GOLDMAN SACHS MORTGAGE COMPANY
EXECUTION
COPY
▇▇▇▇▇▇▇
▇▇▇▇▇ MORTGAGE COMPANY
Purchaser
and
NATIONAL
CITY MORTGAGE CO.
Company
________________________________________________________________
THIRD
AMENDED AND RESTATED
Dated
as of September 1, 2007
________________________________________________________________
Fixed
and Adjustable Rate Pools
TABLE
OF
CONTENTS
Page
ARTICLE
I
DEFINITIONS
|
Section
1.1
|
Definitions
|
2
|
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS; DELIVERY
OF
DOCUMENTS
|
Section
2.1
|
Conveyance
of Mortgage Loans; Possession of Mortgage Files; Maintenance of
Servicing
Files
|
16
|
|
Section
2.2
|
Books
and Records; Transfers of Mortgage Loans
|
17
|
|
Section
2.3
|
Delivery
of Documents
|
18
|
|
Section
2.4
|
Mortgage
Schedule
|
20
|
|
Section
2.5
|
Examination
of Mortgage Files
|
20
|
|
Section
2.6
|
Representations,
Warranties and Agreements of the Company
|
21
|
|
Section
2.7
|
Representation,
Warranties and Agreement of Purchaser
|
21
|
|
Section
2.8
|
Closing
|
22
|
|
Section
2.9
|
Closing
Documents
|
23
|
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES REMEDIES AND BREACH
|
Section
3.1
|
Company
Representations and Warranties
|
23
|
|
Section
3.2
|
Representations
and Warranties Regarding Individual Mortgage .Loans
|
26
|
|
Section
3.3
|
▇▇▇▇▇▇▇▇▇▇
|
▇▇
|
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
|
Section
4.1
|
Company
to Act as Servicer
|
41
|
|
Section
4.2
|
Liquidation
of Mortgage Loans
|
42
|
|
Section
4.3
|
Collection
of Mortgage Loan Payments
|
43
|
|
Section
4.4
|
Establishment
of and Deposits to Custodial Account
|
43
|
|
Section
4.5
|
Permitted
Withdrawals From Custodial Account
|
45
|
|
Section
4.6
|
Establishment
of and Deposits to Escrow Account
|
46
|
|
Section
4.7
|
Permitted
Withdrawals From Escrow Account
|
47
|
|
Section
4.8
|
Payment
of Taxes, Insurance and Other Charges
|
48
|
|
Section
4.9
|
Protection
of Accounts
|
49
|
|
Section
4.10
|
Maintenance
of Hazard Insurance
|
49
|
|
Section
4.11
|
Maintenance
of Primary Mortgage Insurance Policy; Claims
|
51
|
|
Section
4.12
|
Maintenance
of Mortgage Impairment Insurance
|
52
|
|
Section
4.13
|
Maintenance
of Fidelity Bond and Errors and Omissions Insurance
|
52
|
|
Section
4.14
|
Inspections
|
53
|
|
Section
4.15
|
Restoration
of Mortgaged Property
|
53
|
|
Section
4.16
|
Claims
|
53
|
|
Section
4.17
|
Title,
Management and Disposition of REO Property
|
53
|
|
Section
4.18
|
Real
Estate Owned Reports
|
55
|
|
Section
4.19
|
Liquidation
Reports
|
55
|
|
Section
4.20
|
Reports
of Foreclosures and Abandonments of Mortgaged Property
|
55
|
|
Section
4.21
|
Fair
Credit Reporting Act
|
55
|
ARTICLE
V
PAYMENTS
TO PURCHASER
|
Section
5.1
|
Remittances
|
55
|
|
Section
5.2
|
Statements
to Purchaser
|
56
|
|
Section
5.3
|
Monthly
Advances by Company
|
56
|
ARTICLE
VI
GENERAL
SERVICING PROCEDURES
|
Section
6.1
|
Transfers
of Mortgaged Property
|
57
|
|
Section
6.2
|
Satisfaction
of Mortgages and Release of Mortgage Files
|
58
|
|
Section
6.3
|
Servicing
Compensation
|
58
|
|
Section
6.4
|
Annual
Statement as to Compliance
|
58
|
|
Section
6.5
|
Annual
Independent Public Accountants’ Servicing Report
|
59
|
|
Section
6.6
|
Right
to Examine Company Records
|
59
|
|
Section
6.7
|
Compliance
with REMIC Provisions
|
59
|
ARTICLE
VII
COMPANY
TO COOPERATE
|
Section
7.1
|
Provision
of Information
|
59
|
|
Section
7.2
|
Financial
Statements; Servicing Facility
|
60
|
ARTICLE
VIII
THE
COMPANY
|
Section
8.1
|
Indemnification;
Third Party Claims
|
60
|
|
Section
8.2
|
Merger
or Consolidation of the Company
|
61
|
|
Section
8.3
|
Limitation
on Liability of Company and Others
|
61
|
|
Section
8.4
|
Limitation
on Resignation and Assignment by Company
|
61
|
-2-
ARTICLE
IX
SECURITIZATION
TRANSACTION
|
Section
9.1
|
Cooperation
of Company with a Reconstitution
|
62
|
ARTICLE
X
DEFAULT
|
Section
10.1
|
Events
of Default
|
64
|
|
Section
10.2
|
Waiver
of Defaults
|
66
|
ARTICLE
XI
TERMINATION
|
Section
11.1
|
Termination
|
66
|
|
Section
11.2
|
Termination
Without Cause
|
66
|
|
Section
11.3
|
Termination
With Cause
|
66
|
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
|
Section
12.1
|
Successor
to Company
|
67
|
|
Section
12.2
|
Amendment
|
68
|
|
Section
12.3
|
Governing
Law
|
68
|
|
Section
12.4
|
Duration
of Agreement
|
68
|
|
Section
12.5
|
Notices
|
68
|
|
Section
12.6
|
Severability
of Provisions
|
69
|
|
Section
12.7
|
Relationship
of Parties
|
69
|
|
Section
12.8
|
Execution;
Successors and Assigns
|
69
|
|
Section
12.9
|
Recordation
of Assignments of Mortgage
|
70
|
|
Section
12.10
|
Assignment
by Purchaser
|
70
|
|
Section
12.11
|
Solicitation
of Mortgagor
|
70
|
ARTICLE
XIII
COMPLIANCE
WITH REGULATION AB
|
Section
13.1
|
Intent
of the Parties; Reasonableness
|
70
|
|
Section
13.2
|
Additional
Representations and Warranties of the Company
|
71
|
|
Section
13.3
|
Information
to Be Provided by the Company
|
72
|
|
Section
13.4
|
Servicer
Compliance Statement
|
77
|
|
Section
13.5
|
Report
on Assessment of Compliance and Attestation
|
77
|
|
Section
13.6
|
Use
of Subservicers and Subcontractors
|
78
|
|
Section
13.7
|
Indemnification;
Remedies
|
79
|
EXHIBITS
|
Exhibit
A
|
Mortgage
Loan Schedule
|
-3-
|
Exhibit
B
|
Contents
of Each Mortgage Loan File
|
|
Exhibit
C
|
Form
of Custodial Agreement
|
|
Exhibit
D
|
Form
of Opinion of Counsel
|
|
Exhibit
E
|
Items
to Be Included in Monthly Remittance Advice
|
|
Exhibit
F
|
Form
of Assignment and Recognition Agreement
|
|
Exhibit
G
|
Form
of Seller’s Officer’s Certificate
|
|
Exhibit
H
|
Form
of Annual Certification
|
|
Exhibit
I
|
Form
of Warranty ▇▇▇▇ of Sale
|
|
Exhibit
J
|
Company
Guide
|
|
Exhibit
K
|
Servicing
Criteria to be Addressed in Assessment of
Compliance
|
-4-
This
is a
Third Amended and Restated Flow Seller’s Warranties and Servicing Agreement for
various residential first mortgage loans, dated and effective as of September
1,
2007, and is executed between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, as purchaser
(the
“Purchaser”),
and
National City Mortgage Co., as seller and servicer (the “Company”).
WITNESSETH
WHEREAS,
the Company is engaged in the business of, among other things, making loans
to
individuals, the repayment of which is secured by first lien mortgages on such
individuals’ residences (each, a “Mortgage
Loan”)
and
selling such Mortgage Loans to investors;
WHEREAS,
the Purchaser is engaged in the business of, among other things, purchasing
Mortgage Loans for its own account;
WHEREAS,
the Company has established certain terms, conditions and loan programs, as
described in the Company’s Underwriting Guidelines (the “Company
Guide”)
and
the Purchaser is willing to purchase Mortgage Loans that comply with such terms,
conditions and loan programs. The applicable provisions of the Company Guide
are
attached hereto as Exhibit J;
WHEREAS,
the Purchaser and the Company are parties to that certain Second Amended and
Restated Flow Seller’s Warranties and Servicing Agreement, dated as of
January 1, 2006, as amended by Amendment No. 1, dated as of
July 24, 2006, as amended by Amendment No. 2, dated as of
August 9, 2006, as amended by Amendment No. 3, dated as of
August 19, 2007 (the “Original
Agreement”),
pursuant to which the Company will make Fixed and Adjustable Rate Mortgage
Loans
which meet the applicable provisions of the Company Guide, and the Purchaser
will, from time to time, purchase such Mortgage Loans from the Company, provided
the parties agree on the price, date and other conditions or considerations
as
set forth in this Agreement;
WHEREAS,
the Purchaser and the Company wish to prescribe the terms and manner of purchase
by the Purchaser and sale by the Company of the Fixed and Adjustable Rate
Mortgage Loans, and the management and servicing of such Mortgage Loans by
the
Company, as the servicer, in this Agreement; and
WHEREAS,
at the present time, the Purchaser and the Company desire to amend the Original
Agreement to make certain modifications as set forth herein with respect to
all
Mortgage Loans acquired pursuant to this Agreement or the Original Agreement.
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and
for other good and valuable consideration, the receipt and adequacy of which
is
hereby acknowledged, the Purchaser and the Company agree to amend and restate
this Agreement in its entirety as follows:
ARTICLE
I
DEFINITIONS
Section
1.1. Definitions.
Whenever
used herein, the following words and phrases, unless the content otherwise
requires, shall have the following meanings:
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, those customary 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.
Adjustable
Rate Mortgage Loan:
A
Mortgage Loan purchased pursuant to this Agreement, the Mortgage Interest Rate
of which is adjusted from time to time in accordance with the terms of the
related Mortgage Note.
Affiliate:
With
respect to any specified Person, any other Person controlling or controlled
by
or under common control with such specified Person. For the purposes of this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or
otherwise and the terms “controlling” and “controlled” have meanings correlative
to the foregoing.
Agency
Transfer:
A FNMA
Transfer or a FHLMC Transfer.
Agreement:
This
Third Amended and Restated Flow Seller’s Warranties and Servicing Agreement and
all amendments hereof and supplements hereto.
ALTA:
The
American Land Title Association or any successor thereto.
Appraised
Value:
With
respect to any Mortgaged Property, the lesser of (i) the value thereof as
determined by an appraisal made for the originator of the Mortgage Loan at
the
time of origination of the Mortgage Loan by a Qualified Appraiser and
(ii) the purchase price paid for the related Mortgaged Property by the
Mortgagor with the proceeds of the Mortgage Loan; provided, however, that in
the
case of a Refinanced Mortgage Loan, such value of the Mortgaged Property is
based solely upon the value determined by an appraisal made for the originator
of such Refinanced Mortgage Loan at the time of origination of such Refinanced
Mortgage Loan by a Qualified Appraiser.
Applicable
Law:
All
provisions of statutes, rules and regulations, interpretations and orders of
governmental bodies or regulatory agencies applicable to a Person, and all
orders and decrees of all courts and arbitrators in proceedings or actions
in
which the Person in question is a party.
Assignment
of Mortgage or Assignment:
An
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the sale of the Mortgage to
the
Purchaser or its designated assignee.
-2-
Balloon
Mortgage Loan:
Any
Mortgage Loan (a) that requires only payments of interest until the stated
maturity date of the Mortgage Loan or (b) for which Monthly Payments of
principal (not including the payment due on its stated maturity date) are based
on an amortization schedule that would be insufficient to fully amortize the
principal thereof by the stated maturity date of the Mortgage Loan.
Business
Day:
Any day
other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings
and loan institutions in the states where the parties are located are authorized
or obligated by law or executive order to be closed.
Cash-Out
Refinance:
A
Refinanced Mortgage Loan in which the proceeds received were in excess of the
amount of funds required to repay the principal balance of any existing first
mortgage on the related Mortgaged Property, pay related closing costs and
satisfy any outstanding subordinate mortgages on the related Mortgaged Property
and which provided incidental cash to the related Mortgagor of more than 1%
of
the original principal balance of such Mortgage Loan.
Closing
Date:
Each
date that the Purchaser purchases Mortgage Loans from the Company
hereunder.
Code:
The
Internal Revenue Code of 1986, as it may be amended from time to time or any
successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.
Commitment
Letter:
With
respect to any pool of Mortgage Loans purchased and sold on any Closing Date,
the letter agreement between the Purchaser and the Company (including any
exhibits, schedules and attachments thereto), setting forth the terms and
conditions of such transaction and describing the Mortgage Loans to be purchased
by the Purchaser on such Closing Date. A Commitment Letter may relate to more
than one pool of Mortgage Loans to be purchased on one or more Closing Dates
hereunder.
Commission:
The
United States Securities and Exchange Commission.
Company:
National City Mortgage Co., or its successor in interest or assigns, or any
successor to the Company under this Agreement appointed as herein
provided.
Company
Certification:
The
certification delivered by the Company in a form substantially similar to
Exhibit H of this Agreement.
Company
Employees:
The
meaning assigned to such term in Section 4.13.
Company
Information:
As
defined in Section 13.7(a).
Company
Guide:
As
defined in the third recital to this Agreement.
-3-
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.
Covered
Loan:
A
Mortgage Loan categorized as Covered pursuant to Appendix E of Standard &
Poor’s Glossary.
Custodial
Account:
The
separate account or accounts created and maintained pursuant to
Section 4.4.
Custodial
Agreement:
The
agreement governing the retention of the originals of each Mortgage Note,
Mortgage, Assignment of Mortgage and other Mortgage Loan Documents, a form
of
which is annexed hereto as Exhibit C.
Custodian:
The
custodian under a Custodial Agreement, or its successor in interest or assigns,
or any successor to the Custodian under such Custodial Agreement as provided
therein.
Cut-off
Date:
The
first day of the month in which the respective Closing Date occurs.
Deemed
Material Breach Representation:
Each
representation and warranty identified as such in Section 3.2.
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Determination
Date:
The day
preceding the Remittance Date, or if such day is not a Business Day, the
preceding Business Day.
Due
Date:
The
first day of the month on which the Monthly Payment is due on a Mortgage Loan,
exclusive of any days of grace.
Due
Period:
With
respect to each Remittance Date, the period commencing on the second day of
the
month preceding the month in which such Remittance Date occurs and ending on
(and including) the first day of the month in which such Remittance Date
occurs.
Eligible
Investments:
Any one
or more of the following obligations or securities:
-4-
(a) obligations
of or guaranteed as to principal and interest by FHLMC, FNMA or any agency
or
instrumentality of the United States when such obligations are backed by the
full faith and credit of the United States; provided, however, that such
obligations of FHLMC or FNMA shall be limited to senior debt obligations and
mortgage participation certificates except that investments in mortgage backed
or mortgage participation securities with yields evidencing extreme sensitivity
to the rate of principal payments on the underlying mortgages shall not
constitute Eligible Investments hereunder;
(b) repurchase
agreements on obligations specified in clause (a) maturing not more than one
month from the date of acquisition thereof;
(c) federal
funds, certificates of deposit, demand deposits, time deposits and bankers’
acceptances (which shall each have an original maturity of not more than ninety
(90) days and, in the case of bankers’ acceptances, shall in no event have an
original maturity of more than 365 days or a remaining maturity of more than
thirty (30) days) denominated in United States dollars of any United States
depository institution or trust company incorporated under the laws of the
United States or any state thereof or of any domestic branch of a foreign
depository institution or trust company;
(d) commercial
paper (having original maturities of not more than 365 days) of any corporation
incorporated under the laws of the United States or any state thereof which
is
rated not lower than “P 2” by ▇▇▇▇▇’▇ Investors Service, Inc. and rated not
lower than “A 2” by Standard & Poor’s; and
(e) a
money
market fund;
provided,
however, that no instrument shall be an Eligible Investment if it represents,
either (1) the right to receive only interest payments with respect to the
underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest with respect to such instrument provide a yield to
maturity greater than 120% of the yield to maturity at par of such underlying
obligations.
Errors
and Omissions Insurance Policy:
An
errors and omissions insurance policy to be maintained by the Company pursuant
to Section 4.13.
Escrow
Account:
The
separate account or accounts created and maintained pursuant to
Section 4.6.
Escrow
Payments:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and any
other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage or any other related document.
Event
of Default:
Any one
of the conditions or circumstances enumerated in
Section 10.1.
-5-
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
FDIC:
The
Federal Deposit Insurance Corporation, and its successors.
FHA:
The
Federal Housing Administration, an agency within the United States Department
of
Housing and Urban Development, or any successor thereto and including the
Federal Housing Commissioner and the Secretary of Housing and Urban Development
where appropriate under the FHA Regulations.
FHLMC:
Federal
Home Loan Mortgage Corporation, and its successors.
FHLMC
Transfer:
As
defined in Section 9.1.
Fidelity
Bond:
A
fidelity bond to be maintained by the Company pursuant to
Section 4.12.
FIRREA:
The
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended
and in effect from time to time.
First
Remittance Date:
With
respect to each Closing Date, the Remittance Date occurring in the calendar
month immediately following the month in which such Closing Date
occurs.
Fixed
Rate Mortgage Loan:
A fixed
rate mortgage loan purchased pursuant to this Agreement.
FNMA:
Federal
National Mortgage Association, and its successors.
FNMA
Transfer:
As
defined in Section 9.1.
FNMA
Guides:
The
▇▇▇▇▇▇ Mae Seller’s Guide and the ▇▇▇▇▇▇ ▇▇▇ Servicer’s Guide, as amended or
restated from time to time.
Gross
Margin:
With
respect to each Adjustable Rate Mortgage Loan, the fixed percentage amount
set
forth in the related Mortgage Note which amount is added to the Index in
accordance with the terms of the related Mortgage Note to determine on each
Interest Rate Adjustment Date the Mortgage Interest Rate for such Mortgage
Loan.
High
Cost Loan.
A
Mortgage Loan (a) covered by the Home Ownership and Equity Protection Act of
1994 (“HOEPA”),
(b)
with an “annual percentage rate” or total “points and fees” payable by the
related Mortgagor (as each such term is calculated under HOEPA) that exceed
the
thresholds set forth by HOEPA and its implementing regulations, including 12
C.F.R. § 226.32(a)(1)(i) and (ii), (c) classified as a “high cost home,”
“threshold,” “covered,” “high risk home,” “predatory” or similar loan under any
other applicable state, federal or local law (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees) or (d) a Mortgage Loan categorized as High
Cost pursuant to Appendix E of Standard & Poor’s Glossary. For avoidance of
doubt, the parties agree that this definition shall apply to any law regardless
of whether such law is presently, or in the future becomes, the subject of
judicial review or litigation.
-6-
Home
Loan:
A
Mortgage Loan categorized as Home Loan pursuant to Appendix E of Standard &
Poor’s Glossary.
HUD:
The
Department of Housing and Urban Development, or any federal agency or official
thereof which may from time to time succeed to the functions thereof with regard
to Mortgage Insurance issued by the FHA. The term “HUD,” for purposes of this
Agreement, is also deemed to include subdivisions thereof such as the FHA and
Government National Mortgage Association.
Index:
The
index indicated in the related Mortgage Note for each Adjustable Rate Mortgage
Loan.
Insurance
Proceeds:
Proceeds of any mortgage insurance, title policy, hazard policy or other
insurance policy covering a Mortgage Loan, if any, to the extent such proceeds
are not to be applied to the restoration of the related Mortgaged Property
or
released to the Mortgagor in accordance with the procedures that the Company
would follow in servicing mortgage loans held for its own account.
Interest
Rate Adjustment Date:
With
respect to each Adjustable Rate Mortgage Loan, the date specified in the related
Mortgage Note and the Mortgage Loan Schedule, on which the Mortgage Interest
Rate is adjusted.
Lifetime
Rate Cap:
With
respect to each Adjustable Rate Mortgage Loan, the provision of each Mortgage
Note which provides for an absolute maximum Mortgage Interest Rate thereunder,
as specified for each Mortgage Loan in the Mortgage Loan Schedule. The Mortgage
Interest Rate during the terms of each Mortgage Loan shall not at any time
exceed the Mortgage Interest Rate at the time of origination of such Mortgage
Loan by more than the amount per annum set forth on the Mortgage Loan
Schedule.
Liquidation
Proceeds:
Cash
(other than Insurance Proceeds or Condemnation Proceeds) 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, sale of REO
Property, or otherwise, or the sale of the related Mortgaged Property if the
Mortgaged Property is acquired in satisfaction of the Mortgage
Loan.
LPMI
Fee:
With
respect to each Mortgage Loan which has an LPMI Policy, the portion of the
Mortgage Interest Rate as set forth on the related Mortgage Loan Schedule (which
shall be payable solely from the interest portion of Monthly Payments, Insurance
Proceeds, Condemnation Proceeds or Liquidation Proceeds), which, during such
period prior to the required cancellation of the LPMI Policy, shall be used
to
pay the premium due on the related LPMI Policy.
LPMI
Loan:
Any
Mortgage Loan with respect to which Company is responsible for paying the
premium due on the related LPMI Policy with the proceeds generated by the LPMI
Fee relating to such Mortgage Loan, as set forth on the related Mortgage Loan
Schedule.
-7-
LPMI
Policy:
A
policy of primary mortgage guaranty insurance issued by an insurer acceptable
under the Company Guide and qualified to do business in the jurisdiction where
the Mortgaged Property is located, pursuant to which the related premium is
to
be paid by the Company of the related Mortgage Loan from payments of interest
made by the Mortgagor in an amount as is set forth in the related Mortgage
Loan
Schedule.
Loan-to-Value
Ratio:
With
respect to any Mortgage Loan, as of any date of determination, the ratio
(expressed as a percentage) the numerator of which is the outstanding principal
balance of the Mortgage Loan as of the related Cut off Date (unless otherwise
indicated), and the denominator of which is the lesser of (a) the Appraised
Value of the Mortgaged Property at origination and (b) if the Mortgage Loan
was made to finance the acquisition of the related Mortgaged Property, the
purchase price of the Mortgaged Property.
LTV:
Loan-to-Value Ratio.
Manufactured
Home:
A
single family residential unit that is constructed in a factory in sections
in
accordance with the Federal Manufactured Home Construction and Safety Standards
adopted on June 15, 1976, by the Department of Housing and Urban Development
(“HUD
Code”),
as
amended in 2000, which preempts state and local building codes. Each unit is
identified by the presence of a HUD Plate/Compliance Certificate label. The
sections are then transported to the site and joined together and affixed to
a
pre built permanent foundation (which satisfies the manufacturer’s requirements
and all state, county, and local building codes and regulations). The
manufactured home is built on a non removable, permanent frame chassis that
supports the complete unit of walls, floors, and roof. The underneath part
of
the home may have running gear (wheels, axles, and brakes) that enable it to
be
transported to the permanent site. The wheels and hitch are removed prior to
anchoring the unit to the permanent foundation. The manufactured home must
be
classified as real estate and taxed accordingly. The permanent foundation may
be
on land owned by the mortgager or may be on leased land.
Monthly
Advance:
The
portion of each Monthly Payment that is delinquent with respect to each Mortgage
Loan at the close of business on the Determination Date required to be advanced
by the Company pursuant to Section 5.3 on the Business Day immediately
preceding the Remittance Date of the related month.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage
Loan.
Monthly
Remittance Advice:
The
meaning assigned to such term in Section 5.2.
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
the
Mortgaged Property. With respect to a Co-op Loan, the Security
Agreement.
Mortgage
File:
The
items pertaining to a particular Mortgage Loan referred to in Exhibit B annexed
hereto, and any additional documents required to be added to the Mortgage File
pursuant to this Agreement.
-8-
Mortgage
Interest Rate:
The
annual rate of interest borne on a Mortgage Note in accordance with the
provisions of the Mortgage Note.
Mortgage
Loan:
An
individual Fixed Rate Mortgage Loan or Adjustable Rate Mortgage Loan which
is
the subject of this Agreement, each such Mortgage Loan originally sold and
subject to this Agreement being identified on the Mortgage Loan Schedule, which
Mortgage Loan includes without limitation the Mortgage File, the Monthly
Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, REO Disposition Proceeds, and all other rights, benefits,
proceeds and obligations arising from or in connection with such Mortgage
Loan.
Mortgage
Loan Documents:
With
respect to a Mortgage Loan, the original related Mortgage Note with applicable
addenda and riders, the original related security instrument and the originals
of any required addenda and riders, the original related Assignment and any
original intervening related Assignments, the original related title insurance
policy, and the related appraisal report.
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
Loan Schedule:
A
schedule of Mortgage Loans prepared and identified on each Closing Date, such
schedule setting forth the following information with respect to each Mortgage
Loan: (1) the Company’s Mortgage Loan number; (2) the Mortgagor’s
name; (3) the social security number of the Mortgagor; (4) a code
indicating whether the Mortgagor’s race and/or ethnicity is (i) native
American or Alaskan native, (ii) Asian/Pacific islander, (iii) African
American, (iv) White, (v) Hispanic or Latino, (vi) other
minority, (vii) not provided by the Mortgagor, (viii) not applicable
(if the Mortgagor is an entity) and (ix) unknown or missing; (5) the
address, city, county, state and zip code of the Mortgaged Property; (6) a
code
indicating whether the Mortgagor is self-employed; (7) a code indicating
the occupancy type of the Mortgaged Property (i.e. owner-occupied, investment
property or second home); (8) a code indicating the number and type of
residential units constituting the Mortgaged Property (i.e. single family
residence, two-family residence, three-family residence, four-family residence,
multifamily residence, condominium, manufactured housing, planned unit
development or cooperative stock in a cooperative housing corporation);
(9) a code indicating the purpose of the loan (i.e., purchase, Rate/Term
Refinance or Cash-Out Refinance); (10) the Mortgage Interest Rate as of the
related Cut-off Date; (11) the original principal amount of the Mortgage
Loan; (12) the amount of the Monthly Payment as of the related Cut-off
Date; (13) the original term to maturity; (14) the scheduled maturity
date (and, if different, the stated maturity date indicated on the Mortgage
Note
on its date of origination); (15) the principal balance of the Mortgage
Loan as of the Cut-off Date after deduction of payments of principal due on
or
before the Cut-off Date whether or not collected; (16) the date on which the
first Monthly Payment was due on the Mortgage Loan and, if such date is not
consistent with the Due Date currently in effect, the Due Date;
(17) the last payment date on which a payment was actually applied to the
outstanding principal balance; (18) the Loan-to-Value Ratio;
(19) whether the Mortgage Loan is insured by a Primary Mortgage Insurance
Policy; (20) the certificate number of the Primary Mortgage Insurance
Policy, if applicable; (21) the amount of coverage of the Primary Mortgage
Insurance Policy, if applicable; (22) the CPI twelve month pay string;
(23) a field indicating whether such Mortgage Loan is a Home Loan
(24) a code indicating whether the Mortgage Loan is a Balloon Mortgage
Loan; (25) whether the Mortgage Loan has Monthly Payments that are
interest-only for a period of time, and the interest-only period, if applicable;
(26) Appraised Value; (27) appraisal type; (28) appraisal date;
(29) in connection with a condominium unit, a code indicating whether the
condominium project where such unit is located is low-rise or high-rise;
(30) a code indicating whether the Mortgaged Property is a leasehold
estate; (31) a code indicating the documentation style (i.e. no documents,
full, alternative, reduced, no income/no asset, stated income, no ratio);
(32) the credit risk score (FICO score); (33) the date of origination;
(34) a code indicating whether the Mortgage Loan by
its
original terms or any modifications thereof provides for amortization beyond
its
scheduled maturity date;
(35) with respect to the related Mortgagor, the debt-to-income ratio;
(36) sales price; (37) the product type of Mortgage Loan (i.e., Fixed
Rate, Adjustable Rate); (38) asset verification (Y/N); (39) whether the
Mortgage Loan provides for a Prepayment Penalty; (40) the Prepayment
Penalty period of such Mortgage Loan, if applicable; (41) a description of
the Prepayment Penalty, if applicable; (42) a code indicating whether there
is a simultaneous second; and (43) With respect to each Adjustable Rate
Mortgage Loan, (a) the first Interest Rate Adjustment Date and the Interest
Rate Adjustment Date frequency, (b) the Gross Margin, (c) the Lifetime
Rate Cap under the terms of the Mortgage Note, (d) the minimum Mortgage
Interest Rate under the terms of the Mortgage Note, (e) the Periodic Rate
Cap, (f) the first Interest Rate Adjustment Date immediately following the
related Cut-off Date, and (g) the Index on which the Mortgage Interest Rate
is based, including the methodology for rounding (e.g. rounded upward, if
necessary, to the nearest ten thousandth (.0001)) and the applicable time frame
for determining the Index.
-9-
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage
and riders thereto.
Mortgaged
Property:
With
respect to a Mortgage Loan that is not a Co-op Loan, the Mortgagor’s real
property securing repayment of a related Mortgage Note, consisting of an
unsubordinated estate in fee simple or, with respect to real property located
in
jurisdictions in which the use of leasehold estates for residential properties
is a widely accepted practice, a leasehold estate, in a single parcel or
multiple parcels of real property improved by a Residential Dwelling. With
respect to a Co-op Loan, 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.
Mortgagor:
The
obligor on a Mortgage Note, who is an owner of the Mortgaged Property and the
grantor or mortgagor named in the Mortgage and such grantor’s or mortgagor’s
successors in title to the Mortgaged Property.
OCC:
Office
of the Comptroller of the Currency, or any successor thereto.
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
the President, a Vice President, an Assistant Vice President, the Treasurer,
the
Secretary or one of the Assistant Treasurers or Assistant Secretaries of the
Company, and delivered to the Purchaser as required by this
Agreement.
-10-
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the Company, reasonably
acceptable to the Purchaser.
OTS:
The
Office of Thrift Supervision or any successor thereto.
Periodic
Rate Cap:
With
respect to each Adjustable Rate Mortgage Loan, the provision of each Mortgage
Note which provides for an absolute maximum amount by which the Mortgage
Interest Rate therein may increase or decrease on an Interest Rate Adjustment
Date above or below the Mortgage Interest Rate previously in effect. The
Periodic Rate Cap for each Mortgage Loan is the rate set forth on the Mortgage
Loan Schedule.
Periodic
Rate Floor:
With
respect to each Adjustable Rate Mortgage Loan, the provision of each Mortgage
Note which provides for an absolute maximum amount by which the Mortgage
Interest Rate therein may decrease on an Interest Rate Adjustment Date below
the
Mortgage Interest Rate previously in effect.
Person:
Any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
Predatory
Mortgage Loan:
Any
mortgage loan that is classified as having terms that result in costs to the
Mortgagor in excess of a specified limit pursuant to any federal, state or
local
law or regulation that imposes liability on any purchaser or assignee of such
mortgage loan. Predatory Mortgage Loans shall include, without limitation,
mortgage loans designated as “high cost,” “high-cost home loans,” “covered”
loans, “predatory loans” and any designations of similar import in the
applicable federal, state or local statute.
Prepayment
Penalty:
With
respect to each Mortgage Loan, the amount of any premium or penalty required
to
be paid by the Mortgagor if the Mortgagor prepays such Mortgage Loan as provided
in the related Mortgage Note or Mortgage.
Primary
Mortgage Insurance Policy:
Each
policy of primary mortgage insurance represented to be in effect pursuant to
Section 3.2(xxxii), or any replacement policy therefor obtained by the
Servicer pursuant to Section 4.8.
Prime
Rate:
The
prime rate announced to be in effect from time to time, as published as the
average rate in The Wall Street Journal.
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date, including any Prepayment Penalty or premium
thereon and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent
to
the month of prepayment.
Principal
Prepayment Period:
With
respect to each Remittance Date, the period commencing on the first day of
the
month preceding the month in which such Remittance Date occurs, and ending
on
the last day of such month.
-11-
Purchase
Price:
The
purchase price specified in the Commitment Letter.
Purchaser:
▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Company, or its successor in interest or any successor to the
Purchaser under this Agreement as herein provided.
Qualified
Appraiser:
An
appraiser, duly appointed by the Company, who had no interest, direct or
indirect, in the Mortgaged Property or in any loan made on the security thereof,
and whose compensation was not affected by the approval or disapproval of the
Mortgage Loan, and such appraiser and the appraisal made by such appraiser
both
satisfied the requirements of Title XI of FIRREA and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified
Correspondent:
Any
Person from which the Company purchased Mortgage Loans, provided that the
following conditions are satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement between the Company and such Person that contemplated
that such Person would underwrite mortgage loans from time to time, for sale
to
the Company, in accordance with underwriting guidelines designated by the
Company (“Designated
Guidelines”)
or
guidelines that do not vary materially from such Designated Guidelines; (ii)
such Mortgage Loans were in fact underwritten as described in clause (i) above
and were acquired by the Company within one hundred eighty (180) days after
origination; (iii) either (x) the Designated Guidelines were, at the time such
Mortgage Loans were originated, used by the Company in origination of mortgage
loans of the same type as the Mortgage Loans for the Company’s own account or
(y) the Designated Guidelines were, at the time such Mortgage Loans were
underwritten, designated by the Company on a consistent basis for use by lenders
in originating mortgage loans to be purchased by the Company; and (iv) the
Company employed, at the time such Mortgage Loans were acquired by the Company,
pre-purchase or post-purchase quality assurance procedures (which may involve,
among other things, review of a sample of mortgage loans purchased during a
particular time period or through particular channels) designed to ensure that
Persons from which it purchased mortgage loans properly applied the underwriting
criteria designated by the Company. For the avoidance of doubt, a “Qualified
Correspondent” includes a “table broker” or mortgage lender that originates
loans underwritten and funded by the Company or an Affiliate of the Company
to
the Designated Guidelines.
Qualification
Defect:
With
respect to a Mortgage Loan, (a) a defective document in the Mortgage File,
(b)
the absence of a document in the Mortgage File, or (c) the breach of any
representation, warranty or covenant with respect to the Mortgage Loan made
by
the Company, but, in each case, only if the affected Mortgage Loan would cease
to qualify as a “qualified mortgage” for purposes of the REMIC Provisions.
Qualified
Depository:
A
federal or state chartered depository institution, the deposits in which are
insured by the FDIC to the applicable limits and the short-term unsecured debt
obligations of which (or, in the case of a depository institution that is a
subsidiary of a holding company, the short-term unsecured debt obligations
of
such holding company) are rated A-1 by Standard & Poor’s Ratings Group and
Prime-1 by ▇▇▇▇▇’▇ Investors Service, Inc. (or a comparable rating if another
rating agency is specified by the Purchaser by written notice to the Company)
at
the time any deposits are held on deposit therein; provided however,
that in
the event any of the Mortgage Loans are subject to a Securitization Transaction,
the Company agrees that the holding company or other entity which maintains
any
accounts subject to this definition, shall satisfy the rating requirements
established by any Rating Agency which rates securities issued as part of the
Securitization Transaction.
-12-
Qualified
Insurer:
A
mortgage guaranty insurance company duly authorized and licensed where required
by law to transact mortgage guaranty insurance business and approved as an
insurer by FNMA.
Rate/Term
Refinance:
A
Refinanced Mortgage Loan, in which the proceeds received were not in excess
of
the amount of funds required to repay the principal balance of any existing
first mortgage loan on the related Mortgaged Property, pay related closing
costs
and satisfy any outstanding subordinate mortgages on the related Mortgaged
Property and did not provide incidental cash to the related Mortgagor of more
than one percent (1%) of the original principal balance of such Mortgage
Loan.
Rating
Agency:
▇▇▇▇▇’▇
Investors Service, Inc., Standard & Poor’s Ratings Group, division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Fitch, Inc (doing business as “Fitch
Ratings”),
or
any other nationally recognized statistical credit rating agency rating any
security issued in connection with any Securitization Transaction.
Reconstitution:
Any
Securitization Transaction or Whole Loan Transfer.
Reconstitution
Agreement:
Any
servicing agreement relating to a Reconstitution.
Reconstitution
Date:
The
date on which any or all of the Mortgage Loans serviced under this Agreement
shall be reconstituted as part of a Securitization Transaction or Whole Loan
Transfer pursuant to Section 9.1 hereof. The Reconstitution Date shall be
such date the Purchaser shall designate in writing to the Company.
Refinanced
Mortgage Loan:
A
Mortgage Loan the proceeds of which were not used to purchase the related
Mortgaged Property.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506-1,631 (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.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of
the Code.
REMIC
Provisions:
Provisions of the federal income tax law relating to a REMIC, which appear
at
Section 860A through 860G of Subchapter M of Chapter 1, Subtitle A of the
Code, and related provisions, and regulations, rulings or pronouncements
promulgated thereunder, as the foregoing may be in effect from time to
time.
-13-
Remittance
Advice Date:
The
10th Business Day of each month or, if such 10th day is not a Business Day,
the
first Business Day immediately succeeding such date.
Remittance
Date:
The
18th day (or if such 18th day is not a Business Day, the first Business Day
immediately preceding such date) of any month, beginning with the First
Remittance Date.
REO
Disposition:
The
final sale by the Company of any REO Property.
REO
Disposition Proceeds:
All
amounts received with respect to an REO Disposition pursuant to
Section 4.16.
REO
Property:
A
Mortgaged Property acquired by the Company on behalf of the Purchaser through
foreclosure or by deed in lieu of foreclosure, as described in
Section 4.16.
Repurchase
Price:
Unless
agreed otherwise by the Purchaser and the Company (including without limitation
as set forth in the Commitment Letter), a price equal to (i) the Scheduled
Principal Balance of the Mortgage Loan plus
(ii)
interest on such Scheduled Principal Balance at the Mortgage Loan Remittance
Rate from the date on which interest has last been paid and distributed to
the
Purchaser to the last day of the month of repurchase, less
amounts
received or advanced in respect of such repurchased Mortgage Loan which are
being held in the Custodial Account for distribution in the month of repurchase,
to the extent such amounts are actually paid to the Purchaser upon the
repurchase of the related Mortgage Loan plus
(iii)
any costs and damages, including reasonable attorneys’ fees and costs, incurred
by the trust in the applicable Securitization Transaction in connection with
any
violation by the Mortgage Loan of any predatory or abusive lending
law.
Residential
Dwelling:
Any one
of the following: (i) a detached one family dwelling, (ii) a detached
two to four family dwelling, (iii) a one family dwelling unit in a
condominium project, or (iv) a one family dwelling in a planned unit
development, none of which is a co operative, mobile or Manufactured
Home.
Scheduled
Principal Balance:
As to
each Mortgage Loan, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before
such
date, whether or not received, minus (ii) all amounts previously collected
by
the Company as servicer hereunder or advanced and distributed to the Purchaser
with respect to the related Mortgage Loan representing payments or recoveries
of
principal or advances made in lieu thereof.
Securities
Act:
The
Securities Act of 1933, as amended.
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.
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 portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage Loans. No
Securitization shall include less than 10 Mortgage Loans without the consents
of
the Seller which shall not be unreasonably withheld.
-14-
Servicer:
As
defined in Section 13.3(c).
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses other
than Monthly Advances (including reasonable attorney’s fees and disbursements)
incurred in the performance by the Company of its servicing obligations,
including, but not limited to, the cost of (a) the preservation, restoration
and
protection of the Mortgaged Property, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of
any
REO Property and (d) compliance with the obligations under
Section 4.8.
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the per annum fee the Purchaser
shall pay to the Company, which shall, for a period of one full month, be equal
to one-twelfth of the product of (a) the Servicing Fee Rate and (b) the
Scheduled Principal Balance of such Mortgage Loan. Such fee shall be payable
monthly, computed on the basis of the same principal amount and same period
for
which any related interest payment on a Mortgage Loan is computed. 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 4.5) of such Monthly Payment collected by the Company, or as
otherwise provided under Section 4.5.
Servicing
Fee Rate:
0.25%
per annum for each Mortgage Loan.
Servicing
File:
With
respect to each Mortgage Loan, the file retained by the Company 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 in the Custodial
Agreement the originals of which are delivered to the Custodian pursuant to
Section 2.3.
Sponsor:
The
sponsor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Standard &
Poor’s:
Standard & Poor’s Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies Inc., and any successor thereto.
Standard
& Poor’s Glossary:
The
Standard & Poor’s LEVELS® Glossary, as may be in effect from time to
time.
Static
Pool Information:
Static
pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation
AB.
-15-
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 Company or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Company under this Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB;
provided, however, that the term “Subservicer” shall not include any master
servicer, or any special servicer engaged by a Depositor, Purchaser or investor
in a Securitization Transaction, nor any “back-up servicer” or trustee
performing servicing functions on behalf of a Securitization
Transaction.
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, that originated Mortgage Loans
acquired by the Company and shall not include a mortgage broker that does not
fund loans.
Warranty
▇▇▇▇ of Sale:
A
warranty ▇▇▇▇ of sale with respect to the Mortgage Loans purchased on a Closing
Date in the form annexed hereto as Exhibit I.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans, other than a
Securitization Transaction. No Whole Loan Transaction shall include less than
10
Mortgage Loans without the consents of the Seller which shall not be
unreasonably withheld.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS; DELIVERY
OF
DOCUMENTS
Section
2.1. Conveyance
of Mortgage Loans; Possession of Mortgage Files; Maintenance of Servicing
Files.
Company
agrees to sell and Purchaser agrees to purchase, from time to time, those
certain Mortgage Loans identified in a Mortgage Loan Schedule, at the price
and
on the terms set forth herein and in the related Commitment Letter. The
Purchaser, on any Closing Date, shall be obligated to purchase only such
Mortgage Loans set forth in the applicable Mortgage Loan Schedule, subject
to
the terms and conditions of this Agreement and the related Commitment Letter.
Purchaser
will purchase Mortgage Loan(s) from the Company on such Closing Dates as may
be
agreed upon by the Purchaser and the Company. The closing shall, at Purchaser’s
option be either: by telephone, confirmed by letter or wire as the parties
shall
agree; or conducted in person at such place, as the parties shall agree. On
the
Closing Date and subject to the terms and conditions of this Agreement, the
Company will sell, transfer, assign, set over and convey to the Purchaser,
without recourse except as set forth in this Agreement, and the Purchaser will
purchase, all of the right, title and interest of the Company in and to the
Mortgage Loans being conveyed by it hereunder, as identified on the Mortgage
Loan Schedule.
-16-
On
the
Closing Date and in accordance with the terms herein, the Purchaser will pay
to
the Company, by wire transfer of immediately available funds, the Purchase
Price, together with interest, if any, accrued from the Cut-off Date through
the
day immediately preceding the Closing Date, according to the instructions to
be
provided by the Company. The Company, simultaneously with the payment of the
Purchase Price, shall execute and deliver to the Purchaser a Warranty ▇▇▇▇
of
Sale with respect to the Mortgage Loans in the form annexed hereto as Exhibit
I.
The
principal balance of each Mortgage Loan as of the Cut-off Date shall be
determined after application of payments of principal due on or before the
Cut-off Date whether or not collected. Therefore, payments of scheduled
principal and interest prepaid for a Due Date beyond the Cut-off Date shall
not
be applied to the principal balance as of the Cut-off Date. Such prepaid amounts
(minus
interest
at the Servicing Fee Rate) shall be the property of the Purchaser. The Company
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by
the
Company to the Purchaser, and shall remit such amounts as provided in
Section 5.1.
Pursuant
to Section 2.3, the Company shall deliver the Mortgage Loan Documents to
the Custodian. The contents of each Mortgage File not delivered to the Custodian
are and shall be held in trust by the Company for the benefit of the Purchaser
as the owner thereof. The Company shall maintain a Servicing File consisting
of
a copy of the contents of each Mortgage File and the originals of the documents
in each Mortgage File not delivered to the Custodian. The possession of each
Servicing File by the Company is at the will of the Purchaser for the sole
purpose of servicing the related Mortgage Loan, and such retention and
possession by the Company is in a custodial capacity only. Upon the sale of
the
Mortgage Loans the ownership of each Mortgage Note, the related Mortgage and
the
related Mortgage File and Servicing File shall vest immediately in the
Purchaser, and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Company shall vest immediately in the Purchaser and shall be retained and
maintained by the Company, in trust, at the will of the Purchaser and only
in
such custodial capacity. The Company shall release its custody of the contents
of any Servicing File only in accordance with written instructions from the
Purchaser, unless such release is required as incidental to the Company’s
servicing of the Mortgage Loans or is in connection with a repurchase of any
Mortgage Loan pursuant to Sections 2.3, 3.3 or 6.2.
Section
2.2. Books
and Records; Transfers of Mortgage Loans.
From
and
after the sale of the Mortgage Loans to the Purchaser all rights arising out
of
the Mortgage Loans including but not limited to all funds received on or in
connection with the Mortgage Loans, shall be received and held by the Company
in
trust for the benefit of the Purchaser as owner of the Mortgage Loans, and
the
Company shall retain record title to the related Mortgages for the sole purpose
of facilitating the servicing and the supervision of the servicing of the
Mortgage Loans.
The
sale
of each Mortgage Loan shall be reflected on the Company’s balance sheet and
other financial statements as a sale of assets by the Company. The Company
shall
be responsible for maintaining, and shall maintain, a complete set of books
and
records for each Mortgage Loan which shall be marked clearly to reflect the
ownership of each Mortgage Loan by the Purchaser. In particular, the Company
shall maintain in its possession, available for inspection by the Purchaser,
or
its designee, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of FNMA or FHLMC, including but not limited to documentation as
to
the method used in determining the applicability of the provisions of the Flood
Disaster Protection Act of 1973, as amended, to the Mortgaged Property,
documentation evidencing insurance coverage and eligibility of any condominium
project for approval by FNMA or FHLMC, and periodic inspection reports as
required by Section 4.13. To the extent that original documents are not
required for purposes of realization of Liquidation Proceeds or Insurance
Proceeds, documents maintained by the Company may be in the form of microfilm
or
microfiche or such other reliable means of recreating original documents,
including but not limited to, optical imagery techniques so long as the Company
complies with the requirements of the FNMA or FHLMC Selling and Servicing Guide,
as amended from time to time.
-17-
The
Company shall maintain with respect to each Mortgage Loan and shall make
available for inspection by any Purchaser or its designee the related Servicing
File during the time the Purchaser retains ownership of a Mortgage Loan and
thereafter in accordance with Applicable Law.
The
Company shall keep at its servicing office books and records in which, subject
to such reasonable regulations as it may prescribe, the Company shall note
transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made unless
such transfer is in compliance with the terms hereof. For the purposes of this
Agreement, the Company shall be under no obligation to deal with any person
with
respect to this Agreement or the Mortgage Loans unless the books and records
show such person as the owner of the Mortgage Loan. The Purchaser may, subject
to the terms of this Agreement, sell and transfer one or more of the Mortgage
Loans, provided,
however,
that in
no event shall there be more than four Persons at any given time having the
status of “Purchaser” hereunder. The Purchaser also shall advise the Company of
the transfer. Upon receipt of notice of the transfer, the Company shall ▇▇▇▇
its
books and records to reflect the ownership of the Mortgage Loans of such
assignee, and shall release the previous Purchaser from its obligations
hereunder with respect to the Mortgage Loans sold or transferred. If the Company
receives notification of a transfer less than five (5) Business Days before
the
monthly Determination Date, the Company’s duties to remit and report to the new
purchaser(s) as required by Section 5 shall begin with the first
Determination Date after the Reconstitution Date.
Section
2.3. Delivery
of Documents.
Pursuant
to the Custodial Agreement delivered to the Purchaser on or before a Closing
Date, the Company shall deliver and release to the Custodian those Mortgage
Loan
Documents as required by the Custodial Agreement and by this Agreement with
respect to each Mortgage Loan being transferred to the Purchaser on such Closing
Date.
The
Custodian shall certify its receipt of all such Mortgage Loan Documents required
to be delivered pursuant to the Custodial Agreement. The Company will be
responsible for the Custodian’s fees and expenses with respect to the delivery
and certification of those Mortgage Loan Documents required to be delivered
pursuant to the Custodial Agreement. The Company will be responsible for the
fees and expenses related to the recording of the initial Assignments of
Mortgage (including any fees and expenses related to any preparation and
recording of any intervening or prior assignments of the Mortgage Loans to
the
Company or to any prior owners of or mortgagees with respect to the Mortgage
Loans). The Purchaser will be responsible for the Custodian’s fees and expenses
with respect to the initial inventory and maintenance of the Mortgage Loans
on
or after the Closing Date, including the costs associated with clearing
exceptions.
-18-
Within
90
days after each Closing Date, the Company shall deliver to the Custodian each
of
the documents described in Exhibit B not delivered pursuant to the Agreement
with respect to the related Mortgage Loans.
The
Company shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.1 or 6.1 within one week of their
execution, provided,
however,
that
the Company shall provide the Custodian with a certified true copy of any such
document submitted for recordation within ten (10) days of its execution, and
shall provide the original of any document submitted for recordation or a copy
of such document certified by the appropriate public recording office to be
a
true and complete copy of the original within 60 days of its submission for
recordation.
In
the
event the public recording office is delayed in returning any original document,
the Company shall deliver to the Custodian within 240 days of its submission
for
recordation, a copy of such document and an Officer’s Certificate, which shall
(i) identify the recorded document; (ii) state that the recorded document has
not been delivered to the Custodian due solely to a delay by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will
be
delivered to the Custodian. The Company will be required to deliver the document
to the Custodian by the date specified in (iv) above. An extension of the date
specified in (iv) above may be requested from the Purchaser, which consent
shall
not be unreasonably withheld.
Notwithstanding
the foregoing, if the originals or certified copies required in this
Section 2.3 are not delivered as required within 90 days following the
Closing Date or as otherwise extended as set forth above, the related Mortgage
Loan shall, upon request of the Purchaser, be repurchased by the Company in
accordance with Section 3.3 hereof; provided,
however,
that
the foregoing repurchase obligation shall not apply in the event the Company
cannot deliver such items due to a delay caused by the recording office in
the
applicable jurisdiction; provided
that the
Company shall deliver instead a recording receipt of such recording office
or,
if such recording receipt is not available, an Officer’s Certificate from the
Company confirming that such documents have been accepted for recording. Any
such document shall be delivered to the Purchaser or its designee promptly
upon
receipt thereof from the related recording office.
If,
subsequent to the related Closing Date, the Company, the Purchaser or the
Custodian finds any document or documents constituting a part of a Mortgage
File
pertaining to a Mortgage Loan to be defective (or missing) in any material
respect, and such defect or missing document materially and adversely affects
the value of the related Mortgage Loan or the interests of the Purchaser
therein, the party discovering such defect shall promptly so notify the Company.
The Company shall have a period of 90 days after receipt of such written notice
within which to correct or cure any such defect. The Company hereby covenants
and agrees that, if any material defect cannot be corrected or cured, the
Company will, upon the expiration of the applicable cure period described above,
repurchase the related Mortgage Loan in the manner set forth in
Section 3.3; provided,
however,
that
with respect to any Mortgage Loan, if such defect constitutes a Qualification
Defect, any such repurchase must take place within 75 days of the date such
defect is discovered.
-19-
Notwithstanding
the foregoing, with respect to a Mortgage Loan, if, at the end of such 90-day
period, the Company delivers an Officer’s Certificate to the Purchaser
certifying that the Company is using good faith efforts to correct or cure
such
defect and identifying progress made, then the Purchaser shall grant the Company
an extension to correct or cure such defect. The extension shall not extend
beyond (1) the date that is 75 days after the date the defect is discovered,
or,
(2) if the defect is not a Qualification Defect (as evidenced by an Opinion
of
Counsel), the date that is 30 days beyond the original 90-day cure period.
If
the defect is not a Qualification Defect, additional 30-day extensions may
be
obtained pursuant to the same procedure, as long as the Company demonstrates
continued progress toward a correction or cure; provided
that no
extension shall be granted beyond 180 days from the date on which the Company
received the original notice of the defect.
Notwithstanding
the foregoing, with respect to a Mortgage Loan, the failure of the Purchaser
to
notify the Company of any defective or missing document in a Mortgage File
within such 90-day period, or the failure of the Purchaser to require the
Company to cure or repurchase the related Mortgage Loan upon expiration of
such
90-day period, shall not constitute a waiver of its rights hereunder, including
the rights with respect to a Mortgage Loan, to require the Company to repurchase
the affected Mortgage Loan and the right to indemnification pursuant to
Section 3.3 hereof.
Section
2.4. Mortgage
Schedule.
The
Company shall provide the Purchaser with certain information constituting a
listing of the Mortgage Loans to be purchased under this Agreement (the
“Mortgage
Loan Schedule”)
on
each Closing Date substantially in the form attached hereto as Exhibit A. Each
Mortgage Loan Schedule shall conform to the definition of “Mortgage Loan
Schedule” hereunder.
Section
2.5. Examination
of Mortgage Files.
Prior
to
each Closing Date, the Company shall (a) deliver to the Purchaser in escrow,
for
examination, the Mortgage File for each Mortgage Loan to be transferred on
such
Closing Date, including a copy of the Assignment of Mortgage, pertaining to
each
Mortgage Loan, or (b) make the Mortgage Files available to the Purchaser for
examination at the Company’s offices or such other location as shall otherwise
be agreed upon by the Purchaser and the Company. Such examination may be made
by
the Purchaser, or by any prospective purchaser of the Mortgage Loans from the
Purchaser, at any time before or after the related Closing Date upon prior
reasonable notice to the Company. The fact that the Purchaser or any prospective
purchaser of the Mortgage Loans has conducted or has failed to conduct any
partial or complete examination of the Mortgage Files shall not affect the
Purchaser’s (or any of its successor’s) rights to demand repurchase,
substitution or other relief as provided under this Agreement.
-20-
Section
2.6. Representations,
Warranties and Agreements of the Company.
The
Company agrees and acknowledges that it shall, as a condition to the
consummation of the transactions contemplated hereby, make the representations
and warranties specified in Sections 3.1 and 3.2 as of the Closing Date for
the related Mortgage Loans. The Company, without conceding that the Mortgage
Loans are securities, hereby makes the following additional representations,
warranties and agreements which shall be deemed to have been made as of the
Closing Date for the related Mortgage Loans:
(i) neither
the Company nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of any Mortgage Loans, any interest
in
any Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security with, any person in any manner, or made
any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act or which would render the disposition of any
Mortgage Loans a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will it act, nor has it authorized or will
it
authorize any person to act, in such manner with respect to the Mortgage Loans;
and
(ii) the
Company has not dealt with any broker or agent or anyone else who might be
entitled to a fee or commission in connection with this transaction other than
the Purchaser.
Section
2.7. Representation,
Warranties and Agreement of Purchaser.
The
Purchaser, without conceding that the Mortgage Loans are securities, hereby
makes the following representations, warranties and agreements, which shall
have
been deemed to have been made as of the Closing Date for the related Mortgage
Loans:
(i) the
Purchaser understands that the Mortgage Loans have not been registered under
the
Securities Act or the securities laws of any state;
(ii) the
Purchaser is acquiring the Mortgage Loans for its own account only and not
for
any other person;
(iii) the
Purchaser considers itself a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
(iv) the
Purchaser has been duly organized and is validly existing as a limited
partnership in good standing under the laws of the State of New York with full
power and authority (corporate and other) to enter into and perform its
obligations under this Agreement;
(v) this
Agreement has been duly executed and delivered by the Purchaser, and, assuming
due authorization, execution and delivery by each of the other parties hereto,
constitutes a legal, valid, and binding agreement of the Purchaser, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting creditors’ rights
generally and to general principles of equity regardless of whether enforcement
is sought in a proceeding in equity or at law;
-21-
(vi) the
execution, delivery and performance by the Purchaser of this Agreement and
the
consummation of the transactions contemplated hereby do not require the consent
or approval of, the giving of notice to, the registration with, or the taking
of
any other action in respect of, any state, federal or other governmental
authority or agency, except such as has been obtained, given, effected or taken
prior to the date thereof;
(vii) the
execution and delivery of this Agreement have been duly authorized by all
necessary partnership action on the part of the Purchaser; neither the execution
and delivery by the Purchaser of this Agreement, nor the consummation by the
Purchaser of the transactions herein contemplated, nor compliance by the
Purchaser with the provisions hereof, will conflict with or result in a breach
of, or constitute a default under, any of the provisions of the governing
documents of the Purchaser or any law, governmental rule or regulation or any
material judgment, decree or order binding on the Purchaser or any of its
properties, or any of the provisions of any material indenture, mortgage, deed
of trust, contract or other instrument to which the Purchaser is a party or
by
which it is bound;
(viii) there
are
no actions, suits or proceedings pending or, to the knowledge of the Purchaser,
threatened, before or by any court, administrative agency, arbitrator or
governmental body (A) with respect to any of the transactions contemplated
by
this Agreement or (B) with respect to any other matter that in the judgment
of
the Purchaser will be determined adversely to the Purchaser and will if
determined adversely to the Purchaser materially adversely affect its ability
to
perform its obligations under this Agreement; and
(ix) except
for the sale to the Company, the Purchaser has not assigned or pledged any
Mortgage Note or the related Mortgage or any interest or participation
therein.
Section
2.8. Closing.
The
closing for the purchase and sale of each pool of Mortgage Loans shall take
place on the related Closing Date. At the Purchaser’s option, each closing shall
be either: by telephone, confirmed by letter or wire as the parties shall agree;
or conducted in person, at such place as the parties shall agree.
Each
closing shall be subject to each of the following conditions:
(i) all
of
the representations and warranties of the Company under this Agreement shall
be
true and correct as of the related Closing Date and no event shall have occurred
which, with notice or the passage of time, would constitute a default under
this
Agreement;
-22-
(ii) the
Purchaser shall have received, or the Purchaser’s attorneys shall have received
in escrow, all Closing Documents for the related Mortgage Loans as specified
in
Section 2.9 of this Agreement, in such forms as are agreed upon and
acceptable to the Purchaser, duly executed by all signatories other than the
Purchaser as required pursuant to the respective terms thereof;
(iii) the
Company shall have delivered and released to the Custodian all documents
required pursuant to this Agreement and the Custodial Agreement,
and
(iv) all
other
terms and conditions of this Agreement shall have been complied
with.
Subject
to the foregoing conditions, the Purchaser shall pay to the Company on each
Closing Date the Purchase Price for the related Mortgage Loans by wire transfer
of immediately available funds to the account designated by the
Company.
Section
2.9. Closing
Documents.
With
respect to each pool of Mortgage Loans, the Closing Documents shall consist
of
fully executed originals of the following documents:
(i) this
Agreement, in two counterparts;
(ii) the
related Custodial Agreement, dated as of the related Cut-off Date, in three
counterparts, in the form attached as Exhibit C to this Agreement;
(iii) the
related Mortgage Loan Schedule, one copy to be attached to each counterpart
of
this Agreement, and to each counterpart of the related Custodial Agreement,
as
the Mortgage Loan Schedule thereto;
(iv) a
Receipt
and Certification, as required under the Custodial Agreement;
(v) an
officer’s certificate of the Company substantially in the form of Exhibit G
attached hereto; and
(vi) an
Opinion of Counsel of the Company, in the form of Exhibit D hereto.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES REMEDIES AND BREACH
Section
3.1. Company
Representations and Warranties.
The
Company hereby represents and warrants to the Purchaser that, as of each Closing
Date:
(a) Due
Organization and Authority.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Ohio as all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good standing
in each state where a Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the type
conducted by the Company, and in any event the Company is in compliance with
the
laws of any such state to the extent necessary to ensure the enforceability
of
the related Mortgage Loan and the servicing of such Mortgage Loan in accordance
with the terms of this Agreement; the Company has the full 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 of transfer to be delivered pursuant to this Agreement) by
the
Company and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Company; and all requisite corporate action has
been taken by the Company to make this Agreement valid and binding upon the
Company in accordance with its terms;
-23-
(b) Ordinary
Course of Business.
The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Company, which is in the business of selling
and servicing loans, and the transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Company pursuant to this Agreement are not
subject to the bulk transfer or any similar statutory provisions in effect
in
any applicable jurisdiction;
(c) No
Conflicts.
Neither
the execution and delivery of this Agreement, the acquisition of the Mortgage
Loans by the Company, the sale of the Mortgage Loans to the Purchaser or the
transactions contemplated hereby, nor the fulfillment of or compliance with
the
terms and conditions of this Agreement will conflict with or result in a breach
of any of the terms, articles of incorporation or by-laws or any legal
restriction or any agreement or instrument to which the Company is now a party
or by which it is bound, or constitute a default or result in the violation
of
any law, rule, regulation, order, judgment or decree to which the Company or
its
property is subject, or impair the ability of the Purchaser to realize on the
Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Ability
to Service.
The
Company is an approved seller/servicer of residential mortgage loans for FNMA
and FHLMC, with the facilities, procedures, and experienced personnel necessary
for the sound servicing of mortgage loans of the same type as the Mortgage
Loans. The Company is in good standing to sell mortgage loans to and service
mortgage loans for FNMA and FHLMC, and no event has occurred, including but
not
limited to a change in insurance coverage, which would make the Company unable
to comply with FNMA or FHLMC eligibility requirements or which would require
notification to FNMA or FHLMC; The Company is duly qualified, licensed,
registered and otherwise authorized under all applicable federal, state and
local laws, and regulations, if applicable, meets the minimum capital
requirements set forth by HUD, the OTS, the OCC or the FDIC, if applicable,
and
is in good standing to enforce, originate, sell mortgage loans to, and service
mortgage loans in the jurisdiction wherein the Mortgaged Properties are
located;
-24-
(e) Reasonable
Servicing Fee.
The
Company acknowledges and agrees that the Servicing Fee represents reasonable
compensation for performing such services and that the entire Servicing Fee
shall be treated by the Company, for accounting and tax purposes, as
compensation for the servicing and administration of the Mortgage Loans pursuant
to this Agreement;
(f) Ability
to Perform.
The
Company does not believe, nor does it have any reason or cause to believe,
that
it cannot perform each and every covenant contained in this Agreement. The
Company is solvent and the sale of the Mortgage Loans will not cause the Company
to become insolvent. The sale of the Mortgage Loans is not undertaken to hinder,
delay or defraud any of the Company’s creditors;
(g) No
Litigation Pending.
There
is
no action, suit, proceeding or investigation pending or threatened against
the
Company which, either in any one instance or in the aggregate, may result in
any
material adverse change in the business, operations, financial condition,
properties or assets of the Company, or in any material impairment of the right
or ability of the Company to carry on its business substantially as now
conducted, or lead to any material liability on the part of the Company, or
which would draw into question the validity of this Agreement or the Mortgage
Loans or of any action taken or to be contemplated herein, or which would be
likely to impair materially the ability of the Company to perform under the
terms of this Agreement;
(h) No
Consent Required.
No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Company
of
or compliance by the Company with this Agreement or the sale of the Mortgage
Loans as evidenced by the consummation of the transactions contemplated by
this
Agreement, or if required, such approval has been obtained prior to the Closing
Date;
(i) 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;
(j) Sale
Treatment.
The
Company has determined that the disposition of the Mortgage Loans pursuant
to
this Agreement will be afforded sale treatment for accounting and tax
purposes;
(k) No
Material Change.
-25-
There
has
been no material adverse change in the business, operations, financial condition
or assets of the Company since the date of the Company’s most recent financial
statements; and
(l) No
Brokers’ Fees.
The
Company has not dealt with any broker, investment banker, agent or other Person
that may be entitled to any commission or compensation in the connection with
the sale of the Mortgage Loans.
Section
3.2. Representations
and Warranties Regarding Individual Mortgage .Loans
As
to
each Mortgage Loan, the Company hereby represents and warrants to the Purchaser
that as of the related Closing Date (except as set forth in (i)
below):
(i) Mortgage
Loans as Described.
The
information set forth in the Mortgage Loan Schedule is true and correct as
of
the related Cut-off Date.
(ii) Payment
History.
All
payments required to be made up to the related Cut-off Date for each Mortgage
Loan under the terms of the Mortgage Note have been made and credited. No
payment under any Mortgage Loan has been 30 days delinquent more than one time
within twelve months prior to the related Closing Date;
(iii) No
Outstanding Charges.
There
are
no defaults by the Company or the Mortgagor in complying with the terms of
the
Mortgage Note or Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground
rents
which previously became due and owing have been paid, or an escrow of funds
has
been established for every such item which remains unpaid and which has been
assessed but is not yet due and payable;
(iv) Original
Terms Unmodified.
The
terms
of the Mortgage Note and Mortgage have not been impaired, waived, altered or
modified in any respect, except by a written instrument which has been recorded,
if necessary to protect the interests of the Purchaser, and which has been
delivered to the Purchaser. The substance of any such waiver, alteration or
modification has been approved by the mortgage insurer, if the Mortgage Loan
is
insured, the title insurer, to the extent required by the policy, and its terms
are reflected on the Mortgage Loan Schedule. No Mortgagor has been released,
in
whole or in part;
(v) No
Defenses.
-26-
The
Mortgage Loan is not subject to any right of rescission, set-off, counterclaim
or defense, including without limitation the defense of usury, nor will the
operation of any of the terms of the Mortgage Note or the Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including without limitation
the
defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;
(vi) No
Satisfaction of Mortgage.
The
Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such satisfaction, release, cancellation, subordination or
rescission;
(vii) Validity
of Mortgage Documents.
The
Mortgage Note and the Mortgage and any other agreement executed and delivered
by
a Mortgagor in connection with a Mortgage Loan are genuine, and each is the
legal, valid and binding obligation of the maker thereof enforceable in
accordance with its terms (including, without limitation, any provisions therein
relating to prepayment charges). All parties to the Mortgage Note, the Mortgage
and any other such related agreement had legal capacity to enter into the
Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage and
any
such agreement, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by other such related
parties;
(viii) No
Fraud.
All
the
documents executed in connection with the Mortgage Loan including, but not
limited to, the Mortgage Note and the Mortgage, are signed by the persons they
purport to be signed by, and witnessed or, as appropriate, notarized by the
persons whose signatures appear as witnesses or notaries, and each such document
constitutes the valid and binding legal obligation of the signatories and is
enforceable in accordance with its terms. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of the Company in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. The documents, instruments and agreements
submitted for loan underwriting were not falsified and contain no untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the information and statements therein
not
misleading. No fraud, error, omission, misrepresentation, negligence or similar
occurrence with respect to a Mortgage Loan has taken place on the part of any
Person, including without limitation, the Mortgagor, any appraiser, any builder
or developer, or any other party involved in the origination of the Mortgage
Loan or in the application for any insurance in relation to such Mortgage Loan.
The Company has reviewed all of the documents constituting the Servicing File
and has made such inquiries as it deems necessary to make and confirm the
accuracy of the representations set forth herein;
-27-
(ix) Compliance
with Applicable Laws.
Any
and
all requirements of any federal, state or local law including, without
limitation, usury, truth-in-lending, real estate settlement procedures, consumer
credit protection, predatory, abusive and fair lending laws, equal credit
opportunity and disclosure laws or unfair and deceptive practices laws
applicable to the Mortgage Loan including, without limitation, any provisions
relating to Prepayment Penalties, have been complied with, the consummation
of
the transactions contemplated hereby will not involve the violation of any
such
laws or regulations, and the Company shall maintain in its possession, available
for the Purchaser’s inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements. This representation and
warranty is a Deemed Material Breach Representation;
(x) Location
and Type of Mortgaged Property.
With
respect to a Mortgage Loan that is not a Co-op Loan and is not secured by an
interest in a leasehold estate, the Mortgaged Property is located in the state
identified in the related Mortgage Loan Schedule and is a fee simple estate
that
consists of real property with a detached single family residence erected
thereon, or a two- to four-family dwelling, or an individual condominium unit
in
a condominium project, or an individual unit in a planned unit development
(or,
with respect to each Co-op Loan, an individual unit in a residential cooperative
housing corporation) or a de minimis planned unit development which is in each
case four stories or less, provided,
however,
that
any condominium unit, planned unit development or residential cooperative
housing corporation shall conform with the Company Guide and any mobile home
(double wide only) or manufactured dwelling shall conform with the applicable
FNMA and FHLMC requirements regarding such dwellings and that no Mortgage Loan
is secured by a single parcel of real property, a log home or a mobile home
erected thereon or by a mixed-use property, a property in excess of 10 acres,
or
other unique property types. No portion of the Mortgaged Property (or underlying
Mortgaged Property, in the case of a Co-op Loan) is used for commercial
purposes, and since the date of origination, no portion of the Mortgaged
Property has been used for commercial, industrial, agricultural purposes and
no
Mortgaged Property is undeveloped; provided,
that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. None of the Mortgage Properties are log homes, mobile
homes, geodesic domes, a property in excess of 10 acres or other unique property
types. No Mortgaged Property is located anywhere except the continental United
States, Alaska, Hawaii, Puerto Rico, the Virgin Islands or Guam. No Mortgaged
Property is a condominium unit that is part of condominium development that
operates as, or holds itself out to be, a condominium hotel. With respect to
any
Mortgage Loan secured by a Mortgaged Property improved by manufactured housing,
(i) the related manufactured housing unit is permanently affixed to the
land, (ii) the related manufactured housing unit and the related land are
subject to a Mortgage properly filed in the appropriate public recording office
and naming the Company as mortgagee, (iii) the related Mortgaged Property
is not located in the state of New Jersey and (iv) as of the origination
date of the related Mortgage Loan, the related manufactured housing unit that
secures such Mortgage Loan either: (x) was the principal residence of the
Mortgagor or (y) was classified as real property under applicable state
law. This representation and warranty is a Deemed Material Breach
Representation;
-28-
(xi) Valid
First Lien.
The
Mortgage is a valid, subsisting, enforceable and perfected, first lien on the
Mortgaged Property, including all buildings and improvements on the Mortgaged
Property and all installations and mechanical, electrical, plumbing, heating
and
air conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect to the
foregoing. The lien of the Mortgage is subject only to::
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1.
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the
lien of current real property taxes and assessments not yet due and
payable;
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2.
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covenants,
conditions and restrictions, rights of way, easements and other matters
of
the public record as of the date of recording acceptable to prudent
mortgage lending institutions generally and specifically referred
to in
the lender’s title insurance policy or attorney’s title opinion delivered
to the originator of the Mortgage Loan and (a) specifically referred
to or
otherwise considered in the appraisal made for the originator of
the
Mortgage Loan or (b) which do not adversely affect the Appraised
Value of
the Mortgaged Property set forth in such appraisal;
and
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3.
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other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to
be
provided by the Mortgage or the use, enjoyment, value or marketability
of
the related Mortgaged Property.
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Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security
interest on the property described therein and the Company has full right to
sell and assign the same to the Purchaser.
With
respect to any Co-op Loan, the related Mortgage is a valid, subsisting and
enforceable first priority security interest on the related cooperative shares
securing the Mortgage Note, subject only to (a) liens of the related residential
cooperative housing corporation for unpaid assessments representing the
Mortgagor’s pro rata share of the related residential cooperative housing
corporation’s payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments
to
which like collateral is commonly subject and (b) other matters to which like
collateral is commonly subject which do not materially interfere with the
benefits of the security interest intended to be provided by the related
Security Agreement;
(xii) Full
Disbursement of Proceeds.
The
proceeds of the Mortgage Loan have been fully disbursed, except for escrows
established or created due to seasonal weather conditions, and there is no
requirement for future advances thereunder. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
-29-
(xiii) Ownership.
The
Company is the sole owner of record and holder of the Mortgage Loan and the
related Mortgage Note and the Mortgage are not assigned or pledged, and the
Company has good and marketable title thereto and has full right and authority
to transfer and sell the Mortgage Loan to the Purchaser. The Company is
transferring the Mortgage Loan free and clear of any and all encumbrances,
liens, pledges, equities, participation interests, claims, charges or security
interests of any nature encumbering such Mortgage Loan;
(xiv) Origination/Doing
Business.
The
Mortgage Loan was originated by a savings and loan association, a savings bank,
a commercial bank, a credit union, an insurance company, or other similar
institution which is supervised and examined by a federal or state authority
or
by a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 or the National Housing Act. All
parties which have had any interest in the Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) (1) in compliance with any and all
applicable licensing requirements of the laws of the state wherein the Mortgaged
Property is located, and any qualification requirements of FNMA or FHLMC, and
(2) organized under the laws of such state, or (3) qualified to do
business in such state, or (4) federal savings and loan associations or
national banks having principal offices in such state, or (5) not doing
business in such state;
(xv) Title
Insurance.
With
respect to a Mortgage Loan which is not a Co-op Loan, the Mortgage Loan is
covered by an ALTA lender’s title insurance policy or other generally acceptable
form of policy of insurance acceptable to FNMA or FHLMC, issued by a title
insurer acceptable to FNMA or FHLMC and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Company,
its
successors and assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan, subject only to the exceptions
contained in clauses (1), (2) and (3) of paragraph (xi) of this
Section 3.2, and with respect to each Adjustable Rate Mortgage Loan,
against any loss by reason of the invalidity or unenforceability of the lien
resulting from the provisions of the Mortgage providing for adjustments to
the
Mortgage Interest Rate and Monthly Payment; provided,
however,
that in
the case of any Mortgage Loan secured by a Mortgaged Property located in a
jurisdiction where such policies are generally not available, the Mortgage
Loan
is the subject of an opinion of counsel of the type customarily rendered in
such
jurisdiction in lieu of title insurance. The Company is the sole insured of
such
lender’s title insurance policy, and such lender’s title insurance policy is in
full force and effect and will be in force and effect upon the consummation
of
the transactions contemplated by this Agreement. No claims have been made under
such lender’s title insurance policy, and no prior holder of the Mortgage,
including the Company, has done, by act or omission, anything which would impair
the coverage of such lender’s title insurance policy;
-30-
(xvi) No
Mechanics’ Liens.
There
are
no mechanics’ or similar liens or claims which have been filed for work, labor
or material (and no rights are outstanding that under the law could give rise
to
such liens) affecting the related Mortgaged Property which are or may be liens
prior to, or equal or coordinate with, the lien of the related Mortgage which
are not insured against by the title insurance policy referenced in
Section (xv) above;
(xvii) Location
of Improvements; No Encroachments.
Except
as
insured against by the title insurance policy referenced in Section (xv)
above, all improvements which were considered in determining the Appraised
Value
of the Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property and no improvements on adjoining
properties encroach upon the Mortgaged Property. No improvement located on
or
being part of the Mortgaged Property is in violation of any applicable zoning
law or regulation;
(xviii) Customary
Provisions.
The
Mortgage contains customary and enforceable provisions such as to render the
rights and remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security provided thereby,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee’s sale, and (ii) otherwise by judicial foreclosure. There is no
homestead or other exemption available to a Mortgagor which would interfere
with
the right to sell the Mortgaged Property at a trustee’s sale or the right to
foreclose the Mortgage;
(xix) Occupancy
of the Mortgaged Property.
As
of the
related Closing Date the Mortgaged Property is lawfully occupied to the best
of
the Company’s knowledge under Applicable Law. All inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of the Mortgaged Property and, with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the appropriate
authorities. Unless otherwise specified on the related Mortgage Loan Schedule,
the Mortgagor represented at the time of origination of the Mortgage Loan that
the Mortgagor would occupy the Mortgaged Property as the Mortgagor’s primary
residence;
(xx) No
Additional Collateral.
The
Mortgage Note is not and has not been secured by any collateral, pledged account
or other security except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred
to in
(xi) above;
(xxi) Deeds
of Trust.
In
the
event that the Mortgage constitutes a deed of trust, a trustee, duly qualified
under Applicable Law to serve as such, has been properly designated and
currently so serves and is named in the Mortgage, and no fees or expenses are
or
will become payable by the Mortgagee to the trustee under the deed of trust,
except in connection with a trustee’s sale after default by the
Mortgagor;
-31-
(xxii) Transfer
of Mortgage Loans.
The
Assignment is in recordable form and is acceptable for recording under the
laws
of the jurisdiction in which the Mortgaged Property is located;
(xxiii) Mortgaged
Property Undamaged.
The
Mortgaged Property is undamaged by water, fire, earthquake or earth movement,
windstorm, flood, tornado, hurricane or other casualty so as to affect adversely
the value of the Mortgaged Property as security for the Mortgage Loan or the
use
for which the premises were intended;
(xxiv) Collection
Practices; Escrow Deposits.
The
origination and collection practices used with respect to the Mortgage Loan
have
been in accordance with Acceptable Servicing Practices, and have been in all
material respects legal and proper, and in accordance with the terms of the
Mortgage Note and Mortgage. All Escrow Payments have been collected in full
compliance with state and federal law. An escrow of funds is not prohibited
by
Applicable Law and has been established to pay for every item that remains
unpaid and has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Company have been
capitalized under the Mortgage Note;
(xxv) No
Condemnation.
To
the
best of Company’s knowledge, there is no proceeding pending or threatened for
the total or partial condemnation of the related Mortgaged
Property;
(xxvi) The
Appraisal.
The
Mortgage File contains an appraisal of the related Mortgaged Property signed
prior to the origination of the Mortgage Loan application by a Qualified
Appraiser, duly appointed by the Company, who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security thereof,
and whose compensation is not affected by the approval or disapproval of the
Mortgage Loan, and the appraisal and appraiser both satisfy the requirements
of
FNMA or FHLMC and Title XI of FIRREA and the regulations promulgated thereunder,
all as in effect on the date the Mortgage Loan was originated;
(xxvii) Insurance.
The
Mortgaged Property securing each Mortgage Loan is insured by an insurer
acceptable to FNMA or FHLMC against loss by fire and such hazards as are covered
under a standard extended coverage endorsement, in an amount which is not less
than the lesser of 100% of the insurable value of the Mortgaged Property and
the
outstanding principal balance of the Mortgage Loan, but in no event less than
the minimum amount necessary to fully compensate for any damage or loss on
a
replacement cost basis; if the Mortgaged Property is a condominium unit, it
is
included under the coverage afforded by a blanket policy for the project; the
insurance policy contains a standard clause naming the originator of such
mortgage loan, its successor and assigns, as insured mortgagee; if upon
origination of the Mortgage Loan, the improvements on the Mortgaged Property
were in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance carrier,
in an
amount representing coverage not less than the least of (A) the outstanding
principal balance of the Mortgage Loan, (B) the full insurable value and
(C) the maximum amount of insurance which was available under the Flood
Disaster Protection Act of 1983, as amended; and the Mortgage obligates the
mortgagor thereunder to maintain all such insurance at the mortgagor’s cost and
expense and the Company has not acted or failed to act so as to impair the
coverage of any such insurance policy or the validity, binding effect and
enforceability thereof;
-32-
(xxviii) Servicemembers
Civil Relief Act.
The
Mortgagor has not notified the Company, and the Company has no knowledge of
any
relief requested or allowed to the Mortgagor under the Servicemembers Civil
Relief Act as amended, or other similar state statute;
(xxix) Payment
Terms.
The
Mortgage Note is payable on the first day of each month in equal monthly
installments of principal and interest, (provided
that
with respect to Adjustable Rate Mortgage Loans, the installments of interest
are
subject to change due to the adjustments to the Mortgage Interest Rate on each
Interest Rate Adjustment Date, and with respect to all Mortgage Loans, interest
is calculated and payable in arrears) sufficient to amortize the Mortgage Loan
fully by the stated maturity date, over an original term of not more than thirty
years from origination and once the amortization period starts, payments are
calculated to fully amortize by maturity. No Adjustable Rate Mortgage Loan
converts, pursuant to the terms of the related Mortgage Note, from having
interest accrue on the principal amount thereof based on an adjustable rate
to
having interest accrue based on a fixed rate, and no Mortgage Loan has a shared
appreciation or other contingent interest feature, or permits negative
amortization. The Mortgage Interest Rate for each Mortgage Loan and the Lifetime
Rate Cap, each applicable Periodic Rate Cap, Periodic Rate Floor and each
applicable Interest Rate Adjustment Date for each Adjustable Rate Mortgage
Loan
are as set forth for such Mortgage Loan in the Mortgage Loan Schedule; Principal
payments on the Mortgage Loan commenced no more than seventy days after funds
were disbursed in connection with the Mortgage Loan. The Mortgage Interest
Rate
is adjusted, with respect to Adjustable Rate Mortgage Loans, on each Interest
Rate Adjustment Date to equal the Index plus the Gross Margin (rounded up or
down to the nearest 0.125%), subject to the Periodic Rate Cap. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgage Loan is payable
on
the first day of each month. The Mortgage Loan does not require a balloon
payment on its stated maturity date; and by its original terms or any
modification thereof, does not provide for amortization beyond its scheduled
maturity date;
(xxx) No
Defaults.
-33-
Except
with respect to delinquencies identified on the Mortgage Loan Schedule, there
is
no default, breach, violation or event of acceleration existing under any
Mortgage or Mortgage Note and no event that, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration, and the Company has not
waived any default, breach, violation or event of acceleration;
(xxxi) Loan-to-Value
Ratio; Modifications; No Foreclosures.
The
Loan-to-Value Ratio of each Mortgage Loan was less than 100% at the time of
its
origination or refinancing, as applicable. No Mortgage Loan is subject to a
written foreclosure agreement or pending foreclosure proceedings;
(xxxii) Primary
Mortgage Insurance.
Each
Mortgage Loan with an LTV at origination in excess of 80% will be subject to
a
Primary Mortgage Insurance Policy, issued by an insurer acceptable to FNMA
or
FHLMC, in at least such amounts as are required by FHLMC or FNMA. All provisions
of such Primary Mortgage Insurance Policy have been and are being complied
with,
such policy is in full force and effect, and all premiums due thereunder have
been paid. Any Mortgage subject to any such Primary Mortgage Insurance Policy
obligates the Mortgagor thereunder to maintain such insurance and to pay all
premiums and charges in connection therewith unless terminable in accordance
with FHLMC standards or Applicable Law;
(xxxiii) Underwriting
Guidelines.
The
Mortgage Loan was underwritten in accordance with the Company’s underwriting
guidelines in effect at the time of origination with exceptions thereto
exercised in a reasonable manner;
(xxxiv) Adverse
Selection.
The
Company used no adverse selection procedures in selecting the Mortgage Loan
from
among the outstanding first-lien residential mortgage loans owned by it which
were available for inclusion in the Mortgage Loans;
(xxxv) No
Bankruptcy.
To
the
best of the Company’s knowledge, no Mortgagor was a debtor in any state or
federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated and as of the related Closing Date, the Company has not received
notice that any Mortgagor is a debtor under any state or federal bankruptcy
or
insolvency proceeding;
(xxxvi) No
Additional Payments.
There
is
no obligation on the part of the Company or any other party to make payments
in
addition to those made by the Mortgagor;
(xxxvii) Predatory
Lending Regulations.
-34-
No
Mortgage Loan is a High Cost Loan or Covered Loan, as applicable, and no
Mortgage Loan originated on or after October 1, 2002 through March 6, 2003
is
governed by the Georgia Fair Lending Act. No Mortgage Loan is covered by the
Home Ownership and Equity Protection Act of 1994 and no Mortgage Loan is in
violation of any comparable state or local law. This representation and warranty
is a Deemed Material Breach Representation;
(xxxviii) HOEPA.
No
Mortgage Loan is classified as a Predatory Mortgage Loan under Section 32
of the Home Ownership and Equity Protection Act of 1994, as amended, or any
similar state or local law including, without limitation, the Local Law for
the
City of New York, No. 36 relating to predatory lending passed by the New York
City Council on November 20, 2002, as amended from time to time;
(xxxix) Fair
Credit Reporting Act.
The
Company, in its capacity as servicer, has fully furnished, for each Mortgage
Loan, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company (or the successors to such credit repositories), on a
monthly basis. The Servicer will transmit full-file credit reporting data for
each Mortgage Loan pursuant to ▇▇▇▇▇▇ ▇▇▇ Guide Announcement 95-19 and that
for
each Mortgage Loan, Servicer agrees it shall report one of the following
statuses each month as follows: new origination, current, delinquent (30-,
60-,
90-days, etc.), foreclosed, or charged-off. This representation and warranty
is
a Deemed Material Breach Representation;
(xl) No
Arbitration.
With
respect to any Mortgage Loan originated on or after August 1, 2004, neither
the
related Mortgage nor the related Mortgage Note requires the Mortgagor to submit
to arbitration to resolve any dispute arising out of or relating in any way
to
the Mortgage Loan transaction. This representation and warranty is a Deemed
Material Breach Representation;
(xli) Balloon
Mortgages.
No
Mortgage Loan is a Balloon Mortgage Loan that has an original stated maturity
of
less than seven (7) years;
(xlii) No
Credit Insurance Policies.
In
connection with the origination of any Mortgage Loan, no proceeds from any
Mortgage Loan were used to finance or acquire a single-premium credit life
insurance policy. No Mortgagor was required to purchase any single-premium
credit insurance policy (e.g., life, mortgage, disability, accident,
unemployment, or health insurance product) or debt cancellation agreement as
a
condition of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit insurance policy (e.g., life, mortgage, disability,
accident, unemployment, mortgage, or health insurance) in connection with the
origination of the Mortgage Loan; no proceeds from any Mortgage Loan were used
to purchase single-premium credit insurance policies or debt cancellation
agreements as part of the origination of, or as a condition to closing, such
Mortgage Loan. This representation and warranty is a Deemed Material Breach
Representation;
-35-
(xliii) Prepayment
Penalties.
The
Mortgage Loan is subject to a Prepayment Penalty as provided in the related
Mortgage Note and rider except as set forth on the related Mortgage Loan
Schedule. With respect to each Mortgage Loan that has a prepayment penalty
feature, each such Prepayment Penalty is enforceable and will be enforced by
the
Company for the benefit of the Purchaser, and each Prepayment Penalty is
permitted pursuant to federal, state and local law. Each such Prepayment Penalty
is in an amount not more than the maximum amount permitted under applicable
law
and no such Prepayment Penalty may provide for a term in excess of five (5)
years with respect to Mortgage Loans originated prior to October 1, 2002.
With respect to Mortgage Loans originated on or after October 1, 2002, the
duration of the Prepayment Penalty period shall not exceed three (3) years
from the date of the Mortgage Note unless the Mortgage Loan was modified to
reduce the Prepayment Penalty period to no more than three (3) years from
the date of such Mortgage Loan and the Mortgagor was notified in writing of
such
reduction in Prepayment Penalty period. With respect to any Mortgage Loan that
contains a provision permitting imposition of a penalty upon a prepayment prior
to maturity: (i) the Mortgage Loan provides some benefit to the Mortgagor
(e.g., a rate or fee reduction) in exchange for accepting such Prepayment
Penalty (ii) prior to the Mortgage Loan’s origination the Mortgagor was
offered, the option of obtaining a mortgage loan that did not require payment
of
such a penalty and (iii) the Prepayment Penalty was adequately disclosed to
the Mortgagor in the mortgage loan documents pursuant to applicable state,
local
and federal law. This representation and warranty is a Deemed Material Breach
Representation;
(xliv) Manufactured
Housing.
With
respect to any Mortgaged Property that constitutes manufactured housing, each
related Mortgage Loan is secured by a “single family residence” within the
meaning of Section 25(e)(10) of the Code. The fair market value of the
Manufactured Home securing any Mortgage Loan was at least equal to 80% of the
adjusted issue price of the Mortgage Loan at either (i) the date the Mortgage
Loan was originated (as determined pursuant to the REMIC provisions), or (ii)
the date the Mortgage Loan is transferred to the Purchaser;
(xlv) Qualified
Mortgage.
Each
Mortgage Loan is a “qualified mortgage” within Section 860G(a)(3) of the
Code;
(xlvi) Origination
Practices.
The
Mortgagor was not encouraged or required to select a Mortgage Loan product
offered by the Mortgage Loan’s originator which is a higher cost product
designed for less creditworthy borrowers, unless at the time of the Mortgage
Loan’s origination, such Mortgagor did not qualify taking into account such
facts as, without limitation, the Mortgage Loan’s requirements and the
Mortgagor’s credit history, income, assets, and liabilities and debt-to-income
ratios for a lower-cost credit product then offered by the Mortgage Loan’s
originator or any affiliate of the Mortgage Loan’s originator. If, at the time
of loan application, the Mortgagor may have qualified for a lower-cost credit
product then offered by any mortgage lending affiliate of the Mortgage Loan’s
originator, the Mortgage Loan’s originator referred the Mortgagor’s application
to such affiliate for underwriting consideration. This representation and
warranty is a Deemed Material Breach Representation;
-36-
(xlvii) Underwriting
Methodology.
The
methodology used in underwriting the extension of credit for each Mortgage
Loan
does not rely solely on the extent of the Mortgagor’s equity in the collateral
as the principal determining factor in approving such extension of credit.
The
methodology employed objective criteria such as the Mortgagor’s income, assets
and liabilities, to the proposed mortgage payment and, based on such
methodology, the Mortgage Loan’s originator made a reasonable determination that
at the time of origination the Mortgagor had the ability to make timely payments
on the Mortgage Loan. Such underwriting methodology confirmed that at the time
of origination (application/approval) the Mortgagor had a reasonable ability
to
make timely payments on the Mortgage Loan. This representation and warranty
is a
Deemed Material Breach Representation;
(xlviii) Points
and Fees.
No
Mortgagor was charged “points and fees” (whether or not financed) in an amount
greater than 5% of the principal amount of such Mortgage Loan. For purposes
of
this representation, such 5% limitation is calculated in accordance with FNMA’s
anti-predatory lending requirements as set forth in the FNMA Guides and “points
and fees” (x) include origination, underwriting, broker and finder fees and
charges that the mortgagee imposed as a condition of making the Mortgage Loan,
whether they are paid to the mortgagee or a third party, and (y) exclude
bona fide discount points, fees paid for actual services rendered in connection
with the origination of the Mortgage Loan (such as attorneys’ fees, notaries
fees and fees paid for property appraisals, credit reports, surveys, title
examinations and extracts, flood and tax certifications, and home inspections),
the cost of mortgage insurance or credit-risk price adjustments, the costs
of
title, hazard, and flood insurance policies, state and local transfer taxes
or
fees, escrow deposits for the future payment of taxes and insurance premiums,
and other miscellaneous fees and charges which miscellaneous fees and charges,
in total, do not exceed 0.25% of the principal amount of such Mortgage Loan.
This representation and warranty is a Deemed Material Breach
Representation;
(xlix) Fees
Charges.
All
fees
and charges (including finance charges) and whether or not financed, assessed,
collected or to be collected in connection with the origination and servicing
of
each Mortgage Loan has been disclosed in writing to the Mortgagor in accordance
with applicable state and federal law and regulation. This representation and
warranty is a Deemed Material Breach Representation; and
(l) Second
Lien Mortgage Loans.
-37-
With
respect to each Second Lien Mortgage Loan: (1) the related first lien
Mortgage Loan does not permit negative amortization; (2) where required or
customary in the jurisdiction in which the Mortgaged Property is located, the
original lender has filed for record a request for notice of any action by
the
related senior lienholder, and the Company has notified such second lienholder
in writing of the existence of the Second Lien Mortgage Loan and requested
notification of any action to be taken against the Mortgagor by such senior
lienholder; either (a) no consent for the Second Lien Mortgage Loan is required
by the holder of the related first lien Mortgage Loan or (b) such consent has
been obtained and is contained in the related Mortgage File; (3) to the
best of Company’s knowledge, the related first lien Mortgage Loan is in full
force and effect, and there is no default, lien, breach, violation or event
which would permit acceleration existing under such first lien Mortgage Loan
or
Mortgage Note, and no event which, with the passage of time or with notice
and
the expiration of any grace or cure period, would constitute a default, breach,
violation or event which would permit acceleration under such first lien
Mortgage Loan; (4) the related first lien Mortgage contains a provision
which provide for giving notice of default or breach to the mortgagee under
the
Mortgage Loan and allows such mortgagee to cure any default under the related
first lien Mortgage; and (5) the related Mortgaged Property was the
Mortgagor’s principal residence. This representation and warranty is a Deemed
Material Breach Representation.
(li) Due
on
Sale.
The
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent
of
the mortgagee thereunder;
(lii) Environmental
Matters.
The
Mortgaged Property is free from any and all toxic or hazardous substances and
there exists no violation of any local, state or federal environmental law,
rule
or regulation. To the best of the Company’s knowledge, there is no pending
action or proceeding directly involving any Mortgaged Property in which
compliance with any environmental law, rule or regulation is an issue; and
nothing further remains to be done to satisfy in full all requirements of each
such law, rule or regulation consisting a prerequisite to use and enjoyment
of
said property;
(liii) Regarding
the Mortgagor.
The
Mortgagor is one or more natural persons and/or trustees for an Illinois land
trust or a trustee under a “living trust” and such “living trust” is in
compliance with FNMA guidelines for such trusts;
(liv) Simple
Interest Mortgage Loans.
None
of
the Mortgage Loans are simple interest Mortgage Loans;
(lv) No
Buydown Provisions. No Graduated Payments.
The
Mortgage Loan does not contain provisions pursuant to which Monthly Payments
are
paid or partially paid with funds deposited in any separate account established
by the Company, the Mortgagor, or anyone on behalf of the Mortgagor, or paid
by
any source other than the Mortgagor nor does it contain any other similar
provisions which may constitute a “buydown” provision. The Mortgage Loan is not
a graduated payment Mortgage Loan;
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(lvi) Co-op
Loans.
With
respect to a Mortgage Loan that is a Co-op Loan, the stock that is pledged
as
security for the Mortgage Loan is held by a person as a tenant stockholder
(as
defined in Section 216 of the Code) in a cooperative housing corporation
(as defined in Section 216 of the Code);
(lvii) Reserved.
(lviii) Assumability.
With
respect to each Adjustable Rate Mortgage Loan, the Mortgage Loan Documents
provide that after the related first Interest Rate Adjustment Date, a related
Mortgage Loan may only be assumed if the party assuming such Mortgage Loan
meets
certain credit requirements stated in the Mortgage Loan Documents;
(lix) Disclosure
Materials.
The
Mortgagor has executed a statement to the effect that the Mortgagor has received
all disclosure materials required by, and the Company has complied with, all
Applicable Law with respect to the making of the Mortgage Loans. The Company
shall maintain such statement in the Mortgage File;
(lx) Leaseholds.
If
the
Mortgage Loan is secured by a leasehold estate, (1) the ground lease is
assignable or transferable; (2) the ground lease will not terminate earlier
than five years after the maturity date of the Mortgage Loan; (3) the
ground lease does not provide for termination of the lease in the event of
lessee’s default without the Mortgagee being entitled to receive written notice
of, and a reasonable opportunity to cure the default; (4) the ground lease
permits the mortgaging of the related Mortgaged Property; (5) the ground
lease protects the Mortgagee’s interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments
that have become due have been paid; and (7) the use of leasehold estates
for residential properties is a widely accepted practice in the jurisdiction
in
which the Mortgaged Property is located;
(lxi) Tax
Service Contract.
Each
retained Mortgage Loan is covered by a tax monitoring service and if servicing
is transferred a paid in full, life of loan tax service contract will be
purchased by the Company and such contract is transferable;
(lxii) Flood
Service Contract.
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Each
Mortgage Loan is covered by a paid in full, life of loan, flood service contract
issued by First American Real Estate Tax Service or Fidelity, and such contract
is transferable; and
(lxiii) Litigation.
The
Mortgage Loan is not subject to any outstanding litigation for fraud,
origination, predatory lending, servicing or closing practices.
Section
3.3. Repurchase.
It
is
understood and agreed that the representations and warranties set forth in
Sections 3.1 and 3.2 shall survive the sale of the Mortgage Loans to the
Purchaser and the delivery of the Mortgage Loan Documents to the Custodian
and
shall inure to the benefit of the Purchaser notwithstanding any restrictive
or
qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination or failure to examine any Mortgage File. Upon discovery by either
the Company or the Purchaser of a breach of any of the foregoing representations
and warranties which materially and adversely affects the value of the Mortgage
Loans or the interest of the Purchaser (or which materially and adversely
affects the interests of Purchaser in the related Mortgage Loan in the case
of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the
other.
Within
90
days of the earlier of either discovery by or notice to the Company of any
breach of a representation or warranty which materially and adversely affects
the value of the Mortgage Loans, (i) the Company shall use its best efforts
promptly to cure such breach in all material respects and (ii) if such breach
cannot be cured, the Company shall, at the Purchaser’s option, repurchase such
Mortgage Loan at the Repurchase Price. Notwithstanding the above sentence,
(i)
within sixty (60) days of the earlier of either discovery by, or notice to,
the
Company of any breach of the representation and warranty set forth in clause
(xlv) of Section 3.2, the Company shall repurchase such Mortgage Loan at
the Repurchase Price, together with all expenses incurred by the Purchaser
as a
result of such repurchase and (ii) any breach of a Deemed Material Breach
Representation shall automatically be deemed to materially and adversely affect
the value of the Mortgage Loan and the interest of the Purchaser therein. In
the
event that a breach shall involve any representation or warranty set forth
in
Section 3.1, and such breach cannot be cured within ninety (90) days of the
earlier of either discovery by or notice to the Company of such breach, all
of
the Mortgage Loans shall, at the Purchaser’s option, be repurchased by the
Company at the Repurchase Price. Any repurchase of a Mortgage Loan or Loans
pursuant to the foregoing provisions of this Section 3.3 shall be
accomplished by deposit in the Custodial Account of the amount of the Repurchase
Price as required in Section 4.4, for distribution to Purchaser on the
Remittance Date for the month following the date of the repurchase, after
deducting therefrom any amount received in respect of such repurchased Mortgage
Loan or Loans and being held in the Custodial Account for future distribution
for application in accordance with Section 5.1.
At
the
time of repurchase, the Purchaser and the Company shall arrange for the
reassignment of the repurchased Mortgage Loans to the Company and the delivery
to the Company of any documents held by the Custodian relating to the
repurchased Mortgage Loans. In the event of a repurchase, the Company shall,
simultaneously with such reassignment, give written notice to the Purchaser
that
such repurchase has taken place and amend the Mortgage Loan Schedule to reflect
the withdrawal of the repurchased Mortgage Loans from this
Agreement.
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In
addition to such repurchase obligation, the Company shall indemnify the
Purchaser and hold it harmless against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and other costs and expenses resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a breach of the
Company’s representations and warranties contained in this Agreement. It is
understood and agreed that the obligations of the Company set forth in this
Section 3.3 to cure or repurchase a defective Mortgage Loan and to
indemnify the Purchaser as provided in this Section 3.3, constitute the
sole remedies of the Purchaser respecting a breach of the foregoing
representations and warranties.
Any
cause
of action against the Company relating to or arising out of the breach of any
representations and warranties made in Sections 3.1 and 3.2 shall accrue as
to any Mortgage Loan upon the earliest of (i) discovery of such breach by the
Company or the Purchaser or notice thereof by the Purchaser to the Company,
(ii)
failures by the Company to cure such breach or repurchase such Mortgage Loan
as
specified above, and (iii) demand upon the Company by the Purchaser for
compliance with this Agreement.
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
4.1. Company
to Act as Servicer.
The
Company, as an independent contractor, shall service and administer the Mortgage
Loans and shall have full power and authority, acting alone or through the
utilization of a third party servicing provider, to do any and all things in
connection with such servicing and administration which the Company may deem
necessary or desirable, consistent with the terms of this Agreement and with
Accepted Servicing Practices.
Consistent
with the terms of this Agreement and subject to the REMIC Provisions if the
Mortgage Loans have been transferred to a REMIC, the Company may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if in the Company’s reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser. In the event of any such modification which permits the deferral
of
interest or principal payments on any Mortgage Loan, the Company shall, on
the
Business Day immediately preceding the Remittance Date in any month in which
any
such principal or interest payment has been deferred, deposit in the Custodial
Account from its own funds, in accordance with Section 5.3, the difference
between (a) such month’s principal and one month’s interest at the Mortgage Loan
Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b)
the amount paid by the Mortgagor. The Company shall be entitled to reimbursement
for such advances to the same extent as for all other advances made pursuant
to
Section 5.3. Without limiting the generality of the foregoing, the Company
shall continue, and is hereby authorized and empowered, to execute and deliver
on behalf of itself and the Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. If reasonably required by the Company, the Purchaser
shall
furnish the Company with any powers of attorney and other documents necessary
or
appropriate to enable the Company to carry out its servicing and administrative
duties under this Agreement.
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In
servicing and administering the Mortgage Loans, the Company shall employ
procedures (including collection procedures) and exercise the same care that
it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
and the Purchaser’s reliance on the Company.
Section
4.2. Liquidation
of Mortgage Loans.
In
the
event that any payment due under any Mortgage Loan and not postponed pursuant
to
Section 4.1 is not paid when the same becomes due and payable, or in the
event the Mortgagor fails to perform any other covenant or obligation under
the
Mortgage Loan and such failure continues beyond any applicable grace period,
the
Company shall take such action as (1) the Company would take under similar
circumstances with respect to a similar mortgage loan held for its own account
for investment, (2) shall be consistent with Accepted Servicing Practices,
and
(3) the Company shall determine prudently to be in the best interest of
Purchaser. In the event that any payment due under any Mortgage Loan is not
postponed pursuant to Section 4.1 and remains delinquent for a period of 30
days or any other default continues for a period of 30 days beyond the
expiration of any grace or cure period, the Company shall commence foreclosure
proceedings, the Company shall notify the Purchaser in writing of the Company’s
intention to do so, and the Company shall not commence foreclosure proceedings
if the Purchaser objects to such action within ten (10) Business Days of
receiving such notice. In the event the Purchaser objects to such foreclosure
action, the Company shall not be required to make Monthly Advances with respect
to such Mortgage Loan, pursuant to Section 5.3, and the Company’s
obligation to make such Monthly Advances shall terminate on the 90th day
referred to above. In such connection, the Company shall from its own funds
make
all necessary and proper Servicing Advances, provided,
however,
that
the Company shall not be required to expend its own funds in connection with
any
foreclosure or towards the restoration or preservation of any Mortgaged
Property, unless it shall determine (a) that such preservation, restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan to the Purchaser after reimbursement to itself for such expenses and (b)
that such expenses will be recoverable by it either through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Custodial Account pursuant to Section 4.5) or through Insurance Proceeds
(respecting which it shall have similar priority).
Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure
or
acceptance of a deed in lieu of foreclosure, in the event the Company has
reasonable cause to believe that a Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, or if the Purchaser otherwise requests
an environmental inspection or review of such Mortgaged Property, such an
inspection or review is to be conducted by a qualified inspector. The cost
for
such inspection or review shall be borne by the Purchaser. Upon completion
of
the inspection or review, the Company shall promptly provide the Purchaser
with
a written report of the environmental inspection.
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After
reviewing the environmental inspection report, the Purchaser shall determine
how
the Company shall proceed with respect to the Mortgaged Property. In the event
(a) the environmental inspection report indicates that the Mortgaged Property
is
contaminated by hazardous or toxic substances or wastes and (b) the Purchaser
directs the Company to proceed with foreclosure or acceptance of a deed in
lieu
of foreclosure, the Company shall be reimbursed for all reasonable costs
associated with such foreclosure or acceptance of a deed in lieu of foreclosure
and any related environmental clean up costs, as applicable, from the related
Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully
reimburse the Company, the Company shall be entitled to be reimbursed from
amounts in the Custodial Account pursuant to Section 4.5 hereof. In the
event the Purchaser directs the Company not to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Company shall be reimbursed
for
all Servicing Advances made with respect to the related Mortgaged Property
from
the Custodial Account pursuant to Section 4.5 hereof.
Section
4.3. Collection
of Mortgage Loan Payments.
Continuously
from the date hereof until the principal and interest on all Mortgage Loans
are
paid in full, the Company shall proceed diligently to collect all payments
due
under each of the Mortgage Loans when the same shall become due and payable
in
accordance with Accepted Servicing Practices, and shall, in accordance with
RESPA and applicable state law, take special care in ascertaining and estimating
Escrow Payments and all other charges that will become due and payable with
respect to the Mortgage Loan and the Mortgaged Property, to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges
as
and when they become due and payable.
Section
4.4. Establishment
of and Deposits to Custodial Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Custodial Accounts, in the form
of
time deposit or demand accounts, titled “National City Mortgage Co., in trust
for the Purchaser of Residential Mortgage Loans serviced under a Flow Seller’s
Warranties and Servicing Agreement, dated as of May 1, 2003”, or as otherwise
directed in writing by the Purchaser or its assigns after the Closing Date
in
connection with any Whole Loan Transfer or Securitization Transaction. The
Custodial Account shall be established with a Qualified Depository. Upon request
of the Purchaser and within ten (10) days thereof, the Company shall provide
the
Purchaser with written confirmation of the existence of such Custodial Account.
Any funds deposited in the Custodial Account shall at all times be insured
to
the fullest extent allowed by Applicable Law. Funds deposited in the Custodial
Account may be drawn on by the Company in accordance with
Section 4.5.
The
Company shall deposit in the Custodial Account within one Business Day (or
two
Business Days in the case of the amounts described in clauses (iii) through
(v)
below) of the Company’s receipt, and retain therein, the following collections
received by the Company and payments made by the Company after each Cut-off
Date, other than payments of principal and interest due on or before such
Cut-off Date:
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(1) all
payments on account of principal on the Mortgage Loans, including all Principal
Prepayments, but not including Payaheads;
(2) all
payments on account of interest on the Mortgage Loans, adjusted to the Mortgage
Loan Remittance Rate;
(3) all
Liquidation Proceeds;
(4) all
Insurance Proceeds including amounts required to be deposited pursuant to
Section 4.10 (other than proceeds to be held in the Escrow Account and
applied to the restoration or repair of the Mortgaged Property or released
to
the Mortgagor in accordance with Section 4.14), Section 4.11 and
Section 4.15;
(5) all
Condemnation Proceeds which are not applied to the restoration or repair of
the
Mortgaged Property or released to the Mortgagor in accordance with
Section 4.14;
(6) any
amount required to be deposited in the Custodial Account pursuant to
Section 4.1, 5.1, 5.3, 6.1 or 6.2;
(7) any
amounts payable in connection with the repurchase of any Mortgage Loan pursuant
to Section 2.3, 3.3 or 6.2;
(8) with
respect to each Principal Prepayment including, for this purpose, the principal
portion of Insurance Proceeds, Condemnation Proceeds, and Liquidation Proceeds
an amount (to be paid by the Company out of its own funds, but not in excess
of
its aggregate Servicing Fee for the related Due Period) 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;
(9) any
amounts required to be deposited by the Company pursuant to Section 4.11 in
connection with the deductible clause in any blanket hazard insurance policy;
and
(10) any
amounts received with respect to or related to any REO Property and all REO
Disposition Proceeds pursuant to Section 4.16.
The
foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.1, need not be deposited by the
Company into the Custodial Account. Any interest paid on funds deposited in
the
Custodial Account by the depository institution shall accrue to the benefit
of
the Company and the Company shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.5. The Company
shall reimburse the Custodial Account for any losses incurred as a result of
the
investment of amounts on deposit in the Custodial Account.
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The
Company may invest the funds in the Custodial Account in Eligible Investments
designated in the name of the Company for the benefit of the Purchaser, which
shall mature not later than the Business Day next preceding the Remittance
Date
next following the date of such investment (except that (A) any investment
in the institution with which the Custodial Account is maintained may mature
on
such Remittance Date and (B) any other investment may mature on such
Remittance Date if the Company shall advance funds on such Remittance Date,
pending receipt thereof to the extent necessary to make distributions to the
[Owner]) and shall not be sold or disposed of prior to maturity. Notwithstanding
anything to the contrary herein and above, all income and gain realized from
any
such investment shall be for the benefit of the Company and shall be subject
to
withdrawal by the Company. The amount of any losses incurred in respect of
any
such investments shall be deposited in the Custodial Account by the Company
out
of its own funds immediately as realized.
Section
4.5. Permitted
Withdrawals From Custodial Account.
The
Company shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
(1) to
make
payments to the Purchaser in the amounts and in the manner provided for in
Section 5.1;
(2) to
reimburse itself for Monthly Advances of the Company’s funds made pursuant to
Section 5.3, the Company’s right to reimburse itself pursuant to this
subclause (2) being limited to amounts received on the related Mortgage Loan
which represent late payments of principal and/or interest respecting which
any
such advance was made, it being understood that, in the case of any such
reimbursement, the Company’s right thereto shall be prior to the rights of the
Purchaser, except that, where the Company is required to repurchase a Mortgage
Loan pursuant to Section 2.3, 3.3 or 6.2, the Company’s right to such
reimbursement shall be subsequent to the payment to the Purchaser of the
Repurchase Price pursuant to such sections and all other amounts required to
be
paid to the Purchaser with respect to such Mortgage Loan;
(3) to
reimburse itself for unreimbursed Servicing Advances, and for any unpaid
Servicing Fees, the Company’s right to reimburse itself pursuant to this
subclause (3) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and such other
amounts as may be collected by the Company from the Mortgagor or otherwise
relating to the Mortgage Loan, it being understood that, in the case of any
such
reimbursement, the Company’s right thereto shall be prior to the rights of
Purchaser, except that where the Company is required to repurchase a Mortgage
Loan pursuant to Section 2.3, 3.3 or 6.2, in which case the Company’s right
to such reimbursement shall be subsequent to the payment to the Purchaser of
the
Repurchase Price pursuant to such sections and all other amounts required to
be
paid to the Purchaser with respect to such Mortgage Loan;
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(4) to
pay
itself as servicing compensation any interest on funds deposited in the
Custodial Account;
(5) to
reimburse itself for expenses incurred to the extent reimbursable pursuant
to
Section 8.1;
(6) to
pay
any amount required to be paid pursuant to Section 4.16 related to any REO
Property, it being understood that, in the case of any such expenditure or
withdrawal related to a particular REO Property, the amount of such expenditure
or withdrawal from the Custodial Account shall be limited to amounts on deposit
in the Custodial Account with respect to the related REO Property;
(7) to
reimburse itself for any Servicing Advances or REO expenses after liquidation
of
the Mortgaged Property not otherwise reimbursed above;
(8) to
reimburse the trustee with respect to any Securitization Transaction for any
unreimbursed Monthly Advances or Servicing Advances made by the Trustee, as
applicable, the right to reimbursement pursuant to this subclause (8) with
respect to any Mortgage Loan being limited to related Liquidation Proceeds,
proceeds of REO Dispositions, Condemnation Proceeds, Insurance Proceeds and
such
other amounts as may be collected by the Company from the Mortgagor or otherwise
relating to the Mortgage Loan, it being understood that, in the case of such
reimbursement, such trustee’s right thereto shall be prior to the rights of the
Company to reimbursement under (2) and (3), and prior to the rights of the
Purchaser under (1);
(9) to
remove
funds inadvertently placed in the Custodial Account by the Company;
and
(10) to
clear
and terminate the Custodial Account upon the termination of this
Agreement.
In
the
event that the Custodial Account is interest bearing, on each Remittance Date,
the Company shall withdraw all interest earned on funds on deposit in the
Custodial Account. The Company may use such withdrawn funds only for the
purposes described in this Section 4.5.
Section
4.6. Establishment
of and Deposits to Escrow Account.
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The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan constituting Escrow Payments separate and apart from any of its
own funds and general assets and shall establish and maintain one or more Escrow
Accounts, in the form of time deposit or demand accounts, titled, “National City
Mortgage Co., in trust for the Purchaser under the Flow Seller’s Warranties and
Servicing Agreement dated as of May 1, 2003 and/or subsequent purchasers of
Mortgage Loans.” The Escrow Accounts shall be established with a Qualified
Depository, in a manner which shall provide maximum available insurance
thereunder. Upon request of the Purchaser and within ten (10) days thereof,
the
Company shall provide the Purchaser with written confirmation of the existence
of such Escrow Account. Funds deposited in the Escrow Account may be drawn
on by
the Company in accordance with Section 4.7.
The
Company shall deposit in the Escrow Account or Accounts within two (2) Business
Days of the Company’s receipt, and retain therein:
(1) 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;
(2) all
amounts representing Insurance Proceeds or Condemnation Proceeds which are
to be
applied to the restoration or repair of any Mortgaged Property; and
(3) all
amounts representing proceeds of any Primary Mortgage Insurance Policy.
The
Company shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in Section 4.7.
The Company shall be entitled to retain any interest paid on funds deposited
in
the Escrow Account by the depository institution, other than interest on
escrowed funds required by law to be paid to the Mortgagor. To the extent
required by law, the Company shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing
or
that interest paid thereon is insufficient for such purposes. Notwithstanding
the forgoing, the Company shall be responsible to reimburse the Purchaser for
any losses incurred as a result of the investment of amounts on deposit in
the
Escrow Account.
Section
4.7. Permitted
Withdrawals From Escrow Account.
Withdrawals
from the Escrow Account or Accounts may be made by the Company
only:
(1) 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;
(2) to
reimburse the Company for any Servicing Advances made by the Company pursuant
to
Section 4.8 with respect to a related Mortgage Loan, but only from amounts
received on the related Mortgage Loan which represent late collections of Escrow
Payments thereunder;
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(3) to
refund
to any Mortgagor any funds found to be in excess of the amounts required under
the terms of the related Mortgage Loan;
(4) 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;
(5) for
application to restoration or repair of the Mortgaged Property in accordance
with the procedures outlined in Section 4.14;
(6) to
pay to
the Company, or any Mortgagor to the extent required by law, any interest paid
on the funds deposited in the Escrow Account;
(7) to
remove
funds inadvertently placed in the Escrow Account by the Company;
(8) to
apply
the proceeds of Primary Mortgage Insurance as if such proceeds were payments
on,
or Liquidation Proceeds of, the related Mortgage Loan, as the case may be;
and
(9) to
clear
and terminate the Escrow Account on the termination of this
Agreement.
Section
4.8. Payment
of Taxes, Insurance and Other Charges.
With
respect to each Mortgage Loan, the Company shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates, sewer
rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of 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, and at a time appropriate for securing maximum discounts
allowable, employing for such purpose deposits of the Mortgagor in the Escrow
Account which shall have been estimated and accumulated by the Company in
amounts sufficient for such purposes, as allowed under the terms of the
Mortgage. If a Mortgage does not provide for Escrow Payments, the Company shall
determine that any such payments are made by the Mortgagor. The Company assumes
full responsibility for the timely payment of all such bills and shall effect
timely payments of all such charges irrespective of each Mortgagor’s faithful
performance in the payment of same of the making of the Escrow Payments, and
the
Company shall make advances from its own funds to effect such payments. With
respect to each Mortgage Loan for which there is no escrow for tax payments,
the
Company shall ensure that all taxes are current and have been paid on the
related Mortgaged Property.
With
respect to each Mortgage Loan identified on the Mortgage Loan Schedule as an
LPMI Loan, the Company shall maintain in full force and effect any LPMI Policy,
and from time to time, withdraw the premium with respect to such Mortgage Loans
from the Custodial Account in order to pay the premium thereon on a timely
basis. In the event that the interest payments made with respect to the Mortgage
Loan are less than the premium with respect to the LPMI Policy, the Company
shall advance from its own funds the amount of any such shortfall in the LPMI
Policy premiums, in payment of such premium. Any such advance shall be a
Servicing Advance subject to reimbursement. In the event that such LPMI Policy
shall be terminated, the Company shall obtain from another insurer acceptable
under the Company Guide, a comparable replacement policy, with a total coverage
equal to the remaining coverage of such terminated LPMI Policy, at substantially
the same fee level. If the insurer shall cease to be an insurer acceptable
under
the Company Guide, the Company shall determine whether recoveries under the
LPMI
Policy are jeopardized for reasons related to the financial condition of such
insurer, it being understood that the Company shall in no event have any
responsibility or liability for any failure to recover under the LPMI Policy
for
such reason. If the Company determines that recoveries are so jeopardized,
it
shall notify the Purchaser and the Mortgagor, if required, and obtain from
another insurer acceptable under the Company Guide a replacement insurance
policy. The Company shall not take any action which would result in noncoverage
under any applicable LPMI Policy of any loss which, but for the actions of
the
Company would have been covered thereunder. In connection with any assumption
or
substitution agreement entered into or to be entered into, the Company shall
promptly notify the insurer under the related LPMI Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such
LPMI Policy and shall take all actions which may be required by such insurer
as
a condition to the continuation of coverage under such LPMI Policy. If such
LPMI
Policy is terminated as a result of such assumption or substitution of
liability, the Company shall obtain a replacement LPMI Policy as provided
above.
-48-
Purchaser,
in its sole discretion, at any time, may (i) either obtain an additional LPMI
Policy on any Mortgage Loan which already has an LPMI Policy in place, or (ii)
obtain a LPMI Policy for any Mortgage Loan which does not already have a LPMI
Policy in place. In any event, the Company agrees to administer such LPMI
Policies in accordance with the Agreement or any Reconstitution
Agreement.
In
connection with its activities as servicer, the Company agrees to prepare and
present, on behalf of itself and the Purchaser, claims to the insurer under
any
Primary Mortgage Insurance Policy or LPMI Policy in a timely fashion in
accordance with the terms of such Primary Mortgage Insurance Policy and LPMI
Policy and, in this regard, to take such action as shall be necessary to permit
recovery under any Primary Mortgage Insurance Policy or LPMI Policy respecting
a
defaulted Mortgage Loan. Any amounts collected by the Company under any Primary
Mortgage Insurance Policy shall be deposited in the Escrow Account.
Section
4.9. Protection
of Accounts.
The
Company may transfer the Custodial Account or the Escrow Account to a different
Qualified Depository from time to time, upon prior written notice to the
Purchaser.
Section
4.10. Maintenance
of Hazard Insurance.
-49-
The
Company shall cause to be maintained for each Mortgage Loan hazard insurance
such that all buildings upon the Mortgaged Property are insured by an insurer
acceptable to FNMA or FHLMC, against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located, in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements securing such Mortgage Loan and
(ii)
the greater of (a) the outstanding 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. In the event a hazard
insurance policy shall be in danger of being terminated, or in the event the
insurer shall cease to be acceptable to FNMA or FHLMC, the Company shall notify
the Purchaser and the related Mortgagor, and shall use its best efforts, as
permitted by Applicable Law, to obtain from another Qualified Insurer a
replacement hazard insurance policy substantially and materially similar in
all
respects to the original policy. In no event, however, shall a Mortgage Loan
be
without a hazard insurance policy at any time, subject only to Section 4.11
hereof.
If
upon
origination of the Mortgage Loan, the related Mortgaged Property was located
in
an area identified by the Flood Emergency Management Agency as having special
flood hazards (and such flood insurance has been made available) a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect with a generally acceptable
insurance carrier acceptable to FNMA or FHLMC, in an amount representing
coverage equal to the lesser of (i) the minimum amount required, under the
terms
of coverage, to compensate for any damage or loss on a replacement cost basis
(or the unpaid balance of the mortgage if replacement cost coverage is not
available for the type of building insured) and (ii) the maximum amount of
insurance which is available under the Flood Disaster Protection Act of 1973,
as
amended.
If
a
Mortgage is secured by a unit in a condominium project, the Company shall verify
that the coverage required of the owner’s association, including hazard, flood,
liability, and fidelity coverage, is being maintained in accordance with then
current FNMA or FHLMC requirements, secure from the owner’s association its
agreement to notify the Company promptly of any change in the insurance coverage
or of any condemnation or casualty loss that may have a material effect on
the
value of the Mortgaged Property as security.
In
the
event that any Purchaser or the Company shall determine that the Mortgaged
Property should be insured against loss or damage by hazards and risks not
covered by the insurance required to be maintained by the Mortgagor pursuant
to
the terms of the Mortgage, the Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor’s attention the desirability of protection of the Mortgaged
Property.
All
policies required hereunder shall name the Company as loss payee and shall
be
endorsed with standard or union mortgagee clauses, without contribution, which
shall provide for at least 30 days prior written notice of any cancellation,
reduction in amount or material change in coverage.
The
Company shall not interfere with the Mortgagor’s freedom of choice in selecting
either his insurance carrier or agent, provided,
however,
that
the Company shall not accept any such insurance policies from insurance
companies unless such companies are acceptable to FNMA and FHLMC and are
licensed to do business in the jurisdiction in which the Mortgaged Property
is
located. The Company shall determine that such policies provide sufficient
risk
coverage and amounts, that they insure the property owner, and that they
properly describe the property address.
-50-
Pursuant
to Section 4.4, any amounts collected by the Company under any such
policies (other than amounts to be deposited in the Escrow Account and applied
to the restoration or repair of the related Mortgaged Property, or property
acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Company’s normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account
subject to withdrawal pursuant to Section 4.5.
Section
4.11. Maintenance
of Primary Mortgage Insurance Policy; Claims.
With
respect to each Mortgage Loan with a LTV in excess of 80%, the Company shall,
without any cost to the Purchaser, maintain or cause the Mortgagor to maintain
in full force and effect a Primary Mortgage Insurance Policy insuring that
portion of the Mortgage Loan in excess of a percentage in conformance with
FNMA
and FHLMC requirements. The Company shall pay or shall cause the Mortgagor
to
pay the premium thereon on a timely basis, at least until the LTV of such
Mortgage Loan is reduced to 80%, or such amount as required by Applicable Law,
or such other amount as FNMA and FHLMC permits for cancellation of mortgage
insurance. In the event that such Primary Mortgage Insurance Policy shall be
terminated, the Company shall obtain from another insurer a comparable
replacement policy, with a total coverage equal to the remaining coverage of
such terminated Primary Mortgage Insurance Policy. If the insurer shall cease
to
be a qualified insurer, the Company shall determine whether recoveries under
the
Primary Mortgage Insurance Policy are jeopardized for reasons related to the
financial condition of such insurer, it being understood that the Company shall
in no event have any responsibility or liability for any failure to recover
under the Primary Mortgage Insurance Policy for such reason. If the Company
determines that recoveries are so jeopardized, it shall notify the Purchaser
and
the Mortgagor, if required, and obtain from another qualified insurer a
replacement insurance policy. The Company shall not take any action which would
result in noncoverage under any applicable Primary Mortgage Insurance Policy
of
any loss which, but for the actions of the Company would have been covered
thereunder. In connection with any assumption or substitution agreement entered
into or to be entered into pursuant to Subsection 6.1, the Company shall
promptly notify the insurer under the related Primary Mortgage Insurance Policy,
if any, of such assumption or substitution of liability in accordance with
the
terms of such Primary Mortgage Insurance Policy and shall take all actions
which
may be required by such insurer as a condition to the continuation of coverage
under such Primary Mortgage Insurance Policy. If such Primary Mortgage Insurance
Policy is terminated as a result of such assumption or substitution of
liability, the Company shall obtain a replacement Primary Mortgage Insurance
Policy as provided above.
In
connection with its activities as servicer, the Company agrees to prepare and
present, on behalf of itself and the Purchaser, claims to the insurer under
any
Primary Mortgage Insurance Policy in a timely fashion in accordance with the
terms of such Primary Mortgage Insurance Policy and, in this regard, to take
such action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policy respecting a defaulted Mortgage Loan. Pursuant to
Section 4.6, any amounts collected by the Company under any Primary
Mortgage Insurance Policy shall be deposited in the Escrow Account, subject
to
withdrawal pursuant to Section 4.7.
-51-
Section
4.12. Maintenance
of Mortgage Impairment Insurance.
In
the
event that the Company shall obtain and maintain a blanket policy insuring
against losses arising from fire and hazards covered under extended coverage
on
all of the Mortgage Loans, then, to the extent such policy provides coverage
in
an amount equal to the amount required pursuant to Section 4.10 and
otherwise complies with all other requirements of Section 4.10, it shall
conclusively be deemed to have satisfied its obligations as set forth in
Section 4.10. The Company shall prepare and make any claims on the blanket
policy as deemed necessary by the Company in accordance with Accepted Servicing
Practices. Any amounts collected by the Company under any such policy relating
to a Mortgage Loan shall be deposited in the Custodial Account subject to
withdrawal pursuant to Section 4.5. Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained
on
the related Mortgaged Property a policy complying with Section 4.10, and
there shall have been a loss which would have been covered by such policy,
the
Company shall deposit in the Custodial Account at the time of such loss the
amount not otherwise payable under the blanket policy because of such deductible
clause, such amount to be deposited from the Company’s funds, without
reimbursement therefor. Upon request of any Purchaser, the Company shall cause
to be delivered to such 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 such
Purchaser.
Section
4.13. Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
The
Company shall maintain with responsible companies, at its own expense, a blanket
Fidelity Bond and an Errors and Omissions Insurance Policy, with broad coverage
on all officers, employees or other persons acting in any capacity requiring
such persons to handle funds, money, documents or papers relating to the
Mortgage Loans (“Company
Employees”).
Any
such Fidelity Bond and Errors and Omissions Insurance Policy shall be in the
form of the Mortgage Banker’s Blanket Bond and shall protect and insure the
Company against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of such Company Employees. Such Fidelity Bond
and Errors and Omissions Insurance Policy also shall protect and insure the
Company against losses in connection with the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 4.13 requiring such Fidelity
Bond and Errors and Omissions Insurance Policy shall diminish or relieve the
Company from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be at least
equal to the amounts acceptable to FNMA or FHLMC. Upon the request of any
Purchaser, the Company shall cause to be delivered to such Purchaser a certified
true copy of such fidelity bond and insurance policy and a statement from the
surety and the insurer that such fidelity bond and insurance policy shall in
no
event be terminated or materially modified without 30 days’ prior written notice
to the Purchaser.
-52-
Section
4.14. Inspections.
If
any
Mortgage Loan is more than 75 days delinquent, the Company or its agent
immediately shall inspect the Mortgaged Property and shall conduct subsequent
inspections in accordance with Accepted Servicing Practices or as may be
required by the primary mortgage guaranty insurer. The Company shall keep a
written report of each such inspection.
Section
4.15. Restoration
of Mortgaged Property.
The
Company need not obtain the approval of the Purchaser prior to releasing any
Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to
the restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. For claims greater than $15,000,
at a minimum the Company shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation
Proceeds:
(i) The
Company shall receive satisfactory independent verification of completion of
repairs and issuance of any required approvals with respect
thereto;
(ii) the
Company shall take all steps necessary to preserve the priority of the lien
of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics’ and materialmen’s liens;
(iii) the
Company shall verify that the Mortgage Loan is not in default; and
(iv) pending
repairs or restoration, the Company shall place the Insurance Proceeds or
Condemnation Proceeds in the Escrow Account.
If
the
Purchaser is named as an additional loss payee, the Company is hereby empowered
to endorse any loss draft issued in respect of such a claim in the name of
the
Purchaser.
Section
4.16. Claims.
In
connection with its activities as servicer, the Company agrees to prepare and
present, on behalf of itself and the Purchaser, claims to the insurer in a
timely fashion and, in this regard, to take such action as shall be necessary
to
permit recovery respecting a defaulted Mortgage Loan. Pursuant to
Section 4.4, any amounts collected by the Company under any guaranty shall
be deposited in the Custodial Account, subject to withdrawal pursuant to
Section 4.5.
Section
4.17. 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 Company, or in the event the Company 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, or the perfection of the ownership or security
interest of the Purchaser in such REO Property would be adversely effected,
the
deed or certificate of sale shall be taken in the name of such Person or Persons
as shall be consistent with an Opinion of Counsel obtained by the Company from
any attorney duly licensed to practice law in the state where the REO Property
is located. The Person or Persons holding such title other than the Purchaser
shall acknowledge in writing that such title is being held as nominee for the
Purchaser.
-53-
The
Company shall manage, conserve, protect and operate each REO Property for the
Purchaser solely for the purpose of its prompt disposition and sale. The
Company, either itself or through an agent selected by the Company, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for
its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Company shall attempt to sell the same
(and
may temporarily rent the same for a period not greater than one year, except
as
otherwise provided below) on such terms and conditions as the Company deems
to
be in the best interest of the Purchaser.
The
Company shall use its best efforts to dispose of the REO Property as soon as
possible and shall sell such REO Property in any event within one year after
title has been taken to such REO Property, unless (i) a REMIC election has
not
been made with respect to the arrangement under which the Mortgage Loans and
the
REO Property are held, and (ii) the Company determines, 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; provided,
however,
that
the Company agrees not to sell or dispose of any such Mortgage Loan to a person
who acquires such Mortgage Loan using a purchase money mortgage. If a period
longer than one year is permitted under the foregoing sentence and is necessary
to sell any REO Property, the Company shall report monthly to the Purchaser
as
to the progress being made in selling such REO Property.
The
Company 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 required and available under the Flood Disaster Protection
Act of 1973, as amended, flood insurance in the amount required
above.
The
disposition of REO Property shall be carried out by the Company at such price,
and upon such terms and conditions, as the Company deems to be in the best
interests of the Purchaser. The proceeds of sale of the REO Property shall
be
promptly deposited in the Custodial Account. As soon as practical thereafter
the
expenses of such sale shall be paid and the Company shall reimburse itself
for
any related unreimbursed Servicing Advances, unpaid Servicing Fees and
unreimbursed advances made pursuant to Section 5.3. On the Remittance Date
immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Purchaser.
The
Company shall withdraw the Custodial Account funds necessary for the proper
operation management and maintenance of the REO Property, including the cost
of
maintaining any hazard insurance pursuant to Section 4.10 and the fees of
any managing agent of the Company, or the Company itself. The Company shall
make
monthly distributions on each Remittance Date to the Purchaser of the net cash
flow from the REO Property (which shall equal the revenues from such REO
Property net of the expenses described in the Section 4.16 and of any
reserves reasonably required from time to time to be maintained to satisfy
anticipated liabilities for such expenses).
-54-
Section
4.18. Real
Estate Owned Reports.
Together
with the statement furnished pursuant to Section 5.2, the Company shall
furnish to the Purchaser on or before the Remittance Date each month a statement
with respect to any REO Property covering the operation of such REO Property
for
the previous month and the Company’s efforts in connection with the sale of such
REO Property and any rental of such REO Property incidental to the sale thereof
for the previous month. That statement shall be accompanied by such other
information as the Purchaser shall reasonably request.
Section
4.19. 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 Company shall submit
to
the Purchaser a liquidation report with respect to such Mortgaged
Property.
Section
4.20. Reports
of Foreclosures and Abandonments of Mortgaged Property.
Following
the foreclosure sale or abandonment of any Mortgaged Property, the Company
shall
report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code. The Company shall file information reports with
respect to the receipt of mortgage interest received in a trade or business
and
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property as required by the Code. Such reports shall be in
form
and substance sufficient to meet the reporting requirements imposed by the
Code.
Section
4.21. Fair
Credit Reporting Act.
For
each
Mortgage Loan, the Servicer shall furnish, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files,
to
Equifax, Experian, and Trans Union Credit Information Company, or their
successors, on a monthly basis. The Servicer shall provide evidence of such
monthly reporting to the Purchaser upon request.
ARTICLE
V
PAYMENTS
TO PURCHASER
Section
5.1. Remittances.
On
each
Remittance Date the Company shall remit by wire transfer of immediately
available funds to the Purchaser (a) all amounts deposited in the Custodial
Account as of the close of business on the Determination Date (net of charges
against or withdrawals from the Custodial Account pursuant to Section 4.5),
plus
(b) all
amounts, if any, which the Company is obligated to distribute pursuant to
Section 5.3, minus
(c) any
amounts attributable to Principal Prepayments received after the applicable
Principal Prepayment Period which amounts shall be remitted on the following
Remittance Date, together with any additional interest required to be deposited
in the Custodial Account in connection with such Principal Prepayment in
accordance with Section 4.4(viii); and minus
(d) any
amounts attributable to Monthly Payments collected but due on a Due Date or
Dates subsequent to the first day of the month of the Remittance
Date.
-55-
With
respect to any remittance received by the Purchaser after the date on which
such
payment was due, the Company shall pay to the Purchaser interest on any such
late payment at an annual rate equal to the Prime Rate, adjusted as of the
date
of each charge, 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
Company 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 Company of any such interest shall not
be
deemed an extension of time for payment or a waiver of any Event of Default
by
the Company.
Section
5.2. Statements
to Purchaser.
Not
later
than the Remittance Advice Date, the Company shall furnish to the Purchaser
a
Monthly Remittance Advice, including the information set forth in Exhibit E
attached hereto, with a trial balance report attached thereto, as to the period
ending on the last day of the preceding month, in a form to be agreed upon
by
the Purchaser and the Company.
Section
5.3. Monthly
Advances by Company.
On
the
Business Day immediately preceding each Remittance Date, the Company shall
deposit in the Custodial Account from its own funds or from amounts held for
future distribution an amount equal to all Monthly Payments (with interest
adjusted to the Mortgage Loan Remittance Rate) which were due on the Mortgage
Loans during the applicable Due Period and which were delinquent at the close
of
business on the Determination Date immediately preceding such Remittance Date
or
which were deferred pursuant to Section 4.1. Any amounts held for future
distribution and so used shall be replaced by the Company by deposit in the
Custodial Account on or before any future Remittance Date if funds in the
Custodial Account on such Remittance Date shall be less than payments to the
Purchaser required to be made on such Remittance Date. The Company shall have
the right to deduct delinquent payments from amounts held for future
distribution as long as the Company, its parent, or their respective successors
hereunder has a long-term credit rating of at least “A” by Fitch, Inc. (doing
business as Fitch Ratings), “A” by Standard & Poor’s Ratings Group, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and “A2” by ▇▇▇▇▇’▇ Investors
Service, Inc. If the long-term credit rating of the Company, its parent, or
their respective successors hereunder are at any time below the ratings set
forth in the directly preceding sentence, the Company shall no longer be
permitted to make any advances from amounts held for future distribution, and
instead shall be required to make all advances from its own funds. The Company’s
obligation to make such Monthly Advances as to any Mortgage Loan will continue
through the last Monthly Payment due prior to the payment in full of the
Mortgage Loan, or through the earlier of: (i) 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 and (ii) the Remittance Date prior to the
date
the Mortgage Loan is converted to REO Property, provided, however,
that if
requested by a Rating Agency in connection with a Securitization Transaction,
the Company shall be obligated to make such advances through the Remittance
Date
prior to the date on which cash is received in connection with the liquidation
of REO Property; provided,
however,
that
such obligation shall cease if the Company determines, in its sole reasonable
opinion, that advances with respect to such Mortgage Loan are non-recoverable
by
the Company from Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds, or otherwise with respect to a particular Mortgage Loan. In the event
that the Company determines that any such advances are non-recoverable, the
Company shall provide the Purchaser with a certificate signed by two officers
of
the Company evidencing such determination.
-56-
ARTICLE
VI
GENERAL
SERVICING PROCEDURES
Section
6.1. Transfers
of Mortgaged Property.
The
Company shall use its best efforts to enforce any “due-on-sale” provision
contained in any Mortgage or Mortgage Note and to deny assumption by the person
to whom the Mortgaged Property has been or is about to be sold whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note. When the Mortgaged
Property has been conveyed by the Mortgagor, the Company shall, to the extent
it
has knowledge of such conveyance, exercise its rights to accelerate the maturity
of such Mortgage Loan under the “due-on-sale” clause applicable thereto,
provided, however, that the Company shall not exercise such rights if prohibited
by law from doing so.
If
the
Company reasonably believes it is unable under Applicable Law to enforce such
“due-on-sale” clause, the Company shall enter into (i) an assumption and
modification agreement with the person to whom such property has been conveyed,
pursuant to which such person becomes liable under the Mortgage Note and the
original Mortgagor remains liable thereon or (ii) in the event the Company
is
unable under Applicable Law to require that the original Mortgagor remain liable
under the Mortgage Note and the Company has the prior consent of the primary
mortgage guaranty insurer, a substitution of liability agreement with the
purchaser of the Mortgaged Property pursuant to which the original Mortgagor
is
released from liability and the purchaser of the Mortgaged Property is
substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Company for entering into an assumption
agreement the fee will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage
Loan,
the outstanding principal amount of the Mortgage Loan nor any other material
terms shall be changed without Purchaser’s consent.
-57-
To
the
extent that any Mortgage Loan is assumable, the Company shall inquire diligently
into the credit worthiness of the proposed transferee, and shall use the
underwriting criteria for approving the credit of the proposed transferee which
are used with respect to underwriting mortgage loans of the same type as the
Mortgage Loans. If the credit of the proposed transferee does not meet such
underwriting criteria, the Company diligently shall, to the extent permitted
by
the Mortgage or the Mortgage Note and by Applicable Law, accelerate the maturity
of the Mortgage Loan.
Section
6.2. Satisfaction
of Mortgages and Release of Mortgage Files.
Upon
the
payment in full of any Mortgage Loan, the Company shall notify the Purchaser
in
the Monthly Remittance Advice as provided in Section 5.2, and may request
the release of any Mortgage Loan Documents.
If
the
Company satisfies or releases a Mortgage without first having obtained payment
in full of the indebtedness secured by the Mortgage or should the Company
otherwise prejudice any rights the Purchaser may have under the mortgage
instruments, upon written demand of the Purchaser, the Company shall repurchase
the related Mortgage Loan at the Repurchase Price by deposit thereof in the
Custodial Account within 2 Business Days of receipt of such demand by the
Purchaser. The Company shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 4.12 insuring the Company
against any loss it may sustain with respect to any Mortgage Loan not satisfied
in accordance with the procedures set forth herein.
Section
6.3. Servicing
Compensation.
As
compensation for its services hereunder, the Company shall be entitled to
withdraw from the Custodial Account or to retain from interest payments on
the
Mortgage Loans the amount of its Servicing Fee. The Servicing Fee shall be
payable monthly and shall be computed on the basis of the same unpaid scheduled
principal balance and for the period respecting which any related interest
payment on a Mortgage Loan is computed. The obligation of the Purchaser to
pay
the Servicing Fee is limited to, and payable solely from, the interest portion
of such Monthly Payments.
Additional
servicing compensation in the form of assumption fees, to the extent provided
in
Section 6.1, and late payment charges shall be retained by the Company to
the extent not required to be deposited in the Custodial Account. The Company
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement
thereof except as specifically provided for herein.
Section
6.4. Annual
Statement as to Compliance.
The
Company shall deliver to the Purchaser on or before March 15 each year,
beginning March 15, 2006, an Officer’s Certificate, stating that (i) a review of
the activities of the Company during the preceding calendar year and of
performance under this Agreement has been made under such officer’s supervision,
and (ii) the Company has complied with the provisions of this Agreement or
similar agreements, and (iii) to the best of such officer’s knowledge, based on
such review, the Company has fulfilled all its obligations under this Agreement
or similar agreements 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
Company to cure such default.
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Section
6.5. Annual
Independent Public Accountants’ Servicing Report.
On
or
before March 15 of each year beginning March 15, 2006, the Company, at its
expense, shall cause a firm of independent public accountants which is a member
of the American Institute of Certified Public Accountants to furnish a statement
to each Purchaser to the effect that such firm has examined certain documents
and records relating to the servicing of the mortgage loans similar in nature
and that such firm is of the opinion that the provisions of this or similar
agreements have been complied with, and that, on the basis of such examination
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers, nothing has come to their attention which would
indicate that such servicing has not been conducted in compliance therewith,
except for (i) such exceptions as such firm shall believe to be immaterial,
and
(ii) such other exceptions as shall be set forth in such statement. By providing
Purchaser a copy of a Uniform Single Attestation Program Report from their
independent public accountant’s on an annual basis, the Company shall be
considered to have fulfilled its obligations under this
Section 6.5.
Section
6.6. Right
to Examine Company Records.
The
Purchaser, or its designee, shall have the right to examine and audit any and
all of the books, records, or other information of the Company, whether held
by
the Company or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during business hours or at such other times
as
may be reasonable under applicable circumstances, upon reasonable advance
notice. The Purchaser shall pay its own travel expenses associated with such
examination.
Section
6.7. Compliance
with REMIC Provisions.
If
a
REMIC election has been made with respect to the arrangement under which the
Mortgage Loans and REO Property are held, the Company shall not take any action,
cause the REMIC to take any action or fail to take (or fail to cause to be
taken) any action that, under the REMIC Provisions, if taken or not taken,
as
the case may be, could (i) endanger the status of the REMIC as a REMIC or (ii)
result in the imposition of a tax upon the REMIC (including but not limited
to
the tax on “prohibited transactions” as defined Section 860G(a)(2) of the
Code and the tax on “contributions” to a REMIC set forth in Section 860(D)
of the Code) unless the Company has received an Opinion of Counsel (at the
expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such REMIC status or result in the
imposition of any such tax.
ARTICLE
VII
COMPANY
TO COOPERATE
Section
7.1. Provision
of Information.
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During
the term of this Agreement, the Company shall furnish to the Purchaser such
periodic, special, or other reports or information, and copies or originals
of
any documents contained in the Servicing File for each Mortgage Loan provided
for herein. All other special reports or information not provided for herein
as
shall be necessary, reasonable, or appropriate with respect to the Purchaser
or
any regulatory agency will be provided at the Purchaser’s expense. All such
reports, documents or information shall be provided by and in accordance with
all reasonable instructions and directions which the Purchaser may
give.
The
Company shall execute and deliver all such instruments and take all such action
as the Purchaser may reasonably request from time to time, in order to
effectuate the purposes and to carry out the terms of this
Agreement.
Section
7.2. Financial
Statements; Servicing Facility.
In
connection with marketing the Mortgage Loans, the Purchaser may make available
to a prospective Purchaser a Consolidated Statement of Operations of the Company
for the most recently completed two fiscal years for which such a statement
is
available, as well as a Consolidated Statement of Condition at the end of the
last two fiscal years covered by such Consolidated Statement of Operations.
The
Company also shall make available any comparable interim statements to the
extent any such statements have been prepared by or on behalf of the Company
(and are available upon request to members or stockholders of the Company or
to
the public at large).
The
Company also shall make available to the Purchaser or prospective Purchaser,
within a reasonable period after request, a knowledgeable financial or
accounting officer for the purpose of answering questions respecting recent
developments affecting the Company or the financial statements of the Company,
and to permit any prospective Purchaser to inspect the Company’s servicing
facilities for the purpose of satisfying such prospective Purchaser that the
Company has the ability to service the Mortgage Loans as provided in this
Agreement.
ARTICLE
VIII
THE
COMPANY
Section
8.1. Indemnification;
Third Party Claims.
The
Company shall indemnify the Purchaser and hold it harmless against any and
all
claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Purchaser may sustain in any way related to the failure of the Company
to perform its duties and service the Mortgage Loans in strict compliance with
the terms of this Agreement. The Company immediately shall notify the Purchaser
if a claim is made by a third party with respect to this Agreement or the
Mortgage Loans, assume (with the prior written consent of the Purchaser) the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment
or
decree which may be entered against it or the Purchaser in respect of such
claim. The Company shall follow any written instructions received from the
Purchaser in connection with such claim. The Purchaser promptly shall reimburse
the Company for all costs, fees or expenses advanced by it pursuant to this
paragraph except when the claim in any way results from, relates to or arises
out of any liability, obligation, act or omission of the Company, including
without limitation, the Company’s indemnification obligation under
Section 3.3 and this Section 8.1, any repurchase obligation of the
Company hereunder including Sections 2.3, 3.3 and 6.2, or the failure of
the Company to service and administer the Mortgage Loans and otherwise perform
its obligations hereunder in strict compliance with the terms of this
Agreement.
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Section
8.2. Merger
or Consolidation of the Company.
The
Company shall keep in full effect its existence, rights and franchises as a
corporation, and shall obtain and preserve its qualification to do business
as a
foreign 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 Company may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Company
shall be a party, or any Person succeeding to the business of the Company,
shall
be the successor of the Company hereunder, without the execution or filing
of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided,
however,
that
the successor or surviving Person shall be an institution which is a
FNMA/FHLMC-approved company in good standing. Furthermore, in the event the
Company transfers or otherwise disposes of all or substantially all of its
assets to an Affiliate of the Company, such Affiliate shall satisfy the
condition above, and shall also be fully liable to the Purchaser for all of
the
Company’s obligations and liabilities hereunder.
Section
8.3. Limitation
on Liability of Company and Others.
Neither
the Company nor any of the directors, officers, employees or agents of the
Company shall be under any liability to the Purchaser for any action taken
or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment, provided,
however,
that
this provision shall not protect the Company or any such person against any
breach of warranties or representations made herein, or failure to perform
its
obligations in strict compliance with any standard of care set forth in this
Agreement or any other liability which would otherwise be imposed under this
Agreement. The Company and any director, officer, employee or agent of the
Company may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Company shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the Mortgage
Loans in accordance with this Agreement and which in its opinion may involve
it
in any expense or liability, provided,
however,
that
the Company may, with the consent of the Purchaser, undertake any such action
which it may deem necessary or desirable in respect to this Agreement and the
rights and duties of the parties hereto. In such event, the Company shall be
entitled to reimbursement from the Purchaser of the reasonable legal expenses
and costs of such action.
Section
8.4. Limitation
on Resignation and Assignment by Company.
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The
Purchaser has entered into this Agreement with the Company and subsequent
Purchasers will purchase the Mortgage Loans in reliance upon the independent
status of the Company, and the representations as to the adequacy of its
servicing facilities, plant, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore,
the
Company shall neither assign this Agreement or the servicing hereunder, nor
delegate its rights or duties hereunder or any portion hereof, nor sell or
otherwise dispose of all of its property or assets without the prior written
consent of the Purchaser, which consent shall not be unreasonably
withheld.
The
Company shall not resign from the obligations and duties hereby imposed on
it
except by mutual consent of the Company and the Purchaser or upon the
determination that its duties hereunder are no longer permissible under
Applicable Law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced
by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion
of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company’s responsibilities and obligations hereunder in the manner provided in
Section 12.1.
Without
in any way limiting the generality of this Section 8.4, in the event that
the Company 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 10.1, without any payment of any penalty or damages and without any
liability whatsoever to the Company or any third party.
ARTICLE
IX
SECURITIZATION
TRANSACTION
Section
9.1. Cooperation
of Company with a Reconstitution.
The
Company and the Purchaser agree that with respect to some or all of the Mortgage
Loans, after the related 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) FNMA
under its Cash Purchase Program or MBS Program (Special Servicing Option) (each,
a “FNMA
Transfer”);
or
(b) FHLMC
(the “FHLMC
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
Purchaser and the Company agree that with respect to some or all of the Mortgage
Loans, the Purchaser, at its sole option, shall effect up to four Whole Loan
Transfers or Securitization Transactions per pool of Mortgage Loans, each such
pool of Mortgage Loans to include ten (10) or more Mortgage Loans unless
otherwise agreed to by the Purchaser and the Company, retaining the Company
as
the Servicer thereof or subservicer if a master servicer is employed, or as
applicable the “seller/servicer”.
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The
Company agrees to execute in connection with any Agency Transfer, any and all
reasonably acceptable pool purchase contracts, and/or agreements among the
Purchaser, the Company, FNMA or FHLMC (as the case may be) and any servicer
in
connection with a Whole Loan Transfer, a seller’s warranties and servicing
agreement or a participation and servicing agreement in form and substance
reasonably acceptable to the parties, and in connection with a Securitization
Transaction, a pooling and servicing agreement in form and substance reasonably
acceptable to the parties or an Assignment and Recognition Agreement
substantially in the form attached hereto as Exhibit F (collectively, the
agreements referred to herein are designated, the “Reconstitution Agreements”),
together with an opinion of counsel with respect to such Reconstitution
Agreements.
With
respect to each Whole Loan Transfer and each Securitization Transaction entered
into by the Purchaser, the Company 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; and (3) to restate the
representations and warranties with respect to the Mortgage Loans as of the
related Closing Date and with respect to the Company itself as of the closing
date of each Reconstitution or make the representations and warranties set
forth
in the related selling/servicing guide of the servicer or issuer, as the case
may be, or such representations or warranties as may be required by any rating
agency or prospective purchaser of the related securities or such Mortgage
Loans, in connection with such Reconstitution. The Company shall provide to
such
servicer or issuer, as the case may be, and any other participants or purchasers
in such Reconstitution: (i) any and all information and appropriate
verification of information which may be reasonably available to the Company
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 representations, warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Company, as seller or servicer as are reasonably believed necessary
by
the Purchaser or any such other participant (including, without limitation,
such
revisions to this Agreement relating to the servicing of REO Property and the
provision of remittance reports as the Purchaser may reasonably believe to
be
necessary to enable such servicer to fulfill its master servicing obligations)
and (iii) to execute, deliver and satisfy all conditions set forth in any
indemnity agreement mutually agreed upon by Purchaser and Seller at such time.
Moreover, the Company agrees to cooperate with all reasonable requests made
by
the Purchaser to effect such Reconstitution Agreements. The Company shall
indemnify the Purchaser, each Affiliate of the Purchaser participating in the
Reconstitution, each Person who controls the Purchaser or such Affiliate and
each underwriter and initial purchaser participating in the Reconstitution,
and
their respective present and former directors, officers, employees and agents,
and 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 each of them may sustain in any way
related to any information provided by or on behalf of the Company regarding
the
Company, the Company’s servicing practices or the performance of the Mortgage
Loans or the Company Guide set forth in any offering document prepared in
connection with any Reconstitution. For purposes of the previous sentence,
“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.
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With
respect to any Mortgage Loans sold in a Securitization Transaction in which
the
Company is the servicer, the Company agrees that on or before March 10th of
each
year beginning March 10, 2008, the Company shall deliver to the depositor,
the master servicer (if any) and the trustee for the securitization trust in
the
Securitization Transaction, and their officers, directors and affiliates, a
certification in the form attached as Exhibit H hereto, executed by the
senior officer in charge of servicing at the Company for use in connection
with
any Form 10 K to be filed with the Securities and Exchange Commission with
respect to the securitization trust. The Company shall indemnify and hold
harmless the depositor, the master servicer (if any) and the trustee, and their
respective officers, directors and Affiliates, from and against any losses,
damages, penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments and other costs and expenses arising out of or based upon
any
breach of the Company’s obligations under this paragraph or any material
misstatement or omission, negligence, bad faith or willful misconduct of the
Company in connection therewith. If the indemnification provided for in the
preceding sentence is unavailable or insufficient to hold harmless any
indemnified party, then the Company agrees that it shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities of such indemnified party in such proportion
as
is appropriate to reflect the relative fault of such indemnified party, on
the
one hand, and the Company, on the other, in connection with a breach of the
Company’s obligations under this paragraph or any material misstatement or
omission, negligence, bad faith or willful misconduct of the Company in
connection therewith.
All
Mortgage Loans not sold or transferred pursuant to a Reconstitution shall remain
subject to this Agreement and shall continue to be serviced in accordance with
the terms of this Agreement, and with respect thereto this Agreement shall
remain in full force and effect.
ARTICLE
X
DEFAULT
Section
10.1. Events
of Default.
Each
of
the following shall constitute an Event of Default on the part of the
Company:
(i) any
failure by the Company to remit to the Purchaser any payment required to be
made
under the terms of this Agreement which continues unremedied for a period of
three Business Days after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to the Company by
the
Purchaser; or
(ii) failure
by the Company duly to observe or perform in any material respect any other
of
the covenants or agreements on the part of the Company set forth in this
Agreement which continues unremedied for a period of 30 days after the date
on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Company by the Purchaser or by the Custodian;
or
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(iii) failure
by the Company to maintain its license to do business in any jurisdiction where
the Mortgaged Property is located if such license is required; or
(iv) a
decree
or order of a court or agency or supervisory authority having jurisdiction
for
the appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, including bankruptcy, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Company and such degree or order shall
have
remained in force undischarged or unstayed for a period of 30 days;
or
(v) the
Company shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Company or of or
relating to all or substantially all of its property; or
(vi) the
Company shall admit in writing its inability to pay its debts generally as
they
become due, file a petition to take advantage of any applicable insolvency,
bankruptcy or reorganization statute, make an assignment for the benefit of
its
creditors, voluntarily suspend payment of its obligations or cease its normal
business operations for three Business Days; or
(vii) the
Company ceases to meet the qualifications of a FNMA/FHLMC servicer;
or
(viii) the
Company attempts to assign its right to servicing compensation hereunder or
to
assign this Agreement or the servicing responsibilities hereunder or to delegate
its duties hereunder or any portion thereof in violation of Section 8.4;
or
(ix) the
taking of any action by the Company, any Company Employee, any Affiliate or
any
director or employee thereof that constitutes fraud or criminal activity in
the
performance of its obligations under this Agreement or the indictment of any
of
the foregoing Persons for criminal activity related to the mortgage origination
or servicing activities of the Company, in each case, where such indictment
materially and adversely affects the ability of the Company to perform its
obligations under this Agreement (subject to the condition that such indictment
is not dismissed within 90 days).
In
each
and every such case, so long as an Event of Default shall not have been
remedied, in addition to whatever rights the Purchaser may have at law or equity
to damages, including injunctive relief and specific performance, the Purchaser,
by notice in writing to the Company, may terminate with cause all the rights
and
obligations of the Company under this Agreement and in and to the Mortgage
Loans
and the proceeds thereof.
Upon
receipt by the Company of such written notice, all authority and power of the
Company under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant
to
Section 12.1. Upon written request from any Purchaser, the Company shall
prepare, execute and deliver to the successor entity designated by the Purchaser
any and all documents and other instruments, place in such successor’s
possession all Mortgage Files, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Company’s sole
expense. The Company shall cooperate with the Purchaser and such successor
in
effecting the termination of the Company’s responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by
the Company to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
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Section
10.2. Waiver
of Defaults.
By
a
written notice, the Purchaser may waive any default by the Company in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so
waived.
ARTICLE
XI
TERMINATION
Section
11.1. Termination.
This
Agreement shall terminate upon any of: (i) the later of the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or the disposition of any REO Property with respect to the last Mortgage
Loan and the remittance of all funds due hereunder, (ii) mutual consent of
the
Company and the Purchaser in writing or (iii) termination pursuant to
Section 10.1, 11.2 or 11.3.
Section
11.2. Termination
Without Cause.
The
Purchaser may terminate, at its sole option, any rights the Company may have
hereunder, without cause, as provided in this Section 11.2. Any such notice
of termination shall be in writing and delivered to the Company and any Rating
Agency at least 30 days prior to the date of such termination by registered
mail
as provided in Section 12.5.
The
Company shall be entitled to receive, as such liquidated damages, upon its
termination as servicer hereunder without cause pursuant to this
Section 11.2 an amount equal to 1.5% of the aggregate outstanding principal
amount of the Mortgage Loans as of the termination date paid by the Purchaser
to
the Company with respect to all of the Mortgage Loans.
Section
11.3. Termination
With Cause.
Notwithstanding
any other provision hereof to the contrary, the Purchaser, at its option, may
terminate this Agreement, and any rights the Company may have hereunder, with
cause upon ten (10) Business Days’ prior written notice. For all purposes of
determining “cause” with respect to termination of this Agreement or the rights
of the Company hereunder, such term shall mean, without limitation, termination
upon the occurrence of any Event of Default hereunder which is not cured within
any applicable cure period. In the event of a termination of the Company for
cause under this Section 11.3, no liquidated damages shall be payable to
the Company pursuant to Section 11.2.
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ARTICLE
XII
MISCELLANEOUS
PROVISIONS
Section
12.1. Successor
to Company.
Prior
to
termination of the Company’s responsibilities and duties under this Agreement
pursuant to Sections 8.4, 10.1 or 11.1, the Purchaser shall, (i) succeed to
and assume all of the Company’s responsibilities, rights, duties and obligations
under this Agreement, or (ii) appoint a successor having the characteristics
set
forth in Section 8.2 and which shall succeed to all rights and assume all
of the responsibilities, duties and liabilities of the Company under this
Agreement prior to the termination of Company’s responsibilities, duties and
liabilities under this Agreement. In connection with such appointment and
assumption, the Purchaser may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor shall
agree. In the event that the Company’s duties, responsibilities and liabilities
under this Agreement should be terminated pursuant to the aforementioned
sections, the Company shall discharge such duties and responsibilities during
the period from the date it acquires knowledge of such termination until the
effective date thereof with the same degree of diligence and prudence which
it
is obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition
of
its successor. The resignation or removal of the Company pursuant to the
aforementioned sections shall not become effective until a successor shall
be
appointed pursuant to this Section 12.1 and shall in no event relieve the
Company of the representations and warranties made pursuant to Sections 3.1
and 3.2 and the remedies available to the Purchaser under Sections 2.3, 3.3
and 6.2, it being understood and agreed that the provisions of such
Sections 2.3, 3.1, 3.2, 3.3 and 6.1 shall be applicable to the Company
notwithstanding any such sale, assignment, resignation or termination of the
Company, or the termination of this Agreement.
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Company and to the Purchaser an instrument accepting such appointment,
wherein the successor shall make the representations and warranties set forth
in
Section 3.1, except for the portion of subsection (h) relating to sale of
the mortgage loans and all of subsections (j) and (l) thereof, whereupon such
successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Company, with like effect
as if originally named as a party to this Agreement. Any termination or
resignation of the Company or termination of this Agreement pursuant to
Section 8.4, 10.1, 11.1, 11.2 or 11.3 shall not affect any claims that any
Purchaser may have against the Company arising out of the Company’s actions or
failure to act prior to any such termination or resignation.
The
Company shall deliver promptly to the successor servicer the funds in the
Custodial Account and Escrow Account and all Mortgage Files and related
documents and statements held by it hereunder and the Company shall account
for
all funds and shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and definitively vest in
the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Company.
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Upon
a
successor’s acceptance of appointment as such, the Company shall notify by mail
the Purchaser of such appointment in accordance with the procedures set forth
in
Section 12.5.
Section
12.2. Amendment.
This
Agreement may be amended from time to time by written agreement signed by the
Company and the Purchaser.
Section
12.3. Governing
Law.
This
Agreement shall be construed in accordance with the laws of the State of New
York and the obligations, rights and remedies of the parties hereunder shall
be
determined in accordance with such laws.
Each
of
the Company and the Purchaser hereby knowingly, voluntarily and intentionally
waives any and all rights it may have to a trial by jury in respect or any
litigation based on, or arising out of, under, or in connection with, this
Agreement, or any other documents and instruments executed in connection
herewith, or any course of conduct, course of dealing, statements (whether
oral
or written), or actions of the Company or the Purchaser. This provision is
a
material inducement for the Purchaser to enter into this Agreement.
Section
12.4. Duration
of Agreement.
This
Agreement shall continue in existence and effect until terminated as herein
provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.
Section
12.5. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
if
to the
Company:
National
City Mortgage Co.
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Telecopy:
(▇▇▇) ▇▇▇-▇▇▇▇
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or
such
other address as may hereafter be furnished to the Purchaser in writing by
the
Company;
if
to
Purchaser:
▇▇▇▇▇▇▇
Sachs Mortgage Company
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇
▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Whole Loan Execution Group
Tel:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
With
a
copy to:
▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Company
▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
or
such
other address as may hereafter be furnished to the Company in writing by the
Purchaser.
Section
12.6. 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
12.7. Relationship
of Parties.
Nothing
herein contained shall be deemed or construed to create a partnership or joint
venture between the parties hereto and the services of the Company shall be
rendered as an independent contractor and not as agent for the
Purchaser.
Section
12.8. Execution;
Successors and Assigns.
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. Subject to Section 8.4, this Agreement shall inure
to the benefit of and be binding upon, and shall be enforceable by, the Company
and the Purchaser and their respective successors and assigns, including without
limitation, any trustee appointed by the Purchaser with respect to any Whole
Loan Transfer or Securitization Transaction.
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Section
12.9. Recordation
of Assignments of Mortgage.
To
the
extent permitted by Applicable Law, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any
or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, which recordation shall have been effected
at the Company’s expense in the event recordation is either necessary under
Applicable Law or requested by the Purchaser at its sole option.
Section
12.10. Assignment
by Purchaser.
The
Purchaser shall have the right, without the consent of the Company but subject
to the limit set forth in Section 2.2 hereof, 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 Recognition Agreement substantially
in
the form of Exhibit F hereto and the assignee or designee shall accede to the
rights and obligations hereunder of the Purchaser with respect to such Mortgage
Loans. All references to the Purchaser in this Agreement shall be deemed to
include its assignee or designee.
Section
12.11. Solicitation
of Mortgagor.
The
Purchaser, its affiliates, successors or assigns shall not, without the prior
written consent of the Company, take any action to solicit or make direct
contact with the Mortgagor under any Mortgage Loan except to the extent required
by the Company’s breach of this Agreement or as required under Applicable Law or
regulatory authority. Notwithstanding any provision of this Agreement to the
contrary, in the event the Purchaser, its affiliates, successors or assigns
fails to obtain such written consent, the Company shall be entitled, in its
sole
discretion, to terminate its obligations and duties under this Agreement. Upon
termination without cause of the servicing rights and obligations under this
Agreement and the transfer of such rights and obligations to the Purchaser
or
Purchaser’s designee, the Company shall be entitled to receive damages as
provided in Section 11.2.
The
Company agrees that, after the Closing Date, it will not take any action to
solicit the refinancing of any Mortgage Loan. It is understood and agreed that
promotions undertaken by the Company or any affiliate of the Company which
are
directed to the general public at large, including, without limitation, mass
mailings based upon commercially acquired mailing lists, newspaper, radio,
television advertisements or from servicing the refinancing needs of a Mortgagor
who, without solicitation, contacts Company in connection with the refinance
of
such Mortgage or Mortgage Loan, shall not constitute solicitation under this
Section. Notwithstanding anything to the contrary, this Section shall not
prohibit the Company from soliciting any Mortgagor to provide other services
including but not limited to credit cards, insurance investments and banking
related services.
ARTICLE
XIII
COMPLIANCE
WITH REGULATION AB
Section
13.1. Intent
of the Parties; Reasonableness.
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The
Purchaser and the Company 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
Company acknowledges that investors in privately offered securities may require
that the Purchaser or any Depositor provide comparable disclosure in
unregistered offerings. References in this Agreement to compliance with
Regulation AB include provision of comparable disclosure in private offerings
to
the extent that such comparable disclosure becomes industry standard in similar
transactions.
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 provisions of 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) that are applicable to any Securitization
Transaction. The Company acknowledges that interpretations of the requirements
of Regulation AB may change over time, whether due to interpretive guidance
provided by the Commission or its staff, consensus among participants in the
asset-backed securities markets, advice of counsel, or otherwise, and agrees
to
cooperate in good faith with the Purchaser or any Depositor, upon a request
made
in good faith, regarding the Company’s delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Company shall cooperate
as
set forth herein with the Purchaser to deliver to the Purchaser (including
any
of its assignees or designees) and any Depositor, any and all statements,
reports, certifications, records and any other information necessary in the
good
faith determination of the Purchaser or any Depositor to permit the Purchaser
or
such Depositor to comply with the provisions of Regulation AB, together with
such disclosures relating to the Company, any Subservicer, any Third-Party
Originator and the Mortgage Loans, or the servicing of the Mortgage Loans,
reasonably believed by the Purchaser or any Depositor to be necessary in order
to effect such compliance.
The
Purchaser (including any of its assignees or designees) shall cooperate with
the
Company by providing timely notice of requests for information under these
provisions and by reasonably limiting such requests to information required,
in
the Purchaser’s reasonable good faith judgment, to comply with Regulation
AB.
Section
13.2. Additional
Representations and Warranties of the Company.
(a) The
Company shall be deemed to represent to the Purchaser and to any Depositor,
as
of the date on which information is first provided to the Purchaser or any
Depositor under Section 13.03 that, except as disclosed in writing to the
Purchaser or such Depositor prior to such date and unless otherwise disclosed
in
such information provided under Section 13.03: (i) the Company is not aware
and has not received notice that any default, early amortization or other
performance triggering event has occurred as to any other securitization due
to
any act or failure to act of the Company; (ii) the Company has not been
terminated as servicer in a residential mortgage loan securitization, either
due
to a servicing default or to application of a servicing performance test or
trigger; (iii) no material noncompliance with the applicable servicing criteria
with respect to other securitizations of residential mortgage loans involving
the Company as servicer has been disclosed or reported by the Company; (iv)
no
material changes to the Company’s policies or procedures with respect to the
servicing function it will perform under this Agreement and any Reconstitution
Agreement for mortgage loans of a type similar to the Mortgage Loans have
occurred during the three-year period immediately preceding the scheduled
closing date of the related Securitization Transaction; (v) there are no aspects
of the Company’s financial condition that could have a material adverse effect
on the performance by the Company of its servicing obligations under this
Agreement or any Reconstitution Agreement; (vi) there are no material legal
or
governmental proceedings pending (or known to be contemplated by government
authorities) against the Company, any Subservicer or any Third-Party Originator;
and (vii) there are no affiliations, relationships or transactions relating
to
the Company, any Subservicer or any Third-Party Originator with respect to
any
Securitization Transaction and any party thereto identified by the related
Depositor of a type described in Item 1119 of Regulation AB.
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(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 Company shall, as soon as practicable (and in no event
more than 10 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 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
13.3. Information
to Be Provided by the Company.
In
connection with any Securitization Transaction the Company shall (i) as promptly
as practicable (and in no event more than 10 Business Days) following request
by
the Purchaser or any Depositor, provide to the Purchaser and such Depositor
(or,
as applicable, cause each Third-Party Originator and each Subservicer to
provide), in writing, or in a mutually agreed upon electronic format, and in
form and substance reasonably satisfactory to the Purchaser and such Depositor,
the information and materials specified in paragraphs (a), (b), (c) and (f)
of
this Section, and (ii) as promptly as practicable following notice to or
discovery by the Company, provide to the Purchaser and any Depositor (in
writing, or in a mutually agreed upon electronic format, 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 Company shall provide (or
cause
each Third-Party Originator or Subservicer, as applicable, to provide) such
information, as mutually agreed upon by the Purchaser or any Depositor and
the
Company (or such Third-Party Originator or Subservicer, as applicable) such
information regarding (i) the Company, as originator of the Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
or
(ii) each Third-Party Originator, and (iii) as applicable, each Subservicer,
as
is requested for the purpose of compliance with Items 1103(a)(1), 1105, 1110,
1117 and 1119 of Regulation AB. Such information shall include, at a
minimum:
A. the
originator’s form of organization;
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B. a
description of the originator’s origination program and how long the originator
has been engaged in originating residential mortgage loans, which description
shall include a discussion of the originator’s experience in originating
mortgage loans of a similar type as the Mortgage Loans; information regarding
the size and composition of the originator’s origination portfolio; and
information that may be material, in the reasonable good faith judgment of
the
Purchaser or any Depositor, to an analysis of the performance of the Mortgage
Loans, including the originators’ credit-granting or underwriting criteria for
mortgage loans of similar type(s) as the Mortgage Loans and such other
information as the Purchaser or any Depositor may reasonably request for the
purpose of compliance with Item 1110(b)(2) of Regulation AB;
C. a
description of any material legal or governmental proceedings pending (or known
to be contemplated by governmental authorities) against the Company, each
Third-Party Originator and each Subservicer; and
D. as
promptly as practicable following notice to the Company (and in no event more
than 10 Business Days), a description of any affiliation or relationship between
the Company, each Third-Party Originator, each Subservicer and any of the
following parties to a Securitization Transaction, as such parties are
identified and noticed to the Company 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) If
so
requested by the Purchaser or any Depositor, the Company shall provide (or,
as
applicable, cause each Third-Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Company, if the Company is an originator of Mortgage
Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information shall
be
prepared by the Company (or Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of Item 1105(a)(1)-(3)
of Regulation AB. To the extent that there is reasonably available to the
Company (or Third-Party Originator) Static Pool Information with respect to
more
than one mortgage loan type, the Purchaser or any Depositor shall be entitled
to
specify whether some or all of such information shall be provided pursuant
to
this paragraph. The content of such Static Pool Information may be in the form
customarily provided by the Company, and need not be customized for the
Purchaser or any Depositor. Such Static Pool Information for each vintage
origination year or prior securitized pool, as applicable, shall be presented
in
increments no less frequently than quarterly over the life of the mortgage
loans
included in the vintage origination year or prior securitized pool. The most
recent periodic increment must be as of a date no later than 135 days prior
to
the date of the prospectus or other offering document in which the Static Pool
Information is to be included or incorporated by reference. The Static Pool
Information shall be provided in an electronic format that provides a permanent
record of the information provided, such as a portable document format (pdf)
file, or other such electronic format as mutually agreed upon by the Purchaser
or the Depositor and the Company, as applicable.
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Promptly
following notice or discovery of a material error in Static Pool Information
provided pursuant to the immediately preceding paragraph (including an omission
to include therein information required to be provided pursuant to such
paragraph), the Company shall provide corrected Static Pool Information to
the
Purchaser or any Depositor, as applicable, in the same format in which Static
Pool Information was previously provided to such party by the
Company.
If
so
requested by the Purchaser or any Depositor, the Company shall provide (or,
as
applicable, cause each Third-Party Originator to provide), at the expense of
the
Purchaser or Depositor, as applicable (to the extent of any additional
incremental expense associated with delivery pursuant to this Agreement), such
agreed-upon procedures letters of certified public accountants reasonably
acceptable to the Purchaser or Depositor, as applicable, pertaining to Static
Pool Information relating to prior securitized pools for securitizations closed
on or after January 1, 2006 or, in the case of Static Pool Information with
respect to the Company’s or Third-Party Originator’s originations or purchases,
to calendar months commencing January 1, 2006, as the Purchaser or such
Depositor shall reasonably request. Such statements and letters shall be
addressed to and be for the benefit of such parties as the Purchaser or such
Depositor shall designate, which may include, by way of example, any Sponsor,
any Depositor and any broker dealer acting as underwriter, placement agent
or
initial purchaser with respect to a Securitization Transaction, and shall also
be addressed to and for the benefit of the Company and such Third-Party
Originator; provided, however, that the procedures and work to be performed
by
such certified public accountants shall not create an undue disruption or burden
on the business operations of the Company, unless such standards and letters
become standard in the industry for similar transactions. Any such statement
or
letter may take the form of a standard, generally applicable document
accompanied by a reliance letter authorizing reliance by the addressees
designated by the Purchaser or such Depositor.
(c) If
so
requested by the Purchaser or any Depositor, the Company shall provide such
information regarding the Company, as servicer of the Mortgage Loans, and each
Subservicer (each of the Company and each Subservicer, for purposes of this
paragraph, a “Servicer”), as is requested for the purpose of compliance with
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 reasonable good faith judgment of the Purchaser
or
any Depositor, to any analysis of the servicing of the Mortgage Loans or the
related asset-backed securities, as applicable, including, without
limitation:
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(1) whether
any prior securitizations of mortgage loans of a type similar to the Mortgage
Loans involving the Servicer have defaulted or experienced an early amortization
or other performance triggering event because of servicing during the three-year
period immediately preceding the scheduled closing date of 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 scheduled closing date of 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 scheduled closing date of 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 the effect on one or more aspects of servicing resulting
from
such financial condition could have a material impact on pool performance or
the
performance by the Company 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 scheduled closing date of the related
Securitization Transaction, which may be limited to a statement by an authorized
officer of the Servicer to the effect that the Servicer has made all advances
required to be made on residential mortgage loans serviced by it during such
period, or, if such statement would not be accurate, information regarding
the
percentage and type of advances not made as required, and the reasons for such
failure to advance;
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F. a
description of the Servicer’s processes and procedures designed to address any
special or unique factors involved in servicing loans of a similar type as
the
Mortgage Loans;
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.
If
so
requested by the Purchaser or any Depositor for the purpose of satisfying its
reporting obligation under the Exchange Act with respect to any class of
asset-backed securities, the Company shall upon discovery (or shall cause each
Subservicer and Third-Party Originator to so notify upon discovery) (i) notify
the Purchaser and any Depositor in writing of (A) any material litigation or
governmental proceedings pending against the Company, any Subservicer or any
Third-Party Originator, as applicable, and (B) any affiliations or relationships
that develop following the closing date of a Securitization Transaction between
the Company, any Subservicer or any Third-Party Originator and any of the
parties specified in 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.
As
a
condition to the succession to the Company or any Subservicer as servicer or
subservicer under this Agreement or any Reconstitution Agreement by any Person
(i) into which the Company or such Subservicer may be merged or consolidated,
or
(ii) which may be appointed as a successor to the Company or any Subservicer,
the Company shall provide to the Purchaser and any Depositor, at least 5
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 the related Securitization
Transaction.
In
addition to such information as the Company, as servicer, is obligated to
provide pursuant to other provisions of this Agreement, if so requested by
the
Purchaser or any Depositor, the Company shall provide such information
reasonably available to the Company regarding the performance or servicing
of
the Mortgage Loans as is reasonably required 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). Such information shall be provided
concurrently with the monthly reports otherwise required to be delivered by
the
Company under this Agreement or in such other timeframe as Purchaser as
reasonably agreed to, commencing with the first such report due in connection
with the applicable Securitization Transaction.
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Section
13.4. Servicer
Compliance Statement.
On
or
before March 1 of each calendar year, commencing in 2007, the Company shall
deliver to the Purchaser and any Depositor a statement of compliance addressed
to the Purchaser and such Depositor and signed by an authorized officer of
the
Company, to the effect that (i) a review of the Company’s activities as Servicer
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 Company
has fulfilled all of its obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar
year
(or applicable portion thereof) or, if there has been a failure to fulfill
any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status
thereof.
Section
13.5. Report
on Assessment of Compliance and Attestation.
(a) On
or
before March 1 of each calendar year, commencing in 2007, the Company
shall:
(i) deliver
to the Purchaser and any Depositor a report (in form and substance reasonably
satisfactory to the Purchaser and such Depositor) regarding the Company’s
assessment of compliance with the Servicing Criteria during the immediately
preceding calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed
to
the Purchaser and such Depositor and signed by an authorized officer of the
Company, and shall address each of the Servicing Criteria specified on a
certification substantially in the form of Exhibit K 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 Company and delivered
pursuant to the preceding paragraph. Such attestation shall be in accordance
with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act
and
the Exchange Act;
(iii) cause
each Subservicer, and each Subcontractor determined by the Company pursuant
to
Section 13.6(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) If
requested by the Purchaser or any Depositor not later than February 1 of the
calendar year in which such certification is to be delivered, deliver to the
Purchaser, any Depositor and any other Person that will be responsible for
signing the certification (a “Sarbanes
Certification”)
required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant
to
Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002) on behalf of an asset-backed
issuer with respect to a Securitization Transaction a certification in the
form
attached hereto as Exhibit H; provided that such certification delivered by
the
Company may not be filed as an exhibit to, or included in, any offering document
or registration statement unless required by law or regulation.
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The
Company acknowledges that the parties identified in clause (a)(iv) above may
rely on the certification provided by the Company pursuant to such clause in
signing a Sarbanes Certification and filing such with the Commission. Neither
the Purchaser nor any Depositor will request delivery of a certification under
clause (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 13.5(a)(i) shall address each of the Servicing Criteria specified
on a certification substantially in the form of Exhibit K 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 13.5(a)(iii) need not address any elements of the Servicing
Criteria other than those specified by the Company pursuant to
Section 13.6.
Section
13.6. Use
of
Subservicers and Subcontractors.
The
Company shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Company as servicer under this Agreement
or any Reconstitution Agreement unless the Company complies with the provisions
of paragraph (a) of this Section. The Company shall not hire or otherwise
utilize the services of any Subcontractor, and shall not permit any Subservicer
to hire or otherwise utilize the services of any Subcontractor, to fulfill
any
of the obligations of the Company as servicer under this Agreement or any
Reconstitution Agreement unless the Company complies with the provisions of
paragraph (b) of this Section.
(a) It
shall
not be necessary for the Company to seek the consent of the Purchaser or any
Depositor to the utilization of any Subservicer. The Company shall cause any
Subservicer used by the Company (or by any Subservicer) for the benefit of
the
Purchaser and any Depositor to comply with the provisions of this
Section and with Sections 13.2, 13.3(c) and (e), 13.4, 13.5 and 13.7
of this Agreement to the same extent as if such Subservicer were the Company,
and to provide the information required with respect to such Subservicer under
Section 13.3(d) of this Agreement. The Company shall be responsible for
obtaining from each Subservicer and delivering to the Purchaser and any
Depositor any servicer compliance statement required to be delivered by such
Subservicer under Section 13.4, any assessment of compliance and
attestation required to be delivered by such Subservicer under Section 13.5
and any certification required to be delivered to the Person that will be
responsible for signing the Sarbanes Certification under Section 13.5 as
and when required to be delivered.
(b) It
shall
not be necessary for the Company to seek the consent of the Purchaser or any
Depositor to the utilization of any Subcontractor. The Company shall promptly
upon request provide to the Purchaser and any Depositor (or any designee of
the
Depositor, such as a master servicer or administrator) a written description
(in
form and substance satisfactory to the Purchaser and such Depositor) of the
role
and function of each Subcontractor utilized by the Company or any Subservicer,
specifying (i) the identity of each such Subcontractor, (ii) which (if any)
of
such Subcontractors are “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the Servicing
Criteria will be addressed in assessments of compliance provided by each
Subcontractor identified pursuant to clause (ii) of this
paragraph.
-78-
As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 13.5 and 13.7 of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance
and
attestation required to be delivered by such Subcontractor under
Section 13.5, in each case as and when required to be
delivered.
Section
13.7. Indemnification;
Remedies.
(a) The
Company shall indemnify the Purchaser, each affiliate of the Purchaser, and
each
of the following parties participating in a Securitization Transaction: each
sponsor and issuing entity; each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission
with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction; each broker dealer acting as underwriter,
placement agent or initial purchaser, each Person who controls any of such
parties or the Depositor (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); and the respective
present and former directors, officers, employees and agents of each of the
foregoing and of the Depositor, and shall hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
(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 Company, or provided under this Article XIII by or on behalf of any
Subservicer, Subcontractor or Third-Party Originator (collectively, the
“Company
Information”),
or B.
the omission or alleged omission to state in the Company Information a material
fact required to be stated in the Company Information or necessary in order
to
make the statements therein, in the light of the circumstances under which
they
were made, not misleading; provided, by way of clarification, that clause (B)
of
this paragraph shall be construed solely by reference to the Company Information
and not to any other information communicated in connection with a sale or
purchase of securities, without regard to whether the Company Information or
any
portion thereof is presented together with or separately from such other
information;
-79-
(ii) any
failure by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under this Article XIII, including
(except as provided below) any failure by the Company to identify pursuant
to
Section 13.6(b) any Subcontractor “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB; or
(iii) any
breach by the Company of a representation or warranty set forth in
Section 13.2(a) or in a writing furnished pursuant to Section 13.2(b)
and made as of a date prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by such closing date,
or any breach by the Company of a representation or warranty in a writing
furnished pursuant to Section 13.2(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 Company shall promptly reimburse the Purchaser, any Depositor, as
applicable, and each Person responsible for the preparation, execution or filing
of any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to
Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by the Company, any Subservicer,
any
Subcontractor or any Third-Party Originator.
(b) Notification
and Cooperation.
The
parties hereto further agree, and any Indemnified Party not a party hereto
is
deemed to agree, as a condition to its reliance on such indemnification, that
the Company’s indemnification obligations under this Section 13.7 are
subject to the following terms and conditions:
(i) An
Indemnified Party seeking indemnification hereunder shall give written notice
to
the Company within a reasonable time after the Indemnified Party receives notice
or becomes aware of an indemnifiable claim;
(ii) The
Company shall undertake the defense of the action or claim with counsel or
other
representatives of its own choosing and reasonably acceptable to the Indemnified
Party (which counsel shall not, except with the consent of the Indemnified
Party, be counsel to the Indemnifying Party);
(iii) The
Indemnified Party shall have the right to participate and assist in, but not
control, the defense of such claim and employ separate counsel in any action
or
claim at the expense of the Indemnified Party (i.e., at its own expense);
and
(iv) The
Company shall not settle or compromise any claim suit or action against the
Indemnified Party without the express prior written consent of the Indemnified
Party.
(c) With
respect to any breach of this Article 13, the Purchaser shall have the remedies
set forth in this Agreement, including without limitation, Article
10.
-80-
(d) Limitations.
Notwithstanding anything in this Agreement to the contrary, in no event shall
the Company be obligated under this Section 13.7 to indemnify an
Indemnified Party otherwise entitled to indemnity hereunder in respect of any
indemnifiable claims or losses that result from the willful misconduct, bad
faith or grossly negligent acts or omissions of the Indemnified
Party.
-81-
IN
WITNESS WHEREOF, the Company and the Purchaser have caused their names to be
signed hereto by their respective duly authorized officers as of the day and
year first above written.
▇▇▇▇▇▇▇
▇▇▇▇▇ MORTGAGE COMPANY, a
New
York limited partnership
By:
▇▇▇▇▇▇▇ Sachs Real Estate
Funding
Corp., a New York corporation, its General Partner
By:
Name:
Title:
NATIONAL
CITY MORTGAGE CO.,
As
seller
and servicer
By:
Name:
Title:
EXHIBIT
A
MORTGAGE
LOAN SCHEDULE
See
attached
A-1
EXHIBIT
B
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Purchaser and
any prospective Purchaser, and which shall be retained by the Company in the
Servicing File or delivered to the Custodian pursuant to Sections 2.1 and
2.3 of the Flow Seller’s Warranties and the Servicing Agreement to which this
Exhibit is attached (the “Agreement”):
(A) The
original Mortgage Note bearing all intervening endorsements, endorsed “Pay to
the order of ______________, without recourse” and signed in the name of the
Company by an authorized officer (in the event that the Mortgage Loan was
acquired by the Company in a merger, the signature must be in the following
form: “[Company], successor by merger to [name of predecessor]”; and in the
event that the Mortgage Loan was acquired or originated by the Company while
doing business under another name, the signature must be in the following form:
“[Company], formerly know as [previous name]”).
(B) The
original of any personal endorsement, surety and/or guaranty agreement executed
in connection with the Mortgage Note, if any.
(C) With
respect to Mortgage Loans that are not Co-op Loans or except as set forth below,
the original Mortgage, with evidence of recording thereon or a certified true
and correct copy of the Mortgage sent for recordation. With respect to any
Co-op
Loan, an original or copy of the Security Agreement. If in connection with
any
Mortgage Loan, the Company cannot deliver or cause to be delivered the original
Mortgage with evidence of recording thereon on or prior to the Closing Date
because of a delay caused by the public recording office where such Mortgage
has
been delivered for recordation or because such Mortgage has been lost or because
such public recording office retains the original recorded Mortgage, the Company
shall deliver or cause to be delivered to the Custodian, a photocopy of such
Mortgage, together with (i) in the case of a delay caused by the public
recording office, an Officer’s Certificate of the Company stating that such
Mortgage has been dispatched to the appropriate public recording office for
recordation and that the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and complete copy of
the
original recorded Mortgage will be promptly delivered to the Custodian upon
receipt thereof by the Company; or (ii) in the case of a Mortgage where a public
recording office retains the original recorded Mortgage or in the case where
a
Mortgage is lost after recordation in a public recording office, a copy of
such
Mortgage certified by such public recording office or by the title insurance
company that issued the title policy to be a true and complete copy of the
original recorded Mortgage.
B-1
(D) The
originals or certified true copies of all assumption, modification,
consolidation or extension agreements, with evidence of recording noted thereon
if recordation is required to maintain the lien of the mortgage or is otherwise
required, or, if recordation is not so required, an original or copy of any
such
assumption, modification, consolidation or extension agreements.
(E) With
respect to Mortgage Loans that are not Co-op Loans, the original Assignment
of
Mortgage for each Mortgage Loan, in form and substance acceptable for recording,
from the Company to “______________” or as otherwise directed by the Purchaser.
If the Mortgage Loan was acquired by the Company in a merger, the Assignment
of
Mortgage must be made by “[Company], successor by merger to [name of
predecessor].” If the Mortgage Loan was acquired or originated by the Company
while doing business under another name, the Assignment of Mortgage must be
by
“[Company], formerly know as [previous name].” Subject to the foregoing and
where permitted under the Applicable Laws of the jurisdiction wherein the
Mortgaged property is located, such Assignments of Mortgage may be made by
blanket assignments for Mortgage Loans secured by the Mortgaged Properties
located in the same county.
(F) With
respect to Mortgage Loans that are not Co-op Loans, the originals or certified
true copies of all intervening assignments of the Mortgage necessary to show
a
complete chain of title from the original mortgagee to the Company, with
evidence of recording thereon, or if any such intervening assignment has not
been returned from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of mortgage,
the Company shall deliver or cause to be delivered to the Custodian, a photocopy
of such intervening assignment, together with (i) in the case of a delay caused
by the public recording office, an Officer’s Certificate of the Company stating
that such intervening assignment of mortgage has been dispatched to the
appropriate public recording office for recordation and that such original
recorded intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording office
or
by the title insurance company that issued the title policy to be a true and
complete copy of the original recorded intervening assignment of mortgage will
be promptly delivered to the Custodian upon receipt thereof by the Company;
or
(ii) in the case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording office,
a
copy of such intervening assignment certified by such public recording office
to
be a true and complete copy of the original recorded intervening
assignment.
B-2
(G) With
respect to Mortgage Loans that are not Co-op Loans, the original mortgage policy
of title insurance or evidence of title.
(H) Any
security agreement, chattel mortgage or equivalent executed in connection with
the Mortgage.
(I) With
respect to any Co-op Loan; (i) a copy of the Co-op Lease and the Assignment
of
such Co-op Lease, with all intervening assignments showing a complete chain
of
title and an Assignment thereof by Company; (ii) the stock certificate together
with an undated stock power relating to such stock certificate executed in
blank; (iii) the recognition agreement of the interests of the Mortgagee with
respect to the Co-op Loan by the residential cooperative housing corporation,
the stock of which was pledged by the related Mortgagor to the originator of
such Co-op Loan; and (iv) copies of the financial statement filed by the
originator as secured party and, if applicable, a filed UCC-3 assignment of
the
subject security interest showing a complete chain of title, together with
an
executed UCC-3 assignment of such security interest by the Company in a form
sufficient for filing; and
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items to the extent in the possession of the Company or in the
possession of the Company’s agent(s):
(J) Verification
of Mortgage Insurance.
(K) The
original hazard insurance policy and, if required by law, flood insurance
policy, in accordance with Section 4.10 of the Agreement.
(L) Residential
loan application.
(M) Mortgage
Loan closing statement.
(N) Verification
of employment and income, unless originated under the Company’s Limited
Documentation program, FNMA Timesaver Plus.
(O) Verification
of acceptable evidence of source and amount of down payment.
(P) Credit
report on the Mortgagor, if available.
(Q) Residential
appraisal report.
(R) Photograph
of the Mortgaged Property.
B-3
(S) Survey
of
the Mortgaged Property, if required by the title company or Applicable
Law.
(T) Copy
of
each instrument necessary to complete identification of any exception set forth
in the exception schedule in the title policy, i.e. map or plat, restrictions,
easements, sewer agreements, home association declarations, etc.
(U) All
required disclosure statements.
(V) If
available, termite report, structural engineer’s report, water potability and
septic certification.
(W) Sales
contract, if applicable.
(X) Evidence
of payment of taxes and insurance premiums, insurance claim files,
correspondence, current and historical computerized data files, and all other
processing, underwriting and closing papers and records which are customarily
contained in a mortgage loan file and which are required to document the
Mortgage Loan or to service the Mortgage Loan.
(Y) Amortization
schedule, if available.
(Z) Original
power of attorney, if applicable.
In
the
event an Officer’s Certificate of the Company is delivered to the Custodian
because of a delay caused by the public recording office in returning any
recorded document, the Company shall deliver to the Custodian, within 90 days
of
the Closing Date, an Officer’s Certificate which shall (i) identify the recorded
document, (ii) state that the recorded document has not been delivered to the
Custodian due solely to a delay caused by the public recording office, (iii)
state the amount of time generally required by the applicable recording office
to record and return a document submitted for recordation, and (iv) specify
the
date the applicable recorded document will be delivered to the Custodian. The
Company shall be required to deliver to the Custodian the applicable recorded
document by the date specified in (iv) above. An extension of the date specified
in (iv) above may be requested form the Purchaser, which consent shall not
be
unreasonably withheld.
B-4
EXHIBIT
C
FORM
OF
CUSTODIAL AGREEMENT
CUSTODIAL
AGREEMENT
CUSTODIAL
AGREEMENT, dated as of April 1, 2003 (the “Agree-ment”),
among
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company (the “Purchaser”),
having an address of ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, National City
Mortgage Co., having an address at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(in
such capacity the “Seller”),
and
JPMorgan Chase Bank having an address at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the “Custo-▇▇▇▇”).
WITNESSETH:
WHEREAS,
the Purchaser has purchased from the Seller certain one- to four- family,
first-lien, fixed rate residential mortgage loans (the “Mortgage
Loans”)
pursuant to the terms and conditions of the Flow Seller’s Warranties and
Servicing Agreement, dated as of May 1, 2003 (the “Seller’s
Warranties and Servicing Agreement”),
between the Seller and the Purchaser and the Warranty ▇▇▇▇ of Sale dated April
8, 2003 (Fixed Rate Pool Bid date 2/11/03);
WHEREAS,
the Seller has agreed to sell to the Purchaser, with respect to the Mortgage
Loans, the Mortgage Loans pursuant to the terms and conditions of the Seller’s
Warranties and Servicing Agreement;
WHEREAS,
the Mortgage Loans purchased pursuant to the Seller’s Warran-ties and Servicing
Agreement will be serviced by the Seller (in such capacity, the “Servicer”)
pursuant to the Seller’s Warranties and Servicing Agreement; and
WHEREAS,
the Purchaser desires to have the Custodian take possession of the mortgage
notes for the Mortgage Loans, along with certain other documents specified
herein, as the Custodian of the Purchaser or subsequent purchasers of the
Mortgage Loans, in accordance with the terms and conditions hereof.
NOW
THEREFORE, in consideration of the mutual undertaking herein expressed, the
parties hereto hereby agree as follows:
1. On
or
prior to the Closing Date (as defined in the Seller’s Warranties and Servicing
Agreement), the Seller shall deliver and release to the Custodian, subject
to
and in accordance with the relevant section of the Seller’s Warranties and
Servicing Agreement, the following documents, pertaining to each of the Mortgage
Loans identified in the Mortgage Loan Schedule (the “Mortgage
Loan Schedule”)
a copy
of which Mortgage Loan Schedule is annexed as Exhibit 1 hereto:
(a) the
original executed mortgage note endorsed, “Pay to the order of ______________,
without recourse”, or as otherwise directed by the Purchaser, and signed in the
name of the Seller by an officer of the Seller, or a lost note affidavit with
a
copy of the original mortgage note attached; the mortgage note shall include
all
intervening original endorsements showing a complete chain of title from the
originator to the Seller;
C-1
(b) the
original executed mortgage, or a certified copy thereof, in either case with
evidence of recording noted thereon; the standard ▇▇▇▇▇▇ ▇▇▇/FHLMC Condominium
Rider or PUD Rider must be attached to the mortgage if the mortgaged property
is
a condominium or is located in a PUD;
(c) the
original assignment of each mortgage from the Seller to “[in blank]” or as
otherwise directed by the Purchaser;
(d) the
original policy of title insurance, or attorney’s opinion of title (accompanied
by an abstract of title), as the case may be, with respect to each Mortgage
Loan;
(e) originals
of any intervening assignments of the mortgage necessary to show a complete
chain of title from the original mortgagee to the Seller with evidence of
recording noted thereon; provided, that such intervening assignments may be
in
the form of blanket assignments, a copy of which, with evidence of recording
noted thereon, shall be acceptable;
(f) originals
of all modification agreements with evidence of recording noted thereon if
recordation is required to maintain the lien of the mortgage or is otherwise
required, or, if recordation is not so required, an original or copy of any
such
modification agreement;
(g) for
each
Mortgage Loan with respect to which the borrower’s name as it appears on the
note does not match the borrower’s name on the Mortgage Loan Schedule, one of
the following: (i) the original of the assump-tion with evidence of recording
thereon if required to maintain the lien of the mortgage or if otherwise
required, or, if recordation is not so required, an original or copy of such
assumption agreement; or (ii) a copy of a marriage certificate, court order,
decree or other document evidencing that the two different names refer to the
same person;
(h) to
the
extent applicable, (x) an original power of attorney with evidence of
recordation thereon if necessary to maintain the lien on the Mortgage or if
the
document to which such power of attorney relates is required to be recorded,
or,
if recordation is not so required, an original of such power of attorney, and
(y) an original guaranty agreement; and
(i) personal
endorsement and/or guaranty agreements for all non-individual loans.
(corporations, partnerships, trusts, estates, etc.)
Notwithstanding
the foregoing, with respect to any power of attorney, mortgage, assignment,
intervening assignment, assumption agreement, modification agreement or deed
of
sale for which a certified copy is delivered in accordance with the foregoing,
the copy must be certified as true and complete by the appropriate public
recording office, or, if the original has been submitted for recording but
has
not yet been returned from the applicable recording office, an officer of the
Seller must certify the copy as a true copy of the original submitted for
recordation. Copies of blanket intervening assignments, however, need not be
certified.
C-2
2. From
time
to time, the Servicer shall forward to the Custodian additional documents
evidencing an assumption or modification of a Mortgage Loan approved by the
Purchaser and the Servicer. All Mortgage Loan documents held by the Custodian
as
to each Mortgage Loan are referred herein as the “Custodian’s Mortgage File.”
The Custodian, in its independent capacity, agrees to act as custo-▇▇▇▇ for
the
Purchaser and any successor to the Purchaser in accordance with the terms and
conditions of this Agreement, including upon any securitization of the Mortgage
Loans, as custodian for the trustee (the “Trustee”)
under
the securitization trust agreement.
3. With
respect to each Custodian’s Mortgage File delivered to the Custodian, the
Custodian is exclusively the Custodian for the Purchaser, and the Purchaser’s
successor or assigns. The Custodian shall hold all Custodian’s Mortgage Files
for the exclusive use and benefit of the Purchaser and, except as otherwise
provided herein, shall make disposition thereof only in accordance with the
terms of this Agreement and the written instructions of the Purchaser. The
Custodian shall segregate by group (as directed by the Purchaser) and maintain
continuous custody of all Custodian’s Mortgage Files received by it in secure
and fire resistant facilities in accordance with customary standards for such
custody.
4. Upon
the
initial sale of the Mortgage Loans, the Custodian shall deliver to the Purchaser
a Custody Receipt in the form annexed hereto as Exhibit 3 (the “Custody
Receipt”)
which
includes verification that, except as shown on an exceptions list attached
thereto:
(a) all
documents required to be delivered to it pursuant to Sections 1(a) through
(e) of this Agreement are in the Custodian’s possession; provided, that, the
Custodian shall separately note on the Data Collection Schedule (as defined
below) any Mortgage Loans with respect to which the original note is missing
and
a lost note affidavit and a copy of such note is delivered;
(b) all
documents required to be delivered to it pursuant to Sections 1(f) and 1(g)
of this Agreement are in the Custodian’s possession; provided,
that:
(i) the
Custodian shall have no obligation to verify the receipt of any such documents
the existence of which was not made known to the Custodian by the Custodian’s
Mortgage File, and
(ii) the
Custodian shall have no obligation to determine whether recordation of any
such
document is necessary;
(c) all
documents required to be delivered to it pursuant to Section 1(i) of this
Agreement are in the Custodian’s possession; provided, that, the Custodian shall
have no obligation to verify the receipt of any such documents the existence
of
which was not made known to the Custodian by the Custodian’s Mortgage
File;
C-3
(d) all
powers of attorney and other documents required to be delivered to it pursuant
to Section 1(h) of this Agreement are in the Custo-dian’s possession;
provided, that:
(i) the
Custodian shall have no obligation to verify the receipt of any such documents
the existence of which was not made known to the Custodian by the Custodian’s
Mortgage File, and
(ii) the
Custodian shall have no obligation to determine whether recordation of any
such
power of attorney is necessary (except that the Custodian shall conclude that
if
the document to which such power of attorney relates is a mortgage, interim
assign-ment, assignment or a document that was recorded, then the Custo-▇▇▇▇
shall conclude that such power of attorney should have been
recorded);
(e) all
documents have been examined by the Custodian and appear regular on their face
and relate to the Mortgage Loans;
(f) based
only on the Custodian’s examination of the foregoing documents, the information
set forth on the Mortgage Loan Schedule representing each Mortgage Loan
accurately reflects the following:
(i) Mortgage
Loan number,
(ii) the
first
payment date (acceptable of accurate within 30 days),
(iii) the
maturity date (acceptable of accurate within 30 days),
(iv) the
original loan amount,
(v) the
original interest rate,
(vi) the
full
name of the borrower(s) (acceptable if first and/or middle names are missing
or
initialized (e.g., ▇.▇. ▇▇▇▇▇ would match ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇), acceptable
if
first names are shortened or lengthened or nicknames substituted therefor (e.g.,
▇▇▇ for ▇▇▇▇▇▇ or ▇▇▇▇ for ▇▇▇▇▇▇▇), acceptable if middle or maiden names are
omitted, acceptable if “Jr.”, “Sr.”, “II” and similar designations are omitted,
acceptable if discrepancy is a typographical error),
(vii) the
property address, including zip code (acceptable if the first three digits
of
the zip code match), and
(viii) the
original principal and interest payment.
(g) each
mortgage note has been endorsed and each assignment of mortgage has been
assigned as described in Section 1 hereof; provided, that, the Custodian
shall have no obligation to confirm that the assignments are in recordable
form.
C-4
In
making
the verification required by this Section 4, the Custodian may rely
conclusively on the Mortgage Loan Schedule attached hereto, and the Custodian
shall have no obligation to independently verify the correctness of such
Mortgage Loan Schedule. If any discrepancy exists between the Verified
Information and the Mortgage Loan Schedule, the Custodian shall notify the
Purchaser and the Servicer by attaching a list of such discrepancies to the
Final Certification.
It
is
understood that before delivering the Custody Receipt, the Custodian shall
examine the Mortgage Loan Documents to confirm the following (and shall report
any exceptions to these confirmations in the exceptions report attached to
the
Custody Receipt):
(1) each
mortgage note, mortgage, assumption, modification, guaranty, power of attorney
and deed of sale bears a signature or signatures that appear to be original
and
that purport to be that of the Person or Persons named as the maker and
mortgagor/trustor or, if photocopies are permitted by this Agreement, that
such
copies bear a reproduction of such signature or signatures;
(2) the
principal amount of the indebtedness secured by the mortgage is identical to
the
original principal amount of the note;
(3) the
interest rate shown on the note is identical to the interest rate shown on
the
Mortgage Loan Schedule;
(4) the
assignment of the mortgage from the Seller is in the form required pursuant
to
Section l(c) hereof, and bears the signature of the Seller, that appears to
be an original and any other necessary party or, if photocopies are permitted
by
this Agreement, such copies bear a reproduction of such signature or signatures;
(5) if
intervening assignments are included in the Custodian’s Mortgage File, each such
intervening assignment bears the signature of the mortgagee and/or the assignor
(and any other necessary party) that appears to be an original or, if
photocopies are permitted by this Agreement, that such copies bear a
reproduction of such signature or signatures; and
(6) the
title
insurance policy or certificate of title is for an amount not less than the
original principal amount of the related note.
5. Prior
to
August 31, 2003, the Custodian shall deliver to the Purchaser a Final
Certification in the form of Exhibit 4 evidencing the completeness of the
Custodian’s Mortgage File for each Mortgage Loan, with any applicable exceptions
noted on such Certification.
6. No
later
than the fifth Business Day of each month, commencing in May 2003, the Custodian
shall deliver to the Servicer, GS Mortgage Securities Corp., as depositor and
the Trustee in electronic or hard copy format, as requested by the Purchaser,
the exceptions list required by Section 4 hereof, updated to remove
exceptions cured since the date on which the Custody Receipt was issued pursuant
to Section 4 hereof. In the event the Mortgage Loans are securitized, the
Custodian will only be required to deliver the exceptions list upon request.
In
addition, such monthly reports shall list any document with respect to which
the
Seller delivered a copy certifying that the original had been sent for
recording, until such time as the Seller delivers to the Custodian the original
of such document or a copy thereof certified by the appropriate public recording
office. The Data Collection Schedule shall not be included unless specifically
requested in advance. Except as specifically provided above, the Custodian
shall
be under no duty to review, inspect or examine such documents to determine
that
any of them are enforceable or appropriate for their prescribed purpose. During
the life of the Mortgage Loans, in the event the Custodian discovers any defect
with respect to the Custodian’s Mortgage Files, the Custodian shall give written
notice of such defect to the Purchaser.
C-5
7. The
Custodian shall hold in its possession and custody at JPMorgan Chase Bank,
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, for the Purchaser or any assignee
of the Purchaser, all of the Custodian’s Mortgage Files delivered from time to
time by the Servicer to the Custodian.
8. From
time
to time and as appropriate for the foreclosure or servicing of the Mortgage
Loans, the Purchaser hereby authorizes the Custodian to release to the Servicer
(or, after securitization of the Mortgage Loans, if so designated by the
Servicer, to the Trustee), within three (3) business days of receipt of either
(i) a written request and receipt of the Servicer in the form attached hereto
as
Exhibit 5(a) executed by one of the authorized signatories set forth on Exhibit
6, as such exhibit may be updated from time to time by the Servicer or (ii)
an
electronic request through the use of an electronic file request system mutually
acceptable to the Custodian and the Servicer, a Custodian’s Mortgage File to the
place indicated in any such written request from the Servicer. A list of
authorized signatures for such written requests has been furnished to the
Custodian by the Servicer. All Custodian’s Mortgage Files so released to the
Servicer shall be held by it in trust for the benefit of the Purchaser. The
Servicer shall return to the Custodian the Custodian’s ▇▇▇▇-▇▇▇▇ File when the
Servicer’s need therefor in connection with such foreclosure or servicing no
longer exist, unless the Mortgage Loan shall be liquidated or paid in
full.
Servicer
may provide an electronic transmission for release of documents in a form agreed
to in advance of initial transmission by both Servicer and Custodian containing
information readable without intervention by Custodian data processing
operations computer hardware and software staff, and arranged in a record layout
to be specified by Custodian (a “Paperless
Release Request”).
Servicer agrees to maintain and control access to electronic signature
information and assumes liability for any unauthorized use thereof. Servicer
also agrees to maintain accurate records of electronic transactions related
to
the Custodial Files. Servicer hereby authorizes Custodian to automatically
append the electronic signature of an Authorized Representative to the
applicable request for release of documents and agrees and acknowledges that
by
appending such Authorized Representatives electronic signature, the Custodian
shall be entitled to rely thereon. For purposes of this Agreement the term
“electronic signature” is defined as an “electronic identifier intended by the
person using it to have the same force and effect as the use of a manual
signature.”
Servicer
agrees in advance to comply with all Custodian data encryption, security and
record layout standards in connection with any Paperless Release Request as
may
be amended from time to time upon notice from Custodian to Servicer. Custodian
reserves the right to restrict or suspend Servicer’s access to the Custodian’s
computer systems for maintenance or repairs or for any other reason in
Custodian’s sole discretion, provided however that Custodian shall promptly
provide Servicer notice of such restriction or suspension.
C-6
Notwithstanding
the foregoing, Servicer is authorized to transmit and Custodian is authorized
to
accept signed facsimile copies of Requests for Release.
9. Upon
the
repurchase of any Mortgage Loan or the payment or liquidation in full of the
Mortgage Loan, and within three Business Days of receipt by the Custodian of
the
Servicer’s request for release, receipt and certification either (i) in the form
attached hereto as Exhibit 5(b), executed by one of the authorized signatories
set forth on Exhibit 6 as such exhibit may be updated from time to time by
the
Servicer or (ii) through the use of an electronic request system mutually
acceptable to the Custodian and the Servicer (which certification shall include
a statement to the effect that all amounts received in connection with such
repurchase or payment in full or liquidation have been credited to the
Collection Account as provided in the Seller’s Warranties and Servicing
Agreement), the Custodian shall release the related Custodian’s Mortgage File to
the Servicer.
10. Upon
reasonable prior written notice, the Custodian shall permit the Purchaser and
its agents, and servicing officers of the Servicer reasonable access to its
premises during the Custodian’s normal business hours to inspect the Custodian’s
Mortgage Files and all other documents, records and other papers in possession
or under the control of the Custodian relating to the Mortgage Loans serviced
by
the Servicer. Each such person shall comply with the Custodian’s reasonable
standards and procedures for physical security and personal conduct while on
the
Custodian’s premises. Any person failing, in the Custodian’s sole but reasonable
business judgment, to meet such standards may be removed or denied access to
the
premises. The Purchaser shall be responsible for any reasonable expense in
connection with such examination.
11. The
Purchaser, with or without cause, or upon failure by the Custo-▇▇▇▇ to perform
or observe any term of this Agreement, may remove and discharge the Custodian
or
any successor Custodian thereafter appointed from the performance of its duties
under this Agreement upon written notice from the Purchaser to the Custodian
or
the successor Custodian; provided that at least sixty (60) days prior written
notice shall be given with respect to a removal or discharge without cause.
Having given notice of such removal, the Purchaser shall promptly appoint a
successor Custodian to act on its behalf by written instrument, an original
counter-part of which instrument shall be delivered to the Seller and one copy
to the succes-sor Custodian. In the event of any such removal, the Custodian
shall promptly transfer, to the successor Custodian as directed, all Custodian’s
Mortgage Files being administered under this Agreement. Such transfer shall
be
at the Custodian’s expense only if the Custodian is discharged and removed upon
a failure by the Custodian to perform or observe any material terms of this
Agreement; otherwise such transfer shall occur at the expense of the Purchaser.
In any event, the Custodian shall be entitled to the payment of all outstanding
fees and expenses of the Custodian due the Custodian at the time of such removal
by the Purchaser. In the event that the Purchaser removes the Custodian without
cause, any transfer or set-up fees payable to the successor Custodian will
be
payable by the Purchaser. In any event, the reasonable ongoing fees of any
successor Custodian shall be paid by the Purchaser.
C-7
12. It
is
understood that the Custodian will charge for its services under this agreement
as set forth in a separate agreement between the Custodian and the Purchaser,
the payment of which shall be the sole obligation of the Purchaser.
13. The
Custodian shall, at its own expense, maintain at all times during the existence
of this Agreement and keep in full force and effect, (a) fidelity insur-ance,
(b) errors and omissions insurance, and (c) all risk property insurance. All
such insurance shall be in amounts, with standard coverage and subject to
deduct-ibles, all as is customary for insurance typically maintained by banks
which act as custodian and in an amount and with coverages not less than that
required by the ▇▇▇▇▇▇ ▇▇▇. Upon request, the Purchaser will be provided with
certificates of insurance, as specified in this paragraph 13.
14. The
Custodian may resign as the Custodian hereunder upon at least sixty (60) days
prior written notice to the Purchaser whereupon the Custodian shall deliver
the
Custodian’s Mortgage Files to Purchaser, or a designee of the Purchaser, in
accordance with directions from the Purchaser. In the event of such resignation,
or termination, the Purchaser shall pay all outstanding fees and expenses of
the
Custodian and shall appoint a successor Custodian.
15. For
the
purpose of facilitating the execution of this Custodial Agree-ment as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to
be
an original, and such counterparts shall constitute and be one and the same
instrument.
16. Upon
the
request of the Purchaser, at any time, the Custodian shall provide to the
Purchaser a list of all of the Mortgage Loans owned by the Purchaser for which
the Custodian holds a Custodian’s Mortgage File pursuant to this Agree-ment.
Such list may be in the form of a copy of the Mortgage Loan Schedule with manual
deletions to specifically denote any Mortgage Loans paid off, repurchased or
liquidated since the date of this Agreement.
17. The
duties and obligations of the Custodian shall only be such as are expressly
set
forth in this Agreement or as set forth in a written amendment to this Agreement
executed by the parties hereto or their successors and assigns. In no event
shall the Custodian be liable for special, indirect or consequential damages,
even if advised of this possibility of the same.
18. All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered, deliv-ered by facsimile
or mailed by first class mail or overnight express mail, postage prepaid, to
the
parties to this agreement at the address listed on Exhibit 2 or such other
address as may hereafter be furnished in writing to each of the parties to
this
Agreement. Any such demand, notice or communication hereunder shall be deemed
to
have been received on the date received, if received prior to 4 p.m. eastern
time, delivered to or received at the premises of the addressee or received
at
the facsimile number of the address, or, if received after 4 p.m. eastern time,
then on the next business day.
C-8
19. This
Agreement shall be construed in accordance with the laws of the State of New
York, without regard to its conflict of law principles, and the obliga-tions,
rights and remedies of the parties hereunder shall be determined in accordance
with such laws.
20. The
Custodian shall have no duties or obligation except those expressly stated
in
this Agreement, and such duties or obligations shall be deter-mined solely
by
the express provisions of the Agreement. The Custodian, its officers, directors,
employees, agents or other representatives shall not be personally liable for
any action taken, suffered or omitted by it in good faith and believed by it
to
be authorized or within the discretion or rights or powers conferred upon the
Custodian by this Agreement or in reliance upon any written notice, request,
consent, certificate, order, affidavit, letter, telegram or other document
reasonably believed by it to be genuine and to have been signed or sent by
the
proper party or parties; provided, however, that the provisions of this
paragraph shall not be construed to relieve the Custodian from liability from
its own negligent action, its own negligent failure to act, or its own bad
faith
or willful misconduct or any breach by the Custo-dian of any of its obligations
hereunder, which breach was due to negligence on the part of the Custodian.
The
Custodian will be regarded as making no representations and having no
responsibilities (except as expressly set forth herein) as to the validity,
sufficiency, value, genuineness, ownership or transferability of any Mortgage
Loan, and will not be required to and will not make any representations as
to
the validity, value or genuineness of any Mortgage Loan. The Custodian shall
not
be obligated to take any legal action hereunder that might in its judgment
involve any expense or liability unless it has been furnished with reasonable
indemnity. The Custodian may rely on and shall be protected in acting in good
faith upon the written instructions of the Purchaser, the Servicer and the
Trustee (if any) and such employees and repre-sentatives of the Purchaser,
the
Servicer and the Trustee (if any) as each such party may hereinafter designate
in writing. The Custodian may execute any of the powers hereunder or perform
any
duties hereunder either directly or through agents or attorneys; provided,
however, that the execution of such powers by any such agents or attorneys
shall
not diminish or relieve the Custodian for responsibility therefor to the same
degree as if the Custodian itself had executed such powers.
21. The
Custodian shall be entitled to obtain the advice or opinion of counsel (which
shall be either in house counsel or a nationally recognized outside counsel)
with respect to a matter of law for which the Custodian has a reasonable
question as to the rights and duties relating to the Custodian hereunder and
the
Custodian shall have no liability for any action taken or omitted in conformity
with its good faith reliance on such advice or opinion; provided, however,
that
the provisions of this paragraph shall not relieve the Custodian from liability
from its own negligent selection of counsel.
22. This
Agreement (together with the separate fee agreement between the Purchaser and
the Custodian) contains the entire agreement between the parties relating to
the
subject matter hereof and may be amended only by written agreement signed by
the
Purchaser and the Custodian.
23. The
Purchaser shall have the right, without consent of the Custodian, to assign
its
interest under this Agreement with respect to some or all of the ▇▇▇▇-▇▇▇▇
Loans, and designate any person to exercise any rights of the Purchaser
hereun-der, and the assignee or designee shall accede to the rights and
obligations hereunder of the Purchaser with respect to such Mortgage Loans;
provided, however, that the Purchaser may not assign its interest to more than
five (5) persons without the consent of the Custodian, such consent not to
be
unreasonably withheld. All references to the Purchaser in this Agreement shall
be deemed to include its assignee or designee. Upon the Custodian’s receipt of
the written notification, which shall state the name and address of the
transferee and the date of sale and shall be accom-panied by the original
Custody Receipt presently outstanding delivered to the Purchaser, the Custodian
shall change its records to reflect that such transferee is the owner of such
Mortgage Loan and shall immediately issue (i) a new Custody Receipt with respect
to a portion of or all of the Mortgage Loans, as the case may be, in the name
of
such transferee and (ii) a new Custody Receipt with respect to any Mortgage
Loans retained by the Purchaser; provided, that, any Custody Receipt issued
after the date of the initial sale of the Mortgage Loans shall not (1) confirm
the accuracy of the Mortgage Loan Schedule with respect to Verified Information
nor (2) include the Data Collection Schedule. The Purchaser and the Custodian
agree herein that any and all such transferees of a Mortgage Loan shall succeed
to all the rights and obligations of the Purchaser and shall be considered
a
Purchaser under this Agree-ment.
C-9
24. The
Purchaser agrees to indemnify and hold the Custodian, its directors, officers,
agents, employees, and other representatives harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements of any kind or nature whatsoever that may
be
imposed on, incurred by or asserted against it or them in any way arising out
of
this Agreement as a result of any action or failure to act, so long as such
action or failure to act by it or them hereunder does not constitute bad faith,
negligence or willful misconduct of the Custodian or any of its agents,
officers, directors or employees or breach by the Custodian of its obligations
hereunder. The foregoing indemnity shall survive the termination of this
Agreement.
25. This
Agreement shall inure to the benefit of the successors and assigns of the
parties hereto.
26. Each
party agrees to keep confidential the existence of this Agree-ment, the identity
of the parties hereto, and any other term or condition of this Agreement and
the
transactions contemplated hereby, and to use such information solely in order
to
effectuate the purpose of the Agreement; provided, that, each party may provide
confidential information to its employees, agents and affiliates who have a
need
to know such information in order to effectuate the transaction, and provided,
further that such information is identified as confidential non-public
information. In the event that either party or any of its employees, agents
or
affiliates are requested pursuant to, or required by, applicable law, regulation
or legal process to disclose any non-public information, such party will notify
the other promptly prior to any such disclosure so that such party may seek
a
protective order or other appropriate remedy or, in such party’s sole
discretion, waive compliance with the terms of this Section 26. In the
event that no such protective order or other remedy is timely obtained, or
that
such party waives compliance with the terms of this Section 26, the party
required to disclose such non-public information or its employees, agents or
affiliates will furnish only that portion of the non-public information that
it
is advised by counsel is legally required and will exercise all reasonable
efforts to obtain reliable assurance that confidential treatment will be
accorded the non-public information.
C-10
27. The
Custodian (or any successor thereto) shall at all times (a) be a depository
institution or trust company subject to supervision by federal or state
authority, (b) have a combined capital and surplus of at least $10,000,000,
(c)
be qualified to do business in any jurisdiction in which it holds a Custodian’s
Mortgage File, (d) be qualified to act as a custodian for ▇▇▇▇▇▇ Mae, the
Federal Home Loan Mortgage Corporation and the Government National Mortgage
Association, and (e) not be an affiliate of the Purchaser or the Seller, except
insofar as the Purchaser or its assignee gives its prior written
consent.
28. Upon
the
initial sale of the Mortgage Loans, the Custodian shall deliver to the Purchaser
(a) an opinion of counsel and (b) an officer’s certificate, each in form and
substance reasonably satisfactory to the Purchaser.
29. The
Custodian represents, warrants and covenants that:
(a) The
Custodian is (i) a banking corporation duly organized, validly existing and
in
good standing under the laws of the State of New York and (ii) duly qualified
and in good standing and in possession of all requisite authority, power,
licenses, permits and franchises in order to exe-cute, deliver and comply with
its obligations under the terms of this Agreement;
(b) The
execution, delivery and performance of this Agreement have been duly authorized
by all necessary corporate action and the execution and delivery of this
Agreement by the Custodian in the manner contemplated herein and the performance
of and compliance with the terms hereof by it will not (i) violate, contravene,
or create a default under any applicable laws, licenses, or permits to the
best
of its knowledge, or (ii) violate, contravene or create a default under any
charter document or bylaw of the Custodian or to the best of the Custodian’s
knowledge any contract, agreement or instrument to which the Custodian or by
which any of its property may be bound and will not result in the creation
of
any lien, security interest or other charge or encumbrance upon or with respect
to any of its property;
(c) The
execution and delivery of this Agreement by the Custo-dian and the performance
of and compliance with its obligations and cove-nants hereunder do not require
the consent or approval of any governmental authority or, if such consent or
approval is required, it has been obtained;
(d) The
Custodian has duly executed and delivered this Agree-ment, and this Agreement,
assuming due authorization, execution and delivery by the Purchaser and Seller,
constitutes a legal, valid and binding obligation of the Custodian, enforceable
against it in accordance with its terms, except as the enforcement thereof
may
be limited by applicable debtor relief laws and that certain equitable remedies
may not be available regard-less of whether enforcement is sought in equity
or
law; and
(e) There
is
no action, suit, proceeding or investigation pending or, to the Custodian’s
knowledge, threatened, against the Custodian, which seeks to prevent the
consummation of the transaction contemplated hereby or which, either in any
one
instance or in the aggregate, if determined adversely to the Custodian would
adversely affect the execution, delivery or enforceability of this Agreement,
the ability of the Custodian to perform its obligations hereunder, or have
a
material adverse effect on the financial condition of the
Custodian.
C-11
30. The
Custodian is not responsible for preparing or filing any reports or returns
relating to federal, state or local income taxes with respect to this Agreement,
other than for the Custodian’s compensation or for reimbursement of expenses.
The Custodian will be responsible for the transmission of mortgage files and
loan documents, with insurance thereon as provided in the normal course by
the
nation-ally recognized overnight courier service utilized by the Custodian
for
such transmis-sion. At the request of the Purchaser, the Custodian will obtain
and maintain additional insurance with an insurance provider specified by the
Purchaser against loss or damage to such Mortgage Files and loan documents
in
connection with such transmission in an amount specified by the Purchaser.
The
costs and expenses incurred in connection with obtaining and maintaining such
insurance shall be the sole responsibility of the Purchaser. It is expressly
agreed that in no event shall the Custodian have any liability for any losses
or
damages to any person, including, without limitation, the Purchaser or Servicer,
arising out of actions of the Custodian consistent with this Agreement. In
the
absence of any written instructions from the Purchaser with respect to the
transmission of the Custodian’s Mortgage Files, the parties hereby agree that
the Custodian may utilize any nationally recognized overnight courier service
and shall be entitled to reimbursement from the Purchaser.
[Signature
page follows]
C-12
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly
authorized officers as of the date first above written.
▇▇▇▇▇▇▇
SACHS MORTGAGE COMPANY, as Purchaser
|
By:
|
▇▇▇▇▇▇▇
▇▇▇▇▇ Real Estate Funding Corp., General
Partner
|
By:
Name:
______________________________
Title:
_______________________________
JPMORGAN
CHASE BANK,
as
Custodian
By:
Name:
______________________________
Title:
_______________________________
NATIONAL
CITY MORTGAGE CO., as Seller/Servicer
By:
Name:
______________________________
Title:
_______________________________
C-13
EXHIBIT
D
FORM
OF
OPINION OF COUNSEL
Sale
of
Series [ ] Mortgage Loans by
[
]
to
▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Company
Dear
Sir/Madam:
I
am
_____ of [ ] and have acted as counsel to [ ] (the “Company”),
with
respect to certain matters in connection with the sale by the Company of the
mortgage loans (the “Mortgage
Loans”)
pursuant to that certain Third Amended and Restated Flow Seller’s Warranties and
Servicing Agreement designated as Mortgage Loan Series (the “Seller’s
Warranties and Servicing Agreement”)
by and
between the Company and ▇▇▇▇▇▇▇ Sachs Mortgage Company (the “Purchaser”),
dated
as of September 1, 2007, which sale is in the form of whole Mortgage Loans.
The
Mortgage Loans are listed on Schedule A to the Warranty ▇▇▇▇ of Sale issued
in
connection with the Seller’s Warranties and Servicing Agreement. Capitalized
terms not otherwise defined herein have the meanings set forth in the Seller’s
Warranties and Servicing Agreement.
I
have
examined the following documents:
1. the
Seller’s Warranties and Servicing Agreement;
2. the
Custodial Agreement;
3. the
form
of endorsement of the Mortgage Notes; and
4. such
other documents, records and papers as I have deemed necessary and relevant
as a
basis for this opinion.
To
the
extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Seller’s
Warranties and Servicing Agreement. I have assumed the authenticity of all
documents submitted to me as originals, the genuineness of all signatures,
the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based
upon the foregoing, it is my opinion that;
1. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the state of Ohio.
2. The
Company has the power to engage in the transactions contemplated by the Seller’s
Warranties and Servicing Agreement and the Custodial Agreement and all requisite
power, authority and legal right to execute and deliver the Seller’s Warranties
and Servicing Agreement, the Custodial Agreement and the Mortgage Loans, and
to
perform and observe the terms and conditions of such
instruments.
D-1
3. Each
person who, as an officer or attorney-in-fact of the Company, signed (a) the
Seller’s Warranties and Servicing Agreement, (b) the Custodial Agreement , and
(c) any other document delivered prior hereto or on the date hereof in
connection with the sale and servicing of the Mortgage Loans in accordance
with
the Seller’s Warranties and Servicing Agreement and the person was, at the
respective times of such signing and delivery, and is, as of the date hereof,
duly elected or appointed, qualified and acting and as such officer or
attorney-in-fact, and the signatures of such persons appearing on such documents
are their genuine signatures.
4. Each
of
the Seller’s Warranties and Servicing Agreement, the Custodial Agreement and the
Mortgage Loans, has been duly authorized, executed and delivered by the Company
and is a legal, valid and binding agreement enforceable in accordance with
its
terms, subject to bankruptcy laws and other similar laws of general application
affecting rights of creditors and subject to the application of the rules of
equity, including those respecting the availability of specific performance,
none of which will materially interfere with the realization of the benefits
provided thereunder or with the Purchaser’s ownership of the Mortgage
Loans.
5. The
Company has been duly authorized to allow any of its officers to execute any
and
all documents by original signature in order to complete the transactions
contemplated by the Seller’s Warranties and Servicing Agreement and the
Custodial Agreement, and by original or facsimile signature in order to execute
the endorsements to the Mortgage Notes and the assignments of the Mortgages,
and
the original or facsimile signature of the officer at the Company executing
the
endorsements to the Mortgage Notes and the assignments of the Mortgages
represents the legal and valid signature of said officer of the
Company.
6. Either
(i) no consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance by the
Company of or compliance by the Company with the Seller’s Warranties and
Servicing Agreement, the Custodial Agreement or the sale and delivery of the
Mortgage Loans or the consummation of the transactions contemplated by the
Seller’s Warranties and Servicing Agreement, and the Custodial Agreement; or
(ii) any required consent, approval, authorization or order has been obtained
by
the Company.
7. Neither
the consummation of the transactions contemplated by, nor the fulfillment of
the
terms of the Seller’s Warranties and Servicing Agreement and the Custodial
Agreement, will conflict with or results in or will result in a breach of or
constitutes or will constitute a default under the charter or by-laws of the
Company, the terms of any indenture or other agreement or instrument to which
the Company is a party or by which it is bound or to which it is subject, or
violates any statute or order, rule, regulations, writ, injunction or decree
of
any court, governmental authority or regulatory body to which the Company is
subject or by which it is bound.
8. There
is
no action, suit, proceeding or investigation pending or, to the best of my
knowledge, threatened against the Company which, in my opinion, either in any
one instance or in the aggregate, may result in any material adverse change
in
the business, operations, financial condition, properties or assets of the
Company or in any material impairment of the right or ability of the Company
to
carry on its business substantially as now conducted or in any material
liability on the part of the Company or which would draw into question the
validity of the Seller’s Warranties and Servicing Agreement, and the Custodial
Agreement, or of any action taken or to be taken in connection with the
transactions contemplated thereby, or which would be likely to impair materially
the ability of the Company to perform under the terms of the Seller’s Warranties
and Servicing Agreement and the Custodial Agreement.
D-2
9. For
purposes of the foregoing, I have not regarded any legal or governmental
actions, investigations or proceedings to be “threatened” unless the potential
litigant or governmental authority has manifested to the legal department of
the
Company or an employee of the Company responsible for the receipt of process
a
present intention to initiate such proceedings; nor have I regarded any legal
or
governmental actions, investigations or proceedings as including those that
are
conducted by state or federal authorities in connection with their routine
regulatory activities. The sale of each Mortgage Note and Mortgage as and in
the
manner contemplated by the Seller’s Warranties and Servicing Agreement is
sufficient fully to transfer all right, title and interest of the Company
thereto as noteholder and mortgagee, apart from the rights to service the
Mortgage Loans pursuant to the Seller’s Warranties and Servicing
Agreement.
10.
The
form
of endorsement that is to be used with respect to the Mortgage Loans is legally
valid and sufficient to duly endorse the Mortgage Notes to the Purchaser. Upon
the completion of the endorsement of the Mortgage Notes and the completion
of
the assignments of the Mortgages, and the recording thereof, the endorsement
of
the Mortgage Notes, the delivery to the Custodian of the completed assignments
of the Mortgages, and the delivery of the original endorsed Mortgage Notes
to
the Custodian would be sufficient to permit the entity to which such Mortgage
Note is initially endorsed at the Purchaser’s direction, and to whom such
assignment of Mortgages is initially assigned at the Purchaser’s direction, to
avail itself of all protection available under Applicable Law against the claims
of any present or future creditors of the Company, and would be sufficient
to
prevent any other sale, transfer, assignment, pledge or hypothecation of the
Mortgages and the Mortgage Notes by the Company from being enforceable, such
that in a properly presented and argued case under title 11, United States
Code
(the “Bankruptcy
Code”),
in
which the Company were the debtor, a bankruptcy court having jurisdiction over
the Company would consider the transfer of the Mortgage Loans from the Company
to the Purchaser to be a true sale of the Mortgage Loans from the Company to
the
Purchaser and not a secured loan by the Purchaser to the Company and,
accordingly, the Mortgage Loans and the payments and other collections thereon
(other than those at any given time that may be commingled with unrelated funds
held by the Company) and the proceeds thereof transferred to the Purchaser
by
the Company in accordance with the Company’s Warranties and Servicing Agreement
would not be deemed property of the Company’s estate for purposes of
Section 541 of the Bankruptcy Code or be subject to the automatic stay
provisions of Section 362 of the Bankruptcy Code.
D-3
This
opinion is given to you for your sole benefit, and no other person or entity
is
entitled to rely hereon except that the purchaser or purchasers to which you
initially and directly resell the Mortgage Loans may rely on this opinion as
if
it were addressed to them as of its date.
Sincerely,
D-4
EXHIBIT
E
ITEMS
TO
BE INCLUDED IN MONTHLY REMITTANCE ADVICE
On
each
Closing Date, the Company shall deliver to the Purchaser an initial set-up
report (the “Initial
Set-up Report”),
dated
as of the related Cut-off Date, which shall set forth certain information
regarding the related Mortgage Pool. Such information shall include, without
limitation, the principal balance of each Mortgage Loan, the interest rate,
delinquency status and any other information requested by the Purchaser. For
each month after each Closing Date, the Company shall provide a monthly
remittance advice report (the “Monthly
Remittance Advice Reports”)
to the
Purchaser, which shall set forth for each related Mortgage Loan, the trial
balance, interest rate, delinquency, foreclosure and related default
information, and such other information as may be requested by the Purchaser.
The Initial Set-up Report and the Monthly Remittance Advice Reports will be
delivered in an Excel format or in such other electronic format as agreed to
by
the parties. Each Initial Set-up Report and Monthly Remittance Advice Report
shall contain only such information as is readily available to the Company
and
is mutually agreed to by Company and the Purchaser.
E-1
EXHIBIT
F
FORM
OF
ASSIGNMENT AND RECOGNITION AGREEMENT
THIS
ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __, 20__]
(“Agreement”),
among
▇▇▇▇▇▇▇ Sachs Mortgage Company (“Assignor”),
[____________________] (“Assignee”)
and
National City Mortgage Co. (the “Company”):
For
and
in consideration of the sum of TEN DOLLARS ($10.00) and other valuable
consideration the receipt and sufficiency of which hereby are acknowledged,
and
of the mutual covenants herein contained, the parties hereto hereby agree as
follows:
Assignment
and Conveyance
1. The
Assignor hereby conveys, sells, grants, transfers and assigns to the Assignee
all of the right, title and interest of the Assignor, as purchaser, in, to
and
under (a) those certain Mortgage Loans listed on the schedule (the
“Mortgage
Loan Schedule”)
attached hereto as Exhibit A (the “Mortgage
Loans”)
and
(b) except as described below, that certain Third Amended and Restated
Mortgage Flow Seller’s Warranties and Servicing Agreement (the “Sale
and Servicing Agreement”),
dated
as of September 1, 2007, between the Assignor, as purchaser (the
“Purchaser”),
and
the Company, as seller, solely insofar as the Sale and Servicing Agreement
relates to the Mortgage Loans.
The
Assignor specifically reserves and does not assign to the Assignee hereunder
any
and all right, title and interest in, to and under and any obligations of the
Assignor with respect any mortgage loans subject to the Sale and Servicing
Agreement which are not the Mortgage Loans set forth on the Mortgage Loan
Schedule and are not the subject of this Agreement.
Recognition
of the Company
2. From
and
after the date hereof (the “Securitization
Closing Date”),
the
Company shall and does hereby recognize that the Assignee will transfer the
Mortgage Loans and assign its rights under the Sale and Servicing Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the “Trust”)
created pursuant to a Pooling and Servicing Agreement, dated as of [__________,
200_] (the “Pooling
Agreement”),
among
the Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the “Trustee”),
[____________________], as servicer (including its successors in interest and
any successor servicer under the Pooling Agreement, the “Servicer”).
The
Company hereby acknowledges and agrees that from and after the date hereof
(i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of
the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust’s behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate
to
the Mortgage Loans, under the Sale and Servicing Agreement, including, without
limitation, the enforcement of the document delivery requirements set forth
in
Section 6 of the Sale and Servicing Agreement, and shall be entitled to
enforce all of the obligations of the Company thereunder insofar as they relate
to the Mortgage Loans, and (iv) all references to the Purchaser, the
Custodian or the Bailee under the Sale and Servicing Agreement insofar as they
relate to the Mortgage Loans, shall be deemed to refer to the Trust (including
the Trustee and the Servicer acting on the Trust’s behalf). Neither the Company
nor the Assignor shall amend or agree to amend, modify, waiver, or otherwise
alter any of the terms or provisions of the Sale and Servicing Agreement which
amendment, modification, waiver or other alteration would in any way affect
the
Mortgage Loans or the Company’s performance under the Sale and Servicing
Agreement with respect to the Mortgage Loans without the prior written consent
of the Trustee.
F-1
Representations
and Warranties of the Company
3. The
Company warrants and represents to the Assignor, the Assignee and the Trust
as
of the date hereof that:
(a) The
Company is duly organized, validly existing and in good standing under the
laws
of the jurisdiction of its incorporation;
(b) The
Company has full power and authority to execute, deliver and perform its
obligations under this Agreement and has full power and authority to perform
its
obligations under the Sale and Servicing Agreement. The execution by the Company
of this Agreement is in the ordinary course of the Company’s business and will
not conflict with, or result in a breach of, any of the terms, conditions or
provisions of the Company’s charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party or by
which
it is bound, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Company or its property is subject. The
execution, delivery and performance by the Company of this Agreement have been
duly authorized by all necessary corporate action on part of the Company. This
Agreement has been duly executed and delivered by the Company, and, upon the
due
authorization, execution and delivery by the Assignor and the Assignee, will
constitute the valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms except as enforceability may
be
limited by bankruptcy, reorganization, insolvency, moratorium or other similar
laws now or hereafter in effect relating to creditors’ rights generally, and by
general principles of equity regardless of whether enforceability is considered
in a proceeding in equity or at law;
(c) No
consent, approval, order or authorization of, or declaration, filing or
registration with, any governmental entity is required to be obtained or made
by
the Company in connection with the execution, delivery or performance by the
Company of this Agreement; and
(d) There
is
no action, suit, proceeding or investigation pending or threatened against
the
Company, before any court, administrative agency or other tribunal, which would
draw into question the validity of this Agreement or the Sale and Servicing
Agreement, or which, either in any one instance or in the aggregate, would
result in any material adverse change in the ability of the Company to perform
its obligations under this Agreement or the Sale and Servicing Agreement, and
the Company is solvent.
F-2
4. Pursuant
to Section 9.1 of the Sale and Servicing Agreement, the Company hereby
represents and warrants, for the benefit of the Assignor, the Assignee and
the
Trust, that the representations and warranties set forth in Section 3.1 and
Section 3.2 of the Sale and Servicing Agreement are true and correct as of
the date hereof as if such representations and warranties were made on the
date
hereof unless otherwise specifically stated in such representations and
warranties.
Remedies
for Breach of Representations and Warranties
5. The
Company hereby acknowledges and agrees that the remedies available to the
Assignor, the Assignee and the Trust (including the Trustee and the Servicer
acting on the Trust’s behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3
and 4 hereof shall be as set forth in Subsection 3.3
of the
Sale and Servicing Agreement as if they were set forth herein (including without
limitation the repurchase and indemnity obligations set forth
therein).
Miscellaneous
6. This
Agreement shall be construed in accordance with the laws of the State of New
York, without regard to conflicts of law principles, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
7. No
term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced, with the prior written consent of the
Trustee.
8. This
Agreement shall inure to the benefit of (i) the successors and assigns of
the parties hereto and (ii) the Trust (including the Trustee and the
Servicer acting on the Trust’s behalf). Any entity into which Assignor, Assignee
or Company may be merged or consolidated shall, without the requirement for
any
further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each
of
this Agreement and the Sale and Servicing Agreement shall survive the conveyance
of the Mortgage Loans and the assignment of the Sale and Servicing Agreement
(to
the extent assigned hereunder) by Assignor to Assignee and by Assignee to the
Trust and nothing contained herein shall supersede or amend the terms of the
Sale and Servicing Agreement.
10. 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.
11. In
the
event that any provision of this Agreement conflicts with any provision of
the
Sale and Servicing Agreement with respect to the Mortgage Loans, the terms
of
this Agreement shall control.
F-3
12. Capitalized
terms used in this Agreement (including the exhibits hereto) but not defined
in
this Agreement shall have the meanings given to such terms in the Sale and
Servicing Agreement.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
duly authorized officers as of the date first above written.
NATIONAL
CITY MORTGAGE CO.
By:
Name:
Its:
▇▇▇▇▇▇▇
▇▇▇▇▇ MORTGAGE COMPANY
By:
Name:
Its:
[ASSIGNEE]
By:
Name:
Its:
F-4
EXHIBIT
G
FORM
OF
SELLER’S OFFICER’S CERTIFICATE
I,
______________________, hereby certify that I am a duly elected [Vice President]
of _____________________________, a corporation organized under the laws of
the
State of _________ (the “Company”)
and
further as follows:
1. Attached
hereto as Exhibit 1 is a true, correct and complete copy of the Articles of
Incorporation of the Company which is in full force and effect on the date
hereof.
2. Attached
hereto as Exhibit 2 is a true, correct and complete copy of the by-laws of
the
Company which are in effect on the date hereof.
3. The
execution and delivery by the Company of the Third Amended and Restated Flow
Seller’s Warranties and Servicing Agreement, dated as of September 1, 2007 (the
“Sale
and Servicing Agreement”)
and
the Custodial Agreement , dated as of [ ], 2003 (the “Custodial Agreement” and,
together with the Sale and Servicing Agreement, the “Agreements”)
are in
the ordinary course of business of the Company.
4. A
true
and correct copy of the resolutions of the board of directors of the Company
that approve, authorize and direct the Company to enter into the Agreements
are
attached hereto as Exhibit 3.
5. Each
person who, as an officer or representative of the Company, signed (a) the
Sale
and Servicing Agreement, or (b) any other document delivered prior hereto or
on
the date hereof in connection with any transaction described in the Agreements
was, at the respective times of such signing and delivery a duly elected or
appointed, qualified and acting officer or representative of the Company, who
holds the office set forth opposite his or her name on Exhibit 4, and the
signatures of such persons appearing on such documents are their genuine
signatures.
No
proceedings for dissolution, merger, consolidation, liquidation, conservatorship
or receivership of the Company or for the sale of all or substantially all
of
its assets is pending, or to my knowledge threatened, and no such proceeding
is
contemplated by the Company.
G-1
IN
WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Company.
Dated: Title: Vice
President
I,
__________________ the Secretary of __________________________, hereby certify
that _______________________ is a duly elected and acting Vice President of
the
Company and that the signature appearing above is his genuine
signature.
IN
WITNESS WHEREOF, I have hereunto signed my name.
Dated: Title: Secretary
G-2
EXHIBIT
H
FORM
OF
ANNUAL CERTIFICATION
|
Re:
|
The
[ ] agreement dated as of [ ], 200[ ] (the “Agreement”), among [IDENTIFY
PARTIES]
|
I,
________________________________, the _______________________ of National City
Mortgage Co., certify to ▇▇▇▇▇▇▇ Sachs Mortgage Company, [the Depositor], and
the [Master Servicer] [Securities Administrator] [Trustee], and their officers,
with the knowledge and intent that they will rely upon this certification,
that:
(1) I
have
reviewed the servicer compliance statement of the 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”);
(2) 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;
(3) 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];
(4) 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; and
(5) 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
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.
H-1
Date:
By:
Name:
Title:
H-2
EXHIBIT
I
FORM
OF
WARRANTY ▇▇▇▇ OF SALE
On
this
_______ day of ________, 200__, National City Mortgage Co. (“Seller”)
as the
Seller under that certain Third Amended and Restated Flow Seller’s Warranties
and Servicing Agreement, dated as of September 1, 2007 (the “Agreement”)
does
hereby sell, transfer, assign, set over and convey to ▇▇▇▇▇▇▇ Sachs Mortgage
Company as Purchaser under the Agreement, without recourse, but subject to
the
terms of the Agreement, all rights, title and interest of the Seller in and
to
the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto,
together with the related Mortgage Files and all rights and obligations arising
under the documents contained therein. Pursuant to Section 2.01 of the
Agreement, the Seller has delivered to the Purchaser or its custodian the
Mortgage Loan Documents for each Mortgage Loan to be purchased as set forth
in
the Agreement. The contents of each related Servicing File required to be
maintained and retained by the Seller to service the Mortgage Loans pursuant
to
the Agreement and thus not delivered to the Purchaser are and shall be held
in
trust by the Seller for the benefit of the Purchaser as the owner thereof.
The
Seller’s possession of any portion of each such Servicing File is at the will of
the Purchaser for the sole purpose of facilitating servicing of the related
Mortgage Loan pursuant to the Agreement, and such retention and possession
by
the Seller shall be in a custodial capacity only. The ownership of each Mortgage
Note, Mortgage, and the contents of the Mortgage File and Servicing File is
vested in the Purchaser and the ownership of all records and documents with
respect to the related Mortgage Loan prepared by or which come into the
possession of the Seller shall immediately vest in the Purchaser and shall
be
retained and maintained, in trust, by the Seller at the will of the Purchaser
in
such custodial capacity only.
The
Seller confirms to the Purchaser that the representations and warranties set
forth in Sections 2.6, 3.1 and 3.2 of the Agreement are true and correct as
of the date hereof, and that all statements made in the Sellers’ Officer’s
Certificate and all attachments thereto remain complete, true and correct in
all
respects as of the date hereof.
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Agreement.
NATIONAL
CITY MORTGAGE CO.
(Seller)
By:
Name:
Title:
I-1
EXHIBIT
J
COMPANY
GUIDE
J-1
EXHIBIT
K
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by National City Mortgage Co. [Name
of
Subservicer] shall address, at a minimum, the criteria identified as below
as
“Applicable Servicing Criteria”:
|
Servicing
Criteria
|
Applicable
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.
|
K-1
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
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.
|
|
|
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.
|
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized
access.
|
|
|
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.
|
|
|
Investor
Remittances and Reporting
|
||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; and (C) agree with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
|
K-2
|
Servicing
Criteria
|
Applicable
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.
|
|
|
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.
|
|
|
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.
|
|
|
Pool
Asset Administration
|
||
|
1122(d)(4)(i)
|
Collateral
or security on mortgage loans is maintained as required by the transaction
agreements or related mortgage loan documents.
|
|
|
1122(d)(4)(ii)
|
Mortgage
loan and related documents are safeguarded as required by the transaction
agreements
|
|
|
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.
|
|
|
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.
|
|
|
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.
|
K-3
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
1122(d)(4)(vi)
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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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1122(d)(4)(vii)
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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)
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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)
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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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K-4
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Servicing
Criteria
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Applicable
Servicing
Criteria
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Reference
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Criteria
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1122(d)(4)(xi)
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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)
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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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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)
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Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
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1122(d)(4)(xv)
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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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National
City Mortgage Co. [NAME OF SUBSERVICER]
Date:
By:
Name:
K-5