GMAC MORTGAGE CORPORATION
as Servicer,
GMACM HOME EQUITY LOAN TRUST 2003-HE2,
as Issuer
and
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.
as Indenture Trustee
-------------------------
SERVICING AGREEMENT
Dated as of March 26, 2003
-------------------------
TABLE OF CONTENTS
Page
ARTICLE I Definitions...............................................................2
Section 1.01 Definitions.......................................................2
Section 1.02 Other Definitional Provisions.....................................2
Section 1.03 Interest Calculations.............................................3
ARTICLE II Representations and Warranties............................................3
Section 2.01 Representations and Warranties Regarding the Servicer.............3
Section 2.02 Representations and Warranties of the Issuer......................4
Section 2.03 Enforcement of Representations and Warranties.....................5
ARTICLE III Administration and Servicing of Mortgage Loans............................6
Section 3.01 The Servicer......................................................6
Section 3.02 Collection of Certain Mortgage Loan Payments......................8
Section 3.03 Withdrawals from the Custodial Account...........................11
Section 3.04 Maintenance of Hazard Insurance; Property Protection Expenses....13
Section 3.05 Modification Agreements; Release of Lien.........................14
Section 3.06 Trust Estate; Related Documents..................................14
Section 3.07 Realization Upon Defaulted Mortgage Loans; Loss Mitigation.......15
Section 3.08 Issuer and Indenture Trustee to Cooperate........................17
Section 3.09 Servicing Compensation; Payment of Certain Expenses by
Servicer.........................................................18
Section 3.10 Annual Statement as to Compliance................................18
Section 3.11 Annual Servicing Report..........................................19
Section 3.12 Access to Certain Documentation and Information Regarding
the Mortgage Loans...............................................19
Section 3.13 Maintenance of Certain Servicing Insurance Policies..............19
Section 3.14 Information Required by the Internal Revenue Service and
Reports of Foreclosures and Abandonments of Mortgaged
Property.........................................................20
Section 3.15 Optional Repurchase or Transfer of Mortgage Loans................20
Section 3.16 Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.....................20
Section 3.17 Pre-Funding Account..............................................21
Section 3.18 Capitalized Interest Account.....................................22
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ARTICLE IV Servicing Certificate....................................................22
Section 4.01 Statements to Securityholders....................................22
Section 4.02 Tax Returns and 1934 Act Reports.................................24
ARTICLE V Note Payment Account.....................................................25
Section 5.01 Note Payment Account.............................................25
ARTICLE VI The Servicer.............................................................25
Section 6.01 Liability of the Servicer........................................25
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer.................................................25
Section 6.03 Limitation on Liability of the Servicer and Others...............26
Section 6.04 Servicer Not to Resign...........................................26
Section 6.05 Delegation of Duties.............................................27
Section 6.06 Payment of Indenture Trustee's and Owner Trustee's Fees and
Expenses; Indemnification........................................27
ARTICLE VII Default..................................................................29
Section 7.01 Servicing Default................................................29
Section 7.02 Indenture Trustee to Act; Appointment of Successor...............30
Section 7.03 Notification to Securityholders..................................32
ARTICLE VIII Miscellaneous Provisions.................................................32
Section 8.01 Amendment........................................................32
Section 8.02 GOVERNING LAW....................................................33
Section 8.03 Notices..........................................................33
Section 8.04 Severability of Provisions.......................................33
Section 8.05 Third-Party Beneficiaries........................................33
Section 8.06 Counterparts.....................................................34
Section 8.07 Effect of Headings and Table of Contents.........................34
Section 8.08 Termination Upon Purchase by the Servicer or Liquidation of
All Mortgage Loans; Partial Redemption...........................34
Section 8.09 Certain Matters Affecting the Indenture Trustee..................35
Section 8.10 Owner Trustee Not Liable for Related Documents...................35
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EXHIBIT A - MORTGAGE LOAN SCHEDULE A-1
EXHIBIT B - LIMITED POWER OF ATTORNEY B-1
EXHIBIT C - FORM OF REQUEST FOR RELEASE C-1
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This Servicing Agreement, dated as of March 26, 2003 (the "Agreement"),
is among GMAC Mortgage Corporation, as servicer (the "Servicer"), the GMACM Home
Equity Loan Trust 2003-HE2, as issuer (the "Issuer"), and ▇▇▇▇▇ Fargo Bank
Minnesota, N.A., as indenture trustee (the "Indenture Trustee").
WITNESSETH:
WHEREAS, pursuant to the terms of the Purchase Agreement (as defined
herein), GMAC Mortgage Corporation, as seller (in such capacity, "GMACM") and as
servicer, Walnut Grove Mortgage Loan Trust 2001-A, as seller ("WG Trust 2001-A")
and Walnut Grove Mortgage Loan Trust 2003-A, as seller ("WG Trust 2003-A"
together with GMACM and WG Trust 2001-A, the "Sellers"), will sell to
Residential Asset Mortgage Products, Inc. ("RAMP"), as purchaser (in such
capacity, the "Purchaser"), the Initial Mortgage Loans on the Closing Date, and
may sell Subsequent Mortgage Loans on one or more Subsequent Transfer Dates, in
each case together with the Related Documents on the Closing Date and any such
Subsequent Transfer Date;
WHEREAS, RAMP, as depositor (in such capacity, the "Depositor"), will
sell the Initial Mortgage Loans and assign all of its rights under the Purchase
Agreement to the Issuer, together with the Related Documents on the Closing
Date;
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer will
issue the Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will issue
the Notes; and
WHEREAS, pursuant to the terms of this Agreement, the Servicer will
service the Mortgage Loans directly or through one or more Subservicers.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01...Definitions. For all purposes of this Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions contained in Appendix A to the Indenture dated
as of March 26, 2003 (the "Indenture"), between the Issuer and the Indenture
Trustee, which is incorporated by reference herein. All other capitalized terms
used herein shall have the meanings specified herein.
Section 1.02...Other Definitional Provisions.
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(a) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
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(b) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other
document, and accounting terms partly defined in this Agreement or in
any such certificate or other document, to the extent not defined,
shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of
accounting terms in this Agreement or in any such certificate or other
document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall
control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement;
Section and Exhibit references contained in this Agreement are
references to Sections and Exhibits in or to this Agreement
unless otherwise specified; the term "including" shall mean
"including without limitation"; "or" shall include "and/or"; and
the term "proceeds" shall have the meaning ascribed thereto in
the UCC.
(d) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the
masculine as well as the feminine and neuter genders of such
terms.
(e) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in
connection herewith means such agreement, instrument or statute
as from time to time amended, modified or supplemented and
includes (in the case of agreements or instruments) references to
all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and
assigns.
Section 1.03...Interest Calculations. All calculations of interest hereunder
that are made in respect of the Principal Balance of a Mortgage Loan shall be
made on a daily basis using a 365-day year. All calculations of interest on the
Class A-1 Notes shall be made on the basis of the actual number of days in an
Interest Period and a year assumed to consist of 360 days. All calculations of
interest on the Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class A-5
Notes and Class A-IO Notes shall be made on the basis of a 30-day month and a
year assumed to consist of 360 days. The calculation of the Servicing Fee shall
be made on the basis of a 360-day year consisting of twelve 30-day months. All
dollar amounts calculated hereunder shall be rounded to the nearest ▇▇▇▇▇ with
one-half of one ▇▇▇▇▇ being rounded up.
ARTICLE II.....
Representations and Warranties
Section 2.01...Representations and Warranties Regarding the Servicer. The
Servicer represents and warrants to the Issuer and for the benefit of the
Indenture Trustee, as pledgee of the Mortgage Loans, as of the Closing Date:
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(a) the Servicer is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania and
has the corporate power to own its assets and to transact the business
in which it is currently engaged. The Servicer is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it
or properties owned or leased by it requires such qualification and in
which the failure to so qualify would have a material adverse effect
(not in the ordinary course of business) on the business, properties,
assets, or condition (financial or other) of the Servicer;
(b) the Servicer has the power and authority to make, execute, deliver and
perform this Agreement and all of the transactions contemplated under
this Agreement, and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement.
When executed and delivered, this Servicing Agreement will constitute
the legal, valid and binding obligation of the Servicer enforceable in
accordance with its terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies;
(c) the Servicer is not required to obtain the consent of any other
Person or any consent, license, approval or authorization from,
or registration or declaration with, any governmental authority,
bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement, except
for such consent, license, approval or authorization, or
registration or declaration, as shall have been obtained or
filed, as the case may be;
(d) the execution and delivery of this Agreement and the performance
of the transactions contemplated hereby by the Servicer will not
violate any material provision of any existing law or regulation
or any order or decree of any court applicable to the Servicer or
any provision of the Articles of Incorporation or Bylaws of the
Servicer, or constitute a material breach of any material
mortgage, indenture, contract or other agreement to which the
Servicer is a party or by which the Servicer may be bound;
(e) no litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to
the knowledge of the Servicer threatened, against the Servicer or
any of its properties or with respect to this Agreement or the
Securities which in the opinion of the Servicer has a reasonable
likelihood of resulting in a material adverse effect on the
transactions contemplated by this Agreement;
(f) the Servicer is a member of MERS in good standing, and will
comply in all material respects with the rules and procedures of
MERS in connection with the servicing of the Mortgage Loans that
are registered with MERS; and
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(g) the servicing of the Mortgage Loans has at all times been
conducted in material compliance with all applicable federal,
state and local laws, rules and regulations, and there has been
no material violation of any such laws, rules or regulations
arising out of the servicing of the Mortgage Loans.
The foregoing representations and warranties shall survive any
termination of the Servicer hereunder.
Section 2.02...Representations and Warranties of the Issuer. The Issuer hereby
represents and warrants to the Servicer and for the benefit of the Indenture
Trustee, as pledgee of the Mortgage Loans, as of the Closing Date:
(a) the Issuer is a statutory trust duly formed and in good standing under
the laws of the State of Delaware and has full power, authority and
legal right to execute and deliver this Agreement and to perform its
obligations under this Agreement, and has taken all necessary action
to authorize the execution, delivery and performance by it of this
Agreement; and
(b) the execution and delivery by the Issuer of this Agreement and the
performance by the Issuer of its obligations under this Agreement will
not violate any provision of any law or regulation governing the
Issuer or any order, writ, judgment or decree of any court, arbitrator
or governmental authority or agency applicable to the Issuer or any of
its assets. Such execution, delivery, authentication and performance
will not require the authorization, consent or approval of, the giving
of notice to, the filing or registration with, or the taking of any
other action with respect to, any governmental authority or agency
regulating the activities of statutory trusts. Such execution,
delivery, authentication and performance will not conflict with, or
result in a breach or violation of, any mortgage, deed of trust, lease
or other agreement or instrument to which the Issuer is bound.
Section 2.03...Enforcement of Representations and Warranties. The Servicer, on
behalf of and subject to the direction of the Indenture Trustee, as pledgee of
the Mortgage Loans, or the Issuer, shall enforce the representations and
warranties of GMAC Mortgage Corporation, WG Trust 2001-A or WG Trust 2003-A
pursuant to the Purchase Agreement. Upon the discovery by the Sellers, the
Depositor, the Servicer, the Indenture Trustee, the Enhancer, the Issuer, or the
Custodian of a breach of any of the representations and warranties made by
either GMAC Mortgage Corporation, WG Trust 2001-A or WG Trust 2003-A in the
Purchase Agreement, in respect of any Mortgage Loan which materially and
adversely affects the interests of the Securityholders or the Enhancer, the
party discovering such breach shall give prompt written notice to the other
parties (the Custodian being so obligated under the Custodial Agreement). The
Servicer shall promptly notify either GMAC Mortgage Corporation, WG Trust 2001-A
or WG Trust 2003-A, as applicable, of such breach and request that, pursuant to
the terms of the Purchase Agreement, the respective party either (i) cure such
breach in all material respects within 90 days from the date such party was
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notified of such breach, or in the case of a breach which has the effect of
making the Mortgage Loan fail to be a "qualified mortgage" within the meaning of
Section 860G of the Internal Revenue Code, within 90 days after the discovery
thereof by the Sellers, the Depositor, the Servicer, the Indenture Trustee, the
Enhancer, the Issuer or the Purchaser or (ii) purchase such Mortgage Loan from
the Issuer at the price and in the manner set forth in Section 3.1(f) of the
Purchase Agreement; provided, that either GMAC Mortgage Corporation, WG Trust
2001-A or WG Trust 2003-A shall, subject to the conditions set forth in the
Purchase Agreement, have the option to substitute an Eligible Substitute Loan or
Loans for such Mortgage Loan, provided that such substitution occurs within two
years following the Closing Date. In the event that either GMAC Mortgage
Corporation, WG Trust 2001-A or WG Trust 2003-A elects to substitute one or more
Eligible Substitute Loans pursuant to Section 3.1(f) of the Purchase Agreement,
such party shall deliver to the Custodian or the Servicer, in accordance with
the Purchase Agreement, with respect to such Eligible Substitute Loans, the
original Mortgage Note, the Mortgage, and such other documents and agreements as
are required by the Purchase Agreement. Payments due with respect to Eligible
Substitute Loans in the month of substitution shall not be transferred to the
Issuer and will be retained by the Servicer and remitted by the Servicer to such
party on the next succeeding Payment Date except to the extent that a payment
less than the applicable Monthly Payment has been received by the Issuer for
such month in respect of the Mortgage Loan to be removed. The Servicer shall
amend or cause to be amended the Mortgage Loan Schedule to reflect the removal
of such Mortgage Loan and the substitution of the Eligible Substitute Loans and
the Servicer shall promptly deliver the amended Mortgage Loan Schedule to the
Owner Trustee and Indenture Trustee.
It is understood and agreed that the obligation of GMAC Mortgage
Corporation, WG Trust 2001-A and WG Trust 2003-A to cure such breach or purchase
or substitute for such Mortgage Loan as to which such a breach has occurred and
is continuing shall constitute the sole remedy respecting such breach available
to the Issuer and the Indenture Trustee, as pledgee of the Mortgage Loans,
against either GMAC Mortgage Corporation, WG Trust 2001-A or WG Trust 2003-A. In
connection with the purchase of or substitution for any such Mortgage Loan by
either GMAC Mortgage Corporation, WG Trust 2001-A or WG Trust 2003-A, the Issuer
shall assign to such party all of its right, title and interest in respect of
the Purchase Agreement applicable to such Mortgage Loan. Upon receipt of the
Repurchase Price, or upon completion of such substitution, the Servicer shall
notify the Custodian, and the Custodian shall deliver the Mortgage Notes to the
Servicer, together with all relevant endorsements and assignments prepared by
the Servicer that the Indenture Trustee shall execute.
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01...The Servicer.
(a) The Servicer shall service and administer the Mortgage Loans in a
manner generally consistent with the terms of the Program Guide and in
a manner consistent with the terms of this Agreement and that shall be
normal and usual in its general mortgage servicing activities and
consistent with the manner in which it services all other Mortgage
Loans in its servicing portfolio with characteristics similar to those
of the Mortgage Loans. The Servicer shall have full power and
authority, acting alone or through a Subservicer, to do any and all
things in connection with such servicing and administration which it
may deem necessary or desirable, it being understood, however, that
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the Servicer shall at all times remain responsible to the Issuer and
the Indenture Trustee, as pledgee of the Mortgage Loans, for the
performance of its duties and obligations hereunder in accordance with
the terms hereof and the Program Guide. Without limiting the
generality of the foregoing, the Servicer shall continue, and is
hereby authorized and empowered by the Issuer and the Indenture
Trustee, as pledgee of the Mortgage Loans, to execute and deliver, on
behalf of itself, the Issuer, the Indenture Trustee or any of them,
any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge and all other comparable instruments with
respect to the Mortgage Loans and the Mortgaged Properties. The
Issuer, the Indenture Trustee and the Custodian, as applicable, shall
furnish the Servicer with any powers of attorney and other documents
necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. In addition, the
Servicer may, at its own discretion and on behalf of the Indenture
Trustee, obtain credit information in the form of a "credit score"
from a credit repository. On the Closing Date, the Indenture Trustee
shall deliver to the Servicer a limited power of attorney
substantially in the form of Exhibit B hereto. The Servicer is further
authorized and empowered by the Issuer and the Indenture Trustee, on
behalf of the Noteholders and the Indenture Trustee, in its own name
or in the name of the Subservicer, when the Servicer or the
Subservicer, as the case may be, believes it appropriate in its best
judgment to register any Mortgage Loan on the MERS(R)System, or cause
the removal from the registration of any Mortgage Loan on the
MERS(R)System, to execute and deliver, on behalf of the Indenture
Trustee and the Noteholders or any of them, any and all instruments of
assignment and other comparable instruments with respect to such
assignment or re-recording of a Mortgage in the name of MERS, solely
as nominee for the Indenture Trustee and its successors and assigns.
The Indenture Trustee shall have no ongoing responsibility to monitor
the status of the Mortgage Loans in the MERS(R) System. Any expenses
incurred in connection with the actions described in the preceding
sentence shall be borne by the Servicer, with no right of
reimbursement.
Notwithstanding the foregoing, subject to Section 3.02(a), the Servicer
shall not permit any modification with respect to any Mortgage Loan that would
both constitute a sale or exchange of such Mortgage Loan within the meaning of
Section 1001 of the Code and any proposed, temporary or final regulations
promulgated thereunder and cause either REMIC I, REMIC II, or REMIC III to fail
to qualify as a REMIC under the Code or, except as provided in Section 11.01(f)
of the Indenture, cause the imposition of a tax upon either of the REMICs
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code).
If the Mortgage did not have a Lien senior to the related Mortgage Loan
on the related Mortgaged Property as of the related Cut-Off Date, then the
Servicer, in such capacity, may not consent to the placing of a Lien senior to
that of the Mortgage on the related Mortgaged Property. If the Mortgage had a
Lien senior to the related Mortgage Loan on the related Mortgaged Property as of
the related Cut-Off Date, then the Servicer, in such capacity, may not consent
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to the refinancing of such prior senior Lien to the extent such refinancing
shall increase the CLTV on the related Mortgage Loan.
The relationship of the Servicer (and of any successor to the Servicer
as servicer under this Agreement) to the Issuer under this Agreement is intended
by the parties to be that of an independent contractor and not that of a joint
venturer, partner or agent.
(b) The Servicer may enter into Subservicing Agreements with Subservicers
for the servicing and administration of certain of the Mortgage Loans.
The Servicer shall provide notice to the Indenture Trustee upon
entering into a Subservicing Agreement. References in this Agreement
to actions taken or to be taken by the Servicer in servicing the
Mortgage Loans include actions taken or to be taken by a Subservicer
on behalf of the Servicer and any amount actually received by such
Subservicer in respect of a Mortgage Loan shall be deemed to have been
received by the Servicer whether or not actually received by the
Servicer. Each Subservicing Agreement will be upon such terms and
conditions as are not inconsistent with this Agreement and as the
Servicer and the Subservicer have agreed. With the approval of the
Servicer, a Subservicer may delegate its servicing obligations to
third-party servicers, but such Subservicers will remain obligated
under the related Subservicing Agreements. The Servicer and the
Subservicer may enter into amendments to the related Subservicing
Agreements; provided, however, that any such amendments shall not
cause the Mortgage Loans to be serviced in a manner that would be
materially inconsistent with the standards set forth in this
Agreement. The Servicer shall be entitled to terminate any
Subservicing Agreement in accordance with the terms and conditions
thereof and without any limitation by virtue of this Agreement;
provided, however, that in the event of termination of any
Subservicing Agreement by the Servicer or the Subservicer, the
Servicer shall either act as servicer of the related Mortgage Loan or
enter into a Subservicing Agreement with a successor Subservicer which
will be bound by the terms of the related Subservicing Agreement. The
Servicer shall be entitled to enter into any agreement with a
Subservicer for indemnification of the Servicer and nothing contained
in this Agreement shall be deemed to limit or modify such
indemnification.
In the event that the rights, duties and obligations of the Servicer are
terminated hereunder, any successor to the Servicer in its sole discretion may,
to the extent permitted by applicable law, terminate the existing Subservicing
Agreement with any Subservicer in accordance with the terms of the applicable
Subservicing Agreement or assume the terminated Servicer's rights and
obligations under such subservicing arrangements which termination or assumption
will not violate the terms of such arrangements.
As part of its servicing activities hereunder, the Servicer, for the
benefit of the Indenture Trustee, the Enhancer and the Securityholders, shall
use reasonable efforts to enforce the obligations of each Subservicer under the
related Subservicing Agreement, to the extent that the non-performance of any
such obligation would have a material adverse effect on a Mortgage Loan. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Subservicing Agreements and the pursuit of other appropriate
7
remedies, shall be in such form and carried out to such an extent and at such
time as the Servicer, in its good faith business judgment, would require were it
the owner of the related Mortgage Loans. The Servicer shall pay the costs of
such enforcement at its own expense, and shall be reimbursed therefor only (i)
from a general recovery resulting from such enforcement to the extent, if any,
that such recovery exceeds all amounts due in respect of the related Mortgage
Loan or (ii) from a specific recovery of costs, expenses or attorneys fees
against the party against whom such enforcement is directed.
(c) All other documents contained in the Mortgage File and any
original documents relating to the Mortgage Loans not contained
in the Mortgage File or delivered to the Custodian, if any, or
the Indenture Trustee are and shall be held by the Servicer in
trust as agent for the Indenture Trustee on behalf of the
Noteholders.
Section 3.02...Collection of Certain Mortgage Loan Payments.
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(a) The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this
Agreement and generally consistent with the Program Guide, follow such
collection procedures as shall be normal and usual in its general
mortgage servicing activities and consistent with the procedures the
Servicer employs in servicing all other Mortgage Loans in the
servicing portfolio with characteristics similar to those of the
Mortgage Loans. Consistent with the foregoing, and without limiting
the generality of the foregoing, the Servicer may in its discretion
(i) waive any late payment charge, penalty interest or other fees
which may be collected in the ordinary course of servicing a Mortgage
Loan and (ii) arrange with a Mortgagor a schedule for the payment of
principal and interest due and unpaid; provided, that such arrangement
is consistent with the Servicer's policies with respect to home equity
mortgage loans; and provided further, that notwithstanding such
arrangement, such Mortgage Loans will be included in the information
regarding delinquent Mortgage Loans set forth in the Servicing
Certificate. The Servicer may also extend the Due Date for payment due
on a Mortgage Loan in accordance with the Program Guide; provided,
however, that the Servicer shall first determine that any such waiver
or extension will not impair the coverage of any related insurance
policy or materially adversely affect the Lien of the related Mortgage
or the interests of the Securityholders or the Enhancer and the
Servicer shall not grant any such waiver or extension that would have
any such effect. Consistent with the terms of this Agreement, the
Servicer may also:
(i) waive, modify or vary any term of any Mortgage Loan;
(ii) consent to the postponement of strict compliance with any
such term or in any manner grant indulgence to any
Mortgagor;
(iii) arrange with a Mortgagor a schedule for the payment of
principal and interest due and unpaid;
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(iv) forgive any portion of the amounts contractually owed under the
Mortgage Loan;
(v) capitalize past due amounts owed under the Mortgage Loan by adding any
amounts in arrearage to the existing principal balance of the Mortgage
Loan (a "Capitalization Workout") which will result in an increased
Monthly Payment amount, provided that: (A) the amount added to the
existing principal balance of the Mortgage Loan (the "Capitalized
Amount") shall be no greater than five times the Mortgagor's current
Monthly Payment amount; and (B) the Servicer shall not enter into a
Capitalization Workout unless the CLTV of the Mortgage Loan prior to
the Capitalization Workout equals or exceeds 80% and the Mortgagor has
qualified for the Capitalization Workout under the Servicer's
servicing guidelines; or
(vi) reset the maturity date for the Mortgage Loan, but in no event shall
such reset date extend beyond the end of the Collection Period
preceding the Final Payment Date;
or any combination of the foregoing, if in the Servicer's determination such
waiver, modification, postponement or indulgence is not materially adverse to
the interests of the Securityholders or the Enhancer; provided, however, that
the Servicer may not modify or permit any Subservicer to modify any Mortgage
Loan (including without limitation any modification that would change the Loan
Rate, forgive the payment of any principal or interest (unless in connection
with the liquidation of the related Mortgage Loan) or extend the final maturity
date of such Mortgage Loan) unless such Mortgage Loan is in default or, in the
judgment of the Servicer, such default is reasonably foreseeable. The general
terms of any waiver, modification, forgiveness, postponement or indulgence with
respect to any of the Mortgage Loans will be included in the Servicing
Certificate, and such Mortgage Loans will not be considered "delinquent" for the
purposes of the Basic Documents so long as the Mortgagor complies with the terms
of such waiver, modification, forgiveness, postponement or indulgence.
(b) The Servicer shall establish a Custodial Account, which shall be an
Eligible Account, titled "GMACM Home Equity Loan Trust 2003-HE2,"in
which the Servicer shall deposit or cause to be deposited any amounts
representing payments and collections in respect of the Initial
Mortgage Loans received by it subsequent to or on the Cut-Off Date or,
with respect to the Subsequent Mortgage Loans, the Subsequent Cut-Off
Date (other than in respect of the payments referred to in the
following paragraph), within two Business Days following receipt
thereof (or otherwise on or prior to the Closing Date), including the
following payments and collections received or made by it (without
duplication):
(i) all payments of principal of or interest on the Mortgage
Loans received or advanced by the Servicer, net of any
portion of the interest thereof retained by any
Subservicer as subservicing fees;
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(ii) the aggregate Repurchase Price of the Mortgage Loans
purchased by the Servicer pursuant to Section 3.15;
(iii) Net Liquidation Proceeds, net of any related Foreclosure
Profit and all Subsequent Net Recovery Amounts;
(iv) all proceeds of any Mortgage Loans repurchased by a Seller
or GMAC Mortgage Corporation pursuant to the Purchase
Agreement, and all Substitution Adjustment Amounts
required to be deposited in connection with the
substitution of an Eligible Substitute Loan pursuant to
the Purchase Agreement;
(v) Insurance Proceeds, other than Net Liquidation Proceeds,
resulting from any insurance policy maintained on a
Mortgaged Property; and
(vi) amounts required to be paid by the Servicer pursuant to
Section 8.08;
provided, however, that with respect to each Collection Period, the Servicer
shall be permitted to retain from payments in respect of interest on the
Mortgage Loans, the Servicing Fee for such Collection Period. Notwithstanding
the foregoing, the Servicer may, in accordance with its normal servicing
procedures, hold payments by a Mortgagor representing partial payments of a
Monthly Payment that are not applied to principal or interest on the Mortgage
Loans in a separate account, which shall be an Eligible Account, until such
amounts are applied by the Servicer to principal or interest on the Mortgage
Loans. At such time, the Servicer shall deposit such amounts into the Custodial
Account and apply such amounts as payments of principal or interest on the
Mortgage Loans, as applicable. The foregoing requirements respecting deposits to
the Custodial Account are exclusive, it being understood that, without limiting
the generality of the foregoing, the Servicer need not deposit in the Custodial
Account amounts representing Foreclosure Profits, fees (including annual fees)
or late charge penalties, payable by Mortgagors (such amounts to be retained as
additional servicing compensation in accordance with Section 3.09 hereof), or
amounts received by the Servicer for the accounts of Mortgagors for application
towards the payment of taxes, insurance premiums, assessments and similar items.
In the event any amount not required to be deposited in the Custodial Account is
so deposited, the Servicer may at any time withdraw such amount from the
Custodial Account, any provision herein to the contrary notwithstanding. The
Servicer shall retain all Foreclosure Profits as additional servicing
compensation.
The Servicer, in its sole discretion, may deposit into the Custodial
Account amounts representing installments of principal of or interest on
Mortgage Loans that were delinquent as of the end of any Collection Period,
provided that the Servicer reasonably believes that such amounts will be
recoverable from Collections on the related Mortgage Loan. If the Servicer makes
any such advances of delinquent principal and/or interest, the Servicer shall be
entitled to reimburse itself by withdrawing from the Custodial Account, as
provided herein, any amounts so advanced. The Servicer may cause the institution
maintaining the Custodial Account to invest any funds in the Custodial Account
in Permitted Investments (including obligations of the Servicer or any of its
Affiliates, if such obligations otherwise qualify as Permitted Investments),
which investments shall mature not later than the Business Day preceding the
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next succeeding Payment Date, and which investments shall not be sold or
disposed of prior to maturity. In addition, no such Permitted Investment shall
be purchased at a price in excess of par. Except as provided above, all income
and gain realized from any such investment shall inure to the benefit of the
Servicer and shall be subject to its withdrawal or order from time to time. The
amount of any losses incurred in respect of the principal amount of any such
investments shall be deposited in the Custodial Account by the Servicer out of
its own funds immediately as realized.
(c) The Servicer shall require each Subservicer to hold all funds
constituting collections on the Mortgage Loans, pending remittance
thereof to the Servicer, in one or more accounts meeting the
requirements of an Eligible Account, and shall require all such funds
to be invested in Permitted Investments, unless all such collections
are remitted on a daily basis to the Servicer for deposit into the
Custodial Account.
Section 3.03...Withdrawals from the Custodial Account. The Servicer shall, from
time to time as provided herein, make withdrawals from the Custodial Account of
amounts on deposit therein pursuant to Section 3.02 that are attributable to the
Mortgage Loans for the following purposes:
(a) on each Determination Date, the Servicer shall determine the aggregate
amounts to be withdrawn from the Custodial Account and applied
pursuant to Section 3.05(a) of the Indenture and, prior to the close
of business on the Business Day prior to the related Payment Date
(provided, however, that the Indenture Trustee shall not be required
to invest any amounts deposited into the Note Payment Account after
1:00 p.m.), shall withdraw such amounts from the Custodial Account and
deposit such amounts into the Note Payment Account to be distributed
by the Paying Agent in accordance with and in the order or priority
set forth in Section 3.05(a) of the Indenture for such Payment Date,
in accordance with the Servicing Certificate;
(b) to pay to itself from any monthly payments received from the
Mortgagors, the amount of such payment that represents interest
accrued on the related Mortgage Loan for any period prior to the
Cut-Off Date;
(c) to the extent deposited to the Custodial Account, to reimburse itself
or the related Subservicer for previously unreimbursed expenses
incurred in maintaining individual insurance policies pursuant to
Section 3.04, or Liquidation Expenses, paid pursuant to Section 3.07
or otherwise reimbursable pursuant to the terms of this Agreement (to
the extent not payable pursuant to Section 3.09), such withdrawal
right being limited to amounts received on particular Mortgage Loans
(other than any Repurchase Price in respect thereof) that represent
late recoveries of the payments for which such advances were made, or
from related Net Liquidation Proceeds or the proceeds of the purchase
of such Mortgage Loan;
(d) to pay to itself out of each payment received on account of interest
on a Mortgage Loan as contemplated by Section 3.09, an amount equal to
the related Servicing Fee and the Recovery Fee (to the extent not
retained pursuant to Section 3.02 or Section 3.07), and to pay to any
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Subservicer any subservicing fees not previously withheld by such
Subservicer;
(e) to the extent deposited in the Custodial Account, to pay to
itself as additional servicing compensation any (i) interest or
investment income earned on funds deposited in the Custodial
Account that it is entitled to withdraw pursuant to Sections
3.02(b) and 5.01, and (ii) Foreclosure Profits (to the extent
permitted by law);
(f) to pay to itself or the related Seller, with respect to any
Mortgage Loan or property acquired in respect thereof that has
been purchased or otherwise transferred to such Seller, the
Servicer or other entity, all amounts received thereon and not
required to be distributed to Securityholders as of the date on
which the related Purchase Price or Repurchase Price is
determined;
(g) to withdraw any other amount deposited in the Custodial Account
that was not required to be deposited therein pursuant to Section
3.02;
(h) to pay to the REMIC Administrator amounts reimbursable from the
Custodial Account pursuant to Section 11.01(c) of the Indenture;
(i) to pay to itself, with respect to any Mortgage Loan for which it
has made an advance of delinquent principal and/or interest, any
previously unreimbursed advances of such amounts theretofore made
to the extent of receipts of late recoveries of such payments
from the related Mortgagors, out of related Net Liquidation
Proceeds or the proceeds of the purchase of such Mortgage Loans;
(j) to reimburse itself for the amount of any investment earnings
advanced prior to maturity pursuant to Section 3.17(c) or Section
5.01, to the extent not reimbursed from earnings received on the
related investment at maturity;
(k) at its option, for so long as it is the sole Certificateholder,
to pay to itself from amounts otherwise required to be remitted
to the Distribution Account in accordance with Section
3.05(a)(xiii) of the Indenture, all amounts payable to it as a
Certificateholder on the related Payment Date; and
(l) to reimburse itself for advances of delinquent principal and/or
interest on a Mortgage Loan or other advances that are made
pursuant to this Agreement that are not reimbursed pursuant to
clauses (c) and (i) of this Section 3.03.
Since, in connection with withdrawals pursuant to clauses (c), (d), (f)
and (i), the Servicer's entitlement thereto is limited to collections or other
recoveries on the related Mortgage Loan, the Servicer shall keep and maintain
separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose
of justifying any withdrawal from the Custodial Account pursuant to such
clauses. Notwithstanding any other provision of this Agreement, the Servicer
shall be entitled to reimburse itself for any previously unreimbursed expenses
incurred pursuant to Section 3.07 or otherwise reimbursable pursuant to the
terms of this Agreement that the Servicer determines to be otherwise
nonrecoverable (except with respect to any Mortgage Loan as to which the
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Repurchase Price has been paid), by withdrawal from the Custodial Account of
amounts on deposit therein attributable to the Mortgage Loans on any Business
Day prior to the Payment Date succeeding the date of such determination.
Section 3.04...Maintenance of Hazard Insurance; Property Protection Expenses. To
the extent permitted under the related Mortgage Note and Mortgage, and to the
extent the Servicer receives notice that a hazard insurance policy has been
cancelled, the Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance naming the Servicer or related Subservicer as loss payee
thereunder providing extended coverage in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan from time to time or (ii) the combined principal balance owing on
such Mortgage Loan and any mortgage loan senior to such Mortgage Loan from time
to time; provided, however, that such coverage may not be less than the minimum
amount required to fully compensate for any loss or damage on a replacement cost
basis. The Servicer shall use commercially reasonable efforts to monitor that
hazard insurance is maintained as described in the previous sentence in the same
manner as it would for mortgage loans in its own portfolio. The Servicer shall
also cause to be maintained on property acquired upon foreclosure, or deed in
lieu of foreclosure, of any Mortgage Loan, fire insurance with extended coverage
in an amount which is at least equal to the amount necessary to avoid the
application of any co-insurance clause contained in the related hazard insurance
policy. Amounts collected by the Servicer under any such policies (other than
amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Servicer's normal servicing procedures) shall be deposited
in the Custodial Account to the extent called for by Section 3.02. In cases in
which any Mortgaged Property is located at any time during the life of a
Mortgage Loan in a federally designated flood area, to the extent permitted
under the related Mortgage Note and Mortgage, and to the extent the Servicer
receives notice that the related flood insurance has been cancelled, the hazard
insurance to be maintained for the related Mortgage Loan shall include flood
insurance (to the extent available). All such flood insurance shall be in
amounts equal to the lesser of (i) the amount required to compensate for any
loss or damage to the related Mortgaged Property on a replacement cost basis and
(ii) the maximum amount of such insurance available for such Mortgaged Property
under the national flood insurance program (assuming that the area in which such
Mortgaged Property is located is participating in such program). The Servicer
shall use commercially reasonable efforts to monitor such flood insurance as
described in the previous sentence in the same manner as it would for mortgage
loans in its own portfolio. The Servicer shall be under no obligation to require
that any Mortgagor maintain earthquake or other additional insurance and shall
be under no obligation itself to maintain any such additional insurance on
property acquired in respect of a Mortgage Loan, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Servicer shall obtain and maintain a
blanket policy consistent with its general mortgage servicing activities
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.04, it being understood and agreed that such
policy may contain a deductible clause, in which case the Servicer shall, in the
event that there shall not have been maintained on the related Mortgaged
Property a policy complying with the first sentence of this Section 3.04 and
there shall have been a loss which would have been covered by such policy,
deposit in the Custodial Account the amount not otherwise payable under the
blanket policy because of such deductible clause. Any such deposit by the
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Servicer shall be made on the last Business Day of the Collection Period in the
month in which payments under any such policy would have been deposited in the
Custodial Account. In connection with its activities as servicer of the Mortgage
Loans, the Servicer agrees to present, on behalf of itself, the Issuer and the
Indenture Trustee, claims under any such blanket policy.
Section 3.05...Modification Agreements; Release of Lien.
----------------------------------------
The Servicer or the related Subservicer, as the case may be, shall be
entitled to (a) execute assumption agreements, substitution agreements, and
instruments of satisfaction or cancellation or of partial or full release or
discharge, or any other document contemplated by this Agreement and other
comparable instruments with respect to the Mortgage Loans and with respect to
the related Mortgaged Properties (and the Issuer and the Indenture Trustee each
shall promptly execute any such documents on request of the Servicer) and (b)
approve the granting of an easement thereon in favor of another Person, any
alteration or demolition of such Mortgaged Properties or other similar matters,
if it has determined, exercising its good faith business judgment in the same
manner as it would if it were the owner of the related Mortgage Loans, that the
security for, and the timely and full collectability of, such Mortgage Loans
would not be adversely affected thereby. A partial release pursuant to this
Section 3.05 shall be permitted only if the CLTV for the related Mortgage Loan
after such partial release does not exceed the CLTV for such Mortgage Loan as of
the related Cut-Off Date, and provided further that the Servicer and the
Enhancer have received an Opinion of Counsel to the effect that such partial
release will not result in an Adverse REMIC Event. Any fee collected by the
Servicer or the related Subservicer for processing such request will be retained
by the Servicer or such Subservicer as additional servicing compensation.
Section 3.06...Trust Estate; Related Documents.
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(a) When required by the provisions of this Agreement, the Issuer or the
Indenture Trustee shall execute instruments to release property from
the terms of the Trust Agreement, Indenture or Custodial Agreement, as
applicable, or convey the Issuer's or the Indenture Trustee's interest
in the same, in a manner and under circumstances that are not
inconsistent with the provisions of this Agreement. No party relying
upon an instrument executed by the Issuer or the Indenture Trustee as
provided in this Section 3.06 shall be bound to ascertain the Issuer's
or the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any moneys.
(b) If from time to time any written assurance, assumption agreement or
substitution agreement or other similar agreement shall be executed
pursuant to Section 3.05, the Servicer shall check that each of such
documents purports to be an original executed copy (or a copy of the
original executed document if the original executed copy has been
submitted for recording and has not yet been returned) and, if so,
shall file such documents, and upon receipt of the original executed
copy from the applicable recording office or receipt of a copy thereof
certified by the applicable recording office shall file such originals
or certified copies, with the Related Documents held by the Servicer.
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(c) Upon receipt of a Request for Release from the Servicer, substantially
in the form of Exhibit C hereto, to the effect that a Mortgage Loan
has been the subject of a final payment or a prepayment in full and
such Mortgage Loan has been terminated or that substantially all Net
Liquidation Proceeds that have been determined by the Servicer in its
reasonable judgment to be finally recoverable have been recovered, and
upon deposit to the Custodial Account of such final monthly payment,
prepayment in full together with accrued and unpaid interest to the
date of such payment with respect to such Mortgage Loan or, if
applicable, Net Liquidation Proceeds, the Custodian shall promptly
release the Related Documents held by the Custodian to the Servicer.
The Indenture Trustee shall execute such Related Documents, along with
such documents as the Servicer or the related Mortgagor may request to
evidence satisfaction and discharge of such Mortgage Loan, upon
request of the Servicer. If from time to time and as appropriate for
the servicing or foreclosure of any Mortgage Loan, the Servicer
requests the Custodian to release Related Documents held by the
Custodian and delivers to the Custodian a trust receipt reasonably
satisfactory to the Custodian and signed by a Responsible Officer of
the Servicer, the Custodian shall release such Related Documents to
the Servicer. If such Mortgage Loans shall be liquidated and the
Custodian receives a certificate from the Servicer as provided above,
then, upon request of the Servicer, the Custodian shall release the
trust receipt to the Servicer.
Section 3.07...Realization Upon Defaulted Mortgage Loans; Loss Mitigation. With
respect to any Mortgage Loan that comes into and continues in default, the
Servicer shall decide whether to (i) foreclose upon the related Mortgaged
Property, (ii) write off the unpaid Principal Balance thereof as bad debt, (iii)
take a deed in lieu of foreclosure, (iv) accept a short sale (a payoff of the
Mortgage Loan for an amount less than the total amount contractually owed in
order to facilitate a sale of the Mortgaged Property by the Mortgagor), (v)
permit a short refinancing (a payoff of the Mortgage Loan for an amount less
than the total amount contractually owed in order to facilitate refinancing
transactions by the Mortgagor not involving a sale of the Mortgaged Property),
(vi) arrange for a repayment plan, (vii) agree to a modification in accordance
with this Agreement or (viii) take an unsecured note in each case subject to the
rights of any related first Lien holder; provided, that in connection with the
foregoing, if the Servicer has actual knowledge that any Mortgaged Property is
affected by hazardous or toxic wastes or substances and that the acquisition of
such Mortgaged Property would not be commercially reasonable, then the Servicer
shall not cause the Issuer or the Indenture Trustee to acquire title to such
Mortgaged Property in a foreclosure or similar proceeding. In connection with
such decision, the Servicer shall follow such practices (including, in the case
of any default on a related senior mortgage loan, the advancing of funds to
correct such default if deemed to be appropriate by the Servicer) and procedures
as it shall deem necessary or advisable and as shall be normal and usual in its
general mortgage servicing activities and as shall be required or permitted by
the Program Guide; provided, that the Servicer shall not be liable in any
respect hereunder if the Servicer is acting in connection with any such
foreclosure or attempted foreclosure which is not completed or other conversion
in a manner that is consistent with the provisions of this Agreement. The
foregoing is subject to the proviso that the Servicer shall not be required to
expend its own funds in connection with any foreclosure or attempted foreclosure
which is not completed or towards the correction of any default on a related
senior mortgage loan or restoration of any property unless it shall determine
15
that such expenditure will increase the related Net Liquidation Proceeds. In the
event of a determination by the Servicer that any such expenditure previously
made pursuant to this Section 3.07 will not be reimbursable from Net Liquidation
Proceeds, the Servicer shall be entitled to reimbursement of its funds so
expended pursuant to Section 3.03 above.
Notwithstanding any provision of this Agreement, a Mortgage Loan may be
deemed to be finally liquidated if substantially all amounts expected by the
Servicer to be received in connection therewith have been received; provided,
however, that the Servicer may continue to pursue recovery of such Mortgage Loan
and any subsequent collections, minus any Recovery Fee, with respect to any such
Mortgage Loan shall be deposited into the Custodial Account. For purposes of
determining the amount of any Net Liquidation Proceeds, Insurance Proceeds or
other unscheduled collections, the Servicer may take into account minimal
amounts of additional receipts expected to be received or any estimated
additional liquidation expenses expected to be incurred in connection with such
Mortgage Loan.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Indenture Trustee, which shall hold the same on behalf of
the Issuer in accordance with Section 3.13 of the Indenture. Notwithstanding any
such acquisition of title and cancellation of the related Mortgage Loan, such
Mortgaged Property shall (except as otherwise expressly provided herein) be
considered to be an outstanding Mortgage Loan held as an asset of the Issuer
until such time as such property shall be sold. Consistent with the foregoing
for purposes of all calculations hereunder, so long as the related Mortgage Loan
shall be considered to be an outstanding Mortgage Loan, it shall be assumed
that, notwithstanding that the indebtedness evidenced by the related Mortgage
Note shall have been discharged, such Mortgage Note in effect at the time of any
such acquisition of title before any adjustment thereto by reason of any
bankruptcy or similar proceeding or any moratorium or similar waiver or grace
period will remain in effect.
Any proceeds from foreclosure proceedings or the purchase or repurchase
of any Mortgage Loan pursuant to the terms of this Agreement, as well as any
recovery resulting from a collection of Net Liquidation Proceeds or Insurance
Proceeds, shall be applied in the following order of priority: first, to
reimburse the Servicer or the related Subservicer in accordance with this
Section 3.07; second, to pay the Servicer or the related Subservicer all
Servicing Fees payable therefrom; third, to pay accrued and unpaid interest on
such Mortgage Loan, at the Net Loan Rate to the Payment Date on which such
amounts are to be deposited in the Note Payment Account or Distribution Account;
and fourth, as a recovery of principal on such Mortgage Loan. Any remaining
amount shall constitute Foreclosure Profits.
In the event that the Trust acquires any Mortgaged Property as aforesaid
or otherwise in connection with a default or imminent default on a Mortgage
Loan, the Servicer on behalf the Trust shall dispose of such Mortgaged Property
as soon as practicable, giving due consideration to the interests of the
Noteholders and the Certificateholders, but in all cases within three full years
after the taxable year of its acquisition by the Trust for purposes of Section
860G(a)(8) of the Code (or such shorter period as may be necessary under
applicable state (including any state in which such property is located) law to
maintain the status of each of REMIC I, REMIC II or REMIC III as a REMIC under
16
applicable state law and avoid taxes resulting from such property failing to be
foreclosure property under applicable state law) or, at the expense of the
Trust, request, more than 60 days before the day on which such grace period
would otherwise expire, an extension of such grace period unless the Servicer
obtains for the Indenture Trustee an Opinion of Counsel, addressed to the
Indenture Trustee and the Servicer, to the effect that the holding by the Trust
of such Mortgaged Property subsequent to such period will not result in the
imposition of taxes on "prohibited transactions" as defined in Section 860F of
the Code or cause the Trust to fail to qualify as a REMIC (for federal (or any
applicable State or local) income tax purposes) at any time that any
Certificates are outstanding, in which case the Trust may continue to hold such
Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel). The Servicer shall be entitled to be reimbursed from the Custodial
Account for any costs incurred in obtaining such Opinion of Counsel, as provided
in Section 3.03. Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Trust shall be rented (or allowed to continue
to be rented) or otherwise used by or on behalf of the Trust in such a manner or
pursuant to any terms that would (i) cause such Mortgaged Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or (ii) subject REMIC I, REMIC II or REMIC III to the imposition of any
federal income taxes on the income earned from such Mortgaged Property,
including any taxes imposed by reason of Section 860G(c) of the Code, unless the
Servicer has agreed to indemnify and hold harmless the Trust with respect to the
imposition of any such taxes.
Section 3.08...Issuer and Indenture Trustee to Cooperate. On or before each
Payment Date, the Servicer will notify the Indenture Trustee or the Custodian,
with a copy to the Issuer, of the termination of or the payment in full and the
termination of any Mortgage Loan during the preceding Collection Period. Upon
receipt of payment in full, the Servicer is authorized to execute, pursuant to
the authorization contained in Section 3.01, an instrument of satisfaction
regarding the related Mortgage, which instrument of satisfaction shall be
recorded by the Servicer if required by applicable law and be delivered to the
Person entitled thereto and to cause the removal from the registration on the
MERS(R) System of such Mortgage. It is understood and agreed that any expenses
incurred in connection with such instrument of satisfaction or transfer shall be
reimbursed from amounts deposited in the Custodial Account. From time to time
and as appropriate for the servicing or foreclosure of any Mortgage Loan, the
Custodian shall, upon request of the Servicer and delivery to the Custodian,
with a copy to the Issuer, of a Request for Release, in the form attached hereto
as Exhibit C, signed by a Servicing Officer, release or cause to be released the
related Mortgage Note to the Servicer. The Issuer or Indenture Trustee shall
promptly execute such documents, in the forms provided by the Servicer, as shall
be necessary for the prosecution of any such proceedings or the taking of other
servicing actions. Such trust receipt shall obligate the Servicer to return such
Mortgage Note to the Custodian (as specified in such receipt) when the need
therefor by the Servicer no longer exists, unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that specified above, such trust receipt shall be released to the
Servicer.
In order to facilitate the foreclosure of the Mortgage securing any
Mortgage Loan that is in default following recordation of the related Assignment
of Mortgage in accordance with the provisions of the Purchase Agreement, the
Indenture Trustee or the Issuer shall, if so requested in writing by the
Servicer, promptly execute an appropriate assignment in the form provided by the
Servicer to assign such Mortgage Loan for the purpose of collection to the
17
Servicer (any such assignment shall unambiguously indicate that the assignment
is for the purpose of collection only), and, upon such assignment, such assignee
for collection will thereupon bring all required actions in its own name and
otherwise enforce the terms of such Mortgage Loan and deposit or credit the Net
Liquidation Proceeds, exclusive of Foreclosure Profits, received with respect
thereto into the Custodial Account. In the event that all delinquent payments
due under any such Mortgage Loan are paid by the Mortgagor and any other
defaults are cured, then the assignee for collection shall promptly reassign
such Mortgage Loan to the Indenture Trustee and return all Related Documents to
the place where the related Mortgage File was being maintained.
In connection with the Issuer's obligation to cooperate as provided in
this Section 3.08 and all other provisions of this Agreement requiring the
Issuer to authorize or permit any actions to be taken with respect to the
Mortgage Loans, the Indenture Trustee, as pledgee of the Mortgage Loans and as
assignee of record of the Mortgage Loans on behalf of the Issuer pursuant to
Section 3.13 of the Indenture, expressly agrees, on behalf of the Issuer, to
take all such actions on behalf of the Issuer and to promptly execute and return
all instruments reasonably required by the Servicer in connection therewith;
provided, that if the Servicer requests a signature of the Indenture Trustee, on
behalf of the Issuer, then the Servicer shall deliver to the Indenture Trustee
an Officer's Certificate stating that such signature is necessary or appropriate
to enable the Servicer to carry out its servicing and administrative duties
under this Agreement.
Section 3.09...Servicing Compensation; Payment of Certain Expenses by Servicer.
The Servicer shall be entitled to receive the Servicing Fee in accordance with
Section 3.03 hereof as compensation for its services in connection with
servicing the Mortgage Loans. Moreover, late payment charges and other receipts
not required to be deposited in the Custodial Account as specified in Section
3.02 hereof shall be retained by the Servicer as additional servicing
compensation. The Servicer shall be required to pay all expenses incurred by it
in connection with its activities hereunder (including payment of all other fees
and expenses not expressly stated hereunder to be for the account of the
Securityholders), including the fees and expenses of the Owner Trustee,
Indenture Trustee and the Custodian, and shall not be entitled to reimbursement
therefor.
Section 3.10...Annual Statement as to Compliance.
(a) The Servicer shall deliver to the Issuer, the Indenture Trustee, the
Depositor and the Underwriter, with a copy to the Enhancer, beginning
March 31, 2004, and on or before March 31 of each year thereafter, an
Officer's Certificate stating that (i) a review of the activities of
the Servicer during the preceding calendar year and of its performance
under any servicing agreements to which it is a party, including this
Agreement, has been made under such officer's supervision and (ii) to
the best of such officer's knowledge, based on such review, the
Servicer has complied in all material respects with the minimum
servicing standards set forth in the Uniform Single Attestation
Program for Mortgage Bankers and has fulfilled all of its material
obligations in all material respects throughout such year, or, if
there has been material noncompliance with such servicing standards or
a default in the fulfillment in all material respects of any such
obligation relating to this Servicing Agreement, such statement shall
include a description of such noncompliance or specify each such
18
default, as the case may be, known to such officer and the nature and
status thereof.
(b) The Servicer shall deliver to the Issuer and the Indenture
Trustee, with a copy to the Enhancer, promptly after having
obtained knowledge thereof, but in no event later than five
Business Days thereafter, written notice by means of an Officer's
Certificate of any event which with the giving of notice or the
lapse of time or both, would become a Servicing Default.
Section 3.11...Annual Servicing Report. Beginning March 31, 2004, and on or
before March 31 of each year thereafter, the Servicer at its expense shall cause
a firm of nationally recognized independent public accountants (which firm may
also render other services to the Servicer) to furnish a report to the Issuer,
the Indenture Trustee, the Depositor, the Underwriter, the Enhancer and each
Rating Agency stating its opinion that, on the basis of an examination conducted
by such firm substantially in accordance with standards established by the
American Institute of Certified Public Accountants, the assertions made pursuant
to Section 3.10 above regarding compliance with the minimum servicing standards
set forth in the Uniform Single Attestation Program for Mortgage Bankers during
the preceding calendar year are fairly stated in all material respects, subject
to such exceptions and other qualifications that, in the opinion of such firm,
such accounting standards require it to report. In rendering such statement,
such firm may rely, as to matters relating to the direct servicing of Mortgage
Loans by Subservicers, upon comparable statements for examinations conducted by
independent public accountants substantially in accordance with standards
established by the American Institute of Certified Public Accountants (rendered
within one year of such statement) with respect to such Subservicers.
Section 3.12...Access to Certain Documentation and Information Regarding the
Mortgage Loans. Whenever required by statute or regulation, the Servicer shall
provide to the Enhancer, any Securityholder upon reasonable request (or a
regulator for a Securityholder) or the Indenture Trustee, reasonable access to
the documentation regarding the Mortgage Loans. Such access shall be afforded
without charge, but only upon reasonable request and during normal business
hours at the offices of the Servicer. Nothing in this Section 3.12 shall
derogate from the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding Mortgagors, and the failure of
the Servicer to provide access as provided in this Section 3.12 as a result of
such obligation shall not constitute a breach of this Section 3.12.
Section 3.13...Maintenance of Certain Servicing Insurance Policies. The Servicer
shall, during the term of its service as servicer, maintain in force and effect
(i) a policy or policies of insurance covering errors and omissions in the
performance of its obligations as Servicer hereunder and (ii) a fidelity bond in
respect of its officers, employees or agents. Each such policy or policies and
fidelity bond shall be at least equal to the coverage that would be required by
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, whichever is greater, for Persons performing
servicing for mortgage loans purchased by such entity.
Section 3.14...Information Required by the Internal Revenue Service and Reports
of Foreclosures and Abandonments of Mortgaged Property. The Servicer shall
prepare and deliver all federal and state information reports with respect to
the Mortgage Loans when and as required by all applicable state and federal
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income tax laws. In particular, with respect to the requirement under Section
6050J of the Code to the effect that the Servicer or Subservicer shall make
reports of foreclosures and abandonments of any mortgaged property for each year
beginning in 2002, the Servicer or Subservicer shall file reports relating to
each instance occurring during the previous calendar year in which the Servicer
(a) on behalf of the Issuer, acquired an interest in any Mortgaged Property
through foreclosure or other comparable conversion in full or partial
satisfaction of a Mortgage Loan, or (b) knew or had reason to know that any
Mortgaged Property had been abandoned. The reports from the Servicer or
Subservicer shall be in form and substance sufficient to meet the reporting
requirements imposed by Section 6050J and Section 6050H (reports relating to
mortgage interest received) of the Code.
Section 3.15...Optional Repurchase or Transfer of Mortgage Loans.
-------------------------------------------------
Notwithstanding any provision in Section 3.07 above to the contrary, the
Servicer, at its option and in its sole discretion, may repurchase any Mortgage
Loan delinquent in payment for a period of ninety (90) days or longer for a
price equal to the Repurchase Price, provided that any such repurchase shall
occur only during the 60-day period commencing on the first day of the next
calendar month.
Section 3.16...Pre-Funding Account.
(a) No later than the Closing Date, the Indenture Trustee shall establish
and maintain on behalf of itself one or more segregated trust
accounts, which shall be Eligible Accounts, titled "Pre-Funding
Account, ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as Indenture Trustee for
GMACM Home Equity Loan Trust 2003-HE2" (the "Pre-Funding Account").
Notwithstanding anything herein to the contrary, the Pre-Funding
Account shall not be an asset of REMIC I, REMIC II or REMIC III. To
the extent that the Pre-Funding Account constitutes a reserve fund for
federal income tax purposes, (1) it shall be an outside reserve fund
and not an asset of REMIC I, REMIC II or REMIC III, (2) it shall be
owned by GMACM, as Seller and (3) amounts transferred by REMIC I,
REMIC II or REMIC III to the Pre-Funding Account shall be treated as
transferred to GMACM, as Seller, or any successor, all within the
meaning of Section 1.860G-2(h) of the Treasury Regulations. On the
Closing Date, GMACM shall deposit into the Pre-Funding Account an
amount equal to the Original Pre-Funded Amount from the proceeds of
the sale of the Securities. On each Subsequent Transfer Date, the
Servicer shall instruct the Indenture Trustee in writing to withdraw
from the Pre-Funding Account an amount equal to the aggregate
Principal Balance as of the related Subsequent Cut-Off Date of the
Subsequent Mortgage Loans to be sold to the Trust on such Subsequent
Transfer Date and purchased with funds on deposit in the Pre-Funding
Account, and to pay such amount to or upon the order of GMACM upon
satisfaction of the conditions set forth in this Agreement, in the
Purchase Agreement and in the related Subsequent Transfer Agreement
with respect thereto.
(b) If the Pre-Funded Amount has not been reduced to zero at the close of
business on the last day of the Pre-Funding Period, after giving
effect to any withdrawal therefrom on such day, any remaining
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Pre-Funded Amount shall be deposited in the Note Payment Account and
applied as a principal distribution on the Notes on the next
succeeding Payment Date in accordance with the terms of the Indenture.
(c) The Servicer may cause the institution maintaining the Pre-Funding
Account to invest any funds therein in Permitted Investments having a
maturity of up to 90 days or maturing or otherwise available not later
than the Business Day preceding the related Payment Date on which
funds are scheduled to be withdrawn to purchase Subsequent Mortgage
Loans; provided, that any investment in an obligation of the
institution with which the Pre-Funding Account is maintained may
mature on or before 10:30 a.m., New York time, on such Payment Date;
and provided further, that no such investment may be sold or disposed
of prior to maturity. In addition, no such Permitted Investment shall
be purchased at a price in excess of par. Notwithstanding the
foregoing, in the event investment earnings have not matured on any
Payment Date, the amount of such earnings accrued as of such Payment
Date shall be advanced by the Servicer for deposit into the Note
Payment Account (which advance shall be reimbursed to the Servicer
from such investment earnings at maturity). At any time when the
Indenture Trustee is maintaining the Pre-Funding Account, any request
by the Servicer to invest funds on deposit therein shall be in
writing, delivered to the Indenture Trustee at or before 10:30 a.m.,
New York time, if such investment is to be made on such day. The
Servicer shall certify that the requested investment is a Permitted
Investment maturing at or prior to the time required hereby. Any such
investment shall be registered in the name of the Indenture Trustee or
its nominee, and to the extent that any such investment is
certificated, such investment shall be maintained with the Indenture
Trustee at its Corporate Trust Office. All net income or other gain
received from any such investment shall be deposited into or credited
to the Note Payment Account, and may be withdrawn therefrom in
accordance with Section 3.05 of the Indenture. In no event shall the
Indenture Trustee be liable for any investment losses on Permitted
Investments held in or credited to the Pre-Funding Account, provided
that such investments are made in accordance with the provisions of
this Agreement and the Indenture Trustee is not the obligor under the
Permitted Investment.
Section 3.17...Capitalized Interest Account.
----------------------------
(a) No later than the Closing Date, the Indenture Trustee shall establish
and maintain on behalf of itself one or more segregated trust
accounts, which shall be Eligible Accounts, titled "Capitalized
Interest Account, ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as Indenture
Trustee for GMACM Home Equity Loan Trust 2003-HE2" (the "Capitalized
Interest Account"). Notwithstanding anything herein to the contrary,
the Capitalized Interest Account shall not be an asset of REMIC I,
REMIC II or REMIC III. To the extent that the Capitalized Interest
Account constitutes a reserve fund for federal income tax purposes,
(1) it shall be an outside reserve fund and not an asset of REMIC I,
REMIC II or REMIC III, (2) it shall be owned by GMACM, as Servicer and
(3) amounts transferred by REMIC I, REMIC II or REMIC III to the
Capitalized Interest Account shall be treated as transferred to ▇▇▇▇▇,
▇▇
as Servicer, or any successor, all within the meaning of Section
1.860G-2(h) of the Treasury Regulations. The Indenture Trustee shall,
promptly upon receipt, deposit in the Capitalized Interest Account and
retain therein the Interest Coverage Amount. In addition, the
Indenture Trustee shall promptly, upon receipt, deposit in the
Capitalized Interest Account, an additional amount equal to
$322,520.59, which amount is equal to one month's interest on the
Cut-Off Date Principal Balances of the Mortgage Loans for which the
first monthly payment is due on April 1, 2003. If the Indenture
Trustee shall not have received an investment direction from GMACM,
the Indenture Trustee shall invest funds on deposit in the Capitalized
Interest Account in Permitted Investments of the kind described in
clause (v) of the definition of Permitted Investments having a
maturity date no later than the next succeeding Payment Date. In
addition, no such Permitted Investment shall be purchased at a price
in excess of par. The Servicer shall be entitled to retain any
investment earnings on amounts on deposit in the Capitalized Interest
Account and shall deposit into the Capitalized Interest Account the
amount of any net loss incurred in respect of any such Permitted
Investment immediately upon realization of such loss without any right
of reimbursement therefor. The Servicer shall be the owner of the
Capitalized Interest Account and shall report all items of income,
deduction, gain or loss arising therefrom.
(b) On each Payment Date during the Pre-Funding Period and on the Payment
Date immediately after the end of the Pre-Funding Period, the
Indenture Trustee, at the written direction of the Servicer, shall
withdraw from the Capitalized Interest Account and deposit into the
Note Payment Account an amount equal to the sum of (i) the Capitalized
Interest Requirement for such Payment Date and (ii) the Excess
Capitalized Interest Requirement for such Payment Date. In addition,
on the first Payment Date, the Indenture Trustee will transfer
$322,520.59 from the Capitalized Interest Account to the Note Payment
Account to be applied in accordance with Section 3.05 of the
Indenture.
(c) In connection with each Subsequent Transfer Date occurring in the
Pre-Funding Period, the Servicer, at its option, may recalculate the
Interest Coverage Amount taking into account the amount remaining in
the Pre-Funding Account following the sale of Subsequent Mortgage
Loans to the Trust on such date. The recomputed Interest Coverage
Amount shall be not less than the amount necessary to cover the
Capitalized Interest Requirement for each remaining Payment Date in
the Pre-Funding Period. With the written consent of the Enhancer
(which consent shall not be unreasonably withheld), on any such
Subsequent Transfer Date, GMACM shall instruct in writing the
Indenture Trustee to pay to it from funds in the Capitalized Interest
Account the excess of the amount on deposit therein over the
recomputed Interest Coverage Amount.
Upon the earlier of (i) termination of the Trust Agreement in accordance
with Section 8.01 thereof and (ii) the Payment Date following the end of the
Pre-Funding Period, any amount remaining on deposit in the Capitalized Interest
Account shall be withdrawn by the Indenture Trustee and paid to GMACM.
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Section 3.18...Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.
(a) When any Mortgaged Property is conveyed by the Mortgagor, the
Servicer or Subservicer, to the extent it has knowledge of such
conveyance, shall enforce any due-on-sale clause contained in any
Mortgage Note or Mortgage, to the extent permitted under
applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or
jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing:
(i) the Servicer shall not be deemed to be in default under this
Section 3.18(a) by reason of any transfer or assumption which the
Servicer is restricted by law from preventing; and
(ii) if the Servicer determines that it is reasonably likely that any
Mortgagor will bring, or if any Mortgagor does bring, legal
action to declare invalid or otherwise avoid enforcement of a
due-on-sale clause contained in any Mortgage Note or Mortgage,
the Servicer shall not be required to enforce the due-on-sale
clause or to contest such action.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause to
the extent set forth in Section 3.18(a), in any case in which a
Mortgaged Property is to be conveyed to a Person by a Mortgagor, and
such Person is to enter into an assumption or modification agreement
or supplement to the Mortgage Note or Mortgage which requires the
signature of the Indenture Trustee, or if an instrument of release
signed by the Indenture Trustee is required releasing the Mortgagor
from liability on the Mortgage Loan, the Servicer is authorized,
subject to the requirements of the sentence next following, to execute
and deliver, on behalf of the Indenture Trustee, the assumption
agreement with the Person to whom the Mortgaged Property is to be
conveyed and such modification agreement or supplement to the Mortgage
Note or Mortgage or other instruments as are reasonable or necessary
to carry out the terms of the Mortgage Note or Mortgage or otherwise
to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to such Person; provided, however,
none of such terms and requirements shall either (i) both (A)
constitute a "significant modification" effecting an exchange or
reissuance of such Mortgage Loan under the REMIC Provisions and (B)
cause REMIC I, REMIC II or REMIC III to fail to qualify as REMICs
under the Code, or (subject to Section 11.01(f) of the Indenture),
result in the imposition of any tax on "prohibited transactions" or
(ii) constitute "contributions" after the start-up date under the
REMIC Provisions. The Servicer shall execute and deliver such
documents only if it reasonably determines that (i) its execution and
delivery thereof will not conflict with or violate any terms of this
Agreement or cause the unpaid balance and interest on the Mortgage
Loan to be uncollectible in whole or in part, (ii) any required
consents of insurers under any Required Insurance Policies have been
obtained and (iii) subsequent to the closing of the transaction
involving the assumption or transfer (A) such transaction will not
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adversely affect the coverage under any Required Insurance Policies,
(B) the Mortgage Loan will fully amortize over the remaining term
thereof, (C) no material term of the Mortgage Loan (including the
interest rate on the Mortgage Loan) will be altered nor will the term
of the Mortgage Loan be changed and (D) if the seller/transferor of
the Mortgaged Property is to be released from liability on the
Mortgage Loan, such release will not (based on the Servicer's or
Subservicer's good faith determination) adversely affect the
collectability of the Mortgage Loan. Upon receipt of appropriate
instructions from the Servicer in accordance with the foregoing, the
Indenture Trustee shall execute any necessary instruments for such
assumption or substitution of liability as directed in writing by the
Servicer. Upon the closing of the transactions contemplated by such
documents, the Servicer shall cause the originals or true and correct
copies of the assumption agreement, the release (if any), or the
modification or supplement to the Mortgage Note or Mortgage to be
delivered to the Indenture Trustee or the Custodian and deposited with
the Mortgage File for such Mortgage Loan. Any fee collected by the
Servicer or such related Subservicer for entering into an assumption
or substitution of liability agreement will be retained by the
Servicer or such Subservicer as additional servicing compensation.
ARTICLE IV
Servicing Certificate
Section 4.01...Statements to Securityholders.
-----------------------------
(a) With respect to each Payment Date, on the Business Day following the
related Determination Date, the Servicer shall forward the Servicing
Certificate and a computer file containing mutually agreed upon loan
level information to the Indenture Trustee, and the Indenture Trustee,
pursuant to Section 3.26 of the Indenture, shall make such Servicing
Certificate available to each Certificateholder, each Noteholder, the
Depositor, the Owner Trustee, the Certificate Paying Agent and each
Rating Agency, with a copy to the Enhancer. The Servicing Certificate
shall set forth the following information as to the Notes and
Certificates, to the extent applicable:
(i) the aggregate amount of (a) Interest Collections, (b)
Principal Collections, and (c) Substitution Adjustment
Amounts for such Collection Period;
(ii) the amount of such distribution as principal to the
Noteholders of each Class of Notes;
(iii) the amount of such distribution as interest to the
Noteholders of each Class of Notes, the amount thereof, if
any, payable in respect of unpaid Interest Shortfalls, and
the amount of any Interest Shortfalls for the related
Payment Date;
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(iv) the Policy Draw Amount, if any, for such Payment Date and
the aggregate amount of prior draws on the Policy
thereunder not yet reimbursed;
(v) the amount of such distribution to the Certificateholders;
(vi) the aggregate Principal Balance of the Mortgage Loans as
of the end of the preceding Collection Period;
(vii)the number and aggregate Principal Balances of Mortgage
Loans (a) as to which the Monthly Payment is delinquent for
30-59 days, 60-89 days, 90-119 days, 120-149 days and
150-179 days, respectively, (b) the related Mortgaged
Property of which has been foreclosed upon and (c) as to
which the related Mortgaged Property has become REO
Property, in each case as of the end of the preceding
Collection Period; provided, however, that such information
shall not be provided on the statements relating to the
first Payment Date;
(viii) the aggregate Liquidation Loss Amounts with respect to the
related Collection Period, the amount distributed as
principal to Noteholders in respect of Liquidation Loss
Amounts and the aggregate of the Liquidation Loss Amounts
(minus any Subsequent Net Recovery Amounts) from all
Collection Periods to date expressed as dollar amount and
as a percentage of the aggregate Cut-Off Date Principal
Balances of the Mortgage Loans;
(ix) the aggregate Note Balance of each Class of Notes and the
Certificate Balance of the Certificates after giving
effect to the distribution of principal on such Payment
Date;
(x) during the Pre-Funding Period the amount on deposit in
each of the Pre-Funding Account and Capitalized Interest
Account as of the end of the preceding Collection Period;
(xi) the Percentage Interest applicable to each of the
Securities, after application of payments made on such
Payment Date;
(xii) the Overcollateralization Amount as of the end of the
preceding Collection Period;
(xiii) the Weighted Average Net Loan Rate for the Mortgage Loans
for the related Collection Period;
(xiv) the number and aggregate Principal Balance of Mortgage
Loans repurchased pursuant to Section 3.15 herein during
such Collection Period, and
(xv) the aggregate Principal Balance of Subsequent Mortgage
Loans transferred to the Trust Estate.
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In the case of information furnished pursuant to clauses (ii) and (iii)
above, the amounts shall be expressed as an aggregate dollar amount per Note, as
applicable, with a $25,000 denomination and per Certificate with a denomination
equal to a 100% Percentage Interest. In the case of information furnished
pursuant to clause (iii) above for the Class A-IO Notes, the amount shall be
expressed as an aggregate dollar amount with a $1,000,000 denomination.
If a Servicing Default shall occur, on the Business Day following the
related Determination Date, the Servicer shall forward to the Indenture Trustee,
a statement to such effect, including the nature of such Servicing Default. The
Indenture Trustee, pursuant to Section 3.26 of the Indenture, shall deliver or
cause to be delivered by mail to each Certificateholder, each Noteholder, the
Enhancer, the Depositor, the Owner Trustee, the Certificate Paying Agent and
each Rating Agency, notice of such Servicing Default, including the nature of
such Servicing Default. Such statement may be included in, or separate from, the
regular statement sent to Securityholders.
The Indenture Trustee will make the Servicing Certificate (and, at its
option, any additional files containing the same information in an alternative
format) available each month to Securityholders, and other parties to this
Agreement via the Indenture Trustee's internet website. The Indenture Trustee's
internet website shall initially be located at "▇▇▇.▇▇▇▇▇▇▇.▇▇▇". Assistance in
using the website can be obtained by calling the Indenture Trustee's customer
service desk at ▇▇▇-▇▇▇-▇▇▇▇. Parties that are unable to use the above
distribution options are entitled to have a paper copy mailed to them via first
class mail by calling the customer service desk and indicating such. The
Indenture Trustee shall have the right to change the way the statements to
Securityholders are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Indenture Trustee
shall provide timely and adequate notification to all above parties regarding
any such changes. The Indenture Trustee may require registration and the
acceptance of a disclaimer in connection with access to its website.
(b) The Servicer shall forward to the Indenture Trustee any other information
reasonably requested by the Indenture Trustee necessary to make
distributions pursuant to Section 3.05 of the Indenture. Prior to the close
of business on the Business Day next succeeding each Determination Date,
the Servicer shall furnish a written statement to the Certificate Paying
Agent and the Indenture Trustee setting forth the aggregate amounts
required to be withdrawn from the Custodial Account and deposited into the
Note Payment Account and/or Distribution Account on the Business Day
preceding the related Payment Date pursuant to Section 3.03 hereof. The
determination by the Servicer of such amounts shall, in the absence of
obvious error, be deemed to be presumptively correct for all purposes
hereunder, and the Owner Trustee and the Indenture Trustee shall be
protected in relying upon the same without any independent check or
verification. In addition, upon the Issuer's written request, the Servicer
shall promptly furnish such information reasonably requested by the Issuer
that is reasonably available to the Servicer to enable the Issuer to
perform its federal and state income tax reporting obligations.
26
(c) The Servicer shall, on behalf of the Depositor and in respect of the Trust
Fund, sign and cause to be filed with the Commission any periodic reports
required to be filed under the provisions of the Exchange Act, and the
rules and regulations of the Commission thereunder. In connection with the
preparation and filing of such periodic reports, the Indenture Trustee
shall timely provide to the Servicer (I) a list of Noteholders as shown on
the Note Register as of the end of each calendar year, (II) copies of all
pleadings, other legal process and any other documents relating to any
claims, charges or complaints involving the Indenture Trustee, as trustee,
or the Trust Estate that are received by the Indenture Trustee, (III)
notice of all matters that, to the actual knowledge of a Responsible
Officer of the Indenture Trustee, have been submitted to a vote of the
Noteholders or Certificateholders, other than those matters that have been
submitted to a vote of the Noteholders or Certificateholders at the request
of the Depositor or the Servicer, and (IV) notice of any failure of the
Indenture Trustee to make any distribution to the Noteholders or
Certificateholders as required pursuant to the Indenture or Trust
Agreement, as applicable. Neither the Servicer nor the Indenture Trustee
shall have any liability with respect to Servicer's failure to properly
prepare or file such periodic reports resulting from or relating to the
Servicer's inability or failure to obtain any information not resulting
from the Servicer's own negligence or willful misconduct. Any Form 10-K
filed with the Commission in connection with this Section 4.01(c) shall
include a certification, signed by the senior officer in charge of the
servicing functions of the Servicer, in the form attached as Exhibit D-1
hereto or such other form as may be required or permitted by the Commission
(the "Form 10-K Certification"), in compliance with Rule 13a-14 and 15d-14
under the Exchange Act and any additional directives of the Commission. In
connection with the Form 10-K Certification, the Indenture Trustee shall
provide the Servicer with a back-up certification substantially in the form
attached hereto as Exhibit D-2.
Section 4.02...Tax Returns and 1934 Act Reports
(a) The Servicer will act as the Tax Matters Partner pursuant to the
Trust Agreement and the Indenture and will perform the
obligations of the Servicer set forth in Section 8.02 of the
Trust Agreement and the obligations of the Tax Matters Partner
set forth in Article XI of the Indenture.
(b) The Servicer shall prepare all reports on behalf of the Trust
Estate, including, but not limited to, all Forms 8-K, Forms 10-K
and, when applicable, a Form 15 that are required under the
Securities Exchange Act of 1934, as amended. The Servicer shall
continue to file all Forms 8-K and Forms 10-K with respect to the
Trust Estate until directed by the Depositor in writing to
discontinue such filings.
ARTICLE V
Note Payment Account
Section 5.01...Note Payment Account. The Indenture Trustee shall establish and
27
maintain an Eligible Account entitled "▇▇▇▇▇ Fargo Bank Minnesota, N.A., as
Indenture Trustee, for the benefit of the Securityholders, the Certificate
Paying Agent and the Enhancer, pursuant to the Indenture, dated as of March 26,
2003, between GMACM Home Equity Loan Trust 2003-HE2 and ▇▇▇▇▇ Fargo Bank
Minnesota, N.A." (the "Note Payment Account"). On each Payment Date, amounts on
deposit in the Note Payment Account shall be distributed by the Indenture
Trustee in accordance with Section 3.05 of the Indenture. The Indenture Trustee
shall invest or cause the institution maintaining the Note Payment Account to
invest the funds therein in Permitted Investments selected in writing by the
Servicer and designated in the name of the Indenture Trustee, which investments
shall mature not later than the Business Day next preceding the Payment Date
next following the date of such investment (except that any investment in the
institution with which the Note Payment Account is maintained may mature on such
Payment Date) and shall not be sold or disposed of prior to maturity. In
addition, no such Permitted Investment shall be purchased at a price in excess
of par. All income and gain realized from any such investment shall be for the
benefit of the Servicer and shall be subject to its withdrawal or order from
time to time. The amount of any losses incurred in respect of any such
investments shall be deposited in the Note Payment Account by the Servicer out
of its own funds immediately as realized.
ARTICLE VI
The Servicer
Section 6.01...Liability of the Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Servicer herein.
Section 6.02...Merger or Consolidation of, or Assumption of the Obligations of,
the Servicer. Any corporation into which the Servicer may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Servicer shall be a party, or
any corporation succeeding to the business of the Servicer, shall be the
successor of the Servicer hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
The Servicer may assign its rights and delegate its duties and
obligations under this Agreement; provided, that the Person accepting such
assignment or delegation shall be a Person qualified to service mortgage loans,
is reasonably satisfactory to the Enhancer (provided, that such consent to
assignment may not be unreasonably withheld), is willing to service the Mortgage
Loans and executes and delivers to the Issuer (with a copy to the Enhancer) an
agreement, in form and substance reasonably satisfactory to the Enhancer, that
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by the
Servicer under this Agreement; and provided further, that no Rating Event will
occur as a result of such assignment and delegation (as evidenced by a letter to
such effect from each Rating Agency), if determined without regard to the
Policy; and provided further, that the Owner Trustee shall receive an Opinion of
Counsel to the effect that such assignment or delegation will not cause the
28
Issuer to be treated as an association (or a publicly-traded partnership)
taxable as a corporation for federal income tax purposes.
Section 6.03...Limitation on Liability of the Servicer and Others. Neither the
Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Issuer, the Owner Trustee, the
Indenture Trustee or the Securityholders for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement;
provided, however, that this provision shall not protect the Servicer or any
such Person against any liability that would otherwise be imposed by reason of
its willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder or by reason of its reckless disregard of its obligations and
duties hereunder. The Servicer and any director or officer or employee or agent
of the Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Servicer and any director, officer, employee or agent of the
Servicer shall be indemnified by the Issuer and held harmless against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Securities, including any amount paid to the Owner Trustee
or the Indenture Trustee pursuant to Section 6.06(b) hereof, other than any
loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense
incurred by reason of its willful misfeasance, bad faith or gross negligence in
the performance of its duties hereunder or by reason of its reckless disregard
of its obligations and duties hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may in its sole discretion undertake any
such action that it may deem necessary or desirable in respect of this
Agreement, the rights and duties of the parties hereto and the interests of the
Securityholders. In such event, the reasonable legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Issuer, and the Servicer shall be entitled to be reimbursed
therefor. The Servicer's right to indemnity or reimbursement pursuant to this
Section 6.03 shall survive any resignation or termination of the Servicer
pursuant to Section 6.04 or 7.01 hereof with respect to any losses, expenses,
costs or liabilities arising prior to such resignation or termination (or
arising from events that occurred prior to such resignation or termination).
Section 6.04...Servicer Not to Resign. Subject to the provisions of Section 6.02
above, the Servicer shall not resign from the obligations and duties hereby
imposed on it except (a) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Servicer so causing such a conflict being of a type and nature
carried on by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement or (b) upon satisfaction of the following conditions: (i) the Servicer
shall have proposed a successor servicer to the Issuer and the Indenture Trustee
in writing and such proposed successor servicer is reasonably acceptable to the
Issuer, the Indenture Trustee and the Enhancer; (ii) each Rating Agency shall
have delivered a letter to the Issuer, the Enhancer and the Indenture Trustee
prior to the appointment of the successor servicer stating that the proposed
appointment of such successor servicer as Servicer hereunder will not cause a
29
Rating Event, if determined without regard to the Policy; and (iii) such
proposed successor servicer is reasonably acceptable to the Enhancer, as
evidenced by a letter to the Issuer and the Indenture Trustee; provided,
however, that no such resignation by the Servicer shall become effective until
such successor servicer or, in the case of (a) above, the Indenture Trustee, as
pledgee of the Mortgage Loans, shall have assumed the Servicer's
responsibilities and obligations hereunder or the Indenture Trustee, as pledgee
of the Mortgage Loans, shall have designated a successor servicer in accordance
with Section 7.02 hereof. Any such resignation shall not relieve the Servicer of
responsibility for any of the obligations specified in Sections 7.01 and 7.02
hereof as obligations that survive the resignation or termination of the
Servicer. Any such determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Indenture Trustee and the Enhancer.
Section 6.05...Delegation of Duties. In the ordinary course of business, the
Servicer at any time may delegate any of its duties hereunder to any Person,
including any of its Affiliates, that agrees to conduct such duties in
accordance with standards comparable to those with which the Servicer complies
pursuant to Section 3.01 hereof. Such delegation shall not relieve the Servicer
of its liabilities and responsibilities with respect to such duties and shall
not constitute a resignation within the meaning of Section 6.04 above.
Section 6.06...Payment of Indenture Trustee's and Owner Trustee's Fees and
Expenses; Indemnification.
(a) After the Closing Date, the Servicer covenants and agrees to pay to the
Owner Trustee, the Indenture Trustee and any co-trustee of the Indenture
Trustee or the Owner Trustee from time to time, and the Owner Trustee, the
Indenture Trustee and any such co-trustee shall be entitled to, reasonable
compensation (which shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust and, in the case of
the Indenture Trustee, for so long as GMAC Mortgage Corporation is the
Servicer shall be as set forth in the letter agreement between the
Indenture Trustee and the Servicer dated as of March 26, 2003) for all
services rendered by each of them in the execution of the trusts created
under the Trust Agreement and the Indenture and in the exercise and
performance of any of the powers and duties under the Trust Agreement or
the Indenture, as the case may be, of the Owner Trustee, the Indenture
Trustee and any co-trustee, and the Servicer will pay or reimburse the
Indenture Trustee and any co-trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by the Indenture
Trustee or any co-trustee in accordance with any of the provisions of this
Agreement, the Indenture or the Trust Agreement except any such expense,
disbursement or advance as may arise from its negligence, willful
misfeasance or bad faith. In addition, the Indenture Trustee shall be
entitled to be reimbursed from the Servicer for all reasonable costs
associated with the transfer of servicing from the predecessor servicer
pursuant to Section 7.02 hereunder, including, without limitation, any
reasonable costs or expenses associated with the complete transfer of all
servicing data and the completion, correction or manipulation of such
servicing data as may be required by the Indenture Trustee to correct any
errors or insufficiencies in the servicing data or otherwise to enable the
Indenture Trustee to service the Mortgage Loans properly and effectively.
30
(b) The Servicer agrees to indemnify the Indenture Trustee and the Owner
Trustee for, and to hold the Indenture Trustee and the Owner Trustee, as
the case may be, harmless against, any loss, liability or expense incurred
without negligence, bad faith or willful misconduct on the part of the
Indenture Trustee or the Owner Trustee, as the case may be, arising out of,
or in connection with, the acceptance and administration of the Issuer and
the assets thereof, including the costs and expenses (including reasonable
legal fees and expenses) of defending the Indenture Trustee or the Owner
Trustee, as the case may be, against any claim in connection with the
exercise or performance of any of its powers or duties under any Basic
Document; provided that:
(i) with respect to any such claim, the Indenture Trustee or
Owner Trustee, as the case may be, shall have given the
Servicer written notice thereof promptly after the
Indenture Trustee or Owner Trustee, as the case may be,
shall have actual knowledge thereof;
(ii) while maintaining control over its own defense, the
Issuer, the Indenture Trustee or Owner Trustee, as the
case may be, shall cooperate and consult fully with the
Servicer in preparing such defense; and
(iii) notwithstanding anything in this Agreement to the
contrary, the Servicer shall not be liable for settlement
of any claim by the Indenture Trustee or the Owner
Trustee, as the case may be, entered into without the
prior consent of the Servicer.
No termination of this Agreement or resignation or removal of the Indenture
Trustee shall affect the obligations created by this Section 6.06 of the
Servicer to indemnify the Indenture Trustee and the Owner Trustee under the
conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the
Servicer in this Section 6.06(b) shall not pertain to any loss, liability or
expense of the Indenture Trustee or the Owner Trustee, including the costs and
expenses of defending itself against any claim, incurred in connection with any
actions taken by the Indenture Trustee or the Owner Trustee at the direction of
the Noteholders or Certificateholders, as the case may be, pursuant to the terms
of this Agreement.
ARTICLE VII....
Default
Section 7.01...Servicing Default.
(a) If a Servicing Default shall occur and be continuing, then, and in every
such case, so long as a Servicing Default shall not have been remedied by
the Servicer, either the Issuer, the Indenture Trustee, upon actual
knowledge of the occurrence of a Servicing Default and with the consent of
the Enhancer, or the Enhancer, by notice then given in writing to the
Servicer, the Issuer and the Indenture Trustee, may terminate all of the
rights and obligations of the Servicer as servicer under this Agreement
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other than its right to receive servicing compensation and expenses for
servicing the Mortgage Loans hereunder during any period prior to the date
of such termination, and the Issuer, the Enhancer or the Indenture Trustee
(with the consent of the Enhancer), may exercise any and all other remedies
available at law or equity. Any such notice to the Servicer shall also be
given to each Rating Agency, the Enhancer and the Issuer. On or after the
receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Agreement, whether with respect to the Securities
or the Mortgage Loans or otherwise, shall pass to and be vested in the
Indenture Trustee, subject to Section 7.02 hereof, as pledgee of the
Mortgage Loans, pursuant to and under this Section 7.01; and, without
limitation, the Indenture Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer
and endorsement of each Mortgage Loan and related documents, or otherwise.
The Servicer agrees to cooperate with the Issuer, the Enhancer and
Indenture Trustee, as the case may be, in effecting the termination of the
responsibilities and rights of the Servicer hereunder, including, without
limitation, the transfer to the Indenture Trustee for the administration by
it of all cash amounts relating to the Mortgage Loans that shall at the
time be held by the Servicer and to be deposited by it in the Custodial
Account, or that have been deposited by the Servicer in the Custodial
Account or thereafter received by the Servicer with respect to the Mortgage
Loans, the recordation of Assignments of Mortgages to the Indenture Trustee
if MERS is not the mortgagee of a Mortgage Loan, and the delivery of
Mortgage Files in its possession to the Indenture Trustee. All reasonable
costs and expenses (including, but not limited to, attorneys' fees)
incurred in connection with amending this Agreement to reflect such
succession as Servicer pursuant to this Section 7.01 shall be paid by the
predecessor Servicer (or if the predecessor Servicer is the Indenture
Trustee, the initial Servicer) upon presentation of reasonable
documentation of such costs and expenses.
(b) Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late
collection of a payment on a Mortgage Loan which was due prior to the
notice terminating the Servicer's rights and obligations hereunder and
received after such notice, that portion to which the Servicer would have
been entitled pursuant to Sections 3.03 and 3.09 hereof as well as its
Servicing Fee in respect thereof, and any other amounts payable to the
Servicer hereunder the entitlement to which arose prior to the termination
of its activities hereunder.
Notwithstanding the foregoing, a delay in or failure of performance
under clause (i) or (ii) of the definition of Servicing Default, after the
applicable grace periods specified therein, shall not constitute a Servicing
Default if such delay or failure could not be prevented by the exercise of
reasonable diligence by the Servicer and such delay or failure was caused by an
act of God or the public enemy, acts of declared or undeclared war, public
disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The preceding sentence shall
32
not relieve the Servicer from using reasonable efforts to perform its respective
obligations in a timely manner in accordance with the terms of this Agreement.
The Servicer shall provide the Indenture Trustee, the Enhancer and the
Securityholders with notice of any such failure or delay by it, together with a
description of its efforts to so perform its obligations. The Servicer shall
immediately notify the Indenture Trustee, the Enhancer and the Issuer in writing
of any Servicing Default.
Section 7.02...Indenture Trustee to Act; Appointment of Successor.
--------------------------------------------------
(a) On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 above or sends a notice pursuant to Section 6.04
hereof, the Indenture Trustee as pledgee of the Mortgage Loans shall itself
become, or shall appoint an affiliate of the Indenture Trustee to become
the successor in all respects to the Servicer in its capacity as servicer
under this Agreement and the transactions set forth or provided for herein
and shall immediately assume all of the obligations of the Servicer to make
advances on Mortgage Loans under Section 3.02(b) hereof and will be subject
to all other responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof as soon as
practicable, but in no event later than 90 days after the Indenture Trustee
becomes successor servicer. During such 90 day period, the Indenture
Trustee, with the consent of the Enhancer, may require the Servicer being
terminated to continue to perform such servicing responsibilities (other
than making advances on the Mortgage Loans under Section 3.02(b) hereof) as
the Indenture Trustee deems appropriate. In such event, the Servicer being
terminated shall provide such services as directed by the Indenture Trustee
until the earliest of the date the Indenture Trustee notifies such Servicer
to discontinue providing such services, the date on which a successor
servicer or the Indenture Trustee has assumed all responsibilities, duties
and liabilities of the Servicer hereunder or the expiration of the 90 day
period. The Servicer shall be entitled to the Servicing Fee hereunder for
any period during which the Servicer is obligated to provide such services
as if no termination of the Servicer had occurred. Nothing in this
Agreement or in the Trust Agreement shall be construed to permit or require
the Indenture Trustee to (i) succeed to the responsibilities, duties and
liabilities of the initial Servicer in its capacity as Seller under the
Purchase Agreement, (ii) be responsible or accountable for any act or
omission of the Servicer prior to the issuance of a notice of termination
hereunder, (iii) require or obligate the Indenture Trustee, in its capacity
as successor Servicer, to purchase, repurchase or substitute any Mortgage
Loan, (iv) fund any losses on any Permitted Investment directed by any
other Servicer, or (v) be responsible for the representations and
warranties of the Servicer. As compensation therefor, the Indenture Trustee
shall be entitled to such compensation as the Servicer would have been
entitled to hereunder if no such notice of termination had been given.
Notwithstanding the foregoing, if the Indenture Trustee is (x) unwilling to
act as successor Servicer itself or to appoint an affiliate to become
successor Servicer, or (y) legally unable so to act, the Indenture Trustee
as pledgee of the Mortgage Loans may (in the situation described in clause
(x)) or shall (in the situation described in clause (y)) appoint or
33
petition a court of competent jurisdiction to appoint any established
housing and home finance institution, bank or other mortgage loan servicer
having a net worth of not less than $10,000,000 as the successor to the
Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder;
provided, that any such successor Servicer shall be acceptable to the
Enhancer, as evidenced by the Enhancer's prior written consent, which
consent shall not be unreasonably withheld; and provided further, that the
appointment of any such successor Servicer will not result in a Rating
Event, if determined without regard to the Policy. Pending appointment of a
successor to the Servicer hereunder, unless the Indenture Trustee is
prohibited by law from so acting, the Indenture Trustee itself shall act or
appoint an affiliate to act in such capacity as provided above. In
connection with such appointment and assumption, the successor shall be
entitled to receive compensation out of payments on Mortgage Loans in an
amount equal to the compensation that the Servicer would otherwise have
received pursuant to Section 3.09 hereof (or such other compensation as the
Indenture Trustee and such successor shall agree). The appointment of a
successor Servicer shall not affect any liability of the predecessor
Servicer that may have arisen under this Agreement prior to its termination
as Servicer (including the obligation to purchase Mortgage Loans pursuant
to Section 3.01 hereof, to pay any deductible under an insurance policy
pursuant to Section 3.04 hereof or to indemnify the Indenture Trustee
pursuant to Section 6.06 hereof), nor shall any successor Servicer be
liable for any acts or omissions of the predecessor Servicer or for any
breach by such Servicer of any of its representations or warranties
contained herein or in any related document or agreement. The Indenture
Trustee and such successor shall take such action, consistent with this
Agreement and the requirements (including any notice requirements) of
applicable law, as shall be necessary to effectuate any such succession.
Notwithstanding the foregoing, the Indenture Trustee, in its capacity as
successor Servicer, shall not be responsible for the lack of information
and/or documents that it cannot obtain through reasonable efforts or for
failing to take any action that the Indenture Trustee is legally prohibited
from taking by applicable law.
(b) Any successor, including the Indenture Trustee, to the Servicer as servicer
shall during its term as Servicer (i) continue to service and administer
the Mortgage Loans for the benefit of the Securityholders, (ii) maintain in
force a policy or policies of insurance covering errors and omissions in
the performance of its obligations as Servicer hereunder and a fidelity
bond in respect of its officers, employees and agents to the same extent as
the Servicer is so required pursuant to Section 3.13 hereof and (iii) be
bound by the terms of the Insurance Agreement.
(c) Any successor Servicer, including the Indenture Trustee, shall not be
deemed in default or to have breached its duties hereunder if the
predecessor Servicer shall fail to deliver any required deposit to the
Custodial Account or otherwise cooperate with any required servicing
transfer or succession hereunder.
(d) In connection with the termination or resignation of the Servicer
hereunder, either (i) the successor Servicer, including the Indenture
Trustee if the Indenture Trustee is acting as successor Servicer, shall
34
represent and warrant that it is a member of MERS in good standing and
shall agree to comply in all material respects with the rules and
procedures of MERS in connection with the servicing of the Mortgage Loans
that are registered with MERS, in which case the predecessor Servicer shall
cooperate with the successor Servicer in causing MERS to revise its records
to reflect the transfer of servicing to the successor Servicer as necessary
under MERS' rules and regulations, or (ii) the predecessor Servicer shall
cooperate with the successor Servicer in causing MERS to execute and
deliver an assignment of Mortgage in recordable form to transfer the
Mortgage from MERS to the Indenture Trustee and to execute and deliver such
other notices, documents and other instruments as may be necessary or
desirable to effect a transfer of such Mortgage Loan or servicing of such
Mortgage Loan on the MERS System to the successor Servicer. The predecessor
Servicer shall file or cause to be filed any such assignment in the
appropriate recording office. The predecessor Servicer shall bear any and
all fees of MERS, costs of preparing any assignments of Mortgage, and fees
and costs of filing any assignments of Mortgage that may be required under
this subsection (d). The successor Servicer shall cause such assignment to
be delivered to the Indenture Trustee or the Custodian promptly upon
receipt of the original with evidence of recording thereon or a copy
certified by the public recording office in which such assignment was
recorded.
Section 7.03...Notification to Securityholders. Upon any termination of or
appointment of a successor to the Servicer pursuant to this Article VII or
Section 6.04 hereof, the Indenture Trustee shall give prompt written notice
thereof to the Securityholders, the Enhancer, the Issuer and each Rating Agency.
ARTICLE VIII...
Miscellaneous Provisions
Section 8.01...Amendment. This Agreement may be amended from time to time by the
parties hereto; provided, that any such amendment shall be accompanied by a
letter from each Rating Agency to the effect that such amendment will not result
in a Rating Event, if determined without regard to the Policy, and a tax opinion
to the effect that neither such amendment nor any action permitted by such
amendment and not otherwise permitted by this Agreement will cause either REMIC
I, REMIC II or REMIC III to fail to qualify as a REMIC or give rise to the
imposition of a tax on "prohibited transactions" of a REMIC, or prohibited
contributions to a REMIC, on either REMIC I, REMIC II or REMIC III; and provided
further, that the Enhancer and the Indenture Trustee shall consent thereto.
Section 8.02...GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICTS OF
LAW PROVISIONS (EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATION LAW),
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
35
Section 8.03...Notices. All demands, notices and communications hereunder shall
be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by certified mail, return receipt requested, to (a) in
the case of the Servicer, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, (b) in the case of the Enhancer, FGIC Insurance
Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: General
Counsel (GMACM Home Equity Loan Trust 2003-HE2), (c) in the case of ▇▇▇▇▇'▇,
Home Mortgage Loan Monitoring Group, 4th Floor, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, (d) in the case of Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Surveillance Group, (e) in the case
of the Owner Trustee, Wilmington Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, (f) in the case of the Issuer,
GMACM Home Equity Loan Trust 2003-HE2, c/o the Owner Trustee at the address set
forth in clause (e) above, and (g) in the case of the Indenture Trustee, at the
Corporate Trust Office; or, with respect to each of the foregoing Persons, at
such other address as shall be designated by such Person in a written notice to
the other foregoing Persons. Any notice required or permitted to be mailed to a
Securityholder shall be given by first class mail, postage prepaid, at the
address of such Securityholder as shown in the Note Register or Certificate
Register, as the case may be. Any notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given, whether
or not the related Securityholder receives such notice. Any notice or other
document required to be delivered or mailed by the Indenture Trustee to any
Rating Agency shall be given on a reasonable efforts basis and only as a matter
of courtesy and accommodation, and the Indenture Trustee shall have no liability
for failure to deliver any such notice or document to any Rating Agency.
Section 8.04...Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or the Securities or
the rights of the Securityholders.
Section 8.05...Third-Party Beneficiaries. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, the Securityholders, the
Enhancer, the Owner Trustee and their respective successors and permitted
assigns. Except as otherwise provided in this Agreement, no other Person shall
have any right or obligation hereunder.
Section 8.06...Counterparts. This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
Section 8.07...Effect of Headings and Table of Contents. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
Section 8.08...Termination Upon Purchase by the Servicer or Liquidation of All
Mortgage Loans; Partial Redemption.
36
(a) The respective obligations and responsibilities of the Servicer, the Issuer
and the Indenture Trustee created hereby shall terminate upon the last
action required to be taken by the Issuer pursuant to the Trust Agreement
and by the Indenture Trustee pursuant to the Indenture following the
earlier of:
(i) the date on or before which the Indenture or the Trust Agreement
is terminated, or
(ii) the purchase by the Servicer from the Issuer of all Mortgage
Loans and REO Property in accordance with Section 8.08(b) below.
(b) The Servicer shall have the right to purchase from the Issuer all of the
Mortgage Loans and REO Property if the Pool Balance as of any Payment Date
is less than 10% of the Pool Balance as of the Cut-off Date (provided that
a draw on the Policy would not occur as a result of such purchase and
provided further that the purchase price will provide sufficient funds to
pay the outstanding Note Balance and accrued and unpaid interest on the
Notes to the Payment Date on which such amounts are to be distributed to
Securityholders), at a price equal to 100% of the aggregate unpaid
Principal Balance of all such remaining Mortgage Loans, plus accrued and
unpaid interest thereon up to the date preceding the Payment Date on which
such amounts are to be distributed to the Securityholders (and, in the case
of REO Property, the fair market value of the REO Property), plus any
amounts due and owing to the Enhancer under the Insurance Agreement (and
any unpaid Servicing Fee shall be deemed to have been paid at such time)
plus any Interest Shortfall and interest owed thereon to the Noteholders.
If such right is exercised by the Servicer, the Servicer shall deposit the
amount calculated pursuant to this Section 8.08(b) with the Indenture Trustee
pursuant to Section 4.10 of the Indenture and, upon the receipt of such deposit,
the Indenture Trustee or Custodian shall release to the Servicer, the files
pertaining to the Mortgage Loans being purchased. The Servicer, at its expense,
shall prepare and deliver to the Indenture Trustee for execution, at the time
the related Mortgage Loans are to be released to the Servicer, appropriate
documents assigning each such Mortgage Loans from the Indenture Trustee or the
Issuer to the Servicer or the appropriate party.
The Servicer shall send written notice to the Enhancer of its intent to
exercise its right to purchase any of the Mortgage Loans pursuant to this
Section 8.08(b).
Section 8.09...Certain Matters Affecting the Indenture Trustee. For all purposes
of this Agreement, in the performance of any of its duties or in the exercise of
any of its powers hereunder, the Indenture Trustee shall be subject to and
entitled to the benefits of Article VI of the Indenture.
Section 8.10...Owner Trustee Not Liable for Related Documents. The recitals
contained herein shall be taken as the statements of the Servicer, and the Owner
Trustee and the Indenture Trustee assume no responsibility for the correctness
thereof. The Owner Trustee and the Indenture Trustee make no representations as
to the validity or sufficiency of this Agreement, of any Basic Document or
Related Document, or of the Certificates (other than the signatures of the Owner
37
Trustee and the Indenture Trustee on the Certificates) or the Notes. The Owner
Trustee and the Indenture Trustee shall at no time have any responsibility or
liability with respect to the sufficiency of the Trust Estate or its ability to
generate the payments to be distributed to Certificateholders under the Trust
Agreement or the Noteholders under the Indenture, including the compliance by
the Depositor, the Sellers or the Servicer with any warranty or representation
made under any Basic Document or the accuracy of any such warranty or
representation, or any action of any person taken in the name of the Owner
Trustee or the Indenture Trustee.
38
IN WITNESS WHEREOF, the Servicer, the Issuer and the Indenture Trustee
have caused this Agreement to be duly executed by their respective officers or
representatives all as of the day and year first above written.
GMAC MORTGAGE CORPORATION,
as Servicer
By:..............................................
Name: Title:
GMACM HOME EQUITY LOAN TRUST 2003-HE2, as Issuer
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By:..............................................
Name: Title:
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.,
as Indenture Trustee
By:..............................................
Name: Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[TO BE PROVIDED UPON REQUEST]
EXHIBIT B
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PREMISES:
That ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as indenture trustee (the
"Indenture Trustee"), under the indenture dated as of March 26, 2003 (the
"Indenture"), between GMACM Home Equity Loan Trust 2003-HE2, as issuer and the
Indenture Trustee, a national banking association organized and existing under
the laws of the United States of America, and having its principal office
located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, hath made,
constituted and appointed, and does by these presents make, constitute and
appoint GMAC Mortgage Corporation, a corporation organized and existing under
the laws of the Commonwealth of Pennsylvania, its true and lawful
Attorney-in-Fact, with full power and authority to sign, execute, acknowledge,
deliver, file for record, and record any instrument on its behalf and to perform
such other act or acts as may be customarily and reasonably necessary and
appropriate to effectuate the following enumerated transactions in respect of
any of the Mortgages securing a Mortgage Loan and the related Mortgage Notes for
which the undersigned is acting as Indenture Trustee for various Securityholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of such Mortgage Note secured by any
such Mortgage) and for which GMAC Mortgage Corporation is acting as Servicer
pursuant to a Servicing Agreement dated as March 26, 2003 (the "Servicing
Agreement").
This appointment shall apply to the following enumerated transactions only:
1. The modification or re-recording of a Mortgage, where said modification
or re-recording is for the purpose of correcting the Mortgage to conform
same to the original intent of the parties thereto or to correct title
errors discovered after such title insurance was issued and said
modification or re-recording, in either instance, does not adversely
affect the Lien of the Mortgage as insured.
2. The subordination of the Lien of a Mortgage to an easement in favor of a
public utility company or a government agency or unit with powers of
eminent domain; this section shall include, without limitation, the
execution of partial satisfactions/releases, partial reconveyances or
the execution of requests to trustees to accomplish same.
3. With respect to a Mortgage, the foreclosure, the taking of a deed in
lieu of foreclosure, or the completion of judicial or non-judicial
foreclosure or termination, cancellation or rescission of any such
foreclosure, including, without limitation, any and all of the following
acts:
a. The substitution of trustee(s) serving under a Mortgage, in accordance
with state law and the Mortgage;
b. Statements of breach or non-performance;
c. Notices of default;
d. Cancellations/rescissions of notices of default and/or notices of sale;
e. The taking of a deed in lieu of foreclosure; and
f. Such other documents and actions as may be necessary under the terms of
the Mortgage or state law to expeditiously complete said transactions.
4. The conveyance of the properties to the mortgage insurer, or the closing
of the title to the property to be acquired as real estate owned, or
conveyance of title to real estate owned.
5. The completion of loan assumption agreements.
6. The full satisfaction/release of a Mortgage or full reconveyance upon
payment and discharge of all sums secured thereby, including, without
limitation, cancellation of the related Mortgage Note.
7. The assignment of any Mortgage and the related Mortgage Note, in
connection with the repurchase of the Mortgage Loan secured and
evidenced thereby or the removal of any Mortgage from the MERS(R) System
or the re-recording of such mortgage in the name of MERS.
8. The full assignment of a Mortgage upon payment and discharge of all sums
secured thereby in conjunction with the refinancing thereof, including,
without limitation, the endorsement of the related Mortgage Note.
9. The modification or re-recording of a Mortgage, where said modification
or re-recording is for the purpose of any modification pursuant to
Section 3.01 of the Servicing Agreement.
10. The execution of partial satisfactions/releases pursuant to Section 3.01
of the Servicing Agreement.
The undersigned gives said Attorney-in-Fact full power and authority to
execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by or
under this Limited Power of Attorney as fully as the undersigned might or could
do, and hereby does ratify and confirm to all that said Attorney-in-Fact shall
lawfully do or cause to be done by authority hereof.
Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in Appendix A to the Indenture.
Third parties without actual notice may rely upon the exercise of the
power granted under this Limited Power of Attorney; and may be satisfied that
this Limited Power of Attorney shall continue in full force and effect has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.
▇▇▇▇▇ Fargo Bank Minnesota, N.A., not in its
individual capacity but solely as Indenture
Trustee
By:..............................................
Name: Title:
STATE OF )
) SS.
COUNTY OF )
On this day of March, 2003, before me the undersigned, Notary Public of
said State, personally appeared , personally known to me to be duly authorized
officers of ▇▇▇▇▇ Fargo Bank Minnesota, N.A. that executed the within instrument
and personally known to me to be the persons who executed the within instrument
on behalf of ▇▇▇▇▇ Fargo Bank Minnesota, N.A. therein named, and acknowledged to
me such ▇▇▇▇▇ Fargo Bank Minnesota, N.A. executed the within instrument pursuant
to its by-laws.
WITNESS my hand and official seal.
Notary Public in and for the
State of .......................
After recording, please mail to:
Attn:_________________________
EXHIBIT C
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: .......REQUEST FOR RELEASE OF DOCUMENTS
In connection with your administration of the Mortgage Loans, we request the
release of the Mortgage File described below.
Servicing Agreement Dated:
Series #:
Account #:
Pool #:
Loan #:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan
Prepaid in Full Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Servicing Agreement."
-------------------------------
GMAC Mortgage Corporation
Authorized Signature
******************************************************************************
TO CUSTODIAN: Please acknowledge this request, and check off documents being
enclosed with a copy of this form. You should retain this form for your files in
accordance with the terms of the Servicing Agreement.
Enclosed Documents: [ ] Mortgage Note
Name_________________________
Title__________________________
Date__________________________
EXHIBIT D-1
FORM OF FORM 10-K CERTIFICATION
I, [identify the certifying individual], certify that:
1......I have reviewed the annual report on Form 10-K for the fiscal
year ______, and all reports on Form 8-K containing distribution or servicing
reports filed in respect of periods included in the year covered by that annual
report, of GMACM Home Equity Loan Trust 2003-HE2 (the "Trust") created pursuant
to the Servicing Agreement, dated as of March 26, 2003 (the "Servicing
Agreement"), among the Trust, GMAC Mortgage Corporation (the "Servicer") and
▇▇▇▇▇ Fargo Bank Minnesota, N.A. (the "Indenture Trustee");
2......Based on my knowledge, the information in these reports, 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 light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by that annual report;
3......Based on my knowledge, the servicing information required to be
provided to the Indenture Trustee by the Servicer under the Servicing Agreement
is included in these reports;
4......I am responsible for reviewing the activities performed by the
Servicer under the Servicing Agreement and based upon my knowledge and the
review required under the Servicing Agreement, and, except as disclosed in the
report, the Servicer has fulfilled its obligations under the Servicing
Agreement; and
................5. The reports disclose all significant deficiencies relating to
the Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant , after conducting a review
in compliance with the Uniform Single Attestation Program for Mortgage Bankers,
or similar procedure, as set forth in the Servicing Agreement, that is included
in these reports.
[In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: [Well Fargo Bank
Minnesota, N.A.], [ ].
Date:_______________________
____________________________*
Name:
Title:
* to be signed by the senior officer in charge of the servicing functions of
the Servicer
EXHIBIT D-2
FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE
The undersigned, a Responsible Officer of ▇▇▇▇▇ Fargo Bank Minnesota, N.A.
(the "Indenture Trustee") certifies that:
(a)....The Indenture Trustee has performed all of the duties
specifically required to be performed by it pursuant to the provisions of the
Servicing Agreement dated as of March 26, 2003 (the "Agreement") by and among
GMACM Home Equity Loan Trust 2003-HE2, as Issuer, GMAC Mortgage Corporation, as
Servicer, and the Indenture Trustee in accordance with the standards set forth
therein.
(b)....The information listed below, provided by the Indenture Trustee
to the Servicer pursuant to Section 4.01(c) of the Agreement, is accurate as of
the last day of the 20__ calendar year:
(i) a list of Noteholders as shown on the Note Register as of the
end of such calendar year,
(ii) copies of all pleadings, other legal process and any other
documents relating to any claims, charges or complaints involving the
Indenture Trustee, as trustee, or the Trust Estate that, to the actual
knowledge of a Responsible Officer of the Indenture Trustee, have been
received by the Indenture Trustee,
(iii) notice of all matters that, to the actual knowledge of a
Responsible Officer of the Indenture Trustee, have been submitted to a
vote of the Noteholders or Certificateholders, other than those matters
that have been submitted to a vote of the Noteholders or
Certificateholders at the request of the Depositor or the Servicer, and
(iv) notice of any failure of the Indenture Trustee to make any
distribution to the Noteholders or Certificateholders as required
pursuant to the Indenture or Trust Agreement, as applicable.
Capitalized terms used and not defined herein shall have the meanings
given such terms in the Agreement.
IN WITNESS WHEREOF, I have duly executed this certificate as of _________,
20__.
By:__________________________
Name:
Title: