EXHIBIT 4.2
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[______]
as Servicer
[______]
as a Seller
[______]
as a Seller
BancCap Funding LLC
as Administrator
and
[______]
as Master Servicer
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BancCap Asset Securitization Issuance Corporation
Mortgage Pass-Through Certificates, Series 2002-__
SERVICING AGREEMENT
Dated as of_______, 200__
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TABLE OF CONTENTS
PAGE
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ARTICLE I. DEFINITIONS
ARTICLE II. SELLER'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING RESPONSIBILITIES
Section 2.01 Contract for Servicing; Possession of Servicing Files..................................... 15
Section 2.02 Books and Records. ........................................................................15
ARTICLE III. SERVICING OF THE MORTGAGE LOANS
Section 3.01 Servicer to Service....................................................................... 16
Section 3.02 Collection of Mortgage Loan Payments. .....................................................18
Section 3.03 Establishment of and Deposits to Custodial Account........................................ 18
Section 3.04 Permitted Withdrawals From Custodial Account.............................................. 19
Section 3.05 Establishment of and Deposits to Escrow Account........................................... 21
Section 3.06 Permitted Withdrawals From Escrow Account................................................. 21
Section 3.07 Maintenance of PMI Policy and/or LPMI Policy; Claims...................................... 22
Section 3.08 Fidelity Bond and Errors and Omissions Insurance.......................................... 23
Section 3.09 Notification of Adjustments............................................................... 23
Section 3.10 Completion and Recordation of Assignments of Mortgage..................................... 24
Section 3.11 Protection of Accounts.................................................................... 24
Section 3.12 Payment of Taxes, Insurance and Other Charges............................................. 25
Section 3.13 Maintenance of Hazard Insurance........................................................... 25
Section 3.14 Maintenance of Mortgage Blanket Insurance................................................. 26
Section 3.15 Restoration of Mortgaged Property......................................................... 26
Section 3.16 Title, Management and Disposition of REO Property......................................... 26
Section 3.17 Real Estate Owned Reports. ................................................................29
Section 3.18 MERS. .....................................................................................29
ARTICLE IV. PAYMENTS TO MASTER SERVICER
Section 4.01 Remittances. ..............................................................................29
Section 4.02 Statements to Master Servicer. ............................................................30
Section 4.03 Monthly Advances by Servicer. .............................................................31
ARTICLE V. GENERAL SERVICING PROCEDURES
Section 5.01 Servicing Compensation.................................................................... 31
Section 5.02 Annual Audit Report....................................................................... 32
Section 5.03 Annual Officer's Certificate.............................................................. 32
Section 5.04 Transfers of Mortgaged Property........................................................... 32
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ARTICLE VI. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 6.01 Representations, Warranties and Agreements of the Servicer................................ 34
Section 6.02 Remedies for Breach of Representations and Warranties of the Servicer. ....................35
Section 6.03 Additional Indemnification by the Servicer; Third Party Claims. ...........................36
ARTICLE VII. THE SERVICER
Section 7.01 Merger or Consolidation of the Servicer................................................... 37
Section 7.02 Limitation on Liability of the Servicer and Others........................................ 37
Section 7.03 Limitation on Resignation and Assignment by the Servicer.................................. 37
Section 7.04 Sub
servicing Agreements and Successor Subservicer......................................... 38
ARTICLE VIII. TERMINATION
Section 8.01 Termination for Cause..................................................................... 39
Section 8.02 Termination Without Cause................................................................. 41
ARTICLE IX. MISCELLANEOUS PROVISIONS
Section 9.01 Successor to the Servicer................................................................. 41
Section 9.02 Costs..................................................................................... 44
Section 9.03 Notices................................................................................... 44
Section 9.04 Severability Clause....................................................................... 45
Section 9.05 No Personal Solicitation.................................................................. 45
Section 9.06 Counterparts.............................................................................. 46
Section 9.07 Place of Delivery and Governing Law........................................................46
Section 9.08 Further Agreements.........................................................................46
Section 9.09 Intention of the Parties...................................................................46
Section 9.10 Successors and Assigns; Assignment of
Servicing Agreement..................................46
Section 9.11 Assignment by Each Seller..................................................................46
Section 9.12 Waivers....................................................................................47
Section 9.13 Exhibits...................................................................................47
Section 9.14 General Interpretive Principles............................................................47
Section 9.15 Reproduction of Documents..................................................................47
EXHIBITS & SCHEDULES
EXHIBIT A Mortgage Loan Schedule
EXHIBIT B Custodial Account Letter Agreement
EXHIBIT C Escrow Account Letter Agreement
EXHIBIT D-1 Master Servicer Data Field Requirements (Standard Layout)
EXHIBIT D-2 Master Servicer Default File Format
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SERVICING AGREEMENT
THIS
SERVICING AGREEMENT (this "Agreement"), entered into as of the 1st
day of________, 200__, by and between [ ], a [Delaware] corporation
("_________"), [ ] ( "____") (________ and ________ shall collectively be
referred to herein as the "Seller"), BancCap Funding LLC as Administrator, [ ],
a [Delaware] corporation (the "Servicer"), and [ ], as Master Servicer under the
Trust Agreement (as defined herein) recites and provides as follows:
RECITALS
WHEREAS, the Servicer and [ ] are parties to a Flow
Servicing
Agreement, dated as of [_______], 200__ (the "_______ Flow
Servicing
Agreement"), pursuant to which the Servicer services certain residential, fixed
and adjustable rate mortgage loans identified on Exhibit A hereto (the "_______
Mortgage Loans").
WHEREAS, each Seller (with respect to its related Mortgage Loans) has
conveyed such Mortgage Loans on a servicing-[retained/released] basis to BancCap
Asset Securitization Issuance Corporation (the "Depositor"), which in turn has
conveyed the Mortgage Loans to [ ], as trustee (the "Trustee"), under a trust
agreement dated as of [______], 200__ (the "Trust Agreement"), among the
Trustee, [___], as master servicer ("______", and together with any successor
Master Servicer appointed pursuant to the provisions of the Trust Agreement, the
"Master Servicer"), [___], as securities administrator, and BASIC.
WHEREAS, from time to time certain other of the mortgage loans conveyed
by the Depositor to the Trustee under the Trust Agreement on the Closing Date
and serviced by other servicers may subsequent to the Closing Date be
transferred to the Servicer for servicing under this Agreement and Exhibit A
hereto will be amended to include such mortgage loans which will then be
"Mortgage Loans" under this Agreement.
WHEREAS, each Seller (with respect to its related Mortgage Loans)
desires that the Servicer service the Mortgage Loans pursuant to this Agreement,
and the Servicer has agreed to do so, subject to the right of each Seller (with
respect to its related Mortgage Loans) and of the Master Servicer to terminate
the rights and obligations of the Servicer hereunder at any time and to the
other conditions set forth herein.
WHEREAS, each Seller (with respect to its related Flow
Servicing
Agreement ) and the Servicer agree that the provisions of the related Flow
Servicing Agreement shall not apply to such related Mortgage Loans for so long
as such related Mortgage Loans remain subject to the provisions of the Trust
Agreement;
WHEREAS, the Master Servicer shall be obligated under the Trust
Agreement, among other things, to supervise the servicing of the Mortgage Loans
on behalf of the Trustee, and shall have the right, under certain circumstances,
to terminate the rights and obligations of the Servicer under this
Servicing
Agreement.
WHEREAS, each Seller (with respect to its related Mortgage Loans) and
the Servicer acknowledge and agree that each Seller (with respect to its related
Mortgage Loans) will assign all of its rights and delegate all of its
obligations hereunder (excluding such Seller's rights and obligations as owner
of the servicing rights relating to its related Mortgage Loans) to the Trustee,
and that each reference herein to the Seller is intended, unless otherwise
specified, to mean each Seller (with respect to its related Mortgage Loans) or
the Trustee, as assignee, whichever is the owner of the Mortgage Loans from time
to time.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Seller, the Servicer and the
Master Servicer hereby agree as follows:
ARTICLE I
DEFINITIONS
The following terms are defined as follows (except as otherwise agreed
in writing by the parties):
ACCEPTED SERVICING PRACTICES: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions that
service mortgage loans of the same type as such Mortgage Loans in the
jurisdiction where the related Mortgaged Property is located.
ADJUSTABLE RATE MORTGAGE LOAN: A Mortgage Loan serviced pursuant to
this Agreement under which the Mortgage Interest Rate is adjusted from time to
time in accordance with the terms and provisions of the Mortgage Note.
AGGREGATE LOAN BALANCE: At any date of determination, the outstanding
principal balance of the Mortgage Loans serviced hereunder.
AGREEMENT: This Servicing Agreement and all amendments hereof and
supplements hereto.
ANCILLARY INCOME: All income derived from the Mortgage Loans, other
than Servicing Fees, including but not limited to late charges, fees received
with respect to checks or bank drafts returned by the related bank for
non-sufficient funds, assumption fees, optional insurance administrative fees
and all other incidental fees and charges. Ancillary Income shall not include
any Prepayment Penalty Amount.
ANNUAL LOSS PERCENTAGE (ROLLING TWELVE MONTH): As of any date of
determination thereof and as to the related Mortgage Loan Servicing Group, a
fraction, expressed as a percentage, the numerator of which is the aggregate of
the Realized Losses that occurred in such Mortgage Loan Servicing Group during
the twelve immediately preceding Due Periods and denominator of which is the
Loan Balances of the Mortgage Loanss in the related Mortgage Loan Servicing
Group as of the last day of each of the twelve Due Periods preceding such date.
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ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the transfer of the Mortgage to the party indicated therein, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more
blanket assignments covering the Mortgage Loans secured by Mortgaged Properties
located in the same jurisdiction, if permitted by law.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in Colorado, Minnesota,
New York,
New York or,
if other than
New York, the city in which the corporate trust office of the
Trustee is located.
CAPITALIZED INTEREST ACCOUNT: The separate Eligible Account designated
as such and created and maintained by the Trustee pursuant to Section [ ]
hereof. The Capitalized Interest Account shall be treated as an "outside reserve
fund" under applicable Treasury regulations and shall not be part of any REMIC.
Except as provided in Section _____ hereof, any investment earnings on the
Capitalized Interest Account shall be treated as owned by the Depositor and will
be taxable to the Depositor.
CERTIFICATES: Any or all of the Certificates issued pursuant to the
Trust Agreement.
CLOSING DATE: [_______], 200___.
CODE: The Internal Revenue Code of 1986, as it may be amended from time
to time or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.
COMPENSATING INTEREST: For any Remittance Date and the Mortgage Loans
serviced by a Servicer, the lesser of (i) the aggregate Servicing Fee payable to
that Servicer on such Remittance Date and (ii) the aggregate Prepayment Interest
Shortfall allocable to Principal Prepayments in full for that Remittance Date.
CONDEMNATION PROCEEDS: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan documents.
COSTS: For any Person, any claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and other costs and expenses of such Person.
COUPON RATE: The rate of interest borne by each Note from time to time.
CRAM DOWN LOSS: With respect to a Mortgage Loan, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the Loan Balance or the Coupon Rate of such Mortgage Loan, the amount
of such reduction. A Cram Down Loss shall be deemed to have occurred on the date
of issuance of such order.
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CUMULATIVE LOSS PERCENTAGE As of any date of determination thereof, the
Cumulative Realized Losses as a percentage of the Maximum Collateral Amount (and
with respect to the Servicer Loss Test the aggregate portion therof applicable
to the related Servicer as set forth in the definition of Maximum Collateral
Amount)
CUMULATIVE REALIZED LOSSES: As of any date of determination, the
aggregate amount of Realized Losses with respect to the Mortgage Loans (and with
respect to the Servicer Loss Test the aggregate portion thereof applicable to
the related Servicer as set forth in the definition of Maximum Collateral
Amount).
CUSTODIAL ACCOUNT: The separate account or accounts created and
maintained pursuant to Section 3.03.
CUSTODIAL AGREEMENT: The custodial agreements relating to custody of
certain of the Mortgage Loans, between [____]and the Trustee, dated [___],
200___ and between [___]and the Trustee, dated [____], 2002.
CUSTODIANS: [ ] and [___] and their respective successors.
CUT-OFF DATE: For any Initial Mortgage Loan, [____], 200___ For any
Subsequent Mortgage Loan, the applicable Subsequent Transfer Date.
DELINQUENT: A Mortgage Loan is Delinquent if any payment due thereon is
not made by the close of business on the corresponding day such payment is
scheduled to be due. A Mortgage Loan is 30 days Delinquent if such payment has
not been received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or if there is
not such day (e.g., as when a 30-day month follows a 31-day month in which a
payment was due on the 31st day of such month) then on the last day of such
immediately succeeding month. Similarly for 60 days Delinquent, 90 days
Delinquent, and so on.
DEPOSITOR: BancCap Asset Securitization Issuance Corporation, or any
successor in interest.
DETERMINATION DATE: With respect to each Remittance Date, the 15th day
of the month in which such Remittance Date occurs, or, if such 15th day is not a
Business Day, the next succeeding Business Day.
DUE DATE: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace. With respect to the Mortgage
Loans for which payment from the Mortgagor is due on a day other than the first
day of the month, such Mortgage Loans will be treated as if the Monthly Payment
is due on the first day of the immediately succeeding month.
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DUE PERIOD: With respect to each Remittance Date, the period commencing
on the second day of the month immediately preceding the month of the Remittance
Date and ending on the first day of the month of the Remittance Date.
ELIGIBLE INVESTMENTS: Any one or more of the obligations and securities
listed below which investment provides for a date of maturity not later than the
Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed
as to timely payment of principal and interest by, the United States of America
or any agency or instrumentality of the United States of America the obligations
of which are backed by the full faith and credit of the United States of America
("Direct Obligations");
(ii) federal funds, or demand and time deposits in,
certificates of deposits of, or bankers' acceptances issued by, any depository
institution or trust company (including U.S. subsidiaries of foreign
depositories and the Trustee or any agent of the Trustee, acting in its
respective commercial capacity) incorporated or organized under the laws of the
United States of America or any state thereof and subject to supervision and
examination by federal or state banking authorities, so long as at the time of
investment or the contractual commitment providing for such investment the
commercial paper or other short-term debt obligations of such depository
institution or trust company (or, in the case of a depository institution or
trust company which is the principal subsidiary of a holding company, the
commercial paper or other short-term debt or deposit obligations of such holding
company or deposit institution, as the case may be) have been rated by each
Rating Agency in its highest short-term rating category or one of its two
highest long-term rating categories;
(iii) repurchase agreements collateralized by Direct
Obligations or securities guaranteed by ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac
with any registered broker/dealer subject to Securities Investors' Protection
Corporation jurisdiction or any commercial bank insured by the FDIC, if such
broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation
rated by each Rating Agency in its highest short-term rating category;
(iv) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of America
or any state thereof which have a credit rating from each Rating Agency, at the
time of investment or the contractual commitment providing for such investment,
at least equal to one of the two highest long-term credit rating categories of
each Rating Agency; PROVIDED, HOWEVER, that securities issued by any particular
corporation will not be Eligible Investments to the extent that investment
therein will cause the then outstanding principal amount of securities issued by
such corporation and held as part of the Trust Fund to exceed 20% of the sum of
the Aggregate Loan Balance and the aggregate principal amount of all Eligible
Investments in the Certificate Account; provided, further, that such securities
will not be Eligible Investments if they are published as being under review
with negative implications from any Rating Agency;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or on a
specified date not more
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than 180 days after the date of issuance thereof) rated by each Rating Agency in
its highest short-term rating category;
(vi) a Qualified GIC;
(vii) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the United
States of America or its agencies or instrumentalities (which obligations are
backed by the full faith and credit of the United States of America) held by a
custodian in safekeeping on behalf of the holders of such receipts; and
(viii) any other demand, money market, common trust fund or
time deposit or obligation, or interest-bearing or other security or investment,
(A) rated in the highest rating category by each Rating Agency or (B) that would
not adversely affect the then current rating by any Rating Agency of any of the
Certificates. Such investments in this subsection (viii) may include money
market mutual funds or common trust funds, including any fund for which the
Trustee, the Master Servicer or an affiliate thereof serves as an investment
advisor, administrator, shareholder servicing agent, and/or custodian or
subcustodian, notwithstanding that (x) the Trustee, the Master Servicer or an
affiliate thereof charges and collects fees and expenses from such funds for
services rendered, (y) the Trustee, the Master Servicer or an affiliate thereof
charges and collects fees and expenses for services rendered pursuant to this
Agreement, and (z) services performed for such funds and pursuant to this
Agreement may converge at any time.
PROVIDED, HOWEVER, that no such instrument shall be an Eligible
Investment if such instrument evidences either (i) a right to receive only
interest payments with respect to the obligations underlying such instrument, or
(ii) both principal and interest payments derived from obligations underlying
such instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
ERRORS AND OMISSIONS INSURANCE: Errors and Omissions Insurance to be
maintained by the Servicer in accordance with the ▇▇▇▇▇▇ Mae Guides.
ESCROW ACCOUNT: The separate account or accounts created and maintained
pursuant to Section 3.05.
ESCROW PAYMENTS: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other related
document.
EVENT OF DEFAULT: Any event set forth in Section 8.01.
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇, or any successor thereto.
▇▇▇▇▇▇ MAE GUIDES: The ▇▇▇▇▇▇ ▇▇▇ Selling Guide and the ▇▇▇▇▇▇ Mae
Servicing Guide and all amendments or additions thereto.
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FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FIDELITY BOND: A fidelity bond to be maintained by the Servicer in
accordance with the ▇▇▇▇▇▇ ▇▇▇ Guides.
FITCH: Fitch, Inc., or any successor in interest.
▇▇▇▇▇▇▇ MAC: ▇▇▇▇▇▇▇ Mac, or any successor thereto.
FUNDING PERIOD: The period commencing on the Closing Date and ending on
the earliest to occur of (i) the date on which the amount on deposit in the
Pre-Funding Account (exclusive of investment earnings) is less than $[ ] and
(ii) [date].
▇▇▇▇▇▇ MAE: The Government National Mortgage Association, or any
successor thereto.
INITIAL MORTGAGE LOAN: A Mortgage Loan conveyed to the Trust Fund on
the Closing Date pursuant to this Agreement as identified on the Mortgage Loan
Schedule delivered to the Trustee on the Closing Date.
INSURANCE PROCEEDS: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property
including proceeds of any hazard or flood insurance policy, PMI Policy or LPMI
Policy.
INTEREST REMITTANCE AMOUNT: As of any Remittance Date, the sum, without
duplication, of (i) the interest collected or required to be advanced by the
Servicers with respect to the related Due Period (less the Servicing Fee with
respect to such Mortgage Loan), (ii) all Compensating Interest paid by the
Servicers on such Remittance Date, (iii) the portion of the Substitution Amounts
relating to interest on the Mortgage Loans, (iv) any amounts required to be
transferred from the Capitalized Interest Account , and (iv) all the interest
portion of all Net Liquidation Proceeds not previously advanced with respect to
the Mortgage Loans.
LIQUIDATION PROCEEDS: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the
related REO Property, if the Mortgaged Property is acquired in satisfaction of
the Mortgage Loan.
Loan Balance: With respect to each Mortgage Loan and as of any date of
determination, the outstanding principal balance thereof, on the Cut-off Date,
less the sum of (i) any principal payments relating to such Mortgage Loan
(whether received from the related Mortgagor or advanced by the related
Servicer) included in previous Monthly Remittance Amounts, and (ii) any Cram
Down Losses relating to such Mortgage Loan, provided however, that the Loan
Balance for any Mortgage Loan that has become a Liquidated Loan shall be zero as
of the first day of the Due Period following the Due Period in which such
Mortgage Loan becomes a Liquidated Loan, and at all times thereafter.
LPMI FEE: With respect to each LPMI Loan, the portion of the Mortgage
Interest Rate as set forth on the related Mortgage Loan Schedule (which shall be
payable solely from the interest
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portion of Monthly Payments, Insurance Proceeds, Condemnation Proceeds or
Liquidation Proceeds), which, during such period prior to the required
cancellation of the LPMI Policy, shall be used to pay the premium due on the
related LPMI Policy.
LPMI INSURER: [None.]
LPMI LOAN: A Mortgage Loan covered by an LPMI Policy, as set forth in
the Mortgage Loan Schedule or otherwise identified to the Servicer in writing.
LPMI POLICY: A policy of primary mortgage guaranty insurance issued by
a LPMI Insurer pursuant to which the related premium is to be paid from payments
of interest made by the Mortgagor.
MASTER SERVICER: [______], or any successor in interest, or if any
successor master servicer shall be appointed as provided in the Trust Agreement,
then such successor master servicer.
MAXIMUM COLLATERAL AMOUNT: $[ ]; provided that for purposes of
calculating sthe Servicer Loss Test with respect to each Servicer, the Seller
will provide the Maximum Collateral Amounts per Servicer to the Trustee, each
Servicer and the Depositor within 10 days after the end of the Funding Period
for the Mortgage Loans.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS ELIGIBLE MORTGAGE LOAN: Any Mortgage Loan that has been designated
by the Servicer as recordable in the name of MERS.
MERS MORTGAGE LOAN: Any Mortgage Loan as to which the related Mortgage,
or an Assignment of Mortgage, has been or will be recorded in the name of MERS,
as agent for the holder from time to time of the Mortgage Note.
MONTHLY ADVANCE: With respect to each Remittance Date and each Mortgage
Loan, an amount equal to the Monthly Payment (with the interest portion of such
Monthly Payment adjusted to the Mortgage Loan Remittance Rate) that was due on
the Mortgage Loan on the Due Date in the related Due Period, and that (i) was
delinquent at the close of business on the related Determination Date and (ii)
was not the subject of a previous Monthly Advance, but only to the extent that
such amount is expected, in the reasonable judgment of the Servicer, to be
recoverable from collections or other recoveries in respect of such Mortgage
Loan. To the extent that the Servicer determines that any such amount is not
recoverable from collections or other recoveries in respect of such Mortgage
Loan, such determination shall be evidenced by a certificate of a Servicing
Officer delivered to the Master Servicer setting forth such determination and
the procedures and considerations of the Servicer forming the basis of such
determination which shall include a copy of any broker's price opinion and any
other information or reports obtained by the Servicer that may support such
determinations.
MONTHLY PAYMENT: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
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Monthly Remittance Amount: The sum of the Interest Remittance Amount
and the Principal Remittance Amount.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc., or any successor in
interest.
MORTGAGE: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien on an unsubordinated estate
in fee simple in real property securing the Mortgage Note.
MORTGAGE IMPAIRMENT INSURANCE POLICY: A mortgage impairment or blanket
hazard insurance policy as described in the ▇▇▇▇▇▇ Mae Guides.
MORTGAGE INTEREST RATE: The annual rate of interest borne on a Mortgage
Note, after giving effect to any applicable Relief Act Reduction.
MORTGAGE LOAN: An individual Mortgage Loan that is the subject of this
Agreement, each Mortgage Loan subject to this Agreement being identified on the
Mortgage Loan Schedule, which Mortgage Loan includes without limitation the
Mortgage Loan documents, the Monthly Payments, Principal Prepayments,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition
Proceeds, and all other rights, benefits, proceeds and obligations arising from
or in connection with such Mortgage Loan.
MORTGAGE LOAN REMITTANCE RATE: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Master Servicer, which shall be equal to
the Mortgage Interest Rate minus the applicable Servicing Fee.
MORTGAGE LOAN SCHEDULE: A schedule of the Mortgage Loans setting forth
information with respect to such Mortgage Loans (including any MERS
identification number (if available) with respect to each MERS Mortgage Loan or
MERS Eligible Mortgage Loan), attached hereto as Exhibit A, which may be amended
from time to time to include additional mortgage loans which are transferred to
the Servicer by a Prior Servicer in a Servicing Transfer.
MORTGAGE LOAN SERVICING GROUP: [Servicer 1] Mortgage Loans, [Servicer
2] Mortgage Loans, or [Servicer 3] Mortgage Loans, as applicable.
MORTGAGE NOTE: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
MORTGAGED PROPERTY: The real property securing repayment of the debt
evidenced by a Mortgage Note.
MORTGAGOR: The obligor on a Mortgage Note.
NET LIQUIDATION PROCEEDS: As to any Liquidated Loan, Liquidation
Proceeds net of (x) unreimbursed, reasonable out-of-pocket expenses and (y)
accrued, unpaid Servicing Fees, and unreimbursed Servicing Advances and Monthly
Advances. In no event shall Net Liquidation Proceeds with respect to any
Liquidated Loan be less than zero.
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NON-MERS ELIGIBLE MORTGAGE LOAN: Any Mortgage Loan other than a MERS
Eligible Mortgage Loan.
NON-MERS MORTGAGE LOAN: Any Mortgage Loan other than a MERS Mortgage
Loan.
NOTE: the note or other evidence of indebtedness of a Mortgagor under a
Mortgage Loan.
OPINION OF COUNSEL: A written opinion of counsel, who may be an
employee of the Servicer, reasonably acceptable to either Seller (with respect
to its related Mortgage Loans), but which must be independent outside counsel
with respect to any such opinion of counsel concerning (i) the non-recordation
of Mortgage Loans pursuant to Section 2.02 hereof and (ii) federal income tax
matters.
PERSON: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
PMI POLICY: A policy of primary mortgage guaranty insurance issued by a
Qualified Insurer, as required by this Agreement with respect to certain
Mortgage Loans.
PREPAYMENT INTEREST SHORTFALL AMOUNT: With respect to any Remittance
Date and any Principal Prepayment in full which is applied to the related
Mortgage Loan from the seventeenth day of the month immediately preceding the
month of such Remittance Date through the last day of the month immediately
preceding the month of such Remittance Date, the amount of interest (net of the
related Servicing Fee) that would have accrued on the amount of such Principal
Prepayment in full from the date on which such Principal Prepayment was applied
to such Mortgage Loan until the last day of the month immediately preceding the
month of such Remittance Date, inclusive. With respect to any Remittance Date
and any Principal Prepayment in part which is applied to the related Mortgage
Loan during the related Prepayment Period, the amount of interest that would
have accrued on the amount of such Principal Prepayment in part from the date on
which such Principal Prepayment in part was applied to such Mortgage Loan until
the end of the Prepayment Period, inclusive.
PREPAYMENT PENALTY AMOUNT: With respect to any Remittance Date, all
prepayment penalties, penalty or yield maintenance premiums or charges paid by
the obligors under the Mortgage Notes due to Principal Prepayments collected by
the Servicer during the immediately preceding Prepayment Period.
PREPAYMENT PERIOD: With respect to any Remittance Date and a Principal
Prepayment in full, the period from the seventeenth day of the month immediately
preceding the month of such Remittance Date to the sixteenth day of the month of
such Remittance Date. With respect to any Remittance Date and any Principal
Prepayment in part, the calendar month immediately preceding the month of such
Remittance Date.
PRIME RATE: The prime rate published from time to time, as published as
the average rate in THE WALL STREET JOURNAL NORTHEAST EDITION.
10
PRINCIPAL PREPAYMENT: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date and which
is not accompanied by an amount of interest representing scheduled interest due
on any date or dates in any month or months subsequent to the month of
prepayment.
PRINCIPAL REMITTANCE AMOUNT: As of any Remittance Date, the sum,
without duplication, of (i) the principal collected or required to be advanced
by the Servicers with respect to the related Due Period, (ii) the Loan Balance
of each Mortgage Loan that was purchased from the Trustee on or prior to such
Remittance Date, to the extent such Loan Balance was actually deposited in the
Custodial Account, (iii) any Substitution Amounts relating to principal
delivered to the Trust in connection with a substitution of a Mortgage Loan to
the extent such Substitution amounts were actually deposited in the Custodial
Account on or prior to such Remittance Date and (iv) all Net Liquidation
Proceeds actually collected by the Servicers during the related Due Period (to
the extent such Net Liquidation Proceeds related to principal)
PRIOR SERVICER: Any prior servicer (other than the Servicer) of any of
the Mortgage Loans.
QUALIFIED DEPOSITORY: Any of (i) a federal or state-chartered
depository institution the accounts of which are insured by the FDIC and whose
commercial paper, short-term debt obligations or other short-term deposits are
rated at least "A-1+" by Standard & Poor's if the deposits are to be held in the
account for less than 30 days, or whose long-term unsecured debt obligations are
rated at least "AA-" by Standard & Poor's if the deposits are to be held in the
account for more than 30 days, or (ii) the corporate trust department of a
federal or state-chartered depository institution subject to regulations
regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal
Regulations Section 9.10(b), which, in either case, has corporate trust powers,
acting in its fiduciary capacity, or (iii) the Bank.
QUALIFIED INSURER: A mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
RATING AGENCY: Each of ▇▇▇▇▇'▇, S&P and Fitch..
REALIZED LOSS: As to any Liquidated Loan, the amount, if any, by which
(x) the Loan Balance thereof plus any accrued and unpaid interest thereon as of
the date of liquidation exceeds (y) Net Liquidation Proceeds realized thereon
applied in reduction of such Loan Balance and accrued and unpaid interest. As to
any Mortgage Loan to which there has been a Cram Down Loss, the amount of the
Cram Down Loss.
RELIEF ACT REDUCTION: With respect to any Mortgage Loan as to which
there has been a reduction in the amount of the interest collectible thereon as
a result of the application of the Soldiers' and Sailors' Civil Relief Act of
1940, as amended, any amount by which interest collectible on such Mortgage Loan
for the Due Date in the related Due Period is less than the interest accrued
thereon for the applicable one month period at the Mortgage Interest Rate
without giving effect to such reduction.
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REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMITTANCE DATE: The 18th day (or if such 18th day is not a Business
Day, the first Business Day immediately following) of any month.
REO DISPOSITION: The final sale by the Servicer of any REO Property.
REO DISPOSITION PROCEEDS: All amounts received with respect to an REO
Disposition pursuant to Section 3.12.
REO PROPERTY: A Mortgaged Property acquired by the Servicer on behalf
of the Trustee through foreclosure or by deed in lieu of foreclosure, pursuant
to Section 3.12.
RETAINED INTEREST: The meaning set forth in the Trust Agreement.
RETAINED INTEREST HOLDER: The meaning set forth in the Trust Agreement.
SECURITIES ADMINISTRATOR: [___]
SERVICER: [_____] or its successor in interest or assigns or any
successor to the Servicer under this Agreement as herein provided.
SERVICER LOSS TEST: The Servicer Loss Test for each Servicer and with
respect to its related Mortgage Loan Servicing Group for any period set out
below is satisfied if the Cumulative Loss Percentage as it relates to such
Mortgage Loan Servicing Group and such period does not exceed the percentage set
out for such period below:
Cumulative Loss
Period Percentage
First twelve months after initial cut-off date [ ]%
Next twelve months [ ]%
Next twelve months [ ]%
Next twelve months [ ]%
Thereafter [ ]%
SERVICER TERMINATION EVENT: As defined in Section 8.01 hereof.
SERVICER TERMINATION TEST: The Servicer Termination Test for each
Servicer and with respect to the related Mortgage Loan Servicing Group is
satisfied for any date of determination thereof, if (x) the 60+ Delinquency
Percentage (Rolling Three Month) with respect to the related
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Mortgage Loan Servicing Group is less than [___]%, (y) the Servicer Loss Test is
satisfied, and (z) the Annual Loss Percentage (Rolling Twelve Month) as it
relates to such Mortgage Loan Servicing Group for the twelve month period
immediately preceding the date of determination thereof is not greater than
[_____}%
SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
inspection, restoration and protection of the Mortgaged Property, (ii) any
enforcement or administrative or judicial proceedings, including foreclosures,
(iii) the management and liquidation of the Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage, (iv) taxes, assessments,
water rates, sewer rents and other charges which are or may become a lien upon
the Mortgaged Property, and PMI Policy premiums and fire and hazard insurance
coverage, (v) any losses sustained by the Servicer with respect to the
liquidation of the Mortgaged Property and (vi) compliance with the obligations
pursuant to the provisions of the ▇▇▇▇▇▇ ▇▇▇ Guides.
SERVICING FEE: An amount equal to one-twelfth the product of (i) a rate
per annum equal to [ ] % and (ii) the outstanding principal balance of such
Mortgage Loan. The obligation of the Trustee to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from the interest portion (including
recoveries with respect to interest from Liquidation Proceeds to the extent
permitted by Section 3.02 of this Agreement) of such Monthly Payment collected
by the Servicer or as otherwise provided under this Agreement.
SERVICING FILE: The items pertaining to a particular Mortgage Loan
including, but not limited to, the computer files, data disks, books, records,
data tapes, notes, and all additional documents generated as a result of or
utilized in originating and/or servicing each Mortgage Loan, which are held in
trust for the Trustee by the Servicer.
SERVICING OFFICER: Any officer of the Servicer involved in or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Servicer to the
Master Servicer or either Seller (with respect to its related Mortgage Loans)
upon request, as such list may from time to time be amended.
SERVICING TRANSFER: Any transfer of the servicing by a Prior Servicer
of Mortgage Loans to the Servicer under this Agreement.
SERVICING TRANSFER DATE: The date on which a Servicing Transfer occurs.
60+ DAY DELINQUENT LOAN: With respect to any date of determination
thereof, the Mortgage Loan related to each REO Property and each Mortgage Loan
with respect to which any portion of a Scheduled Payment is, as of the last day
of the month preceding the current Remittance Date, 60 days or more Delinquent
(including Mortgage Loans that have gone into foreclosure or have been
discharged by reason of bankruptcy).
60+ DAY PERCENTAGE (ROLLING THREE MONTH): With respect to each Mortgage
Loan Servicing Group and any date of determination thereof, the average of the
percentage equivalents of the fractions determined for each the three
immediately preceding Due Periods the numerator
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of each of which is equal to the Aggregate Loan Balance of 60+ Day Delinquent
Loans in the related Mortgage Loan Servicing Group as of the date of
determination and the denominator of which is the Aggregate Loan Balance of all
of the Mortgage Loans in the related Mortgage Loan Servicing Group as of such
date of determination.
S&P: Standard & Poor's Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc, or any successor in interest.
SUBSEQUENT CUT-OFF DATE: With respect to any Subsequent Mortgage Loan,
the date of which such Mortgage Loan is transferred to the Trust.
SUBSEQUENT MORTGAGE LOAN: Any Mortgage Loan other than an Initial
Mortgage Loan conveyed to the Trust Fund pursuant to Section [ ] hereof and to a
Subsequent Transfer Agreement, which Mortgage Loan shall be listed on the
revised Mortgage Loan Schedule delivered pursuant to this Agreement and on
Schedule A to such Subsequent Transfer Agreement. When used with respect to a
single Subsequent Transfer Date, Subsequent Mortgage Loan shall mean a
Subsequent Mortgage Loan conveyed to the Trust on that Subsequent Transfer Date.
SUBSEQUENT TRANSFER AGREEMENT: A Subsequent Transfer Agreement
substantially in the form of Exhibit [ ] hereto, executed and delivered by the
Depositor and the Servicers and the Trustee as provided by Section [ ] hereof.
SUBSEQUENT TRANSFER DATE: For any Subsequent Transfer Agreement, the
date the related Subsequent Mortgage Loans are transferred to the Trust pursuant
to the related Subsequent Transfer Agreement.
TRUST AGREEMENT: The Trust Agreement dated as of [ ], 200___, among
the Trustee, the Master Servicer and the Depositor.
TRUST FUND: The trust fund established by the Trust Agreement, the
assets of which consist of the Mortgage Loans and any related assets.
TRUSTEE: [___]or any successor in interest, or if any successor trustee
or co-trustee shall be appointed as provided in the Trust Agreement, then such
successor trustee or such co-trustee, as the case may be.
Any capitalized terms used and not defined in this Agreement shall have
the meanings ascribed to such terms in the Trust Agreement.
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ARTICLE II.
SELLER'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING
RESPONSIBILITIES
Section 2.01 CONTRACT FOR SERVICING; POSSESSION OF SERVICING FILES.
Each Seller (with respect to its related Mortgage Loans), by execution
and delivery of this Agreement, does hereby contract with the Servicer, subject
to the terms of this Agreement, for the servicing of the Mortgage Loans. On or
before the Closing Date or Servicing Transfer Date, as applicable, each Seller
(with respect to its related Mortgage Loans) shall cause to be delivered the
Servicing Files with respect to its related Mortgage Loans listed on the
Mortgage Loan Schedule to the Servicer. Each Servicing File delivered to a
Servicer shall be held in trust by such Servicer for the benefit of the Trustee;
provided, however, that the Servicer shall have no liability for any Servicing
Files (or portions thereof) not delivered by each Seller (with respect to its
related Mortgage Loans). The Servicer's possession of any portion of the
Mortgage Loan documents shall be at the will of the Trustee for the sole purpose
of facilitating servicing of the related Mortgage Loan pursuant to this
Agreement, and such retention and possession by the Servicer shall be in a
custodial capacity only. The ownership of each Mortgage Note, Mortgage, and the
contents of the Servicing File shall be vested in the Trustee and the ownership
of all records and documents with respect to the related Mortgage Loan prepared
by or which come into the possession of the Servicer shall immediately vest in
the Trustee and shall be retained and maintained, in trust, by the Servicer at
the will of the Trustee in such custodial capacity only. The portion of each
Servicing File retained by the Servicer pursuant to this Agreement shall be
segregated from the other books and records of the Servicer and shall be
appropriately marked to clearly reflect the ownership of the related Mortgage
Loan by the Trustee. The Servicer shall release from its custody the contents of
any Servicing File retained by it only in accordance with this Agreement.
Section 2.02 BOOKS AND RECORDS.
(a) Subject to Section 3.01(a) hereof, as soon as practicable after
the Closing Date, the Servicing Transfer Date or the date on which a Qualifying
Substitute Mortgage Loan is delivered pursuant to Section 2.05 of the Trust
Agreement, as applicable (but in no event more than 90 days thereafter except to
the extent delays are caused by the applicable recording office), the Servicer,
at the expense of the Depositor, shall cause the Mortgage or Assignment of
Mortgage, as applicable, with respect to each MERS Eligible Mortgage Loan, to be
properly recorded in the name of MERS in the public recording office in the
applicable jurisdiction, or shall ascertain that such have previously been so
recorded and, with the cooperation of the Trustee, shall take such actions as
are necessary to cause the Trustee to be clearly identified as the owner of each
MERS Mortgage Loan and each MERS Eligible Mortgage Loan on the records of MERS
for purposes of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS.
(b) Subject to Section 3.01(a) hereof, an Assignment of Mortgage in
favor of the Trustee shall be recorded as to each Non-MERS Mortgage Loan unless
instructions to the contrary are delivered to the Servicer, in writing, by the
Trustee. Subject to the preceding
15
sentence, as soon as practicable after the Closing Date or Servicing Transfer
Date, as applicable (but in no event more than 90 days thereafter except to the
extent delays are caused by the applicable recording office), the Servicer, at
the expense of the Depositor, shall cause to be properly recorded in each public
recording office where such Non-MERS Eligible Mortgage Loans are recorded each
Assignment of Mortgage.
(c) Additionally, the Servicer shall prepare and execute, at the
direction of the Trustee, any note endorsements relating to any of the Non-MERS
Mortgage Loans.
(d) All rights arising out of the Mortgage Loans shall be vested in
the Trustee, subject to the Servicer's right to service and administer the
Mortgage Loans hereunder in accordance with the terms of this Agreement. All
funds received on or in connection with a Mortgage Loan, other than the
Servicing Fee and other compensation to which the Servicer is entitled as set
forth herein, including but not limited to in Section 5.01 below, shall be
received and held by the Servicer in trust for the benefit of the Trustee
pursuant to the terms of this Agreement.
(e) Any out-of-pocket costs incurred by the Servicer pursuant to this
Section 2.02 and Section 3.01(a), including any recording or other fees in
connection with the Servicer's obtaining the necessary powers of attorney (and
which are specified herein to be an expense of each Seller), shall be reimbursed
to the Servicer by each Seller (with respect to its related Mortgage Loans)
within five (5) Business Days of receipt by the Seller of an invoice for
reimbursement. The Trust Fund shall not reimburse either Seller for any such
reimbursement to the Servicer.
ARTICLE III
SERVICING OF THE MORTGAGE LOANS
Section 3.01 SERVICER TO SERVICE.
The Servicer, as an independent contractor, shall service and
administer the Mortgage Loans from and after the Closing Date or Servicing
Transfer Date, as applicable, and shall have full power and authority, acting
alone, to do any and all things in connection with such servicing and
administration which the Servicer may deem necessary or desirable, consistent
with the terms of this Agreement and with Accepted Servicing Practices.
Each Seller (with respect to its related Mortgage Loans) and the
Servicer additionally agree as follows:
(a) The Servicer shall (i) record or cause to be recorded the
Mortgage or the Assignment of Mortgage, as applicable, with respect to all MERS
Eligible Mortgage Loans, in the name of MERS, or shall ascertain that such have
previously been so recorded; (ii) with the cooperation of the Trustee, take such
actions as are necessary to cause the Trustee to be clearly identified as the
owner of each MERS Mortgage Loan and each MERS Eligible Mortgage Loan on the
records of MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS; (iii) prepare or cause to be prepared
all Assignments of Mortgage with respect to all Non-MERS Eligible Mortgage
Loans; (iv) record or cause to be recorded, subject to Section 2.02(b) hereof,
all Assignments of Mortgage with respect to Non-MERS Mortgage Loans in the name
of the Trustee; (v) pay the recording costs
16
pursuant to Section 2.02 hereof; and/or (vi) track such Mortgages and
Assignments of Mortgage to ensure they have been recorded. The Servicer shall be
entitled to be paid by each Seller (with respect to its related Mortgage Loans)
fees for the preparation and recordation of the Mortgages and Assignments of
Mortgage. After the expenses of such recording costs pursuant to Section 2.02
hereof shall have been paid by the Servicer, the Servicer shall submit to the
related Seller a reasonably detailed invoice for reimbursement of recording
costs and fees it incurred hereunder.
(b) If applicable, the Servicer shall, in accordance with the
relevant provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ National Affordable Housing Act of
1990, as the same may be amended from time to time, and the regulations provided
in accordance with the Real Estate Settlement Procedures Act, provide notice to
the Mortgagor of each Mortgage Loan of the transfer of the servicing thereto to
the Servicer.
(c) The Servicer shall be responsible for the preparation of and
costs associated with notifications to Mortgagors of the assumption of servicing
by the Servicer.
Consistent with the terms of this Agreement, the Servicer may waive any
late payment charge, assumption fee or other fee that may be collected in the
ordinary course of servicing the Mortgage Loans. The Servicer shall not make any
future advances to any obligor under any Mortgage Loan, and (unless the
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the Servicer, reasonably foreseeable) the Servicer shall not
permit any modification of any material term of any Mortgage Loan, including any
modification that would change the Mortgage Interest Rate, defer or forgive the
payment of principal or interest, reduce or increase the outstanding principal
balance (except for actual payments of principal) or change the final maturity
date on such Mortgage Loan. In the event of any such modification which permits
the deferral of interest or principal payments on any Mortgage Loan, the
Servicer shall, on the Business Day immediately preceding the Remittance Date in
any month in which any such principal or interest payment has been deferred,
make a Monthly Advance in accordance with Section 4.03, in an amount equal to
the difference between (i) such month's principal and one month's interest at
the Mortgage Loan Remittance Rate on the unpaid principal balance of such
Mortgage Loan and (ii) the amount paid by the Mortgagor. The Servicer shall be
entitled to reimbursement for such advances to the same extent as for all other
advances made pursuant to Section 4.03. Without limiting the generality of the
foregoing, the Servicer shall continue, and is hereby authorized and empowered,
to execute and deliver on behalf of itself and the Trustee, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties. Upon the request of the Servicer, the
Trustee shall execute and deliver to the Servicer any powers of attorney and
other documents, furnished to it by the Servicer and reasonably satisfactory to
the Trustee, necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties under this Agreement. Promptly after the
execution of any assumption, modification, consolidation or extension of any
Mortgage Loan, the Servicer shall forward to the Master Servicer copies of any
documents evidencing such assumption, modification, consolidation or extension.
Notwithstanding anything to the contrary contained in this Servicing Agreement,
the Servicer shall not make or permit any modification, waiver or amendment of
any term of any Mortgage Loan that would cause any REMIC created under the Trust
Agreement to fail to qualify as a REMIC or result in the imposition of any tax
under Section 860F(a) or Section 860G(d) of the Code.
17
Notwithstanding anything to the contrary in this Agreement, the
Servicer shall not (unless the Servicer determines, in its own discretion, that
there exists a situation of extreme hardship to the Mortgagor), waive any
premium or penalty in connection with a prepayment of principal of any Mortgage
Loan, and shall not consent to the modification of any Mortgage Note to the
extent that such modification relates to payment of a prepayment premium or
penalty. If a Prepayment Penalty Amount is waived other than in a situation of
extreme hardship to the Mortgagor, the Servicer will be required to pay the
amount of such Prepayment Penalty Amount for the benefit of the Trust Fund by
depositing such amount from its own funds into the Custodial Account together
with and at the time that the amount prepaid on the related Mortgage Loan is
required to be deposited in the Custodial Account.
In servicing and administering the Mortgage Loans, the Servicer shall
employ procedures (including collection procedures) and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, giving due consideration to Accepted
Servicing Practices where such practices do not conflict with the requirements
of this Agreement, the ▇▇▇▇▇▇ ▇▇▇ Guides, and the Master Servicer's and Seller's
reliance on the Servicer.
Section 3.02 COLLECTION OF MORTGAGE LOAN PAYMENTS.
Continuously from the Closing Date or Servicing Transfer Date, as
applicable, until the date each Mortgage Loan ceases to be subject to this
Agreement, the Servicer shall proceed diligently to collect all payments due
under each of the Mortgage Loans when the same shall become due and payable and
shall take special care in ascertaining and estimating Escrow Payments and all
other charges that will become due and payable with respect to the Mortgage
Loans and each related Mortgaged Property, to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.
Section 3.03 ESTABLISHMENT OF AND DEPOSITS TO CUSTODIAL ACCOUNT.
The Servicer shall segregate and hold all funds collected and received
pursuant to the Mortgage Loans separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand accounts, titled as directed by the Master
Servicer. The Custodial Account shall be established with a Qualified
Depository. Any funds deposited in the Custodial Account may be invested in
Eligible Investments subject to the provisions of Section 3.11 hereof. Funds
deposited in the Custodial Account may be drawn on by the Servicer in accordance
with Section 3.04. The creation of any Custodial Account shall be evidenced by a
letter agreement in the form of Exhibit B. A copy of such certification or
letter agreement shall be furnished to the Master Servicer and, upon request, to
any subsequent owner of the Mortgage Loans.
The Servicer shall deposit in the Custodial Account on a daily basis,
and retain therein, the following collections received by the Servicer and
payments made by the Servicer after the Closing Date or Servicing Transfer Date,
as applicable:
(i) all payments on account of principal on the Mortgage
Loans, including all Principal Prepayments;
18
(ii) all payments on account of interest on the Mortgage
Loans adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds (other than amounts applied to
the restoration or repair of the Mortgaged Property or immediately released to
the Mortgagor in accordance with Accepted Servicing Practices);
(v) all Condemnation Proceeds that are not applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor;
(vi) with respect to each Principal Prepayment in full or in
part, the Prepayment Interest Shortfall Amount, if any, for the month of
distribution. Such deposit shall be made from the Servicer's own funds, without
reimbursement therefor, up to a maximum amount per month of the Servicing Fee
actually received for such month for the Mortgage Loans;
(vii) all Monthly Advances made by the Servicer pursuant to
Section 4.03;
(viii) any amounts required to be deposited by the Servicer in
connection with the deductible clause in any blanket hazard insurance policy;
(ix) any amounts received with respect to or related to any
REO Property or REO Disposition Proceeds;
(x) any Prepayment Penalty Amount; and,
(xi) any other amount required hereunder to be deposited by
the Servicer in the Custodial Account.
The foregoing requirements for deposit into the Custodial Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of the Servicing Fee and
Ancillary Income need not be deposited by the Servicer into the Custodial
Account.
Any interest paid on funds deposited in the Custodial Account by the
depository institution shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 3.04. Any other benefit derived from the
Custodial Account associated with the receipt, disbursement and accumulation of
principal, interest, taxes, hazard insurance, mortgage insurance, etc. shall
accrue to the Trust Fund.
Section 3.04 PERMITTED WITHDRAWALS FROM CUSTODIAL ACCOUNT.
The Servicer shall, from time to time, withdraw funds from the
Custodial Account for the following purposes:
19
(i) to make payments to the Master Servicer in the amounts
and in the manner provided for in Section 4.01;
(ii) with respect to each LPMI Loan, in the amount of the
related LPMI Fee, to make payments with respect to premiums for LPMI Policies in
accordance with Section 3.07;
(iii) in the event the Servicer has elected not to retain the
Servicing Fee out of any Mortgagor payments on account of interest or other
recovery of interest with respect to a particular Mortgage Loan (including late
collections of interest on such Mortgage Loan, or interest portions of Insurance
Proceeds, Condemnation Proceeds or Liquidation Proceeds) prior to the deposit of
such Mortgagor payment or recovery in the Custodial Account, to pay to itself
the related Servicing Fee from all such Mortgagor payments on account of
interest or other such recovery for interest with respect to that Mortgage Loan;
(iv) to pay itself investment earnings on funds deposited in
the Custodial Account;
(v) to clear and terminate the Custodial Account upon the
termination of this Agreement;
(vi) to transfer funds to another Qualified Depository in
accordance with Section 3.11 hereof;
(vii) to invest funds in certain Eligible Investments in
accordance with Section 3.11 hereof;
(viii) to reimburse itself to the extent of funds in the
Custodial Account for Monthly Advances of the Servicer's funds made pursuant to
Section 4.03, the Servicer's right to reimburse itself pursuant to this
subclause (viii) with respect to any Mortgage Loan being limited to amounts
received on or in respect of the related Mortgage Loan which represent late
recoveries of payments of principal or interest with respect to which a Monthly
Advance was made, it being understood that, in the case of any such
reimbursement, the Servicer's right thereto shall be prior to the rights of the
Trust Fund, PROVIDED, HOWEVER, that following the final liquidation of a
Mortgage Loan, the Servicer may reimburse itself for previously unreimbursed
Monthly Advances only from Liquidation Proceeds or Insurance Proceeds with
respect to such Mortgage Loan it being understood that in no case may a Servicer
recover Servicing Advances from principal and interest payments on any Mortgage
Loan or from any amounts relating to any other Mortgage Loan.. In the case of
any such reimbursement, that the Servicer's right thereto shall be prior to the
rights of the Trust Fund.
(ix) to reimburse itself for unreimbursed Servicing Advances,
and for any unpaid Servicing Fees, the Servicer's right to reimburse itself
pursuant to this subclause (ix) with respect to any Mortgage Loan being limited
to related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO
Disposition Proceeds and other amounts received in respect of the related REO
Property, and such other amounts as may be collected by the Servicer from the
Mortgagor or otherwise relating to the Mortgage Loan, it being understood that,
in the case of any such reimbursement, the Servicer's right thereto shall be
prior to the rights of the Trust Fund;
20
(x) to reimburse itself for expenses incurred or
reimbursable to the Servicer pursuant to Sections 3.12 and 6.03 to the extent
not previously reimbursed under clause (ix) of this Section 3.04; and
(xi) to withdraw funds deposited in error.
Section 3.05 ESTABLISHMENT OF AND DEPOSITS TO ESCROW ACCOUNT.
The Servicer shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts, in the form of time deposit or demand accounts, titled as
directed by the Master Servicer. The Escrow Accounts shall be established with a
Qualified Depository in a manner that shall provide maximum available insurance
thereunder. Funds deposited in the Escrow Account may be drawn on by the
Servicer in accordance with Section 3.06. The creation of any Escrow Account
shall be evidenced by a letter agreement in the form of Exhibit C. A copy of
such certification or letter agreement shall be furnished to the Master Servicer
and, upon request, to any subsequent owner of the Mortgage Loans.
The Servicer shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or
Condemnation Proceeds that are to be applied to the restoration or repair of any
Mortgaged Property.
The Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 3.06. The Servicer shall retain any interest paid on funds deposited in
the Escrow Account by the depository institution, other than interest on
escrowed funds required by law to be paid to the Mortgagor. Additionally, any
other benefit derived from the Escrow Account associated with the receipt,
disbursement and accumulation of principal, interest, taxes, hazard insurance,
mortgage insurance, etc. shall accrue to the Servicer. To the extent required by
law, the Servicer shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes.
Section 3.06 PERMITTED WITHDRAWALS FROM ESCROW ACCOUNT.
Withdrawals from the Escrow Account or Accounts may be made by the
Servicer only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, sewer rents, mortgage insurance premiums, condominium
charges, fire and hazard insurance premiums or other items constituting Escrow
Payments for the related Mortgage;
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(ii) to refund to any Mortgagor any funds found to be in
excess of the amounts required under the terms of the related Mortgage Loan;
(iii) for transfer to the Custodial Account and application to
reduce the principal balance of the Mortgage Loan in accordance with the terms
of the related Mortgage and Mortgage Note;
(iv) to reimburse the Servicer for any Servicing Advance made
by the Servicer with respect to a related Mortgage Loan, but only from amounts
received on the related Mortgage Loan which represent late collections of Escrow
Payments.
(v) for application to restoration or repair of the
Mortgaged Property in accordance with the ▇▇▇▇▇▇ ▇▇▇ Guides;
(vi) to pay to the Servicer, or any Mortgagor to the extent
required by law, any interest paid on the funds deposited in the Escrow Account;
(vii) to remove funds inadvertently placed in the Escrow
Account by the Servicer; and
(viii) to clear and terminate the Escrow Account on the
termination of this Agreement.
Section 3.07 MAINTENANCE OF PMI POLICY AND/OR LPMI POLICY; CLAIMS.
The Servicer shall comply with all provisions of applicable state and
federal law relating to the cancellation of, or collection of premiums with
respect to, PMI Policies, including, but not limited to, the provisions of the
Homeowners Protection Act of 1998, and all regulations promulgated thereunder,
as amended from time to time.
With respect to each Mortgage Loan (other than LPMI Loans) with a loan
to value ratio at origination in excess of 80%, the Servicer shall maintain or
cause the Mortgagor to maintain (to the extent that the Mortgage Loan requires
the Mortgagor to maintain such insurance) in full force and effect a PMI Policy,
and shall pay or shall cause the Mortgagor to pay the premium thereon on a
timely basis, until the LTV of such Mortgage Loan is reduced to 80%. In the
event that such PMI Policy shall be terminated, the Servicer shall obtain from
another Qualified Insurer a comparable replacement policy, with a total coverage
equal to the remaining coverage of such terminated PMI Policy, at substantially
the same fee level. The Servicer shall not take any action which would result in
noncoverage under any applicable PMI Policy of any loss which, but for the
actions of the Servicer would have been covered thereunder. In connection with
any assumption or substitution agreements entered into or to be entered into
with respect to a Mortgage Loan, the Servicer shall promptly notify the insurer
under the related PMI Policy, if any, of such assumption or substitution of
liability in accordance with the terms of such PMI Policy and shall take all
actions which may be required by such insurer as a condition to the continuation
of coverage under such PMI Policy. If such PMI Policy is terminated as a result
of such assumption or substitution of liability, the Servicer shall obtain a
replacement PMI Policy as provided above.
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The Servicer shall take all such actions as are necessary to service,
maintain and administer the LPMI Loans in accordance with the LPMI Policy and to
perform and enforce the rights of the insured under such LPMI Policy. Except as
expressly set forth herein, the Servicer shall have full authority on behalf of
the Trust to do anything it reasonably deems appropriate or desirable in
connection with the servicing, maintenance and administration of the LPMI
Policy. The Servicer shall not modify or assume a Mortgage Loan covered by the
LPMI Policy or take any other action with respect to such Mortgage Loan which
would result in non-coverage under the LPMI Policy of any loss which, but for
the actions of the Servicer, would have been covered thereunder. If the LPMI
Insurer fails to pay a claim under the LPMI Policy as a result of breach by the
Servicer of its obligations hereunder or under the LPMI Policy, the Servicer
shall be required to deposit in the Custodial Account on or prior to the next
succeeding Remittance Date an amount equal to such unpaid claim from its own
funds without any right to reimbursement from the Trust Fund. The Servicer shall
cooperate with the LPMI Insurer and the Master Servicer and shall use its best
efforts to furnish all reasonable aid, evidence and information in the
possession of the Servicer to which the Servicer has access with respect to any
LPMI Loan; PROVIDED, HOWEVER, notwithstanding anything to the contrary contained
in any LPMI Policy, the Servicer shall not be required to submit any reports to
the LPMI Insurer until a reporting date that is at least 15 days after the
Servicer has received sufficient loan level information from each Seller, the
Master Servicer or the LPMI Insurer to appropriately code its servicing system
in accordance with the LPMI Insurer's requirements.
In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the Trustee, claims to the insurer
under any PMI Policy or LPMI Policy in a timely fashion in accordance with the
terms of such PMI Policy or LPMI Policy and, in this regard, to take such action
as shall be necessary to permit recovery under any PMI Policy or LPMI Policy
respecting a defaulted Mortgage Loan. Any amounts collected by the Servicer
under any PMI Policy or LPMI Policy shall be deposited in the Custodial Account,
subject to withdrawal pursuant to Section 3.04.
Section 3.08 FIDELITY BOND AND ERRORS AND OMISSIONS INSURANCE.
The Servicer shall keep in force during the term of this Agreement a
Fidelity Bond and Errors and Omissions Insurance Policy. Such Fidelity Bond and
Errors and Omissions Insurance shall be maintained with recognized insurers and
shall be in such form and amount as would permit the Servicer to be qualified as
a ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac seller-servicer. The Servicer shall be deemed to
have complied with this provision if an affiliate of the Servicer has such
errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Servicer. The Servicer shall furnish to the Master Servicer a copy of each
such bond and insurance policy if the Master Servicer so requests.
Section 3.09 NOTIFICATION OF ADJUSTMENTS.
With respect to each Adjustable Rate Mortgage Loan, the Servicer shall
adjust the Mortgage Interest Rate on the related interest rate adjustment date
and shall adjust the Monthly Payment on the related mortgage payment adjustment
date, if applicable, in compliance with the requirements of applicable law and
the related Mortgage and Mortgage Note. The Servicer shall
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execute and deliver any and all necessary notices required under applicable law
and the terms of the related Mortgage Note and Mortgage regarding the Mortgage
Interest Rate and Monthly Payment adjustments. The Servicer shall promptly, upon
written request therefor, deliver to the Master Servicer such notifications and
any additional applicable data regarding such adjustments and the methods used
to calculate and implement such adjustments. Upon the discovery by the Servicer
or the receipt of notice from the Master Servicer that the Servicer has failed
to adjust a Mortgage Interest Rate or Monthly Payment in accordance with the
terms of the related Mortgage Note, the Servicer shall immediately deposit in
the Custodial Account from its own funds the amount of any interest loss or
deferral caused thereby.
Section 3.10 COMPLETION AND RECORDATION OF ASSIGNMENTS OF MORTGAGE.
As soon as practicable after the Closing Date, the Servicing Transfer
Date or the date on which a Qualifying Substitute Mortgage Loan is delivered
pursuant to Section 2.05 of the Trust Agreement, as applicable (but in no event
more than 90 days thereafter except to the extent delays are caused by the
applicable public recording office), the Servicer shall cause the endorsements
on the Mortgage Note (if applicable), and the Assignments of Mortgage (subject
to Section 3.01(a)) to be completed in the name of the Trustee (or MERS, as
applicable).
Section 3.11 PROTECTION OF ACCOUNTS.
The Servicer may transfer the Custodial Account or the Escrow Account
to a different Qualified Depository from time to time. Such transfer shall be
made only upon obtaining the consent of the Master Servicer, which consent shall
not be withheld unreasonably.
The Servicer shall bear any expenses, losses or damages sustained by
the Master Servicer or the Trustee if the Custodial Account and/or the Escrow
Account are not demand deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow Account may
at the option of the Servicer be invested in Eligible Investments; provided that
in the event that amounts on deposit in the Custodial Account or the Escrow
Account exceed the amount fully insured by the FDIC (the "Insured Amount") the
Servicer shall be obligated to invest the excess amount over the Insured Amount
in Eligible Investments on the same Business Day as such excess amount becomes
present in the Custodial Account or the Escrow Account. Any such Eligible
Investment shall mature no later than the Business Day immediately preceding the
related Remittance Date, provided, however, that if such Eligible Investment is
an obligation of a Qualified Depository (other than the Servicer) that maintains
the Custodial Account or the Escrow Account, then such Eligible Investment may
mature on the related Remittance Date. Any such Eligible Investment shall be
made in the name of the Servicer in trust for the benefit of the Trustee. All
income on or gain realized from any such Eligible Investment shall be for the
benefit of the Servicer and may be withdrawn at any time by the Servicer. Any
losses incurred in respect of any such investment shall be deposited in the
Custodial Account or the Escrow Account, by the Servicer out of its own funds
immediately as realized.
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Section 3.12 PAYMENT OF TAXES, INSURANCE AND OTHER CHARGES.
With respect to each Mortgage Loan, the Servicer shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates, sewer rents, and other charges which are or may become a lien upon
the Mortgaged Property and the status of PMI Policy and LPMI Policy (if any)
premiums and fire and hazard insurance coverage and shall obtain, from time to
time, all bills for the payment of such charges (including renewal premiums) and
shall effect payment thereof prior to the applicable penalty or termination
date, employing for such purpose deposits of the Mortgagor in the Escrow Account
which shall have been estimated and accumulated by the Servicer in amounts
sufficient for such purposes, as allowed under the terms of the Mortgage. The
Servicer shall not be required to maintain records with respect to the payment
of LPMI Premiums unless the Servicer shall be required to make payment of such
premiums and such requirement shall be indicated on the Mortgage Loan Schedule
with respect to each applicable Mortgage Loan. The Servicer assumes full
responsibility for the timely payment of all such bills, shall effect timely
payment of all such charges irrespective of each Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments, and
shall make advances from its own funds to effect such payments. With regard to
any Mortgage Loans for which the Mortgagor is not required to escrow Escrow
Payments with the Servicer, the Servicer shall use reasonable efforts consistent
with Accepted Servicing Practices to determine that any such payments are made
by the Mortgagor at the time they first became due and shall insure that the
Mortgaged Property is not lost to a tax lien as a result of nonpayment and that
such Mortgage is not left uninsured and shall make advances from its own funds
to effect any such delinquent payments to avoid the lapse of insurance coverage
on the Mortgaged Property or to avoid the imposition of a tax lien.
Section 3.13 MAINTENANCE OF HAZARD INSURANCE.
The Servicer shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located, in an amount which is at least equal to the greater of (i) the
outstanding principal balance of the Mortgage Loan and (ii) an amount such that
the proceeds thereof shall be sufficient to prevent the Mortgagor or the loss
payee from becoming a co-insurer.
If upon origination of the Mortgage Loan, the related Mortgaged
Property was located in an area identified in the Federal Register by the Flood
Emergency Management Agency as having special flood hazards (and such flood
insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect with a generally acceptable insurance carrier in an amount
representing coverage equal to the lesser of (i) the minimum amount required,
under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. If at any time during the term of the
Mortgage Loan, the Servicer determines in accordance with applicable law and
pursuant to the ▇▇▇▇▇▇ Mae Guides that a Mortgaged Property is located in a
special flood hazard area and is not covered by flood
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insurance or is covered in an amount less than the amount required by the Flood
Disaster Protection Act of 1973, as amended, the Servicer shall notify the
related Mortgagor that the Mortgagor must obtain such flood insurance coverage,
and if said Mortgagor fails to obtain the required flood insurance coverage
within forty-five (45) days after such notification, the Servicer shall force
place the required flood insurance on the Mortgagor's behalf.
Section 3.14 MAINTENANCE OF MORTGAGE BLANKET INSURANCE.
The Servicer shall obtain and maintain a blanket policy insuring
against losses arising from fire and hazards covered under extended coverage on
all of the Mortgage Loans. To the extent such policy provides coverage in an
amount equal to the amount required pursuant to Section 3.12 and otherwise
complies with all other requirements of Section 3.12, it shall conclusively be
deemed to have satisfied its obligations as set forth in Section 3.12. Any
amounts collected by the Servicer under any such policy relating to a Mortgage
Loan shall be deposited in the Custodial Account or Escrow Account subject to
withdrawal pursuant to Sections 3.04 or 3.06. Such policy may contain a
deductible clause, in which case, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with Section
3.12, and there shall have been a loss which would have been covered by such
policy, the Servicer shall deposit in the Custodial Account at the time of such
loss the amount not otherwise payable under the blanket policy because of such
deductible clause, such amount to be deposited from the Servicer's funds,
without reimbursement therefor.
Section 3.15 RESTORATION OF MORTGAGED PROPERTY.
The Servicer need not obtain the approval of the Trustee or the Master
Servicer prior to releasing any Insurance Proceeds or Condemnation Proceeds to
the Mortgagor to be applied to the restoration or repair of the Mortgaged
Property if such release is in accordance with Accepted Servicing Practices. At
a minimum, with respect to claims greater than $[ ], the Servicer shall comply
with the following conditions in connection with any such release of Insurance
Proceeds or Condemnation Proceeds:
(i) the Servicer shall receive satisfactory independent
verification of completion of repairs and issuance of any required approvals
with respect thereto;
(ii) the Servicer shall take all steps necessary to preserve
the priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens; and
(iii) pending repairs or restoration, the Servicer shall place
the Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
Section 3.16 TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Trustee (or MERS, as applicable), or in the
event the Trustee is not authorized or permitted to hold title to real property
in the state where the REO Property is located, or would be adversely affected
under the "doing business" or tax laws of such state by so holding title, the
deed or certificate of
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sale shall be taken in the name of such Person or Persons as shall be consistent
with an Opinion of Counsel obtained by the Servicer from any attorney duly
licensed to practice law in the state where the REO Property is located. The
Person or Persons holding such title other than the Trustee shall acknowledge in
writing that such title is being held as nominee for the Trustee.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Trustee solely for the purpose of its prompt disposition and
sale. The Servicer, either itself or through an agent selected by the Servicer,
shall manage, conserve, protect and operate the REO Property in the same manner
that it manages, conserves, protects and operates other foreclosed property for
its own account, and in the same manner that similar property in the same
locality as the REO Property is managed. The Servicer shall attempt to sell the
same (and may temporarily rent the same for a period not greater than one year,
except as otherwise provided below) on such terms and conditions as the Servicer
deems to be in the best interest of the Trustee.
The Servicer may permit an obligor to pay off a non-performing Mortgage
Loan at less than its unpaid principal balance or chargeoff all or a portion of
such non-performing Mortgage Loan if such discounted payoff or chargeoff is in
accordance with Accepted Servicing Practices and the Servicer believes that such
discounted payoff or chargeoff is in the best interest of the Trust Fund;
provided that in the case of any proposed discounted payoff or proposed
chargeoff, the Servicer shall notify the Master Servicer, by telecopy and
telephone, of the proposed discounted the discounted payoff or chargeoff of any
Mortgage Loan unless the Master Servicer notifies the Servicer in writing,
within five (5) Business Days after its receipt of the related notice, that it
disapproves of the discounted payoff or chargeoff, in which case the Servicer
shall notproceed with such discounted payoff or chargeoff.
Notwithstanding anything to the contrary contained in this Section
3.16, in connection with a foreclosure or acceptance of a deed in lieu of
foreclosure, in the event the Servicer has reasonable cause to believe that a
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
or if the Trustee or the Master Servicer otherwise requests, an environmental
inspection or review of such Mortgaged Property to be conducted by a qualified
inspector shall be arranged by the Servicer. Upon completion of the inspection,
the Servicer shall provide the Trustee and the Master Servicer with a written
report of such environmental inspection. In the event that the environmental
inspection report indicates that the Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, the Servicer shall not proceed with
foreclosure or acceptance of a deed in lieu of foreclosure. In the event that
the environmental inspection report is inconclusive as to the whether or not the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
the Servicer shall not, without the prior approval of the Trustee, proceed with
foreclosure or acceptance of a deed in lieu of foreclosure. In such instance,
the Trustee shall be deemed to have approved such foreclosure or acceptance of a
deed in lieu of foreclosure unless the Trustee notifies the Servicer in writing,
within two (2) Business Days after its receipt of written notice of the proposed
foreclosure or deed in lieu of foreclosure from the Servicer, that it
disapproves of the related foreclosure or acceptance of a deed in lieu of
foreclosure. The Servicer shall be reimbursed for all Servicing Advances made
pursuant to this paragraph with respect to the related Mortgaged Property from
the Custodial Account.
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The Servicer shall use its best efforts to dispose of the REO Property
as soon as possible and shall sell such REO Property in any event within three
years after title has been taken to such REO Property, unless (a) a REMIC
election has not been made with respect to the arrangement under which the
Mortgage Loans and the REO Property are held, and (b) the Servicer determines,
and gives an appropriate notice to the Master Servicer to such effect, that a
longer period is necessary for the orderly liquidation of such REO Property. If
a period longer than three years is permitted under the foregoing sentence and
is necessary to sell any REO Property, the Servicer shall report monthly to the
Master Servicer as to the progress being made in selling such REO Property.
Notwithstanding anything herein to the contrary, the Servicer shall not be
required to provide financing for the sale of any REO Property.
The Servicer shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
Subject to the approval of the Master Servicer as described in this
paragraph, the disposition of REO Property shall be carried out by the Servicer
at such price, and upon such terms and conditions, as the Servicer deems to be
in the best interests of the Trust Fund. Prior to acceptance by the Servicer of
an offer to sell any REO Property, the Servicer shall notify the Master Servicer
of such offer in writing which notification shall set forth all material terms
of said offer (each a "Notice of Sale"). The Master Servicer shall be deemed to
have approved the sale of any REO Property unless the Master Servicer notifies
the Servicer in writing, within five (5) Business Days after its receipt of the
related Notice of Sale, that it disapproves of the related sale, in which case
the Servicer shall not proceed with the sale.
The Servicer shall withdraw from the Custodial Account funds necessary
for the proper operation, management and maintenance of the REO Property,
including the cost of maintaining any hazard insurance pursuant to the ▇▇▇▇▇▇
▇▇▇ Guides. The Servicer shall make monthly distributions on each Remittance
Date to the Master Servicer of the net cash flow from the REO Property (which
shall equal the revenues from such REO Property net of the expenses described in
this Section 3.12 and of any reserves reasonably required from time to time to
be maintained to satisfy anticipated liabilities for such expenses).
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Section 3.17 REAL ESTATE OWNED REPORTS.
Together with the statement furnished pursuant to Section 4.02, the
Servicer shall furnish to the Master Servicer on or before the Remittance Date
each month a statement with respect to any REO Property covering the operation
of such REO Property for the previous month and the Servicer's efforts in
connection with the sale of such REO Property and any rental of such REO
Property incidental to the sale thereof for the previous month. That statement
shall be accompanied by such other information as the Master Servicer shall
reasonably request.
Section 3.18 MERS.
(a) So long as the Trustee is a member of MERS, the Servicer shall
use its best efforts to cause the Trustee to be identified as the owner of each
MERS Mortgage Loan on the records of MERS for purposes of the system of
recording transfers of beneficial ownership of mortgages maintained by MERS.
(b) The Servicer shall maintain in good standing its membership in
MERS. In addition, the Servicer shall comply with all rules, policies and
procedures of MERS, including the Rules of Membership, as amended, and the MERS
Procedures Manual, as amended.
(c) With respect to all MERS Mortgage Loans serviced hereunder, the
Servicer shall promptly notify MERS as to any transfer of beneficial ownership
of such Mortgage Loans of which the Servicer has notice.
(d) With respect to all MERS Mortgage Loans serviced hereunder, the
Servicer shall notify MERS as to any transfer of servicing pursuant to Section
3.15 or Section 9.01 within 10 Business Days of such transfer of servicing. The
Servicer shall cooperate with the Trustee, the Master Servicer and any successor
servicer to the extent necessary to ensure that such transfer of servicing is
appropriately reflected on the MERS system.
ARTICLE IV.
PAYMENTS TO MASTER SERVICER
Section 4.01 REMITTANCES.
On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the Master Servicer (i) all amounts deposited in
the Custodial Account as of the close of business on the last day of the related
Due Period (net of charges against or withdrawals from the Custodial Account
pursuant to Section 3.04), plus (ii) all Monthly Advances, if any, which the
Servicer is obligated to make pursuant to Section 4.03, minus (iii) any amounts
attributable to Principal Prepayments, Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds or REO Disposition Proceeds received after the applicable
Prepayment Period, which amounts shall be remitted on the following Remittance
Date, together with any additional interest required to be deposited in the
Custodial Account in connection with such Principal Prepayment in accordance
with Section 3.03(vi), and minus (iv) any amounts attributable to Monthly
Payments collected but due on a Due Date or Due Dates subsequent to
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the first day of the month in which such Remittance Date occurs, which amounts
shall be remitted on the Remittance Date next succeeding the Due Date related to
such Monthly Payment.
With respect to any remittance received by the Master Servicer after
the Business Day on which such payment was due, the Servicer shall pay to the
Master Servicer interest on any such late payment at an annual rate equal to the
Prime Rate, adjusted as of the date of each change, plus two (2) percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be deposited in the Custodial Account by the Servicer
on the date such late payment is made and shall cover the period commencing with
the day following such Business Day and ending with the Business Day on which
such payment is made, both inclusive. Such interest shall be remitted along with
the distribution payable on the next succeeding Remittance Date. The payment by
the Servicer of any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Servicer.
All remittances required to be made to the Master Servicer shall be
made to the following wire account or to such other account as may be specified
by the Master Servicer from time to time:
[___]
ABA#: ▇▇▇-▇▇▇-▇▇▇
Account Name: [______] Loan Services Inc.,
Master Servicing Payment Clearing Account
Account Number: [_____]
Beneficiary: [______]
For further credit to: BASIC 200____-___
Section 4.02 STATEMENTS TO MASTER SERVICER.
Not later than the tenth calendar day of each month (or if such
calendar day is not a Business Day, the immediately succeeding Business Day),
the Servicer shall furnish to the Master Servicer (i) a monthly remittance
advice in the format set forth in Exhibit D-1 hereto and a monthly defaulted
loan report in the format set forth in Exhibit D-2 hereto (or in such other
format mutually agreed between the Servicer and the Master Servicer) relating to
the period ending on the last day of the preceding calendar month and (ii) all
such information required pursuant to clause (i) above on a magnetic tape or
other similar media reasonably acceptable to the Master Servicer.
Not later than the seventeenth day of each month, the Servicer shall
furnish to the Master Servicer (a) a monthly payoff remittance advice regarding
any Principal Prepayments in full applied to the related Mortgage Loan on or
after the seventeenth day of the month preceding the month of such reporting
date, but on or before the sixteenth day of the month of such reporting date,
containing such information and in such format as is mutually acceptable to the
Master Servicer and the Servicer, and in any event containing sufficient
information to permit the Master Servicer to properly report Principal
Prepayment in full information to the Trustee under the Trust Agreement and (b)
all such information required pursuant to clause (a) above in electronic format,
on magnetic tape or other similar media reasonably acceptable to the Master
Servicer.
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In addition, not more than 60 days after the end of each calendar year,
commencing [_______], 200__ the Servicer shall furnish to each Person who was an
owner of the Mortgage Loans at any time during such calendar year as required by
applicable law or if not required by applicable law, at the request of such
owner as to the aggregate of remittances for the applicable portion of such
year.
Such obligation of the Servicer shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided by the
Servicer pursuant to any requirements of the Internal Revenue Code as from time
to time are in force.
Beginning with calendar year 200_, the Servicer shall provide the
Master Servicer with such information concerning the Mortgage Loans as is
necessary for the Master Servicer or the Trustee to prepare the Trust Fund's
federal income tax return as the Master Servicer or the Trustee may reasonably
request from time to time.
Section 4.03 MONTHLY ADVANCES BY SERVICER.
On the Business Day immediately preceding each Remittance Date, the
Servicer shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution, or both, an amount equal to the aggregate
of all Monthly Advances relating to Monthly Payments which were due on the
Mortgage Loans during the applicable Due Period and which were delinquent at the
close of business on the immediately preceding Determination Date or which were
deferred pursuant to Section 3.01. The Servicer's obligation to make such
Monthly Advances as to any Mortgage Loan will continue through the last Monthly
Payment due prior to the payment in full of the Mortgage Loan, or through the
last Remittance Date prior to the Remittance Date for the distribution of all
Liquidation Proceeds and other payments or recoveries (including Insurance
Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan unless the
Servicer deems such Monthly Advances to be unrecoverable, as evidenced by an
Officer's Certificate of the Servicer delivered to the Master Servicer.
ARTICLE V.
GENERAL SERVICING PROCEDURES
Section 5.01 SERVICING COMPENSATION.
As consideration for servicing the Mortgage Loans subject to this
Agreement, the Servicer shall retain (i) the relevant Servicing Fee for each
Mortgage Loan remaining subject to this Agreement during any month and (ii)
Ancillary Income. In addition, if at any time the Servicer is the Retained
Interest Holder with respect to any Mortgage Loans, then the Servicer, as the
Retained Interest Holder, shall retain an amount equal to the Retained Interest
relating to such Mortgage Loans; provided, that (i) the Trustee and the Master
Servicer shall have no obligation to make payment of the Retained Interest to
the Servicer and (ii) the Servicer's right to retain the Retained Interest is
limited to (and the Retained Interest may only be retained from) the interest
portion (including recoveries with respect to interest from Liquidation Proceeds
to the extent permitted by Section 3.02 of this Agreement) of the Monthly
Payments collected by the Servicer with respect to those Mortgage Loans for
which payment is in fact made of the
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entire amount of the Monthly Payment. The Servicing Fee shall be payable
monthly. The Servicing Fees shall be payable only at the time of and with
respect to those Mortgage Loans for which payment is in fact made of the entire
amount of the Monthly Payment or as otherwise provided in Section 3.04. The
obligation of the Trustee to pay the Servicing Fees is limited as provided in
Section 3.04. The aggregate of the Servicing Fees payable to the Servicer for
any month with respect to the Mortgage Loans shall be reduced by any Prepayment
Interest Shortfall Amount with respect to such month.
The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
Section 5.02 ANNUAL AUDIT REPORT.
On or before [______] __ of each year, beginning with [______], 200__,
Servicer shall, at its own expense, cause a firm of independent public
accountants (who may also render other services to Servicer), which is a member
of the American Institute of Certified Public Accountants, to furnish to each
Seller (with respect to its related Mortgage Loans) and the Master Servicer (i)
year-end audited (if available) financial statements of the Servicer and (ii) a
statement to the effect that such firm has examined certain documents and
records for the preceding fiscal year (or during the period from the date of
commencement of such Servicer's duties hereunder until the end of such preceding
fiscal year in the case of the first such certificate) and that, on the basis of
such examination conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, such firm is of the opinion that
Servicer's overall servicing operations have been conducted in compliance with
the Uniform Single Attestation Program for Mortgage Bankers except for such
exceptions that, in the opinion of such firm, the Uniform Single Attestation
Program for Mortgage Bankers requires it to report, in which case such
exceptions shall be set forth in such statement.
Section 5.03 ANNUAL OFFICER'S CERTIFICATE.
On or before [______]of each year, beginning with [______], 200__, the
Servicer, at its own expense, will deliver to each Seller (with respect to its
related Mortgage Loans) and the Master Servicer a Servicing Officer's
certificate stating, as to each signer thereof, that (i) a review of the
activities of the Servicer during such preceding fiscal year and of performance
under this Agreement has been made under such officers' supervision, and (ii) to
the best of such officers' knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement for such year, or, if there
has been a default in the fulfillment of all such obligations, specifying each
such default known to such officers and the nature and status thereof including
the steps being taken by the Servicer to remedy such default.
Section 5.04 TRANSFERS OF MORTGAGED PROPERTY.
The Servicer shall use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note;
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provided that, if in the Servicer's prudent business judgment, it determines
that an assumption of the Mortgage Loan is in the best interests of the Trust
Fund, it shall deliver notice of such determination to the Master Servicer and
may permit such assumption if approved by the Master Servicer. When the
Mortgaged Property has been conveyed by the Mortgagor, the Servicer shall, to
the extent it has knowledge of such conveyance, so long as the Master Servicer
has not consented to an assumption in accordance with the preceding sentence,
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause applicable thereto, provided, however, that the Servicer
shall not be required to take such action if the Servicer, in its prudent
business judgment, believes it is not in the best interests of the Trust Fund
and shall not exercise such rights if prohibited by law from doing so or if the
exercise of such rights would impair or threaten to impair any recovery under
the related PMI Policy or LPMI Policy, if any.
If the Servicer reasonably believes it is unable under applicable law
to enforce such "due-on-sale" clause or if the Master Servicer approves such
assumption pursuant to the preceding paragraph, the Servicer shall enter into
(i) an assumption and modification agreement with the person to whom such
property has been conveyed, pursuant to which such person becomes liable under
the Mortgage Note and the original Mortgagor remains liable thereon or (ii) in
the event the Servicer is unable under applicable law to require that the
original Mortgagor remain liable under the Mortgage Note and the Servicer has
the prior consent of the primary mortgage guaranty insurer, a substitution of
liability agreement with the owner of the Mortgaged Property pursuant to which
the original Mortgagor is released from liability and the owner of the Mortgaged
Property is substituted as Mortgagor and becomes liable under the Mortgage Note;
provided that no such substitutions should be permitted unless such person
satisfies the underwriting criteria of the Servicer and has a credit risk rating
at least equal to that of the original Mortgagor. The Mortgage Loan, as assumed,
shall conform in all respects to the requirements, representations and
warranties of this Agreement. The Servicer shall notify the Master Servicer that
any such assumption or substitution agreement has been contemplated by
forwarding to the Master Servicer a copy of such assumption or substitution
agreement (indicating the Mortgage File to which it relates). The Servicer shall
forward an original copy of such agreement to the Custodian to be held by the
Custodian with the other documents related to such Mortgage Loan. The Servicer
shall be responsible for recording any such assumption or substitution
agreements. In connection with any such assumption or substitution agreement,
the Monthly Payment on the related Mortgage Loan shall not be changed but shall
remain as in effect immediately prior to the assumption or substitution, the
Mortgage Interest Rate, the stated maturity or the outstanding principal amount
of such Mortgage Loan shall not be changed nor shall any required monthly
payments of principal or interest be deferred or forgiven. Any assumption fee
collected by the Servicer for entering into an assumption agreement shall be
retained by the Servicer as additional servicing compensation. In connection
with any such assumption, neither the Mortgage Interest Rate borne by the
related Mortgage Note, the term of the Mortgage Loan nor the outstanding
principal amount of the Mortgage Loan shall be changed.
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ARTICLE VI
REPRESENTATIONS, WARRANTIES
AND AGREEMENTS
Section 6.01 REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
SERVICER.
The Servicer, as a condition to the consummation of the transactions
contemplated hereby, hereby makes the following representations and warranties
to each Seller, the Master Servicer and the Trustee as of the Closing Date:
(a) DUE ORGANIZATION AND AUTHORITY. The Servicer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of [Delaware] and has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified and in good standing in each
state where a Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type conducted by
the Servicer, and in any event the Servicer is in compliance with the laws of
any such state to the extent necessary to ensure the enforceability of the terms
of this Agreement; the Servicer has the full power and authority to execute and
deliver this Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Servicer and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Servicer and all requisite action has been taken by the
Servicer to make this Agreement valid and binding upon the Servicer in
accordance with its terms;
(b) ORDINARY COURSE OF BUSINESS. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Servicer;
(c) NO CONFLICTS. Neither the execution and delivery of this
Agreement, the acquisition of the servicing responsibilities by the Servicer or
the transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with or result in a
breach of any of the terms, conditions or provisions of the Servicer's
organizational documents or any legal restriction or any agreement or instrument
to which the Servicer is now a party or by which it is bound, or constitute a
default or result in an acceleration under any of the foregoing, or result in
the violation of any law, rule, regulation, order, judgment or decree to which
the Servicer or its property is subject, or impair the ability of the Servicer
to service the Mortgage Loans, or impair the value of the Mortgage Loans;
(d) ABILITY TO PERFORM. The Servicer does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
(e) NO LITIGATION PENDING. There is no action, suit, proceeding or
investigation pending or threatened against the Servicer which, either in any
one instance or in the aggregate, may result in any material adverse change in
the business, operations, financial condition, properties or assets of the
Servicer, or in any material impairment of the right or ability of the Servicer
to carry on its business substantially as now conducted, or in any material
liability on
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the part of the Servicer, or which would draw into question the validity of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or which would be likely to
impair materially the ability of the Servicer to perform under the terms of this
Agreement;
(f) NO CONSENT REQUIRED. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by the Servicer of or compliance by the Servicer with
this Agreement;
(g) ABILITY TO SERVICE. The Servicer is an approved seller/servicer
of conventional residential mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, with
the facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The Servicer
is in good standing to service mortgage loans for either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac. The Servicer is a member in good standing of the MERS system;
(h) NO UNTRUE INFORMATION. Neither this Agreement nor any statement,
report or other document furnished or to be furnished pursuant to this Agreement
or in connection with the transactions contemplated hereby contains any untrue
statement of fact or omits to state a fact necessary to make the statements
contained therein not misleading; and
(i) NO COMMISSIONS TO THIRD PARTIES. The Servicer has not dealt with
any broker or agent or anyone else who might be entitled to a fee or commission
in connection with this transaction other than each Seller.
Section 6.02 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES OF
THE SERVICER.
It is understood and agreed that the representations and warranties set
forth in Section 6.01 shall survive the engagement of the Servicer to perform
the servicing responsibilities as of the Closing Date or Servicing Transfer
Date, as applicable, hereunder and the delivery of the Servicing Files to the
Servicer and shall inure to the benefit of each Seller (with respect to its
related Mortgage Loans), the Depositor and the Trustee. Upon discovery by either
the Servicer, the Master Servicer, either Seller, the Depositor, or the Trustee
of a breach of any of the foregoing representations and warranties which
materially and adversely affects the ability of the Servicer to perform its
duties and obligations under this Agreement or otherwise materially and
adversely affects the value of the Mortgage Loans, the Mortgaged Property or the
priority of the security interest on such Mortgaged Property or the interest of
either Seller (with respect to its related Mortgage Loans), the Depositor or the
Trustee, the party discovering such breach shall give prompt written notice to
the other.
Within 60 days of the earlier of either discovery by or notice to the
Servicer of any breach of a representation or warranty set forth in Section 6.01
which materially and adversely affects the ability of the Servicer to perform
its duties and obligations under this Agreement or otherwise materially and
adversely affects the value of the Mortgage Loans, the Mortgaged Property or the
priority of the security interest on such Mortgaged Property, the Servicer shall
use its best efforts promptly to cure such breach in all material respects and,
if such breach cannot be cured, the Servicer shall, at the Trustee's option,
assign the Servicer's rights and
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obligations under this Agreement (or respecting the affected Mortgage Loans) to
a successor Servicer. Such assignment shall be made in accordance with Sections
9.01 and 9.02.
In addition, the Servicer shall indemnify each Seller, the Depositor,
the Trustee and the Master Servicer and hold each of them harmless against any
Costs resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Servicer representations and
warranties contained in this Agreement. It is understood and agreed that the
remedies set forth in this Section 6.02 constitute the sole remedies of each
Seller, the Depositor, the Master Servicer and the Trustee respecting a breach
of the foregoing representations and warranties.
Any cause of action against the Servicer relating to or arising out of
the breach of any representations and warranties made in Section 6.01 shall
accrue upon (i) discovery of such breach by the Servicer or notice thereof by
either Seller, the Depositor, the Trustee, or the Master Servicer to the
Servicer, (ii) failure by the Servicer to cure such breach within the applicable
cure period, and (iii) demand upon the Servicer by either Seller, the Depositor,
the Trustee, or the Master Servicer for compliance with this Agreement.
Section 6.03 ADDITIONAL INDEMNIFICATION BY THE SERVICER; THIRD
PARTY CLAIMS.
The Servicer shall indemnify each Seller, the Depositor, the Trustee,
the Master Servicer and the Trust Fund and hold them harmless against any and
all Costs that the indemnified party may sustain in any way related to (i) the
failure of the Servicer to perform its duties and service the Mortgage Loans in
material compliance with the terms of this Agreement or (ii) the failure of the
Servicer to cause any event to occur which requires its "best efforts" under
this Agreement. The Servicer shall immediately notify each Seller, the
Depositor, the Master Servicer, the Trustee, or any other relevant party if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans, assume (with the prior written consent of the indemnified party) the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees, promptly pay, discharge and satisfy any judgment or
decree which may be entered against it or any indemnified party in respect of
such claim and follow any written instructions received from such indemnified
party in connection with such claim. Each indemnified party, as applicable,
promptly shall reimburse the Servicer for all amounts advanced by it pursuant to
the preceding sentence except when the claim is in any way related to the
Servicer's indemnification pursuant to Section 6.02, or the failure of the
Servicer to service and administer the Mortgage Loans in material compliance
with the terms of this Agreement. In the event a dispute arises between an
indemnified party and the Servicer with respect to any of the rights and
obligations of the parties pursuant to this Agreement, and such dispute is
adjudicated in a court of law, by an arbitration panel or any other judicial
process, then the losing party shall indemnify and reimburse the winning party
for all attorney's fees and other costs and expenses related to the adjudication
of said dispute.
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ARTICLE VII.
THE SERVICER
Section 7.01 MERGER OR CONSOLIDATION OF THE SERVICER.
The Servicer shall keep in full effect its existence, rights and
franchises as a corporation, and shall obtain and preserve its qualification to
do business as a foreign entity in each jurisdiction in which such qualification
is or shall be necessary to protect the validity and enforceability of this
Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement.
Any Person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person 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, provided,
however, that the successor or surviving Person shall be an institution (i)
having a net worth of not less than $25,000,000, and (ii) which is a ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac approved servicer in good standing.
Section 7.02 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to either Seller, the Master
Servicer or the Trustee for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Servicer
or any such person against any breach of warranties or representations made
herein, or failure to perform its obligations in strict compliance with any
standard of care set forth in this Agreement, or any liability which would
otherwise be imposed by reason of any breach of the terms and conditions of this
Agreement. The Servicer and any director, officer, 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 shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the Mortgage
Loans in accordance with this Agreement and which in its opinion may involve it
in any expense or liability, provided, however, that the Servicer may, with the
consent of the Master Servicer, undertake any such action which it may deem
necessary or desirable in respect of this Agreement and the rights and duties of
the parties hereto. In such event, the Servicer shall be entitled to
reimbursement from the Trust Fund for the reasonable legal expenses and costs of
such action.
Section 7.03 LIMITATION ON RESIGNATION AND ASSIGNMENT BY THE
SERVICER.
Each Seller has entered into this Agreement with the Servicer in
reliance upon the independent status of the Servicer, and the representations as
to the adequacy of its servicing facilities, plant, personnel, records and
procedures, its integrity, reputation and financial standing, and the
continuance thereof. Therefore, the Servicer shall neither assign its rights
under this Agreement or the servicing hereunder nor delegate its duties
hereunder or any portion thereof, or sell or otherwise dispose of all or
substantially all of its property or assets without, in
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each case, the prior written consent of each Seller and the Master Servicer,
which consent, in the case of an assignment of rights or delegation of duties,
shall be granted or withheld in the discretion of each Seller and the Master
Servicer, and which consent, in the case of a sale or disposition of all or
substantially all of the property or assets of the Servicer, shall not be
unreasonably withheld; provided, that in each case, there must be delivered to
the Master Servicer and the Trustee a letter from each Rating Agency to the
effect that such transfer of servicing or sale or disposition of assets will not
result in a qualification, withdrawal or downgrade of the then-current rating of
any of the Certificates. Notwithstanding the foregoing, the Servicer, without
the consent of either Seller, the Master Servicer or the Trustee, may retain
third party contractors to perform certain servicing and loan administration
functions, including without limitation, hazard insurance administration, tax
payment and administration, flood certification and administration, collection
services and similar functions; provided, that the retention of such contractors
by Servicer shall not limit the obligation of the Servicer to service the
Mortgage Loans pursuant to the terms and conditions of this Agreement.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer and the Master Servicer
or upon the determination that its duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Servicer. Any
such determination permitting the resignation of the Servicer shall be evidenced
by an Opinion of Counsel to such effect delivered to the Master Servicer and the
Trustee which Opinion of Counsel shall be in form and substance acceptable to
the Master Servicer and the Trustee. No such resignation shall become effective
until a successor shall have assumed the Servicer's responsibilities and
obligations hereunder in the manner provided in Section 9.01.
Without in any way limiting the generality of this Section 7.03, in the
event that the Servicer either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof or sell or otherwise dispose of all or substantially all of its property
or assets, without the prior written consent of each Seller and the Master
Servicer, then either Seller or the Master Servicer shall have the right to
terminate this Agreement upon notice given as set forth in Section 8.01, without
any payment of any penalty or damages and without any liability whatsoever to
the Servicer or any third party.
Section 7.04 SUBSERVICING AGREEMENTS AND SUCCESSOR SUBSERVICER.
(a) The Servicer may enter into subservicing agreements for
any servicing and administration of the Mortgage Loans with any institution
which (i) is an approved ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac Seller/Servicer and (ii)
which represents and warrants that it is in compliance with the laws of each
state as necessary to enable it to perform its obligations under such
subservicing agreement. For this purpose, subservicing shall not be deemed to
include outsourcing routine tasks to third parties including, but not limited
to, taxes, insurance, property inspection, reconveyance, collection or brokering
REO Property. The Servicer shall give prior written notice to the Master
Servicer and the Trustee of the appointment of any subservicer and shall furnish
to the Master Servicer a copy of such subservicing agreement. For purposes of
this Agreement, the Servicer shall be deemed to have received payments on
Mortgage Loans immediately upon receipt by any subservicer of such payments. Any
such subservicing agreement shall be consistent with and not violate the
provisions of this Agreement. Each
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subservicing agreement shall provide that a successor servicer shall have the
option to terminate such agreement without payment of any fees if the
predecessor servicer is terminated or resigns.
(b) The Servicer may terminate any subservicing agreement to
which it is a party in accordance with the terms and conditions of such
subservicing agreement and either itself directly service the related Mortgage
Loans or enter into a subservicing agreement with a successor subservicer that
qualifies under Section 7.04(a).
(c) Notwithstanding any subservicing agreement or the
provisions of this Agreement relating to agreements or arrangements between the
Servicer and a subservicer or reference to actions taken through a subservicer
or otherwise, the Servicer shall remain obligated and primarily liable to the
Trustee, the Master Servicer and the Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions hereof
without diminution of such obligation or liability by virtue of such
subservicing agreements or arrangements or by virtue of indemnification from the
subservicer and to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the Mortgage Loans. The
Servicer shall be entitled to enter into any agreement with a subservicer for
indemnification of the Servicer by such subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
ARTICLE VIII.
TERMINATION
Section 8.01 TERMINATION FOR CAUSE.
This Agreement shall be terminable at the option of Administrator, or
the Master Servicer if any of the following events of default exist on the part
of the Servicer:
(i) any failure by the Servicer to remit to the Master
Servicer any payment required to be made under the terms of this Agreement which
continues unremedied for a period of two Business Days after the date upon which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Master Servicer; or
(ii) failure by the Servicer duly to observe or perform in
any material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement which continues unremedied for a period of
30 days; or
(iii) failure by the Servicer to maintain its license to do
business or service residential mortgage loans in any jurisdiction, if required
by such jurisdiction, where the Mortgaged Properties are located; or
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Servicer and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; or
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(v) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(vi) 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, bankruptcy or reorganization statute, make an assignment
for the benefit of its creditors, voluntarily suspend payment of its obligations
or cease its normal business operations for three Business Days; or
(vii) the Servicer ceases to meet the qualifications of a
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac seller/servicer; or
(viii) the Servicer attempts to assign the servicing of the
Mortgage Loans or its right to servicing compensation hereunder or the Servicer
attempts to sell or otherwise dispose of all or substantially all of its
property or assets or to assign this Agreement or the servicing responsibilities
hereunder or to delegate its duties hereunder or any portion thereof (to other
than a third party in the case of outsourcing routine tasks including, but not
limited to, taxes, insurance, property inspection, reconveyance, collection or
brokering REO Property), in each case without complying fully with the
provisions of Section 7.03, or
(ix) the servicer fails to satisfy the Servicer Termination
Test.
In each and every such case, so long as an event of default shall not
have been remedied, in addition to whatever rights each Seller or the Master
Servicer may have at law or equity to damages, including injunctive relief and
specific performance, either Seller or the Master Servicer, by notice in writing
to the Servicer, may terminate all the rights and obligations of the Servicer
under this Agreement and in and to the servicing contract established hereby and
the proceeds thereof.
Upon receipt by the Servicer of such written notice, all authority and
power of the Servicer under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in a successor Servicer
appointed by each Seller (with respect to its related Mortgage Loans) and the
Master Servicer. Upon written request from either Seller (with respect to its
related Mortgage Loans), the Servicer shall prepare, execute and deliver to the
successor entity designated by such Seller any and all documents and other
instruments, place in such successor's possession all Servicing Files relating
to such Seller's Mortgage Loans, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Servicer's sole
expense. The Servicer shall cooperate with each Seller (with respect to its
related Mortgage Loans) and the Master Servicer and such successor in effecting
the termination of the Servicer's responsibilities and rights hereunder,
including without limitation, the transfer to such successor for administration
by it of all cash amounts which shall at the time be credited by the Servicer to
the Custodial Account or Escrow Account or thereafter received with respect to
the Mortgage Loans.
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By a written notice, each Seller (with respect to its related Mortgage
Loans) and the Master Servicer may waive any default by the Servicer in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.
Section 8.02 TERMINATION WITHOUT CAUSE.
This Agreement shall terminate upon: (i) the later of (a) the
distribution of the final payment or liquidation proceeds on the last Mortgage
Loan to the Master Servicer (or advances by the Servicer for the same), and (b)
the disposition of all REO Property acquired upon foreclosure of the last
Mortgage Loan and the remittance of all funds due hereunder, (ii) mutual consent
of the Servicer, each Seller (with respect to its related Mortgage Loans) and
the Master Servicer in writing or (iii) at the sole discretion of either Seller
(with respect to its related Mortgage Loans) (acting in its capacity as owner of
the servicing rights relating to the Mortgage Loans). Any such termination
pursuant to clause (iii) above shall be with 30 days' prior notice, in writing
and delivered to the Trustee, the Master Servicer and the Servicer by registered
mail to the addresses set forth in Section 9.03 of this Agreement (in the case
of the Servicer) or in the Trust Agreement (in the case of the Trustee or the
Master Servicer). The Servicer shall comply with the termination procedures set
forth in Sections 7.03, 8.01 and 9.01 hereof. The Master Servicer or the Trustee
shall have no right to terminate the Servicer pursuant to this Section 8.02. In
connection with a termination by either Seller (with respect to its related
Mortgage Loans) pursuant to clause (iii) of this Section 8.02, the Servicer
shall be reimbursed for all unreimbursed out-of-pocket Servicing Advances,
Monthly Advances and Servicing Fees and other reasonable and necessary
out-of-pocket costs associated with any transfer of servicing at the time of
such transfer of servicing. Any invoices received by the Servicer after
termination will be forwarded to the Seller or the successor servicer for
payment within thirty (30) days of receipt from the Servicer.
Section 8.03 TERMINATED SERVICER'S RIGHT TO FEES AND UNREIMBURSED
ADVANCES
At the time of of a Servicer pursuant to either Section 8.01 or 8.02,
the Servicer shall be entitled to all accrued and unpaid Servicing Fees and
unreimbursed Servicing Advances and Monthly Advances, provided however, in the
event of a termination for cause under Section 8.01, such amounts shall not be
paid to the Servicer until such amounts are received by the Trust Fund From the
related Mortgage Loans.
ARTICLE IX.
MISCELLANEOUS PROVISIONS
Section 9.01 SUCCESSOR TO THE SERVICER.
Simultaneously with the termination of the Servicer's responsibilities
and duties under this Agreement (a) pursuant to Sections 6.02, 7.03, 8.01 or
8.02(ii), the Master Servicer shall, in accordance with provisions of the Trust
Agreement (i) succeed to and assume all of the
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Servicer's responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor having the characteristics set forth in
clauses (i) and (ii) of Section 7.01 and which shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of the Servicer under
this Agreement simultaneously with the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement; or (b) pursuant
to a termination under Section 8.02(iii), a Seller (with respect to those
related Mortgage Loans) shall appoint a successor having the characteristics set
forth in clauses (i) and (ii) of Section 7.01 and which shall succeed to all
rights and assume all of the responsibilities, duties and liabilities of the
Servicer under this Agreement simultaneously with the termination of the
Servicer's responsibilities, duties and liabilities under this Agreement (with
respect to those related Mortgage Loans). Any successor to the Servicer that is
not at that time a Servicer of other Mortgage Loans for the Trust Fund shall be
subject to the approval of the Master Servicer and, to the extent required by
the Trust Agreement, the Trustee, shall be a member in good standing of the MERS
system (if any of the Mortgage Loans are MERS Eligible Mortgage Loans, unless
such Mortgage Loans are withdrawn from MERS and Assignments of Mortgage are
recorded in favor of the Trustee at the expense of the successor Servicer). Any
approval of a successor servicer by the Master Servicer and, to the extent
required by the Trust Agreement, the Trustee, shall, if the successor servicer
is not at that time a servicer of other Mortgage Loans for the Trust Fund, be
conditioned upon the receipt by the Master Servicer and the Trustee of a letter
from each Rating Agency to the effect that such transfer of servicing will not
result in a qualification, withdrawal or downgrade of the then-current rating of
any of the Certificates. In connection with such appointment and assumption, the
Master Servicer or either Seller (with respect to its related Mortgage Loans),
as applicable, may make such arrangements for the compensation of such successor
out of payments on Mortgage Loans as it and such successor shall agree,
provided, however, that no such compensation shall be in excess of that
permitted the Servicer under this Agreement. In the event that the Servicer's
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to the aforementioned sections, the Servicer shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 9.01 and
shall in no event relieve the Servicer of the representations and warranties
made pursuant to Sections 6.01 and the remedies available to the Master Servicer
and each Seller (with respect to its related Mortgage Loans) under Section 6.02
and 6.03, it being understood and agreed that the provisions of such Sections
6.01, 6.02 and 6.03 shall be applicable to the Servicer notwithstanding any such
resignation or termination of the Servicer, or the termination of this
Agreement. Neither the Master Servicer, in its capacity as successor servicer,
nor any other successor servicer, shall be responsible for the lack of
information and/or documents that are not transferred to it by the Servicer and
that it cannot otherwise obtain through reasonable efforts.
Within a reasonable period of time, but in no event longer than 30 days
of the appointment of a successor entity, the Servicer shall prepare, execute
and deliver to the successor entity any and all documents and other instruments,
place in such successor's possession all Servicing Files, and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, including but not limited to the transfer and
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endorsement of the Mortgage Notes and related documents, and the preparation and
recordation of Assignments of Mortgage. The Servicer shall cooperate with the
Trustee, the Master Servicer or each Seller (with respect to its related
Mortgage Loans), as applicable, and such successor in effecting the termination
of the Servicer's responsibilities and rights hereunder and the transfer of
servicing responsibilities to the successor Servicer, including without
limitation, the transfer to such successor for administration by it of all cash
amounts which shall at the time be credited by the Servicer to the Custodial
Account or Escrow Account or thereafter received with respect to the Mortgage
Loans.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Trustee, the Servicer, the Master Servicer and each Seller
(with respect to its related Mortgage Loans) an instrument (i) accepting such
appointment, wherein the successor shall make the representations and warranties
set forth in Section 6.01 (including a representation that the successor
Servicer is a member of MERS, unless none of the Mortgage Loans are MERS
Mortgage Loans or MERS Eligible Mortgage Loans or any such Mortgage Loans have
been withdrawn from MERS and Assignments of Mortgage are recorded in favor of
the Trustee) and (ii) an assumption of the due and punctual performance and
observance of each covenant and condition to be performed and observed by the
Servicer under this Agreement, whereupon such successor shall become fully
vested with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer, with like effect as if originally named as a party
to this Agreement. Any termination or resignation of the Servicer or termination
of this Agreement pursuant to Sections 6.02, 7.03, 8.01 or 8.02 shall not affect
any claims that the Master Servicer or the Trustee may have against the Servicer
arising out of the Servicer's actions or failure to act prior to any such
termination or resignation. In addition, in the event any successor servicer is
appointed pursuant to Section 8.02(iii) of this Agreement, such successor
servicer must satisfy the conditions relating to the transfer of servicing set
forth in the Trust Agreement.
The Servicer shall deliver promptly to the successor servicer the funds
in the Custodial Account and Escrow Account and all Mortgage Loan documents and
related documents and statements held by it hereunder and the Servicer shall
account for all funds and shall execute and deliver such instruments and do such
other things as may reasonably be required to more fully and definitively vest
in the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Servicer.
Upon a successor's acceptance of appointment as such, the Servicer
shall notify the Trustee, each Seller (with respect to its related Mortgage
Loans) and Master Servicer of such appointment in accordance with the procedures
set forth in Section 9.03.
Except as otherwise provided in this Agreement, all reasonable costs
and expenses incerred in connectin with any transfer of servicing hereunder
(whether as a result of termination or removal of the Servicer or resignation of
the Servicer or otherwise) including, without limitation, the costs and expenses
of the Master Servicer in assuming the responsibilities of the Servicer
hereunder, or of transferring the Servicing Files and other necessary data to
the successor Servicer shall be paid by the terminated, removed or resigning
Servicer from its own funds without reimbursement.
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Section 9.02 COSTS.
Each Seller shall pay the legal fees and expenses of its attorneys.
Costs and expenses incurred in connection with the transfer of the servicing
responsibilities, including fees for delivering Servicing Files, shall be paid
by each Seller (with respect to its related Mortgage Loans). Subject to Sections
2.02 and 3.01(a), the Depositor shall pay the costs associated with the
preparation, delivery and recording of Assignments of Mortgages.
Section 9.03 NOTICES.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if sent by facsimile or mailed by
overnight courier, addressed as follows (or such other address as may hereafter
be furnished to the other party by like notice):
(i) if to either Seller:
[___]
Attention: [ ]
Telephone No.: [___-___-____]
Facsimile: [ (___) ___-____
[ ]
Attention: [ ]
Telephone: [ ]
Telecopier: [ ]
(ii) if to the Servicer:
[______]
[______]
Attention: [ ]
Telephone No.: [ (▇▇▇) ▇▇▇-▇▇▇▇]
Telecopier No.: [ ]
with a copy to:
[______]
Attention:
Telephone No.:
Telecopier No.: if to the Master Servicer:
[______]
[______]
Attention:
Telephone:
Telecopier:
if to the Trustee:
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[ ]
Attention:
Telephone:
Facsimile:
Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee.
Section 9.04 SEVERABILITY CLAUSE.
Any part, provision, representation or warranty of this Agreement which
is prohibited or which is held to be void or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is as close as possible to the economic effect of this Agreement
without regard to such invalidity.
Section 9.05 NO PERSONAL SOLICITATION.
From and after the Closing Date, the Servicer hereby agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Servicer's
behalf, to personally, by telephone or mail, solicit the borrower or obligor
under any Mortgage Loan (on a targeted basis) for any purposes of prepayment,
refinancing or modification of the related Mortgage Loan, provided, however,
that this limitation shall not prohibit Servicer from soliciting such Mortgagor
for purposes of prepayment, refinance or modification of any loan owned or
serviced by Servicer other than a Mortgage Loan. It is understood and agreed
that, among other marketing activities, promotions undertaken by Servicer which
are directed of the general public at large or which are directed generally to a
segment of the then existing customers of Servicer or any of its direct or
indirect subsidiaries (including, without limitation, the mailing of promotional
materials to Servicer's deposit customers by inserting such materials into
customer account statements, mass mailings based on commercially acquired
mailing lists and newspaper, radio and television advertisements) shall not
constitute solicitation under this section. In the event the Servicer does
refinance any Mortgage Loan as a result of a violation of the requirements set
forth in this Section 9.05, Servicer hereby agrees to pay to the Trust Fund an
amount equal to the difference, if any, between the amount that the Trust Fund
would have received if it had sold the Mortgage Loan to a third party, and the
proceeds received by the Trust Fund as a result of such refinancing.
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Section 9.06 COUNTERPARTS.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
Section 9.07 PLACE OF DELIVERY AND GOVERNING LAW.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by each Seller in the State of [
New York] and
shall be deemed to have been made in the State of
New York. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW
YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF [
NEW YORK],
NOTWITHSTANDING
NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
Section 9.08 FURTHER AGREEMENTS.
Each Seller and the Servicer each agree to execute and deliver to the
other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
Section 9.09 INTENTION OF THE PARTIES.
It is the intention of the parties that each Seller is conveying, and
the Servicer is receiving only a contract for servicing the Mortgage Loans.
Accordingly, the parties hereby acknowledge that the Trust Fund remains the sole
and absolute owner of the Mortgage Loans and all rights (other than the
servicing rights) related thereto.
Section 9.10 SUCCESSORS AND ASSIGNS; ASSIGNMENT OF SERVICING
AGREEMENT.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Servicer, each Seller, the Trustee and the Master Servicer
and their respective successors and assigns. This Agreement shall not be
assigned, pledged or hypothecated by the Servicer to a third party except in
accordance with Section 7.03.
Section 9.11 ASSIGNMENT BY EACH SELLER.
Each Seller (with respect to its related Mortgage Loans) shall have the
right, upon notice to but without the consent of the Servicer, to assign, in
whole or in part, its interest under this Agreement to the Depositor, which in
turn shall assign such rights to the Trustee, and the Trustee then shall succeed
to all rights of the Seller under this Agreement. All references to each Seller
in this Agreement shall be deemed to include its assignee or designee and any
subsequent assignee or designee, specifically including the Trustee, except with
respect to each Seller's retained servicing rights pursuant to Section
8.02(iii).
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Each Seller shall have the right, upon notice to but without the
consent of the Servicer, to assign, in whole or in part, its retained servicing
rights. All references to each Seller in this Agreement, in its capacity as an
owner of servicing rights, shall be deemed to include the assignee or designee
and any subsequent assignee or designee, of such Seller's rights arising
pursuant to Section 8.02(iii).
Section 9.12 WAIVERS.
No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing and signed by the party against whom
such waiver or modification is sought to be enforced.
Section 9.13 EXHIBITS.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 9.14 GENERAL INTERPRETIVE PRINCIPLES.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean by reason of
enumeration.
Section 9.15 REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and (iii)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic,
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microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
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IN WITNESS WHEREOF, the Servicer, each Seller and the Master Servicer
have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the date first above written.
[ ],
as Seller
By:
--------------------------------
Name:
Title:
[ ],
as Servicer
By:
--------------------------------
Name:
Title:
[ ],
as Master Servicer
By:
--------------------------------
Name:
Title:
BancCap Funding LLC,
as Administrator
By:
--------------------------------
Name:
Title:
Acknowledged By:
By:
------------------
Name:
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
EXHIBIT B
CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 20__
To:
----------------------------
---------------------------
---------------------------
(the "Depository")
As Servicer under the Servicing Agreement, dated as of [______], 200__
(the "Agreement"), we hereby authorize and request you to establish an account,
as a Custodial Account pursuant to Section 3.03 of the Agreement, to be
designated as "[______], in trust for the Master Servicer for BancCap Asset
Securitization Issuance Corporation, Mortgage Pass-Through Certificates Series
[______]." All deposits in the account shall be subject to withdrawal therefrom
by order signed by the Servicer. This letter is submitted to you in duplicate.
Please execute and return one original to us.
[______].
By:
---------------------------------
Name:
Title:
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above.
------------------------------------
Depository
By:
---------------------------------
Name:
Title:
Date:
EXHIBIT C
ESCROW ACCOUNT LETTER AGREEMENT
_______ __, 20__
To:
------------------------
---------------------------
---------------------------
(the "Depository")
As Servicer under the Servicing Agreement, dated as of [______], 200__
(the "Agreement"), we hereby authorize and request you to establish an account,
as an Escrow Account pursuant to Section 3.05 of the Agreement, to be designated
as "[______], in trust for the Master Servicer for BancCap Asset Securitization
Issuance Corporation, Mortgage Pass-Through Certificates, Series [______]." All
deposits in the account shall be subject to withdrawal therefrom by order signed
by the Servicer. This letter is submitted to you in duplicate. Please execute
and return one original to us.
[______].
By:
---------------------------------
Name:
Title:
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above.
------------------------------------
Depository
By:
---------------------------------
Name:
Title:
Date
EXHIBIT ▇-▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇-▇
STANDARD DEFAULT FILE FORMAT
