EXHIBIT 4.2
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RESIDENTIAL FUNDING CORPORATION,
as Master Servicer
HOME LOAN TRUST 2005-[___],
as Issuer
and
[______________________________]
as Indenture Trustee
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SERVICING AGREEMENT
Dated as of [_______], 200[__]
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Home Loans
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS.................................................... 1
Section 1.01. Definitions........................................... 1
Section 1.02. Other Definitional Provisions......................... 1
Section 1.03. Interest Calculations................................. 2
ARTICLE II REPRESENTATIONS AND WARRANTIES................................ 2
Section 2.01. Representations and Warranties Regarding the Master
Servicer.............................................. 2
Section 2.02. Representations and Warranties of the Issuer.......... 3
Section 2.03. Enforcement of Representations and Warranties......... 4
ARTICLE III ADMINISTRATION AND SERVICING OF HOME LOANS................... 5
Section 3.01. The Master Servicer................................... 5
Section 3.02. Collection of Certain Home Loan Payments.............. 8
Section 3.03. Withdrawals from the Custodial Account................ 11
Section 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses.............................................. 12
Section 3.05. Modification Agreements; Release or Substitution of
Lien.................................................. 13
Section 3.06. Trust Estate; Related Documents....................... 14
Section 3.07. Realization Upon Defaulted Home Loans; Loss
Mitigation............................................ 15
Section 3.08. Issuer and Indenture Trustee to Cooperate............. 17
Section 3.09. Servicing Compensation; Payment of Certain Expenses by
Master Servicer....................................... 18
Section 3.10. Annual Statement as to Compliance..................... 18
Section 3.11. Annual Independent Public Accountants' Servicing
Report................................................ 19
Section 3.12. Access to Certain Documentation and Information
Regarding the Home Loans.............................. 19
Section 3.13. Maintenance of Certain Servicing Insurance Policies... 19
Section 3.14. Information Required by the Internal Revenue Service
and Reports of Foreclosures and Abandonments of
Mortgaged Property.................................... 20
Section 3.15. Optional Repurchase of Defaulted Home Loans........... 20
Section 3.16. Limited Home Loan Repurchase Right.................... 20
ARTICLE IV SERVICING CERTIFICATE......................................... 20
Section 4.01. Statements to Securityholders......................... 20
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SERVICING AGREEMENT
TABLE OF CONTENTS
(continued)
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Section 4.02. Tax Reporting......................................... 24
Section 4.03. Calculation of Adjusted Issue Price................... 24
Section 4.04. Exchange Act Reporting................................ 24
ARTICLE V PAYMENT ACCOUNT................................................ 25
Section 5.01. Payment Account....................................... 25
ARTICLE VI THE MASTER SERVICER........................................... 26
Section 6.01. Liability of the Master Servicer...................... 26
Section 6.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer................... 26
Section 6.03. Limitation on Liability of the Master Servicer and
Others................................................ 27
Section 6.04. Master Servicer Not to Resign......................... 27
Section 6.05. Delegation of Duties.................................. 28
Section 6.06. Master Servicer to Pay Indenture Trustee's and Owner
Trustee's Fees and Expenses; Indemnification.......... 28
ARTICLE VII DEFAULT...................................................... 29
Section 7.01. Servicing Default..................................... 29
Section 7.02. Indenture Trustee to Act; Appointment of Successor.... 31
Section 7.03. Notification to Securityholders....................... 33
ARTICLE VIII MISCELLANEOUS PROVISIONS.................................... 33
Section 8.01. Amendment............................................. 33
Section 8.02. GOVERNING LAW......................................... 33
Section 8.03. Notices............................................... 33
Section 8.04. Severability of Provisions............................ 34
Section 8.05. Third-Party Beneficiaries............................. 34
Section 8.06. Counterparts.......................................... 34
Section 8.07. Effect of Headings and Table of Contents.............. 34
Section 8.08. Termination Upon Purchase by the Master Servicer or
Liquidation of All Home Loans; Partial Redemption..... 34
Section 8.09. Certain Matters Affecting the Indenture Trustee....... 35
Section 8.10. Owner Trustee Not Liable for Related Documents........ 35
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SERVICING AGREEMENT
TABLE OF CONTENTS
(continued)
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ARTICLE IX COMPLIANCE WITH REGULATION AB................................. 36
Section 9.01. Intent of the Parties; Reasonableness................. 36
Section 9.02. Additional Representations and Warranties of the
Indenture Trustee..................................... 36
Section 9.03. Information to Be Provided by the Indenture Trustee... 37
Section 9.04. Report on Assessment of Compliance and Attestation.... 37
Section 9.05. Indemnification; Remedies............................. 37
EXHIBIT A - HOME LOANS................................................... A-1
EXHIBIT B - POWER OF ATTORNEY............................................ B-1
EXHIBIT C - FORM OF REQUEST FOR RELEASE ................................. C-1
EXHIBIT D - FORM OF FORM 10-K CERTIFICATE ............................... D-1
EXHIBIT E - [FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE]..... E-1
EXHIBIT F - SERVICING CRITERIA........................................... F-1
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SERVICING AGREEMENT
This is a Servicing Agreement, dated as of [__________], 200[__] (the
"Servicing Agreement"), among Residential Funding Corporation (the "Master
Servicer"), the Home Loan Trust 2005-[____] (the "Issuer") and
[__________________] (the "Indenture Trustee").
WITNESSETH THAT:
WHEREAS, pursuant to the terms of the Home Loan Purchase Agreement,
Residential Funding Corporation (in its capacity as Seller) will sell to the
Depositor the Home Loans together with the Related Documents on the Closing
Date;
WHEREAS, the Depositor will sell the Home Loans and all of its rights under
the Home Loan Purchase Agreement to the Issuer, together with the Related
Documents on the Closing Date;
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer will
issue and transfer to or at the direction of the Depositor, the Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will issue and
transfer to or at the direction of the Depositor, the Notes; and
WHEREAS, pursuant to the terms of this Servicing Agreement, the Master
Servicer will service the Home Loans directly or through one or more
Subservicers;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For all purposes of this Servicing Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in the Definitions contained in Appendix A to the
Indenture dated [_______________], 200[__] (the "Indenture"), between Home Loan
Trust 2005-[__], as issuer, and [_______________], as indenture trustee, which
is incorporated by reference herein. All other capitalized terms used herein
shall have the meanings specified herein.
Section 1.02. Other Definitional Provisions. (a) All terms defined in this
Servicing Agreement shall have the defined meanings when used in any certificate
or other document made or delivered pursuant hereto unless otherwise defined
therein.
(b) As used in this Servicing Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Servicing Agreement or in any such certificate or other
document, and accounting terms partly defined in
this Servicing Agreement or in any such certificate or other document, to the
extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles. To the extent that the definitions of
accounting terms in this Servicing Agreement or in any such certificate or other
document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Servicing
Agreement or in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Servicing Agreement shall refer to this Servicing Agreement as
a whole and not to any particular provision of this Servicing Agreement; Section
and Exhibit references contained in this Servicing Agreement are references to
Sections and Exhibits in or to this Servicing Agreement unless otherwise
specified; and the term "including" shall mean "including without limitation".
(d) The definitions contained in this Servicing Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
Section 1.03. Interest Calculations. All calculations of interest hereunder
that are made in respect of the Loan Balance of a Home Loan shall be made in
accordance with the Mortgage Note. All calculations of interest on the
Securities (other than the Class A-1 Notes) shall be made on the basis of a
30-day month and a year assumed to consist of 360 days. Calculation of interest
on the Class A-1 Notes shall be made on the basis of the actual number of days
in the applicable Interest Accrual Period and a year assumed to consist of 360
days. The calculation of the Servicing Fee shall be made on the basis of a
30-day month and a year assumed to consist of 360 days. All dollar amounts
calculated hereunder shall be rounded to the nearest ▇▇▇▇▇ with one-half of one
▇▇▇▇▇ being rounded up.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01. Representations and Warranties Regarding the Master Servicer.
The Master Servicer represents and warrants to the Issuer and for the benefit of
the Indenture Trustee, as pledgee of the Home Loans, as of the Cut-off Date:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
has the corporate power to own its assets and to transact the business in
which it is currently engaged. The Master
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Servicer is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires such
qualification and in which the failure to so qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of the Master Servicer;
(ii) The Master Servicer has the power and authority to make, execute,
deliver and perform this Servicing Agreement and all of the transactions
contemplated under this Servicing Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance of
this Servicing Agreement. When executed and delivered, this Servicing
Agreement will constitute the legal, valid and binding obligation of the
Master Servicer enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and
by the availability of equitable remedies;
(iii) The Master Servicer is not required to obtain the consent of any
other Person or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Servicing Agreement, except for such consent,
license, approval or authorization, or registration or declaration, as
shall have been obtained or filed, as the case may be;
(iv) The execution and delivery of this Servicing Agreement and the
performance of the transactions contemplated hereby by the Master Servicer
will not violate any provision of any existing law or regulation or any
order or decree of any court applicable to the Master Servicer or any
provision of the Certificate of Incorporation or Bylaws of the Master
Servicer, or constitute a material breach of any mortgage, indenture,
contract or other agreement to which the Master Servicer is a party or by
which the Master Servicer may be bound;
(v) No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending, or to the knowledge of
the Master Servicer threatened, against the Master Servicer or any of its
properties or with respect to this Servicing Agreement or the Securities
which in the opinion of the Master Servicer has a reasonable likelihood of
resulting in a material adverse effect on the transactions contemplated by
this Servicing Agreement; and
(vi) The Master Servicer is a member of MERS in good standing, and
will comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Home Loans that are registered with
MERS.
The foregoing representations and warranties shall survive any termination
of the Master Servicer hereunder.
Section 2.02. Representations and Warranties of the Issuer. The Issuer
hereby represents and warrants to the Master Servicer and for the benefit of the
Indenture Trustee, as pledgee of the Home Loans, as of the Cut-off Date:
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(i) The Issuer is a statutory trust duly formed and in good standing
under the laws of the State of Delaware and has full power, authority and
legal right to execute and deliver this Servicing Agreement and to perform
its obligations under this Servicing Agreement, and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Servicing Agreement; and
(ii) The execution and delivery by the Issuer of this Servicing
Agreement and the performance by the Issuer of its obligations under this
Servicing Agreement will not violate any provision of any law or regulation
governing the Issuer or any order, writ, judgment or decree of any court,
arbitrator or governmental authority or agency applicable to the Issuer or
any of its assets. Such execution, delivery, authentication and performance
will not require the authorization, consent or approval of, the giving of
notice to, the filing or registration with, or the taking of any other
action with respect to, any governmental authority or agency regulating the
activities of statutory trusts. Such execution, delivery, authentication
and performance will not conflict with, or result in a breach or violation
of, any mortgage, deed of trust, lease or other agreement or instrument to
which the Issuer is bound.
Section 2.03. Enforcement of Representations and Warranties. The Master
Servicer, on behalf of and subject to the direction of the Indenture Trustee, as
pledgee of the Home Loans, or the Issuer, shall enforce the representations and
warranties of the Seller pursuant to the Home Loan Purchase Agreement. Upon the
discovery by the Seller, the Depositor, the Master Servicer, the Indenture
Trustee, the Issuer, or any Custodian of a breach of any of the representations
and warranties made in the Home Loan Purchase Agreement or of the existence of a
Repurchase Event, in respect of any Home Loan which materially and adversely
affects the interests of the Securityholders, the party discovering such breach
or existence shall give prompt written notice to the other parties. The Master
Servicer shall promptly notify the Seller of such breach or existence and
request that, pursuant to the terms of the Home Loan Purchase Agreement, the
Seller either (i) cure such breach or Repurchase Event in all material respects
within 45 days (with respect to a breach of the representations and warranties
contained in Section 3.1(a) of the Home Loan Purchase Agreement or Repurchase
Event) or 90 days (with respect to a breach of the representations and
warranties contained in Section 3.1(b) of the Home Loan Purchase Agreement) from
the date the Seller was notified of such breach or Repurchase Event or (ii)
purchase such Home Loan from the Issuer at the price and in the manner set forth
in Section 3.1(c) of the Home Loan Purchase Agreement; provided that the Seller
shall, subject to compliance with all the conditions set forth in the Home Loan
Purchase Agreement, have the option to substitute an Eligible Substitute Loan or
Loans for such Home Loan. In the event that the Seller elects to substitute one
or more Eligible Substitute Loans pursuant to Section 3.1(c) of the Home Loan
Purchase Agreement, the Seller shall deliver to the Issuer with respect to such
Eligible Substitute Loans, the original Mortgage Note, the Mortgage, and such
other documents and agreements as are required by the Home Loan Purchase
Agreement. Payments due with respect to Eligible Substitute Loans in the month
of substitution shall not be transferred to the Issuer and will be retained by
the Master Servicer and remitted by the Master Servicer to the Seller on the
next succeeding Payment Date provided a payment at least equal to the applicable
Monthly Payment has been received by the Issuer for such month in respect of the
Home Loan to be removed. The Master Servicer shall amend or cause to be amended
the Home Loan Schedule to reflect the removal of such Home Loan and the
substitution of the Eligible Substitute Loans
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and the Master Servicer shall promptly deliver the amended Home Loan Schedule to
the Owner Trustee and the Indenture Trustee.
It is understood and agreed that the obligation of the Seller to cure such
breach or purchase or substitute for such Home Loan as to which such a breach
has occurred and is continuing shall constitute the sole remedy respecting such
breach available to the Issuer and the Indenture Trustee, as pledgee of the Home
Loans, against the Seller. In connection with the purchase of or substitution
for any such Home Loan by the Seller, the Issuer shall assign to the Seller all
of its right, title and interest in respect of the Home Loan Purchase Agreement
applicable to such Home Loan. Upon receipt of the Repurchase Price, or upon
completion of such substitution, the Master Servicer shall notify the Custodian
and then the Custodian shall deliver the Mortgage Files to the Master Servicer,
together with all relevant endorsements and assignments prepared by the Master
Servicer which the Indenture Trustee shall execute.
ARTICLE III
ADMINISTRATION AND SERVICING
OF HOME LOANS
Section 3.01. The Master Servicer. (a) The Master Servicer shall service
and administer the Home Loans in accordance with the terms of this Servicing
Agreement, following such procedures as it would employ in its good faith
business judgment and which are normal and usual in its general mortgage
servicing activities, and shall have full power and authority, acting alone or
through a Subservicer, to do any and all things in connection with such
servicing and administration which it may deem necessary or desirable, it being
understood, however, that the Master Servicer shall at all times remain
responsible to the Issuer and the Indenture Trustee for the performance of its
duties and obligations hereunder in accordance with the terms hereof. Without
limiting the generality of the foregoing, the Master Servicer shall continue,
and is hereby authorized and empowered by the Issuer and the Indenture Trustee,
as pledgee of the Home Loans, to execute and deliver, on behalf of itself, the
Issuer, the Indenture Trustee or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, or of
consent to modification in connection with a proposed conveyance, or of
assignment of any Mortgage and Mortgage Note in connection with the repurchase
of a Home Loan and all other comparable instruments with respect to the Home
Loans and with respect to the Mortgaged Properties, or with respect to the
modification or re-recording of a Mortgage for the purpose of correcting the
Mortgage, the subordination of the lien of the Mortgage in favor of a public
utility company or government agency or unit with powers of eminent domain, the
taking of a deed in lieu of foreclosure, the commencement, prosecution or
completion of judicial or non-judicial foreclosure, the acquisition of any
property acquired by foreclosure or deed in lieu of foreclosure, or the
management, marketing and conveyance of any property acquired by foreclosure or
deed in lieu of foreclosure. The Issuer, the Indenture Trustee and the
Custodian, as applicable, shall furnish the Master Servicer with any powers of
attorney and other documents necessary or appropriate to enable the Master
Servicer to carry out its servicing and administrative duties hereunder. In
addition, the Master Servicer may, at its own discretion and
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on behalf of the Indenture Trustee, obtain credit information in the form of a
Credit Score from a credit repository. On the Closing Date, the Indenture
Trustee shall deliver to the Master Servicer a limited power of attorney
substantially in the form of Exhibit B hereto. The Master Servicer further is
authorized and empowered by the Issuer and the Indenture Trustee, on behalf of
the Noteholders and the Indenture Trustee, in its own name or in the name of the
Subservicer, when the Master Servicer or the Subservicer, as the case may be,
believes it is appropriate in its best judgment to register any Home Loan on the
MERS(R) System, or cause the removal from the registration of any Home Loan on
the MERS(R) System, to execute and deliver, on behalf of the Indenture Trustee
and the Noteholders or any of them, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording of
a Mortgage in the name of MERS, solely as nominee for the Indenture Trustee and
its successors and assigns. Any expenses incurred in connection with the actions
described in the preceding sentence shall be borne by the Master Servicer in
accordance with Section 3.09, with no right of reimbursement; provided, that if,
as a result of MERS discontinuing or becoming unable to continue operations in
connection with the MERS(R) System, it becomes necessary to remove any Home Loan
from registration on the MERS(R) System and to arrange for the assignment of the
related Mortgages to the Indenture Trustee, then any related expenses shall be
reimbursable to the Master Servicer as set forth in Section 3.03(ii).
If the Mortgage relating to a Home Loan did not have a lien senior to the
Home Loan on the related Mortgaged Property as of the Cut-off Date, then the
Master Servicer, in such capacity, may not consent to the placing of a lien
senior to that of the Mortgage on the related Mortgaged Property. If the
Mortgage relating to a Home Loan had a lien senior to the Home Loan on the
related Mortgaged Property as of the Cut-off Date, then the Master Servicer, in
such capacity, may consent to the refinancing of the prior senior lien, provided
that the following requirements are met:
(i) (A) the Mortgagor's debt-to-income ratio resulting from such
refinancing is less than the original debt-to-income ratio as set forth on
the Mortgage Loan Schedule; provided, however, that in no instance shall
the resulting Combined Loan-to-Value Ratio of such Home Loan be higher than
that permitted by the Program Guide; or
(B) the resulting Combined Loan-to-Value Ratio of such Home Loan
is no higher than the Combined Loan-to-Value Ratio prior to such
refinancing; provided, however, if such refinanced mortgage loan is a "rate
and term" mortgage loan (meaning, the Mortgagor does not receive any cash
from the refinancing), the Combined Loan-to-Value Ratio may increase to the
extent of either (a) the reasonable closing costs of such refinancing or
(b) any decrease in the value of the related Mortgaged Property, if the
Mortgagor is in good standing as defined by the Program Guide;
(ii) the interest rate, or, in the case of an adjustable rate existing
senior lien, the maximum interest rate, for the loan evidencing the
refinanced senior lien is no more than 2.0% higher than the interest rate
or the maximum interest rate, as the case may be, on the loan evidencing
the existing senior lien immediately prior to the date of such refinancing;
provided, however (a) if the loan evidencing the existing senior lien prior
to the date of refinancing has an adjustable rate and the loan evidencing
the refinanced
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senior lien has a fixed rate, then the current interest rate on the loan
evidencing the refinanced senior lien may be up to 2.0% higher than the
then-current loan rate of the loan evidencing the existing senior lien and
(b) if the loan evidencing the existing senior lien prior to the date of
refinancing has a fixed rate and the loan evidencing the refinanced senior
lien has an adjustable rate, then the maximum interest rate on the loan
evidencing the refinanced senior lien shall be less than or equal to (x)
the interest rate on the loan evidencing the existing senior lien prior to
the date of refinancing plus (y) 2.0%; and
(iii) the loan evidencing the refinanced senior lien is not subject to
negative amortization.
The relationship of the Master Servicer (and of any successor to the Master
Servicer as servicer under this Servicing Agreement) to the Issuer under this
Servicing Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent.
(b) The Master Servicer may continue in effect Subservicing Agreements
entered into by Residential Funding and Subservicers prior to the execution and
delivery of this Servicing Agreement, and may enter into Subservicing Agreements
with Subservicers for the servicing and administration of certain of the Home
Loans. Each Subservicer of a Home Loan shall be entitled to receive and retain,
as provided in the related Subservicing Agreement and in Section 3.02, the
related Subservicing Fee from payments of interest received on such Home Loan
after payment of all amounts required to be remitted to the Master Servicer in
respect of such Home Loan. For any Home Loan not subject to a Subservicing
Agreement, the Master Servicer shall be entitled to receive and retain an amount
equal to the Subservicing Fee from payments of interest. References in this
Servicing Agreement to actions taken or to be taken by the Master Servicer in
servicing the Home Loans include actions taken or to be taken by a Subservicer
on behalf of the Master Servicer. Each Subservicing Agreement will be upon such
terms and conditions as are not inconsistent with this Servicing Agreement and
as the Master Servicer and the Subservicer have agreed. With the approval of the
Master Servicer, a Subservicer may delegate its servicing obligations to
third-party servicers, but such Subservicers will remain obligated under the
related Subservicing Agreements. The Master Servicer and the Subservicer may
enter into amendments to the related Subservicing Agreements; provided, however,
that any such amendments shall not cause the Home Loans to be serviced in a
manner that would be materially inconsistent with the standards set forth in
this Servicing Agreement. The Master Servicer shall be entitled to terminate any
Subservicing Agreement in accordance with the terms and conditions thereof and
without any limitation by virtue of this Servicing Agreement; provided, however,
that in the event of termination of any Subservicing Agreement by the Master
Servicer or the Subservicer, the Master Servicer shall either act as servicer of
the related Home Loan or enter into a Subservicing Agreement with a successor
Subservicer which will be bound by the terms of the related Subservicing
Agreement. The Master Servicer shall be entitled to enter into any agreement
with a Subservicer for indemnification of the Master Servicer and nothing
contained in this Servicing Agreement shall be deemed to limit or modify such
indemnification. The Program Guide and any other Subservicing Agreement entered
into between the Master Servicer and any Subservicer shall require the
Subservicer to accurately and fully report its borrower credit files to each of
the Credit Repositories in a timely manner.
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In the event that the rights, duties and obligations of the Master Servicer
are terminated hereunder, any successor to the Master Servicer in its sole
discretion may, to the extent permitted by applicable law, terminate the
existing Subservicing Agreement with any Subservicer in accordance with the
terms of the applicable Subservicing Agreement or assume the terminated Master
Servicer's rights and obligations under such subservicing arrangements which
termination or assumption will not violate the terms of such arrangements.
As part of its servicing activities hereunder, the Master Servicer, for the
benefit of the Securityholders, shall use reasonable efforts to enforce the
obligations of each Subservicer under the related Subservicing Agreement, to the
extent that the non-performance of any such obligation would have a material
adverse effect on a Home Loan. Such enforcement, including, without limitation,
the legal prosecution of claims, termination of Subservicing Agreements and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Master Servicer would employ in its good
faith business judgment and which are normal and usual in its general mortgage
servicing activities. The Master Servicer shall pay the costs of such
enforcement at its own expense, and shall be reimbursed therefor only (i) from a
general recovery resulting from such enforcement to the extent, if any, that
such recovery exceeds all amounts due in respect of the related Home Loan or
(ii) from a specific recovery of costs, expenses or attorneys fees against the
party against whom such enforcement is directed.
Section 3.02. Collection of Certain Home Loan Payments. (a) The Master
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Home Loans, and shall, to the extent such
procedures shall be consistent with this Servicing Agreement and generally
consistent with any related insurance policy, follow such collection procedures
as it would employ in its good faith business judgment and which are normal and
usual in its general mortgage servicing activities. Consistent with the
foregoing, and without limiting the generality of the foregoing, the Master
Servicer may in its discretion waive any late payment charge, prepayment charge
or penalty interest or other fees which may be collected in the ordinary course
of servicing such Home Loan. The Master Servicer may also extend the Due Date
for payment due on a Home Loan in accordance with the Program Guide, provided,
however, that the Master Servicer shall first determine that any such waiver or
extension will not impair the coverage of any related insurance policy or
materially adversely affect the lien of the related Mortgage (except as
described below) or the interests of the Securityholders. Notwithstanding
anything in this Section to the contrary, the Master Servicer or any Subservicer
shall not enforce any prepayment charge to the extent that such enforcement
would violate any applicable law. Consistent with the terms of this Servicing
Agreement, the Master Servicer may also:
(i) waive, modify or vary any term of any Home Loan;
(ii) consent to the postponement of strict compliance with any such
term or in any manner grant indulgence to any Mortgagor;
(iii) arrange with a Mortgagor a schedule for the payment of principal
and interest due and unpaid;
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(iv) forgive any portion of the amounts contractually owed under the
Home Loan;
(v) capitalize past due amounts owed under the Home Loan by adding any
amounts in arrearage to the existing principal balance of the Home Loan (a
"Capitalization Workout") of which will result in an increased Monthly
Payment amount, provided that: (A) the amount added to the existing
principal balance of the Home Loan (the "Capitalized Amount") shall be no
greater than five times the Mortgagor's current Monthly Payment amount; and
(B) the Master Servicer shall not enter into a Capitalization Workout
unless the Combined Loan-to-Value Ratio of the Home Loan prior to the
Capitalization Workout equals or exceeds 80% and the Mortgagor has
qualified for the Capitalization Workout under the Master Servicer's
servicing guidelines;
(vi) reset the Due Date for the Home Loan, or any combination of the
foregoing;
if in the Master Servicer's determination such waiver, modification,
postponement or indulgence, arrangement or other action referred to above is not
materially adverse to the interests of the Securityholders and is generally
consistent with the Master Servicer's policies with respect to mortgage loans
similar to those in the Home Loan Pool (meaning, mortgage loans used for home
improvement or debt consolidation); provided, however, that the Master Servicer
may not modify or permit any Subservicer to modify any Home Loan (including
without limitation any modification that would change the Loan Rate, forgive the
payment of any principal or interest (unless in connection with the liquidation
of the related Home Loan) or extend the final maturity date of such Home Loan)
unless such Home Loan is in default or, in the judgment of the Master Servicer,
such default is reasonably foreseeable. The general terms of any waiver,
modification, forgiveness, postponement or indulgence with respect to any of the
Home Loans will be included in the Servicing Certificate, and such Home Loans
will not be considered "delinquent" for the purposes of the Basic Documents so
long as the Mortgagor complies with the terms of such waiver, modification,
forgiveness, postponement or indulgence.
(b) The Master Servicer shall establish a Custodial Account, which shall be
an Eligible Account in which the Master Servicer shall deposit or cause to be
deposited any amounts representing payments and collections in respect of the
Home Loans received by it subsequent to the Cut-off Date (other than in respect
of the payments referred to in the following paragraph) within one Business Day
following receipt thereof (or otherwise on or prior to the Closing Date),
including the following payments and collections received or made by it (without
duplication):
(i) all payments of principal or interest on the Home Loans received
by the Master Servicer from the respective Subservicer, net of any portion
of the interest thereof retained by the Subservicer as Subservicing Fees;
(ii) the aggregate Repurchase Price of the Home Loans purchased by the
Master Servicer pursuant to Section 3.15 or by the Limited Repurchase Price
Holder pursuant to Section 3.16;
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(iii) Net Liquidation Proceeds net of any related Foreclosure Profit;
(iv) all proceeds of any Home Loans repurchased by the Seller pursuant
to the Home Loan Purchase Agreement, and all Substitution Adjustment
Amounts required to be deposited in connection with the substitution of an
Eligible Substitute Loan pursuant to the Home Loan Purchase Agreement;
(v) Insurance Proceeds, other than Net Liquidation Proceeds, resulting
from any insurance policy maintained on a Mortgaged Property; and
(vi) amounts required to be paid by the Master Servicer pursuant to
Sections 3.04 and 8.08 and any prepayments or collections constituting
prepayment charges.
provided, however, that with respect to each Collection Period, the Master
Servicer shall be permitted to retain from payments in respect of interest on
the Home Loans, the Master Servicing Fee for such Collection Period. The
foregoing requirements respecting deposits to the Custodial Account are
exclusive, it being understood that, without limiting the generality of the
foregoing, the Master Servicer need not deposit in the Custodial Account amounts
representing Foreclosure Profits, fees (including annual fees) or late charge
penalties payable by Mortgagors (such amounts to be retained as additional
servicing compensation in accordance with Section 3.09 hereof), or amounts
received by the Master Servicer for the accounts of Mortgagors for application
towards the payment of taxes, insurance premiums, assessments and similar items.
In the event any amount not required to be deposited in the Custodial Account is
so deposited, the Master Servicer may at any time withdraw such amount from the
Custodial Account, any provision herein to the contrary notwithstanding. The
Custodial Account may contain funds that belong to one or more trust funds
created for the notes or certificates of other series and may contain other
funds respecting payments on other mortgage loans belonging to the Master
Servicer or serviced or master serviced by it on behalf of others.
Notwithstanding such commingling of funds, the Master Servicer shall keep
records that accurately reflect the funds on deposit in the Custodial Account
that have been identified by it as being attributable to the Home Loans and
shall hold all collections in the Custodial Account to the extent they represent
collections on the Home Loans for the benefit of the Trust, the Securityholders
and the Indenture Trustee, as their interests may appear. The Master Servicer
shall retain all Foreclosure Profits as additional servicing compensation.
The Master Servicer may cause the institution maintaining the Custodial
Account to invest any funds in the Custodial Account in Permitted Investments
(including obligations of the Master Servicer or any of its Affiliates, if such
obligations otherwise qualify as Permitted Investments), which investments shall
mature not later than the Business Day preceding the next succeeding Payment
Date and which investments shall not be sold or disposed of prior to maturity.
Except as provided above, all income and gain realized from any such investment
shall inure to the benefit of the Master Servicer and shall be subject to its
withdrawal or order from time to time. The amount of any losses incurred in
respect of the principal amount of any such investments shall be deposited in
the Custodial Account by the Master Servicer out of its own funds immediately as
realized.
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(c) The Master Servicer shall require each Subservicer to hold all funds
constituting collections on the Home Loans, pending remittance thereof to the
Master Servicer, in one or more accounts meeting the requirements of an Eligible
Account, and invested in Permitted Investments.
Section 3.03. Withdrawals from the Custodial Account. The Master Servicer
shall, from time to time as provided herein, make withdrawals from the Custodial
Account of amounts on deposit therein pursuant to Section 3.02 that are
attributable to the Home Loans for the following purposes:
(i) to remit to the Paying Agent for deposit in the Payment Account,
on the Business Day prior to each Payment Date, an amount equal to the
Interest Collections and Principal Collections required to be distributed
on such Payment Date and any payments or collections constituting
prepayment charges received during the related Prepayment Period;
(ii) to the extent deposited to the Custodial Account, to reimburse
itself or the related Subservicer for previously unreimbursed expenses,
made pursuant to Section 3.01, incurred in maintaining individual insurance
policies pursuant to Section 3.04, or Liquidation Expenses, paid pursuant
to Section 3.07 or otherwise reimbursable pursuant to the terms of this
Servicing Agreement (to the extent not payable pursuant to Section 3.09),
such withdrawal right being limited to amounts received on particular Home
Loans (other than any Repurchase Price in respect thereof) which represent
late recoveries of the payments for which such advances were made, or from
related Net Liquidation Proceeds or the proceeds of the purchase of such
Home Loan;
(iii) to pay to itself out of each payment received on account of
interest on a Home Loan as contemplated by Section 3.09, an amount equal to
the related Master Servicing Fee (to the extent not retained pursuant to
Section 3.02), and to pay to any Subservicer any Subservicing Fees not
previously withheld by the Subservicer;
(iv) to the extent deposited in the Custodial Account to pay to itself
as additional servicing compensation any interest or investment income
earned on funds deposited in the Custodial Account and Payment Account that
it is entitled to withdraw pursuant to Sections 3.02(b) and 5.01;
(v) to the extent deposited in the Custodial Account, to pay to itself
as additional servicing compensation any Foreclosure Profits;
(vi) to pay to itself or the Seller, with respect to any Home Loan or
property acquired in respect thereof that has been purchased or otherwise
transferred to the Seller, the Master Servicer, the Limited Repurchase
Right Holder or other entity, all amounts received thereon and not required
to be distributed to Securityholders as of the date on which the related
Purchase Price or Repurchase Price is determined;
(vii) to clear and terminate the Custodial Account upon the
termination of this Agreement; and
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(viii) to withdraw any other amount deposited in the Custodial Account
that was not required to be deposited therein pursuant to Section 3.02.
Since, in connection with withdrawals pursuant to clauses (ii), (iii), (v)
and (vi), the Master Servicer's entitlement thereto is limited to collections or
other recoveries on the related Home Loan, the Master Servicer shall keep and
maintain separate accounting, on a Home Loan by Home Loan basis, for the purpose
of justifying any withdrawal from the Custodial Account pursuant to such
clauses. Notwithstanding any other provision of this Servicing Agreement, the
Master Servicer shall be entitled to reimburse itself for any previously
unreimbursed expenses incurred pursuant to Section 3.07 or otherwise
reimbursable pursuant to the terms of this Servicing Agreement that the Master
Servicer determines to be otherwise nonrecoverable (except with respect to any
Home Loan as to which the Repurchase Price has been paid), by withdrawal from
the Custodial Account of amounts on deposit therein attributable to the Home
Loans on any Business Day prior to the Payment Date succeeding the date of such
determination.
Section 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses. The Master Servicer shall cause to be maintained for each Home Loan
hazard insurance naming the Master Servicer or related Subservicer as loss payee
thereunder providing extended coverage in an amount which is at least equal to
at least 100% of the insurable value of the improvements (guaranteed
replacement) or the sum of the unpaid principal balance of the first mortgage
loan and the Home Loan amount. The Master Servicer shall also cause to be
maintained on property acquired upon foreclosure, or deed in lieu of
foreclosure, of any Home Loan, fire insurance with extended coverage in an
amount which is at least equal to the amount necessary to avoid the application
of any co-insurance clause contained in the related hazard insurance policy.
Amounts collected by the Master Servicer under any such policies (other than
amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Master Servicer's normal servicing procedures) shall be
deposited in the Custodial Account to the extent called for by Section 3.02. In
cases in which any Mortgaged Property is located at any time during the life of
a Home Loan in a federally designated flood area, the hazard insurance to be
maintained for the related Home Loan shall include flood insurance (to the
extent available). All such flood insurance shall be in amounts equal to the
lesser of (i) the amount required to compensate for any loss or damage to the
related Mortgaged Property on a replacement cost basis and (ii) the maximum
amount of such insurance available for such Mortgaged Property under the
national flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program). The Master Servicer shall
be under no obligation to require that any Mortgagor maintain earthquake or
other additional insurance and shall be under no obligation itself to maintain
any such additional insurance on property acquired in respect of a Home Loan,
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Master
Servicer shall obtain and maintain a blanket policy consistent with its general
mortgage servicing activities insuring against hazard losses on all of the Home
Loans, it shall conclusively be deemed to have satisfied its obligations as set
forth in the first sentence of this Section 3.04, it being understood and agreed
that such blanket policy may contain a deductible clause, in which case the
Master Servicer shall, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with the first sentence of
this Section 3.04 and there shall have been a loss which would have been covered
by such policy, deposit in the Custodial Account the amount not otherwise
payable
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under the blanket policy because of such deductible clause. Any such deposit by
the Master Servicer shall be made on the last Business Day of the Collection
Period in the month in which payments under any such policy would have been
deposited in the Custodial Account. In connection with its activities as
servicer of the Home Loans, the Master Servicer agrees to present, on behalf of
itself, the Issuer and the Indenture Trustee, claims under any such blanket
policy.
Section 3.05. Modification Agreements; Release or Substitution of Lien. (a)
The Master Servicer or the related Subservicer, as the case may be, shall be
entitled to (A) execute assumption agreements, modification agreements,
substitution agreements, and instruments of satisfaction or cancellation or of
partial or full release or discharge, or any other document contemplated by this
Servicing Agreement and other comparable instruments with respect to the Home
Loans and with respect to the Mortgaged Properties subject to the Mortgages (and
the Issuer and the Indenture Trustee each shall promptly execute any such
documents on request of the Master Servicer) and (B) approve the granting of an
easement thereon in favor of another Person, any alteration or demolition of the
related Mortgaged Properties or other similar matters, in each case if it has
determined, exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Home Loans, that the security for, and
the timely and full collectability of, such Home Loans would not be adversely
affected thereby. A partial release pursuant to this Section 3.05 shall be
permitted only if the Combined Loan-to-Value Ratio for such Home Loan after such
partial release does not exceed the Combined Loan-to-Value Ratio for such Home
Loan as of the Cut-off Date. Any fee collected by the Master Servicer or the
related Subservicer for processing such request will be retained by the Master
Servicer or such Subservicer as additional servicing compensation.
(b) The Master Servicer may enter into an agreement with a Mortgagor to
release the lien on the Mortgaged Property relating to a Home Loan (the
"Existing Lien"), if at the time of such agreement the Home Loan is current in
payment of principal and interest, under any of the following circumstances:
(i) in any case in which, simultaneously with the release of the
Existing Lien, the Mortgagor executes and delivers to the Master Servicer a
Mortgage on a substitute Mortgaged Property, provided that the Combined
Loan-to-Value Ratio of the Home Loan (calculated based on the Appraised
Value of the substitute Mortgaged Property) is not greater than the
Combined Loan-to-Value Ratio prior to releasing the Existing Lien;
(ii) in any case in which, simultaneously with the release of the
Existing Lien, the Mortgagor executes and delivers to the Master Servicer a
Mortgage on a substitute Mortgaged Property, provided that: (A) the
Combined Loan-to-Value Ratio of the Home Loan (calculated based on the
Appraised Value of the substitute Mortgaged Property) is not greater than
the lesser of (1) 125% and (2) 105% of the Combined Loan-to-Value Ratio
prior to releasing the Existing Lien; and (B) the Master Servicer
determines that at least two appropriate compensating factors are present
(compensating factors may include, without limitation, an increase in the
Mortgagor's monthly cash flow after debt service, the Mortgagor's
debt-to-income ratio has not increased since origination, or an increase in
the Mortgagor's credit score); or
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(iii) in any case in which, at the time of release of the Existing
Lien, the Mortgagor does not provide the Master Servicer with a Mortgage on
a substitute Mortgaged Property (any Home Loan that becomes and remains
unsecured in accordance with this subsection, an "Unsecured Loan"),
provided that: (A) the Mortgagor, in addition to being current in payment
of principal and interest on the related Home Loan, is current in payment
of principal and interest on any loan senior to the Home Loan; (B) the
Mortgagor's Credit Score, as determined by the Master Servicer at the time
of the request for release of lien, is not less than 640; (C) the Mortgagor
makes a cash contribution in reduction of the outstanding principal balance
of the Home Loan, which may include any net proceeds from the sale of the
original Mortgaged Property, of not less than 20% of the unpaid principal
balance of the Home Loan; and (D) the Mortgagor signs a reaffirmation
agreement acknowledging that they must continue to pay in accordance with
the terms of the original Mortgage Note;
(iv) If the above conditions (iii)(A) through (iii)(D) are not met,
the Master Servicer may still enter into an agreement to release the
Existing Lien, provided that: (A) the Master Servicer shall not permit the
release of an Existing Lien under this clause (iv) as to more than 200 Home
Loans in any calendar year; (B) at no time shall the aggregate Principal
Balance of Unsecured Loans exceed 5% of the then Pool Balance; (C) the
Mortgagor agrees to an automatic debit payment plan; and (D) the Master
Servicer shall provide notice to each Rating Agency that has requested
notice of such releases.
In connection with any Unsecured Loan, the Master Servicer may require the
Mortgagor to enter into an agreement under which: (i) the Loan Rate may be
increased effective until a substitute Mortgage meeting the criteria under (i)
or (ii) above is provided; or (ii) any other provision may be made which the
Master Servicer considers to be appropriate. Thereafter, the Master Servicer
shall determine in its discretion whether to accept any proposed Mortgage on any
substitute Mortgaged Property as security for the Home Loan, and the Master
Servicer may require the Mortgagor to agree to any further conditions which the
Master Servicer considers appropriate in connection with such substitution,
which may include a reduction of the Loan Rate (but not below the Loan Rate in
effect at the Closing Date). Any Home Loan as to which a Mortgage on a
substitute Mortgaged Property is provided in accordance with the preceding
sentence shall no longer be deemed to be an Unsecured Loan.
Section 3.06. Trust Estate; Related Documents. (a) When required by the
provisions of this Servicing Agreement, the Issuer or the Indenture Trustee
shall execute instruments to release property from the terms of the Trust
Agreement, Indenture or Custodial Agreement, as applicable, or convey the
Issuer's or the Indenture Trustee's interest in the same, in a manner and under
circumstances which are not inconsistent with the provisions of this Servicing
Agreement. No party relying upon an instrument executed by the Issuer or the
Indenture Trustee as provided in this Section 3.06 shall be bound to ascertain
the Issuer's or the Indenture Trustee's authority, inquire into the satisfaction
of any conditions precedent or see to the application of any monies.
(b) If from time to time the Master Servicer shall deliver to the Custodian
copies of any written assurance, assumption agreement or substitution agreement
or other similar agreement pursuant to Section 3.05, the Custodian shall check
that each of such documents
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purports to be an original executed copy (or a copy of the original executed
document if the original executed copy has been submitted for recording and has
not yet been returned) and, if so, shall file such documents, and upon receipt
of the original executed copy from the applicable recording office or receipt of
a copy thereof certified by the applicable recording office shall file such
originals or certified copies with the Related Documents. If any such documents
submitted by the Master Servicer do not meet the above qualifications, such
documents shall promptly be returned by the Custodian to the Master Servicer
pursuant to the related Custodial Agreement, with a direction to the Master
Servicer to forward the correct documentation.
(c) Upon receipt of a Request for Release from the Master Servicer, to the
effect that a Home Loan has been the subject of a final payment or a prepayment
in full and the related Home Loan has been terminated or that substantially all
Liquidation Proceeds which have been determined by the Master Servicer in its
reasonable judgment to be finally recoverable have been recovered, and upon
deposit to the Custodial Account of such final monthly payment, prepayment in
full together with accrued and unpaid interest to the date of such payment with
respect to such Home Loan or, if applicable, Net Liquidation Proceeds, the
Custodian shall promptly release the Related Documents to the Master Servicer
pursuant to the related Custodial Agreement, which the Indenture Trustee shall
execute, along with such documents as the Master Servicer or the related
Mortgagor may request to evidence satisfaction and discharge of such Home Loan,
upon request of the Master Servicer. If from time to time and as appropriate for
the servicing or foreclosure of any Home Loan, the Master Servicer requests the
Custodian to release the Related Documents and delivers to the Custodian a trust
receipt reasonably satisfactory to the Custodian and signed by a Responsible
Officer of the Master Servicer, the Custodian shall release the Related
Documents to the Master Servicer pursuant to the related Custodial Agreement. If
such Home Loans shall be liquidated and the Custodian receives a certificate
from the Master Servicer as provided above, then, upon request of the Master
Servicer, the Custodian shall release the trust receipt to the Master Servicer
pursuant to the related Custodial Agreement.
Section 3.07. Realization Upon Defaulted Home Loans; Loss Mitigation. With
respect to such of the Home Loans as come into and continue in default, the
Master Servicer shall decide whether to (i) foreclose upon the Mortgaged
Properties securing such Home Loans, (ii) write off the unpaid principal balance
of the Home Loans as bad debt, (iii) take a deed in lieu of foreclosure, (iv)
accept a short sale (a payoff of the Home Loan for an amount less than the total
amount contractually owed in order to facilitate a sale of the Mortgaged
Property by the Mortgagor) or permit a short refinancing (a payoff of the Home
Loan for an amount less than the total amount contractually owed in order to
facilitate refinancing transactions by the Mortgagor not involving a sale of the
Mortgaged Property), (v) arrange for a repayment plan, (vi) agree to a
modification in accordance with this Servicing Agreement, or (vii) take an
unsecured note, in connection with a negotiated release of the lien of the
Mortgage in order to facilitate a settlement with the Mortgagor; in each case
subject to the rights of any related first lien holder; provided that in
connection with the foregoing if the Master Servicer has actual knowledge that
any Mortgaged Property is affected by hazardous or toxic wastes or substances
and that the acquisition of such Mortgaged Property would not be commercially
reasonable, then the Master Servicer shall not cause the Issuer or the Indenture
Trustee to acquire title to such Mortgaged Property in a foreclosure or similar
proceeding. In connection with such decision, the Master Servicer shall follow
such practices (including, in the case of any default on a related senior
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mortgage loan, the advancing of funds to correct such default if deemed to be
appropriate by the Master Servicer) and procedures as it shall deem necessary or
advisable and as shall be normal and usual in its general mortgage servicing
activities and as shall be required or permitted by the Program Guide; provided
that the Master Servicer shall not be liable in any respect hereunder if the
Master Servicer is acting in connection with any such foreclosure or attempted
foreclosure which is not completed or other conversion in a manner that is
consistent with the provisions of this Servicing Agreement. The foregoing is
subject to the proviso that the Master Servicer shall not be required to expend
its own funds in connection with any foreclosure or attempted foreclosure which
is not completed or towards the correction of any default on a related senior
mortgage loan or restoration of any property unless it shall determine that such
expenditure will increase Net Liquidation Proceeds. In the event of a
determination by the Master Servicer that any such expenditure previously made
pursuant to this Section 3.07 will not be reimbursable from Net Liquidation
Proceeds, the Master Servicer shall be entitled to reimbursement of its funds so
expended pursuant to Section 3.03.
Notwithstanding any provision of this Servicing Agreement, a Home Loan may
be deemed to be finally liquidated if substantially all amounts expected by the
Master Servicer to be received in connection with the related defaulted Home
Loan have been received; provided, however, the Master Servicer shall treat any
Home Loan that is 180 days or more delinquent as having been finally liquidated.
Any subsequent collections with respect to any such Home Loan shall be deposited
to the Custodial Account. For purposes of determining the amount of any
Liquidation Proceeds or Insurance Proceeds, or other unscheduled collections,
the Master Servicer may take into account minimal amounts of additional receipts
expected to be received or any estimated additional liquidation expenses
expected to be incurred in connection with the related defaulted Home Loan.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Indenture Trustee, who shall hold the same on behalf of
the Issuer in accordance with Section 3.13 of the Indenture. Notwithstanding any
such acquisition of title and cancellation of the related Home Loan, such
Mortgaged Property shall (except as otherwise expressly provided herein) be
considered to be an outstanding Home Loan held as an asset of the Issuer until
such time as such property shall be sold.
Any proceeds from the purchase or repurchase that occurs prior to the Home
Loan becoming a Liquidated Home Loan of any Home Loan pursuant to the terms of
this Servicing Agreement (including without limitation Sections 2.03, 3.15 and
3.16) will be applied in the following order of priority: first, to the Master
Servicer or the related Subservicer, all Servicing Fees payable therefrom to the
Payment Date on which such amounts are to be deposited in the Payment Account;
second, as Interest Collections, accrued and unpaid interest on the related Home
Loan, at the Net Loan Rate to the Payment Date on which such amounts are to be
deposited in the Payment Account; and third, as Principal Collections, as a
recovery of principal on the Home Loan.
Liquidation Proceeds with respect to a Liquidated Home Loan will be applied
in the following order of priority: first, to reimburse the Master Servicer or
the related Subservicer in accordance with this Section 3.07 for any Liquidation
Expenses; second, to the Master Servicer
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or the related Subservicer, all unpaid Servicing Fees through the date of
receipt of the final Liquidation Proceeds; third, as Principal Collections, as a
recovery of principal on the Home Loan, up to an amount equal to the Loan
Balance of the related Home Loan immediately prior to the date it became a
Liquidated Home Loan; fourth, as Interest Collections, accrued and unpaid
interest on the related Home Loan at the Net Loan Rate through the date of
receipt of the final Liquidation Proceeds; and fifth, to Foreclosure Profits.
Proceeds and other recoveries from a Home Loan after it becomes a
Liquidated Home Loan will be applied in the following order of priority: first,
to reimburse the Master Servicer or the related Subservicer in accordance with
this Section 3.07 for any expenses previously unreimbursed from Liquidation
Proceeds or otherwise; second, to the Master Servicer or the related
Subservicer, all unpaid Servicing Fees payable thereto through the date of
receipt of the proceeds previously unreimbursed from Liquidation Proceeds or
otherwise; third, as Interest Collections, up to an amount equal to the sum of
(a) the Loan Balance of the related Home Loan immediately prior to the date it
became a Liquidated Home Loan, less any Net Liquidation Proceeds previously
received with respect to such Home Loan and applied as a recovery of principal,
and (b) accrued and unpaid interest on the related Home Loan at the Net Loan
Rate through the date it became a Liquidation Home Loan; and fourth, to
Foreclosure Profits.
Section 3.08. Issuer and Indenture Trustee to Cooperate. On or before each
Payment Date, the Master Servicer will notify the Indenture Trustee or the
Custodian, with a copy to the Issuer, of the termination of or the payment in
full and the termination of any Home Loan during the preceding Collection
Period. Upon receipt of payment in full, the Master Servicer is authorized to
execute, pursuant to the authorization contained in Section 3.01, if the
assignments of Mortgage have been recorded if required under the Home Loan
Purchase Agreement, an instrument of satisfaction regarding the related
Mortgage, which instrument of satisfaction shall be recorded by the Master
Servicer if required by applicable law and be delivered to the Person entitled
thereto, and to cause the removal from the registration on the MERS(R) System of
such Mortgage, if applicable. It is understood and agreed that any expenses
incurred in connection with such instrument of satisfaction or transfer shall be
reimbursed from amounts deposited in the Custodial Account. From time to time
and as appropriate for the servicing or foreclosure of any Home Loan, the
Indenture Trustee or the Custodian shall, upon request of the Master Servicer
and delivery to the Indenture Trustee or Custodian, with a copy to the Issuer,
of a Request for Release, signed by a Servicing Officer, release or cause to be
released the related Mortgage File to the Master Servicer and the Issuer or
Indenture Trustee shall promptly execute such documents, in the forms provided
by the Master Servicer, as shall be necessary for the prosecution of any such
proceedings or the taking of other servicing actions. Such trust receipt shall
obligate the Master Servicer to return the Mortgage File to the Indenture
Trustee or the Custodian (as specified in such receipt) when the need therefor
by the Master Servicer no longer exists unless the Home Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that hereinabove specified, the trust receipt shall be released to
the Master Servicer.
In order to facilitate the foreclosure of the Mortgage securing any Home
Loan that is in default following recordation of the related Assignment of
Mortgage in accordance with the provisions of the Home Loan Purchase Agreement,
the Indenture Trustee or the Issuer shall, if so requested in writing by the
Master Servicer, promptly execute an appropriate assignment in the
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form provided by the Master Servicer to assign such Home Loan for the purpose of
collection to the Master Servicer (any such assignment shall unambiguously
indicate that the assignment is for the purpose of collection only), and, upon
such assignment, such assignee for collection will thereupon bring all required
actions in its own name and otherwise enforce the terms of the Home Loan and
deposit or credit the Net Liquidation Proceeds, exclusive of Foreclosure
Profits, received with respect thereto in the Custodial Account. In the event
that all delinquent payments due under any such Home Loan are paid by the
Mortgagor and any other defaults are cured, then the assignee for collection
shall promptly reassign such Home Loan to the Indenture Trustee and return all
Related Documents to the place where the related Mortgage File was being
maintained.
In connection with the Issuer's obligation to cooperate as provided in this
Section 3.08 and all other provisions of this Servicing Agreement requiring the
Issuer to authorize or permit any actions to be taken with respect to the Home
Loans, the Indenture Trustee, as pledgee of the Home Loans and as assignee of
record of the Home Loans on behalf of the Issuer pursuant to Section 3.13 of the
Indenture, expressly agrees, on behalf of the Issuer, to take all such actions
on behalf of the Issuer and to promptly execute and return all instruments
reasonably required by the Master Servicer in connection therewith; provided
that if the Master Servicer shall request a signature of the Indenture Trustee,
on behalf of the Issuer, the Master Servicer shall deliver to the Indenture
Trustee an Officer's Certificate stating that such signature is necessary or
appropriate to enable the Master Servicer to carry out its servicing and
administrative duties under this Servicing Agreement.
Section 3.09. Servicing Compensation; Payment of Certain Expenses by Master
Servicer. The Master Servicer shall be entitled to receive the Master Servicing
Fee in accordance with Sections 3.02 and 3.03 as compensation for its services
in connection with servicing the Home Loans. Moreover, additional servicing
compensation in the form of late payment charges, investment income on amounts
in the Custodial Account or the Payment Account and other receipts not required
to be deposited in the Custodial Account as specified in Section 3.02 shall be
retained by the Master Servicer. The Master Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder
(including payment of all other fees and expenses not expressly stated hereunder
to be for the account of the Securityholders, including, without limitation, the
fees and expenses of the Owner Trustee, Indenture Trustee and any Custodian) and
shall not be entitled to reimbursement therefor.
Section 3.10. Annual Statement as to Compliance. (a) The Master Servicer
will deliver to the Depositor and the Indenture Trustee on or before the earlier
of (a) March 31 of each year or (b) with respect to any calendar year during
which the Depositor's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, the date on which the annual report on Form 10-K is required to be
filed in accordance with the Exchange Act and the rules and regulations of the
Commission, a servicer compliance certificate, signed by an authorized officer
of the Master Servicer, as described in Item 1123 of Regulation AB, to the
effect that:
(i) A review of the Master Servicer's activities during the reporting
period and of its performance under this Agreement has been made under such
officer's supervision.
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(ii) To the best of such officer's knowledge, based on such review,
the Master Servicer has fulfilled all of its obligations under this
Agreement in all materials respects throughout the reporting period or, if
there has been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such officer and the nature
and status thereof.
The Master Servicer shall use commercially reasonable efforts to obtain
from all other parties participating in the servicing function any additional
certifications required under Item 1123 of Regulation AB to the extent required
to be included in a Report on Form 10-K; provided, however, that a failure to
obtain such certifications shall not be a breach of the Master Servicer's duties
hereunder if any such party fails to deliver such a certification.
(b) The Master Servicer shall deliver to the Issuer and the Indenture
Trustee, promptly after having obtained knowledge thereof, but in no event later
than five Business Days thereafter, written notice by means of an Officer's
Certificate of any event which with the giving of notice or the lapse of time or
both, would become a Servicing Default.
Section 3.11. Annual Independent Public Accountants' Servicing Report. On
or before the earlier of (a) March 31 of each year or (b) with respect to any
calendar year during which the Depositor's annual report on Form 10-K is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, the date on which the annual report is required
to be filed in accordance with the Exchange Act and the rules and regulations of
the Commission, the Master Servicer at its expense shall cause a firm of
independent public accountants, which shall be members of the American Institute
of Certified Public Accountants, to furnish a report to the Depositor and the
Indenture Trustee the attestation required under Item 1122(b) of Regulation AB.
In rendering such statement, such firm may rely, as to matters relating to the
direct servicing of mortgage loans by Subservicers, upon comparable statements
for examinations conducted by independent public accountants substantially in
accordance with standards established by the American Institute of Certified
Public Accountants (rendered within one year of such statement) with respect to
such Subservicers.
Section 3.12. Access to Certain Documentation and Information Regarding the
Home Loans. Whenever required by statute or regulation, the Master Servicer
shall provide to any Securityholder upon reasonable request (or a regulator for
a Securityholder) or the Indenture Trustee, reasonable access to the
documentation regarding the Home Loans such access shall be afforded without
charge but only upon reasonable request and during normal business hours at the
offices of the Master Servicer. Nothing in this Section 3.12 shall derogate from
the obligation of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the Master
Servicer to provide access as provided in this Section 3.12 as a result of such
obligation shall not constitute a breach of this Section 3.12.
Section 3.13. Maintenance of Certain Servicing Insurance Policies. The
Master Servicer shall during the term of its service as servicer maintain in
force (i) a policy or policies of insurance covering errors and omissions in the
performance of its obligations as master servicer hereunder and (ii) a fidelity
bond in respect of its officers, employees or agents. Each such policy or
policies and fidelity bond shall be at least equal to the coverage that would be
required
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by FNMA or FHLMC, whichever is greater, for Persons performing servicing for
loans similar to the Home Loans purchased by such entity.
Section 3.14. Information Required by the Internal Revenue Service and
Reports of Foreclosures and Abandonments of Mortgaged Property. The Master
Servicer shall prepare and deliver all federal and state information reports
when and as required by all applicable state and federal income tax laws. In
particular, with respect to the requirement under Section 6050J of the Code to
the effect that the Master Servicer or Subservicer shall make reports of
foreclosures and abandonments of any mortgaged property for each year beginning
in 2005, the Master Servicer or Subservicer shall file reports relating to each
instance occurring during the previous calendar year in which the Master
Servicer (i) on behalf of the Issuer, acquires an interest in any Mortgaged
Property through foreclosure or other comparable conversion in full or partial
satisfaction of a Home Loan, or (ii) knows or has reason to know that any
Mortgaged Property has been abandoned. The reports from the Master Servicer or
Subservicer shall be in form and substance sufficient to meet the reporting
requirements imposed by Section 6050J and Section 6050H (reports relating to
mortgage interest received) of the Code.
Section 3.15. Optional Repurchase of Defaulted Home Loans. Notwithstanding
any provision in Section 3.07 to the contrary, the Master Servicer, at its
option and in its sole discretion, may repurchase any Home Loan delinquent in
payment for a period of 90 days or longer for a price equal to the Repurchase
Price.
Section 3.16. Limited Home Loan Repurchase Right. The Limited Repurchase
Right Holder will have the irrevocable option at any time to purchase any of the
Home Loans at the Repurchase Price, up to a maximum of five Home Loans. In the
event that this option is exercised as to any five Home Loans in the aggregate,
this option will thereupon terminate. If at any time the Limited Repurchase
Right Holder makes a payment to the Custodial Account covering the amount of the
Repurchase Price for such a Home Loan, and the Limited Repurchase Right Holder
provides to the Indenture Trustee a certification signed by a Servicing Officer
stating that the amount of such payment has been deposited in the Custodial
Account, then, at the request of the Limited Repurchase Right Holder, the
Indenture Trustee shall execute the assignment of such Home Loan, without
recourse, to the Limited Repurchase Right Holder which shall succeed to all the
Indenture Trustee's right, title and interest in and to such Home Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. The Limited Repurchase Right Holder will
thereupon own such Mortgage, and all such security and documents, free of any
further obligation to the Indenture Trustee with respect thereto.
ARTICLE IV
SERVICING CERTIFICATE
Section 4.01. Statements to Securityholders. (a) With respect to each
Payment Date, on the Business Day following the related Determination Date, the
Master Servicer shall forward to the Indenture Trustee and the Indenture Trustee
pursuant to Section 3.26 of the Indenture shall
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forward or cause to be forwarded by mail or otherwise make available
electronically at ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇ to each Certificateholder, Noteholder,
the Depositor, the Owner Trustee, the Certificate Paying Agent and each Rating
Agency, a statement setting forth the following information (the "Servicing
Certificate") as to the Notes and Certificates, to the extent applicable:
(i) the applicable Record Date, Determination Date and Payment Date;
(ii) the aggregate amount of payments received with respect to the
Home Loans, including prepayment amounts;
(iii) the Servicing Fee and Subservicing Fee payable to the Master
Servicer and the Subservicer;
(iv) the amount of any other fees or expenses paid, and the identity
of the party receiving such fees or expenses;
(v) (a) the amount of such distribution to the Securityholders of such
Class applied to reduce the Note Balance or Certificate Principal Balance
thereof, and (b) the aggregate amount included therein representing
Principal Prepayments;
(vi) the amount of such distribution to Holders of such Class of
Securities allocable to interest;
(vii) if the distribution to the Holders of such Class of Securities
is less than the full amount that would be distributable to such Holders if
there were sufficient funds available therefor, the amount of the
shortfall;
(viii) the aggregate Note Balance or Certificate Principal Balance of
each Class of Securities and [the Senior Percentage] [each of the related
Class CB and Class NB Percentages and Subordinate Class Percentage], before
and after giving effect to the amounts distributed on such Payment Date,
separately identifying any reduction thereof due to Realized Losses other
than pursuant to an actual distribution of principal;
(ix) the weighted average remaining term to maturity of the Home Loans
after giving effect to the amounts distributed on such Payment Date;
(x) the weighted average Loan Rates of the Home Loans after giving
effect to the amounts distributed on such Payment Date;
(xi) if applicable, the Special Hazard Amount, Fraud Loss Amount and
Bankruptcy Amount at the opening of business and as of the close of
business on the applicable Payment Date and a description of any change in
the calculation of those amounts;
(xii) the percentage of the outstanding principal balances of the
Senior Securities after giving effect to the distributions on that Payment
Date;
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(xiii) the number and Pool Balance of the Home Loans after giving
effect to the distribution of principal on such Payment Date and the number
of Home Loans at the beginning and end of the preceding Collection Period;
(xiv) on the basis of the most recent reports furnished to it by
Sub-Servicers, the number and aggregate principal balances of Home Loans
that are Delinquent (A) 30-59 days, (B) 60-89 days and (C) 90 or more days
and the number and aggregate principal balance of Home Loans that are in
foreclosure;
(xv) the aggregate amount of Realized Losses for such Payment Date;
(xvi) any material modifications, extensions or waivers to the terms
of the Home Loans during the Due Period or that have cumulatively become
material over time;
(xvii) any material breaches of Home Loan representations or
warranties or covenants in the Agreement.
(xviii) [the Guaranteed Payment for such Payment Date, and the
respective portions thereof allocable to principal and interest for the
Insured Securities;]
(xix) [the amount of any Certificate Insurance Payment made on such
Payment Date, the amount of any reimbursement payment made to Insurer on
such Payment Date pursuant to Section 3.05 of the Indenture and the amount
of Cumulative Insurance Payments after giving effect to any such Insurance
Payment or any such reimbursement payment to the Insurer;]
(xx) the related Subordinate Principal Payment Amount and Prepayment
Payment Percentage, if applicable;
(xxi) the number, aggregate principal balance and book value of any
REO Properties;
(xxii) the aggregate accrued interest remaining unpaid, if any, for
each Class of Securities, after giving effect to the distribution made on
such Payment Date;
(xxiii) the weighted average Pool Strip Rate for such Payment Date and
the Pass-Through Rate with respect to the Class A-V Certificates and each
Subclass, if any, thereof;
(xxiv) (a) the number and principal amount of release agreements
pursuant to Section 3.05(b)(iv) entered into during the calendar year and
since the Closing Date, stated separately, for the Home Loans and, the
aggregate outstanding principal amount of such release agreements expressed
as a percentage of the Pool Balance with information provided separately
with respect to all Unsecured Loans and (b) the number and principal amount
of Capitalization Workouts pursuant to Section 3.02(a)(v) entered into
since the Closing Date;
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(xxv) [the Pass-Through Rates on the [Floater Certificates] [and
Inverse Floater Certificates] for such Payment Date, separately identifying
LIBOR for such Payment Date;]
(xxvi) the Notional Amount with respect to each class of Interest Only
Securities and each Subclass Notional Amount;
(xxvii) [the occurrence of the Credit Support Depletion Date [and the
Accretion Termination Date;] (xxviii) [the related Senior Accelerated
Distribution Percentage applicable to such distribution;]
(xxix) [the related Senior Percentage for such Payment Date;]
(xxx) the aggregate amount of any recoveries on previously foreclosed
loans from Sellers due to a breach of a representation or warranty assigned
to the Trustee;
(xxxi) the amount, if any, to be paid by a Derivative Counterparty
under a Derivative Contract; and
(xxxii) whether or not a Servicing Trigger has occurred.
(xxxiii) [the amount of any payment made from the Reserve Fund on such
Payment Date and the balance of the Reserve Fund after giving effect to
such amounts.]
In the case of information furnished pursuant to clauses (ii) and (iii)
above, the amounts shall be expressed as an aggregate dollar amount per Note or
Certificate, as applicable, with a $1,000 denomination.
(b) In addition, with respect to each Payment Date, on the Business Day
following the related Determination Date, the Master Servicer shall forward to
the Rating Agencies the following information for each Capitalization Workout
entered into during the related Collection Period:
(i) the original Home Loan amount;
(ii) the Home Loan amount after the Capitalization Workout;
(iii) the original Monthly Payment amount;
(iv) the Monthly Payment amount after the Capitalization Workout;
(v) the Capitalized Amount as defined in Section 3.02(a)(v) herein;
(vi) the Combined Loan-to-Value Ratio prior to the Capitalization
Workout;
(vii) the Combined Loan-to-Value Ratio after the Capitalization
Workout; and
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(viii) if an appraisal was used in determining the Combined
Loan-to-Value Ratio referred to in (vii) above, the type and date of
appraisal.
The Master Servicer shall also forward to the Indenture Trustee any other
information reasonably requested by the Indenture Trustee necessary to make
distributions pursuant to Section 3.05 of the Indenture. Prior to the close of
business on the Business Day next succeeding each Determination Date, the Master
Servicer shall furnish a written statement to the Certificate Paying Agent and
the Indenture Trustee setting forth the aggregate amounts required to be
withdrawn from the Custodial Account and deposited into the Payment Account on
the Business Day preceding the related Payment Date pursuant to Section 3.03.
The determination by the Master Servicer of such amounts shall, in the absence
of obvious error, be presumptively deemed to be correct for all purposes
hereunder and the Owner Trustee and Indenture Trustee shall be protected in
relying upon the same without any independent check or verification. In
addition, upon the Issuer's written request, the Master Servicer shall promptly
furnish information reasonably requested by the Issuer that is reasonably
available to the Master Servicer to enable the Issuer to perform its federal and
state income tax reporting obligations.
Section 4.02. Tax Reporting. So long as 100% of the Certificates are owned
by the same person, then no separate federal and state income tax returns and
information returns or reports will be filed with respect to the Issuer, and the
Issuer will be treated as an entity disregarded from the 100% Certificateholder.
Section 4.03. Calculation of Adjusted Issue Price. The Master Servicer
shall calculate the Adjusted Issue Price for purposes of calculating the
Termination Price.
Section 4.04. Exchange Act Reporting.
(a) The Master Servicer shall, on behalf of the Depositor and in respect of
the Trust Estate, prepare and cause to be filed with the Commission any periodic
reports required to be filed under the provisions of the Exchange Act, and the
rules and regulations of the Commission thereunder including, without
limitation, reports on Form 10-K, Form 10-D and Form 8-K. In connection with the
preparation and filing of such periodic reports, the Indenture Trustee shall
timely provide to the Master Servicer (I) a list of Securityholders as shown on
the Register as of the end of each calendar year, (II) copies of all pleadings,
other legal process and any other documents relating to any claims, charges or
complaints involving the Indenture Trustee, as trustee hereunder, or the Trust
Estate that are received by the Indenture Trustee, (III) notice of all matters
that, to the actual knowledge of a Responsible Officer of the Indenture Trustee,
have been submitted to a vote of the Securityholders, other than those matters
that have been submitted to a vote of the Securityholders at the request of the
Depositor or the Master Servicer, and (IV) notice of any failure of the
Indenture Trustee to make any distribution to the Securityholders as required
pursuant to this Agreement. Neither the Master Servicer nor the Indenture
Trustee shall have any liability with respect to the Master Servicer's failure
to properly prepare or file such periodic reports resulting from or relating to
the Master Servicer's inability or failure to obtain any information not
resulting from the Master Servicer's own negligence or willful misconduct
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(b) Any Form 10-K filed with the Commission in connection with this Section
4.03 shall include:
(i) A certification, signed by the senior officer in charge of the
servicing functions of the Master Servicer, in the form attached as Exhibit
D hereto or such other form as may be required or permitted by the
Commission (the "Form 10-K Certification"), in compliance with Rules 13a-14
and 15d-14 under the Exchange Act and any additional directives of the
Commission.
(ii) A report regarding its assessment of compliance during the
preceding calendar year with all applicable servicing criteria set forth in
relevant Commission regulations with respect to mortgage-backed securities
transactions taken as a whole involving the Master Servicer that are backed
by the same types of assets as those backing the certificates, as well as
similar reports on assessment of compliance received from other parties
participating in the servicing function as required by relevant Commission
regulations, as described in Item 1122(a) of Regulation AB. The Master
Servicer shall obtain from all other parties participating in the servicing
function any required certifications.
(iii) With respect to each assessment report described immediately
above, a report by a registered public accounting firm that attests to, and
reports on, the assessment made by the asserting party, as set forth in
relevant Commission regulations, as described in Regulation 1122(b) of
Regulation AB and Section 3.11.
(iv) The servicer compliance certificate required to be delivered
pursuant Section 3.10.
(c) In connection with the Form 10-K Certification, the Indenture Trustee
shall provide the Master Servicer with a back-up certification substantially in
the form attached hereto as Exhibit E.
(d) This Section 4.04 may be amended in accordance with this Agreement
without the consent of the Securityholders.
ARTICLE V
PAYMENT ACCOUNT
Section 5.01. Payment Account. The Indenture Trustee shall establish and
maintain a Payment Account entitled "[_________________], as Indenture Trustee,
for the benefit of the Securityholders and the Certificate Paying Agent pursuant
to the Indenture, dated as of [________________], 200[____], between Home Loan
Trust 2005-[____] and [________________]". The Payment Account shall be an
Eligible Account. On each Payment Date, amounts on deposit in the Payment
Account will be distributed by the Indenture Trustee in accordance with Section
3.05 of the Indenture. The Indenture Trustee shall, upon written request from
the Master
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Servicer, invest or cause the institution maintaining the Payment Account to
invest the funds in the Payment Account in Permitted Investments designated in
the name of the Indenture Trustee, which shall mature not later than the
Business Day next preceding the Payment Date next following the date of such
investment (except that (i) any investment in the institution with which the
Payment Account is maintained or a fund for which such institution serves as
custodian may mature on such Payment Date and (ii) any other investment may
mature on such Payment Date if the Indenture Trustee shall advance funds on such
Payment Date to the Payment Account in the amount payable on such investment on
such Payment Date, pending receipt thereof to the extent necessary to make
distributions on the Securities) and shall not be sold or disposed of prior to
maturity. All income and gain realized from any such investment shall be for the
benefit of the Master Servicer and shall be subject to its withdrawal or order
from time to time. The amount of any losses incurred in respect of any such
investments shall be deposited in the Payment Account by the Master Servicer out
of its own funds immediately as realized.
ARTICLE VI
THE MASTER SERVICER
Section 6.01. Liability of the Master Servicer. The Master Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Master Servicer herein.
Section 6.02. Merger or Consolidation of, or Assumption of the Obligations
of, the Master Servicer. Any corporation into which the Master Servicer may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Master
Servicer shall be a party, or any corporation succeeding to the business of the
Master Servicer, shall be the successor of the Master Servicer, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
The Master Servicer may assign its rights and delegate its duties and
obligations under this Servicing Agreement; provided that the Person accepting
such assignment or delegation shall be a Person which is qualified to service
mortgage loans similar to those in the Trust Estate (meaning, mortgage loans
used for home improvement or debt consolidation), is reasonably satisfactory to
the Indenture Trustee (as pledgee of the Home Loans) and the Issuer, is willing
to service the Home Loans and executes and delivers to the Indenture Trustee and
the Issuer an agreement in form and substance reasonably satisfactory to the
Indenture Trustee and the Issuer, which contains an assumption by such Person of
the due and punctual performance and observance of each covenant and condition
to be performed or observed by the Master Servicer under this Servicing
Agreement; provided further that each Rating Agency's rating of the Securities
in effect immediately prior to such assignment and delegation will not be
qualified, reduced, or withdrawn as a result of such assignment and delegation
(as evidenced by a letter to such effect from each Rating Agency), and provided
further that the Owner Trustee receives an Opinion of Counsel to the effect that
such assignment or delegation shall not cause the Owner Trust to be treated as a
corporation for federal or state income tax purposes.
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Section 6.03. Limitation on Liability of the Master Servicer and Others.
Neither the Master Servicer nor any of the directors or officers or employees or
agents of the Master Servicer shall be under any liability to the Issuer, the
Owner Trustee, the Indenture Trustee or the Securityholders for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Servicing Agreement, provided, however, that this provision shall not protect
the Master Servicer or any such Person against any liability which would
otherwise be imposed by reason of its willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder or by reason of its
reckless disregard of its obligations and duties hereunder. The Master Servicer
and any director or officer or employee or agent of the Master Servicer may rely
in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Master
Servicer and any director or officer or employee or agent of the Master Servicer
shall be indemnified by the Issuer and held harmless against any loss, liability
or expense incurred in connection with any legal action relating to this
Servicing Agreement or the Securities, including any amount paid to the Owner
Trustee or the Indenture Trustee pursuant to Section 6.06(b), other than any
loss, liability or expense incurred by reason of its willful misfeasance, bad
faith or gross negligence in the performance of its duties hereunder or by
reason of its reckless disregard of its obligations and duties hereunder. The
Master Servicer shall not be under any obligation to appear in, prosecute or
defend any legal action which is not incidental to its duties to service the
Home Loans in accordance with this Servicing Agreement, and which in its opinion
may involve it in any expense or liability; provided, however, that the Master
Servicer may in its sole discretion undertake any such action which it may deem
necessary or desirable in respect of this Servicing Agreement, and the rights
and duties of the parties hereto and the interests of the Securityholders. In
such event, the reasonable legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Issuer, and the Master Servicer shall be entitled to be reimbursed therefor. The
Master Servicer's right to indemnity or reimbursement pursuant to this Section
6.03 shall survive any resignation or termination of the Master Servicer
pursuant to Section 6.04 or 7.01 with respect to any losses, expenses, costs or
liabilities arising prior to such resignation or termination (or arising from
events that occurred prior to such resignation or termination).
Section 6.04. Master Servicer Not to Resign. Subject to the provisions of
Section 6.02, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that the performance
of its obligations or duties hereunder are no longer permissible under
applicable law or are in material conflict by reason of applicable law with any
other activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Master Servicer so causing such a conflict being of a type and
nature carried on by the Master Servicer or its subsidiaries or Affiliates at
the date of this Servicing Agreement or (ii) upon satisfaction of the following
conditions: (a) the Master Servicer shall have proposed a successor servicer to
the Issuer and the Indenture Trustee in writing and such proposed successor
servicer is reasonably acceptable to the Issuer and the Indenture Trustee; and
(b) each Rating Agency shall have delivered a letter to the Issuer and the
Indenture Trustee prior to the appointment of the successor servicer stating
that the proposed appointment of such successor servicer as Master Servicer
hereunder will not result in the reduction or withdrawal of the then current
rating of the Securities, provided, however, that no such resignation by the
Master Servicer shall become effective until such successor servicer or, in the
case of (i) above, the Indenture Trustee, as pledgee of the Home Loans, shall
have assumed the Master Servicer's responsibilities and
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obligations hereunder or the Indenture Trustee, as pledgee of the Home Loans,
shall have designated a successor servicer in accordance with Section 7.02. Any
such resignation shall not relieve the Master Servicer of responsibility for any
of the obligations specified in Sections 7.01 and 7.02 as obligations that
survive the resignation or termination of the Master Servicer. Any such
determination permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Indenture
Trustee.
Section 6.05. Delegation of Duties. In the ordinary course of business, the
Master Servicer at any time may delegate any of its duties hereunder to any
Person, including any of its Affiliates, who agrees to conduct such duties in
accordance with standards comparable to those with which the Master Servicer
complies pursuant to Section 3.01. Such delegation shall not relieve the Master
Servicer of its liabilities and responsibilities with respect to such duties and
shall not constitute a resignation within the meaning of Section 6.04.
Section 6.06. Master Servicer to Pay Indenture Trustee's and Owner
Trustee's Fees and Expenses; Indemnification. (a) The Master Servicer covenants
and agrees to pay to the Owner Trustee, the Indenture Trustee and any co-trustee
of the Indenture Trustee or the Owner Trustee from time to time, and the Owner
Trustee, the Indenture Trustee and any such co-trustee shall be entitled to,
reasonable compensation (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) for all services
rendered by each of them in the execution of the trusts created under the Trust
Agreement and the Indenture and in the exercise and performance of any of the
powers and duties under the Trust Agreement or the Indenture, as the case may
be, of the Owner Trustee, the Indenture Trustee and any co-trustee, and the
Master Servicer will pay or reimburse the Indenture Trustee and any co-trustee
upon request for all reasonable expenses, disbursements and advances incurred or
made by the Indenture Trustee or any co-trustee in accordance with any of the
provisions of this Servicing Agreement except any such expense, disbursement or
advance as may arise from its negligence, willful misfeasance or bad faith.
(b) The Master Servicer agrees to indemnify the Indenture Trustee and the
Owner Trustee for, and to hold the Indenture Trustee and the Owner Trustee, as
the case may be, harmless against, any loss, liability or expense incurred
without negligence, bad faith or willful misconduct on the part of the Indenture
Trustee or the Owner Trustee, as the case may be, arising out of, or in
connection with, the acceptance and administration of the Issuer and the assets
thereof, including the costs and expenses (including reasonable legal fees and
expenses) of defending the Indenture Trustee or the Owner Trustee, as the case
may be, against any claim in connection with the exercise or performance of any
of its powers or duties under any Basic Document (including, without limitation,
any claim against the Indenture Trustee or the Owner Trustee alleging a
violation of the Homeownership and Equity Protection Act of 1994, as amended),
provided that:
(i) with respect to any such claim, the Indenture Trustee or Owner
Trustee, as the case may be, shall have given the Master Servicer written
notice thereof promptly after the Indenture Trustee or Owner Trustee, as
the case may be, shall have actual knowledge thereof;
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(ii) while maintaining control over its own defense, the Issuer, the
Indenture Trustee or Owner Trustee, as the case may be, shall cooperate and
consult fully with the Master Servicer in preparing such defense; and
(iii) notwithstanding anything in this Servicing Agreement to the
contrary, the Master Servicer shall not be liable for settlement of any
claim by the Indenture Trustee or the Owner Trustee, as the case may be,
entered into without the prior consent of the Master Servicer.
No termination of this Servicing Agreement shall affect the obligations created
by this Section 6.06 of the Master Servicer to indemnify the Indenture Trustee
and the Owner Trustee under the conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the Master
Servicer in this Section 6.06(b) shall not pertain to any loss, liability or
expense of the Indenture Trustee or the Owner Trustee, including the costs and
expenses of defending itself against any claim, incurred in connection with any
actions taken by the Indenture Trustee or the Owner Trustee at the direction of
the Noteholders or Certificateholders, as the case may be, pursuant to the terms
of this Servicing Agreement.
ARTICLE VII
DEFAULT
Section 7.01. Servicing Default. If any one of the following events
("Servicing Default") shall occur and be continuing:
(i) Any failure by the Master Servicer to deposit in the Custodial
Account or to remit to the Paying Agent for deposit in the Payment Account
any deposit required to be made under the terms of this Servicing Agreement
which continues unremedied for a period of five Business Days after the
date upon which written notice of such failure shall have been given to the
Master Servicer by the Issuer or the Indenture Trustee; or
(ii) Failure on the part of the Master Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Master Servicer set forth in the Securities or in this Servicing Agreement,
which failure, in each case, materially and adversely affects the interests
of Securityholders and which continues unremedied for a period of 45 days
after the date on which written notice of such failure, requiring the same
to be remedied, and stating that such notice is a "Notice of Default"
hereunder, shall have been given to the Master Servicer by the Issuer or
the Indenture Trustee; or
(iii) The entry against the Master Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership, readjustment
of debt, marshalling of assets and liabilities or similar
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proceedings, or for the winding up or liquidation of its affairs, and the
continuance of any such decree or order undischarged or unstayed and in
effect for a period of 60 consecutive days; or
(iv) The Master Servicer shall voluntarily go into liquidation,
consent to the appointment of a conservator, receiver, liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Master
Servicer or of or relating to all or substantially all of its property, or
a decree or order of a court, agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator,
receiver, liquidator or similar person in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have remained in
force undischarged, unbonded or unstayed for a period of 60 days; or the
Master Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations.
Then, and in every such case, so long as a Servicing Default shall not have been
remedied by the Master Servicer, either the Issuer or the Indenture Trustee, by
notice then given in writing to the Master Servicer may terminate all of the
rights and obligations of the Master Servicer as servicer under this Servicing
Agreement other than its right to receive servicing compensation and expenses
for servicing the Home Loans hereunder during any period prior to the date of
such termination and the Issuer or the Indenture Trustee. Any such notice to the
Master Servicer shall also be given to each Rating Agency and the Issuer. On or
after the receipt by the Master Servicer of such written notice, all authority
and power of the Master Servicer under this Servicing Agreement, whether with
respect to the Securities or the Home Loans or otherwise, shall pass to and be
vested in the Indenture Trustee as successor Master Servicer, pursuant to and
under this Section 7.01; and, without limitation, the Indenture Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of each Home Loan and related documents,
or otherwise. The Master Servicer agrees to cooperate with the Indenture Trustee
in effecting the termination of the responsibilities and rights of the Master
Servicer hereunder, including, without limitation, the transfer to the Indenture
Trustee for the administration by it of all cash amounts relating to the Home
Loans that shall at the time be held by the Master Servicer and to be deposited
by it in the Custodial Account, or that have been deposited by the Master
Servicer in the Custodial Account or thereafter received by the Master Servicer
with respect to the Home Loans. All reasonable costs and expenses (including,
but not limited to, attorneys' fees) incurred in connection with amending this
Servicing Agreement to reflect such succession as Master Servicer pursuant to
this Section 7.01 shall be paid by the predecessor Master Servicer (or if the
predecessor Master Servicer is the Indenture Trustee, the initial Master
Servicer) upon presentation of reasonable documentation of such costs and
expenses.
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Notwithstanding any termination of the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to receive, out of any late
collection of a payment on a Home Loan which was due prior to the notice
terminating the Master Servicer's rights and obligations hereunder and received
after such notice, that portion to which the Master Servicer would have been
entitled pursuant to Sections 3.03 and 3.09 as well as its Master Servicing Fee
in respect thereof, and any other amounts payable to the Master Servicer
hereunder the entitlement to which arose prior to the termination of its
activities hereunder.
Notwithstanding the foregoing, a delay in or failure of performance under
Section 7.01(i) or under Section 7.01(ii) after the applicable grace periods
specified in such Sections, shall not constitute a Servicing Default if such
delay or failure could not be prevented by the exercise of reasonable diligence
by the Master Servicer and such delay or failure was caused by an act of God or
the public enemy, acts of declared or undeclared war, public disorder, rebellion
or sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes,
floods or similar causes. The preceding sentence shall not relieve the Master
Servicer from using reasonable efforts to perform its respective obligations in
a timely manner in accordance with the terms of this Servicing Agreement and the
Master Servicer shall provide the Indenture Trustee and the Securityholders with
notice of such failure or delay by it, together with a description of its
efforts to so perform its obligations. The Master Servicer shall immediately
notify the Indenture Trustee and the Issuer in writing of any Servicing Default.
Section 7.02. Indenture Trustee to Act; Appointment of Successor. (a) On
and after the time the Master Servicer receives a notice of termination pursuant
to Section 7.01 or sends a notice pursuant to Section 6.04, the Indenture
Trustee shall be the successor in all respects to the Master Servicer in its
capacity as servicer under this Servicing Agreement and the transactions set
forth or provided for herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof. Nothing in this Servicing Agreement or in the Trust
Agreement shall be construed to permit or require the Indenture Trustee to (i)
succeed to the responsibilities, duties and liabilities of the initial Master
Servicer in its capacity as Seller under the Home Loan Purchase Agreement, (ii)
be responsible or accountable for any act or omission of the Master Servicer
prior to the issuance of a notice of termination hereunder, (iii) require or
obligate the Indenture Trustee, in its capacity as successor Master Servicer, to
purchase, repurchase or substitute any Home Loan, (iv) fund any losses on any
Permitted Investment directed by any other Master Servicer or (v) be responsible
for the representations and warranties of the Master Servicer. As compensation
therefor, the Indenture Trustee shall be entitled to such compensation as the
Master Servicer would have been entitled to hereunder if no such notice of
termination had been given. Notwithstanding the above, (i) if the Indenture
Trustee is unwilling to act as successor Master Servicer, or (ii) if the
Indenture Trustee is legally unable so to act, the Indenture Trustee may (in the
situation described in clause (i)) or shall (in the situation described in
clause (ii)) appoint or petition a court of competent jurisdiction to appoint
any established housing and home finance institution, bank or other mortgage
loan or home equity loan servicer having a net worth of not less than
$10,000,000 as the successor to the Master Servicer hereunder in the assumption
of all or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder; provided that the appointment of any such successor Master
Servicer will not result in the qualification, reduction or withdrawal of the
ratings assigned to the Securities by the Rating Agencies. Pending appointment
of a successor to the Master Servicer hereunder, unless the Indenture
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Trustee is prohibited by law from so acting, the Indenture Trustee shall act in
such capacity as herein above provided. In connection with such appointment and
assumption, the successor Master Servicer shall be entitled to receive
compensation out of payments on Home Loans in an amount equal to the
compensation which the Master Servicer would otherwise have received pursuant to
Section 3.09 (or such lesser compensation as the Indenture Trustee and such
successor shall agree). The appointment of a successor Master Servicer shall not
affect any liability of the predecessor Master Servicer which may have arisen
under this Servicing Agreement prior to its termination as Master Servicer
(including, without limitation, the obligation to purchase Home Loans pursuant
to Section 3.01, to pay any deductible under an insurance policy pursuant to
Section 3.04 or to indemnify the Indenture Trustee pursuant to Section 6.06),
nor shall any successor Master Servicer be liable for any acts or omissions of
the predecessor Master Servicer or for any breach by such Master Servicer of any
of its representations or warranties contained herein or in any related document
or agreement. The Indenture Trustee and such successor shall take such action,
consistent with this Servicing Agreement, as shall be necessary to effectuate
any such succession.
(b) Any successor, including the Indenture Trustee, to the Master Servicer
as servicer shall during the term of its service as servicer (i) continue to
service and administer the Home Loans for the benefit of the Securityholders,
and (ii) maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Master Servicer hereunder and
a fidelity bond in respect of its officers, employees and agents to the same
extent as the Master Servicer is so required pursuant to Section 3.13.
(c) Any successor Master Servicer, including the Indenture Trustee, shall
not be deemed in default or to have breached its duties hereunder if the
predecessor Master Servicer shall fail to deliver any required deposit to the
Custodial Account or otherwise cooperate with any required servicing transfer or
succession hereunder.
(d) In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Indenture Trustee if the Indenture Trustee is acting as successor Master
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 Home Loans that are
registered with MERS, in which case the predecessor Master Servicer shall
cooperate with the successor Master Servicer in causing MERS to revise its
records to reflect the transfer of servicing to the successor Master Servicer as
necessary under MERS' rules and regulations, or (ii) the predecessor Master
Servicer shall cooperate with the successor Master Servicer in causing MERS to
execute and deliver an assignment of Mortgage in recordable form to transfer the
Mortgage from MERS to the Indenture Trustee and to execute and deliver such
other notices, documents and other instruments as may be necessary or desirable
to effect a transfer of such Home Loan or servicing of such Home Loan on the
MERS System to the successor Master Servicer. The predecessor Master Servicer
shall file or cause to be filed any such assignment in the appropriate recording
office. The predecessor Master Servicer shall bear any and all fees of MERS,
costs of preparing any assignments of Mortgage, and fees and costs of filing any
assignments of Mortgage that may be required under this subsection (d). The
successor Master Servicer shall cause such assignment to be delivered to the
Indenture Trustee or the Custodian
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promptly upon receipt of the original with evidence of recording thereon or a
copy certified by the public recording office in which such assignment was
recorded.
Section 7.03. Notification to Securityholders. Upon any termination of or
appointment of a successor to the Master Servicer pursuant to this Article VII
or Section 6.04, the Indenture Trustee shall give prompt written notice thereof
to the Securityholders, the Issuer and each Rating Agency.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. Amendment. This Servicing Agreement may be amended from time
to time by the parties hereto, provided that any amendment be accompanied by a
letter from the Rating Agencies that the amendment will not result in the
downgrading or withdrawal of the rating then assigned to the Securities and the
consent of the Indenture Trustee. Promptly after the execution by the Master
Servicer, the Issuer and the Indenture Trustee of any amendment of this
Servicing Agreement pursuant to this Section 8.01, the Indenture Trustee shall
provide the Custodian with written copies thereof. Any failure of the Indenture
Trustee to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment.
Section 8.02. GOVERNING LAW. THIS SERVICING AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICTS OF LAW PROVISIONS (EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATION LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 8.03. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by certified mail, return receipt requested, to (a) in
the case of the Master Servicer, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Addition Director - Bond Administration, (b)
in the case of ▇▇▇▇▇'▇, Home Mortgage Loan Monitoring Group, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (c) in the case of Standard & Poor's, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ - 41st Floor, New York, New York 10041, Attention: Residential
Mortgage Surveillance Group, (d) in the case of the Owner Trustee, Wilmington
Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Administration, (e) in the case
of the Issuer, to Home Loan Trust 2005-[_____], c/o Owner Trustee, Wilmington
Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Administration, (f) in the case
of the Indenture Trustee, [_______________], 4 New York Plaza, 6th Floor, New
York, New York 10004, Attention: Worldwide Securities Services/Global Debt Home
Loan Trust 2005-[_____] and (g) in the case of the Underwriters c/o the
Representative, at Residential Funding Securities Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General
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Counsel; or, as to each party, at such other address as shall be designated by
such party in a written notice to each other party. Any notice required or
permitted to be mailed to a Securityholder shall be given by first class mail,
postage prepaid, at the address of such Securityholder as shown in the Register.
Any notice so mailed within the time prescribed in this Servicing Agreement
shall be conclusively presumed to have been duly given, whether or not the
Securityholder receives such notice. Any notice or other document required to be
delivered or mailed by the Indenture Trustee to any Rating Agency shall be given
on a reasonable efforts basis and only as a matter of courtesy and accommodation
and the Indenture Trustee shall have no liability for failure to delivery such
notice or document to any Rating Agency.
Section 8.04. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Servicing Agreement shall be
for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Servicing Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Servicing
Agreement or of the Securities or the rights of the Securityholders thereof.
Section 8.05. Third-Party Beneficiaries. This Servicing Agreement shall
inure to the benefit of and be binding upon the parties hereto, the
Securityholders, the Owner Trustee and their respective successors and permitted
assigns. Except as otherwise provided in this Servicing Agreement, no other
Person shall have any right or obligation hereunder.
Section 8.06. Counterparts. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 8.07. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 8.08. Termination Upon Purchase by the Master Servicer or
Liquidation of All Home Loans; Partial Redemption. (a) The respective
obligations and responsibilities of the Master Servicer, the Issuer and the
Indenture Trustee created hereby shall terminate upon the last action required
to be taken by the Issuer pursuant to the Trust Agreement and by the Indenture
Trustee pursuant to the Indenture following the earlier of:
(i) the date on or before which the Indenture or Trust Agreement is
terminated, or
(ii) the purchase by the Master Servicer from the Issuer of all Home
Loans and all property acquired in respect of any Home Loan at a price
equal to the Termination Price.
The right of the Master Servicer to purchase the assets of the Issuer pursuant
to clause (ii) above on any Payment Date is conditioned upon the Pool Balance
(after applying payments received in the related Collection Period) as of such
Payment Date being less than ten percent of the aggregate of the Cut-off Date
Loan Balances of the Home Loans. If such right is exercised by
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the Master Servicer, the Master Servicer shall deposit the Termination Price
calculated pursuant to clause (ii) above with the Indenture Trustee pursuant to
Section 4.10 of the Indenture and, upon the receipt of such deposit, the
Indenture Trustee or Custodian shall release to the Master Servicer, the files
pertaining to the Home Loans being purchased.
(b) The Master Servicer, at its expense, shall prepare and deliver to the
Indenture Trustee for execution, at the time the Home Loans are to be released
to the Master Servicer, appropriate documents assigning each such Home Loan from
the Indenture Trustee or the Issuer to the Master Servicer or the appropriate
party.
(c) The Master Servicer shall give the Indenture Trustee not less than
seven Business Days' prior written notice of the Payment Date on which the
Master Servicer anticipates that the final distribution will be made to
Noteholders. Notice of any termination, specifying the anticipated Final
Scheduled Payment Date or other Payment Date (which shall be a date that would
otherwise be a Payment Date) upon which the Noteholders may surrender their
Notes to the Indenture Trustee (if so required by the terms hereof) for payment
of the final distribution and cancellation, shall be given promptly by the
Master Servicer to the Indenture Trustee specifying:
(i) the anticipated Final Scheduled Payment Date or other Payment Date
upon which final payment of the Notes is anticipated to be made upon
presentation and surrender of Notes at the office or agency of the
Indenture Trustee therein designated; and
(ii) the amount of any such final payment, if known.
Section 8.09. Certain Matters Affecting the Indenture Trustee. For all
purposes of this Servicing Agreement, in the performance of any of its duties or
in the exercise of any of its powers hereunder, the Indenture Trustee shall be
subject to and entitled to the benefits of Article VI of the Indenture.
Section 8.10. Owner Trustee Not Liable for Related Documents. The recitals
contained herein shall be taken as the statements of the Depositor, and the
Owner Trustee assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or sufficiency of this
Servicing Agreement, of any Basic Document or of the Certificates (other than
the signatures of the Owner Trustee on the Certificates) or the Notes, or of any
Related Documents, or of MERS or the MERS(R) System. The Owner Trustee shall at
no time have any responsibility or liability with respect to the sufficiency of
the Owner Trust Estate or its ability to generate the payments to be distributed
to Certificateholders under the Trust Agreement or the Noteholders under the
Indenture, including, the compliance by the Depositor or the Seller with any
warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation, or any action
of the Certificate Paying Agent, the Certificate Registrar or the Indenture
Trustee taken in the name of the Owner Trustee.
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ARTICLE IX
COMPLIANCE WITH REGULATION AB
Section 9.01. Intent of the Parties; Reasonableness.
The Depositor, the Indenture Trustee and the Master Servicer acknowledge
and agree that the purpose of this Article XII is to facilitate compliance by
the Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. The Depositor shall not exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
under the Securities Act and the Exchange Act. Each of the Master Servicer and
the Indenture Trustee acknowledges that interpretations of the requirements of
Regulation AB may change over time, whether due to interpretive guidance
provided by the Commission or its staff, consensus among participants in the
mortgage-backed securities markets, advice of counsel, or otherwise, and agrees
to comply with requests made by the Depositor in good faith for delivery of
information under these provisions on the basis of evolving interpretations of
Regulation AB. Each of the Master Servicer and the Indenture Trustee shall
cooperate fully with the Depositor to deliver to the Depositor (including any of
its assignees or designees), any and all statements, reports, certifications,
records and any other information necessary in the good faith determination of
the Depositor to permit the Depositor to comply with the provisions of
Regulation AB, together with such disclosures relating to the Master Servicer,
the Indenture Trustee and the Home Loans, or the servicing of the Home Loans,
reasonably believed by the Depositor to be necessary in order to effect such
compliance.
Section 9.02. Additional Representations and Warranties of the Indenture
Trustee.
(a) The Indenture Trustee shall be deemed to represent to the Depositor as
of the date on which information is first provided to the Depositor under
Section 9.03 that, except as disclosed in writing to the Depositor prior to such
date: (i) it is not aware and has not received notice that any default, early
amortization or other performance triggering event has occurred as to any other
Securitization Transaction due to any act or failure to act of the Indenture
Trustee; (ii) it has not been terminated as trustee in a securitization of home
loans; (iii) there are no aspects of its financial condition that could have a
material adverse effect on the performance by it of its trustee obligations
under this Agreement or any other Securitization Transaction; (iv) there are no
material legal or governmental proceedings pending (or known to be contemplated)
against it; and (v) there are no affiliations, relationships or transactions
relating to the Indenture Trustee with respect to the Depositor or any sponsor,
issuing entity, servicer, trustee, originator, significant obligor, enhancement
or support provider or other material transaction party (as such terms are used
in Regulation AB) relating to the Securitization Transaction contemplated by the
Agreement (each, a "Transaction Party").
(b) If so requested by the Depositor on any date following the date on
which information is first provided to the Depositor under Section 9.03, the
Indenture Trustee shall, within five Business Days following such request,
confirm in writing the accuracy of the representations and warranties set forth
in paragraph (a) of this Section or, if any such
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representation and warranty is not accurate as of the date of such request or
such confirmation, provide reasonably adequate disclosure of the pertinent
facts, in writing, to the requesting party.
Section 9.03. Information to Be Provided by the Indenture Trustee.
(a) If so requested by the Depositor for the purpose of satisfying its
reporting obligation under the Exchange Act with respect to any class of
Securities, the Indenture Trustee shall (i) notify the Depositor in writing of
(A) any material litigation or governmental proceedings pending against the
Indenture Trustee and (B) any affiliations or relationships that develop
following the Closing Date between the Indenture Trustee and any Transaction
Party, and (ii) provide to the Depositor a written description of such
proceedings, affiliations or relationships.
(b) In addition to such information as the Indenture Trustee is obligated
to provide pursuant to other provisions of this Agreement, if so requested by
the Depositor, the Indenture Trustee shall provide such information reasonably
available to the Indenture Trustee regarding the performance or servicing of the
Home Loans as is reasonably required to facilitate preparation of distribution
reports in accordance with Item 1121 of Regulation AB.
Section 9.04. Report on Assessment of Compliance and Attestation.
On or before March 15 of each calendar year, the Indenture Trustee shall:
(a) deliver to the Depositor a report (in form and substance reasonably
satisfactory to the Depositor) regarding the Indenture Trustee's assessment of
compliance with the Servicing Criteria during the immediately preceding calendar
year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122 of Regulation AB. Such report shall be addressed to the Depositor and
signed by an authorized officer of the Indenture Trustee, and shall address each
of the Servicing Criteria specified on a certification substantially in the form
of Exhibit F hereto; and
(b) deliver to the Depositor a report of a registered public accounting
firm reasonably acceptable to the Depositor that attests to, and reports on, the
assessment of compliance made by the Indenture Trustee and delivered pursuant to
the preceding paragraph. Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act.
Section 9.05. Indemnification; Remedies.
(a) The Indenture Trustee shall indemnify the Depositor, each affiliate of
the Depositor, the Master Servicer and each broker dealer acting as underwriter,
placement agent or initial purchaser of the Securities or each Person who
controls any of such parties (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act); and the respective present and former
directors, officers, employees and agents of each of the foregoing, and shall
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain arising out of
or based upon:
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(i) (A) any untrue statement of a material fact contained or alleged
to be contained in any information, report, certification, accountants'
letter or other material provided under this Article XII by or on behalf of
the Indenture Trustee (collectively, the "Indenture Trustee Information"),
or (B) the omission or alleged omission to state in the Indenture Trustee
Information a material fact required to be stated in the Indenture Trustee
Information or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this paragraph shall
be construed solely by reference to the Indenture Trustee Information and
not to any other information communicated in connection with a sale or
purchase of securities, without regard to whether the Indenture Trustee
Information or any portion thereof is presented together with or separately
from such other information;
(ii) any failure by the Indenture Trustee to deliver any information,
report, certification, accountants' letter or other material when and as
required under this Article IX; or
(iii) any breach by the Indenture Trustee of a representation or
warranty set forth in Section 9.02(a) or in a writing furnished pursuant to
Section 9.02(b).
(b) In the case of any failure of performance described in clause (ii) of
this Section, the Indenture Trustee shall promptly reimburse the Depositor for
all costs reasonably incurred by each such party in order to obtain the
information, report, certification, accountants' letter or other material not
delivered as required by the Indenture Trustee.
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IN WITNESS WHEREOF, the Master Servicer, the Indenture Trustee and the
Issuer have caused this Servicing Agreement to be duly executed by their
respective officers or representatives all as of the day and year first above
written.
RESIDENTIAL FUNDING CORPORATION,
as Master Servicer
By:
---------------------------------------
Name:
Title:
HOME LOAN TRUST 2005-[______]
By: [_________________________], not in its
individual capacity but solely as Owner
Trustee
By:
---------------------------------------
Name:
Title:
[____________________________],
as Indenture Trustee
By:
---------------------------------------
Name:
Title:
Acknowledged and Agreed
solely with respect to Article IX:
RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.
By:
------------------------------
Name:
Title:
S-1
SERVICING AGREEMENT
EXHIBIT A
HOME LOAN SCHEDULE
Exh. A-1
SERVICING AGREEMENT
EXHIBIT B
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PREMISES:
That [__], as Indenture Trustee (the "Trustee"), under the Indenture (the
"Indenture") among ________________________________________ and the Indenture
Trustee, a national banking association organized and existing under the laws of
the State of New York, and having its principal office located at 4 New York
Plaza, in the City of New York in the State of New York, hath made, constituted
and appointed, and does by these presents make, constitute and appoint
Residential Funding Corporation, a corporation organized and existing under the
laws of the State of Delaware, its true and lawful Attorney-in-Fact, with full
power and authority to sign, execute, acknowledge, deliver, file for record, and
record any instrument on its behalf and to perform such other act or acts as may
be customarily and reasonably necessary and appropriate to effectuate the
following enumerated transactions in respect of any of the mortgages or deeds of
trust (the "Mortgages" and the "Deeds of Trust", respectively) creating a trust
or second lien or an estate in fee simple interest in real property securing a
Home Loan and promissory notes secured thereby (the "Mortgage Notes") for which
the undersigned is acting as Indenture Trustee for various Securityholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of Endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which Residential Funding Corporation is
acting as master servicer pursuant to a Servicing Agreement, dated as of [__],
200[__] (the "Servicing Agreement"). This appointment shall apply only to
transactions which the Trustee is authorized to enter into under the Indenture,
but in no event shall apply to any transactions other than the following
enumerated transactions only:
1. The modification or re-recording of a Mortgage or Deed of Trust, where
said modification or re-recording is for the purpose of correcting the
Mortgage or Deed of Trust to conform same to the original intent of
the parties thereto or to correct title errors discovered after such
title insurance was issued and said modification or re-recording, in
either instance, does not adversely affect the lien of the Mortgage or
Deed of Trust as insured.
2. The subordination of the lien of a Mortgage or Deed of Trust to an
easement in favor of a public utility company or a government agency
or unit with powers of eminent domain; this section shall include,
without limitation, the execution of partial satisfactions/releases,
partial reconveyances or the execution of requests to trustees to
accomplish same.
3. With respect to a Mortgage or Deed of Trust, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of judicial
or non-judicial foreclosure or termination, cancellation or rescission
of any such foreclosure, including, without limitation, any and all of
the following acts:
a. The substitution of trustee(s) serving under a Deed of Trust, in
accordance with state law and the Deed of Trust;
Exh. B-1
SERVICING AGREEMENT
b. Statements of breach or non-performance;
c. Notices of default;
d. Cancellations/rescissions of notices of default and/or notices of
sale;
e. The taking of a deed in lieu of foreclosure; and
f. Such other documents and actions as may be necessary under the
terms of the Mortgage, Deed of Trust or state law to
expeditiously complete said transactions.
4. The conveyance of the properties to the mortgage insurer, or the
closing of the title to the property to be acquired as real estate
owned, or conveyance of title to real estate owned.
5. The completion of loan assumption agreements.
6. The full satisfaction/release of a Mortgage or Deed of Trust or full
reconveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage
Note.
7. The assignment of any Mortgage or Deed of Trust and the related
Mortgage Note, in connection with the repurchase of the Home Loan
secured and evidenced thereby pursuant to the requirements of a
Residential Funding Corporation Seller Contract, or the removal of any
Mortgage from the MERS(R) System or the re-recording of such Mortgage
in the name of MERS.
8. The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the
refinancing thereof, including, without limitation, the endorsement of
the related Mortgage Note.
9. The modification or re-recording of a Mortgage or Deed of Trust, where
said modification or re-recording is for the purpose of any
modification pursuant to Section 3.01 of the Servicing Agreement.
10. The subordination of the lien of a Mortgage or Deed of Trust, where
said subordination is in connection with any modification pursuant to
Section 3.01 of the Servicing Agreement, and the execution of partial
satisfactions/releases in connection with such same Section 3.01.
The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof.
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in Appendix A to the Indenture.
Exh. B-2
SERVICING AGREEMENT
Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of Attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect has not been
revoked unless an instrument of revocation has been made in writing by the
undersigned.
[______________], not in its individual
capacity, but solely as Indenture
Trustee under the Servicing Agreement
and the Indenture
-------------------------------------- ---------------------------------------
Name: Name:
-------------------------------- ---------------------------------
Title: Title:
------------------------------- --------------------------------
Exh. B-3
SERVICING AGREEMENT
STATE OF )
SS.
COUNTY OF )
On this __ day of _______________, 200[_], before me the undersigned,
Notary Public of said State, personally appeared _______________________________
personally known to me to be duly authorized officers of [__] that executed the
within instrument and personally known to me to be the persons who executed the
within instrument on behalf of [__] therein named, and acknowledged to me such
[__] executed the within instrument pursuant to its by-laws.
WITNESS my hand and official seal.
---------------------------------------
Notary Public in and for the
State of ___________________
After recording, please mail to:
______________________________________
______________________________________
______________________________________
Attn: ________________________________
Exh. B-4
SERVICING AGREEMENT
EXHIBIT C
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with your administration of the Home Loans, we request the release
of the Mortgage File described below.
Servicing Agreement Dated:
Series #:
Account #:
Pool #:
Loan #:
Borrower Name(s):
Reason for Document Request: (circle one) Home Loan Prepaid in Full
Home Loan Repurchased
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Servicing Agreement."
-------------------------------------
Residential Funding Corporation
Authorized Signature
******************************************************************************
TO CUSTODIAN/INDENTURE TRUSTEE: Please acknowledge this request, and check off
documents being enclosed with a copy of this form. You should retain this form
for your files in accordance with the terms of the Servicing Agreement.
Enclosed Documents: [_] Promissory Note
[_] Mortgage or Deed of Trust
[_] Assignment(s) of Mortgage or
Deed of Trust
[_] Title Insurance Policy
[_] Other: ___________________________
----------------------------
Name
----------------------------
Title
----------------------------
Date
Exh. C-1
SERVICING AGREEMENT
EXHIBIT D
FORM OF FORM 10-K CERTIFICATE
I, [identify the certifying individual], certify that:
1. I have reviewed this report on Form 10-K and all reports on Form 10-D
required to be filed in respect of the period covered by this report on Form
10-K of the trust (the Exchange Act periodic reports) pursuant to the Servicing
Agreement dated __________ (the "Agreement") between Residential Funding
Corporation (the "Master Servicer") and [Name of Trustee] (the "Trustee") and
acknowledged and agreed to by Residential Funding Mortgage Securities II, Inc.
2. Based on my knowledge, Exchange Act periodic reports, taken as a whole,
do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;
4. I am responsible for reviewing the activities performed by the Master
Servicer and based on my knowledge and the compliance review conducted in
preparing the servicer compliance statement required in this report under Item
1123 of Regulation AB and except as disclosed in the Exchange Act periodic
reports, the Master Servicer has fulfilled its obligations under the Agreement;
and
5. All of the reports on assessment of compliance with servicing criteria
for asset-backed securities and their related attestation reports on assessment
of compliance with servicing criteria for asset-backed securities required to be
included in this report in accordance with Item 1122 of Regulation AB and
Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this
report, except as otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this report on
Form 10-K.
In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: [the Trustee].
Date:____________
_________________________________*
[Signature]
Name:
Title:
* -to be signed by the senior officer in charge of the servicing functions of
the Master Servicer
Exh. D-1
SERVICING AGREEMENT
EXHIBIT E
[FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE]
The undersigned, a Responsible Officer of [_________] (the "Indenture
Trustee") certifies that:
(a) The Indenture Trustee has performed all of the duties specifically
required to be performed by it pursuant to the provisions of the Servicing
Agreement dated as of [_________], 20[__] (the "Agreement") by and among
[__________], as depositor, Residential Funding Corporation, as Master
Servicer, and the Indenture Trustee in accordance with the standards set
forth therein.
(b) Based on my knowledge, the list of Securityholders as shown on the
Register as of the end of each calendar year that is provided by the
Indenture Trustee pursuant to the Agreement is accurate as of the last day
of the 20[__] calendar year.
Capitalized terms used and not defined herein shall have the meanings given such
terms in the Agreement.
IN WITNESS WHEREOF, I have duly executed this certificate as of _________,
20__.]
Name: _________________________________
Title: ________________________________
Exh. E-1
SERVICING AGREEMENT
EXHIBIT F
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Trustee shall address,
at a minimum, the criteria identified as below as "Applicable Servicing
Criteria":
-----------------------------------------------------------------------------------------------------
APPLICABLE
SERVICING CRITERIA SERVICING CRITERIA
-----------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
-----------------------------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
-----------------------------------------------------------------------------------------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements.
-----------------------------------------------------------------------------------------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor
the third party's performance and compliance with such
servicing activities.
-----------------------------------------------------------------------------------------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a
back-up servicer for the pool assets are maintained.
-----------------------------------------------------------------------------------------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect
on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of the
transaction agreements.
-----------------------------------------------------------------------------------------------------
CASH COLLECTION AND ADMINISTRATION
-----------------------------------------------------------------------------------------------------
1122(d)(2)(i) Payments on pool assets are deposited into the appropriate [X]
custodial bank accounts and related bank clearing accounts
no more than two business days following receipt, or such
other number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor [X]
or to an investor are made only by authorized personnel.
-----------------------------------------------------------------------------------------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash
flows or distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved as
specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------
1122(d)(2)(iv) The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
transaction agreements.
-----------------------------------------------------------------------------------------------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
-----------------------------------------------------------------------------------------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized
access.
-----------------------------------------------------------------------------------------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date,
or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items
are resolved within 90 calendar days of their original
identification, or such other number of days specified in the
transaction agreements.
-----------------------------------------------------------------------------------------------------
Exh. F-1
SERVICING AGREEMENT
-----------------------------------------------------------------------------------------------------
APPLICABLE
SERVICING CRITERIA SERVICING CRITERIA
-----------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
-----------------------------------------------------------------------------------------------------
INVESTOR REMITTANCES AND REPORTING
-----------------------------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance
with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C)
are filed with the Commission as required by its rules and
regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number
of pool assets serviced by the servicer.
-----------------------------------------------------------------------------------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in [X]
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within two [X]
business days to the servicer's investor records, or such
other number of days specified in the transaction
agreements.
-----------------------------------------------------------------------------------------------------
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree [X]
with cancelled checks, or other form of payment, or custodial
bank statements.
-----------------------------------------------------------------------------------------------------
POOL ASSET ADMINISTRATION
-----------------------------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on pool assets is maintained as [X]
required by the transaction agreements or related asset
pool documents.
-----------------------------------------------------------------------------------------------------
1122(d)(4)(ii) Pool assets and related documents are safeguarded as required [X]
by the transaction agreements
-----------------------------------------------------------------------------------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any
conditions or requirements in the transaction agreements.
-----------------------------------------------------------------------------------------------------
1122(d)(4)(iv) Payments on pool assets, including any payoffs, made in
accordance with the related pool assets documents are posted
to the servicer's obligor records maintained no more than two
business days after receipt, or such other number of days
specified in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in
accordance with the related pool asset documents.
-----------------------------------------------------------------------------------------------------
1122(d)(4)(v) The servicer's records regarding the pool assets agree with
the servicer's records with respect to an obligor's unpaid
principal balance.
-----------------------------------------------------------------------------------------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's
pool asset (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance
with the transaction agreements and related pool asset
documents.
-----------------------------------------------------------------------------------------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures
and repossessions, as applicable) are initiated, conducted
and concluded in accordance with the timeframes or other
requirements established by the transaction agreements.
-----------------------------------------------------------------------------------------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained during
the period a pool asset is delinquent in accordance with the
transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity's activities
in monitoring delinquent pool assets including, for example,
phone calls, letters and payment rescheduling plans in cases
where delinquency is deemed temporary (e.g., illness or
unemployment).
-----------------------------------------------------------------------------------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for pool
assets with variable rates are computed based on the related
pool asset documents.
-----------------------------------------------------------------------------------------------------
Exh. F-2
SERVICING AGREEMENT
-----------------------------------------------------------------------------------------------------
APPLICABLE
SERVICING CRITERIA SERVICING CRITERIA
-----------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
-----------------------------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's pool asset documents, on at least an
annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with applicable pool
asset documents and state laws; and (C) such funds are
returned to the obligor within 30 calendar days of full
repayment of the related pool assets or such other number of
days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related penalty
or expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has
been received by the servicer at least 30 calendar days prior
to these dates, or such other number of days specified in the
transaction agreements.
-----------------------------------------------------------------------------------------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment to
be made on behalf of an obligor are paid from the servicer's
funds and not charged to the obligor, unless the late payment
was due to the obligor's error or omission.
-----------------------------------------------------------------------------------------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within
two business days to the obligor's records maintained by the
servicer, or such other number of days specified in the
transaction agreements.
-----------------------------------------------------------------------------------------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements.
-----------------------------------------------------------------------------------------------------
1122(d)(4)(xv) Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
maintained as set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------------
Exh. F-3
SERVICING AGREEMENT
