the Collection Account
(excluding any investment earnings thereon) and all other property
specified in the definition of "Trust" as being part of the corpus of the
Trust conveyed to the Trust, and upon payment for the Additional Balances,
will constitute a valid transfer and assignment to the Trustee of all
right, title and interest of the Sponsor in and to the
15
Additional Balances, all monies due or to become due with respect thereto,
and all proceeds of such Additional Balances and all other property
specified in the definition of "Trust" relating to the Additional Balances;
(xxxiii) As of the Closing Date, no Mortgage Loan is the subject of
foreclosure proceedings and, to the best of the Sponsor's knowledge, no
obligor of any of the Mortgage Loans has filed for bankruptcy protection;
(xxxiv) The proceeds of each Closed End Mortgage Loan have been fully
disbursed, and there is no obligation on the part of the mortgagee to make
future advances thereunder. Any and all requirements as to completion of
any on-site or off-site improvements and as to disbursements of any escrow
funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing or recording such Closed End Mortgage Loans
were paid;
(xxxv) Each Mortgage contains customary and enforceable provisions which
render the rights and remedies of the holder thereof adequate for the
realization against the related Mortgaged Property of the benefits of the
security, including (A) in the case of a Mortgage designated as a deed of
trust, by trustee's sale and (B) otherwise by judicial foreclosure. Subject
to applicable state law, there is no homestead or other exemption available
to the Mortgagor which would materially interfere with the rights to sell
the Mortgaged Property at a trustee's sale or the right to foreclose upon
the related Mortgage;
(xxxvi) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loan, except for events permissible under Section 2.05(a)(x) of this
Agreement, there is no default, breach, violation or event of acceleration
existing under any Mortgage or the related 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 the Sponsor has not waived any default, breach,
violation or event of acceleration;
(xxxvii) To the best knowledge of the Sponsor, all parties to the
Mortgage Note and the Mortgage had legal capacity to execute the Mortgage
Note and the Mortgage and each Mortgage Note and Mortgage have been duly
and properly executed by such parties; Each Mortgage and Mortgage Note is
the legal, valid and binding obligation of the related Mortgagor and is
enforceable by the Issuer against the Mortgagor in accordance with its
terms, except only as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by law;
(xxxviii)As of the Cut-Off Date no more than 0.10% of the Principal
Balance of the Pool I Mortgage Loans nor more than 0.45% of the Principal
Balance of the Pool II Mortgage Loans represents Mortgage Loans with
respect to which the related Mortgagor had a Credit Score of 600 or less at
the time of origination or whose Credit Score was unavailable.
16
(xxxix) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loan, no Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement which has been approved by the
applicable title insurer (to the extent required by such title insurer) and
which is part of the Mortgage File delivered to the Trustee;
(xl) At the time of origination of each Mortgage Loan, the related prior
lien was not more than 30 days delinquent. Additionally, as of the Closing
Date, no senior mortgage loan on the related Mortgaged Property was more
than 59 days delinquent;
(xli) All required inspections, licenses and certificates with respect to
the use and occupancy of all occupied portions of all property securing the
Mortgages have been made, obtained or issued, as applicable;
(xlii) If the improvements securing a Mortgage Loan were in a federally
designated special flood hazard area as of the date of origination, flood
insurance to the extent required in Section 3.04 hereof covers the related
Mortgaged Property (either by coverage under the federal flood insurance
program or by coverage by private insurers);
(xliii) With respect to each Mortgage Loan, the related prior lien does
not provide for negative amortization;
(xliv) With respect to each Mortgage Loan, the maturity date of the
Mortgage Loan is prior to the maturity date of the related prior lien if
such prior lien provides for a balloon payment;
(xlv) All amounts received after the Cut-Off Date with respect to the
Mortgage Loans to which the Sponsor is not entitled will be deposited into
the Collection Account within one Business Day after the Closing Date;
(xlvi) Each Pool I Mortgage Loan is secured by a property having an
appraised value as of origination of $3,600,000 or less and each Pool II
Mortgage Loan is secured by a property having an appraised value as of
origination of $5,300,000 or less;
(xlvii) Except for events permissible under this agreement, there are no
defaults in complying with the terms of the Mortgage, and either (1) any
taxes, governmental assessments, insurance premiums, water, sewer and
municipal charges or ground rents which previously became due and owing
have been paid, or (2) 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. There are no defaults in
complying with the terms of any senior mortgage on the related Mortgaged
Property that have not been cured by anyone other than the Servicer. Except
for payments in the nature of escrow payments, including without
limitation, taxes and insurance payments, the Sponsor has not advanced
funds, or induced, solicited or knowingly received any advance of funds by
a party other than the Mortgagor, directly or indirectly, for the payment
of any amount required by the Mortgage Note, except for interest accruing
from the date of the Mortgage Note or date of disbursement of the
17
Mortgage proceeds, whichever is greater, to the day which precedes by one
month the Due Date of the first installment of principal and interest;
(xlviii) With respect to each Mortgage Loan, the improvements upon each
Mortgaged Property are covered by a valid and existing hazard insurance
policy with a carrier generally acceptable to the Servicer that provides
for fire and extended coverage representing coverage not less than (a) the
Credit Limit of such HELOC Mortgage Loan or (b) the Cut-Off Date Principal
Balance of such Closed End Mortgage Loan or (c) the maximum insurable value
of the Mortgaged Property;
(xlix) No misrepresentation of a material fact or fraud in respect of the
origination, modification or amendment of any Mortgage Loan has taken place
on the part of any person, including, without limitation, the related
Mortgagor, any appraiser, any builder or developer or any party involved in
the origination of such Mortgage Loan;
(l) With respect to the Pool I Mortgage Loans, the terms of the Mortgage
Note and the Mortgage have not been impaired, altered or modified in any
material respect, except by a written instrument which has been recorded or
is in the process of being recorded, if necessary, to protect the interests
of the Securityholders and which has been or will be delivered to the
Trustee on behalf of the Trust;
(li) As of the Cut-Off Date, no Mortgage Loan is 30 or more days
delinquent in payment of principal and interest. In addition, none of the
Mortgage Loans have been 30 or more days delinquent in the last 12 months
and none of the Mortgage Loans have been 30 or more days delinquent for two
payment periods in the last 12 months;
(lii) With respect to the Pool I Mortgage Loans, approximately 15.22% of
the Mortgage Loans, as of the Closing Date, are fixed rate fully amortizing
Mortgage Loans having an original term to maturity from the date on which
the first monthly payment is due of not more than 30 years. Each Mortgage
Note with respect to a fixed rate and balloon Mortgage Note will provide
for a schedule of substantially level and equal Monthly Payments which are
sufficient to amortize fully the principal balance of such Mortgage Loan
over a period of time equal to the amortization period of such Mortgage
Note; provided, however, that certain Mortgage Loans -------- -------
constituting approximately 7.91% of the Cut-Off Date Aggregate Loan Balance
are balloon loans that provide for final monthly payment substantially
greater than the preceding monthly payments. All such balloon loans provide
for monthly payment based upon a 30 year amortization schedule with a final
balloon payment no later than the 15th year.
(liii) Except for Mortgage Loans that are delinquent for a time period
less than that set forth in (li) above, there is no default, breach,
violation or event of acceleration existing under any Mortgage or the
related 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
Sponsor, nor any other entity involved in originating or servicing a
Mortgage Loan, has waived any default, breach, violation or event of
acceleration;
18
(liv) None of the Mortgage Loans are cooperative share mortgages;
(lv) Each appraisal of a Mortgage Loan that was used to determine the
appraised value of the related Mortgaged Property was conducted generally
in accordance with the Servicer's mortgage loan origination program(s) and
customary industry standards and included an assessment of the fair market
value of the related mortgaged property at the time of the appraisal. The
Mortgage File contains an appraisal of the applicable Mortgaged Property;
(lvi) All individual insurance policies contain a standard mortgagee
clause naming the Sponsor, its successors and assigns, as mortgagee. All
premiums thereon have been paid. Each Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and
expense, and upon the Mortgagor's failure to do so, authorizes the holder
of the Mortgage to obtain and maintain such insurance at the Mortgagor's
cost and expense and to seek reimbursement therefor from the Mortgagor;
(lvii) Any advances made after the date of origination of a Mortgage Loan
but prior to the Cut-Off Date have been consolidated with the outstanding
principal amount secured by the related Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment
term reflected on the Mortgage Loan Schedule. The consolidated principal
amount does not exceed the original principal amount of the related
Mortgage Loan;
(lviii) No improvement located on or being part of any Mortgaged Property
is in violation of any applicable zoning law or regulation. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of each 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 and such Mortgaged
Property is lawfully occupied under the applicable law and all improvements
which were included for the purpose of determining the appraisal value of
the Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvement on adjoining
property encroach upon the Mortgage Property;
(lix) The proceeds of each fixed rate and balloon Mortgage Loan have been
fully disbursed and there is no obligation on the part of the mortgagee to
make future advances thereunder and any and all requirements as to
completion of any on-site or off-site improvements and as to disbursement
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making, closing or recording the Mortgage Loans were
paid and the Mortgagor is not entitled to any refund of amounts paid or due
under the Mortgage Note;
(lx) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature;
(lxi) All parties which have had any interest in the Mortgage Loan,
whether as originator, mortgagee, assignee, pledgee or otherwise, are (or,
during the period in
19
which they held and disposed of such interest, were): (A) organized under
the laws of such state, or (B) qualified to do business in such state, or
(C) federal savings and loan associations or national banks having
principal offices in such state, or (D) not doing business in such state so
as to require qualification or licensing, or (E) not otherwise required or
licensed in such state. To the best of Sponsor's knowledge, all parties
which have had any interest in the Mortgage Loan were in compliance with
any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located or were not required to be
licensed in such state;
(lxii) Each document or instrument in the related Mortgage File is in a
form generally acceptable to prudent mortgage lenders that regularly
originate or purchase mortgage loans comparable to the Mortgage Loans for
sale to prudent investors in the secondary market that invest in mortgage
loans such as the Mortgage Loans;
(lxiii) Each original Mortgage was recorded and all subsequent
assignments of the original Mortgage (other than the assignment to the
Trustee) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors
of the Sponsor, or is in the process of being recorded;
(lxiv) No Mortgage Loan was originated under a buydown plan;
(lxv) No Mortgage Loan is subject to the requirements of the Home
Ownership and Equity Protection Act of 1994 ("HOEPA") or is in violation of
any state or municipal law comparable to HOEPA;
(lxvi) The Servicer for each Mortgage Loan has accurately and fully
reported its borrower credit files to each of the credit repositories in a
timely manner;
(lxvii) No proceeds from any Mortgage Loan were used to purchase
single-premium credit insurance policies;
(lxviii) No Mortgage Loan has a prepayment penalty term longer than three
years after its origination;
(lxix) Each Mortgage Loan conforms, and all Mortgage Loans in the
aggregate conform, in all material respects, to the descriptions thereof
set forth in the Information Circular and the Prospectus Supplement;
(lxx) Each Mortgage Loan was originated on or after December 23, 1998;
(lxxi) The Sponsor represents and warrants that the Servicer currently
operates or actively participates in an on-going business (A) to originate
single family mortgage loans ("Loans"), and/or (B) to make periodic
purchases of Loans from originators or sellers, and/or (C) to issue and/or
purchase securities or bonds supported by the Loans, a portion of which
Loans are made to borrowers who are:
(a) low-income families (families with incomes of 80% or less of
area median income) living in low-income areas (a census tract or
20
block numbering area in which the median income does not exceed
80 percent of the area median income); or
(b) very low-income families (families with incomes of 60% or
less of area median income).
(lxxii) Each Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the related Mortgage Loan in the
event the related Mortgaged Property is sold without the prior consent of
the mortgagee thereunder;
(lxxiii) With respect to the Pool I Mortgage Loans, to the best of
Sponsor's knowledge, no Mortgage Loan that is a second-lien Mortgage Loan
has a principal balance as of the applicable Cut-Off Date in excess of half
of ▇▇▇▇▇▇▇ Mac's loan limits for such type of residence;
(lxxiv) To the best of Sponsor's knowledge, the pool of Mortgages backing
the Class A-1 Certificates does not contain the first and second lien
mortgage loans relating to a single Mortgaged Property if the aggregate
original principal balance of such mortgage loans exceeds ▇▇▇▇▇▇▇ Mac's
loan limits. To the best of Sponsor's knowledge, the pool of Mortgages
backing the Securities will not result in a violation of ▇▇▇▇▇▇▇ Mac's loan
limitations;
(lxxv) Each Mortgage Loan was originated substantially in accordance with
Servicer's underwriting criteria, which conform to the underwriting
criteria set forth in the Information Circular (for the Pool I loans) or
the Prospectus Supplement (for the Pool II loans);
(lxxvi) There exists no violation of any local, state or federal
environmental law, rule or regulation in respect of the Mortgaged Property
which violation has or could have a material adverse effect on the market
value of such Mortgaged Property. Sponsor has no knowledge of any pending
action or proceeding directly involving the related Mortgaged Property in
which compliance with any environmental law, rule or regulation is in
issue; and, to the best of Sponsor'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 the use and enjoyment of such
Mortgaged Property;
(lxxvii) The Sponsor has caused or will cause to be performed any and ail
acts required to be performed to preserve the rights and remedies of the
Trustee in any insurance policies applicable to the Mortgage Loans
including, without limitation, any necessary notifications of insurers,
assignment of policies or interests therein, and establishments of
co-insured, joint loss payee and mortgagee rights in favor of the Trustee;
(lxxviii) The related Mortgage Note is not and has not been secured by
any collateral, pledged account or other security except the lien of the
corresponding Mortgage;
21
(lxxix) There is no obligation on the part of the Sponsor or any other
party to make payments in addition to those made by the Mortgagor;
(lxxx) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under existing law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage,
and no fees or expenses are or will become payable by the Securityholders
or the Trust to the trustee under the deed of trust, except in connection
with a trustee's sale after default by the Mortgagor;
(lxxxi) Each Mortgagor has executed a statement to the effect that such
Mortgagor has received all disclosure materials including the notice of the
right of cancellation or rescission required by applicable law with respect
to the making of the Mortgage Loan and any waiver of any right of
cancellation or rescission exercised by the Mortgagor was in accordance
with applicable law and is binding on the Mortgagor.
With respect to the representations and warranties set forth in this Section
2.05 that are made to the best of the Sponsor's knowledge or as to which the
Sponsor has no knowledge, if it is discovered by the Sponsor, the Servicer, the
Insurer, ▇▇▇▇▇▇▇ Mac or a Responsible Officer of the Trustee that the substance
of such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan then,
notwithstanding the Sponsor's lack of knowledge with respect to the substance of
such representation and warranty being inaccurate at the time the representation
or warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.
(b) It is understood and agreed that the representations and warranties set
forth in this Section 2.05 shall survive delivery of the respective Mortgage
Files to the Trustee pursuant to Section 2.01 and the termination of the rights
and obligations of the Servicer pursuant to Section 5.04 or 6.02. Upon discovery
by the Sponsor, the Servicer, the Insurer, ▇▇▇▇▇▇▇ Mac or a Responsible Officer
of the Trustee of a breach of any of the foregoing representations and
warranties, without regard to any limitation set forth therein concerning the
knowledge of the Sponsor as to the facts stated therein, which materially and
adversely affects the interests of the Trust or the Securityholders or the
Insurer or ▇▇▇▇▇▇▇ Mac in the related Mortgage Loans, the party discovering such
breach shall give prompt written notice to the other parties and to the Insurer
and ▇▇▇▇▇▇▇ Mac. Within 90 days of its discovery or its receipt of notice of
such breach, the Sponsor shall use all reasonable efforts to cure such breach in
all material respects or shall, not later than the Business Day next preceding
the Payment Date in the month following the Collection Period in which any such
cure period expired (or such later date that is acceptable to the Trustee or the
Controlling Party as evidenced by their written consents), either (a) accept a
transfer of such Mortgage Loan from the Trust or (b) substitute an Eligible
Substitute Mortgage Loan, each in the same manner and subject to the same
conditions as set forth in Section 2.03; provided, however, that the cure for
any breach of a representation and warranty relating to the characteristics of
the Mortgage Loans in the aggregate shall be a repurchase of or substitution for
only the Mortgage Loans necessary to cause such characteristics to be in
compliance with the related representation and warranty. Upon accepting such
transfer and making any required deposit into the Collection Account or
substitution of an Eligible Substitute Mortgage Loans, as the case may be, the
Sponsor shall be entitled to receive an instrument of assignment or transfer
from the Trustee to the same extent as set forth in Section 2.03 with respect to
the transfer of
22
Mortgage Loans under that Section. ▇▇▇▇▇▇▇ Mac and the Insurer shall be notified
of any substitution of an Eligible Substitute Mortgage Loan.
It is understood and agreed that the obligation of the Sponsor to accept a
removal of a Mortgage Loan as to which a breach has occurred and is continuing
and to make any required deposit in the Collection Account or to substitute an
Eligible Substitute Mortgage Loan, as the case may be, shall constitute the sole
remedy against the Sponsor respecting such breach available to Securityholders,
the Trustee on behalf of Securityholders, the Insurer and ▇▇▇▇▇▇▇ Mac; provided,
however, that the Sponsor shall defend and indemnify the Trustee, the Insurer,
▇▇▇▇▇▇▇ Mac and the Securityholders against all reasonable costs and expenses,
and all losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and the amount of any settlement entered into with the
consent of the Sponsor (such consent not to be unreasonably withheld), which may
be asserted against or incurred by any of them as a result of any third-party
action arising out of any breach of any such representation and warranty.
Notwithstanding the foregoing, with regard to any breach of the representation
and warranty set forth in Section 2.05(a)(xxxii), the Sponsor shall pay to the
Trust the sum of (i) the amount of the related Principal Balances, plus unpaid
accrued interest on each such Principal Balance at the applicable Loan Rate to
the date of payment, (ii) the amount of any loss suffered by the
Securityholders, the Insurer or ▇▇▇▇▇▇▇ Mac with respect to the affected
Mortgage Loans and (iii) all amounts owing to the Insurer pursuant to the
Insurance Agreement and to ▇▇▇▇▇▇▇ Mac pursuant to the Pooling Agreement.
The Sponsor does hereby assign to the Trust the benefits of the
representations and warranties made to it with respect to the Mortgage Loans
under the Mortgage Loan Purchase Agreement and the Trust may exercise the rights
with respect thereto relating to a Mortgage Loan, including the right to require
repurchase in the event such Mortgage Loan is not repurchased by the Sponsor
Section 2.06. Covenants of the Sponsor. The Sponsor hereby covenants that:
(a) Security Interests. The Sponsor will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Mortgage Loans, whether now existing or hereafter created, or
any interest therein; the Sponsor will notify the Trustee, the Insurer and
▇▇▇▇▇▇▇ Mac of the existence of any Lien on any Mortgage Loans immediately upon
discovery thereof; and the Sponsor will defend the Trust's right, title and
interest (including the Trust's security interest) in, to and under the Mortgage
Loans, whether now existing or hereafter created, against all claims of third
parties claiming through or under the Sponsor; provided, however, that nothing
in this Section 2.06(a) shall prevent or be deemed to prohibit the Sponsor from
suffering to exist upon any of the Mortgage Loans any Liens for municipal or
other local taxes and other governmental charges if such taxes or governmental
charges shall not at the time be due and payable or if the Sponsor shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto.
(b) UCC-1 Financing Statements. On the Closing Date with respect to the
Mortgage Loans and, to the extent not already included in such filing, on the
applicable Transfer Date with
23
respect to any Eligible Substitute Mortgage Loans, the Sponsor will file UCC-1
financing statements with respect to such Mortgage Loans.
(c) Negative Pledge. The Sponsor hereby agrees not to transfer, assign,
exchange, pledge, finance, hypothecate, grant a security interest in or
otherwise convey the Residual Certificates except in accordance with Sections
5.05 and 6.02 hereof and in accordance with the Insurance Agreement and the
Trust Agreement.
(d) Downgrading. The Sponsor will not engage in any activity which would
result in a downgrading or withdrawal of the ratings on the Securities without
regard to the effect of the Policy or the Guarantee.
(e) Amendment to Certificate of Incorporation. The Sponsor will not amend
its Certificate of Incorporation without prior written notice to the Trustee and
the Rating Agencies and the prior written consent of the Controlling Party which
consent shall not be unreasonably withheld.
(f) Principal Place of Business. The Sponsor's principal place of business
is in California, and the Sponsor will not change its principal place of
business without prior written notice to the Trustee, the Rating Agencies,
▇▇▇▇▇▇▇ Mac and the Insurer.
Section 2.07. Removal of Mortgage Loans at Election of Issuer. Subject to
the conditions set forth below and Section 8.2 of the Pooling Agreement, the
Issuer may, but shall not be obligated to, require the removal of Mortgage Loans
from Pool I and/or Pool II, from time to time, as of the close of business on a
Payment Date (each, a "Removal Date"). On the tenth Business Day (the "Removal
Notice Date") prior to the Removal Date designated in such notice, the Issuer
shall give the Trustee, the Insurer, ▇▇▇▇▇▇▇ Mac (with respect to Pool I only)
and the Servicer a notice of the proposed removal that contains a list of the
Mortgage Loans to be removed. Such removal of Mortgage Loans in Pool I or Pool
II shall be permitted upon satisfaction of the following conditions:
(i) The applicable Rapid Amortization Period shall not have commenced;
(ii) On the Removal Date, the related Overcollateralization Amount (after
giving effect to the removal from the applicable Pool of the Mortgage Loans
proposed to be removed) exceeds the related Specified Overcollateralization
Amount;
(iii) The transfer of such Mortgage Loans on any Removal Date during the
related Managed Amortization Period shall not, in the reasonable belief of
the Sponsor, cause a Rapid Amortization Event with respect to the related
Class of Securities to occur or an event which with notice or lapse of time
or both would constitute such a Rapid Amortization Event and a Rapid
Amortization Event has not occurred;
(iv) On or before the Removal Date, the Issuer shall have delivered to
the Trustee a revised Mortgage Loan Schedule, reflecting the proposed
transfer and the Removal Date, and the Servicer shall have marked the
Electronic Ledger to show that the Mortgage Loans removed are no longer
included in the applicable Pool;
24
(v) The Issuer shall represent and warrant that no selection procedures
reasonably believed by the Issuer to be adverse to the interests of the
Securityholders or the Insurer or ▇▇▇▇▇▇▇ Mac (with respect to Pool I only)
were utilized in selecting the Mortgage Loans to be removed from the
applicable Pool;
(vi) In connection with each such removal of Mortgage Loans pursuant to
this Section, each Rating Agency shall have received on or prior to the
related Removal Notice Date notice of such proposed removal of Mortgage
Loans and, prior to the Removal Date, shall have notified the Trustee, the
Insurer and ▇▇▇▇▇▇▇ Mac (with respect to Pool I only) in writing that such
removal of Mortgage Loans would not result in a reduction or withdrawal of
its then current ratings of the Class A-1 Certificates or of the Class A-2
Notes, in either case without regard to the Policy or Guarantee, as
applicable; and
(vii) The Issuer shall have delivered to the Trustee, the Insurer and
▇▇▇▇▇▇▇ Mac an Officer's Certificate certifying that the items set forth in
subparagraphs (i) through (vi), inclusive, have been performed or are true
and correct, as the case may be. The Trustee, the Insurer and ▇▇▇▇▇▇▇ Mac
may conclusively rely on such Officer's Certificate, shall have no duty to
make inquiries with regard to the matters set forth therein and shall incur
no liability in so relying.
(viii) The Insurer and ▇▇▇▇▇▇▇ Mac shall have been given an opportunity
to review any Mortgage Loans proposed to be removed by the Trust.
Upon receiving the requisite information from the Issuer, the Servicer
shall perform in a timely manner those acts required of it, as specified above.
Upon satisfaction of the above conditions, on the Removal Date the Trustee shall
deliver, or cause to be delivered, to the Issuer the Mortgage File for each
Mortgage Loan being so transferred, and the Trustee shall execute and deliver to
the Issuer such other documents prepared by the Issuer as shall be reasonably
necessary to remove such Mortgage Loans from the applicable Pool. Any such
removal of Mortgage Loans shall be without recourse, representation or warranty
by or of the Trustee or the Trust to the Issuer. The review right given to the
Insurer and ▇▇▇▇▇▇▇ Mac in clause (viii), above, must be completed prior to the
Removal Date.
Section 2.08. Execution and Authentication of Securities. The Trustee, on
behalf of the Trust, has caused to be executed, authenticated and delivered to
or upon the order of the Sponsor, in exchange for the Trust, concurrently with
the sale, assignment and conveyance to the Trustee of the Trust, two classes of
Securities (the Class A-1 Certificates representing beneficial interests in the
Trust and the Class A-2 Notes representing indebtedness of the Trust) in
authorized denominations and the Residual Certificates, evidencing the ownership
of the Trust.
Section 2.09. Tax Treatment. It is the intention of the Sponsor and the
Residual Certificateholders that the Securities will be indebtedness of the
Sponsor for federal, state and local income and franchise tax purposes and for
purposes of any other tax imposed on or measured by income. The Sponsor, the
Trustee and each Securityholder (or Security Owner) by acceptance of its
Security (or, in the case of a Security Owner, by virtue of such Security
Owner's acquisition of a beneficial interest therein) agrees to treat the
Securities (or beneficial
25
interest therein), for purposes of federal, state and local income or franchise
taxes and any other tax imposed on or measured by income, as indebtedness of the
Sponsor secured by the assets of the Trust and to report the transactions
contemplated by this Agreement on all applicable tax returns in a manner
consistent with such treatment. Each Securityholder agrees that it will cause
any Security Owner acquiring an interest in a Security through it to comply with
this Agreement as to treatment of the Securities as indebtedness for federal,
state and local income and franchise tax purposes and for purposes of any other
tax imposed on or measured by income. The Trustee will prepare and file all tax
reports required hereunder consistent with this Agreement except as may be
required by or provided in Section 3.15.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. The Servicer.
(a) The Servicer is hereby authorized to act as agent for the Trust and in
such capacity shall manage, service, administer and make collections on the
Mortgage Loans and perform the other actions under this Agreement. The Servicer
shall service and administer the Mortgage Loans in a manner consistent with the
terms of this Agreement and with general industry practice and shall have full
power and authority, acting alone or through a subservicer, to do any and all
things in connection with such servicing and administration which it may deem
necessary or desirable, it being understood, however, that the Servicer shall at
all times remain responsible to the Trustee, the Securityholders, the Residual
Certificateholders, the Insurer and ▇▇▇▇▇▇▇ Mac for the performance of its
duties and obligations hereunder in accordance with the terms hereof. Any
amounts received by any subservicer in respect of a Mortgage Loan shall be
deemed to have been received by the Servicer whether or not actually received by
it. Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered by the Trust, to execute and
deliver, on behalf of the Trust, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Mortgage Loans and with respect to
the Mortgaged Properties and to make deposits to and withdrawals from the
Collection Account. The Trustee and the Owner Trustee shall, upon the written
request of a Servicing Officer, furnish the Servicer with any powers of attorney
and other documents necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties hereunder. The Servicer in such capacity
may also consent to the placing of a lien senior to that of any Mortgage on the
related Mortgaged Property, provided that
(i) such Mortgage succeeded to a first lien position after the related
Mortgage Loan was conveyed to the Trust and, immediately following the
placement of such senior lien, such Mortgage is in a second lien position
and the outstanding principal amount of the mortgage loan secured by such
subsequent senior lien is no greater than the outstanding principal amount
of the senior mortgage loan secured by the Mortgaged Property as of the
date the related Mortgage Loan was originated; or
26
(ii) the Mortgage relating to such Mortgage Loan was in a second lien
position as of the Cut-Off Date and the new senior lien secures a mortgage
loan that refinances an existing first mortgage loan and the outstanding
principal amount of the replacement first mortgage loan immediately
following such refinancing is not greater than the outstanding principal
amount of such existing first mortgage loan at the date of origination of
such Mortgage Loan;
provided, further, that such senior lien does not secure a note that provides
for negative amortization.
The Servicer may also, without prior approval from the Rating Agencies,
▇▇▇▇▇▇▇ Mac or the Insurer, increase the Credit Limits on HELOC Mortgage Loans
included in Pool II provided that (i) new appraisals are obtained and the
Combined Loan-to-Value Ratios of the HELOC Mortgage Loans after giving effect to
such increase are less than or equal to the Combined Loan-to-Value Ratios of the
Mortgage Loans as of the Cut-Off Date and (ii) such increases are consistent
with the Servicer's credit and collection policies. No material change or
departure from the Servicer's credit and collection policies with respect to any
Mortgage Loans as in effect as of the Closing Date shall be permitted without
the prior written consent of the Insurer and of ▇▇▇▇▇▇▇ Mac.
In addition, the Servicer may agree to changes in the terms of a Mortgage
Loan at the request of the Mortgagor; provided that (i) such changes do not
materially and adversely affect the interests of Securityholders, Residual
Certificateholders, ▇▇▇▇▇▇▇ Mac or the Insurer, (ii) such changes are consistent
with prudent and customary business practice as evidenced by a certificate
signed by a Servicing Officer delivered to the Trustee, the Insurer and ▇▇▇▇▇▇▇
Mac and (iii) the Rating Agencies, the Insurer and ▇▇▇▇▇▇▇ Mac are promptly
notified of the changes.
In addition to the foregoing, the Servicer may solicit Mortgagors to change
any other terms of the related Mortgage Loans; provided that such changes (i) do
not materially and adversely affect the interest of Securityholders, the Insurer
or ▇▇▇▇▇▇▇ Mac and (ii) are consistent with prudent and customary business
practice as evidenced by a certificate signed by a Servicing Officer delivered
to the Trustee, the Insurer and ▇▇▇▇▇▇▇ Mac. Nothing herein shall limit the
right of the Servicer to solicit Mortgagors with respect to new loans (including
mortgage loans) that are not Mortgage Loans.
The relationship of the Servicer (and of any successor to the Servicer as
servicer under this Agreement) to the Trustee under this Agreement is intended
by the parties to be that of an independent contractor and not that of a joint
venturer, partner or agent.
(b) In the event that the rights, duties and obligations of the Servicer
are terminated hereunder, any successor to the Servicer in its sole discretion
may, to the extent permitted by applicable law, terminate the existing
subservicer arrangements with any subservicer, without charge, or assume the
terminated Servicer's rights under such subservicing arrangements which
termination or assumption will not violate the terms of such arrangements.
Section 3.02. Collection of Certain Mortgage Loan Payments.
27
(a) Servicer shall make reasonable efforts to collect all payments called
for under the terms and provisions of the Mortgage Loans, and shall, to the
extent such procedures shall be consistent with this Agreement, follow such
collection procedures as it follows with respect to home equity loans in its
servicing portfolio comparable to the Mortgage Loans. Consistent with the
foregoing, and without limiting the generality of the foregoing, the Servicer
may in its discretion (i) waive any late payment charge or any assumption fees
or other fees which may be collected in the ordinary course of servicing such
Mortgage Loans and (ii) arrange with a Mortgagor a schedule for the payment of
interest due and unpaid; provided that such arrangement is consistent with the
Servicer's policies with respect to the Mortgage Loans it owns or services;
provided, further, that notwithstanding such arrangement such Mortgage Loans
will be included in the information regarding delinquent Mortgage Loans set
forth in the Servicing Certificate and monthly statement to Securityholders
pursuant to Section 4.01.
(b) The Servicer shall on the Closing Date deposit into the Collection
Account any amounts representing payments on, and any collections in respect of,
the Mortgage Loans received after the related Cut-Off Date and prior to the
Closing Date (exclusive of payments in respect of accrued interest due on or
prior to such Cut-Off Date) and thereafter the Servicer, or the Sponsor, as the
case may be, shall deposit into the Collection Account within one Business Day
following receipt thereof the following payments and collections received or
made by it (without duplication):
(i) all collections on and in respect of the Mortgage Loans;
(ii) the amounts, if any, deposited to the Collection Account pursuant
to Section 3.04;
(iii) Net Liquidation Proceeds;
(iv) Insurance Proceeds (including, for this purpose, any amount
required to be credited by the Servicer pursuant to the last sentence of
Section 3.04 and excluding the portion thereof, if any, that has been
applied to the restoration or repair of the related Mortgaged Property or
released to the related Mortgagor in accordance with the normal servicing
procedures of the Servicer);
(v) any amounts required to be deposited therein pursuant to
Section 7.01;
(vi) any amounts drawn under the Policy pursuant to Section 8.4(d) of
the Pooling Agreement; and
(vii) any amounts drawn pursuant to the Demand Note;
provided, however, that with respect to each Collection Period, the Servicer
shall be permitted to retain from payments in respect of interest on the
Mortgage Loans, the Servicing Fee for such Collection Period. The foregoing
requirements respecting deposits to the Collection Account are exclusive, it
being understood that, without limiting the generality of the foregoing, the
Servicer need not deposit in the Collection Account amounts representing
Foreclosure Profits, fees (including annual fees) or late charge penalties
payable by Mortgagors, or amounts received by the Servicer for the accounts of
Mortgagors for application towards the payment of taxes,
28
insurance premiums, assessments, excess pay off amounts and similar items. The
Servicer shall remit all Foreclosure Profits to the Sponsor.
The Trustee shall hold amounts deposited in the Collection Account as
trustee for the Securityholders, the Insurer and ▇▇▇▇▇▇▇ Mac. The Servicer shall
notify the Trustee, the Insurer, and ▇▇▇▇▇▇▇ Mac in writing on each
Determination Date of the amount of payments and collections in the Collection
Account allocable to Interest Collections and Principal Collections for the
related Payment Date. Following such notification, the Servicer shall be
entitled to withdraw from the Collection Account and retain any amounts that
constitute income and gain realized from the investment of such payments and
collections.
At the direction of the Servicer, the Trustee shall invest funds in the
Collection Account in Eligible Investments. All income and gain realized from
any investment in Eligible Investments of funds in the Collection Account shall
be for the benefit of the Servicer and shall be subject to its withdrawal from
time to time. The amount of any losses incurred in respect of the principal
amount of any such investments shall be deposited in the Collection Account by
the Servicer out of its own funds immediately as realized.
Section 3.03. Withdrawals from the Collection Account. From time to time,
withdrawals may be made from the Collection Account by the Servicer for the
following purposes:
(i) If not received by the Servicer pursuant to Section 3.02(b), to the
Servicer as payment for its Servicing Fee pursuant to Section 3.08;
(ii) To pay to the Servicer amounts on deposit in the Collection Account
that are not to be included in the distributions and payments pursuant to
Section 8.7 of the Pooling Agreement to the extent provided by the second
to the last and the last paragraph of Section 3.02(b);
(iii) To make or to permit the Paying Agent to make distributions and
payments pursuant to Section 8.7 of the Pooling Agreement;
(iv) Prior to the Collection Period preceding the commencement of the
Rapid Amortization Period, to pay to the Sponsor the amount of any
Additional Balances as and when created during the related Collection
Period; provided, that the aggregate amount so paid to the Sponsor in
respect of Additional Balances at any time during any Collection Period
shall not exceed the amount of Principal Collections theretofore received
for such Collection Period;
(v) To pay to the Servicer any Liquidation Expenses not reimbursed prior
to the deposit of Net Liquidation Proceeds to the Collection Account;
(vi) Upon termination of the Trust, to make any payments required by
Section 7.01.
If the Servicer deposits in the Collection Account any amount not required
to be deposited therein or any amount in respect of payments by Mortgagors made
by checks
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subsequently returned for insufficient funds or other reason for non-payment it
may at any time withdraw such amount from the Collection Account, and any such
amounts shall not be included in the amounts to be deposited in the Collection
Account pursuant to Section 3.02(b), any provision herein to the contrary
notwithstanding.
Section 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses. The Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance naming the Servicer or the related subservicer as loss payee
thereunder providing extended coverage in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan from time to time or (ii) the combined principal balance owing on
such Mortgage Loan and any mortgage loan senior to such Mortgage Loan from time
to time. The Servicer shall also maintain on property acquired upon foreclosure,
or by deed in lieu of foreclosure, hazard insurance with extended coverage in an
amount which is at least equal to the lesser of (i) the maximum insurable value
from time to time of the improvements which are a part of such property or (ii)
the combined principal balance owing on such Mortgage Loan and any mortgage loan
senior to such Mortgage Loan at the time of such foreclosure or deed in lieu of
foreclosure plus accrued interest and the good-faith estimate of the Servicer of
related Liquidation Expenses to be incurred in connection therewith. Amounts
collected by the Servicer under any such policies shall be deposited in the
Collection Account to the extent called for by Section 3.02. In cases in which
any Mortgaged Property is located in a federally designated flood area, the
hazard insurance to be maintained for the related Mortgage Loan shall include
flood insurance. All such flood insurance shall be in such amounts as are
required under applicable guidelines of the Federal Flood Emergency Act. The
Servicer shall be under no obligation to require that any Mortgagor maintain
earthquake or other additional insurance and shall be under no obligation itself
to maintain any such additional insurance on property acquired in respect of a
Mortgage Loan, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance. If
the Servicer shall obtain and maintain a blanket policy consistent with prudent
industry standards insuring against hazard losses on all of the Mortgage Loans
in an aggregate amount prudent under industry standards, it shall (a)
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.04 and (b) if there shall have been a loss
which would have been covered by such policy, deposit in the Collection Account
without right of reimbursement, as the case may be, the amount not otherwise
payable under the blanket policy because of any deductible clause.
Section 3.05. Assumption and Modification Agreements. In any case in which
a Mortgaged Property has been or is about to be conveyed by the Mortgagor, the
Servicer shall exercise its right to accelerate the maturity of such Mortgage
Loan consistent with the then current practice of the Servicer and without
regard to the inclusion of such Mortgage Loan in the Trust. If it elects not to
enforce its right to accelerate or if it is prevented from doing so by
applicable law, the Servicer (so long as such action conforms with the
underwriting standards generally acceptable in the industry at the time for new
origination) is authorized to take or enter into an assumption and modification
agreement from or with the Person to whom such Mortgaged Property has been or is
about to be conveyed, pursuant to which such Person becomes liable under the
Loan Agreement and, to the extent permitted by applicable law, the Mortgagor
remains liable thereon. The Servicer shall notify the Trustee that any
assumption and modification agreement has been completed by delivering to the
Trustee an Officer's Certificate
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signed by a Servicing Officer certifying that such agreement is in compliance
with this Section 3.05 and by forwarding to the Trustee the original copy of
such assumption and modification agreement. Any such assumption and modification
agreement shall, for all purposes, be considered a part of the related Mortgage
File to the same extent as all other documents and instruments constituting a
part thereof. No change in the terms of the related Loan Agreement may be made
by the Servicer in connection with any such assumption to the extent that such
change would not be permitted to be made in respect of the original Loan
Agreement pursuant to the fourth paragraph of Section 3.01(a). Any fee collected
by the Servicer for entering into any such agreement will be retained by the
Servicer as additional servicing compensation.
Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans. The Servicer shall foreclose upon or otherwise
comparably convert to ownership Mortgaged Properties securing such of the
Mortgage Loans as come into and continue in default when, in the opinion of the
Servicer based upon the practices and procedures referred to in the following
sentence, no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.02; provided, that if the Servicer has knowledge
or reasonably believes that any Mortgaged Property is affected by hazardous or
toxic wastes or substances and that the acquisition of such Mortgaged Property
would not be commercially reasonable, then the Servicer will not cause the Trust
to acquire title to such Mortgaged Property in a foreclosure or similar
proceeding. In connection with such foreclosure or other conversion, the
Servicer shall follow such practices (including, in the case of any default on a
related senior mortgage loan, the advancing of funds to correct such default)
and procedures as it shall deem necessary or advisable and as shall be normal
and usual in its general mortgage servicing activities. The foregoing is subject
to the proviso that the Servicer shall not be required to incur any Liquidation
Expenses or to otherwise expend its own funds in connection with any foreclosure
or towards the correction of any default on a related senior mortgage loan or
restoration of any property unless it shall determine that such expenditure will
increase Net Liquidation Proceeds.
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 issued to the Trustee, or to its nominee on behalf of the Trust.
The Servicer, in its sole discretion, shall have the right but not the
obligation to purchase for its own account from the Trust any Mortgage Loan
which is 91 days or more delinquent. The Servicer shall notify ▇▇▇▇▇▇▇ Mac and
the Insurer in writing of any such purchase. The price for any Mortgage Loan
purchased hereunder (which shall be at a purchase price equal to the Loan
Purchase Price thereof), shall be deposited in the Collection Account and the
Trustee, upon receipt of a certificate from the Servicer in the form of Exhibit
C-1 hereto, shall release or cause to be released to the Servicer the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment prepared by the Servicer, in each case without recourse,
representation or warranty, as shall be necessary to vest in the purchaser of
such Mortgage Loans any Mortgage Loans released pursuant hereto and the Servicer
shall succeed to all the Trustee's right, title and interest in and to such
Mortgage Loans and all security and documents related thereto. Such assignment
shall be an assignment outright and not for security. The Servicer shall
thereupon own such Mortgage Loans, and all security and documents, free of any
further
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obligation to the Trustee, the Insurer, ▇▇▇▇▇▇▇ Mac, the Securityholders or the
Residual Certificateholders with respect thereto.
Section 3.07. Trustee to Cooperate. On or before each Payment Date, the
Servicer will notify the Trustee of the payment in full of the Principal Balance
of any Mortgage Loan during the preceding Collection Period, which notification
shall be by a certification (which certification shall include a statement to
the effect that all amounts received in connection with such payment which are
required to be deposited in the Collection Account pursuant to Section 3.02 have
been so deposited or credited) of a Servicing Officer. Upon any such payment in
full, the Servicer is authorized to execute, pursuant to the authorization
contained in Section 3.01, if the assignments of Mortgage have been recorded as
required hereunder, an instrument of satisfaction regarding the related
Mortgage, which instrument of satisfaction shall be recorded by the Servicer if
required by applicable law and be delivered to the Person entitled thereto. It
is understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or transfer shall be reimbursed from amounts
deposited in the Collection Account. If the Trustee is holding the Mortgage
Files, from time to time and as appropriate for the servicing or foreclosure of
any Mortgage Loan, or in connection with the payment in full of the Principal
Balance of any Mortgage Loan, the Trustee shall, upon request of the Servicer
and delivery to the Trustee of a Request for Release substantially in the form
attached hereto as Exhibit C signed by a Servicing Officer, release the related
Mortgage File to the Servicer and the Trustee shall execute such documents, in
the forms provided by the Servicer, as shall be necessary to the prosecution of
any such proceedings or the taking of other servicing actions. Such trust
receipt shall obligate the Servicer to return the Mortgage File to the Trustee
when the need therefor by the Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that hereinabove specified, the trust receipt shall be
released by the Trustee.
In order to facilitate the foreclosure of the Mortgage securing any
Mortgage Loan that is in default following recordation of the Assignments of
Mortgage in accordance with the provisions hereof, the Trustee shall, if so
requested in writing by the Servicer, execute an appropriate assignment in the
form provided to the Trustee by the Servicer to assign such Mortgage Loan for
the purpose of collection to the Servicer or to the related subservicer (any
such assignment shall unambiguously indicate that the assignment is for the
purpose of collection only), and, upon such assignment, the Servicer will
thereupon bring all required actions in its own name and otherwise enforce the
terms of the Mortgage Loan and deposit the Net Liquidation Proceeds, exclusive
of Foreclosure Profits, received with respect thereto in the Collection Account.
In the event that all delinquent payments due under any such Mortgage Loan are
paid by the Mortgagor and any other defaults are cured, then the Servicer shall,
within two Business Days, reassign such Mortgage Loan to the Trustee and return
the related Mortgage File to the place where it was being maintained. The
Residual Certificateholders shall be deemed to have repurchased the ownership
interest in any Liquidated Mortgage Loan in Pool I beneficially held by Holders
of the Class A-1 Certificates. After such repurchase, the Servicer, if requested
by such Residual Certificateholders and if offered suitable indemnification and
reimbursement for expenses, is authorized to seek a deficiency judgment if
permitted by law against the Mortgagor under such Liquidated Mortgage Loan on
behalf of the Residual Certificateholders to the extent of any Liquidation Loss
Amount.
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Section 3.08. Servicing Compensation; Payment of Certain Expenses by
Servicer. The Servicer shall be entitled to receive the Servicing Fee pursuant
to Section 3.03 as compensation for its services in connection with servicing
the Mortgage Loans. Moreover, additional servicing compensation in the form of
late payment charges or other receipts not required to be deposited in the
Collection Account (other than Foreclosure Profits) shall be retained by the
Servicer. The Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder (including payment of all other fees
and expenses not expressly stated hereunder to be for the account of the
Securityholders and the Residual Certificateholders) and shall not be entitled
to reimbursement therefor except as specifically provided herein. Liquidation
Expenses are reimbursable to the Servicer solely from related Liquidation
Proceeds.
Section 3.09. Annual Statement as to Compliance.
(a) The Servicer will deliver to the Trustee, the Insurer, ▇▇▇▇▇▇▇ Mac and
the Rating Agencies, on or before March 31 of each year, beginning March 31,
2001, an Officer's Certificate stating that (i) a review of the activities of
the Servicer during the preceding fiscal year (or such shorter period as is
applicable in the case of the first report) and of its performance under this
Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all
of its material obligations under this Agreement throughout such fiscal year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof.
(b) The Servicer shall deliver to the Trustee, the Insurer, ▇▇▇▇▇▇▇ Mac and
each of the Rating Agencies, promptly after having obtained knowledge thereof,
but in no event later than five Business Days thereafter, written notice by
means of an Officer's Certificate of any event which with the giving of notice
or the lapse of time or both, would become an Event of Servicing Termination.
Section 3.10. Annual Servicing Report. On or before March 31 of each year,
beginning March 31, 2001, the Servicer, at its expense, shall cause a firm of
nationally recognized independent public accountants (who may also render other
services to the Servicer) to furnish a report to the Trustee, the Insurer,
▇▇▇▇▇▇▇ Mac and each Rating Agency to the effect that such firm has examined
certain documents and records relating to the servicing of mortgage loans during
the most recent fiscal year then ended under pooling and servicing agreements
(substantially similar to this Agreement, including this Agreement), that such
examination was conducted substantially in compliance with the audit guide for
audits of non-supervised mortgagees approved by the Department of Housing and
Urban Development for use by independent public accountants (to the extent that
the procedures in such audit guide are applicable to the servicing obligations
set forth in such agreements) and that such examination has disclosed no items
of noncompliance with the provisions of this Agreement which, in the opinion of
such firm, are material, except for such items of noncompliance as shall be set
forth in such report.
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Section 3.11. Annual Opinion of Counsel. On or before March 31 of each
year, beginning March 31, 2001, the Sponsor, at its expense, shall deliver to
the Trustee, the Insurer and ▇▇▇▇▇▇▇ Mac the applicable Opinion of Counsel
specified in Exhibit B hereto.
Section 3.12. Access to Certain Documentation and Information Regarding the
Mortgage Loans.
(a) Servicer shall provide to the Trustee, the Insurer, ▇▇▇▇▇▇▇ Mac, any
Securityholders that are federally insured savings and loan associations, the
Office of Thrift Supervision, successor to the Federal Home Loan Bank Board, the
FDIC and the supervisory agents and examiners of the Office of Thrift
Supervision access to the documentation regarding the Mortgage Loans required by
applicable regulations of the Office of Thrift Supervision and the FDIC (acting
as operator of the SAIF or the BIF), such access being afforded without charge
but only upon reasonable request and during normal business hours at the offices
of the Servicer. Nothing in this Section 3.12 shall derogate from the obligation
of the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Servicer to provide
access as provided in this Section 3.12 as a result of such obligation shall not
constitute a breach of this Section 3.12.
(b) The Servicer shall supply information in such form as the Trustee shall
reasonably request to the Trustee and the Paying Agent, on or before the start
of the Determination Date preceding the related Payment Date, as is required in
the Trustee's reasonable judgment to enable the Paying Agent or the Trustee, as
the case may be, to make required distributions and to furnish the required
reports to Securityholders and to make any claim under the Policy or Guarantee.
Section 3.13. Maintenance of Certain Servicing Insurance Policies. The
Servicer shall maintain, at its own expense, a blanket fidelity bond (the
"Fidelity Bond") and an errors and omissions insurance policy, with broad
coverage with financially responsible companies on all officers, employees, or
other persons acting in any capacity with regard to the Mortgage Loans to handle
funds, money, documents and papers relating to the Mortgage Loans. The Fidelity
Bond and errors and omissions insurance policy shall be in the form of the
Mortgage Banker's Blanket Bond and shall protect and insure the Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons. Such Fidelity Bond shall also protect and insure
the Servicer against losses in connection with the failure to maintain any
insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 3.13 requiring the
Fidelity Bond and errors and omissions insurance policy shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such bond and insurance policy shall
be at least equal to the corresponding amounts required by ▇▇▇▇▇▇▇ Mac in
▇▇▇▇▇▇▇ Mac's Seller/Servicer's Guide. Upon request of the Trustee, the Servicer
shall cause to be delivered to the Trustee a certified true copy of the 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
days' prior written notice to the Trustee.
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Section 3.14. Reports to the Securities and Exchange Commission. The
Trustee shall, on behalf of the Trust, cause to be filed with the Securities and
Exchange Commission any periodic reports required to be filed under the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission thereunder. Upon the
request of the Trustee, each of the Servicer and the Sponsor shall cooperate
with the Trustee in the preparation of any such report and shall provide to the
Trustee in a timely manner all such information or documentation as the Trustee
may reasonably request in connection with the performance of its duties and
obligations under this Section.
Section 3.15. Tax Returns. In accordance with Section 2.09 hereof, the
Servicer shall prepare and file any Federal, State or local income and franchise
tax return for the Trust as well as any other applicable return and apply for a
taxpayer identification number on behalf of the Trust as provided in Article V
of the Trust Agreement, including, without limitation, forms 1099 and 1065. The
Sponsor shall treat the Mortgage Loans as its property for all Federal, State or
local tax purposes and shall report all income earned thereon (including amounts
payable as fees to the Servicer) as its income for income tax purposes. In the
event the Trust shall be required pursuant to an audit or administrative
proceeding or change in applicable regulations to file Federal, State or local
tax returns, the Servicer shall prepare and file or shall cause to be prepared
and filed any tax returns required to be filed by the Trust; the Trustee shall
promptly sign such returns and deliver such returns after signature to the
Servicer and such returns shall be filed by the Servicer. The Trustee shall also
prepare or shall cause to be prepared all tax information required by law to be
distributed to Securityholders. In no event shall the Trustee or the Servicer be
liable for any liabilities, costs or expenses of the Trust, the Securityholders,
the Residual Certificateholders or the Security Owners arising under any tax
law, including, without limitation, Federal, state or local income and franchise
or excise taxes or any other tax imposed on or measured by income (or any
interest or penalty with respect thereto or arising from a failure to comply
therewith), except as provided in Sections 5.06 and 5.07 of this Agreement. The
Trustee shall represent the Trust in any administrative or judicial proceedings
relating to an examination or audit by any governmental taxing authority or
otherwise act on behalf of the Trust in relation to any tax matter involving the
Trust, provided, that to the extent that such representation affects ▇▇▇▇▇▇▇
Mac's obligations under the Guarantee, the Trustee agrees to consult with
▇▇▇▇▇▇▇ Mac and accommodate ▇▇▇▇▇▇▇ Mac's reasonable requests.
Section 3.16. Information Required by the Internal Revenue Service
Generally and Reports of Foreclosures and Abandonments of Mortgaged Property.
The Servicer shall prepare and deliver all federal and state information reports
when and as required by all applicable state and federal income tax laws. In
particular, with respect to the requirement under Section 6050J of the Code to
the effect that the Servicer shall make reports of foreclosures and abandonments
of any mortgaged property for each year beginning in 2000, the Servicer shall
file reports relating to each instance occurring during the previous calendar
year in which the Servicer (i) on behalf of the Trustee acquires an interest in
any Mortgaged Property through foreclosure or other comparable conversion in
full or partial satisfaction of a Mortgage Loan, or (ii) knows or has reason to
know that any Mortgaged Property has been abandoned. The reports from the
Servicer shall be in form and substance sufficient to meet the reporting
requirements imposed by Section 6050J.
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Section 3.17. Inspection Rights; Miscellaneous
(a) Within 90 days of the Closing Date, ▇▇▇▇▇▇▇ Mac will have the right to
review up to 500 of the Mortgage Files and the related underwriting
documentation in order to ascertain whether each Mortgage Loan was originated
generally in accordance with the Servicer's underwriting criteria.
If ▇▇▇▇▇▇▇ Mac determines that more than 20% (by number) of the 500
Mortgage Loans in such sample were not so originated in accordance with such the
Servicer's underwriting criteria, ▇▇▇▇▇▇▇ Mac will have the right to review
additional Mortgage Loans until ▇▇▇▇▇▇▇ Mac has reviewed a sample of Mortgage
Loans less than 20% (by number) of which were not so originated.
With respect to any Mortgage Loan for which the value of the related
Mortgaged Property at the time of origination did not adequately support the
original loan amount of the Mortgage Loan due to the value, condition,
marketability or adverse environmental conditions of such Mortgaged Property,
the Sponsor shall repurchase such Mortgage Loan or replace such Mortgage Loan
with a substitute Mortgage Loan acceptable to ▇▇▇▇▇▇▇ Mac and the Insurer. In
addition, ▇▇▇▇▇▇▇ Mac shall have the right to collect data on an additional
1,200 Mortgage Loans over and above the Mortgage Loans reviewed as described in
the first paragraph of this Section 3.17(a).
▇▇▇▇▇▇▇ Mac has the right to review any Mortgage Loan at any time. With
respect to any Mortgage Loan that goes into foreclosure, ▇▇▇▇▇▇▇ Mac will have
the right to request that the Servicer deliver a copy of the related Mortgage
File to ▇▇▇▇▇▇▇ Mac.
(b) ▇▇▇▇▇▇▇ Mac, for a period of two years from the Closing Date, may
contact the Servicer to confirm that the Servicer continues actively to engage
in a business to originate mortgage loans to low-income families and to obtain
other non-proprietary information about the Sponsor's activities that may assist
▇▇▇▇▇▇▇ Mac in completing its own regulatory requirements. The Servicer will use
its best efforts to provide such information to ▇▇▇▇▇▇▇ Mac.
(c) For each Mortgage Loan, the Servicer will accurately and fully report
its borrower credit files to each of Equifax Credit Information Services, Inc.,
TransUnion, LLC and Experion Information Solution, Inc. (or their successors) in
a timely manner on a monthly basis.
(d) ▇▇▇▇▇▇▇ Mac, from time to time, shall have the right to audit the
Servicer's servicing practices and to review the Mortgage Files. The Servicer
shall forward to ▇▇▇▇▇▇▇ Mac and the Insurer all of its financial statements.
(e) The Servicer will not increase the applicable Credit Limit on any HELOC
Mortgage Loan included in Pool I.
(f) The Servicer will not allow any further draws on any HELOC Mortgage
Loan if (i) the related borrower is 90 days delinquent in payment of principal
and interest on such HELOC Mortgage Loan; (ii) the related borrower is 60 days
delinquent in payment of principal and interest on such HELOC Mortgage Loan,
unless a payment has been made by the borrower in the last 30 days on that
60-day delinquent HELOC Mortgage Loan; or (iii) any loan senior to
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that HELOC Mortgage Loan is 90 days delinquent in payment of principal and
interest or 60 days delinquent in such payment, unless a payment has been made
by the borrower in the last 30 days on that 60-day delinquent loan; provided,
however, that if the Servicer does not service such senior loan, then the
condition described in clause (iii) will be satisfied to the extent that, to the
best knowledge of the Servicer, such senior loan is not so delinquent.
ARTICLE IV
SERVICING CERTIFICATE
Section 4.01. Servicing Certificate. Not later than seven (7) Business Days
prior to the Payment Date, the Servicer shall deliver to the Trustee, a
Servicing Certificate (in written form or the form of computer readable media or
such other form as may be agreed to by the Trustee and the Servicer), together
with an Officer's Certificate to the effect that such Servicing Certificate is
true and correct in all material respects, stating the related Collection
Period, Payment Date, the series number of the Securities, the date of this
Agreement, and:
(i) the aggregate amount of collections received on the Mortgage Loans on
or prior to the Determination Date in respect of such Collection Period;
(ii) the aggregate amount of (a) Interest Collections and (b) Principal
Collections for such Collection Period;
(iii) the Principal Collections for such Payment Date, separately stating
the components thereof;
(iv) any accrued and unpaid Servicing Fees for previous Collection
Periods and the Servicing Fee for such Collection Period;
(v) the related Pool Balance for each Pool as of the end of the preceding
Collection Period and as of the end of the second preceding Collection
Period;
(vi) the aggregate amount of Additional Balances created during the
previous Collection Period;
(vii) by Pool and in the aggregate, the number and aggregate Principal
Balances of Mortgage Loans (A) as to which the Minimum Monthly Payment is
delinquent for 30-59 days, 60-89 days, 90-119 days, 120-149 days, 150-179
days and 180 or more days respectively and (B) that have become REO, in
each case as of the end of the preceding Collection Period; (C) as to which
foreclosure proceedings have been commenced, and (D) in bankruptcy and
delinquent as of the close of business on the last day of the calendar
month preceding such Distribution Date;
(viii) the amount to be paid to the Servicer pursuant to Section
8.7(d)(xi) of the Pooling Agreement;
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(ix) the number and Principal Balances of any Mortgage Loans removed to
the Sponsor pursuant to Section 2.07;
The Trustee shall conclusively rely upon the information contained in a
Servicing Certificate for purposes of making distributions pursuant to Section
8.7 of the Pooling Agreement, shall have no duty to inquire into such
information and shall have no liability in so relying. The format and content of
the Servicing Certificate may be modified by the mutual agreement of the
Servicer, the Trustee, the Insurer and ▇▇▇▇▇▇▇ Mac. The Servicer shall give
notice of any such change to the Rating Agencies.
Section 4.02. Reserved.
Section 4.03. The Trustee Remittance Report.
(a) On each Determination Date by noon Eastern Standard time, the Trustee
shall furnish a report (the "Trustee Remittance Report") in the form attached as
Exhibit F-1 to this Agreement (together with a statement containing the
information that is required to be included in the statement to be prepared by
the Trustee pursuant to Section 4.03) to the Guarantor and the Insurer by
electronic medium as agreed to by the Trustee, the Guarantor and the Insurer, or
as applicable.
(b) Subject to paragraph (d) below, if in any month the Trustee fails to
deliver the Trustee Remittance Report by 5:00 p.m. Eastern Standard time on the
related Determination Date, the Guarantor shall use its best efforts to
determine the amount of any required Guarantor Payment. If on any Distribution
Date the Guarantor makes any Guarantee Payment as a result of the failure of the
Trustee to distribute any remittance, the Trustee shall pay the Guarantor from
its own funds (not from the proceeds of the Trust Fund), not later than the
fourth Business Day following such Distribution Date, a $100 fee plus an amount
equal to the product of (i) the principal portion of such Guarantee Payment,
(ii) a percentage equal to (A) the Prime Rate plus 2.00% divided by (B) 365 and
(iii) the number of days between the Determination Date and the date on which
the Guarantor received the Trustee Remittance Report.
(c) Subject to paragraph (d) below, if in any month the Trustee fails to
provide the Guarantor the Trustee Remittance Report on or prior to the
Determination Date, the Trustee shall pay to the Guarantor the following
amounts: (i) upon the first such failure, $500; (ii) upon the second such
failure, $750; and (iii) upon the third such failure, $1,000; provided, however,
that the Trustee shall not be required to make any such payment upon the first
such failure during each successive two year period following the Closing Date.
The fourth consecutive such failure to provide a Trustee Remittance Report to
the Guarantor pursuant to Section 4.03 (a) shall constitute an event of default
and permit the Guarantor to remove the Trustee for cause.
(d) The Trustee shall have no responsibility or liability (including
removal as Trustee) under paragraphs (b) and (c) of this Section 4.03 if the
Trustee's failure to timely deliver the Trustee Remittance Report is due to the
failure of the Servicer to furnish the Trustee with a Servicing Certificate or
Loan Data Remittance Report in accordance with Sections 4.01 and 4.04(a). If the
Trustee's failure to timely deliver the Trustee Remittance Report is due to the
failure of the Servicer to furnish the Trustee with a Servicing Certificate or
Loan Data
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Remittance Report in accordance with Sections 4.01 and 4.04(a), the Servicer
shall pay to the Guarantor the amount set forth in Section 4.03(b) above
provided, however, that the Servicer shall not be required to make any such
payment upon the first such failure during each successive two year period
following the Closing Date. The fourth consecutive such failure to provide the
Trustee with a report to accordance with Section 4.04(a) and thereby causing the
Trustee's failure to timely deliver a Trustee Remittance Report to the Guarantor
pursuant to Section 4.03(a) shall constitute an Event of Servicing Termination
and permit the Guarantor to remove the Servicer for cause.
(e) On each Determination Date by noon Eastern Standard time, the Trustee
shall forward to the Guarantor by electronic medium as agreed to by the Trustee
and the Guarantor a report describing each Mortgage Loan that became a
Liquidated Mortgage Loan during the related Collection Period, any Liquidation
Proceeds received or Liquidation Loss Amounts incurred with respect to each such
Liquidated Mortgage Loan and Liquidation Expenses incurred in the liquidation of
any such Liquidated Mortgage Loan, in each case to the extent that the Trustee
has received from the Servicer a report providing such information.
Section 4.04. Loan Data Remittance Report.
(a) On the seventh Business Day before each Payment Date (the "Loan Data
Remittance Date") by noon Eastern Standard time, the Servicer shall furnish a
report (the "Loan Data Remittance Report") in the form attached as Exhibit F-2
to this Agreement to the Guarantor, the Insurer and the Trustee by electronic
medium as agreed to by the Servicer, the Trustee, the Insurer and the Guarantor.
(b) If in any month the Servicer fails to provide the Guarantor the Loan
Data Remittance Report on or prior to the Loan Data Remittance Date, the
Servicer shall pay to the Guarantor the following amounts: (i) upon the first
such failure, $500; (ii) upon the second such failure, $750; and (iii) upon the
third such failure, $1,000; provided, however, that the Servicer shall not be
required to make any such payment upon the first such failure during each
successive two year period following the Closing Date. The fourth consecutive
such failure to provide a Loan Data Remittance Report to the Guarantor pursuant
to Section 4.04(a) shall constitute an event of default and permit the Guarantor
to remove the Servicer for cause.
Section 4.05. Reserve Fund.
(a) Amounts on deposit in the Reserve Fund will, at the direction of the
Servicer, be invested in Eligible Investments maturing no later than the day
before the next Payment Date or on such Payment Date if approved by the Rating
Agencies and the Controlling Party.
All income and gain realized from any investment of funds in the Reserve
Fund shall be considered part of the Reserve Fund until released pursuant to the
Pooling Agreement. Following that point all earnings shall go to the Sponsor.
The Sponsor will report for Federal, state and local income tax purposes the
income, if any, represented by the Reserve Fund.
(b) Following the termination of the Trust pursuant to Section 7.01 hereof,
the Trustee shall withdraw all amounts then on deposit in the Reserve Fund
pursuant to the Pooling Agreement.
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ARTICLE V
THE SERVICER AND THE SPONSOR
Section 5.01. Liability of the Servicer and the Sponsor. The Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Servicer herein. The Sponsor
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Sponsor.
Section 5.02. Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer or the Sponsor. Any corporation into which the Servicer or the
Sponsor may be merged or consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Servicer or the Sponsor shall
be a party, or any corporation succeeding to the business of the Servicer or the
Sponsor, shall be the successor of the Servicer or the Sponsor, as the case may
be, 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.
Section 5.03. Limitation on Liability of the Servicer and Others. Neither
the Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust or the Securityholders or
Residual Certificateholders for any action taken or for refraining from the
taking of any action by the Servicer in good faith pursuant to this Agreement,
or for errors in judgment; provided, however, that this provision shall not
protect the Servicer or any such Person against any breach of representations
and warranties made herein, or against any specific liability imposed on the
Servicer for a breach of its servicing under this Agreement or against liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties of the Servicer or by reason of reckless
disregard of obligations and duties of the Servicer hereunder. The Servicer and
any director or officer or employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Servicer and any
director or officer or employee or agent of the Servicer shall be indemnified by
the Trust and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Securities,
other than any loss, liability or expense related to any specific Mortgage Loan
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of its willful misfeasance, bad faith or negligence, breach of
representations and warranties made herein, or against any specific liability
imposed on the Servicer for a breach of its servicing under this Agreement or
against in the performance of duties hereunder or by reason of its reckless
disregard of obligations and duties hereunder. The Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to duties to service the Mortgage Loans in accordance with this
Agreement, and which in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may in its sole discretion undertake any
such action which it may deem necessary or desirable in respect of this
Agreement, and the rights and duties of the parties hereto and the interests of
the Securityholders and Residual Certificateholders hereunder. In such event,
the reasonable legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust and
the Servicer shall only be entitled to be reimbursed therefor pursuant to
Section 8.7(d)(xi) of the Pooling Agreement. The
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Servicer's right to indemnity or reimbursement pursuant to this Section 5.03
shall survive any resignation or termination of the Servicer pursuant to Section
5.04 or 6.01 with respect to any losses, expenses, costs or liabilities arising
prior to such resignation or termination (or arising from events that occurred
prior to such resignation or termination).
Section 5.04. Servicer Not to Resign. Subject to the provisions of Section
5.02, the Servicer shall not resign from the obligations and duties hereby
imposed on it except (i) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Servicer so causing such a conflict being of a type and nature
carried on by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement or (ii) upon satisfaction of the following conditions: (a) the
Servicer has proposed a successor servicer to the Trustee, the Insurer and
▇▇▇▇▇▇▇ Mac in writing and such proposed successor servicer is reasonably
acceptable to the Trustee; (b) each Rating Agency shall have delivered a letter
to the Trustee, the Insurer and ▇▇▇▇▇▇▇ Mac prior to the appointment of the
successor servicer stating that the proposed appointment of such successor
servicer as Servicer hereunder will not result in the qualification, reduction
or withdrawal of the then current rating of the Securities without regard to the
Policy; and (c) such proposed successor servicer is reasonably acceptable to the
Controlling Party, as evidenced by a letter from each to the Trustee; provided,
however, that no such resignation by the Servicer shall become effective until
the Trustee or successor servicer designated by the Servicer as provided above
shall have assumed the Servicer's responsibilities and obligations hereunder or
the Trustee shall have designated a successor servicer in accordance with
Section 6.02. Any such resignation shall not relieve the Servicer of
responsibility for any of the obligations specified in Sections 6.01 and 6.02 as
obligations that survive the resignation or termination of the Servicer. Any
such determination permitting the resignation of the Servicer pursuant to clause
(i) above shall be evidenced by an Opinion of Counsel to such effect delivered
to the Trustee, the Insurer and ▇▇▇▇▇▇▇ Mac. The Servicer shall have no claim
(whether by subrogation or otherwise) or other action against any Securityholder
or Residual Certificateholder for any amounts paid by the Servicer pursuant to
any provision of this Agreement.
Section 5.05. Delegation of Duties. In the ordinary course of business, the
Servicer at any time may delegate any of its duties hereunder to any Person,
including any of its Affiliates, or any subservicer referred to in Section 3.01,
who agrees to conduct such duties in accordance with standards comparable to
those with which the Servicer complies pursuant to Section 3.01. Such delegation
shall not relieve the Servicer of its liabilities and responsibilities with
respect to such duties and shall not constitute a resignation within the meaning
of Section 5.04. The Servicer's delegation of any of its duties hereunder to any
subservicer shall be subject to the prior approval of the Controlling Party;
provided, that any such subservicer must be an "approved servicer" of ▇▇▇▇▇▇▇
Mac. The Servicer shall terminate its delegation of any of its duties hereunder
to any subservicer at the Controlling Party's reasonable request.
Section 5.06. Indemnification of the Trust by the Servicer. The Servicer
shall indemnify and hold harmless the Trust, the Owner Trustee and the Trustee
from and against any loss, liability, expense, damage or injury suffered or
sustained by reason of the Servicer's activities or omissions in servicing or
administering the Mortgage Loans that are not in accordance with this Agreement,
including, but not limited to, any judgment, award, settlement,
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reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim. Any
such indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this Section
5.06 shall survive termination of this Agreement.
Section 5.07. Indemnification of the Trust by the Sponsor. Notwithstanding
anything to the contrary contained herein, the Sponsor (i) agrees to be liable
directly to the injured party for the entire amount of any losses, claims,
damages, liabilities and expenses of the Trust (other than those attributable to
a Securityholder as a result of defaults on the Mortgage Loans) to the extent
that the Sponsor would be liable if the Trust were a partnership under the
Delaware Revised Uniform Limited Partnership Act in which the Sponsor was a
general partner and (ii) shall indemnify and hold harmless the Trust, the Owner
Trustee and the Trustee from and against any loss, liability, expense, damage,
claim or injury (other than those attributable to a Securityholder as a result
of defaults on the Mortgage Loans) arising out of or based on this Agreement by
reason of any acts, omissions, or alleged acts or omissions arising out of
activities of the Trust, the Owner Trustee or the Trustee, or the actions of the
Servicer, including, but not limited to, amounts payable to the Servicer
pursuant to Section 5.03, any judgment, award, settlement, reasonable attorneys'
fees and other costs or expenses incurred in connection with the defense of any
actual or threatened action, proceeding or claim; provided that the Sponsor
shall not indemnify the Owner Trustee or the Trustee (but shall indemnify any
other injured party) if such loss, liability, expense, damage or injury is due
to the Owner Trustee's or the Trustee's willful malfeasance, bad faith or
negligence, breach of representations and warranties made herein, or against any
specific liability imposed on the Owner Trustee or Trustee for a breach of its
obligations hereunder. The provisions of this indemnity shall run directly to
and be enforceable by an injured party subject to the limitations hereof.
Section 5.08. Limitation on Liability of the Sponsor. None of the directors
or officers or employees or agents of the Sponsor shall be under any liability
to the Trust, the Owner Trustee or the Trustee, the Securityholders or the
Residual Certificateholders, it being expressly understood that all such
liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement and the issuance of the
Securities; provided, however, that this provision shall not protect any such
Person against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith, negligence or breach of representations and
warranties made herein, or against any specific liability imposed on such Person
in the performance of the duties hereunder. Except as provided in Section 5.07,
the Sponsor shall not be under any liability to the Trust, the Owner Trustee or
the Trustee or the Securityholders or Residual Certificateholders for any action
taken or for refraining from the taking of any action in its capacity as Sponsor
pursuant to this Agreement whether arising from express or implied duties under
this Agreement; provided, however, that this provision shall not protect the
Sponsor against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of its duties or
by reason of reckless disregard of its obligations and duties hereunder. The
Sponsor and any director or officer or employee or agent of the Sponsor 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.
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ARTICLE VI
SERVICING TERMINATION
Section 6.01. Events of Servicing Termination. If any one of the following
events ("Events of Servicing Termination") shall occur and be continuing:
(i) Any failure by the Servicer to deposit in the Collection Account any
deposit required to be made under the terms of this Agreement which
continues unremedied for a period of one Business Day after the date upon
which written notice of such failure shall have been given to the Servicer
by the Trustee or to the Servicer and the Trustee by the Insurer or ▇▇▇▇▇▇▇
Mac or Holders of Securities evidencing more than 25% of the Principal
Balance of the Securities instruct otherwise; or
(ii) Failure on the part of the Servicer duly to observe or perform in
any material respect any other covenants or agreements of the Servicer set
forth in the Securities or in this Agreement, which failure continues
unremedied for a period of 15 days after the date on which written notice
of such failure, requiring the same to be remedied, and stating that such
notice is a "Notice of Default" hereunder, shall have been given to the
Servicer by the Trustee or to the Servicer and the Trustee by the Insurer
or ▇▇▇▇▇▇▇ Mac or the Holders of Securities evidencing more than 25% of the
Principal Balance of the Securities; or
(iii) The entry against the Servicer of a decree or order by a court or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days;
or
(iv) The consent by the Servicer to the appointment of a trustee,
conservator, receiver or liquidator in any insolvency, conservatorship,
receivership, readjustment of debt, marshalling of assets and liabilities
or similar proceedings of or relating to the Servicer or of or relating to
substantially all of its property; or the Servicer shall admit in writing
its inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations;
(v) the occurrence of an Event of Servicer Termination under the
Insurance Agreement;
(vi) the Servicer is no longer an "approved servicer" of ▇▇▇▇▇▇▇ Mac;
then, and in each and every such case, so long as an Event of Servicing
Termination shall not have been remedied by the Servicer, either the Trustee,
the Controlling Party or the Holders of Securities evidencing more than 50% of
the Outstanding Amount of the Securities, in each case with the consent of the
Controlling Party, by notice then given in writing to the Servicer (and to
43
the Trustee if given by the Insurer or the Holders of Securities) may terminate
all of the rights and obligations of the Servicer as servicer under this
Agreement. Upon the occurrence of a Servicer Termination Delinquency Rate
Trigger or Servicer Termination Loss Trigger as those terms are defined in the
Insurance Agreement, the Insurer may, in its reasonable discretion, terminate
all of the rights and obligations of the Servicer pursuant to the terms hereof.
Any such notice to the Servicer shall also be given to each Rating Agency,
▇▇▇▇▇▇▇ Mac and the Insurer. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Securities or the Mortgage Loans or otherwise, shall
pass to and be vested in the Trustee pursuant to and under this Section 6.01;
and, without limitation, the Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement of each
Mortgage Loan and related documents, or otherwise. The Servicer agrees to
cooperate with the Trustee in effecting the termination of the responsibilities
and rights of the Servicer hereunder, including, without limitation, the
transfer to the Trustee for the administration by it of all cash amounts that
shall at the time be held by the Servicer to be deposited by it in the
Collection Account, or that have been deposited by the Servicer in the
Collection Account or thereafter received by the Servicer with respect to the
Mortgage Loans. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with amending this Agreement to reflect such succession
as Servicer pursuant to this Section 6.01 shall be paid by the predecessor
Servicer (or if the predecessor Servicer is the Trustee, the initial Servicer)
upon presentation of reasonable documentation of such costs and expenses.
Notwithstanding the foregoing, a delay in or failure of performance under
Section 6.01(i) for a period of one Business Day or under Section 6.01(ii) for a
period of 15 days, shall not constitute an Event of Servicing Termination if
such delay or failure could not be prevented by the exercise of reasonable
diligence by the Servicer and such delay or failure was caused by an act of God
or the public enemy, acts of declared or undeclared war, public disorder,
rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes,
earthquakes or floods. The preceding sentence shall not relieve the Servicer
from using its best efforts to perform its respective obligations in a timely
manner in accordance with the terms of this Agreement and the Servicer shall
provide the Trustee, the Sponsor, ▇▇▇▇▇▇▇ Mac, the Insurer and the
Securityholders and Residual Certificateholders with an Officer's Certificate
giving prompt notice of such failure or delay by it, together with a description
of its efforts to so perform its obligations. The Servicer shall immediately
notify the Trustee, the Insurer and ▇▇▇▇▇▇▇ Mac in writing of any Events of
Servicing Termination.
Section 6.02. Trustee to Act; Appointment of Successor.
(a) On and after the time the Servicer receives a notice of termination
pursuant to Section 6.01 or resigns pursuant to Section 5.04, the Trustee shall
be the successor in all respects to the Servicer in its capacity as servicer
under this Agreement and the transactions set forth or provided for herein and
shall be subject to all the responsibilities, duties and liabilities relating
thereto placed on the Servicer by the terms and provisions hereof.
Notwithstanding the above, if the Trustee becomes the Servicer hereunder, it
shall have no responsibility or obligation (i) of repurchase or substitution
with respect to any Mortgage Loan, (ii) with respect to any
44
representation or warranty of the Servicer, and (iii) for any act or omission of
either a predecessor or successor Servicer other than the Trustee. As
compensation therefor, the Trustee shall be entitled to such compensation as the
Servicer would have been entitled to hereunder if no such notice of termination
had been given. In addition, the Trustee will be entitled to compensation with
respect to its expenses in connection with conversion of certain information,
documents and record keeping, as provided in Sections 6.7 and 6.8 of the Pooling
Agreement. Notwithstanding the above, (i) if the Trustee is unwilling to act as
successor Servicer, or (ii) if the Trustee is legally unable so to act, the
Trustee may with the consent of the Controlling Party (in the situation
described in clause (i)) or shall (in the situation described in clause (ii))
appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution, bank or other mortgage loan or
home equity loan servicer with all licenses and permits required to perform its
obligations under this Agreement and having a net worth of not less than
$15,000,000 as the successor to the Servicer hereunder in the assumption of all
or any part of the responsibilities, duties or liabilities of the Servicer
hereunder; provided that any such successor Servicer shall be acceptable to the
Controlling Party, as evidenced by its prior written consent, which consent
shall not be unreasonably withheld; and provided, further, that the appointment
of any such successor Servicer will not result in the qualification, reduction
or withdrawal of the ratings assigned to the Securities by the Rating Agencies
without regard to the Policy or the Guarantee. Pending appointment of a
successor to the Servicer hereunder, unless the Trustee is prohibited by law
from so acting, the Trustee shall act in such capacity as hereinabove provided.
In connection with such appointment and assumption, the successor shall be
entitled to receive compensation out of payments on Mortgage Loans in an amount
equal to the compensation which the Servicer would otherwise have received
pursuant to Section 3.08 (or such lesser compensation as the Trustee and such
successor shall agree). The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
(b) Any successor, including the Trustee, to the Servicer as servicer shall
during the term of its service as servicer (i) continue to service and
administer the Mortgage Loans for the benefit of the Securityholders and
Residual Certificateholders, the Insurer and ▇▇▇▇▇▇▇ Mac and (ii) maintain in
force a policy or policies of insurance covering errors and omissions in the
performance of its obligations as Servicer hereunder and a fidelity bond in
respect of its officers, employees and agents to the same extent as the Servicer
is so required pursuant to Section 3.13. The appointment of a successor Servicer
shall not affect any liability of the predecessor Servicer which may have arisen
under this Agreement prior to its termination as Servicer (including, without
limitation, any deductible under an Insurance Policy pursuant to Section 3.04),
nor shall any successor Servicer be liable for any acts or omissions of the
predecessor Servicer or for any breach by such Servicer of any of its
representations or warranties contained herein.
Section 6.03. Notification to Securityholders and Residual
Certificateholders. Upon any termination or appointment of a successor to the
Servicer pursuant to this Article VI or Section 5.04, the Trustee shall give
prompt written notice thereof to the Securityholders and Residual
Certificateholders (at their respective addresses appearing in the Security
Register and in the Residual Certificate Register), the Insurer, ▇▇▇▇▇▇▇ Mac and
each Rating Agency.
45
ARTICLE VII
TERMINATION
Section 7.01. Termination.
(a) The respective obligations and responsibilities of the Servicer, the
Sponsor and the Trustee created hereby (other than the obligation of the Trustee
to make certain payments to Securityholders after the final Payment Date and the
obligation of the Servicer to send certain notices as hereinafter set forth)
shall terminate upon the last action required to be taken by the Trustee on the
final Payment Date pursuant to this Article VII following the later of (A) the
Payment Date following payment in full of all amounts owing to the Insurer and
Guarantor and (B) the earliest of (i) the transfer, under the conditions
specified in Section 7.01(b), to the Sponsor of the Securityholders' interest in
each Mortgage Loan and all property acquired in respect of any Mortgage Loans
remaining in the Trust for an amount equal to the sum of (v) the sum of the
Class A-1 Certificate Principal Balance and the Class A-2 Note Principal
Balance, (w) the sum of accrued and unpaid Class A-1 Interest Payment Amount and
Class A-2 Interest Payment Amount through the day preceding the final Payment
Date, (x) the sum of the Class A-1 Deferred Interest and Class A-2 Deferred
Interest and any interest accrued on any Class A-1 Deferred Interest or Class
A-2 Deferred Interest to the extent legally permissible, (y) all amounts due and
owing the Insurer pursuant to the Insurance Agreement and Section 8.7 of the
Pooling Agreement and (z) all amounts due and owing ▇▇▇▇▇▇▇ Mac under the
Pooling Agreement, (ii) the day following the Payment Date on which the
distribution made to Securityholders has reduced the Class A-1 Certificate
Principal Balance and the Class A-2 Note Principal Balance to zero and no other
amounts are owed to the Securityholders hereunder, no other amounts are owed to
the Insurer pursuant to the Insurance Agreement and Section 8.7 of the Pooling
Agreement and no other amounts are owed to ▇▇▇▇▇▇▇ Mac under the Pooling
Agreement, (iii) the final payment or other liquidation of the last Mortgage
Loan remaining in the Trust (including, without limitation, the disposition of
the Mortgage Loans pursuant to Section 5.4 of the Pooling Agreement) or the
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (iv) the Payment Date in September 2026;
provided, however, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the date of death of the last surviving
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to
the Court of St. ▇▇▇▇▇, living on the date hereof. Upon termination in
accordance with clause (a)(B)(i) of this Section 7.01, the Trustee shall execute
such documents and instruments of transfer presented by the Sponsor, in each
case without recourse, representation or warranty, and take such other actions
as the Sponsor may reasonably request to effect the transfer of the Mortgage
Loans to the Sponsor.
(b) (i) The Sponsor shall have the right to exercise the option to effect
the transfer to the Sponsor of each Pool I Mortgage Loan pursuant to
Section 7.01(a)(B) above on any Payment Date on or after the Payment Date
immediately prior to which the Class A-1 Certificate Principal Balance is
less than ten percent (10%) of the Original Class A-1 Certificate Principal
Balance and all amounts due and owing to the Insurer for unpaid premiums
and unreimbursed draws on the Policy (in each case, related to the Class
A-1 Certificates) and all other amounts due and owing to the Insurer
pursuant to the Insurance Agreement, together with interest thereon as
provided under the Insurance
46
Agreement, and all amounts due and owing to ▇▇▇▇▇▇▇ Mac under the Pooling
Agreement, have been paid.
(ii) The Sponsor shall have the right to exercise the option to effect
the transfer to the Sponsor of each Pool II Mortgage Loan pursuant to
Section 7.01(a)(B) above on any Payment Date on or after the Payment Date
immediately prior to which the Class A-2 Note Principal Balance is less
than ten percent (10%) of the Original Class A-2 Note Principal Balance and
all amounts due and owing to the Insurer for unpaid premiums and
unreimbursed draws on the Policy (in each case, related to the Class A-2
Notes) and all other amounts due and owing to the Insurer for unpaid
premiums and unreimbursed draws on the Policy and all other amounts due and
owing to the Insurer pursuant to the Insurance Agreement and to ▇▇▇▇▇▇▇
Mac, together with interest thereon as provided under the Insurance
Agreement, have been paid.
(c) The Sponsor, at its expense, shall prepare and deliver to the Trustee
for execution, at the time the related Mortgage Loans are to be released to the
Sponsor, appropriate documents assigning each such Mortgage Loan from the
Trustee to the Sponsor and shall promptly record such assignments.
(d) The Sponsor shall not exercise its right to repurchase the Mortgage
Loans pursuant to Section 7.01(b) hereof if (a) such repurchase would result in
a draw on the Policy or a Guarantee Payment, without the consent of the Insurer
or ▇▇▇▇▇▇▇ Mac as applicable, which consent shall not be unreasonably withheld,
(b) reimbursement is due to the Insurer or ▇▇▇▇▇▇▇ Mac and (c) the
Overcollateralization Amount for Pool I and/or Pool II at such time does not
equal the Specified Overcollateralization Amount for such Pool (unless the
Controlling Party waives such requirement).
ARTICLE VIII
ADMINISTRATIVE DUTIES OF THE SERVICER
Section 8.01. Administrative Duties.
(a) Duties with Respect to the Pooling Agreement. The Servicer shall
perform all its duties and the duties of the Issuer under the Pooling Agreement.
In addition, the Servicer shall consult with the Owner Trustee as the Servicer
deems appropriate regarding the duties of the Issuer under the Pooling
Agreement. The Servicer shall monitor the performance of the Issuer and shall
advise the Owner Trustee when action is necessary to comply with the Issuer's
duties under the Pooling Agreement. The Servicer shall prepare for execution by
the Issuer or shall cause the preparation by other appropriate Persons of all
such documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Issuer to prepare, file or deliver pursuant to the
Pooling Agreement. In furtherance of the foregoing, the Servicer shall take all
necessary action that is the duty of the Issuer to take pursuant to the Pooling
Agreement.
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(b) Duties with Respect to the Issuer.
(i) In addition to the duties of the Servicer set forth in this Agreement
or any of the Basic Documents, the Servicer shall perform such calculations
and shall prepare for execution by the Issuer or the Owner Trustee or shall
cause the preparation by other appropriate Persons of all such documents,
reports, filings, instruments, certificates and opinions as it shall be the
duty of the Issuer or the Owner Trustee to prepare, file or deliver
pursuant to this Agreement or any of the Basic Documents or under state and
federal tax and securities laws, and at the request of the Owner Trustee
shall take all appropriate action that it is the duty of the Issuer to take
pursuant to this Agreement or any of the Basic Documents, including,
without limitation, pursuant to Sections 2.6 and 2.11 of the Trust
Agreement. In accordance with the directions of the Issuer or the Owner
Trustee, the Servicer shall administer, perform or supervise the
performance of such other activities in connection with the Mortgage Loans
(including the Basic Documents) as are not covered by any of the foregoing
provisions and as are expressly requested by the Issuer or the Owner
Trustee and are reasonably within the capability of the Servicer.
(ii) Notwithstanding anything in this Agreement or any of the Basic
Documents to the contrary, the Servicer shall be responsible for promptly
notifying the Owner Trustee and the Trustee, the Insurer and ▇▇▇▇▇▇▇ Mac in
the event that any withholding tax is imposed on the Issuer's payments (or
allocations of income) to a Residual Certificateholder (as defined in the
Trust Agreement) as contemplated by this Agreement. Any such notice shall
be in writing and specify the amount of any withholding tax required to be
withheld by the Owner Trustee or the Trustee pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the Basic Documents
to the contrary, the Servicer shall be responsible for performance of the
duties of the Issuer or the Sponsor set forth in Section 5.1(a), (b), (c)
and (d) of the Trust Agreement with respect to, among other things,
accounting and reports to Residual Certificateholders (as defined in the
Trust Agreement).
(iv) The Servicer shall perform the duties of the Sponsor specified in
Section 11.2 of the Trust Agreement required to be performed in connection
with the resignation or removal of the Owner Trustee, and any other duties
expressly required to be performed by the Servicer under this Agreement or
any of the Basic Documents.
(v) In carrying out the foregoing duties or any of its other obligations
under this Agreement, the Servicer may enter into transactions with or
otherwise deal with any of its Affiliates; provided, however, that the
terms of any such transactions or dealings shall be in accordance with any
directions received from the Issuer and shall be, in the Servicer's
opinion, no less favorable to the Issuer in any material respect.
(c) Non-Ministerial Matters. With respect to matters that in the reasonable
judgment of the Servicer are non-ministerial, the Servicer shall not take any
action pursuant to this Article VIII unless within a reasonable time before the
taking of such action, the Servicer shall have
48
notified the Owner Trustee, the Insurer and ▇▇▇▇▇▇▇ Mac of the proposed action
and the Owner Trustee, the Insurer and ▇▇▇▇▇▇▇ Mac shall not have withheld
consent or provided an alternative direction. For the purpose of the preceding
sentence, "non-ministerial matters" shall include:
(A) the amendment of or any supplement to the Pooling Agreement;
(B) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the Issuer
(other than in connection with the collection of the Mortgage Loans);
(C) the amendment, change or modification of this Agreement or any of the
Basic Documents;
(D) the appointment of successor Security Registrars, successor Paying
Agents and successor Trustees pursuant to the Pooling Agreement or the
appointment of successor Servicers or the consent to the assignment by the
Security Registrar, Paying Agent or Trustee of its obligations under the
Pooling Agreement; and
(E) the removal of the Trustee.
(d) Exceptions. Notwithstanding anything to the contrary in this Agreement,
except as expressly provided herein or in the other Basic Documents, the
Servicer, in its capacity hereunder, shall not be obligated to, and shall not,
(1) make any payments to the Securityholders or Residual Certificateholders
under the Basic Documents, (2) sell the Trust Property pursuant to Section 5.4
of the Pooling Agreement, (3) take any other action that the Issuer directs the
Servicer not to take on its behalf or (4) in connection with its duties
hereunder assume any indemnification obligation of any other Person.
(e) The Trustee or any successor Servicer shall not be responsible for any
obligations or duties of the Servicer under Section 8.01.
Section 8.02. Records. The Servicer shall maintain appropriate books of
account and records relating to services performed under this Agreement, which
books of account and records shall be accessible for inspection by the Issuer
and the Trustee at any time during normal business hours.
Section 8.03. Additional Information to be Furnished to the Issuer. The
Servicer shall furnish to the Issuer and the Trustee from time to time such
additional information regarding the Mortgage Loans as the Issuer and the
Trustee shall reasonably request.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment. This Agreement may be amended from time to time by
agreement among the Sponsor, the Servicer, and the Trustee, in each case without
notice to or the consent of any of the Securityholders or Residual
Certificateholders, but only with the
49
consent of the Insurer and of ▇▇▇▇▇▇▇ Mac (which consent shall not be
unreasonably withheld), (i) to cure any ambiguity, (ii) to correct any defective
provisions or to correct or supplement any provisions herein that may be
inconsistent with any other provisions herein, (iii) to add to the duties of the
Sponsor or the Servicer, (iv) to add any other provisions with respect to
matters or questions arising under this Agreement or the Policy, as the case may
be, which shall not be inconsistent with the provisions of this Agreement, (v)
to add or amend any provisions of this Agreement as required by any Rating
Agency or any other nationally recognized statistical rating organization in
order to maintain or improve any rating of the Securities (it being understood
that, after obtaining the ratings in effect on the Closing Date, neither the
Trustee, the Sponsor nor the Servicer is obligated to obtain, maintain or
improve any such rating) or (vi) to comply with any requirement imposed by the
Code; provided, however, that such action shall not, as evidenced by an Opinion
of Counsel, materially and adversely affect the interests of any Securityholder
or any Residual Certificateholder, the Insurer or ▇▇▇▇▇▇▇ Mac; and provided,
further, that the amendment shall be deemed not to adversely affect in any
material respect the interests of the Securityholders and the Residual
Certificateholders and no opinion referred to in the preceding proviso shall be
required to be delivered if the Person requesting the amendment obtains a letter
from each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Securities without regard to the Policy or Guarantee.
This Agreement also may be amended from time to time by agreement among the
Servicer, the Sponsor and the Trustee, with the consent of the Insurer, ▇▇▇▇▇▇▇
Mac and the Holders of the Securities evidencing more than 50% of the
Outstanding Amount of the Securities and the Holders of the Residual
Certificates evidencing more than 50% of the percentage interest in the Residual
Certificates (which consent of such Holders of Securities and Residual
Certificates given pursuant to this Section 9.01 or pursuant to any other
provision of this Agreement shall be conclusive and binding on such Holder and
all future Holders of such securities and of any security issued upon the
transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the security) for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the
Securityholders or the Residual Certificateholders; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments on the Securities or distributions or payments under the Policy
which are required to be made on any Security without the consent of the Holder
of such Security or (ii) reduce the aforesaid percentage required to consent to
any such amendment, without the consent of the Holders of all then outstanding
Securities and Residual Certificates or (iii) adversely affect in any material
respect the interests of the Insurer or the interests of ▇▇▇▇▇▇▇ Mac.
Following the execution and delivery of any such amendment hereto or to the
Policy, either the Sponsor, if the Sponsor requested the amendment, or the
Servicer, if the Servicer requested the amendment, shall reimburse the Insurer
and ▇▇▇▇▇▇▇ Mac for the reasonable out-of-pocket costs and expenses incurred by
each in connection with such amendment.
Prior to the execution of any such amendment, the party hereto requesting
any such amendment shall furnish written notification of the substance of such
amendment to each Rating Agency. In addition, promptly after the execution of
any such amendment made with the
50
consent of the Securityholders, the Trustee shall furnish written notification
of the substance of such amendment to each Securityholder and fully executed
original counterparts of the instruments effecting such amendment to the Insurer
and ▇▇▇▇▇▇▇ Mac.
It shall not be necessary for the consent of Securityholders under this
Section 9.01 to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Securityholders and Residual
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
In executing any amendment permitted by this Section 9.01, the Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel stating that such amendment is authorized or permitted hereby
and that all conditions precedent to the execution and delivery of such
amendment have been satisfied. The Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Trustee's own rights, duties or
immunities under this Agreement or otherwise.
Section 9.02. Recordation of Agreement. This Agreement 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
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Trustee, but only upon direction of Securityholders accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially affects
the interests of Securityholders. The Securityholders requesting such
recordation shall bear all costs and expenses of such recordation. The Trustee
shall have no obligation to ascertain whether such recordation so affects the
interests of the Securityholders.
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.
Section 9.03. Limitation on Rights of Securityholders. No Securityholder
shall have any right to vote (except as provided in Sections 6.01, 7.01, and
9.01 herein and Section 5.4 of the Pooling Agreement) or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Securities, be construed so as to constitute the Securityholders from
time to time as partners or members of an association; nor shall any
Securityholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
No Securityholder shall have any right by virtue or by availing itself of
any provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Securities evidencing more than 50% of the Outstanding Amount of the
Securities shall have made written request upon the Trustee to institute such
action, suit or
51
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each Securityholder
with every other Securityholder and the Trustee, that no one or more Holders
of Securities shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of the Securities,
or to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Agreement, except in the manner
herein provided and for the equal, ratable and common benefit of all
Securityholders. For the protection and enforcement of the provisions of this
Section 9.03, each and every Securityholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
By accepting its Certificate, each Securityholder agrees that unless a
Insurer Default exists, the Insurer shall have the right to exercise all rights
of the Securityholder under this Agreement without any further consent of the
Securityholder.
Section 9.04. 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.
Section 9.05. 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 certified mail, return receipt requested, to (a) in
the case of the Sponsor, GreenPoint Mortgage Securities Inc., ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇,
(b) in the case of the Servicer, GreenPoint Mortgage Funding, Inc., ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, (c) in the case of the Trustee, at the Corporate Trust
Office, (d) in the case of the Insurer, Financial Guaranty Insurance Company,
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Research and Risk Management
GreenPoint Home Equity Loan Trust--2000-2 (telecopy number (▇▇▇) ▇▇▇-▇▇▇▇), (e)
in the case of ▇▇▇▇▇▇▇ Mac, Federal Home Loan Mortgage Corporation, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice-President, Mortgage
Funding (telecopy number (▇▇▇) ▇▇▇-▇▇▇▇), (f) ▇▇▇▇▇'▇, Residential Loan
Monitoring Group, 4th Floor, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and (g)
in the case of Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or,
as to each party, at such other address as shall be designated by such party in
a written notice to each other party. Any notice required or permitted to be
mailed to a Securityholder shall be given by first class mail, postage prepaid,
at the address of such Holder as shown in the Security Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Securityholder or Residual
Certificateholder receives such notice. Any notice or other document required to
be delivered or mailed by the Trustee to any Rating Agency shall be given on a
best efforts basis and only as a matter of courtesy and accommodation and the
Trustee shall have no liability for failure to deliver such notice or document
to any Rating Agency.
52
Section 9.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, 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 or of the Securities or
the rights of the Holders thereof.
Section 9.07. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 5.02 and 5.04, this Agreement
may not be assigned by the Sponsor or the Servicer without the prior written
consent of the Controlling Party and Holders of the Securities evidencing
Percentage Interests aggregating not less than 66%.
Section 9.08. Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, the Residual
Certificateholders, the Security Owners, the Insurer, ▇▇▇▇▇▇▇ Mac and their
respective successors and permitted assigns. Except as otherwise provided in
this Agreement, no other Person will have any right or obligation hereunder.
Section 9.09. Counterparts. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 9.10. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 9.11. Insurance Agreement. The Trustee is authorized and directed
to execute and deliver the Insurance Agreement and to perform the obligations of
the Trustee thereunder. In addition, the Sponsor and Servicer hereby agree to
provide to ▇▇▇▇▇▇▇ Mac all of the information provided to the Insurer pursuant
to Section 2.03(f) of the Insurance Agreement.
Section 9.12. Nonpetition Covenant. Until one year plus one day shall have
elapsed since the termination of the Trust in accordance with Section 7.01, none
of the Sponsor, the Company, the Servicer, nor the Trustee shall petition or
otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Sponsor or the Trust
under any federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Sponsor or the Trust or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the
Sponsor or the Trust.
53
IN WITNESS WHEREOF, the Sponsor, the Servicer and the Trustee have caused
this Agreement to be duly executed by their respective officers all as of the
day and year first above written.
GREENPOINT MORTGAGE SECURITIES INC.,
as Sponsor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
GREENPOINT MORTGAGE FUNDING, INC.,
as Company and Servicer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President/Chief
Financial Officer
BANK ONE, N.A.,
as Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
GREENPOINT HOME EQUITY LOAN TRUST
2000-2, as Issuer
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Financial Services Officer
[Sale and Servicing Agreement]
State of California )
) ss.:
County of Marin )
On the 25th day of September, 2000 before me, a notary public in and for the
State of California, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇, known to me who, being
by me duly sworn, did depose and say that he resides at Larkspur, California;
that he is the Vice President of GreenPoint Mortgage Securities of GreenPoint
Mortgage Securities Inc., a Delaware corporation, one of the parties that
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation; and that he
signed his name thereto by like order.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Notary Public
[Notarial Seal]
State of Delaware )
) ss.:
County of New Castle )
On the 22th day of September, 2000 before me, a notary public in and for the
State of Delaware, personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, known to me who, being
by me duly sworn, did depose and say that he resides at Delaware; that he is the
FSO of Wilmington Trust Corporation, a Delaware corporation, one of the parties
that executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation;
and that he signed his name thereto by like order.
/s/ ▇▇▇▇▇ ▇▇▇▇
----------------------------------
Notary Public
[Notarial Seal]
State of California )
) ss.:
County of Marin )
On the 25th day of September, 2000 before me, a notary public in and for the
State of California, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, known to me who,
being by me duly sworn, did depose and say that he resides at Larkspur,
California; that he is the Executive Vice President/Chief Financial Officer of
GreenPoint Mortgage Funding, Inc., a closely-held California corporation, one of
the parties that executed the foregoing instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation; and that he signed his name thereto by like order.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Notary Public
[Notarial Seal]
State of New York )
) ss.:
County of New York )
On the 25th day of September, 2000 before me, a notary public in and for the
State of New York, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, known to me who, being
by me duly sworn, did depose and say that he resides at ▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇; that he is a Vice President of Bank One, N.A., a National Banking
Association, one of the parties that executed the foregoing instrument; and that
he signed his name thereto by order of the Board of Directors of said
corporation.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A
---------
MORTGAGE LOAN SCHEDULE
[On file with Trustee]
A-1
EXHIBIT B
---------
FORM OF OPINION OF COUNSEL
WITH RESPECT TO SECTION 3.11 OF THE
SALE AND SERVICING AGREEMENT
The opinions set forth below may be subject to all the qualifications,
assumptions, limitations and exceptions taken or made in the opinions of counsel
to the Company delivered on the Closing Date. Unless otherwise indicated, all
capitalized terms used herein shall have the meanings ascribed to them in the
Sale and Servicing Agreement dated as of September 1, 2000 among GreenPoint
Mortgage Funding, Inc. (the "Company" and the "Servicer"), GreenPoint Mortgage
Securities Inc. (the "Sponsor") and Bank One, N.A., as Trustee. Terms used but
not defined herein shall have the meaning given to such terms in the
above-referenced Sale and Servicing Agreement.
The Trustee has a valid perfected first priority security interest with respect
to the Sponsor's right, title and interest in and to the Mortgage Loans
(including all Eligible Substitute Mortgage Loans).
B-1
EXHIBIT C-1
-----------
OFFICER'S CERTIFICATE
REQUEST BY THE SERVICER FOR PERMANENT
RELEASE OF MORTGAGE LOANS AND MORTGAGE FILES
TO: Bank One, N.A.,
as Trustee
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Gentlemen:
In connection with the payment in full of the Mortgage Loans held by you as
Trustee, under the Sale and Servicing Agreement dated as of September 1, 2000
among GreenPoint Mortgage Funding, Inc., as Servicer, GreenPoint Mortgage
Securities Inc., as Sponsor, and you, as Trustee, the undersigned requests the
release of the Mortgage Loans and the Mortgage Files for the Mortgage Loans
identified in the schedule attached to this Request.
The undersigned hereby certifies that any and all payments received on the
Mortgage Loans identified in the schedule attached to this Request which are
required to be deposited in the Collection Account pursuant to Section 3.02 of
such Sale and Servicing Agreement have been so deposited.
GREENPOINT MORTGAGE FUNDING, INC.,
as Servicer
By:
-------------------------------
Name:
-------------------------
Title:
-------------------------
Date:
--------------------------
ACKNOWLEDGED BY:
BANK ONE, N.A.,
as Trustee
By:
-------------------------------
Name:
------------------------
Title:
-----------------------
Date:
------------------------
C-1-1
EXHIBIT C-2
-----------
OFFICER'S CERTIFICATE
REQUEST BY THE SERVICER FOR TEMPORARY
RELEASE OF MORTGAGE LOANS AND MORTGAGE FILES
TO: Bank One, N.A.,
as Trustee
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Gentlemen:
In connection with the administration of the Mortgage Loans held by you as
Trustee, under the Sale and Servicing Agreement dated as of September 1, 2000
among GreenPoint Mortgage Funding, Inc., as Servicer, GreenPoint Mortgage
Securities Inc., as Sponsor, and you, as Trustee, the undersigned requests the
temporary release of the Mortgage Loans and the related Mortgage Files for the
Mortgage Loans identified in the schedule attached to this Request.
GREENPOINT MORTGAGE FUNDING, INC.,
as Servicer
By:
--------------------------------
Name:
----------------------------
Title:
---------------------------
Date:
----------------------------
ACKNOWLEDGED BY:
BANK ONE, N.A.,
as Trustee
By:
-------------------------------
Name:
-------------------------
Title:
------------------------
Date:
--------------------------
C-2-1
EXHIBIT D
---------
FORM OF CREDIT LINE AGREEMENT
D-1
EXHIBIT E
---------
FORM OF MORTGAGE NOTE FOR
CLOSED END MORTGAGE LOANS
E-1
EXHIBIT F-1
-----------
FORM OF ▇▇▇▇▇▇▇ MAC CERTIFICATE
BOND SUMMARY REPORTING
DETAIL RECORD FIELDS: FILE NAME: T0NNMMYY.BND
---------------------------------------------------------------------------------------------------------------------------
FIELD NAME FLD NBR FORMAT FIELD POSITION DEFINITION
---------------------------------------------------------------------------------------------------------------------------
Series # (Deal 1 10 (x) 001-010 As defined by issuer or as assigned - T0nn
Identifier)
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 011
---------------------------------------------------------------------------------------------------------------------------
Class # 2 2 (x) 012-013 As assigned or determined by issuer. Input default value if
not applicable.
---------------------------------------------------------------------------------------------------------------------------
Blank 5 (x) 014-018
---------------------------------------------------------------------------------------------------------------------------
CUSIP # 3 9 (x) 019-027 If not available, Input default value. ▇▇▇▇▇▇▇ Mac may
provide dummy numbers, if CUSIP numbers are not assigned by
the issuer.
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 028
---------------------------------------------------------------------------------------------------------------------------
Coupon - Current 4 6.3 029-034 Bond Coupon Rate
Pass-through Rate
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 035
---------------------------------------------------------------------------------------------------------------------------
Original Face Value 5 13.2 036-048 Par Value, original issue amount, of Class
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 049
---------------------------------------------------------------------------------------------------------------------------
Beginning Unpaid 6 13.2 050-062 Beginning Class UPB as of beginning of cycle
Principal Balance
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 063
---------------------------------------------------------------------------------------------------------------------------
Principal payment 7 13.2 064-076 Dollar amount of class principal payment
amount
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 077
---------------------------------------------------------------------------------------------------------------------------
Interest payment amount 8 13.2 078-090 Dollar amount of class interest payment
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 091
---------------------------------------------------------------------------------------------------------------------------
Total Distribution 9 13.2 092-104 Dollar amount of principal & interest payment
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 105
---------------------------------------------------------------------------------------------------------------------------
Deferred Interest 10 13.2 106-118 Dollar amount of overcollateralization (Difference between
security principal and mortgage principal balances applied
this period. This can include non-cash allocations)
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 119
---------------------------------------------------------------------------------------------------------------------------
Principal Loss 11 13.2 120-132 Dollar amount of principal losses applied this period
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 133
---------------------------------------------------------------------------------------------------------------------------
Interest Loss 12 13.2 134-146 Dollar amount of interest losses applied this period
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 147
---------------------------------------------------------------------------------------------------------------------------
Ending Unpaid 13 13.2 148-160 Ending Class UPB as of beginning of cycle
Principal Balance
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 161
---------------------------------------------------------------------------------------------------------------------------
Principal Distribution 14 9.7 162-170 Factor representing the principal payment divided by the
Factor Original UPB of the class.
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 171
---------------------------------------------------------------------------------------------------------------------------
F-1-1
---------------------------------------------------------------------------------------------------------------------------
FIELD NAME FLD NBR FORMAT FIELD POSITION DEFINITION
---------------------------------------------------------------------------------------------------------------------------
Interest Distribution 15 9.7 172-180 Factor representing the interest payment divided by the
Factor Original UPB of the class.
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 181
---------------------------------------------------------------------------------------------------------------------------
Prepayment Interest 16 9.7 182-190 If loans were prepaid and an interest shortfall arose in
Shortfall this period, it should be entered in this field. If not
applicable, a zero should be used.
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 191
---------------------------------------------------------------------------------------------------------------------------
Total Distribution 17 9.7 192-200 Factor representing the combined principal and interest
Factor payment divided by the Original UPB of the class.
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 201
---------------------------------------------------------------------------------------------------------------------------
Deferred Interest 18 9.7 202-210 Factor representing any increase in residual class due to
Factor credit enhancement requirements. This is determined by
dividing the increase amount by the original UPB.
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 211
---------------------------------------------------------------------------------------------------------------------------
Ending Principal 19 9.7 212-220 Ending UPB divided by original UPB.
Balance Factor
---------------------------------------------------------------------------------------------------------------------------
Blank 1 (x) 221
---------------------------------------------------------------------------------------------------------------------------
Remaining Unpaid 20 13.2 222-234 If interest should be due, but not received on a given
Interest amount, then that amount should be entered.
---------------------------------------------------------------------------------------------------------------------------
F-1-2
EXHIBIT F-2
-----------
FORM OF ▇▇▇▇▇▇▇ MAC CERTIFICATE:
LOAN LEVEL REPORTING
DETAIL RECORD FIELDS: FILE NAME: T0##MMYY.LNS
-----------------------------------------------------------------------------------------------------------------------------
DATA: T0NNMMYY.LNS FIELD NBR FORMAT DEFINITION
-----------------------------------------------------------------------------------------------------------------------------
Servicer Loan No. 1 13(X) Unique loan number assigned to the mortgage by the Seller/Servicer
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Due Date of Last Paid 2 YYYYMMDD DUE DATE of last full payment received from the borrower.
Installment (DDLPI)
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Last Payment Received 3 YYYYMMDD RECEIPT DATE of the last fully paid monthly installment of principal,
Date (LPRD) interest, and escrow (if any) that was received from the borrower.
Note: Dates of partial payments should not be entered here. {Data is
when payment was actually received from the borrower) IF THIS
INFORMATION IS NOT AVAILABLE, THEN POPULATE THE FIELD WITH THE DEFAULT
VALUE OF 19000101.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Unpaid Principal 4 13.2 Unpaid Principal balance as of the end of the current period
Balance (UPB) 100%
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Interest Paid 5 13.2 Gross / Coupon Interest payment amount
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Principal Paid 6 13.2 Total principal paid down on the mortgage balance.
* For approved payment reversals or principal applied incorrectly in a
prior cycle the amount of negative principal to bring the mortgage
balance in line with the correct UPB reported.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Draw Amount 7 13.2 Total draws made against the line of credit for the current month
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
F-2-1
-----------------------------------------------------------------------------------------------------------------------------
DATA: T0NNMMYY.LNS FIELD NBR FORMAT DEFINITION
-----------------------------------------------------------------------------------------------------------------------------
Exception Code 8 2(x) This field should contain an exception code only when exception activity
occurs for that period, otherwise this field should contain a 0.
DEFAULT VALUE IS 0.
40 Inactivate loan, deemed the loan non-recoverable
60 Payoff - mortgage matured
61 Payoff - mortgage prepaid
65 Payoff - mortgage repurchased
69 Payoff - mortgage liquidated
70 Transfer to REO (status change exception)
72 Foreclosure (change of status from Active to Foreclosure)
80 Substituted Loan - Loan is added as a substitute for another loan
81 Reinstated Loan - Loan was previously delinquent, but the borrower has
brought it current.
90 Loan Modified - This is an exceptional activity code which is reserved
for future use. Modifications typically require repurchase from the trust
prior to modifying the loan.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Exception Date 9 YYYYMMDD Date the exception occurred. If an exception has not occurred, this
field should contain the default value of 19000101.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Mortgage Note Rate 10 6.3 Rate associated with the borrower's scheduled payment
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Mortgage P&I Amount 11 13.2 Principal and interest portion of the borrowers minimum installment.
Note: 100% of the principal and interest amount should be entered in
this field, including servicing and guarantee fees.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Realized Losses 12 13.2 Amount of realized losses for that period. This field will also include
any supplemental claims or proceeds for loans liquidated in a previous
cycle.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Cumulative Principal 13 13.2 Total principal payments advanced by the Servicer and not repaid by the
Advances borrower.
NOT APPLICABLE--DO NOT REPORT
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Interest Advances 14 13.2 Amount of interest payment advanced by the Servicer for that period.
NOT APPLICABLE--DO NOT REPORT
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Loan Status 15 1(X) Pertains to activity in the prior reporting cycle.
0 - Active
4 - Foreclosure
5 - REO
6 - Closed (PAYOFFS & REPURCHASES)
9 - Bankruptcy (OVERRIDES Active Status)
Note: 30,60 & 90 day delinquency status will be derived from the DDLPI
field.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Subservicer No. 16 6 Subservicer ID# - S/S# assigned by ▇▇▇▇▇▇▇ Mac - 6 digits
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Actual Loan Balance 17 13.2 Actual loan balance outstanding from the borrower.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
F-2-2
-----------------------------------------------------------------------------------------------------------------------------
DATA: T0NNMMYY.LNS FIELD NBR FORMAT DEFINITION
-----------------------------------------------------------------------------------------------------------------------------
Next Interest Rate 18 YYYYMMDD Applies only to ARM loans and reflects the next pending interest rate
Change Date adjustment date. DEFAULT IS 19000101. SINCE LOANS ADJUST MONTHLY, ONLY
REPORT THE FIRST ADJUSTMENT DATE FOR LOANS WITH TEASER PERIOD.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Next Interest Payment 19 YYYYMMDD Applies only to payment capped ARM loans and reflects the next pending
Change Date payment adjustment date. DEFAULT IS 19000101.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Index Value at Reset 20 6.3 The index rate used in determining the ARM coupon.
Date DEFAULT VALUE IS 0 FOR AN ARM LOAN IF THE INDEX IS NOT CHANGING IN THE
CURRENT PERIOD. ALSO POPULATE 0 IF THE LOAN IS A FIXED RATE LOAN.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Next Mortgage Rate 21 6.3 Should be populated in advance of the rate adjustment.. DEFAULT VALUE IS
EXPECTED AT RESET DATE 0 FOR AN ARM LOAN IF THE RATE IS NOT CHANGING. DEFAULT VALUE IS 0 IF
THE LOAN IS A FIXED RATE LOAN.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Collateral Group No. # 22 2 This is a collateral grouping number for whole loan directed collateral
deals. DEFAULT VALUE IS 0. REPORT THE HELOCS AND FIXED RATES SEPARATELY.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Current Arrearage Paid 23 13.2 The current amount of cashflow applied to the arrearage balance.
Applies to loans that have been or are currently in default. DEFAULT
VALUE IS 0.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Outstanding Arrearage 24 13.2 The total amount of outstanding interest accrued under forbearance
Balance period, after current arrearage payment. DEFAULT VALUE IS 0.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Mac Loan Number 25 13(X) Unique & permanent loan number assigned to the mortgage by ▇▇▇▇▇▇▇ Mac.
Used for disclosure.
-----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
-----------------------------------------------------------------------------------------------------------------------------
Prepayment Premium 26 13.2 The borrowers penalty payment for prepaying his mortgage. This amount
Amount is allocated in aggregate as a directed collateral amount to a specific
bond. DEFAULT VALUE IS 0.
-----------------------------------------------------------------------------------------------------------------------------
The Notes:
o File must be a text file (either space or tab delimited).
o Any dates should be in YYYYMMDD format. They should not contain slashes
(/) or dashes (-).
o Number fields should NOT include commas.
o Any negative number should be denoted by a "-" in front of the number, do
not put the "-" after the number or use parentheses.
F-2-3