EXECUTION
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▇▇▇▇▇▇ BROTHERS BANK, FSB,
Purchaser
and
WACHOVIA MORTGAGE CORPORATION,
Seller
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FLOW PURCHASE, WARRANTIES AND SERVICING AGREEMENT
Dated as of July 1, 2004
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Conventional Residential Fixed and Adjustable Rate Mortgage Loans
Group No. 2004-FLOW
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT
DELIVERY OF DOCUMENTS
Section 2.01 Conveyance of Mortgage Loans; Possession of Mortgage Files;
Maintenance of Servicing Files...............................15
Section 2.02 Books and Records; Transfers of Mortgage Loans.................15
Section 2.03 Delivery of Documents..........................................16
ARTICLE III
PURCHASE PRICE
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
REMEDIES AND BREACH
Section 4.01 Seller Representations and Warranties..........................18
Section 4.02 Representations and Warranties Regarding Individual
Mortgage Loans...............................................21
Section 4.03 Remedies for Breach of Representations and Warranties..........32
Section 4.04 Post Closing Due Diligence.....................................35
Section 4.05 Restrictions and Requirements Applicable in the Event that
a Mortgage Loan is Acquired by a REMIC.......................35
ARTICLE V
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 5.01 Seller to Act as Servicer......................................37
Section 5.02 Liquidation of Mortgage Loans..................................39
Section 5.03 Collection of Mortgage Loan Payments...........................40
Section 5.04 Establishment of and Deposits to Custodial Account.............40
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Section 5.05 Permitted Withdrawals From Custodial Account...................41
Section 5.06 Establishment of and Deposits to Escrow Account................43
Section 5.07 Permitted Withdrawals From Escrow Account......................43
Section 5.08 Completion and Recordation of Assignment of Mortgage...........44
Section 5.09 Payment of Taxes, Insurance and Other Charges..................44
Section 5.10 Protection of Accounts.........................................45
Section 5.11 Maintenance of Hazard Insurance................................46
Section 5.12 Maintenance of Mortgage Insurance..............................47
Section 5.13 Maintenance of Fidelity Bond and Errors and Omissions
Insurance....................................................48
Section 5.14 Inspections....................................................48
Section 5.15 Restoration of Mortgaged Property..............................48
Section 5.16 Maintenance of PMI and/or LPMI Policy; Claims..................49
Section 5.17 Title, Management and Disposition of REO Property..............50
Section 5.18 Real Estate Owned Reports......................................52
Section 5.19 Liquidation Reports............................................52
Section 5.20 Notification of Adjustments....................................53
Section 5.21 Reports of Foreclosures and Abandonments of Mortgaged
Property.....................................................53
Section 5.22 Prepayment Charges.............................................53
Section 5.23 Credit Reporting...............................................53
Section 5.24 Safeguarding Customer Information..............................54
ARTICLE VI
PAYMENTS TO PURCHASER
Section 6.01 Remittances....................................................54
Section 6.02 Statements to Purchaser........................................55
Section 6.03 Due Dates Other Than the First of the Month....................55
Section 6.04 Monthly Advances by the Seller.................................55
ARTICLE VII
GENERAL SERVICING PROCEDURES
Section 7.01 Transfers of Mortgaged Property................................56
Section 7.02 Satisfaction of Mortgages and Release of Mortgage Files........57
Section 7.03 Servicing Compensation.........................................57
Section 7.04 Annual Audit Report............................................58
Section 7.05 Annual Officer's Certificate...................................58
Section 7.06 Right to Examine Seller Records................................58
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ARTICLE VIII
AGENCY TRANSFER; PASS-THROUGH TRANSFER
Section 8.01 Removal of Mortgage Loans from Inclusion Under this Agreement
Upon an Agency Transfer, or a Pass-Through Transfer on One
or More Reconstitution Dates.................................59
Section 8.02 Transfer of Servicing Following Reconstitution.................61
Section 8.03 Purchaser's Repurchase and Indemnification Obligations.........62
Section 8.04 Additional Indemnification by the Seller.......................62
Section 8.05 Transfer Of Servicing..........................................63
ARTICLE IX
THE COMPANY
Section 9.01 Merger or Consolidation of the Seller..........................63
Section 9.02 Limitation on Liability of Seller and Others...................64
Section 9.03 Limitation on Resignation and Assignment by Seller.............64
Section 9.04 Limitation on Assignment by the Seller.........................65
ARTICLE X
DEFAULT
Section 10.01 Events of Default..............................................65
Section 10.02 Waiver of Defaults.............................................67
ARTICLE XI
TERMINATION
Section 11.01 Termination....................................................67
Section 11.02 Termination Without Cause......................................68
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Seller............................................68
Section 12.02 Amendment......................................................69
Section 12.03 Closing........................................................70
Section 12.04 Closing Documents..............................................71
Section 12.05 Costs..........................................................72
Section 12.06 Governing Law..................................................72
Section 12.07 Duration of Agreement..........................................72
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Section 12.08 Notices........................................................73
Section 12.09 Severability of Provisions.....................................73
Section 12.10 Relationship of Parties........................................74
Section 12.11 Execution; Successors and Assigns..............................74
Section 12.12 Recordation of Assignments of Mortgage.........................74
Section 12.13 Assignment by Purchaser........................................74
Section 12.14 No Personal Solicitation.......................................75
Section 12.15 Confidential Information.......................................75
Section 12.16 Appointment and Designation of Master Servicer.................77
Section 12.17 Waivers; Other Agreements......................................77
Section 12.18 Exhibits.......................................................77
Section 12.19 General Interpretive Principles................................77
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EXHIBITS
EXHIBIT A-1 ACKNOWLEDGMENT AND CONVEYANCE AGREEMENT
EXHIBIT A-2 MORTGAGE LOAN SCHEDULE DATA FIELDS
EXHIBIT B CONTENTS OF EACH MORTGAGE FILE
EXHIBIT C RESERVED
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-1 FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT F-2 STANDARD LAYOUT FOR DEFAULTED LOAN REPORT
EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION
EXHIBIT H SELLER'S OFFICER'S CERTIFICATE
EXHIBIT I FORM OF OPINION OF COUNSEL TO SELLER
EXHIBIT J-1 SECURITY RELEASE CERTIFICATION
EXHIBIT J-2 SECURITY RELEASE CERTIFICATION
EXHIBIT K UNDERWRITING GUIDELINES
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This is a Flow Purchase, Warranties and Servicing Agreement
for residential conventional fixed and adjustable rate residential mortgage
loans, dated and effective as of July 1, 2004, and is executed between ▇▇▇▇▇▇
Brothers Bank, FSB, as purchaser (the "Purchaser"), and Wachovia Mortgage
Corporation, as seller and servicer (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser has agreed to purchase from the Seller
and the Seller has agreed to sell to the Purchaser, from time to time, certain
Mortgage Loans on a servicing retained basis as described herein, and which
shall be delivered as whole loans on the related Closing Date, as defined below;
WHEREAS, each Mortgage Loan will be secured by a mortgage,
deed of trust or other security instrument creating a first or second lien on a
residential dwelling located in the jurisdiction indicated on the related
Mortgage Loan Schedule, which shall be annexed to the related Acknowledgment and
Conveyance Agreement; and
WHEREAS, the Purchaser and the Seller wish to prescribe the
manner of conveyance, servicing and control of the Mortgage Loans.
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Acknowledgment and Conveyance Agreement: The agreement,
substantially in the form of Exhibit A-1 hereto to be executed by the Seller and
the Purchaser on each Closing Date.
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 which
are in accordance with ▇▇▇▇▇▇ ▇▇▇ servicing practices and procedures, for MBS
pool mortgages, as defined in the ▇▇▇▇▇▇ Mae Guides, including future updates.
Agency Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans to ▇▇▇▇▇▇ ▇▇▇ 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 Seller as "servicer" thereunder.
Agreement: This Flow Purchase, Warranties and Servicing
Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor
thereto.
Ancillary Income: All ancillary income derived from the
Mortgage Loans, excluding Servicing Fees and Prepayment Charges attributable to
the Mortgage Loans, including but not limited to, interest received on funds
deposited in the Custodial Account or any Escrow Account, escrow account
benefits, reinstatement fees, all 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 arising from or in connection with any Mortgage Loan to the
extent not otherwise payable to the Mortgagor under applicable law or pursuant
to the terms of the related Mortgage Loan.
Appraised Value: With respect to any Mortgaged Property, the
lesser of (i) the value thereof as determined by an appraisal of the Mortgage
Loan at the time of origination of the Mortgage Loan by an appraiser who met the
underwriting requirements of the originator, 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 of such Refinanced Mortgage Loan at the time of origination of
such Refinance Mortgage Loan by an appraiser who met the underwriting
requirements of the originator.
Approved Flood Policy Insurer: Any of the following insurers:
Flood Data Services, Inc., Flood Zone, Inc., GEOTrac, or Transamerica Flood
Hazard Certification.
Approved Tax Service Contract Provider: Any of the following
providers: First American, Transamerica, Lereta or Fidelity.
ARM Mortgage Loan: A Mortgage Loan pursuant to which the
interest rate shall be adjusted from time to time in accordance with the related
Mortgage Note.
Assignment of Mortgage: An assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Purchaser, or in the case of a MERS
Mortgage Loan, a confirmed electronic transmission to MERS, identifying a
transfer of ownership of the related Mortgage to the Purchaser or its designee.
BIF: The Bank Insurance Fund, or any successor thereto.
BPO: A broker's price opinion obtained by the Purchaser
Business Day: Any day other than (i) a Saturday or Sunday, or
(ii) a day on which banking and savings and loan institutions in the States of
New York or North Carolina are authorized or obligated by law or executive order
to be closed.
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Combined Loan-to-Value Ratio or CLTV: With respect to any
Second Lien Mortgage Loan, the ratio of (a) the sum of (i) the outstanding
principal balance of the Mortgage Loan at origination and (ii) the original
principal amount of any related First Lien (as of the Cut-off Date)(unless
otherwise indicated) and (b) the lesser of (i) the Appraised Value of the
Mortgaged Property and (ii) if the Mortgage Loan was made to finance the
acquisition of the related Mortgaged Property, the purchase price of the
Mortgaged Property, expressed as a percentage.
Closing Date: Means the date or dates on which the Seller
shall sell and Purchaser shall purchase Mortgage Loans listed on the related
Mortgage Loan Schedule under this Agreement as set forth in the related Purchase
Price and Terms Agreement.
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.
Condemnation Proceeds: All awards, compensation or settlements
in respect of a Mortgaged Property, whether permanent or temporary, partial or
entire, by exercise of the power of eminent domain or condemnation, to the
extent not required to be released to a Mortgagor in accordance with the terms
of the related Mortgage Loan Documents.
Co-op Lease: With respect to a Co-op Loan, the lease with
respect to a dwelling unit occupied by the Mortgagor and relating to the stock
allocated to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock
allocated to a dwelling unit in a residential cooperative housing corporation
and a collateral assignment of the related Co-op Lease.
Co-op Stock: With respect to a Co-op Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related residential cooperative housing corporation.
Custodial Account: The separate account or accounts created
and maintained pursuant to Section 5.04.
Custodial Agreement: The agreement governing the retention of
the originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents.
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: With respect to any Mortgage Loan purchased on a
Closing Date, the first day of the month in which the related Closing Date
occurs, or such other date as may be set forth in the related Purchase Price and
Terms Letter.
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Deleted Mortgage Loan: A Mortgage Loan which is repurchased by
the Seller in accordance with the terms of this Agreement and which is, in the
case of a substitution pursuant to Section 4.03, replaced or to be replaced with
a Qualified Substitute Mortgage Loan.
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.
Disqualified Organization: An organization defined as such in
Section 860E(e) of the Code.
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 following the actual 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 on the first day of the month of the Remittance Date.
Eligible Account: An account established and maintained: (a)
within FDIC insured accounts (or other accounts with comparable insurance
coverage acceptable to the Rating Agencies) created, maintained and monitored by
the Seller so that all funds deposited therein are fully insured, (b) with the
corporate trust department of a financial institution assigned a long-term debt
rating of not less than "Baa3," and a short term debt rating of "P3," from
▇▇▇▇▇'▇ Investors Services, Inc. and, if ownership of the Mortgage Loans is
evidenced by mortgage backed securities, the equivalent ratings of the rating
agencies, and held such that the rights of the Purchaser and the owner of the
Mortgage Loans shall be fully protected against the claims of any creditors of
the Seller and of any creditors or depositors of the institution in which such
account is maintained or (c) in a separate non-trust account without FDIC or
other insurance in Qualified Depository.
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 and/or
the short-term deposit rating and/or the long-term unsecured debt
obligations or deposits of such depository institution or trust
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company at the time of such investment or contractual commitment
providing for such investment are rated in one of the two highest
rating categories by each Rating Agency and any other demand or time
deposit or certificate that is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed thirty
(30) days and with respect to any security described in clause (i)
above and entered into with a depository institution or trust company
(acting as principal) described in clause (ii) above;
(iv) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of
America or any state thereof that are rated in one of the two highest
rating categories by each Rating Agency at the time of such investment
or contractual commitment providing for such investment; provided,
however, that securities issued by any particular corporation will not
be Eligible Investments to the extent that investments therein will
cause the then outstanding principal amount of securities issued by
such corporation and held as Eligible Investments to exceed 10% of the
aggregate outstanding principal balances of all of the Mortgage Loans
and Eligible Investments;
(v) commercial paper (including both non-interest bearing
discount obligations and interest bearing obligations payable on demand
or on a specified date not more than one year after the date of
issuance thereof) which are rated in one of the two highest rating
categories by each Rating Agency at the time of such investment;
(vi) any other demand, money market or time deposit,
obligation, security or investment as may be acceptable to each Rating
Agency as evidenced in writing by each Rating Agency; and
(vii) any money market funds, the collateral of which consists
of 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 (which may include repurchase obligations
secured by collateral described in clause (i)) and other securities,
and which money market funds are rated in one of the two highest rating
categories by each Rating Agency.
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.
Notwithstanding anything to the contrary, with respect to
Mortgage Loans subject to an Agency Transfer or a Pass-Through Transfer, in the
event that the applicable Reconstitution Agreement has a more limiting
definition of "Eligible Investments", then the definition contained in such
Reconstitution Agreement shall apply to such Mortgage Loans.
Errors and Omissions Insurance Policy: An errors and omissions
insurance policy to be maintained by the Seller pursuant to Section 5.13.
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Escrow Account: The separate account or accounts created and
maintained pursuant to Section 5.06.
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 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.
▇▇▇▇▇▇ Mae: The entity formerly known as the Federal National
Mortgage Association, or any successor thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the
▇▇▇▇▇▇ ▇▇▇ Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FICO Score: A statistical credit score obtained by mortgage
lenders in connection with the loan application to help assess a borrower's
credit worthiness.
Fidelity Bond: A fidelity bond to be maintained by the Seller
pursuant to Section 5.13.
First Lien: With respect to any Second Lien Mortgage Loan, the
mortgage loan relating to the corresponding Mortgaged Property having a first
priority lien.
First Lien Mortgage Loan: A Mortgage Loan secured by a first
priority lien Mortgage on the related Mortgaged Property.
Fixed Rate Mortgage Loan: A Mortgage Loan purchased pursuant
to this Agreement which bears a fixed Mortgage Interest Rate during the life of
the loan.
▇▇▇▇▇▇▇ Mac: The entity formerly known as the Federal Home
Loan Mortgage Corporation, or any successor thereto.
▇▇▇▇▇▇▇ Mac Guides: The ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the
▇▇▇▇▇▇▇ Mac Servicers' Guide and all amendments or additions thereto, including,
but not limited to, any future updates thereof.
Gross Margin: With respect to each ARM Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note which amount is
added to the Index in accordance with the terms of the related Mortgage Note to
determine, on each Interest Rate Adjustment Date, the Mortgage Interest Rate for
such Mortgage Loan.
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Index: On each Interest Rate Adjustment Date the applicable
index with respect to each ARM Mortgage Loan shall be the index set forth on the
Mortgage Loan Schedule with respect to such ARM Mortgage Loan.
Initial Mortgage Interest Rate Cap: With respect to each ARM
Mortgage Loan, the limit on the initial Mortgage Interest Rate adjustment as
indicated on the related Mortgage Loan Schedule.
Interest Only Mortgage Loan: A Mortgage Loan that only
requires payments of interest for a period of time specified in the related
Mortgage Note.
Insurance Proceeds: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interest Rate Adjustment Date: With respect to each ARM
Mortgage Loan, the date on which an adjustment to the Mortgage Interest Rate on
the related Mortgage Note becomes effective.
Insured Depository Institution: Insured Depository Institution
shall have the meaning ascribed to such term by Section 1813(c)(2) of Title 12
of the United States Code, as amended from time to time.
Lifetime Rate Cap: With respect to each ARM Mortgage Loan, the
provision of each Mortgage Note which provides for an absolute maximum Mortgage
Interest Rate thereunder, as set forth on the related Mortgage Loan Schedule.
The Mortgage Interest Rate during the term of each Mortgage Loan shall not at
any time exceed the Mortgage Interest Rate at the time of origination of such
Mortgage Loan by more than the amount per annum set forth on the related
Mortgage Loan Schedule.
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.
Loan-to-Value Ratio or LTV: With respect to any First Lien
Mortgage Loan, the ratio of the original outstanding principal amount of the
Mortgage Loan at origination to the lesser of (a) the Appraised Value of the
Mortgaged Property and (b) if the Mortgage Loan was made to finance the
acquisition of the related Mortgaged Property, the purchase price of the
Mortgaged Property, expressed as a percentage, and, with respect to any Second
Lien Mortgage Loan, the ratio of the sum of the original outstanding principal
amount of the Second Lien Mortgage Loan at origination and the outstanding
principal amount of any related First Lien as of the date of origination of such
Second Lien Mortgage Loan, to the Appraised Value of the related Mortgaged
Property.
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 from
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payments of interest made by the Mortgagor in an amount as is set forth in the
related Mortgage Loan Schedule. An LPMI Policy shall also include any policy of
primary mortgage guaranty insurance issued by a Qualified Insurer that is
purchased by the Seller with respect to some or all of the Mortgage Loans.
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 the Monthly Payments,
Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds), which,
during such period prior to the required cancellation of the LPMI Policy, shall
be used to pay the premium due on the related LPMI Policy.
Master Servicer: Aurora Loan Services, Inc. or such other
master servicer as the Purchaser may designate by written instruction to the
Seller.
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.
MOM Loan: Any Mortgage Loan as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns.
Monthly Advance: With respect to each Remittance Date and each
Mortgage Loan following Reconstitution, an amount equal to the Monthly Payment
(with the interest portion of such Monthly Payment adjusted to the Mortgage Loan
Remittance Rate) which was due on the Mortgage Loan on the Due Date in the
related Due Period, and (i) which was delinquent immediately preceding the
Determination Date and (ii) which was not the subject of a previous Monthly
Advance.
Monthly Payment: The scheduled monthly payment of principal
and/or interest on a Mortgage Loan.
Mortgage: With respect to any Mortgage Loan that is not a
Co-op Loan, the mortgage, deed of trust or other instrument securing a Mortgage
Note, which creates a first or second lien on an unsubordinated estate in fee
simple or leasehold estate in real property securing the Mortgage Note. With
respect to a Co-op Loan, the related Security Agreement.
Mortgage File: The items pertaining to a particular Mortgage
Loan referred to in Exhibit B annexed hereto, and any additional documents
required to be added to the Mortgage File pursuant to this Agreement.
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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, as adjusted from time to time in accordance with the provisions
of the Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the
subject of this Agreement, each Mortgage Loan originally sold and subject to
this Agreement being identified on the Mortgage Loan Schedule, which Mortgage
Loan includes without limitation the Mortgage File, the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The documents listed in Exhibit B
hereto.
Mortgage Loan Package: A group of Mortgage Loans sold to the
Purchaser by the Seller on a Closing Date and set forth on the Mortgage Loan
Schedule annexed to the related Acknowledgment and Conveyance Agreement.
Mortgage Loan Remittance Rate: With respect to each Mortgage
Loan, the annual rate of interest remitted to the Purchaser, which shall be
equal to the Mortgage Interest Rate minus the sum of the Servicing Fee Rate and
the LPMI Fee, if any.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed
as Annex 1 to each Acknowledgment and Conveyance Agreement, each such schedule
setting forth the data and information listed on Exhibit A-2 with respect to
each Mortgage Loan in the related Mortgage Loan Package.
Mortgage Note: The original executed note or other evidence of
the indebtedness of a Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to any Mortgage Loan, the
real property securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Notice of Intent: As defined in Section 5.02 hereof.
OCC: Office of the Comptroller of the Currency, its successors
and assigns.
Officer's Certificate: A certificate signed by the Chairman of
the Board, the Vice Chairman of the Board, the President or a Vice President and
by the Treasurer, the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Seller, 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 Seller, reasonably acceptable to the Purchaser, provided that
any Opinion of Counsel relating to (a) qualification of the Mortgage Loans in a
REMIC or (b) compliance with the REMIC
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Provisions, must be an opinion of counsel who (i) is in fact independent of the
Seller and any Master Servicer of the Mortgage Loans, (ii) does not have any
material direct or indirect financial interest in the Seller or any Master
Servicer of the Mortgage Loans or in an affiliate of any such entity and (iii)
is not connected with the Seller or any Master Servicer of the Mortgage Loans as
an officer, employee, director or person performing similar functions.
Pass-Through Transfer: The sale or transfer of some or all of
the Mortgage Loans to a trust to be formed as part of a publicly-issued and/or
privately placed, rated or unrated, mortgage pass-through transaction, retaining
the Seller as "servicer" (with or without a Master Servicer) thereunder.
Periodic Rate Cap: With respect to each ARM Mortgage Loan, and
any Adjustment Date therefor, the percentage set forth in the related Mortgage
Loan Schedule and in the related Mortgage Note which is the maximum amount by
which the Mortgage Interest Rate for such 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.
Prepayment Charge: With respect to any Mortgage Loan and
Remittance Date, the charges or premiums, if any, due in connection with a full
or partial prepayment of such Mortgage Loan during the related Due Period in
accordance with 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 the related Principal Prepayment Period, which Principal Prepayment was
applied to such Mortgage Loan prior to the Due Date on which such payment was
due, the amount of interest (net of the related Servicing Fee) 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 last day of such Principal Prepayment Period, inclusive.
Primary Mortgage Insurance Policy or PMI Policy: Each policy
of primary mortgage insurance represented to be in effect pursuant to Section
4.02(p), or any replacement policy therefor obtained by the Seller pursuant to
Section 5.16.
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.
Principal Prepayment: Any full or partial payment or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date, including any prepayment penalty or premium thereon and
which is not accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent to the month
of prepayment.
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Principal Prepayment Period: The month preceding the month in
which the related Remittance Date occurs.
Purchase Price: The price paid on the related Closing Date by
the Purchaser to the Seller in exchange for the Mortgage Loans as calculated in
Article III of this Agreement.
Purchase Price and Terms Agreement: With respect to each
purchase of a Mortgage Loan Package hereunder, that certain letter agreement by
and between the Seller and the Purchaser setting forth the general terms,
conditions and portfolio characteristics for each Mortgage Loan Package to be
purchased hereunder as of any Closing Date.
Purchaser: ▇▇▇▇▇▇ Brothers Bank, FSB or its successor in
interest or any successor to the Purchaser under this Agreement as herein
provided.
Qualified Appraiser: An appraiser who had no interest, direct
or indirect, in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or disapproval
of the Mortgage Loan, and such appraiser and the appraisal made by such
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.
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, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
Qualified Insurer: A mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
Qualified Substitute Mortgage Loan: A mortgage loan eligible
to be substituted by the Seller 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 Mortgage Loan Remittance
Rate of the Deleted Mortgage Loan; (iii) have a remaining term to maturity not
greater than and not more than one year less than that of the Deleted Mortgage
Loan; (iv) have a Gross Margin not less than that of the Deleted Mortgage Loan;
(v) have a maximum Mortgage Interest Rate Cap not less than that of the Deleted
Mortgage Loan; (vi) have a maximum periodic mortgage Interest Rate Cap not less
than that of the Deleted Mortgage Loan; (vii) comply with each representation
and warranty set forth in Sections 3.01 and 3.02; and (viii) be a REMIC Eligible
Mortgage Loan.
Rating Agency: Any of Fitch, Inc., ▇▇▇▇▇'▇ Investors Service,
Inc. or Standard & Poor's Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., or their respective successors.
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Reconstitution: A Pass-Through Transfer, a Whole Loan Transfer
or an Agency Transfer.
Reconstitution Agreements: The agreement or agreements entered
into by the Purchaser, the Seller, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac or certain third
parties on the Reconstitution Date(s) with respect to any or all of the Mortgage
Loans serviced hereunder, in connection with a Pass-Through Transfer, a Whole
Loan Transfer or an Agency Transfer as set forth in Section 8.01, 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 Pass-Through Transfer. Such
agreement or agreements shall prescribe the rights and obligations of the Seller
in servicing the related Mortgage Loans and shall provide for servicing
compensation to the Seller (calculated on a weighted average basis for all the
related Mortgage Loans as of the Reconstitution Date), net of any guarantee fees
due ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, if applicable, at least equal to the Servicing
Fee due the Seller in accordance with this Agreement or the servicing fee
required pursuant to the Reconstitution Agreement, whichever is greater.
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, a Whole Loan Transfer
or a Pass-Through Transfer pursuant to Section 8.01 hereof. On such date or
dates, the Mortgage Loans transferred shall cease to be covered by this
Agreement and the Seller's servicing responsibilities (but not its obligations
as seller and originator hereunder) shall cease under this Agreement with
respect to the related transferred Mortgage Loans.
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 which was made to a
Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan and the proceeds of which were used in whole or in part to satisfy
an existing mortgage.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Documents: The document or documents creating and
governing the administration of a REMIC.
REMIC Eligible Mortgage Loan: A Mortgage Loan held by a REMIC
which satisfies and/or complies with all applicable REMIC Provisions.
REMIC Provisions: Provisions of the federal income tax law
relating to a REMIC, which appear at Section 860A through 860G of Subchapter M
of Chapter 1, Subtitle A
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of the Code, and related provisions, and regulations, rulings or pronouncements
promulgated thereunder, as the foregoing may be in effect from time to time.
Remittance Date: The 18th day (or if such18th day is not a
Business Day, the first Business Day immediately following) of any month.
REO Disposition: The final sale by the Seller of any REO
Property.
REO Disposition Proceeds: All amounts received with respect to
an REO Disposition pursuant to Section 5.17.
REO Property: A Mortgaged Property acquired by the Seller on
behalf of the Purchaser through foreclosure or by deed in lieu of foreclosure in
full satisfaction of the related Mortgage, as described in Section 5.17.
Repurchase Price: With respect to any Mortgage Loan, a price
equal to (i) the Stated Principal Balance of the Mortgage Loan plus (ii)
interest on such Stated Principal Balance at the Mortgage Interest Rate from the
date on which interest has last been paid and distributed to the Purchaser to
the date of repurchase, less amounts received, if any, plus amounts advanced, if
any, by an servicer, in respect of such repurchased Mortgage Loan.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second
lien on the related Mortgaged Property
Securities Act of 1933 or the 1933 Act: The Securities Act of
1933, as amended.
Security Agreement: With respect to a Co-op Loan, the
agreement or mortgage creating a security interest in favor of the originator of
the Co-op Loan in the related Co-op Stock.
Seller: Wachovia Mortgage Corporation, or its successor in
interest or assigns, or any successor to the Seller under this Agreement
appointed as herein provided.
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
Seller of its servicing obligations, including, but not limited to, the cost of
(a) the preservation, restoration, protection and inspection 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 5.01, 5.02, 5.07, 5.08, 5.09, 5.11, 5.12, 5.14,
5.15 and 5.16.
Servicing Fee: With respect to each Mortgage Loan, the amount
of the annual fee the Purchaser shall pay to the Seller, 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 Stated Principal Balance of such Mortgage Loan.
Such fee shall be payable monthly, computed on the basis of the same principal
amount and period respecting which any related interest payment on a Mortgage
Loan is
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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, Condemnation or
Insurance Proceeds) of such Monthly Payment collected by the Seller.
Servicing Fee Rate: The rate set forth as such in the related
Purchase Price and Terms Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the Mortgage
File which are not delivered to the Custodian and copies of the Mortgage Loan
Documents listed in Exhibit B the originals of which are delivered to the
Custodian pursuant to Section 2.03.
Servicing Officer: Any officer of the Seller 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 Seller to the
Purchaser upon request, as such list may from time to time be amended.
Stated Principal Balance: As to each Mortgage Loan and any
date of determination, (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.
Tax Returns: The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of any REMIC under the REMIC Provisions, together with any
and all other information, reports or returns that may be required to be
furnished to the certificate holders under a REMIC or filed with the Internal
Revenue Service or any other governmental taxing authority under any applicable
provisions of federal, state or local tax laws.
Texas Home Equity Loan: An extension of credit described in
Section 50(a)(6), Article XVI of the Texas Constitution.
Underwriting Guidelines: The underwriting guidelines of the
Seller attached hereto as Exhibit K.
Whole Loan Transfer: The sale or transfer of some or all of
the Mortgage Loans to a third party purchaser in a whole loan transaction
pursuant to a loan purchase, warranties and servicing agreement or a
participation and servicing agreement, or similar agreement, retaining the
Seller as "servicer" thereunder.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT
DELIVERY OF DOCUMENTS
Section 2.01 Conveyance of Mortgage Loans; Possession of
Mortgage Files; Maintenance of Servicing Files.
On each Closing Date, the Seller, simultaneously with the
execution and delivery of the related Acknowledgment and Conveyance Agreement,
does hereby sell, transfer, assign, set over and convey to the Purchaser,
without recourse, but subject to the terms of this Agreement, all right, title
and interest of the Seller in and to the Mortgage Loans included in the related
Mortgage Loan Package, together with Mortgage Files and all rights and
obligations arising under the documents contained therein for each Mortgage
Loan. Pursuant to Section 2.03 hereof, on or prior to each Closing Date, the
Seller shall deliver the Mortgage File for each Mortgage Loan included in the
related Mortgage Loan Package to the Purchaser or its designee.
The contents of each Mortgage File and Servicing File not
delivered to the Purchaser are and shall be held in trust by the Seller for the
benefit of the Purchaser as the owner thereof. The Seller shall maintain a
Servicing File consisting of a copy of the contents of each Mortgage File and
the originals of the documents in each Mortgage File not delivered to the
Custodian. The Seller's possession of any portion of the Servicing File is at
the will of the Purchaser for the sole purpose of facilitating servicing of the
related Mortgage Loan, and such retention and possession by the Seller shall be
in a custodial capacity only. The ownership of each Mortgage Note, Mortgage and
the contents of the Mortgage File and Servicing File is vested in the Purchaser,
and the ownership of all records and documents with respect to the related
Mortgage Loan prepared by or which come into the possession of the Seller shall
immediately vest in the Purchaser and shall be retained and maintained by the
Seller, in trust, at the will of the Purchaser in such custodial capacity only.
The Servicing File retained by the Seller shall be segregated from the other
books and records of the Seller and shall be appropriately marked to clearly
reflect the sale of the related Mortgage Loan to the Purchaser. The Seller shall
release from its custody the contents of any Servicing File retained by it only
in accordance with the written instructions from the Purchaser, unless such
release is required as incidental to the Seller's servicing of the Mortgage
Loans pursuant hereto or is in connection with a repurchase of any Mortgage Loan
pursuant hereto.
Section 2.02 Books and Records; Transfers of Mortgage Loans.
Record title to each Mortgage and the related Mortgage Note as
of the applicable Closing Date shall be in the name of the Purchaser or as
Purchaser shall designate. All rights arising out of the Mortgage Loans
including but not limited to all funds received by the Seller after the related
Cut-off Date on or in connection with a Mortgage Loan shall be vested in the
Purchaser; provided, however, that all funds received on or in connection with a
Mortgage Loan shall be received and held by the Seller in trust for the benefit
of the Purchaser as owner of the Mortgage Loans for the sole purpose of
facilitating the servicing and the supervision of the servicing of the Mortgage
Loans.
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The sale of each Mortgage Loan shall be reflected on the
Seller's balance sheet and other financial statements as a sale of assets by the
Seller and will be reflected on the Purchaser's balance sheet and other
financial statements as a purchase by the Purchaser. The Seller 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 Seller
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,
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 periodic inspection reports as required by Section 5.14. To the
extent that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Seller
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.
This Agreement continuously, from the time of its execution,
shall be an official record of the Seller and Seller will maintain a copy of
this Agreement and each agreement related hereto in its official books and
records. The Seller 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 Seller shall keep at its office books and records in which
the Seller shall note transfers of Mortgage Loans. No transfer of a Mortgage
Loan may be made unless such transfer is in compliance with the terms of Section
12.13. For the purposes of this Agreement, the Seller shall be under no
obligation to deal with any person with respect to this Agreement or any
Mortgage Loan unless a properly executed Assignment and Assumption substantially
in the form of Exhibit G with respect to such Mortgage Loan has been delivered
to the Seller; provided, that, in no event shall there be more than four (4)
"Purchasers" with respect to any Mortgage Loan Package, except as may be
otherwise set forth in the related Purchase Price and Terms Agreement.
Section 2.03 Delivery of Documents.
No later than the date set forth in the related Purchase Price
and Terms Agreement, the Seller shall deliver to the Custodian those Mortgage
Loan Documents as required by this Agreement with respect to each Mortgage Loan
included in the related Mortgage Loan Package, a list of which is attached as
Exhibit B hereto. On or prior to the related Closing Date, the Custodian shall
have certified its receipt of all such Mortgage Loan Documents required to be
delivered pursuant to the Custodial Agreement, as evidenced by the initial
certification of the Custodian in the form annexed to the Custodial Agreement.
The Purchaser shall be responsible for maintaining the Custodial Agreement and
shall pay all fees and expenses of the Custodian. On the related Closing Date,
the Seller shall release any interest that it has in the Mortgage Loan Documents
upon its receipt of the Purchase Price for the related Mortgage Loans. Within
forty-five (45) days of receipt by the Seller of any notice from the Purchaser
or the Custodian that any of the Mortgage Loan Documents is missing, does not
appear regular on its face (i.e., is
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mutilated, damaged, defaced, torn or otherwise physically altered) or appears to
be unrelated to the Mortgage Loans identified in the Mortgage Loan Schedule
(each, a "Material Defect"), the Seller shall cure such Material Defect (and, in
such event, the Seller shall provide the Purchaser with an Officer's Certificate
confirming that such cure has been effected). If the Seller does not so cure
such Material Defect, it shall, if such Material Defect would under Accepted
Servicing Practices reasonably be expected to result in a loss, repurchase the
related Mortgage Loan at the Repurchase Price. A loss shall be deemed to be
attributable to the failure of the Seller to cure a Material Defect if, as
determined by the Purchaser acting in good faith, absent such Material Defect,
such loss would not have been incurred.
The Seller shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with Section 5.01 or 7.01 within two
weeks of their execution, provided, however, that the Seller shall provide the
Custodian and the Purchaser or its designee with a certified true copy of any
such document submitted for recordation within two weeks of its execution, and
shall provide the original of any document submitted for recordation or a copy
of such document certified by the appropriate public recording office to be a
true and complete copy of the original within ninety (90) days of its submission
for recordation. If delivery is not completed within ninety (90) days from its
submission solely because such documents shall not have been returned by the
appropriate recording office, the Seller shall notify the Purchaser of the same
and indicate in such notice the approximate date on which such documents shall
be delivered, provided that, if such delivery is not completed within one
hundred eighty (180) days of submission, the Seller shall provide the Purchaser
with periodic updates as to the status of any such submission, which updates
shall be provided as often as may reasonably be deemed necessary by the
Purchaser.
The Seller shall deliver a final Mortgage Loan Schedule for
the Mortgage Loans included in any Mortgage Loan Package to be purchased on any
Closing Date to the Purchaser no later than the date set forth in the related
Purchaser Price and Terms Agreement.
In addition, in connection with the assignment of any MERS
Mortgage Loan, the Seller agrees that it will cause, at its own expense, the
MERS System to indicate that such Mortgage Loans have been assigned by the
Seller 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) in such computer files the information required by the MERS
System to identify the Purchaser of such Mortgage Loans. The Seller further
agrees that it will not alter the information referenced in this paragraph with
respect to any Mortgage Loan during the term of this Agreement unless and until
such Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
ARTICLE III
PURCHASE PRICE
The Purchase Price shall be the percentage of par as stated in
the related Purchase Price and Terms Agreement (subject to the adjustments as
provided therein), multiplied by the aggregate Stated Principal Balance of the
Mortgage Loans included in the related Mortgage Loan
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Package. Notwithstanding the foregoing, if a Mortgage Loan prepays in full
between the related Cut-off Date and the related Closing Date, inclusive, the
Seller shall either remove such Mortgage Loan from the Mortgage Loan Schedule or
reimburse the Purchaser for the premium over par (if any) which the Purchaser
paid within five (5) days of the related Closing Date. In addition, Purchaser
will not purchase any Mortgage Loan that has not made a payment as of the date
set forth in the related Purchase Price and Terms Agreement. The initial
principal amount of the Mortgage Loans shall be the aggregate principal balance
of such Mortgage Loans, so computed as of the related Cut-off Date. On each
Closing Date, the Purchaser shall deduct from the Purchase Price proceeds
certain costs and expenses set forth in Article XIII or in the related Purchase
Price and Terms Agreement, if applicable.
In addition to the Purchase Price as described above, the
Purchaser shall pay to the Seller, on the related Closing Date, accrued interest
on the Stated Principal Balance of the Mortgage Loans as of the related Cut-off
Date at the weighted average Mortgage Interest Rate from the date interest was
last received on the related Mortgage Loan through the day prior to the related
Closing Date, inclusive.
The Purchase Price shall be paid on the related Closing Date
by wire transfer of immediately available federal funds.
The Purchaser shall be entitled to (i) all principal received
after the related Cut-off Date, (ii) all other recoveries of late charges,
assumption fees or other charges collected after the related Cut-off Date, to
the extent any such charges are not Ancillary Income, and (iii) all payments of
interest on the Mortgage Loans at the Mortgage Interest Rate. The principal
balance of each Mortgage Loan as of the related Cut-off Date is determined after
application of payments of principal received on or before the related Cut-off
Date. All payments of principal and interest (minus interest at the Servicing
Fee Rate) due on the first day of the month after the related Cut-off Date shall
belong to the Purchaser.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
REMEDIES AND BREACH
Section 4.01 Seller Representations and Warranties.
The Seller represents and warrants to the Purchaser that as of
the Closing Date:
(a) Due Organization and Authority. The Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of North Carolina 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 Seller, and in any event the Seller is in compliance with the
laws of any such state to the extent necessary to ensure the enforceability of
the related Mortgage Loan and the servicing of such Mortgage Loan in accordance
with the terms of this Agreement; the Seller has the full corporate power and
authority to execute and deliver this Agreement and to perform in
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accordance herewith; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by the Seller and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement evidences the
valid, binding and enforceable obligation of the Seller, subject to the effect
of bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights and to the application of equitable
principles in any proceeding, whether at law or in equity; and all requisite
corporate action has been taken by the Seller to make this Agreement valid and
binding upon the Seller 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 Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller 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 Seller, 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 Seller's charter or by-laws or any legal restriction or any
material agreement or instrument to which the Seller 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 Seller 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 Perform. The Seller 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 Seller is solvent and the sale of the
Mortgage Loans will not cause the Seller to become insolvent. The sale of the
Mortgage Loans is not undertaken with the intent to hinder, delay or defraud any
of the Seller's creditors;
(e) No Litigation Pending. There is no action, suit,
proceeding or investigation pending or, to the Seller's knowledge, threatened
against the Seller which, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations, financial
condition, properties or assets of the Seller, or in any material impairment of
the right or ability of the Seller to carry on its business substantially as now
conducted, or in any material liability on the part of the Seller, or which
would draw into question the validity of this Agreement or the Mortgage Loans or
of any action taken or to be taken in connection with the obligations of the
Seller contemplated herein, or which would be likely to impair materially the
ability of the Seller to perform under the terms of this Agreement;
(f) No Consent Required. No consent, approval, authorization
or order of any court or governmental agency or body is required for the
execution, delivery and performance by the Seller of or compliance by the Seller
with this Agreement or the Mortgage Loans, the delivery of a portion of the
Mortgage Files to the Custodian or the sale of the Mortgage Loans to the
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Purchaser or the consummation of the transactions contemplated by this
Agreement, or if required, such approval has been obtained prior to the related
Closing Date;
(g) Selection Process. The Mortgage Loans were not
intentionally selected in a manner so as to affect adversely the interests of
the Purchaser;
(h) No Untrue Information. This Agreement, the related
Acknowledgment and Conveyance Agreement, and any statement, report or other
document furnished or to be furnished pursuant to this Agreement, the related
Acknowledgment and Conveyance Agreement or in connection with the transactions
contemplated hereby do not contain any untrue statement of material fact or omit
to state a material fact necessary to make the statements contained therein not
misleading;
(i) Sale Treatment. The Seller will treat the sale of the
Mortgage Loans to the Purchaser as a sale for reporting and accounting purposes
and for federal income tax purposes;
(j) No Commissions to Third Parties: The Seller has not dealt
with any broker or agent or anyone else who might be entitled to a fee or
commission in connection with this transaction other than the Purchaser;
(k) Financial Statements. The Seller has delivered to the
Purchaser financial statements as to its last two (2) complete fiscal years for
which financial statements are available. 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 Seller 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 Seller since the date of the Seller's
financial statements that would have a material adverse effect on its ability to
perform its obligations under this Agreement. The Seller has completed any forms
requested by the Purchaser in a timely manner and in accordance with the
provided instructions;
(l) Fair Consideration. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans; and
(m) MERS: The Seller 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;
(n) Ability to Service: The Seller is an approved servicer of
conventional residential mortgage loans for ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ 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 Seller
is in good standing to service mortgage loans for ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac,
and no event has occurred, including but not limited to a change in insurance
coverage, which would make the Seller unable to comply with ▇▇▇▇▇▇ Mae and
▇▇▇▇▇▇▇ Mac eligibility requirements or which would require notification to
either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, as applicable; and
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(o) Reasonable Servicing Fee: The Seller 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 Seller, for accounting and tax
purposes, as compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement.
Section 4.02 Representations and Warranties Regarding
Individual Mortgage Loans.
As to each Mortgage Loan, the Seller hereby represents and
warrants to the Purchaser that as of the related Closing Date:
(a) Mortgage Loans as Described. The information set forth in
the Mortgage Loan Schedule is complete, true and correct in all material
respects;
(b) Payments Current. All payments required to be made up to
the related Closing Date on 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 the Mortgage Loan been delinquent for
thirty (30) days or more at any time since the date the Mortgage Loan was
originated. The first Monthly Payment has been or shall be made with respect to
the Mortgage Loan on its Due Date or within the grace period, all in accordance
with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying
with the terms of the Mortgages, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which previously became due and owing have been paid, or an escrow
of funds has been established 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 Seller 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 the Mortgage Loan proceeds, whichever is earlier, 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 Purchaser.
The substance of any such waiver, alteration or modification has been approved
by any related title insurer, to the extent required by the policy, and its
terms are reflected on the Mortgage Loan Schedule. No Mortgagor has been
released, in whole or in part, except in connection with an assumption agreement
approved by any related 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;
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(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. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards a
life-of-loan 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 ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. Such flood
insurance shall be with an insurer acceptable under the ▇▇▇▇▇▇ Mae Guides or the
▇▇▇▇▇▇▇ Mac Guides. All individual insurance policies contain a standard
mortgagee clause naming the Seller 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 Seller has
not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
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 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 Seller;
(g) Compliance with Applicable Laws. Any and all requirements
of any federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, predatory or abusive lending, or disclosure laws
applicable to the Mortgage Loan have been complied with, and the Seller shall
maintain in its possession, available for the Purchaser's inspection, and shall
deliver to the Purchaser on the related Closing Date, evidence of compliance
with all such requirements.
(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
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executed that would effect any such release, cancellation, subordination or
rescission. The Seller 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 Seller waived any default resulting
from any action or inaction by the Mortgagor;
(i) Location and Type of Mortgaged Property. As to Mortgage
Loans that are not Co-op Loans and that are not secured by an interest in a
leasehold estate, the Mortgaged Property is a fee simple property located in the
state identified in the related Mortgage Loan Schedule and consists of a single
parcel of real property with a detached single family residence erected thereon,
a two- to four-family dwelling, an individual condominium unit in a condominium
project, or an individual unit in a planned unit development, provided, however,
that any condominium unit or planned unit development shall conform with the
applicable Underwriting Guidelines regarding such dwellings and that no
residence or dwelling is a mobile home or a manufactured dwelling. No portion of
the Mortgaged Property is used for commercial purposes except as permitted under
the Underwriting Guidelines;
(j) Valid First or Second Lien. With respect to any First Lien
Mortgage Loan, the related Mortgage is a valid, subsisting, enforceable and
perfected first lien on the Mortgaged Property, and with respect to any Second
Lien Mortgage Loan, the related Mortgage is a valid, subsisting, enforceable and
perfected second lien on the Mortgaged Property, including, for Mortgage Loans
that are not Co-op Loans, all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing securing the
Mortgage Note's original principal balance. Such lien is free and clear of all
adverse claims, liens and encumbrances having priority over the first lien or
second lien, as applicable, of the Mortgage subject only to:
(1) with respect to any Second Lien Mortgage Loan, the related
First Lien;
(2) the lien of current real property taxes and assessments
not yet due and payable;
(3) 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
(4) 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.
(k) Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates (1) with respect to
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any First Lien Mortgage Loan, a valid, subsisting and enforceable first lien and
first priority security interest and (2) with respect to any Second Lien
Mortgage Loan, a valid, subsisting, enforceable and perfected second lien and
second priority security interest, in each case, on the property described
therein and the Seller 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 secure debt or
other security instrument, if any, creating a lien subordinate to the lien of
the Mortgage;
(l) 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, except as such
enforcement may be limited by bankruptcy, insolvency, moratorium, reorganization
and other laws of general application affecting the rights of creditors
generally and the equitable remedy of specific performance and by general
equitable principles. 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 related Mortgage and any other
related agreement, and the Mortgage Note and the related Mortgage and any other
related agreement have been duly and properly executed by such parties. No fraud
was committed in connection with the origination of the Mortgage Loan. The
Seller 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;
(m) 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 related Mortgage;
(n) Ownership. Except with respect to MERS Mortgage Loans, the
Seller or its affiliate is the sole owner of record and holder of the Mortgage
Loan. The Mortgage Loan is not assigned or pledged, and the Seller 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;
(o) 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) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;
(p) LTV, PMI Policy. If a Mortgage Loan has an LTV greater
than 80% and is subject to a PMI Policy, such PMI Policy was issued by a
Qualified Insurer and insures against
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payment defaults that portion of the Mortgage Loan in excess of the portion of
the Appraised Value of the Mortgaged Property required by ▇▇▇▇▇▇ Mae. All
provisions of any such PMI Policy have been and are being complied with, any
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. If the Mortgage Loan provides for negative amortization or for the
potential for negative amortization, the PMI Policy insures any increase in the
Stated Principal Balance from the original balance of the Mortgage Note. 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. The Mortgage Interest Rate for the Mortgage Loan as set forth on the
Mortgage Loan Schedule is net of any such insurance premium;
(q) Loan to Value Ratio. No Mortgage Loan has an LTV of
greater than as set forth in the related Purchase Price and Terms Agreement. No
Second Lien Mortgage Loan has a CLTV of greater than 100%;
(r) Title Insurance. Each Mortgage Loan that is not a Co-op
Loan is covered by 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 Seller, 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 4.02. 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 Seller, its successors and assigns, are
the sole insureds 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 Seller, 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
Seller;
(s) No Defaults. There is no default, breach, violation or
event of acceleration existing under the Mortgage or the Mortgage Note or
related documents and no event which, with the passage of time or with notice
and the expiration of any applicable grace or cure period, would constitute a
default, breach, violation or event of acceleration, and neither the Seller nor
any of its predecessors have waived any default, breach, violation or event of
acceleration. With respect to each Second Lien Mortgage Loan, (i) the First Lien
is in full force and effect, (ii) there is no default, breach, violation or
event of acceleration existing under such prior mortgage or the related mortgage
note, (iii) 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 thereunder, and either (A) the prior mortgage
contains a provision which allows or (B) applicable law requires, the mortgagee
under the Second Lien
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Mortgage Loan to receive notice of, and affords such mortgagee an opportunity to
cure any default by payment in full or otherwise under the prior mortgage;
(t) 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;
(u) 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 wholly within the project with respect to a
condominium unit) and no improvements on adjoining properties to which value was
assigned encroach upon the Mortgaged Property; further, the value of the
Mortgaged Property is not diminished by any improvements on adjoining properties
which encroach the Mortgaged Property. No improvement located on or being part
of the Mortgaged Property (upon which value was given in determining the
Appraised Value) is in violation of any applicable zoning law or regulation;
provided, that in no event shall a legal nonconforming use of the Mortgaged
Property be considered a violation of any such zoning law or regulation;
(v) Origination: Payment Terms. Except with respect to
Interest Only Mortgage Loans, principal payments on the Mortgage Loan commenced
no more than sixty (60) days after the funds were disbursed in connection with
the Mortgage Loan. At the time the Mortgage Loan was originated, the originator
was a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act or a savings and
loan association, a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a Federal or State authority.
The Mortgage Interest Rate is (i) with respect to ARM Mortgage Loans, adjusted
on each Interest Rate Adjustment Date pursuant to the related Mortgage Loan
Documents and subject to the Mortgage Interest Rate Cap, the Periodic Rate Cap
and the Lifetime Rate Cap and (ii) with respect to Fixed Rate Mortgage Loans,
the fixed interest rate set forth in the Mortgage Note. Except with respect to
any balloon Mortgage Loans and Interest Only Mortgage Loans, as indicated on the
related Mortgage Loan Schedule, the Mortgage Note is payable in equal monthly
installments of principal and interest, with interest calculated and payable in
arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity
date, over an original term of not more than thirty (30) years from commencement
of amortization; provided, however, in the case of a balloon Mortgage Loan, the
Mortgage Loan matures at least five (5) years after the first payment date, but
prior to the full amortization of the Mortgage Loan, thereby requiring a final
payment of the outstanding principal balance prior to the full amortization of
such Mortgage Loan. The Mortgage Interest Rate, as well as the Lifetime Rate
Cap, the Periodic Rate Cap and the Mortgage Interest Rate Cap, are as set forth
on the Mortgage Loan Schedule. No ARM Mortgage Loan contains terms whereby the
Mortgagor is permitted to convert the Mortgage Loan to a Fixed Rate Mortgage
Loan and no ARM Mortgage Loan contains a rounding feature. All of the ARM
Mortgage Loans contain an interest rate provision that requires a lookback of 25
days. No mortgage loan provides for negative amortization. The Mortgage Interest
Rate is as set forth on the Mortgage Loan Schedule.
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(w) Customary Provisions. The related Mortgage contains
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including, (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and (ii)
otherwise by judicial or nonjudicial foreclosure. 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 subject to applicable federal and state laws and judicial
precedent with respect to bankruptcy and right of redemption;
(x) Conformance with Underwriting Guidelines. The Mortgage
Loan was underwritten in accordance with the Underwriting Guidelines in effect
at the time the Mortgage Loan was originated. The Mortgage Note and Mortgage are
on forms acceptable to participants in the secondary mortgage market for similar
types of Mortgage Loans;
(y) Occupancy of the Mortgaged Property. As of the related
Closing Date the Mortgaged Property will be 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;
(z) No Additional Collateral. The related 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 the "Valid First or Second Lien" representation
above;
(aa) Deeds of Trust. In the event the Mortgage constitutes a
deed of trust, a trustee, authorized and 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, except as may be required by local
law, 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;
(bb) Acceptable Investment. The Seller 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;
(cc) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been or will be delivered to
the Purchaser or its designee prior to the related Closing Date. The Seller is
in possession of a complete, true and accurate Mortgage File in
-27-
compliance with Exhibit B hereto, except for such documents the originals of
which have been delivered to the Purchaser or its designee;
(dd) Condominiums/Planned Unit Developments/Manufactured
Dwellings. If 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 the related Underwriting Guidelines.
With respect to each Mortgage Loan secured by a manufactured home: (i) the
manufactured home is permanently affixed to a foundation which is suitable for
the soil conditions of the side; (ii) all foundations, both perimeter and
interior have footings that are located below the frost line; (iii) any wheels,
axles and trailer hitches are removed from the manufactured home; (iv) the
related Mortgage Loan is covered under a standard real estate title insurance
policy or attorney's title opinion or certificate that identified the
manufactured home as part of the real property an insures or indemnifies against
any loss if the manufactured home is determined not to be part of the real
property. In no event shall any Mortgage Loan be secured by a mobile home;
(ee) Transfer of Mortgage Loans. If the Mortgage Loan is not a
MERS Mortgage Loan, each of the Mortgage and the Assignment of Mortgage (upon
the insertion of the assignee's name) is in recordable form and is acceptable
for recording under the laws of the jurisdiction in which the Mortgaged Property
is located;
(ff) Due on Sale. Each Mortgage, together with any such
documents as may be required under applicable law, 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, at
the option of the mortgagee;
(gg) No Buydown Provisions; No Graduated Payments or
Contingent Interests. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" 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;
(hh) Consolidation of Future Advances. Any future advances
made to the Mortgagor 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 readjustment
feature and single repayment term. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having first lien priority
as indicated on the Mortgage Loan Schedule by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to the Purchaser, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;
(ii) Mortgaged Property Undamaged; No Condemnation
Proceedings. There is no proceeding pending or to the Seller's knowledge
threatened for the total or partial
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condemnation of the 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 Payments. The origination
and collection practices used with respect to the Mortgage Loan have been in
accordance with Accepted Servicing Practices in all respects in compliance with
all applicable laws and regulations and in all material respects proper and
prudent in the mortgage origination and servicing business. With respect to
escrow deposits and Escrow Payments, if applicable, all such payments are in the
possession of the Seller 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 Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage Note. The index used for the adjustment of the
Mortgage Interest Rate on each ARM Loan is the Index. Any interest required to
be paid pursuant to state and local law has been properly paid and credited;
(kk) Appraisal. The Mortgage File contains an appraisal of the
related Mortgage Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser;
(ll) Servicemembers' Relief Act. Unless otherwise indicated on
the related Mortgage Loan Schedule, the Mortgagor has not notified the Seller,
and the Seller has no knowledge of any relief requested or allowed to the
Mortgagor under the Servicemembers' Civil Relief Act;
(mm) Environmental Matters. To the best of the Seller's
knowledge, 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. There is no pending action or proceeding
directly involving any Mortgaged Property of which the Seller is aware in which
compliance with any environmental law, rule or regulation is an issue; and to
the best of the Seller'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 Seller 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 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 or bankruptcy
bond, irrespective of the cause of such failure of coverage. In
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connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or any designee of
the Seller or any corporation in which the Seller or any officer, director, or
employee had a financial interest at the time of placement of such insurance;
(oo) Mortgagor Acknowledgment. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of ARM Mortgage Loans or
the Seller has verification of delivery of such materials. The Seller shall
maintain or cause to be maintained such statement or verification in the
Mortgage File;
(pp) Regarding the Mortgagor. The Mortgagor is one or more
natural persons, or, to the extent such entities are acceptable mortgagors under
▇▇▇▇▇▇ ▇▇▇ guidelines, a qualified living trust (revocable trust) or a qualified
land trust.
(qq) Predatory Lending Regulations; High Cost Loans. None of
the Mortgage Loans are classified as (i) "high cost" loans under the Home
Ownership and Equity Protection Act of 1994 or (ii) "high cost," "threshold,"
"abusive," "covered" (excluding home loans defined as "covered home loans"
pursuant to the New Jersey Home Ownership Security Act of 2002) or "predatory"
loans under any other applicable state, federal or local law. Each loan at the
time it was made complied in all material respects with applicable local, state,
and federal laws, including, but not limited to, all applicable predatory and
abusive lending laws;
(rr) Georgia Mortgage Loans. No Mortgage Loan originated
between October 1, 2002 and March 7, 2003 (both inclusive) and secured by a
Mortgaged Property located in the State of Georgia is a "home loan" and is
either a "covered" or "high cost loan" as defined in the Georgia Fair Lending
Act, as amended. No Mortgage Loan originated after March 7, 2003 and secured by
a Mortgaged Property located in the State of Georgia is a "home loan" and is a
"high cost loan" as defined in the Georgia Fair Lending Act, as amended;
(ss) REMIC Status. The Mortgage Loan is a qualified mortgage
for inclusion in a "real estate mortgage investment conduit" for federal income
tax purposes;
(tt) Simple Interest Mortgage Loans. None of the Mortgage
Loans are simple interest Mortgage Loans;
(uu) Single Premium Credit Life Insurance. None of the
proceeds of the Mortgage Loan were used to finance single-premium credit life
insurance policies;
(vv) Tax Service Contract The Seller has obtained a life of
loan, transferable real estate tax service contract with an Approved Tax Service
Contract Provider on each Mortgage Loan and such contract is assignable without
penalty, premium or cost to the Purchaser; upon the initial set-up, each such
tax service contract shall contain complete and accurate information with
respect to the Mortgage Loan and the Mortgaged Property;
(ww) Flood Certification Contract. The Seller has obtained a
life of loan, transferable flood certification contract with an Approved Flood
Policy Insurer for each
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Mortgage Loan and such contract is assignable without penalty, premium or cost
to the Purchaser;
(xx) Genuineness of Signatures. Each of the documents in the
Mortgage File is genuine and contains genuine signatures. Each document that
Purchaser requires to be an original document is an original document. All
certified copies of original documents are true copies and meet the applicable
requirements and specifications of this Agreement and any other written
requirements that Purchaser has reasonably made of the Seller;
(yy) No Prior Rejection. No Mortgage Loan has been previously
submitted for purchase by the Seller to the Purchaser and reviewed and rejected
by the Purchaser for credit compliance or valuation reasons;
(zz) Qualified Mortgage Loan. Each Mortgage Loan constitutes a
qualified mortgage loan under Section 860(g)(a)(3)(A) of the Code and Treasury
Regulations Section 1.860G-2(a)(1) and (3);
(aaa) Convertibility. No ARM Mortgage Loan contains a
provision whereby the Mortgagor can convert the mortgage loan to a fixed rate
instrument.
(bbb) Recordation. Each original Mortgage was recorded and,
except for those Mortgage Loans subject to MERS, 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 Seller, or is in the
process of recordation.
(ccc) Origination Practices. No error, omission,
misrepresentation, negligence, fraud or similar occurrence with respect to a
Mortgage Loan has taken place on the part of any person including without
limitation the Seller, the Mortgagor, any appraiser, any builder or developer,
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; no predatory or
deceptive lending practices or deceptive trade practices, including, without
limitation, the extension of credit without regard to the ability of the
borrower to repay and the extension of credit which has no apparent benefit to
the borrower, were employed in the origination of the Mortgage Loan. No
Mortgagor was a debtor in any state or federal bankruptcy or insolvency
proceeding at any time within twenty-four months prior to the origination of the
Mortgage Loan, nor has any Mortgagor had a foreclosure proceeding commenced
against such Mortgagor within twenty-four months prior to origination of the
Mortgage Loan;
(ddd) Compliance with Anti-Money Laundering Laws. The Seller
has complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001;
(eee) Credit Reporting. The Seller has fully furnished in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information on the Mortgagor credit files to Equifax,
Experian and Trans Union on a monthly basis.
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(fff) FICO Scores. The FICO score of each Mortgage Loan is not
less than what is set forth on the related Mortgage Loan Schedule;
(ggg) Prepayment Fee. With respect to each Mortgage Loan that
has a prepayment fee feature, each such prepayment fee is enforceable and will
be enforced by the Seller through the related Closing Date, and each prepayment
fee is permitted pursuant to federal, state and local law and does not exceed
the maximum amount permitted under applicable law. With respect to each Mortgage
Loan that contains a prepayment fee, such prepayment fee is set forth on the
related Mortgage Loan Schedule;
(hhh) Lost Instrument Affidavits. In the event any Mortgage
File contains a lost note affidavit in lieu of a Mortgage Note, such lost note
affidavit, when assigned, will be sufficient to effect the transfer of title to
the related Mortgage Loan, without the need for a judicial proceeding,
administrative action, court or regulatory order, or similar action or order;
and
(iii) Second Lien Mortgage Loans.
(i) Either (A) no consent for the Second Lien Mortgage Loan is
required by the holder of the related First Lien or (B) such consent
has been obtained and is contained in the Mortgage File;
(ii) With respect to any Second Lien Mortgage Loan, the Seller
has not received notice of: (A) any proceeding for the total or partial
condemnation of any Mortgaged Property, (B) any subsequent, intervening
mortgage, lien, attachment, lis pendens or other encumbrance affecting
such Mortgaged Property or (C) any default under any mortgage, lien or
other encumbrance senior to such Mortgage;
(iii) With respect to any Second Lien Mortgage Loan, where
required or customary in the jurisdiction in which the Mortgaged
Property is located, the original lender has filed of record a request
for notice of any action by the senior lienholder under the related
First Lien, and the original lender has notified any senior lienholder
in writing of the existence of the Second Lien Mortgage Loan and
requested notification of any action to be taken against the Mortgagor
by the senior lienholder;
(iv) No Second Lien Mortgage Loan is a "home equity line of
credit" or Texas Home Equity Loan; and
(v) (v) As of the related Closing Date, the Seller has not
received a notice of default of a First Lien which has not been cured.
Section 4.03 Remedies for Breach of Representations and
Warranties.
(a) It is understood and agreed that the representations and
warranties set forth in Sections 4.01 and 4.02 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
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discovery by the Seller 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 therein, 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.
Upon discovery by either party of a Breach of any
representation or warranty, the party discovering such Breach shall give prompt
written notice to the other party. Within 60 days of the earlier of either
discovery by or notice to the Seller of any Breach of a representation or
warranty, the Seller shall use its best efforts promptly to cure such Breach in
all material respects and, if such Breach cannot be cured, the Seller shall, at
the Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
In the event that a Breach shall involve any representation or warranty set
forth in Section 4.01, the Seller shall use its best efforts to cure such Breach
within 60 days of the earlier of notice or discovery thereof, and if such Breach
cannot be cured within 75 days of the earlier of either discovery by or notice
to the Seller of such Breach, the Seller shall, at the Purchaser's option,
repurchase all affected Mortgage Loans at the Repurchase Price. Any repurchase
of a Mortgage Loan or Loans pursuant to the foregoing provisions of this Section
4.03 shall be accomplished by deposit in the Custodial Account of the amount of
the Repurchase Price for distribution to Purchaser on the next 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.
If pursuant to the foregoing provisions the Seller repurchases
a Mortgage Loan that is a MERS Mortgage, the Seller 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 Seller 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 Seller as
the beneficial holder of such Mortgage Loan.
At the time of repurchase, the Purchaser and the Seller shall
arrange for the reassignment of the Deleted Mortgage Loan to the Seller and the
delivery to the Seller of any documents held by the Custodian relating to the
Deleted Mortgage Loan. In the event of a repurchase, the Seller shall,
simultaneously with such reassignment, give written notice to the Purchaser and
any servicer of the Mortgage Loans that such repurchase has taken place. For the
month of repurchase, distributions to Purchaser shall include the Monthly
Payment due on any Deleted Mortgage Loan in the month of repurchase, and the
Seller shall thereafter be entitled to retain all amounts subsequently received
by the Seller in respect of such Deleted Mortgage Loan.
If the Seller is required to repurchase any Mortgage Loan
pursuant to this Section 4.03 as a result of a breach of any of the
representations and warranties set forth in Section 4.02, the Seller may, with
the Purchaser's prior consent, which consent shall not be unreasonably withheld,
within two years from the related Closing Date, remove such defective Mortgage
Loan from the terms of this Agreement and provide a Qualified Substitute
Mortgage Loan for such defective Mortgage Loan, in lieu of repurchase.
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The Seller shall amend the related Mortgage Loan Schedule to
reflect the withdrawal of the removed Mortgage Loan from this Agreement and the
substitution of such Qualified Substitute Mortgage Loan therefor. Upon such
amendment, the Purchaser shall review the Mortgage File delivered to it relating
to the Qualified Substitute Mortgage Loan. The Monthly Payment on a Qualified
Substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property of the Seller and the Monthly Payment on the defective Mortgage
Loan for which the substitution is made, due on such Due Date shall be the
property of the Purchaser.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and hold it harmless against any losses,
damages, penalties, fines, forfeitures, including without limitation, 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 Seller representations and
warranties contained in this Agreement. It is understood and agreed that the
obligations of the Seller set forth in this Section 4.03 to cure or repurchase a
defective Mortgage Loan and to indemnify the Purchaser as provided in this
Section 4.03 constitute the sole remedies of the Purchaser respecting a Breach
of the foregoing representations and warranties.
Any cause of action against the Seller relating to or arising
out of the Breach of any representations and warranties made in Sections 4.01
and 4.02 shall accrue as to any Mortgage Loan upon (i) discovery of such Breach
by the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure
by the Seller to cure such Breach within the applicable cure period or
repurchase such Mortgage Loan as specified above, and (iii) demand upon the
Seller by the Purchaser for compliance with this Agreement.
With respect to any Mortgage Loan, if the related Mortgagor is
thirty (30) or more days delinquent with respect to the Mortgage Loan's first
Monthly Payment due to the Purchaser, the Seller shall, upon receipt of notice
from the Purchaser, promptly repurchase such Mortgage Loan from the Purchaser in
accordance with this Section; provided, that no right to cure set forth herein
shall apply.
Notwithstanding any provision to the contrary, in the event
that a Mortgage Loan is prepaid in full within thirty days of the related
Closing Date, the Seller shall pay to the Purchaser the purchase price premium
(if any) paid by the Purchaser for the Mortgage Loan, reduced by any prepayment
penalty fees received from the borrower and remitted to the Purchaser; provided,
however, in the event that the Purchaser or a subsequent servicer forgives the
related prepayment penalty and still satisfies the Mortgage Loan, the Seller
shall pay to the Purchaser the purchase price premium paid by the Purchaser for
the Mortgage Loan, reduced by the forgiven prepayment penalty amount.
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Section 4.04 Restrictions and Requirements Applicable in the
Event that a Mortgage Loan is Acquired by a
REMIC.
In the event that any Mortgage Loan is held by a REMIC,
notwithstanding any contrary provision of this Agreement, the following
provisions shall be applicable to such Mortgage Loan:
(A) Repurchase of Mortgage Loans.
With respect to any Mortgage Loan that is not in default or as
to which no default is imminent, no repurchase pursuant to Section 4.03 or 8.03
shall be made, unless, if so required by the applicable REMIC Documents the
Seller has obtained an Opinion of Counsel to the effect that such repurchase
will not (i) result in the imposition of taxes on "prohibited transactions" of
such REMIC (as defined in Section 860F of the Code) or otherwise subject the
REMIC to tax, or (ii) cause the REMIC to fail to qualify as a REMIC at any time.
(B) Tax Returns.
(1) With respect to the Mortgage Loans serviced by the Seller
under this Agreement, the Seller covenants and agrees that it shall
cooperate and provide any and all information to enable the trustee or
other responsible party to perform all of the following duties: (a)
prepare, file, and sign all Tax Returns using a calendar year as the
taxable year for the REMIC and the accrual method of accounting when
and as required by the REMIC Provisions and other applicable federal
income tax laws; (b) make an election, on behalf of the REMIC to be
treated as a REMIC on the Tax Returns of the REMIC for its first
taxable year, in accordance with the REMIC Provisions; (c) prepare and
file, or cause to be prepared and filed, and deliver, any and all Tax
Returns, information statements or other filings required to be
delivered to any governmental taxing authority, or to any owner
thereunder, pursuant to any applicable federal, state or local tax law
with respect to the REMIC or the certificates issued thereunder and the
transactions contemplated thereby; (d) cause to be provided to the
owner thereunder such data necessary for their original issue discount
computations and market discount computations with respect to the
certificates issued thereunder for federal income tax purposes as the
owner thereunder may reasonably request from time to time; (e) conduct
the affairs of the REMIC so as to maintain the status thereof as a
REMIC under the REMIC Provisions; (f) not knowingly or intentionally
take any action or omit to take any action that would cause the
termination of the REMIC status of the REMIC; (g) make any election
required by the REMIC Provisions to treat as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code all property that
the REMIC has acquired or will acquire that may qualify as such
foreclosure property; (h) provide or cause to be provided notice to the
holders of any certificates issued thereunder of the existence of the
restrictions on transfers and exchange provided under the REMIC
documents; (i) provide or cause to be provided information necessary
for the computation of tax imposed on the transfer of a residual
certificate issued thereunder to a Disqualified Organization, or an
agent of a Disqualified Organization, provided that the reasonable cost
of computing and furnishing such information may be charged to the
person liable for such tax; and (j) in a timely manner cause to be paid
the amount of any and all federal, state and local taxes
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imposed on the REMIC or its respective assets or transactions
including, without limitation, (i) "prohibited transaction" penalty
taxes as defined in Section 860F of the Code, if, when and as the same
shall be due and payable, (ii) any tax on contributions to a REMIC
after the closing date of such REMIC imposed under Section 860G(d) of
the Code and (iii) any tax on "net income from foreclosure property" as
defined in Section 860G(c) of the Code.
(2) Within 30 days after the closing date of any REMIC, if so
required by the applicable REMIC Documents, the Seller shall cooperate
and provide any and all information necessary or helpful to enable the
trustee or other responsible party to prepare and file (or cause to be
prepared and filed) with the Internal Revenue Service Form 8811,
"Information Return for Real Estate Mortgage Investment Conduits
(REMIC) and Issuers of Collateralized Debt Obligations" for the REMIC.
The trustee or other responsible party shall sign such returns and is
hereby indemnified and held harmless by the Seller with respect to any
tax or liability arising from the trustee's or other responsible
party's signing such information returns to the extent that such tax or
liability results from information provided by or on behalf of the
Seller or information that should have been provided by or on behalf of
the Seller pursuant to the terms hereof and in accordance with Accepted
Servicing Practices, and is not the result of any miscalculation,
misinterpretation, error or omission on the part of such trustee or
responsible party.
(C) General Servicing Obligations.
The Seller shall use its best efforts to sell any REO Property
within three (3) years after its acquisition by the REMIC unless (i) the Seller
applies for an extension of such three-year period from the Internal Revenue
Service pursuant to the REMIC Provisions and Code Section 856(e)(3), in which
event such REO Property shall be sold within the applicable extension period, or
(ii) the Seller obtains for the Purchaser an Opinion of Counsel, addressed to
the Purchaser and the Seller, to the effect that the holding by the REMIC of
such REO Property subsequent to such three year period will not result in the
imposition of taxes on "prohibited transactions" as defined in Section 860F of
the Code or cause the REMIC to fail to qualify as a REMIC under the REMIC
Provisions or comparable provisions of relevant state laws at any time. The
Seller shall manage, conserve, protect and operate each REO Property for the
Purchaser solely for the purpose of its prompt disposition and sale 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) or result in the receipt by
the 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"
which is subject to taxation under Section 860G(a)(1) of the Code. Pursuant to
its efforts to sell such REO Property, the Seller shall either itself or through
an agent selected by the Seller protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Purchaser, rent the same, or any part thereof, as the Seller
deems to be in the best interest of the Seller and the Purchaser for the period
prior to the sale of such REO Property; provided, however, that any rent
received or accrued with respect to such REO Property qualifies as "rents from
real property" as defined in Section 856(d) of the Code.
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(D) Additional Covenants.
In addition to the provision set forth in this Section 4.04,
if a REMIC election is made with respect to the arrangement under which any of
the Mortgage Loans or REO Properties are held, then, with respect to such
Mortgage Loans and/or REO Properties, and notwithstanding the terms of this
Agreement, the Seller shall not take any action, cause the REMIC to take any
action or fail to take (or fail to cause to be taken) any action that, under the
REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger
the status of the REMIC as a REMIC or (ii) result in the imposition of a tax
upon the REMIC (including but not limited to the tax on "prohibited
transactions" as defined 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
Seller 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.
If a REMIC election is made with respect to the arrangement
under which any Mortgage Loans or REO Properties are held, the Purchaser and
Seller shall amend this Agreement such that it will meet all applicable Rating
Agency requirements.
ARTICLE V
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 5.01 Seller to Act as Servicer.
The Seller, as an independent contractor, shall service and
administer the Mortgage Loans from the related closing date and shall have full
power and authority, acting alone, to do any and all things in connection with
such servicing and administration which the Seller may deem necessary or
desirable, consistent with the terms of this Agreement and with Accepted
Servicing Practices. The Seller shall service and administer the Mortgage Loans
through the exercise of the same care that it customarily employs for its own
account. The Seller may perform its servicing responsibilities through agents or
independent contractors, but shall not thereby be released from any of its
responsibilities hereunder. Notwithstanding anything herein to the contrary, the
Seller may delegate any of its duties under this Agreement to one or more
affiliates without regard to any of the requirements of this Section; provided,
however, that the Seller shall not be released from any of its responsibilities
hereunder by virtue of such delegation.
Consistent with the terms of this Agreement, prior to a
Mortgage Loan becoming subject to a Reconstitution Agreement, the Seller 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 Seller's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Purchaser, provided, however, that the Seller 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 Seller, imminent and the Seller has obtained the prior
written consent of the Purchaser) the Seller shall not permit any modification
with respect
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to any Mortgage Loan 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. The Seller agrees and acknowledges,
provided, that, in the event of any such modification which permits the deferral
of interest or principal payments on any Mortgage Loan, the Seller 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, 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. To the extent the Seller has received the Purchaser's prior written
consent for any such modification permitting the deferral of interest or
principal payments, the Seller shall be entitled to reimbursement for advances
required under this paragraph, pursuant to Section 5.05. Without limiting the
generality of the foregoing, the Seller 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, and, with the prior consent
of the Purchaser, which shall be deemed given if the Purchaser does not
affirmatively grant or deny consent within five (5) days of request therefor,
institute foreclosure proceedings or obtain a deed-in-lieu of foreclosure so as
to convert the ownership of such properties, and to hold or cause to be held
title to such properties, on behalf of the Purchaser pursuant to the provisions
of Section 5.17. If reasonably required by the Seller, the Purchaser shall
promptly furnish the Seller with any powers of attorney and other documents
necessary or appropriate to enable the Seller to carry out its servicing and
administrative duties under this Agreement.
The Seller is authorized and empowered by the Purchaser, in
its own name, when the Seller believes it appropriate in its reasonable judgment
to register any Mortgage Loan on the MERS System, or cause the removal from the
registration of any Mortgage Loan on the MERS System, to execute and deliver, on
behalf of the Purchaser, any and all instruments of assignment and other
comparable instruments with respect to such assignment or re-recording of a
Mortgage in the name of MERS, solely as nominee for the Purchaser and its
successors and assigns.
In servicing and administering the Mortgage Loans, the Seller
shall employ procedures (including collection procedures) and exercise the same
care that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, giving due consideration to Accepted
Servicing Practices where such practices do not conflict with the requirements
of this Agreement, and the Purchaser's reliance on the Seller. If the Seller
determines that any Servicing Advance or Monthly Advance made, or to be made,
with respect to such Mortgage Loan is not, or, if made would not be, recoverable
from related late collections thereon or proceeds thereof, the Seller shall
deliver to the Purchaser an Officer's Certificate indicating the reasons for
such determination. The Purchaser and Seller shall cooperate to minimize the
number of Officer's Certificates required to be delivered pursuant to the
preceding sentence.
If the Seller is notified that any superior lienholder has
accelerated or intends to accelerate the obligations secured by the superior
lien, or has declared or intends to declare a default under the Mortgage or the
Mortgage Note secured thereby, or has filed or intends to file
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an election to have the Mortgaged Property sold or foreclosed, the Seller shall
immediately notify the Purchaser of any such notice from or action by the
superior lienholder and of the amount necessary to cure the default or reinstate
the superior lien. The Seller shall further make recommendations to the
Purchaser (including note sales to third parties) so as to best protect the
Purchaser's interest in and the security of the related Mortgage Loan. If the
Purchaser directs the Seller to cure a default under or otherwise reinstate a
superior lien, the Purchaser will advance to the Seller necessary funds to cure
the default or reinstate the superior lien. The Seller shall thereafter take
immediate action to recover from the Mortgagor the amount so advanced. The
Purchaser shall notify the Seller in writing of any and all action which it
requests the Seller to take.
In the event that the Seller reasonably deems that the factual
circumstances require prompt action, the Seller may (but shall not be obligated
to) without notice to the Purchaser, advance the necessary funds to cure the
default or reinstate the superior lien so as to best protect the Purchaser's
interest. The Seller shall thereafter notify the Purchaser of the action taken,
including the amount of the advance. The Purchaser shall reimburse the Seller
for all advances made pursuant to this paragraph. The Seller shall thereafter
take immediate action to recover from the Mortgagor the amount so advanced.
Section 5.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and
not postponed pursuant to Section 5.01 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 Seller shall take such action as (1) the Seller
would take under similar circumstances with respect to a similar mortgage loan
held for its own account for investment, (2) shall be consistent with Accepted
Servicing Practices, and (3) the Seller shall determine prudently to be in the
best interest of Purchaser, provided, however, that the Seller shall deliver a
notice to the applicable Mortgagor of the Seller's intent to foreclose (such
notice, a "Notice of Intent") by the time period set forth in the ▇▇▇▇▇▇ ▇▇▇
Guides or at such other time as permitted under applicable state law. In the
event that any payment due under any Mortgage Loan is not postponed pursuant to
Section 5.01 and remains delinquent for a period of no later than ninety (90)
days or any other default continues for a period of ninety (90) days beyond the
expiration of any grace or cure period, the Seller shall commence foreclosure
proceedings and provide notice thereof to the Purchaser in writing; provided
that, the Seller may postpone such foreclosure proceedings until such payment is
delinquent or any other default continues for a period of no later than one
hundred twenty (120) days beyond the expiration of any grace or cure period, if
the Seller in its good faith business judgment reasonably believes that the
postponement of such foreclosure proceedings is warranted and the Purchaser
shall not suffer a material loss in connection with such postponement. In such
connection, the Seller shall from its own funds make all necessary and proper
Servicing Advances, provided, however, that the Seller shall not be required to
expend its own funds in connection with any foreclosure or towards the
restoration, preservation or inspection of any Mortgaged Property, unless in its
good faith business judgment, the Seller reasonably believes (a) that such
preservation, restoration and/or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for
such expenses and (b) that such expenses will be recoverable by it either
through Liquidation Proceeds (respecting which it shall have priority for
purposes of
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withdrawals from the Custodial Account pursuant to Section 5.05) or through
Insurance or Condemnation Proceeds (respecting which it shall have similar
priority). If the Seller determines not to make a Servicing Advance pursuant to
the preceding sentence, then the Seller shall deliver an Officer's Certificate
setting forth the reasons for such determination.
Section 5.03 Collection of Mortgage Loan Payments.
Continuously from the related Closing Date until the date each
Mortgage Loan ceases to be subject to this Agreement, the Seller shall proceed
diligently to collect all payments due under each of the Mortgage Loans when the
same shall become due and payable and shall take special care in ascertaining
and estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loans and each related Mortgaged Property,
to the end that the installments payable by the Mortgagors will be sufficient to
pay such charges as and when they become due and payable.
Section 5.04 Establishment of and Deposits to Custodial
Account.
The Seller shall segregate and hold all funds collected and
received pursuant to a Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Custodial
Accounts, in the form of time deposit or demand accounts, titled "Wachovia
Mortgage Corporation in trust for ▇▇▇▇▇▇ Brothers Bank, purchaser of
Conventional Residential Fixed and Adjustable Rate Mortgage Loans, Group No.
2004-FLOW". The Custodial Account shall be established with a Qualified
Depository. Any funds deposited in the Custodial Account shall at all times be
fully insured to the full extent permitted under applicable law. Funds deposited
in the Custodial Account may be drawn on by the Seller in accordance with
Section 5.05. 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 Seller, 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 Seller. A
copy of such certification or letter agreement shall be furnished to the
Purchaser and, upon request, to any subsequent purchaser of the Mortgage Loans.
The Seller shall deposit in the Custodial Account on a daily
basis, within two (2) Business Days of receipt thereof, and retain therein, the
following collections received by the Seller and payments made by the Seller
after the Cut-off Date:
(i) all payments on account of principal on the Mortgage
Loans, including all Principal Prepayments;
(ii) any Prepayment Charge received in connection with the
Mortgage Loans;
(iii) all payments on account of interest on the Mortgage
Loans adjusted to the Mortgage Loan Remittance Rate;
(iv) all Liquidation Proceeds;
(v) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 5.11 (other than proceeds to be held in
the Escrow Account and
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applied to the restoration or repair of the Mortgaged Property or
released to the Mortgagor in accordance with Section 5.15), Section
5.12 and Section 5.15;
(vi) 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 5.15;
(vii) any amount required to be deposited in the Custodial
Account pursuant to Section 5.01, 5.10, 5.11, 5.20, 6.01, 6.03, 6.04,
7.01 or 7.02;
(viii) any amounts payable in connection with the repurchase
of any Mortgage Loan pursuant to Section 4.03; (ix) any amounts
required to be deposited by the Seller pursuant to Section 5.12 in
connection with the deductible clause in any blanket hazard insurance
policy;
(x) any amounts required to be deposited by the Seller
pursuant to Section 5.16 in connection with any unpaid claims that are
a result of a breach by the Seller or any subservicer of the
obligations hereunder or under the terms of a PMI Policy;
(xi) any amounts received by the Seller under a PMI or LPMI
Policy;
(xii) with respect to each Principal Prepayment in full or in
part, the Prepayment Interest Shortfall Amount, if any, for the month
of distribution. Such deposit shall be made from the Seller's own
funds, without reimbursement therefor up to a maximum amount per month
of the Servicing Fee actually received for such month for the Mortgage
Loans; and
(xiii) any amounts received with respect to or related to any
REO Property and all REO Disposition Proceeds pursuant to Section 5.17.
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 need not be deposited by the Seller 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 Seller and the Seller shall be
entitled to retain and withdraw such interest from the Custodial Account
pursuant to Section 5.05.
Section 5.05 Permitted Withdrawals From Custodial Account.
The Seller 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 6.01;
(ii) to reimburse itself for Monthly Advances, the Seller's
right to reimburse itself pursuant to this subclause (ii) being limited
to amounts received on the related
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Mortgage Loan which represent late collections (net of the related
Servicing Fee) of principal and/or interest respecting which any such
advance was made, it being understood that, in the case of such
reimbursement, the Seller's right thereto shall be prior to the rights
of the Purchaser, except that, where the Seller is required to
repurchase a Mortgage Loan, pursuant to Section 3.03, the Seller's
right to such reimbursement shall be subsequent to the payment to the
Purchaser of the Repurchase Price pursuant to such Section 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,
the Seller'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, REO Disposition
Proceeds and other amounts received in respect of the related REO
Property, and such other amounts as may be collected by the Seller from
the Mortgagor or otherwise relating to the Mortgage Loan, it being
understood that, in the case of any such reimbursement, the Seller's
right thereto shall be prior to the rights of the Purchaser;
(iv) to pay itself interest on funds deposited in the
Custodial Account;
(v) with respect to each LPMI Loan, and amount equal to the
related LPMI Fee to make payment of premiums due under the LPMI Policy;
(vi) to clear and terminate the Custodial Account upon the
termination of this Agreement; (vii) to withdraw funds deposited in
error; (viii) to pay to itself with respect to each Mortgage Loan that
has been repurchased pursuant to Section 4.03 all amounts received
thereon and not distributed as of the date on which the related
Repurchase Price is determined;
(ix) to reimburse itself for unreimbursed Monthly Advances and
Servicing Advances deemed to be non-recoverable, to the extent not
fully reimbursed pursuant to paragraphs (ii) or (iii) above;
(x) to invest funds in certain Eligible Investments; and
(xi) to transfer funds to another Custodial Account
established with a Qualified Depository in accordance with Section
5.10.
In the event that the Custodial Account is interest bearing,
on each Remittance Date, the Seller shall withdraw all funds from the Custodial
Account except for those amounts which, pursuant to Section 6.01, the Seller is
not obligated to remit on such Remittance Date. The Seller may use such
withdrawn funds only for the purposes described in this Section 5.05.
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Section 5.06 Establishment of and Deposits to Escrow Account.
The Seller 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, "Wachovia Mortgage Corporation, in trust ▇▇▇▇▇▇ Brothers Bank,
FSB, purchaser of Conventional Residential Fixed and Adjustable Rate Mortgage
Loans, Group No. 2004-FLOW, 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 Seller in accordance with Section 5.07. 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 Seller, 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 Seller. A copy of such certification shall
be furnished to the Purchaser and, upon request, to any subsequent purchaser.
The Seller shall deposit in the Escrow Account or Accounts on
a daily basis, not later than two (2) Business Days after receipt thereof, and
retain therein:
(i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or
Condemnation Proceeds which are to be applied to the restoration or
repair of any Mortgaged Property.
The Seller shall make withdrawals from the Escrow Account only
to effect such payments as are required under this Agreement, as set forth in
Section 5.07. The Seller 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 Seller 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 5.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by
the Seller 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 Seller for any Servicing Advances made
by the Seller pursuant to Section 5.09 with respect to a related
Mortgage Loan, but only from amounts received on the related Mortgage
Loan which represent late collections of Escrow Payments thereunder;
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(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, inspection or repair of
the Mortgaged Property in accordance with the procedures outlined in
Section 5.15;
(vi) to pay to the Seller, or any Mortgagor to the extent
required by law, any interest paid on the funds deposited in the Escrow
Account;
(vii) to pay to the Mortgagors or other parties Insurance
Proceeds in accordance with Section 5.06;
(viii) to clear and terminate the Escrow Account on the
termination of this Agreement; and
(ix) to withdraw funds deposited in error.
The Seller will be responsible for the administration of the
Escrow Accounts and will be obligated to make Servicing Advances to the Escrow
Account in respect of its obligations under this Section 5.07, reimbursable from
the Escrow Accounts or Custodial Account to the extent not collected from the
related Mortgagor, anything to the contrary notwithstanding, when and as
necessary to avoid the lapse of insurance coverage on the Mortgaged Property, or
which the Seller knows, or in the exercise of the required standard of care of
the Seller hereunder should know, is necessary to avoid the loss of the
Mortgaged Property due to a tax sale or the foreclosure as a result of a tax
lien. If any such payment has not been made and the Seller receives notice of a
tax lien with respect to the Mortgage being imposed, the Seller will, within ten
(10) days of such notice, advance or cause to be advanced funds necessary to
discharge such lien on the Mortgaged Property.
Section 5.08 Completion and Recordation of Assignment of
Mortgage.
To the extent permitted by applicable law, each of the
Assignments of Mortgage to be prepared by the Seller will be 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.
Section 5.09 Payment of Taxes, Insurance and Other Charges.
(a) With respect to each Mortgage Loan which provides for
Escrow Payments, the Seller shall maintain accurate records reflecting the
status of ground rents, taxes, assessments, water rates, sewer rents, and other
charges which are or may become a lien upon the Mortgaged Property and the
status of fire and hazard insurance coverage and shall obtain, from time to
time, all bills for the payment of such charges (including renewal premiums) and
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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 Seller in amounts
sufficient for such purposes, as allowed under the terms of the Mortgage. The
Seller 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 Seller shall make advances from its own funds to effect such
payments.
(b) To the extent that a Mortgage Loan does not provide for
Escrow Payments, the Seller shall make advances from its own funds to effect
payment of all Property Charges upon receipt of notice of any failure to pay on
the part of the Mortgagor, or at such other time as the Seller determines to be
in the best interest of the Purchaser, provided, that in any event the Seller
shall pay such charges on or before the earlier of (a) any date by which payment
is necessary to preserve the lien status of the Mortgage or (b) the date which
is ninety days after the date on which such charges first became due. The Seller
shall pay any late fee or penalty which is payable due to any delay in payment
of any Property Charge after the earlier to occur of (a) the date on which the
Seller receives notice of the failure of the Mortgagor to pay such Property
Charge or (b) the date which is ninety days after the date on which such charges
first became due.
Section 5.10 Protection of Accounts.
The Seller 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 providing notice to the Purchaser.
The Seller 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 Seller be invested in Eligible Investments;
provided that in the event that amounts on deposit in the Custodial Account or
the Escrow Account exceed the amount fully insured by the FDIC (the "Insured
Amount") the Seller shall be obligated to invest the excess amount over the
Insured Amount in Eligible Investments on the same Business Day as such excess
amount becomes present in the Custodial Account or the Escrow Account. Any such
Eligible Investment shall mature no later than the 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
Seller) 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 Seller 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 Seller and may be withdrawn at any time by the
Seller. Any losses incurred in respect of any such investment shall be deposited
in the Custodial Account or the Escrow Account, by the Seller out of its own
funds immediately as realized.
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Section 5.11 Maintenance of Hazard Insurance.
The Seller 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 acceptable under ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac
guidelines 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 (a) 100% of the maximum
insurable value of the improvements securing such Mortgage Loan and (b) the
greater of (i) the outstanding principal balance of the Mortgage Loan and (ii)
an amount such that the proceeds thereof shall be sufficient to prevent the
Mortgagor or the loss payee from becoming a co-insurer.
If upon origination of the Mortgage Loan, the related
Mortgaged Property was located in an area identified in the Federal Register by
the Flood Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect with an insurance carrier acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac,
in an amount representing coverage equal to the lesser of (i) the minimum amount
required, under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. If at any time during the term of the
Mortgage Loan, the Seller determines in accordance with applicable law and
pursuant to the ▇▇▇▇▇▇ Mae Guides that a Mortgaged Property is located in a
special flood hazard area and is not covered by flood insurance or is covered in
an amount less than the amount required by the Flood Disaster Protection Act of
1973, as amended, the Seller 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 Seller 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 Seller 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 ▇▇▇▇▇▇ ▇▇▇ requirements, and secure from the
owner's association its agreement to notify the Seller 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 Seller shall cause to be maintained on each Mortgaged
Property earthquake or such other or additional insurance as may be required
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance, or pursuant to the
requirements of any private mortgage guaranty insurer, or as may be required to
conform with Accepted Servicing Practices.
In the event that any Purchaser or the Seller 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 Seller shall, in its
discretion, communicate with the Mortgagor with respect to the need for such
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insurance and bring to the Mortgagor's attention the desirability of protection
of the Mortgaged Property.
All policies required hereunder shall name the Seller as loss
payee and shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least thirty (30) days' prior written
notice of any cancellation, reduction in amount or material change in coverage.
The Seller shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Seller shall not accept any such insurance policies from insurance
companies unless such companies are acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and
are licensed to do business in the jurisdiction in which the Mortgaged Property
is located. The Seller 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 Seller 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 5.04, any amounts collected by the Seller
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 Seller's normal servicing
procedures as specified in Section 5.15) shall be deposited in the Custodial
Account subject to withdrawal pursuant to Section 5.05.
Notwithstanding anything set forth in the preceding paragraph,
the Seller agrees to indemnify the Purchaser for any 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 the failure of the Mortgage (or the Seller) to maintain hazard insurance or
flood insurance with respect to the related Mortgaged Property which complies
with the requirements of this section.
Section 5.12 Maintenance of Mortgage Insurance.
In the event that the Seller 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 5.11 and otherwise complies with all other requirements of Section 5.11,
it shall conclusively be deemed to have satisfied its obligations as set forth
in Section 5.11. Any amounts collected by the Seller under any such policy
relating to a Mortgage Loan shall be deposited in the Custodial Account or
Escrow Account subject to withdrawal pursuant to Section 5.05 or 5.17. 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 5.11, and there shall have been a loss which would have
been covered by such policy, the Seller 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
Seller's funds, without reimbursement therefor. Upon the
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reasonable request of any Purchaser, the Seller 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 thirty (30) days' prior written notice to such
Purchaser.
Section 5.13 Maintenance of Fidelity Bond and Errors and
Omissions Insurance.
The Seller shall maintain with responsible companies, at its
own expense, a blanket Fidelity Bond and an Errors and Omissions Insurance
Policy, with broad coverage on all officers, employees or other persons acting
in any capacity requiring such persons to handle funds, money, documents or
papers relating to the Mortgage Loans ("Seller 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 Seller against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Seller Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Seller 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 5.13 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Seller from its duties
and obligations as set forth in this Agreement. The minimum coverage under any
such bond and insurance policy shall be at least equal to the corresponding
amounts required by ▇▇▇▇▇▇ Mae in the ▇▇▇▇▇▇ ▇▇▇ Guides or by ▇▇▇▇▇▇▇ Mac in the
▇▇▇▇▇▇▇ Mac Guides. Upon the reasonable request of the Purchaser, the Seller
shall cause to be delivered to such Purchaser a certified true copy of such
fidelity bond and insurance policy and a statement from the surety and the
insurer that such fidelity bond and insurance policy shall in no event be
terminated or materially modified without 30 days' prior written notice to the
Purchaser.
Section 5.14 Inspections.
The Seller shall inspect the Mortgaged Property as often as
deemed necessary by the Seller to assure itself that the value of the Mortgaged
Property is being preserved. In addition, if any Mortgage Loan is more than
sixty (60) days delinquent, the Seller 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 Seller shall keep a written report of each such inspection.
Section 5.15 Restoration of Mortgaged Property.
The Seller 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
Seller shall comply with the following conditions in connection with any such
release of Insurance Proceeds or Condemnation Proceeds:
(i) the Seller shall receive satisfactory independent
verification of completion of repairs and issuance of any required
approvals with respect thereto;
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(ii) the Seller 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 Seller shall verify that the Mortgage Loan is not in
default; and
(iv) pending repairs or restoration, the Seller shall place
the Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the
Seller is hereby empowered to endorse any loss draft issued in respect of such a
claim in the name of the Purchaser.
Section 5.16 Maintenance of PMI and/or LPMI Policy; Claims.
(a) The Seller shall comply with all provisions of applicable
state and federal law relating to the cancellation of, or collection of premiums
with respect to, PMI Policies, including, but not limited to, the provisions of
the Home Purchasers Protection Act of 1998, and all regulations promulgated
thereunder, as amended from time to time. The Seller shall be obligated to make
premium payments with respect to PMI Policies required to be maintained by the
Mortgagor rather than the Purchaser, if the Mortgagor is required but fails to
pay any PMI Policy premium, which shall be paid from the Seller's own funds. Any
premium payments made by the Seller from its own funds pursuant to this Section
5.16(a) shall be recoverable by the Seller as a Servicing Advance, subject to
the reimbursement provisions of Section 5.05(iii) and 5.05(vii).
With respect to each Mortgage Loan with a loan-to-value ratio
at origination in excess of 80% and subject to a PMI Policy, the Seller shall,
without any cost to the Purchaser, maintain or cause the Mortgagor to maintain
(to the extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance) such PMI Policy in full force and effect, and shall pay or shall
cause the Mortgagor to pay the premium thereon on a timely basis, until the LTV
of such Mortgage Loan is reduced to 80%. In the event that such PMI Policy shall
be terminated, the Seller shall obtain from another Qualified Insurer a
comparable replacement policy, with a total coverage equal to the remaining
coverage of such terminated PMI Policy, at substantially the same fee level. The
Seller 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 Seller would
have been covered thereunder. In connection with any assumption or substitution
agreements entered into or to be entered into with respect to a Mortgage Loan,
the Seller 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 Seller shall obtain a replacement PMI Policy as
provided above.
(b) With respect to each Mortgage Loan covered by a PMI Policy, the Seller shall
take all such actions on behalf of the Purchaser as are necessary to service,
maintain and administer the related Mortgage Loan in accordance with such Policy
and to enforce the rights under such Policy. Except as expressly set forth
herein, the Seller shall have full authority on
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behalf of the Purchaser to do anything it deems appropriate or desirable in
connection with the servicing, maintenance and administration of such Policy;
provided that the Seller shall not take any action to permit any modification or
assumption of a Mortgage Loan covered by a PMI Policy, or take any other action
with respect to such Mortgage Loan, which would result in non-coverage under
such Policy of any loss which, but for actions of the Seller, would have been
covered thereunder. If the Qualified Insurer fails to pay a claim under a PMI
Policy solely as a result of a breach by the Seller of its obligations under
this paragraph or under such Policy, the Seller shall be required to deposit in
the Custodial Account on or prior to the next succeeding Remittance Date an
amount equal to such unpaid claim from its own funds without any rights to
reimbursement from the Purchaser; provided, that once the Seller has paid the
amount of such unpaid claim and the Purchaser has otherwise fully recovered all
amounts due to the Purchaser with respect to the Mortgage Loan, the Purchaser
shall (at the Seller's cost and expense) cooperate with the Seller in permitting
the Seller to be subrogated to the rights of the Purchaser with respect to such
Mortgage Loan to the same extent that the insurer would have been subrogated
under the applicable PMI Policy had such insurer not failed to pay such claim.
The Seller shall cooperate with the Qualified Insurers and shall furnish all
reasonable evidence and information in the possession of the Seller to which the
Seller has access with respect to the related Mortgage Loan; provided, however,
notwithstanding anything to the contrary contained in any PMI Policy, the Seller
shall not be required to submit any reports to the related Qualified Insurer
until a reporting date that is at least fifteen (15) days after the Seller has
received sufficient loan level information from each Purchaser to appropriately
code its servicing systems in accordance with the Qualified Insurer's
requirements.
(c) In connection with its activities as servicer, the Seller
agrees to prepare and present, on behalf of itself and the Purchaser, claims to
the Qualified Insurer under any PMI Policy in a timely fashion in accordance
with the terms of such PMI Policy and, in this regard, to take such action as
shall be necessary to permit recovery under any PMI Policy respecting a
defaulted Mortgage Loan. Any amounts collected by the Seller under any PMI
Policy shall be deposited in the Custodial Account pursuant to Section 5.03(xi),
subject to withdrawal pursuant to Section 5.04(iv).
Section 5.17 Title, Management and Disposition of REO
Property.
In the event that title to any Mortgaged Property is acquired
in foreclosure or by deed in lieu of foreclosure, the deed or certificate of
sale shall be taken in the name of the Purchaser's designee, or in the event the
Purchaser's designee 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
Seller from any attorney duly licensed to practice law in the state where the
REO Property is located. The Person or Persons holding such title other than the
Purchaser shall acknowledge in writing that such title is being held as nominee
for the Purchaser's designee.
The Seller shall manage, conserve, protect and operate each
REO Property for the Purchaser solely for the purpose of its prompt disposition
and sale. The Seller, either itself or through an agent selected by the Seller,
shall manage, conserve, protect and operate the REO
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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 Seller
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 Seller deems to be in the best interest of the Purchaser. The
Seller shall notify the Purchaser from time to time as to the status of each REO
Property.
The Seller shall use its best efforts to dispose of the REO
Property as soon as possible and shall sell such REO Property in any event
within three years after title has been taken to such REO Property, not later
than the end of the third taxable year after the year of its acquisition unless
(i) (A) a REMIC election has not been made with respect to the arrangement under
which the Mortgage Loans and the REO Property are held, and (ii) the Seller
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 three years is permitted under the foregoing
sentence and is necessary to sell any REO Property, (i) the Seller shall report
monthly to the Purchaser as to the progress being made in selling such REO
Property and (ii) if, with the written consent of the Purchaser, a purchase
money mortgage is taken in connection with such sale, such purchase money
mortgage shall name the Seller as mortgagee, and such purchase money mortgage
shall not be held pursuant to this Agreement, but instead a separate
participation agreement among the Seller and Purchaser shall be entered into
with respect to such purchase money mortgage.
Notwithstanding anything to the contrary contained in this
Section 5.17, in connection with a foreclosure or acceptance of a deed in lieu
of foreclosure, in the event the Seller has reasonable cause to believe that a
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
or if the Purchaser otherwise requests, an environmental inspection or review of
such Mortgaged Property to be conducted by a qualified inspector shall be
arranged by the Seller. Upon completion of the inspection, the Seller shall
provide the Purchaser with a written report of such environmental inspection. In
the event that the environmental inspection report indicates that the Mortgaged
Property is contaminated by hazardous or toxic substances or wastes, the Seller
shall not proceed with foreclosure or acceptance of a deed in lieu of
foreclosure. In the event that the environmental inspection report is
inconclusive as to the whether or not the Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, the Seller shall not, without the prior
approval of the Purchaser, proceed with foreclosure or acceptance of a deed in
lieu of foreclosure. In the event the Purchaser or its designee directs the
Seller not to proceed with foreclosure or acceptance of a deed in lieu of
foreclosure, the Seller shall be reimbursed for all Servicing Advances,
including any inspection costs incurred pursuant to this paragraph, made with
respect to the related Mortgaged Property from the Custodial Account pursuant to
Section 5.05 hereof.
Subject to the approval of the Purchaser or its designee as
described in this paragraph, the disposition of REO Property shall be carried
out by the Seller at such price, and upon such terms and conditions, as the
Seller deems to be in the best interests of the Purchaser. Prior to acceptance
by the Seller of an offer to sell any REO Property, the Seller shall notify the
Purchaser or its designee of such offer in writing which notification shall set
forth all material terms of said offer (each a "Notice of Sale"). The Purchaser
or its designee shall be deemed to have approved the sale of any REO Property
unless the Purchaser or its designee notifies the
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Seller in writing, within two (2) Business Days after its receipt of the related
Notice of Sale, that it disapproves of the related sale, in which case the
Seller shall not proceed with such sale.
The Seller shall also maintain on each REO Property fire and
hazard insurance with extended coverage in amount which is at least equal to the
unpaid principal amount of the Mortgage Loan applicable to such REO Property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
The disposition of REO Property shall be carried out by the
Seller at such price, and upon such terms and conditions, as the Seller deems to
be in the best interests of the Purchaser. The proceeds of sale of the REO
Property shall be promptly deposited in the Custodial Account. As soon as
practical thereafter the expenses of such sale shall be paid and the Seller
shall reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and unreimbursed advances made pursuant to this Section or
Section 6.04, and on the Remittance Date immediately following the Principal
Prepayment Period in which such sale proceeds are received the net cash proceeds
of such sale remaining in the Custodial Account shall be distributed to the
Purchaser.
The Seller shall make advances of all funds necessary for the
proper operation, management and maintenance of the REO Property, including the
cost of maintaining any hazard insurance pursuant to Section 5.11, such advances
to reimbursed from the disposition or liquidation proceeds of the REO Property.
The Seller 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 this Section
5.17 and of any reserves reasonably required from time to time to be maintained
to satisfy anticipated liabilities for such expenses).
Section 5.18 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section
6.02, the Seller shall furnish to the Purchaser or its designee on or before the
tenth (10th) calendar day of each month a statement with respect to any REO
Property covering the operation of such REO Property for the previous month and
the Seller'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 or its designee shall reasonably request.
Section 5.19 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Purchaser pursuant to a deed in lieu of foreclosure,
the Seller shall submit to the Purchaser a liquidation report with respect to
such Mortgaged Property. In addition, the Seller shall provide the Purchaser or
its designee a report of Servicing Advances and other expenses in connection
with the liquidation of any Mortgage Loan. Section 5.20 Notification of
Adjustments.
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With respect to each ARM Mortgage Loan, the Seller shall
adjust the Mortgage Interest Rate on the related Interest Rate Adjustment Date
in compliance with the requirements of applicable law and the related Mortgage
and Mortgage Note. The Seller shall execute and deliver any and all necessary
notices required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Interest Rate adjustments. The Seller shall
promptly, upon written request therefor, deliver to the Purchaser such
notifications and any additional applicable data regarding such adjustments and
the methods used to calculate and implement such adjustments. Upon the discovery
by the Seller or the receipt of notice from the Purchaser that the Seller has
failed to adjust a Mortgage Interest Rate in accordance with the terms of the
related Mortgage Note, the Seller shall immediately deposit in the Custodial
Account from its own funds the amount of any interest loss or deferral caused
the Purchaser thereby.
Section 5.21 Reports of Foreclosures and Abandonments of
Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged
Property, the Seller shall report such foreclosure or abandonment as required
pursuant to Section 6050J of the Code.
Section 5.22 Prepayment Charges
The Seller or any designee of the Seller shall not waive any
Prepayment Charge with respect to any Mortgage Loan which contains a Prepayment
Charge which prepays during the term of the penalty. If the Seller or its
designee fails to collect the Prepayment Charge upon any prepayment of any
Mortgage Loan which contains a Prepayment Charge, the Seller shall pay the
Purchaser an amount equal to the Prepayment Charge which was not collected.
Notwithstanding the above, the Seller or its designee may waive a Prepayment
Charge without paying the Purchaser the amount of the Prepayment Charge if (i)
the Mortgage Loan is in default (defined as 61 days or more delinquent) and such
waiver would maximize recovery of total proceeds taking into account the value
of such Prepayment Charge and the related Mortgage Loan or (ii) if the
prepayment is not a result of a refinance by the Seller or any of its affiliates
and the Mortgage Loan is foreseen to be in default and such waiver would
maximize recovery of total proceeds taking into account the value of such
Prepayment Charge and the related Mortgage Loan or (iii) the collection of the
Prepayment Charge would be in violation of applicable laws.
Section 5.23 Credit Reporting.
For each Mortgage Loan, the Seller shall accurately and 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 each of the following credit repositories:
Equifax, Experian Information Solutions, Inc., and Trans Union, LLC on a monthly
basis.
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Section 5.24 Safeguarding Customer Information
The Seller has implemented and will maintain security measures
designed to meet the objectives of the Interagency Guidelines Establishing
Standards for Safeguarding Customer Information published in final form on
February 1, 2001, 66 Fed. Reg. 8616, and the rules promulgated thereunder, as
amended from time to time (the "Guidelines").
The Seller shall promptly provide the Purchaser information
regarding such security measures upon the reasonable request of the Purchaser or
its designee (including any Master Servicer of the Mortgage Loans) which
information shall include, but not be limited to, any Statement on Auditing
Standards (SAS) No. 70 report covering the Seller's operations, and any other
audit reports, summaries of test results or equivalent measures taken by the
Seller with respect to its security measures.
ARTICLE VI
PAYMENTS TO PURCHASER
Section 6.01 Remittances.
On each Remittance Date the Seller 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 last day
of the related Due Period (net of charges against or withdrawals from the
Custodial Account pursuant to Section 5.05), plus (b) all amounts, if any, which
the Seller is obligated to distribute pursuant to Section 6.04, minus (c) any
amounts attributable to Principal Prepayments, Liquidation Proceeds, Insurance
Proceeds, Condemnation Proceeds or REO Disposition Proceeds received after the
applicable Due 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 5.04(xii), 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 second Business Day following the Business Day on which such payment was
due, the Seller shall pay to the Purchaser interest on any such late payment at
an annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus two percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the Custodial
Account by the Seller 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 Seller of any such interest shall
not be deemed an extension of time for payment or a waiver of any Event of
Default by the Seller.
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Section 6.02 Statements to Purchaser.
Not later than the tenth (10th) calendar day of each month,
the Seller shall furnish to the Purchaser or its designee a monthly remittance
advice in the format set forth in Exhibit F-1 hereto and a monthly defaulted
loan report in format set forth in Exhibit F-2 hereto (or in such other format
mutually agreed to between the Seller and the Purchaser) relating to the period
ending on the last day of the preceding calendar month.
The Seller shall prepare and file any and all 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. In
addition, the Seller shall provide each Purchaser with such information
concerning the Mortgage Loans as is necessary for such Purchaser to prepare its
federal income tax return as any Purchaser may reasonably request from time to
time.
Such obligation of the Seller shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Seller pursuant to any requirements of the Internal Revenue Code
as from time to time are in force.
Section 6.03 Due Dates Other Than the First of the Month
After Reconstitution, Mortgage Loans having Due Dates other
than the first day of a month, including Mortgage Loans permitting semi-annual
amortization of principal, shall be accounted for as described in this Section
6.03. Any payment due on a day other than the first day of each month shall be
considered due on the first day of the month following the month in which that
payment is due as if such payment were due on the first day of said month. For
example, a payment due on August 15 shall be considered to be due on September 1
of said month. With respect to a Mortgage Note permitting semi-annual
amortization of principal, the Seller shall be required to remit monthly
scheduled principal and interest based on a monthly amortization schedule. Any
payment collected on a Mortgage Loan after each Cut-off Date shall be deposited
in the Custodial Account. For Mortgage Loans with Due Dates on the first day of
a month, deposits to the Custodial Account begin with the payment due on the
first of the month following each Cut-off Date.
Section 6.04 Monthly Advances by the Seller
The Seller shall deposit in the Custodial Account on the
Business Day immediately preceding each Remittance Date, from its own funds or
from amount held for future distribution, or both, 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 6.01. Any amounts
held for future distribution and so used shall be replaced by the Seller by
deposit in the Custodial Account on or before any future Remittance Date if
funds in the Custodial Account on such Remittance Date shall be less than
remittances to the Purchaser required to be made on such Remittance Date. The
Seller's obligation to make such Monthly Advances as to any Mortgage Loan will
continue through the earlier of (i) the date of the termination or resignation,
as
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applicable, of the Seller pursuant to Section 8.02, 10.01,11.01 or 11.02 or (ii)
the date of final disposition and liquidation of the related Mortgage Loan or
any Mortgaged Property acquired through foreclosure or a conveyance in lieu of
foreclosure, unless the Seller reasonably believes such advance to be
non-recoverable from proceeds of the related Mortgage Loan.
ARTICLE VII
GENERAL SERVICING PROCEDURES
Section 7.01 Transfers of Mortgaged Property.
The Seller 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 Seller 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 Seller 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 LPMI Policy, if any.
If the Seller reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Seller shall enter into
(i) an assumption and modification agreement with the person to whom such
property has been conveyed, pursuant to which such person becomes liable under
the Mortgage Note and the original Mortgagor remains liable thereon or (ii) in
the event the Seller is unable under applicable law to require that the original
Mortgagor remain liable under the Mortgage Note and the Seller 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.
Any assumption fee collected by the Seller for entering into an assumption
agreement shall be retained by the Seller 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 Seller
shall inquire diligently into the creditworthiness of the proposed transferee,
and shall use the underwriting criteria for approving the credit of the proposed
transferee which are used by the Seller with respect to underwriting mortgage
loans of the same type as the Mortgage Loans. If the credit of the proposed
transferee does not meet such underwriting criteria, the Seller diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.
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Section 7.02 Satisfaction of Mortgages and Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, or the receipt
by the Seller of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Seller shall notify the Purchaser in the
monthly remittance advice as provided in Section 6.02, and may request the
release of any Mortgage Loan Documents from the Purchaser in accordance with
this Section 7.02. The Purchaser shall no later than five (5) Business Days
after receipt of such certification and request, release or cause to be released
to the Seller, the related Mortgage Loan Documents and, upon its receipt of such
documents, the Seller shall promptly prepare and deliver to the Purchaser the
requisite satisfaction or release. No later than three (3) Business Days
following its receipt of such satisfaction or release, the Purchaser shall
deliver, or cause to be delivered, to the Seller the release or satisfaction
properly executed by the owner of record of the applicable Mortgage or its duly
appointed attorney in fact. If such Mortgage Loan is a MERS Mortgage Loan, the
Seller is authorized to cause the removal from the registration on the MERS
System of such Mortgage and to execute and deliver, on behalf of the Purchaser,
any and all instruments of satisfaction or cancellation or of partial or full
release.
If the Seller satisfies or releases a Mortgage without first
having obtained payment in full of the indebtedness secured by the Mortgage or
should the Seller otherwise prejudice any rights the Purchaser may have under
the mortgage instruments, the Seller shall deposit into the Custodial Account
the then outstanding principal balance, plus all accrued interest on such
Mortgage Loan, on the day preceding the Remittance Date in the month following
the date of such release. The Seller shall maintain the Fidelity Bond and Errors
and Omissions Insurance Policy as provided for in Section 5.13 insuring the
Seller against any loss it may sustain with respect to any Mortgage Loan not
satisfied in accordance with the procedures set forth herein.
From time to time and as appropriate for the servicing or
foreclosure of the Mortgage Loans, including for the purpose of collection under
any Primary Mortgage Insurance Policy, the Purchaser shall, upon request of the
Seller and delivery to the Purchaser of a servicing receipt signed by a
Servicing Officer, release the portion of the Mortgage File held by the
Purchaser to the Seller. Such servicing receipt shall obligate the Seller to
return such Mortgage Loan Documents to the Purchaser when the need therefor by
the Seller no longer exists, unless the Mortgage Loan has been liquidated and
the Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the Custodial Account or the Mortgage File has been delivered to an attorney, or
to a public trustee or other public official as required by law, for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgaged Property either judicially or non-judicially, and the Seller has
delivered to the Purchaser an Officer's Certificate of a Servicing Officer
stating that such Mortgage Loan was liquidated, the servicing receipt shall be
released by the Purchaser to the Seller.
Section 7.03 Servicing Compensation.
As compensation for servicing the Mortgage Loans subject to
this Agreement, the Seller shall retain the relevant Servicing Fee for each
Mortgage Loan remaining subject to this Agreement during any month or part
thereof. Such Servicing Fee shall be payable monthly. Additional servicing
compensation in the form of Ancillary Income shall be retained by the
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Seller and is not required to be deposited in the Custodial Account. 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) of such Monthly Payment
collected by the Seller.
The Seller 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 7.04 Annual Audit Report.
On or before March 15th of each calendar year, commencing
March 15, 2005, the Seller shall, at its own expense, cause a firm of
independent public accountants (who may also render other services to the
Seller), which is a member of the American Institute of Certified Public
Accountants, to furnish to the Purchaser (i) year-end audited (if available)
financial statements of the Seller and (ii) a statement to the effect that such
firm has examined certain documents and records for the preceding fiscal year
(or during the period from the date of commencement of such Seller's duties
hereunder until the end of such preceding fiscal year in the case of the first
such certificate) and that, on the basis of such examination conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Seller's overall
servicing operations have been conducted in compliance with the Uniform Single
Attestation Program for Mortgage Bankers except for such exceptions that, in the
opinion of such firm, the Uniform Single Attestation Program for Mortgage
Bankers requires it to report, in which case such exceptions shall be set forth
in such statement.
Section 7.05 Annual Officer's Certificate.
On or before March 15th of each calendar year, commencing
March 15, 2005, the Seller shall, at its own expense, deliver to the Purchaser a
Servicing Officer's certificate stating, as to each signer thereof, that (i) a
review of the activities of the Seller during such preceding fiscal year and of
performance under this Agreement has been made under such officers' supervision,
and (ii) to the best of such officers' knowledge, based on such review, the
Seller has fulfilled all its obligations under this Agreement for such year, or,
if there has been a default in the fulfillment of all such obligations,
specifying each such default known to such officers and the nature and status
thereof including the steps being taken by the Seller to remedy such default.
Section 7.06 Right to Examine Seller Records.
The Purchaser shall have the right to examine and audit any
and all of the books, records, or other information of the Seller, whether held
by the Seller or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during normal business hours or at such other
times as may be reasonable under applicable circumstances, upon reasonable
advance notice.
The Seller shall provide to the Purchaser and any supervisory
agents or examiners representing a state or federal governmental agency having
jurisdiction over the Purchaser or the Master Servicer, including without
limitation, OCC, OTS, the FDIC and other similar entities,
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access to any documentation regarding the Mortgage Loans in the possession of
the Seller that is required by any applicable regulations. Such access shall be
afforded without charge, upon reasonable request, during normal business hours,
at the offices of the Seller and in accordance with any applicable regulations.
In connection with providing such access, the Seller shall not be required to
incur any out-of-pocket costs or expenses unless provisions have been made for
the reimbursement therefor.
ARTICLE VIII
AGENCY TRANSFER; WHOLE LOAN TRANSFER, PASS-THROUGH TRANSFER
Section 8.01 Removal of Mortgage Loans from Inclusion Under
this Agreement Upon an Agency Transfer, Whole
Loan Transfer, or a Pass-Through Transfer on One
or More Reconstitution Dates.
The Purchaser and the Seller agree that with respect to some
or all of the Mortgage Loans, from time to time and upon no less than ten (10)
Business Days' prior notice to the Seller the Purchaser shall:
(1) Effect an Agency Transfer, and/or
(2) Effect a Whole Loan Transfer, and/or
(3) Effect a Pass-Through Transfer,
in each case retaining the Seller as the Seller thereof to service the Mortgage
Loans on a "scheduled/scheduled" basis. On the related Reconstitution Date, the
Mortgage Loans transferred shall cease to be covered by this Agreement, except
with respect to the right of the Purchaser to cause a transfer of the servicing
responsibilities with respect to the Mortgage Loans in accordance with Section
8.02 hereof.
(a) The Seller shall cooperate with the Purchaser in
connection with any Agency Transfer, Pass-Through Transfer or Whole Loan
Transfer contemplated by the Purchaser pursuant to this Section 8.01. In that
connection, the Seller shall:
A. execute any Reconstitution Agreement within a reasonable
period of time after receipt of any Reconstitution Agreement
which time shall be sufficient for the Seller and Seller's
counsel to review and reasonably negotiate in good faith
such Reconstitution Agreement, but such time shall not
exceed ten (10) days after such receipt; in the case of any
Agency Transfer, the Reconstitution Agreements shall be
those customarily employed by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac for
transactions of such nature;
B. cooperate fully with the Purchaser, ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac,
the trustee or a third party purchaser and any prospective
purchaser, at the Purchaser's expense, with respect to all
reasonable requests and due diligence procedures including
participating in meetings with rating agencies, ▇▇▇▇▇▇ Mae,
▇▇▇▇▇▇▇ Mac, bond
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insurers, guarantors, loss mitigation or credit risk
management advisors and such other parties as the Purchaser
shall designate and participating in meetings with
prospective purchasers of the Mortgage Loans or interests
therein and providing information contained in the Mortgage
Loan Schedule including any diskette or other related data
tapes provided as reasonably requested by such purchasers;
C. negotiate and execute one or more customary loss mitigation
advisory or credit risk management agreements between the
Seller and any loss mitigation or credit risk management
advisor designated by the Purchaser in its sole discretion;
D. deliver to the Purchaser and to any Person designated by the
Purchaser (a) for inclusion in any prospectus or other
offering material such publicly available information
regarding the Seller, its financial condition and its
mortgage loan delinquency, foreclosure and loss experience
and any additional information requested by the Purchaser,
(b) any similar non-public, unaudited financial information
(which the Purchaser may, at its option and at its cost,
have audited by certified public accountants) and such other
information as is reasonably requested by the Purchaser and
which the Seller is capable of providing without
unreasonable effort or expense, and to indemnify the
Purchaser and its affiliates for material misstatements
contained in such information or for any omissions of
material fact required to be stated therein, provided, that,
the Purchaser shall indemnify the Seller and its affiliates
for any losses, costs or damages related to any material
misstatements contained in any prospectus or other offering
material other than in such information provided by the
Seller specifically for use therein or for any omissions of
material fact required to be stated therein, and (c) such
statements and audit letters of reputable, certified public
accountants pertaining to information provided by the Seller
pursuant to clause (a) above as shall be reasonably
requested by the Purchaser; and
E. provide, on an ongoing basis from information obtained
through its servicing of the Mortgage Loans, any information
necessary to enable the "tax matters person" for any REMIC
in a Pass-Through Transfer, including any Master Servicer or
trustee acting in such capacity, to perform its obligations
in accordance with applicable law and customary secondary
mortgage market standards for securitized transactions.
(b) The Seller shall provide to the Purchaser or issuer, as
the case may be, and any other participants in such Agency Transfer, Whole Loan
Transfer or Pass-Through Transfer, (i) any and all information with respect to
itself, its servicing portfolio or the Mortgage Loans and appropriate
verification of information which may be reasonably available to the Seller,
whether through letters of its auditors and counsel or otherwise, as the
Purchaser or any such other participant shall request upon reasonable demand and
(ii) such additional representations, warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller as may reasonably be negotiated in good faith by Seller and are
reasonably believed necessary by ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, the trustee, such
third party
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purchaser, any Master Servicer, any Rating Agency or the Purchaser, as the case
may be, in connection with such transactions.
(c) If requested by Purchaser, for so long as a certificate
under the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended, ("▇▇▇▇▇▇▇▇-▇▇▇▇▇") is required
to be given on behalf of the trust fund pursuant to any Reconstitution, no later
than March 15th of each year (or if not a Business Day, the immediately
preceding Business Day), or at any other time that a party provides a
certification pursuant to ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and the related Reconstitution, and
upon thirty (30) days written request of such parties, an officer of the Seller
shall execute and deliver an Officer's Certificate to the appropriate parties
for the benefit of the trust fund and the required parties and their officers,
directors and affiliates.
(d) To the extent required by the applicable Reconstitution
Agreements or otherwise requested by the Purchaser in connection with a
Reconstitution, the Seller shall prepare Assignments of Mortgage in form and
substance acceptable to ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, the trustee or such third
party, as the case may be, for each Mortgage Loan that is part of a
Reconstitution. The Seller 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 Seller's receipt thereof. The Purchaser shall pay all
reasonable fees associated with the preparation, recording and tracking of such
Assignments of Mortgage.
The Purchaser shall reimburse the Seller for any and all
reasonable out-of-pocket costs and fees, including reasonable attorney's fees,
incurred by the Seller in response to requests for information or assistance
under this Section. All Mortgage Loans not sold or transferred pursuant to an
Agency Transfer, Pass-Through Transfer or Whole Loan Transfer and any and all
Mortgage Loans repurchased by the Purchaser pursuant to Section 8.03 below with
respect to an Agency Transfer, Pass-Through Transfer or Whole Loan Transfer
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.
Section 8.02 Transfer of Servicing Following Reconstitution.
Following a Reconstitution of Mortgage Loans, the Purchaser or
its designee (which may include the Master Servicer, trustee, insurer, guarantor
or certificateholders) shall have the right, in its sole discretion, to cause
the Seller at any time under any Reconstitution Agreement to transfer the
servicing responsibilities and duties with respect to some or all of the
Mortgage Loans serviced thereunder to the Purchaser or any designee of the
Purchaser; provided, however, that the Purchaser shall provide the Seller with
thirty (30) days prior written notice and shall pay to the Seller a termination
fee identical to the "termination without cause fee" structure set forth in
Section 11.02, provided further that such transfer shall be subject to the
approval of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, as the case may be, with respect to
Agency Transfers, the trustee, Master Servicer or Rating Agencies with respect
to Pass-Through Transfers or any relevant third party purchaser with respect to
Whole Loan Transfers. No termination fee shall be paid or payable for any
Mortgage Loans with respect to which any payment is more than one hundred twenty
(120) days past due as of the date of such termination. The Seller agrees to
cooperate
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with the Purchaser in such transfer of servicing responsibilities and shall
comply with the termination procedures set forth in Sections 10.01 and 12.01
hereof.
Section 8.03 Purchaser's Repurchase and Indemnification
Obligations.
Upon receipt by the Seller of notice from ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇
Mac or other such third party purchaser of a breach of any Purchaser
representation or warranty contained in any Reconstitution Agreement or a
request by ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, the trustee or third party purchaser as the
case may be, for the repurchase of any Mortgage Loan transferred to ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac pursuant to an Agency Transfer or to a trustee pursuant to a
Pass-Through Transfer or to a third party purchaser pursuant to a Whole Loan
Transfer, the Seller shall promptly notify the Purchaser of same and shall, at
the direction of the Purchaser, use its best efforts to cure and correct any
such breach and to satisfy the requests or concerns of ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac,
the trustee or the third party purchaser related to such deficiencies of the
related Mortgage Loans transferred to ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, the trustee or
other such third party purchaser.
The Purchaser shall repurchase from the Seller any Mortgage
Loan transferred to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac pursuant to an Agency Transfer or
to a trustee pursuant to a Pass-Through Transfer or to a third party purchaser
pursuant to a Whole Loan Transfer with respect to which the Seller has been
required by ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, or the trustee to repurchase due to a
breach of a representation or warranty made by the Purchaser with respect to the
Mortgage Loans, or the servicing thereof prior to the related Closing Date to
▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, the trustee or any third party purchaser in any
Reconstitution Agreement and not due to a breach of the Seller's representations
or obligations thereunder or pursuant to this Agreement. The repurchase price to
be paid by the Purchaser to the Seller shall equal that repurchase price paid by
the Seller to ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, or the third party purchaser plus all
reasonable costs and expenses borne by the Seller in connection with the cure of
said breach of a representation or warranty made by the Purchaser and in
connection with the repurchase of such Mortgage Loan from ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇
Mac, the trustee or the third party purchaser, including, but not limited to,
reasonable attorneys' fees.
At the time of repurchase, the Custodian and the Seller shall
arrange for the reassignment of the repurchased Mortgage Loan to the Purchaser
according to the Purchaser's instructions and the delivery to the Custodian of
any documents held by ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, the trustee or other relevant
third party purchaser with respect to the repurchased Mortgage Loan pursuant to
the related Reconstitution Agreement. In the event of a repurchase, the Seller
shall, simultaneously with such reassignment, give written notice to the
Purchaser that such repurchase has taken place, and amend the Mortgage Loan
Schedule to reflect the addition of the repurchased Mortgage Loan to this
Agreement.
Section 8.04 Additional Indemnification by the Seller.
The Seller shall indemnify the Purchaser and hold it harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses that the Purchaser may sustain in any way related to
the failure of the Seller to perform its duties and service the Mortgage Loans
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in compliance with the terms of this Agreement or any Reconstitution Agreement
entered into pursuant to Section 8.01. The Seller shall promptly 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 ▇▇▇▇▇▇
Mae, ▇▇▇▇▇▇▇ Mac, the trustee or other relevant third party 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, promptly
pay, discharge and satisfy any judgment or decree which may be entered against
it or the Purchaser in respect of such claim and follow any written instructions
received from the Purchaser in connection with such claim. The Purchaser
promptly shall reimburse the Seller for all amounts advanced by it pursuant to
the preceding sentence except when the claim is in any way related to the
failure of the Seller to service and administer the Mortgage Loans in compliance
with the terms of this Agreement or any Reconstitution Agreement. In the event a
dispute arises between the Seller and the Purchaser with respect to any of the
rights and obligations of the parties pursuant to this Agreement, and such
dispute is adjudicated in a court of law, by an arbitration panel or any other
judicial process, then the losing party shall indemnify and reimburse the
winning party for all attorney's fees and other costs and expenses related to
the adjudication of said dispute.
Section 8.05 Transfer Of Servicing.
In the event that the Seller's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to the provisions
of this Agreement, the Seller 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 Seller pursuant to the
aforementioned sections shall not become effective until a successor shall be
appointed by the Purchaser. The Seller shall deliver promptly to the successor
Seller the funds in the Custodial Account and Escrow Account and all Servicing
Files and related documents and statements held by it hereunder and the Seller
shall account for all funds and shall execute and deliver such instruments and
do such other things as may reasonably be required to more fully and
definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Seller.
ARTICLE IX
THE COMPANY
Section 9.01 Merger or Consolidation of the Seller.
The Seller 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.
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Any person into which the Seller may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Seller shall be a party, or any Person succeeding to
the business of the Seller (including by means of sale or disposal of all or
substantially all of the Seller's property or assets), shall be the successor of
the Seller hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding, provided, however, that the successor or surviving
Person shall be an institution (i) having a net worth of not less than
$25,000,000, (ii) which is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved servicer in
good standing.
Section 9.02 Limitation on Liability of Seller and Others.
The duties and obligations of the Seller shall be determined
solely by the express provisions of this Agreement, and the Seller shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement. Neither the Seller nor any of the
directors, officers, employees or agents of the Seller 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 Seller or
any such person against any Breach of warranties or representations made herein,
or failure to perform its obligations in 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
Seller and any director, officer, employee or agent of the Seller 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 Seller
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 Seller 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 Seller shall be entitled to reimbursement from the
Purchaser of the reasonable legal expenses and costs of such action.
Section 9.03 Limitation on Resignation and Assignment by
Seller.
The Purchaser has entered into this Agreement with the Seller
and subsequent Purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Seller, and the representations as to the adequacy of
its servicing facilities, plant, personnel, records and procedures, its
integrity, reputation and financial standing, and the continuance thereof.
Without in any way limiting the generality of this Section 9.03, the Seller
shall neither assign this Agreement or the servicing hereunder nor delegate its
rights or duties hereunder or any portion hereof (to other than a third party in
the case of outsourcing routine tasks such as (by way of example) taxes,
insurance, mortgage release and property inspection, in which case the Seller
shall be fully liable for such tasks as if the Seller performed them itself)
without the prior written consent of the Purchaser, which consent shall not be
unreasonably withheld.
The Seller shall not resign from the obligations and duties
hereby imposed on it except by mutual consent of the Seller 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
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the Seller. Any such determination permitting the resignation of the Seller
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Purchaser which Opinion of Counsel shall be in form and substance acceptable to
the Purchaser. No such resignation shall become effective until a successor
shall have assumed the Seller's responsibilities and obligations hereunder in
the manner provided in Section 13.01.
Without in any way limiting the generality of this Section
9.03, in the event that the Seller either shall assign this Agreement or the
servicing responsibilities hereunder or delegate its duties hereunder or any
portion thereof (to other than a third party in the case of outsourcing routine
tasks such as (by way of example) taxes, insurance, mortgage release and
property inspection, in which case the Seller shall be fully liable for such
tasks as if the Seller performed them itself) 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 Seller or
any third party.
Section 9.04 Limitation on Assignment by the Seller.
Except as otherwise provided herein, this Agreement shall not
be assigned, pledged or hypothecated by the Seller to a third party without the
prior written consent of the Purchaser, which consent shall be granted or
withheld in the sole discretion of the Purchaser.
ARTICLE X
DEFAULT
Section 10.01 Events of Default.
Each of the following shall constitute an Event of Default on
the part of the Seller:
(i) any failure by the Seller to remit to the Purchaser any
payment required to be made under the terms of this Agreement which
continues unremedied for a period of two Business Days after the date
upon which written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller by the Purchaser; or
(ii) failure by the Seller duly to observe or perform in any
material respect any other of the covenants or agreements on the part
of the Seller set forth in this Agreement or in the Custodial
Agreement which continues unremedied for a period of 30 days after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller by the Purchaser; or
(iii) failure by the Seller to maintain its license to do
business or service mortgage loans in any jurisdiction where the
Mortgage Property is located, but only to the extent such
non-qualification materially and adversely affects the Seller's
ability to perform its obligations hereunder; 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 Seller and such decree or order
shall have remained in force undischarged or unstayed for a period of
sixty (60) days; or
(v) the Seller 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 Seller or of or relating to all or substantially all
of its property; or
(vi) the Seller 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 Seller ceases to meet the qualifications of a ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac servicer for more than thirty (30) days; or
(viii) the Seller fails to maintain a minimum net worth of
$25,000,000; or
(ix) the Seller attempts to assign its right to servicing
compensation hereunder or attempts without the consent of the
Purchaser to assign this Agreement or the servicing responsibilities
hereunder or to delegate its duties hereunder or any portion thereof
in a manner not permitted under this Agreement;
(x) if (a) after a Reconstitution in a Pass-Through Transfer, any
of the Rating Agencies reduces or withdraws the rating of any of the
certificates issued by a securitization trust that owns the Mortgage
Loans due to a reason attributable to the Seller or (b) the Seller's
performance in servicing mortgage loans materially and negatively
impacts the ability of the Purchaser to effect an Agency Transfer,
Whole Loan Transfer or Pass-Through Transfer with respect to the
Mortgage Loans; or
(xi) except as set forth in Section 9.01, the Seller attempts,
without the consent of the Purchaser, to sell or otherwise dispose of
all or substantially all of its property or assets.
Then, and 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 Seller, (i) may
terminate all the rights and obligations of the Seller under this Agreement and
in and to the Mortgage Loans and the proceeds thereof, and (ii) may terminate
any commitment the Purchaser has entered into to purchase additional Mortgage
Loans from the Seller hereunder.
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Upon receipt by the Seller of such written notice, all
authority and power of the Seller 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 13.01. Upon written request from any Purchaser,
the Seller 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 Seller's sole
expense. The Seller shall cooperate with the Purchaser and such successor in
effecting the termination of the Seller's responsibilities and rights hereunder,
including without limitation, the transfer to such successor for administration
by it of all cash amounts which shall at the time be credited by the Seller 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 of the Seller hereunder, either
(i) the successor servicer 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 Seller shall cooperate
with the successor servicer 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 servicer or (y) in causing MERS to designate on the MERS System the
successor servicer 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 Seller 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, and the respective obligations and
responsibilities of the Seller and the Purchaser, 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 Seller and the Purchaser in
writing.
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Section 11.02 Termination Without Cause.
This Agreement and the Seller's rights hereunder with respect
to some or all of the Mortgage Loans shall terminate upon: (i) the later of (a)
the distribution of the final payment or liquidation proceeds on the last
Mortgage Loan to the Purchaser (or advances by the Seller for the same), and (b)
the disposition of all REO Property acquired upon foreclosure of the last
Mortgage Loan and the remittance of all funds due hereunder, or (ii) mutual
consent of the Seller and the Purchaser in writing or (iii) at the sole option
of the Purchaser, without cause, upon 30 days written notice, subject to the
limitations set forth below. Any such notice of termination shall be in writing
and delivered to the Seller by registered mail to the address set forth at the
beginning of this Agreement. The Purchaser and the Seller shall comply with the
termination procedures set forth in Sections 10.01 and 12.01 hereof.
In the event the Purchaser terminates the Seller without cause
with respect to some or all of the Mortgage Loans, the Purchaser shall be
required to pay to the Seller a termination fee equal to 2.0% of the aggregate
unpaid principal balance of the Mortgage Loans as of such termination date.
Notwithstanding and in addition to the foregoing, in the event
that (i) a Mortgage Loan becomes delinquent for a period of one hundred twenty
(120) 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 thirty (30) days' written notice to
the Seller.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Seller.
Prior to termination of the Seller's responsibilities and
duties under this Agreement pursuant to Sections 8.05, 10.01, 11.01 (ii) or
pursuant to Section 11.02 after the 30 day period has expired, the Purchaser
shall, (i) succeed to and assume all of the Seller's responsibilities, rights,
duties and obligations under this Agreement, or (ii) appoint a successor which
shall succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Seller under this Agreement simultaneously with the
termination of Seller's responsibilities, duties and liabilities under this
Agreement. In connection with such appointment and assumption, the Purchaser may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree. In the event that the
Seller's duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to the aforementioned sections, the Seller 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 Seller pursuant to the aforementioned sections shall not become effective
until a successor shall
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be appointed pursuant to this Section 12.01 and shall in no event relieve the
Seller of the representations and warranties made pursuant to Sections 4.01 and
4.02 and the remedies available to the Purchaser under Section 4.03, it being
understood and agreed that the provisions of such Sections 4.01, 4.02, and 4.03
shall be applicable to the Seller notwithstanding any such sale, assignment,
resignation or termination of the Seller, or the termination of this Agreement.
Within thirty (30) days of the appointment of a successor
entity by the Purchaser, the Seller shall prepare, execute and deliver to the
successor entity any and all documents and other instruments, place in such
successor's possession all Servicing Files, and do or cause to be done all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer of the Mortgage Notes and
related documents. The Seller shall cooperate with the Purchaser and such
successor in effecting the termination of the Seller's responsibilities and
rights hereunder and the transfer of servicing responsibilities to the successor
Seller, 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 Seller to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Seller and to the Purchaser an instrument
accepting such appointment, wherein the successor shall make the representations
and warranties set forth in Section 4.01, whereupon such successor shall become
fully vested with all the rights, powers, duties, responsibilities, obligations
and liabilities of the Seller, with like effect as if originally named as a
party to this Agreement. Any termination or resignation of the Seller or
termination of this Agreement pursuant to Section 8.05, 10.01, 11.01 or 11.02
shall not affect any claims that any Purchaser may have against the Seller
arising out of the Seller's actions or failure to act prior to any such
termination or resignation.
The Seller shall deliver promptly to the successor servicer
the Funds in the Custodial Account and Escrow Account and all Mortgage Files and
related documents and statements held by it hereunder and the Seller shall
account for all funds and shall execute and deliver such instruments and do such
other things as may reasonably be required to more fully and definitively vest
in the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Seller. Upon the appointment of a successor servicer to
the Seller following to the Seller's termination under Section 11.02 hereof, the
Seller shall be reimbursed for unreimbursed Servicing Advances and Monthly
Advances and unpaid Servicing Fees which would otherwise have been recovered by
the Seller pursuant to this Agreement but for the appointment of such successor
servicer.
Upon a successor's acceptance of appointment as such, the
Seller shall notify by mail the Purchaser of such appointment in accordance with
the procedures set forth in Section 12.05.
Section 12.02 Amendment.
This Agreement may be amended from time to time by the Seller
and the Purchaser by written agreement signed by the Seller and the Purchaser,
provided, however that the
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servicing provisions of this Agreement may be amended by the Seller, as servicer
and the Purchaser by written agreement signed only by the Seller, as servicer
and the Purchaser.
Section 12.03 Closing.
Each closing for the purchase and sale of Mortgage Loans
hereunder shall take place on the related Closing Date. At the Purchaser's
option, the closing shall be either: by telephone, confirmed by letter or wire
as the parties shall agree; or conducted in person, at such place as the parties
shall agree.
Each closing for a Mortgage Loan Package shall be subject to
each of the following conditions:
(a) No later than the date set forth in the related Purchase
Price and Terms Agreement, the Seller shall deliver to the Purchaser a Mortgage
Loan Schedule with respect to the Mortgage Loans to be purchased and sold on
such date;
(b) all of the representations and warranties of the Seller
under this Agreement shall be true and correct as of the related Closing Date
or, with respect to representations and warranties made as of a date other than
the related Closing Date, as of such date, and no event shall have occurred
which, with notice or the passage of time, would constitute a default under this
Agreement;
(c) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents as specified in
Section 12.04 of this Agreement, in such forms as are agreed upon and acceptable
to the Purchaser, duly executed by all signatories other than the Purchaser as
required pursuant to the respective terms thereof;
(d) the Seller shall have received, or the Seller's attorneys
shall have received in escrow, all closing documents as specified in Section
12.04 of the Agreement, in such forms as are agreed upon and mutually acceptable
to the Seller and the Purchaser;
(e) The Seller shall have delivered and released to the
Custodian on or prior to the related Closing Date all documents required
pursuant to the Custodial Agreement; and
(f) all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay
to the Seller on the related Closing Date the Purchase Price, plus accrued
interest pursuant to Article III of this Agreement, plus the costs specified in
Section 12.05 or in the related Purchase Price and Terms Agreement by wire
transfer of immediately available funds to the account designated by the Seller.
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Section 12.04 Closing Documents.
(a) The closing documents to be delivered on the initial
Closing Date shall consist of fully executed originals of the following
documents, as well as the documents referred to in Section 12.04(b):
(i) this Agreement;
(ii) a Custodial Account Letter Agreement or a Custodial Account
Certification, as applicable, in the form of Exhibit D-1 or Exhibit
D-2 hereto, as applicable;
(iii) an Escrow Account Letter Agreement or an Escrow Account
Certification, as applicable, in the form of Exhibit E-1 or Exhibit
E-2 hereto, as applicable;
(iv) an Officer's Certificate, in the form of Exhibit H hereto,
including all attachments thereto; and
(v) an Opinion of Counsel of the Seller, in the form of Exhibit I
hereto.
(b) The closing documents for the Mortgage Loans to be
purchased on each Closing Date under this Agreement (including the initial
Closing Date) shall consist of fully executed originals of the following
documents:
(i) the related Purchase Price and Terms Agreement;
(ii) the related Acknowledgment and Conveyance Agreement,
including all annexes thereto;
(iii) each of the documents required to be delivered by the
Seller pursuant to Section 2.03 hereof;
(iv) an initial certification of the Custodian;
(v) (A) a Security Release Certification, in the form of Exhibit
J-1 hereto (if Seller is a member of the Federal Home Loan Bank
System), executed by the applicable regional Federal Home Loan Bank
and, (B) if applicable, a Security Release Certification, in the form
of Exhibit J-2 hereto, executed by any other person, as requested by
the Purchaser, if any of the Mortgage Loans have at any time been
subject to any security interest, pledge or hypothecation for the
benefit of such person and (C) if applicable, a certificate of the
Seller and an opinion of counsel of the Seller stating that the
Mortgage Loans are not subject to any security interest, claim,
pledge, hypothecation or lien;
(vi) 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 Seller by merger or acquired
or originated by the Seller while conducting business under a name
other than its present name;
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(vii) upon reasonable request by the Purchaser, an Officer's
Certificate, in the form of Exhibit H hereto, including all
attachments thereto;
(viii) upon reasonable request by the Purchaser, an Opinion of
Counsel to the Seller, in the form of Exhibit I hereto; and
(ix) upon request by the Purchaser an Escrow Agreement between
the Seller, the Purchaser and a mutually acceptable third party acting
as escrow agent.
The Seller shall bear the risk of loss of the Closing
Documents until such time as they are received by the Purchaser or its
attorneys. Section 12.05 Costs.
The Purchaser shall pay any commissions due its salesmen and
the legal fees and expenses of its attorneys and the expenses and fees of any
broker retained by the Purchaser with respect to the transactions covered by
this Agreement. To the extent not otherwise provided herein, all other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans, including fees for the preparation and tracking of Assignments of
Mortgage, fees for title policy endorsements and continuations and the Seller's
attorney's fees, shall be paid by the Seller. On the related Closing Date, the
Seller shall pay to the Purchaser a fee of $25.00 per Mortgage Loan with respect
to Mortgage Loans which are not MERS Mortgage Loans for the initial recordation
of the Assignments of Mortgage (the "Assignment Fees"), which Assignment Fees
shall be deducted from the actual Purchase Price proceeds paid to the Seller on
such Closing Date. To the extent a Mortgage Loan does not have a tax service
contract or a flood insurance contract in place on the related Closing Date, the
Seller shall a fee of $75.00 per Mortgage Loan with respect to the set up of all
tax service contracts and a fee of $10.00 per Mortgage Loan with respect to the
set up of all flood insurance contracts, the cost of which fees shall be
deducted from the actual Purchase Price proceeds paid to the Seller on such
Closing Date. The Seller shall be responsible for the payment of any costs
associated with the transfer of the tax service contracts or flood insurance
contracts to a subsequent servicer in the event that the Seller may be
terminated as servicer under this Agreement pursuant to Section 10.01.
Section 12.06 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK OTHER THAN WITH RESPECT TO CONFLICT OF LAWS PRINCIPLES
(OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 12.07 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.
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Section 12.08 Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by registered mail, postage prepaid, addressed as follows:
(i) if to the Seller:
Wachovia Mortgage Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 28288-1022
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Wachovia Mortgage Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished to the Purchaser
in writing by the Seller;
(ii) if to Purchaser:
▇▇▇▇▇▇ Brothers Bank, FSB
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Contract Finance
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
Section 12.09 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be held invalid for any reason whatsoever, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this
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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 12.10 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 Seller shall be rendered as an independent contractor and not as
agent for the Purchaser.
Section 12.11 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. This Agreement shall inure to the benefit
of and be binding upon the Seller and the Purchaser and their respective
successors and assigns.
Section 12.12 Recordation of Assignments of Mortgage.
The Assignments of Mortgage are generally required to be
recorded by or on behalf of the Seller in the appropriate offices for real
property records; provided however, the Seller shall not cause to be recorded
any Assignment which relates to a Mortgage Loan in a jurisdiction where either
the rating agencies (in the case of Agency or Pass-Through Transfers) or
purchasers (in the case of Whole Loan Transfers) do not require recordation;
provided further, however, notwithstanding the foregoing, upon the occurrence of
certain events set forth in the pooling agreement (in the case of and Agency or
Pass-Through Transfer), each such assignment of Mortgage shall be recorded by
the Master Servicer or the trustee as set forth in the pooling agreement. Any
costs associated with the recording of the initial Assignments of Mortgage and
other relevant documents will be borne by the Seller, provided, however, if the
Seller fails to pay the cost of recording or with respect to additional
Assignments of Mortgage, such expense will be paid by the Master Servicer or the
trustee, as applicable, and will be reimbursable to such party (other than the
Master Servicer so long as the Master Servicer is also the Seller) by the
applicable trust prior to any distribution to certificateholders. In the event
that Purchaser sells any Mortgage Loans in a Whole Loan Transfer and the
subsequent purchaser requests recorded Assignments of Mortgage, the Seller,
shall at its expense (or at the Purchaser's expense if the Seller has already
paid for the initial recording of such Assignments of Mortgage pursuant to this
Agreement) cause to be recorded any Assignments of Mortgage.
Section 12.13 Assignment by Purchaser.
The Purchaser shall have the right, upon notice to the Seller,
to assign, in whole or in part, its interest under this Agreement with respect
to some or all of the Mortgage Loans, and designate any person to exercise any
rights of the Purchaser hereunder, by executing an Assignment and Assumption
Agreement substantially in the form of Exhibit G hereto. Upon such assignment of
rights and assumption of obligations, the assignee or designee shall accede to
the rights and obligations hereunder of the Purchaser with respect to such
Mortgage Loans and
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the Purchaser as assignor shall be released from all obligations hereunder with
respect to such Mortgage Loans from and after the date of such assignment and
assumption, provided, however, that, in no event shall there be any more than
four (4) "Purchasers" with respect to any Mortgage Loan Package, except as may
be permitted under the related Purchase Price and Terms Agreement. All
references to the Purchaser in this Agreement shall be deemed to include its
assignee or designee.
Section 12.14 No Personal Solicitation.
From and after the related Closing Date, the Seller 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 Seller's behalf, to personally, by telephone, mail, e-mail or the internet,
solicit the borrower or obligor under any Mortgage Loan to refinance a Mortgage
Loan, in whole or in part, without the prior written consent of the Purchaser.
It is understood and agreed that all rights and benefits relating to the
solicitation of any Mortgagors to refinance any Mortgage Loan 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
Seller shall not take any action to undermine these rights and benefits.
Notwithstanding the foregoing, it is understood and agreed that (i) offers to
refinance a Mortgage Loan made within thirty (30) days following receipt by the
Seller of a pay-off request from the Mortgagor (ii) promotions and solicitations
undertaken by the Seller or any affiliate of the Seller which are directed to
the general public at large, including, without limitation, mass mailing based
on commercially acquired mailing lists, newspaper, radio and television
advertisements and (iii) promotions, solicitations or responding to any
Mortgagor requests for information regarding other bank or financial products or
services, unless such promotions or solicitations are related to the refinancing
or prepayment of a Mortgage Loan, shall not constitute solicitation under this
Section 12.14. The provisions of this Section 12.14 shall survive any
termination of this Agreement.
Section 12.15 Confidential Information
The Seller shall keep confidential and shall not divulge to
any party, without the Purchaser's prior written consent, the Purchase Price
paid by the Purchaser for any Mortgage Loan or Mortgage Loan Package, except to
the extent that it is appropriate for the Seller to do so in working with legal
counsel, auditors, taxing authorities or other governmental agencies.
The Seller hereby acknowledges that the Purchaser is subject
to the privacy regulations under Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, 15
U.S.C. ss. 6801 et seq., pursuant to which regulations the Purchaser is required
to obtain certain undertakings from the Seller with regard to the privacy, use
and protection of nonpublic personal financial information of the Mortgagors.
Therefore, notwithstanding anything to the contrary contained in this Agreement,
the Seller agrees that (a) it shall not disclose or use any personally
identifiable information relating to a mortgagor (as defined below, "Customer
Information") except to the extent necessary to carry out its obligations under
this Agreement and for no other purpose, (b) it shall not disclose Customer
Information to any third party, including, without limitation, its third party
service providers without the prior consent of the Purchaser and an agreement in
writing from the third party to use or disclose such Customer Information only
to the extent necessary to carry
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out the Seller's obligations under this Agreement and for no other purposes, (c)
it shall maintain, and shall require all third parties approved under subsection
(b) to maintain, effective information security measures to protect Customer
Information from unauthorized disclosure or use, and (d) it shall provide the
Purchaser with information regarding such security measures upon the reasonable
request of the Purchaser and promptly provide the Purchaser with information
regarding any failure of such security measures or any security breach related
to Customer Information. The obligations set forth in this Section shall survive
termination of the Agreement. For the purposes of this Agreement, "Customer
Information" means the nonpublic personal information (as defined in 15 U.S.C.
ss. 6809(4)) of the Purchaser's employees, clients or prospective clients,
including the Mortgagors (and/or clients or prospective clients of the
Purchaser's parent, affiliated or subsidiary companies) received by the Seller
in connection with the performance of its obligations under the Agreement,
including, but not limited to (i) an individual's name, address, e-mail address,
IP address, telephone number and/or social security number, (ii) the fact that
an individual has a relationship with the Purchaser and/or its parent,
affiliated or subsidiary companies, or (iii) an individual's account information
to the extent Nonpublic Personal Information (as defined) is, either
intentionally or unintentionally, disclosed to or obtained by the Seller during
the Agreement. The Seller covenants to keep such Nonpublic Personal Information
strictly confidential and to strictly limit its use of such information to
carrying out the services set forth herein. For the purposes of this provision,
the term "Nonpublic Personal Information" is defined as any non-public
personally identifiable financial information of an individual, including but
not limited to the Mortgagors or the Purchaser's clients or employees.
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Section 12.16 Appointment and Designation of Master Servicer.
The Purchaser may, in its sole discretion from time to time,
engage a master servicer (the "Master Servicer") to assist the Purchaser in the
supervision of the performance by the Seller of its obligations and
responsibilities arising under this Agreement. In the event that the Purchaser
so appoints a Master Servicer, the Purchaser shall provide written notice
thereof to the Seller. From the date of such notice until such time as the
Seller receives written notice from the Purchaser that it has terminated or
replaced such Master Servicer, the Seller shall deliver all notices, reports and
remittances that the Seller is obligated to deliver to the Purchaser under this
Agreement directly to the Master Servicer named in such notice (or to any
successor master servicer named in any subsequent written notice received from
the Purchaser). The Master Servicer, acting on behalf of the Purchaser, shall
have the benefit of the covenants and agreements of the Seller under this
Agreement and the Master Servicer, acting on behalf of the Purchaser, shall have
the same rights as the Purchaser to enforce the obligations of the Seller
arising under this Agreement. The Master Servicer shall be entitled to terminate
the rights and obligations of the Seller under this Agreement upon the
occurrence of an Event of Default as provided in this Agreement. Notwithstanding
anything herein to the contrary, in no event shall the Master Servicer assume
any of the obligations of the Purchaser under this Agreement; and in connection
with the performance of the Master Servicer's duties hereunder the Seller agrees
that the Master Servicer shall be entitled to all of the rights, protections,
indemnities and limitations of liability afforded to the Purchaser under this
Agreement. The Purchaser hereby appoints Aurora Loan Services Inc. as its Master
Servicer hereunder, effective with respect to Mortgage Loans serviced hereunder
in connection with a Reconstitution after the related Reconstitution Date.
Section 12.17 Waivers; Other Agreements.
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 12.18 Exhibits.
The exhibits to this Agreement are hereby incorporated and
made a part hereof and are an integral part of this Agreement.
Section 12.19 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the other
gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
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(c) references herein to "Articles", "Sections",
"Subsections", "Paragraphs", and other subdivisions without reference to a
document are to designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 12.20 Entire Agreement.
Each of the parties to this Agreement acknowledges that no
representation, agreements or promises were made to any of the other parties to
this Agreement or any of its employees other than those representations,
agreements or promises specifically contained herein. This Agreement and the
related Purchase Price and Terms Letter set forth the entire understanding
between the parties hereto and shall be binding upon all successors of all of
the parties. In the event of any inconsistency between a Purchase Price and
Terms Letter and this Agreement, this Agreement shall control.
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IN WITNESS WHEREOF, the Seller 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.
▇▇▇▇▇▇ BROTHERS BANK, FSB
By:
--------------------------------------
Name:
Title:
WACHOVIA MORTGAGE CORPORATION
By:
--------------------------------------
Name:
Title:
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On the __ day of ________, 2004 before me, a Notary Public in
and for said State, personally appeared ________, known to me to be Vice
President of ▇▇▇▇▇▇ Brothers Bank, FSB, the corporation that executed the within
instrument and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my
office seal the day and year in this certificate first above written.
---------------------------------------
Notary Public
My Commission expires
-----------------
STATE OF )
) ss.:
COUNTY OF )
On the __ day of _______, 2004 before me, a Notary Public in
and for said State, personally appeared __________, known to me to be
______________ of Wachovia Mortgage Corporation, the corporation that executed
the within instrument and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my
office seal the day and year in this certificate first above written.
---------------------------------------
Notary Public
My Commission expires
-----------------
FORM OF ACKNOWLEDGMENT AND CONVEYANCE AGREEMENT
(Group No. 200_-____)
This is an Acknowledgment and Conveyance Agreement delivered
pursuant to that certain Flow Purchase, Warranties and Servicing Agreement,
dated as of July 1, 2004 (the "Agreement"), between ▇▇▇▇▇▇ BROTHERS BANK, FSB
(the "Purchaser"), and WACHOVIA MORTGAGE CORPORATION (the "Seller"). All
capitalized terms used herein without definition shall have the meanings
ascribed thereto in the Agreement.
The Purchaser and the Seller hereby confirm that they have
reached agreement on the purchase, sale and servicing of the Mortgage Loans
described on the Mortgage Loan Schedule attached as Annex 1 hereto on the terms
and conditions set forth in the Purchase Agreement (which terms and conditions
are incorporated herein by this reference) and the Purchase Price and Terms
Agreement, dated as of ___________ __, 200_ between the parties hereto.
Accordingly, on this [___ day of _________, 200_], the Seller
does hereby sell, transfer, assign, set over and convey to the Purchaser all
right, title and interest of the Seller in and to the Mortgage Loans listed on
the Mortgage Loan Schedule attached as Annex 1 hereto (other than the servicing
rights with respect thereto), including all interest and principal received by
the Seller on or with respect to the Mortgage Loans after the related Cut-off
Date, together with all of the Seller's right, title and interest in and to each
Custodial Account and all amounts from time to time credited to and the proceeds
of such Custodial Account, all amounts from time to time credited to and the
proceeds of any Escrow Account, any Liquidation Proceeds or Condemnation
Proceeds, any REO Disposition Proceeds, the Seller's rights under any insurance
policies related to the Mortgage Loans, the PMI Policy related to each Mortgage
Loan (if any) and all rights of the Seller thereunder, any Insurance Proceeds,
the Seller's security interest in any collateral pledged to secure the Mortgage
Loans, including the Mortgaged Properties, and any proceeds of the foregoing.
Pursuant to Article II of the Agreement, the Seller has delivered to the
Custodian the documents for each Mortgage Loan to be purchased as set forth in
the Agreement. The ownership of each Mortgage Note, Mortgage, and the contents
of each Mortgage File is vested in the Purchaser and the ownership of all
records and documents with respect to the related Mortgage Loan prepared by or
which come into the possession of the Seller shall immediately vest in the
Purchaser.
By its execution and delivery of this Acknowledgment and
Conveyance Agreement, the Seller represent and warrant to the Purchaser that
each of the representations and warranties contained in Sections 4.01 and 4.02
of the Agreement and Annex 2 hereto is true and correct as of the date hereof
with respect to the Seller and each of the Mortgage Loans listed on the Mortgage
Loan Schedule attached as Annex 1 hereto. In addition, the Seller represents and
warrants to the Purchaser that the Underwriting Guidelines set forth on Exhibit
K of the Agreement, or the most recent copy thereof provided to the Purchaser by
the Seller, are the Underwriting Guidelines used by the Seller with respect to
the origination of the Mortgage Loans in this Mortgage Loan Package.
A-1
By its execution and delivery of this Acknowledgment and
Conveyance Agreement, the Seller agrees that it shall service the Mortgage Loans
on behalf of the Purchaser in accordance with the terms and conditions contained
in the Agreement.
This Acknowledgment and Conveyance Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
an original, and all such counterparts shall constitute one and the same
instrument.
WACHOVIA MORTGAGE CORPORATION, as Seller
By:
-------------------------------------
Name:
Title:
▇▇▇▇▇▇ BROTHERS BANK, FSB, as Purchaser
By:
-------------------------------------
Name:
Title:
A-2
Annex 1 to
Acknowledgment and Conveyance Agreement
MORTGAGE LOAN SCHEDULE
[Each Mortgage Loan Schedule shall provide the information required by Exhibit
A-2 to the Agreement with respect to each Mortgage Loan and the related Cut-Off
Date.]
A-1
Annex 2 to
Acknowledgment and Conveyance Agreement
POOL CHARACTERISTICS
The Seller hereby represents and warrants to the Purchaser, as to each Mortgage
Loan, that as of [DATE] or as of such other date specifically provided therein:
Pool Characteristics. ["Pool 1 Mortgage Loans" are the group
of _________ Mortgage Loans set forth on the Mortgage Loan Schedule, "Pool 2
Mortgage Loans" are the group of _________ Mortgage Loans set forth on the
Mortgage Loan Schedule.] With respect to the aggregate unpaid principal balance
of all of the Mortgage Loans as of the Closing Date, (a) the Mortgage Loans are
secured by real property improved by one- to four- family dwellings with
original terms of up to [___] years, (b) with respect to each ARM Mortgage Loan
the Index shall be as set forth on the Mortgage Loan Schedule, (c) the maximum
Mortgage Interest Rate of the Mortgage Loans is [___]%, (d) the minimum Mortgage
Interest Rate of the Mortgage Loans is [___]%, (e) the Mortgage Loans have a
weighted average remaining term of [___] months, (f) each of the Mortgaged
Properties consists of a single parcel of real property of which (i) at least
[___]% are attached or detached one family residences, (ii) approximately [___]%
are individual condominium units in a condominium project, (iii) approximately
[___]% are units in planned unit developments, (iv) approximately [___]% are
two-to-four family residential dwellings, (v) not more than [___]% are
townhouses and (vi) not more than [___]% are manufactured housing which are
permanently affixed to the ground, (g) no more than [___]% of the Mortgage Loans
are rate-term refinance mortgage loans, (h) no more than [___]% of the Mortgage
Loans are cash out refinance mortgage loans, (i) at least [___]% of the Mortgage
Loans are purchase money mortgage loans, (j) the Mortgaged Properties are
located as follows (i) approximately [___]% in [___], (ii) approximately [___]%
in [___] and (iii) no other state shall contain a percentage which is greater
than [___]% and (k) with respect to the ARM Mortgage Loans, the weighted average
initial period gross Lifetime Rate Cap shall be [___]% and the weighted average
lifetime Mortgage Interest Rate of [___]%. With respect to the aggregate unpaid
principal balance of the Mortgage Loans at the time of origination, (a) no more
than [___]% of the Mortgaged Properties were investment properties and (b) at
least [___]% of the Mortgaged Properties were owner-occupied primary residences.
With respect to the aggregate unpaid principal balance of the Mortgage Loans,
(a) at least [___]% of the Mortgage Loans shall have full documentation, (b) no
more than [___]% of the Mortgage Loans shall have stated income documentation
and (c) no more than [___]% of the Mortgage Loans shall have alternate income
documentation. The maximum LTV at origination of the Mortgage Loans in Pool 1
was not more than [___]% and the maximum LTV at origination of the Mortgage
Loans in Pool 2 was not more than [___]%. The weighted average LTV at
origination of the Mortgage Loans in Pool 1 was not more than [___]% and the
weighted average LTV at origination of the Mortgage Loans in Pool 2 was not more
than [___]%. The weighted average FICO Score of the Mortgage Loans in Pool 1 is
not less than [___] and the weighted average FICO Score of the Mortgage Loans in
Pool 2 is not less than [__]. The Mortgage Loans have the approximate pool
characteristics as set forth in the Purchase Price and Terms Letter.
B-1
Annex 3 to
Acknowledgment and Conveyance Agreement
EXHIBIT A-2
MORTGAGE LOAN SCHEDULE DATA FIELDS
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's and Co-Mortgagor's (if applicable) names;
(3) the street address of the Mortgaged Property, including the city, state,
zip code, county, lot number, block number and section number;
(4) a code indicating whether the Mortgaged Property is a single family
residence, a 2 family dwelling, a 3-4 family dwelling, a manufactured home,
a PUD, a townhouse, a unit in a condominium project, a co-operative, a
mixed-use property, land, or a non-residential property;
(5) a code indicating the loan is a fixed rate or adjustable rate Mortgage Loan
(to be provided in accordance with Standard and Poor's loan type
requirements-Field 14);
(6) Product Description (to be provided in accordance with Standard and Poor's
description categories-Field 7);
(7) a code indicating the lien status of the Mortgage Loan;
(8) the original months to maturity or the remaining months to maturity from
the 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;
(9) the Loan to Value Ratio at origination;
(10) the combined Loan to Value Ratio at origination;
(11) the Mortgage Interest Rate as of the Cut-off Date;
(12) the Payment and Rate Adjustment Frequencies (if applicable);
(13) the Index (if applicable);
(14) the initial Interest Rate Adjustment Date (if applicable);
(15) the initial Payment Adjustment Date (if applicable);
(16) the next Interest Rate Adjustment Date (if applicable);
(17) the next Payment Adjustment Date (if applicable);
B-1
(18) the Gross Margin (if applicable);
(19) the minimum Mortgage Interest Rate under the terms of the Mortgage Note (if
applicable);
(20) Mortgage Interest Rate adjustment frequencies (if applicable);
(21) the maximum Mortgage Interest Rate under the terms of the Mortgage Note (if
applicable);
(22) the Mortgage Interest Rate adjustment cap at the initial Interest Rate
Adjustment Date (if applicable);
(23) the Mortgage Interest Rate adjustment cap at all subsequent Interest Rate
Adjustment Dates (if applicable);
(24) the Lifetime Mortgage Interest Rate Cap (if applicable);
(25) the rounding provisions under the terms of the Mortgage Note (if
applicable);
(26) the lookback provisions (#of days) under the terms of the Mortgage Note (if
applicable);
(27) negative amortization indicator and limit;
(28) the date on which the first payment is due;
(29) the original term of the Mortgage Loan;
(30) the stated maturity date;
(31) the amount of the Monthly Payment;
(32) the Annual Payment Cap expressed as a percentage (for Arms only);
(33) the next due date as of the Cut-off Date;
(34) the original principal amount of the Mortgage Loan;
(35) the Senior and Subordinate balances (if applicable);
(36) the closing date of the Mortgage Loan;
(37) the principal balance of the Mortgage Loan as of the close of business on
the Cut-off Date; after deduction of payments of principal actually
received on or before the Cut-off Date;
B-2
(38) monthly payment histories on current mortgage (24 months if available);
(39) prior foreclosure history (for the past 24 months);
(40) prior bankruptcy history (for the past 24 months);
(41) the loan purpose code;
(42) the occupancy code;
(43) the loan documentation type;
(44) Asset Verification (Purchase Money loans only), (yes or no);
(45) a code indicating the Credit Grade of the Mortgage Loan;
(46) the debt to income ratio;
(47) the Mortgagor's and Co-Mortgagor's (if applicable) social security numbers;
(48) the Mortgagor's and Co-Mortgagor's (if applicable) original FICO score and
the Next Generation FICO score for new credit scores;
(49) the Mortgagor's mailing address if different from Number (3) above;
(50) the Mortgagor's home telephone number;
(51) the Mortgagor's business telephone number;
(52) the purchase price of the Mortgaged Property (if a purchase);
(53) the Appraisal date and the Appraisal value of the Mortgaged Property;
(54) the Mortgagor's and Co-Mortgagor's (if applicable) race;
(55) the Mortgagor's and Co-Mortgagor's (if applicable) gender;
(56) the Mortgagor's and Co-Mortgagor's (if applicable) date of birth;
(57) the number of bedrooms;
(58) rental income per unit;
(59) the combined annual income;
B-3
(60) the application date;
(61) the origination channel (wholesale, retail, or correspondent);
(62) flood insurance contract provider;
(63) tax service contract provider;
(64) number of units;
(65) as of date;
(66) amortization term;
(67) balloon flag;
(68) prepayment penalty flag;
(69) prepayment penalty term and prepayment penalty description (i.e.- 6 months
interest, set percentage of UPB);
(70) payment history current loan;
(71) mortgage insurance provider, or code for LPMI;
(72) mortgage insurance coverage percentage;
(73) mortgage insurance cost;
(74) mortgage insurance certificate number;
(75) number of borrowers;
(76) first time home buyer flag;
(77) the year in which the Mortgaged Property was built;
(78) the monthly tax and insurance payment;
(79) the monthly servicing fee;
(80) the escrow balance as of the Cut-off Date;
(81) The MIN number assigned to each Mortgage Loan, if applicable;
B-4
(82) a code indicating the Appraisal Type (Tax Assessment, BPO, Drive-By Form
704, URAR, Form 2065, Form 2055 (Exterior only), Form 2055 (Interior
Inspection), or AVM;
(83) if the Appraisal Type in #89 is an AVM, then a description of the AVM type;
(84) a code indicating whether the Borrower(s) is self-employed (yes or no);
(85) a section 32 flag and the origination points and or fees;
(86) a code indicating if a loan is assumable (yes or no);
(87) next generation fico;
(88) code indicating whether borrower's assets were verified;
(89) code indicating whether the loan is a High Cost or Covered Loan under
applicable state/jurisdiction anti-predatory lending laws; and
(90) Annual Percentage Rate (APR)
B-5
Annex 3 to
Acknowledgment and Conveyance Agreement
EXHIBIT B
CONTENTS OF EACH MORTGAGE FILE
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 Flow Purchase, Warranties and Servicing
Agreement to which this Exhibit is annexed (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements and
including any riders to the Mortgage Note endorsed "Pay to the order of
__________________________________, without recourse and signed in the
name of the previous owner by an authorized officer;
(b) the original of any guarantee executed in connection with the Mortgage
Note (if any);
(c) except as provided below and for each Mortgage Loan that is not a MERS
Mortgage Loan, the original Mortgage with evidence of recording thereon
or, copies certified by the related recording office or if the original
Mortgage has not yet been returned from the recording office, a copy
certified by the Seller indicating that such Mortgage has been
delivered for recording, and in the case of each 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
recording indicated thereof, or a copy of the Mortgage certified by the
public recording office in which such Mortgage has been recorded. The
return directions for the original Mortgage should indicate, when
recorded, mail to the Seller;
(d) the originals of all assumption, modification, consolidation or
extension agreements, (or, if an original of any of these documents has
not been returned from the recording office, a certified copy thereof,
the original to be delivered to the Seller forthwith after return from
such recording office) with evidence of recording thereon, if any;
(e) in the case of each Mortgage Loan that is not a MERS Mortgage Loan, the
original Assignment of Mortgage as appropriate, in recordable form, for
each Mortgage Loan to ____________________________, or the original
Assignment of Mortgage in recordable form into MERS;
(f) the originals of any intervening recorded Assignments of Mortgage
showing a complete chain of assignment from origination to the Seller,
including warehousing assignments, with evidence of recording thereon,
(or, if any original intervening Assignment of Mortgage has not been
returned from the recording office, a certified copy thereof, the
B-1
original to be delivered to the Custodian forthwith after return from
such recording office);
(g) with respect to each Mortgage Loan, the original mortgage title
insurance policy or attorney's opinion of title and abstract or a title
commitment or title binder if an original title insurance policy has
not been issued, or a duplicate copy of an original title insurance
policy;
(h) the original or copy of the PMI policy or certificate of insurance,
where required and unless indicated otherwise as set forth in Section
4(l) herein;
(i) with respect to Mortgage Loans that are not Co-op Loans, the original
policy of title insurance, including riders and endorsements thereto,
or if the policy has not yet been issued, a written commitment or
interim binder or preliminary report of title issued by the title
insurance or escrow company; and
(j) with respect to a Co-op Loan: (i) a copy of the Co-op Lease and the
assignment of such Co-op Lease to the originator of the Mortgage Loan,
with all intervening assignments showing a complete chain of title and
an assignment thereof by Seller, (ii) the stock certificate together
with an undated stock power relating to such stock certificate executed
in blank, (iii) the recognition agreement in substantially the same
form as a standard "AZTECH" form, (iv) copies of the financial
statement filed by the originator as secured party and, if applicable,
a filed UCC-3 Assignment of the subject security interest showing a
complete chain of title, together with an executed UCC-3 Assignment of
such security interest by the Seller in a form sufficient for filing.
In the event an Officer's Certificate of the Seller is
delivered to the Custodian because of a delay caused by the public recording
office in returning any recorded document, the Seller shall deliver to the
Custodian, within 75 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 Seller shall be required to deliver to the
Custodian the applicable recorded document by no later than 180 days following
the Closing Date, provided, that an extension of such date may be requested from
the Purchaser, which consent shall not be unreasonably withheld.
▇-▇
▇▇▇▇▇▇▇ ▇
[▇▇▇▇▇▇▇▇]
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
CUSTODIAL ACCOUNT CERTIFICATION
_____________________, 200_
Wachovia Mortgage Corporation hereby certifies that it has
established the account described below as a Custodial Account pursuant to
Section 5.04 of the Flow Purchase, Warranties and Servicing Agreement, dated as
of July 1, 2004, Conventional Residential Fixed and Adjustable Rate Mortgage
Loans, Group No. 2004-FLOW.
Title of Account: Wachovia Mortgage Corporation in trust for the Purchaser,
Group No. 2004-FLOW.
Account Number: _______________
Address of office or branch
of the Seller at
which Account is maintained:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Wachovia Mortgage Corporation,
Seller
By:
------------------------------
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
CUSTODIAL ACCOUNT LETTER AGREEMENT
_________________, 200_
To:
------------------------------------
------------------------------------
------------------------------------
(the "Depository")
As Seller under the Flow Purchase, Warranties and Servicing
Agreement, dated as of July 1, 2004, Conventional Residential Fixed and
Adjustable Rate Mortgage Loans, Group No. 2004-FLOW (the "Agreement"), we hereby
authorize and request you to establish an account, as a Custodial Account
pursuant to Section 5.04 of the Agreement, to be designated as "Wachovia
Mortgage Corporation, in trust for the Purchaser - Conventional Residential
Fixed and Adjustable Rate Mortgage Loans - Group No. 2004-FLOW." All deposits in
the account shall be subject to withdrawal therefrom by order signed by the
Seller. 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.
Wachovia Mortgage Corporation,
Seller
By:
------------------------------
Name:
Title:
Date:
----------------------------
D-2-1
The undersigned, as Depository, hereby certifies that the
above described account has been established under Account Number __________, at
the office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
---------------------------------
Depository
By:
------------------------------
Name:
Title:
Date:
----------------------------
D-2-2
EXHIBIT E-1
ESCROW ACCOUNT CERTIFICATION
__________________, 200_
Wachovia Mortgage Corporation hereby certifies that it has
established the account described below as an Escrow Account pursuant to Section
5.06 of the Flow Purchase, Warranties and Servicing Agreement, dated as of July
1, 2004, Conventional Residential Adjustable Rate Mortgage Loans, Group No.
2004-FLOW.
Title of Account: "Wachovia Mortgage Corporation in trust for the Purchaser,
Group No. 2004-FLOW, and various Mortgagors."
Account Number:__________________
Address of office or branch
of the Seller at
which Account is maintained:
------------------------------------
------------------------------------
------------------------------------
------------------------------------
Wachovia Mortgage Corporation,
Seller
By:
--------------------------------
Name:
Title:
E-1-1
EXHIBIT E-2
ESCROW ACCOUNT LETTER AGREEMENT
___________________, 200_
To:
-------------------------------------
-------------------------------------
-------------------------------------
(the "Depository")
As Seller under the Flow Purchase Warranties and Servicing
Agreement, dated as of July 1, 2004, Conventional Residential Adjustable Rate
Mortgage Loans, Group No. 2004-FLOW (the "Agreement"), we hereby authorize and
request you to establish an account, as an Escrow Account pursuant to Section
5.06 of the Agreement, to be designated as "Wachovia Mortgage Corporation, in
trust for the Purchaser - Conventional Residential Fixed and Adjustable Rate
Mortgage Loans - Group No. 200_-____." All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Seller. 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.
Wachovia Mortgage Corporation,
Seller
By:
------------------------------
Name:
Title:
Date:
----------------------------
E-2-1
The undersigned, as Depository, hereby certifies that the
above described account has been established under Account Number ______, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
----------------------------------
Depository
By:
------------------------------
Name:
Title:
Date:
----------------------------
E-2-2
EXHIBIT F-1
FORM OF MONTHLY REMITTANCE ADVICE
Seller shall provide monthly remittance advices in the following standard
formats:
1. Alltel P139
2. Alltel S214
3. Alltel S215
4. Alltel S50y
F-1
EXHIBIT F-2
STANDARD LAYOUT FOR DEFAULTED LOAN REPORT
------------------------------------------------------------------------------------------------------
DATA FIELD FORMAT DATA DESCRIPTION
------------------------------------------------------------------------------------------------------
% of MI coverage NUMBER(6,5) The percent of coverage provided by the
PMI company in the event of loss on a
defaulted loan.
------------------------------------------------------------------------------------------------------
Actual MI claim filed date DATE(MM/DD/YYYY) Actual date that the claim was submitted to
the PMI company.
------------------------------------------------------------------------------------------------------
Actual bankruptcy start date DATE(MM/DD/YYYY) Actual date that the bankruptcy petition is
filed with the court.
------------------------------------------------------------------------------------------------------
Actual MI claim amount filed NUMBER(15,2) The amount of the claim that was filed by
the servicer with the PMI company.
------------------------------------------------------------------------------------------------------
Actual discharge date DATE(MM/DD/YYYY) Actual date that the Discharge Order is
entered in the bankruptcy docket.
------------------------------------------------------------------------------------------------------
Actual due date DATE(MM/DD/YYYY) Actual due date of the next outstanding
payment amount due from the mortgagor.
------------------------------------------------------------------------------------------------------
Actual eviction complete date DATE(MM/DD/YYYY) Actual date that the eviction proceedings
are completed by local counsel.
------------------------------------------------------------------------------------------------------
Actual eviction start date DATE(MM/DD/YYYY) Actual date that the eviction proceedings
are commenced by local counsel.
------------------------------------------------------------------------------------------------------
Actual first legal date DATE(MM/DD/YYYY) Actual date that foreclosure counsel filed
the first legal action as defined by state
statute.
------------------------------------------------------------------------------------------------------
Actual redemption end date DATE(MM/DD/YYYY) Actual date that the foreclosure redemption
period expires.
------------------------------------------------------------------------------------------------------
Bankruptcy chapter VARCHAR2(2) Chapter of bankruptcy filed.
------------------------------------------------------------------------------------------------------
Bankruptcy flag VARCHAR2(2) Servicer defined indicator that identifies
that the property is an asset in an active
bankruptcy case.
------------------------------------------------------------------------------------------------------
Bankruptcy Case Number VARCHAR2(15) The court assigned case number of the
bankruptcy filed by a party with interest
in the property.
------------------------------------------------------------------------------------------------------
G-1
MI claim amount paid NUMBER(15,2) The amount paid to the servicer by the PMI
company as a result of submitting an MI
claim.
--------------------------------------------------------------------------------------------------------------------
MI claim funds received date DATE(MM/DD/YYYY) Actual date that funds were received from
the PMI company as a result of transmitting
an MI claim.
--------------------------------------------------------------------------------------------------------------------
Current loan amount NUMBER(10,2) Current unpaid principal balance of the
loan as of the date of reporting to Aurora
Master Servicing.
--------------------------------------------------------------------------------------------------------------------
Date FC sale scheduled DATE(MM/DD/YYYY) Date that the foreclosure sale is scheduled
to be held.
--------------------------------------------------------------------------------------------------------------------
Date relief/dismissal granted DATE(MM/DD/YYYY) Actual date that the dismissal or relief
from stay order is entered by the
bankruptcy court.
--------------------------------------------------------------------------------------------------------------------
Date REO offer accepted DATE(MM/DD/YYYY) Actual date of acceptance of an REO offer.
--------------------------------------------------------------------------------------------------------------------
Date REO offer received DATE(MM/DD/YYYY) Actual date of receipt of an REO offer.
--------------------------------------------------------------------------------------------------------------------
Delinquency value NUMBER(10,2) Value obtained typically from a BPO
prior to foreclosure referral not
related to loss mitigation activity.
--------------------------------------------------------------------------------------------------------------------
Delinquency value source VARCHAR2(15) Name of vendor or management company
that provided the delinquency valuation
amount.
--------------------------------------------------------------------------------------------------------------------
Delinquency value date DATE(MM/DD/YYYY) Date that the delinquency valuation
amount was completed by vendor or
property management company.
--------------------------------------------------------------------------------------------------------------------
Delinquency flag VARCHAR2(2) Servicer defined indicator that
indentifies that the loan is delinquent
but is not involved in loss mitigation,
foreclosure, bankruptcy or REO.
--------------------------------------------------------------------------------------------------------------------
Foreclosure flag VARCHAR2(2) Servicer defined indicator that
identifies that the loan is involved in
foreclosure proceedings.
--------------------------------------------------------------------------------------------------------------------
Corporate expense balance NUMBER(10,2) Total of all cumulative expenses
advanced by the servicer for non-escrow
expenses such as but not limited to: FC
fees and costs, bankruptcy fees and
costs, property preservation and
property inspections.
--------------------------------------------------------------------------------------------------------------------
Foreclosure attorney referral date DATE(MM/DD/YYYY) Actual date that the loan was referred
to local counsel to begin foreclosure
proceedings.
--------------------------------------------------------------------------------------------------------------------
Foreclosure valuation amount NUMBER(15,2) Value obtained during the foreclosure
process. Usually as a result of a BPO
and typically used to calculate the bid.
--------------------------------------------------------------------------------------------------------------------
Foreclosure valuation date DATE(MM/DD/YYYY) Date that foreclosure valuation amount
was completed by vendor or property
management company.
--------------------------------------------------------------------------------------------------------------------
Foreclosure valuation source VARCHAR2(80) Name of vendor or management company
that provided the foreclosure valuation
amount.
--------------------------------------------------------------------------------------------------------------------
FHA 27011A transmitted date DATE(MM/DD/YYYY) Actual date that the FHA 27011A claim
was submitted to HUD.
--------------------------------------------------------------------------------------------------------------------
FHA 27011 B transmitted date DATE(MM/DD/YYYY) Actual date that the FHA 27011B claim
was submitted to HUD.
--------------------------------------------------------------------------------------------------------------------
VA LGC/ FHA Case number VARCHAR2(15) Number that is assigned individually to
the loan by either HUD or VA at the time
of origination. The number is located
on the Loan Guarantee Certificate (LGC)
or the Mortgage Insurance Certificate
(MIC).
--------------------------------------------------------------------------------------------------------------------
FHA Part A funds received date DATE(MM/DD/YYYY) Actual date that funds were received
from HUD as a result of transmitting the
27011A claim.
--------------------------------------------------------------------------------------------------------------------
Foreclosure actual sale date DATE(MM/DD/YYYY) Actual date that the foreclosure sale
was held.
--------------------------------------------------------------------------------------------------------------------
Servicer loan number VARCHAR2(15) Individual number that uniquely
identifies loan as defined by servicer.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Loan type VARCHAR2(2) Type of loan being serviced generally
defined by the existence of certain
types of insurance. (ie: FHA, VA,
conventional insured, conventional
uninsured, SBA, etc.)
--------------------------------------------------------------------------------------------------------------------
Loss mit approval date DATE(MM/DD/YYYY) The date determined that the servicer
and mortgagor agree to pursue a defined
loss mitigation alternative.
--------------------------------------------------------------------------------------------------------------------
Loss mit flag VARCHAR2(2) Servicer defined indicator that
identifies that the loan is involved in
completing aloss mitigation
alternative.
--------------------------------------------------------------------------------------------------------------------
Loss mit removal date DATE(MM/DD/YYYY) The date that the mortgagor is denied
loss mitigation alternatives or the date
that the loss mitigation alternative is
completed resulting in a current or
liquidated loan.
--------------------------------------------------------------------------------------------------------------------
Loss mit type VARCHAR2(2) The defined loss mitigation alternative
identified on the loss mit approval date.
--------------------------------------------------------------------------------------------------------------------
Loss mit value NUMBER(10,2) Value obtained typically from a BPO
prior to foreclosure sale intended to
aid in the completion of loss mitigation
activity.
--------------------------------------------------------------------------------------------------------------------
Loss mit value date DATE(MM/DD/YYYY) Name of vendor or management company
that provided the loss mitigation
valuation amount.
--------------------------------------------------------------------------------------------------------------------
Loss mit value source VARCHAR2(15) Date that the lostt mitigation valuation
amount was completed by vendor or
property management company.
--------------------------------------------------------------------------------------------------------------------
MI certificate number VARCHAR2(15) A number that is assigned individually
to the loan by the PMI company at the
time of origination. Similar to the VA
LGC/FHA Case Number in purpose.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
LPMI Cost NUMBER(7,7) The current premium paid to the PMI
company for Lender Paid Mortgage
Insurance.
--------------------------------------------------------------------------------------------------------------------
Occupancy status VARCHAR2(1) The most recent status of the property
regarding who if anyone is occupying the
property. Typically a result of a
routine property inspection.
--------------------------------------------------------------------------------------------------------------------
First Vacancydate/ Occupancy status date DATE(MM/DD/YYYY) The date that the most recent occupancy
status was determined. Typically the
date of the most recent property
inspection.
--------------------------------------------------------------------------------------------------------------------
Original loan amount NUMBER(10,2) Amount of the contractual obligations
(ie: note and mortgage/deed of trust).
--------------------------------------------------------------------------------------------------------------------
Original value amount NUMBER(10,2) Appraised value of property as of
origination typically determined through
the appraisal process.
--------------------------------------------------------------------------------------------------------------------
Origination date DATE(MM/DD/YYYY) Date that the contractual obligations
(ie: note and mortgage/deed of trust) of
the mortgagor was executed.
--------------------------------------------------------------------------------------------------------------------
FHA Part B funds received date DATE(MM/DD/YYYY) Actual date that funds were received fro
HUD as a result of transmitting the
27011B claim.
--------------------------------------------------------------------------------------------------------------------
Post petition due date DATE(MM/DD/YYYY) The post petition due date of a loan
involved in a chapter 13 bankruptcy.
--------------------------------------------------------------------------------------------------------------------
Property condition VARCHAR2(2) Physical condition of the property as
most recently reported to the servicer
by vendor or property management company.
--------------------------------------------------------------------------------------------------------------------
Property type VARCHAR2(2) Type of property secured by mortgage
such as: single family, 2-4 unit, etc.
--------------------------------------------------------------------------------------------------------------------
Reason for default VARCHAR2(3) Cause of delinquency as identified by
mortgagor.
--------------------------------------------------------------------------------------------------------------------
REO repaired value NUMBER(10,2) The projected value of the property that
is adjusted from the "as is" value
assuming necessary repairs have been
made to the property as determined by
the vendor/property management company.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
REO list price adjustment amount NUMBER(15,2) The most recent listing/pricing amount
as updated by the servicer for REO
properties.
--------------------------------------------------------------------------------------------------------------------
REO list price adjustment date DATE(MM/DD/YYYY) The most recent date that the servicer
advised the agent to make an adjustment
to the REO listing price.
--------------------------------------------------------------------------------------------------------------------
REO value (as is) NUMBER(10,2) The value of the property without making
any repairs as determined by the
vendor/property management copmany.
--------------------------------------------------------------------------------------------------------------------
REO actual closing date DATE(MM/DD/YYYY) The actual date that the sale of the REO
property closed escrow.
--------------------------------------------------------------------------------------------------------------------
REO flag VARCHAR2(7) Servicer defined indicator that
identifies that the property is now Real
Estate Owned.
--------------------------------------------------------------------------------------------------------------------
REO original list date DATE(MM/DD/YYYY) The initial/first date that the property
was listed with an agent as an REO.
--------------------------------------------------------------------------------------------------------------------
REO original list price NUMBER(15,2) The initial/first price that was used to
list the property with an agent as an
REO.
--------------------------------------------------------------------------------------------------------------------
REO net sales proceeds NUMBER(10,2) The actual REO sales price less closing
costs paid. The net sales proceeds are
identified within the HUD1 settlement
statement.
--------------------------------------------------------------------------------------------------------------------
REO sales price NUMBER(10,2) Actual sales price agreed upon by both
the purchaser and servicer as documented
on the HUD1 settlement statement.
--------------------------------------------------------------------------------------------------------------------
REO scheduled close date DATE(MM/DD/YYYY) The date that the sale of the REO
property is scheduled to close escrow.
--------------------------------------------------------------------------------------------------------------------
REO value date DATE(MM/DD/YYYY) Date that the vendor or management
company completed the valuation of the
property resulting in the REO value (as
is).
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
REO value source VARCHAR2(15) Name of vendor or management company
that provided the REO value (as is).
--------------------------------------------------------------------------------------------------------------------
Repay first due date DATE(MM/DD/YYYY) The due date of the first scheduled
payment due under a forbearance or
repayment plan agreed to by both the
mortgagor and servicer.
--------------------------------------------------------------------------------------------------------------------
Repay next due date DATE(MM/DD/YYYY) The due date of the next outstanding
payment due under a forbearance or
repayment plan agreed to by both the
mortgagor and servicer.
--------------------------------------------------------------------------------------------------------------------
Repay plan broken/reinstated/closed date DATE(MM/DD/YYYY) The servicer defined date upon which the
servicer considers that the plan is no
longer in effect as a result of plan
completion or mortgagor's failure to
remit payments as scheduled.
--------------------------------------------------------------------------------------------------------------------
Repay plan created date DATE(MM/DD/YYYY) The date that both the mortgagor and
servicer agree to the terms of a
forebearance or repayment plan.
--------------------------------------------------------------------------------------------------------------------
SBO loan number NUMBER(9) Individual number that uniquely
identifies loan as defined by Aurora
Master Servicing.
--------------------------------------------------------------------------------------------------------------------
Escrow balance/advance balance NUMBER(10,2) The positive or negative account balance
that is dedicated to payment of hazard
insurance, property taxes, MI, etc.
(escrow items only)
--------------------------------------------------------------------------------------------------------------------
Title approval letter received date DATE(MM/DD/YYYY) The actual date that the title approval
was received as set forth in the HUD
title approval letter.
--------------------------------------------------------------------------------------------------------------------
Title package HUD/VA date DATE(MM/DD/YYYY) The actual date that the title package
was submitted to either HUD or VA.
--------------------------------------------------------------------------------------------------------------------
VA claim funds received date DATE(MM/DD/YYYY) The actual date that funds were received
by the servicer from the VA for the
expense claim submitted by the servicer.
--------------------------------------------------------------------------------------------------------------------
VA claim submitted date DATE(MM/DD/YYYY) The actual date that the expense claim
was submitted by the servicer to the VA.
--------------------------------------------------------------------------------------------------------------------
VA first funds received amount NUMBER(15,2) The amount of funds received by the
servicer from VA as a result of the
specified bid.
--------------------------------------------------------------------------------------------------------------------
VA first funds received date DATE(MM/DD/YYYY) The date that the funds from the
specified bid were received by the
servicer from the VA.
--------------------------------------------------------------------------------------------------------------------
VA ▇▇▇ submitted date DATE(MM/DD/YYYY) Actual date that the Notice of Election
to Convey was submitted to the VA.
--------------------------------------------------------------------------------------------------------------------
Zip Code VARCHAR2(5) US postal zip code that corresponds to
property location.
--------------------------------------------------------------------------------------------------------------------
FNMA action code VARCHAR2(3) The code that is electronically reported
to FNMA by the servicer that reflects
the current defaulted status of a loan.
(ie: 65, 67, 43 or 44)
--------------------------------------------------------------------------------------------------------------------
FNMA delinquency reason code VARCHAR2(3) The code that is electronically reported
to FNMA by the servicer that describes
the circumstance that appears to be the
primary contributing factor to the
delinquency.
--------------------------------------------------------------------------------------------------------------------
Suspense balance NUMBER(10,2) Money submitted to the servicer,
credited to the mortgagor's account but
not allocated to principal, interest,
escrow, etc.
--------------------------------------------------------------------------------------------------------------------
Restricted escrow balance NUMBER(10,2) Money held in escrow by the mortgage
company through completion of repairs to
property.
--------------------------------------------------------------------------------------------------------------------
EXHIBIT G
ASSIGNMENT AND ASSUMPTION
_________________, 200_
ASSIGNMENT AND ASSUMPTION, dated __________, between
__________________________________, a ___________________ corporation having an
office at __________________ ("Assignor") and _________________________________,
a __________________ corporation having an office at __________________
("Assignee"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and other
valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee all of
the right, title and interest of Assignor, as purchaser, with respect to the
Mortgage Loans identified on Exhibit A hereto (the "Mortgage Loans") in, to and
under that certain Flow Purchase Warranties and Servicing Agreement,
Conventional Residential Fixed and Adjustable Rate Mortgage Loans, Group No.
2004-FLOW (the "Flow Purchase, Warranties and Servicing Agreement"), dated as of
July 1, 2004, by and between ▇▇▇▇▇▇ Brothers Bank, FSB (the "Purchaser"), and
Wachovia Mortgage Corporation (the "Seller"), and the Mortgage Loans Group No.
2004-FLOW delivered thereunder by the Seller to the Assignor.
The Assignor specifically reserves and does not assign to the Assignee
hereunder any and all right, title and interest in, to and under any and all
obligations of the Assignor with respect to any mortgage loans subject to the
Purchase Agreement which are not the Mortgage Loans set forth on Exhibit A
attached hereto and are not the subject of this Assignment Agreement.
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with the full
right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. The Assignor has not received notice of, and has no knowledge of, any
offsets, counterclaims or other defenses available to the Seller with respect to
the Flow Purchase, Warranties and Servicing Agreement or the Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver under, or agreed
to any amendment or other modification of, the Flow Purchase, Warranties and
Servicing Agreement, the Custodial Agreement or the Mortgage Loans, including
without limitation the transfer of the servicing obligations under the Flow
Purchase, Warranties and Servicing Agreement. The Assignor has no knowledge of,
and has not received notice of, any waivers
G-1
under or amendments or other modifications of, or assignments of rights or
obligations under, the Flow Purchase, Warranties and Servicing Agreement or the
Mortgage Loans; and
d. Neither the Assignor nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
from, or otherwise approached or negotiated with respect to the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of the Mortgage Loans under the Securities Act of 1933
(the "33 Act") or which would render the disposition of the Mortgage Loans a
violation of Section 5 of the 33 Act or require registration pursuant thereto.
3. The Assignee warrants and represents to, and covenants with, the
Assignor and the Seller that:
a. The Assignee agrees to be bound, as Purchaser, by all of the terms,
covenants and conditions of the Flow Purchase, Warranties and Servicing
Agreement, and the Mortgage Loans and the Custodial Agreement, and from and
after the date hereof, the Assignee assumes for the benefit of each of the
Seller and the Assignor all of the Assignor's obligations as Purchaser
thereunder;
b. The Assignee understands that the Mortgage Loans have not been
registered under the 33 Act or the securities laws of any state;
c. The purchase price being paid by the Assignee for the Mortgage Loans
are in excess of $250,000 and will be paid by cash remittance of the full
purchase price within 60 days of the sale;
d. The Assignee is acquiring the Mortgage Loans for investment for its
own account only and not for any other person. In this connection, neither the
Assignee nor any Person authorized to act therefor has offered the Mortgage
Loans by means of any general advertising or general solicitation within the
meaning of Rule 502(c) of U.S. Securities and Exchange Commission Regulation D,
promulgated under the 1933 Act;
e. The Assignee considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
f. The Assignee has been furnished with all information regarding the
Mortgage Loans that it has requested from the Assignor or the Seller;
g. Neither the Assignee nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Mortgage
Loans, any interest in the Mortgage Loans or any other similar security from, or
otherwise approached or negotiated with respect to the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security with, any person in
any manner which would constitute a distribution of the Mortgage Loans under the
33 Act or which would render the disposition of the Mortgage Loans a violation
of Section 5 of the 33 Act or require registration pursuant thereto, nor will it
act, nor has it authorized or will it authorize any person to act, in such
manner with respect to the Mortgage Loans; and
h. Either: (1) the Assignee is not an employee benefit plan ("Plan")
within the meaning of section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the meaning of
section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and the
Assignee is not directly or indirectly purchasing the Mortgage Loans on behalf
of, investment manager of, as named fiduciary of, as Trustee of, or with assets
of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not result
in a prohibited transaction under section 406 of ERISA or section 4975 of the
Code.
i. The Assignee's address for purposes of all notices and correspondence
related to the Mortgage Loans and the Flow Purchase, Warranties and Servicing
Agreement is:
--------------------------
--------------------------
--------------------------
Attention:
----------------
The Assignee's wire transfer instructions for purposes of all remittances
and payments related to the Mortgage Loans and the Flow Purchase, Warranties and
Servicing Agreement are:
--------------------------
--------------------------
--------------------------
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption to be executed by their duly authorized officers as of the date first
above written.
----------------------------------- ----------------------------------------
Assignor Assignee
By: By:
-------------------------------- ------------------------------------
Its: Its:
------------------------------- -----------------------------------
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected [Vice]
President of Wachovia Mortgage Corporation, a corporation organized under the
laws of the state of [_______], (the "Seller") and further as follows:
1. _______Attached hereto as Exhibit 1 is a true, correct and complete copy of
the certificate of incorporation of the Seller which is in full force and
effect on the date hereof and which has been in effect without amendment,
waiver, rescission or modification.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy of the
bylaws of the Seller which are in effect on the date hereof and which have
been in effect without amendment, waiver, rescission or modification.
3. Attached hereto as Exhibit 3 is an original certificate of good standing of
the Seller issued within ten days of the date hereof, and no event has
occurred since the date thereof which would impair such standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy of the
corporate resolutions of the Board of Directors of the Seller authorizing
the Seller to execute and deliver each of the Flow Purchase, Warranties and
Servicing Agreement, Group No. 2004-FLOW dated July 1, 2004 by and between
the Seller and ▇▇▇▇▇▇ Brothers Bank, FSB (the "Purchaser") (the "Purchase
Agreement") and to endorse the Mortgage Notes and execute the Assignments of
Mortgages by original signature, and such resolutions are in effect on the
date hereof and have been in effect without amendment, waiver, rescission or
modification.
5. Each person listed on Exhibit 5 attached hereto who, as an officer or
representative of the Seller, signed (a) the Purchase Agreement and (b) any
other document delivered prior hereto or on the date hereof in connection
with any purchase described in the agreements set forth above was, at the
respective times of such signing and delivery, and is now, a duly elected or
appointed, qualified and acting officer or representative of the Seller, who
holds the office set forth opposite his or her name on Exhibit 5, and the
signatures of such persons appearing on such documents are their genuine
signatures.
Exh. H-1
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal
of the Seller.
Dated: By:
-------------------------------- ---------------------------------
[Seal] Name:
-------------------------------
Title: [Vice] President
I, ________________________, an [Assistant] Secretary of Wachovia
Mortgage Corporation, hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Seller and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By:
-------------------------------- ---------------------------------
[Seal] Name:
-------------------------------
Title: [Vice] President
Exh. H-2
EXHIBIT 5 to
Seller's Officer's Certificate
Name Title Signature
---------------------------
---------------------------
---------------------------
---------------------------
---------------------------
Exh. H-3
EXHIBIT I
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
▇▇▇▇▇▇ Brothers Bank, FSB
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to Wachovia Mortgage Corporation (the "Seller"), with respect to certain
matters in connection with the sale by the Seller of the Mortgage Loans pursuant
to that certain Flow Purchase, Warranties and Servicing Agreement by and between
the Seller and ▇▇▇▇▇▇ Brothers Bank, FSB (the "Purchaser"), Group No. 2004-FLOW
dated as of July 1, 2004 (the "Purchase Agreement") which sale is in the form of
whole loans, serviced pursuant thereto. Capitalized terms not otherwise defined
herein have the meanings set forth in the Purchase Agreement.
[We] [I] have examined the following documents:
1. the
Purchase Agreement;
2. the form of Assignment of Mortgage;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as we have
deemed necessary and relevant as a basis for this
opinion.
To the extent [we] [I] have deemed necessary and proper, [we]
[I] have relied upon the representations and warranties of the Seller contained
in the Purchase Agreement. [We] [I] have assumed the authenticity of all
documents submitted to [us] [me] as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all documents.
Exh. I-1
Based upon the foregoing, it is [our] [my] opinion that:
1. The Seller is a corporation duly formed, validly existing and in
good standing under the laws of the state of [_______] and is
qualified to transact business in, and is in good standing under,
the laws of the state of [________].
2. The Seller has the power to engage in the transactions
contemplated by the Purchase Agreement and all requisite power,
authority and legal right to execute and deliver the Purchase
Agreement, and to perform and observe the terms and conditions of
such Agreement.
3. The Purchase Agreement has been duly authorized, executed and
delivered by the Seller and is a legal, valid and binding
agreement enforceable in accordance with its respective terms
against the Seller, subject to bankruptcy laws and other similar
laws of general application affecting rights of creditors and
subject to the application of the rules of equity, including those
respecting the availability of specific performance, none of which
will materially interfere with the realization of the benefits
provided thereunder or with the Purchaser's ownership of the
Mortgage Loans.
4. The Seller has been duly authorized to allow any of its officers
to execute any and all documents by original signature in order to
complete the transactions contemplated by the Purchase Agreement
and by original signature in order to execute the endorsements to
the Mortgage Notes and the Assignments of Mortgages, and the
original signature of the officer at the Seller executing the
endorsements to the Mortgage Notes and the Assignments of
Mortgages represents the legal and valid signature of said officer
of the Seller.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Seller of or compliance
by the Seller with the Purchase Agreement or the sale of the
Mortgage Loans or the consummation of the transactions
contemplated by the Purchase Agreement; or (ii) any required
consent, approval, authorization or order has been obtained by the
Seller.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of, the Purchase Agreement conflicts
or will conflict with or results or will result in a breach of or
constitutes or will constitute a default under the charter or
by-laws of the Seller, the terms of any indenture or other
agreement or instrument to which the Seller is a party or by which
it is bound or to which it is subject, or violates any statute or
order, rule, regulations, writ, injunction or decree of any court,
Exh. I-2
governmental authority or regulatory body to which the Seller is
subject or by which it is bound.
7. There is no action, suit, proceeding or investigation pending or,
to the best of [our] [my] knowledge, threatened against the Seller
which, in [our] [my] judgment, either in any one instance or in
the aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of
the Seller or in any material impairment of the right or ability
of the Seller to carry on its business substantially as now
conducted or in any material liability on the part of the Seller
or which would draw into question the validity of the Purchase
Agreement, or the Mortgage Loans or of any action taken or to be
taken in connection with the transactions contemplated thereby, or
which would be likely to impair materially the ability of the
Seller to perform under the terms of the Purchase Agreement.
8. The sale of each Mortgage Note and Mortgage as and in the manner
contemplated by the Purchase Agreement is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Seller thereto as noteholder and mortgagee.
9. The Mortgages have been duly assigned and the Mortgage Notes have
been duly endorsed as provided in the Purchase Agreement. The
Assignments of Mortgage are in recordable form, except for the
insertion of the name of the assignee, and upon the name of the
assignee being inserted, are acceptable for recording under the
laws of the state where each related Mortgaged Property is
located. The endorsement of the Mortgage Notes, the delivery to
the Purchaser, or its designee, of the Assignments of Mortgage,
and the delivery of the original endorsed Mortgage Notes to the
Purchaser, or its designee, are sufficient to permit the Purchaser
to avail itself of all protection available under applicable law
against the claims of any present or future creditors of the
Seller, and are sufficient to prevent any other sale, transfer,
assignment, pledge or hypothecation of the Mortgages and the
Mortgage Notes by the Seller from being enforceable.
This opinion is given to you for your sole benefit, and no other person
or entity is entitled to rely hereon except that the purchaser or purchasers to
which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of its date.
Very truly yours,
Exh. I-3
------------------------------------
[Name]
[Assistant] General Counsel
Exh. I-4
EXHIBIT J-1
SECURITY RELEASE CERTIFICATION
___________________, 200_
Federal Home Loan Bank of
______(the "Association")
Attention:
------------------------------------------
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that Wachovia Mortgage Corporation, a
corporation formed pursuant to the laws of the state of [_______] (the "Seller")
has committed to sell to ▇▇▇▇▇▇ Brothers Bank, FSB under a Flow Purchase,
Warranties and Servicing Agreement Group No. 2004-FLOW, dated as of July 1,
2004, certain mortgage loans originated by the Seller. The Seller warrants that
the mortgage loans to be sold to ▇▇▇▇▇▇ Brothers Bank, FSB on this date pursuant
to the Acknowledgment and Conveyance Agreement dated as of ________ (the
"Related Loans") are in addition to and beyond any collateral required to secure
advances made by the Association to the Seller.
The Seller acknowledges that the Related Loans shall not be used as
additional or substitute collateral for advances made by the Association. ▇▇▇▇▇▇
Brothers Bank, FSB understands that the balance of the Seller's mortgage loan
portfolio may be used as collateral or additional collateral for advances made
by the Association, and confirms that it has no interest therein.
Exh. J-1-1
Execution of this letter by the Association shall constitute a full and
complete release of any security interest, claim, or lien which the Association
may have against the Related Loans.
Very truly yours,
Wachovia Mortgage Corporation
By:
----------------------------------
Name:
Title:
Date:
Acknowledged and approved:
FEDERAL HOME LOAN BANK OF
-------------------------------------
By:
----------------------------------
Name:
Title:
Date:
Exh. J-1-2
EXHIBIT J-2
SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and all
right, title and interest it may have in all Mortgage Loans to be purchased by
▇▇▇▇▇▇ Brothers Bank, FSB from the Seller named below pursuant to that certain
Flow Purchase, Warranties and Servicing Agreement, Group No. 2004-FLOW, dated as
of July 1, 2004 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 Seller named below or its designees, as of the date and time
of the sale of such Mortgage Loans to ▇▇▇▇▇▇ Brothers Bank, FSB pursuant to the
Acknowledgment and Conveyance Agreement dated as of __________.
Name and Address of Financial Institution
-----------------------------------------
(name)
-----------------------------------------
(Address)
By:
--------------------------------------
II. Certification of Release
The Seller named below hereby certifies to ▇▇▇▇▇▇ Brothers Bank, FSB,
that, as of the date and time of the sale of the above-mentioned Mortgage Loans
to ▇▇▇▇▇▇ Brothers Bank, FSB, the security interests in the Mortgage Loans
released by the above-named financial institution comprise all security
interests relating to or affecting any and all such Mortgage Loans. The Seller
warrants that, as of such time, there are and will be no other security
interests affecting any or all of such Mortgage Loans.
Wachovia Mortgage Corporation
By:
------------------------------
Name:
Date:
Exh. J-1-2
EXHIBIT K
[TO BE PROVIDED BY SELLER]
Exh. J-1-3