NATIONAL CITY MORTGAGE CO., as Servicer, and NATIONAL CITY MORTGAGE CAPITAL LLC as Company
EXHIBIT
4.3
NATIONAL
CITY MORTGAGE CO.,
as
Servicer,
and
as
Company
Dated
as
of _______________
________________Mortgage
Loans
[National
City Mortgage Capital LLC MBN]
Trust Series 20__-__
TABLE
OF
CONTENTS
ARTICLE
I
DEFINITIONS 1
|
SECTION
1.01.
|
Definitions.
|
|
|
SECTION
1.02.
|
Other
Definitional Provisons.
|
|
|
SECTION
1.03.
|
Interest
Calculations.
|
|
ARTICLE
II
REPRESENTATIONS AND WARRANTIES 3
|
SECTION
2.01.
|
Representations
and Warranties Regarding the Servicer.
|
|
|
SECTION
2.02.
|
Representations
and Warranties of the Company.
|
|
|
SECTION
2.03.
|
Enforcement
of Representations and Warranties.
|
|
ARTICLE
III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS 5
|
SECTION
3.01.
|
The
Servicers.
|
|
|
SECTION
3.02.
|
Collection
of Certain Mortgage Loan Payments.
|
|
|
SECTION
3.03.
|
Withdrawals
From the Collection Account.
|
|
|
SECTION
3.04.
|
Maintenance
of Hazard Insurance; Property Protection Expenses.
|
|
|
SECTION
3.05.
|
Modification
Agreements.
|
|
|
SECTION
3.06.
|
Trust
Estate; Related Documents.
|
|
|
SECTION
3.07.
|
Realization
Upon Defaulted Mortgage Loans.
|
|
|
SECTION
3.08.
|
Company
and Indenture Trustee to Cooperate.
|
|
|
SECTION
3.09.
|
Servicing
Compensation; Payment of Certain Expenses by Servicer.
|
|
|
SECTION
3.10.
|
Annual
Statement as to Compliance.
|
|
|
SECTION
3.11.
|
ANNUAL
SERVICING REPORT.
|
|
|
SECTION
3.12.
|
Access
to Certain Documentation and Information Regarding the Mortgage
Loans.
|
|
|
SECTION
3.13.
|
Maintenance
of Certain Servicing Insurance Policies.
|
|
|
SECTION
3.14.
|
Information
Required by the Internal Revenue Service Generally and Reports of
Foreclosures and Abandonments of Mortgaged Property.
|
|
|
SECTION
3.15.
|
Optional
Repurchase of Defaulted Mortgage Loans.
|
|
ARTICLE
IV
SERVICING CERTIFICATE 17
|
SECTION
4.01.
|
Statements
to Securityholders.
|
|
ARTICLE
V
DISTRIBUTION AND PAYMENT ACCOUNTS 19
|
SECTION
5.01.
|
Distribution
Account.
|
|
|
SECTION
5.02.
|
Payment
Account.
|
|
ARTICLE
VI
THE
SERVICER 20
|
SECTION
6.01.
|
Liability
of the Servicer.
|
|
|
SECTION
6.02.
|
Merger
of Consolidation of, or Assumption of the Obligations of, the
Servicer.
|
|
|
SECTION
6.03.
|
Limitation
on Liability of the Servicer and Others.
|
|
|
SECTION
6.04.
|
Servicer
Not to Resign.
|
|
|
SECTION
6.05.
|
Delegation
of Duties.
|
|
|
SECTION
6.06.
|
Servicer
to Pay Indenture Trustee’s and Owner Trustee’s Fees and Expenses;
Indemnification.
|
|
ARTICLE
VII
DEFAULT 23
|
SECTION
7.01.
|
Servicing
Default.
|
|
|
SECTION
7.02.
|
Indenture
Trustee to Act; Appointment of Successor.
|
|
|
SECTION
7.03.
|
Notification
to Securityholders.
|
|
ARTICLE
VIII
MISCELLANEOUS PROVISIONS 27
|
SECTION
8.01.
|
Amendment.
|
|
|
SECTION
8.02.
|
GOVERNING
LAW.
|
|
|
SECTION
8.03.
|
Notices.
|
|
|
SECTION
8.04.
|
Severability
of Provisions.
|
|
|
SECTION
8.05.
|
Third-Party
Beneficiaries.
|
|
|
SECTION
8.06.
|
Counterparts.
|
|
|
SECTION
8.07.
|
Effect
of Headings and Table of Contents.
|
|
|
SECTION
8.08.
|
Termination
Upon Purchase by the Servicer or Liquidation of All Mortgage
Loans.
|
|
|
SECTION
8.09.
|
Certain
Matters Affecting the Indenture Trustee.
|
|
|
SECTION
8.10.
|
Authority
of the Administrator.
|
|
Schedule
1 - Mortgage Insurance Component Schedule1
This
Servicing Agreement, dated as of _______________, between NATIONAL CITY MORTGAGE
CO., as Servicer (the “Servicer”) and NATIONAL
CITY MORTGAGE CAPITAL LLC,
as
Company (the “Company”).
W
I T N E
S S E T H
T
H A
T:
WHEREAS,
National
City Mortgage Capital LLC will
create [National
City Mortgage Capital LLC MBN]
Trust Series 20__-__, an owner trust (the “Issuer”) under Delaware law, and will
transfer the Mortgage Loans and all of its rights under the Mortgage Loan
Purchase Agreement to the Issuer,;
WHEREAS,
pursuant to the terms of a Trust Agreement dated as of _______________ (the
“Owner Trust Agreement”) between the Company, as depositor, and
______________________, as owner trustee (the “Owner Trustee”), the Company will
sell the Mortgage Collateral to Issuer in exchange for the cash proceeds of
the
Securities;
WHEREAS,
pursuant to the terms of the Trust Agreement between the Depositor and the
Owner
Trustee, the Issuer will issue and transfer to or at the direction of the
Depositor, the Mortgage-Backed Certificates, Series 20__-__ (the
“Certificates”);
WHEREAS,
pursuant to the terms of an Indenture dated as of _______________ (the
“Indenture”) between the Issuer and the Indenture Trustee, the Issuer will issue
and transfer to or at the direction of the Purchaser the Mortgage-Backed Notes,
Series 20__-__ (the “Notes”), consisting of the Notes and secured by the
Mortgage Collateral;
WHEREAS,
pursuant to the terms of the Mortgage Loan Purchase Agreement, the Company
will
acquire the Initial Loans; and
WHEREAS,
pursuant to the terms of this Servicing Agreement, the Servicer will service
the
Mortgage Loans directly or through one or more Subservicers;
NOW,
THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
SECTION
1.01. Definitions.
For
all
purposes of this Servicing Agreement, except as otherwise expressly provided
herein or unless the context otherwise requires, capitalized terms not otherwise
defined herein shall have the meanings assigned to such terms in the Definitions
contained in Appendix A to the Indenture which is incorporated by reference
herein. All other capitalized terms used herein shall have the meanings
specified herein.
SECTION
1.02. Other
Definitional Provisons.
(a) All
terms
defined in this Servicing Agreement shall have the defined meanings when used
in
any certificate or other document made or delivered pursuant hereto unless
otherwise defined therein.
(b) As
used
in this Servicing Agreement and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in this
Servicing Agreement or in any such certificate or other document, and accounting
terms partly defined in this Servicing Agreement or in any such certificate
or
other document, to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent
that
the definitions of accounting terms in this Servicing Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Servicing Agreement or in any such certificate or other document shall
control.
(c) The
words
“hereof,” “herein,” “hereunder” and words of similar import when used in this
Servicing Agreement shall refer to this Servicing Agreement as a whole and
not
to any particular provision of this Servicing Agreement; Section and Exhibit
references contained in this Servicing Agreement are references to Sections
and
Exhibits in or to this Servicing Agreement unless otherwise specified; and
the
term “including” shall mean “including without limitation”.
(d) The
definitions contained in this Servicing Agreement are applicable to the singular
as well as the plural forms of such terms and to the masculine as well as the
feminine and neuter genders of such terms.
(e) 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
REPRESENTATIONS
AND WARRANTIES
SECTION
2.01. Representations
and Warranties Regarding the Servicer.
The
Servicer represents and warrants to Company, the Issuer and for the benefit
of
the Indenture Trustee, as pledgee of the Mortgage Collateral, and the
Securityholders, as of the Cut-Off Date, [the date of the Servicing Agreement],
the Closing Date [and any Deposit Date], that:
(i) The
Servicer is a corporation duly organized, validly existing and in good standing
under the laws of the State of [_______] 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 properties owned or leased by it requires such qualification
and in which the failure to so 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
Servicing Agreement and all of the transactions contemplated under this
Servicing Agreement, and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Servicing Agreement. When
executed and delivered, this Servicing 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 or similar laws affecting the enforcement of creditors’ rights
generally and by the availability of equitable remedies;
(iii) The
Servicer is not required to obtain the consent of any other Person 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 Servicing
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;
(iv) The
execution and delivery of this Servicing Agreement and the performance of the
transactions contemplated hereby 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, indenture,
contract or other agreement to which the Servicer is a party or by which the
Servicer may be bound; and
(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 Servicing Agreement or the Notes or the Certificates which in the opinion
of the Servicer has a reasonable likelihood of resulting in a material adverse
effect on the transactions contemplated by this Servicing Agreement. The
foregoing representations and warranties shall survive any termination of the
Servicer hereunder.
SECTION
2.02. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to the Servicer for the benefit of the
Indenture Trustee, as pledgee of the Mortgage Collateral, and the
Securityholders, as of the Cut-Off Date, the Closing Date and any Deposit Date,
that:
(i) The
Company is a limited liability company in good standing under the laws of the
State of Delaware;
(ii) The
Company has full power, authority and legal right to execute and deliver this
Servicing Agreement and to perform its obligations under this Servicing
Agreement, and has taken all necessary action to authorize the execution,
delivery and performance by it of this Servicing Agreement; and
(iii) The
execution and delivery by the Company of this Servicing Agreement and the
performance by the Company of its obligations under this Servicing Agreement
will not violate any provision of any law or regulation governing the Company
or
any order, writ, judgment or decree of any court, arbitrator or governmental
authority or agency applicable to the Company or any of its assets. Such
execution, delivery, authentication and performance will not require the
authorization, consent or approval of, the giving of notice to, the filing
or
registration with, or the taking of any other action with respect to, any
governmental authority or agency regulating the activities of limited liability
companies. Such execution, delivery, authentication and performance will not
conflict with, or result in a breach or violation of, any mortgage, deed of
trust, lease or other agreement or instrument to which the Company is
bound.
SECTION
2.03. Enforcement
of Representations and Warranties.
The
Servicer, on behalf of and subject to the direction of the Indenture Trustee,
as
pledgee of the Mortgage Collateral, or the Credit Enhancer, shall enforce the
representations and warranties of the Seller pursuant to the Mortgage Loan
Purchase Agreement. Upon the discovery by the Seller, the Servicer, the
Indenture Trustee, the Credit Enhancer, the Company or any Custodian of a breach
of any of the representations and warranties made in the Mortgage Loan Purchase
Agreement, in respect of any Mortgage Loan which materially and adversely
affects the interests of the Securityholders or the Credit Enhancer, the party
discovering such breach shall give prompt written notice to the other parties
(any Custodian being so obligated under a Custodial Agreement). The Servicer
shall promptly notify the Seller of such breach and request that, pursuant
to
the terms of the Mortgage Loan Purchase Agreement, the Seller either (i) cure
such breach in all material respects within 45 days (with respect to a breach
of
the representations and warranties contained in Section 3.1(a) of the Mortgage
Loan Purchase Agreement) or 90 days (with respect to a breach of the
representations and warranties contained in Section 3.1(b) of the Mortgage
Loan
Purchase Agreement) from the date the Seller was notified of such breach or
(ii)
purchase such Mortgage Loan from the Company at the price and in the manner
set
forth in Section 3.1(b) of the Mortgage Loan Purchase Agreement; PROVIDED that
the Seller shall, subject to the conditions set forth in the Mortgage Loan
Purchase Agreement, have the option to substitute an Eligible Substitute
Mortgage Loan or Loans for such Mortgage Loan. In the event that the Seller
elects to substitute one or more Eligible Substitute Mortgage Loans pursuant
to
Section 3.1(b) of the Mortgage Loan Purchase Agreement, the Seller shall deliver
to the Company with respect to such Eligible Substitute Mortgage Loans, the
original Mortgage Note, the Mortgage, and such other documents and agreements
as
are required by the Mortgage Loan Purchase Agreement. No substitution will
be
made in any calendar month after the Determination Date for such month. Payments
due with respect to Eligible Substitute Mortgage Loans in the month of
substitution shall not be transferred to the Company and will be retained by
the
Servicer and remitted by the Servicer to the Seller on the next succeeding
Payment Date provided a payment has been received by the Company for such month
in respect of the Mortgage Loan to be removed. The Servicer shall amend or
cause
to be amended the Mortgage Loan Schedule to reflect the removal of such Mortgage
Loan and the substitution of the Eligible Substitute Mortgage Loans and the
Servicer shall promptly deliver the amended Mortgage Loan Schedule to the Owner
Trustee and Indenture Trustee.
It
is
understood and agreed that the obligation of the Seller to cure such breach
or
purchase or substitute for such Mortgage Loan as to which such a breach has
occurred and is continuing shall constitute the sole remedy respecting such
breach available to the Company and the Indenture Trustee, as pledgee of the
Mortgage Collateral, against the Seller. In connection with the purchase of
or
substitution for any such Mortgage Loan by the Seller, the Company shall assign
to the Seller all of the right, title and interest in respect of the Mortgage
Loan Purchase Agreement applicable to such Mortgage Loan. Upon receipt of the
Repurchase Price, or upon completion of such substitution, the applicable
Custodian shall deliver the Mortgage Files to the Servicer, together with all
relevant endorsements and assignments.
ARTICLE
III
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
SECTION
3.01. The
Servicers.
(a) The
Servicer shall service and administer the Mortgage Loans in the same manner
as
would prudent institutional mortgage lenders servicing comparable mortgage
loans
for their own account in the jurisdictions where the related Mortgaged
Properties are located and in a manner consistent with the terms of this
Servicing Agreement and which shall be normal and usual in its general mortgage
servicing activities 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, how ever, that the Servicer shall at all times remain responsible
to
the Company, the Indenture Trustee, as pledgee of the Mortgage Collateral,
and
the Securityholders for the performance of its duties and obligations hereunder
in accordance with the terms hereof and the servicing standard set forth above.
Without limiting the generality of the foregoing, the Servicer shall continue,
and is hereby authorized and empowered by the Company and the Indenture Trustee,
as pledgee of the Mortgage Collateral, to execute and deliver, on behalf of
itself, the Company, the Securityholders and the Indenture Trustee or any of
them, 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. The Company,
the Indenture Trustee and the Custodian, as applicable, shall 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. On the Closing Date, the Company shall deliver to the Servicer
a power of attorney substantially in the form of Exhibit B hereto.
If
the
Mortgage relating to a Mortgage Loan did not have a lien senior on the related
Mortgaged Property as of the Cut-Off Date, then the Servicer, in such capacity,
may not consent to the placing of a lien senior to that of the Mortgage on
the
related Mortgaged Property. If the Mortgage relating to a Mortgage Loan had
a
lien senior to the Mortgage Loan on the related Mortgaged Property as of the
Cut-Off Date, then the Servicer, in such capacity, may consent to the
refinancing of such senior lien; provided
that (i)
the resulting Combined Loan-to-Value Ratio of such Mortgage Loan is no higher
than the Combined Loan-to-Value Ratio prior to such refinancing and (ii) the
interest rate for the loan evidencing the refinanced senior lien on the date
of
such refinancing is no higher than the interest rate on the loan evidencing
the
existing senior lien immediately prior to the date of such
refinancing.
The
relationship of the Servicer (and of any successor to the Servicer as servicer
under this Servicing Agreement) to the Company under this Servicing Agreement
is
intended by the parties to be that of an independent contractor and not that
of
a joint venturer, partner or agent.
(b) The
Servicer has entered into Initial Subservicing Agreements with the Initial
Subservicers for the servicing and administration of the Mortgage Loans and
may
enter into additional Sub servicing Agreements with Subservicers for the
servicing and administration of certain of the Mortgage Loans. References in
this Servicing Agreement to actions taken or to be taken by the Servicer in
servicing the Mortgage Loans include actions taken or to be taken by a
Subservicer on behalf of the Servicer and any amount received by such
Subservicer in respect of a Mortgage Loan shall be deemed to have been received
by the Servicer whether or not actually received by the Servicer. Each
Subservicing Agreement will be upon such terms and conditions as are not
inconsistent with this Servicing Agreement and as the Servicer and the
Subservicer have agreed. With the approval of the Servicer, a Subservicer may
delegate its servicing obligations to third-party servicers, but such
Subservicers will remain obligated under the related Subservicing Agreements.
The Servicer and the Subservicer may enter into amendments to the related
Subservicing Agreements; provided,
however,
that
any such amendments shall be consistent with and not violate the provisions
of
this Servicing Agreement. The Servicer shall be entitled to terminate any
Subservicing Agreement in accordance with the terms and conditions thereof
and
without any limitation by virtue of this Servicing Agreement; provided,
however,
that in
the event of termination of any Subservicing Agreement by the Servicer or the
Subservicer, the Servicer shall either act as servicer of the related Mortgage
Loan or enter into a Subservicing Agreement with a successor Subservicer which
will be bound by the terms of the related Subservicing Agreement. The Servicer
shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Servicer and nothing contained in this Servicing
Agreement shall be deemed to limit or modify such indemnification.
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 Subservicing
Agreement with any Subservicer in accordance with the terms of the applicable
Subservicing Agreement or assume the terminated Servicer’s rights and
obligations under such subservicing arrangements which termination or assumption
will not violate the terms of such arrangements.
As
part
of its servicing activities hereunder, the Servicer, for the benefit of the
Company, shall use reasonable efforts to enforce the obligations of each
Subservicer under the related Subservicing Agreement, to the extent that the
non-performance of any such obligation would have material and adverse effect
on
a Mortgage Loan. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Subservicing Agreements and the pursuit
of
other appropriate remedies, shall be in such form and carried out to such an
extent and at such time as the Servicer, in its good faith business judgment,
would require were it the owner of the related Mortgage Loans. The Servicer
shall pay the costs of such enforcement at its own expense, and shall be
reimbursed therefor only (i) from a general recovery resulting from such
enforcement to the extent, if any, that such recovery exceeds all amounts due
in
respect of the related Mortgage Loan or (ii) from a specific recovery of costs,
expenses or attorneys fees against the party against whom such enforcement
is
directed.
SECTION
3.02. Collection
of Certain Mortgage Loan Payments.
(a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the ▇▇▇▇ ▇▇▇▇ Loans, and shall, to the extent such
procedures shall be consistent with this Servicing Agreement, follow such
collection procedures as shall be normal and usual in its general mortgage
servicing activities. Consistent with the foregoing, and without limiting the
generality of the foregoing, the Servicer may in its discretion (i) waive any
late payment charge, penalty interest or other fees which may be collected
in
the ordinary course of servicing such Mortgage Loan and (ii) arrange with a
Mortgagor a schedule for the payment of principal and interest due and unpaid;
provided
such
arrangement is consistent with the Servicer’s policies with respect to home
equity mortgage loans; 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. The Servicer may also extend the Due Date for payment due on a
Mortgage Loan, provided,
however,
that
the Servicer shall first determine that any such waiver or extension will not
adversely affect the lien of the related Mortgage. Consistent with the terms
of
this Servicing Agreement, the Servicer may also waive, modify or vary any term
of any Mortgage Loan or consent to the postponement of strict compliance with
any such term or in any manner grant indulgence to any Mortgagor if in the
Servicer’s determination such waiver, modification, postponement or indulgence
is not materially adverse to the interests of the Securityholders or the Credit
Enhancer, provided,
however,
that
the Servicer may not modify or permit any Subservicer to modify any Mortgage
Loan (including without limitation any modification that would change the
Mortgage Rate, forgive the payment of any principal or interest (unless in
connection with the liquidation of the related Mortgage Loan) or extend the
final maturity date of such Mortgage Loan) unless such Mortgage Loan is in
default or, in the judgment of the Servicer, such default is reasonably
foreseeable.
(b) The
Servicer shall establish an account (the “Collection Account”) in which the
Servicer shall deposit or cause to be deposited any amounts representing
payments on and any collections in respect of the Mortgage Loans received by
it
subsequent to the Cut-Off Date as to any Initial Loan or the related Deposit
Date as to any Additional Loan (other than in respect of the payments referred
to in the following paragraph) within __ Business Day[s] following receipt
thereof (or otherwise on or prior to the Closing Date), including the following
payments and collections received or made by it (without
duplication):
(i) all
payments of principal of or interest on the Mortgage Loans received by the
Servicer from the respective Subservicer, net of any portion of the interest
thereof retained by the Subservicer as Subservicing Fees;
(ii) the
aggregate Repurchase Price of the Mortgage Loans purchased by the Servicer
pursuant to Section 3.15;
(iii) Net
Liquidation Proceeds net of any related Foreclosure Profit;
(iv) all
proceeds of any Mortgage Loans repurchased by the Seller pursuant to the
Mortgage Loan Purchase Agreement, and all Substitution Adjustment Amounts
required to be deposited in connection with the substitution of an Eligible
Substitute Mortgage Loan pursuant to the Mortgage Loan Purchase
Agreement;
(v) insurance
proceeds, other than Net Liquidation Proceeds, resulting from any insurance
policy maintained on a Mortgaged Property; and
(vi) amounts
required to be paid by the Servicer pursuant to Section 8.08.
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, insurance premiums, assessments and similar items.
In the event any amount not required to be deposited in the Collection Account
is so deposited, the Servicer may at any time withdraw such amount from the
Collection Account, any provision herein to the contrary notwithstanding. The
Collection Account may contain funds that belong to one or more trust funds
created for the notes or certificates of other series and may contain other
funds respecting payments on mortgage loans belonging to the Servicer or
serviced or serviced by it on behalf of others. Notwithstanding such commingling
of funds, the Servicer shall keep records that accurately reflect the funds
on
deposit in the Collection Account that have been identified by it as being
attributable to the Mortgage Loans and shall hold all collections in the
Collection Account to the extent they represent collections on the Mortgage
Loans for the benefit of the Company, the Indenture Trustee, the Securityholders
and the Credit Enhancer, as their interests may appear. The Servicer shall
remit
all Foreclosure Profits to itself as additional servicing
compensation.
The
Servicer may cause the institution maintaining the Collection Account to invest
any funds in the Collection Account in Eligible Investments (including
obligations of the Servicer or any of its Affiliates, if such obligations
otherwise qualify as Eligible Investments), which shall mature not later than
the Business Day next preceding the Payment Date and shall not be sold or
disposed of prior to its maturity. Except as provided above, all income and
gain
realized from any such investment shall be for the benefit of the Servicer
and
shall be subject to its withdrawal or order 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.
(c) The
Servicer will require each Subservicer to hold all funds constituting
collections on the Mortgage Loans, pending remittance thereof to the Servicer,
in one or more accounts meeting the requirements of an Eligible Account, and
invested in Eligible Investments, unless, all such collections are remitted
on a
daily basis to the Servicer for deposit into the Collection
Account.
SECTION
3.03. Withdrawals
From the Collection Account.
The
Servicer shall, from time to time as provided herein, make withdrawals from
the
Collection Account of amounts on deposit therein pursuant to Section 3.02 that
are attributable to the Mortgage Loans for the following purposes:
(i) to
deposit in the Distribution Account, on the Business Day prior to each Payment
Date, an amount equal to the Security Collections required to be distributed
on
such Payment Date;
(ii) to
the
extent deposited to the Collection Account, to reimburse itself or the related
Subservicer for previously unreimbursed expenses incurred in maintaining
individual insurance policies pursuant to Section 3.04, or Liquidation Expenses,
paid pursuant to Section 3.07 or otherwise reimbursable pursuant to the terms
of
this Servicing Agreement (to the extent not payable pursuant to Section 3.09),
such withdrawal right being limited to amounts received on particular Mortgage
Loans (other than any Repurchase Price in respect thereof) which represent
late
recoveries of the payments for which such advances were made, or from related
Liquidation Proceeds or the proceeds of the purchase of such Mortgage
Loan;
(iii) to
pay to
itself out of each payment received on account of interest on a Mortgage Loan
as
contemplated by Section 3.09, an amount equal to the related Servicing Fee
(to
the extent not retained pursuant to Section 3.02), and to pay to any Subservicer
any Subservicing Fees not previously withheld by the Subservicer;
(iv) to
the
extent deposited in the Collection Account to pay to itself as additional
servicing compensation any interest or investment income earned on funds
deposited in the Collection Account and Payment Account that it is entitled
to
withdraw pursuant to Sections 3.02(b) and 5.01;
(v) to
the
extent deposited in the Collection Account, to pay to itself as additional
servicing compensation any Foreclosure Profits;
(vi) to
pay to
itself or the Seller, with respect to any Mortgage Loan or property acquired in
respect thereof that has been purchased or otherwise transferred to the Seller,
the Servicer or other entity, all amounts received thereon and not required
to
be distributed to Securityholders as of the date on which the related Purchase
Price or Repurchase Price is determined;
(vii) to
withdraw any other amount deposited in the Collection Account that was not
required to be deposited therein pursuant to Section 3.02;
(viii) to
pay to
the Seller the amount, if any, deposited in the Collection Account by the
Indenture Trustee upon release thereof from the Funding Account representing
payments for Additional Loans; and
(ix) after
the
occurrence of an Amortization Event, to pay to the Seller, the Excluded
Amount.
Since,
in
connection with withdrawals pursuant to clauses (iii), (iv), (vi) and (vii),
the
Servicer’s entitlement thereto is limited to collections or other recoveries on
the related Mortgage Loan, the Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account pursuant to such clauses.
Notwithstanding any other provision of this Servicing Agreement, the Servicer
shall be entitled to reimburse itself for any previously unreimbursed expenses
incurred pursuant to Section 3.07 or otherwise reimbursable pursuant to the
terms of this Servicing Agreement that the Servicer determines to be otherwise
nonrecoverable (except with respect to any Mortgage Loan as to which the
Repurchase Price has been paid), by withdrawal from the Collection Account
of
amounts on deposit therein attributable to the Mortgage Loans on any Business
Day prior to the Payment Date succeeding the date of such
determination.
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 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 cause to be maintained on property acquired upon
foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan, fire
insurance with extended coverage in an amount which is at least equal to the
amount necessary to avoid the application of any co-insurance clause contained
in the related hazard insurance policy. Amounts collected by the Servicer under
any such policies (other than amounts to be applied to the restoration or repair
of the related Mortgaged Property or property thus acquired or amounts released
to the Mortgagor in accordance with the Servicer’s normal servicing procedures)
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 at any time during
the
life of a Mortgage Loan in a federally designated flood area, the hazard
insurance to be maintained for the related Mortgage Loan shall include flood
insurance (to the extent available). All such flood insurance shall be in
amounts equal to the lesser of (i) the amount required to compensate for any
loss or damage to the Mortgaged Property on a replacement cost basis and (ii)
the maximum amount of such insurance available for the related Mortgaged
Property under the national flood insurance program (assuming that the area
in
which such Mortgaged Property is located is participating in such program).
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 its
general mortgage servicing activities insuring against hazard losses on all
of
the Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first sentence of this Section 3.04, it being
understood and agreed that such policy may contain a deductible clause, in
which
case the Servicer shall, in the event that there shall not have been maintained
on the related Mortgaged Property a policy complying with the first sentence
of
this Section 3.04 and there shall have been a loss which would have been covered
by such policy, deposit in the Collection Account the amount not otherwise
payable under the blanket policy because of such deductible clause. Any such
deposit by the Servicer shall be made on the last Business Day of the Collection
Period in the month in which payments under any such policy would have been
deposited in the Collection Account. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Servicer agrees to
present, on behalf of itself, the Company, the Issuer, the Indenture Trustee
and
the Securityholders, claims under any such blanket policy.
SECTION
3.05. Modification
Agreements.
The
Servicer or the related Subservicer, as the case may be, shall be entitled
to
(A) execute assumption agreements, substitution agreements, and instruments
of
satisfaction or cancellation or of partial or full release or discharge, or
any
other document contemplated by this Servicing Agreement and other comparable
instruments with respect to the Mortgage Loans and with respect to the Mortgaged
Properties subject to the Mortgages (and the Company shall promptly execute
any
such documents on request of the Servicer) and (B) approve the granting of
an
easement thereon in favor of another Person, any alteration or demolition of
the
related Mortgaged Property or other similar matters, if it has determined,
exercising its good faith business judgment in the same manner as it would
if it
were the owner of the related Mortgage Loan, that the security for, and the
timely and full collectability of, such Mortgage Loan would not be adversely
affected thereby. A partial release pursuant to this Section 3.05 shall be
permitted only if the Combined Loan-to-Value Ratio for such Mortgage Loan after
such partial release does not exceed the Combined Loan-to-Value Ratio for such
Mortgage Loan as of the Cut-Off Date. Any fee collected by the Servicer or
the
related Sub servicer for processing such request will be retained by the
Servicer or such Subservicer as additional servicing compensation.
SECTION
3.06. Trust
Estate; Related Documents.
(a) When
required by the provisions of this Servicing Agreement, the Company shall
execute instruments to release property from the terms of this Servicing
Agreement, or convey the Company’s interest in the same, in a manner and under
circumstances which are not inconsistent with the provisions of this Servicing
Agreement. No party relying upon an instrument executed by the Company as
provided in this Article III shall be bound to ascertain the Company’s
authority, inquire into the satisfaction of any conditions precedent or see
to
the application of any moneys.
(b) If
from
time to time the Servicer shall deliver to the Company or the related Custodian
copies of any written assurance, assumption agreement or substitution agreement
or other similar agreement pursuant to Section 3.05, the Company or the related
Custodian shall check that each of such documents purports to be an original
executed copy (or a copy of the original executed document if the original
executed copy has been submitted for recording and has not yet been returned)
and, if so, shall file such documents, and upon receipt of the original executed
copy from the applicable recording office or receipt of a copy thereof certified
by the applicable recording office shall file such originals or certified copies
with the Related Documents. If any such documents submitted by the Servicer
do
not meet the above qualifications, such documents shall promptly be returned
by
the Company or the related Custodian to the Servicer, with a direction to the
Servicer to forward the correct documentation.
(c) Upon
Company Request accompanied by an Officers’ Certificate of the Servicer pursuant
to Section 3.09 of this Servicing Agreement to the effect that a Mortgage Loan
has been the subject of a final payment or a prepayment in full and the related
Mortgage Loan has been terminated or that substantially all Liquidation Proceeds
which have been determined by the Servicer in its reasonable judgment to be
finally recoverable have been recovered, and upon deposit to the Collection
Account of such final monthly payment, prepayment in full together with accrued
and unpaid interest to the date of such payment with respect to such Mortgage
Loan or, if applicable, Liquidation Proceeds, the Company shall promptly release
the Related Documents to the Servicer, along with such documents as the Servicer
or the Mortgagor may request as contemplated by the Servicing Agreement to
evidence satisfaction and discharge of such Mortgage Loan. If from time to
time
and as appropriate for the servicing or foreclosure of any Mortgage Loan, the
Servicer requests the Company or the related Custodian to release the Related
Documents and delivers to the Company or the related Custodian a trust receipt
reasonably satisfactory to the Company or the related Custodian and signed
by a
Responsible Officer of the Servicer, the Company or the related Custodian shall
release the Related Documents to the Servicer. If such Mortgage Loans shall
be
liquidated and the Company or the related Custodian receives a certificate
from
the Servicer as provided above, then, upon request of the Company or the related
Custodian shall release the trust receipt to the Servicer.
SECTION
3.07. Realization
Upon Defaulted Mortgage Loans.
With
respect to such of the Mortgage Loans as come into and continue in default,
the
Servicer will decide whether to foreclose upon the Mortgaged Properties securing
such Mortgage Loans or write off the unpaid principal balance of the Mortgage
Loans as bad debt; provided
that if
the Servicer has actual knowledge 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 Company 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;
provided
that the
Servicer shall not be liable in any respect hereunder if the Servicer is acting
in connection with any such foreclosure or attempted foreclosure which is not
completed or other conversion in a manner that is consistent with the provisions
of this Servicing Agreement. The foregoing is subject to the proviso that the
Servicer shall not be required to expend its own funds in connection with any
fore closure or attempted foreclosure which is not completed 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 of a determination by the Servicer that
any
such expenditure previously made pursuant to this Section 3.07 will not be
reimbursable from Net Liquidation Proceeds, the Servicer shall be entitled
to
reimbursement of its funds so expended pursuant to Section 3.03.
Notwithstanding
any provision of this Servicing Agreement, a Mortgage Loan may be deemed to
be
finally liquidated if substantially all amounts expected by the Servicer to
be
received in connection with the related defaulted Mortgage Loan have been
received; provided,
however,
any
subsequent collections with respect to any such Mortgage Loan shall be deposited
to the Collection Account. For purposes of determining the amount of any
Liquidation Proceeds or Insurance Proceeds, or other unscheduled collections,
the Servicer may take into account minimal amounts of additional receipts
expected to be received or any estimated additional liquidation expenses
expected to be incurred in connection with the related defaulted Mortgage
Loan.
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
Company and the Indenture Trustee as their interests may appear, or to their
respective nominee on behalf of Securityholders. Notwithstanding any such
acquisition of title and cancellation of the related Mortgage Loan, such
Mortgaged Property shall (except as otherwise expressly provided herein) be
considered to be an outstanding Mortgage Loan held as an asset of the Company
until such time as such property shall be sold. Consistent with the foregoing
for purposes of all calculations hereunder, so long as such Mortgaged Property
shall be considered to be an outstanding Mortgage Loan it shall be assumed
that,
notwithstanding that the indebtedness evidenced by the related Mortgage Note
shall have been discharged, such Mortgage Note in effect at the time of any
such
acquisition of title before any adjustment thereto by reason of any bankruptcy
or similar proceeding or any moratorium or similar waiver or grace period will
remain in effect.
Any
proceeds from foreclosure proceedings or the purchase or repurchase of any
Mortgage Loan pursuant to the terms of this Servicing Agreement, as well as
any
recovery resulting from a collection of Liquidation Proceeds or Insurance
Proceeds, will be applied in the following order of priority: first, to
reimburse the Servicer or the related Subservicer in accordance with Section
3.07; second, to all Servicing Fees payable therefrom; third, to the extent
of
accrued and unpaid interest on the related Mortgage Loan, at the Net Mortgage
Rate to the Due Date prior to the Payment Date on which such amounts are to
be
deposited in the Payment Account; fourth, as a recovery of principal on the
Mortgage Loan; and fifth, to Foreclosure Profits.
SECTION
3.08. Company
and Indenture Trustee to Cooperate.
On
or
before each Payment Date, the Servicer will notify the Indenture Trustee or
the
relevant Custodian, with a copy to the Company, of the termination of or the
payment in full and the termination of any Mortgage Loan during the preceding
Collection Period, which notification shall be by a certification in
substantially the form attached hereto as Exhibit C (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 receipt of 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 under the Mortgage Loan Purchase
Agreement, 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 any expenses incurred in connection with such instrument of
satisfaction or transfer shall be reimbursed from amounts deposited in the
Collection Account. From time to time and as appropriate for the servicing
or
foreclosure of any Mortgage Loan, the Indenture Trustee or the relevant
Custodian shall, upon request of the Servicer and delivery to the Indenture
Trustee or relevant Custodian, with a copy to the Company, of a Request for
Release, in the form annexed hereto as Exhibit D, signed by a Servicing Officer,
release or cause to be released the related Mortgage File to the Servicer and
the Company and Indenture Trustee shall promptly execute such documents, in
the
forms provided by the Servicer, as shall be necessary for 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 Indenture Trustee
or the related Custodian (as specified in such receipt) 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 to the
Servicer.
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 of the Mortgage Loan Purchase Agreement, the Company shall,
if so requested in writing by the Servicer, promptly execute an appropriate
assignment in the form provided by the Servicer to assign such Mortgage Loan
for
the purpose of collection to the Servicer (any such assignment shall
unambiguously indicate that the assignment is for the purpose of collection
only), and, upon such assignment, such assignee for collection will thereupon
bring all required actions in its own name and otherwise enforce the terms
of
the Mortgage Loan and deposit or credit 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 assignee for
collection shall promptly reassign such Mortgage Loan to the Company and return
all Related Documents to the place where the related Mortgage File was being
maintained.
In
connection with the Company’s obligation to cooperate as provided in this
Section 3.08 and all other provisions of this Servicing Agreement requiring
the
Company to authorize or permit any actions to be taken with respect to the
Mortgage Loans, the Indenture Trustee, as pledgee of the Mortgage Collateral
in
the Company, expressly agrees, on behalf of the Company, to take all such
actions on behalf of the Company and to promptly execute and return all
instruments reasonably required by the Servicer in connection therewith;
PROVIDED that if the Servicer shall request a signature of the Indenture
Trustee, on behalf of the Company, the Servicer will deliver to the Indenture
Trustee an Officer’s Certificate stating that such signature is necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties under this Servicing Agreement.
SECTION
3.09. Servicing
Compensation; Payment of Certain Expenses by Servicer.
The
Servicer shall be entitled to receive the Servicing Fee in accordance with
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 and certain other receipts not required to be deposited in
the
Collection Account as specified in Section 3.02 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, including, without limitation, the fees and expenses of the
Administrator, Owner Trustee, Indenture Trustee and any Custodian) and shall
not
be entitled to reimbursement therefor except as specifically provided
herein.
SECTION
3.10. Annual
Statement as to Compliance.
The
Servicer shall deliver to the Indenture Trustee, the Depositor and the Rating
Agencies on or before March 15 of each year, commencing in 20[__], an officer’s
certificate (an “Annual Statement of Compliance”), certifying that with respect
to the period ending December 31st of the prior year: (i) the Servicer or such
Servicing Officer, as applicable, has reviewed the activities of the Servicer
during the preceding calendar year or portion thereof and its performance under
this Agreement or other applicable servicing agreement and (ii) to the best
of
the Servicer’s or such Servicing Officer’s, as applicable, knowledge, based on
such review, the Servicer has performed and fulfilled its duties,
responsibilities and obligations under this Agreement or other applicable
servicing agreement in all material respects throughout such year, or, if there
has been a failure to fullfill of any such duties, responsibilities or
obligations, in any material respect, specifying each such failure known to
such
Servicing Officer and the nature and status of cure provisions thereof. In
addition to the foregoing, the Servicer will, to the extent reasonable, give
any
other servicing information required by the Securities and Exchange Commission
pursuant to applicable law. The Servicer shall indemnify and hold harmless
the
Depositor and its officers, directors and Affiliates from and against any actual
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses that such Person
may sustain based upon a breach of the Servicer’s obligations under this Section
3.10. Such Annual Statement of Compliance shall contain no restrictions or
limitations on its use. In the event that the Servicer has delegated any
servicing responsibilities with respect to the Mortgage Loans serviced by it
to
a Sub-Servicer, the Servicer shall deliver an officer's certificate of the
Sub-Servicer as described above as to each Sub-Servicer as and when required
with respect to the Servicer.
If
the
Servicer cannot deliver the Annual Statement of Compliance by March 15th of
such
year, the Indenture Trustee, at the direction of the Depositor, may permit
a
cure period for the related Servicer to deliver such Annual Statement of
Compliance, but in no event later than March 30th of such year.
Failure
of the Servicer to timely comply with this Section 3.20 shall be deemed an
event
of default,, automatically, without notice and without any cure period, and
the
Indenture Trustee at the direction of the Depositor shall, in addition to
whatever rights the Indenture Trustee may have under this Agreement and at
law
or equity or to damages, including injunctive relief and specific performance,
terminate all the rights and obligations of the Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof without compensating
the Servicer for the same. This paragraph shall supercede any other provision
in
this Agreement or any other agreement to the contrary.
SECTION
3.11. Assessments
of Compliance and Attestation Reports.
On
and
after [________________], the Servicer shall service and administer the Mortgage
Loans in accordance with all applicable requirements of the Servicing Criteria
(as set forth in Exhibit [__]). The Servicer shall deliver to the Indenture
Trustee on or before March 15th of each calendar year beginning in [____],
a
report (an “Assessment of Compliance”) reasonably satisfactory to the Depositor
regarding the Servicer’s assessment of compliance with the applicable Servicing
Criteria during the preceding calendar year as required by Rules 13a-18 and
15d-18 of the Exchange Act and Item 1122 of Regulation AB, which as of the
date
hereof, require a report by an authorized officer of the Servicer that contains
the following:
A
statement by such officer of its responsibility for assessing compliance with
the Servicing Criteria applicable to the Servicer;
A
statement by such officer that such officer used the Servicing Criteria to
assess compliance with the Servicing Criteria applicable to the
Servicer;
An
assessment by such officer of the Servicer’s compliance with the applicable
Servicing Criteria for the period consisting of the preceding calendar year,
including disclosure of any material instance of noncompliance with respect
thereto during such period, which assessment shall be based on the activities
it
performs with respect to asset-backed securities transactions taken as a whole
involving the Servicer that are backed by the same asset type as the Mortgage
Loans;
A
statement that a registered public accounting firm has issued an attestation
report on the Servicer’s Assessment of Compliance for the period consisting of
the preceding calendar year; and
A
statement as to which of the Servicing Criteria, if any, are not applicable
to
the Servicer, which statement shall be based on the activities it performs
with
respect to asset-backed securities transactions taken as a whole involving
the
Servicer, that are backed by the same asset type as the Mortgage
Loans.
Such
report at a minimum shall address each of the Servicing Criteria specified
on a
certification substantially in the form of Exhibit [___] hereto delivered to
the
Indenture Trustee concurrently with the execution of this
Agreement.
On
or
before March 15th of each calendar year beginning in 200[__], the Servicer
shall
furnish to the Indenture Trustee a report (an “Attestation Report”) by a
registered public accounting firm that attests to, and reports on, the
Assessment of Compliance made by the Servicer, as required by Rules 13a-18
and
15d-18 of the Exchange Act and Item 1122(b) of Regulation AB, which Attestation
Report must be made in accordance with standards for attestation reports issued
or adopted by the Public Company Accounting Oversight Board.
The
Servicer shall cause any servicer, and each subcontractor determined by the
Servicer, as applicable, to be “participating in the servicing function” within
the meaning of Item 1122 of Regulation AB, to deliver to the Indenture Trustee
an assessment of compliance and accountants’ attestation.
If
the
Servicer cannot deliver the related Assessment of Compliance or Attestation
Report by March 15th of such year, the Depositor, at its sole option, may permit
a cure period for the Servicer to deliver such Assessment of Compliance or
Attestation Report, but in no event later than March 30th of such
year.
Failure
of the Servicer to timely comply with this Section 3.21 shall be deemed an
event
of default, automatically, without notice and without any cure period, and
the
Indenture Trustee may, in addition to whatever rights the Indenture Trustee
may
have under the agreements and at law or equity or to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Servicer under the agreements and in and to the Mortgage
Loans and the proceeds thereof without compensating the Servicer for the same.
This paragraph shall supercede any other provision in this Agreement or any
other agreement to the contrary.
SECTION
3.12. Access
to
Certain Documentation and Information Regarding the Mortgage Loans.
Whenever
required by statute or regulation, the Servicer shall provide to the Credit
Enhancer, any Securityholder upon reasonable request (or a regulator for a
Securityholder) or the Indenture Trustee, reasonable access to the documentation
regarding the Mortgage Loans 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.
SECTION
3.13. Maintenance
of Certain Servicing Insurance Policies.
The
Servicer shall during the term of its service as servicer maintain in force
(i)
a policy or policies of insurance covering errors and omissions in the
performance of its obligations as servicer hereunder and (ii) a fidelity bond
in
respect of its officers, employees or agents. Each such policy or policies
and
bond shall be at least equal to the coverage that would be required by FNMA
or
FHLMC, whichever is greater, for Persons performing servicing for mortgage
loans
purchased by such entity.
SECTION
3.14. 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 or Subservicer shall make reports of foreclosures
and abandonments of any mortgaged property for each year beginning in ____,
the
Servicer or Subservicer shall file reports relating to each instance occurring
during the previous calendar year in which the Servicer (i) on behalf of the
Company, 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 or Subservicer shall be in form and
substance sufficient to meet the reporting requirements imposed by Section
6050J
and Section 6050H (reports relating to mortgage interest received) of the
Code.
SECTION
3.15. Optional
Repurchase of Defaulted Mortgage Loans.
Notwithstanding
any provision in Section 3.07 to the contrary, the Servicer may repurchase
any
Mortgage Loan delinquent in payment for a period of 60 days or longer for a
price equal to the Repurchase Price.
ARTICLE
IV
SERVICING
CERTIFICATE
SECTION
4.01. Statements
to Securityholders.
(a) With
respect to each Payment Date, the Servicer shall forward to the Indenture
Trustee and the Indenture Trustee pursuant to Section 3.26 of the Indenture
shall forward or cause to be forwarded by mail to each Certificateholder,
Noteholder, the Credit Enhancer, the Depositor, the Owner Trustee, the
Certificate Paying Agent and each Rating Agency, a statement setting forth
the
following information as to the Notes and Certificates, to the extent
applicable:
(i) the
aggregate amount of (a) Security Interest Collections with respect to the Notes
and the Certificates, (b) aggregate Security Principal Collections with respect
to the Notes and the Certificates and (c) Security Collections for the related
Collection Period with respect to the Notes and the Certificates;
(ii) the
amount of such distribution to the Securityholders of the Notes and the
Certificates applied to reduce the principal balance thereof and separately
stating the portion thereof in respect of the Accelerated Principal Distribution
Amount and the amount to be deposited in the Funding Account on such Payment
Date;
(iii) the
amount of such distribution to the Securityholders of the Notes and the
Certificates allocable to interest and separately stating the portion thereof
in
respect of overdue accrued interest;
(iv) the
Credit Enhancement Draw Amount, if any, for such Payment Date and the aggregate
amount of prior draws thereunder not yet reimbursed;
(v) the
aggregate Principal Balance of (a) the ________ Loans, (b) the ______ Loans,
(c)
the _________ Loans, as of the end of the preceding Collection Period and (d)
all of the Mortgage Loans;
(vi) 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, 90-179 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; provided,
however,
that
such information will not be provided on the statements relating to the first
Payment Date;
(vii) the
Weighted Average Net Mortgage Rate for the related Collection Period and the
Weighted Average Net Mortgage Rate for (a) the ________ Loans, (b) the
_______Loans and (c) the _________ Loans for the related Collection
Period;
(viii) the
Special Capital Distribution Amount and the Required Special Capital
Distribution Amount, in each case as the end of the related Collection Period;
and
(ix) the
aggregate amount of Additional Loans acquired during the previous Collection
Period with amounts in respect of Net Principal Collections from the Funding
Account;
(x) the
aggregate Liquidation Loss Amounts with respect to the related Collection
Period, the amount of any remaining Carryover Loss Amount with respect to the
Notes and Certificates, respectively, and the aggregate of the Liquidation
Loss
Amounts from all Collection Periods to date expressed as a percentage of the
sum
of (a) the Cut-Off Date Pool Balance and (b) the amount by which the Pool
Balance as of the latest date that the Additional Loans have been transferred
to
the Company exceeds the Cut-Off Date Pool Balance;
(xi) any
unpaid interest on the Notes and Certificates, respectively, after such
Distribution Date;
(xii) the
aggregate Principal Balance of each Class of Notes and of the Certificates
after
giving effect to the distribution of principal on such Payment
Date;
(xiii) the
respective Security Percentage applicable to the Notes and Certificates, after
application of payments made on such Payment Date; and
(xiv) the
amount distributed pursuant to Section 3.05(a)(xi) of the Indenture on such
Payment Date.
In
the
case of information furnished pursuant to clauses (ii) and (iii) above, the
amounts shall be expressed as an aggregate dollar amount per Note or Certificate
with a $1,000 denomination.
Prior
to
the close of business on the Business Day next succeeding each Determination
Date, the Servicer shall furnish a written statement to the Company, the Owner
Trustee, the Depositor, the Certificate Paying Agent and the Indenture Trustee
setting forth (i) all the foregoing information, (ii) the aggregate amounts
required to be withdrawn from the Collection Account and deposited into the
Payment Account on the Business Day preceding the Payment Date pursuant to
Section 3.03 and (iii) the amounts (A) withdrawn from the Payment Account and
deposited to the Funding Account pursuant to Section 8.02(b) of the Indenture
and (B) withdrawn from the Funding Account and deposited to the Collection
Account pursuant to Section 8.02(c)(i) of the Indenture. The determination
by
the Servicer of such amounts shall, in the absence of obvious error, be
presumptively deemed to be correct for all purposes hereunder and the Owner
Trustee and Indenture Trustee shall be protected in relying upon the same
without any independent check or verification. In addition, upon the Company’s
written request, the Servicer shall promptly furnish information reasonably
requested by the Company that is reasonably available to the Servicer to enable
the Company to perform its federal and state income tax reporting
obligations.
ARTICLE
V
DISTRIBUTION
AND PAYMENT ACCOUNTS
SECTION
5.01. Distribution
Account.
The
Servicer shall establish and maintain a separate trust account (the
“Distribution Account”) titled “[National
City Mortgage Capital LLC MBN]
Trust Series 20__-__, [for the benefit of the Noteholders, the
Certificateholders and the Credit Enhancer pursuant to the Indenture, dated
as
of _______________, between [National
City Mortgage Capital LLC MBN]
Trust Series 20__-__ and [Name of Indenture Trustee]. The Distribution Account
shall be an Eligible Account. On the Business Day prior to each Payment Date,
(i) amounts deposited into the Distribution Account pursuant to Section 3.03(i)
hereof will be distributed by the Servicer in accordance with Section ____
of
the [Trust] Agreement, and (ii) the portion of such amounts then distributable
with respect to the Mortgage Collateral shall be deposited into the Payment
Account. [The Servicer shall invest or cause the institution maintaining the
Distribution Account to invest the funds in the Distribution Account in Eligible
Investments designated in the name of the National City Mortgage Co., which
shall mature not later than the Business Day next preceding the Payment Date
next following the date of such investment (except that (i) any investment
in
the institution with which the Distribution Account is maintained may mature
on
such Payment Date and (ii) any other investment may mature on such Payment
Date
if the Servicer shall advance funds on such Payment Date to the Payment Account
in the amount payable on such investment on such Payment Date, pending receipt
thereof to the extent necessary to make distributions on the Securities) and
shall not be sold or disposed of prior to maturity. All income and gain realized
from any such investment shall be for the benefit of the Servicer and shall
be
subject to its withdrawal or order from time to time. The amount of any losses
incurred in respect of any such investments shall be deposited in the
Distribution Account by the Servicer out of its own funds immediately as
realized.]
SECTION
5.02. Payment
Account.
The
Indenture Trustee shall establish and maintain a separate trust account (the
“Payment Account”) titled “__________________________________, as Indenture
Trustee, for the benefit of the Noteholders, the Certificate Paying Agent and
the Credit Enhancer pursuant to the Indenture, dated as of _______________,
between [National
City Mortgage Capital LLC MBN]
Trust Series 20__-___ and __________________________________”. The Payment
Account shall be an Eligible Account. On each Payment Date, amounts on deposit
in the Payment Account will be distributed by the Indenture Trustee in
accordance with Section 3.05 of the Indenture. The Indenture Trustee shall,
upon
written request from the Servicer, invest or cause the institution maintaining
the Payment Account to invest the funds in the Payment Account in Eligible
Investments designated in the name of the Indenture Trustee, which shall mature
not later than the Business Day next preceding the Payment Date next following
the date of such investment (except that (i) any investment in the institution
with which the Payment Account is maintained may mature on such Payment Date
and
(ii) any other investment may mature on such Payment Date if the Indenture
Trustee shall advance funds on such Payment Date to the Payment Account in
the
amount payable on such investment on such Payment Date, pending receipt thereof
to the extent necessary to make distributions on the Securities) and shall
not
be sold or disposed of prior to maturity. All income and gain realized from
any
such investment shall be for the benefit of the Servicer and shall be subject
to
its withdrawal or order from time to time. The amount of any losses incurred
in
respect of any such investments shall be deposited in the Payment Account by
the
Servicer out of its own funds immediately as realized.
ARTICLE
VI
THE
SERVICER
SECTION
6.01. Liability
of the Servicer.
The
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Servicer
herein.
SECTION
6.02. Merger
of
Consolidation of, or Assumption of the Obligations of, the
Servicer.
Any
corporation into which the Servicer may be merged or converted or with which
it
may be consolidated, or any corporation resulting from any merger, conversion
or
consolidation to which the Servicer shall be a party, or any corporation
succeeding to the business of the Servicer, shall be the successor of the
Servicer, hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
The
Servicer may assign its rights and delegate its duties and obligations under
this Servicing Agreement; provided
that the
Person accepting such assignment or delegation shall be a Person which is
qualified to service mortgage loans on behalf of FNMA or FHLMC, is reasonably
satisfactory to the Indenture Trustee (as pledgee of the Mortgage Collateral),
the Company and the Credit Enhancer, is willing to service the Mortgage Loans
and executes and delivers to the Indenture Trustee and the Company an agreement,
in form and substance reason ably satisfactory to the Credit Enhancer, the
Indenture Trustee and the Company, which contains an assumption by such Person
of the due and punctual performance and observance of each covenant and
condition to be performed or observed by the Servicer under this Servicing
Agreement; PROVIDED further that each Rating Agency’s rating of the Securities
in effect immediately prior to such assignment and delegation will not be
qualified, reduced, or withdrawn as a result of such assignment and delegation
(as evidenced by a letter to such effect from each Rating Agency) or considered
to be below investment grade without taking into account the Credit Enhancement
Instrument.
SECTION
6.03. 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 Company, the Issuer, the Owner
Trustee, the Indenture Trustee or the Securityholders for any action taken
or
for refraining from the taking of any action in good faith pursuant to this
Servicing Agreement, Provided,
however,
that
this provision shall not protect the Servicer or any such Person against any
liability which would otherwise be imposed by reason of its willful misfeasance,
bad faith or gross negligence in the performance of its duties hereunder or
by
reason of its reckless disregard of its obligations and duties 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 Company and held harmless against any loss,
liability or expense incurred in connection with any legal action relating
to
this Servicing Agreement or the Securities, including any amount paid to the
Owner Trustee or the Indenture Trustee pursuant to Section 6.06(b), other than
any loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Servicing Agreement) and any loss, liability
or
expense incurred by reason of its willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder or by reason of its
reckless disregard of its 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 its duties to service the Mortgage Loans in
accordance with this Servicing 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 Servicing Agreement, and the
rights and duties of the parties hereto and the interests of the Securityholders
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 Company, and the Servicer shall be entitled to be reimbursed therefor.
The Servicer’s right to indemnity or reimbursement pursuant to this Section 6.03
shall survive any resignation or termination of the Servicer pursuant to Section
6.04 or 7.01 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
6.04. Servicer
Not to Resign.
Subject
to the provisions of Section 6.02, 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 Servicing Agreement or (ii) upon satisfaction of the following
conditions: (a) the Servicer has proposed a successor servicer to the Company,
the Administrator and the Indenture Trustee in writing and such proposed
successor servicer is reasonably acceptable to the Company, the Administrator,
the Indenture Trustee and the Credit Enhancer; (b) each Rating Agency shall
have
delivered a letter to the Company, the Credit Enhancer and the Indenture Trustee
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 reduction or withdrawal of the then current rating of the Securities; and
(c) such proposed successor servicer is reasonably acceptable to the Credit
Enhancer, as evidenced by a letter to the Company and the Indenture Trustee;
provided,
however,
that no
such resignation by the Servicer shall become effective until such successor
servicer or, in the case of (i) above, the Indenture Trustee, as pledgee of
the
Mortgage Collateral, shall have assumed the Servicer’s responsibilities and
obligations hereunder or the Indenture Trustee, as pledgee of the Mortgage
Collateral, shall have designated a successor servicer in accordance with
Section 7.02. Any such resignation shall not relieve the Servicer of
responsibility for any of the obligations specified in Sections 7.01 and 7.02
as
obligations that survive the resignation or termination of the Servicer. The
Servicer shall have no claim (whether by subrogation or otherwise) or other
action against any Securityholder or the Credit Enhancer for any amounts paid
by
the Servicer pursuant to any provision of this Servicing Agreement. Any such
determination permitting the resignation of the Servicer shall be evidenced
by
an Opinion of Counsel to such effect delivered to the Indenture Trustee and
the
Credit Enhancer.
SECTION
6.05. 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, 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
6.04.
SECTION
6.06. Servicer
to Pay Indenture Trustee’s and Owner Trustee’s Fees and Expenses;
Indemnification.
(a) The
Servicer covenants and agrees to pay to the Owner Trustee, the Indenture Trustee
and any co-trustee of the Indenture Trustee from time to time, and the Owner
Trustee, the Indenture Trustee and any such co-trustee shall be entitled to,
reasonable compensation (which shall not be limited by any provision of law
in
regard to the compensation of a trustee of an express trust) for all services
rendered by each of them in the execution of the trusts created under the Trust
Agreement and the Indenture and in the exercise and performance of any of the
powers and duties under the Trust Agreement or the Indenture, as the case may
be, of the Owner Trustee, the Indenture Trustee and any co-trustee, and the
Servicer will pay or reimburse the Indenture Trustee and any co-trustee upon
request for all reasonable expenses, disbursements and advances incurred or
made
by the Indenture Trustee or any co-trustee in accordance with any of the
provisions of this Servicing Agreement except any such expense, disbursement
or
advance as may arise from its negligence or bad faith.
(b) The
Servicer agrees to indemnify the Indenture Trustee and the Owner Trustee for,
and to hold the Indenture Trustee and the Owner Trustee, as the case may be,
harmless against, any loss, liability or expense incurred without negligence
or
willful misconduct on its part, arising out of, or in connection with, the
acceptance and administration of the Company and the assets thereof, including
the costs and expenses (including reasonable legal fees and expenses) of
defending itself against any claim in connection with the exercise or
performance of any of its powers or duties under any Basic Document, provided
that:
(i) with
respect to any such claim, the Indenture Trustee or Owner Trustee, as the case
may be, shall have given the Servicer written notice thereof promptly after
the
Indenture Trustee or Owner Trustee, as the case may be, shall have actual
knowledge thereof;
(ii) while
maintaining control over its own defense, the Company, the Indenture Trustee
or
Owner Trustee, as the case may be, shall cooperate and consult fully with the
Servicer in preparing such defense; and
(iii) notwithstanding
anything in this Servicing Agreement to the contrary, the Servicer shall not
be
liable for settlement of any claim by the Indenture Trustee or the Owner
Trustee, as the case may be, entered into without the prior consent of the
Servicer, which consent shall not be unreasonably withheld.
No
termination of this Servicing Agreement shall affect the obligations created
by
this Section 6.06 of the Servicer to indemnify the Indenture Trustee and the
Owner Trustee under the conditions and to the extent set forth
herein.
Notwithstanding
the foregoing, the indemnification provided by the Servicer in this Section
6.06(b) shall not pertain to any loss, liability or expense of the Indenture
Trustee or the Owner Trustee, including the costs and expenses of defending
itself against any claim, incurred in connection with any actions taken by
the
Indenture Trustee or the Owner Trustee at the direction of the Noteholders
or
Certificateholders, as the case may be, pursuant to the terms of this Servicing
Agreement.
ARTICLE
VII
DEFAULT
SECTION
7.01. Servicing
Default.
If
any
one of the following events (“Servicing Default”) hall occur and be
continuing:
(i) Any
failure by the Servicer to deposit in the Collection Account, the Funding
Account or Payment Account any deposit required to be made under the terms
of
this Servicing Agreement which continues unremedied for a period of five
Business Days after the date upon which written notice of such failure shall
have been given to the Servicer by the Company, the Issuer or the Indenture
Trustee or to the Servicer, the Company, the Issuer and the Indenture Trustee
by
the Credit Enhancer; 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 Servicing Agreement, which failure, in each case, materially and
adversely affects the interests of Securityholders or the Credit Enhancer and
which continues unremedied for a period of 45 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 Company, the Issuer or the Indenture Trustee or to the
Servicer, the Company, the Issuer and the Indenture Trustee by the Credit
Enhancer; 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
Servicer shall voluntarily go into liquidation, consent to the appointment
of a
conservator, receiver, liquidator or similar person in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer or of or relating to all or
substantially all of its property, or a decree or order of a court, agency
or
supervisory authority having jurisdiction in the premises for the appointment
of
a conservator, receiver, liquidator or similar person in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Servicer and such decree or order shall have remained
in force undischarged, unbonded or unstayed for a period of 60 days; 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; or
(v) Any
failure by the Seller (so long as the Seller is the Servicer) or the Servicer,
as the case may be, to pay when due any amount payable by it under the terms of
the Insurance Agreement which continues unremedied for a period of three (3)
Business Days after the date upon which written notice of such failure shall
have been given to the Seller (so long as the Seller is the Servicer) or the
Servicer, as the case may be; or
(vi) Failure
on the part of the Seller or the Servicer to duly perform in any material
respect any covenant or agreement set forth in the Insurance Agreement, which
failure in each case materially and adversely affects the interests of the
Credit Enhancer and continues unremedied for a period of 60 days after the
date
on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Depositor, the Indenture Trustee, the Seller or
the
Servicer, as the case may be, by the Credit Enhancer. Then, and in every such
case, other than that set forth in (vi) hereof, so long as a Servicing Default
shall not have been remedied by the Servicer, either the Company, subject to
the
direction of the Indenture Trustee as pledgee of the Mortgage Collateral, with
the consent of the Credit Enhancer, or the Credit Enhancer, by notice then
given
in writing to the Servicer (and to the Company and the Issuer if given by the
Credit Enhancer) and in the case of the event set forth in (vi) hereof, the
Credit Enhancer with the consent of Securityholders at least 51% of the
aggregate Principal Balance of the Notes and the Certificates may terminate
all
of the rights and obligations of the Servicer as servicer under this Servicing
Agreement other than its right to receive servicing compensation and expenses
for servicing the Mortgage Loans hereunder during any period prior to the date
of such termination and the Company, subject to the direction of the Indenture
Trustee as pledgee of the Mortgage Collateral, with the consent of the Credit
Enhancer, or the Credit Enhancer may exercise any and all other remedies
available at law or equity. Any such notice to the Servicer shall also be given
to each Rating Agency, the Credit Enhancer, the Company and the Issuer. On
or
after the receipt by the Servicer of such written notice, all authority and
power of the Servicer under this Servicing Agreement, whether with respect
to
the Securities or the Mortgage Loans or otherwise, shall pass to and be vested
in the Company, subject to the direction of the Indenture Trustee as pledgee
of
the Mortgage Collateral, pursuant to and under this Section 7.01; and, without
limitation, the Company 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 Company in effecting the termination of the responsibilities and rights
of
the Servicer hereunder, including, without limitation, the transfer to the
Indenture Trustee for the administration by it of all cash amounts relating
to
the Mortgage Loans that shall at the time be held by the Servicer and 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,
but
not limited to, attorneys’ fees) incurred in connection with amending this
Servicing Agreement to reflect such succession as Servicer pursuant to this
Section 7.01 shall be paid by the predecessor Servicer (or if the predecessor
Servicer is the Indenture Trustee, the initial Servicer) upon presentation
of
reasonable documentation of such costs and expenses.
Notwithstanding
any termination of the activities of the Servicer hereunder, the Servicer shall
be entitled to receive, out of any late collection of a payment on a Mortgage
Loan which was due prior to the notice terminating the Servicer’s rights and
obligations hereunder and received after such notice, that portion to which
the
Servicer would have been entitled pursuant to Sections 3.03 and 3.09 as well
as
its Servicing Fee in respect thereof, and any other amounts payable to the
Servicer hereunder the entitlement to which arose prior to the termination
of
its activities hereunder.
Notwithstanding
the foregoing, a delay in or failure of performance under Section 7.01(i) or
under Section 7.01(ii) after the applicable grace periods specified in such
Sections, shall not constitute a Servicer Default 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, floods or similar causes.
The pre ceding sentence shall not relieve the Servicer from using reasonable
efforts to perform its respective obligations in a timely manner in accordance
with the terms of this Servicing Agreement and the Servicer shall provide the
Indenture Trustee, the Credit Enhancer and the Securityholders with 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 Indenture
Trustee, the Credit Enhancer and the Owner Trustee in writing of any Servicer
Default.
SECTION
7.02. Indenture
Trustee to Act; Appointment of Successor.
(a) On
and
after the time the Servicer receives a notice of termination pursuant to Section
7.01 or sends a notice pursuant to Section 6.04, the Indenture Trustee on behalf
of the Noteholders shall be the successor in all respects to the Servicer in
its
capacity as servicer under this Servicing 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. Nothing in this Servicing Agreement or in the Trust Agreement
shall be construed to permit or require the Indenture Trustee to (i) succeed
to
the responsibilities, duties and liabilities of the initial Servicer in its
capacity as Seller under the Mortgage Loan Purchase Agreement, (ii) be
responsible or accountable for any act or omission of the Servicer prior to
the
issuance of a notice of termination hereunder, (iii) require or obligate the
Indenture Trustee, in its capacity as successor Servicer, to purchase,
repurchase or substitute any Mortgage Loan, (iv) fund any losses on any Eligible
Investment directed by any other Servicer, or (v) be responsible for the
representations and warranties of the Servicer. As compensation therefor, the
Indenture 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.
Notwithstanding the above, (i) if the Indenture Trustee is unwilling to act
as
successor Servicer, or (ii) if the Indenture Trustee is legally unable so to
act, the Indenture Trustee on behalf of the Mortgage Collateral holders may
(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 having a net worth of not less than
$10,000,000 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
Credit Enhancer, as evidenced by the Credit Enhancer’s 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. Pending appointment of a successor to the Servicer hereunder, unless
the Indenture Trustee is prohibited by law from so acting, the Indenture 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 3.09 (or such lesser compensation as the Indenture Trustee and such
successor shall agree). The appointment of a successor Servicer shall not affect
any liability of the predecessor Servicer which may have arisen under this
Servicing Agreement prior to its termination as Servicer (including, without
limitation, the obligation to purchase Mortgage Loans pursuant to Section 3.01,
to pay any deductible under an insurance policy pursuant to Section 3.04 or
to
indemnify the Indenture Trustee pursuant to Section 6.06), 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 or in any related document or agreement. The
Indenture Trustee and such successor shall take such action, consistent with
this Servicing Agreement, as shall be necessary to effectuate any such
succession.
(b) Any
successor, including the Indenture Trustee on behalf of the Noteholders, 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, (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.
(c) Any
successor Servicer, including the Indenture Trustee on behalf of the Mortgage
Collateral holders, shall not be deemed in default or to have breached its
duties hereunder if the predecessor Servicer shall fail to deliver any required
deposit to the Collection Account or otherwise cooperate with any required
servicing transfer or succession hereunder.
SECTION
7.03. Notification
to Securityholders.
Upon
any
termination or appointment of a successor to the Servicer pursuant to this
Article VII or Section 6.04, the Indenture Trustee shall give prompt written
notice thereof to the Securityholders, the Credit Enhancer, the Company, the
Issuer and each Rating Agency.
ARTICLE
VIII
MISCELLANEOUS
PROVISIONS
SECTION
8.01. Amendment.
This
Servicing Agreement may be amended from time to time by the parties hereto,
provided that any amendment be accompanied by a letter from the Rating Agencies
that the amendment will not result in the downgrading or withdrawal of the
rating then assigned to the Securities and the consent of the Credit Enhancer
and the Indenture Trustee.
SECTION
8.02. GOVERNING
LAW.
THIS
SERVICING 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
8.03. 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 Servicer, [Name and
Address of Servicer], (b) in the case of the Credit Enhancer, ________________,
________, ______________, Attention: _________________,
___________________________, (c) in the case of [Moody’s, ___________, 4th
Floor, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇], (d) in the case of [Standard
& Poor’s, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Residential Mortgage Surveillance Group], (e) in the case of the Owner Trustee,
the Corporate Trust Office, and (f) in the case of the Issuer, to [National
City Mortgage Capital LLC MBN]
Trust Series 20__-___, c/o ______________________, __________________,
__________, ______________, Attention: __________________________, with a copy
to the Administrator at ______________ 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
Securityholder as shown in the Register. Any notice so mailed within the time
prescribed in this Servicing Agreement shall be conclusively presumed to have
been duly given, whether or not the Securityholder receives such notice. Any
notice or other document required to be delivered or mailed by the Indenture
Trustee to any Rating Agency shall be given on a reasonable efforts basis and
only as a matter of courtesy and accommodation and the Indenture Trustee shall
have no liability for failure to delivery such notice or document to any Rating
Agency.]
SECTION
8.04. Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Servicing
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 Servicing Agreement and
shall
in no way affect the validity or enforceability of the other provisions of
this
Servicing Agreement or of the Securities or the rights of the Securityholders
thereof.
SECTION
8.05. Third-Party
Beneficiaries.
This
Servicing Agreement will inure to the benefit of and be binding upon the parties
hereto, the Securityholders, the Credit Enhancer, the Owner Trustee, the
Indenture Trustee and their respective successors and permitted assigns. Except
as otherwise provided in this Servicing Agreement, no other Person will have
any
right or obligation hereunder.
SECTION
8.06. 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
8.07. 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
8.08. Termination
Upon Purchase by the Servicer or Liquidation of All Mortgage Loans.
The
respective obligations and responsibilities of the Servicer and the Company
created hereby shall terminate upon the last action required to be taken by
the
Issuer pursuant to the Trust Agreement and by the Indenture Trustee pursuant
to
the Indenture following the earlier of:
(i) the
date
on or before which the Indenture or Trust Agreement is terminated,
or
(ii) the
purchase by the Servicer from the Company of all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price equal to the greater of
(a)
100% of the unpaid Principal Balance of each Mortgage Loan, plus accrued and
unpaid interest thereon at the Weighted Average Net Mortgage Rate up to the
day
preceding the Payment Date on which such amounts are to be distributed to
Securityholders, plus any amounts due and owing to the Credit Enhancer under
the
Insurance Agreement and (b) the fair market value of the Mortgage Loans as
determined by two bids from competitive participants in the adjustable home
equity loan market.
The
right
of the Servicer to purchase the assets of the Company pursuant to clause (ii)
above is conditioned upon the Pool Balance as of the Final Scheduled Payment
Date being less than ten percent of the aggregate of the Cut-Off Date Principal
Balances of the Mortgage Loans. If such right is exercised by the Servicer,
the
Servicer shall deposit the amount calculated pursuant to clause (ii) above
with
the Indenture Trustee pursuant to Section 4.10 of the Indenture and, upon the
receipt of such deposit, the Indenture Trustee or relevant Custodian shall
release to the Servicer, the files pertaining to the Mortgage Loans being
purchased.
The
Servicer, at its expense, shall prepare and deliver to the Indenture Trustee
and
the Owner Trustee for execution, at the time the Mortgage Loans are to be
released to the Servicer, appropriate documents assigning each such Mortgage
Loan from the Company to the Servicer or the appropriate party.
SECTION
8.09. Certain
Matters Affecting the Indenture Trustee.
For
all
purposes of this Servicing Agreement, in the performance of any of its duties
or
in the exercise of any of its powers hereunder, the Indenture Trustee shall
be
subject to and entitled to the benefits of Article VI of the
Indenture.
SECTION
8.10. Authority
of the Administrator.
Each
of
the parties to this Agreement acknowledges that the Issuer and the Owner Trustee
have each appointed the Administrator to act as its agent to perform the duties
and obligations of the Issuer hereunder. Unless otherwise instructed by the
Issuer or the Owner Trustee, copies of all notices, requests, demands and other
documents to be delivered to the Issuer or the Owner Trustee pursuant to the
terms hereof shall be delivered to the Administrator. Unless otherwise
instructed by the Issuer or the Owner Trustee, all notices, requests, demands
and other documents to be executed or delivered, and any action to be taken,
by
the Issuer or the Owner Trustee pursuant to the terms hereof may be executed,
delivered and/or taken by the Administrator pursuant to the Administration
Agreement.
IN
WITNESS WHEREOF, the Servicer and the Company have caused this Servicing
Agreement to be duly executed by their respective officers or representatives
all as of the day and year first above written.
NATIONAL
CITY MORTGAGE CO., as Servicer
By: _____________________________
Title:
NATIONAL
CITY MORTGAGE CAPITAL LLC as
Company
By: __________________________
Title:
EXHIBIT
D
FORM
OF
REQUEST FOR RELEASE
DATE:
TO:
RE:
REQUEST
FOR RELEASE OF DOCUMENTS
In
connection with your administration of the Mortgage Collateral, we request
the
release of the Mortgage File described below.
Servicing
Agreement Dated: Series #: Account #: Pool #: Loan #: Borrower Name(s): Reason
for Document Request: (circle one) Mortgage Loan Prepaid in Full Mortgage Loan
Repurchased
“We
hereby certify that all amounts received or to be received in connection with
such payments which are required to be deposited have been or will be so
deposited as provided in the Servicing Agreement.”
__________________________________
NATIONAL CITY MORTGAGE CO. Authorized Signature
******************************************************************
TO
CUSTODIAN/INDENTURE TRUSTEE:
Please
acknowledge this request, and check off documents being enclosed with a copy
of
this form. You should retain this form for your files in accordance with the
terms of the Servicing Agreement. Enclosed Documents: [ ] Promissory Note [
]
Primary Insurance Policy [ ] Mortgage or Deed of Trust [ ] Assignment(s) of
Mortgage or Deed of Trust [ ] Title Insurance Policy [ ] Other:
___________________________
Name: ___________________________
Title: ___________________________
Date: ___________________________