EXHIBIT 99.2
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▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC.
Purchaser
and
INDYMAC BANK, F.S.B.
Company
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MASTER SELLER'S WARRANTIES AND SERVICING
AGREEMENT
Dated as of May 1, 2006
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Conventional Mortgage Loans
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.................................................... 1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; DELIVERY OF DOCUMENTS...................... 15
Section 2.01 Conveyance of Mortgage Loans; Possession of Mortgage
Files; Maintenance of Servicing Files.................... 15
Section 2.02 Purchase Price........................................... 16
Section 2.03 Books and Records; Transfers of Mortgage Loans........... 16
Section 2.04 Delivery of Documents.................................... 18
Section 2.05 Closing Documents........................................ 18
ARTICLE III REPRESENTATIONS AND WARRANTIES; REMEDIES AND BREACH.......... 19
Section 3.01 Company Representations and Warranties................... 19
Section 3.02 Representations and Warranties Regarding Individual
Mortgage Loans........................................... 22
Section 3.03 Remedies for Breach of Representations and Warranties.... 35
Section 3.04 Repurchase of Certain Mortgage Loans; Premium Recapture.. 37
Section 3.05 Review of Mortgage Loans................................. 37
ARTICLE IV ADMINISTRATION AND SERVICING OF MORTGAGE LOANS................ 38
Section 4.01 Company to Act as Servicer............................... 38
Section 4.02 Liquidation of Mortgage Loans............................ 40
Section 4.03 Collection of Mortgage Loan Payments..................... 41
Section 4.04 Establishment of and Deposits to Custodial Account....... 41
Section 4.05 Permitted Withdrawals From Custodial Account............. 43
Section 4.06 Establishment of and Deposits to Escrow Account.......... 44
Section 4.07 Permitted Withdrawals From Escrow Account................ 45
Section 4.08 Payment of Taxes, Insurance and Other Charges............ 45
Section 4.09 Protection of Accounts................................... 46
Section 4.10 Maintenance of Hazard Insurance.......................... 46
Section 4.11 Maintenance of Mortgage Impairment Insurance............. 48
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions
Insurance................................................ 48
Section 4.13 Inspections.............................................. 49
Section 4.14 Restoration of Mortgaged Property........................ 49
Section 4.15 Maintenance of PMI and LPMI Policy; Claims............... 49
Section 4.16 Title, Management and Disposition of REO Property........ 51
Section 4.17 Real Estate Owned Reports................................ 53
Section 4.18 Liquidation Reports...................................... 53
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged
Property................................................. 53
Section 4.20 Notification of Adjustments,............................. 53
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ARTICLE V PAYMENTS TO PURCHASER.......................................... 54
Section 5.01 Remittances.............................................. 54
Section 5.02 Statements to Purchaser.................................. 54
Section 5.03 Monthly Advances by Company.............................. 55
ARTICLE VI GENERAL SERVICING PROCEDURES.................................. 55
Section 6.01 Transfers of Mortgaged Property.......................... 55
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files.. 56
Section 6.03 Servicing Compensation................................... 57
Section 6.04 Annual Statement as to Compliance........................ 57
Section 6.05 Annual Independent Public Accountant's Servicing Report.. 57
Section 6.06 Access to Certain Documentation.......................... 58
Section 6.07 Reports and Returns to be Filed by the Company........... 58
Section 6.08 Compliance with REMIC Provisions......................... 58
Section 6.09 Right to Examine Company Records......................... 58
ARTICLE VII AGENCY TRANSFER; SECURITIZATION TRANSACTION.................. 59
Section 7.01 Removal of Mortgage Loans from Inclusion Under this
Agreement Upon an Agency Transfer, Whole-Loan Transfer or
a Securitization Transaction on One or More
Reconstitution Dates..................................... 59
SECTION 7A.01 COMPLIANCE WITH REGULATION AB.............................. 61
Subsection 7A.01. Intent of the Parties; Reasonableness............... 61
Subsection 7A.02. Additional Representations and Warranties of the
Company............................................. 62
Subsection 7A.03. Information to Be Provided by the Company........... 63
Subsection 7A.04. Servicer Compliance Statement....................... 66
Subsection 7A.05. Report on Assessment of Compliance and Attestation.. 66
Subsection 7A.06. Use of Subservicers and Subcontractors.............. 67
Subsection 7A.07. Indemnification; Remedies........................... 68
ARTICLE VIII COMPANY TO COOPERATE........................................ 71
Section 8.01 Provision of Information................................. 71
Section 8.02 Financial Statements; Servicing Facility................. 71
ARTICLE IX THE COMPANY................................................... 72
Section 9.01 Indemnification; Third Party Claims...................... 72
Section 9.02 Merger or Consolidation of the Company................... 73
Section 9.03 Limitation on Liability of Company and Others............ 73
Section 9.04 Limitation on Resignation and Assignment by Company...... 73
ARTICLE X DEFAULT........................................................ 74
Section 10.01 Events of Default....................................... 74
Section 10.02 Waiver of Defaults...................................... 76
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ARTICLE XI TERMINATION................................................... 76
Section 11.01 Termination............................................. 76
Section 11.02 Termination Without Cause............................... 76
ARTICLE XII MISCELLANEOUS PROVISIONS..................................... 77
Section 12.01 Successor to Company.................................... 77
Section 12.02 Financial Statements.................................... 78
Section 12.03 Mandatory Delivery: Grant of Security Interest.......... 78
Section 12.04 Amendment............................................... 78
Section 12.05 Governing Law........................................... 79
Section 12.06 Duration of Agreement................................... 79
Section 12.07 Notices................................................. 79
Section 12.08 Severability of Provisions.............................. 79
Section 12.09 Relationship of Parties................................. 80
Section 12.10 Execution; Successors and Assigns....................... 80
Section 12.11 Recordation of Assignments of Mortgage.................. 80
Section 12.12 Assignment by Purchaser................................. 80
Section 12.13 No Personal Solicitation................................ 81
Section 12.14 Intention of the Parties................................ 81
Section 12.15 Acknowledgement of Anti-Predatory Lending Policies...... 82
Section 12.16 Waivers................................................. 82
Section 12.17 Exhibits................................................ 82
Section 12.18 General Interpretive Principles......................... 82
Section 12.19 Reproduction of Documents............................... 82
Section 12.20 Further Agreements...................................... 83
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EXHIBITS
EXHIBIT A MORTGAGE LOAN SCHEDULE
EXHIBIT B CONTENTS OF EACH MORTGAGE FILE
EXHIBIT C MORTGAGE LOAN DOCUMENTS
EXHIBIT D-1 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT D-2 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT E-1 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT E-2 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT F FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT G RESERVED
EXHIBIT H RESERVED
EXHIBIT I COMPANY'S OFFICER'S CERTIFICATE
EXHIBIT J FORM OF OPINION OF COUNSEL TO THE COMPANY
EXHIBIT K SECURITY RELEASE CERTIFICATION
EXHIBIT L ASSIGNMENT AND CONVEYANCE
EXHIBIT M ANNUAL CERTIFICATION
EXHIBIT N SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
This is a Master Seller's Warranties and Servicing Agreement for
conventional fixed rate and adjustable rate residential first lien mortgage
loans, dated and effective as of May 1, 2006 and is executed between ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Lending, Inc. as purchaser (the "Purchaser"), and IndyMac Bank,
F.S.B., as seller and servicer (the "Company").
WITNESSETH:
WHEREAS, the Purchaser may agree to purchase from the Company from
time to time and the Company desires to sell to the Purchaser from time to time
certain Mortgage Loans;
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of
trust or other security instrument creating a first lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule,
which is annexed hereto as Exhibit A; and
WHEREAS, the Purchaser and the Company wish to prescribe the manner of
purchase of the Mortgage Loans and the management, servicing and control of the
Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Purchaser and the Company agree as
follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and in accordance
with applicable law and the terms of the related Mortgage and Mortgage Note.
Adjustable Rate Mortgage Loan: A Mortgage Loan which provides for the
adjustment of the Mortgage Interest Rate payable in respect thereto.
Adjustment Date: With respect to any Adjustable Rate Mortgage Loan,
the date set forth in the related Mortgage Note on which the Mortgage Interest
Rate on such Adjustable Rate Mortgage Loan is adjusted in accordance with the
terms of the Mortgagee Note.
Agency Transfer: The sale or transfer by Purchaser of some or all of
the Mortgage Loans to ▇▇▇▇▇▇ Mae under its Cash Purchase Program or its MBS Swap
Program (Special Servicing Option) or to ▇▇▇▇▇▇▇ Mac under its ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Program or Gold PC Program, retaining the Company as servicer thereunder.
Agreement: This Master Seller's Warranties and Servicing Agreement and
all
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amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Ancillary Income: All fees derived from the Mortgage Loans, other than
Servicing Fees and prepayment fees, including but not limited to, late charges,
fees received with respect to checks or bank drafts returned by the related bank
for non-sufficient funds, assumption fees, optional insurance administrative
fees and all other incidental fees and charges.
Appraised Value: With respect to any Mortgaged Property, the least of
(i) the value thereof as determined by an appraisal made for the originator of
the Mortgage Loan at the time of origination of the Mortgage Loan by an
appraiser who met the minimum requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and (ii)
the purchase price paid for the related Mortgaged Property by the Mortgagor with
the proceeds of the Mortgage Loan, provided, however, in the case of a
Refinanced Mortgage Loan, such value of the Mortgaged Property is based solely
upon the value determined by an appraisal made for the originator of such
Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage
Loan by an appraiser who met the minimum requirements of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇
Mac.
Appropriate Federal Banking Agency: Appropriate Federal Banking Agency
shall have the meaning ascribed to it by Section 1813(q) of Title 12 of the
United States Code, as amended from time to time.
Approved Flood Policy Insurer: An insurer that meets the guidelines of
the Federal Insurance Administration.
Approved Tax Service Contract Provider: Any of the following
providers: First American, TransAmerica, Lereta or Fidelity
Assignment of Mortgage: An individual assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form, sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property is located
to give record notice of the sale of the Mortgage to the Purchaser.
Balloon Loan: A Mortgage Loan identified on the Mortgage Loan Schedule
as a balloon mortgage loan.
BIF: The Bank Insurance Fund, or any successor thereto.
BPO: A broker's price opinion with respect to a Mortgaged Property.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions in the State of
California are authorized or obligated by law or executive order to be closed.
Cash-Out Refinancing: A Refinanced Mortgage Loan the proceeds of which
were in excess of the principal balance of any existing first mortgage on the
related Mortgaged Property, related closing costs, and any subordinate mortgages
on the related Mortgaged Property paid with the proceeds.
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Closing Date: The date or dates set forth on the related Trade
Confirmation on which the Purchaser from time to time shall purchase and the
Company from time to time shall sell, the Mortgage Loans listed on the related
Mortgage Loan Schedule.
Code: The Internal Revenue Code of 1986, as it may be amended from
time to time or any successor statute thereto, and applicable U.S. Department of
the Treasury regulations issued pursuant thereto.
Combined LTV or CLTV: With respect to any Mortgage Loan, the ratio of
the Stated Principal Balance of the Mortgage Loan and any other mortgage loan
which is secured by a lien on the related Mortgage Property as of the related
Cut-off Date (unless otherwise indicated) to the Appraised Value, expressed as a
percentage.
Commission: The United States Securities and Exchange Commission.
Company: IndyMac Bank, F.S.B., or its successor in interest or
assigns, or any successor to the Company under this Agreement appointed as
herein provided.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any Mortgage Loan purchased pursuant to
this Agreement as to which the related Mortgage Note permits the Mortgagor to
convert the Mortgage Interest Rate on such Mortgage Loan to a fixed Mortgage
Interest Rate.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 4.04.
Custodial Agreement: That certain Custodial Agreement, dated as of
January 1, 2002, by and between the Purchaser and ▇▇▇▇▇ Fargo Bank Minnesota,
National Association.
Custodian: The Custodian under the Custodial Agreement, or its
successor in interest or assigns or any successor to the Custodian under the
Custodial Agreement as provided therein.
Cut-off Date: The date set forth on the related Trade Confirmation.
Deleted Mortgage Loan: A Mortgage Loan which is repurchased by the
Company in accordance with the terms of this Agreement and which is, in the case
of a substitution pursuant to Section 3.03, replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Determination Date: The 15th day (or if such 15th day is not a
Business Day, the Business Day immediately preceding such 15th day) of the month
of the related Remittance Date.
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Due Date: The day of the month on which the Monthly Payment is due on
a Mortgage Loan, exclusive of any days of grace. With respect to the Mortgage
Loans for which payment from the Mortgagor is due on a day other than the first
day of the month, such Mortgage Loans will be treated as if the Monthly Payment
is due on the first day of the month of such Due Date.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of the Remittance
Date and ending in the first day of the month of the Remittance Date.
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than the Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed by,
the United States of America, or any agency or instrumentality of the
United States of America the obligations of which are backed by the full
faith and credit of the United States of America; and
(ii) federal funds, demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution
or trust company incorporated or organized under the laws of the United
States of America or any state thereof and subject to supervision and
examination by federal and/or state banking authorities, so long as at the
time of such investment or contractual commitment providing for such
investment the commercial paper or other short-term debt obligations of
such depository institution or trust company (or, in the case of a
depository institution or trust company which is the principal subsidiary
of a holding company, the commercial paper or other short-term debt
obligations of such holding company) are rated "P-1" by ▇▇▇▇▇'▇ Investors
Service, Inc. and the long-term debt obligations of such depository
institution or trust company (or, in the case of a depository institution
or trust company which is the principal subsidiary of a holding company,
the long-term debt obligations of such holding company) are rated at least
"Aa" by ▇▇▇▇▇'▇ Investors Service, Inc.;
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Errors and Omissions Insurance Policy: An errors and omissions
insurance policy to be maintained by the Company pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 4.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments
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required to be escrowed by the Mortgagor with the mortgagee pursuant to the
Mortgage or any other related document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 10.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇ (formerly known as the Federal National
Mortgage Association), or any successor thereto.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ Mae
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fidelity Bond: A fidelity bond to be maintained by the Company
pursuant to Section 4.12.
First Remittance Date: June 18, 2006.
Fitch: Fitch Ratings or any successor in interest.
Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for the term of
such Mortgage Loan.
▇▇▇▇▇▇▇ Mac: ▇▇▇▇▇▇▇ Mac (formerly known as The Federal Home Loan
Mortgage Corporation), or any successor thereto.
Gross Margin: With respect to any Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note and the related
Mortgage Loan Schedule that is added to the Index on each Adjustment Date in
accordance with the terms of the related Mortgage Note to determine the new
Mortgage Interest Rate for such Mortgage Loan.
HUD: The United States Department of Housing and Urban Development or
any successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
set forth in the related Mortgage Note for the purpose of calculating the
Mortgage Interest Rate thereon.
Initial Rate Cap: With respect to each Adjustable Rate Mortgage Loan
and the initial Adjustment Date therefor, a number of percentage points per
annum that is set forth in the related Mortgage Note, which is the maximum
amount by which the Mortgage Interest Rate for such Mortgage Loan may increase
or decrease from the Mortgage Interest Rate in effect immediately prior to such
Adjustment Date.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
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Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the
related Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage Loan.
Lifetime Rate Cap: With respect to each Adjustable Rate Mortgage Loan
during the term thereof, a number of percentage points per annum that is set
forth in the related Mortgage Note, which is the maximum amount by which the
Mortgage Interest Rate for such Adjustable Rate Mortgage Loan may increase or
decrease during the term thereof from the Mortgage Interest Rate in effect on
the date of origination of such Adjustable Rate Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio of the Stated Principal Balance of the Mortgage Loan as of the related
Cut-off Date (unless otherwise indicated) to the Appraised Value, expressed as a
percentage.
LPMI Fee: With respect to each LPMI Loan, the portion of the Mortgage
Interest Rate as set forth on the related Mortgage Loan Schedule (which shall be
payable solely from the interest portion of Monthly Payments, Insurance
Proceeds, Condemnation Proceeds or Liquidation Proceeds or by the Purchaser),
which, during such period prior to the required cancellation of the LPMI Policy,
shall be used to pay the premium due on the related LPMI Policy.
LPMI Loan: A Mortgage Loan with a LPMI Policy.
LPMI Policy: A policy of primary mortgage guaranty insurance issued by
a Qualified Insurer pursuant to which the related premium is to be paid by the
Servicer of the related Mortgage Loan from payments of interest made by the
Mortgagor (or by the Purchaser) in an amount as is set forth in the related
Trade Confirmation and the related Mortgage Loan Schedule.
Maximum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth in the related Mortgage Note and is the
maximum interest rate to which the Mortgage Interest Rate on such Adjustable
Rate Mortgage Loan may be increased on any Adjustment Date.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
Minimum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth in the related Mortgage Note and is the
minimum interest rate to which the Mortgage Interest Rate on such Adjustable
Rate Mortgage Loan may be decreased on any Adjustment Date.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely
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as nominee for the originator of such Mortgage Loan and its successors and
assigns.
Monthly Advance: The portion of Monthly Payment delinquent with
respect to each Mortgage Loan at the close of business on the Determination Date
required to be advanced by the Company pursuant to Section 5.03 on the Business
Day immediately preceding the Remittance Date of the related month.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 4.11.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note.
Mortgage Loan: Each first lien, residential loan, which is the subject
of this Agreement, originally sold and subject to this Agreement being
identified on the related Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The documents listed in Exhibit C hereto.
Mortgage Loan Package: A pool of Mortgage Loans sold to the Purchaser
by the Company on a Closing Date.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Purchaser, which shall be equal to the
Mortgage Interest Rate minus (i) the Servicing Fee Rate and (ii) with respect to
LPMI Loans, the LPMI Fee.
Mortgage Loan Schedule: With respect to each Mortgage Loan Package, a
schedule of Mortgage Loans annexed to the related Assignment and Conveyance and
annexed hereto as Exhibit A, such schedule setting forth the following
information with respect to each Mortgage Loan: (1) the Company's Mortgage Loan
identifying number; (2) the Mortgagor's and Co-Mortgagor's name; (3) the street
address of the Mortgaged Property including the city, state, county, and the zip
code; (4) a code indicating whether the Mortgaged Property is a single family
residence, a 2-4 family dwelling, a PUD, a townhouse or a unit in a high-rise or
low-rise condominium project;; (5) the original months to maturity or the
remaining months to maturity from the related Cut-off Date, in any case based on
the original amortization schedule, and if different, the maturity expressed in
the same manner but based on the actual amortization schedule; (6) the
Loan-to-Value Ratio at origination; (7) the Combined LTV at origination, if
applicable; (8) the Appraised Value and purchase price, if applicable, of the
Mortgaged Property; (9) the Mortgage Interest Rate at the
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time of origination; (10) the Mortgage Interest Rate as of the related Cut-off
Date; (11) the origination date of the Mortgage Loan; (12) the first payment
date of the Mortgage Loan; (13) the stated maturity date of the Mortgage Loan;
(14) the amount of the Monthly Payment as of the related Cut-off Date; (15) the
amount of the Monthly Payment at the time of origination; (16) the date on which
the first Monthly Payment was due on the Mortgage Loan and, if such date is not
consistent with the Due Date, such Due Date; (17) the next actual Due Date of
the Mortgage Loan; (18) a twelve month history for the Mortgage Loan and the
number of times thirty, sixty, and ninety days delinquent in the past twelve
months; (19) a code indicating the payment status of the Mortgage Loan (i.e.
bankruptcy, foreclosure, REO); (20) a twelve month history for the prior
Mortgage Loan and the number of times thirty, sixty, and ninety days delinquent
in the past twelve months; (21) the original principal amount of the Mortgage
Loan; (22) ) a code indicating if the Mortgage Loan is an interest-only Mortgage
Loan and, if so, the term of the interest-only period of such Mortgage Loan;
(23) the actual principal balance of the Mortgage Loan as of the close of
business on the related Cut-off Date, after deduction of payments of principal
actually collected on or before the related Cut-off Date; (24) the Stated
Principal Balance; (25) the Mortgage Loan purpose type (i.e., purchase
financing, Rate/Term Refinancing, Cash-Out Refinancing); (26) the product type
(i.e., 2/28, 15 years, 30 year fixed, 15/30 balloon); (27) the occupancy status
of the Mortgaged Property at the time of origination; (28) FICO score; (29) a
code indicating the mortgage insurance provider (PMI or LPMI) and percent of
coverage, if applicable; (30) the mortgage insurance certificate number; a code
indicating the method of payment for mortgage insurance premiums and cost
(LPMI), if applicable; (31) the loan documentation type (i.e., full,
alternative, reduced); (32) the back-end debt to income ratio; (33) Mortgagor
Social Security Number; (34) co-Mortgagor Social Security Number; (35) the
Servicing Fee Rate (36) a code indicating whether the Mortgage Loan is subject
to a Prepayment Charge, the term of such Prepayment Charge and the amount of
such Prepayment Charge; (37) a code indicating whether the Mortgage Loan is an
Adjustable Rate Mortgage Loan or a Fixed Rate Mortgage Loan; (38) the first
Adjustment Date and the Adjustment Date frequency; (39) the Gross Margin; (40)
the Maximum Mortgage Interest Rate under the terms of the Mortgage Note; (41)
the Minimum Mortgage Interest Rate under the terms of the Mortgage Note; (42)
the Initial Rate Cap and Periodic Rate Cap; (43) the first Adjustment Date
immediately following origination and the related Cut-off Date; (44) the Index;
(45) a code indicating the type of Adjustable Rate Mortgage Loan (i.e. 3/1,
5/1/7/1, etc); (46) a code indicating whether the Mortgage Loan is a MERS
Mortgage Loan and, if so, the corresponding MIN; (47) the Lifetime Rate Cap;
(48) the last Due Date on which a Monthly Payment was actually applied to the
unpaid Stated Principal Balance; and (49) the Mortgage Loan Remittance Rate as
of the Cut off Date. With respect to the Mortgage Loans in each Mortgage Loan
Package in the aggregate, the related Mortgage Loan Schedule shall set forth the
following information, as of the related Cut-off Date: (1) the number of
Mortgage Loans; (2) the current aggregate outstanding principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and (4) the weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property, improved by a residential
dwelling, securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Interest Rate: With respect to any Mortgage Loan (or the
related REO
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Property), as of any date of determination, a per annum rate of interest equal
to the then applicable Mortgage Interest Rate for such Mortgage Loan minus the
Servicing Fee Rate.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or the President or a Vice President or
an assistant Vice President and by the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Company, and delivered to
the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the Company, reasonably acceptable to the Purchaser.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan
and any Adjustment Date therefor, a number of percentage points that is set
forth in the related Mortgage Note, which is the maximum amount by which the
Mortgage Interest Rate for such Adjustable Rate Mortgage Loan may increase
(without regard to the Maximum Mortgage Interest Rate) or decrease (without
regard to the Minimum Mortgage Interest Rate) on such Adjustment Date from the
Mortgage Interest Rate in effect immediately prior to such Adjustment Date,
which may be a different amount with respect to the first Adjustment Date.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
PMI: PMI Mortgage Insurance Co., or any successor thereto.
PMI Policy: A policy of primary mortgage guaranty insurance issued by
a Qualified Insurer, as required by this Agreement with respect to certain
Mortgage Loans.
Premium: The premium payable by the Company to the Purchaser with
respect to any Mortgage Loans that prepay-in-full as stated in the related Trade
Confirmation.
Prepayment Charge: With respect to any Mortgage Loan, any prepayment
penalty or premium thereon payable in connection with a principal prepayment on
such Mortgage Loan pursuant to the terms of the related Mortgage Note.
Prepayment Interest Shortfall Amount: With respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or in part during any
Prepayment Period, which Principal Prepayment was applied to such Mortgage Loan
prior to such Mortgage Loan's Due Date in such Prepayment Period, the amount of
interest (at the Mortgage Loan Remittance Rate) that would have accrued on the
amount of such Principal Prepayment during the period commencing on the date as
of which such Principal Prepayment was applied to such Mortgage Loan and ending
on the day immediately preceding such Due Date, inclusive.
Prepayment Period: With respect to any Remittance Date, the period
beginning on the second day of the month preceding the related Remittance Date
and ending on the first day of the month in which the related Remittance Date
occurs.
Prime Rate: The prime rate announced to be in effect from time to
time, as published as the average rate in the "Money Rates" section of The Wall
Street Journal.
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Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any Prepayment Charge, which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date, by the
Purchaser to the Company pursuant to the related Trade Confirmation in exchange
for the Mortgage Loans purchased on such Closing Date as provided in Section
2.01 and 2.02.
Purchase Price Percentage: The percentage of par used to calculate the
purchase price for the Mortgage Loans as set forth in the related Trade
Confirmation.
Purchaser: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc. or its successor in
interest or any successor to the Purchaser under this Agreement as herein
provided.
Qualified Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Company and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Company, in accordance with underwriting
guidelines designated by the Company ("Designated Guidelines") or guidelines
that do not vary materially from such Designated Guidelines; (ii) such Mortgage
Loans were in fact underwritten as described in clause (i) above and were
acquired by the Company within one hundred eighty (180) days after origination;
(iii) either (x) the Designated Guidelines were, at the time such Mortgage Loans
were originated, used by the Company in origination of mortgage loans of the
same type as the Mortgage Loans for the Company's own account or (y) the
Designated Guidelines were, at the time such Mortgage Loans were underwritten,
designated by the Company on a consistent basis for use by lenders in
originating mortgage loans to be purchased by the Company; and (iv) the Company
employed, at the time such Mortgage Loans were acquired by the Company,
pre-purchase or post-purchase quality assurance procedures (which may involve,
among other things, review of a sample of mortgage loans purchased during a
particular time period or through particular channels) designed to ensure that
Persons from which it purchased mortgage loans properly applied the underwriting
criteria designated by the Company.
Qualified Depository: A depository the accounts of which are insured
by the FDIC through the BIF or the SAIF and the debt obligations of which are
rated AA or better by Standard & Poor's Ratings Group.
Qualified Insurer: A mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Company for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after deduction
of all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the Stated Principal Balance of
the Deleted Mortgage Loan as of the Due Date in the calendar month during which
the substitution occurs; (ii) have a Mortgage Loan Remittance Rate not less than
and not more than 1% greater than the
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Mortgage Loan Remittance Rate of the Deleted Mortgage Loan; (iii) have a Net
Mortgage Interest Rate not less than and not more than 1% greater than the Net
Mortgage Interest Rate of the Deleted Mortgage Loan; (iv) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (v) comply with each representation and warranty set
forth in Sections 3.01 and 3.02; (vi) have the same Due Date as the Due Date on
the Deleted Mortgage Loan; (vii) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date; (viii) be covered under a PMI Policy if such
Qualified Substitute Mortgage Loan has a Loan-to-Value Ratio in excess of 80%
and the Deleted Mortgage Loan was covered under a PMI Policy; and (ix) be the
same type of mortgage loan (i.e. fixed or adjustable rate with the same Gross
Margin and Index as the Deleted Mortgage Loan). In the event that one or more
mortgage loans are substituted for one or more Deleted Mortgage Loans, the
amounts described in clause (i) hereof shall be determined on the basis of
aggregate principal balances, the Mortgage Interest Rates described in clause
(ii) hereof shall be determined on the basis of weighted average Mortgage
Interest Rates and shall be satisfied as to each such mortgage loan, the terms
described in clause (iv) shall be determined on the basis of weighted average
remaining terms to maturity, the Loan-to-Value Ratios described in clause (vii)
hereof shall be satisfied as to each such mortgage loan and, except to the
extent otherwise provided in this sentence, the representations and warranties
described in clause (v) hereof must be satisfied as to each Qualified Substitute
Mortgage Loan or in the aggregate, as the case may be. In addition, the
substitution of more than one Mortgage Loan pursuant to the previous sentence
shall be subject to the Purchaser's approval in its sole discretion.
Rate/Term Refinancing: A Refinanced Mortgage Loan, the proceeds of
which are not in excess of the existing first mortgage loan on the related
Mortgaged Property and related closing costs, and were used exclusively to
satisfy the then existing first mortgage loan of the Mortgagor on the related
Mortgaged Property and to pay related closing costs.
Rating Agency: Any of Fitch, ▇▇▇▇▇'▇ Investors Service, Inc. or
Standard & Poor's Ratings Group or their respective successors designated by the
Purchaser.
Reconstitution Agreements: The agreement or agreements entered into by
the Purchaser, the Company, ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac or certain third parties
on the Reconstitution Date(s) with respect to any or all of the Mortgage Loans,
in connection with a Securitization Transaction, Whole-Loan Transfer or an
Agency Transfer as set forth in Section 7.01, including, but not limited to, (i)
a ▇▇▇▇▇▇ Mae Mortgage Selling and Servicing Contract, a Pool Purchase Contract,
and any and all servicing agreements and tri-party agreements reasonably
required by ▇▇▇▇▇▇ ▇▇▇ with respect to a ▇▇▇▇▇▇ Mae Transfer, (ii) a Purchase
Contract and all purchase documents associated therewith as set forth in the
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' & Servicers' Guide, and any and all servicing agreements
and tri-party agreements reasonably required by ▇▇▇▇▇▇▇ Mac with respect to a
▇▇▇▇▇▇▇ Mac Transfer, and (iii) a Pooling and Servicing Agreement and/or a
subservicing/master servicing agreement and related custodial/trust agreement
and related documents with respect to a Securitization Transaction.
Reconstitution Date: The date or dates on which any or all of the
Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and reconstituted as part of an Agency Transfer, Whole Loan Transfer
or a Securitization Transaction pursuant to Section 7.01 hereof. On such date or
dates, the Mortgage Loans transferred shall cease to be covered by this
Agreement and the Company's servicing responsibilities shall cease under this
Agreement with respect to the related transferred Mortgage Loans.
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Record Date: The close of business of the last Business Day of the
month preceding the month of the related Remittance Date.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to
REMICs, which appear in Sections 860A through 860G of the Code, and related
provisions, and proposed, temporary and final regulations and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Date: The 18th day (or if such 18th day is not a Business
Day, the first Business Day immediately following) of any month, beginning with
the First Remittance Date.
REO Account: The separate account or accounts created and maintained
pursuant to this Agreement which shall be entitled "IndyMac Bank, F.S.B., in
trust for the Purchaser, as of [date of acquisition of title], Fixed and
Adjustable Rate Mortgage Loans".
REO Disposition: The final sale by the Company of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Company on behalf
of the Purchasers through foreclosure or by deed in lieu of foreclosure, as
described in Section 4.16.
Repurchase Price: With respect to any Mortgage Loan, (1) a price equal
to (A) during the first twelve months following the related Closing Date (i) the
Purchase Price Percentage used to calculate the Purchase Price, as stated in the
related Trade Confirmation, times the Stated Principal Balance of the Mortgage
Loan so repurchased plus (ii) accrued interest thereon to the last day of the
month such repurchase occurs, and (B) thereafter (i) the Stated Principal
Balance of the Mortgage Loan so repurchased plus (ii) accrued interest thereon
to the last day of the month in which such repurchase occurs, or (2) such other
amount set forth in the related Trade Confirmation.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Securities Act of 1933 or the 1933 Act: The Securities Act of 1933, as
amended.
Securitization Transaction: The sale or transfer of some or all of the
Mortgage Loans
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to a trust to be formed as part of a publicly-issued and/or privately placed,
rated or unrated, mortgage pass-through transaction.
Servicer: As defined in Section 7A.03(c).
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses other than Monthly Advances (including reasonable
attorneys' fees and disbursements) incurred in the performance by the Company of
its servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of any REO Property and (d) compliance with the obligations
under Section 4.08.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Company, which shall, for a period of
one full month, be equal to one twelfth of the product of (a) the Servicing Fee
Rate and (b) the outstanding principal balance of such Mortgage Loan. Such fee
shall be payable monthly in arrears, and for any partial month, pro rated on a
per diem basis, and shall be computed on the basis of the same principal amount
and period respecting which any related interest payment on a Mortgage Loan is
computed. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to the
extent permitted by Section 4.05) of such Monthly Payment collected by the
Company, or as otherwise provided under Section 4.05.
Servicing Fee Rate: The per annum rate set forth on the related
Mortgage Loan Schedule and the related Trade Confirmation at which the Servicing
Fee accrues.
Servicing File: With respect to each Mortgage Loan, the file retained
by the Company consisting of originals of all documents in the Mortgage File
which are not delivered to the Custodian and copies of the Mortgage Loan
Documents the originals of which are delivered to the Custodian pursuant to
Section 2.01.
Servicing Officer: Any officer of the Company involved in or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Company to the
Purchaser upon request, as such list may from time to time be amended.
Stated Principal Balance: As to each Mortgage Loan, (i) the principal
balance of the Mortgage Loan at the related Cut-off Date after giving effect to
payments of principal due on or before such date, whether or not received, minus
(ii) all amounts previously distributed to the Purchaser with respect to the
related Mortgage Loan representing payments or recoveries of principal or
advances in lieu thereof.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for
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the overall servicing (as "servicing" is commonly understood by participants in
the mortgage-backed securities market) of Mortgage Loans but performs one or
more discrete functions identified in Item 1122(d) of Regulation AB with respect
to Mortgage Loans under the direction or authority of the Company or a
Subservicer.
Subservicer: Any Subservicer which is subservicing the Mortgage Loans
pursuant to a Subservicing Agreement. Any subservicer shall meet the
qualifications set forth in Section 4.01.
Subservicing Agreement: An agreement between the Company and a
Subservicer for the servicing of the Mortgage Loans.
Termination Fee: The termination fee payable by the Purchaser to the
Company as provided in Section 11.02 hereof.
Third-Party Originator: Each Person, other than a Qualified
Correspondent or the Company, that originated Mortgage Loans acquired by the
Company.
Trade Confirmation: With respect to any Mortgage Loan Package
purchased and sold on any Closing Date, the letter agreement between the
Purchaser and the Company (including any exhibits, schedules and attachments
thereto) setting forth the terms and conditions of such transaction and
describing the Mortgage Loans to be purchased by the Purchaser on such Closing
Date. A Trade Confirmation may relate to more than one Mortgage Loan Package to
be purchased on one or more Closing Dates hereunder.
Underwriting Guidelines: The underwriting guidelines of the Company
with respect to mortgage loans as made available to the Purchaser in connection
with its review of a Mortgage Loan Package.
Whole Loan Transfer: The sale or transfer of some or all of the
Mortgage Loans to third parties pursuant to a Reconstitution Agreement, other
than a Securitization Transaction or an Agency Transfer.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; DELIVERY OF DOCUMENTS
Section 2.01 Conveyance of Mortgage Loans; Possession of Mortgage Files;
Maintenance of Servicing Files.
On each Closing Date, the Company, simultaneously with the payment of
the Purchase Price shall execute and deliver to the Purchaser an Assignment and
Conveyance with respect to the related Mortgage Loan Package in the form
attached hereto as Exhibit L. Pursuant to Section 2.04, on or prior to the
related Closing Date the Company shall have delivered the Mortgage Loan
Documents for each Mortgage Loan in the Mortgage Loan Package to the Custodian.
The contents of each Mortgage File not delivered to the Custodian are
and shall be held in trust by the Company for the benefit of the Purchaser as
the owner thereof. The Company shall maintain a Servicing File for each Mortgage
Loan. The possession of each Servicing File by
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the Company is for the sole purpose of servicing the related Mortgage Loan, and
such retention and possession by the Company is in a custodial capacity only.
Upon the sale of the Mortgage Loans the ownership of each Mortgage Note, the
related Mortgage and the related Mortgage File and Servicing File shall vest
immediately in the Purchaser, and the ownership of all records and documents
with respect to the related Mortgage Loan prepared by or which come into the
possession of the Company shall vest immediately in the Purchaser and shall be
retained and maintained by the Company, in trust, at the will of the Purchaser
and only in such custodial capacity. Each Servicing File shall be segregated
from the other books and records of the Company and shall be marked
appropriately to reflect clearly the sale of the related Mortgage Loan to the
Purchaser. The Company shall release its custody of the contents of any
Servicing File only in accordance with written instructions from the Purchaser,
unless such release is required as incidental to the Company's servicing of the
Mortgage Loans or is in connection with a repurchase of any Mortgage Loan
pursuant to Section 3.03 or 6.02.
In addition, in connection with the assignment of any MERS Mortgage
Loans, the Company agrees that it will cause, at its own expense, the MERS
System to indicate that such Mortgage Loans have been assigned by the Company to
the Purchaser in accordance with this Agreement by including (or deleting, in
the case of Mortgage Loans which are repurchased in accordance with this
Agreement prior to the related repurchase date) in such computer files the
information required by the MERS System to identify the Purchaser of such
Mortgage Loans.
Section 2.02 Purchase Price.
On the related Closing Date, the Purchaser shall pay to the Company
for the Mortgage Loans in the related Mortgage Loan Package the sum of (i) the
Stated Principal Balance of such Mortgage Loans multiplied by the Purchase Price
Percentage, plus (ii) an amount equal to accrued and unpaid interest on the
Mortgage Loans at the Net Mortgage Interest Rate, from and including the related
Cut-Off Date through and including the day before the related Closing Date. If
so provided in the related Trade Confirmation, portions of the Mortgage Loans
shall be priced separately.
If any miscalculation is reflected in the purchase price for the
Mortgage Loans, the party benefiting from such error shall pay an amount
sufficient to correct the error. The Purchaser shall own and be entitled to
receive with respect to each Mortgage Loan purchased, (1) all scheduled
principal due after the related Cut-off Date, (2) all other recoveries of
principal collected after the related Cut-off Date (provided, however, that all
scheduled payments of principal due on or before the related Cut-off Date and
collected by the Company after the related Cut-off Date shall belong to the
Company), and (3) all payments of interest on the Mortgage Loans minus that
portion of any such interest payment that is allocable to the period prior to
the related Cut-off Date. Payments of scheduled principal and interest prepaid
for a Due Date after the Cut-off Date shall not be applied to the principal
balance as of the Cut-off Date. Such prepaid amounts shall be the property of
the Purchaser. The Company shall deposit any such prepaid amounts into the
Custodial Account, which account is established for the benefit of the
Purchaser, for the remittance by the Company to the Purchaser on the First
Remittance Date. All payments of principal and interest due on a Due Date
following the related Cut-off Date shall belong to the Purchaser.
Section 2.03 Books and Records; Transfers of Mortgage Loans.
From and after each sale of the Mortgage Loans to the Purchaser all
rights arising
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out of the Mortgage Loans in the related Mortgage Loan Package including but not
limited to all funds received on or in connection with the Mortgage Loans, shall
be received and held by the Company in trust for the benefit of the Purchaser as
owner of such Mortgage Loans, and the Company shall retain record title to the
related Mortgages for the sole purpose of facilitating the servicing and the
supervision of the servicing of the Mortgage Loans.
It is the express intention of the parties that the transactions
contemplated by this Agreement be, and be construed as, a sale of the Mortgage
Loans by the Company and not a pledge of the Mortgage Loans by the Company to
the Purchaser to secure a debt or other obligation of the Company. Consequently,
the sale of each Mortgage Loan in a Mortgage Loan Package shall be reflected on
the Company's balance sheet and other financial statements as well as its
business records and tax returns as a sale of assets by the Company. In the
event, for any reason, any transaction contemplated herein is construed by any
court or regulatory authority as a borrowing rather than as a sale, the Company
and the Purchaser intend that the Purchaser or its assignee, as the case may be,
shall have a perfected first priority security interest in the Mortgage Loans,
the Custodial Account and the proceeds of any and all of the foregoing
(collectively, the "Collateral"), free and clear of adverse claims. In such
case, the Company shall be deemed to have hereby granted to the Purchaser or its
assignee, as the case may be, a first priority security interest in and lien
upon the Collateral, free and clear of adverse claims. In such event, the
related Trade Confirmation and this Agreement shall constitute a security
agreement, the Custodian shall be deemed to be an independent custodian for
purposes of perfection of the security interest granted to the Purchaser or its
assignee, as the case may be, and the Purchaser or its assignee, as the case may
be, shall have all of the rights of a secured party under applicable law.
The Company shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be marked
clearly to reflect the ownership of each Mortgage Loan by the Purchaser. In
particular, the Company shall maintain in its possession, available for
inspection by the Purchaser, or its designee and shall deliver to the Purchaser
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations, and requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, including
but not limited to documentation as to the method used in determining the
applicability of the provisions of the Flood Disaster Protection Act of 1973, as
amended, to the Mortgaged Property, documentation evidencing insurance coverage
and eligibility of any condominium project for approval by ▇▇▇▇▇▇ Mae and
periodic inspection reports as required by Section 4.13. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Company may be in
the form of microfilm or microfiche or such other reliable means of recreating
original documents, including but not limited to, optical imagery techniques so
long as the Company complies with the requirements of the ▇▇▇▇▇▇ ▇▇▇ Selling and
Servicing Guide, as amended from time to time.
The Company shall maintain with respect to each Mortgage Loan and
shall make available for inspection by any Purchaser or its designee the related
Servicing File during the time the Purchaser retains ownership of a Mortgage
Loan and thereafter in accordance with applicable laws and regulations.
The Company shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe, the Company
shall note transfers of Mortgage Loans. For the purposes of this Agreement, the
Company shall be under no obligation to deal with any person with respect to
this Agreement or the Mortgage Loans unless the books and records
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show such person as the owner of the Mortgage Loan. The Purchaser may sell and
transfer one or more of the Mortgage Loans, provided, however, that the
transferee will not be deemed to be a Purchaser hereunder binding upon the
Company unless such transferee shall agree in writing to be bound by the terms
of this Agreement and an original counterpart of the instrument of transfer and
an assignment and assumption of this Agreement executed by the transferee shall
have been delivered to the Company. Upon receipt of notice of the transfer, the
Company shall ▇▇▇▇ its books and records to reflect the ownership of the
Mortgage Loans of such assignee, and shall release the previous Purchaser from
its obligations hereunder with respect to the Mortgage Loans sold or
transferred.
Section 2.04 Delivery of Documents.
On or before the date which is five Business Days prior to the related
Closing Date, the Company shall deliver and release to the Custodian those
Mortgage Loan Documents as required by this Agreement with respect to each
Mortgage Loan in the related Mortgage Loan Package.
On or prior to the related Closing Date, the Custodian shall certify
its receipt of all such Mortgage Loan Documents required to be delivered
pursuant to the Custodial Agreement, as evidenced by the initial trust receipt
of the Custodian in the form annexed to the Custodial Agreement (other than
those Mortgage Loan Documents listed on a document exception report attached
thereto). The Purchaser shall pay the fees and expenses of the Custodian as
incurred by such party.
The Company shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with Section 4.01 or 6.01 within one
week of its execution, provided, however, that the Company shall provide the
Custodian with a certified true copy of any such document submitted for
recordation within one week of its execution, and shall provide the original of
any document submitted for recordation or a copy of such document certified by
the appropriate public recording office to be a true and complete copy of the
original within one week of its receipt back from such public recording office.
Section 2.05 Closing Documents.
(a) On or before the initial Closing Date, the Company shall
submit to the Purchaser fully executed originals of the following
documents:
hereto;
(i) this Agreement, in four counterparts;
hereto;
(ii) an Officer's Certificate, in the form of Exhibit I hereto,
including all attachments thereto;
hereto; and
(iii) an Opinion of Counsel to the Company, in the form of
Exhibit J
(iv) a Custodial Account Letter Agreement in the form of Exhibit
▇-▇
▇-▇▇
(v) an Escrow Account Letter Agreement in the form of Exhibit E-2
(vi) the Company's Underwriting Guidelines for each of its
origination
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(b) The Closing Documents for the Loans to be purchased on each
Closing Date (including the initial Closing Date) shall consist of fully
executed originals of the following documents:
(i) the related Trade Confirmation;
(ii) if requested by the Purchaser, an Officer's Certificate, in
the form of Exhibit I hereto, including all attachments thereto;
(iii) if requested by the Purchaser, an Opinion of Counsel to the
Company, in the form of Exhibit J hereto;
(iv) if any of the Mortgage Loans are subject to any security
interest, pledge or hypothecation for the benefit of any Person at the
Closing Date, a Security Release Certification, in the form of Exhibit K
hereto, executed by such Person;
(v) a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if any of the
Mortgage Loans were acquired by the Company by merger or acquired or
originated by the Company while conducting business under a name other than
its present name, if applicable; and
(vi) an Assignment and Conveyance, in the form of Exhibit L
hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES AND BREACH
Section 3.01 Company Representations and Warranties.
The Company represents and warrants to the Purchaser that as of each
Closing Date or as of such date specifically provided herein:
(a) Due Organization and Authority. The Company is a federal savings
association duly organized, validly existing and in good standing under the laws
of the United States, and has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified and in good standing in each
state where a Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type conducted by
the Company, and in any event the Company is in compliance with the laws of any
such state to the extent necessary to ensure the enforceability of the related
Mortgage Loan and the servicing of such Mortgage Loan in accordance with the
terms of this Agreement; no licenses or approvals obtained by the Company have
been suspended or revoked by any court, administrative agency, arbitrator or
governmental body and no proceedings are pending which might result in such
suspension or revocation; the Company has the full corporate power and authority
to hold each Mortgage Loan, to sell each Mortgage Loan and to execute and
deliver this Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Company and the
consummation of the transactions contemplated hereby have been duly
B-23
and validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Company; and all requisite corporate action has
been taken by the Company to make this Agreement valid and binding upon the
Company in accordance with its terms;
(b) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Company, and the transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Company pursuant to this Agreement are not subject to the
bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition of the Mortgage Loans by the Company, the sale of the
Mortgage Loans to the Purchaser or the transactions contemplated hereby, nor the
fulfillment of, or compliance with, the terms and conditions of this Agreement,
will conflict with or result in a breach of any of the terms, conditions or
provisions of the Company's charter or by-laws or any legal restriction or any
agreement or instrument to which the Company is now a party or by which it is
bound, or constitute a default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Company or its property is subject, or impair
the ability of the Purchaser to realize on the Mortgage Loans, or impair the
value of the Mortgage Loans;
(d) Ability to Service. The Company is an approved seller/servicer of
conventional residential mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, with the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The Company
is in good standing to sell mortgage loans to and service mortgage loans for
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, and no event has occurred, including but not limited
to a change in insurance coverage, which would make the Company unable to comply
with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility requirements or which would require
notification to either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(e) Reasonable Servicing Fee. The Company acknowledges and agrees that
the Servicing Fee, as calculated at the Servicing Fee Rate, represents
reasonable compensation for performing such services and that the entire
Servicing Fee shall be treated by the Company, for accounting and tax purposes,
as compensation for the servicing and administration of the Mortgage Loans
pursuant to this Agreement.
(f) Ability to Perform. The Company does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement. The Company is solvent and will not be rendered
insolvent by the consummation of the transactions contemplated hereby. The sale
of the Mortgage Loans is not undertaken to hinder, delay or defraud any of the
Company's creditors;
(g) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or to the best of the Company's knowledge threatened
against the Company which, either in any one instance or in the aggregate (i)
may result in any material adverse change in the business, operations, financial
condition, properties or assets of the Company, or in any material impairment of
the right or ability of the Company to carry on its business substantially as
B-24
now conducted, or in any material liability on the part of the Company, or (ii)
would prohibit the Company from entering into this Agreement or seek to prevent
the sale of the Mortgage Loans or the consummation of the transactions
contemplated by this Agreement or (iii) would otherwise draw into question the
validity of this Agreement or the Mortgage Loans or of any action taken or to be
taken in connection with the obligations of the Company contemplated herein, or
(D) would be likely to prohibit or impair materially and adversely affect the
performance by the Company of its obligations under, or the validity or
enforceability of, this Agreement;
(h) No Consent Required. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company with
this Agreement or the sale of the Mortgage Loans as evidenced by the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the related Closing Date;
(i) Selection Process. The Mortgage Loans were selected from among the
outstanding fixed rate one- to four-family or one- to two-family adjustable rate
mortgage loans in the Company's portfolio at the related Closing Date as to
which the representations and warranties set forth in Section 3.02 could be made
and such selection (i) was not made in a manner so as to affect adversely the
interests of the Purchaser and (ii) did not identify the Mortgage Loans as being
less desirable or valuable than other comparable Mortgage Loans in the Company's
portfolio as of the Cut-off Date;
(j) Pool Characteristics. With respect to each Mortgage Loan Package,
the Mortgage Loan characteristics set forth on the related Mortgage Loan
Schedule attached to the related Assignment and Conveyance are true and
complete;
(k) No Untrue Information. Neither this Agreement nor any statement,
report or other document furnished or to be furnished pursuant to this Agreement
or in connection with the transactions contemplated hereby contains any untrue
statement of fact or omits to state a fact necessary to make the statements
contained therein not misleading;
(l) Sale Treatment. The disposition of the Mortgage Loans shall be
treated as a sale on the books and records of the Company. The Company has
determined that the disposition of the Mortgage Loans pursuant to this Agreement
will be afforded sale treatment for accounting and tax purposes. The Company
shall maintain a complete set of books and records for each Mortgage Loan, which
shall be clearly marked to reflect the ownership of such Mortgage Loan;
(m) Financial Statements. If not publicly available, the Company has
delivered to the Purchaser financial statements of its ultimate corporate parent
as to its last three complete fiscal years and any later quarter ended more than
60 days prior to the execution of this Agreement. All such financial statements
fairly present the pertinent results of operations and changes in financial
position at the end of each such period of the Company and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. There has been no change in the business, operations, financial
condition, properties or assets of the Company since the date of the Company's
financial statements that would have a material adverse effect on
B-25
its ability to perform its obligations under this Agreement. The Company has
completed any forms requested by the Purchaser in a timely manner and in
accordance with the provided instructions;
(n) No Brokers' Fees. The Company has not dealt with any broker,
investment banker, agent or other person that may be entitled to any commission
or compensation in connection with the sale of the Mortgage Loans;
(o) Origination. The Company's decision to originate any mortgage loan
or to deny any mortgage loan application is an independent decision based upon
Company's Underwriting Guidelines, and is in no way made as a result of
Purchaser's decision to purchase, or not to purchase, or the price Purchaser may
offer to pay for, any such mortgage loan, if originated; and
(p) Fair Consideration. The consideration received by the Company upon
the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans; and (q)
The Company 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 MERS Mortgage Loans for as long as such Mortgage Loans are
registered with MERS.
Section 3.02 Representations and Warranties Regarding Individual Mortgage
Loans.
As to each Mortgage Loan, the Company hereby represents and warrants
to the Purchaser that as of the related Closing Date: (a) Mortgage Loans as
Described. The Mortgage Loan is in compliance with all requirements set forth in
the related Trade Confirmation. The information set forth in the related
Mortgage Loan Schedule and the electronic file delivered to the Purchaser is
true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note
have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under such Mortgage Loan been 30 or more days
delinquent at any time in the year prior to the Closing Date.
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgages, and all taxes, governmental assessments, insurance
premiums, ground rents, leasehold payments, water, sewer and municipal charges,
leasehold payments or ground rents which previously became due and owing have
been paid, or an escrow of funds has been established in an amount sufficient to
pay for every such item which remains unpaid and which has been assessed but is
not yet due and payable. The Company has not advanced funds, or induced,
solicited or knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount required under
the Mortgage Loan, except for interest accruing from the date of the Mortgage
Note or date of disbursement of
B-26
the Mortgage Loan proceeds, whichever is greater, to the day which precedes by
one month the Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Custodian.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related PMI Policy and the title insurer, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule. No instrument of waiver, alteration or modification has been executed,
and no Mortgagor has been released, in whole or in part, except in connection
with an assumption agreement approved by the issuer of any related PMI Policy
and the title insurer, to the extent required by the policy, and which
assumption agreement is part of the Mortgage Loan File delivered to the
Custodian and the terms of which are reflected in the related Mortgage Loan
Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto;
(f) Hazard Insurance. All buildings or other improvements upon the
Mortgaged Property are insured by an insurer acceptable to ▇▇▇▇▇▇▇ Mac and
▇▇▇▇▇▇ ▇▇▇ against loss by fire, hazards of extended coverage and such other
hazards as are customary in the area where the Mortgaged Property is located
pursuant to insurance policies conforming to the requirements of Section 4.10.
If the Mortgaged Property is in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards (and
such flood insurance has been made available) a flood insurance policy meeting
the requirements of the current guidelines of the Federal Flood Insurance
Administration is in effect which policy conforms to the requirements of Section
4.10. All individual insurance policies contain a standard mortgagee clause
naming the Company and its successors and assigns as mortgagee, and all premiums
thereon have been paid. The Mortgage obligates the Mortgagor thereunder to
maintain the hazard insurance policy at the Mortgagor's cost and expense, and on
the Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and expense, and to
seek reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering the common facilities of a planned
unit development. The hazard insurance policy is the valid and binding
obligation of the insurer, is in full force and effect, and will be in full
force and effect and inure to the benefit of the Purchaser upon the consummation
of the transactions contemplated by this Agreement. The Company has not engaged
in, and has no knowledge of the Mortgagor, any Subservicer or any prior
originator or subservicer having engaged in, any act or omission which would
impair the coverage of any such policy, the benefits of the endorsement provided
for herein, or the validity and binding effect of either, including
B-27
without limitation, no unlawful fee, unlawful commission, unlawful kickback or
other unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Company;
(g) Compliance with Applicable Law. Any and all requirements of any
federal, state or local law including, without limitation, usury, truth in
lending, real estate settlement procedures, consumer credit protection, equal
credit opportunity, fair housing, disclosure laws or all predatory and abusive
lending laws applicable to the origination and servicing of mortgage loans of a
type similar to the Mortgage Loans have been complied with and the consummation
of the transactions contemplated hereby will not involve the violation of any
such laws;
(h) No Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission. The Company has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Company waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property is
a fee simple property located in the state identified in the related Mortgage
Loan Schedule and consists of a parcel of real property with a detached single
family residence erected thereon, or a two- to four-family dwelling, or an
individual condominium unit in a condominium project, or an individual unit in a
planned unit development, provided, however, that any condominium project or
planned unit development shall conform with the Company's Underwriting
Guidelines regarding such dwellings, and no residence or dwelling is a mobile
home or a manufactured dwelling. No portion of the Mortgaged Property is used
for commercial purposes;
(j) Valid First Lien. The Mortgage is a valid, subsisting, enforceable
and perfected first lien on the Mortgaged Property, including all buildings and
improvements on the Mortgaged Property, and all additions, alterations and
replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(1) the lien of current real property taxes and assessments not
yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered
to the originator of the Mortgage Loan and (i) referred to or to otherwise
considered in the appraisal made for the originator of the Mortgage Loan or
(ii) which do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
B-28
(3) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable first lien and first priority security interest on
the property described therein and the Company has full right to sell and assign
the same to the Purchaser. The Mortgaged Property was not, as of the date of
origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to
secured debt or other security instrument creating a lien subordinate to the
lien of the Mortgage;
(k) Validity of Mortgage Documents. The Mortgage Note and the Mortgage
are genuine, and each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms. All parties to the Mortgage
Note and the Mortgage and any other related agreement had legal capacity to
enter into the Mortgage Loan and to execute and deliver the Mortgage Note and
the Mortgage and any other related agreement, and the Mortgage Note and the
Mortgage have been duly and properly executed by such parties. The documents,
instruments and agreements submitted for loan underwriting were not falsified
and contain no untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the information and
statements therein not misleading. No error, negligence, fraud or similar
occurrence was committed by any person, including without limitation, the
Mortgagor, any appraiser, or any other party involved in the origination of the
Mortgage Loan or in the application of any insurance in relation to such
Mortgage Loan. The Company has reviewed all of the documents constituting the
Servicing File and has made such inquiries as it deems necessary to make and
confirm the accuracy of the representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Company is the sole owner of record and holder of
the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and the Company
has good and marketable title thereto, and has full right to transfer and sell
the Mortgage Loan therein to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement. In the event that the Company retains
record title, the Company shall retain such record title to each Mortgage, each
related Mortgage Note and the related Mortgage Files with respect thereto in
trust for the Purchaser as the owner thereof and only for the purpose of
servicing and supervising the servicing of each Mortgage Loan;
B-29
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) (a) organized under the
laws of such state, (b) qualified to do business in such state, (c) federal
savings and loan associations or national banks having principal offices in such
state, or (d) not doing business in such state;
(o) LTV, PMI Policy. At origination, no Mortgage Loan had a LTV
greater than 95% and no Mortgage Loan had a CLTV greater than 100% (or such
other percentages as stated in the related Trade Confirmation). Each Loan with
an LTV at origination in excess of 80% is and will be subject to a Primary
Insurance Policy or LPMI Policy, as identified on the related Mortgage Loan
Schedule, issued by a Qualified Insurer, which insures that portion of the Loan
in excess of the portion of the Appraised Value of the Mortgaged Property
required by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. All provisions of such PMI Policy have
been and are being complied with, such policy is in full force and effect, and
all premiums due thereunder have been paid. No action, inaction, or event has
occurred and no state of facts exists that has, or will result in the exclusion
from, denial of, or defense to coverage. Any Mortgage Loan subject to a PMI
Policy obligates the Mortgagor thereunder to maintain the PMI Policy and to pay
all premiums and charges in connection therewith; provided, that, with respect
to LPMI Loans, the related Servicer is obligated thereunder to maintain the LPMI
Policy and to pay all premiums and charges in connection therewith. The Mortgage
Interest Rate for the Mortgage Loan as set forth on the related Mortgage Loan
Schedule is net of any such insurance premium;
(p) Title Insurance. The Mortgage Loan is covered by either (i) an
attorney's opinion of title and abstract of title the form and substance of
which is acceptable to mortgage lending institutions making mortgage loans in
the area where the Mortgaged Property is located or (ii) an ALTA lender's title
insurance policy or other generally acceptable form of policy of insurance
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, issued by a title insurer acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified to do business in the jurisdiction where
the Mortgaged Property is located, insuring the Company, its successors and
assigns, as to the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan, subject only to the exceptions contained in clauses
(1), (2) and (3) of paragraph (j) of this Section 3.02. Where required by state
law or regulation, the Mortgagor has been given the opportunity to choose the
carrier of the required mortgage title insurance. Additionally, such lender's
title insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Company is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Company, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Company;
B-30
(q) No Defaults. There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration, and neither the Company nor its predecessors have waived any
default, breach, violation or event of acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements which
were considered in determining the Appraised Value of the Mortgaged Property lay
wholly within the boundaries and building restriction lines of the Mortgaged
Property and no improvements on adjoining properties encroach upon the Mortgaged
Property. No improvement located on or being part of the Mortgaged Property is
in violation of any applicable zoning law or regulation;
(t) Origination: Payment Terms. Such Mortgage Loan was originated by
the Company, a credit union, a savings and loan association, a savings bank, a
commercial bank, a mortgage banking company or a similar banking institution
which is supervised and examined by a federal or state credit union or banking
authority, or is a mortgagee approved by HUD. Principal payments on the Mortgage
Loan shall commence (with respect to any newly originated Mortgage Loans) or
commenced no more than sixty days after the proceeds of the Mortgage Loan were
disbursed. The Mortgage Loan bears interest at the Mortgage Interest Rate
calculated and payable in arrears. With respect to each Mortgage Loan, the
Mortgage Note is payable on the first day of each month in Monthly Payments,
which (i) in the case of a Fixed Rate Mortgage Loan are sufficient to fully
amortize the original principal balance over the original term thereof (other
than with respect to a Mortgage Loan identified on the related Mortgage Loan
Schedule as an interest-only Mortgage Loan during the interest-only period) and
to pay interest at the related Mortgage Interest Rate, (ii) in the case of an
Adjustable Rate Mortgage Loan, are changed on each Adjustment Date, and in any
case, are sufficient to fully amortize the original principal balance over the
original term thereof (other than with respect to a Mortgage Loan identified on
the related Mortgage Loan Schedule as an interest-only Mortgage Loan during the
interest-only period) and to pay interest at the related Mortgage Interest Rate,
(iv) in the case of a Mortgage Loan identified on the Mortgage Loan Schedule as
an interest-only Mortgage Loan, the interest-only period shall not exceed ten
(10) years (or such other period specified on the Mortgage Loan Schedule) and
following the expiration of such interest-only period, the remaining Monthly
Payments shall be sufficient to fully amortize the original principal balance
over the remaining term of the Mortgage Loan, and (iv) in the case of a Balloon
Loan, are based on a fifteen (15) or thirty (30) year amortization schedule, as
set forth in the related Mortgage Note, and a final Monthly Payment
substantially greater than the preceding Monthly Payment which is sufficient to
amortize the remaining principal balance of the Balloon Loan and to pay interest
at the related Mortgage Interest Rate in each case after any interest-only
period. The Mortgage does not permit negative amortization. No Mortgage Loan is
a Convertible Mortgage Loan;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the
B-31
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (i) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. The
Mortgaged Property has not been subject to any bankruptcy proceeding or
foreclosure proceeding during the term of the applicable Mortgage Loan and the
Mortgagor has not filed for protection under applicable bankruptcy laws after
the origination of the Mortgage Loan. Upon default by a Mortgagor on a Mortgage
Loan and foreclosure on, or trustee's sale of, the Mortgaged Property pursuant
to the proper procedures, the holder of the Mortgage Loan will be able to
deliver good and merchantable title to the Mortgaged Property. There is no
homestead or other exemption available to a Mortgagor which would interfere with
the right to sell the Mortgaged Property at a trustee's sale or the right to
foreclose the Mortgage;
(v) No "Buydowns". No Mortgage Loan contains provisions pursuant to
which Monthly Payments are (i) paid or partially paid with funds deposited in
any separate account established by the Company, the Mortgagor, or anyone on
behalf of the Mortgagor, (ii) paid by any source other than the Mortgagor or
(iii) contains any other similar provisions which may constitute a "buy-down"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;
(w) Compliance with Disclosure Requirements. The Mortgagor has
executed a statement to the effect that the Mortgagor has received all
disclosure materials required by applicable law and rescission materials with
respect to Refinanced Mortgage Loans, and such statement is and will remain in
the Mortgage File. All fees and charges (including finance charges) and whether
or not financed, assessed, collected or to be collected in connection with the
origination and servicing of each Mortgage Loan have been disclosed in writing
to the Mortgagor in accordance with applicable state and federal law and
regulation;
(x) No Construction or Rehabilitation Loans. Except for construction
to permanent Mortgage Loans, which are in their permanent phase, no Mortgage
Loan was made in connection with (i) the construction or rehabilitation of a
Mortgaged Property or (ii) facilitating the trade-in or exchange of a Mortgaged
Property;
(y) Conformance with Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with the Company's Underwriting Guidelines in effect
at the time the Mortgage Loan was originated. The Mortgage Note and Mortgage are
on forms substantially similar to forms acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae;
(z) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Except as otherwise stated on the Mortgage Loan
Schedule, the Mortgagor represented at the time of origination of the Mortgage
Loan that the Mortgagor would occupy the Mortgaged Property as the Mortgagor's
primary residence;
B-32
(aa) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in (j) above;
(bb) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(cc) Acceptable Investment. The Company has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;
(dd) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered for
the Mortgage Loan by the Company under this Agreement as set forth in Exhibit C
attached hereto have been delivered to the Custodian. The Company is in
possession of a complete, true and accurate Mortgage File in compliance with
Exhibit B, except for such documents the originals of which have been delivered
to the Custodian;
(ee) Condominiums/Planned Unit Developments. If the dwelling on the
Mortgaged Property is a condominium unit or a planned unit development (other
than a de minimus planned unit development) such condominium or planned unit
development project meets ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac eligibility requirements.
(ff) Transfer of Mortgage Loans. The Assignment of Mortgage is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;
(gg) Due on Sale. The Mortgage contains an enforceable provision for
the acceleration of the payment of the unpaid principal balance of the Mortgage
Loan in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the Mortgagee thereunder;
(hh) Consolidation of Future Advances. Any principal advances made
prior to the related Cut-off Date have been consolidated with the outstanding
principal amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having first lien priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other title evidence
acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac. The consolidated principal amount does
not exceed the original principal amount of the Mortgage Loan;
(ii) Mortgaged Property Undamaged. There is no proceeding pending or,
to the best of the Company's knowledge, threatened for the total or partial
condemnation of the
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Mortgaged Property. The Mortgaged Property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other casualty so as
to affect adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended;
(jj) Collection Practices; Escrow Deposits. The origination, servicing
and collection practices used with respect to the Mortgage Loan have been in
accordance with Accepted Servicing Practices, and have been in all respects in
compliance with all applicable laws and regulations. The Mortgage Loan has been
serviced by the Company and any predecessor servicer in accordance with the
terms of the Mortgage Note. With respect to escrow deposits and Escrow Payments,
all such payments are in the possession of the Company and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law. An escrow of funds is not prohibited
by applicable law and has been established in an amount sufficient to pay for
every item which remains unpaid and which has been assessed but is not yet due
and payable. No escrow deposits or Escrow Payments or other charges or payments
due the Company have been capitalized under the Mortgage or the Mortgage Note
and no such escrow deposits or Escrow Payments are being held by the Company for
any work on a Mortgaged Property which has not been completed;
(kk) Appraisal. The Mortgage File contains an appraisal of the related
Mortgage Property which satisfied the standards of ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac
and was made and signed prior to the approval of the Mortgage Loan application
by a qualified appraiser, duly appointed by the Company (i) who had no interest,
direct or indirect in the Mortgaged Property or in any loan made on the security
thereof and who met the minimum qualifications of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac,
and (ii) whose compensation is not affected by the approval or disapproval of
the Mortgage Loan. The appraisal and appraiser both satisfy the requirements of
Title XI of the Federal Institutions Reform, Recovery, and Enforcement Act of
1989 and the regulations promulgated thereunder, all as in effect on the date
the Mortgage Loan was originated;
(ll) Servicemembers Civil Relief Act. The Mortgagor has not notified
the Company, and the Company has no knowledge of any relief requested or allowed
to the Mortgagor under the Servicemembers Civil Relief Act;
(mm) Environmental Matters. The Mortgaged Property is free from any
and all toxic or hazardous substances and there exists no violation of any
local, state or federal environmental law, rule or regulation. To the best of
the Company's knowledge, there is no pending action or proceeding directly
involving any Mortgaged Property of which the Company is aware in which
compliance with any environmental law, rule or regulation is an issue; and to
the best of the Company's knowledge, nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation consisting
a prerequisite to use and enjoyment of said property;
(nn) Insurance. The Company has caused or will cause to be performed
any and all acts required to preserve the rights and remedies of the Purchaser
in any insurance policies applicable to the Mortgage Loans including, without
limitation, any necessary notifications of insurers, assignments of policies or
interests therein, and establishments of coinsured, joint loss
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payee and mortgagee rights in favor of the Purchaser. No action, inaction, or
event has occurred and no state of fact exists or has existed that has resulted
or will result in the exclusion from, denial of, or defense to coverage under
any applicable pool insurance policy, special hazard insurance policy, PMI
Policy or bankruptcy bond, irrespective of the cause of such failure of
coverage. In connection with the placement of any such insurance, no commission,
fee, or other compensation has been or will be received by the Company or any
designee of the Company or any corporation in which the Company or any officer,
director, or employee had a financial interest at the time of placement of such
insurance;
(oo) Regarding the Mortgagor. The Mortgagor is one or more natural
persons (other than such Mortgagor that is an revocable, inter-vivos trust made
by a natural person that conforms to the eligibility requirements of ▇▇▇▇▇▇ Mae
for such mortgagors). No Mortgagor is the obligor on more than two Mortgage
Notes in any Mortgage Loan Package;
(pp) Compliance with Texas Law Requirements. Each Mortgage Loan
originated in the state of Texas pursuant to Article XVI, Section 50(a)(6) of
the Texas Constitution (a "Texas Refinance Loan") has been originated in
compliance with the provisions of Article XVI, Section 50(a)(6) of the Texas
Constitution, Texas Civil Statutes and the Texas Finance Code. With respect to
each Texas Refinance Loan that is a Cash-Out Refinancing, the related Mortgage
Loan Documents state that the Mortgagor may prepay such Texas Refinance Loan in
whole or in part without incurring a Prepayment Charge. The Company does not
collect any such Prepayment Charges in connection with any such Texas Refinance
Loan;
(qq) Interest Rate Calculation. Interest on each Mortgage Loan is
calculated on the basis of a 360-day year consisting of twelve 30-day months;
(rr) Qualified Mortgage. Each Mortgage Loan constitutes a "qualified
mortgage" under Section 860G(a)(3)(A) of the Code and Treasury Regulation
Section 1.860G-2(a)(1);
(ss) Predatory Lending Regulations; High Cost Loans. No Mortgage Loan
is (a) subject to, covered by or in violation of the provisions of the
Homeownership and Equity Protection Act of 1994, as amended, (b) a "high cost",
"covered", "abusive", "predatory", "home loan", "Oklahoma Section 10" or "high
risk" mortgage loan (or a similarly designated loan using different terminology)
under any federal, state or local law, including without limitation, the
provisions of the Georgia Fair Lending Act, New York Banking Law, Section 6-1,
the Arkansas Home Loan Protection Act, effective as of June 14, 2003, Kentucky
State Statute KRS 360.100, effective as of June 25, 2003, the New Jersey Home
Ownership Security Act of ▇▇▇▇ (▇▇▇ "▇▇ ▇▇▇"), ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ Home Loan
Protection Act (N.M. Stat. ▇▇▇. Sections 58-21A-1 et seq.), the Illinois
High-Risk Home Loan Act (815 Ill. Comp. Stat. 137/1 et seq.), the Oklahoma Home
Ownership and Equity Protection Act, Nevada Assembly ▇▇▇▇ No. 284, effective as
of Oct. 1, 2003, the Minnesota Residential Mortgage Originator and Servicer
Licensing Act (MN Stat. Section 58.137), the South Carolina High-Cost and
Consumer Home Loans Act, effective January 1, 2004, or any other statute or
regulation providing assignee liability to holders of such mortgage loans, or
(c) subject to or in violation of any such or comparable federal, state or local
statutes or regulations. Each Mortgage Loan is in compliance with the
anti-predatory lending eligibility for purchase requirements of ▇▇▇▇▇▇ Mae's
Selling Guide. No Mortgage Loan is a High Cost Loan
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or Covered Loan, as applicable (as such terms are defined in the then current
Standard & Poor's LEVELS(R) Glossary);
(tt) Single Premium Credit Insurance. No Mortgagor was required to
purchase any credit life, disability, accident or health insurance product as a
condition of obtaining the extension of credit. No Mortgagor obtained a prepaid
single premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan, and no proceeds from any
Mortgage Loan were used to finance single-premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(uu) Tax Service Contract. The Company has obtained a life of loan,
transferable real estate Tax Service Contract on each Mortgage Loan with an
Approved Tax Servicer Contract Provider and such contract is assignable without
penalty, premium or cost to the Purchaser;
(vv) Flood Certification Contract. The Company has obtained a life of
loan, transferable flood certification contract with an Approved Flood Policy
Insurer acceptable to Purchaser in its sole discretion for each Mortgage Loan
and such contract is assignable without penalty, premium or cost to the
Purchaser;
(ww) Prepayment Charge. With respect to each Mortgage Loan that has a
Prepayment Charge feature, each such Prepayment Charge is enforceable and will
be enforced by the Company, and each Prepayment Charge is permitted pursuant to
federal, state and local law. No Mortgage Loan will impose a Prepayment Charge
for a term in excess of three years from the date such Mortgage Loan was
originated. Except as otherwise set forth in the related Mortgage Loan Schedule,
with respect to each Mortgage Loan that contains a Prepayment Charge, such
Prepayment Charge is at least equal to the lesser of (a) the maximum amount
permitted under applicable law and (b) six months interest at the related
Mortgage Interest Rate on the amount prepaid in excess of 20% of the original
principal balance of such Mortgage Loan.
(xx) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Company, or is in the process of being recorded;
(yy) Leaseholds. No mortgaged property is secured by a leasehold
(other than a mortgaged property subject to a leasehold which conforms to the
eligibility requirements of ▇▇▇▇▇▇ Mae for such mortgage property type),
cooperative or manufactured housing. No Mortgage Loans are agricultural loans.
(zz) Payment in Full. No Mortgage Loan will be paid in full on or
prior to the related Closing Date;
(aaa) MERS Assignments. With respect to each MERS Mortgage Loan, a MIN
has been assigned by MERS and such MIN is accurately provided on the related
Mortgage Loan Schedule. The related assignment of Mortgage to MERS has been duly
and properly recorded;
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(bbb) MERS Notice of Liens. With respect to each MERS Mortgage Loan,
the Company has not received any notice of liens or legal actions with respect
to such Mortgage Loan and no such notices have been electronically posted by
MERS;
(ccc) Fair Credit Reporting Act. The Company and any predecessor
servicer has fully furnished, in accordance with the Fair Credit Reporting Act
and its implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian and
Trans Union Credit Information Company (three of the credit repositories), on a
monthly basis; and the Company will fully furnish, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Credit Information Company (three of the credit
repositories), on a monthly basis. As to each consumer report (as defined in the
Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Company to the Purchaser, that Company has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded by the terms of
the Mortgage Loan Documents from furnishing the same to any subsequent or
prospective purchaser of such Mortgage.;
(ddd) Extension of Credit. No predatory, abusive or deceptive lending
practices, including but not limited to, the extension of credit to a Mortgagor
without regard for the Mortgagor's ability to repay the Mortgage Loan and the
extension of credit to a Mortgagor which has no tangible net benefit to the
Mortgagor, were employed in connection with the origination of the Mortgage
Loan. Each Mortgage Loan is in compliance with the anti-predatory lending
eligibility for purchase requirements of FNMA's Selling Guide;
(eee) Prepayment Charge. With respect to any Mortgage Loan that
contains a provision permitting imposition of a Prepayment Charge upon a
Principal Prepayment prior to maturity: (i) prior to the Mortgage Loan's
origination, the Mortgagor agreed to such Prepayment Charge in exchange for a
monetary benefit, including but not limited to a Mortgage Interest Rate or fee
reduction, (ii) prior to the Mortgage Loan's origination, the Mortgagor was
offered the option of applying for a Mortgage Loan that did not require payment
of a Prepayment Charge, (iii) the Prepayment Charge is disclosed to the
Mortgagor in the Mortgage Loan Documents pursuant to applicable state and
federal law, and (iv) notwithstanding any state or federal law to the contrary,
the Company shall not impose such Prepayment Charge in any instance when the
Mortgage debt is accelerated as the result of the Mortgagor's default in making
the Monthly Payments;
(fff) Patriot Act. The Company has complied with all applicable
anti-money laundering laws and regulations, including without limitation the USA
Patriot Act of 2001 (collectively, the "Anti-Money Laundering Laws"). The
Company has established an anti-money laundering compliance program as required
by the Anti-Money Laundering Laws, has conducted the requisite due diligence in
connection with the origination of each Mortgage Loan for purposes of the
Anti-Money Laundering Laws, including with respect to the legitimacy of the
applicable Mortgagor and the origin of the assets used by the said Mortgagor to
purchase the property in question, and maintains, and will maintain, sufficient
information to identify the applicable Mortgagor for purposes of the Anti-Money
Laundering Laws; no Mortgage Loan is subject to nullification pursuant to
Executive Order 13224 (the "Executive Order") or the regulations
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promulgated by the Office of Foreign Assets Control of the United States
Department of the Treasury (the "OFAC Regulations") or in violation of the
Executive Order or the OFAC Regulations, and no Mortgagor is subject to the
provisions of such Executive Order or the OFAC Regulations nor listed as a
"blocked person" for purposes of the OFAC Regulations;
(ggg) Higher Cost Loans. No Mortgagor was encouraged or required to
select a Mortgage Loan product offered by the Company which is a higher cost
product designed for less creditworthy borrowers, unless at the time of the
related Mortgage Loan's origination, such Mortgagor did not qualify taking into
account credit history and debt to income ratios for a lower cost credit product
then offered by the Company or any affiliate of the Company. If, at the time of
the related loan application, the Mortgagor may have qualified for a lower cost
credit product then offered by any mortgage lending affiliate of the Company,
the Company referred the Mortgagor's application to such affiliate for
underwriting consideration;
(hhh) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the Mortgagor's income, assets and liabilities to the
proposed payment and such underwriting methodology does not rely on the extent
of the Mortgagor's equity in the collateral as the principal determining factor
in approving such credit extension. Such underwriting methodology confirmed that
at the time of origination (application/approval) the Mortgagor had a reasonable
ability to make timely payments on the Mortgage Loan;
(iii) Finance Charges. All points, fees and charges, including finance
charges (whether or not financed, assessed, collected or to be collected), in
connection with the origination and servicing of each Mortgage Loan were
disclosed in writing to the related Mortgagor in accordance with applicable
state and federal law and regulation. Except in the case of a Mortgage Loan in
an original principal amount of less than $60,000 which would have resulted in
an unprofitable origination, no related Mortgagor was charged "points and fees"
(whether or not financed) in an amount greater than 5% of the principal amount
of such loan, such 5% limitation is calculated in accordance with FNMA's
anti-predatory lending requirements as set forth in the FNMA Selling Guide;
(jjj) No Arbitration. No Mortgagor agreed to submit to arbitration to
resolve any dispute arising out of or relating in any way to the Mortgage Loan
transaction;
(kkk) Simple Interest Mortgage Loans. None of the Mortgage Loans are
simple interest Mortgage Loans;
(lll) Full-File Credit Reporting Data The Seller will transmit
full-file credit reporting data for each Mortgage Loan pursuant to ▇▇▇▇▇▇ ▇▇▇
Guide Announcement 95-19 and for each Mortgage Loan, Company agrees it shall
report one of the following statuses each month as follows: new origination,
current, delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off;
(mmm)Illinois Interest Act: No Mortgage Loan secured by a Mortgage
Property located in the State of Illinois is in violation of the provisions of
the Illinois Interest Act, including Section 4.1a which provides that no such
Mortgage Loan with a Mortgage Interest Rate
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in excess of 8.0% per annum has lender-imposed fees (or other charges) in excess
of 3.0% of the original principal balance of the Mortgage Loan; and
(nnn) Georgia. No Mortgage Loan originated or modified on or after
October 1, 2002 and prior to March 7, 2003 is secured by a Mortgaged Property
located in the State of Georgia.
Section 3.03 Remedies for Breach of Representations and Warranties.
It is understood and agreed that the representations and warranties
set forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans
to the Purchaser and the delivery of the Mortgage Loan Documents to the
Custodian and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination or failure to examine any Mortgage File. Upon
discovery by either the Company or the Purchaser of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the value of the Mortgage Loans or the interest of the Purchaser, or which
materially and adversely affects the interests of Purchaser in the related
Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan (in the case of any of the foregoing, a "Breach"), the
party discovering such Breach shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to the
Company of any Breach of a representation or warranty, the Company shall use its
best efforts promptly to cure such Breach in all material respects and, if such
Breach cannot be cured, the Company shall, at the Purchaser's option, repurchase
such Mortgage Loan at the Repurchase Price. Notwithstanding the above sentence,
within 60 days of the earlier of either discovery by, or notice to, the Seller
of any breach of the representations or warranties set forth in clauses (qq),
(rr), (uu), (zz), (ggg) and (jjj) of Section 3.02, the Seller shall repurchase
such Mortgage Loan at the Repurchase Price, together with all expenses incurred
by the Purchaser as a result of such repurchase. In the event that a Breach
shall involve any representation or warranty set forth in Section 3.01, and such
Breach cannot be cured within 60 days of the earlier of either discovery by or
notice to the Company of such Breach, all of the Mortgage Loans shall be
repurchased by the Company at the Repurchase Price unless the Purchaser
instructs the Company within 30 days of the expiration of the applicable cure
period not to repurchase the Mortgage Loans; provided, that if such Breach may
be cured by the repurchase of one or more individual Mortgage Loans, the Company
may repurchase only those Mortgage Loans necessary to cure the Breach. However,
if the Breach shall involve a representation or warranty set forth in Section
3.02 and the Company discovers or receives notice of any such Breach within 120
days of the related Closing Date, the Company shall, at the Purchaser's option
and provided that the Company has a Qualified Substitute Mortgage Loan, rather
than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan
(a "Deleted Mortgage Loan") and substitute in its place a Qualified Substitute
Mortgage Loan or Loans, provided that any such substitution shall be effected
not later than 120 days after the related Closing Date. If the Company has no
Qualified Substitute Mortgage Loan, it shall repurchase the deficient Mortgage
Loan. Any repurchase of a Mortgage Loan or Loans pursuant to the foregoing
provisions of this Section 3.03 shall occur on a date designated by the Company
and shall be accomplished by deposit in the Custodial Account of the amount of
the Repurchase Price for distribution to Purchaser on the next
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scheduled Remittance Date, after deducting therefrom any amount received in
respect of such repurchased Mortgage Loan or Loans and being held in the
Custodial Account for future distribution; provided however, that any such
repurchase by the Company shall take place no later that five (5) Business Days
following the expiration of the applicable cure period.
If pursuant to the foregoing provisions the Company repurchases a
Mortgage Loan that is a MERS Mortgage Loan, the Company shall either (i) cause
MERS to execute and deliver an assignment of the Mortgage in recordable form to
transfer the Mortgage from MERS to the Company and shall cause such Mortgage to
be removed from registration on the MERS System in accordance with MERS' rules
and regulations or (ii) cause MERS to designate on the MERS System the Company
as the beneficial holder of such Mortgage Loan.
At the time of repurchase or substitution, the Purchaser and the
Company shall arrange for the reassignment of the Deleted Mortgage Loan to the
Company and the delivery to the Company of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Company shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the related Mortgage Loan Schedule to reflect the withdrawal of the
Deleted Mortgage Loan from this Agreement, and, in the case of substitution,
identify a Qualified Substitute Mortgage Loan and amend the related Mortgage
Loan Schedule to reflect the addition of such Qualified Substitute Mortgage Loan
to this Agreement. In connection with any such substitution, the Company shall
be deemed to have made as to such Qualified Substitute Mortgage Loan the
representations and warranties set forth in this Agreement except that all such
representations and warranties set forth in this Agreement shall be deemed made
as of the date of such substitution. The Company shall effect such substitution
by delivering to the Custodian for such Qualified Substitute Mortgage Loan the
documents required by Section 2.03, with the Mortgage Note endorsed as required
by Section 2.03. No substitution will be made in any calendar month after the
Determination Date for such month. The Company shall deposit in the Custodial
Account the Monthly Payment less the Servicing Fee due on such Qualified
Substitute Mortgage Loan or Loans in the month following the date of such
substitution. Monthly Payments due with respect to Qualified Substitute Mortgage
Loans in the month of substitution shall be retained by the Company. For the
month of substitution, distributions to Purchaser shall include the Monthly
Payment due on any Deleted Mortgage Loan in the month of substitution, and the
Company shall thereafter be entitled to retain all amounts subsequently received
by the Company in respect of such Deleted Mortgage Loan.
For any month in which the Company substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Company shall determine the
amount (if any) by which the aggregate principal balance of all Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
An amount equal to the product of such shortfall multiplied by the percentage of
par set forth in the definition of "Repurchase Price" shall be distributed by
the Company in the month of substitution pursuant to Section 5.01. Accordingly,
on the date of such substitution, the Company shall deposit from its own funds
into the Custodial Account an amount equal to such amount.
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In addition to such cure, repurchase and substitution obligation, the
Company shall indemnify the Purchaser and hold it harmless against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and other costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or resulting from, a
breach of the Company's representations and warranties contained in this Section
3. It is understood and agreed that the obligations of the Company set forth in
this Subsection 3.03 to cure or repurchase a defective Loan and to indemnify the
Purchaser as provided in this Subsection 3.03 constitute the sole remedies of
the Purchaser respecting a breach of the foregoing representations and
warranties.
Any cause of action against the Company relating to or arising out of
the Breach of any representations and warranties made in Sections 3.01 and 3.02
shall accrue as to any Mortgage Loan upon (i) discovery of such Breach by the
Purchaser or notice thereof by the Company to the Purchaser, (ii) failures by
the Company to cure such Breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Company by the Purchaser for compliance with
this Agreement.
Section 3.04 Repurchase of Certain Mortgage Loans; Premium Recapture.
In the event that any Mortgage Loan prepays-in-full within the period
of time from the related Closing Date set forth in the related Trade
Confirmation (the "Premium Recapture Period"), the Company shall, upon demand by
the Purchaser made no later than 180 days after the expiration of the related
Premium Recapture Period, remit to the Purchaser the Premium with respect to
such prepaid Mortgage Loan net of the amount of any Prepayment Charges paid with
respect to such Mortgage Loan. With respect to any Mortgage Loan, if the related
Mortgagor fails to make the first or second scheduled Monthly Payment due to the
Purchaser on such Mortgage Loan within the calendar month such payment is due,
the Company shall, upon demand by the Purchaser made no later than 180 days
after the end of the calendar month in which such payment is due, repurchase
such Mortgage Loan at the related Purchase Price; provided that no right to cure
set forth therein shall apply.
Section 3.05 Review of Mortgage Loans.
From the related Closing Date until the date 30 days after the related
Closing Date, the Purchaser shall have the right to review the Mortgage Files
and obtain BPOs on the Mortgaged Properties relating to the Mortgage Loans
purchased on the related Closing Date, with the results of such BPO reviews to
be communicated to the Company for a period up to 30 days after the related
Closing Date. In addition, the Purchaser shall have the right to reject any
Mortgage Loan which in the Purchaser's sole determination (i) fails to conform
to Underwriting Guidelines, (ii) is underwritten without verification of the
Mortgagor's income and assets and there is no credit report or FICO Score, (iii)
the Purchaser deems the Mortgage Loan to not be an acceptable credit risk, or
(iv) the value of the Mortgaged Property pursuant to any BPO varies by more than
15% from the Appraised Value. In the event that the Purchaser so rejects any
Mortgage Loan, the Company shall repurchase the rejected Mortgage Loan at the
Repurchase Price in the manner prescribed in Section 3.03 upon receipt of notice
from the Purchaser of the rejection of such Mortgage Loan. Any rejected Mortgage
Loan shall be removed from the terms of this Agreement. The Company shall make
available all files required by the Purchaser in order
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to complete its review, including all CRA/HMDA required data fields. To the
extent that during the course of the Purchaser's initial review, the Purchaser
discovers that the Mortgage Loans do not otherwise meet the Company's
Underwriting Guidelines or the terms of the related Trade Confirmation, the
Purchaser shall have the right to carry out additional due diligence reviews,
which additional due diligence shall be at the expense of the Company. The
Purchaser's decision to increase its due diligence review or obtain additional
BPO's or other property evaluations is at its sole discretion. The additional
review may be for any reason including but not limited to credit quality,
property valuations, and data integrity. Any review performed by the Purchaser
prior to the Closing Date does not limit the Purchaser's rights or the Company's
obligations under this section.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer.
The Company, as an independent contractor, shall service and
administer the Mortgage Loans and shall have full power and authority, acting
alone, to do any and all things in connection with such servicing and
administration which the Company may deem necessary or desirable, consistent
with the terms of this Agreement and with Accepted Servicing Practices.
Consistent with the terms of this Agreement, the Company may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Company's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser, provided, however, that the Company shall not make any future
advances with respect to a Mortgage Loan and (unless the Mortgagor is in default
with respect to the Mortgage Loan or such default is, in the judgment of the
Company, imminent and the Company has obtained the prior written consent of the
Purchaser) the Company shall not permit any modification of any material term of
any Mortgage Loan including any modifications that would change the Mortgage
Interest Rate, defer or forgive the payment of principal or interest, reduce or
increase the outstanding principal balance (except for actual payments of
principal) or change the final maturity date on such Mortgage Loan. In the event
of any such modification which permits the deferral of interest or principal
payments on any Mortgage Loan, the Company shall, on the Business Day
immediately preceding the Remittance Date in any month in which any such
principal or interest payment has been deferred, deposit in the Custodial
Account from its own funds, in accordance with Section 5.03, the difference
between (a) such month's principal and one month's interest at the Mortgage Loan
Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b)
the amount paid by the Mortgagor. The Company shall be entitled to reimbursement
for such advances to the same extent as for all other advances made pursuant to
Section 5.03. Without limiting the generality of the foregoing, the Company
shall continue, and is hereby authorized and empowered, to execute and deliver
on behalf of itself and the Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. If reasonably required by the Company, the Purchaser shall
furnish the Company with any powers of attorney and other documents necessary
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or appropriate to enable the Company to carry out its servicing and
administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Company shall
employ procedures (including collection procedures) and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans (similar in quality to the Mortgage Loans) for its own account,
giving due consideration to Accepted Servicing Practices where such practices do
not conflict with the requirements of this Agreement, and the Purchaser's
reliance on the Company.
Notwithstanding anything in this Agreement to the contrary, in the
event of a Principal Prepayment in full or in part of a Mortgage Loan, the
Company may not waive any Prepayment Charge or portion thereof required by the
terms of the related Mortgage Note, unless required to do so pursuant to any law
or regulation in effect at the time of the prepayment. The Company shall collect
any Prepayment Charge required to be paid by the Mortgagor under the terms of
any Mortgage Note for the account of the Purchaser. The Company shall remit the
amount of such Prepayment Charge to the Purchaser on the Remittance Date
immediately following the date of collection of such Prepayment Charge. If the
Company waives or does not collect all or a portion of a Prepayment Charge
relating to a Principal Prepayment in full or in part due to any action or
omission of the Company, the Company shall deposit the amount of such Prepayment
Charge (or such portion thereof as had been waived for deposit) into the
Custodial Account for distribution in accordance with the terms of this
Agreement.
The Mortgage Loans may be subserviced by the Subservicer on behalf of
the Company provided that the Subservicer is a ▇▇▇▇▇▇ ▇▇▇-approved servicer or a
▇▇▇▇▇▇▇ Mac seller/servicer in good standing, and no event has occurred,
including but not limited to a change in insurance coverage, which would make it
unable to comply with the eligibility requirements for lenders imposed by ▇▇▇▇▇▇
▇▇▇ or for seller/servicers imposed by ▇▇▇▇▇▇▇ Mac, or which would require
notification to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac. The Company may perform any of its
servicing responsibilities hereunder or may cause the Subservicer to perform any
such servicing responsibilities on its behalf, but the use by the Company of the
Subservicer shall not release the Company from any of its obligations hereunder
and the Company shall remain responsible hereunder for all acts and omissions of
the Subservicer as fully as if such acts and omissions were those of the
Company. The Company shall pay all fees and expenses of the Subservicer from its
own funds, and the Subservicer's fee shall not exceed the Servicing Fee.
At the cost and expense of the Company, without any right of
reimbursement from the Custodial Account, the Company shall be entitled to
terminate the rights and responsibilities of the Subservicer and arrange for any
servicing responsibilities to be performed by a successor Subservicer meeting
the requirements in the preceding paragraph, provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Company, at the
Company's option, from electing to service the related Mortgage Loans itself. In
the event that the Company's responsibilities and duties under this Agreement
are terminated pursuant to Section 9.04, 10.01 or 11.02, and if requested to do
so by the Purchaser, the Company shall at its own cost and expense terminate the
rights and responsibilities of the Subservicer as soon as is reasonably
possible. The Company shall pay all fees, expenses or penalties necessary in
order to
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terminate the rights and responsibilities of the Subservicer from the Company's
own funds without reimbursement from the Purchaser.
Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between the Company and the Subservicer or any
reference herein to actions taken through the Subservicer or otherwise, the
Company shall not be relieved of its obligations to the Purchaser and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the Mortgage Loans. The Company shall be
entitled to enter into an agreement with the Subservicer for indemnification of
the Company by the Subservicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
Any Subservicing Agreement and any other transactions or services
relating to the Mortgage Loans involving the Subservicer shall be deemed to be
between the Subservicer and Company alone, and the Purchaser shall have no
obligations, duties or liabilities with respect to the Subservicer including no
obligation, duty or liability of Purchaser to pay the Subservicer's fees and
expenses. For purposes of distributions and advances by the Company pursuant to
this Agreement, the Company shall be deemed to have received a payment on a
Mortgage Loan when the Subservicer has received such payment.
Section 4.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 4.01 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Company shall take such action as (1) the Company
would take under similar circumstances with respect to a similar mortgage loan
held for its own account for investment, (2) shall be consistent with Accepted
Servicing Practices, (3) the Company shall determine prudently to be in the best
interest of Purchaser, and (4) is consistent with any related PMI Policy. In the
event that any payment due under any Mortgage Loan is not postponed pursuant to
Section 4.01 and remains delinquent for a period of 90 days or any other default
continues for a period of 90 days beyond the expiration of any grace or cure
period, the Company shall commence foreclosure proceedings, provided that, prior
to commencing foreclosure proceedings, the Company shall notify the Purchaser in
writing of the Company's intention to do so, and the Company shall not commence
foreclosure proceedings if the Purchaser objects to such action within 10
Business Days of receiving such notice. In the event the Purchaser objects to
such foreclosure action, the Company shall not be required to make Monthly
Advances with respect to such Mortgage Loan, pursuant to Section 5.03.
The Company shall notify the Purchaser in writing of the commencement
of foreclosure proceedings. In such connection, the Company shall from its own
funds make all necessary and proper Servicing Advances, provided, however, that
the Company shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration or preservation of any Mortgaged
Property, unless it shall determine (a) that such preservation, restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan to the Purchaser after reimbursement to itself for such expenses and (b)
that such expenses will be recoverable by it either through Liquidation Proceeds
(respecting which it shall have priority for
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purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or
through Insurance Proceeds (respecting which it shall have similar priority).
The Company shall use its best efforts to realize upon defaulted Mortgage Loans
in such a manner as will maximize the receipt of principal and interest by the
Purchaser, taking into account, among other things, the timing of foreclosure
proceedings.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Company has reasonable cause to believe that a Mortgaged Property
is contaminated by hazardous or toxic substances or wastes, or upon the request
of the Purchaser, the Company shall arrange for the preparation of an
environmental inspection report with respect to such Mortgaged Property by a
qualified inspector who regularly conducts environmental audits using customary
industry standards. Upon completion of the inspection, the Company shall
promptly provide the Purchaser with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Purchaser
shall determine how the Company shall proceed with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Purchaser directs the Company to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Company shall be reimbursed for
all reasonable costs associated with such foreclosure or acceptance of a deed in
lieu of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Company, the Company shall be entitled to be
reimbursed from amounts in the Custodial Account pursuant to Section 4.05
hereof. In the event the Purchaser directs the Company not to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the Company shall be
reimbursed for all Servicing Advances made with respect to the related Mortgaged
Property from the Custodial Account pursuant to Section 4.05 hereof.
Section 4.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on
all Mortgage Loans are paid in full, the Company shall proceed diligently to
collect all payments due under each of the Mortgage Loans when the same shall
become due and payable and shall take, to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related PMI
Policy or LPMI Policy, follow such collection procedures as it follows with
respect to mortgage loans comparable to the Mortgage Loans and held for its
account. Further, the Company shall take special care in ascertaining and
estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loan and the Mortgaged Property, to the end
that the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.
Section 4.04 Establishment of and Deposits to Custodial Account.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand
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accounts, titled "IndyMac Bank, F.S.B., as Servicer, in trust for the Purchaser
of Conventional Residential Conventional Residential Fixed Rate and Adjustable
Rate Mortgage Loans". The Custodial Account shall be established with a
Qualified Depository Funds deposited in the Custodial Account may be drawn on by
the Company in accordance with Section 4.05. The creation of any Custodial
Account shall be evidenced by a certification in the form of Exhibit D-1 hereto,
in the case of an account established with the Company, or by a letter agreement
in the form of Exhibit D-2 hereto, in the case of an account held by a
depository other than the Company. A copy of such certification or letter
agreement shall be furnished to the Purchaser and, upon request, to any
subsequent Purchaser.
The Company shall deposit in the Custodial Account on a daily basis,
and retain therein, the following collections received by the Company and
payments made by the Company after the related Cut-off Date, (other than
payments of principal and interest due on or before the related Cut-off Date, or
with respect to each LPMI Loan, the amount of the LPMI Fee):
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate, including all Prepayment
Charges;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 4.10 (other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with Section 4.14),
Section 4.11 and Section 4.15;
(v) all Condemnation Proceeds which are not applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 4.14;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 4.01, 4.09, 5.03, 6.01 or 6.02;
(vii) any amounts payable in connection with the repurchase of
any Mortgage Loan pursuant to Section 3.03 or 3.04 and all amounts required
to be deposited by the Company in connection with a shortfall in principal
amount of any Qualified Substitute Mortgage Loan pursuant to Section 3.03;
(viii) with respect to each Principal Prepayment in full or in
part, the Prepayment Interest Shortfall Amount, to be paid by the Company
out of its own funds without reimbursement therefor, if any, for the month
of distribution. Such deposit shall be made from the Company's own funds,
without reimbursement therefore;
(ix) any amounts required to be deposited by the Company pursuant
to Section 4.11 in connection with the deductible clause in any blanket
hazard insurance policy; and
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(x) any amounts received with respect to or related to any REO
Property and all REO Disposition Proceeds pursuant to Section 4.16.
The foregoing requirements for deposit into the Custodial Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of Ancillary Income,
including late payment charges and assumption fees, to the extent permitted by
Section 6.01, need not be deposited by the Company into the Custodial Account.
Any interest paid on funds deposited in the Custodial Account by the depository
institution shall accrue to the benefit of the Company and the Company shall be
entitled to retain and withdraw such interest from the Custodial Account
pursuant to Section 4.05. Prior to changing the location of the Custodial
Account, the Company shall give notice to the Purchaser of such change, which
notice shall set forth the new location of the Custodial Account when
established.
Section 4.05 Permitted Withdrawals From Custodial Account.
The Company shall, from time to time, withdraw funds from the
Custodial Account for the following purposes:
(i) to make payments to the Purchaser in the amounts and in the
manner provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances of the Company's
funds made pursuant to Section 5.03, the Company's right to reimburse
itself pursuant to this subclause (ii) being limited to amounts received on
the related Mortgage Loan which represent late payments of principal and/or
interest respecting which any such advance was made, it being understood
that, in the case of any such reimbursement, the Company's right thereto
shall be prior to the rights of Purchaser, except that, where the Company
is required to repurchase a Mortgage Loan pursuant to Section 3.03, 3.04 or
6.02, the Company's right to such reimbursement shall be subsequent to the
payment to the Purchaser of the Repurchase Price pursuant to such sections
and all other amounts required to be paid to the Purchaser with respect to
such Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances,
and for any unpaid Servicing Fees, the Company's right to reimburse itself
pursuant to this subclause (iii) with respect to any Mortgage Loan being
limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds and such other amounts as may be collected by the Company from the
Mortgagor or otherwise relating to the Mortgage Loan, it being understood
that, in the case of any such reimbursement, the Company's right thereto
shall be prior to the rights of Purchaser except where the Company is
required to repurchase a Mortgage Loan pursuant to Section 3.03, 3.04 or
6.02, in which case the Company's right to such reimbursement shall be
subsequent to the payment to the Purchaser of the Repurchase Price pursuant
to such sections and all other amounts required to be paid to the Purchaser
with respect to such Mortgage Loan;
(iv) to pay itself interest on funds deposited in the Custodial
Account;
B-47
(v) to reimburse itself for expenses incurred and reimbursable to
it pursuant to Section 9.01;
(vi) to pay any amount required to be paid pursuant to Section
4.16 related to any REO Property, it being understood that in the case of
any such expenditure or withdrawal related to a particular REO Property,
the amount of such expenditure or withdrawal from the Custodial Account
shall be limited to amounts on deposit in the Custodial Account with
respect to the related REO Property;
(vii) to clear and terminate the Custodial Account upon the
termination of this Agreement; and
(viii) to withdraw funds deposited in error.
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Company shall withdraw all funds from the Custodial Account
except for those amounts which, pursuant to Section 5.01, the Company is not
obligated to remit on such Remittance Date. The Company may use such withdrawn
funds only for the purposes described in this Section 4.05.
The Company 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 paragraphs (ii) through (viii) above.
Section 4.06 Establishment of and Deposits to Escrow Account.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts, in the form of time deposit or demand accounts, titled,
"IndyMac Bank, F.S.B., as Servicer, in trust for the Purchaser of Conventional
Residential Fixed Rate and Adjustable Rate Mortgage Loans and various
Mortgagors". The Escrow Accounts shall be established with a Qualified
Depository, in a manner which shall provide maximum available insurance
thereunder. Funds deposited in the Escrow Account may be drawn on by the Company
in accordance with Section 4.07. The creation of any Escrow Account shall be
evidenced by a certification in the form of Exhibit E-1 hereto, in the case of
an account established with the Company, or by a letter agreement in the form of
Exhibit E-2 hereto, in the case of an account held by a depository other than
the Company. A copy of such certification shall be furnished to the Purchaser
and, upon request, to any subsequent Purchaser.
The Company shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement; and
B-48
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property.
The Company shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 4.07. The Company shall be entitled to retain any interest paid on funds
deposited in the Escrow Account by the depository institution, other than
interest on escrowed funds required by law to be paid to the Mortgagor. To the
extent required by law, the Company shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Company only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, mortgage insurance premiums, condominium charges,
fire and hazard insurance premiums or other items constituting Escrow
Payments for the related Mortgage;
(ii) to reimburse the Company for any Servicing Advances made by
the Company pursuant to Section 4.08 with respect to a related Mortgage
Loan, but only from amounts received on the related Mortgage Loan which
represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess
of the amounts required under the terms of the related Mortgage Loan;
(iv) for transfer to the Custodial Account and application to
reduce the principal balance of the Mortgage Loan in accordance with the
terms of the related Mortgage and Mortgage Note;
(v) for application to restoration or repair of the Mortgaged
Property in accordance with the procedures outlined in Section 4.14;
(vi) to pay to the Company, or any Mortgagor to the extent
required by law, any interest paid on the funds deposited in the Escrow
Account;
(vii) to clear and terminate the Escrow Account on the
termination of this Agreement; and
(viii) to withdraw funds deposited in error.
Section 4.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Company shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates, sewer rents, and
B-49
other charges which are or may become a lien upon the Mortgaged Property and the
status of PMI Policy premiums and fire and hazard insurance coverage and shall
obtain, from time to time, all bills for the payment of such charges (including
renewal premiums) and shall effect payment thereof prior to the applicable
penalty or termination date, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and accumulated
by the Company in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage. To the extent that a Mortgage does not provide for Escrow
Payments, the Company shall determine that any such payments are made by the
Mortgagor at the time they first become due. The Company assumes full
responsibility for the timely payment of all such bills and shall effect timely
payment of all such charges irrespective of each Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments, and the
Company shall make advances from its own funds to effect such payments.
Section 4.09 Protection of Accounts.
The Company may transfer the Custodial Account or the Escrow Account
to a different Qualified Depository from time to time. Such transfer shall be
made only upon obtaining the consent of the Purchaser, which consent shall not
be withheld unreasonably.
The Company shall bear any expenses, losses or damages sustained by
the Purchaser because the Custodial Account and/or the Escrow Account are not
demand deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow Account may
at the option of the Company be invested in Eligible Investments. Any such
Eligible Investment shall mature no later than the Determination Date next
following the date of such Eligible Investment, provided, however, that if such
Eligible Investment is an obligation of a Qualified Depository (other than the
Company) that maintains the Custodial Account or the Escrow Account, then such
Eligible Investment may mature on such Remittance Date. Any such Eligible
Investment shall be made in the name of the Company in trust for the benefit of
the Purchaser. All income on or gain realized from any such Eligible Investment
shall be for the benefit of the Company and may be withdrawn at any time by the
Company. Any losses incurred in respect of any such investment shall be
deposited in the Custodial Account or the Escrow Account, by the Company out of
its own funds immediately as realized.
Section 4.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by a
generally acceptable insurer rated A:VI or better in the current Best's Key
Rating Guide ("Best's") against loss by fire, hazards of extended coverage and
such other hazards as are customary in the area where the Mortgaged Property is
located, in an amount which is at least equal to the lesser of (i) the
replacement value of the improvements securing such Mortgage Loan and (ii) the
greater of (a) the outstanding principal balance of the Mortgage Loan and (b) an
amount such that the proceeds thereof shall be sufficient to prevent the
Mortgagor or the loss payee from becoming a co-insurer.
B-50
If the related Mortgaged Property is located in an area identified in
the Federal Register by the Flood Emergency Management Agency as having special
flood hazards (and such flood insurance has been made available) a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect with a generally acceptable
insurance carrier in an amount representing coverage not less than the lesser of
(i) the minimum amount required, under the terms of coverage, to compensate for
any damage or loss on a replacement cost basis (or the unpaid balance of the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under the
National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, as amended. If at any time during the term of the Mortgage Loan, the
Company determines in accordance with applicable law and pursuant to the ▇▇▇▇▇▇
▇▇▇ Guides that a Mortgaged Property is located in a special flood hazard area
and is not covered by flood insurance or is covered in an amount less than the
amount required by the Flood Disaster Protection Act of 1973, as amended, the
Company shall notify the related Mortgagor that the Mortgagor must obtain such
flood insurance coverage, and if said Mortgagor fails to obtain the required
flood insurance coverage within forty-five (45) days after such notification,
the Company shall immediately force place the required flood insurance on the
Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project, the
Company shall verify that the coverage required of the owner's association,
including hazard, flood, liability, and fidelity coverage, is being maintained
in accordance with then current ▇▇▇▇▇▇ Mae requirements, and secure from the
owner's association its agreement to notify the Company promptly of any change
in the insurance coverage or of any condemnation or casualty loss that may have
a material effect on the value of the Mortgaged Property as security.
The Company shall have no obligation to be maintain on each Mortgaged
Property earthquake or other or additional insurance unless it is required
pursuant to applicable laws and regulations as shall at any time be in force and
as shall require such additional insurance, or pursuant to the requirements of
any private mortgage guaranty insurer, or as may be required to conform with
Accepted Servicing Practices.
In the event that any Purchaser or the Company shall determine that
the Mortgaged Property should be insured against loss or damage by hazards and
risks not covered by the insurance required to be maintained by the Mortgagor
pursuant to the terms of the Mortgage, the Company shall communicate and consult
with the Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the desirability of protection of the Mortgaged Property.
All policies required hereunder shall name the Company as loss payee
and shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least 30 days prior written notice of
any cancellation, reduction in amount or material change in coverage.
The Company shall not interfere with the Mortgagor's freedom of choice
in selecting either his insurance carrier or agent, provided, however, that the
Company shall not accept any such insurance policies from insurance companies
unless such companies are rated A:VI or better in Best's and are licensed to do
business in the jurisdiction in which the
B-51
Mortgaged Property is located. The Company shall determine that such policies
provide sufficient risk coverage and amounts, that they insure the property
owner, and that they properly describe the property address. The Company shall
furnish to the Mortgagor a formal notice of expiration of any such insurance in
sufficient time for the Mortgagor to arrange for renewal coverage by the
expiration date.
Pursuant to Section 4.04, any amounts collected by the Company under
any such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Company's normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05.
Section 4.11 Maintenance of Mortgage Impairment Insurance.
In the event that the Company shall obtain and maintain a blanket
policy insuring against losses arising from fire and hazards covered under
extended coverage on all of the Mortgage Loans, then, to the extent such policy
provides coverage in an amount equal to the amount required pursuant to Section
4.10 and otherwise complies with all other requirements of Section 4.10, it
shall conclusively be deemed to have satisfied its obligations as set forth in
Section 4.10. Any such policy shall be issued by an issuer that has a Best
rating of A:VI or better. Any amounts collected by the Company under any such
policy relating to a Mortgage Loan shall be deposited in the Custodial Account
subject to withdrawal pursuant to Section 4.05. Such policy may contain a
deductible clause, in which case, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with Section
4.10, and there shall have been a loss which would have been covered by such
policy, the Company shall deposit in the Custodial Account at the time of such
loss the amount not otherwise payable under the blanket policy because of such
deductible clause, such amount to deposited from the Company's funds, without
reimbursement therefor. Upon request of any Purchaser, the Company shall cause
to be delivered to such Purchaser a certified true copy of such policy and a
statement from the insurer thereunder that such policy shall in no event be
terminated or materially modified without 30 days' prior written notice to such
Purchaser.
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
The Company shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy
that meets the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, with broad coverage on
all officers, employees or other persons acting in any capacity requiring such
persons to handle funds, money, documents or papers relating to the Mortgage
Loans ("Company Employees"). Any such Fidelity Bond and Errors and Omissions
Insurance Policy shall be in the form of the Mortgage Banker's Blanket Bond and
shall protect and insure the Company against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such Company
Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy also
shall protect and insure the Company against losses in connection with the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the
B-52
Company from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. Upon the request of any Purchaser, the Company shall
cause to be delivered to such Purchaser a certificate of insurance with respect
to such fidelity bond or insurance policy.
Section 4.13 Inspections.
The Company shall inspect the Mortgaged Property as often as deemed
necessary by the Company to assure itself that the value of the Mortgaged
Property is being preserved. In addition, if any Mortgage Loan is more than 60
days delinquent, the Company immediately shall inspect the Mortgaged Property
and shall conduct subsequent inspections in accordance with Accepted Servicing
Practices or as may be required by the primary mortgage guaranty insurer. The
Company shall keep a written report of each such inspection.
Section 4.14 Restoration of Mortgaged Property.
The Company need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Accepted Servicing Practices. At a minimum, the Company
shall comply with the following conditions in connection with any such release
of Insurance Proceeds or Condemnation Proceeds:
(i) the Company shall receive satisfactory independent
verification of completion of repairs and issuance of any required
approvals with respect thereto;
(ii) the Company shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens;
(iii) the Company shall verify that the Mortgage Loan is not in
default; and
(iv) pending repairs or restoration, the Company shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the Company is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Purchaser.
Section 4.15 Maintenance of PMI and LPMI Policy; Claims.
(a) With respect to each Mortgage Loan with a LTV in excess of 80% (or
such other percentage as stated in the related Trade Confirmation), the Company
shall:
(i) with respect to Mortgage Loans which are not LPMI Loans, in
accordance with state and federal laws and without any cost to the Purchaser,
maintain or cause the Mortgagor to maintain in full force and effect a PMI
Policy insuring the portion of the Mortgage Loan required by ▇▇▇▇▇▇ Mae, and
shall pay or shall cause the Mortgagor to pay the premium
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thereon on a timely basis, until the LTV of such Mortgage Loan is reduced to (A)
80% (or such other amount as stated in the related Trade Confirmation) or (B)
that amount for which ▇▇▇▇▇▇ ▇▇▇ no longer requires such insurance to be
maintained. In the event that such PMI Policy shall be terminated, the Company
shall obtain from another Qualified Insurer a comparable replacement policy,
with a total coverage equal to the remaining coverage of such terminated PMI
Policy, at substantially the same fee level. If the insurer shall cease to be a
Qualified Insurer, the Company shall determine whether recoveries under the PMI
Policy are jeopardized for reasons related to the financial condition of such
insurer, it being understood that the Company shall in no event have any
responsibility or liability for any failure to recover under the PMI Policy for
such reason. If the Company determines that recoveries are so jeopardized, it
shall notify the Purchaser and the Mortgagor, if required, and obtain from
another Qualified Insurer a replacement insurance policy. The Company will not
cancel or refuse to renew any PMI Policy in effect on the related Closing Date
that is required to be kept in force under this Agreement unless a replacement
PMI Policy or LPMI Policy for such cancelled or non-renewed policy is obtained
from and maintained with a Qualified Insurer. The Company shall not take any
action which would result in noncoverage under any applicable PMI Policy of any
loss which, but for the actions of the Company would have been covered
thereunder. In connection with any assumption or substitution agreement entered
into or to be entered into pursuant to Section 6.01, the Company shall promptly
notify the insurer under the related PMI Policy, if any, of such assumption or
substitution of liability in accordance with the terms of such PMI Policy and
shall take all actions which may be required by such insurer as a condition to
the continuation of coverage under such PMI Policy. If such PMI Policy is
terminated as a result of such assumption or substitution of liability, the
Company shall obtain a replacement PMI Policy as provided above.
(ii) with respect to LPMI Loans, maintain in full force and effect an
LPMI Policy insuring that portion of the Mortgage Loan covered by the original
LPMI Policy, and from time to time, withdraw the LPMI Fee with respect to such
LPMI Loan from the Custodial Account in order to pay the premium thereon on a
timely basis. In the event that the interest payments made with respect to any
LPMI Loan are less than the LPMI Fee, the Company shall advance from its own
funds the amount of any such shortfall in the LPMI Fee, in payment of the
premium on the related LPMI Policy. Any such advance shall be a Servicing
Advance subject to reimbursement pursuant to the provisions on Section 4.05. In
the event that such LPMI Policy shall be terminated, the Company shall obtain
from another Qualified Insurer a comparable replacement policy, with a total
coverage equal to the remaining coverage of such terminated LPMI Policy, at
substantially the same fee level. If the insurer shall cease to be a Qualified
Insurer, the Company shall determine whether recoveries under the LPMI Policy
are jeopardized for reasons related to the financial condition of such insurer,
it being understood that the Company shall in no event have any responsibility
or liability for any failure to recover under the LPMI Policy for such reason.
If the Company determines that recoveries are so jeopardized, it shall notify
the Purchaser and the Mortgagor, if required, and obtain from another Qualified
Insurer a replacement insurance policy. The Company will not cancel or refuse to
renew any LPMI Policy in effect on the related Closing Date that is required to
be kept in force under this Agreement unless a replacement PMI Policy or LPMI
Policy for such cancelled or non-renewed policy is obtained from and maintained
with a Qualified Insurer. The Company shall not take any action which would
result in noncoverage under any applicable LPMI Policy of any loss which, but
for the actions of the Company would have been covered thereunder. In connection
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with any assumption or substitution agreement entered into or to be entered into
pursuant to Section 6.01, the Company shall promptly notify the insurer under
the related LPMI Policy, if any, of such assumption or substitution of liability
in accordance with the terms of such LPMI Policy and shall take all actions
which may be required by such insurer as a condition to the continuation of
coverage under such PMI Policy. If such LPMI Policy is terminated as a result of
such assumption or substitution of liability, the Company shall obtain a
replacement LPMI Policy as provided above.
(b) In connection with its activities as servicer, the Company agrees
to prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any PMI Policy or LPMI Policy in a timely fashion in accordance
with the terms of such PMI Policy or LPMI Policy and, in this regard, to take
such action as shall be necessary to permit recovery under any PMI Policy or
LPMI Policy respecting a defaulted Mortgage Loan. Pursuant to Section 4.04, any
amounts collected by the Company under any PMI Policy or LPMI Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
(c) Purchaser, in its sole discretion, at any time, may (i) either
obtain an additional PMI Policy on any Mortgage Loan which already has a PMI
Policy in place, or (ii) obtain a PMI Policy for any Mortgage Loan which does
not already have a PMI Policy in place. In any event, the Company agrees to
administer such PMI Policies in accordance with the Agreement or any
Reconstitution Agreement.
Section 4.16 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Company, or in the event the Company is not
authorized or permitted to hold title to real property in the state where the
REO Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an Opinion of Counsel obtained by the Company from any attorney
duly licensed to practice law in the state where the REO Property is located.
The Person or Persons holding such title other than the Purchaser's designee
shall acknowledge in writing that such title is being held as nominee for the
Purchaser's designee.
The Company shall manage, conserve, protect and operate each REO
Property for the Purchaser solely for the purpose of its prompt disposition and
sale. The Company, either itself or through an agent selected by the Company,
shall manage, conserve, protect and operate the REO Property in the same manner
that it manages, conserves, protects and operates other foreclosed property for
its own account, and in the same manner that similar property in the same
locality as the REO Property is managed. The Company shall attempt to sell the
same (and may temporarily rent the same for a period not greater than one year,
except as otherwise provided below) on such terms and conditions as the Company
deems to be in the best interest of the Purchaser.
The Company shall cause each REO Property to be inspected promptly
upon the acquisition of title thereto and shall cause each REO Property to be
inspected at least annually
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thereafter. The Company shall make or cause to be made a written report of each
such Inspection. Such reports shall be retained in the Mortgage File and copies
thereof shall be forwarded by the Company to the Purchaser. The Company shall
use its best efforts to dispose of the REO Property as soon as possible and
shall sell such REO Property in any event within one year after title has been
taken to such REO Property, unless the Company determines, and gives an
appropriate notice to the Purchaser to such effect, that a longer period is
necessary for the orderly liquidation of such REO Property. If a period longer
than one year is permitted under the foregoing sentence and is necessary to sell
any REO Property, the Company shall report monthly to the Purchaser as to the
progress being made in selling such REO Property.
With respect to each REO Property, the Company shall segregate and
hold all funds collected and received in connection with the operation of the
REO Property separate and apart from its own funds or general assets and shall
establish and maintain a separate REO Account for each REO Property in the form
of a non interest bearing demand account. Each REO Account shall be established
with the Company, any subsidiary, affiliate or parent of the Company each of
which must be a Qualified Depository, or, with the prior consent of the
Purchaser, with a commercial bank, a mutual savings bank or a savings
association. The creation of any REO Account shall be evidenced by a letter
agreement substantially in the form of the Custodial Account Letter Agreement
attached as Exhibit D-2 hereto. An original of such letter agreement shall be
furnished to any Purchaser upon request.
The Company shall deposit or cause to be deposited, on a daily basis
in each REO Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property, including the cost of
maintaining any hazard insurance pursuant to Section 4.10 and Section 4.16
hereof and the fees of any managing agent acting on behalf of the Company. The
Company shall not be entitled to retain interest paid or other earnings, if any,
on funds deposited in such REO Account. On or before each Determination Date,
the Company shall withdraw from each REO Account and deposit into the Custodial
Account the net income from the REO Property on deposit in the REO Account.
The Company shall furnish to the Purchaser on each Remittance Date, an
operating statement for each REO Property covering the operation of each REO
Property for the previous month. Such operating statement shall be accompanied
by such other information as the Purchaser shall reasonably request.
The Company shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the National
Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as
amended, flood insurance in the amount required above.
The disposition of REO Property shall be carried out by the Company at
such price, and upon such terms and conditions, as the Company deems to be in
the best interests of the Purchaser. If as of the date title to any REO Property
was acquired by the Company there were outstanding unreimbursed Servicing
Advances with respect to the REO Property, the Company, upon an REO Disposition
of such REO Property, shall be entitled to reimbursement
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for any related unreimbursed Servicing Advances from proceeds received in
connection with such REO Disposition. The proceeds from the REO Disposition, net
of any payment to the Company as provided above, shall be deposited in the REO
Account and shall be transferred to the Custodial Account on the Determination
Date in the month following receipt thereof for distribution on the succeeding
Remittance Date in accordance with Section 4.05.
The Company shall withdraw the Custodial Account funds necessary for
the proper operation, management and maintenance of the REO Property, including
the cost of maintaining any hazard insurance pursuant to Section 4.10 hereof and
the fees of any managing agent of the Company, a Subservicer, or the Company
itself. The REO management fee shall be an amount that is reasonable and
customary in the area where the Mortgaged Property is located. The Company shall
make monthly distributions on each Remittance Date to the Purchaser of the net
cash flow from the REO Property (which shall equal the revenues from such REO
Property net of the expenses described in the Section 4.16 and of any reserves
reasonably required from time to time to be maintained to satisfy anticipated
liabilities for such expenses).
Notwithstanding the foregoing, at any time and from time to time, the
Purchaser may at its election terminate this Agreement with respect to one or
more REO Properties as provided by Section 11.02.
Section 4.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 5.02, the
Company shall furnish to the Purchaser on or before the Remittance Date each
month a statement with respect to any REO Property covering the operation of
such REO Property for the previous month and the Company's efforts in connection
with the sale of such REO Property and any rental of such REO Property
incidental to the sale thereof for the previous month. That statement shall be
accompanied by such other information as the Purchaser shall reasonably request.
Section 4.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Company pursuant to a deed in lieu of foreclosure, the Company
shall submit to the Purchaser a liquidation report with respect to such
Mortgaged Property.
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged
Property.
Following the foreclosure sale or abandonment of any Mortgaged
Property, the Company shall report such foreclosure or abandonment as required
pursuant to Section 6050J of the Code.
Section 4.20 Notification of Adjustments,
On each Adjustment Date, the Company shall make interest rate
adjustments for each Adjustable Rate Mortgage Loan in compliance with the
requirements of the related Mortgage and Mortgage Note. The Company shall
execute and deliver the notices required by each Mortgage and Mortgage Note
regarding interest rate adjustments. The Company also shall provide timely
notification to the Purchaser of all applicable data and information regarding
such
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interest rate adjustments and the Company's methods of implementing such
interest rate adjustments. Upon the discovery by the Company or the Purchaser
that the Company has failed to adjust a Mortgage Interest Rate or a Monthly
Payment pursuant to the terms of the related Mortgage Note and Mortgage, the
Company shall immediately deposit in the Custodial Account from its own funds
the amount of any interest loss caused thereby without reimbursement therefor.
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances.
On each Remittance Date the Company shall remit by wire transfer of
immediately available funds to the Purchaser (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net of
charges against or withdrawals from the Custodial Account pursuant to Section
4.05), plus (b) all amounts, if any, which the Company is obligated to
distribute pursuant to Section 5.03, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Prepayment Period which
amounts shall be remitted on the following Remittance Date, together with any
additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 4.04(viii),
and minus (d) any amounts attributable to Monthly Payments collected but due on
a Due Date or Dates subsequent to the first day of the month of the Remittance
Date, which amounts shall be remitted on the Remittance Date next succeeding the
Due Period for such amounts.
With respect to any remittance received by the Purchaser after the
Business Day following the Business Day on which such payment was due, the
Company shall pay to the Purchaser interest on any such late payment at an
annual rate equal to the federal funds rate, adjusted as of the date of each
change, plus two percentage points, but in no event greater than the maximum
amount permitted by applicable law. Such interest shall be deposited in the
Custodial Account by the Company on the date such late payment is made and shall
cover the period commencing with the day following such second Business Day and
ending with the Business Day on which such payment is made, both inclusive. Such
interest shall be remitted along with the distribution payable on the next
succeeding Remittance Date. The payment by the Company of any such interest
shall not be deemed an extension of time for payment or a waiver of any Event of
Default by the Company.
Section 5.02 Statements to Purchaser.
Not later than the 10th calendar day of each month (or if such 10t'
day is not a Business Day, the Business Day immediately preceding such 10(1) 0
day), the Company shall furnish to the Purchaser in electronic form monthly
reports in the form of standard Fidelity reports in Microsoft Excel format with
respect to the Mortgage Loans and the period from but including the first day of
the preceding calendar month through but excluding the first day of such month.
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In addition, the Company shall provide each Purchaser with such
information as any Purchaser may reasonably request from time to time concerning
the Mortgage Loans as is necessary for such Purchaser to prepare its federal
income tax return and any and all other tax returns, information statements or
other filings required to be delivered to any governmental taxing authority or
to any Purchaser pursuant to any applicable law with respect to the Mortgage
Loans and the transactions contemplated hereby.
Section 5.03 Monthly Advances by Company.
On each Remittance Date, the Company shall deposit in the Custodial
Account from its own funds or from the Custodial Account, to the extent of funds
held therein for future distribution (in which case it will cause to be made an
appropriate entry in the records of the Custodial Account that amounts held for
future distribution have been, as permitted by this Section 5.03, used by the
Company in discharge of any such Monthly Advances) an amount equal to all
Monthly Payments (with interest adjusted to the Mortgage Loan Remittance Rate)
which were due on the Mortgage Loans during the applicable Due Period and which
were delinquent at the close of business on the immediately preceding
Determination Date or which were deferred pursuant to Section 4.01. Any amounts
held for future distribution and so used shall be appropriately reflected in the
Company's records and replaced by the Company by deposit in the Custodial
Account on or prior to the next Remittance Date. The Company's obligation to
make such Monthly Advances as to any Mortgage Loan will continue through the
last Monthly Payment due prior to the payment in full of the Mortgage Loan, or
through the last Remittance Date prior to the Remittance Date for the
distribution of all Liquidation Proceeds and other payments or recoveries
(including Insurance Proceeds and Condemnation Proceeds) with respect to the
Mortgage Loan.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property.
The Company shall use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Company shall, to the
extent it has knowledge of such conveyance, exercise its rights to accelerate
the maturity of such Mortgage Loan under the "due-on-sale" clause applicable
thereto, provided, however, that the Company shall not exercise such rights if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related PMI Policy or LPMI Policy,
if any.
If the Company reasonably believes it is unable under applicable law
to enforce such "due-on-sale" clause, the Company shall enter into (i) an
assumption and modification agreement with the person to whom such property has
been conveyed, pursuant to which such person becomes liable under the Mortgage
Note and the original Mortgagor remains liable
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thereon or (ii) in the event the Company is unable under applicable law to
require that the original Mortgagor remain liable under the Mortgage Note and
the Company has the prior consent of the primary mortgage guaranty insurer, a
substitution of liability agreement with the purchaser of the Mortgaged Property
pursuant to which the original Mortgagor is released from liability and the
purchaser of the Mortgaged Property is substituted as Mortgagor and becomes
liable under the Mortgage Note. The Company shall notify the Purchaser that any
such substitution of liability or assumption agreement has been completed by
forwarding to the Purchaser the original of any such substitution of liability
or assumption agreement, which document shall be added to the related Mortgage
File and shall, for all purposes, be considered a part of such Mortgage File to
the same extent as all other documents and instruments constituting a part
thereof. If any fee is collected by the Company for entering into an assumption
or substitution of liability agreement, such fee will be retained by the Company
as additional servicing compensation.
In connection with any such assumption, neither the Mortgage Interest
Rate borne by the related Mortgage Note, the term of the Mortgage Loan nor the
outstanding principal amount of the Mortgage Loan shall be changed.
To the extent that any Mortgage Loan is assumable, the Company shall
inquire diligently into the creditworthiness of the proposed transferee, and
shall use the Underwriting Guidelines criteria for approving the credit of the
proposed transferee with respect to underwriting mortgage loans of the same type
as the Mortgage Loan. If the credit of the proposed transferee does not meet
such underwriting criteria, the Company diligently shall, to the extent
permitted by the Mortgage or the Mortgage Note and by applicable law, accelerate
the maturity of the Mortgage Loan.
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Company of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Company shall notify the Purchaser by a
certification of a servicing officer of the Company (a "Servicing Officer"),
which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required to
be deposited in the Custodial Account pursuant to Section 4.04 have been or will
be so deposited, and shall request execution of any document necessary to
satisfy the Mortgage Loan and delivery to it of the portion of the Mortgage File
held by the Purchaser or the Purchaser's designee. No expense incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Custodial Account or the Purchaser. In connection with any
such prepayment in full, the Company shall comply with all applicable laws
regarding satisfaction, release or reconveyance with respect to the Mortgage.
If the Company satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Company otherwise prejudice any rights the Purchaser may have under the
mortgage instruments, upon written demand of the Purchaser, the Company shall
repurchase the related Mortgage Loan at the Repurchase Price by deposit thereof
in the Custodial Account within 2 Business Days of receipt of such demand by the
Purchaser. The Company shall maintain the Fidelity Bond and Errors and
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Omissions Insurance Policy as provided for in Section 4.12 insuring the Company
against any loss it may sustain with respect to any Mortgage Loan not satisfied
in accordance with the procedures set forth herein.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Company shall be
entitled to withdraw from the Custodial Account or to retain from interest
payments on the Mortgage Loans the amount of its Servicing Fee. The Servicing
Fee shall be payable monthly and shall be computed on the basis of the same
unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is computed. The Servicing Fee shall be
payable only at the time of and with respect to those Mortgage Loans for which
payment is in fact made of the entire amount of the Monthly Payment. The
obligation of the Purchaser to pay the Servicing Fee is limited to, and payable
solely from, the interest portion of such Monthly Payments collected by the
Company.
Additional servicing compensation in the form of assumption fees and
Ancillary Income shall be retained by the Company to the extent not required to
be deposited in the Custodial Account. The Company shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement thereof except as specifically
provided for herein.
Section 6.04 Annual Statement as to Compliance.
On or before March 31st of each year beginning March 31, 2007, the
Company shall deliver to the Purchaser an Officer's Certificate of a Servicing
Officer (each, an "Annual Statement of Compliance"), stating that (i) a review
of the activities of the Company during the preceding calendar year and of
performance under this Agreement has been made under such officer's supervision,
and (ii) the Company has complied fully with this Agreement, and (iii) to the
best of such officer's knowledge, based on such review, the Company has
fulfilled all its obligations under this Agreement throughout such year, or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof and
the action being taken by the Company to cure such default. The Company's
delivery to the Purchaser of the reports described in Subsections 7A.04 and
7A.05 shall be deemed to satisfy the requirements of this paragraph.
Section 6.05 Annual Independent Public Accountant's Servicing Report.
On or before March 31st of each year beginning March 31, 2007, the
Company, at its expense, shall cause a firm of independent public accountants
which is a member of the American Institute of Certified Public Accountants to
furnish a statement to each Purchaser (each, an "Annual Independent Public
Accountant's Servicing Report") to the effect that such firm has examined
certain documents and records relating to the servicing of the Mortgage Loans
and this Agreement and that such firm is of the opinion that the provisions of
this Agreement have been complied with, and that, on the basis of such
examination conducted substantially in compliance with the Single Attestation
Program for Mortgage Bankers, nothing has come to their attention which would
indicate that such servicing has not been conducted in compliance
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therewith, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement. The Company's delivery to the Purchaser of the reports described in
Subsections 7A.04 and 7A.05 shall be deemed to satisfy the requirements of this
paragraph.
Section 6.06 Access to Certain Documentation.
The Company shall provide to the Office of Thrift Supervision, the
FDIC and any other federal or state banking or insurance regulatory authority
that may exercise authority over the Purchaser access to the documentation
regarding the Mortgage Loans serviced by the Company required by applicable laws
and regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Company. In addition, access to the documentation will be provided to the
Purchaser and any Person identified to the Company by the Purchaser without
charge, upon reasonable request during normal business hours at the offices of
the Company.
Section 6.07 Reports and Returns to be Filed by the Company.
The Company shall file information reports with respect to the receipt
of mortgage interest received in a trade or business, reports of foreclosures
and abandonments of any Mortgaged Property and information returns relating to
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
Section 6.08 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement
under which the Mortgage Loans and REO Property are held, the Company (i) shall
manage, conserve, protect and operate each REO Property in a manner which does
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code or result in the receipt by such
REMIC of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" within
the meaning of Section 860G(c)(2) of the Code; and (ii) shall not take any
action, cause the REMIC to take any action or fail to take (or fail to cause to
be taken) any action that, under the REMIC Provisions, if taken or not taken, as
the case may be, could (A) endanger the status of the REMIC as a REMIC or (B)
result in the imposition of a tax upon the REMIC (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) unless the Company has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
Section 6.09 Right to Examine Company Records.
The Purchaser shall have the right to examine and audit any and all of
the books, records, or other information of the Company, whether held by the
Company or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during business
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hours or at such other times as may be reasonable under applicable
circumstances, upon reasonable advance notice.
ARTICLE VII
AGENCY TRANSFER; SECURITIZATION TRANSACTION
Section 7.01 Removal of Mortgage Loans from Inclusion Under this Agreement
Upon an Agency Transfer, Whole-Loan Transfer or a Securitization Transaction on
One or More Reconstitution Dates.
The Purchaser and the Company agree that with respect to some or all
of the Mortgage Loans, from time to time, but with respect to the Mortgage Loans
in each Mortgage Loan Package the Purchaser shall:
(1) Effect an Agency Transfer; and/or
(2) Effect a Whole Loan Transfer; and/or
(3) Effect a Securitization Transaction.
in each case retaining the Company as the servicer [or sub-servicer]
thereof, or as applicable the "seller/servicer". On the related Reconstitution
Date, the Mortgage Loans transferred shall cease to be covered by this
Agreement.
The Company shall cooperate with the Purchaser in connection with any
Agency Transfer, Whole Loan Transfer or Securitization Transaction contemplated
by the Purchaser pursuant to this Section 7.01. In that connection, the Company
agrees:
(a) to execute any Reconstitution Agreement which is in form and
substance reasonably satisfactory to the Company and its counsel
within a reasonable period of time after receipt of any
Reconstitution Agreement which time shall be sufficient for the
Company and Company's counsel to review such Reconstitution
Agreement, but such time shall not exceed five (5) Business Days
after such receipt;
(b) to cooperate fully with the Purchaser and any prospective
purchaser with respect to all reasonable requests and due
diligence procedures and with respect to the preparation
(including, but not limited to, the endorsement, delivery,
assignment, and execution) of the Mortgage Loan Documents and
other related documents, and with respect to servicing
requirements reasonably requested by the rating agencies and
credit enhancers;
(c) with respect to any Agency Transfer, Whole Loan Transfer or
Securitization Transaction, to make reasonable, accurate and
appropriate representations and warranties regarding the Company
and, the representations and warranties regarding the Mortgage
Loans as of the date of the Agency Transfer, Whole Loan Transfer
or Securitization
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Transaction, modified to the extent necessary to accurately
reflect the pool statistics of the Mortgage Loans as of the date
of such Agency Transfer, Whole Loan Transfer or Securitization
Transaction and any events or circumstances existing subsequent
to the related Closing Date(s);
(d) to deliver to the Purchaser or any affiliate of the Purchaser
such legal documents and in-house Opinions of Counsel
satisfactory to the Company as are customarily delivered by
originators or servicers, as the case may be, and reasonably
determined by the Purchaser to be necessary in connection with
the Agency Transfer, Whole Loan Transfers or Securitization
Transactions, as the case may be, such in-house Opinions of
Counsel for an Agency Transfer or a Securitization Transaction to
be in the form reasonably acceptable to the Purchaser and the
Company, it being understood that the cost of any opinions of
outside special counsel that may be required for an Agency
Transfer, a Whole Loan Transfer or Securitization Transaction, as
the case may be, shall be the responsibility of the Purchaser;
(e) to negotiate and execute one or more subservicing agreements
between the Company and any master servicer which is a prudent
master servicer in the secondary mortgage market, designated by
the Purchaser in its sole discretion after consultation with the
Company and/or one or more custodial and servicing agreements
among the Purchaser, the Company and a third party
custodian/trustee which is generally considered to be a prudent
custodian/trustee in the secondary mortgage market designated by
the Purchaser in its sole discretion after consultation with the
Company, in either case for the purpose of pooling the Mortgage
Loans with other Mortgage Loans for resale or securitization; and
(f) in connection with any securitization of any Mortgage Loans, to
execute a pooling and servicing agreement in form and substance
reasonably satisfactory to the Company, which pooling and
servicing agreement shall provide indemnification for the benefit
of the Company against liability and damage, not caused by the
Company, in connection with such agreement may, at the
Purchaser's direction, contain contractual provisions including,
but not limited to, a 24-day certificate payment delay (54-day
total payment delay), servicer advances of delinquent scheduled
payments of principal and interest through liquidation (unless
deemed non-recoverable) and prepayment interest shortfalls (to
the extent of the monthly servicing fee payable thereto),
servicing and mortgage loan representations and warranties which
in form and substance conform to the representations and
warranties in this Agreement and to secondary market standards
for securities backed by mortgage loans similar to the Mortgage
Loans and such provisions with regard to servicing
responsibilities, investor reporting, segregation and deposit of
principal and interest payments, custody of the Mortgage Loans,
and other covenants as are required by the Purchaser and one or
more nationally
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recognized rating agencies for "AAA" rated mortgage pass-through
transactions which are "mortgage related securities" for the
purposes of the Secondary Mortgage Market Enhancement Act of
1984, unless otherwise mutually agreed. At the option of the
Purchaser, the facilities of the Depository Trust Company ("DTC")
may be used in connection with any class of security issued
pursuant to any pooling agreement, subject only to the consent of
the DTC. If the Purchaser deems it advisable at any time to pool
the Mortgage Loans with other mortgage loans for the purpose of
resale or securitization, the Company agrees to execute one or
more subservicing agreements between itself (as servicer) and a
master servicer designated by the Purchaser and/or one or more
servicing agreements among the Company (as servicer), the
Purchaser and a trustee designated by the Purchaser, such
agreements in each case incorporating terms and provisions
substantially identical to those described in the immediately
preceding paragraph.
In the event the Purchaser has elected to have the Company hold record
title to the Mortgages, prior to a Reconstitution Date the Company or its
designee shall prepare an Assignment of Mortgage in blank from the Company,
acceptable to ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, the trustee or such third party, as the
case may be, for each Mortgage Loan that is part of an Agency Transfer, Whole
Loan Transfer or Securitization Transaction and shall pay all preparation and
recording costs associated therewith. The Company shall execute each Assignment
of Mortgage, track such Assignments of Mortgage to ensure they have been
recorded and deliver them as required by ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, the trustee or
such third party, as the case may be, upon the Company's receipt thereof.
Additionally, the Company shall prepare and execute, at the direction of the
Purchaser, any note endorsements in connection with any and all Reconstitution
Agreements.
All Mortgage Loans not sold or transferred pursuant to an Agency
Transfer, Whole Loan Transfer or Securitization Transaction and any Mortgage
Loans repurchased by the Purchaser pursuant to Section 7.02 hereof, shall be
subject to this Agreement and shall continue to be serviced in accordance with
the terms of this Agreement and with respect thereto this Agreement shall remain
in full force and effect.
Unless otherwise agreed to between the Company and the Purchaser, with
respect to any Mortgage Loan Package, the Company will not be obligated to enter
into any Reconstitution Agreement in connection with a Securitization
Transaction or Agency Transfer in excess of any express restrictions set forth
in the related Assignment and Conveyance and related Trade Confirmation.
Section 7A.01 Compliance with Regulation AB.
Subsection 7A.01. Intent of the Parties; Reasonableness.
The Purchaser and the Company acknowledge and agree that the purpose
of Section 7A of this Agreement is to facilitate compliance by the Purchaser and
any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission.
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Although Regulation AB is applicable by its terms only to offerings of
asset-backed securities that are registered under the Securities Act of 1933,
the Company acknowledges that investors in privately offered securities may
require that the Purchaser or any Depositor provide comparable disclosure in
unregistered offerings. References in this Agreement to compliance with
Regulation AB include provision of comparable disclosure in private offerings.
Neither the Purchaser nor any Depositor shall exercise its right to request
delivery of information or other performance under these provisions other than
in good faith, or for purposes other than compliance with the Securities Act of
1933, the Exchange Act and, in each case, the rules and regulations of the
Commission thereunder (or the provision in a private offering of disclosure
comparable to that required under the Securities Act of 1933) and the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agrees to comply with requests made by the Purchaser, any Master Servicer or any
Depositor in good faith for delivery of information under these provisions on
the basis of established and evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Company shall cooperate
fully with the Purchaser and any Master Servicer to deliver to the Purchaser
(including any of its assignees or designees), any Master Servicer and any
Depositor, any and all statements, reports, certifications, records and any
other information necessary in the good faith determination of the Purchaser,
the Master Servicer or any Depositor to permit the Purchaser, such Master
Servicer or such Depositor to comply with the provisions of Regulation AB,
together with such disclosures relating to the Company, any Subservicer, any
Third-Party Originator and the Mortgage Loans, or the servicing of the Mortgage
Loans, reasonably believed by the Purchaser or any Depositor to be necessary in
order to effect such compliance. In the event of any conflict between Section 7A
and any other term or provision in this Agreement, the provisions of Section 7A
shall control.
The Purchaser (including any of its assignees or designees) shall
cooperate with the Company by providing timely notice of requests for
information under these provisions and by reasonably limiting such requests to
information required, in the Purchaser's reasonable judgment, to comply with
Regulation AB.
Subsection 7A.02. Additional Representations and Warranties of the
Company.
(a) The Company hereby represents to the Purchaser, to any Master
Servicer and to any Depositor, as of the date on which information is first
provided to the Purchaser, any Master Servicer or any Depositor under Subsection
7A.03 that, except as disclosed in writing to the Purchaser, such Master
Servicer or such Depositor prior to such date: (i) the Company is not aware and
has not received notice that any default, early amortization or other
performance triggering event has occurred as to any other securitization due to
any act or failure to act of the Company; (ii) the Company has not been
terminated as servicer in a residential mortgage loan securitization, either due
to a servicing default or to application of a servicing performance test or
trigger; (iii) no material noncompliance with the applicable servicing criteria
with respect to other securitizations of residential mortgage loans involving
the Company as servicer has been disclosed or reported by the Company; (iv) no
material changes to the Company's policies or procedures with respect to the
servicing function it will perform under this Agreement and any
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Reconstitution Agreement for mortgage loans of a type similar to the Mortgage
Loans have occurred during the three-year period immediately preceding the
related Securitization Transaction; (v) there are no aspects of the Company's
financial condition that could have a material adverse effect on the performance
by the Company of its servicing obligations under this Agreement or any
Reconstitution Agreement; (vi) there are no material legal or governmental
proceedings pending (or known to be contemplated) against the Company, any
Subservicer or any Third-Party Originator; and (vii) there are no affiliations,
relationships or transactions relating to the Company, any Subservicer or any
Third-Party Originator with respect to any Securitization Transaction and any
party thereto identified by the related Depositor of a type described in Item
1119 of Regulation AB.
(b) If so requested by the Purchaser, any Master Servicer or any
Depositor on any date following the date on which information is first provided
to the Purchaser, any Master Servicer or any Depositor under Subsection 7A.03,
the Company shall, within five (5) Business Days following such request, confirm
in writing the accuracy of the representations and warranties set forth in
paragraph (a) of this Subsection or, if any such representation and warranty is
not accurate as of the date of such request, provide reasonably adequate
disclosure of the pertinent facts, in writing, to the requesting party.
Subsection 7A.03. Information to Be Provided by the Company.
In connection with any Securitization Transaction the Company shall
(i) within five (5) Business Days following request by the Purchaser or any
Depositor, provide to the Purchaser and such Depositor (or, as applicable, cause
each Third-Party Originator and each Subservicer to provide), in writing and in
form and substance reasonably satisfactory to the Purchaser and such Depositor,
the information and materials specified in paragraphs (a), (b), (c) and (g) of
this Subsection, and (ii) as promptly as practicable following notice to or
discovery by the Company, provide to the Purchaser and any Depositor (in writing
and in form and substance reasonably satisfactory to the Purchaser and such
Depositor) the information specified in paragraph (d) of this Subsection.
(a) If so requested by the Purchaser or any Depositor, the Company
shall provide such information regarding (i) the Company, as originator of the
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) each Third-Party Originator, and (iii) as applicable,
each Subservicer, as is requested for the purpose of compliance with Items
1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor, the Company
shall provide (or, as applicable, cause each Third-Party Originator to provide)
Static Pool Information with respect to the mortgage loans (of a similar type as
the Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Company, if the Company is an originator of Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information shall be
prepared by the Company (or Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of Item 1105(a)(1)-(3)
of Regulation AB. To the extent that there is reasonably available to the
Company (or Third-Party Originator) Static Pool Information with respect to more
than one mortgage loan type, the Purchaser or any Depositor shall be
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entitled to specify whether some or all of such information shall be provided
pursuant to this paragraph. The content of such Static Pool Information may be
in the form customarily provided by the Company, and need not be customized for
the Purchaser or any Depositor. Such Static Pool Information for each vintage
origination year or prior securitized pool, as applicable, shall be presented in
increments no less frequently than quarterly over the life of the mortgage loans
included in the vintage origination year or prior securitized pool. The most
recent periodic increment must be as of a date no later than one hundred
thirty-five (135) days prior to the date of the prospectus or other offering
document in which the Static Pool Information is to be included or incorporated
by reference. The Static Pool Information shall be provided in an electronic
format that provides a permanent record of the information provided, such as a
portable document format (pdf) file, or other such electronic format reasonably
required by the Purchaser or the Depositor, as applicable.
Promptly following notice or discovery of a material error in Static
Pool Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Company shall provide corrected Static Pool
Information to the Purchaser or any Depositor, as applicable, in the same format
in which Static Pool Information was previously provided to such party by the
Company.
If so requested by the Purchaser or any Depositor, the Company shall
provide (or, as applicable, cause each Third-Party Originator to provide), at
the expense of the requesting party (to the extent of any additional incremental
expense associated with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants reasonably acceptable to the
Purchaser or Depositor, as applicable, pertaining to Static Pool Information
relating to prior securitized pools for securitizations closed on or after
January 1, 2006 or, in the case of Static Pool Information with respect to the
Company's or Third-Party Originator's originations or purchases, to calendar
months commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such letters shall be addressed to and be for the benefit of
such parties as the Purchaser or such Depositor shall designate (subject to the
reasonable agreement of the Purchaser, the Company and the accountants), which
may include, by way of example, any Sponsor, any Depositor and any broker dealer
acting as underwriter, placement agent or initial purchaser with respect to a
Securitization Transaction. Any such statement or letter may take the form of a
standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
(c) If so requested by the Purchaser or any Depositor, the Company
shall provide such information regarding the Company, as servicer of the
Mortgage Loans, and each Subservicer (each of the Company and each Subservicer,
for purposes of this paragraph, a "Servicer"), as is requested for the purpose
of compliance with Items 1108, 1117 and 1119 of Regulation AB.
(d) For the purpose of satisfying the reporting obligation under the
Exchange Act with respect to any class of asset-backed securities, the Company
shall (or shall cause each Subservicer and Third-Party Originator to) (i)
provide prompt notice to the Purchaser, any Master Servicer and any Depositor in
writing of (A) any material litigation or governmental proceedings involving the
Company, any Subservicer or any Third-Party Originator, (B) any
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affiliations or relationships that develop following the closing date of a
Securitization Transaction between the Company, any Subservicer or any
Third-Party Originator and any of the parties specified in clause (D) of
paragraph (a) of this Subsection (and any other parties identified in writing by
the requesting party) with respect to such Securitization Transaction, (C) any
Event of Default under the terms of this Agreement or any Reconstitution
Agreement, (D) any merger, consolidation or sale of substantially all of the
assets of the Company, and (E) the Company's entry into an agreement with a
Subservicer or Subcontractor to perform or assist in the performance of any of
the Company's obligations under this Agreement or any Reconstitution Agreement
and (ii) provide to the Purchaser and any Depositor a description of such
proceedings, affiliations or relationships.
(e) As a condition to the succession to the Company or any Subservicer
as servicer or subservicer under this Agreement or any Reconstitution Agreement
by any Person (i) into which the Company or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Company or
any Subservicer, the Company shall provide to the Purchaser and any Depositor,
at least 15 calendar days prior to the effective date of such succession or
appointment, (x) written notice to the Purchaser and any Depositor of such
succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, all information
reasonably requested by the Purchaser or any Depositor in order to comply with
the Depositor's reporting obligation under Item 6.02 of Form 8-K with respect to
any class of asset-backed securities.
(f) In addition to such information as the Company, as servicer, is
obligated to provide pursuant to other provisions of this Agreement, not later
than ten days prior to the deadline for the filing of any distribution report on
Form 10-D in respect of any Securitization Transaction that includes any of the
Mortgage Loans serviced by the Company or any Subservicer, the Company or such
Subservicer, as applicable, shall, to the extent the Servicer or such
Subservicer has knowledge, provide to the party responsible for filing such
report (including, if applicable, the Master Servicer) notice of the occurrence
of any of the following events along with all information, data, and materials
related thereto as may be required to be included in the related distribution
report on Form 10-D (as specified in the provisions of Regulation AB referenced
below):
(A) any material modifications, extensions or waivers of pool
asset terms, fees, penalties or payments during the distribution period or that
have cumulatively become material over time (Item 1121(a)(11) of Regulation AB),
in each case to the extent applicable to Mortgage Loans;
(B) material breaches of pool asset representations or warranties
or transaction covenants (Item 1121(a)(12) of Regulation AB) to the extent
applicable to Mortgage Loans; and
(C) information regarding new asset-backed securities issuances
backed by the same pool assets, any pool asset changes (such as, additions,
substitutions or repurchases), and any material changes in origination,
underwriting or other criteria for acquisition or selection of pool assets (Item
1121(a)(14) of Regulation AB), in each case to the extent applicable to Mortgage
Loans.
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(g) The Company shall provide to the Purchaser, any Master Servicer
and any Depositor, such additional information as such party may reasonably
request, including evidence of the authorization of the person signing any
certification or statement, financial information and reports, and such other
information related to the Company or any Subservicer or the Company or such
Subservicer's performance hereunder.
Subsection 7A.04. Servicer Compliance Statement.
On or before March 1 of each calendar year, commencing in 2007, the
Company shall deliver to the Purchaser, any Master Servicer and any Depositor a
statement of compliance addressed to the Purchaser, such Master Servicer and
such Depositor and signed by an authorized officer of the Company, to the effect
that (i) a review of the Company's activities during the immediately preceding
calendar year (or applicable portion thereof) and of its performance under this
Agreement and any applicable Reconstitution Agreement during such period has
been made under such officer's supervision, and (ii) to the best of such
officers' knowledge, based on such review, the Company has fulfilled all of its
obligations under this Agreement and any applicable Reconstitution Agreement in
all material respects throughout such calendar year (or applicable portion
thereof) or, if there has been a failure to fulfill any such obligation in any
material respect, specifically identifying each such failure known to such
officer and the nature and the status thereof.
Subsection 7A.05. Report on Assessment of Compliance and Attestation.
(a) On or before March 1 of each calendar year, commencing in 2007,
the Company shall:
(i) deliver to the Purchaser, any Master Servicer and any
Depositor a report (in form and substance reasonably satisfactory to the
Purchaser, such Master Servicer and such Depositor) regarding the Company's
assessment of compliance with the Servicing Criteria during the immediately
preceding calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed to
the Purchaser, such Master Servicer and such Depositor and signed by an
authorized officer of the Company, and shall address each of the "Applicable
Servicing Criteria" specified on Exhibit N hereto;
(ii) deliver to the Purchaser, any Master Servicer and any
Depositor a report of a registered public accounting firm reasonably acceptable
to the Purchaser, such Master Servicer and such Depositor that attests to, and
reports on, the assessment of compliance made by the Company and delivered
pursuant to the preceding paragraph. Such attestation shall be in accordance
with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act of
1933 and the Exchange Act;
(iii) cause each Subservicer, and each Subcontractor determined
by the Company pursuant to Subsection 7A.06(b) to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, and, to
the extent required of such Subservicer or Subcontractor under Item 1123 of
Regulation AB, an annual compliance certificate as and when provided by Section
7A.04, to deliver to the Purchaser, any Master Servicer and any Depositor
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an assessment of compliance and accountants' attestation as and when provided in
paragraphs (a) and (b) of this Subsection; and
(iv) if requested by the Purchaser, any Depositor or any Master
Servicer not later than February 1 of the calendar year in which such
certification is to be delivered, deliver, and cause each Subservicer and
Subcontractor described in clause (iii) above to deliver, to the Purchaser, any
Depositor, any Master Servicer and any other Person that will be responsible for
signing the certification (a "Sarbanes Certification") required by Rules
13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section 302 of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002) on behalf of an asset-backed issuer with respect to
a Securitization Transaction a certification, signed by the appropriate officer
of the Company, in the form attached hereto as Exhibit M.
The Company acknowledges that the parties identified in clause (a)(iv)
above may rely on the certification provided by the Company pursuant to such
clause in signing a Sarbanes Certification and filing such with the Commission.
Neither the Purchaser, any Depositor or any Master Servicer will request
delivery of a certification under clause (a)(iv) above unless a Depositor is
required under the Exchange Act to file an annual report on Form 10-K or any
amendment thereto with respect to an issuing entity whose asset pool includes
Mortgage Loans.
(b) Each assessment of compliance provided by a Subservicer pursuant
to Subsection 7A.05(a)(i) shall address each of the Servicing Criteria specified
on a certification substantially in the form of Exhibit N hereto delivered to
the Purchaser concurrently with the execution of this Agreement or, in the case
of a Subservicer subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance provided by a Subcontractor pursuant to
Subsection 7A.05(a)(iii) need not address any elements of the Servicing Criteria
other than those specified by the Company pursuant to Subsection 7A.06.
Subsection 7A.06. Use of Subservicers and Subcontractors.
The Company shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Company as servicer under
this Agreement or any Reconstitution Agreement unless the Company complies with
the provisions of paragraph (a) of this Subsection. The Company shall not hire
or otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to
fulfill any of the obligations of the Company as servicer under this Agreement
or any Reconstitution Agreement unless the Company complies with the provisions
of paragraph (b) of this Subsection.
(a) It shall not be necessary for the Company to seek the consent of
the Purchaser, any Master Servicer or any Depositor to the utilization of any
Subservicer. The Company shall cause any Subservicer used by the Company (or by
any Subservicer) for the benefit of the Purchaser and any Depositor to comply
with the provisions of this Subsection and with Subsections 7A.02, 7A.03(c),
(e), (f) and (g), 7A.04, 7A.05 and 7A.07 of this Agreement to the same extent as
if such Subservicer were the Company, and to provide the information required
with respect to such Subservicer under Subsection 7A.03(d) of this Agreement.
The
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Company shall be responsible for obtaining from each Subservicer and delivering
to the Purchaser and any Depositor any servicer compliance statement required to
be delivered by such Subservicer under Subsection 7A.04, any assessment of
compliance and attestation required to be delivered by such Subservicer under
Subsection 7A.05 and any certification required to be delivered to the Person
that will be responsible for signing the Sarbanes Certification under Subsection
7A.05 as and when required to be delivered.
(b) It shall not be necessary for the Company to seek the consent of
the Purchaser, any Master Servicer or any Depositor to the utilization of any
Subcontractor. The Company shall promptly upon request provide to the Purchaser,
any Master Servicer and any Depositor (or any designee of the Depositor, such as
an administrator) a written description (in form and substance satisfactory to
the Purchaser, such Depositor and such Master Servicer) of the role and function
of each Subcontractor utilized by the Company or any Subservicer, specifying (i)
the identity of each such Subcontractor, (ii) which (if any) of such
Subcontractors are "participating in the servicing function" within the meaning
of Item 1122 of Regulation AB, and (iii) which elements of the Servicing
Criteria will be addressed in assessments of compliance provided by each
Subcontractor identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to
be "participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Subsections 7A.05 and 7A.07 of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation and the other certifications required to be delivered by such
Subservicer and such Subcontractor under Subsection 7A.05, in each case as and
when required to be delivered.
Subsection 7A.07. Indemnification; Remedies.
(a) The Company shall indemnify the Purchaser, each affiliate of the
Purchaser, and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person (including, but not
limited to, any Master Servicer if applicable) responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction; each broker dealer acting as underwriter,
placement agent or initial purchaser, each Person who controls any of such
parties or the Depositor (within the meaning of Section 15 of the Securities Act
of 1933 and Section 20 of the Exchange Act); and the respective present and
former directors, officers, employees, agents and affiliates of each of the
foregoing and of the Depositor (each, an "Indemnified Party"), and shall hold
each of them harmless from and against any claims, losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain arising out of
or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report, certification, data,
accountants' letter or other material
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provided in written or electronic form under this Section 7A by or on behalf of
the Company, or provided under this Section 7A by or on behalf of any
Subservicer, Subcontractor or Third-Party Originator (collectively, the "Company
Information"), or (B) the omission or alleged omission to state in the Company
Information a material fact required to be stated in the Company Information or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, by way of
clarification, that clause (B) of this paragraph shall be construed solely by
reference to the Company Information and not to any other information
communicated in connection with a sale or purchase of securities, without regard
to whether the Company Information or any portion thereof is presented together
with or separately from such other information;
(ii) any breach by the Company of its obligations under this
Section 7A, including particularly any failure by the Company, any Subservicer,
any Subcontractor or any Third-Party Originator to deliver any information,
report, certification, accountants' letter or other material when and as
required under this Section 7A, including any failure by the Company to identify
pursuant to Subsection 7A.06(b) any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB;
(iii) any breach by the Company of a representation or warranty
set forth in Subsection 7A.02(a) or in a writing furnished pursuant to
Subsection 7A.02(b) and made as of a date prior to the closing date of the
related Securitization Transaction, to the extent that such breach is not cured
by such closing date, or any breach by the Company of a representation or
warranty in a writing furnished pursuant to Subsection 7A.02(b) to the extent
made as of a date subsequent to such closing date; or
(iv) the negligence bad faith or willful misconduct of the
Company in connection with its performance under this Section 7A.
If the indemnification provided for herein is unavailable or
insufficient to hold harmless an Indemnified Party, then the Company agrees that
it shall contribute to the amount paid or payable by such Indemnified Party as a
result of any claims, losses, damages or liabilities incurred by such
Indemnified Party in such proportion as is appropriate to reflect the relative
fault of such Indemnified Party on the one hand and the Company on the other.
In the case of any failure of performance described in clause (a)(ii)
of this Subsection, the Company shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction, for all costs reasonably incurred by each
such party in order to obtain the information, report, certification,
accountants' letter or other material not delivered as required by the Company,
any Subservicer, any Subcontractor or any Third-Party Originator.
This indemnification shall survive the termination of this Agreement
or the termination of any party to this Agreement.
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(b) (i) Any failure by the Company, any Subservicer, any Subcontractor
or any Third-Party Originator to deliver any information, report, certification,
accountants' letter or other material when and as required under this Section
7A, or any breach by the Company of a representation or warranty set forth in
Subsection 7A.02(a) or in a writing furnished pursuant to Subsection 7A.02(b)
and made as of a date prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by such closing date,
or any breach by the Company of a representation or warranty in a writing
furnished pursuant to Subsection 7A.02(b) to the extent made as of a date
subsequent to such closing date, shall, except as provided in clause (ii) of
this paragraph, immediately and automatically, without notice or grace period,
constitute an Event of Default with respect to the Company under this Agreement
and any applicable Reconstitution Agreement, and shall entitle the Purchaser,
any Master Servicer or any Depositor, as applicable, in its sole discretion to
terminate the rights and obligations of the Company as servicer under this
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement or any applicable Reconstitution
Agreement to the contrary) of any compensation to the Company and if the
Servicer is servicing any of the Mortgage Loans in a Securitization Transaction,
appoint a successor servicer, in accordance with the related securitization
agreement, reasonably acceptable to any Master Servicer of such Securitization
Transaction; provided that to the extent that any provision of this Agreement
and/or any applicable Reconstitution Agreement expressly provides for the
survival of certain rights or obligations following termination of the Company
as servicer, such provision shall be given effect.
(ii) Any failure by the Company, any Subservicer or any
Subcontractor to deliver any information, report, certification or accountants'
letter when and as required under Subsections 7A.04 or 7A.05, including (except
as provided in the following paragraph) any failure by the Company to identify
pursuant to Subsection 7A.06(b) any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, which
continues unremedied for ten (10) calendar days after the date on which such
information, report, certification or accountants' letter was required to be
delivered shall constitute an Event of Default with respect to the Company under
this Agreement and any applicable Reconstitution Agreement, and shall entitle
the Purchaser, any Master Servicer or any Depositor, as applicable, in its sole
discretion to terminate the rights and obligations of the Company as servicer
under this Agreement and/or any applicable Reconstitution Agreement without
payment (notwithstanding anything in this Agreement to the contrary) of any
compensation to the Company; provided that to the extent that any provision of
this Agreement and/or any applicable Reconstitution Agreement expressly provides
for the survival of certain rights or obligations following termination of the
Company as servicer, such provision shall be given effect.
Neither the Purchaser nor any Depositor shall be entitled to terminate
the rights and obligations of the Company pursuant to this subparagraph (b)(ii)
if a failure of the Company to identify a Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB was
attributable solely to the role or functions of such Subcontractor with respect
to mortgage loans other than the Mortgage Loans.
(iii) The Company shall promptly reimburse the Purchaser (or any
designee of the Purchaser, such as a master servicer) and any Depositor, as
applicable, for all reasonable expenses incurred by the Purchaser (or such
designee) or such Depositor, as such are
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incurred, in connection with the termination of the Company as servicer and the
transfer of servicing of the Mortgage Loans to a successor servicer. The
provisions of this paragraph shall not limit whatever rights the Purchaser or
any Depositor may have under other provisions of this Agreement and/or any
applicable Reconstitution Agreement or otherwise, whether in equity or at law,
such as an action for damages, specific performance or injunctive relief.
ARTICLE VIII
COMPANY TO COOPERATE
Section 8.01 Provision of Information.
During the term of this Agreement, the Company shall furnish to the
Purchaser such periodic, special, or other reports or information and copies or
originals of any documents contained in the Servicing File for each Mortgage
Loan, whether or not provided for herein, as shall be necessary, reasonable, or
appropriate with respect to the Purchaser, any regulatory requirement pertaining
to the Purchaser or the purposes of this Agreement. All such reports, documents
or information shall be provided by and in accordance with all reasonable
instructions and directions which the Purchaser may give. Any special reports or
information delivered shall be at the Purchaser's expense.
The Company shall execute and deliver all such instruments and take
all such action as the Purchaser may reasonably request from time to time, in
order to effectuate the purposes and to carry out the terms of this Agreement.
Section 8.02 Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the Purchaser may
make available to a prospective Purchaser a Consolidated Statement of Operations
of the Company for the most recently completed five fiscal years for which such
a statement is available, as well as a Consolidated Statement of Condition at
the end of the last two fiscal years covered by such Consolidated Statement of
Operations. Purchaser shall not make such statement available to any prospective
Purchaser unless such prospective Purchaser has signed a confidentiality
agreement with respect to the information provided with respect to Company
unless already publicly available. The Company also shall make available any
comparable interim statements to the extent any such statements have been
prepared by or on behalf of the Company (and are available upon request to
members or stockholders of the Company or to the public at large). If it has not
already done so, the Company shall furnish promptly to the Purchaser copies of
the statement specified above.
The Company also shall make available to Purchaser or prospective
Purchaser a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Company or the
financial statements of the Company, and to permit any prospective Purchaser to
inspect the Company's servicing facilities or those of any Subservicer for the
purpose of satisfying such prospective Purchaser that the Company and any
Subservicer have the ability to service the Mortgage Loans as provided in this
Agreement.
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ARTICLE IX
THE COMPANY
Section 9.01 Indemnification; Third Party Claims.
(a) Breaches of Representations and Warranties. The Company agrees to
indemnify the Purchaser and hold it harmless from and against any and all
claims, losses, damages, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, fees and expenses that the Purchaser may
sustain in any way related to any assertion based on, grounded upon resulting
from a Breach of any of the Company's representations and warranties contained
herein. The Company shall immediately notify the Purchaser if a claim is made by
a third party with respect to this Agreement or the Mortgage Loans, assume (with
the consent of the Purchaser and with counsel reasonably satisfactory to the
Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim but failure to so notify the Purchaser shall not limit its
obligations hereunder. The Company agrees that it will not enter into any
settlement of any such claim without the consent of the Purchaser unless such
settlement includes an unconditional release of the Purchaser from all liability
that is the subject matter of such claim. In addition to the obligations of the
Company set forth in this Section 9.01(a), the Purchaser may pursue any and all
remedies otherwise available at law or in equity, including, but not limited to,
the right to seek damages. The provisions of this Section 9.01(a) shall survive
termination of this Agreement.
It is understood and agreed that the obligations of the Company set
forth in Sections 3.03 and 9.01(a) to cure, substitute for or repurchase a
defective Mortgage Loan and to indemnify the Purchaser constitute the sole
remedies of the Purchaser respecting a Breach of the representations and
warranties set forth in Section 3.01 and 3.02.
(b) Servicing. The Company shall indemnify the Purchaser and hold it
harmless against any and all claims, losses, damages, penalties, fines, and
forfeitures, including, but not limited to reasonable and necessary legal fees
and related costs, judgments, and any other costs, fees and expenses that the
Purchaser may sustain in any way related to the failure of the Company to (a)
perform its duties and service the Mortgage Loans in strict compliance with the
terms of this Agreement or any Reconstitution Agreement entered into pursuant to
Section 7.01, and/or (b) comply with applicable law, and/or (c) perform any
other covenants set forth in this Agreement. The Company immediately shall
notify the Purchaser if a claim is made by a third party with respect to this
Agreement or any Reconstitution Agreement or the Mortgage Loans, shall promptly
notify ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, or the trustee with respect to any claim made by
a third party with respect to any Reconstitution Agreement, assume (with the
prior written consent of the Purchaser) the defense of any such claim and pay
all expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
the Purchaser in respect of such claim. The Company shall follow any written
instructions received from the Purchaser in connection with such claim. The
Purchaser promptly shall reimburse the Company for all amounts advanced by it
pursuant to the preceding sentence except when the claim is in any way related
to the Company's indemnification pursuant to Section 3.03, or the failure of the
Company to (a) service and
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administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement, and/or (b) comply with applicable
law.
Section 9.02 Merger or Consolidation of the Company.
The Company shall keep in full effect its existence, rights and
franchises as a corporation, and shall obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform its
duties under this Agreement.
Any person into which the Company may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding, provided, however, that
in the event that such successor servicer is not acceptable to the Purchaser in
its sole discretion, the Purchaser shall have the right to terminate the
successor servicer's rights under this servicing agreement without payment of
any termination fee.
Section 9.03 Limitation on Liability of Company and Others.
Neither the Company nor any of the directors, officers, employees or
agents of the Company shall be under any liability to the Purchaser for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment, provided, however, that
this provision shall not protect the Company or any such person against any
Breach of warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed by reason of any
breach of the terms and conditions of this Agreement. The Company and any
director, officer, employee or agent of the Company may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Company shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement and which in its opinion may involve it in any expense or liability,
provided, however, that the Company may, with the consent of the Purchaser,
undertake any such action which it may deem necessary or desirable in respect to
this Agreement and the rights and duties of the parties hereto. In such event,
the Company shall be entitled to reimbursement from the Purchaser of the
reasonable legal expenses and costs of such action except when such expenses and
costs are subject to the Company's indemnification under this Agreement.
Section 9.04 Limitation on Resignation and Assignment by Company.
The Company acknowledges that the Purchaser has entered into this
Agreement with the Company, and that subsequent Purchasers will purchase the
Mortgage Loans, in reliance upon the independent status of the Company, and the
representations as to the adequacy of its servicing facilities, plant,
personnel, records and procedures, its integrity, reputation and
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financial standing, and the continuance thereof. Therefore, the Company shall
neither assign this Agreement or the servicing hereunder or delegate its rights
or duties hereunder or any portion hereof (to other than a Subservicer).
The Company shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Company and the Purchaser or upon
the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company in which event
the Company may resign as servicer. Any such determination permitting the
resignation of the Company shall be evidenced by an Opinion of Counsel to such
effect delivered to the Purchaser which Opinion of Counsel shall be in form and
substance acceptable to the Purchaser and which shall be provided at the cost of
the Company. No such resignation shall become effective until a successor shall
have assumed the Company's responsibilities and obligations hereunder in the
manner provided in Section 12.01.
Without in any way limiting the generality of this Section 9.04, in
the event that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof (to other than a Subservicer) or sell or otherwise dispose of all or
substantially all of its property or assets, without the prior written consent
of the Purchaser, then the Purchaser shall have the right to terminate this
Agreement upon notice given as set forth in Section 10.01, without any payment
of any penalty or damages and without any liability whatsoever to the Company or
any third party.
ARTICLE X
DEFAULT
Section 10.01 Events of Default.
Each of the following shall constitute an Event of Default on the part
of the Company:
(i) any failure by the Company to remit to the Purchaser any
payment required to be made under the terms of this Agreement which
continues unremedied for a period of one Business Day after the date upon
which written notice of such failure, requiring the same to be remedied,
shall have been given to the Company by the Purchaser; or
(ii) failure by the Company duly to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Company set forth in this Agreement which continues unremedied for a
period of 30 days (except that such number of days shall be fifteen in the
case of a failure to pay any premium for any insurance policy required to
be maintained under this Agreement) after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given
to the Company by the Purchaser; or
(iii) failure by the Company to maintain its license to do
business in any jurisdiction where the Mortgage Property is located; or
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(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, including
bankruptcy, marshaling of assets and liabilities or similar proceedings, or
for the winding-up or liquidation of its affairs, shall have been entered
against the Company and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(v) the Company shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating
to the Company or of or relating to all or substantially all of its
property; or
(vi) the Company shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
any applicable insolvency, bankruptcy or reorganization statute, make an
assignment for the benefit of its creditors, voluntarily suspend payment of
its obligations or cease its normal business operations for three Business
Days; or
(vii) the Company ceases to meet the qualifications of a ▇▇▇▇▇▇
▇▇▇ or ▇▇▇▇▇▇▇ Mac seller/servicer; or
(viii) the Company fails to maintain a minimum net worth of
$25,000,000; or
(ix) the Company attempts to assign its right to servicing
compensation hereunder or the Company attempts, without the consent of the
Purchaser, to sell or otherwise dispose of all or substantially all of its
property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any
portion thereof (to other than a Subservicer) in violation of Section 9.04.
In each and every such case, so long as an Event of Default shall not
have been remedied, in addition to whatsoever rights the Purchaser may have at
law or equity to damages, including injunctive relief and specific performance,
the Purchaser, by notice in writing to the Company, may terminate all the rights
and obligations of the Company under this Agreement and in and to the Mortgage
Loans and the proceeds thereof without payment of any termination fee.
Upon receipt by the Company of such written notice, all authority and
power of the Company under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the successor appointed
pursuant to Section 12.01. Upon written request from any Purchaser, the Company
shall prepare, execute and deliver to the successor entity designated by the
Purchaser any and all documents and other instruments, place in such successor's
possession all Mortgage Files, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Company's sole
expense. The Company shall cooperate with the Purchaser and such successor in
effecting the termination of the Company's responsibilities and rights
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hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Company to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
If any of the Mortgage Loans are MERS Mortgage Loans, in connection
with the termination or resignation (as described in Section 9.04) of the
Company hereunder, either (i) the successor Company shall 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, or (ii) the
Company shall cooperate with the successor company either (x) in causing MERS to
execute and deliver an assignment of Mortgage in recordable form to transfer the
Mortgage from MERS to the Purchaser 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 company or (y) in causing MERS to designate on
the MERS System the successor company as the servicer of such Mortgage Loan.
Section 10.02 Waiver of Defaults.
By a written notice, the Purchaser may waive any default by the
Company in the performance of its obligations hereunder and its consequences.
Upon any waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE XI
TERMINATION
Section 11.01 Termination.
This Agreement shall terminate upon either: (i) the later of the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of any REO Property with respect to the last
Mortgage Loan and the remittance of all funds due hereunder; or (ii) mutual
consent of the Company and the Purchaser in writing.
Section 11.02 Termination Without Cause.
The Purchaser may terminate, at its sole option, any rights the
Company may have hereunder, without cause, upon thirty days notice or as
provided in this Section 11.02. Any such notice of termination shall be in
writing and delivered to the Company by registered mail as provided in Section
12.05. The Purchaser and the Servicer shall comply with the termination
procedures set forth in Section 12.01 hereof.
In the event the Purchaser terminates the Company without cause with
respect to some or all of the Mortgage Loans, the Purchaser shall be required to
pay to the Company a Termination Fee in an amount equal to the product of (a)
0.75% and (b) the Stated Principal Balance, as of the date of such termination,
of each such Mortgage Loan.
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In the event that (i) a Mortgage Loan becomes delinquent for a period
of 91 days or more (a "Delinquent Mortgage Loan") or (ii) a Mortgage Loan
becomes an REO Property, the Purchaser may at its election terminate this
Agreement with respect to such Delinquent Mortgage Loan or REO Property without
payment of a termination fee therefor, upon 15 days' written notice to the
Company and reimbursement of all related advances.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Company.
Prior to termination of the Company's responsibilities and duties
under this Agreement pursuant to Sections 9.04, 10.01, 11.01 (ii) or pursuant to
Section 11.02 after the 90 day period has expired, the Purchaser shall, (i)
succeed to and assume all of the Company's responsibilities, rights, duties and
obligations under this Agreement, or (ii) appoint a successor having the
characteristics set forth in clauses (i) through (iii) of Section 9.02 and which
shall succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Company under this Agreement prior to the termination of
Company's responsibilities, duties and liabilities under this Agreement. In
connection with such appointment and assumption, the Purchaser may make such
arrangements for the reasonable compensation of such successor out of payments
on Mortgage Loans as it and such successor shall agree. In the event that the
Company's duties, responsibilities and liabilities under this Agreement should
be terminated pursuant to the aforementioned sections, the Company shall
discharge such duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective date thereof with the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor. The resignation or
removal of the Company pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01
and shall in no event relieve the Company of the representations and warranties
made pursuant to Sections 3.01 and 3.02 and the remedies available to the
Purchaser under Sections 3.03, and 3.06, it being understood and agreed that the
provisions of such Sections 3.01, 3.02, 3.03, and 3.06 shall be applicable to
the Company notwithstanding any such sale, assignment, resignation or
termination of the Company, or the termination of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Company and to the Purchaser an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Company, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Company or termination of this Agreement
pursuant to Section 9.04, 10.01, 11.01 or 11.02 shall not affect any claims that
any Purchaser may have against the Company arising out of the Company's actions
or failure to act prior to any such termination or resignation.
The Company shall deliver promptly to the successor servicer the Funds
in the Custodial Account and Escrow Account and all Mortgage Files and related
documents and
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statements held by it hereunder and the Company shall account for all funds and
shall execute and deliver such instruments and do such other things as may
reasonably be required to more fully and definitively vest and confirm in the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Company. The successor shall make arrangements as it may deem
appropriate to reimburse the Company for amounts the Company actually expended
as servicer pursuant to this Agreement which the successor is entitled to retain
hereunder and which would otherwise have been recovered by the Company pursuant
to this Agreement but for the appointment of the successor servicer.
Upon a successor's acceptance of appointment as such, the Company
shall notify by mail the Purchaser of such appointment in accordance with the
procedures set forth in Section 12.05.
Section 12.02 Financial Statements.
The Company understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers the Company's financial statements for the most recently
completed three fiscal years respecting which such statements are available. The
Company also shall make available any comparable interim statements to the
extent any such statements have been prepared by the Company (and are available
upon request to members or stockholders of the Company or the public at large).
The Company, if it has not already done so, agrees to furnish promptly to the
Purchaser copies of the statements specified above. The Company also shall make
available information on its servicing performance with respect to mortgage
loans serviced for others, including delinquency ratios.
The Company also agrees to allow access to knowledgeable financial,
accounting, origination and servicing officers of the Company for the purpose of
answering questions asked by any prospective purchaser regarding recent
developments affecting the Company, its loan origination or servicing practices
or the financial statements of the Company.
Section 12.03 Mandatory Delivery: Grant of Security Interest.
The sale and delivery of each Mortgage Loan on or before the related
Closing Date is mandatory from and after the date of the related Cut-Off Date,
subject to the terms of this Agreement, it being specifically understood and
agreed that each Mortgage Loan is unique and identifiable as of the related
Closing Date and that an award of money damages would be insufficient to
compensate the Purchaser for the losses and damages incurred by the Purchaser
(including damages to prospective purchasers of the Mortgage Loans) in the event
of the Company's failure to deliver each of the related Mortgage Loans or one or
more Mortgage Loans otherwise acceptable to the Purchaser on or before the
related Closing Date.
Section 12.04 Amendment.
This Agreement may be amended from time to time by the Company and the
Purchaser by written agreement signed by the Company and the Purchaser.
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Section 12.05 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.06 Duration of Agreement.
This Agreement shall continue in existence and effect until terminated
as herein provided. This Agreement shall continue notwithstanding transfers of
the Mortgage Loans by the Purchaser.
Section 12.07 Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given when delivered, addressed as
follows:
(i) if to the Company:
IndyMac Bank, F.S.B.
ATTN: Secondary Marketing - Transaction Management ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or such other address as may hereafter be furnished to the Purchaser
in writing by the Company;
(ii) if to Purchaser:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc. ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Account Management
or such other address as may hereafter be furnished to the Company in
writing by the Purchaser.
Section 12.08 Severability of Provisions.
If any one or more of the representations, warranties, covenants,
agreements, provisions or terms of this Agreement shall be held invalid for any
reason whatsoever, then such covenants, agreements, provisions or terms shall be
deemed severable from the remaining covenants, agreements, provisions or terms
of this Agreement and shall in no way affect the validity or enforceability of
the other provisions of this Agreement. Any one or more of the representations,
warranties, covenants, agreements, provisions or terms of this Agreement which
is or are held invalid for any purpose in any jurisdiction shall be ineffective,
as to such jurisdiction, to the extent of such invalidity without invalidating
the remaining provisions hereof,
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and any such invalidity in any jurisdiction as to any Mortgage Loan shall not
invalidate or render unenforceable such provision in any other jurisdiction. To
the extent permitted by applicable law, the parties hereto waive any provision
of law which prohibits or renders void or unenforceable any provision hereof. If
the invalidity of any representation, warranty, covenant, agreement, provision
or term of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
Section 12.09 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of the
Company shall be rendered as an independent contractor and not as agent for the
Purchaser.
Section 12.10 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 9.04, this Agreement
shall inure to the benefit of and be binding upon the Company and the Purchaser
and their respective successors and assigns.
Section 12.11 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Company's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
Section 12.12 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the Company
but subject to the limit set forth in Section 2.02 hereof, to assign, in whole
or in part, its interest under this Agreement with respect to some or all of the
Mortgage Loans, and designate any person to exercise any rights of the Purchaser
hereunder. All references to the Purchaser in this Agreement shall be deemed to
include its assignee or designee.
Upon any such assignment, the Person to whom such assignment is made
shall succeed to all rights and obligations of the Purchaser under this
Agreement to the extent of the related Mortgage Loan or Mortgage Loans and this
Agreement, to the extent of the related Mortgage Loan or Loans, shall be deemed
to be a separate and distinct Agreement between the Company and such Purchaser,
and a separate and distinct Agreement between the Company and each other
Purchaser to the extent of the other related Mortgage Loan or Loans. In the
event that this Agreement is assigned to any Person to whom the servicing or
master servicing of any Mortgage Loan is sold or transferred, the rights and
benefits under this agreement which inure to
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the Purchaser shall inure to the benefit of both the Person to whom such
Mortgage Loan is transferred and the Person to whom the servicing or master
servicing of the Mortgage Loan has been transferred; provided that, the right to
require a Mortgage Loan to be repurchased by the Company pursuant to Section
3.02 or 3.04 shall be retained solely by the Purchaser. This Agreement shall not
be assigned, pledged or hypothecated by the Company to a third party without the
consent of the Purchaser, which consent shall not be unreasonably withheld.
Section 12.13 No Personal Solicitation.
From and after the related Closing Date, the Company hereby agrees
that it will not take any action or permit or cause any action to be taken by
any of its agents or affiliates, or by any independent contractors on the
Company's behalf, to personally, by telephone or mail, solicit the borrower or
obligor under any Mortgage Loan for any purpose whatsoever, including to
refinance a Mortgage Loan, in whole or in part, without the prior written
consent of the Purchaser or any of its assignees; provided that the Company may
solicit any Mortgagor for whom the Company has received a request for demand for
payoff or a borrower or obligor initiated communication indicating a desire to
prepay the related Mortgage Loan. It is understood and agreed that all rights
and benefits relating to the solicitation of any Mortgagors and the attendant
rights, title and interest in and to the list of such Mortgagors and data
relating to their Mortgages (including insurance renewal dates) shall be
transferred to the Purchaser pursuant hereto on the related Closing Date and the
Company shall take no action to undermine these rights and benefits.
Notwithstanding the foregoing, it is understood and agreed that promotions
undertaken by the Company or any affiliate of the Company which are directed to
the general public at large, or designated segments thereof, including, without
limitation, mass mailings based on commercially acquired mailing lists, and
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 12.11.
Section 12.14 Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Company is selling, the Mortgage Loans and not a debt instrument of the
Company or another security. Accordingly, the parties hereto each intend to
treat the transaction for Federal income tax purposes as a sale by the Company,
and a purchase by the Purchaser, of the Mortgage Loans. The Purchaser shall have
the right to review the Mortgage Loans and the related Mortgage Loan Files to
determine the characteristics of the Mortgage Loans which shall affect the
Federal income tax consequences of owning the Mortgage Loans and the Company
shall cooperate with all reasonable requests made by the Purchaser in the course
of such review. In the event, for any reason, any transaction contemplated
herein is construed by any court or regulatory authority as a borrowing rather
than as a sale, the Company and the Purchaser intend that the Purchaser or its
assignee, as the case may be, shall have a perfected first priority security
interest in the Mortgage Loans, the Custodial Account and the proceeds of any
and all of the foregoing (collectively, the "Collateral"), free and clear of
adverse claims. In such case, the Company shall be deemed to have hereby granted
to the Purchaser or its assignee, as the case may be, a first priority security
interest in and lien upon the Collateral, free and clear of adverse claims. In
such event, the related Trade Confirmation and this Agreement shall constitute a
security agreement, the Custodian shall be deemed to be an independent custodian
for purposes of perfection of the security interest granted to the Purchaser or
its assignee, as the case may be, and the Purchaser or
B-85
its assignee, as the case may be, shall have all of the rights of a secured
party under applicable law.
Section 12.15 Acknowledgement of Anti-Predatory Lending Policies.
On each Closing Date, Purchaser has in place internal policies and
procedures that expressly prohibit its purchase of any Mortgage Loan which
breaches Section 3.02(tt).
Section 12.16 Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
Section 12.17 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 12.18 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
the terms defined in this Agreement have the meanings assigned to them
in this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender;
accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
reference to a Subsection without further reference to a Section is a
reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
the words "herein," "hereof," "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular provision;
and
the term "include" or "including" shall mean without limitation by
reason of enumeration.
Section 12.19 Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents
B-86
received by any party at the closing, and (c) financial statements, certificates
and other information previously or hereafter furnished, may be reproduced by
any photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
Section 12.20 Further Agreements.
The Company and the Purchaser each agree to execute and deliver to the
other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
B-87
IN WITNESS WHEREOF, the Company and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
INDYMAC BANK, F.S.B.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
B-88
EXHIBIT A
MORTGAGE LOAN SCHEDULE
B-89
EXHIBIT B
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be retained by the
Company in the Servicing File or delivered to the Custodian pursuant to Section
2.01 and 2.03 of the Master Seller's Warranties and Servicing Agreement to which
this Exhibit is attached (the "Agreement"):
1. The original Mortgage Note bearing all intervening endorsements
necessary to show a complete chain of endorsements from the original
payee to the Company, endorsed in blank, "Pay to the order of without
recourse", signed via original signature in the name of the Company by
an authorized officer and if previously endorsed, signed in the name
of the last endorsee by a duly qualified officer of the last endorsee.
If the Mortgage Loan was acquired by the Company in a merger, the
signature must be in the following form: "[SELLER], successor by
merger to [name of predecessor]"; and if the Mortgage Loan was
acquired or originated by the Company while doing business under
another name, the signature must be in the following form: "[SELLER],
formerly known as [previous name]"
If the Company uses facsimile signatures to endorse Mortgage Notes,
the Company must provide in an Officer's Certificate that the
endorsement is valid and enforceable in the jurisdiction(s) in which
the Mortgaged Properties are located and must retain in its corporate
records the following specific documentation authorizing the use of
facsimile signatures: (i) a resolution from its board of directors
authorizing specific officers to use facsimile signatures; stating
that facsimile signatures will be a valid and binding act on the
Company's part; and authorizing the Company's corporate secretary to
certify the validity of the resolution, the names of the officers
authorized to execute documents by using facsimile signatures, and the
authenticity of specimen forms of facsimile signatures; (ii) the
corporate secretary's certification of the authenticity and validity
of the board of directors' resolution; and (iii) a notarized
"certification of facsimile signature," which includes both the
facsimile and the original signatures of the signing officer(s) and
each officer's certification that the facsimile is a true and correct
copy of his or her original signature
2. The original of any guarantee executed in connection with the Mortgage
Note (if any).
3. The original Mortgage, with evidence of recording thereon. If in
connection with any Mortgage Loan, the Company cannot deliver or cause
to be delivered the original Mortgage with evidence of recording
thereon on or prior to the related Closing Date because of a delay
caused by the public recording office where such Mortgage has been
delivered for recordation or because such Mortgage has been lost or
because such public recording office retains the original recorded
B-90
Mortgage, the Company shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case
of a delay caused by the public recording office, an Officer's
Certificate of the title insurer insuring the Mortgage stating that
such Mortgage has been dispatched to the appropriate public recording
office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage will be
promptly delivered to the Custodian upon receipt thereof by the party
delivering the Officer's Certificate or by the Company; or (ii) in the
case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost
after recordation in a public recording office, a copy of such
Mortgage certified by such public recording office or by the title
insurance company that issued the title policy to be a true and
complete copy of the original recorded Mortgage.
4. The originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon.
5. The original Assignment of Mortgage for each Mortgage Loan, in form
and substance acceptable for recording, delivered in blank. If the
Mortgage Loan was acquired by the Company in a merger, the Assignment
of Mortgage must be made by "[SELLER], successor by merger to [name of
predecessor]." If the Mortgage Loan was acquired or originated by the
Company while doing business under another name, the Assignment of
Mortgage must be by "[SELLER], formerly known as [previous name]."
6. Originals of all intervening assignments of the Mortgage with evidence
of recording thereon evidencing a complete chain of ownership from the
originator of the Mortgage Loan to the last assignee, or if any such
intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office
retains the original recorded assignments of mortgage, the Company
shall deliver or cause to be delivered to the Custodian, a photocopy
of such intervening assignment, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate
of the title insurer insuring the Mortgage stating that such
intervening assignment of mortgage has been dispatched to the
appropriate public recording office for recordation and that such
original recorded intervening assignment of mortgage or a copy of such
intervening assignment of mortgage certified by the appropriate public
recording office or by the title insurance company that issued the
title policy to be a true and complete copy of the original recorded
intervening assignment of mortgage will be promptly delivered to the
Custodian upon receipt thereof by the party delivering the Officer's
Certificate or by the Company; or (ii) in the case of an intervening
assignment where a public recording office retains the original
recorded intervening assignment of Mortgage or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original
recorded intervening assignment.
B-2
7. The original PMI Policy, LPMI Policy or certificate of insurance,
where required pursuant to the Agreement.
8. The original mortgagee policy of title insurance or attorney's opinion
of title and abstract of title (provided such attorney's opinion of
title is customary for such jurisdiction) in the form of an ALTA
mortgage title insurance policy, containing each of the endorsements
required by ▇▇▇▇▇▇ ▇▇▇ and insuring the Purchaser and its successors
and assigns as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan or, if the original
mortgagee policy of title insurance has not been issued, the
irrevocable commitment to issue the same.
9. Any security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.
10. The original hazard insurance policy and, if required by law, flood
insurance policy, in accordance with Section 4.10 of the Agreement.
11. Residential loan application.
12. Mortgage Loan closing statement.
13. Verification of employment and income.
14. Verification of acceptable evidence of source and amount of
downpayment.
15. Credit report on the Mortgagor.
16. Residential appraisal report.
17. Photograph of the Mortgaged Property.
18. Survey of the Mortgaged Property.
19. Copy of each instrument necessary to complete identification of any
exception set forth in the exception schedule in the title policy,
i.e., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
20. All required disclosure statements and statement of Mortgagor
confirming receipt thereof.
21. If available, termite report, structural engineer's report, water
potability and septic certification.
22. Sales contract.
23. Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files,
correspondence, current and historical computerized data files, and
all other processing, underwriting and closing papers
B-3
and records which are customarily contained in a mortgage loan file
and which are required to document the Mortgage Loan or to service the
Mortgage Loan.
24. The original recorded power of attorney, if the Mortgage Note, the
Mortgage, any assignment of the Mortgage, or any other related
document was executed by a Person on behalf of the Mortgagor pursuant
to a power of attorney, with evidence of recording thereon;
25. Amortization schedule, if available; and
26. Payment history for Mortgage Loans that have been closed for more than
90 days.
In the event an Officer's Certificate of the Company is delivered to
the Custodian because of a delay caused by the public recording office in
returning any recorded document, the Company shall deliver to the Custodian,
within 60 days of the related Closing Date, an Officer's Certificate which shall
(i) identify the recorded document, (ii) state that the recorded document has
not been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. The Company shall be required to deliver to the
Custodian the applicable recorded document by the date specified in (iv) above.
An extension of the date specified in (iv) above may be requested from the
Purchaser, which consent shall not be unreasonably withheld. In the event that
any document described above has not been delivered to the Custodian by (1) the
date set forth in (iv) above, or by the extended date as may be agreed to by
both parties, the Company shall, at Purchaser's request, repurchase the related
Mortgage Loan(s) for which such documents have not been delivered.
EXHIBIT C
MORTGAGE LOAN DOCUMENTS
The Mortgage Loan Documents for each Mortgage Loan shall include each
of the following items, which shall be delivered to the Custodian pursuant to
Section 2.01 of the Master Seller's Warranties and Servicing Agreement to which
this Exhibit is annexed (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements
necessary to show a complete chain of endorsements from the original payee to
the Company, endorsed in blank, "Pay to the order of __________________________,
without recourse" and signed via original signature in the name of the Company
by an authorized officer and if previously endorsed, signed in the name of the
last endorsee by a duly qualified officer of the last endorsee. To the extent
that there is no room on the face of the Mortgage Note for endorsements, the
endorsement may be contained on an allonge, if state law so allows. If the
Mortgage Loan was acquired by the Company in a merger, the endorsement must be
by "[SELLER], successor by merger to [name of predecessor]." If the Mortgage
Loan was acquired or originated by the Company while doing business under
another name, the endorsement must be by "[SELLER], formerly known as [previous
name]."
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed pursuant to a
power of attorney, with evidence of recording thereon;
(d) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon;
(e) In the case of a Mortgage Loan that is not a MERS Mortgage Loan,
the original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording, delivered in blank. If the Mortgage Loan was
acquired by the Company in a merger, the Assignment of Mortgage must be made by
"[SELLER], successor by merger to [name of predecessor]." If the Mortgage Loan
was acquired or originated by the Company while doing business under another
name, the Assignment of Mortgage must be by "[SELLER], formerly known as
[previous name];"
(f) for each Mortgage Loan that is not a MERS Mortgage Loan, the
originals of all intervening assignments of mortgage with evidence of recording
thereon evidencing a complete chain of ownership from the originator of the
Mortgage Loan to the last assignee, including warehousing assignments, if any;
(g) for each Mortgage Loan that is a MERS Mortgage Loan, the original
Mortgage, noting the presence of the MIN of the Mortgage Loan and either
language indicating that the Mortgage Loan is a MOM Loan or if the Mortgage Loan
was not a MOM Loan at origination, the original Mortgage and the assignment
thereof to MERS, with evidence of
C-1
recording indicated thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded;
(h) the original PMI or LPMI Policy or certificate, if private
mortgage guaranty insurance is required pursuant to the Agreement;
(i) the original or duplicate original lender's title policy and all
riders, if any, thereto or, in the event such original title policy has not been
received from the insurer, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy thereof
certified by the title company, with the original policy of title insurance to
be delivered within 180 days of the Closing Date; and
(j) the original of any security agreement, chattel mortgage or
equivalent executed in connection with the Mortgage.
EXHIBIT D-1
CUSTODIAL ACCOUNT CERTIFICATION
___________________, 200_
IndyMac Bank, F.S.B. hereby certifies that it has established the
account described below as a Custodial Account pursuant to Section 4.04 of the
Master Seller's Warranties and Servicing Agreement, dated as of [Date],
Conventional Residential Fixed Rate Mortgage Loans.
Title of Account: IndyMac Bank, F.S.B. in trust for the Purchaser
Account Number: _________________
Address of office or branch
of the Company at
which Account is maintained: ________________________________________
________________________________________
________________________________________
________________________________________
INDYMAC BANK, F.S.B.
Company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT D-2
CUSTODIAL ACCOUNT LETTER AGREEMENT
____________________, 200_
To: _______________________________
_______________________________
(the "Depository")
_______________________________
As Company under the Master Seller's Warranties and Servicing
Agreement, dated as of _________________________, Conventional Residential Fixed
Rate Mortgage Loans (the "Agreement"), we hereby authorize and request you to
establish an account, as a Custodial Account pursuant to Section 4.04 of the
Agreement, to be designated as "IndyMac Bank, F.S.B., in trust for the Purchaser
- Conventional Residential Fixed Rate and Adjustable Rate Mortgage Loans." All
deposits in the account shall be subject to withdrawal therefrom by order signed
by the Company. You may refuse any deposit which would result in violation of
the requirement that the account be fully insured as described below. This
letter is submitted to you in duplicate. Please execute and return one original
to us.
INDYMAC BANK, F.S.B.
Company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number _________________,
at the office of the Depository indicated above, and agrees to honor withdrawals
on such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
----------------------------------------
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
EXHIBIT E-1
ESCROW ACCOUNT CERTIFICATION
___________________, 200_
IndyMac Bank, F.S.B. hereby certifies that it has established the
account described below as an Escrow Account pursuant to Section 4.06 of the
Master Seller's Warranties and Servicing Agreement, dated as of
___________________________________________, Conventional Residential Fixed Rate
Mortgage Loans.
Title of Account: "IndyMac Bank, F.S.B. in trust for the Purchaser and various
Mortgagors."
Account Number:
Address of office or branch
of the Company at
____________________
which Account is maintained:
________________________________________
________________________________________
________________________________________
INDYMAC BANK, F.S.B.
Company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT E-2
ESCROW ACCOUNT LETTER AGREEMENT
______________________, 200_
To: _______________________________
_______________________________
(the "Depository")
_______________________________
As Company under the Master Seller's Warranties and Servicing
Agreement, dated as of ______________________________, Conventional Residential
Fixed Rate Mortgage Loans (the "Agreement"), we hereby authorize and request you
to establish an account, as an Escrow Account pursuant to Section 4.07 of the
Agreement, to be designated as "IndyMac Bank, F.S.B., in trust for the Purchaser
- Conventional Residential Fixed Rate and Adjustable Rate Mortgage Loans." All
deposits in the account shall be subject to withdrawal therefrom by order signed
by the Company. You may refuse any deposit which would result in violation of
the requirement that the account be fully insured as described below. This
letter is submitted to you in duplicate. Please execute and return one original
to us.
INDYMAC BANK, F.S.B.
Company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number ___________________,
at the office of the Depository indicated above, and agrees to honor withdrawals
on such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
----------------------------------------
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
EXHIBIT F
MONTHLY REMITTANCE ADVICE
EXHIBIT G
[RESERVED]
EXHIBIT H
[RESERVED]
EXHIBIT I
COMPANY'S OFFICER'S CERTIFICATE
I, __________________________________ hereby certify that I am the
duly elected ___________________________ of [COMPANY], a _______________________
(the "Company"), and further certify, on behalf of the Company as follows:
[1. Attached hereto as Attachment I are a true and correct copy of the
[Certificate of Incorporation and by-laws] [Certificate of limited
partnership and limited partnership agreement] of the Company as are in
full force and effect on the date hereof.]
2. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of the Company are pending or contemplated.
3. Each person who, as an officer or attorney-in-fact of the Company,
signed (a) the Master Seller's Warranties and Servicing Agreement (the
"Purchase Agreement"), dated as of [Date] by and between the Company and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc. (the "Purchaser"); (b) the Trade
Confirmation, dated __________________, 200_, between the Company and the
Purchaser (the "Trade Confirmation"); and (c) any other document delivered
prior hereto or on the date hereof in connection with the sale and
servicing of the Mortgage Loans in accordance with the Purchase Agreement
and the Trade Confirmation was, at the respective times of such signing and
delivery, and is as of the date hereof, duly elected or appointed,
qualified and acting as such officer or attorney-in-fact, and the
signatures of such persons appearing on such documents are their genuine
signatures.
[4. Attached hereto as Attachment II is a true and correct copy of the
resolutions duly adopted by the board of directors of the Company on
________________, 200_ (the "Resolutions") with respect to the
authorization and approval of the sale and servicing of the Mortgage Loans;
said Resolutions have not been amended, modified, annulled or revoked and
are in full force and effect on the date hereof.]
[5. Attached hereto as Attachment III is a Certificate of Good
Standing of the Company dated ______________, 200_. No event has occurred
since _____________, 200_ which has affected the good standing of the
Company under the laws of the State of _______________________.]
6. Attached hereto as Attachment IV is a copy of each license of the
Company to originate and sell the Mortgage Loans. No such licenses have
been suspended or revoked by any court, administrative agency, arbitrator
or governmental body and no proceedings are pending which might result in
such suspension or revocation.
7. All of the representations and warranties of the Company contained
in Section 3.01 and 3.02 of the Purchase Agreement were true and correct in
all material
respects as of the date of the Purchase Agreement and are true and correct
in all material respects as of the date hereof.
8. The Company has performed all of its duties and has satisfied all
the material conditions on its part to be performed or satisfied prior to
the Closing Date pursuant to the Purchase Agreement and the related Trade
Confirmation.
All capitalized terms used herein and not otherwise defined shall have
the meaning assigned to them in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:
------------------
[COMPANY]
(Company)
By:
------------------------------------
Name:
----------------------------------
Title: Vice President
I, ________________________, Secretary of the Company, hereby certify
that ________________________ is the duly elected, qualified and acting Vice
President of the Company and that the signature appearing above is his genuine
signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:
------------------
[COMPANY]
(Company)
By:
------------------------------------
Name:
----------------------------------
Title: [Assistant] Secretary
1
EXHIBIT J
[FORM OF OPINION OF COUNSEL TO THE COMPANY]
[Date], 2006
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc. ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Account Management
Reference: Master Seller's Warranties and Servicing Agreement, dated as of
May 1, 2006, between IndyMac Bank, F.S.B. (the "IndyMac"), as seller
and servicer, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., as purchaser
(the "Purchaser")
Ladies and Gentlemen:
I have acted as special counsel to IndyMac in connection with the sale by
the IndyMac of certain mortgage loans (the "Mortgage Loans") to the Purchaser
pursuant to the agreement referenced above (the "Agreement"). Capitalized terms
not otherwise defined herein have the meanings set forth in the Agreement.
For the purpose of rendering this opinion, I have made such documentary,
factual and legal examinations as I deemed necessary under the circumstances. As
to factual matters, I have relied upon statements, certificates and other
assurances of public officials and of officers and other representatives of
IndyMac, and upon such other certificates as I deemed appropriate, which factual
matters have not been independently established or verified by me. I have also
assumed, among other things, the genuineness of all signatures, the legal
capacity of all natural persons, the accuracy of representations contained in
reviewed documents, the authenticity of all documents submitted to me as
originals, and the conformity to original documents of all documents submitted
to me as copies and the authenticity of the originals of such copied documents.
On the basis of and subject to the foregoing examination, and in reliance
thereon, and subject to the assumptions, qualifications, exceptions and
limitations expressed herein, I am of the opinion that:
1. IndyMac has been duly organized and is validly existing as a federal
savings bank in good standing under the federal laws of the United States
of America.
2. The Agreement has been duly authorized, executed and delivered by IndyMac.
3. No consent, approval, authorization or order of any federal court or
governmental agency or body is required for the execution, delivery or
performance by IndyMac of the
2
Agreement except for those consents, approvals, authorizations or orders
which previously have been obtained.
4. The performance by IndyMac of its obligations under the Agreement does not
conflict with or result in a breach or violation of any material term or
provision of, or constitute a default under, (a) the Character or Bylaws of
IndyMac, or (b) to the best of my knowledge, (i) any indenture or other
agreement or instrument to which IndyMac is a party or by which it is
bound, (ii) any federal statute or regulation applicable to IndyMac, or
(iii) any written order of any federal court, regulatory body,
administrative agency or governmental body having jurisdiction over
IndyMac, except in any such case where the breach, violation or default
would not have a material adverse effect on IndyMac or its ability to
perform its obligations under the Agreement.
5. There are no legal or governmental actions, investigations or proceedings
pending or, to the best of my knowledge, threatened against IndyMac (a)
asserting the invalidity of the Agreement or (b) which would be likely to
impair materially the ability of the IndyMac to perform its obligations
under the Agreement. For the purpose of the foregoing, (i) I have not
regarded any legal or governmental actions, investigations or proceedings
to be "pending" unless the legal department of IndyMac has received notice
of such actions, investigations or proceedings and (ii) I have not regarded
any legal or governmental actions, investigations or proceedings to be
"threatened" unless the potential litigant or governmental authority has
manifested to the legal department of IndyMac a present intention to
initiate such proceedings. The opinion expressed in this paragraph 5 does
not address loan-level legal or governmental actions, investigations or
proceedings.
The qualification of any opinion or statement herein by the use of the
words "to the best of my knowledge" or "known to me" means that, during the
course of my employment in connection with the affairs of IndyMac and with
respect to the Agreement, no information has come to my attention that gives me
actual knowledge of the existence or absence of the matters, actions,
proceedings, orders, items, indentures, agreements, documents or facts so
qualified. However, I have not undertaken any independent investigation or
inquiry to determine the existence of such matters, actions, proceedings,
orders, items, indentures, agreements, documents or facts and no inference as to
my knowledge thereof shall be drawn from the fact of my employment by any
entity. As used in this paragraph, the term "actual knowledge" means conscious
awareness.
I express no opinion as to the effect of federal or state anti-trust laws
or other state or federal laws governing restraints of trade or unfair
competition, or the effect of federal or state securities, tax, labor or
environmental laws on the Agreement or any transaction contemplated thereby.
Although I do not believe that the provisions of the Agreement designating the
governing law thereof affect the opinions rendered herein, I note that the
Agreement, by its terms, is governed by the laws of the State of New York. I
express no opinion as to the effect of such governing law provisions, and I
assume for purposes of this opinion that the substantive provisions of New York
law (if applicable) are identical to [State of Admission] law, without regard to
its conflict of law principles.
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I am admitted to practice in the State of [State of Admission], and, except
as set forth below, I render no opinion herein as to matters involving the laws
of any jurisdiction other than the State of [State of Admission]and the federal
laws of the United States of America. This opinion is limited to such laws as
they presently exist, to present judicial interpretations thereof and to the
facts as they presently exist or are contemplated by the agreements referred to
herein. In rendering this opinion, I assume no obligation to revise or
supplement this opinion should the present laws of the jurisdictions mentioned
herein be changed by legislative actions, judicial decisions or otherwise. This
opinion is rendered as of the date hereof, and I express no opinion as to, and
disclaim any undertaking or obligation to update this opinion in respect of,
changes of circumstances or events that occur subsequent to this date.
This opinion is furnished to you in connection with the Agreement and the
transactions contemplated thereby and may not be relied upon by any other person
or by you in any other context without my prior written consent. This opinion
may not be included in any other document or quoted or otherwise referred to in
whole or in part without my prior written consent.
Very truly yours,
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EXHIBIT K
SECURITY RELEASE CERTIFICATION
1. Release of Security Interest
________________________________________, hereby relinquishes any and
all right, title and interest it may have in and to the Mortgage Loans described
in Exhibit A attached hereto upon purchase thereof by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Lending, Inc. from the Company named below pursuant to that certain Master
Seller's Warranties and Servicing Agreement, dated as of [Date], as of the date
and time of receipt by________________ of $__________ for such Mortgage Loans
(the "Date and Time of Sale"), and certifies that all notes, mortgages,
assignments and other documents in its possession relating to such Mortgage
Loans have been delivered and released to the Company named below or its
designees as of the Date and Time of Sale.
Name and Address of Financial Institution
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(Name)
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(Address)
By:
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2. Certification of Release
The Company named below hereby certifies to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Lending, Inc. that, as of the Date and Time of Sale of the above mentioned
Mortgage Loans to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Holdings, Inc., the security interests
in the Mortgage Loans released by the above named corporation comprise all
security interests relating to or affecting any and all such Mortgage Loans. The
Company warrants that, as of such time, there are and will be no other security
interests affecting any or all of such Mortgage Loans.
Company
By:
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Name:
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Title:
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EXHIBIT L
ASSIGNMENT AND CONVEYANCE
On this____________day of___________, 200_, IndyMac Bank, F.S.B.
("Company") as the Company under that certain Master Seller's Warranties and
Servicing Agreement, dated as of [Date] (the "Agreement") does hereby sell,
transfer, assign, set over and convey to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc. as
Purchaser under the Agreement, without recourse, but subject to the terms of the
Agreement, all rights, title and interest of the Company in and to the Mortgage
Loans listed on the Mortgage Loan Schedule attached hereto, together with the
related Mortgage Files and all rights and obligations arising under the
documents contained therein. Pursuant to Section 2.03 of the Agreement, the
Company has delivered to the Custodian the documents for each Mortgage Loan to
be purchased as set forth in the Custodial Agreement. The contents of each
related Servicing File required to be retained by the Company to service the
Mortgage Loans pursuant to the Agreement and thus not delivered to the Purchaser
are and shall be held in trust by the Company for the benefit of the Purchaser
as the owner thereof. The Company's possession of any portion of each such
Servicing File is at the will of the Purchaser for the sole purpose of
facilitating servicing of the related Mortgage Loan pursuant to the Agreement,
and such retention and possession by the Company shall be in a custodial
capacity only. The ownership of each Mortgage Note, Mortgage, and the contents
of the Mortgage File and Servicing File is vested in the Purchaser and the
ownership of all records and documents with respect to the related Mortgage Loan
prepared by or which come into the possession of the Company shall immediately
vest in the Purchaser and shall be retained and maintained, in trust, by the
Company at the will of the Purchaser in such custodial capacity only.
The Company confirms to the Purchaser that the representations and
warranties set forth in Sections 3.01 and 3.02 of the Agreement are true and
correct as of the date hereof, and that all statements made in the Company's
Officer's Certificates and all Attachments thereto remain complete, true and
correct in all respects as of the date hereof. The Mortgage Loan Schedule
attached hereto as Attachment 1 is true and correct as of the date hereof.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
INDYMAC BANK, F.S.B.
(Company)
By:
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Name:
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Title:
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EXHIBIT M
ANNUAL CERTIFICATION
Re: [______________________] (the "Trust"), Mortgage Pass-Through Certificates,
Series [_________________], issued pursuant to the Pooling and Servicing
Agreement, dated as of [_____________________], 200__ (the "Pooling and
Servicing Agreement"), among [____________________], as depositor (the
"Depositor"), [___________], as trustee (the "Trustee"), [__________], as
servicer (the "Servicer"), and [__________], as [depositor] [master
servicer] [trustee].
I, [identify the certifying individual], certify to the Depositor and the
Trustee, and their officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:
(i) Based on my knowledge, the information in the Annual Statement of
Compliance and the Annual Independent Public Accountant's Servicing
Report delivered pursuant to the Master Seller's Warranties and
Servicing Agreement dated as of [ ], 200_ between ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Lending, Inc. and [SELLER] (the "Master Seller's Warranties
and Servicing Agreement"), and all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans submitted to the Master Servicer 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 date of this certification;
(ii) The servicing information required to be provided to the Master
Servicer by the Company under this Master Seller's Warranties and
Servicing Agreement has been provided to the Master Servicer;
(iii) I am responsible for reviewing the activities performed by the
Company under the Master Seller's Warranties and Servicing Agreement
and based upon the review required by this Master Seller's Warranties
and Servicing Agreement, and except as disclosed in the Annual
Statement of Compliance or the Annual Independent Public Accountant's
Servicing Report submitted to the Master Servicer, the Company has, as
of the date of this certification fulfilled its obligations under this
Master Seller's Warranties and Servicing Agreement; and
(iv) I have disclosed to the Master Servicer all significant deficiencies
relating to the Company's compliance with the minimum servicing
standards in accordance with a review conducted in compliance with the
Uniform Single Attestation Program for Mortgage Bankers or similar
standard as set forth in the Master Seller's Warranties and Servicing
Agreement.
Date:
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[Signature]
[Title]:
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EXHIBIT N
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Seller] [Name of
Subservicer] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":
SERVICING CRITERIA APPLICABLE
-------------------------------------------------------------------------------- SERVICING
REFERENCE CRITERIA CRITERIA
---------------- ------------------------------------------------------------- ----------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to monitor any X
performance or other triggers and events of default in
accordance with the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third X
parties, policies and procedures are instituted to monitor
the third party's performance and compliance with such
servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a
back-up servicer for the mortgage loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect X
on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of the
transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate X
custodial bank accounts and related bank clearing accounts no
more than two business days following receipt, or such other
number of days specified in the transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor X
or to an investor are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash X
flows or distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved as
specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such as cash X
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a federally insured X
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized X
access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all X
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date,
or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain
explanations for reconciling items.
SERVICING CRITERIA APPLICABLE
-------------------------------------------------------------------------------- SERVICING
REFERENCE CRITERIA CRITERIA
---------------- ------------------------------------------------------------- ----------
These reconciling items are resolved within 90 calendar days
of their original identification, or such other number of
days specified in the transaction agreements.
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be filed with the X
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance
with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C)
are filed with the Commission as required by its rules and
regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number
of mortgage loans serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in [X]
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within two [X]
business days to the Servicer's investor records, or such
other number of days specified in the transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree [X]
with cancelled checks, or other form of payment, or custodial
bank statements.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as
required by the transaction agreements or related mortgage
loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as
required by the transaction agreements.
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any
conditions or requirements in the transaction agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in X
accordance with the related mortgage loan documents are
posted to the Servicer's obligor records maintained no more
than two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated
to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree X
with the Servicer's records with respect to an obligor's
unpaid principal balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's X
mortgage loans (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related pool
asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, X
modifications and deeds in lieu of foreclosure, foreclosures
and repossessions, as applicable) are initiated, conducted
and concluded in accordance with the timeframes or other
requirements established by the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are maintained during X
the period a mortgage loan is delinquent in accordance with
the transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the
SERVICING CRITERIA APPLICABLE
-------------------------------------------------------------------------------- SERVICING
REFERENCE CRITERIA CRITERIA
---------------- ------------------------------------------------------------- ----------
transaction agreements, and describe the entity's activities
in monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling plans
in cases where delinquency is deemed temporary (e.g., illness
or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage X
loans with variable rates are computed based on the related
mortgage loan documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as X
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's mortgage loan documents, on at least an
annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with applicable
mortgage loan documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar days of full
repayment of the related mortgage loans, or such other number
of days specified in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or X
insurance payments) are made on or before the related penalty
or expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has
been received by the servicer at least 30 calendar days prior
to these dates, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with any payment to X
be made on behalf of an obligor are paid from the servicer's
funds and not charged to the obligor, unless the late payment
was due to the obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within X
two business days to the obligor's records maintained by the
servicer, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are X
recognized and recorded in accordance with the transaction
agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified in Item [X]
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
maintained as set forth in the transaction agreements.