Exhibit 99.8(c)
SERVICING
AGREEMENT
between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
Purchaser
and
INDYMAC BANK, F.S.B.
Servicer
Dated as of September 1, 2006
CONVENTIONAL, ADJUSTABLE AND FIXED RATE RESIDENTIAL MORTGAGE LOANS
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions...................................................................................1
ARTICLE II
SERVICING
Section 2.01 Servicer to Service...........................................................................7
Section 2.02 Liquidation of Mortgage Loans.................................................................9
Section 2.03 Collection of Mortgage Loan Payments.........................................................10
Section 2.04 Establishment of and Deposits to Custodial Account...........................................10
Section 2.05 Permitted Withdrawals From Custodial Account.................................................11
Section 2.06 Establishment of and Deposits to Escrow Account..............................................12
Section 2.07 Permitted Withdrawals From Escrow Account....................................................12
Section 2.08 Payment of Taxes, Insurance and Other Charges; Tax Service Contracts.........................13
Section 2.09 Protection of Accounts.......................................................................14
Section 2.10 Maintenance of Hazard Insurance..............................................................14
Section 2.11 Maintenance of Mortgage Impairment Insurance.................................................15
Section 2.12 Maintenance of Fidelity Bond and Errors and Omissions Insurance..............................16
Section 2.13 Inspections..................................................................................16
Section 2.14 Restoration of Mortgaged Property............................................................17
Section 2.15 Maintenance of PMI Policy; Claims............................................................17
Section 2.16 Title, Management and Disposition of REO Property............................................18
Section 2.17 Permitted Withdrawals with respect to REO Property...........................................19
Section 2.18 Real Estate Owned Reports....................................................................19
Section 2.19 Liquidation Reports..........................................................................19
Section 2.20 Reports of Foreclosures and Abandonments of Mortgaged Property...............................20
ARTICLE III
PAYMENTS TO PURCHASER
Section 3.01 Remittances..................................................................................20
Section 3.02 Statements to Purchaser......................................................................20
Section 3.03 Advances by Servicer.........................................................................21
ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property..............................................................21
Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files......................................22
Section 4.03 Servicing Compensation.......................................................................22
Section 4.04 Annual Statement as to Compliance............................................................23
Section 4.05 Annual Independent Public Accountants' Servicing Report......................................23
Section 4.06 Right to Examine Servicer Records............................................................23
Section 4.07 Compliance with ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999...............................................24
ARTICLE V
SERVICER TO COOPERATE
Section 5.01 Provision of Information.....................................................................24
Section 5.02 Financial Statements; Servicing Facilities...................................................24
ARTICLE VI
TERMINATION
Section 6.01 Termination..................................................................................25
Section 6.02 Termination Upon Transfer of Servicing.......................................................25
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files................................................................26
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification..............................................................................27
Section 8.02 Limitation on Liability of Servicer and Others...............................................27
Section 8.03 Limitation on Resignation and Assignment by Servicer.........................................28
Section 8.04 Assignment by Purchaser......................................................................28
Section 8.05 Merger or Consolidation of the Servicer......................................................28
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ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
Section 9.01 Authority and Capacity.......................................................................29
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SERVICER
Section 10.01 Due Organization and Authority...............................................................29
Section 10.02 Ordinary Course of Business..................................................................30
Section 10.03 No Conflicts.................................................................................30
Section 10.04 Ability to Service...........................................................................30
Section 10.05 Ability to Perform...........................................................................30
Section 10.06 No Litigation Pending........................................................................30
Section 10.07 No Consent Required..........................................................................31
Section 10.08 No Untrue Information........................................................................31
Section 10.09 Reasonable Servicing Fee.....................................................................31
ARTICLE XI
DEFAULT
Section 11.01 Events of Default............................................................................31
Section 11.02 Waiver of Defaults...........................................................................33
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Notices......................................................................................33
Section 12.02 Waivers......................................................................................34
Section 12.03 Entire Agreement; Amendment..................................................................34
Section 12.04 Execution; Binding Effect....................................................................34
Section 12.05 Headings.....................................................................................34
Section 12.06 Applicable Law...............................................................................34
Section 12.07 Relationship of Parties......................................................................35
Section 12.08 Severability of Provisions...................................................................35
Section 12.09 [Reserved]...................................................................................35
Section 12.10 Exhibits.....................................................................................35
Section 12.11 Counterparts.................................................................................35
Section 12.12 No Solicitation..............................................................................35
Section 12.13 Cooperation of Servicer with a Reconstitution................................................36
Section 12.14 Waiver of Trial by Jury......................................................................37
Section 12.15 Submission To Jurisdiction; Waivers..........................................................38
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ARTICLE XIII
COMPLIANCE WITH REGULATION AB PROVISIONS
Section 13.01 Intent of the Parties; Reasonableness........................................................38
Section 13.02 Additional Representations and Warranties of the Servicer....................................39
Section 13.03 Information to Be Provided by the Servicer...................................................40
Section 13.04 Servicer Compliance Statement................................................................43
Section 13.05 Report on Assessment of Compliance and Attestation...........................................43
Section 13.06 Use of Subservicers and Subcontractors.......................................................44
Section 13.07 Indemnification; Remedies....................................................................45
EXHIBITS
--------
EXHIBIT 1 FORM OF REMITTANCE REPORT
EXHIBIT 2 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 3 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 4 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 6 [RESERVED]
EXHIBIT 7 ANNUAL CERTIFICATIONS
EXHIBIT 8 SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
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SERVICING AGREEMENT
This Servicing Agreement ("Servicing Agreement" or
"Agreement") is entered into as of September 1, 2006, by and between INDYMAC
BANK, F.S.B., a federal savings bank (the "Servicer"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
MORTGAGE CAPITAL INC., a New York corporation (the "Purchaser").
WHEREAS, the Purchaser and IndyMac Bank, F.S.B., as seller
(the "Seller") entered into a Mortgage Loan Purchase and Warranties Agreement,
dated as of September 1, 2006 (the "Purchase Agreement") pursuant to which the
Purchaser agreed to purchase from the Seller certain conventional, fixed and
adjustable rate, first lien, residential mortgage loans (the "Mortgage Loans")
to be delivered as whole loans on a servicing retained basis; and
WHEREAS, the Purchaser desires to have the Servicer service
the Mortgage Loans, the Servicer desires to service and administer the
Mortgage Loans on behalf of the Purchaser, and the parties desire to provide
the terms and conditions of such servicing by the Servicer.
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein and for other good and valuable consideration, the
receipt and the sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. All capitalized terms not
otherwise defined herein have the respective meanings set forth in the
Purchase Agreement. The following terms are defined as follows:
Accepted Servicing Practices: With respect to any Mortgage
Loan, those mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the same type as such Mortgage
Loan in the jurisdiction where the related Mortgaged Property is located and
incorporating the Delinquency Collection Policies and Procedures.
Ancillary Income: All late charges, assumption fees, escrow
account benefits, reinstatement fees, and similar types of fees arising from
or in connection with any Mortgage Loan to the extent not otherwise payable to
the Mortgagor under applicable law or pursuant to the terms of the related
Mortgage Note.
Closing Date: Shall have the meaning set forth in the
applicable Purchase Price and Terms Agreement.
Condemnation Proceeds: All awards or settlements in respect
of a Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent
domain or condemnation, to the extent not required to be released to a
Mortgagor in accordance with the terms of the related Mortgage Loan Documents.
Co-op Lease: With respect to a Co-op Loan, the lease with
respect to a dwelling unit occupied by the Mortgagor and relating to the stock
allocated to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock
allocated to a dwelling unit in a residential cooperative housing corporation
and a collateral assignment of the related Co-op Lease.
Custodial Account: The separate account or accounts created
and maintained pursuant to Section 2.04.
Cut-off Date: Shall have the meaning set forth in the
applicable Purchase Price and Terms Agreement.
Delinquency Collection Policies and Procedures: The
delinquency collection policies and procedures of the Servicer.
Depositor: The depositor, as such term is defined in
Regulation AB, with respect to any Securitization Transaction.
Determination Date: The 15th day (or if such 15th day is
not a Business Day, the Business Day immediately preceding such 15th day) of
the month of the related Remittance Date.
Errors and Omissions Insurance Policy: An errors and
omissions insurance policy to be maintained by the Servicer pursuant to
Section 2.12.
Escrow Account: The separate account or accounts created
and maintained pursuant to Section 2.06.
Escrow Payment: With respect to any Mortgage Loan, the
amounts constituting ground rents, taxes, assessments, water rates, sewer
rents, municipal charges, mortgage insurance premiums, fire and hazard
insurance premiums, condominium charges, and any other payments required to be
escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any
other document.
Event of Default: Any one of the conditions or
circumstances enumerated in Section 11.01.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
Fidelity Bond: A fidelity bond to be maintained by the
Servicer pursuant to Section 2.12.
Insurance Proceeds: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
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Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise, or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan.
Mortgage: With respect to a Mortgage Loan that is not a
Co-op Loan, the mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note; except that with respect
to real property located in jurisdictions in which the use of leasehold
estates for residential properties is a widely-accepted practice, the
mortgage, deed of trust or other instrument securing the Mortgage Note may
secure and create a first lien upon a leasehold estate of the Mortgagor. With
respect to a Co-op Loan, the Security Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment
or blanket hazard insurance policy as described in Section 2.11.
Mortgage Loan Remittance Rate: With respect to each
Mortgage Loan, the annual rate of interest remitted to the Purchaser, which
shall be equal to the Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Note: The note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman
of the Board or the Vice Chairman of the Board or a President or Vice
President and by the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Servicer, and delivered to the
Purchaser.
PMI Policy or Primary Insurance Policy: A policy of primary
mortgage guaranty insurance issued by a Qualified Insurer, as required by this
Agreement with respect to certain Mortgage Loans.
Prime Rate: The prime rate announced to be in effect from
time to time, as published as the average rate in The Wall Street Journal
(Northeast edition).
Principal Prepayment: Any payment or other recovery of
principal on a Mortgage Loan which is received in advance of its scheduled Due
Date, including any prepayment penalty or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of
prepayment.
Principal Prepayment Period: The month preceding the month
in which the related Remittance Date occurs.
Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of September 1, 2006, between the Purchaser and
the Seller.
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Purchase Price and Terms Agreement: With respect to each
pool of Mortgage Loans purchased pursuant to the Purchase Agreement the
related agreement setting forth the general terms and conditions of the
purchase transaction and identifying the Mortgage Loans to be purchased
thereunder, by and between the Seller and the Purchaser.
Purchaser: As defined in the Recitals.
Qualified Depository: A depository the accounts of which
are insured by the FDIC through the BIF or the SAIF.
Qualified Insurer: An insurance company duly qualified as
such under the laws of the states in which the Mortgaged Properties are
located, duly authorized and licensed in such states to transact the
applicable insurance business and to write the insurance provided, approved as
an insurer by ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac (or such other rating as may be
required by a Rating Agency in connection with a Securitization Transaction in
order to achieve the desired ratings for the securities to be issued in
connection with such Securitization Transaction).
Reconstitution: Any Securitization Transaction or Whole
Loan Transfer.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
Remittance Date: The 18th day (or if such 18th day is not a
Business Day, the first Business Day immediately preceding such 18th day) of
any month, beginning with the first Remittance Date after the Closing Date.
Remittance Report: As defined in Section 3.02.
REO Property: A Mortgaged Property acquired by the Servicer
on behalf of the Purchaser through foreclosure or by deed in lieu of
foreclosure, as described in Section 2.16.
Reporting Date: As defined in Section 3.02.
Repurchase Price: As defined in the Purchase Agreement.
SAIF: The Savings Association Insurance Fund, or any
successor thereto.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving
either (1) a sale or other transfer of some or all of the Mortgage Loans
directly or indirectly to an issuing entity in connection with an issuance of
publicly offered or privately placed, rated or unrated mortgage-backed
securities or (2) an issuance of publicly offered or privately placed, rated
or unrated securities, the payments on which are determined primarily by
reference to one or more
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portfolios of residential mortgage loans consisting, in whole or in part, of
some or all of the Mortgage Loans.
Security Agreement: The agreement creating a security
interest in the stock allocated to a dwelling unit in the residential
cooperative housing corporation that was pledged to secure such Co-op Loan and
the related Co-op Lease.
Seller: As defined in the Recitals.
Servicer: As defined in the Recitals.
Servicer Employees: As defined in Section 2.12.
Servicer Information: As defined in Section 13.07(a).
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 (a) the preservation,
restoration and protection of the Mortgaged Property, (b) any enforcement,
administrative or judicial proceedings, or any legal work or advice
specifically related to servicing the Mortgage Loans, including but not
limited to, foreclosures, bankruptcies, condemnations, drug seizures,
foreclosures by subordinate or superior lienholders, and other legal actions
incidental to the servicing of the Mortgage Loans (provided that such expenses
are reasonable and that the Servicer specifies the Mortgage Loan(s) to which
such expenses relate), (c) the management and liquidation of the Mortgaged
Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage, (d) taxes, assessments, water rates, sewer rates and other charges
which are or may become a lien upon the Mortgaged Property, and PMI Policy
premiums and fire and hazard insurance coverage, (e) any losses sustained by
the Servicer with respect to the liquidation of the Mortgaged Property and (f)
compliance with the obligations under Section 2.08 (except with respect to any
expenses incurred in connection with procuring or transferring Tax Service
Contracts as provided therein).
Servicing Agreement: This agreement between the Purchaser
and the Servicer for the servicing and administration of the Mortgage Loans.
Servicing Criteria: The "servicing criteria" set forth in
Item 1122(d) of Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan subject
to this Agreement, an amount equal to one-twelfth of the product of (a) the
Servicing Fee Rate and (b) the outstanding principal balance of such Mortgage
Loan payable monthly. Such fee shall be payable monthly and shall be pro-rated
for any portion of a month during which the Mortgage Loan is serviced by the
Servicer under this Agreement. The obligation of the Purchaser to pay the
Servicing Fee is limited to, and the Servicing Fee is payable solely from, the
interest portion (including recoveries with respect to interest from
Liquidation Proceeds, to the extent permitted by Section 4.03) of such Monthly
Payment collected by the Servicer, or as otherwise provided under Section
4.03.
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Servicing Fee Rate: 37.5 basis points (0.375%) per annum.
Servicing File: With respect to each Mortgage Loan, the
file retained by the Servicer, during the period in which the Servicer is
acting as servicer pursuant to the Servicing Agreement, consisting of
originals of all documents in the Mortgage File which are not delivered to the
Custodian and copies of the Mortgage Loan Documents listed on Exhibit A to the
Purchase Agreement.
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 Purchaser upon request, as such list may from time to time be amended.
Servicing Rights: Any and all of the following: (a) any and
all rights to service the Mortgage Loans; (b) any payments to or monies
received by the Servicer for servicing the Mortgage Loans; (c) any late fees,
penalties or similar payments (excluding any prepayment penalties) with
respect to the Mortgage Loans; (d) all agreements or documents creating,
defining or evidencing any such servicing rights to the extent they relate to
such servicing rights and all rights of the Servicer thereunder; (e) Escrow
Payments or other similar payments with respect to the Mortgage Loans and any
amounts actually collected by the Servicer with respect thereto; (f) all
accounts and other rights to payment related to any of the property described
in this paragraph; and (g) any and all documents, files, records, servicing
files, servicing documents, servicing records, data tapes, computer records,
or other information pertaining to the Mortgage Loans or pertaining to the
past, present or prospective servicing of the Mortgage Loans.
Subcontractor: Any vendor, subcontractor or other Person
that is not responsible for the overall servicing (as "servicing" is commonly
understood by participants in the mortgage-backed securities market) of
Mortgage Loans but performs one or more discrete functions identified in Item
1122(d) of Regulation AB with respect to Mortgage Loans under the direction or
authority of the Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on
behalf of the Servicer or any Subservicer and is responsible for the
performance (whether directly or through Subservicers or Subcontractors) of a
substantial portion of the material servicing functions required to be
performed by the Servicer under this Agreement or any Reconstitution Agreement
that are identified in Item 1122(d) of Regulation AB.
Tax Service Contract: A paid-in-full, life-of-loan tax
service contract as described in Section 2.08 hereof.
Whole Loan Transfer: Any sale or transfer of some or all of
the Mortgage Loans, other than a Securitization Transaction.
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ARTICLE II
SERVICING
Section 2.01 Servicer to Service.
(a) From and after the Closing Date, the Servicer, as an
independent contractor, shall service and administer each Mortgage Loan 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. Except as set forth in this Agreement, the
Originator shall service the Mortgage Loans on an "scheduled/scheduled" basis
and in strict compliance with Accepted Servicing Practices.
Consistent with the terms of this Agreement, the Servicer
may waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Servicer's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Purchaser, provided, however, that unless the
Servicer has obtained the prior written consent of the Purchaser, the Servicer
shall not permit any modification with respect to any Mortgage Loan that would
change the Mortgage Interest Rate, defer or forgive the payment of principal,
interest or prepayment penalties (unless the Servicer returns the prepayment
penalties as indicated in the related Purchase Price and Terms Agreement or
unless the Servicer waives such prepayment penalty because it is mandated by
applicable law or the Servicer does so in its own discretion and remits from
the Servicer's own funds, without the right to reimbursement therefore, the
amount of the waived prepayment penalty to the Purchaser or its successors and
assigns), reduce or increase the outstanding principal balance (except for
actual payments of principal) or change the final maturity date on such
Mortgage Loan. 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 Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other
comparable instruments, with respect to the Mortgage Loans and with respect to
the Mortgaged Properties. If reasonably required by the Servicer, the
Purchaser shall furnish the Servicer with any powers of attorney and other
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties under this Agreement.
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, and the Purchaser's reliance on the Servicer.
In addition, the Servicer shall retain adequate personnel to effect such
servicing and administration of the Mortgage Loans.
The Servicer shall keep at its servicing office books and
records in which, subject to such reasonable regulations as it may prescribe,
the Servicer shall note transfers of Mortgage Loans. No transfer of a Mortgage
Loan may be made unless such transfer is in compliance with
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the terms hereof. For the purposes of this Agreement, Servicer shall be under
no obligation to deal with any Person with respect to this Agreement or the
Mortgage Loans unless the Servicer has been notified of such transfers as
provided in this Section 2.01. The Purchaser may sell and transfer, in whole
or in part, the Mortgage Loans, provided that no such sale and transfer shall
be binding upon Servicer unless such transferee shall agree in writing to be
bound by the terms of this Agreement and the Purchase Agreement, and an
executed copy of the same shall have been delivered to the Servicer. Upon
receipt of notice of such transfer, the Servicer shall ▇▇▇▇ its books and
records to reflect the ownership of the Mortgage Loans by such assignee, and
the previous Purchaser shall be released from its obligations hereunder. This
Agreement shall be binding upon and inure to the benefit of the Purchaser and
the Servicer and their permitted successors, assignees and designees.
The Servicing File retained by the Servicer pursuant to
this Agreement shall be appropriately marked and identified in the Servicer's
computer system to clearly reflect the sale of the related Mortgage Loan to
the Purchaser. The Servicer shall release from its custody the contents of any
Servicing File retained by it only in accordance with this Agreement, except
when such release is required in connection with a repurchase of any such
Mortgage Loan pursuant to Section 9 of the Purchase Agreement.
The Servicer shall forward to the Custodian or, at the
request of the Purchaser, to the Purchaser or its designee, original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks
of their execution, provided, however, that the Servicer shall provide the
Custodian with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide the original
of any document submitted for recordation or a copy of such document certified
by the appropriate public recording office to be a true and complete copy of
the original within ninety days of its submission for recordation.
In the event that such original or copy of any document
submitted for recordation to the appropriate public recording office is not so
delivered to the Custodian within 120 days of its submission for recordation,
and in the event that the Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the
Purchaser, the related Mortgage Loan shall, upon the request of the Purchaser,
be repurchased by the Seller at the price and in the manner specified in
Section 9 of the Purchase Agreement. The foregoing repurchase obligation shall
not apply in the event that the Seller cannot deliver such original or copy of
any document submitted for recordation to the appropriate public recording
office within the specified period due to a delay caused by the recording
office in the applicable jurisdiction; provided that the Seller shall instead
deliver an Officer's Certificate of a servicing officer of the Seller,
confirming that all such documents have been accepted for recording; provided
that, upon request of the Purchaser and delivery by the Purchaser to the
Seller of a schedule of the related Mortgage Loans, the Seller shall reissue
and deliver to the Purchaser or its designee said officer's certificate
relating to the related Mortgage Loans.
The Servicer must have an internal quality control program
that verifies, on a regular basis, the existence and accuracy of the legal
documents, credit documents, property appraisals, and underwriting decisions.
The program shall include evaluating and monitoring the overall quality of its
loan production and the servicing activities of the Servicer. The program is
8
to ensure that the Mortgage Loans are originated and serviced in accordance
with Accepted Servicing Standards and the Underwriting Guidelines; guard
against dishonest, fraudulent, or negligent acts; and guard against errors and
omissions by officers, employees, or other authorized persons.
(b) In addition to the Servicer's servicing obligations as
set forth herein, the Servicer shall not consent to the placement of a lien on
the Mortgaged Property senior to that of the related Mortgage.
Section 2.02 Liquidation of Mortgage Loans
In the event that any payment due under any Mortgage Loan
and not postponed pursuant to Section 2.01 is not paid when the same becomes
due and payable, or in the event the Mortgagor fails to perform any other
covenant or obligation under the Mortgage Loan and such failure continues
beyond any applicable grace period, the Servicer shall take such action as (1)
the Servicer would take under similar circumstances with respect to a similar
mortgage loan held for its own account for investment, (2) shall be consistent
with Accepted Servicing Practices, (3) the Servicer shall determine prudently
to be in the best interest of Purchaser, and (4) is consistent with any
related PMI Policy. Therefore, in connection therewith, the Servicer shall
strictly comply with Accepted Servicing Practices. In the event that any
payment due under any Mortgage Loan is not postponed pursuant to Section 2.01
and remains delinquent for a period of 60 days or any other default continues
for a period of 60 days beyond the expiration of any grace or cure period (or
such other period as is required by law in the jurisdiction where the related
Mortgaged Property is located), the Servicer shall commence foreclosure
proceedings in accordance with the Delinquency Collection Policies and
Procedures. In such connection, the Servicer shall from its own funds make all
necessary and proper Servicing Advances, provided, however, that the Servicer
shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration or preservation of any Mortgaged
Property, unless it shall determine (a) that such preservation, restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan to Purchaser after reimbursement to itself for such expenses and (b) that
such expenses will be recoverable by it either through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Custodial Account pursuant to Section 2.05) or through Insurance Proceeds
(respecting which it shall have similar priority).
Notwithstanding anything to the contrary contained herein,
in connection with a 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 Purchaser otherwise requests an
environmental inspection or review of such Mortgaged Property to be conducted
by a qualified inspector the Servicer shall cause the Mortgaged Property to be
so inspected. Upon completion of the inspection, the Servicer shall promptly
provide the Purchaser with a written report of the environmental inspection.
After reviewing the environmental inspection report, the
Purchaser shall determine how the Servicer shall proceed with respect to the
Mortgaged Property. In the event (a) the environmental inspection report
indicates that the Mortgaged Property is contaminated by hazardous or toxic
substances or wastes and (b) the Purchaser directs the Servicer to proceed
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with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer
shall be reimbursed for all reasonable costs associated with such foreclosure
or acceptance of a deed in lieu of foreclosure and any related environmental
clean up costs, as applicable, from the related Liquidation Proceeds, or if
the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the
Servicer shall be entitled to be reimbursed from amounts in the Custodial
Account pursuant to Section 2.05 hereof. In the event the Purchaser directs
the Servicer not to proceed with foreclosure or acceptance of a deed in lieu
of foreclosure, the Servicer shall be reimbursed for all Servicing Advances
made with respect to the related Mortgaged Property from the Custodial Account
pursuant to Section 2.05 hereof.
Section 2.03 Collection of Mortgage Loan Payments.
Following the Closing Date the Servicer shall proceed
diligently to collect all payments due under each of the related Mortgage
Loans when the same shall become due and payable and shall take special care
in ascertaining and estimating Escrow Payments and all other charges that will
become due and payable with respect to the Mortgage Loans and each related
Mortgaged Property, to the end that the installments payable by the Mortgagors
will be sufficient to pay such charges as and when they become due and
payable.
Section 2.04 Establishment of and Deposits to Custodial
Account.
The 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 one or more Custodial
Accounts, to be maintained under the sole dominion and control of the
Purchaser and titled "IndyMac Bank, F.S.B. in trust for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc., owner of Conventional Fixed Rate Residential Mortgage
Loans, and various Mortgagors". The Custodial Account shall be established
with a Qualified Depository acceptable to the Purchaser. Any funds deposited
in the Custodial Account shall at all times be fully insured to the full
extent permitted under applicable law. The creation of any Custodial Account
shall be evidenced by a certification in the form of Exhibit 2 hereto, in the
case of an account established with the Servicer, or by a letter agreement in
the form of Exhibit 3 hereto, in the case of an account held by a depository
other than the Servicer. A copy of such certification or letter agreement
shall be furnished to the Purchaser and, upon request, to any subsequent
Purchaser.
The Servicer shall deposit in the Custodial Account on a
daily basis on the Business Day following receipt thereof, the following
collections received by the Servicer and payments made by the Servicer after
the Cut-off Date, other than payments of principal and interest due on or
before the Cut-off Date, or received by the Servicer prior to the Cut-off Date
but allocable to a period subsequent thereto:
(i) all payments on account of principal on the Mortgage
Loans, including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage;
(iii) all Liquidation Proceeds and any amount received with
respect to REO Property;
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(iv) all Insurance Proceeds including amounts required to
be deposited pursuant to Section 2.10 (other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with Section 2.14),
Section 2.11 and Section 2.15;
(v) all Condemnation Proceeds which are not applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor
in accordance with Section 2.14;
(vi) any amount required to be deposited in the Custodial
Account pursuant to Section 2.01, 2.09, 2.16, 3.01, 4.01 or 4.02;
(vii) any amounts payable in connection with the repurchase
of any Mortgage Loan pursuant to Section 9 of the Purchase Agreement;
(viii) any prepayment penalties received with respect to
any Mortgage Loan or payable by the Servicer pursuant to Section 2.01 (unless
the related Purchase Price and Terms Agreement indicates otherwise);
(ix) any amounts required to be deposited by the Servicer
pursuant to Section 2.11 in connection with the deductible clause in any
blanket hazard insurance policy; and
(x) with respect to each Principal Prepayment an amount (to
be paid by the Servicer out of its funds) which, when added to all amounts
allocable to interest received in connection with the Principal Prepayment,
equals one month's interest on the amount of principal so prepaid at the
Mortgage Loan Remittance Rate.
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, unless otherwise provided herein,
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 2.05.
Section 2.05 Permitted Withdrawals From Custodial Account.
Subject to Section 3.01, on each Remittance Date, the
Servicer shall be entitled to funds from the Custodial Account for the
following purposes:
(i) to pay to itself the Servicing Fee;
(ii) to reimburse itself for unreimbursed Servicing
Advances (except to the extent reimbursed pursuant to Section 2.07), any
accrued but unpaid Servicing Fees and for unreimbursed advances of Servicer
funds made pursuant to Sections 2.16 or 3.03, the Servicer's right to
reimburse itself pursuant to this subclause (ii) with respect to any Mortgage
Loan being limited to related Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds and such other amounts as may be collected by the 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 Purchaser except that, where the
Seller
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is required to repurchase a Mortgage Loan pursuant to Section 9 of the
Purchase Agreement or Section 4.02 of this Agreement, the Servicer's right to
such reimbursement shall be subsequent to the payment to the Purchaser of the
Repurchase Price pursuant to such sections and all other amounts required to
be paid to the Purchaser with respect to such Mortgage Loan;
(iii) to pay itself any interest earned on funds deposited
in the Custodial Account (all such interest to be withdrawn monthly not later
than each Remittance Date); and
(iv) to clear and terminate the Custodial Account upon the
termination of this Agreement.
Section 2.06 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, "IndyMac Bank, F.S.B., as servicer, in trust for ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Capital Inc., owner of Conventional Fixed Rate Residential
Mortgage Loans, and various Mortgagors". The Escrow Account shall be
established with a Qualified Depository, in a manner which shall provide
maximum available insurance thereunder. Funds deposited in the Escrow Accounts
may be drawn on by the Servicer in accordance with Section 2.07. The creation
of any Escrow Account shall be evidenced by a certification in the form of
Exhibit 4 hereto, in the case of an account established with the Servicer, or
by a letter agreement in the form of Exhibit 5 hereto, in the case of an
account held by a depository other than the Servicer. A copy of such
certification shall be furnished to the Purchaser and, upon request, to any
subsequent Purchaser.
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 which 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 2.07. The Servicer shall be entitled to retain any interest
paid on funds deposited in the Escrow Account by the depository institution,
other than interest on escrowed funds required by law to be paid to the
Mortgagor. To the extent required by law, the Servicer shall pay from its own
funds interest on escrowed funds to the Mortgagor notwithstanding that the
Escrow Account may be non-interest bearing or that interest paid thereon is
insufficient for such purposes.
Section 2.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made
by the Servicer only:
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(i) to effect timely payments of ground rents, taxes,
assessments, water rates, mortgage insurance premiums, condominium charges,
fire and hazard insurance premiums or other items constituting Escrow Payments
for the related Mortgage;
(ii) to reimburse itself for any Servicing Advance relating
to taxes, assessments, water rates, sewer rates and other charges which are or
may become a lien upon the Mortgaged Property, and PMI Policy premiums and
fire and hazard insurance coverage made by the Servicer with respect to a
related Mortgage Loan (except with respect to any expenses incurred in
procuring or transferring Tax Service Contracts pursuant to Section 2.08), but
only from amounts received on the related Mortgage Loan which represent late
collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in
excess of the amounts required under the terms of the related Mortgage Loan or
applicable federal or state law or judicial or administrative ruling;
(iv) for transfer to the Custodial Account and application
to reduce the principal balance of the Mortgage Loan in accordance with the
terms of the related Mortgage and Mortgage Note;
(v) for application to restoration or repair of the
Mortgaged Property in accordance with the procedures outlined in Section 2.14;
(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; and
(vii) to clear and terminate the Escrow Account on the
termination of this Agreement.
Section 2.08 Payment of Taxes, Insurance and Other Charges;
Tax Service Contracts.
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
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. To the extent that a Mortgage does not provide for Escrow Payments,
the Servicer shall determine whether any such payments are made by the
Mortgagor at the time they first become due. The Servicer assumes full
responsibility for the payment of all such bills and shall effect payment of
all such charges irrespective of each Mortgagor's faithful performance in the
payment of same or the making of the Escrow Payments, and the Servicer shall
make advances from its own funds to effect such payments within such time
period as will avoid the loss of the related Mortgaged Property by foreclosure
of a tax or other lien.
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The Servicer shall ensure that each of the Mortgage Loans
shall be covered by a Tax Service Contract which shall be assigned to the
Purchaser or the Purchaser's designee at the Servicer's expense in the event
that the Servicer is no longer the servicer of the related Mortgage Loan(s)
hereunder. To the extent that a Mortgage Loan does not have a Tax Service
Contract, the Servicer shall pay to a tax service vendor the appropriate fee
to obtain coverage.
Section 2.09 Protection of Accounts.
The Servicer may transfer the Escrow Account to a different
Qualified Depository from time to time. Such transfer shall be made only upon
obtaining the consent of the Purchaser, which consent shall not be withheld
unreasonably.
The Servicer shall bear any expenses, losses or damages
sustained by the Purchaser because the Escrow Account are not demand deposit
accounts.
Section 2.10 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 rated as described in the
Underwriting Guidelines against loss by fire, hazards of extended coverage and
such other hazards as are required to be insured pursuant to Accepted
Servicing Practices, in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements securing such Mortgage Loan
and (ii) the greater of (a) the aggregate unpaid principal balance of the
Mortgage Loan and, (b) an amount such that the proceeds thereof shall be
sufficient to prevent the Mortgagor or the loss payee from becoming a
co-insurer.
If required by the National Flood Insurance Act of 1968, as
amended, each Mortgage Loan is, and shall continue to be, covered by a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect with a generally acceptable
insurance carrier rated as described in the Underwriting Guidelines in an
amount representing coverage not less than the least of (i) the aggregate
unpaid principal balance of the related Mortgage Loan and of any mortgage loan
senior to such Mortgage Loan, (ii) the maximum amount of insurance which is
available under the National Flood Insurance Act of 1968, as amended
(regardless of whether the area in which such Mortgaged Property is located is
participating in such program), and (iii) the full replacement value of the
improvements which are part of such Mortgaged Property. If a Mortgaged
Property is located in a special flood hazard area and is not covered by flood
insurance or is covered in an amount less than the amount required by the
National Flood Insurance Act of 1968, 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 immediately force place the required flood insurance on the Mortgagor's
behalf.
If a Mortgage is secured by a unit in a condominium
project, the Servicer shall verify that the coverage required of the owner's
association, including hazard, flood, liability, and fidelity coverage, is
being maintained in accordance with Accepted Servicing Practices, and
14
secure from the owner's association its agreement to notify the Servicer
promptly of any change in the insurance coverage or of any condemnation or
casualty loss that may have a material effect on the value of the Mortgaged
Property as security.
The Servicer shall cause to be maintained on each Mortgaged
Property such other or additional insurance as may be required pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance, or pursuant to the requirements of
any private mortgage guaranty insurer, or as may be required to conform with
Accepted Servicing Practices.
In the event that the Purchaser or the Servicer shall
determine that the Mortgaged Property should be insured against loss or damage
by hazards and risks not covered by the insurance required to be maintained by
the Mortgagor pursuant to the terms of the Mortgage, the Servicer shall
communicate and consult with the Mortgagor with respect to the need for such
insurance and bring to the Mortgagor's attention the desirability of
protection of the Mortgaged Property.
All policies required hereunder shall name the Servicer and
its successors and assigns as a mortgagee and loss payee and shall be endorsed
with non contributory standard or New York mortgagee clauses which shall
provide for at least 30 days prior written notice of any cancellation,
reduction in amount or material change in coverage.
The Servicer shall not interfere with the Mortgagor's
freedom of choice in selecting either his insurance carrier or agent,
provided, however, that the Servicer shall not accept any such insurance
policies from insurance companies unless such companies are as described in
the Underwriting Guidelines and are licensed to do business in the
jurisdiction in which the Mortgaged Property is located. The Servicer shall
determine that such policies provide sufficient risk coverage and amounts as
required pursuant to Accepted Servicing Practices, that they insure the
property owner, and that they properly describe the property address. The
Servicer shall furnish to the Mortgagor a formal notice of expiration of any
such insurance in sufficient time for the Mortgagor to arrange for renewal
coverage by the expiration date; provided, however, that in the event that no
such notice is furnished by the Servicer, the Servicer shall ensure that
replacement insurance policies are in place in the required coverages and the
Servicer shall be solely liable for any losses in the event coverage is not
provided.
Pursuant to Section 2.04, any amounts collected by the
Servicer under any such policies (other than amounts to be deposited in the
Escrow Account and applied to the restoration or repair of the related
Mortgaged Property, or property acquired in liquidation of the Mortgage Loan,
or to be released to the Mortgagor, in accordance with the Servicer's normal
servicing procedures as specified in Section 2.14) shall be deposited in the
Custodial Account subject to withdrawal pursuant to Section 2.05.
Section 2.11 Maintenance of Mortgage Impairment Insurance.
In the event that 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, then, to the extent such
policy provides coverage in an amount equal to the
15
amount required pursuant to Section 2.10 and otherwise complies with all other
requirements of Section 2.10, it shall conclusively be deemed to have
satisfied its obligations as set forth in Section 2.10. Any amounts collected
by the Servicer under any such policy relating to a Mortgage Loan shall be
deposited in the Custodial Account subject to withdrawal pursuant to Section
2.05. Such policy may contain a deductible clause, in which case, in the event
that there shall not have been maintained on the related Mortgaged Property a
policy complying with Section 2.10, 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. Upon
request of the Purchaser, the Servicer shall cause to be delivered to the
Purchaser a certified true copy of such policy and a statement from the
insurer thereunder that such policy shall in no event be terminated or
materially modified without 30 days' prior written notice to the Purchaser.
Section 2.12 Maintenance of Fidelity Bond and Errors and
Omissions Insurance.
The Servicer shall maintain with responsible companies, at
its own expense, a blanket Fidelity Bond and an Errors and Omissions Insurance
Policy, with broad coverage on all officers, employees or other persons acting
in any capacity requiring such persons to handle funds, money, documents or
papers relating to the Mortgage Loans ("Servicer Employees"). Any such
Fidelity Bond and Errors and Omissions Insurance Policy shall be in the form
of the Mortgage Banker's Blanket Bond and shall protect and insure the
Servicer against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of such Servicer Employees. Such Fidelity
Bond and Errors and Omissions Insurance Policy also shall protect and insure
the Servicer against losses in connection with the release or satisfaction of
a Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 2.12 requiring such Fidelity
Bond and Errors and Omissions Insurance Policy shall diminish or relieve the
Servicer from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such Fidelity Bond and Errors and Omissions
Insurance Policy shall be at least equal to the corresponding amounts required
by ▇▇▇▇▇▇ Mae in the ▇▇▇▇▇▇ ▇▇▇ Guides or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇' & Servicers' Guide. Upon the request of the Purchaser, the Servicer
shall cause to be delivered to the Purchaser a certified true copy of such
Fidelity Bond and Errors and Omissions Insurance Policy and a statement from
the surety and the insurer that such Fidelity Bond and Errors and Omissions
Insurance Policy shall in no event be terminated or materially modified
without 30 days' prior written notice to the Purchaser.
Section 2.13 Inspections.
The Servicer shall inspect the Mortgaged Property as often
as is deemed necessary by the Servicer to assure itself that the value of the
Mortgaged Property is being preserved. In addition, if any Mortgage Loan is
more than 45 and less than 60 days delinquent, the Servicer shall inspect the
Mortgaged Property and shall conduct subsequent inspections in accordance with
Accepted Servicing Practices. The Servicer shall keep a written report of each
such inspection.
16
Section 2.14 Restoration of Mortgaged Property.
The Servicer need not obtain the approval of the Purchaser
prior to releasing any Insurance Proceeds or Condemnation Proceeds to the
Mortgagor to be applied to the restoration or repair of the Mortgaged Property
if such release is in accordance with Accepted Servicing Practices and the
terms of this Agreement. At a minimum, 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;
(iii) the Servicer shall verify that the Mortgage Loan is
not in default; and
(iv) pending repairs or restoration, the Servicer shall
place the Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the
Servicer is hereby empowered to endorse any loss draft issued in respect of
such a claim in the name of the Purchaser.
Section 2.15 Maintenance of PMI Policy; Claims.
With respect to each Mortgage Loan covered by a PMI Policy,
as set forth on the Mortgage Loan Schedule, the Servicer shall, without any
cost to the Purchaser, maintain or cause the Mortgagor to maintain 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, for the term of such Mortgage Loan.
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.
If the insurer shall cease to be a Qualified Insurer, the Servicer shall
determine whether recoveries under the PMI Policy are jeopardized for reasons
related to the financial condition of such insurer, it being understood that
the Servicer shall in no event have any responsibility or liability for any
failure to recover under the PMI Policy for such reason. If the Servicer
determines that recoveries are so jeopardized, it shall notify the Purchaser
and the Mortgagor, if required, and obtain from another Qualified Insurer a
replacement insurance policy. The 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 agreement entered into or to be
entered into pursuant to Section 4.01, 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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In connection with its activities as servicer, the Servicer
agrees to prepare and present, on behalf of itself and the Purchaser, claims
to the insurer under any PMI Policy in a timely fashion in accordance with the
terms of such PMI Policy and, in this regard, to take such action as shall be
necessary to permit recovery under any PMI Policy respecting a defaulted
Mortgage Loan. Pursuant to Section 2.04, any amounts collected by the Servicer
under any PMI Policy shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 2.05.
Section 2.16 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 Servicer or the
Purchaser's designee, on behalf of the Purchaser, or in the event the
Purchaser is not authorized or permitted to hold title to real property in the
state where the REO Property is located, or would be adversely affected under
the "doing business" or tax laws of such state by so holding title, the deed
or certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an Opinion of Counsel obtained by the 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 Purchaser
shall acknowledge in writing that such title is being held as nominee for the
Purchaser.
The Servicer shall manage, conserve, protect and operate
each REO Property for the Purchaser 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
Purchaser. The Servicer shall notify the Purchaser from time to time as to the
status of each REO Property.
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 one year after title has been taken to such REO Property, unless the
Servicer determines, and gives an appropriate notice to the Purchaser to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than one year is permitted under the
foregoing sentence and is necessary to sell any REO Property, (i) the Servicer
shall report monthly to the Purchaser as to the progress being made in selling
such REO Property and (ii) if, with the written consent of the Purchaser, a
purchase money mortgage is taken in connection with such sale, such purchase
money mortgage shall name the Servicer as mortgagee, and such purchase money
mortgage shall not be held pursuant to this Agreement, but instead a separate
participation agreement among the Servicer and Purchaser shall be entered into
with respect to such purchase money mortgage.
The Servicer shall also maintain on each REO Property fire
and hazard insurance with extended coverage in an amount which is at least
equal to the maximum insurable value of the improvements which are a part of
such property, liability insurance and, to the extent
18
required and available under the National Flood Insurance Act of 1968, as
amended, flood insurance in the amount required in Section 2.10 hereof.
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 Purchaser. The proceeds of sale of
the REO Property shall be promptly deposited in the Custodial Account. As soon
as practical thereafter the expenses of such sale shall be paid and the
Servicer shall reimburse itself pursuant to Section 2.05(iii) hereof, for any
related unreimbursed Servicing Advances, unpaid Servicing Fees and
unreimbursed advances made pursuant to this Section, and on the Remittance
Date immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Purchaser; provided that such
distribution shall, in any event, be made within ninety (90) days from and
after the closing of the sale of such REO Property.
With respect to each REO Property, the Servicer shall hold
all funds collected and received in connection with the operation of the REO
Property in the Custodial Account. The Servicer shall cause to be deposited on
a daily basis upon the receipt thereof in each Custodial Account all revenues
received with respect to the conservation and disposition of the related REO
Property.
Section 2.17 Permitted Withdrawals with respect to REO
Property.
The Servicer shall withdraw funds on deposit in the
Custodial Account with respect to each related REO Property necessary for the
proper operation, management and maintenance of the REO Property, including
the cost of maintaining any hazard insurance pursuant to Section 2.10 and the
fees of any managing agent acting on behalf of the Servicer. The Servicer
shall make monthly distributions on each Remittance Date to the Purchaser of
the net cash flow from the REO Property (which shall equal the revenues from
such REO Property net of the expenses described in Section 2.16 and of any
reserves reasonably required from time to time to be maintained to satisfy
anticipated liabilities for such expenses).
Section 2.18 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section
2.19, the Servicer shall furnish to the Purchaser on or before the 10th
Business Day of each month a statement with respect to any REO Property
covering the operation of such REO Property for the previous month and the
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
Purchaser shall reasonably request.
Section 2.19 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Purchaser pursuant to a deed in lieu of
foreclosure, the Servicer shall submit to the Purchaser a liquidation report
with respect to such Mortgaged Property.
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Section 2.20 Reports of Foreclosures and Abandonments of
Mortgaged Property.
Following the foreclosure sale or abandonment of any
Mortgaged Property, the Servicer shall report such foreclosure or abandonment
as required pursuant to Section 6050J of the Code.
ARTICLE III
PAYMENTS TO PURCHASER
Section 3.01 Remittances.
With respect to each Determination Date, the Servicer shall
submit to the Purchaser the Remittance Report required by Section 3.02 of this
Agreement, setting forth the sources and uses of funds deposited and to be
deposited by the Servicer into the Custodial Account. If such monthly
remittance advice is determined by the Purchaser to be in order, on each
Remittance Date the Servicer shall cause all amounts deposited in the
Custodial Account as of the close of business on the immediately preceding
Determination Date, minus any amounts attributable to Monthly Payments
collected but due on a Due Date or Dates subsequent to the first day of the
month of the Remittance Date (which amounts shall be remitted on the
Remittance Date next succeeding the Due Period for such amounts) to be
remitted as follows: (i) to the Servicer, amounts due to the Servicer pursuant
to Section 2.05, and (ii) to the Purchaser, all funds remaining in the
Custodial Account.
With respect to any funds deposited in the Custodial
Account after the second Business Day following the Business Day on which such
deposit was required to be made, the Servicer shall pay to the Purchaser
interest on any such late payment at an annual rate equal to the Prime Rate,
adjusted as of the date of each change, plus two 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 second Business Day and ending with the Business Day on
which such payment is made, both inclusive. Such interest shall be remitted
along with the distribution payable on the next succeeding Remittance Date.
The payment by the 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.
Section 3.02 Statements to Purchaser.
Each month, no later than the 10th Business Day (the
"Reporting Date"), the Servicer shall furnish to the Purchaser a remittance
report, in the form of Exhibit 1 hereto (the "Remittance Report"), in
electronic format acceptable to the Purchaser, containing information
regarding funds collected during the prior calendar month.
In addition, not more than 60 days after the end of each
calendar year, commencing with the first December 31 following the Cut-off
Date, the Servicer shall furnish to each Person who was a Purchaser of the
Mortgage Loans at any time during such calendar year
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an annual statement in accordance with the requirements of applicable federal
income tax law as to the aggregate of remittances for the applicable portion
of such year.
Such obligation of the 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.
The Servicer shall provide any and all information
necessary for the preparation and filing of tax returns, information
statements or other filings required to be delivered to any governmental
taxing authority or to any Purchaser pursuant to any applicable law with
respect to the Mortgage Loans and the transactions contemplated hereby.
Section 3.03 Advances by Servicer.
On the Business Day immediately preceding each Remittance
Date, the Servicer shall deposit in the Custodial Account from its own funds
an amount equal to all 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 2.01. The Servicer's obligation to make such
advances as to any Mortgage Loan will continue through the earlier to occur of
(a) the last Monthly Payment due prior to the payment in full of the Mortgage
Loan or (b) 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. To the extent permitted under Section 2.05 hereof, the Servicer
shall be entitled to first priority reimbursement for principal and interest
advances and for Servicing Advances from recoveries from the related Mortgagor
or from all Liquidation Proceeds and other payments or recoveries (including
Insurance Proceeds and Condemnation Proceeds) with respect to the related
Mortgage Loan.
ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property.
The Servicer shall be required to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Servicer shall, to
the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto, provided, however, that the Servicer shall not exercise
such rights if prohibited by law from doing so, provided, however, that the
Servicer shall not exercise such rights if prohibited by law from doing so or
if the exercise of such rights would impair or threaten to impair any recovery
under the related PMI Policy, if any.
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If the Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Servicer, in the
Purchaser's name, shall, to the extent permitted by applicable law, 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 guarantee insurer, a substitution of
liability agreement with the purchaser of the Mortgaged Property pursuant to
which the original Mortgagor is released from liability and the purchaser of
the Mortgaged Property is substituted as Mortgagor and becomes liable under
the Mortgage Note. In connection with any such assumption, neither the
Mortgage Interest Rate borne by the related Mortgage Note, the term of the
Mortgage Loan nor the outstanding principal amount of the Mortgage Loan shall
be changed.
To the extent that any Mortgage Loan is assumable, the
Servicer shall inquire diligently into the creditworthiness of the proposed
transferee, and shall use the Underwriting Guidelines for approving the credit
of the proposed transferee which are used by the Servicer with respect to
underwriting mortgage loans of the same type as the Mortgage Loans. If the
credit of the proposed transferee does not meet the Underwriting Guidelines,
the Servicer diligently shall, to the extent permitted by the Mortgage or the
Mortgage Note and by applicable law, accelerate the maturity of the Mortgage
Loan.
Section 4.02 Satisfaction of Mortgages and Release of
Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the
receipt by the Servicer of a notification that payment in full will be
escrowed in a manner customary for such purposes, the Servicer shall notify
the Purchaser in the Monthly Remittance Advice as provided in Section 3.02,
and may request the release of any Mortgage Loan Documents from the Purchaser
in accordance with this Section 4.02 hereof. The Servicer shall obtain
discharge of the related Mortgage Loan as of record within any related time
limit required by applicable law.
If the Servicer satisfies or releases a Mortgage without
first having obtained payment in full of the indebtedness secured by the
Mortgage or should the Servicer otherwise prejudice any rights the Purchaser
may have under the mortgage instruments, upon written demand of the Purchaser,
the Servicer shall repurchase the related Mortgage Loan at the Repurchase
Price by deposit thereof in the Custodial Account within 2 Business Days of
receipt of such demand by the Purchaser. The Servicer shall maintain the
Fidelity Bond and Errors and Omissions Insurance Policy as provided for in
Section 2.12 insuring the Servicer against any loss it may sustain with
respect to any Mortgage Loan not satisfied in accordance with the procedures
set forth herein.
Section 4.03 Servicing Compensation.
As consideration for servicing the Mortgage Loans, the
Servicer shall withdraw the Servicing Fee with respect to each Mortgage Loan
from the Custodial Account pursuant to Section 2.05 hereof. Such Servicing Fee
shall be payable monthly, computed on the basis of the number of Mortgage
Loans subject to this Agreement. The Servicing Fee shall be pro-rated
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when servicing is for less than one month. The obligation of the Purchaser to
pay, and the Servicer's right to withdraw, the Servicing Fee is limited to,
and the Servicing Fee is payable solely from, the interest portion (including
recoveries with respect to interest from Liquidation Proceeds, to the extent
permitted by Section 2.05), of such Monthly Payment collected by the Servicer,
or as otherwise provided under Section 2.05.
Additional servicing compensation in the form of Ancillary
Income shall be retained by the Servicer to the extent not required to be
deposited in the Custodial Account. 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 4.04 Annual Statement as to Compliance.
The Servicer shall deliver to the Purchaser, on or before
March 10th each year beginning March 10, 2007, and, if applicable, on the
related Transfer Date an Officer's Certificate, stating that (i) a review of
the activities of the Servicer during the preceding calendar year and of
performance under this Agreement has been made under such officer's
supervision, and (ii) the Servicer has complied fully with the provisions of
Article II and Article IV, and (iii) to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under
this Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof and the action being taken by the
Servicer to cure such default.
Section 4.05 Annual Independent Public Accountants'
Servicing Report.
As long as any Mortgage Loans are being serviced hereunder,
or were serviced during the prior calendar year on, or before March 10th of
each year beginning March 10, 2007, the Servicer, at its expense, shall cause
a firm of independent public accountants which is a member of the American
Institute of Certified Public Accountants to furnish a statement to each
Purchaser to the effect that such firm has examined certain documents and
records relating to the servicing of the Mortgage Loans and this Agreement and
that such firm is of the opinion that the provisions of Article II and Article
III have been complied with, and that, on the basis of such examination
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers, nothing has come to their attention which would
indicate that such servicing has not been conducted in compliance therewith,
except for such exceptions as such firm shall believe to be immaterial.
Section 4.06 Right to Examine Servicer Records.
The Purchaser shall have the right to examine and audit any
and all of the books, records, or other information of the Servicer, whether
held by the Servicer or by another on its behalf, with respect to or
concerning this Agreement or the Mortgage Loans, during business hours or at
such other times as may be reasonable under applicable circumstances, upon
reasonable advance notice.
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Section 4.07 Compliance with ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of
1999.
With respect to each Mortgage Loan and the related
Mortgagor, the Servicer shall comply with Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Act of 1999, as amended and all applicable regulations promulgated thereunder,
and shall provide all notices required thereunder.
ARTICLE V
SERVICER TO COOPERATE
Section 5.01 Provision of Information.
During the term of this Agreement, the Servicer shall
furnish to the Purchaser such periodic, special, or other reports or
information, whether or not provided for herein, as shall be necessary,
reasonable, or appropriate with respect to the Purchaser or the purposes of
this Agreement. All such reports or information shall be provided by and in
accordance with all reasonable instructions and directions which the Purchaser
may give.
The Servicer shall execute and deliver all such instruments
and take all such action as the Purchaser may reasonably request from time to
time, in order to effectuate the purposes and to carry out the terms of this
Agreement.
Section 5.02 Financial Statements; Servicing Facilities.
In connection with marketing the Mortgage Loans, the
Purchaser may make available to a prospective purchaser audited financial
statements of the corporate group that includes the Servicer for the most
recently completed five fiscal years for which such statements are available,
as well as a Consolidated Statement of Condition at the end of the last two
fiscal years covered by any Consolidated Statement of Operations. The Servicer
also shall make available any comparable interim statements to the extent any
such statements have been prepared by or on behalf of the corporate group that
includes the Servicer (and are available upon request to members or
stockholders of the corporate group that includes the Servicer or to the
public at large). The Servicer shall furnish promptly to the Purchaser or a
prospective purchaser copies of the statements specified above.
The Servicer shall make available to the Purchaser or any
prospective Purchaser a knowledgeable financial or accounting officer for the
purpose of answering questions respecting recent developments affecting the
Servicer or the financial statements of the corporate group that includes the
Servicer, and to permit any prospective purchaser to inspect the Servicer's
servicing facilities for the purpose of satisfying such prospective purchaser
that the Servicer has the ability to service the Mortgage Loans as provided in
this Agreement.
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ARTICLE VI
TERMINATION
Section 6.01 Termination.
(a) Termination of Servicer. The respective obligations and
responsibilities of the Servicer shall terminate upon: (i) the later of the
final payment or other liquidation (or any advance with respect thereto) of
the last Mortgage Loan or the disposition of all REO Property and the
remittance of all funds due hereunder; or (ii) by mutual consent of the
Servicer and the Purchaser in writing; or (iii) in the event that the Mortgage
Loans become the subject of a Securitization Transaction, in accordance with
any requirements of any rating agency which has rated or will rate some or all
of the securities issued in connection with such Securitization Transaction,
as such requirements pertain to such Securitization Transaction.
(b) Agency Suspension. Should the Servicer at any time
during the term of this Agreement have its right to service temporarily or
permanently suspended by ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac or otherwise cease to be
an approved servicer of conventional residential mortgage loans for ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac, then the Purchaser may immediately terminate this Agreement
and accelerate performance of the provisions of the Purchase Agreement to
require immediate transfer of the Servicing Rights.
Section 6.02 Termination Upon Transfer of Servicing.
(a) Termination Procedures. Subject to Section 11.01, the
Purchaser may terminate this Agreement and transfer the servicing from the
Servicer with respect to the Mortgage Loans on such date as the Purchaser
shall inform the Servicer (the "Transfer Date") by providing written notice to
the Servicer at least 30 Business Days prior to the Transfer Date of its
intent to transfer the servicing of the Mortgage Loans from the Servicer on
the Transfer Date, provided that, in any event, the Servicer shall be given
timely notice to allow it to notify the related mortgagors of the transfer of
servicing in accordance with the requirements of the Real Estate Settlement
Procedures Act and the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ National Affordable Housing Act of
1990, as amended. On or before the Transfer Date specified by the Purchaser in
accordance with this paragraph (a) for the transfer of servicing from the
Servicer, the Servicer shall prepare, execute and deliver to the successor
entity designated by the Purchaser any and all documents and other
instruments, place in such successor's possession all Mortgage Loan Documents
necessary or appropriate to effect the purposes of such notice of termination,
including but not limited to the transfer and endorsement or assignment of the
related Mortgage Loans and related documents, at the Purchaser's sole expense.
The Servicer shall cooperate fully with the Purchaser and such successor in
effecting the termination of the Servicer's responsibilities and rights
hereunder.
Except as otherwise provided in this Agreement, on the
Transfer Date for each Mortgage Loan, this Agreement, except for Articles VI,
VIII, IX and X which shall survive the related Transfer Date, shall terminate
with respect to such Mortgage Loan.
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(b) Servicing Advances and Advances of Principal and
Interest. The Servicer shall be reimbursed for any Servicing Advances or
advances of principal and interest in relation to any Mortgage Loan no later
than five (5) Business Days following the related Transfer Date,
notwithstanding the fact that the Servicer or the successor servicer has not
received a Monthly Payment or Liquidation Proceeds in relation to such
Mortgage Loan. At such time, the Servicer shall be entitled to be reimbursed
for all unreimbursed Servicing Advances and/or advances of principal and
interest with respect to such Mortgage Loan on a first priority basis from the
Monthly Payment or Liquidation Proceeds received with respect to such Mortgage
Loan. This Section 6.02(b) shall survive each Transfer Date.
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files.
The contents of each Servicing File are and shall be held
in trust by the Servicer for the benefit of the Purchaser as the owner
thereof. The Servicer shall maintain in the Servicing File a copy of the
contents of each Mortgage File and the originals of the documents in each
Mortgage File not delivered to the Purchaser. The possession of the Servicing
File by the Servicer is at the will of the Purchaser for the sole purpose of
servicing the related Mortgage Loan, pursuant to this Agreement, and such
retention and possession by the Servicer is in its capacity as Servicer only
and at the election of the Purchaser. The Servicer shall release its custody
of the contents of any Servicing File only in accordance with written
instructions from the Purchaser, unless such release is required as incidental
to the Servicer's servicing of the Mortgage Loans pursuant to this Agreement,
or is in connection with a repurchase of any Mortgage Loan pursuant to Section
9 of the Purchase Agreement.
The Servicer shall be responsible for maintaining, and
shall maintain, a complete set of books and records for each Mortgage Loan
which shall be marked clearly to reflect the ownership of each Mortgage Loan
by the Purchaser. In particular, the Servicer shall maintain in its
possession, available for inspection by the Purchaser's designee, and shall
deliver to the Purchaser or its designee upon demand, evidence of compliance
with all federal, state and local laws, rules and regulations, including but
not limited to documentation as to the method used in determining the
applicability of the provisions of the National Flood Insurance Act of 1968,
as amended, to the Mortgaged Property, documentation evidencing insurance
coverage and eligibility of any condominium project pursuant to Accepted
Servicing Practices and periodic inspection reports as required by Section
2.13.
The Servicer shall keep at its servicing office books and
records in which, subject to such reasonable regulations as it may prescribe,
the Servicer shall note transfers of Mortgage Loans. No transfer of a Mortgage
Loan may be made unless such transfer is in compliance with the terms hereof.
For the purposes of this Agreement, the Servicer shall be under no obligation
to deal with any person with respect to this Agreement or the Mortgage Loans
unless the books and records show such person as the owner of the Mortgage
Loan. The Purchaser may, subject to the terms of this Agreement, sell or
transfer one or more of the Mortgage Loans, provided, however, that the
transferee will not be deemed to be a Purchaser hereunder binding upon the
26
Servicer unless such transferee shall agree in writing to be bound by the
terms of this Agreement and of the assignment and assumption of this Agreement
executed by the transferee shall have been delivered to the Servicer. The
Purchaser also shall advise the Servicer of the transfer. Upon receipt of
notice of the transfer, the Servicer shall cause its books and records to
reflect the ownership of the Mortgage Loans of such assignee, and shall
release the previous Purchaser from its obligations hereunder with respect to
the Mortgage Loans sold or transferred.
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification.
The Servicer agrees to indemnify and hold the Purchaser
harmless from any liability, claim, loss or damage (including, without
limitation, any reasonable legal fees, judgments or expenses relating to such
liability, claim, loss or damage) to the Purchaser directly or indirectly
resulting from the Servicer's failure:
(a) to observe and perform any or all of Servicer's duties,
obligations, covenants, agreements, warranties or representations contained in
this Agreement or in the Purchase Agreement; or
(b) to comply with all applicable requirements with respect
to the servicing of the Mortgage Loans as set forth herein.
The Servicer immediately shall notify the Purchaser if a
claim is made by a third party with respect to this Agreement.
Section 8.02 Limitation on Liability of Servicer and
Others.
Neither the Servicer nor any of the directors, officers,
employees or agents of the Servicer shall be under any liability to the
Purchaser for any action taken or for refraining from the taking of any action
in good faith pursuant to this Agreement, or for errors in judgment, provided,
however, that this provision shall not protect the Servicer or any such person
against any breach of warranties or representations made herein, its own
negligent actions, 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 prior written consent of the Purchaser, undertake
any such action which it may deem necessary or desirable in respect to this
Agreement and the rights and duties of the parties hereto. In such event, the
Servicer shall be entitled to reimbursement from the Purchaser of the
reasonable legal expenses and costs of such action.
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Section 8.03 Limitation on Resignation and Assignment by
Servicer.
The Purchaser has entered into this Agreement with the
Servicer and subsequent purchasers will purchase the Mortgage Loans 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 not assign this Agreement
or the servicing hereunder or delegate its rights or duties hereunder or any
portion hereof or sell or otherwise dispose of all or substantially all of its
property or assets without the prior written consent of the Purchaser, which
consent shall be granted or withheld in the sole discretion of the Purchaser.
The Servicer shall not resign from the obligations and
duties hereby imposed on it except by consent of the Purchaser or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Purchaser which Opinion
of Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder in the manner provided
in Section 6.02.
Without in any way limiting the generality of this Section
8.03, 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 the Purchaser,
then the Purchaser shall have the right to terminate this Agreement upon
notice given as set forth in Section 12.01, without any payment of any penalty
or damages and without any liability whatsoever to the Purchaser or any third
party.
Section 8.04 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of
the Servicer, to assign, in whole or in part, its interest under this
Agreement with respect to some or all of the Mortgage Loans, and designate any
person to exercise any rights of the Purchaser hereunder, by executing an
assignment and assumption agreement and the assignee or designee shall accede
to the rights and obligations hereunder of the Purchaser with respect to such
Mortgage Loans. All references to the Purchaser in this Agreement shall be
deemed to include its assignee or designee. Any such notice of assignment
shall be in writing and delivered to the Servicer as provided in Section 12.01
of this Agreement.
Section 8.05 Merger or Consolidation of the Servicer.
The Servicer will keep in full effect its existence, rights
and franchises as a corporation under the laws of the state of its
incorporation except as permitted herein, and will obtain and preserve its
qualification to do business as a foreign corporation 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
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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 whose deposits are insured by FDIC
or a company whose business includes the origination and servicing of mortgage
loans, shall meet the requirements set forth in Section 6.02 hereof, and shall
have a tangible net worth not less than $25,000,000.
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
As of the Closing Date, the Purchaser warrants and
represents to, and covenants and agrees with, the Servicer as follows:
Section 9.01 Authority and Capacity.
The execution, delivery and performance by the Purchaser of
this Agreement has been duly and validly authorized by all necessary corporate
action. This Agreement constitutes a legal, valid and enforceable obligation
of the Purchaser.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SERVICER
As of the Closing Date, the Servicer warrants and
represents to, and covenants and agrees with, the Purchaser as follows:
Section 10.01 Due Organization and Authority.
The Servicer is a federal savings bank duly organized,
validly existing and in good standing under the laws of the United States of
America 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 related Mortgage Loan in accordance with the terms of
this Agreement; the Servicer has the full corporate power and authority to
execute and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all
instruments or transfer to be delivered pursuant to this Agreement) by the
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 corporate action
has been taken by the Servicer to make this Agreement valid and binding upon
the Servicer in accordance with its terms;
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Section 10.02 Ordinary Course of Business.
The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Servicer.
Section 10.03 No Conflicts.
Neither the execution and delivery of this Agreement, nor
the fulfillment of or compliance with the terms and conditions of this
Agreement, will conflict with or result in a breach of any of the terms,
conditions or provisions of the Servicer's charter or by-laws 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 Purchaser to realize on the
Mortgage Loans, or impair the value of the Mortgage Loans.
Section 10.04 Ability to Service.
The Servicer is an approved 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 enforce, originate, sell mortgage loans to, and service mortgage
loans in the jurisdictions wherein the Mortgaged Properties are located and
with ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac, and no event has occurred, including but not
limited to a change in insurance coverage, which would make the Servicer
unable to comply with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility requirements or
which would require notification to either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Section 10.05 Ability to Perform.
The 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.
Section 10.06 No Litigation Pending.
There is no action, suit, proceeding or investigation
pending or threatened against the Servicer, before any court, administrative
agency or other tribunal asserting the invalidity of this Agreement, seeking
to prevent the consummation of any of the transactions contemplated by this
Agreement or 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 the part of the Servicer, or
which would draw into question the validity of this Agreement or the Mortgage
Loans or of any action taken or to be taken in connection with the obligations
of the Servicer contemplated herein, or which would be likely to impair
materially the ability of the Servicer to perform under the terms of this
Agreement.
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Section 10.07 No Consent Required.
No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with this
Agreement or the servicing of the Mortgage Loans as evidenced by the
consummation of the transactions contemplated by this Agreement, or if
required, such approval has been obtained prior to the Closing Date.
Section 10.08 No Untrue Information.
Neither this Agreement nor any statement, report or other
document furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any untrue
statement of fact or omits to state a fact necessary to make the statements
contained therein not misleading.
Section 10.09 Reasonable Servicing Fee.
The Servicer acknowledges and agrees that the Servicing Fee
represents reasonable compensation for performing such services and that the
entire Servicing Fee shall be treated by the Servicer, for accounting and tax
purposes, as compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement and the Purchase Agreement.
ARTICLE XI
DEFAULT
Section 11.01 Events of Default.
The following shall constitute an Event of Default under
this Agreement on the part of the Servicer:
(a) any failure by the Servicer to remit to the Purchaser
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 Purchaser; or
(b) the 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 (except that such number of days shall be fifteen in the
case of a failure to pay any premium for any insurance policy required to be
maintained under this Agreement) after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Purchaser or by the Custodian; or
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling
of assets and liabilities or similar proceedings, or
31
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
(d) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
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
(e) the Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(f) the Servicer attempts to assign its right to servicing
compensation hereunder or the Servicer attempts, without the consent of the
Purchaser, to sell or otherwise dispose of all or substantially all of its
property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any portion
thereof; or
(g) the Servicer fails to maintain its license to do
business or service residential mortgage loans in any jurisdiction where the
Mortgaged Properties are located.
In each and every such case, so long as an Event of Default
shall not have been remedied, in addition to whatsoever rights the Purchaser
may have at law or equity to damages, including injunctive relief and specific
performance, the Purchaser, by notice in writing to the Servicer, may
immediately terminate without compensation all the rights and obligations of
the Servicer under this Agreement and any Reconstitution Agreement and in and
to the Mortgage Loans and the proceeds thereof, provided, however, that with
respect to any termination as a result of an Event of Default under clause (c)
or (d) above, the Servicer, within sixty (60) days following receipt of such
notice from the Purchaser, shall have the right to deliver to the Purchaser a
firm commitment by a third party servicer (an "Acceptable Commitment"), which
commitment is in form and substance acceptable to the Purchaser in its sole
discretion, to purchase the Servicing Rights and assume the servicing
obligations hereunder or under any Reconstitution Agreement related to any of
the Mortgage Loans; provided further that such third party servicer is
acceptable to the Purchaser in its sole discretion.
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 the
successor appointed pursuant to Section 6.02. Upon written request from the
Purchaser, the Servicer shall prepare, execute and deliver any and all
documents and other instruments, place in such successor's possession all
Mortgage Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at the Servicer's sole expense. The Servicer
agrees to cooperate with the Purchaser 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
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the Custodial Account or Escrow Account or thereafter received with respect to
the Mortgage Loans.
Section 11.02 Waiver of Defaults.
The Purchaser may waive any default by the Servicer in the
performance of its obligations hereunder and its consequences. Upon any such
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Notices.
All notices, requests, demands and other communications
which are required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been duly given upon the delivery or
mailing thereof, as the case may be, sent by registered or certified mail,
return receipt requested:
(a) If to Purchaser to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
1221 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Whole Loan
Operations Manager
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with copies to:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - Servicing Oversight
▇▇▇▇ ▇-▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
(b) If to Servicer to:
IndyMac Bank, F.S.B.
Capital Markets
33
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: SVP, Chief Operations Officer
Section 12.02 Waivers.
Either the Servicer or the Purchaser may upon consent of
all parties, by written notice to the others:
(a) Waive compliance with any of the terms, conditions or
covenants required to be complied with by the others hereunder; and
(b) Waive or modify performance of any of the obligations
of the others hereunder.
The waiver by any party hereto of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any other
subsequent breach.
Section 12.03 Entire Agreement; Amendment.
This Agreement and the Purchase Agreement constitute the
entire agreement between the parties with respect to servicing of the Mortgage
Loans. This Agreement may be amended and any provision hereof waived, but,
only in writing signed by the party against whom such enforcement is sought.
Section 12.04 Execution; Binding Effect.
This Agreement may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same agreement. Subject to Sections
8.03 and 8.04, this Agreement shall inure to the benefit of and be binding
upon the Servicer and the Purchaser and their respective successors and
assigns.
Section 12.05 Headings.
Headings of the Articles and Sections in this Agreement are
for reference purposes only and shall not be deemed to have any substantive
effect.
Section 12.06 Applicable Law.
This Agreement shall be construed in accordance with the
laws of the State of New York and the obligations, rights and remedies
hereunder shall be determined in accordance with the substantive laws of the
State of New York (without regard to conflicts of laws principles), except to
the extent preempted by Federal law.
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Section 12.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to
create a partnership or joint venture between the parties. The duties and
responsibilities of the Servicer shall be rendered by it as an independent
contractor and not as an agent of the Purchaser. The Servicer shall have full
control of all of its acts, doings, proceedings, relating to or requisite in
connection with the discharge of its duties and responsibilities under this
Agreement.
Section 12.08 Severability of Provisions.
If any one or more of the covenants, agreements, provisions
or terms of this Agreement shall be held invalid for any reason whatsoever,
then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the
other provisions of this Agreement.
Section 12.09 [Reserved].
Section 12.10 Exhibits.
The exhibits to this Agreement are hereby incorporated and
made a part hereof and are integral parts of this Agreement.
Section 12.11 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 12.12 No Solicitation.
From and after the Closing Date, the Servicer 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 (via electronic means
or otherwise), solicit the borrower or obligor under any Mortgage Loan for any
purpose whatsoever, including to refinance a Mortgage Loan, in whole or in
part, without (i) the prior written consent of the Purchaser; or (ii) written
notice from the related borrower or obligor under a Mortgage Loan of such
party's intention to refinance such Mortgage Loan. It is understood and agreed
that all rights and benefits relating to the solicitation of any Mortgagors
and the attendant rights, title and interest in and to the list of such
Mortgagors and data relating to their Mortgages (including insurance renewal
dates) shall be transferred to the Purchaser pursuant hereto on the Closing
Date and the Servicer shall take no action to undermine these rights and
benefits. Notwithstanding the foregoing, it is understood and agreed that
promotions undertaken by the Servicer or any affiliate of the Servicer which
are directed to the general public at large, including, without limitation,
mass mailing based on commercially acquired mailing lists, newspaper, radio
and television advertisements shall not constitute solicitation under this
Section 12.12.
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Section 12.13 Cooperation of Servicer with a
Reconstitution.
The Servicer and the Purchaser agree that with respect to
some or all of the Mortgage Loans, after the Closing Date, on one or more
dates (each a "Reconstitution Date") at the Purchaser's sole option, the
Purchaser may effect a sale (each, a "Reconstitution") of some or all of the
Mortgage Loans then subject to this Agreement, without recourse, to:
a) ▇▇▇▇▇▇ Mae under its Cash Purchase Program or MBS
Program (Special Servicing Option) (each a "▇▇▇▇▇▇
Mae Transfer"); or
b) ▇▇▇▇▇▇▇ Mac (the "▇▇▇▇▇▇▇ Mac Transfer"); or
c) one or more third party purchasers in one or more
Whole Loan Transfers; or
d) one or more trusts or other entities to be formed
as part of one or more Securitization Transactions.
The Servicer agrees to execute in connection with any
Agency Transfer, any and all pool purchase contracts, and/or agreements
reasonably acceptable to the Servicer among the Purchaser, the Servicer,
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac (as the case may be) and any servicer in connection
with a Whole Loan Transfer, an assignment and assumption agreement or a
participation and servicing agreement in form and substance reasonably
acceptable to the Servicer, and in connection with a Securitization
Transaction, a pooling and servicing agreement or sale and servicing agreement
in form and substance reasonably acceptable to the Servicer (collectively the
agreements referred to herein are designated, the "Reconstitution
Agreements").
With respect to each Whole Loan Transfer and each
Securitization Transaction entered into by the Purchaser, the Servicer agrees
(1) to cooperate fully with the Purchaser and any prospective purchaser with
respect to all reasonable requests and due diligence procedures; (2) to
execute, deliver and perform all Reconstitution Agreements required by the
Purchaser; (3) to restate the representations and warranties set forth in this
Agreement as of the settlement or closing date in connection with such
Reconstitution. In that connection, the Servicer shall provide to such master
servicer or issuer, as the case may be, and any other participants in such
Reconstitution: (i) any and all information and appropriate verification of
information which may be reasonably available to the Servicer or its
affiliates, whether through letters of its auditors and counsel or otherwise,
as the Purchaser or any such other participant shall request; (ii) such
additional reasonable representations, warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or
officers of the Servicer as are believed necessary by the Purchaser or any
such other participant; and (iii) to execute, deliver and satisfy all
conditions set forth in any indemnity agreement required by the Purchaser or
any such participant mutually agreeable to the Servicer and the Purchaser. The
Servicer shall indemnify the Purchaser, each Affiliate designated by the
Purchaser and each Person who controls the Purchaser or such Affiliate and
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and any other costs, fees and expenses that each of them may
sustain in any way related to any information provided by or on behalf of the
Servicer regarding the Servicer, the
36
Servicer's servicing practices or performance, the Mortgage Loans or the
Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. Moreover, the Servicer agrees to cooperate
with all reasonable requests made by the Purchaser to effect such
Reconstitution Agreements. But in no event shall the Servicer be obligated to
any greater extent under a Reconstitution Agreement than it is under this
Agreement. For purposes of this Section, "Purchaser" shall mean the Person
then acting as the Purchaser under this Agreement and any and all Persons who
previously were "Purchasers" under this Agreement.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if this Agreement
shall remain in effect with respect to the Mortgage Loans, shall continue to
be serviced in accordance with the terms of this Agreement and the Purchase
Agreement and with respect thereto this Agreement shall remain in full force
and effect.
With respect to any Securitization Transaction, the
Servicer agrees that on or prior to March 1st of each year, the Servicer shall
deliver to the Purchaser and the trustee for such Securitization Transaction,
a certification substantially the form annexed hereto as Exhibit 7, executed
by the senior officer in charge of servicing at the Servicer, for inclusion in
the Annual Report on Form 10-K to be filed with the Securities and Exchange
Commission with respect to the trust formed for such Securitization
Transaction. The Servicer shall indemnify and hold harmless the Purchaser, the
depositor for such Securitization Transaction, the trustee for such
Securitization Transaction and their respective officers, directors and
Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon any breach of the
Servicer's obligations under this paragraph or the Servicer's negligence, bad
faith or willful misconduct in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the
indemnified party, then the Servicer agrees that it shall contribute to the
amount paid or payable by such depositor and/or such trustee as a result of
the losses, claims, damages or liabilities of such depositor and/or such
trustee in such proportion as is appropriate to reflect the relative fault of
such depositor or such trustee, as the case may be, on the one hand and the
Servicer on the other in connection with a breach of the Servicer's
obligations under this paragraph or the Servicer's negligence, bad faith or
willful misconduct in connection therewith.
Section 12.14 Waiver of Trial by Jury.
THE SERVICER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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Section 12.15 Submission To Jurisdiction; Waivers.
The Servicer hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT
OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS
FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN
AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID,
TO ITS ADDRESS SET FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE
PURCHASER SHALL HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION.
ARTICLE XIII
COMPLIANCE WITH REGULATION AB PROVISIONS
Section 13.01 Intent of the Parties; Reasonableness.
The Purchaser and the Servicer acknowledge and agree that
the purpose of Article XIII of this Agreement is to facilitate compliance by
the Purchaser and any Depositor with the provisions of Regulation AB and
related rules and regulations of the Commission. Although Regulation AB is
applicable by its terms only to offerings of asset-backed securities that are
registered under the Securities Act, the Servicer acknowledges that investors
in privately offered securities may require that the Purchaser or any
Depositor provide comparable disclosure in unregistered offerings. References
in this Agreement to compliance with Regulation AB include provision of
comparable disclosure in private offerings.
38
Neither the Purchaser nor any Depositor shall exercise its
right to request delivery of information or other performance under these
provisions other than in good faith, or for purposes other than compliance
with the Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder (or the provision in a private offering of disclosure
comparable to that required under the Securities Act). The Servicer
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Purchaser or any Depositor in good faith for delivery of
information under these provisions on the basis of evolving interpretations of
Regulation AB. In connection with any Securitization Transaction, the Servicer
shall cooperate fully with the Purchaser to deliver to the Purchaser
(including any of its assignees or designees) and any Depositor, any and all
statements, reports, certifications, records and any other information
necessary in the good faith determination of the Purchaser or any Depositor to
permit the Purchaser or such Depositor to comply with the provisions of
Regulation AB, together with such disclosures relating to the Servicer any
Subservicer and the Mortgage Loans, or the servicing of the Mortgage Loans,
reasonably believed by the Purchaser or any Depositor to be necessary in order
to effect such compliance.
Section 13.02 Additional Representations and Warranties of the
Servicer.
(a) The Servicer shall be deemed to represent to the
Purchaser and to any Depositor, as of the date on which information is first
provided to the Purchaser or any Depositor under Section 13.03 that, except as
disclosed in writing to the Purchaser or such Depositor prior to such date:
(i) the Servicer is not aware and has not received notice that any default,
early amortization or other performance triggering event has occurred as to
any other securitization due to any act or failure to act of the Servicer ;
(ii) the Servicer has not been terminated as servicer in a residential
mortgage loan securitization, either due to a servicing default or to
application of a servicing performance test or trigger; (iii) no material
noncompliance with the applicable servicing criteria with respect to other
securitizations of residential mortgage loans involving the Servicer has been
disclosed or reported by the Servicer ; (iv) no material changes to the
Servicer 's policies or procedures with respect to the servicing function it
will perform under this Agreement and any Reconstitution Agreement for
mortgage loans of a type similar to the Mortgage Loans have occurred during
the three-year period immediately preceding the related Securitization
Transaction; (v) there are no aspects of the Servicer 's financial condition
that could have a material adverse effect on the performance by the Servicer
of its servicing obligations under this Agreement or any Reconstitution
Agreement; (vi) there are no material legal or governmental proceedings
pending (or known to be contemplated) against the Servicer or any Subservicer;
and (vii) there are no affiliations, relationships or transactions relating to
the Servicer or any Subservicer with respect to any Securitization Transaction
and any party thereto identified by the related Depositor of a type described
in Item 1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on
any date following the date on which information is first provided to the
Purchaser or any Depositor under Section 13.03, the Servicer shall, within
five Business Days following such request, confirm in writing the accuracy of
the representations and warranties set forth in paragraph (a) of this Section
or, if
39
any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
Section 13.03 Information to Be Provided by the Servicer .
In connection with any Securitization Transaction the
Servicer shall (i) within five Business Days following request by the
Purchaser or any Depositor, provide to the Purchaser and such Depositor (or
cause each Subservicer to provide), in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, the information
and materials specified in paragraphs (a), (c) and (f) of this Section, and
(ii) as promptly as practicable following notice to or discovery by the
Servicer , provide to the Purchaser and any Depositor (in writing and in form
and substance reasonably satisfactory to the Purchaser and such Depositor) the
information specified in paragraph (d) of this Section.
(a) If so requested by the Purchaser or any Depositor, the
Servicer shall provide such information regarding each Subservicer, as is
requested for the purpose of compliance with Items 1103(a)(1), 1117 and 1119
of Regulation AB. Such information shall include, at a minimum:
(A) [Reserved];
(B) [Reserved];
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated)
against the Servicer and each Subservicer; and
(D) a description of any affiliation or relationship
between the Servicer , each Subservicer and any of
the following parties to a Securitization
Transaction, as such parties are identified to the
Servicer by the Purchaser or any Depositor in
writing in advance of such Securitization
Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) [Reserved].
(c) If so requested by the Purchaser or any Depositor, the
Servicer shall provide such information regarding the Servicer , as servicer
of the Mortgage Loans, and each Subservicer (each of the Servicer and each
Subservicer, for purposes of this paragraph, a
40
"Servicer"), as is requested for the purpose of compliance with Item 1108 of
Regulation AB. Such information shall include, at a minimum:
(A) the Servicer's form of organization;
(B) a description of how long the Servicer has been
servicing residential mortgage loans; a general
discussion of the Servicer's experience in
servicing assets of any type as well as a more
detailed discussion of the Servicer's experience
in, and procedures for, the servicing function it
will perform under this Agreement and any
Reconstitution Agreements; information regarding
the size, composition and growth of the Servicer's
portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on
factors related to the Servicer that may be
material, in the good faith judgment of the
Purchaser or any Depositor, to any analysis of the
servicing of the Mortgage Loans or the related
asset-backed securities, as applicable, including,
without limitation:
(1) whether any prior securitizations of
mortgage loans of a type similar to the Mortgage
Loans involving the Servicer have defaulted or
experienced an early amortization or other
performance triggering event because of servicing
during the three-year period immediately preceding
the related Securitization Transaction;
(2) the extent of outsourcing the Servicer
utilizes;
(3) whether there has been previous
disclosure of material noncompliance with the
applicable servicing criteria with respect to other
securitizations of residential mortgage loans
involving the Servicer as a servicer during the
three-year period immediately preceding the related
Securitization Transaction;
(4) whether the Servicer has been
terminated as servicer in a residential mortgage
loan securitization, either due to a servicing
default or to application of a servicing
performance test or trigger; and
(5) such other information as the
Purchaser or any Depositor may reasonably request
for the purpose of compliance with Item 1108(b)(2)
of Regulation AB;
(C) a description of any material changes during the
three-year period immediately preceding the related
Securitization Transaction to the Servicer's
policies or procedures with respect to the
servicing function it will perform under this
Agreement and any Reconstitution Agreements for
mortgage loans of a type similar to the Mortgage
Loans;
(D) information regarding the Servicer's financial
condition, to the extent that there is a material
risk that an adverse financial event or
circumstance involving the Servicer could have a
material adverse effect on the
41
performance by the Servicer of its servicing
obligations under this Agreement or any
Reconstitution Agreement;
(E) information regarding advances made by the Servicer
on the Mortgage Loans and the Servicer's overall
servicing portfolio of residential mortgage loans
for the three-year period immediately preceding the
related Securitization Transaction, which may be
limited to a statement by an authorized officer of
the Servicer to the effect that the Servicer has
made all advances required to be made on
residential mortgage loans serviced by it during
such period, or, if such statement would not be
accurate, information regarding the percentage and
type of advances not made as required, and the
reasons for such failure to advance;
(F) a description of the Servicer's processes and
procedures designed to address any special or
unique factors involved in servicing loans of a
similar type as the Mortgage Loans;
(G) a description of the Servicer's processes for
handling delinquencies, losses, bankruptcies and
recoveries, such as through liquidation of
mortgaged properties, sale of defaulted mortgage
loans or workouts; and
(H) information as to how the Servicer defines or
determines delinquencies and charge-offs, including
the effect of any grace period, re-aging,
restructuring, partial payments considered current
or other practices with respect to delinquency and
loss experience.
(d) If so requested by the Purchaser or any Depositor for
the purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Servicer shall (or shall
cause each Subservicer to) (i) notify the Purchaser and any Depositor in
writing of (A) any material litigation or governmental proceedings pending
against the Servicer or any Subservicer and (B) any affiliations or
relationships that develop following the closing date of a Securitization
Transaction between the Servicer or any Subservicer and any of the parties
specified in clause (D) of paragraph (a) of this Section (and any other
parties identified in writing by the requesting party) with respect to such
Securitization Transaction, and (ii) provide to the Purchaser and any
Depositor a description of such proceedings, affiliations or relationships.
(e) As a condition to the succession to the Servicer or any
SubServicer or subservicer under this Agreement or any Reconstitution
Agreement by any Person (i) into which the Servicer or such Subservicer may be
merged or consolidated, or (ii) which may be appointed as a successor to the
Servicer or any Subservicer, the Servicer shall provide to the Purchaser and
any Depositor, at least 15 calendar days prior to the effective date of such
succession or appointment, (x) written notice to the Purchaser and any
Depositor of such succession or appointment and (y) in writing and in form and
substance reasonably satisfactory to the Purchaser and such Depositor, all
information reasonably requested by the Purchaser or any Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to any class of asset-backed securities.
42
(f) In addition to such information as the Servicer , as
servicer, is obligated to provide pursuant to other provisions of this
Agreement, if so requested by the Purchaser or any Depositor, the Servicer
shall provide such information regarding the performance or servicing of the
Mortgage Loans as is reasonably required by the Purchaser or any Depositor to
facilitate preparation of distribution reports in accordance with Item 1121 of
Regulation AB and to permit the Purchaser or such Depositor to comply with the
provisions of Regulation AB relating to Static Pool Information regarding the
performance of the Mortgage Loans on the basis of the Purchaser's or such
Depositor's reasonable, good faith interpretation of the requirements of Item
1105(a)(1)-(3) of Regulation AB (including without limitation as to the format
and content of such Static Pool Information) in connection with any future
securitization by the Purchaser or any Depositor of mortgage loans of a
similar type as the Mortgage Loans. Such information shall be provided
concurrently with the monthly reports otherwise required to be delivered by
the Servicer under this Agreement commencing with the first such report due in
connection with the applicable Securitization Transaction).
Section 13.04 Servicer Compliance Statement.
On or before March 1 of each calendar year, commencing in
2007, the Servicer shall deliver to the Purchaser and any Depositor a
statement of compliance addressed to the Purchaser and such Depositor and
signed by an authorized officer of the Servicer , to the effect that (i) a
review of the Servicer 's activities during the immediately preceding calendar
year (or applicable portion thereof) and of its performance under this
Agreement and any applicable Reconstitution Agreement during such period has
been made under such officer's supervision, and (ii) to the best of such
officers' knowledge, based on such review, the Servicer has fulfilled all of
its obligations under this Agreement and any applicable Reconstitution
Agreement in all material respects throughout such calendar year (or
applicable portion thereof) or, if there has been a failure to fulfill any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status thereof.
Section 13.05 Report on Assessment of Compliance and Attestation.
(a) On or before March 1 of each calendar year, commencing
in 2007, the Servicer shall:
(i) deliver to the Purchaser and any Depositor a report (in
form and substance reasonably satisfactory to the Purchaser and such
Depositor) regarding the Servicer's assessment of compliance with the
Servicing Criteria during the immediately preceding calendar year, as
required under Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122 of Regulation AB. Such report shall be addressed to the
Purchaser and such Depositor and signed by an authorized officer of
the Servicer, and shall address each of the Servicing Criteria
specified on a certification substantially in the form of Exhibit 8
hereto delivered to the Purchaser concurrently with the execution of
this Agreement;
(ii) deliver to the Purchaser and any Depositor a report of
a registered public accounting firm reasonably acceptable to the
Purchaser and such Depositor that attests to, and reports on, the
assessment of compliance made by the Servicer and delivered
43
pursuant to the preceding paragraph. Such attestation shall be in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under
the Securities Act and the Exchange Act;
(iii) cause each Subservicer, and each Subcontractor
determined by the Company pursuant to Section 13.06(b) to be
"participating in the servicing function" within the meaning of Item
1122 of Regulation AB, to deliver to the Purchaser and any Depositor
an assessment of compliance and accountants' attestation as and when
provided in paragraphs (a) and (b) of this Section; and
(iv) deliver to the Purchaser, any Depositor and any other
Person that will be responsible for signing the certification (a
"Sarbanes Certification") required by Rules 13a-14(d) and 15d-14(d)
under the Exchange Act (pursuant to Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act of 2002) on behalf of an asset-backed issuer with respect to a
Securitization Transaction a certification in the form attached
hereto as Exhibit 7.
The Servicer acknowledges that the parties identified in
clause (a)(iv) above may rely on the certification provided by the Servicer
pursuant to such clause in signing a Sarbanes Certification and filing such
with the Commission. Neither the Purchaser nor any Depositor will request
delivery of a certification under clause (a)(iv) above unless a Depositor is
required under the Exchange Act to file an annual report on Form 10-K with
respect to an issuing entity whose asset pool includes Mortgage Loans.
(b) Each assessment of compliance provided by a Subservicer
pursuant to Section 13.05(a)(i) shall address each of the Servicing Criteria
specified on a certification substantially in the form of Exhibit 7 hereto
delivered to the Purchaser concurrently with the execution of this Agreement
or, in the case of a Subservicer subsequently appointed as such, on or prior
to the date of such appointment. An assessment of compliance provided by a
Subcontractor pursuant to Section 13.05(a)(iii) need not address any elements
of the Servicing Criteria other than those specified by the Servicer pursuant
to Section 13.06.
Section 13.06 Use of Subservicers and Subcontractors.
The Servicer shall not hire or otherwise utilize the
services of any Subservicer to fulfill any of the obligations of the Servicer
under this Agreement or any Reconstitution Agreement unless the Servicer
complies with the provisions of paragraph (a) of this Section. The Servicer
shall not hire or otherwise utilize the services of any Subcontractor, and
shall not permit any Subservicer to hire or otherwise utilize the services of
any Subcontractor, to fulfill any of the obligations of the Servicer under
this Agreement or any Reconstitution Agreement unless the Servicer complies
with the provisions of paragraph (b) of this Section.
(a) The Servicer shall not hire or otherwise utilize the
services of any Subservicer with respect to the Mortgage Loans without giving
the Purchaser or its designee fifteen (15) calendar days' advance written
notice of the effective date of such hiring or utilization of a Subservicer,
followed by written confirmation of such hiring or utilization of a
Subservicer on the effective date of such engagement and indicating the
circumstances surrounding such hiring or utilization. Any notices required by
this Section 13.06(a) shall be sent via telecopier or certified or registered
mail to the addresses set forth below: ▇▇▇▇ ▇.
44
▇▇▇▇▇▇▇▇, Servicer Oversight Group, ▇▇▇▇ ▇-▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Telecopy: ▇▇▇-▇▇▇-▇▇▇▇ and emailed to:
▇▇▇▇▇_▇▇▇▇▇▇▇▇_▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, with a copy to ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇ LLP, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Telecopy:
▇▇▇-▇▇▇-▇▇▇▇, Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ (or such other address as such
Person may otherwise specify to Servicer). The Servicer shall cause any
Subservicer used by the Servicer (or by any Subservicer) for the benefit of
the Purchaser and any Depositor to comply with the provisions of this Section
and with Sections 13.02, 13.03(c) and (e), 13.04, 13.05 and 13.07 of this
Agreement to the same extent as if such Subservicer were the Servicer , and to
provide the information required with respect to such Subservicer under
Section 13.03(d) of this Agreement. The Servicer shall be responsible for
obtaining from each Subservicer and delivering to the Purchaser and any
Depositor any servicer compliance statement required to be delivered by such
Subservicer under Section 13.04, any assessment of compliance and attestation
required to be delivered by such Subservicer under Section 13.05 and any
certification required to be delivered to the Person that will be responsible
for signing the Sarbanes Certification under Section 13.05 as and when
required to be delivered.
(b) It shall not be necessary for the Servicer to seek the
consent of the Purchaser or any Depositor to the utilization of any
Subcontractor. The Servicer shall promptly upon request provide to the
Purchaser and any Depositor (or any designee of the Depositor, such as a
master servicer or administrator) a written description (in form and substance
satisfactory to the Purchaser and such Depositor) of the role and function of
each Subcontractor utilized by the Servicer or any Subservicer, specifying (i)
the identity of each such Subcontractor, (ii) which (if any) of such
Subcontractors are "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the
Servicing Criteria will be addressed in assessments of compliance provided by
each Subcontractor identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor
determined to be "participating in the servicing function" within the meaning
of Item 1122 of Regulation AB, the Servicer shall cause any such Subcontractor
used by the Servicer (or by any Subservicer) for the benefit of the Purchaser
and any Depositor to comply with the provisions of Sections 13.05 and 13.07 of
this Agreement to the same extent as if such Subcontractor were the Servicer .
The Servicer shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation required to be delivered by such Subcontractor under Section
13.05, in each case as and when required to be delivered.
Section 13.07 Indemnification; Remedies.
(a) The Servicer shall indemnify the Purchaser, each
affiliate of the Purchaser, and each of the following parties participating in
a Securitization Transaction: each sponsor and issuing entity; each Person
responsible for the preparation, execution or filing of any report required to
be filed with the Commission with respect to such Securitization Transaction,
or for execution of a certification pursuant to Rule 13a-14(d) or Rule
15d-14(d) under the Exchange Act with respect to such Securitization
Transaction; each broker dealer acting as underwriter, placement agent or
initial purchaser, each Person who controls any of such parties or the
Depositor (within the meaning of Section 15 of the Securities Act and ▇▇▇▇▇▇▇
▇▇ ▇▇ ▇▇▇
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇); and the respective present and former directors, officers,
employees and agents of each of the foregoing and of the Depositor, and shall
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain arising out of
or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report, certification,
accountants' letter or other material provided in written or
electronic form under this Article XIII by or on behalf of the
Servicer , or provided under this Article XIII by or on behalf of any
Subservicer or Subcontractor (collectively, the "Servicer
Information"), or (B) the omission or alleged omission to state in
the Servicer Information a material fact required to be stated in the
Servicer Information or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided, by way of clarification, that clause
(B) of this paragraph shall be construed solely by reference to the
Servicer Information and not to any other information communicated in
connection with a sale or purchase of securities, without regard to
whether the Servicer Information or any portion thereof is presented
together with or separately from such other information;
(ii) any failure by the Servicer , any Subservicer or any
Subcontractor to deliver any information, report, certification,
accountants' letter or other material when and as required under this
Article XIII, including any failure by the Servicer to identify
pursuant to Section 13.06(b) any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB;
or
(iii) any breach by the Servicer of a representation or
warranty set forth in Section 13.02(a) or in a writing furnished
pursuant to Section 13.02(b) and made as of a date prior to the
closing date of the related Securitization Transaction, to the extent
that such breach is not cured by such closing date, or any breach by
the Servicer of a representation or warranty in a writing furnished
pursuant to Section 13.02(b) to the extent made as of a date
subsequent to such closing date.
In the case of any failure of performance described in
clause (a)(ii) of this Section, the Servicer shall promptly reimburse the
Purchaser, any Depositor, as applicable, and each Person responsible for the
preparation, execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or for execution
of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with respect to such Securitization Transaction, for all costs
reasonably incurred by each such party in order to obtain the information,
report, certification, accountants' letter or other material not delivered as
required by the Servicer, any Subservicer or any Subcontractor.
(b) (i) Any failure by the Seller, Servicer, any
Subservicer or any Subcontractor to deliver any information, report,
certification, accountants' letter or other material when and as required
under this Article XIII or under Section 34 of the Purchase Agreement, or any
breach by the Servicer of a representation or warranty set forth in Section
13.02(a) or in a writing furnished pursuant to Section 13.02(b) or any breach
by the
46
Seller of a representation or warranty set forth in Section 34.02(a) of the
Purchase Agreement or in a writing furnished pursuant to Section 34.02(b) of
the Purchase Agreement and made as of a date prior to the closing date of the
related Securitization Transaction, to the extent that such breach is not
cured by such closing date, or any breach by the Servicer of a representation
or warranty in a writing furnished pursuant to Section 13.02(b) or any breach
by the Seller of a representation or warranty in a writing furnished pursuant
to Section 34.02(b) of the Purchase Agreement to the extent made as of a date
subsequent to such closing date, shall, except as provided in clause (ii) of
this paragraph, immediately and automatically, without notice or grace period,
constitute an Event of Default with respect to the Servicer under this
Agreement and any applicable Reconstitution Agreement, and shall entitle the
Purchaser or Depositor, as applicable, in its sole discretion to terminate the
rights and obligations of the Servicer under this Agreement and/or any
applicable Reconstitution Agreement without payment (notwithstanding anything
in this Agreement or any applicable Reconstitution Agreement to the contrary)
of any compensation to the Servicer ; provided that to the extent that any
provision of this Agreement and/or any applicable Reconstitution Agreement
expressly provides for the survival of certain rights or obligations following
termination of the Servicer as servicer, such provision shall be given effect.
(ii) Any failure by the Servicer , any Subservicer or any
Subcontractor to deliver any information, report, certification or
accountants' letter when and as required under Section 13.04 or
13.05, including (except as provided below) any failure by the
Servicer to identify pursuant to Section 13.06(b) any Subcontractor
"participating in the servicing function" within the meaning of Item
1122 of Regulation AB, which continues unremedied for ten calendar
days after the date on which such information, report, certification
or accountants' letter was required to be delivered shall constitute
an Event of Default with respect to the Servicer under this Agreement
and any applicable Reconstitution Agreement, and shall entitle the
Purchaser or Depositor, as applicable, in its sole discretion to
terminate the rights and obligations of the Servicer under this
Agreement and/or any applicable Reconstitution Agreement without
payment (notwithstanding anything in this Agreement to the contrary)
of any compensation to the Servicer ; provided that to the extent
that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of
certain rights or obligations following termination of the Servicer
as servicer, such provision shall be given effect.
Neither the Purchaser nor any Depositor shall be entitled to
terminate the rights and obligations of the Company pursuant to this
subparagraph (b)(ii) if a failure of the Company to identify a
Subcontractor "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB was attributable solely to the
role or functions of such Subcontractor with respect to mortgage
loans other than the Mortgage Loans.
(iii) The Servicer shall promptly reimburse the Purchaser
(or any designee of the Purchaser, such as a master servicer) and any
Depositor, as applicable, for all reasonable expenses incurred by the
Purchaser (or such designee) or such Depositor, as such are incurred,
in connection with the termination of the Servicer and the transfer
of servicing of the Mortgage Loans to a successor servicer. The
provisions of this
47
paragraph shall not limit whatever rights the Purchaser or any
Depositor may have under other provisions of this Agreement and/or
any applicable Reconstitution Agreement or otherwise, whether in
equity or at law, such as an action for damages, specific performance
or injunctive relief.
[Signature Page Follows]
48
IN WITNESS WHEREOF, the parties have executed this
Agreement under seal as of the date and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
(the Purchaser)
By: _______________________________
Name:
Title:
INDYMAC BANK, F.S.B.
(the Servicer)
By: _______________________________
Name:
Title:
EXHIBIT 1
REMITTANCE REPORT
Exh. 1-1
EXHIBIT 2
CUSTODIAL ACCOUNT CERTIFICATION
_______ __, 200_
The Servicer hereby certifies that it has established the
account described below as a Custodial Account pursuant to Section 2.04 of the
Servicing Agreement, dated as of September 1, 2006, Conventional Fixed Rate
Mortgage Loans.
Title of Account: "IndyMac Bank, F.S.B. in trust for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc., owner of Conventional Fixed
Rate Residential Mortgage Loans, and various
Mortgagors."
Account Number: _____________________
Address of office or branch
of the Servicer at
which Account is maintained:______________________________
INDYMAC BANK, F.S.B.,
Servicer
By:___________________________
Name:_________________________
Title:________________________
Date:_________________________
Exh. 2-1
EXHIBIT 3
CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 200_
To: ___________________________
___________________________
___________________________
(the "Depository")
As Servicer under the Servicing Agreement, dated as of
September 1, 2006, (the "Agreement"), we hereby authorize and request you to
establish an account, as a Custodial Account pursuant to Section 2.04 of the
Agreement, to be designated "IndyMac Bank, F.S.B. in trust for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc., owner of Residential Mortgage Loans, and various
Mortgagors." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Servicer. You may refuse any deposit which
would result in violation of the requirement that the account be fully insured
as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
INDYMAC BANK, F.S.B.,
Servicer
By:___________________________
Name:_________________________
Title:________________________
Date:_________________________
Exh. 3-1
The undersigned, as Depository, hereby certifies that the
above described account has been established under Account Number __________,
at the office of the Depository indicated above, and agrees to honor
withdrawals on such account as provided above. The full amount deposited at
any time in the account will be insured by the Federal Deposit Insurance
Corporation through the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF").
------------------------------
Depository
By:___________________________
Name:_________________________
Title:________________________
Date:_________________________
Exh. 3-2
EXHIBIT 4
ESCROW ACCOUNT CERTIFICATION
_________ ___, 200_
________________________ hereby certifies that it has
established the account described below as an Escrow Account pursuant to
Section 2.06 of the Servicing Agreement, dated as of September 1, 2006,
Residential Mortgage Loans.
Title of Account: "IndyMac Bank, F.S.B., as servicer, in trust for
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., owner of
Residential Mortgage Loans, and various
Mortgagors."
Account Number: ___________________
Address of office or branch
of the Servicer at
which Account is maintained: _________________________
_________________________
_________________________
_________________________
INDYMAC BANK, F.S.B.,
Servicer
By:__________________________
Name:________________________
Title:_______________________
Exh. 4-1
EXHIBIT 5
ESCROW ACCOUNT LETTER AGREEMENT
_______ ___, 200_
To: _____________________________
_____________________________
_____________________________
(the "Depository")
As Servicer under the Servicing Agreement, dated as of
September 1, 2006, Conventional Fixed Rate Residential Mortgage Loans (the
"Agreement"), we hereby authorize and request you to establish an account, as
an Escrow Account pursuant to Section 2.06 of the Agreement, to be designated
as "IndyMac Bank, F.S.B., as servicer, in trust for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc., owner of Conventional Fixed Rate Residential Mortgage Loans, and
various Mortgagors." All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Servicer. You may refuse any
deposit which would result in violation of the requirement that the account be
fully insured as described below. This letter is submitted to you in
duplicate. Please execute and return one original to us.
INDYMAC BANK, F.S.B.,
Servicer
By:________________________________
Name:______________________________
Title:_____________________________
Date:______________________________
Exh. 5-1
The undersigned, as Depository, hereby certifies that the
above described account has been established under Account Number ______, at
the office of the Depository indicated above, and agrees to honor withdrawals
on such account as provided above. The full amount deposited at any time in
the account will be insured by the Federal Deposit Insurance Corporation
through the Bank Insurance Fund ("BIF") or the Savings Association Insurance
Fund ("SAIF").
__________________________________
Depository
By:__________________________________
Name:________________________________
Title:_______________________________
Date:________________________________
Exh. 5-2
EXHIBIT 6
DELINQUENCY COLLECTION POLICIES AND PROCEDURES
Exh. 6-1
EXHIBIT 7
CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"), among
[IDENTIFY PARTIES]
I, ________________________________, the _______________________ of
[NAME OF COMPANY] (the "Company"), certify to [the Purchaser], [the
Depositor], and the [Master Servicer] [Securities Administrator] [Trustee],
and their officers, with the knowledge and intent that they will rely upon
this certification, that:
First, I have reviewed the servicer compliance statement of
the Company provided in accordance with Item 1123 of Regulation AB
(the "Compliance Statement"), the report on assessment of the
Company's compliance with the servicing criteria set forth in Item
1122(d) of Regulation AB (the "Servicing Criteria"), provided in
accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act
of 1934, as amended (the "Exchange Act") and Item 1122 of Regulation
AB (the "Servicing Assessment"), the registered public accounting
firm's attestation report provided in accordance with Rules 13a-18
and 15d-18 under the Exchange Act and Section 1122(b) of Regulation
AB (the "Attestation Report"), and all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans by the Company during 200[ ] that were delivered by
the Company to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the
"Company Servicing Information");
Second, Based on my knowledge, the Company Servicing
Information, taken as a whole, does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make
the statements made, in the light of the circumstances under which
such statements were made, not misleading with respect to the period
of time covered by the Company Servicing Information;
Third, Based on my knowledge, all of the Company Servicing
Information required to be provided by the Company under the
Agreement has been provided to the [Depositor] [Master Servicer]
[Securities Administrator] [Trustee];
Fourth, I am responsible for reviewing the activities
performed by the Company as servicer under the Agreement, and based
on my knowledge and the compliance review conducted in preparing the
Compliance Statement and except as disclosed in the Compliance
Statement, the Servicing Assessment or the Attestation Report, the
Company has fulfilled its obligations under the Agreement, in all
material respects; and
Fifth, The Compliance Statement required to be delivered by
the Company pursuant to the Agreement, and the Servicing Assessment
and Attestation Report required to be provided by the Company and by
any Subservicer or Subcontractor pursuant to the Agreement, have been
provided to the [Depositor] [Master Servicer]. Any material
Exh. 7-1
instances of noncompliance described in such reports have been
disclosed to the [Depositor] [Master Servicer]. Any material instance
of noncompliance with the Servicing Criteria has been disclosed in
such reports.
Date: _________________________
_______________________________
[Signature]
[Title]
▇▇▇. ▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
--------------------------------------------------------------
The assessment of compliance to be delivered by [IndyMac Bank, F.S.B] [Subservicer] shall address,
at a minimum, the criteria identified as below as "Applicable Servicing Criteria":
------------------------ -------------------------------------------------------------------- ------------------------
Applicable
Servicing Criteria Servicing Criteria
------------------------ -------------------------------------------------------------------- ------------------------
Reference Criteria
------------------------ -------------------------------------------------------------------- ------------------------
General Servicing Considerations
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance
or other triggers and events of default in accordance with the
transaction agreements.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the third
party's performance and compliance with such servicing activities.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a back-up
servicer for the mortgage loans are maintained.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the
party participating in the servicing function throughout the
reporting period in the amount of coverage required by and otherwise
in accordance with the terms of the transaction agreements.
------------------------ -------------------------------------------------------------------- ------------------------
Cash Collection and Administration
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate
custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such other number of
days specified in the transaction agreements.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to
an investor are made only by authorized personnel.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
transaction agreements.
------------------------ -------------------------------------------------------------------- ------------------------
Exh. 8-1
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Applicable
Servicing Criteria Servicing Criteria
------------------------ -------------------------------------------------------------------- ------------------------
Reference Criteria
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1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of overcollateralization,
are separately maintained (e.g., with respect to commingling of
cash) as set forth in the transaction agreements.
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1122(d)(2)(v) Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction agreements.
For purposes of this criterion, "federally insured depository
institution" with respect to a foreign financial institution means a
foreign financial institution that meets the requirements of Rule
13k-1(b)(1) of the Securities Exchange Act.
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1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized
access.
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1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all asset-backed
securities related bank accounts, including custodial accounts and
related bank clearing accounts. These reconciliations are (A)
mathematically accurate; (B) prepared within 30 calendar days after
the bank statement cutoff date, or such other number of days
specified in the transaction agreements; (C) reviewed and approved
by someone other than the person who prepared the reconciliation;
and (D) contain explanations for reconciling items. These
reconciling items are resolved within 90 calendar days of their
original identification, or such other number of days specified in
the transaction agreements.
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Investor Remittances and Reporting
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1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in the
transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with investors'
or the trustee's records as to the total unpaid principal balance
and number of mortgage loans serviced by the Servicer.
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Exh. 8-2
------------------------ -------------------------------------------------------------------- ------------------------
Applicable
Servicing Criteria Servicing Criteria
------------------------ -------------------------------------------------------------------- ------------------------
Reference Criteria
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance
with timeframes, distribution priority and other terms set forth
in the transaction agreements.
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1122(d)(3)(iii) Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of
days specified in the transaction agreements.
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1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank
statements.
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Pool Asset Administration
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1122(d)(4)(i) Collateral or security on mortgage loans is maintained as required
by the transaction agreements or related mortgage loan documents.
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1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as required by
the transaction agreements
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1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made,
reviewed and approved in accordance with any conditions or
requirements in the transaction agreements.
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1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two business
days after receipt, or such other number of days specified in the
transaction agreements, and allocated to principal, interest or
other items (e.g., escrow) in accordance with the related mortgage
loan documents.
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1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with the
Servicer's records with respect to an obligor's unpaid principal
balance.
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1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's mortgage
loans (e.g., loan modifications or re-agings) are made, reviewed and
approved by authorized personnel in accordance with the transaction
agreements and related pool asset documents.
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Exh. 8-3
------------------------ -------------------------------------------------------------------- ------------------------
Applicable
Servicing Criteria Servicing Criteria
------------------------ -------------------------------------------------------------------- ------------------------
Reference Criteria
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and concluded
in accordance with the timeframes or other requirements established
by the transaction agreements.
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1122(d)(4)(viii) Records documenting collection efforts are maintained during the
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency is
deemed temporary (e.g., illness or unemployment).
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1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage loans
with variable rates are computed based on the related mortgage loan
documents.
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1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or
such other period specified in the transaction agreements; (B)
interest on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or such other
number of days specified in the transaction agreements.
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1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the
servicer at least 30 calendar days prior to these dates, or such
other number of days specified in the transaction agreements.
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1122(d)(4)(xii) Any late payment penalties in connection with any payment to be
made on behalf of an obligor are paid from the servicer's funds
and not charged to the obligor, unless the late payment was due to
the obligor's error or omission.
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Exh. 8-4
------------------------ -------------------------------------------------------------------- ------------------------
Applicable
Servicing Criteria Servicing Criteria
------------------------ -------------------------------------------------------------------- ------------------------
Reference Criteria
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within two
business days to the obligor's records maintained by the servicer,
or such other number of days specified in the transaction
agreements.
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1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements.
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1122(d)(4)(xv) Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
maintained as set forth in the transaction agreements.
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[INDYMAC BANK, F.S.B] [SUBSERVICER]
Date:____________________________________________________
Exh. 8-5