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MASTER MORTGAGE LOAN SALE AND SERVICING AGREEMENT
Dated and effective as of February 1, 2003
▇▇▇▇▇▇ BROTHERS BANK, FSB
(Initial Owner)
and
GMAC MORTGAGE CORPORATION
(Company)
Fixed and Adjustable Rate Conventional 103% LTV Mortgage Loans
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This is a Master Mortgage Loan Sale and Servicing Agreement (the
"Agreement"), dated and effective as of February 1, 2003, and is executed
between ▇▇▇▇▇▇ Brothers Bank, FSB as purchaser and initial owner (hereinafter,
the "Initial Owner"), and GMAC Mortgage Corporation, a Pennsylvania corporation,
as seller and servicer (the "Company").
The Initial Owner has agreed to purchase, from time to time, from
the Company, and the Company has agreed to sell, from time to time, to the
Initial Owner, certain conventional fixed and adjustable rate residential
mortgage loans (the "Mortgage Loans") as described herein on a servicing
retained basis, which shall be delivered in groups of whole loans on various
dates as provided herein (each a "Closing Date").
Each Mortgage Loan is secured by a mortgage or deed of trust
creating a first lien on a residential dwelling located in the jurisdiction
indicated on the Mortgage Loan Schedule, which is to be annexed hereto on each
Closing Date as Schedule I.
The Initial Owner and Company wish to prescribe the manner of the
conveyance, servicing and control of the Mortgage Loans.
In consideration of the premises and the mutual agreements
hereinafter set forth, the Initial Owner and the Company agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the context
otherwise requires, shall have the following meanings:
"Agreement": This Master Mortgage Loan Sale and Servicing Agreement,
including all exhibits hereto, and all amendments hereof and supplements hereto.
"ALTA": The American Land Title Association.
"Annual Mortgage Interest Rate Cap": The maximum amount, as provided in
the Mortgage Note, that a Mortgage Interest Rate can change on any Interest Rate
Change Date.
"Appraised Value": The amount set forth in an appraisal in connection with
the origination of each Mortgage Loan as the value of the Mortgaged Property.
For Refinanced Mortgage Loans, the Appraised Value shall equal the amount
indicated on the Company's servicing system as the appraised value of the
Mortgaged Property.
"Assignment and Conveyance": An assignment and conveyance of the Mortgage
Loans purchased on a Closing Date in the form annexed hereto as Exhibit D.
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"Assignment of Mortgage": An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (but not recorded) that,
when properly completed and recorded, is sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage Loan to the Owner.
"Assumed Principal Balance": As to each Mortgage Loan as of any date of
determination, (i) the principal balance of the Mortgage Loan outstanding as of
the related Cut-off Date after application of payments due on or before the
related Cut-off Date, whether or not received, minus (ii) all amounts previously
distributed to the Owner with respect to the Mortgage Loan pursuant to Section
5.01 and representing (a) payments or other recoveries of principal or (b)
advances of scheduled principal payments made pursuant to Section 5.03.
"BIF": The Bank Insurance Fund, or any successor thereto.
"Business Day": Any day other than (i) a Saturday or Sunday, or (ii) a day
on which banking or savings and loan institutions in the Commonwealth of
Pennsylvania or State of New York are authorized or obligated by law or
executive order to be closed.
"Buydown Agreement": An agreement between the Company and a Mortgagor, or
an agreement among the Company, a Mortgagor and a seller of a Mortgaged Property
or a third party with respect to a Mortgage Loan which provides for the
application of Buydown Funds.
"Buydown Funds": Amounts delivered to the Company by a Mortgagor, seller
of a Mortgaged Property, the Company or third party in connection with a Buydown
Mortgage Loan.
"Buydown Mortgage Loan": An individual Mortgage Loan which is subject to
the terms of a Buydown Agreement as indicated on the Mortgage Loan Schedule.
"Buydown Period": The period of time when a Buydown Agreement is in effect
with respect to a related Buydown Mortgage Loan.
"Closing Date": The date or dates on which the Initial Owner from time to
time shall purchase and the Company from time to time shall sell to the Initial
Owner, the Mortgage Loans listed on the related Mortgage Loan Schedule with
respect to the related Mortgage Loan Package.
"Code": The Internal Revenue Code of 1986, as it may be amended from time
to time or any successor statute thereto, and applicable U.S. Treasury
Department regulations issued pursuant thereto.
"Company": GMAC Mortgage Corporation, a Pennsylvania corporation, or its
successor in interest or any successor to the Company under this Agreement
appointed as herein provided.
"Condemnation Proceeds": All awards or settlements in respect of a taking
of an entire Mortgaged Property by exercise of the power of eminent domain or
condemnation.
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"Confirmation": With respect to the Mortgage Loan Package purchased and
sold on any Closing Date, the letter agreement between the Initial Owner and the
Company setting forth the terms and conditions of such transaction and
describing the Mortgage Loans to be purchased by the Initial Owner as of the
Closing Date.
"Current Index": The index, as provided in each Mortgage Note, used to
adjust the Mortgage Interest Rate on each Interest Rate Change Date.
"Custodial Account": The separate account or accounts created and
maintained pursuant to Section 4.04.
"Custodian": U.S. Bank Trust National Association
Custodial Agreement: That certain custodial Agreement dated as of
September 1, 1999 by and between the Initial Owner as servicer and the
Custodian, which Custodial Agreement shall be assigned to Company, as servicer
on the Initial Closing Date.
"Curtailment": Any Principal Prepayment made by a Mortgagor that is not a
Full Principal Prepayment.
"Customary Servicing Procedures": Procedures (including collection
procedures) using the same care that the Company customarily employs and
exercises in servicing and administering mortgage loans of the same type for its
own account giving due consideration to accepted mortgage servicing practices.
"Cut-off Date": The first day of the month or if the first day of the
month is not a Business Day, the Business Day immediately following.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced with a
Qualified Substitute Mortgage Loan in accordance with this Agreement.
"Determination Date": The 16th day (or if such 16th day is not a Business
Day, the Business Day immediately preceding such 16th day) of the month of the
related Remittance Date.
"Due Date": The day of the month on which each Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.
"Due Period": With respect to each Remittance Date, the period beginning
on the first day of the month preceding the month of the Remittance Date, and
ending on the last day of the month preceding the Remittance Date.
"Eligible Depository Institution": Either a (i) depository the accounts of
which are insured by the FDIC through the BIF or the SAIF and the debt
obligations of which are rated A (or Aa3) or better by S&P or Moody's or (ii)
the corporate trust department of any bank the debt obligations of which are
rated at least A-1 (or P-1) by S&P or Moody's.
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"Eligible Investments": Any one or more of the following obligations or
securities:
(i) obligations of or guaranteed as to principal and interest
by the (a) United States, the Federal Home Loan Mortgage Corporation
("▇▇▇▇▇▇▇ Mac"), the Federal National Mortgage Association ("▇▇▇▇▇▇
Mae") or any agency or instrumentality of the United States when
such obligations are backed by the full faith and credit of the
United States; provided, that such obligations of ▇▇▇▇▇▇▇ Mac or
▇▇▇▇▇▇ Mae shall be limited to senior debt obligations and mortgage
participation certificates except that investments in
mortgage-backed or mortgage participation securities with yields
evidencing extreme sensitivity to the rate of principal payments on
the underlying mortgages shall not constitute Eligible Investments
hereunder;
(ii) repurchase agreements (which must be fully
collateralized) on obligations specified in clause (i) maturing not
more than one month from the date of acquisition thereof;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of
bankers' acceptances, shall in no event have an original maturity of
more than 365 days or a remaining maturity of more than 30 days)
denominated in United States dollars of any U.S. depository
institution or trust company incorporated under the laws of the
United States or any state thereof or of any domestic branch of a
foreign depository institution or trust company;
(iv) commercial paper (having original maturities of not more
than 270 days) of any corporation incorporated under the laws of the
United States or any state thereof which are rated at least A-1 or
P-1 by S & P Corporation ("S & P") and ▇▇▇▇▇'▇ Investor Services,
Inc. ("Moody's"), respectively;
(v) obligations of major foreign commercial banks, limited to
Eurodollar deposits, time deposits, certificate of deposits, bankers
acceptances, Yankee Bankers acceptances and Yankee certificate of
deposits;
(vi) obligations of major foreign corporations limited to
commercial paper, auction rate preferred stock, medium term notes,
master notes and loan participations;
(vii) money market funds comprised of securities described in
the aforementioned clauses (i-iv) and having a stated policy of
maintaining a set net asset value per share (a "Money Market Fund").
All Money Market Funds will conform to Rule 2a-7 of the Investment
Company Act of 1940; and
provided, however, that no instrument shall be an Eligible Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument
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and the principal and interest with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations.
"Escrow Account": The separate account or accounts created and maintained
pursuant to Section 4.06.
"Escrow Payments": The amounts constituting taxes, assessments, mortgage
insurance premiums, fire and hazard insurance premiums and other payments
required to be escrowed by the Mortgagor with the mortgagee pursuant to any
Mortgage Loan.
"Event of Default": Any one of the conditions or circumstances enumerated
in Section 9.01.
"▇▇▇▇▇▇ ▇▇▇": The Federal National Mortgage Association or any successor
organization.
"Fidelity Bond": A fidelity bond required to be maintained by the Company
pursuant to Section 4.13.
"FDIC": The Federal Deposit Insurance Corporation or any successor
organization.
"▇▇▇▇▇▇▇ Mac": The Federal Home Loan Mortgage Corporation or any successor
organization.
"Full Principal Prepayment": A Principal Prepayment made by a Mortgagor of
the entire principal balance of a Mortgage Loan.
"GMAC": General Motors Acceptance Corporation.
"HUD": The Department of Housing and Urban Development or any successor
organization.
"Initial Owner": ▇▇▇▇▇▇ Brothers Bank, FSB.
"Insurance Proceeds": Proceeds of any Primary Insurance Policy, title
policy, hazard policy or other insurance policy covering a Mortgage Loan, if
any, to the extent such proceeds are not to be applied to the restoration of the
related Mortgaged Property or released to the Mortgagor in accordance with
Customary Servicing Procedures or in accordance with the terms of the related
Mortgage Loan or applicable law.
"Interest Rate Change Date": The date on which the Mortgage Interest Rate
is subject to change as provided in the related Mortgage Note.
"Lifetime Mortgage Interest Rate Cap": The maximum amount, as provided in
the Mortgage Note, that a Mortgage Interest Rate can change over the life of the
Mortgage Loan.
"Liquidation Proceeds": Cash, other than Insurance Proceeds, Condemnation
Proceeds or REO Disposition Proceeds, received in connection with the
liquidation of a defaulted Mortgage
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Loan, whether through the sale or assignment of the Mortgage Loan, trustee's
sale, foreclosure sale or otherwise.
"Loan-to-Value Ratio" or "LTV": With respect to any Mortgage Loan, the
original principal balance of such Mortgage Loan divided by the lesser of the
Appraised Value of the related Mortgaged Property and the purchase price of the
Mortgaged Property.
"Margin": The amount that is added to the Current Index value to determine
the Mortgage Interest Rate on each Interest Rate Change Date.
"MERS": Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
"MERS(R)System": The system of recording transfers of Mortgages
electronically maintained by MERS.
"MIN": The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.
"MOM Loan": With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
"Monthly Payment": The scheduled monthly payment of principal and interest
on a Mortgage Loan which is payable by a Mortgagor under the related Mortgage
Note.
"Moody's": ▇▇▇▇▇'▇ Investors Service, or any successor in interest.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien on or first priority ownership interest in an estate in fee simple,
or a leasehold estate, in real property securing a Mortgage Note, including any
rider incorporated by reference therein.
"Mortgage File": The documents, records and other items referred to in
Exhibit A annexed hereto pertaining to a particular Mortgage Loan.
"Mortgage Interest Rate": The annual rate at which interest accrues on any
Mortgage Loan in accordance with the provisions of the related Mortgage Note.
"Mortgage Loan": An individual mortgage loan that is the subject of this
Agreement, each mortgage loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule.
"Mortgage Loan Package": The Mortgage Loans listed on a Mortgage Loan
Schedule, delivered to the Custodian and the Purchaser prior to the related
Closing Date and attached to this Agreement as Schedule I on the related Closing
Date.
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"Mortgage Loan Remittance Rate": As to each Mortgage Loan, the annual rate
of interest required to be remitted hereunder to the Owner, which shall be equal
to the related Mortgage Interest Rate minus the related Servicing Fee Rate.
"Mortgage Loan Schedule": With respect to each Mortgage Loan Package, the
schedule of Mortgage Loans to be annexed hereto as Schedule I (or a supplement
thereto) on each Closing Date for the Mortgage Loan Package delivered on such
Closing Date, such schedule setting forth the following information as to each
Mortgage Loan, as applicable, as well as the data fields set forth in the
related Confirmation: (a) the Mortgage Loan identifying number, (b) the
Mortgagor's name, (c) the street address of the Mortgaged Property, including
the state and zip code, (d) the Mortgage Interest Rate, (e) the original
principal balance of the Mortgage Loan, (f) principal balance of the Mortgage
Loan as of the related Cut-off Date after deduction of payments of principal due
on or before the related Cut-off Date, whether or not collected, (g) the first
payment date, (h) a code indicating whether the Mortgaged Property is occupied
by the owner (and, if so, whether it is occupied as a primary, secondary or
vacation residence), (i) the purpose of the Mortgage Loan and (j) a code
indicating whether the Mortgage Loan is a Buydown Mortgage Loan, (k) the next
Interest Rate Change Date, (l) Margin, and (m) the Lifetime Mortgage Interest
Rate Cap. Schedule I hereto shall be supplemented as of each Closing Date to
reflect the addition of the Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
"Mortgage Note": The note or other evidence of the indebtedness of a
Mortgagor secured by the related Mortgage.
"Mortgaged Property": The real property and improvements subject to a
Mortgage, constituting security for repayment of the debt evidenced by the
related Mortgage Note.
"Mortgagor": The obligor on a Mortgage Note.
"Nonrecoverable Advance": Any advance previously made by the Company
pursuant to Section 5.03 or any expenses incurred pursuant to Section 4.08
which, in the good faith judgement of the Company, may not be ultimately
recoverable by the Company from Liquidation Proceeds. The determination by the
Company that is has made a Nonrecoverable Advance, shall be evidenced by an
Officer's Certificate of the Company delivered to the Owner and detailing the
reasons for such determination.
"Officers' Certificate": A certificate signed by the President, a Senior
Vice President or a Vice President and by the Treasurer or the Secretary or one
of the Assistant Secretaries of the Company, or by other duly authorized
officers or agents of the Company, and delivered to the Owner as required by
this Agreement.
"Opinion of Counsel": A written opinion of counsel, who may be salaried
counsel employed by the Company.
"Owner": Any successor or assign to this Agreement by the Initial Owner or
an Owner.
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"P&I Advance": As to any Mortgage Loan, any advance made by the Company
pursuant to Section 5.03.
"Pass-Through Transfer": The sale or transfer of some or all of the
Mortgage Loans by the Initial Owner to a trust to be formed as part of a
publicly issued or privately placed mortgage-backed securities transaction.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Prepayment Interest Shortfall": As to any Remittance Date and any
Mortgage Loan, (a) if such Mortgage Loan was the subject of a Full Principal
Prepayment during the related Principal Prepayment Period, the excess of one
month's interest (adjusted to the Mortgage Loan Remittance Rate) on the Assumed
Principal Balance of such Mortgage Loan outstanding immediately prior to such
prepayment, over the amount of interest (adjusted to the Mortgage Loan
Remittance Rate) actually paid by the Mortgagor in respect of such Principal
Prepayment Period, and (b) if such Mortgage Loan was the subject of a
Curtailment during the related Principal Prepayment Period, an amount equal to
one month's interest at the Mortgage Loan Remittance Rate on the amount of such
Curtailment.
"Primary Insurance Policy": With respect to each Mortgage Loan, the
primary policy of mortgage insurance in effect, or any replacement policy
therefor obtained by the Company pursuant to Section 4.21.
"Principal Prepayment": Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any prepayment penalty or premium thereon, and is not accompanied by an amount
of interest representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment.
"Principal Prepayment Period": As to any Remittance Date, the calendar
month preceding the calendar month in which such Remittance Date occurs.
"Purchase Price": The price paid on the related Closing Date by the
Initial Owner to the Company pursuant to the related Confirmation in exchange
for the Mortgage Loans purchased on such Closing Date.
"Qualified Appraiser": An appraiser who (a) satisfies the requirements of
Title XI of the Financial Institutions Reform, and Enforcement Act of 1989, as
amended, and the regulations promulgated thereunder, (b) is acceptable to ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac and (c) approved by the Company.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted by the
Company for a Deleted Mortgage Loan which must, on the date of such
substitution, (i) have a principal balance at the time of substitution not in
excess of the principal balance of the Deleted Mortgage Loan (the amount of any
difference being deemed to be a principal payment to be credited to or deposited
by
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the Company in the Custodial Account), (ii) have a Mortgage Interest Rate not
less than and not more than 1% greater than that of the Deleted Mortgage Loan,
(iii) have a remaining maturity not later than and not more than one year less
than the remaining maturity of the Deleted Mortgage Loan and (iv) be, in the
reasonable determination of the Company, of the same type, quality and character
as the Deleted Mortgage Loan as if the breach had not occurred.
"Reconstitution Agreement": The agreement or agreements entered into by
the Company and the Initial Owner and certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
serviced hereunder, in connection with a Whole Loan Transfer, a Pass-Through
Transfer or Agency Transfer as provided in Section 12.01.
"Reconstitution Date": The date or dates on which any or all of the
Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and reconstituted as part of a Whole Loan Transfer, Pass-Through
Transfer or Agency Transfer pursuant to Section 12.01 hereof. On such date, the
Mortgage Loans transferred shall cease to be covered by this Agreement and the
Company shall cease to service such Mortgage Loans under this Agreement.
"Record Date": The close of business of the last Business Day of the month
preceding the month of the related Remittance Date.
"Refinanced Mortgage Loan": A Mortgage Loan that was made to a Mortgagor
who owned the Mortgaged Property prior to the origination of such Mortgage Loan.
"REMIC": A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
"Remittance Date": The 18th day of any month, beginning in November, 2001,
or if such 18th day is not a Business Day, the first Business Day immediately
following.
"REO Disposition": The final sale by the Company of a Mortgaged Property
acquired by the Company in foreclosure or by deed in lieu of foreclosure.
"REO Disposition Proceeds": All amounts received with respect to an REO
Disposition pursuant to Section 4.14.
"REO Property": A Mortgaged Property acquired by the Company through
foreclosure or deed in lieu of foreclosure, as described in Section 4.14.
"Repurchase Price": With respect to any Mortgage Loan to be repurchased by
the Company pursuant to Section 3.03, an amount equal to the Assumed Principal
Balance of such Mortgage Loan as of the date of such repurchase, plus interest
on such Assumed Principal Balance at the Mortgage Loan Remittance Rate from the
date to which interest has last been paid up to and including the day prior to
repurchase.
"S&P": Standard & Poor's Rating Services, a division of the ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., or any successor in interest.
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"Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Company of its
servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of REO Property pursuant to Section 4.14 and (d) compliance with
the Company's obligations described in Section 4.08.
"Servicing Fee": The amount of the annual fee the Owner shall pay to the
Company, equal to .25% of the outstanding principal amount of each fixed rate
Mortgage Loan and equal to .375% of the outstanding principal amount of each
adjustable rate Mortgage Loan. Such fee shall be payable monthly from the
interest portion (including recoveries with respect to interest from the
Liquidation Proceeds) of each Monthly Payment collected by the Company (or as
otherwise provided under Section 4.05) and shall be computed on the basis of the
same principal amount and for the period respecting which any related interest
payment on a Mortgage Loan is computed.
"Servicing Officer": Any officer of the Company involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Company to the
Owner upon request, as such list may from time to time be amended.
"Transfer Date": The meaning set forth in Section 10.02.
"Whole Loan Transfer": Any sale or transfer of all of the Mortgage Loans
by the Initial Owner to a third party.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT;
DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01 Conveyance of Mortgage Loans; Possession of Mortgage Files.
The Company, simultaneously with the payment of the Purchase Price and
with the execution and delivery to the Initial Owner of an Assignment and
Conveyance with respect to the related Mortgage Loan Package does hereby sell,
transfer, assign, set over and convey to the Owner, without recourse, but
subject to the terms of this Agreement, all the right, title and interest of the
Company in and to the Mortgage Loans, including all interest and principal
received by the Company on or with respect to the Mortgage Loans after the
related Cut-off Date (other than payments of principal and interest due on the
Mortgage Loans on or before the related Cut-off Date). Pursuant to Section 2.03
hereof, the Company has delivered a portion of each Mortgage File to the
Custodian. The contents of each Mortgage File not delivered to the Custodian are
and shall be held in trust by the Company for the benefit of the Owner as the
owner thereof and the Company's possession of the portion of each Mortgage File
so retained is at the will of the Owner for the sole purpose of servicing the
related Mortgage Loan, and such retention and possession by the Company is in a
custodial capacity only. On the related Closing Date, the ownership of each
Mortgage Note, Mortgage and each related Mortgage File is vested in the Owner
and the ownership of all records and documents with respect to each related
Mortgage Loan prepared by or which come into the possession of the Company shall
immediately vest in the Owner and shall be retained and maintained, in trust, by
the Company at the will of the Owner in such custodial capacity only. The
Mortgage File may be retained in microfilm, microfiche, optical storage or
magnetic media in lieu of hard copy. The Company shall maintain records (i)
confirming the sale of the related Mortgage Loan to the Owner and (ii)
confirming the Owner's ownership interest in the Mortgage File. The Company
shall release from its custody the contents of any Mortgage File only in
accordance with written instructions from the Owner, unless such release is
required as incidental to the Company's servicing of the Mortgage Loans or is in
connection with a repurchase of any Mortgage Loan or the removal of any Mortgage
Loan or related REO Property from the terms of this Agreement pursuant to
Section 3.03 such written instructions shall not be required.
Section 2.02 Books and Records.
Notwithstanding the sale of the Mortgage Loans to the Owner, record title
to each Mortgage and the related Mortgage Note shall continue in the name of the
Company and be retained by the Company in trust for the Owner for the sole
purpose of facilitating the servicing and the supervision of the servicing of
the Mortgage Loans; provided however, that the Company agrees to cooperate with
the Initial Owner in the event the Initial Owner requests recordation of the
Assignments of Mortgage in connection with a reconstitution of this Agreement as
contemplated under Article XII. It being further understood that this Assignment
of Mortgage may necessitate putting the Assignments in the name of the Trust or
some other third party. If the Mortgage is registered with MERS, the Company
shall effect a transfer of such Mortgage to the name of the Owner (or other
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designee as directed by the Initial Owner) as soon as practicable in accordance
with MERS requirements. All rights arising out of the Mortgage Loans including,
but not limited to, all funds received on or in connection with a Mortgage Loan
shall be held by the Company in trust for the benefit of the Owner as the owner
of the Mortgage Loans, subject to subsequent deduction of amounts to which the
Company is entitled pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Company's balance
sheet and other financial statements as a sale of assets by the Company. The
Company shall be responsible for maintaining, and shall maintain, a complete set
of books and records for each Mortgage Loan which shall be clearly marked to
reflect the ownership of each Mortgage Loan by the Owner.
Section 2.03 Custodial Agreement; Delivery of Mortgage Loan Documents.
1. Prior to the related Closing Date, the Company has delivered to the
Custodian each of the following documents for each Mortgage Loan:
(a) The original Mortgage Note endorsed, "Pay to the order of
______________________, without recourse" and signed in the name of
the Company by an authorized officer. Such signature may be an
original signature or a facsimile signature of such officer. If the
Mortgage Loan was acquired by the Company in a merger, the
endorsement must be by "GMAC Mortgage Corporation, successor by
merger to [name of predecessor]"; and if the Mortgage Loan was
acquired or originated by the Company while doing business under
another name, the endorsement must be by "GMAC Mortgage Corporation,
formerly known as [previous name]". The Mortgage Note shall include
all intervening endorsements showing a complete chain of title from
the originator to the Company.
(b) Unless the Mortgage is registered with MERS, the original Assignment
of Mortgage, assigned to ______________________, but otherwise in
form and substance acceptable for recording and sent for recording;
provided, however, that certain recording information will not be
available if, as of the related Closing Date, the Company has not
received the related Mortgage from the appropriate recording office.
If the Mortgage Loan was acquired by the Company in a merger, the
assignment must be by "GMAC Mortgage Corporation, successor by
merger to [name of predecessor]"; and if the Mortgage Loan was
acquired or originated by the Company while doing business under
another name, the assignment must be by "GMAC Mortgage Corporation,
formerly known as [previous name]". If the Mortgage is registered
with MERS, the Company shall effect a transfer of such Mortgage to
the name of the Initial Owner (or other designee as directed by the
Initial Owner), in accordance with MERS requirements.
(c) Originals or certified true copies from the appropriate recording
offices of all assumption and modification agreements, if any, or if
the original has not yet been returned from the recording office, a
copy of such original certified by the Company.
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2. In the event the Owner is required under the terms of a Reconstitution
Agreement as provided in Section 12.01, the Company agrees to deliver the
following documents to the Owner or its designee within 10 Business Days of
written request by the Owner:
(a) The original Mortgage, or a copy of the Mortgage with evidence of
recording thereon certified by the appropriate recording office to
be a true copy of the recorded Mortgage, or, if the original
Mortgage has not yet been returned from the recording office, a copy
of the original Mortgage together with a certificate of a duly
authorized representative of the Company (which certificate may
consist of stamped text appearing on such copy of the Mortgage,
provided that the signature of the representative appearing below
such text is an original signature), the closing attorney or an
officer of the title insurer which issued the related title
insurance policy, certifying that the copy is a true copy of the
original of the Mortgage which has been transmitted for recording in
the appropriate recording office of the jurisdiction in which the
Mortgaged Property is located.
(b) The original policy of title insurance or, if such insurance is in
force but the original policy of title insurance has not been
delivered to the Company by the issuing title insurer, the initial
report of title insurance or title commitment or other evidence of
title insurance generally acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
(c) Originals, or certified true copies from the appropriate recording
offices, of any intervening assignments of the Mortgage with
evidence of recording thereon, or, if the original intervening
assignment has not yet been returned from the recording office, a
copy of such assignment certified by the Company.
(d) The original Primary Insurance Policy, if any (or a facsimile copy
thereof), or if the Mortgage Loan was processed with the primary
insurance company via electronic data interchange, the Company shall
provide in lieu of the original Primary Insurance Policy (or a
facsimile copy thereof) a printout of the Company's primary
insurance servicing screen which indicates information including
(but not limited to) the name of the primary insurance company and
the certificate number of the Primary Insurance Policy, if any.
(e) Certified true copy of any power of attorney, if applicable.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY;
REPURCHASE AND SUBSTITUTION;
REVIEW OF MORTGAGE LOANS
Section 3.01 Representations and Warranties of the Company.
The Company represents, warrants and covenants to the Owner, as of the
initial Closing Date and each subsequent Closing Date or as of such other date
specified below, that:
(i) The Company is a validly existing corporation in good standing
under the laws of the Commonwealth of Pennsylvania and is qualified to transact
business in, is in good standing under the laws of, and possesses all licenses
necessary for the conduct of its business in, each state in which any Mortgaged
Property is located or is otherwise exempt or not required under applicable law
to effect such qualification or license and no demand for such qualification or
license has been made upon the Company by any such state, and in any event the
Company is in compliance with the laws of each such State to the extent
necessary to ensure the enforceability of each Mortgage Loan;
(ii) The Company has full power and authority to hold each Mortgage
Loan, to sell each Mortgage Loan pursuant to this Agreement and to execute,
deliver and perform, and to enter into and consummate all transactions
contemplated by this Agreement and to conduct its business as presently
conducted, has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement and each Assignment of
Mortgage to the Owner constitutes a legal, valid and binding obligation of the
Company, enforceable against it in accordance with its terms subject to
bankruptcy laws and other similar laws of general application affecting rights
of creditors and subject to the application of the rules of equity, including
those respecting the availability of specific performance;
(iii) None of the execution and delivery of this Agreement, the
origination of the Mortgage Loans by the Company, the sale of the Mortgage Loans
to the Owner, the consummation of the transactions contemplated hereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement
will conflict with any of the terms, conditions or provisions of the Company's
articles of incorporation or by-laws or materially conflict with or result in a
material breach of any of the terms, conditions or provisions of any legal
restriction or any agreement or instrument to which the Company is now a party
or by which it is bound, or constitute a default or result in an acceleration
under any of the foregoing, or result in the material violation of any law,
rule, regulation, order, judgment or decree to which the Company or its property
is subject;
(iv) Each Mortgage Note, each Mortgage, each Assignment of Mortgage
(if applicable) and any other documents required pursuant to this Agreement to
be delivered to the Owner or its assignee for each Mortgage Loan have been, on
or before the related Closing Date, delivered to the Owner or its designee;
15
(v) There is no litigation pending or to the best of Company's
knowledge threatened with respect to the Company which is reasonably likely to
have a material adverse effect on the sale of the related Mortgage Loans, the
execution, delivery or enforceability of this Agreement, or which is reasonably
likely to have a material adverse effect on the financial condition of the
Company, or which would draw into question the validity of this Agreement or the
Mortgage Loans or if any action taken in connection with the obligations of the
Company contemplated herein, or which would be likely to impair materially the
ability of the Company to perform under the terms of this Agreement;
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with this Agreement,
the sale of the Mortgage Loans or the consummation of the transactions
contemplated by this Agreement except for consents, approvals, authorizations
and orders which have been obtained;
(vii) The consummation of the transactions contemplated by this
Agreement is in the ordinary course of business of the Company, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Company pursuant to this Agreement are not subject to bulk transfer or any
similar statutory provisions in effect in any applicable jurisdiction; and
(viii) The Mortgage Loans were selected on a random basis from among
the outstanding residential mortgage loans contained in the Company's 103% LTV
fixed and adjustable rate portfolio immediately prior to the related Closing
Date as to which the representations and warranties set forth in this Section
3.01 and Section 3.02 could be made; and
(ix) The Company has delivered to the Owner financial statements as
to its last complete fiscal year. There has been no change in the business,
operations, financial condition, properties or assets of the Company since the
date of the Company's financial statements that would have a material adverse
effect on its ability to perform its obligations under this Agreement.
(x) The Company does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained in
this Agreement. The Company is solvent and the sale of the Mortgage Loans will
not cause the Company to become insolvent. The sale of the Mortgage Loans is not
undertaken with the intent to hinder, delay or defraud any of the Company's
creditors;
(xi) Neither this Agreement nor any statement, report or other
document furnished pursuant to this Agreement or in connection with the
transactions contemplated hereby contains any untrue statement of fact or omits
to state a fact necessary to make the statements contained therein not
misleading;
Section 3.02 Representations and Warranties as to Individual Mortgage
Loans.
The Company hereby represents and warrants to the Owner, as to each
Mortgage Loan as of the related Closing Date or such other date as may be
specified below, that:
16
(i) The information set forth in the Mortgage Loan Schedule is true,
complete and correct in all material respects as of the related Cut-Off Date;
(ii) The Mortgage creates a first lien or a first priority ownership
interest in an estate in fee simple in real property securing the related
Mortgage Note, free and clear of all adverse claims, liens and encumbrances
having priority over the first lien of the Mortgage subject only to (1) the lien
of non-delinquent current real property taxes and assessments not yet due and
payable, (2) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording which are
acceptable to mortgage lending institutions generally and, with respect to any
Mortgage Loan for which an appraisal was made prior to the related Cut-Off Date,
either (A) which are referred to or otherwise considered in the appraisal made
for the originator of the Mortgage Loan, or (B) which do not adversely affect
the appraised value of the Mortgaged Property as set forth in such appraisal,
and (C) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting and enforceable first lien and first
priority security interest on the property described therein. The Mortgage Note
is not and has not been secured by any collateral except the lien of the
corresponding Mortgage and the security interest of any applicable security or
chattel mortgage ;
(iii) The Mortgage Loan has not been delinquent thirty (30) days or
more at any time during the twelve (12) month period prior to the related
Cut-off Date for such Mortgage Loan. There are no defaults under the terms of
the Mortgage Loan; and the Company has not advanced funds, or induced, solicited
or knowingly received any advance of funds from a party other than the owner of
the Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required by the Mortgage Loan;
(iv) There are no delinquent taxes which are due and payable, ground
rents, assessments or other outstanding charges affecting the related Mortgaged
Property;
(v) The terms of the Mortgage Note of the related Mortgagor and the
Mortgage have not been impaired, waived, altered or modified in any respect,
except by written instruments which have been recorded to the extent any such
recordation is required by applicable law or is necessary to protect the
interests of the Owner, and which have been approved by the title insurer and
the primary mortgage insurer, as applicable, and copies of which written
instruments are included in the Mortgage File. No other instrument of waiver,
alteration or modification has been executed, and no Mortgagor has been
released, in whole or in part, from the terms thereof except in connection with
an assumption agreement, which assumption agreement is part of the Mortgage File
and the terms of which are reflected on the Mortgage Loan Schedule. To the best
of the Company's knowledge, no Mortgagor was in debtor in any state or federal
insolvency proceeding at the time the Mortgage Loan was originated;
(vi) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder,
17
render the Mortgage Note or Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense, including
the defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;
(vii) All buildings upon the Mortgaged Property are insured by a
generally acceptable insurer pursuant to standard hazard policies conforming to
the requirements of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac. All such standard hazard
policies are in effect and on the date of origination contained a standard
mortgagee clause naming the Company and its successors in interest as loss payee
and such clause is still in effect and all premiums due thereon have been paid.
If the Mortgaged Property is located in an area identified by the Federal
Emergency Management Agency as having special flood hazards under the Flood
Disaster Protection Act of 1973, as amended, such Mortgaged Property is covered
by flood insurance by a generally acceptable insurer in an amount not less than
the requirements of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac. The Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to maintain such insurance at the Mortgagor's cost and expense and to
seek reimbursement therefor from the Mortgagor;
(viii) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws applicable to the Mortgage Loan have been complied with, and the Company
shall maintain in its possession, available for the Owner's inspection, evidence
of compliance with all such requirements;
(ix) The Mortgage has not been satisfied, canceled or subordinated,
in whole or in part, or rescinded, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part nor has any
instrument been executed that would effect any such satisfaction, release,
cancellation, subordination or rescission;
(x) The Mortgage Note and the related Mortgage are original and
genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms subject to
bankruptcy, insolvency and other laws of general application affecting the
rights of creditors, and the Company has taken all action necessary to transfer
such rights of enforceability to the Owner. All parties to the Mortgage Note and
the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. The proceeds
of the Mortgage Note have been fully disbursed and there is no requirement for
future advances thereunder, and any and all requirements as to completion of any
on-site or off-site improvements and as to disbursements of any escrow funds
therefor have been complied with;
(xi) Immediately prior to the transfer and assignment to the Owner,
the Mortgage Note and the Mortgage were not subject to an assignment or pledge,
and the Company had good and marketable title to and was the sole owner thereof
and had full right to transfer and sell the Mortgage Loan to the Owner free and
clear of any encumbrance, equity, lien, pledge, charge, claim or security
interest;
18
(xii) The Mortgage Loan is covered by an ALTA lender's title
insurance policy or other generally acceptable form of policy of insurance, with
all necessary endorsements, issued by a title insurer qualified to do business
in the jurisdiction where the Mortgaged Property is located, insuring (subject
to the exceptions contained in clause (b) (1), (2) and (3) above) the Company,
its successors and assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan. Such title insurance policy
affirmatively insures ingress and egress and against encroachments by or upon
the Mortgaged Property or any interest therein. The Company is the sole insured
of such lender's title insurance policy, such title insurance policy has been
duly and validly endorsed to the Owner or the assignment to the Owner of the
Company's interest therein does not require the consent of or notification to
the insurer and such lender's title insurance policy is in full force and effect
and will be in full force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy;
(xiii) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related Mortgage Note and, to
the Company's knowledge, no event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a default,
breach, violation or event permitting acceleration; and neither the Company nor
any prior mortgagee has waived any default, breach, violation or event
permitting acceleration;
(xiv) To the best of the Company's knowledge, there are no
mechanics, or similar liens or claims which have been filed for work, labor or
material affecting the related Mortgaged Property which are or may be liens
prior to or equal to the lien of the related Mortgage;
(xv) All improvements subject to the Mortgage lie wholly within the
boundaries and building restriction lines of the Mortgaged Property (and wholly
within the project with respect to a condominium unit) and no improvements on
adjoining properties encroach upon the Mortgaged Property except those which are
insured against by the title insurance policy referred to in clause (xii) above
and all improvements on the property comply with all applicable zoning and
subdivision laws and ordinances;
(xvi) The Mortgage Loan was originated by the Company or by an
eligible correspondent of the Company. The Mortgage Loan complies in all
material respects with all the terms, conditions and requirements of the
Company's underwriting standards attached here as Exhibit G. The Company has
been given delegated underwriting authority by United Guaranty Residential
Insurance Corporation ("UGRIC"). The Mortgage Notes and Mortgages are on forms
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac;
(xvii) The Mortgage Loan contains the usual and enforceable
provisions of the originator at the time of origination for the acceleration of
the payment of the unpaid principal amount if the related Mortgaged Property is
sold without the prior consent of the mortgagee thereunder. The Mortgage Loan
has an original term to maturity of not more than 30 years, with interest
payable in arrears on the first day of each month. Except as otherwise set forth
on the Mortgage Loan Schedule, the Mortgage Loan does not contain terms or
provisions which would result in negative amortization nor contain "graduated
payment" features;
19
(xviii) The Mortgaged Property at origination of the Mortgage Loan
was and, to the Company's knowledge, currently is free of damage and waste and
at origination of the Mortgage Loan there was, and, to the Company's knowledge,
there currently is, no proceeding pending for the total or partial condemnation
thereof. At the time of the origination of the Mortgage Loan, the Mortgaged
Property was lawfully occupied;
(xix) The related Mortgage contains enforceable provisions such as
to render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (1) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (2) otherwise by judicial foreclosure;
(xx) If the Mortgage constitutes a deed of trust, a trustee, duly
qualified if required under applicable law to act as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Owner to the trustee under the deed
of trust, except in connection with a trustees sale or attempted sale after
default by the Mortgagor;
(xxi) If required by the applicable processing style, the Mortgage
File contains an appraisal of the related Mortgaged Property made and signed
prior to the final approval of the mortgage loan application by a Qualified
Appraiser. The appraisal, if applicable, is in a form generally acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(xxii) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (A) in substantial
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (B) (1) organized under the
laws of such state, or (2) qualified to do business in such state, or (3)
federal savings and loan associations, national banks, a Federal Home Loan Bank
or the Federal Reserve Bank, or (4) not doing business in such state;
(xxiii) To the best of the Company's knowledge, there does not exist
any circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that could reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, to cause the Mortgage Loan to become delinquent,
or to materially adversely affect the value or marketability of the Mortgage
Loan;
(xxiv) Each of the Mortgaged Properties consists of a single parcel
of real property with a detached single-family residence erected thereon, or a
two- to four-family dwelling, or a townhouse, or an individual condominium unit
in a condominium project or an individual unit in a planned unit development.
Any condominium unit or planned unit development conforms with applicable ▇▇▇▇▇▇
Mae requirements regarding such dwellings or is covered by a waiver confirming
that such condominium unit or planned unit development is acceptable to ▇▇▇▇▇▇
▇▇▇. No such residence is a mobile home or manufactured dwelling or is used for
commercial purposes;
20
(xxv) The Loan-to-Value Ratio of the Mortgage Loan is not in excess
of 103.00%. In the event the original LTV is greater than 80%, the excess over
67.00% is insured as to payment defaults by a Primary Insurance Policy issued by
UGRIC until the LTV of such Mortgage Loan is reduced to 80%. All provisions of
any Primary Insurance Policy (if required) have been and are being complied
with, such policy is in full force and effect, and all premiums due thereunder
have been paid. Any Mortgage Loan subject to a Primary Insurance Policy
obligates the Mortgagor thereunder to maintain the Primary Insurance Policy and
to pay all premiums and charges in connection therewith. The Mortgage Interest
Rate for the Mortgage Loan as set forth on the Mortgage Loan Schedule is net of
any such insurance premium;
(xxvi) The Assignment of Mortgage (if applicable) is in recordable
form and is acceptable for recording under the laws of the jurisdiction in which
the Mortgaged Property is located;
(xxvii) The Company is either, and each Mortgage Loan was originated
by, a savings and loan association, savings bank, commercial bank, credit union,
insurance company or similar institution which is supervised and examined by a
federal or State authority, or by a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Section 203 and 211 of the National
Housing Act;
(xxviii) The origination, collection and servicing practices with
respect to each Mortgage Note and Mortgage have been legal in all material
respects and in accordance with Customary Servicing Procedures. With respect to
escrow deposits and payments that the Company collects, all such payments are in
the possession of, or under the control of, the Company, and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or other charges or
payments due under the Mortgage Note have been capitalized under any Mortgage or
the related Mortgage Note;
(xxix) No fraud or misrepresentation of a material fact with respect
to the origination of a Mortgage Loan has taken place on the part of the
Company; and
(xxx) No Mortgage Loan contains a provision whereby the related
Mortgagor can convert the related Mortgage Loan to a fixed rate instrument.
Section 3.03 Repurchase and Substitution.
The representations and warranties set forth in Sections 3.01 and 3.02
shall survive the sale of the Mortgage Loans and shall inure to the benefit of
the Owner, notwithstanding any restrictive or qualified endorsement on any
Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File.
Upon discovery by either the Company or an Owner of a breach of any of the
representations and warranties set forth in Sections 3.01 and 3.02
(notwithstanding the Company's lack of knowledge of such representation and
warranty), which breach materially and adversely affects the value of the
Mortgage Loans or the interest of the Owner (or which materially and adversely
affects the interest of the Owner in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach
21
shall give prompt written notice to the other. Upon the earlier of either
discovery by or notice to the Company of any such breach, the Company shall use
its best efforts to promptly cure such breach in all material respects within 60
days, and, if such breach cannot be cured during such time period, the Company
shall, at the Owner's option, repurchase such Mortgage Loan at the Repurchase
Price. If any such breach shall involve any representation or warranty set forth
in Section 3.01, and such breach cannot be cured within 60 days of the earlier
of either discovery by or notice to the Company of such breach, all the Mortgage
Loans shall, at the Owner's option, be repurchased by the Company at the
Repurchase Price; provided, however, that in the event of a breach of
representation and warranty set forth in Section 3.01 that relates to less than
all of the Mortgage Loans, the Company shall repurchase only the Mortgage Loans
to which such breach relates. However, the Company may, at its option, replace a
Mortgage Loan as to which a breach of representation of warranty has occurred as
described in the foregoing sentences of this Section 3.03 and substitute in its
place with a Qualified Substitute Mortgage Loan or Loans, provided, however,
that any such substitution shall be effected not later than 120 days after the
related Closing Date. Any repurchase of a Mortgage Loan or Loans pursuant to the
foregoing provisions of this Section 3.03 shall be accomplished by deposit in
the Custodial Account of the amount of the Repurchase Price (after deducting
therefrom any amounts received in respect of such repurchased Mortgage Loan or
Loans and being held in the Custodial Account for future distribution).
The Company shall effect any substitution of a Qualified Substitute
Mortgage Loan by delivering to the Custodian the documents as are required to be
delivered by Section 2.03, with the Mortgage Note endorsed as required by
Section 2.03. No substitution will be made in any calendar month after the
Determination Date occurring in such month. The Company shall deposit in the
Custodial Account the Monthly Payment less the Servicing Fee due on such
Qualified Substitute Mortgage Loan or Loans in the month following the date of
such substitution. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution will be retained by the Company. For
the month of substitution, distributions to the Owner will include the Monthly
Payment due on such Deleted Mortgage Loan in the month of substitution, and the
Company shall thereafter be entitled to retain all amounts subsequently received
by the Company in respect of such Deleted Mortgage Loan. The Company shall give
written notice to the Owner that such substitution has taken place and shall
amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage
Loan from the terms of this Agreement and the substitution of the Qualified
Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall be subject to the terms of this Agreement in all
respects, and the Company shall be deemed to have made with respect to such
Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the
covenants, representations and warranties set forth in Sections 3.01 and 3.02,
except to the extent a representation contained in Section 3.02 relates to an
expressly specified percentage of the Mortgage Loans.
For any month in which the Company substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Company
will determine the amount (if any) by which the aggregate principal balance of
all such Qualified Substitute Mortgage Loans as of the date of substitution is
less than the aggregate Assumed Principal Balance of all such Deleted Mortgage
Loans (after application of scheduled principal payments due in the month of
substitution). The amount of such shortfall shall be distributed by the Company
in the month of substitution pursuant to Section 5.01. Accordingly, on the date
of such substitution, the Company
22
will deposit from its own funds into the Custodial Account an amount equal to
the amount of such shortfall.
In addition to such repurchase obligation, the Company shall indemnify the
Owner for any expenses reasonably incurred by the Owner in enforcing its
remedies hereunder in connection with any breach by the Company of any
representation or warranty set forth in this Agreement. It is understood and
agreed that the obligations of the Company set forth in this Section 3.03 to
cure or to repurchase a defective Mortgage Loan and to indemnify the Owner as
provided in this Section 3.03 constitute the sole remedies of the Owner
respecting a breach of the foregoing representations and warranties.
23
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer.
The Company, as independent contract servicer, shall service and
administer the Mortgage Loans for the benefit of the Owner in accordance with
the terms of this Agreement and in conformity with Customary Servicing
Procedures. In performing its obligations hereunder, the Company shall exercise
no less than the same care that it customarily employs and exercises in
servicing and administering mortgage loans for its own account, but shall
perform such obligations without regard to the Company's obligation to make
Servicing Advances or P&I Advances, or to the Company's right to receive
compensation for its services hereunder.
Subject to the above-described servicing standards, the specific
requirements and prohibitions of this Agreement and the respective Mortgage
Loans, and the provisions of any Primary Insurance Policy and applicable law,
the Company shall have full power and authority, acting alone, to do any and all
things in connection with such servicing and administration which the Company
may deem necessary or desirable. Without limiting the generality of the
foregoing, the Company shall, and is hereby authorized and empowered to (i)
execute and deliver on behalf of itself and the Owner, any and all instruments
of satisfaction or cancellation, or of partial or full release, discharge and
all other comparable instruments, with respect to the Mortgage Loan and with
respect to the Mortgaged Property and (ii) waive, modify or vary any term of any
Mortgage Loan or consent to the postponement of strict compliance with any such
term or in any manner grant indulgence to the related Mortgagor if in the
Company's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the interests of the
Owner and is not prohibited by a Primary Insurance Policy; provided, however,
that the Company may not, unless it has obtained the consent of the Owner,
permit any modification with respect to any Mortgage Loan that would vary the
Mortgage Interest Rate, defer or forgive the payment of interest or of any
principal, reduce the outstanding principal amount (other than as a result of
its actual receipt of payment of principal on) or extend the final maturity date
of such Mortgage Loan. If, with the consent of the Owner, the Company permits
the deferral of interest or principal payments on any Mortgage Loan, the Company
shall include in each remittance for any month in which any such principal or
interest payment has been deferred an amount equal to the amount that the
Company would have been required to advance pursuant to Section 5.03 if such
deferred amounts had been delinquent, and shall be entitled to reimbursement for
such advances only to the same extent as for P&I Advances made pursuant to
Section 5.03. If reasonably required by the Company, the Owner shall furnish the
Company with any powers of attorney and other documents necessary or appropriate
to enable the Company to carry out its servicing and administrative duties under
this Agreement.
24
Section 4.02 Liquidation of Mortgage Loans; Servicing Advances and
Foreclosure.
If any payment due under any Mortgage Loan and not postponed pursuant to
Section 4.01 is not paid when the same becomes due and payable, or if the
Mortgagor fails to perform any other covenant or obligation under the Mortgage
Loan and such failure continues beyond any applicable grace period, the Company
shall take such action as it shall deem to be in the best interests of the
Owner. If any payment due under any Mortgage Loan and not postponed pursuant to
Section 4.01 remains delinquent for a period of 90 days or more, the Company
shall (a) act in the best interests of the Owner, and such action may include
the commencement of foreclosure proceedings, (b) if the Company commences
foreclosure proceedings, notify the Owner thereof on the monthly remittance
report delivered pursuant to Section 5.02 on the first Remittance Date following
such commencement and (c) respond to reasonable inquiries of the Owner with
respect to the Mortgage Loan or related REO Property. If the Company has
commenced foreclosure proceedings and the Owner wishes to participate in such
proceedings or the disposition of an REO Property upon acquisition thereof, the
Owner shall notify the Company in writing (addressed to "Department Head of the
Foreclosure Department") within 15 days following the Owner's receipt of the
notice of commencement of foreclosure proceedings described in clause (c) of the
preceding sentence and upon receipt thereof the Company shall thereafter
periodically advise the Owner of the status of the foreclosure proceedings and
follow the Owner's instructions in connection therewith. The Owner shall be
entitled to compensation for loss mitigation, as permitted by ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac.
Whether in connection with the foreclosure of a Mortgage Loan or
otherwise, the Company shall from its own funds make all necessary and proper
Servicing Advances; provided, however, that the Company is not required to make
a Servicing Advance unless the Company determines in the exercise of its good
faith reasonable judgment that such Servicing Advance would ultimately be
recoverable from REO Dispositions, Insurance Proceeds or Condemnation Proceeds
(with respect to each of which the Company shall have the priority described in
Section 4.05 for purposes of withdrawals from the Custodial Account). In the
event that any Servicing Advance or any commitment to pay Servicing Advances in
connection with any Mortgage Loan exceeds $5,000 in the aggregate, the Company
shall secure the written approval of the Owner.
Section 4.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on all
Mortgage Loans are paid in full, the Company will proceed diligently, in
accordance with this Agreement, to collect all payments due under each of the
Mortgage Loans when the same shall become due and payable, and will take special
care in ascertaining and estimating annual taxes, assessments, fire and hazard
insurance premiums, mortgage insurance premiums, and all other charges that, as
provided in any Mortgage, will become due and payable in order that the
installments payable by the Mortgagors will be sufficient to pay such charges as
and when they become due and payable.
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Section 4.04 Establishment of Custodial Account; Deposits in Custodial
Account.
The Company shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan and REO Property separate and apart from any of
its own funds and general assets and shall establish and maintain one or more
Custodial Accounts (collectively, the "Custodial Account"), in the form of
non-interest bearing time deposit or demand accounts. The Custodial Account
shall be established with an Eligible Depository Institution. The creation of
any Custodial Account shall be evidenced by a letter agreement in the form of
Exhibit B hereto. A copy of such certification or letter agreement shall be
furnished to any Owner upon request.
The Company shall deposit in a mortgage clearing account on a daily basis
and in the Custodial Account no later than the second Business Day thereafter
and retain therein:
(i) all scheduled payments due after the related Cutoff Date on
account of principal, including Principal Prepayments collected after the
related Cutoff Date, on the Mortgage Loans;
(ii) all scheduled payments on account of interest on the Mortgage
Loans (minus the portion of any such payment which is allocable to the
period prior to the related Cutoff Date) adjusted to the Mortgage Loan
Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds, including amounts required to be
deposited pursuant to Section 4.10 and Section 4.11, other than proceeds
to be held in the Escrow Account and applied to the restoration or repair
of the Mortgaged Property or released to the Mortgagor in accordance with
Customary Servicing Procedures, the Mortgage Loan documents or applicable
law;
(v) all Condemnation Proceeds with respect to any Mortgaged Property
which are not released to the Mortgagor in accordance with Customary
Servicing Procedures, the Mortgage Loan documents or applicable law;
(vi) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Section 3.03 and all amounts required to be
deposited by the Company in connection with shortfalls in principal amount
of Qualified Substitute Mortgage Loans pursuant to Section 3.03 or;
(vii) any amount required to be deposited in the Custodial Account
pursuant to Section 5.04;
(viii) any amount required to be deposited in the Custodial Account
pursuant to Sections 4.01, 4.14, 5.01, 5.03, 5.04 and 6.02; and
(ix) all Buydown Funds.
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The foregoing requirements for deposit in the Custodial Account shall be
exclusive. Without limiting the generality of the foregoing, payments in the
nature of late payment charges, fees for special services provided to a
Mortgagor and assumption fees need not be deposited by the Company in the
Custodial Account.
The Company may invest the funds in the Custodial Account in Eligible
Investments designated in the name of the Company for the benefit of the Owner,
which shall mature not later than the Business Day next preceding the Remittance
Date next following the date of such investment (except that (i) any investment
in the institution with which the Custodial Account is maintained may mature on
such Remittance Date and (ii) any other investment may mature on such Remittance
Date if the Company shall advance funds on such Remittance Date, pending receipt
thereof to the extent necessary to make distributions to the Owner) and shall
not be sold or disposed of prior to maturity. Notwithstanding anything to the
contrary herein and above, all income and gain realized from any such investment
shall be for the benefit of the Company and shall be subject to 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 Custodial Account by the Company out
of its own funds immediately as realized.
Section 4.05 Withdrawals From the Custodial Account.
The Company shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(i) to make payments to the Owner in the amounts and in the manner
provided for in Section 5.01;
(ii) to reimburse itself for P&I Advances, the Company's right to
reimburse itself pursuant to this subclause (ii) being limited to amounts
received on the related Mortgage Loan that represent payments of principal
and/or interest respecting which any such P&I Advance was made;
(iii) to reimburse itself first for unreimbursed Servicing Advances,
second for ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, and third for any unpaid Servicing
Fees, the Company's right to reimburse itself pursuant to this subclause
(iii) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO
Disposition Proceeds and such other amounts as may be collected by the
Company from the Mortgagor or otherwise relating to the Mortgage Loan, it
being understood that, in the case of any such reimbursement, the
Company's right thereto shall be prior to the rights of the Owner unless
the Company is required to repurchase a Mortgage Loan pursuant to Section
3.03, in which case the Company's right to such reimbursement shall be
subsequent to the payment to the Owner of the Repurchase Price pursuant to
Section 3.03 and all other amounts required to be paid to the Owner with
respect to such Mortgage Loan;
(iv) to reimburse itself for unreimbursed Servicing Advances and
advances of Company funds made pursuant to Section 5.03 to the extent that
such amounts are
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nonrecoverable by the Company pursuant to subclause (iii) above, provided
that the Mortgage Loan for which such advances were made is not required
to be repurchased by the Company pursuant to Section 3.03, in which case
the Company's right to such reimbursement shall be subsequent to the
payment to the Owner of the Repurchase Price pursuant to Section 3.03 and
all other amounts required to be paid to the Owner with respect to such
Mortgage Loan, and to reimburse itself for such amounts to the extent that
such amounts are nonrecoverable from the disposition of REO Property
pursuant to Section 4.14 hereof;
(v) to reimburse itself for expenses incurred by and reimbursable to
it pursuant to Section 8.01;
(vi) to pay itself with respect to each Mortgage Loan repurchased
pursuant to Section 3.03 all amounts collected in respect of such Mortgage
Loan and remaining on deposit in the Custodial Account as of the date on
which the related Repurchase Price is deposited into the Custodial Account
(other than the amount of such Repurchase Price) and, in the event a
Buydown Mortgage Loan is repurchased, to withdraw any Buydown Funds
remaining in the Custodial Account with respect to the repurchased Buydown
Mortgage Loan;
(vii) to pay itself with respect to each Mortgage Loan servicing
compensation pursuant to Section 6.03;
(viii) to reimburse itself for any Nonrecoverable Advance or
Advances; it being understood that if the amounts available upon
liquidation of the related Mortgage Loan are insufficient to fully
reimburse the Company for Nonrecoverable Advances or Advances previously
made, then the Company shall provide the Owner with the amount of such
deficiency and the Owner shall promptly reimburse the Company upon receipt
of notice of such deficiency from Company; and
(ix) to clear and terminate the Custodial Account upon the
termination of this Agreement.
On each Remittance Date, the Company shall withdraw all funds from the
Custodial Account except for those amounts which, pursuant to Section
5.01(a)(iv) and (v), the Company is not obligated to remit on such
Remittance Date. The Company may use such withdrawn funds only for the
purposes described in this Section 4.05.
Section 4.06 Establishment of Escrow Account; Deposits in Escrow Account.
The Company shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate
and apart from any of its own funds and general assets and shall establish
and maintain one or more Escrow Accounts (collectively, the "Escrow
Account"), in the form of non-interest bearing time deposit or demand
accounts. The Escrow Account shall be established with an Eligible
Depository Institution. The creation of any Escrow Account shall be
evidenced by a letter agreement in
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the form of Exhibit C hereto. Upon request, the Company shall provide the
Owner with a copy of a letter agreement evidencing the establishment of
each Escrow Account.
The Company shall deposit in a mortgage clearing account on a daily basis
and no later than the second Business Day thereafter in the Escrow Account and
retain therein: (i) all Escrow Payments held or collected on account of the
Mortgage Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement, (ii) all Insurance Proceeds that are
to be applied to the restoration or repair of any Mortgaged Property and (iii)
all revenues received with respect to the management, conservation, protection
and operation of the REO Properties pursuant to Section 4.14. The Company shall
make withdrawals therefrom only to effect such payments as are required under
this Agreement, and for such other purposes as shall be set forth in or in
accordance with Section 4.07. The Company shall pay to the Mortgagor interest on
escrowed funds to the extent required by law notwithstanding that the Escrow
Account is non-interest bearing.
Section 4.07 Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Company only (a) to
effect timely payments of taxes, assessments, Primary Insurance Policy premiums,
fire and hazard insurance premiums or other items constituting Escrow Payments
for the related Mortgage, (b) to reimburse the Company for any Servicing Advance
made by Company pursuant to Section 4.08 hereof with respect to a related
Mortgage Loan, but only from amounts received on the related Mortgage Loan which
represent late payments or collections of Escrow Payments thereunder, (c) to
refund to any Mortgagor any funds found to be in excess of the amounts required
under the terms of the related Mortgage Loan, (d) upon default of a Mortgagor or
in accordance with the terms of the related Mortgage Loan and if permitted by
applicable law, for transfer to the Custodial Account of such amounts as are to
be applied to the indebtedness of a Mortgage Loan in accordance with the terms
thereof, (e) for application to restoration or repair of the Mortgaged Property,
(f) to deposit into the Custodial Account the funds required to be deposited
therein pursuant to Section 4.14, (g) to pay to itself amounts to which it is
entitled pursuant to Section 4.14, (h) to withdraw any Escrow Payments related
to a Mortgage Loan repurchased by the Company pursuant to Section 3.03, or (i)
to clear and terminate the Escrow Account upon the termination of this
Agreement.
Section 4.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Company shall maintain accurate
records reflecting the status of taxes, assessments, and other charges for which
an escrow is maintained and the status of Primary Insurance Policy premiums and
fire and hazard insurance coverage and shall obtain, from time to time, all
bills for the payment of such charges (including renewal premiums) and shall
effect payment thereof employing for such purpose deposits of the Mortgagor in
the Escrow Account which shall have been estimated and accumulated by the
Company in amounts sufficient for such purposes, as allowed under the terms of
the Mortgage or applicable law. To the extent that a Mortgage does not provide
for Escrow Payments, or the Company has waived the escrow of Escrow Payments or
the Company is prohibited by applicable state law from requiring the escrow of
Escrow Payments, the Company shall determine that any such payments are made by
the Mortgagor. The Company assumes full responsibility for the timely payment of
all such bills
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and shall effect timely payments of all such bills irrespective of each
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments.
Section 4.09 Transfer of Accounts.
The Company may from time to time transfer the Custodial Account and the
Escrow Account to any other Eligible Depository Institution. The Company shall
notify the Owner within 14 days of any such transfer under this Section 4.09.
Section 4.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained (with an insurance company
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac) for each Mortgage Loan, fire and hazard
insurance with extended coverage customary in the area where the Mortgaged
Property is located, in an amount which is, subject to applicable law, at least
equal to the lesser of (i) the maximum insurable value of the improvements
securing the related Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) the minimum amount necessary to
prevent the Mortgagor and/or the mortgagee from becoming a co-insurer. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) the Company will cause to be maintained
a flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration with a generally acceptable insurance
carrier, in an amount representing coverage not less than the least of (i) the
outstanding principal balance of the Mortgage Loan, (ii) the full insurable
value of the Mortgaged Property, or (iii) the maximum amount of insurance
available under the National Flood Insurance Act of 1968 and the Flood Disaster
Protection Act of 1973, each as amended. The Company shall also maintain on any
REO Property, fire and hazard insurance with extended coverage in an amount
which is at least equal to the maximum insurable value of the improvements which
are a part of such property, liability insurance and, to the extent required and
available under the National Flood Insurance Act of 1968 and the Flood Disaster
Protection Act of 1973, each as amended, flood insurance in an amount required
above. Any amounts collected by the Company under any such policies (other than
amounts to be deposited in the Escrow Account and applied to the restoration or
repair of the related Mortgaged Property, REO Property, or released to the
Mortgagor in accordance with Customary Servicing Procedures or in accordance
with the terms of the Mortgage Loan or applicable law) shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 4.05. It is
understood and agreed that no earthquake or other additional insurance need be
required by the Company of any Mortgagor or maintained on property acquired in
respect of a Mortgage Loan, other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All policies required hereunder shall be endorsed with
standard mortgagee clauses with loss payable to the Company, its successors and
its assigns, or, upon request of the Owner, to the Owner, and shall provide for
at least 30 days prior written notice to the Company of any cancellation
thereof. The Company shall not accept or obtain any such insurance policy from
an insurance company that does not at that time maintain a General Policy Rating
of B-III or better in Best's Key Rating Guide, or that is not licensed to do
business in the State wherein the related Mortgaged Property is located.
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Section 4.11 Maintenance of Blanket Insurance Policy.
If the Company shall obtain and maintain a blanket insurance policy that
is issued by an insurer generally acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and
that insures against hazard losses on all of the Mortgage Loans, then, to the
extent such policy provides coverage in an amount equal to the coverage required
pursuant to Section 4.10 and otherwise complies with all other requirements of
Section 4.10, the Company shall be deemed to have satisfied its obligations as
set forth in Section 4.10. Such policy may contain a clause providing for a
reasonable deductible, in which case the Company shall, if there shall not have
been maintained on the related Mortgaged Property a policy complying with
Section 4.10, and if there shall have been a loss that would have been covered
by such policy, deposit in the Custodial Account the amount not otherwise
payable under the blanket policy because of such deductible clause.
Section 4.12 Maintenance of Mortgage Impairment Insurance Policy.
The Company may satisfy its obligations under Section 4.10 and 4.11
pertaining to physical storage of insurance policies and general policy rating
requirements by maintaining a mortgage impairment or other form of blanket
policy that will protect the Company and/or investor in the event of uninsured
loss, insolvency of an insurance carrier or any other loss normally to be
covered by a mortgage impairment policy. It is agreed that any expense incurred
by the Company in maintaining any such insurance shall be borne by the Company.
This shall be deemed to include any loss or any expense as a result of a
deductible clause in such a policy.
Section 4.13 Fidelity Bond; Errors and Omissions Insurance.
The Company at its own expense shall maintain with responsible companies
throughout the term of this Agreement a blanket fidelity bond and an errors and
omissions insurance policy, with broad coverage on all officers, employees and
other individuals acting on behalf of the Company in connection with its
activities under this Agreement. The amount of coverage shall be at least equal
to the coverage that would be required of the Company by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, if the Company were servicing the Mortgage Loans for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, and such policy shall be issued by a company that is acceptable to ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac. The Fidelity Bond and errors and omissions insurance shall
be in the form of the Mortgage Banker's Blanket Bond and shall protect and
insure the Company against losses caused by such individuals, including losses
from forgery, theft, embezzlement, fraud, errors and omissions and negligent
acts of such individuals. Such Fidelity Bond shall also protect and insure the
Company against losses in connection with the failure to maintain any insurance
policies required pursuant to this Agreement and the release or satisfaction of
a Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 4.13 requiring such fidelity bond
and errors and omissions insurance shall diminish or relieve the Company from
its duties and obligations as set forth in this Agreement.
31
Section 4.14 Title, Management and Disposition of REO Property.
If title to a Mortgaged Property is acquired in foreclosure or by deed in
lieu of foreclosure, the deed or certificate of sale shall be taken in the name
of the Company or its nominee, in either case as nominee, for the benefit of the
Owner on the date of acquisition of title (the "REO Owner"). In the event the
Company is not authorized or permitted to hold title to real property in the
state in which the REO Property is located, or would be adversely affected under
the "doing business" or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an opinion of counsel obtained by the Company, at
expense of the REO Owner, from an attorney duly licensed to practice law in the
state where the REO Property is located. The Person or Persons holding such
title other than the REO Owner shall acknowledge in writing that such title is
being held as nominee for the REO Owner.
The Company shall notify the Owner in accordance with Customary Servicing
Procedures of each acquisition of REO Property upon such acquisition, and
thereafter assume the responsibility for marketing such REO Property in
accordance with Customary Servicing Procedures. Thereafter, the Company shall
continue to provide certain administrative services to the Owner relating to
such REO Property as set forth in this Section 4.14. The REO Property must be
sold within three years following the end of the calendar year of the date of
acquisition, unless a REMIC election has been made with respect to the
arrangement under which the Mortgage Loans and REO Property are held and (i) the
Owner shall have been supplied with an Opinion of Counsel to the effect that the
holding by the related trust of such Mortgaged Property subsequent to such
three-year period (and specifying the period beyond such three-year period for
which the Mortgaged Property may be held) will not result in the imposition of
taxes on "prohibited transactions" of the related trust as defined in Section
860F of the Code, or cause the related REMIC to fail to qualify as a REMIC, in
which case the related trust may continue to hold such Mortgaged Property
(subject to any conditions contained in such Opinion of Counsel), or (ii) the
Owner or the Company shall have applied for, prior to the expiration of such
three-year period, an extension of such three-year period in the manner
contemplated by Section 856(e)(3) of the Code, in which case the three-year
period shall be extended by the applicable period. If a period longer than three
years is permitted under the foregoing sentence and is necessary to sell any REO
Property, (i) the Company shall report monthly to the Owner as to progress being
made in selling such REO Property and (ii) if, with the written consent of the
Owner, a purchase money mortgage is taken in connection with such sale, such
purchase money mortgage shall name the Company as mortgagee, and such purchase
money mortgage shall not be held pursuant to this Agreement, but instead a
separate participation agreement between the Company and Owner shall be entered
into with respect to such purchase money mortgage.
32
Notwithstanding any other provision of this Agreement, if a REMIC election
has been made, no Mortgaged Property held by a REMIC shall be rented (or allowed
to continue to be rented) or otherwise used for the production of income by or
on behalf of the related trust or sold in such a manner or pursuant to any terms
that would (i) cause such Mortgaged Property to fail to qualify at any time as
"foreclosure property" within a meaning of Section 860G(a)(8) of the Code, (ii)
subject the related trust to the imposition of any federal or state income taxes
on "net income from foreclosure property" with respect to such Mortgaged
Property within the meaning of Section 860G(c) of the Code, or (iii) cause the
sale of such Mortgaged Property to result in the receipt by the related trust or
any income from non-permitted assets as described in Section 860F(a) (2)(B) of
the Code, unless the Company has agreed to indemnify and hold harmless the
related trust with respect to the imposition of any such taxes.
The Company, either itself or through an agent selected by the Company,
shall manage, conserve, protect and operate each REO Property for the REO Owner
solely for the purpose of its prompt disposition and sale, and in same manner
that it would be required to manage, conserve, protect and operate foreclosed
property for its own account (subject to the condition described in the second
paragraph of Section 4.02). The Company shall attempt to sell the same (and may
temporarily rent the same) on such terms and conditions as the Company deems to
be in the best interest of the REO Owner.
The Company shall cause to be deposited in the Escrow Account, on a daily
basis upon receipt thereof, all revenues received with respect to the
conservation and disposition of the related REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of the related REO Property, including the cost of maintaining any hazard
insurance pursuant to Section 4.10 hereof and the fees of any managing agent
acting on behalf of the Company. In the event the Company chooses to manage the
related REO Property, the Company shall be entitled to receive a management fee
in an amount equal to the greater of $1,200 or 1% of the sales price of the
related REO Property (the "REO Disposition Fee"). The Company shall be entitled
to deduct the REO Disposition Fee directly from the REO Disposition proceeds
prior to distribution of the REO Distribution Proceeds to the REO Owner. Any
disbursement in excess of $5,000 shall be made only with the written approval of
the REO Owner. For purposes of the preceding sentence, any approval given by the
Owner shall constitute approval by the REO Owner. On or before each
Determination Date, the Company shall withdraw from the Escrow Account and
deposit into the Custodial Account the net income from the REO Property on
deposit in the Escrow Account less any reserves required to be maintained in the
Escrow Account from time to time to satisfy reasonably anticipated expenses. The
Company shall furnish to the Owner on each Remittance Date, an operating
statement for each REO Property covering the operation of each REO Property for
the previous month and the Company's efforts in connection with the sale of that
REO Property. Such statement shall be accompanied by such other information as
the Owner shall reasonably request.
Each REO Disposition shall be carried out by the Company at such price,
and upon such terms and conditions, as the Company deems to be in the best
interests of the REO Owner; provided however, that the REO Property shall not be
sold for an amount less than 95% of the appraised value without the consent of
the Owner. If upon the acquisition of title to the Mortgaged Property by
foreclosure sale or deed in lieu of foreclosure or otherwise, there remain
outstanding
33
▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances pursuant to Section 5.03 with respect to the Mortgage
Loan or if, upon liquidation as provided in this Section 4.14, there remain
outstanding any unreimbursed Servicing Advances with respect to the Mortgaged
Property or the Mortgage Loan, the Company shall be entitled to reimbursement
from the proceeds received in connection with the disposition of the Mortgaged
Property, and from the Owner if such proceeds are insufficient, for any related
unreimbursed Servicing Advances or related ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances pursuant to
Section 5.03. On the Remittance Date immediately following the Principal
Prepayment Period in which REO Disposition Proceeds are received, the net cash
proceeds of such REO Disposition shall be distributed to the REO Owner. In the
event that the Company is billed for expenses related to an REO Property
subsequent to the date on which the net cash proceeds of such REO Disposition
are distributed to the REO Owner, the Company shall pay such expenses and shall
thereupon be entitled to reimburse itself therefor by withdrawing the amount of
such expenses from the Custodial Account.
Section 4.15 Application of Buydown Funds.
With respect to each Buydown Loan, the Company shall segregate and hold
all Buydown Funds in the Custodial Account separate and apart from the Company's
funds and general assets.
With respect to each Buydown Mortgage Loan, the Company shall have
deposited into the Custodial Account, no later than the related Closing Date,
Buydown Funds in an amount equal to the aggregate undiscounted amount of
payments that, when added to the amount the Mortgagor on such Mortgage Loan is
obligated to pay on all Due Dates in accordance with the terms of the Buydown
Agreement, is equal to the full scheduled Monthly Payments which are required to
be paid by the Mortgagor under the terms of the related Mortgage Note (without
regard to the related Buydown Agreement as if the Mortgage Loan were not subject
to the terms of the Buydown Agreement). With respect to each Buydown Mortgage
Loan, the Company will distribute to the Owner on each Remittance Date an amount
of Buydown Funds equal to the amount that, when added to the amount required to
be paid on such date by the related Mortgagor, pursuant to and in accordance
with the related Buydown Agreement, equals the full Monthly Payment that would
otherwise be required to be paid on such Mortgage Loan by the related Mortgagor
under the terms of the related Mortgage Note (as if the Mortgage Loan were not a
Buydown Mortgage Loan and without regard to the related Buydown Agreement).
If the Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan
during the Buydown period and the Mortgaged Property securing such Buydown
Mortgage Loan is sold in the liquidation thereof (either by the Company or the
insurer under any related Primary Insurance Policy) the Company shall, on the
Remittance Date following the date upon which Liquidation Proceeds or REO
Disposition Proceeds are received with respect to any such Buydown Mortgage Loan
(if such Liquidation or REO Disposition Proceeds are received on or before the
23rd day of any month, or on the second succeeding Remittance Date if such
proceeds are received after the 23rd day of any month), distribute to the Owner
all remaining Buydown Funds for such Mortgage Loan then remaining in the
Custodial Account. Pursuant to the terms of each Buydown Agreement, any amounts
distributed to the Owner in accordance with the preceding sentence will be
applied to reduce the outstanding principal balance of the related Buydown
Mortgage Loan. If a Mortgagor on a Buydown Mortgage Loan prepays such Mortgage
Loan in its entirety during the related Buydown
34
Period, the Company shall distribute to the Owner, on the Remittance Date
occurring in the calendar month immediately following the date on which such
prepayment is received, any Buydown Funds related to such Buydown Mortgage Loan
then remaining in the Custodial Account. If a Principal Prepayment by a
Mortgagor on a Buydown Mortgage Loan during the related Buydown Period, together
with any Buydown Funds then remaining in the Custodial Account related to such
Buydown Mortgage Loan, would result in a Full Principal Prepayment, the Company
shall distribute to the Owner on the Remittance Date occurring in the month
immediately succeeding the month in which such Principal Prepayment is received,
all Buydown Funds related to such Mortgage Loan so remaining in the Custodial
Account, together with any amounts required to be deposited into the Custodial
Account pursuant to Section 5.03.
Section 4.17 Adjustments to Mortgage Interest Rate and Monthly Payment.
On each applicable Interest Rate Change Date, the Mortgage Interest
Rate shall be adjusted, in compliance with the requirements of the related
Mortgage and Mortgage Note, to equal the sum of the Current Index plus the
Margin (rounded in accordance with the related Mortgage Note) subject to the
applicable Annual Mortgage Interest Rate Cap and Lifetime Mortgage Interest Rate
Cap, as set forth in the Mortgage Note. The Company shall execute and deliver
the notices required by each Mortgage and Mortgage Note and applicable laws and
regulations regarding interest rate adjustments.
Section 4.18 Force Placed Insurance.
Each Mortgage obligates the Mortgagor thereunder to maintain the
required hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the Company to obtain and maintain such
insurance at such Mortgagor's cost and expense, and to seek reimbursement
therefor from the Mortgagor. Upon any failure of the Mortgagor to maintain the
required hazard insurance, the Company shall obtain and maintain such force
placed hazard insurance at the Mortgagor's cost and expense.
Section 4.19 Inspections.
The Company shall inspect the Mortgaged Property as often as deemed
necessary by the Company to assure itself that the value of the Mortgaged
Property is being preserved. In addition, if any Mortgage Loan is more than 90
days delinquent, the Company immediately shall inspect the Mortgaged Property
and shall conduct subsequent inspections in accordance with Customary Servicing
Procedures. The Company shall keep an electronic report of each such inspection.
Section 4.20 Restoration of Mortgaged Property.
The Company need not obtain the approval of the Owner prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Accepted Servicing Practices. At a minimum, with respect
to claims greater than $10,000, the Company shall
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comply with the following conditions in connection with any such release of
Insurance Proceeds or Condemnation Proceeds:
(i) the Company shall receive satisfactory independent verification
of completion of repairs and issuance of any required approvals with respect
thereto;
(ii) the Company shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to requiring
waivers with respect to mechanics' and materialmen's liens;
(iii) the Company shall verify that the Mortgage Loan is not 60 or
more days delinquent; and
(iv) pending repairs or restoration, the Company shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
With respect to claims of $10,000 or less, the Company shall comply
with the following conditions in connection with any such release of Insurance
Proceeds or Condemnation Proceeds:
(i) the related Mortgagor shall provide an affidavit verifying the
completion of repairs and issuance of any required approvals with respect
thereto;
(ii) the Company shall verify the total amount of the claim with the
applicable insurance company; and
(iii) pending repairs or restoration, the Company shall place the
Insurance Proceeds or Condemnation proceeds in the Escrow Account.
If the Owner is named as an additional loss payee, the Company is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Owner.
Section 4.21 Maintenance of Primary Insurance Policy; Claims.
With respect to each Mortgage Loan with a LTV in excess of 80%, the
Company shall:
(i) without any cost to the Owner, maintain or cause the Mortgagor to
maintain in full force and effect a Primary Insurance Policy insuring that
portion of the Mortgage Loan in excess of 67% of value, and shall pay or shall
cause the Mortgagor to pay the premium thereon on a timely basis, until the LTV
of such Mortgage Loan is reduced to 80%. In the event that such Primary
Insurance Policy shall be terminated, the Company shall obtain from another
qualified insurer a comparable replacement policy, with a total coverage equal
to the remaining coverage of such terminated Primary Insurance Policy, at
substantially the same fee level. The Company shall not take any action which
would result in noncoverage under any applicable Primary Insurance Policy of any
loss which, but for the actions of the Company would have been covered
thereunder. In connection with any assumption or substitution agreement entered
into or to be entered into
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pursuant to Section 6.01, the Company shall promptly notify the insurer under
the related Primary Insurance Policy, if any, of such assumption or substitution
of liability in accordance with the terms of such Primary Insurance Policy and
shall take all actions which may be required by such insurer as a condition to
the continuation of coverage under such Primary Insurance Policy. If such
Primary Insurance Policy is terminated as a result of such assumption or
substitution of liability, the Company shall obtain a replacement Primary
Insurance Policy as provided above.
In connection with its activities as servicer, the Company agrees to
prepare and present, on behalf of itself and the Owner, claims to the insurer
under any Primary Insurance Policy in a timely fashion in accordance with the
terms of such Primary Insurance Policy and, in this regard, to take such action
as shall be necessary to permit recovery under any Primary Insurance Policy
collected by the Company under any Primary Insurance Policy shall be deposited
in the Custodial Account, subject to withdrawal pursuant to Section 4.05.
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ARTICLE V
PAYMENTS TO THE OWNER
Section 5.01 Distributions.
(a) On each Remittance Date, the Company shall remit to the Owner of
record on the preceding Record Date (i) all amounts credited to the Custodial
Account as of the close of business on the preceding Determination Date (net of
charges against or withdrawals from the Custodial Account pursuant to Section
4.05(ii)-(iv), plus (ii) the aggregate amount of P&I Advances, if any, and
payments pursuant to Section 5.03, if any, that the Company is obligated to make
on such Remittance Date, plus (iii) the aggregate amount of any Prepayment
Interest Shortfall existing as of such Remittance Date, minus (iv) any amounts
that represent early receipts of Monthly Payments due on a Due Date or Due Dates
subsequent to the Due Date occurring in the month of such Remittance Date
(except to the extent that, pursuant to Section 5.03, any funds described in
this clause (iv) are to be remitted to the Owner in lieu of P&I Advances by the
Company out of its own funds), and minus (v) any amounts attributable to Buydown
Funds being held in the Custodial Account for distribution to the Owner on
subsequent Remittance Dates (except to the extent that, pursuant to Section
5.03, any funds described in this clause (v) are to be remitted to the Owner in
lieu of P&I Advances by the Company out of its own funds).
(b) Each remittance pursuant to this Section 5.01 shall be made by wire
transfer of immediately available funds to, or by other means of transmission or
transfer that causes funds to be immediately available in, the account which
shall have been designated by the Owner.
With respect to any remittance received by the Owner after the Business
Day on which such payment was due, the Company shall pay to the Owner interest
on any such late payment at an annual rate equal to the Prime Rate, adjusted as
of the date of each change, plus three percentage points, but in no event
greater than the maximum amount permitted by applicable law. Such interest shall
be deposited in the Custodial Account by the Company on the date such late
payment is made and shall cover the period commencing with the day following
such Business Day and ending with the Business Day on which such payment is
made, both inclusive. Such interest shall be remitted along with the
distribution payable on the next succeeding related Remittance Date.
The Company shall ten days prior to the Remittance Date on which the final
distribution of funds to Owner is to be made hereunder, notify each Owner of the
pendency of such distribution and such distribution shall be made to each Owner.
Section 5.02 Statements to the Owner.
No later than the tenth (10th) calendar day of each month, the Company
shall deliver to the Owner a monthly remittance statement in the form of, and
providing the information described in, Exhibit F hereto.
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In addition, not more than 60 days after the end of each calendar year,
upon receipt of written request by the Owner, the Company will furnish at any
time during such calendar year, a listing of the principal balances of the
Mortgage Loans outstanding at the end of such calendar year.
The Company shall prepare and file any and all tax returns, information
statements or other filings required to be delivered to any governmental taxing
authority (other than those required to be filed by the Owner) or to the Owner
pursuant to any applicable law with respect to the Mortgage Loans and the
transactions contemplated hereby.
Section 5.03 P&I Advances by the Company.
Not later than the close of business on the Business Day preceding each
Remittance Date, the Company shall from its own funds deposit in the Custodial
Account an amount equal to all Monthly Payments that were due on the related Due
Date and that were delinquent at the close of business on the related
Determination Date, with the interest adjusted to the respective Mortgage Loan
Remittance Rates; provided, however, that to the extent there are funds on
deposit in the Custodial Account that are not otherwise required to be
distributed to the Owner on such Remittance Date, including any Buydown Funds,
the Company may remit such funds in lieu of making advances of its own funds;
and further provided that any such funds held for future distribution and so
used shall be appropriately reflected in the Company's records and replaced by
the Company by deposit into the Custodial Account on or before each Remittance
Date to the extent that funds on deposit in the Custodial Account for the
related Remittance Date (determined without regard to P&I Advances required to
be made on such Remittance Date) shall be less than the aggregate amount
required to be distributed to the Owner pursuant to Section 5.01 on such related
Remittance Date. For purposes of this Section 5.03, any Monthly Payment or
portion thereof deferred pursuant to Section 4.01 shall be considered delinquent
until paid. The Company's obligation to make P&I Advances as to any Mortgage
Loan shall continue through the earlier to occur of (a) the repurchase of the
Mortgage Loan by the Company pursuant to Section 3.03, as the case may be, and
(b) the Remittance Date following REO Disposition.
Notwithstanding the provisions of this Section 5.03, the Company shall not
be required to make any advance of principal and interest if, in the good faith
judgment of the Company, such advance of principal and interest will not
ultimately be recoverable from the related Mortgagor, from Liquidation Proceeds
or otherwise.
Section 5.04 Prepayment Interest Shortfalls.
Not later than the close of business on the Business Day preceding each
Remittance Date, the Company shall from its own funds deposit in the Custodial
Account an amount equal to the aggregate Prepayment Interest Shortfall, if any,
existing in respect of the related Principal Prepayment Period.
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ARTICLE VI
GENERAL SERVICING PROCEDURE
Section 6.01 Assumption Agreements.
The Company shall use its best efforts to enforce any "due-on-sale"
provision contained in each Mortgage or Mortgage Note to the extent permitted by
law and provided that such enforcement would not impair any recovery under any
related Primary Insurance Policy. The Company shall be entitled to retain as
additional servicing compensation any assumption fee collected by the Company
for entering into an assumption agreement.
Section 6.02 Release of Mortgage Files; Wrongful Satisfaction of
Mortgages.
Upon the payment in full of any Mortgage Loan, the Company will obtain the
portion of the Mortgage File that is in the possession of the Custodian, prepare
and process any required satisfaction or release of the Mortgage and notify the
Owner as provided in Section 5.02.
If the Company satisfies or releases the lien of a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage, the
Company, upon written demand, shall remit to the Owner the then Assumed
Principal Balance of the related Mortgage Loan by deposit thereof in the
Custodial Account. The Company shall maintain the Fidelity Bond as provided for
in Section 4.13 insuring the Company against any loss it may sustain with
respect to any Mortgage Loan not satisfied in accordance with the procedures set
forth herein.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Company shall be entitled
to withdraw from the Custodial Account or to retain from interest payments on
the Mortgage Loans the amounts provided for as the Company's Servicing Fee.
Additional servicing compensation in the form of assumption fees, as provided in
Section 6.01, and late payment charges or otherwise shall be retained by the
Company. The Company shall be entitled to request reimbursement for additional
services, including:
a) express and other delivery charges and any other reasonable out-of-pocket
expenses incurred by the Company with respect to a Mortgage Loan to the extent
not ordinary to the servicing function (but not including salaries, rent and
other general operating expenses of Company normally classified as overhead);
b) preparation and delivery of any special reports, magnetic tapes, disks, or
transmission outside the normal monthly accounting reports; and
c) to the extent not ordinary to the servicing function, any action taken by the
Company which the Company reasonably determines to be necessary or appropriate
in order to protect the rights of Owner, (including property preservation), with
respect to any Mortgage Loan, not to exceed
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$5,000.00 without the prior approval by Owner (with the exception of advances
for real estate taxes and insurance premiums).
Section 6.04 Annual Statement as to Compliance.
The Company shall deliver to the Owner, on or before March 31 of each
year, beginning March 31, 2003, an Officers' Certificate stating that (i) a
review of the activities of the Company during the preceding calendar year and
of the Company's performance under this Agreement has been made under such
officer's supervision, and (ii) to the best of such officer's knowledge, based
on such review, the Company has fulfilled all of its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
Servicing Officer and the nature and status thereof and the action being taken
by the Company to cure such default.
Section 6.05 Annual Independent Public Accountants' Servicing Report.
On or before March 31 of each year, beginning March 31, 2003, the Company,
at its expense, shall cause a firm of independent public accountants that is a
member of the American Institute of Certified Public Accountants to furnish a
statement to the Owner to the effect that such firm has examined certain
documents and records relating to the servicing of mortgage loans in the
Company's portfolio. On the basis of this examination, the CPA firm will
disclose any exceptions or errors relating to the servicing of mortgage loans,
as required by paragraph four (4) of "The Uniform Single Attestation Program for
Mortgage Bankers."
Section 6.06 Owner's Right to Examine Company Records.
The Owner shall have the right, upon reasonable notice to the Company, to
examine and audit any and all of the books, records or other information of the
Company whether held by the Company or by another on behalf of the Company,
which may be relevant to the performance or observance by the Company of the
terms, covenants or conditions of this Agreement, and to discuss such books,
records or other information with an officer or employee of the Company who is
knowledgeable about the matters contained therein.
Section 6.07 Credit Reporting.
For each Mortgage Loan, the Company shall accurately and fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information on its borrower credit files to each of the
following credit repositories: Equifax Credit Information Services, Inc.,
TransUnion, LLC and Experian Information Solutions, Inc. on a monthly basis.
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Section 6.08 Safeguarding Customer Information.
The Servicer hereby covenants to and with the Owner as follows:
1. With respect to the services provided for ▇▇▇▇▇▇ Bank, the Servicer
will maintain security measures designed to meet the objectives of the
Interagency Guidelines Establishing Standards for Safeguarding Customer
Information published in final form on February 1, 2001, 66 Fed. Reg. 8616, and
the rules promulgated thereunder, as amended from time to time.
2. With respect to the services provided for ▇▇▇▇▇▇ Capital, the Servicer,
to the extent applicable, will maintain security measures designed to meet the
objectives of the Securities and Exchange Commission's Regulation S-P published
in final form at 17 C.F.R. 248, and the rules promulgated thereunder, as amended
from time to time.
3. The Servicer shall promptly provide the Owner information regarding
such security measures upon the reasonable request of the Owner or its designee
(including any Master Servicer of the Mortgage Loans) which information shall
include, but not be limited to, any statement on Auditing Standards (SAS) No. 70
report covering the Servicer's operations, Servicer with respect to its security
measures.
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ARTICLE VII
REPORTS TO BE PREPARED BY COMPANY
Section 7.01 Company Shall Provide Access and Information as Reasonably
Required.
The Company shall furnish to the Owner upon written request, during the
term of this Agreement, such periodic, special or other reports or information,
whether or not provided for herein, as shall be necessary, reasonable or
appropriate with respect to the purposes of this Agreement. The Company may
negotiate with the Owner for a reasonable fee for providing such report or
information, unless (i) the Company is required to supply such report or
information pursuant to any other section of this Agreement, or (ii) the report
or information has been requested in connection with Internal Revenue Service
requirements. The Company agrees to execute and deliver all such instruments as
the Owner, from time to time, may reasonably request in order to effectuate the
purposes and to carry out the terms of this Agreement.
Section 7.02 Financial Statements.
The Company understands that, in connection with marketing the Mortgage
Loans, the Owner may make available to a prospective Owner a consolidated
statement of operations of Company for the most recently completed five fiscal
years for which such a statement is available as well as a consolidated
statement of condition at the end of the last two fiscal years covered by such
consolidated statement of operations. The Company, if it has not already done
so, agrees to promptly furnish to Owner copies of the statements specified
above.
The Company also agrees to make available upon reasonable notice and
during normal business hours to any prospective Owner a knowledgeable financial
or accounting officer for the purposes of answering questions respecting recent
developments affecting the Company or the financial statements of the Company
and to permit upon reasonable notice and during normal business hours any
prospective Owner to inspect the Company's servicing facilities for the purpose
of satisfying such prospective Owner that the Company has the ability to service
the Mortgage Loans in accordance with this Agreement.
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ARTICLE VIII
THE COMPANY
Section 8.01 Indemnification; Third Party Claims.
The Company agrees to indemnify the Owner and hold them harmless against
any and all claims, losses, penalties, fines, forfeitures, reasonable legal fees
and related costs, judgments, and any other costs, fees and expenses that the
Owner incurs directly resulting from the failure of the Company to perform its
duties and service the Mortgage Loans in material compliance with the terms of
this Agreement. The Company shall immediately notify the Owner if a claim is
made by a third party with respect to this Agreement or any Mortgage Loans. The
Company shall follow any written instructions received from the Owner in
connection with such claim.
Section 8.02 Merger or Consolidation of the Company.
The Company shall keep in full effect its existence, rights and franchises
as a corporation, and shall preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement, or
the ability of the Company to perform its duties under this Agreement.
Any Person into which the Company may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Company shall be a party, or any Person succeeding to the business of the
Company hereunder, shall be the successor of the Company hereunder without the
execution or filing of any paper or any further act on the part of either of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person shall be an institution (i) that
is qualified to service mortgage loans on behalf of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac
and (ii) that has a net worth of not less than $15,000,000.
Section 8.03 Company Not to Resign.
The Company shall not assign this Agreement (except to any affiliate or
subsidiary of the Company) or resign from the obligations and duties hereby
imposed on it except by mutual consent of the Company and the Owner or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced by an
Opinion of Counsel to such effect delivered to the Owner. No such resignation
shall become effective until a successor shall have assumed the Company's
responsibilities and obligations hereunder in the manner provided in Section
11.01.
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ARTICLE IX
DEFAULT
Section 9.01 Events of Default.
Event of Default, whenever used herein, means any one or more of the
following events:
(i) any failure by the Company to remit to the Owner any payment
required to be made under the terms of this Agreement that continues unremedied
for a period of three Business Days after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been received by the
Company from the Owner; or
(ii) any failure on the part of the Company duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Company set forth in this Agreement or in the Custodial Agreement
that continues unremedied for a period of 45 days (30 days in instances where
the Company has failed to pay insurance premiums) after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been received by the Company from the Owner; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a trustee in bankruptcy,
conservator, receiver or liquidator in any bankruptcy, reorganization,
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 Company and such decree or order shall have
remained in force undischarged or unstayed for a period of 45 days; or
(iv) the Company ceases to be qualified to transact business in any
jurisdiction where it is currently so qualified, but only to the extent such
non-qualification materially and adversely affects the Company's ability to
perform its obligations hereunder; or
(v) the Company shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Company or
of or relating to all or substantially all of its property; or
(vi) the Company shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations; or
(vii) the Company ceases to be approved by either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac (to the extent such entities are then operating in a capacity similar to
that in which they operate on the related Closing Date) as a mortgage loans
servicer for more than 30 (thirty) days.
45
If an Event of Default shall occur, then so long as such Event of Default
shall not have been remedied, the Owner may, by notice in writing to the
Company, in addition to whatever rights the Owner may have at law or equity to
damages, including injunctive relief and specific performance, terminate all the
rights and obligations of the Company under this Agreement and in and to the
Mortgage Loans and the proceeds thereof. On or after the receipt by the Company
of such written notice, all authority and power of the Company under this
Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the successor appointed pursuant to Section 11.01. Upon
written request from the Owner, the Company shall prepare, execute and deliver,
any and all documents and other instruments, place in such successor's
possession all Mortgage Files, and 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 or assignment of the Mortgage
Loans and related documents, or otherwise, at the Company's sole expense. The
Company shall cooperate with the Owner and such successor in effecting the
termination of the Company's responsibilities and rights hereunder, including,
without limitation, the transfer to such successor for administration by it of
all cash amounts (less any amounts due the Company pursuant to the terms of this
Agreement) which shall at the time be credited by the Company to the Custodial
Account or Escrow Account or thereafter received with respect to the Mortgage
Loans.
Section 9.02 Waiver of Defaults.
The Owner may in writing waive any past default by the Company in the
performance of its obligations hereunder and the consequences thereof and any
default in remitting to Owner any required distribution in accordance with this
Agreement, including the Company's obligation to make P&I Advances. Subject to
the preceding sentence, upon any waiver of a past default, such default shall be
deemed not to exist and any Event of Default arising therefrom shall be deemed
to have been remedied for every purpose of this Agreement, except as otherwise
stated in such waiver; provided, however, that no such waiver shall extend to
any subsequent or other default or impair any right consequent thereto, except
as otherwise stated in such waiver.
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ARTICLE X
TERMINATION
Section 10.01 Termination.
(a) This Agreement shall terminate upon either: (i) the later of the
distribution to the Owner of final payment or liquidation with respect to the
last Mortgage Loan (or advances of same by the Company), or the disposition of
all property acquired upon foreclosure or deed in lieu of foreclosure with
respect to the last Mortgage Loan and the remittance of all funds due hereunder
or (ii) mutual consent of the Company and the Owner in writing.
(b) The Company, at its option but only upon thirty (30) days' prior
written notice to the Owner, may terminate this Agreement at any time when the
aggregate Assumed Principal Balance of the Mortgage Loans which remain subject
to this Agreement (the "Remaining Mortgage Loans") has been reduced by
application of Monthly Payments or otherwise to an amount no greater than ten
percent (10%), or other agreed upon percentage as set forth in the Confirmation,
of the aggregate Assumed Principal Balance of the Remaining Mortgage Loans as of
the related Cut-off Date. Such termination shall be effected by the deposit by
the Company of an amount equal to the sum of (i) 100% of the aggregate Assumed
Principal Balance of the Remaining Mortgage Loans as of the first calendar day
of the month in which such repurchase occurs (the "Repurchase Cut-off Date")
after application of principal due on such date whether or not received, and the
appraised value of REO Properties, which appraisals shall be performed by an
appraiser acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac, and (ii) interest on the
aggregate Assumed Principal Balance at the Mortgage Loan Remittance Rate from
the Repurchase Cut-off Date to, but not including, the date of repurchase. Upon
any such purchase of Mortgage Loans and REO Properties under this Section
10.01(b), the Owner shall, to the extent necessary, transfer or cause to be
transferred to the Company title to the repurchased Mortgage Loans and REO
Properties by instruments of transfer or assignment, without recourse. The
Company may not purchase fewer than all of such Mortgage Loans and REO
Properties. The Company shall deposit the repurchase price for the remaining
Mortgage Loans as described in (i) and (ii) above in the Custodial Account no
later than one (1) Business Day prior to the first Remittance Date to occur
after the expiration of thirty days following the notice described in the first
sentence of this Section 10.01(b). Upon presentation and surrender of the
outstanding Mortgage Loans, the Company shall cause to be distributed to the
Owner on such Remittance Date the repurchase price together with the amounts
(including P&I Advances) that would be otherwise distributable to the Owner in
respect of Mortgage Loans and REO Properties on such Remittance Date. Upon
receipt of such final payment, the Owner shall deliver, or cause the Custodian
to deliver to the Company, the Mortgage Files in connection therewith and shall
otherwise use its best efforts to effect or cause to be effected the orderly
transfer of assets to the Company.
Section 10.02 Termination Without Cause.
The Owner may, at its sole option, terminate any rights the Company may
have hereunder, without cause, upon 30 days prior written notice. In the event
of such a termination, the Owner agrees to pay a sum, as liquidated damages, in
an amount equal to (i) two percent (2%) of the
47
aggregate Assumed Principal Balance of the Mortgage Loans if such written notice
is received by the Company on or before the Business Day five years from the
related Closing Date, or (ii) one percent (1%) of the aggregate Assumed
Principal Balance of the Mortgage Loans if such written notice is received by
the Company after the Business Day five years from the related Closing Date
(either amount shall be referred to as "Liquidated Damages".) Any such notice of
termination shall be in writing and delivered to the Company by registered mail
as provided in Section 11.07 of this Agreement.
Termination pursuant to this Section 10.02 shall be effective on the date
(the "Transfer Date") on which the Company transfers all responsibilities,
rights, duties and obligations under this Agreement to the successor appointed
pursuant to Section 11.01. Such successor shall be appointed by the Owner and
such Transfer Date shall be no more than 90 days following the date on which
such written notice of termination is received by the Company. On the Transfer
Date, the Owner shall pay to the Company 90% of the Liquidated Damages by wire
transfer (or other vehicle which permits immediate delivery) to the Company. The
remaining amount of Liquidated Damages owing to the Company shall be paid by the
Owner on the date on which all requirements for the transfer of servicing have
been fulfilled by the Company to the reasonable satisfaction of the Owner. Such
date shall be no later than 20 Business Days after the Transfer Date.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Successor to the Company.
Prior to termination of the Company's responsibilities and duties under
this Agreement pursuant to Section 8.03, 9.01 or 10.01(a)(ii), the Owner shall
(i) succeed to and assume all of the Company's responsibilities, rights, duties
and obligations under this Agreement, or (ii) appoint a successor which shall
succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Company under this Agreement prior to the termination of
Company's responsibilities, duties and liabilities under this Agreement. In
connection with such appointment and assumption, the Owner may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree. The Company shall discharge its
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence that it is obligated to exercise under this
Agreement. The resignation or removal of the Company pursuant to the
aforementioned Sections shall not become effective until a successor shall be
appointed pursuant to this Section and shall not relieve the Company named
herein of its obligations under Section 3.03 or Section 8.01 (in the event a
third party claim is filed during the period of time in which the Company is
servicing the Mortgage Loans).
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Company and to the Owner an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Company, with like effect as if originally named as a party to this Agreement.
No termination of the Company or this Agreement shall affect any claims that the
Owner may have against the Company arising prior to any such termination or
resignation.
The Company shall timely deliver to its successor the funds in the
Custodial Account and the Escrow Account (less any amounts to which the Company
is entitled pursuant to the terms of this Agreement) and all Mortgage Files and
related documents and statements held by it hereunder and the Company shall
account for all funds. The Company shall execute and deliver such instruments
and do such other things all as may reasonably be required to more fully and
definitely vest and confirm in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Company.
Upon a successor's acceptance of appointment as such, the Company shall
notify by mail the Owner of such appointment.
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Section 11.02 Repurchases and Related Assurances.
In the event the Company repurchases a Mortgage Loan pursuant to Section
3.03, the Owner shall upon any request of the Company subsequent to the
Remittance Date on which the Repurchase Price has been remitted to the Owner
take actions reasonably necessary to effect the reconveyance of the Mortgage
Loan.
Section 11.03 Amendment.
This Agreement may be amended only by written agreement signed by the
Company and Owner hereunder.
Section 11.04 Recordation of Assignment of Mortgages.
Each Assignment of Mortgage (if applicable) shall be in a form acceptable
for recording in all appropriate public offices for real property records in the
jurisdiction in which the Mortgaged Property recited in each such Assignment of
Mortgage is situated. At the Owner's request (and upon written notice to the
Company), the Assignments of Mortgage shall be recorded in the name of the Owner
or in the name of a Person designated by the Owner in all appropriate public
offices for real property records. All recording fees related to such initial
recordation shall be paid by the Company. If the Mortgage is registered with
MERS, the Company shall, at its own expense, effect a transfer of such Mortgage
to the name of the Owner in accordance with MERS requirements.
Section 11.05 Duration of Agreement.
This Agreement shall continue in existence and effect until terminated as
herein provided.
Section 11.06 Governing Law.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Pennsylvania, except to the extent preempted by federal law but
without regard to principles of conflicts of laws, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 11.07 Notices.
Any communications provided for or permitted hereunder shall be in
writing and, unless otherwise expressly provided herein, shall be deemed to have
been duly given if (a) personally delivered, (b) mailed by registered mail,
postage prepaid, return receipt requested, and received by the addressee, (c)
sent by express courier delivery service and received by the addressee, or (d)
transmitted by telex, telecopy or telegraph and confirmed by a writing delivered
by means of (a), (b) or (c), to: (i) in the case of the Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice
President, or such other address as may hereafter be furnished to the Owner in
writing by the Company, with a copy to the
50
Company at the same address and (ii) in the case of the Owner, ▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention Manager, Contract Finance
and ▇▇▇▇▇▇ Brothers Bank, FSB, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn:
Manager, ▇▇▇▇▇▇ Brothers Bank.
Section 11.08 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement.
Section 11.09 No Partnership.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Company shall be rendered as an independent contractor and not as agent for
the Owner.
Section 11.10 Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which shall be deemed
to be an original. Such counterparts shall constitute one and the same
agreement.
Section 11.11 Successors and Assigns.
Notwithstanding anything to the contrary in this agreement, it is
understood and agreed that the Owner may transfer its interest in this Agreement
and the Mortgage Loans in whole or in part, in accordance with Article XII of
this Agreement. This Agreement shall inure to the benefit of and be binding upon
the Company and the Owner and their respective successors and assigns permitted
hereunder.
Section 11.12 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to them
in this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
51
(c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs, Clauses and other
subdivisions of this Agreement;
(d) a reference to a Subsection without further reference to a Section is
a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs, Clauses, and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular provision;
and
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
Section 11.13 No Solicitation
The Company agrees not to directly solicit the Mortgagor of any Mortgage
Loan for refinancing of any Mortgage Loan or in any way induce, or directly
attempt to induce, the refinancing of any Mortgage Loan or the substitution of
any Mortgage Loan with any other loan. Nothing contained herein shall prohibit
the Company from (i) providing all Mortgagors which the Seller services mortgage
loans for with any general advertising including information brochures, coupon
books, monthly statements or other similar documentation which indicates
services the Company offers, including refinances or (ii) providing financing of
home equity loans to Mortgagors at the Mortgagor's request.
52
ARTICLE XII
WHOLE LOAN TRANSFER; PASS-THROUGH TRANSFER; AGENCY TRANSFER
Section 12.01 Removal of Mortgage Loans from Inclusion under this
Agreement upon a Whole Loan Transfer, a Pass-Through Transfer or Agency
Transfer on One or more Reconstitution Dates
The Company acknowledges and the Initial Owner agrees that with respect to
some or all of the Mortgage Loans in each Mortgage Loan Package, the Initial
Owner may effect either:
(1) one or more Whole Loan Transfers;
(2) one or more Pass Through Transfers; or
(3) one or more Agency Transfers;
provided, however, that the aggregate number of Whole Loan Transfers,
Pass-Through Transfers and Agency Transfers for each Mortgage Loan Package shall
not exceed two (2).
The Company shall cooperate with the Initial Owner in connection with any
Whole Loan Transfer, Pass-Through Transfer or Agency Transfer contemplated by
the Initial Owner pursuant to this Section. In connection therewith, the Initial
Owner shall deliver any Reconstitution Agreement or other document related to
the Whole Loan Transfer, Pass Through Transfer or Agency Transfer to the Company
at least 10 days prior to such transfer and the Company shall execute any
Reconstitution Agreement which contains servicing provisions substantially
similar to those herein or otherwise reasonably acceptable to the Initial Owner
and the Company and which restates the representations and warranties contained
in Section 3.01 as of the Reconstitution Date (except to the extent any such
representation or warranty is not accurate on such date) and Section 3.02 herein
as of the related Closing Date. The Initial Owner hereby agrees to reimburse the
Company for reasonable "out-of-pocket" expenses incurred by the Company that
relate to such Whole Loan Transfer, Pass-Through Transfer or Agency Transfer,
including reimbursement for the amount which reasonably reflects time and effort
expended by the Company in connection therewith. It is understood and agreed by
Initial Owner and Company that the right to effectuate such Whole Loan Transfer,
Pass-Through Transfer or Agency Transfer as contemplated by this Section 12.01
is limited to the Initial Owner. It is further understood that any subsequent
Owner has the right to transfer Mortgage Loans under this Agreement pursuant to
a Whole Loan Transfer.
All Mortgage Loans not sold or transferred pursuant to a Whole Loan
Transfer, Pass-Through Transfer or Agency Transfer shall be subject to this
Agreement and shall continue to be serviced in accordance with the terms of this
Agreement and with respect thereto this Agreement shall remain in full force and
effect.
53
IN WITNESS WHEREOF, the Company and the Initial Owner have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
GMAC MORTGAGE CORPORATION,
Company
By:______________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ BROTHERS BANK, FSB,
Initial Owner
By:______________________________
Name:____________________________
Title:___________________________
54
COMMONWEALTH OF PENNSYLVANIA )
) SS.
COUNTY OF ▇▇▇▇▇▇▇▇▇▇ )
On the [ ]th day of _________ 200_ before me, a Notary Public in and for
said Commonwealth, personally appeared ______________ known to me to be [Vice
President] of GMAC Mortgage Corporation, that executed the within instrument and
also known to me to be the person who executed it on behalf of said association,
and acknowledged to me that such association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my official seal
the day and year in this certificate first above written.
_____________________________
Notary Public
My Commission expires ________
STATE OF _______________)
) SS.
COUNTY OF ______________)
On the ______ day of ___________ before me, a Notary Public in and for
said state, personally appeared ________________ known to me to be a
_____________ of __________ ________________, the company that executed the
within instrument and also known to me to be the person who executed it on
behalf of said company, and acknowledged to me that such company executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my official seal
the day and year in this certificate first above written.
_____________________________
Notary Public
My Commission expires _______
EXHIBIT A
CONTENTS OF MORTGAGE FILES
With respect to each Mortgage Loan, the Mortgage File shall include each
of the following items (except the items delivered to the Custodian pursuant to
Section 2.03), all of which shall be available for inspection by the Owner and
which may be retained in microfilm, microfiche, optical storage or magnetic
media in lieu of hard copy:
1. The original Mortgage Note endorsed, "Pay to the order of
___________________, without recourse" and signed in the name of the
Company by an authorized officer. Such signature may be an original
signature or a facsimile signature of such officer. If the Mortgage
Loan was acquired by the Company in a merger, the endorsement must
be by "GMAC Mortgage Corporation, successor by merger to [name of
predecessor]"; and if the Mortgage Loan was acquired or originated
by the Company while doing business under another name, the
endorsement must be by "GMAC Mortgage Corporation, formerly known as
[previous name]". The Mortgage Note shall include all intervening
endorsements showing a complete chain of title from the originator
to the Company.
2. The original Mortgage, or a copy of the Mortgage with evidence of
recording thereon certified by the appropriate recording office to
be a true copy of the recorded Mortgage, or, if the original
Mortgage has not yet been returned from the recording office, a copy
of the original Mortgage together with a certificate of a duly
authorized representative of the Company (which certificate may
consist of stamped text appearing on such copy of the Mortgage), the
closing attorney or an officer of the title insurer which issued the
related title insurance policy, certifying that the copy is a true
copy of the original of the Mortgage which has been transmitted for
recording in the appropriate recording office of the jurisdiction in
which the Mortgaged Property is located.
3. Unless the Mortgage is registered with MERS, the original Assignment
of Mortgage, executed in blank, but otherwise in form and substance
acceptable for recording; provided, however, that certain recording
information will not be available if, as of the related Closing
Date, the Company has not received the related Mortgage from the
appropriate recording office. If the Mortgage Loan was acquired by
the Company in a merger, the assignment must be by "GMAC Mortgage
Corporation, successor by merger to [name of predecessor]"; and if
the Mortgage Loan was acquired or originated by the Company while
doing business under another name, the assignment must be by "GMAC
Mortgage Corporation, formerly known as [previous name]". If the
Mortgage is registered with MERS, the Company shall effect a
transfer of such Mortgage to the name of the Initial Owner (or other
designee as directed by the Initial Owner), in accordance with MERS
requirements.
4. The original policy of title insurance or, if such insurance is in
force but the original policy of title insurance has not been
delivered to the Company by the issuing title
-2-
insurer, the report of title insurance or other evidence of title
insurance generally acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac or, if
the Mortgage Loan is the subject of a ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac
approved master title insurance policy, a certified copy of the
certificate of title insurance issued thereunder.
5. Originals or certified true copies from the appropriate recording
offices of all assumption and modification agreements, if any or if
the original has not yet been returned from the recording office, a
copy of such original certified by the Company.
6. Originals, or certified true copies from the appropriate recording
offices, of any intervening assignments of the Mortgage with
evidence of recording thereon, or, if the original intervening
assignment has not yet been returned from the recording office, a
certified copy of such assignment.
7. The original Primary Insurance Policy, if any, or, if the Primary
Insurance Policy has been issued but the original thereof has not
been delivered to the Company by the issuer thereof, a copy of the
Primary Insurance Policy certified by a duly authorized officer of
the Company to be a true, complete and correct copy of the original,
which certification may be in the form of a blanket certification
relating to more than one Mortgage Loan.
8. Original hazard insurance policy or a binder evidencing such
coverage and, if required by law, flood insurance policy, with
extended coverage of the hazard insurance policy, unless the
Mortgage Loan is the subject of a blanket mortgage impairment
insurance policy meeting the requirements of Section 4.11 of the
Agreement.
9. Mortgage Loan closing statement (Form HUD-1 or HUD-1A).
10. Residential loan application.
11. Credit report on the Mortgagor.
12. Residential appraisal report, if applicable.
13. Photograph of the property, if applicable.
14. Income and asset verification, if applicable.
15. Other disclosures required in connection with the origination of the
Mortgage Loan, as applicable.
EXHIBIT B
CUSTODIAL ACCOUNT LETTER AGREEMENT
[Intentionally Omitted]
EXHIBIT C
ESCROW ACCOUNT LETTER AGREEMENT
[Intentionally Omitted]
EXHIBIT D
FORM OF ASSIGNMENT AND CONVEYANCE
On this [_________] day of [______], 2003, GMAC Mortgage Corporation. as the
Company, under that certain Master Mortgage Loan Sale and Servicing Agreement,
dated as of February 1, 2003 (the "Agreement") does hereby sell, transfer,
assign, set over and convey to ▇▇▇▇▇▇ Brothers Bank, FSB, as Purchaser under the
Agreement all rights, title and interest of the Company in and to the Mortgage
Loans listed on the Mortgage Loan Schedule attached hereto as Exhibit A,
together with the related Mortgage Files and all rights and obligations arising
under the documents contained therein. Pursuant to Section 2.03 of the
Agreement, the Company has delivered to the Custodian the documents for each
Mortgage Loan to be purchased as set forth in the Agreement. The ownership of
each Mortgage Note, Mortgage, and the contents of each Mortgage File is vested
in the Purchaser and the ownership of all records and documents with respect to
the related Mortgage Loan prepared by or which come into the possession of the
Company shall immediately vest in the Purchaser and shall be retained and
maintained, in trust, by the Seller at the will of the Purchaser in such
custodial capacity only; and upon request by the Purchaser shall be delivered
promptly by the Company to the Purchaser.
The Company confirms to the Purchaser that the representations and warranties
set forth in Section 3.02 of the Agreement with respect to the Mortgage Loans
listed on the Mortgage Loan Schedule attached hereto, and the representations
and warranties in Section 3.01 of the Agreement with respect to the Company are
true and correct as of the date hereof.
All other terms and conditions of this transaction shall be governed by the
Agreement.
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Agreement.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
GMAC MORTGAGE CORPORATION
By:______________________________
Name:____________________________
Title: _________________________
SCHEDULE I
EXHIBIT A TO ASSIGNMENT AND CONVEYANCE
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
EXHIBIT E
FORM OF MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
EXHIBIT F
FORM OF MONTHLY REMITTANCE STATEMENT
[Intentionally Omitted]
EXHIBIT G
UNDERWRITING STANDARDS
[Intentionally Omitted]