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GREENPOINT MORTGAGE SECURITIES INC.,
Sponsor,
GREENPOINT MORTGAGE FUNDING, INC.,
Servicer,
GREENPOINT HOME EQUITY LOAN TRUST 200_-_,
Issuer,
and
[INDENTURE TRUSTEE],
Indenture Trustee
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SALE AND SERVICING AGREEMENT
Dated as of __________, 200_
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Home Equity Loan Asset-Backed Notes
Series 200_-_
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.............................................................................................1
Section 1.01. Definitions..................................................................................1
Section 1.02. Other Definitional Provisions................................................................1
Section 1.03. Interest Calculations........................................................................2
ARTICLE II Conveyance of Mortgage Loans; Original Issuance of Notes; Tax Treatment................................2
Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to Fund Advances Under Credit
Line Agreements.............................................................................. 2
Section 2.02. Further Encumbrance of Trust Property........................................................6
Section 2.03. Acceptance by Indenture Trustee; Certain Substitution of Mortgage Loans......................7
Section 2.04. Representations and Warranties Regarding the Servicer and the Sponsor........................8
Section 2.05. Representations and Warranties of the Sponsor Regarding the Mortgage Loans; Removal
of Certain Mortgage Loans...................................................................11
Section 2.06. Covenants of the Sponsor....................................................................23
Section 2.07. Removal of Mortgage Loans at Election of Issuer.............................................24
Section 2.08. Execution and Authentication of Notes.......................................................25
Section 2.09. Tax Treatment...............................................................................25
ARTICLE III Administration and Servicing of Mortgage Loans.......................................................26
Section 3.01. The Servicer................................................................................26
Section 3.02. Collection of Certain Mortgage Loan Payments................................................27
Section 3.03. Withdrawals from the Collection Account.....................................................29
Section 3.04. Maintenance of Hazard Insurance; Property Protection Expenses...............................30
Section 3.05. Assumption and Modification Agreements......................................................30
Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage Loans.............31
Section 3.07. Indenture Trustee to Cooperate..............................................................31
Section 3.08. Servicing Compensation; Payment of Certain Expenses by Servicer.............................32
Section 3.09. Annual Statement as to Compliance...........................................................33
Section 3.10. Annual Servicing Report.....................................................................33
Section 3.11. Annual Opinion of Counsel...................................................................33
Section 3.12. Access to Certain Documentation and Information Regarding the Mortgage Loans................33
Section 3.13. Maintenance of Certain Servicing Insurance Policies.........................................34
Section 3.14. Reports to the SEC..........................................................................34
Section 3.15. Tax Returns.................................................................................34
Section 3.16. Information Required by the Internal Revenue Service Generally and Reports of
Foreclosures and Abandonments of Mortgaged Property.........................................35
Section 3.17. Reporting Requirements......................................................................35
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ARTICLE IV SERVICING CERTIFICATE.................................................................................35
Section 4.01. Servicing Certificate.......................................................................35
Section 4.02. Reserved....................................................................................36
Section 4.03. Reserved....................................................................................36
Section 4.04. Loan Data Remittance Report.................................................................36
Section 4.05. Reserve Fund................................................................................37
ARTICLE V The Servicer and the Sponsor...........................................................................37
Section 5.01. Liability of the Servicer and the Sponsor...................................................37
Section 5.02. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer or
the Sponsor.................................................................................37
Section 5.03. Limitation on Liability of the Servicer and Others..........................................37
Section 5.04. Servicer Not to Resign......................................................................38
Section 5.05. Delegation of Duties........................................................................39
Section 5.06. Indemnification of the Trust by the Servicer................................................39
Section 5.07. Indemnification of the Trust by the Sponsor.................................................39
Section 5.08. Limitation on Liability of the Sponsor......................................................39
ARTICLE VI Servicing Termination.................................................................................40
Section 6.01. Events of Servicing Termination.............................................................40
Section 6.02. Indenture Trustee to Act; Appointment of Successor..........................................42
Section 6.03. Notification to Noteholders and Residual Certificateholders.................................43
ARTICLE VII Termination..........................................................................................43
Section 7.01. Termination.................................................................................43
ARTICLE VIII Administrative Duties of the Servicer...............................................................44
Section 8.01. Administrative Duties.......................................................................44
Section 8.02. Records.....................................................................................46
Section 8.03. Additional Information to be Furnished to the Issuer........................................46
ARTICLE IX Miscellaneous Provisions..............................................................................47
Section 9.01. Amendment...................................................................................47
Section 9.02. Recordation of Agreement....................................................................48
Section 9.03. Limitation on Rights of Noteholders.........................................................48
Section 9.04. Governing Law...............................................................................49
Section 9.05. Notices.....................................................................................49
Section 9.06. Severability of Provisions..................................................................50
Section 9.07. Assignment..................................................................................50
Section 9.08. Third-Party Beneficiaries...................................................................50
Section 9.09. Counterparts................................................................................50
Section 9.10. Effect of Headings and Table of Contents....................................................50
Section 9.11. Insurance Agreement.........................................................................50
Section 9.12. Nonpetition Covenant........................................................................50
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EXHIBITS
EXHIBIT A: MORTGAGE LOAN SCHEDULE...........................................A-1
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EXHIBIT B: FORM OF OPINION OF COUNSEL.......................................B-1
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EXHIBIT C-1: OFFICER'S CERTIFICATE: PERMANENT RELEASE......................C-1
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EXHIBIT C-2: OFFICER'S CERTIFICATE: TEMPORARY RELEASE.......................C-2
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EXHIBIT D: FORM OF CREDIT LINE AGREEMENT....................................D-1
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EXHIBIT E: FORM OF MORTGAGE NOTE (SECOND LIEN)..............................E-1
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EXHIBIT F: FORM OF CERTIFICATE: LOAN LEVEL REPORTING.......................F-1
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SALE AND SERVICING AGREEMENT, dated as of __________, 200_,
(the "Agreement") among GREENPOINT HOME EQUITY LOAN TRUST 200_-_, a Delaware
business trust (the "Issuer" or "Trust"), GREENPOINT MORTGAGE SECURITIES INC., a
Delaware corporation (the "Sponsor"), GREENPOINT MORTGAGE FUNDING, INC., a New
York corporation (the "Servicer"), and [INDENTURE TRUSTEE], as Indenture Trustee
(the "Indenture Trustee").
WHEREAS, the Issuer desires to purchase a portfolio of
Mortgage Loans arising in connection with Loan Agreements acquired by GreenPoint
Mortgage Funding, Inc.;
WHEREAS, the Sponsor has purchased such Mortgage Loans from
GreenPoint Mortgage Funding, Inc. and is willing to sell such Mortgage Loans
to the Issuer;
WHEREAS, such Mortgage Loans consist of certain home equity
revolving lines of credit (the "HELOC Mortgage Loans") and certain second lien,
closed-end mortgage loans (the "Closed End Mortgage Loans");
WHEREAS, the Servicer is willing to service all such Mortgage
Loans;
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. All capitalized terms used in this Agreement
and not otherwise defined herein, shall have the meanings assigned thereto in
Annex A to the Indenture dated as of __________, 200_, between the Issuer and
the Indenture Trustee, as the same may be amended and supplemented from time to
time.
Section 1.02. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any instrument governed hereby and in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement, in any instrument governed hereby and in
any certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Agreement or in any such instrument,
certificate or other document, and accounting terms partly defined in this
Agreement or in any such instrument, certificate or other document to the extent
not defined, shall have the respective meanings given to them under generally
accepted accounting principles as in effect on the date of this Agreement or any
such instrument, certificate or other document, as applicable. To the extent
that the definitions of accounting terms in this Agreement or in any such
instrument, certificate or other document are inconsistent with the meanings of
such terms under generally accepted accounting principles, the
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definitions contained in this Agreement or in any such instrument, certificate
or other document shall control.
(c) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
Section 1.03. Interest Calculations. All calculations of interest
hereunder that are made in respect of the Principal Balance of a Mortgage Loan
shall be made on a daily basis using a 365-day year. All calculations of
interest on the Notes shall be made on the basis of the actual number of days in
an Interest Period and a year assumed to consist of 360 days. The calculation of
the Servicing Fee shall be made on the basis of a 360-day year consisting of
twelve 30-day months. All dollar amounts calculated hereunder shall be rounded
to the nearest ▇▇▇▇▇ with one-half of one ▇▇▇▇▇ being rounded down.
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Notes;
Tax Treatment
Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to Fund
Advances Under Credit Line Agreements.
(a) In consideration of the Issuer's delivery to or upon the order of
the Sponsor on the Closing Date of the net proceeds from the sale of the Notes
and the Residual Certificates and the other amounts to be distributed from time
to time to the Sponsor in accordance with the terms of this Agreement, the
Sponsor, concurrently with the execution and delivery of this Agreement, hereby
sells, transfers, assigns, sets over and otherwise conveys to the Issuer,
without recourse (subject to Sections 2.03 and 2.05), all of its right, title
and interest in and to (i) each Mortgage Loan, including its Principal Balance
(including any Additional Balances related thereto) and all collections in
respect thereof received after the Cut-Off Date (excluding Interest Collection
due on or prior to the Cut-Off Date); (ii) property that secured a Mortgage Loan
that is acquired by foreclosure or deed in lieu of foreclosure; (iii) all of the
Sponsor's rights under the Purchase Agreement (including all representations and
warranties of the Servicer contained therein); (iv) the Sponsor's rights under
the hazard insurance policies; (v) the Reserve Fund; (vi) the Policy; (vii) the
Demand Note; and (viii) any proceeds of the foregoing and all other assets
included or to be included in the Trust for the benefit of Noteholders, the
Residual Certificateholders and the Insurer; provided, however, neither the
Indenture Trustee nor the Trust assumes the obligation under any Credit Line
Agreement that provides for the funding of future advances to the Mortgagor
thereunder, and neither the Trust nor the Indenture Trustee shall be obligated
or permitted to fund any such future advances. With respect to the HELOC
Mortgage Loans, Additional Balances shall be part of the related Principal
Balance and are hereby transferred to the Trust on the Closing Date pursuant to
this Section 2.01, and therefore part of the Trust Property. On or prior to the
Closing Date, the Sponsor shall cause the Insurer to deliver the
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Policy to the Indenture Trustee for the benefit of the Noteholders. It is the
intention of the Sponsor that the transfer and assignment contemplated by this
Agreement shall constitute a sale of the Mortgage Loans and other Trust Property
from the Sponsor to the Issuer and that such sale should constitute a valid
transfer and assignment of the Mortgage Loans and other Trust Property to the
Issuer and the beneficial interest in and title to the Mortgage Loans and the
other Trust Property shall not be part of the Sponsor's estate in the event of
the filing of a bankruptcy petition by or against the Sponsor under any
bankruptcy law. In the event that, notwithstanding the intent of the Sponsor,
the transfer and assignment contemplated hereby is held not to be a sale, this
Agreement shall constitute a grant of a security interest in the property
referred to in this Section 2.01 for the benefit of the Noteholders, the
Residual Certificateholders and the Insurer. To the extent that the fair market
value of any Additional Balance is greater than the cash consideration paid by
the Issuer for such Additional Balance, the difference between such fair market
value and the amount of such cash consideration shall be deemed to be a capital
contribution made to the Issuer by the Sponsor. To the extent that the Sponsor
receives cash consideration for the entire fair market value of such Additional
Balance on any future date, any corresponding capital contribution that had
previously been deemed to have been made to the Issuer by the Sponsor shall be
deemed to have been redeemed.
(b) Each of the Servicer and the Sponsor agrees to take or cause to be
taken such actions and execute such documents (including, without limitation,
the filing of all necessary continuation statements for the UCC-1 financing
statements filed in the States of California and Delaware, respectively, which
shall have been filed on or as of the Closing Date) describing the Cut-Off Date
Principal Balances and Additional Balances and naming (i) the Servicer as debtor
and the Sponsor as secured party, and (ii) the Sponsor as debtor and the Issuer
as secured party and any amendments to UCC-1 financing statements required to
reflect a change in the name or corporate structure of the Servicer or the
Sponsor or the filing of any additional UCC-1 financing statements due to the
change in the principal office of the Servicer or the Sponsor (within 10 days of
any event necessitating such filing) as are necessary to perfect and protect the
Noteholders' and the Insurer' interests in each Cut-Off Date Principal Balance
and Additional Balance and the proceeds thereof (other than maintaining
possession by the Indenture Trustee of the Mortgage Loans and the Mortgage
Files).
(c) In connection with such transfer and assignment, the Servicer shall
deliver to the Indenture Trustee the following documents or instruments (each a
"Related Document" and together for each Mortgage Loan, the "Mortgage File")
with respect to each Mortgage Loan on the Closing Date:
(i) with respect to any Closed-End Mortgage Loan, the original
Mortgage Note endorsed in blank or endorsed with the following:
"[Indenture Trustee] as Indenture Trustee for the GreenPoint Home
Equity Loan Trust 200_-_", and with respect to any HELOC Mortgage Loan,
the original Credit Line Agreement;
(ii) an original Assignment of Mortgage in blank in recordable
form;
(iii) the original recorded Mortgage or, if, in connection
with any Mortgage Loan, the original recorded Mortgage with evidence of
recording thereon cannot be delivered on or prior to the Closing Date
because of a delay caused by the public recording office where such
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original Mortgage has been delivered for recordation or because such
original Mortgage has been lost, the Sponsor shall deliver or cause to
be delivered to the Indenture Trustee, a true and correct copy of such
Mortgage, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the Sponsor stating that
such original Mortgage has been dispatched to the appropriate public
recording official or (ii) in the case of an original Mortgage that has
been lost, a certificate by the appropriate county recording office
where such Mortgage is recorded;
(iv) if applicable, the original intervening assignments, if
any ("Intervening Assignments"), with evidence of recording thereon,
showing a complete chain of title to the Mortgage from the originator
to the Indenture Trustee or, if any such original Intervening
Assignment has not been returned from the applicable recording office
or has been lost, a true and correct copy thereof, together with (i) in
the case of a delay caused by the public recording office, an Officer's
Certificate of the Sponsor stating that such original Intervening
Assignment has been dispatched to the appropriate public recording
official for recordation or (ii) in the case of an original Intervening
Assignment that has been lost, a certificate by the appropriate county
recording office where such Mortgage is recorded;
(v) either a title policy, a title search or guaranty title
with respect to the related Mortgaged Property;
(vi) the original of any guaranty executed in connection with
the Mortgage Note;
(vii) the original of each assumption, modification,
consolidation or substitution agreement, if any, relating to the
Mortgage Loans; and
(viii) any security agreement, chattel mortgage or equivalent
instrument executed in connection with the Mortgage.
The Sponsor hereby confirms to the Indenture Trustee that it has caused
the portions of the Electronic Ledgers relating to the Mortgage Loans as of the
Closing Date to be clearly and unambiguously marked, and has made, or will make,
the appropriate entries in its general accounting records to indicate that such
Mortgage Loans have been transferred to the Trust. The Servicer hereby confirms
to the Indenture Trustee that it has clearly and unambiguously made appropriate
entries in its general accounting records indicating that such Mortgage Loans
constitute part of the Trust and are serviced by it on behalf of the Trust in
accordance with the terms hereof.
(d) Notwithstanding the characterization of the Notes as debt for
Federal, state and local income and franchise tax purposes, the parties hereto
intend to treat the transfer of the Mortgage Loans to the Trust as provided
herein as a sale, for certain non-tax purposes, of all the Sponsor's right,
title and interest in and to the Mortgage Loans, whether now existing or
hereafter created, and the other property described above and all proceeds
thereof. In the event such transfer is deemed not to be a sale for such
purposes, the Sponsor grants to the Trust, a security
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interest in all of such party's right, title and interest in, to and under the
Mortgage Loans, whether now existing or hereafter created, and the other
property described above and all proceeds thereof; and this Agreement shall
constitute a security agreement under applicable law.
(e) Within 90 days following delivery of the Mortgage Files to the
Indenture Trustee pursuant to this Section, the Indenture Trustee shall review
each such Mortgage File to ascertain that all required documents set forth in
this Section 2.01 have been executed and received, and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan Schedule and in so
doing the Indenture Trustee may rely on the purported due execution and
genuineness of any signature thereon. If within such 90-day period the Indenture
Trustee finds any document constituting a part of a Mortgage File not to have
been executed or received or to be unrelated to the Mortgage Loans identified in
said Mortgage Loan Schedule or, if in the course of its review, the Indenture
Trustee determines that such Mortgage File is otherwise defective in any
material respect, the Indenture Trustee shall promptly upon the conclusion of
its review notify the Sponsor and the Insurer, and the Sponsor shall have a
period of 90 days after such notice within which to correct or cure any such
defect.
The Indenture Trustee shall have no responsibility for reviewing any
Mortgage File except as expressly provided in this Section 2.01. In reviewing
any Mortgage File pursuant to this Section, the Indenture Trustee shall have no
responsibility for determining whether any document is valid and binding,
whether the text of any assignment or endorsement is in proper or recordable
form (except, if applicable, to determine if the Indenture Trustee is the
assignee or endorsee), whether any document has been recorded in accordance with
the requirements of any applicable jurisdiction, or whether a blanket assignment
is permitted in any applicable jurisdiction, whether any Person executing any
document is authorized to do so or whether any signature thereon is genuine, but
shall only be required to determine whether a document has been executed, that
it appears to be what it purports to be, and, where applicable, that it purports
to be recorded.
Upon its receipt of written notice from the Servicer that the long-term
senior unsecured debt rating of the Servicer is no longer rated at least "____"
by [First Rating Agency] and "____" by [Second Rating Agency], the Sponsor shall
take all necessary steps to prepare and submit for recordation an Assignment of
Mortgage (or a blanket Assignment of Mortgage covering multiple Mortgage Loans
if the same is permitted in any applicable jurisdiction) in the name of the
Indenture Trustee for each Mortgage Loan within 30 days from the date on which
it receives such written notice.
(f) The Sponsor shall sell, assign, transfer, set over and otherwise
convey without recourse to the Indenture Trustee all right, title and interest
of the Sponsor in and to any Eligible Substitute Mortgage Loan delivered to the
Indenture Trustee on behalf of the Trust by the Sponsor pursuant to Section 2.03
or Section 2.05 hereof and all its right, title and interest to principal
collected and interest accruing on such Eligible Substitute Mortgage Loan on and
after the applicable Substitute Cut-Off Date; provided, however, that the
Sponsor shall reserve and retain all right, title and interest in and to
payments of interest due on such Eligible Substitute Mortgage Loan prior to the
applicable Substitute Cut-Off Date; provided, further, that neither the Trust
nor the Indenture Trustee shall be obligated to fund any future advances to the
related Mortgagor under such Eligible Substitute Mortgage Loan.
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In connection with any transfer and assignment of an Eligible
Substitute Mortgage Loan to the Indenture Trustee on behalf of the Trust, the
Sponsor agrees to cause to be delivered to the Indenture Trustee the items
described in Section 2.01(c) on the date of such transfer and assignment or, if
a later delivery time is permitted by Section 2.01(c), then no later than such
later delivery time.
(g) Each Defective Mortgage Loan that is required to be repurchased or
substituted pursuant to the provisions this Agreement or the Purchase Agreement
shall, upon such repurchase or substitution in accordance with the provisions
hereof, be released from the Trust and from the lien created by the Indenture.
As to each Mortgage Loan released from the Trust in connection with the
repurchase thereof or the conveyance of an Eligible Substitute Mortgage Loan
therefor, the Indenture Trustee will transfer, assign, set over and otherwise
convey without recourse, to or upon the order of the Sponsor, all of its right,
title and interest in and to such released Mortgage Loan and all the Trust's
right title and interest to principal collected and interest accruing on such
released Mortgage Loan on and after the first day of the calendar month in which
such Mortgage Loan is released; provided, however, that the Trust shall reserve
and retain all right, title and interest in and to payments of principal and
interest collected on such released Mortgage Loan prior to such date.
Section 2.02. Further Encumbrance of Trust Property.
(a) Immediately upon the conveyance to the Trust by the Sponsor of any
item of the Trust Property pursuant to Section 2.01, all right, title and
interest of the Sponsor in and to such item of Trust Property shall terminate,
and all such right, title and interest shall vest in the Trust, in accordance
with the Trust Agreement and Sections 3802 and 3805 of the Delaware Business
Trust Act (12 Del. Code, ss. 3801 et seq.).
(b) Immediately upon the vesting of the Trust Property in the Trust,
the Trust shall have the sole right to pledge or otherwise encumber, such Trust
Property. Pursuant to the Indenture and contemporaneously with such property
vesting in the Trust pursuant to (a) above, the Trust shall grant a security
interest in the Trust Property to secure the repayment of the Notes. The
Residual Certificates shall represent the beneficial ownership interest in the
Trust Property, and the Residual Certificateholders shall be entitled to receive
distributions with respect thereto as set forth herein.
(c) Prior to the payment in full on the Notes, the payment of all
amounts due to the Insurer under the Insurance Agreement, the termination of the
Policy (as defined therein) and the surrender of the Policy by the Indenture
Trustee to the Insurer, the Indenture Trustee shall hold the Trust Property on
behalf of the Noteholders and the Insurer. Following the payment in full of the
Notes and the release and discharge of the Indenture, all covenants of the
Issuer under Article III of the Indenture shall, until payment in full of the
Residual Certificates, remain as covenants of the Issuer for the benefit of the
Residual Certificateholders, enforceable by the Residual Certificateholders to
the same extent as such covenants were enforceable by the Noteholders prior to
the discharge of the Indenture. Any rights of the Indenture Trustee under
Article III of the Indenture, following the discharge of the Indenture, shall
vest in the Residual Certificateholders.
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Section 2.03. Acceptance by Indenture Trustee; Certain Substitution of
Mortgage Loans.
(a) The Indenture Trustee shall, at such time as there are no Notes
outstanding and all sums due to (i) the Indenture Trustee or any agent or
counsel thereof pursuant to the Indenture, (ii) the Indenture Trustee pursuant
to this Agreement and (iii) the Insurer pursuant to the Insurance Agreement have
been paid, release any remaining portion of the Trust Property to the Sponsor;
provided, that the release of the Reserve Fund is subject to Section 2.05 of the
Insurance Agreement.
(b) The Trust hereby acknowledges its receipt of the Policy and the
Mortgage Loans, and declares that the Indenture Trustee holds and will hold such
instrument, and to the extent that any documents are delivered to it pursuant to
Section 2.01, will hold such documents, and all amounts received by it
thereunder and hereunder, in trust, upon the terms herein set forth, for the use
and benefit of all present and future Noteholders and the Insurer. If the time
to cure any defect in respect of any Mortgage Loan of which the Indenture
Trustee has notified the Sponsor following the review pursuant to Section 2.01
has expired or if at any time any loss is suffered by the Indenture Trustee on
behalf of the Noteholders or the Insurer, in respect of any Mortgage Loan as a
result of (i) a defect in any document constituting a part of its Mortgage File
or (ii) an Assignment of Mortgage to the Indenture Trustee not having been
recorded as required by Section 2.01, then on the next succeeding Business Day,
the Indenture Trustee shall (i) substitute in lieu of such Mortgage Loan all
Eligible Substitute Mortgage Loans and, deliver the Substitution Amount
applicable thereto to the Servicer for deposit in the Collection Account or (ii)
purchase such Mortgage Loan at a purchase price equal to the Loan Purchase Price
thereof, which purchase price shall be delivered to the Servicer for deposit in
the Collection Account. Upon receipt of any Mortgage Loan or of written
notification signed by a Servicing Officer to the effect that the Loan Purchase
Price in respect of a Defective Mortgage Loan has been deposited into the
Collection Account, then as promptly as practicable, the Indenture Trustee shall
execute such documents and instruments of transfer presented by the Sponsor, in
each case without recourse, representation or warranty, and take such other
actions as shall reasonably be requested by the Sponsor to effect such transfer
by the Trust of such Defective Mortgage Loan pursuant to this Section. It is
understood and agreed that the obligation of the Sponsor to accept a transfer of
a Defective Mortgage Loan and to either convey an Eligible Substitute Mortgage
Loan or to make a deposit of any related Loan Purchase Price into the Collection
Account shall constitute the sole remedy respecting such defect available to
Noteholders and the Indenture Trustee against the Sponsor.
(c) As to any Eligible Substitute Mortgage Loan, the Sponsor shall, if
required to deliver any such Eligible Substitute Mortgage Loan, deliver to the
Indenture Trustee with respect to such Eligible Substitute Mortgage Loan such
documents and agreements as are required to be held by the Indenture Trustee in
accordance with Section 2.01. For any Collection Period during which the Sponsor
substitutes one or more Eligible Substitute Mortgage Loans, the Servicer shall
determine the Substitution Amount which amount shall be deposited by the Sponsor
in the Collection Account at the time of substitution. All amounts received in
respect of the Eligible Substitute Mortgage Loan during the Collection Period in
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which the circumstances giving rise to such substitution occur shall not be a
part of the Trust and shall not be deposited by the Servicer in the Collection
Account. All amounts received by the Servicer during the Collection Period in
which the circumstances giving rise to such substitution occur in respect of any
Defective Mortgage Loan so removed by the Trust shall be deposited by the
Servicer in the Collection Account. Upon such substitution, the Eligible
Substitute Mortgage Loan shall be subject to the terms of this Agreement in all
respects, and the Sponsor shall be deemed (i) to have made with respect to such
Eligible Substitute Mortgage Loan as of the date of substitution, the covenants,
representations and warranties set forth in Section 2.05 and (ii) to have
certified that such Mortgage Loan is an Eligible Substitute Mortgage Loan. The
procedures applied by the Sponsor in selecting each Eligible Substitute Mortgage
Loan shall not be materially adverse to the interests of the Indenture Trustee,
the Noteholders or the Insurer.
The Servicer, promptly following the transfer of a Defective Mortgage
Loan from, or an Eligible Substitute Mortgage Loan to, the Trust pursuant to
this Section, shall amend the Mortgage Loan Schedule and make appropriate
entries in its general account records to reflect such transfer. The Servicer
shall, following such transfer, appropriately ▇▇▇▇ its records to indicate that
it is no longer servicing such Mortgage Loan on behalf of the Trust. The
Sponsor, promptly following such transfer, shall appropriately ▇▇▇▇ its
Electronic Ledger and make appropriate entries in its general account records to
reflect such transfer.
Section 2.04. Representations and Warranties Regarding the Servicer and
the Sponsor.
(a) The Servicer represents and warrants to the Indenture Trustee and
the Insurer that as of (i) the Closing Date and (ii) each date on which any
Mortgage Loans are transferred from the Sponsor to the Issuer pursuant to
Article II hereof:
(i) The Servicer is a New York corporation, validly existing
and in good standing under the laws of the State of New York, and has
the corporate power to own its assets and to transact the business in
which it is currently engaged. The Servicer is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it or
any properties owned or leased by it requires such qualification and in
which the failure so to qualify would have a material adverse effect on
the business, properties, assets, or condition (financial or other) of
the Servicer;
(ii) The Servicer has the power and authority to make,
execute, deliver and perform this Agreement and all of the transactions
contemplated under this Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance
of this Agreement. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of the Servicer
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies;
(iii) The Servicer is not required to obtain the consent of
any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority,
bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement, except for
such consent, license, approval or authorization, or registration or
declaration, as shall have been obtained or filed, as the case may be,
prior to the Closing Date;
8
(iv) The execution, delivery and performance of this Agreement
by the Servicer will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to the
Servicer or any provision of the Certificate of Incorporation or Bylaws
of the Servicer, or constitute a material breach of any mortgage,
Indenture, contract or other agreement to which the Servicer is a party
or by which the Servicer may be bound;
(v) No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to
the knowledge of the Servicer threatened, against the Servicer or any
of its properties or with respect to this Agreement or the Notes; and
(vi) The Servicer is solvent and will not be rendered
insolvent by the transactions described herein and, after giving effect
to the transactions described herein, will not be left with an
unreasonably small amount of capital with which to engage in the
ordinary course of its business and the Servicer does not intend to
incur, nor does the Servicer believe that it has incurred, debts beyond
its ability to pay as they mature. The Servicer does not contemplate
the commencement of insolvency, liquidation or consolidation
proceedings or the appointment of a receiver, liquidator, conservator,
Indenture Trustee or similar official in respect of the Servicer or any
of its respective assets.
The representations and warranties set forth in this Section 2.04(a) shall
survive the sale and assignment of the Mortgage Loans to the Trust. Upon
discovery of a breach of any representations and warranties which materially and
adversely affects the interests of the Noteholders or the Insurer, the person
discovering such breach shall give written notice within five (5) days of
discovery to the other parties and the Insurer. Within 90 days of its discovery
or its receipt of notice of breach, or, with the prior written consent of a
Responsible Officer of the Indenture Trustee and the Insurer, such longer period
specified in such consent, the Servicer shall cure such breach in all material
respects.
(b) The Sponsor represents and warrants to the Indenture Trustee and
the Insurer that as of (i) the Closing Date and (ii) each date on which any
Mortgage Loans are transferred from the Sponsor to the Issuer pursuant to
Article II hereof:
(i) The Sponsor is a Delaware corporation, validly existing
and in good standing under the laws of the State of Delaware, and has
the statutory power to own its assets and to transact the business in
which it is currently engaged. The Sponsor is duly qualified to do
business as a foreign limited liability company and is in good standing
in each jurisdiction in which the character of the business transacted
by it or any properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a
material adverse effect on the business, properties, assets, or
condition (financial or other) of the Sponsor;
9
(ii) The Sponsor has the power and authority to make, execute,
deliver and perform this Agreement and all of the transactions
contemplated under this Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance
of this Agreement. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of the Sponsor
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies;
(iii) The Sponsor is not required to obtain the consent of any
other party or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance,
validity or enforceability of this Agreement;
(iv) The execution, delivery and performance of this Agreement
by the Sponsor will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to the
Sponsor or any provision of the Certificate of Incorporation or bylaws
of the Sponsor, or constitute a material breach of any mortgage,
Indenture, contract or other agreement to which the Sponsor is a party
or by which the Sponsor may be bound;
(v) No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to
the knowledge of the Sponsor threatened, against the Sponsor or any of
its properties or with respect to this Agreement or the Notes; and
(vi) The Sponsor is solvent and will not be rendered insolvent
by the transactions described herein and, after giving effect to the
transactions described herein, will not be left with an unreasonably
small amount of capital with which to engage in the ordinary course of
its business and the Sponsor does not intend to incur, nor does the
Sponsor believe that it has incurred, debts beyond its ability to pay
as they mature. The Sponsor does not contemplate the commencement of
insolvency, liquidation or consolidation proceedings or the appointment
of a receiver, liquidator, conservator, Indenture Trustee or similar
official in respect of the Sponsor or any of its respective assets.
The representations and warranties set forth in this Section 2.04(b) shall
survive the sale and assignment of the Mortgage Loans to the Trust. Upon
discovery of a breach of any representations and warranties which materially and
adversely affects the interests of the Noteholders or the Insurer, the person
discovering such breach shall give prompt written notice to the other parties,
and the Insurer. Within 90 days of its discovery or its receipt of notice of
breach, or, with the prior written consent of a Responsible Officer of the
Indenture Trustee and the Insurer, such longer period specified in such consent,
the Sponsor shall cure such breach in all material respects.
10
Section 2.05. Representations and Warranties of the Sponsor Regarding
the Mortgage Loans; Removal of Certain Mortgage Loans.
(a) The Sponsor hereby makes the following representations and
warranties on which the Issuer is deemed to have relied in acquiring the
Mortgage Loans and upon which the Insurer is deemed to rely in issuing the
Policy. Such representations and warranties speak as of the execution and
delivery of this Agreement, as of the Closing Date and as of the applicable
Transfer Date with respect to the Mortgage Loans, but shall survive the sale,
transfer, and assignment of the Mortgage Loans to the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture,
(i) As of the Closing Date with respect to the Mortgage Loans
and as of the related Transfer Date with respect to any Eligible
Substitute Mortgage Loans and with respect to any HELOC Mortgage Loan,
as of the date any Additional Balance is created, the information set
forth in the Mortgage Loan Schedule for such Mortgage Loans is true and
correct in all material respects;
(ii) Each Mortgage Loan is being serviced by the Servicer;
(iii) The applicable Cut-Off Date Principal Balance has not
been assigned or pledged, and the Sponsor is the sole owner and holder
of such Cut-Off Date Principal Balance free and clear of any and all
liens, claims, encumbrances, participation interests, equities,
pledges, charges or security interests of any nature, and has full
right and authority, under all governmental and regulatory bodies
having jurisdiction over the ownership of the applicable Mortgage
Loans, to sell, assign or transfer the same pursuant to this Agreement
and upon its acquisition of the Mortgage Loans, the Trust will be the
sole owner of the Cut-Off Date Principal Balance free and clear of any
and all liens claims, encumbrances, participating interests, equities,
pledges, charges, or security interests of any nature;
(iv) Except with respect to liens released immediately prior
to the transfer herein contemplated, each Credit Line Agreement and
each Mortgage Note and related Mortgage has not been assigned or
pledged and immediately prior to the transfer and assignment herein
contemplated, the Sponsor held good, marketable and indefeasible title
to, and was the sole owner and holder of, each Mortgage Loan subject to
no liens, charges, mortgages, claims, participation interests,
equities, pledges or security interests of any nature, encumbrances or
rights of others (collectively, a "Lien"); the Sponsor has full right
and ---- authority under all governmental and regulatory bodies having
jurisdiction over the Sponsor, subject to no interest or participation
of, or agreement with, any party, to sell and assign the same pursuant
to this Agreement; and immediately upon the transfers and assignments
herein contemplated, the Sponsor shall have transferred all of its
right, title and interest in and to each Mortgage Loan and the Trust
will hold good, marketable and indefeasible title, to, and be the sole
owner of, each Mortgage Loan subject to no Liens;
(v) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
11
Substitute Mortgage Loans, the related Mortgage is a valid and
subsisting first or second lien, as set forth on the Mortgage Loan
Schedule with respect to each related Mortgaged Property, and as of the
applicable Cut-Off Date the related Mortgaged Property is free and
clear of all encumbrances and liens having priority over the first or
second lien, as applicable, of such Mortgage except for liens for (i)
real estate taxes and special assessments not yet delinquent; (ii) any
first mortgage loan secured by such Mortgaged Property and specified on
the Mortgage Loan Schedule; (iii) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record as of the date of recording that are acceptable to mortgage
lending institutions generally or specifically reflected in the
appraisals; and (iv) 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 such Mortgage;
(vi) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, there is no valid right to rescission
offset, defense (including the defense of usury) or counterclaim of any
obligor under any Loan Agreement or Mortgage;
(vii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, there is no delinquent recording or other
tax or fee or assessment lien against any related Mortgaged Property;
(viii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, there is no proceeding pending or threatened
for the total or partial condemnation of any Mortgaged Property, nor is
such a proceeding currently occurring, and such property is in good
repair and is undamaged by waste, fire, earthquake or earth movement,
windstorm, flood, tornado or other casualty, so as to affect adversely
the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;
(ix) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, 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 or equal
to the lien of the related Mortgage, except liens which are fully
insured against by the title insurance policy or other title protection
referred to in clause (xiv);
(x) No Minimum Monthly Payment is more than 59 days delinquent
(measured on a contractual basis);
(xi) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, for each Mortgage Loan, the related Mortgage
File contains each of the documents and instruments specified to be
included therein and such Mortgage File has been delivered to the
Indenture Trustee;
12
(xii) The related Loan Agreement and the related Mortgage at
origination complied in all material respects with applicable state and
federal laws and regulations, including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, recording or disclosure laws
applicable to the Mortgage Loans and consummation of the transactions
contemplated hereby, including without limitation the receipt of
interest, will not involve the violation or such laws;
(xiii) On the Closing Date with respect to the Mortgage Loans
and to the extent not already included in such filing, on the
applicable Transfer Date with respect to any Eligible Substitute
Mortgage Loans, the Sponsor has filed UCC-1 financing statements with
respect to such Mortgage Loans;
(xiv) A lender's policy of title insurance, ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
lender master protection program (standard mortgage guaranty) or a
commitment (binder) to issue the same or an attorney's certificate or
opinion of title was effective on the date of the origination of each
mortgage loan and each such policy or certificate or opinion of title
is valid and remains in full force and effect;
(xv) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, none of the Mortgaged Properties is a mobile
home or a manufactured housing unit;
(xvi) As of the Cut-Off Date for the Mortgage Loans no more
than (a) ____% of the Pool I Mortgage Loans (by Pool I Balance) and (b)
____% of the Pool II Mortgage Loans (by Pool II Balance) are secured by
Mortgaged Properties located in one United States postal zip code;
(xvii) The Combined Loan-to-Value Ratio for each Pool I
Mortgage Loan was not in excess of ____% and the Combined Loan-to-Value
Ratio for each Pool II Mortgage Loan was not in excess of ____%;
(xviii) Each Pool I Mortgage Loan substantially conforms to
all applicable loan origination standards with respect to loan balances
as of the date of origination set forth by ▇▇▇▇▇▇▇ Mac;
(xix) No selection procedure reasonably believed by the
Sponsor to be adverse to the interests of the Noteholders or the
Insurer was utilized in selecting the Mortgage Loans for sale to the
Trust, provided, however, that the Mortgage Loans were selected from
the pool of mortgage loans originated in connection with the Sponsor's
mortgage loan origination program;
(xx) The Sponsor has not transferred the Mortgage Loans to the
Trust with any intent to hinder, delay or defraud any of its creditors;
(xxi) The Minimum Monthly Payment with respect to any Mortgage
Loan is not less than the interest accrued at the applicable Loan Rate
on the average daily Principal Balance during the interest period
relating to the date on which such Minimum Monthly Payment is due;
(xxii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, each Loan Agreement and each Mortgage Loan
is genuine and is a legal, valid, binding obligation and enforceable
obligation of the related Mortgagor, except as the enforceability
thereof may be limited by the bankruptcy, insolvency or similar laws
affecting creditors' rights generally;
(xxiii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, there has been no default, breach, violation
or event of acceleration of any senior mortgage loan related to a
Mortgaged Property that has not been cured by a party other than the
Servicer;
(xxiv) The terms of each Mortgage Note and each Mortgage have
not been impaired, altered or modified in any respect, except by a
written instrument which (if such instrument is secured by real
property) has been recorded, if necessary, to protect the interest of
the Noteholders and which has been delivered to the Indenture Trustee.
The substance of any such alteration or modification is reflected on
the related Mortgage Loan Schedule and has been approved by the primary
mortgage guaranty insurer, if any;
(xxv) The definition of "prime rate" in each Credit Line
Agreement relating to a HELOC Mortgage Loan does not differ materially
from the definition in the form of Credit Line Agreement in Exhibit D;
(xxvi) The weighted average remaining term to maturity of the
Pool I Mortgage Loans on a contractual basis as of the related Cut-Off
Date is approximately ____ months. The weighted average remaining term
to maturity of the Pool II Mortgage Loans on a contractual basis as of
the related Cut-Off Date is approximately ____ months. On each date
that the Loan Rates relating to HELOC Mortgage Loans have been
adjusted, interest rate adjustments on the HELOC Mortgage Loans were
made in compliance with the related Mortgages and Credit Line Agreement
and applicable law. Over the term of each HELOC Mortgage Loan, the Loan
Rate may not exceed the related Loan Rate Cap, if any. With respect to
the Pool I HELOC Mortgage Loans, the weighted average Loan Rate Cap is
approximately ____%. With respect to the Pool II HELOC Mortgage Loans,
the weighted average Loan Rate Cap is approximately ____%. With respect
to the Pool I HELOC Mortgage Loans, the margins range between ____% and
____% and the weighted average margin is approximately ____% as of the
related Cut-Off Date. With respect to the Pool II HELOC Mortgage Loans,
the margins range between ____% and ____% and the weighted average
margin is approximately ____% as of the related Cut-Off Date. The Loan
Rates on the Pool I Mortgage Loans range between ____% and ____%, the
Loan Rates on the Pool II Mortgage Loans range between ____% and ____%,
and the weighted average Loan Rate is approximately ____% for Pool I
and ____% for Pool II;
14
(xxvii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, each Mortgaged Property consists of a single
parcel of real property with a one-to-four unit single family residence
erected thereon, or an individual condominium unit, planned unit
development unit or townhouse;
(xxviii) No more than ____% (by Pool I Balance) of the Pool I
Mortgage Loans are secured by real property improved by individual
condominium units, planned development units or two-to-four family
residences erected thereon, and approximately ____% (by Pool I Balance)
of the Pool I Mortgage Loans are secured by real property with a
one-family residence erected thereon. No more than ____% (by Pool II
Balance) of the Pool II Mortgage Loans are secured by real property
improved by individual condominium units, planned development units or
two-to-four family residences erected thereon, and approximately ____%
(by Pool II Balance) of the Pool II Mortgage Loans are secured by real
property with a one-family residence erected thereon;
(xxix) Each Mortgage Note evidencing a Closed End Mortgage
Loan is comprised of one original promissory note and each such
promissory note constitutes an "instrument" for purposes of Section
9-105(1)(i) of the UCC. There is no obligation on the part of the
Sponsor or any other party to make payments in addition to those made
by the Mortgagor with respect to the Closed End Mortgage Loans;
(xxx) The Credit Limits on the Pool I HELOC Mortgage Loans
range between $____ and $____ with an average of approximately $____.
The Credit Limits on the Pool II HELOC Mortgage Loans range between
$____ and $____ with an average of approximately $____. The Principal
Balances on the Pool I HELOC Mortgage Loans range between $____ and
$____ with an average of approximately $____. The Principal Balances on
the Pool II HELOC Mortgage Loans range between $____ and $____ with an
average of approximately $____. The Principal Balances on the Pool I
Closed End Mortgage Loans range between $____ and $____ with an average
of approximately $____. The Principal Balances on the Pool II Closed
End Mortgage Loans range between $____ and $____ with an average of
approximately $____. The average Credit Limit Utilization Rate
(weighted by credit line) of the Pool I HELOC Mortgage Loans is
approximately ____%. The average Credit Limit Utilization Rate
(weighted by credit line) of the Pool II HELOC Mortgage Loans is
approximately ____%;
(xxxi) Substantially all of the Mortgage Loans are second
liens, and either (A) no consent for each Mortgage Loan was required by
the holder of the related senior lien, if any, prior to the making of
such Mortgage Loan or (B) such consent has been obtained and is
contained in the related Mortgage File;
(xxxii) This Agreement constitutes a valid transfer and
assignment to the Trust of all right, title and interest of the Sponsor
in and to the Cut-Off Date Principal Balances with respect to the
applicable Mortgage Loans, all monies due or to become due with respect
thereto and all proceeds of such Cut-Off Date Principal Balances with
respect to the Mortgage Loans and such funds as are from time to time
deposited in the Collection Account (excluding any investment earnings
thereon) and all other property specified in the definition of "Trust"
15
as being part of the corpus of the Trust conveyed to the Trust, and
upon payment for the Additional Balances, will constitute a valid
transfer and assignment to the Indenture Trustee of all right, title
and interest of the Sponsor in and to the Additional Balances, all
monies due or to become due with respect thereto, and all proceeds of
such Additional Balances and all other property specified in the
definition of "Trust" relating to the Additional Balances;
(xxxiii) As of the Closing Date, no Mortgage Loan is the
subject of foreclosure proceedings and, to the best of the Sponsor's
knowledge, no obligor of any of the Mortgage Loans has filed for
bankruptcy protection;
(xxxiv) The proceeds of each Closed End Mortgage Loan have
been fully disbursed, and there is no obligation on the part of the
mortgagee to make future advances thereunder. 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. All
costs, fees and expenses incurred in making or closing or recording
such Closed End Mortgage Loans were paid;
(xxxv) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of
the benefits of the security, including (A) in the case of a Mortgage
designated as a deed of trust, by trustee's sale and (B) otherwise by
judicial foreclosure. Subject to applicable state law, there is no
homestead or other exemption available to the Mortgagor which would
materially interfere with the rights to sell the Mortgaged Property at
a trustee's sale or the right to foreclose upon the related Mortgage;
(xxxvi) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, except for events permissible under Section
3.05(a)(x) of this Agreement, there is no default, breach, violation or
event of acceleration existing under any Mortgage or the related
Mortgage Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute
a default, breach, violation or event of acceleration; and the Sponsor
has not waived any default, breach, violation or event of acceleration;
(xxxvii) To the best knowledge of the Sponsor, all parties to
the Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage have
been duly and properly executed by such parties; Each Mortgage and
Mortgage Note is the legal, valid and binding obligation of the related
Mortgagor and is enforceable by the Issuer against the Mortgagor in
accordance with its terms, except only as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and by law;
(xxxviii)As of the Cut-Off Date no more than ____% of the
Principal Balance of the Pool I Mortgage Loans, nor more than ____% of
the Principal Balance of the Pool II Mortgage Loans represent Mortgage
Loans with respect to which the related Mortgagor had a Credit Score of
____ or less at the time of origination or whose Credit Score was
unavailable.
16
(xxxix) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, no Mortgagor has been released, in whole or
in part, except in connection with an assumption agreement which has
been approved by the applicable title insurer (to the extent required
by such title insurer) and which is part of the Mortgage File delivered
to the Indenture Trustee;
(xl) At the time of origination of each Mortgage Loan, the
related prior lien was not more than 30 days delinquent. Additionally,
as of the Closing Date, no senior mortgage loan on the related
Mortgaged Property was more than 59 days delinquent;
(xli) All required inspections, licenses and certificates with
respect to the use and occupancy of all occupied portions of all
property securing the Mortgages have been made, obtained or issued, as
applicable;
(xlii) If the improvements securing a Mortgage Loan were in a
federally designated special flood hazard area as of the date of
origination, flood insurance to the extent required in Section 3.04
covers the related Mortgaged Property (either by coverage under the
federal flood insurance program or by coverage by private insurers);
(xliii) With respect to each Mortgage Loan, the related prior
lien does not provide for negative amortization;
(xliv) With respect to each Mortgage Loan, the maturity date
of the Mortgage Loan is prior to the maturity date of the related prior
lien if such prior lien provides for a balloon payment;
(xlv) All amounts received after the Cut-Off Date with respect
to the Mortgage Loans to which the Sponsor is not entitled will be
deposited into the Collection Account within one Business Day after the
Closing Date;
(xlvi) Each Pool I Mortgage Loan is secured by a property
having an appraised value as of origination of $____ or less and each
Pool II Mortgage Loan is secured by a property having an appraised
value as of origination of $____ or less;
(xlvii) Except for events permissible under Section 3.05(a)(x)
of this Agreement, there are no defaults in complying with the terms of
the Mortgage, and either (1) any taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges or ground rents
which previously became due and owing have been paid, or (2) an escrow
of funds has been established in an amount sufficient to pay for every
such item which remains unpaid and which has been assessed but is not
yet due and payable. There are no defaults in complying with the terms
of any senior mortgage on the related Mortgaged Property that have not
been cured by anyone other than the Servicer, except for any payment
defaults of less than 30 days. Except for payments in the nature of
escrow payments, including without limitation, taxes and insurance
17
payments, the Sponsor has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount
required by the Mortgage Note, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage
proceeds, whichever is greater, to the day which precedes by one month
the Due Date of the first installment of principal and interest;
(xlviii) With respect to each Mortgage Loan, the improvements
upon each Mortgaged Property are covered by a valid and existing hazard
insurance policy with a carrier generally acceptable to the Servicer
that provides for fire and extended coverage representing coverage not
less than (a) the Credit Limit of such HELOC Mortgage Loan or (b) the
Cut-Off Date Principal Balance of such Closed End Mortgage Loan or (c)
the maximum insurable value of the Mortgaged Property;
(xlix) No misrepresentation of a material fact or fraud in
respect of the origination, modification or amendment of any Mortgage
Loan has taken place on the part of any person, including, without
limitation, the related Mortgagor, any appraiser, any builder or
developer or any party involved in the origination of such Mortgage
Loan;
(l) With respect to the Pool I Mortgage Loans, the terms of
the Mortgage Note and the Mortgage have not been impaired, altered or
modified in any material respect, except by a written instrument which
has been recorded or is in the process of being recorded, if necessary,
to protect the interests of the Noteholders and which has been or will
be delivered to the Indenture Trustee on behalf of the Trust;
(li) As of the Cut-Off Date, except as otherwise indicated in
the pool tape, no Mortgage Loan is more than 30 days delinquent in
payment of principal and interest. In addition, none of the Mortgage
Loans have been 30 or more days delinquent for two payment periods in
the last 12 months;
(lii) With respect to the Pool I Mortgage Loans, approximately
89.36% of the Mortgage Loans, as of the Closing Date, are fixed rate
fully amortizing Mortgage Loans having an original term to maturity
from the date on which the first monthly payment is due of not more
than 30 years. Each Mortgage Note with respect to a fixed rate and
balloon Mortgage Note will provide for a schedule of substantially
level and equal Monthly Payments which are sufficient to amortize fully
the principal balance of such Mortgage Loan over a period of time equal
to the amortization period of such Mortgage Note; provided, however,
that certain -------- ------- Mortgage Loans constituting approximately
____% of the aggregate balance of the Mortgage Loans as of Cut-Off Date
are balloon loans that provide for final monthly payment substantially
greater than the preceding monthly payments. All such balloon loans
provide for monthly payment based upon a 30 year amortization schedule
with a final balloon payment no later than the 15th year;
(liii) Except for Mortgage Loans that are delinquent for a
time period less than that set forth in (li) above, there is no
default, breach, violation or event of acceleration existing under any
Mortgage or the related Mortgage Note and no event which, with the
18
passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of
acceleration; and neither the Sponsor, nor any other entity involved in
originating or servicing a Mortgage Loan, has waived any default,
breach, violation or event of acceleration;
(liv) None of the Mortgage Loans are cooperative share
mortgages;
(lv) Each appraisal of a Mortgage Loan that was used to
determine the appraised value of the related Mortgaged Property was
conducted generally in accordance with the Sponsor's mortgage loan
origination program(s) and customary industry standards and included an
assessment of the fair market value of the related mortgaged property
at the time of the appraisal. The Mortgage File contains an appraisal
of the applicable Mortgaged Property;
(lvi) All individual insurance policies contain a standard
mortgagee clause naming the Sponsor, its successors and assigns, as
mortgagee. All premiums thereon have been paid. Each Mortgage obligates
the Mortgagor thereunder to maintain all such insurance at the
Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor;
(lvii) Any advances made after the date of origination of a
Mortgage Loan but prior to the Cut-Off Date have been consolidated with
the outstanding principal amount secured by the related Mortgage, and
the secured principal amount, as consolidated, bears a single interest
rate and single repayment term reflected on the Mortgage Loan Schedule.
The consolidated principal amount does not exceed the original
principal amount of the related Mortgage Loan;
(lviii) No improvement located on or being part of any
Mortgaged Property is in violation of any applicable zoning law or
regulation. All inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of each Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities and such Mortgaged Property is lawfully
occupied under the applicable law and all improvements which were
included for the purpose of determining the appraised value of the
Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
property encroach upon the Mortgage Property;
(lix) The proceeds of each fixed rate and balloon Mortgage
Loan have been fully disbursed and there is no obligation on the part
of the mortgagee to make future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvements
and as to disbursement of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in making, closing or
recording the Mortgage Loans were paid and the Mortgagor is not
entitled to any refund of amounts paid or due under the Mortgage Note;
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(lx) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature;
(lxi) All parties which have had any interest in the Mortgage
Loan, whether as originator, mortgagee, assignee, pledgee or otherwise,
are (or, during the period in which they held and disposed of such
interest, were): (A) organized under the laws of such state, or (B)
qualified to do business in such state, or (C) federal savings and loan
associations or national banks having principal offices in such state,
or (D) not doing business in such state so as to require qualification
or licensing, or (E) not otherwise required or licensed in such state.
To the best of Sponsor's knowledge, all parties which have had any
interest in the Mortgage Loan were in compliance with any and all
applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located or were not required to be licensed in
such state;
(lxii) Each document or instrument in the related Mortgage
File is in a form generally acceptable to prudent mortgage lenders that
regularly originate or purchase mortgage loans comparable to the
Mortgage Loans for sale to prudent investors in the secondary market
that invest in mortgage loans such as the Mortgage Loans;
(lxiii) Each original Mortgage was recorded and all subsequent
assignments of the original Mortgage (other than the assignment to the
Indenture Trustee) have been recorded in the appropriate jurisdictions
wherein such recordation is necessary to perfect the lien thereof as
against creditors of the Sponsor, or is in the process of being
recorded;
(lxiv) No Mortgage Loan was originated under a buydown plan;
(lxv) No Mortgage Loan is subject to the requirements of the
Home Ownership and Equity Protection Act of 1994 ("HOEPA") or is in
violation of any state or municipal law comparable to HOEPA;
(lxvi) The Servicer for each Mortgage Loan will accurately and
fully report its borrower credit files to all three credit repositories
in a timely manner;
(lxvii) No proceeds from any Mortgage Loan were used to
purchase single-premium credit insurance policies;
(lxviii) No Mortgage Loan has a prepayment penalty term longer
than five years after its origination;
(lxix) Each Mortgage Loan conforms, and all Mortgage Loans in
the aggregate conform, in all material respects, to the descriptions
thereof set forth in the Prospectus Supplement;
(lxx) Each Mortgage Loan was originated on or after
___________, ____;
(lxxi) The Sponsor represents and warrants that the Servicer
currently operates or actively participates in an on-going business (A)
to originate single family mortgage loans ("Loans"), and/or (B) to make
periodic purchases of Loans from originators or sellers, and/or (C) to
issue and/or purchase securities or bonds supported by the Loans, a
portion of which Loans are made to borrowers who are:
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(a) low-income families (families with incomes of
80% or less of area median income) living in
low-income areas (a census tract or block
numbering area in which the median income does
not exceed 80 percent of the area median income);
or
(b) very low-income families (families with
incomes of 60% or less of area median income).
(lxxii) Each Mortgage contains a provision for the
acceleration of the payment of the unpaid principal balance of the
related Mortgage Loan in the event the related Mortgaged Property is
sold without the prior consent of the mortgagee thereunder;
(lxxiii) To the best of Sponsor's knowledge, Pool I does not
contain the first and second lien mortgage loans relating to a single
Mortgaged Property if the aggregate original principal balance of such
mortgage loans exceeds ▇▇▇▇▇▇▇ Mac's loan limits. To the best of
Sponsor's knowledge, Pool I will not result in a violation of ▇▇▇▇▇▇▇
Mac's loan limitations;
(lxxiv) Each Mortgage Loan was originated substantially in
accordance with Sponsor's underwriting criteria, which conform to the
underwriting criteria set forth in the Prospectus Supplement.
(lxxv) There exists no violation of any local, state or
federal environmental law, rule or regulation in respect of any
Mortgaged Property which violation has or could have a material adverse
effect on the market value of such Mortgaged Property. Sponsor has no
knowledge of any pending action or proceeding directly involving any
such Mortgaged Property in which compliance with any environmental law,
rule or regulation is in issue; and, to the best of Sponsor's
knowledge, nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation constituting a
prerequisite to the use and enjoyment of any such Mortgaged Property;
(lxxvi) The Sponsor has caused or will cause to be performed
any and all acts required to be performed to preserve the rights and
remedies of the Indenture Trustee in any insurance policies applicable
to the Mortgage Loans including, without limitation, any necessary
notifications of insurers, assignment of policies or interests therein,
and establishments of co-insured, joint loss payee and mortgagee rights
in favor of the Indenture Trustee;
(lxxvii) The related Mortgage Note is not and has not been
secured by any collateral, pledged account or other security except the
lien of the corresponding Mortgage;
(lxxviii) There is no obligation on the part of the Sponsor or
any other party to make payments in addition to those made by the
Mortgagor;
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(lxxix) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under existing law to serve as such,
has been properly designated and currently so serves and is named in
such Mortgage, and no fees or expenses are or will become payable by
the Noteholders or the Trust to the trustee under the deed of trust,
except in connection with a trustee's sale after default by the
Mortgagor;
(lxxx) Each Mortgagor has executed a statement to the effect
that such Mortgagor has received all disclosure materials including the
notice of the right of cancellation or rescission required by
applicable law with respect to the making of the Mortgage Loan and any
waiver of any right of cancellation or rescission exercised by the
Mortgagor was in accordance with applicable law and is binding on the
Mortgagor.
(lxxxi) Each of the Mortgaged Properties relating to the
seventy-six Mortgage Loans included in the sample report provided to
the Insurer for which a reappraisal is received by the Insurer on or
before __________, 200_, shall be reappraised for a value that is at
least ____% of the original appraisal that was provided to the Insurer
with respect to such Mortgaged Property; the Insurer shall have the
discretion to waive such requirement.
With respect to the representations and warranties set forth in this Section
2.05 that are made to the best of the Sponsor's knowledge or as to which the
Sponsor has no knowledge, if it is discovered by the Sponsor, the Servicer, the
Insurer, or a Responsible Officer of the Indenture Trustee that the substance of
such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan then,
notwithstanding the Sponsor's lack of knowledge with respect to the substance of
such representation and warranty being inaccurate at the time the representation
or warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.
(b) It is understood and agreed that the representations and warranties
set forth in this Section 2.05 shall survive delivery of the respective Mortgage
Files to the Indenture Trustee pursuant to Section 2.01 and the termination of
the rights and obligations of the Servicer pursuant to Section 5.04 or 6.02.
Upon discovery by the Sponsor, the Servicer, the Insurer or a Responsible
Officer of the Indenture Trustee of a breach of any of the foregoing
representations and warranties, without regard to any limitation set forth
therein concerning the knowledge of the Sponsor as to the facts stated therein,
which materially and adversely affects the interests of the Trust or the
Noteholders or the Insurer in the related Mortgage Loans, the party discovering
such breach shall give prompt written notice to the other parties and to the
Insurer. Within 90 days (or, in the case of a breach of the representation
contained in Section 2.05(a)(lxxxi), 30 days) of its discovery or its receipt of
notice of such breach, the Sponsor shall use all reasonable efforts to cure such
breach in all material respects or shall, not later than the Business Day next
preceding the Payment Date in the month following the Collection Period in which
any such cure period expired (or such later date that is acceptable to the
Indenture Trustee or the Insurer as evidenced by their written consents), either
(a) accept a transfer of such Mortgage Loan from the Trust or (b) substitute an
Eligible Substitute Mortgage Loan, each in the same manner and subject to the
same conditions as set forth in Section 2.03; provided, however, that the cure
for any breach of a representation and warranty relating to the characteristics
of the Mortgage Loans in the aggregate shall be a repurchase of or substitution
for only the Mortgage Loans necessary to cause such characteristics to be in
compliance with the related representation and warranty. Upon accepting such
transfer and making any required deposit into the Collection Account or
substitution of an Eligible Substitute Mortgage Loans, as the case may be, the
Sponsor shall be entitled to receive an instrument of assignment or transfer
from the Indenture Trustee to the same extent as set forth in Section 2.03 with
respect to the transfer of Mortgage Loans under that Section. The Insurer shall
be notified of any substitution of an Eligible Substitute Mortgage Loan.
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It is understood and agreed that the obligation of the Sponsor to
accept a removal of a Mortgage Loan as to which a breach has occurred and is
continuing and to make any required deposit in the Collection Account or to
substitute an Eligible Substitute Mortgage Loan, as the case may be, shall
constitute the sole remedy against the Sponsor respecting such breach available
to Noteholders, the Indenture Trustee on behalf of Noteholders and the Insurer;
provided, however, that the Sponsor shall defend and indemnify the Indenture
Trustee, the Insurer and the Noteholders against all reasonable costs and
expenses, and all losses, damages, claims and liabilities, including reasonable
fees and expenses of counsel and the amount of any settlement entered into with
the consent of the Sponsor (such consent not to be unreasonably withheld), which
may be asserted against or incurred by any of them as a result of any
third-party action arising out of any breach of any such representation and
warranty. Notwithstanding the foregoing, with regard to any breach of the
representation and warranty set forth in Section 2.05(a)(xxxii), the Sponsor
shall pay to the Trust the sum of (i) the amount of the related Principal
Balances, plus unpaid accrued interest on each such Principal Balance at the
applicable Loan Rate to the date of payment, (ii) the amount of any loss
suffered by the Noteholders or the Insurer with respect to the affected Mortgage
Loans and (iii) all amounts owing to the Insurer pursuant to the Insurance
Agreement.
The Sponsor does hereby assign to the Trust the benefits of the
representations and warranties made to it with respect to the Mortgage Loans
under the Mortgage Loan Purchase Agreement and the Trust may exercise the rights
with respect thereto relating to a Mortgage Loan, including the right to require
repurchase in the event such Mortgage Loan is not repurchased by the Sponsor
Section 2.06. Covenants of the Sponsor. The Sponsor hereby covenants
that:
(a) Security Interests. The Sponsor will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Mortgage Loans, whether now existing or hereafter created, or
any interest therein; the Sponsor will notify the Indenture Trustee and the
Insurer of the existence of any Lien on any Mortgage Loans immediately upon
discovery thereof; and the Sponsor will defend the Trust's right, title and
interest (including the Trust's security interest) in, to and under the Mortgage
Loans, whether now existing or hereafter created, against all claims of third
parties claiming through or under the Sponsor; provided, however, that nothing
in this Section 2.06(a) shall prevent or be deemed to prohibit the Sponsor from
suffering to exist upon any of the Mortgage Loans any Liens for municipal or
other local taxes and other governmental charges if such taxes or governmental
charges shall not at the time be due and payable or if the Sponsor shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto.
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(b) UCC-1 Financing Statements. On the Closing Date with respect to the
Mortgage Loans and, to the extent not already included in such filing, on the
applicable Transfer Date with respect to any Eligible Substitute Mortgage Loans,
the Sponsor will file UCC-1 financing statements with respect to such Mortgage
Loans.
(c) Negative Pledge. The Sponsor hereby agrees not to transfer, assign,
exchange, pledge, finance, hypothecate, grant a security interest in or
otherwise convey the Residual Certificates except in accordance with Sections
5.05 and 6.02 hereof and in accordance with the Insurance Agreement and the
Trust Agreement.
(d) Downgrading. The Sponsor will not engage in any activity which
would result in a downgrading or withdrawal of the ratings on the Notes without
regard to the effect of the Policy.
(e) Amendment to Certificate of Incorporation. The Sponsor will not
amend its Certificate of Incorporation without prior written notice to the
Indenture Trustee and the Rating Agencies and the prior written consent of the
Insurer which consent shall not be unreasonably withheld.
(f) Principal Place of Business. The Sponsor's principal place of
business is in California, and the Sponsor will not change its principal place
of business without prior written notice to the Indenture Trustee, the Rating
Agencies and the Insurer.
Section 2.07. Removal of Mortgage Loans at Election of Issuer. Subject
to the conditions set forth below and Section 8.2 of the Indenture, the Issuer
may, but shall not be obligated to, require the removal of Mortgage Loans from
Pool I and/or Pool II, from time to time, as of the close of business on a
Payment Date (each, a "Removal Date"). On the tenth Business Day (the "Removal
Notice Date") prior to the Removal Date designated in such notice, the Issuer
shall give the Indenture Trustee, the Insurer and the Servicer a notice of the
proposed removal that contains a list of the Mortgage Loans to be removed. Such
removal of Mortgage Loans in Pool I and/or Pool II shall be permitted upon
satisfaction of the following conditions:
(i) A Rapid Amortization Event shall not have occurred;
(ii) On the Removal Date, the related Overcollateralization
Amount (after giving effect to the removal from the applicable Pool of
the Mortgage Loans proposed to be removed) exceeds the related
Specified Overcollateralization Amount;
(iii) The transfer of such Mortgage Loans on any Removal Date
during the related Managed Amortization Period shall not, in the
reasonable belief of the Sponsor, cause a Rapid Amortization Event with
respect to the related Class of Notes to occur or an event which with
notice or lapse of time or both would constitute such a Rapid
Amortization Event and a Rapid Amortization Event has not occurred;
(iv) On or before the Removal Date, the Issuer shall have
delivered to the Indenture Trustee a revised Mortgage Loan Schedule,
reflecting the proposed transfer and the Removal Date, and the Servicer
shall have marked the Electronic Ledger to show that the Mortgage Loans
removed are no longer included in the applicable Pool;
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(v) The Issuer shall represent and warrant that its selection
procedures are random and no selection procedures reasonably believed
by the Issuer to be adverse to the interests of the Noteholders or the
Insurer were utilized in selecting the Mortgage Loans to be removed
from the applicable Pool;
(vi) In connection with each such removal of Mortgage Loans
pursuant to this Section, each Rating Agency shall have received on or
prior to the related Removal Notice Date notice of such proposed
removal of Mortgage Loans and, prior to the Removal Date, shall have
notified the Indenture Trustee and the Insurer in writing that such
removal of Mortgage Loans would not result in a reduction or withdrawal
of its then current ratings of the Notes, without regard to the Policy;
and
(vii) The Issuer shall have delivered to the Indenture Trustee
and the Insurer an Officer's Certificate certifying that the items set
forth in subparagraphs (i) through (vi), inclusive, have been performed
or are true and correct, as the case may be. The Indenture Trustee and
the Insurer may conclusively rely on such Officer's Certificate, shall
have no duty to make inquiries with regard to the matters set forth
therein and shall incur no liability in so relying.
(viii) The Insurer shall have been given an opportunity to
review any Mortgage Loans proposed to be removed by the Trust.
(ix) The Issuer shall have delivered a certificate in the form
of Exhibit C-1 hereto to the Indenture Trustee.
Upon receiving the requisite information from the Issuer, the Servicer
shall perform in a timely manner those acts required of it, as specified above.
Upon satisfaction of the above conditions, on the Removal Date the Indenture
Trustee shall deliver, or cause to be delivered, to the Issuer the Mortgage File
for each Mortgage Loan being so transferred, and the Indenture Trustee shall
execute and deliver to the Issuer such other documents prepared by the Issuer as
shall be reasonably necessary to remove such Mortgage Loans from the applicable
Pool. Any such removal of Mortgage Loans shall be without recourse,
representation or warranty by or of the Indenture Trustee or the Trust to the
Issuer. The review right given to the Insurer in clause (viii), above, must be
completed prior to the Removal Date.
Section 2.08. Execution and Authentication of Notes. The Indenture
Trustee, on behalf of the Trust, has caused to be executed, authenticated and
delivered to or upon the order of the Sponsor, in exchange for the Trust,
concurrently with the sale, assignment and conveyance to the Indenture Trustee
of the Trust, two Classes of Notes in authorized denominations and the Residual
Certificates, evidencing the ownership of the Trust.
Section 2.09. Tax Treatment. It is the intention of the Sponsor and the
Residual Certificateholders that the Notes will be indebtedness of the Sponsor
for federal, state and local income and franchise tax purposes and for purposes
of any other tax imposed on or measured by income. The Sponsor, the Indenture
Trustee and each Noteholder (or Note Owner) by acceptance of its Note (or, in
the case of a Note Owner, by virtue of such Note Owner's acquisition of a
beneficial interest therein) agrees to treat the Notes (or beneficial interest
therein), for purposes of federal, state and local income or franchise taxes and
any other tax imposed on or measured by income, as indebtedness of the Sponsor
secured by the assets of the Trust and to report the transactions contemplated
by this Agreement on all applicable tax returns in a manner consistent with such
treatment. Each Noteholder agrees that it will cause any Note Owner acquiring an
interest in a Note through it to comply with this Agreement as to treatment of
the Notes as indebtedness for federal, state and local income and franchise tax
purposes and for purposes of any other tax imposed on or measured by income. The
Indenture Trustee will prepare and file all tax reports required hereunder
consistent with this Agreement except as may be required by or provided in
Section 3.15.
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ARTICLE III
Administration and Servicing
of Mortgage Loans
Section 3.01. The Servicer.
(a) The Servicer is hereby authorized to act as agent for the Trust and
in such capacity shall manage, service, administer and make collections on the
Mortgage Loans and perform the other actions under this Agreement. The Servicer
shall service and administer the Mortgage Loans in a manner consistent with the
terms of this Agreement and with general industry practice and shall have full
power and authority, acting alone or through a subservicer, to do any and all
things in connection with such servicing and administration which it may deem
necessary or desirable, it being understood, however, that the Servicer shall at
all times remain responsible to the Indenture Trustee, the Noteholders, the
Residual Certificateholders and the Insurer for the performance of its duties
and obligations hereunder in accordance with the terms hereof. Any amounts
received by any subservicer in respect of a Mortgage Loan shall be deemed to
have been received by the Servicer whether or not actually received by it.
Without limiting the generality of the foregoing, the Servicer shall continue,
and is hereby authorized and empowered by the Trust, to execute and deliver, on
behalf of the Trust, any and all instruments of satisfaction or cancellation, or
of partial or full release or discharge and all other comparable instruments,
with respect to the Mortgage Loans and with respect to the Mortgaged Properties
and to make deposits to and withdrawals from the Collection Account. The
Indenture Trustee and the Owner Trustee shall, upon the written request of a
Servicing Officer, furnish the Servicer with any powers of attorney and other
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. The Servicer in such capacity may
also consent to the placing of a lien senior to that of any Mortgage on the
related Mortgaged Property, provided that
(i) such Mortgage succeeded to a first lien position after the
related Mortgage Loan was conveyed to the Trust and, immediately
following the placement of such senior lien, such Mortgage is in a
second lien position and the outstanding principal amount of the
mortgage loan secured by such subsequent senior lien is no greater than
the outstanding principal amount of the senior mortgage loan secured by
the Mortgaged Property as of the date the related Mortgage Loan was
originated; or
26
(ii) the Mortgage relating to such Mortgage Loan was in a
second lien position as of the Cut-Off Date and the new senior lien
secures a mortgage loan that refinances an existing first mortgage loan
and the outstanding principal amount of the replacement first mortgage
loan immediately following such refinancing is not greater than the
outstanding principal amount of such existing first mortgage loan at
the date of origination of such Mortgage Loan;
provided, further, that such senior lien does not secure a note that provides
for negative amortization.
The Servicer may also, without prior approval from the Rating Agencies
or the Insurer, increase the Credit Limits on HELOC Mortgage Loans provided that
(i) new appraisals are obtained and the Combined Loan-to-Value Ratios of the
HELOC Mortgage Loans after giving effect to such increase are less than or equal
to the Combined Loan-to-Value Ratios of the Mortgage Loans as of the Cut-Off
Date and (ii) such increases are consistent with the Servicer's credit and
collection policies. No material change or departure from the Servicer's credit
and collection policies with respect to any Mortgage Loans as in effect as of
the Closing Date shall be permitted without the prior written consent of the
Insurer.
In addition, the Servicer may agree to changes in the terms of a
Mortgage Loan at the request of the Mortgagor; provided that (i) such changes do
not materially and adversely affect the interests of Noteholders, Residual
Certificateholders or the Insurer, (ii) such changes are consistent with prudent
and customary business practice as evidenced by a certificate signed by a
Servicing Officer delivered to the Indenture Trustee and the Insurer and (iii)
the Rating Agencies and the Insurer are promptly notified of the changes.
In addition to the foregoing, the Servicer may solicit Mortgagors to
change any other terms of the related Mortgage Loans; provided that such changes
(i) do not materially and adversely affect the interest of Noteholders or the
Insurer and (ii) are consistent with prudent and customary business practice as
evidenced by a certificate signed by a Servicing Officer delivered to the
Indenture Trustee and the Insurer. Nothing herein shall limit the right of the
Servicer to solicit Mortgagors with respect to new loans (including mortgage
loans) that are not Mortgage Loans.
The relationship of the Servicer (and of any successor to the Servicer
as servicer under this Agreement) to the Indenture Trustee under this Agreement
is intended by the parties to be that of an independent contractor and not that
of a joint venturer, partner or agent.
(b) In the event that the rights, duties and obligations of the
Servicer are terminated hereunder, any successor to the Servicer in its sole
discretion may, to the extent permitted by applicable law, terminate the
existing subservicer arrangements with any subservicer, without charge, or
assume the terminated Servicer's rights under such subservicing arrangements
which termination or assumption will not violate the terms of such arrangements.
Section 3.02. Collection of Certain Mortgage Loan Payments.
(a) Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement, follow such
collection procedures as it follows with respect to home equity loans in its
servicing portfolio comparable to the Mortgage Loans. Consistent with the
foregoing, and without limiting the generality of the foregoing, the Servicer
may in its discretion (i) waive any late payment charge or any assumption fees
or other fees which may be collected in the ordinary course of servicing such
Mortgage Loans and (ii) arrange with a Mortgagor a schedule for the payment of
interest due and unpaid; provided that such arrangement is consistent with the
Servicer's policies with respect to the Mortgage Loans it owns or services;
provided, further, that notwithstanding such arrangement such Mortgage Loans
will be included in the information regarding delinquent Mortgage Loans set
forth in the Servicing Certificate and monthly statement to Noteholders pursuant
to Section 4.01.
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(b) The Servicer shall on the Closing Date deposit into the Collection
Account any amounts representing payments on, and any collections in respect of,
the Mortgage Loans received after the related Cut-Off Date and prior to the
Closing Date (exclusive of payments in respect of accrued interest due on or
prior to such Cut-Off Date) and thereafter the Servicer, or the Sponsor, as the
case may be, shall deposit into the Collection Account within one Business Day
following receipt thereof the following payments and collections received or
made by it (without duplication):
(i) all collections on and in respect of the Mortgage Loans;
(ii) the amounts, if any, deposited to the Collection Account
pursuant to Section 3.04;
(iii) Net Liquidation Proceeds;
(iv) Insurance Proceeds (including, for this purpose, any
amount required to be credited by the Servicer pursuant to the last
sentence of Section 3.04 and excluding the portion thereof, if any,
that has been applied to the restoration or repair of the related
Mortgaged Property or released to the related Mortgagor in accordance
with the normal servicing procedures of the Servicer);
(v) any amounts required to be deposited therein pursuant to
Section 7.01;
(vi) any amounts drawn under the Policy pursuant to Section
8.4(d) of the Indenture; and
(vii) any amounts drawn pursuant to the Demand Note;
provided, however, that with respect to each Collection Period, the Servicer
shall be permitted to retain from payments in respect of interest on the
Mortgage Loans, the Servicing Fee for such Collection Period. The foregoing
requirements respecting deposits to the Collection Account are exclusive, it
being understood that, without limiting the generality of the foregoing, the
Servicer need not deposit in the Collection Account amounts representing
Foreclosure Profits, fees (including annual fees) or late charge penalties
payable by Mortgagors, or amounts received by the Servicer for the accounts of
Mortgagors for application towards the payment of taxes, insurance premiums,
assessments, excess pay off amounts and similar items. The Servicer shall remit
all Foreclosure Profits to the Sponsor.
The Indenture Trustee shall hold amounts deposited in the Collection
Account as Indenture Trustee for the Noteholders and the Insurer. The Servicer
shall notify the Indenture Trustee and the Insurer in writing on each
Determination Date of the amount of payments and collections in the Collection
Account allocable to Interest Collections and Principal Collections for the
related Payment Date. Following such notification, the Servicer shall be
entitled to withdraw from the Collection Account and retain any amounts that
constitute income and gain realized from the investment of such payments and
collections.
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At the direction of the Servicer, the Indenture Trustee shall invest
funds in the Collection Account in Eligible Investments. All income and gain
realized from any investment in Eligible Investments of funds in the Collection
Account shall be for the benefit of the Servicer and shall be subject to its
withdrawal from time to time. The amount of any losses incurred in respect of
the principal amount of any such investments shall be deposited in the
Collection Account by the Servicer out of its own funds immediately as realized.
Section 3.03. Withdrawals from the Collection Account. From time to
time, withdrawals may be made from the Collection Account by the Servicer for
the following purposes:
(i) If not received by the Servicer pursuant to Section
3.02(b), to the Servicer as payment for its Servicing Fee pursuant to
Section 3.08;
(ii) To pay to the Servicer amounts on deposit in the
Collection Account that are not to be included in the distributions and
payments pursuant to Section 8.7 of the Indenture to the extent
provided by the second to the last and the last paragraph of Section
3.02(b);
(iii) To make or to permit the Paying Agent to make
distributions and payments pursuant to Section 8.7 of the Indenture;
(iv) Prior to the Collection Period preceding the commencement
of the Rapid Amortization Period, to pay to the Sponsor (A) with
respect to Pool I, the amount of any Additional Balances related to
Pool I HELOC Mortgage Loans and (B) with respect to Pool II, the amount
of any Additional Balances related to Pool II HELOC Mortgage Loans, in
each case as and when created during the related Collection Period;
provided, that the aggregate amount so paid to the Sponsor in respect
of Additional Balances with respect to either Pool at any time during
any Collection Period shall not exceed the amount of Principal
Collections theretofore received for such Collection Period with
respect to such Pool;
(v) To pay to the Servicer any Liquidation Expenses not
reimbursed prior to the deposit of Net Liquidation Proceeds to the
Collection Account;
(vi) Upon termination of the Trust, to make any payments
required by Section 7.01.
If the Servicer deposits in the Collection Account any amount not
required to be deposited therein or any amount in respect of payments by
Mortgagors made by checks subsequently returned for insufficient funds or other
reason for non-payment it may at any time withdraw such amount from the
Collection Account, and any such amounts shall not be included in the amounts to
be deposited in the Collection Account pursuant to Section 3.02(b), any
provision herein to the contrary notwithstanding.
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Section 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses. The Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance naming the Servicer or the related subservicer as loss payee
thereunder providing extended coverage in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan from time to time or (ii) the combined principal balance owing on
such Mortgage Loan and any mortgage loan senior to such Mortgage Loan from time
to time. The Servicer shall also maintain on property acquired upon foreclosure,
or by deed in lieu of foreclosure, hazard insurance with extended coverage in an
amount which is at least equal to the lesser of (i) the maximum insurable value
from time to time of the improvements which are a part of such property or (ii)
the combined principal balance owing on such Mortgage Loan and any mortgage loan
senior to such Mortgage Loan at the time of such foreclosure or deed in lieu of
foreclosure plus accrued interest and the good-faith estimate of the Servicer of
related Liquidation Expenses to be incurred in connection therewith. Amounts
collected by the Servicer under any such policies shall be deposited in the
Collection Account to the extent called for by Section 3.02. In cases in which
any Mortgaged Property is located in a federally designated flood area, the
hazard insurance to be maintained for the related Mortgage Loan shall include
flood insurance. All such flood insurance shall be in such amounts as are
required under applicable guidelines of the Federal Flood Emergency Act. The
Servicer shall be under no obligation to require that any Mortgagor maintain
earthquake or other additional insurance and shall be under no obligation itself
to maintain any such additional insurance on property acquired in respect of a
Mortgage Loan, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance. If
the Servicer shall obtain and maintain a blanket policy consistent with prudent
industry standards insuring against hazard losses on all of the Mortgage Loans
in an aggregate amount prudent under industry standards, it shall (a)
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.04 and (b) if there shall have been a loss
which would have been covered by such policy, deposit in the Collection Account
without right of reimbursement, as the case may be, the amount not otherwise
payable under the blanket policy because of any deductible clause.
Section 3.05. Assumption and Modification Agreements. In any case in
which a Mortgaged Property has been or is about to be conveyed by the Mortgagor,
the Servicer shall exercise its right to accelerate the maturity of such
Mortgage Loan consistent with the then current practice of the Servicer and
without regard to the inclusion of such Mortgage Loan in the Trust. If it elects
not to enforce its right to accelerate or if it is prevented from doing so by
applicable law, the Servicer (so long as such action conforms with the
underwriting standards generally acceptable in the industry at the time for new
origination) is authorized to take or enter into an assumption and modification
agreement from or with the Person to whom such Mortgaged Property has been or is
about to be conveyed, pursuant to which such Person becomes liable under the
Loan Agreement and, to the extent permitted by applicable law, the Mortgagor
remains liable thereon. The Servicer shall notify the Indenture Trustee that any
assumption and modification agreement has been completed by delivering to the
Indenture Trustee an Officer's Certificate signed by a Servicing Officer
certifying that such agreement is in compliance with this Section 3.05 and by
forwarding to the Indenture Trustee the original copy of such assumption and
modification agreement. Any such assumption and modification agreement shall,
for all purposes, be considered a part of the related Mortgage File to the same
extent as all other documents and instruments constituting a part thereof. No
change in the terms of the related Loan Agreement may be made by the Servicer in
connection with any such assumption to the extent that such change would not be
permitted to be made in respect of the original Loan Agreement pursuant to the
fourth paragraph of Section 3.01(a). Any fee collected by the Servicer for
entering into any such agreement will be retained by the Servicer as additional
servicing compensation.
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Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans. The Servicer shall foreclose upon or otherwise
comparably convert to ownership Mortgaged Properties securing such of the
Mortgage Loans as come into and continue in default when, in the opinion of the
Servicer based upon the practices and procedures referred to in the following
sentence, no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.02; provided, that if the Servicer has knowledge
or reasonably believes that any Mortgaged Property is affected by hazardous or
toxic wastes or substances and that the acquisition of such Mortgaged Property
would not be commercially reasonable, then the Servicer will not cause the Trust
to acquire title to such Mortgaged Property in a foreclosure or similar
proceeding. In connection with such foreclosure or other conversion, the
Servicer shall follow such practices (including, in the case of any default on a
related senior mortgage loan, the advancing of funds to correct such default)
and procedures as it shall deem necessary or advisable and as shall be normal
and usual in its general mortgage servicing activities. The foregoing is subject
to the proviso that the Servicer shall not be required to incur any Liquidation
Expenses or to otherwise expend its own funds in connection with any foreclosure
or towards the correction of any default on a related senior mortgage loan or
restoration of any property unless it shall determine that such expenditure will
increase Net Liquidation Proceeds.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Indenture Trustee, or to its nominee on behalf of the
Trust.
Section 3.07. Indenture Trustee to Cooperate. On or before each Payment
Date, the Servicer will notify the Indenture Trustee of the payment in full of
the Principal Balance of any Mortgage Loan during the preceding Collection
Period, which notification shall be by a certification (which certification
shall include a statement to the effect that all amounts received in connection
with such payment which are required to be deposited in the Collection Account
pursuant to Section 3.02 have been so deposited or credited) of a Servicing
Officer. Upon any such payment in full, the Servicer is authorized to execute,
pursuant to the authorization contained in Section 3.01, if the assignments of
Mortgage have been recorded as required hereunder, an instrument of satisfaction
regarding the related Mortgage, which instrument of satisfaction shall be
recorded by the Servicer if required by applicable law and be delivered to the
Person entitled thereto. It is understood and agreed that no expenses incurred
in connection with such instrument of satisfaction or transfer shall be
reimbursed from amounts deposited in the Collection Account. If the Indenture
Trustee is holding the Mortgage Files, from time to time and as appropriate for
the servicing or foreclosure of any Mortgage Loan, or in connection with the
payment in full of the Principal Balance of any Mortgage Loan, the Indenture
Trustee shall, upon request of the Servicer and delivery to the Indenture
Trustee of a Request for Release substantially in the form attached hereto as
Exhibit C signed by a Servicing Officer, release the related Mortgage File to
the Servicer and the Indenture Trustee shall execute such documents, in the
forms provided by the Servicer, as shall be necessary to the prosecution of any
such proceedings or the taking of other servicing actions. Such trust receipt
shall obligate the Servicer to return the Mortgage File to the Indenture Trustee
when the need therefor by the Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that hereinabove specified, the trust receipt shall be
released by the Indenture Trustee.
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In order to facilitate the foreclosure of the Mortgage securing any
Mortgage Loan that is in default following recordation of the Assignments of
Mortgage in accordance with the provisions hereof, the Indenture Trustee shall,
if so requested in writing by the Servicer, execute an appropriate assignment in
the form provided to the Indenture Trustee by the Servicer to assign such
Mortgage Loan for the purpose of collection to the Servicer or to the related
subservicer (any such assignment shall unambiguously indicate that the
assignment is for the purpose of collection only), and, upon such assignment,
the Servicer will thereupon bring all required actions in its own name and
otherwise enforce the terms of the Mortgage Loan and deposit the Net Liquidation
Proceeds, exclusive of Foreclosure Profits, received with respect thereto in the
Collection Account. In the event that all delinquent payments due under any such
Mortgage Loan are paid by the Mortgagor and any other defaults are cured, then
the Servicer shall, within two Business Days, reassign such Mortgage Loan to the
Indenture Trustee and return the related Mortgage File to the place where it was
being maintained. The Residual Certificateholders shall be deemed to have
repurchased the ownership interest in any Liquidated Mortgage Loan in Pool I
beneficially held by Holders of the Class A-1 Certificates. After such
repurchase, the Servicer, if requested by such Residual Certificateholders and
if offered suitable indemnification and reimbursement for expenses, is
authorized to seek a deficiency judgment if permitted by law against the
Mortgagor under such Liquidated Mortgage Loan on behalf of the Residual
Certificateholders to the extent of any Liquidation Loss Amount.
Section 3.08. Servicing Compensation; Payment of Certain Expenses by
Servicer. The Servicer shall be entitled to receive the Servicing Fee pursuant
to Section 3.03 as compensation for its services in connection with servicing
the Mortgage Loans. Moreover, additional servicing compensation in the form of
late payment charges or other receipts not required to be deposited in the
Collection Account (other than Foreclosure Profits) shall be retained by the
Servicer. The Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder (including payment of all other fees
and expenses not expressly stated hereunder to be for the account of the
Noteholders and the Residual Certificateholders) and shall not be entitled to
reimbursement therefor except as specifically provided herein. Liquidation
Expenses are reimbursable to the Servicer solely from related Liquidation
Proceeds.
Section 3.09. Annual Statement as to Compliance.
(a) The Servicer will deliver to the Indenture Trustee, the Insurer and
the Rating Agencies, on or before __________ of each year, beginning __________,
200_, an Officer's Certificate stating that (i) a review of the activities of
the Servicer during the preceding fiscal year (or such shorter period as is
applicable in the case of the first report) and of its 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 Servicer has fulfilled all
of its material obligations under this Agreement throughout such fiscal year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof.
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(b) The Servicer shall deliver to the Indenture Trustee, the Insurer
and each of the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five Business Days thereafter, written
notice by means of an Officer's Certificate of any event which with the giving
of notice or the lapse of time or both, would become an Event of Servicing
Termination.
Section 3.10. Annual Servicing Report. On or before __________ of each
year, beginning __________, 200_, the Servicer, at its expense, shall cause a
firm of nationally recognized independent public accountants (who may also
render other services to the Servicer) to furnish a report to the Indenture
Trustee, the Insurer and each Rating Agency to the effect that such firm has
examined certain documents and records relating to the servicing of mortgage
loans during the most recent fiscal year then ended under pooling and servicing
agreements (substantially similar to this Agreement, including this Agreement),
that such examination was conducted substantially in compliance with the audit
guide for audits of non-supervised mortgagees approved by the Department of
Housing and Urban Development for use by independent public accountants (to the
extent that the procedures in such audit guide are applicable to the servicing
obligations set forth in such agreements) and that such examination has
disclosed no items of noncompliance with the provisions of this Agreement which,
in the opinion of such firm, are material, except for such items of
noncompliance as shall be set forth in such report.
Section 3.11. Annual Opinion of Counsel. On or before __________ of
each year, beginning __________, 200_, the Sponsor, at its expense, shall
deliver to the Indenture Trustee and the Insurer the applicable Opinion of
Counsel specified in Exhibit B hereto.
Section 3.12. Access to Certain Documentation and Information Regarding
the Mortgage Loans.
(a) Servicer shall provide to the Indenture Trustee, the Insurer, any
Noteholders that are federally insured savings and loan associations, the Office
of Thrift Supervision, successor to the Federal Home Loan Bank Board, the FDIC
and the supervisory agents and examiners of the Office of Thrift Supervision
access to the documentation regarding the Mortgage Loans required by applicable
regulations of the Office of Thrift Supervision and the FDIC (acting as operator
of the SAIF or the BIF), such access being afforded without charge but only upon
reasonable request and during normal business hours at the offices of the
Servicer. Nothing in this Section 3.12 shall derogate from the obligation of the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Servicer to provide access as
provided in this Section 3.12 as a result of such obligation shall not
constitute a breach of this Section 3.12.
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(b) The Servicer shall supply information in such form as the Indenture
Trustee shall reasonably request to the Indenture Trustee and the Paying Agent,
on or before the start of the Determination Date preceding the related Payment
Date, as is required in the Indenture Trustee's reasonable judgment to enable
the Paying Agent or the Indenture Trustee, as the case may be, to make required
distributions and to furnish the required reports to Noteholders and to make any
claim under the Policy.
Section 3.13. Maintenance of Certain Servicing Insurance Policies. The
Servicer shall maintain, at its own expense, a blanket fidelity bond (the
"Fidelity Bond") and an errors and omissions insurance policy, with broad
coverage with financially responsible companies on all officers, employees, or
other persons acting in any capacity with regard to the Mortgage Loans to handle
funds, money, documents and papers relating to the Mortgage Loans. The Fidelity
Bond and errors and omissions insurance policy shall be in the form of the
Mortgage Banker's Blanket Bond and shall protect and insure the Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons. Such Fidelity Bond shall also protect and insure
the Servicer 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 3.13 requiring the
Fidelity Bond and errors and omissions insurance policy shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such bond and insurance policy shall
be at least equal to the corresponding amounts required by ▇▇▇▇▇▇▇ Mac in
▇▇▇▇▇▇▇ Mac's Seller/Servicer's Guide. Upon request of the Indenture Trustee,
the Servicer shall cause to be delivered to the Indenture Trustee a certified
true copy of the Fidelity Bond and errors and omissions insurance policy and a
statement from the surety and the insurer that such Fidelity Bond and errors and
omissions insurance policy shall in no event be terminated or materially
modified without thirty days' prior written notice to the Indenture Trustee.
Section 3.14. Reports to the SEC. GreenPoint Mortgage Funding, Inc., as
Manager under the Management Agreement, shall, on behalf of the Trust, cause to
be filed with the SEC any periodic reports required to be filed under the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC thereunder. Upon the request of the Manager, the
Indenture Trustee shall make available to the Manager and the Sponsor a copy of
the statement to the Certificateholder for each Distribution Date to be filed
with the SEC by the Manager as a Form 8-K Current Report of the Trust. The
Indenture Trustee and the Sponsor shall cooperate with the Manager in the
preparation of any such periodic reports and shall provide to the Manager in a
timely manner all such information or documentation as the Manager may
reasonably request in connection with the performance of its duties and
obligations under this Section.
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Section 3.15. Tax Returns. In accordance with Section 2.09 hereof, the
Servicer shall prepare and file any Federal, State or local income and franchise
tax return for the Trust as well as any other applicable return and apply for a
taxpayer identification number on behalf of the Trust as provided in Article V
of the Trust Agreement, including, without limitation, forms 1099 and 1065. The
Sponsor shall treat the Mortgage Loans as its property for all Federal, State or
local tax purposes and shall report all income earned thereon (including amounts
payable as fees to the Servicer) as its income for income tax purposes. In the
event the Trust shall be required pursuant to an audit or administrative
proceeding or change in applicable regulations to file Federal, State or local
tax returns, the Servicer shall prepare and file or shall cause to be prepared
and filed any tax returns required to be filed by the Trust; the Indenture
Trustee shall promptly sign such returns and deliver such returns after
signature to the Servicer and such returns shall be filed by the Servicer. The
Indenture Trustee shall also prepare or shall cause to be prepared all tax
information required by law to be distributed to Noteholders. In no event shall
the Indenture Trustee or the Servicer be liable for any liabilities, costs or
expenses of the Trust, the Noteholders, the Residual Certificateholders or the
Note Owners arising under any tax law, including, without limitation, Federal,
state or local income and franchise or excise taxes or any other tax imposed on
or measured by income (or any interest or penalty with respect thereto or
arising from a failure to comply therewith).
Section 3.16. Information Required by the Internal Revenue Service
Generally and Reports of Foreclosures and Abandonments of Mortgaged Property.
The Servicer shall prepare and deliver all federal and state information reports
when and as required by all applicable state and federal income tax laws. In
particular, with respect to the requirement under Section 6050J of the Code to
the effect that the Servicer shall make reports of foreclosures and abandonments
of any mortgaged property for each year beginning in 200_, the Servicer shall
file reports relating to each instance occurring during the previous calendar
year in which the Servicer (i) on behalf of the Indenture Trustee acquires an
interest in any Mortgaged Property through foreclosure or other comparable
conversion in full or partial satisfaction of a Mortgage Loan, or (ii) knows or
has reason to know that any Mortgaged Property has been abandoned. The reports
from the Servicer shall be in form and substance sufficient to meet the
reporting requirements imposed by Section 6050J.
Section 3.17. Reporting Requirements. For each Mortgage Loan, the
Servicer will accurately and fully report its borrower credit files to each of
Equifax Credit Information Services, Inc., TransUnion, LLC and Experion
Information Solution, Inc. (or their successors) in a timely manner on a monthly
basis.
ARTICLE IV
SERVICING CERTIFICATE
Section 4.01. Servicing Certificate. Not later than seven (7) Business
Days prior to the Payment Date, the Servicer shall deliver to the Indenture
Trustee, a Servicing Certificate (in written form or the form of computer
readable media or such other form as may be agreed to by the Indenture Trustee
and the Servicer), together with an Officer's Certificate to the effect that
such Servicing Certificate is true and correct in all material respects, stating
the related Collection Period, Payment Date, the series number of the Notes, the
date of this Agreement, and:
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(i) the aggregate amount of collections received on the
Mortgage Loans on or prior to the Determination Date in respect of such
Collection Period;
(ii) the aggregate amount of (a) Interest Collections and (b)
Principal Collections for such Collection Period;
(iii) the Principal Collections for such Payment Date,
separately stating the components thereof;
(iv) any accrued and unpaid Servicing Fees for previous
Collection Periods and the Servicing Fee for such Collection Period;
(v) the related Pool Balance for each Pool as of the end of
the preceding Collection Period and as of the end of the second
preceding Collection Period;
(vi) the aggregate amount of Additional Balances created
during the previous Collection Period;
(vii) by Pool and in the aggregate, the number and aggregate
Principal Balances of Mortgage Loans (A) as to which the Minimum
Monthly Payment is delinquent for 30-59 days, 60-89 days, 90-119 days,
120-149 days, 150-179 days and 180 or more days respectively and (B)
that have become REO, in each case as of the end of the preceding
Collection Period; (C) as to which foreclosure proceedings have been
commenced, and (D) in bankruptcy and delinquent as of the close of
business on the last day of the calendar month preceding such
Distribution Date;
(viii) the amount to be paid to the Servicer pursuant to
Section 8.7(c)(xi) of the Indenture;
(ix) the number and Principal Balances of any Mortgage Loans
removed to the Sponsor pursuant to Section 2.07;
The Indenture Trustee shall conclusively rely upon the information
contained in a Servicing Certificate for purposes of making distributions
pursuant to Section 8.7 of the Indenture, shall have no duty to inquire into
such information and shall have no liability in so relying. The format and
content of the Servicing Certificate may be modified by the mutual agreement of
the Servicer, the Indenture Trustee and the Insurer. The Servicer shall give
notice of any such change to the Rating Agencies.
Section 4.02. Reserved.
Section 4.03. Reserved.
Section 4.04. Loan Data Remittance Report. On the seventh Business Day
before each Payment Date (the "Loan Data Remittance Date") by noon Eastern
Standard time, the Servicer shall furnish a report (the "Loan Data Remittance
Report") in the form attached as Exhibit F to this Agreement to the Insurer and
the Indenture Trustee by electronic medium as agreed to by the Servicer, the
Indenture Trustee and the Insurer.
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Section 4.05. Reserve Fund.
(a) Amounts on deposit in the Reserve Fund will, at the direction of
the Servicer, be invested in Eligible Investments maturing no later than the day
before the next Payment Date or on such Payment Date if approved by the Rating
Agencies and the Insurer.
All income and gain realized from any investment of funds in the
Reserve Fund shall be considered part of the Reserve Fund until released
pursuant to the Indenture. Following that point all earnings shall go to the
Sponsor. The Sponsor will report for Federal, state and local income tax
purposes the income, if any, represented by the Reserve Fund.
(b) Following the termination of the Trust pursuant to Section 7.01
hereof, the Indenture Trustee shall withdraw all amounts then on deposit in the
Reserve Fund pursuant to the Indenture.
ARTICLE V
THE SERVICER AND THE SPONSOR
Section 5.01. Liability of the Servicer and the Sponsor. The Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Servicer herein. The Sponsor
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Sponsor.
Section 5.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer or the Sponsor. Any corporation into which the
Servicer or the Sponsor may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer or
the Sponsor shall be a party, or any corporation succeeding to the business of
the Servicer or the Sponsor, shall be the successor of the Servicer or the
Sponsor, as the case may be, hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 5.03. Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors or officers or employees or agents
of the Servicer shall be under any liability to the Trust or the Noteholders or
Residual Certificateholders for any action taken or for refraining from the
taking of any action by the Servicer in good faith pursuant to this Agreement,
or for errors in judgment; provided, however, that this provision shall not
protect the Servicer or any such Person against any breach of representations
and warranties made herein, or against any specific liability imposed on the
Servicer for a breach of its servicing under this Agreement or against liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties of the Servicer or by reason of reckless
disregard of obligations and duties of the Servicer hereunder. The Servicer and
any director or officer or employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Servicer and any
director or officer or employee or agent of the Servicer shall be indemnified by
the Trust and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Notes, other
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than any loss, liability or expense related to any specific Mortgage Loan
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of its willful misfeasance, bad faith or negligence, breach of
representations and warranties made herein, or against any specific liability
imposed on the Servicer for a breach of its servicing under this Agreement or
against in the performance of duties hereunder or by reason of its reckless
disregard of obligations and duties hereunder. The Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to duties to service the Mortgage Loans in accordance with this
Agreement, and which in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may in its sole discretion undertake any
such action which it may deem necessary or desirable in respect of this
Agreement, and the rights and duties of the parties hereto and the interests of
the Noteholders and Residual Certificateholders hereunder. In such event, the
reasonable legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust and the Servicer
shall only be entitled to be reimbursed therefor pursuant to Section 8.7(c)(xi)
of the Indenture. The Servicer's right to indemnity or reimbursement pursuant to
this Section 5.03 shall survive any resignation or termination of the Servicer
pursuant to Section 5.04 or 6.01 with respect to any losses, expenses, costs or
liabilities arising prior to such resignation or termination (or arising from
events that occurred prior to such resignation or termination).
Section 5.04. Servicer Not to Resign. Subject to the provisions of
Section 5.02, the Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Servicer so causing such a conflict being of a type and nature
carried on by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement or (ii) upon satisfaction of the following conditions: (a) the
Servicer has proposed a successor servicer to the Indenture Trustee and the
Insurer in writing and such proposed successor servicer is reasonably acceptable
to the Indenture Trustee; (b) each Rating Agency shall have delivered a letter
to the Indenture Trustee and the Insurer prior to the appointment of the
successor servicer stating that the proposed appointment of such successor
servicer as Servicer hereunder will not result in the qualification, reduction
or withdrawal of the then current rating of the Notes without regard to the
Policy; and (c) such proposed successor servicer is reasonably acceptable to the
Insurer, as evidenced by a letter from each to the Indenture Trustee; provided,
however, that no such resignation by the Servicer shall become effective until
the Indenture Trustee or successor servicer designated by the Servicer as
provided above shall have assumed the Servicer's responsibilities and
obligations hereunder or the Indenture Trustee shall have designated a successor
servicer in accordance with Section 6.02. Any such resignation shall not relieve
the Servicer of responsibility for any of the obligations specified in Sections
6.01 and 6.02 as obligations that survive the resignation or termination of the
Servicer. Any such determination permitting the resignation of the Servicer
pursuant to clause (i) above shall be evidenced by an Opinion of Counsel to such
effect delivered to the Indenture Trustee and the Insurer. The Servicer shall
have no claim (whether by subrogation or otherwise) or other action against any
Noteholder or Residual Certificateholder for any amounts paid by the Servicer
pursuant to any provision of this Agreement.
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Section 5.05. Delegation of Duties. In the ordinary course of business,
the Servicer at any time may delegate any of its duties hereunder to any Person,
including any of its Affiliates, or any subservicer referred to in Section 3.01,
who agrees to conduct such duties in accordance with standards comparable to
those with which the Servicer complies pursuant to Section 3.01. Such delegation
shall not relieve the Servicer of its liabilities and responsibilities with
respect to such duties and shall not constitute a resignation within the meaning
of Section 5.04. The Servicer's delegation of any of its duties hereunder to any
subservicer shall be subject to the prior approval of the Insurer. The Servicer
shall terminate its delegation of any of its duties hereunder to any subservicer
at the Insurer's reasonable request.
Section 5.06. Indemnification of the Trust by the Servicer. The
Servicer shall indemnify and hold harmless the Trust, the Owner Trustee and the
Indenture Trustee from and against any loss, liability, expense, damage or
injury suffered or sustained by reason of the Servicer's activities or omissions
in servicing or administering the Mortgage Loans that are not in accordance with
this Agreement, including, but not limited to, any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim. Any
such indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this Section
5.06 shall survive termination of this Agreement.
Section 5.07. Indemnification of the Trust by the Sponsor.
Notwithstanding anything to the contrary contained herein, the Sponsor (i)
agrees to be liable directly to the injured party for the entire amount of any
losses, claims, damages, liabilities and expenses of the Trust (other than those
attributable to a Noteholder as a result of defaults on the Mortgage Loans) to
the extent that the Sponsor would be liable if the Trust were a partnership
under the Delaware Revised Uniform Limited Partnership Act in which the Sponsor
was a general partner and (ii) shall indemnify and hold harmless the Trust, the
Owner Trustee and the Indenture Trustee from and against any loss, liability,
expense, damage, claim or injury (other than those attributable to a Noteholder
as a result of defaults on the Mortgage Loans) arising out of or based on this
Agreement by reason of any acts, omissions, or alleged acts or omissions arising
out of activities of the Trust, the Owner Trustee or the Indenture Trustee, or
the actions of the Servicer, including, but not limited to, amounts payable to
the Servicer pursuant to Section 5.03, any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim;
provided that the Sponsor shall not indemnify the Owner Trustee or the Indenture
Trustee (but shall indemnify any other injured party) if such loss, liability,
expense, damage or injury is due to the Owner Trustee's or the Indenture
Trustee's willful malfeasance, bad faith or negligence, breach of
representations and warranties made herein, or against any specific liability
imposed on the Owner Trustee or Indenture Trustee for a breach of its
obligations hereunder. The provisions of this indemnity shall run directly to
and be enforceable by an injured party subject to the limitations hereof.
Section 5.08. Limitation on Liability of the Sponsor. None of the
directors or officers or employees or agents of the Sponsor shall be under any
liability to the Trust, the Owner Trustee or the Indenture Trustee, the
Noteholders or the Residual Certificateholders, it being expressly understood
that all such liability is expressly waived and released as a condition of, and
as consideration for, the execution of this Agreement and the issuance of the
Notes; provided, however, that this provision shall not protect any such Person
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith, negligence or breach of representations and warranties
made herein, or against any specific liability imposed on such Person in the
performance of the duties hereunder. Except as provided in Section 5.07, the
Sponsor shall not be under any liability to the Trust, the Owner Trustee or the
Indenture Trustee or the Noteholders or Residual Certificateholders for any
action taken or for refraining from the taking of any action in its capacity as
Sponsor pursuant to this Agreement whether arising from express or implied
duties under this Agreement; provided, however, that this provision shall not
protect the Sponsor against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties
hereunder. The Sponsor and any director or officer or employee or agent of the
Sponsor may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
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ARTICLE VI
Servicing Termination
Section 6.01. Events of Servicing Termination. If any one of the
following events ("Events of Servicing Termination") shall occur and be
continuing:
(i) Any failure by the Servicer to deposit in the Collection
Account any deposit required to be made under the terms of this
Agreement which continues unremedied for a period of one Business Day
after the date upon which written notice of such failure shall have
been given to the Servicer by the Indenture Trustee or to the Servicer
and the Indenture Trustee by the Insurer or Holders of Notes evidencing
more than 25% of the Principal Balance of the Notes instruct otherwise;
or
(ii) Failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of
the Servicer set forth in the Notes or in this Agreement, which failure
continues unremedied for a period of 15 days after the date on which
written notice of such failure, requiring the same to be remedied, and
stating that such notice is a "Notice of Default" hereunder, shall have
been given to the Servicer by the Indenture Trustee or to the Servicer
and the Indenture Trustee by the Insurer or the Holders of Notes
evidencing more than 25% of the Principal Balance of the Notes; or
(iii) The entry against the Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a Indenture Trustee, conservator,
receiver or liquidator in any insolvency, conservatorship,
receivership, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
(iv) The consent by the Servicer to the appointment of a
Indenture Trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Servicer or of or relating to substantially all of its
property; or the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations;
(v) the occurrence of an Event of Servicer Termination under
the Insurance Agreement;
then, and in each and every such case, so long as an Event of Servicing
Termination shall not have been remedied by the Servicer, either the Indenture
Trustee, the Insurer or the Holders of Notes evidencing more than 50% of the
Outstanding Amount of the Notes, in each case with the consent of the Insurer,
by notice then given in writing to the Servicer (and to the Indenture Trustee if
given by the Insurer or the Holders of Notes) may terminate all of the rights
and obligations of the Servicer as servicer under this Agreement. Upon the
occurrence of a Servicer Termination Delinquency Rate Trigger or Servicer
Termination Loss Trigger as those terms are defined in the Insurance Agreement,
the Insurer may, in its reasonable discretion, terminate all of the rights and
obligations of the Servicer pursuant to the terms hereof. Any such notice to the
Servicer shall also be given to each Rating Agency and the Insurer. On or after
the receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Agreement, whether with respect to the Notes or the
Mortgage Loans or otherwise, shall pass to and be vested in the Indenture
Trustee pursuant to and under this Section 6.01; and, without limitation, the
Indenture Trustee is hereby authorized and empowered to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement of each Mortgage Loan and
related documents, or otherwise. The Servicer agrees to cooperate with the
Indenture Trustee in effecting the termination of the responsibilities and
rights of the Servicer hereunder, including, without limitation, the transfer to
the Indenture Trustee for the administration by it of all cash amounts that
shall at the time be held by the Servicer to be deposited by it in the
Collection Account, or that have been deposited by the Servicer in the
Collection Account or thereafter received by the Servicer with respect to the
Mortgage Loans. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with amending this Agreement to reflect such succession
as Servicer pursuant to this Section 6.01 shall be paid by the predecessor
Servicer (or if the predecessor Servicer is the Indenture Trustee, the initial
Servicer) upon presentation of reasonable documentation of such costs and
expenses.
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Notwithstanding the foregoing, a delay in or failure of performance
under Section 6.01(i) for a period of one Business Day or under Section 6.01(ii)
for a period of 15 days, shall not constitute an Event of Servicing Termination
if such delay or failure could not be prevented by the exercise of reasonable
diligence by the Servicer and such delay or failure was caused by an act of God
or the public enemy, acts of declared or undeclared war, public disorder,
rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes,
earthquakes or floods. The preceding sentence shall not relieve the Servicer
from using its best efforts to perform its respective obligations in a timely
manner in accordance with the terms of this Agreement and the Servicer shall
provide the Indenture Trustee, the Sponsor, the Insurer and the Noteholders and
Residual Certificateholders with an Officer's Certificate giving prompt notice
of such failure or delay by it, together with a description of its efforts to so
perform its obligations. The Servicer shall immediately notify the Indenture
Trustee and the Insurer in writing of any Events of Servicing Termination.
Section 6.02. Indenture Trustee to Act; Appointment of Successor.
(a) On and after the time the Servicer receives a notice of termination
pursuant to Section 6.01 or resigns pursuant to Section 5.04, the Indenture
Trustee shall be the successor in all respects to the Servicer in its capacity
as servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof.
Notwithstanding the above, if the Indenture Trustee becomes the Servicer
hereunder, it shall have no responsibility or obligation (i) of repurchase or
substitution with respect to any Mortgage Loan, (ii) with respect to any
representation or warranty of the Servicer, and (iii) for any act or omission of
either a predecessor or successor Servicer other than the Indenture Trustee. As
compensation therefor, the Indenture Trustee shall be entitled to such
compensation as the Servicer would have been entitled to hereunder if no such
notice of termination had been given. In addition, the Indenture Trustee will be
entitled to compensation with respect to its expenses in connection with
conversion of certain information, documents and record keeping, as provided in
Sections 6.7 and 6.8 of the Indenture. Notwithstanding the above, (i) if the
Indenture Trustee is unwilling to act as successor Servicer, or (ii) if the
Indenture Trustee is legally unable so to act, the Indenture Trustee may with
the consent of the Insurer (in the situation described in clause (i)) or shall
(in the situation described in clause (ii)) appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution, bank or other mortgage loan or home equity loan servicer with all
licenses and permits required to perform its obligations under this Agreement
and having a net worth of not less than $15,000,000 as the successor to the
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Servicer hereunder; provided that any such
successor Servicer shall be acceptable to the Insurer, as evidenced by its prior
written consent, which consent shall not be unreasonably withheld; and provided,
further, that the appointment of any such successor Servicer will not result in
the qualification, reduction or withdrawal of the ratings assigned to the Notes
by the Rating Agencies without regard to the Policy. Pending appointment of a
successor to the Servicer hereunder, unless the Indenture Trustee is prohibited
by law from so acting, the Indenture Trustee shall act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
successor shall be entitled to receive compensation out of payments on Mortgage
Loans in an amount equal to the compensation which the Servicer would otherwise
have received pursuant to Section 3.08 (or such lesser compensation as the
Indenture Trustee and such successor shall agree). The Indenture Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession.
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(b) Any successor, including the Indenture Trustee, to the Servicer as
servicer shall during the term of its service as servicer (i) continue to
service and administer the Mortgage Loans for the benefit of the Noteholders and
Residual Certificateholders and the Insurer and (ii) maintain in force a policy
or policies of insurance covering errors and omissions in the performance of its
obligations as Servicer hereunder and a fidelity bond in respect of its
officers, employees and agents to the same extent as the Servicer is so required
pursuant to Section 3.13. The appointment of a successor Servicer shall not
affect any liability of the predecessor Servicer which may have arisen under
this Agreement prior to its termination as Servicer (including, without
limitation, any deductible under an Insurance Policy pursuant to Section 3.04),
nor shall any successor Servicer be liable for any acts or omissions of the
predecessor Servicer or for any breach by such Servicer of any of its
representations or warranties contained herein.
Section 6.03. Notification to Noteholders and Residual
Certificateholders. Upon any termination or appointment of a successor to the
Servicer pursuant to this Article VI or Section 5.04, the Indenture Trustee
shall give prompt written notice thereof to the Noteholders and Residual
Certificateholders (at their respective addresses appearing in the Note Register
and in the Residual Certificate Register), the Insurer and each Rating Agency.
ARTICLE VII
Termination
Section 7.01. Termination.
(a) The respective obligations and responsibilities of the Servicer,
the Sponsor and the Indenture Trustee created hereby (other than the obligation
of the Indenture Trustee to make certain payments to Noteholders after the final
Payment Date and the obligation of the Servicer to send certain notices as
hereinafter set forth) shall terminate upon the last action required to be taken
by the Indenture Trustee on the final Payment Date pursuant to this Article VII
following the later of (A) the Payment Date following payment in full of all
amounts owing to the Insurer and (B) the earliest of (i) the transfer, under the
conditions specified in Section 7.01(b), to the Sponsor of the Noteholders'
interest in each Mortgage Loan and all property acquired in respect of any
Mortgage Loans remaining in each of Pool I and Pool II, (ii) the day following
the Payment Date on which the distribution made to Noteholders has reduced the
Class A-1 Note Principal Balance and the Class A-2 Note Principal Balance to
zero and no other amounts are owed to the Noteholders hereunder, and no other
amounts are owed to the Insurer pursuant to the Insurance Agreement and Section
8.7 of the Indenture, (iii) the final payment or other liquidation of the last
Mortgage Loan remaining in the Trust (including, without limitation, the
disposition of the Mortgage Loans pursuant to Section 5.4 of the Indenture) or
the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (iv) the Payment Date in January ___;
provided, however, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the date of death of the last surviving
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to
the Court of St. ▇▇▇▇▇, living on the date hereof. Upon termination in
accordance with clause (a)(B)(i) of this Section 7.01, the Indenture Trustee
shall execute such documents and instruments of transfer presented by the
Sponsor, in each case without recourse, representation or warranty, and take
such other actions as the Sponsor may reasonably request to effect the transfer
of the Mortgage Loans to the Sponsor.
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(b) (i) (i) The Sponsor shall have the right to effect the
transfer to the Sponsor of each Pool I Mortgage Loan on any Payment
Date on or after the Payment Date immediately prior to which the Class
A-1 Note Principal Balance is less than or equal to ten percent (10%)
of the Original Class A-1 Note Principal Balance. If the Sponsor elects
to exercise its right it will notify the Issuer, the Servicer, the
Indenture Trustee and the Insurer no later than thirty-five (35) days
prior to the Payment Date on which the transfer is to take place. The
Indenture Trustee will make the transfer on such Payment Date subject
to Section 7.01(d) and provided that the Redemption Price for the Class
A-1 Notes has been deposited with it not less than five (5) Business
Days prior to such Payment Date.
(ii) The Sponsor shall have the right to effect the transfer
to the Sponsor of each Pool II Mortgage Loan on any Payment Date on or
after the Payment Date immediately prior to which the Class A-2 Note
Principal Balance is less than or equal to ten percent (10%) of the
Original Class A-2 Note Principal Balance. If the Sponsor elects to
exercise its right it will notify the Issuer, the Servicer, the
Indenture Trustee and the Insurer no later than thirty-five (35) days
prior to the Payment Date on which the transfer is to take place. The
Indenture Trustee will make the transfer on such Payment Date subject
to Section 7.01(d) and provided that the Redemption Price for the Class
A-2 Notes has been deposited with it not less than five (5) Business
Days prior to such Payment Date.
(c) The Sponsor, at its expense, shall prepare and deliver to the
Indenture Trustee for execution, at the time the related Mortgage Loans are to
be released to the Sponsor, appropriate documents assigning each such Mortgage
Loan from the Indenture Trustee to the Sponsor and shall promptly record such
assignments.
(d) The Sponsor shall not exercise its right to repurchase the Mortgage
Loans in a Pool pursuant to Section 7.01(b) hereof if (a) such repurchase would
result in a draw on the Policy, without the consent of the Insurer, which
consent shall not be unreasonably withheld, (b) any reimbursement due to the
Insurer would not be fully satisfied pursuant to the repurchase, or (c) the
Overcollateralization Amount for the other Pool at such time does not at least
equal the Specified Overcollateralization Amount for each such Pool (unless the
Insurer waives such requirement).
ARTICLE VIII
Administrative Duties of the Servicer
Section 8.01. Administrative Duties.
(a) Duties with Respect to the Indenture. The Servicer shall perform all its
duties and the duties of the Issuer under the Indenture. In addition, the
Servicer shall consult with the Owner Trustee as the Servicer deems appropriate
regarding the duties of the Issuer under the Indenture. The Servicer shall
monitor the performance of the Issuer and shall advise the Owner Trustee when
action is necessary to comply with the Issuer's duties under the Indenture. The
Servicer shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Indenture. In furtherance of
the foregoing, the Servicer shall take all necessary action that is the duty of
the Issuer to take pursuant to the Indenture.
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(b) Duties with Respect to the Issuer.
(i) In addition to the duties of the Servicer set forth in
this Agreement or any of the Basic Documents, the Servicer shall
perform such calculations and shall prepare for execution by the Issuer
or the Owner Trustee or shall cause the preparation by other
appropriate Persons of all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the
Issuer or the Owner Trustee to prepare, file or deliver pursuant to
this Agreement or any of the Basic Documents or under state and federal
tax and securities laws, and at the request of the Owner Trustee shall
take all appropriate action that it is the duty of the Issuer to take
pursuant to this Agreement or any of the Basic Documents, including,
without limitation, pursuant to Sections 2.6 and 2.11 of the Trust
Agreement. In accordance with the directions of the Issuer or the Owner
Trustee, the Servicer shall administer, perform or supervise the
performance of such other activities in connection with the Mortgage
Loans (including the Basic Documents) as are not covered by any of the
foregoing provisions and as are expressly requested by the Issuer or
the Owner Trustee and are reasonably within the capability of the
Servicer.
(ii) Notwithstanding anything in this Agreement or any of the
Basic Documents to the contrary, the Servicer shall be responsible for
promptly notifying the Owner Trustee and the Indenture Trustee and the
Insurer in the event that any withholding tax is imposed on the
Issuer's payments (or allocations of income) to a Residual
Certificateholder (as defined in the Trust Agreement) as contemplated
by this Agreement. Any such notice shall be in writing and specify the
amount of any withholding tax required to be withheld by the Owner
Trustee or the Indenture Trustee pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the Basic
Documents to the contrary, the Servicer shall be responsible for
performance of the duties of the Issuer or the Sponsor set forth in
Section 5.1(a), (b), (c) and (d) of the Trust Agreement with respect
to, among other things, accounting and reports to Residual
Certificateholders (as defined in the Trust Agreement).
(iv) The Servicer shall perform the duties of the Sponsor
specified in Section 11.2 of the Trust Agreement required to be
performed in connection with the resignation or removal of the Owner
Trustee, and any other duties expressly required to be performed by the
Servicer under this Agreement or any of the Basic Documents.
(v) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Servicer may enter into
transactions with or otherwise deal with any of its Affiliates;
provided, however, that the terms of any such transactions or dealings
shall be in accordance with any directions received from the Issuer and
shall be, in the Servicer's opinion, no less favorable to the Issuer in
any material respect.
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(c) Non-Ministerial Matters. With respect to matters that in the
reasonable judgment of the Servicer are non-ministerial, the Servicer shall not
take any action pursuant to this Article VIII unless within a reasonable time
before the taking of such action, the Servicer shall have notified the Owner
Trustee and the Insurer of the proposed action and the Owner Trustee and the
Insurer shall not have withheld consent or provided an alternative direction.
For the purpose of the preceding sentence, "non-ministerial matters" shall
include:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and
the compromise of any action, claim or lawsuit brought by or against
the Issuer (other than in connection with the collection of the
Mortgage Loans);
(C) the amendment, change or modification of this Agreement or
any of the Basic Documents;
(D) the appointment of successor Note Registrars, successor
Paying Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of successor Servicers or the consent to
the assignment by the Note Registrar, Paying Agent or Indenture Trustee
of its obligations under the Indenture; and
(E) the removal of the Indenture Trustee.
(d) Exceptions. Notwithstanding anything to the contrary in this
Agreement, except as expressly provided herein or in the other Basic Documents,
the Servicer, in its capacity hereunder, shall not be obligated to, and shall
not, (1) make any payments to the Noteholders or Residual Certificateholders
under the Basic Documents, (2) sell the Trust Property pursuant to Section 5.4
of the Indenture, (3) take any other action that the Issuer directs the Servicer
not to take on its behalf or (4) in connection with its duties hereunder assume
any indemnification obligation of any other Person.
(e) The Indenture Trustee or any successor Servicer shall not be
responsible for any obligations or duties of the Servicer under Section 8.01.
Section 8.02. Records. The Servicer shall maintain appropriate books of
account and records relating to services performed under this Agreement, which
books of account and records shall be accessible for inspection by the Issuer
and the Indenture Trustee at any time during normal business hours.
Section 8.03. Additional Information to be Furnished to the Issuer. The
Servicer shall furnish to the Issuer and the Indenture Trustee from time to time
such additional information regarding the Mortgage Loans as the Issuer and the
Indenture Trustee shall reasonably request.
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ARTICLE IX
Miscellaneous Provisions
Section 9.01. Amendment. This Agreement may be amended from time to
time by agreement among the Sponsor, the Servicer, and the Indenture Trustee, in
each case without notice to or the consent of any of the Noteholders or Residual
Certificateholders, but only with the consent of the Insurer (which consent
shall not be unreasonably withheld), (i) to cure any ambiguity, (ii) to correct
any defective provisions or to correct or supplement any provisions herein that
may be inconsistent with any other provisions herein, (iii) to add to the duties
of the Sponsor or the Servicer, (iv) to add any other provisions with respect to
matters or questions arising under this Agreement or the Policy, as the case may
be, which shall not be inconsistent with the provisions of this Agreement, (v)
to add or amend any provisions of this Agreement as required by any Rating
Agency or any other nationally recognized statistical rating organization in
order to maintain or improve any rating of the Notes (it being understood that,
after obtaining the ratings in effect on the Closing Date, neither the Indenture
Trustee, the Sponsor nor the Servicer is obligated to obtain, maintain or
improve any such rating) or (vi) to comply with any requirement imposed by the
Code; provided, however, that such action shall not, as evidenced by an Opinion
of Counsel, materially and adversely affect the interests of any Noteholder or
any Residual Certificateholder, or the Insurer; and provided, further, that the
amendment shall be deemed not to adversely affect in any material respect the
interests of the Noteholders and the Residual Certificateholders and no opinion
referred to in the preceding proviso shall be required to be delivered if the
Person requesting the amendment obtains a letter from each Rating Agency stating
that the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Notes without regard to the Policy.
This Agreement also may be amended from time to time by agreement among
the Servicer, the Sponsor and the Indenture Trustee, with the consent of the
Insurer and the Holders of the Notes evidencing more than 50% of the Outstanding
Amount of the Notes and the Holders of the Residual Certificates evidencing more
than 50% of the percentage interest in the Residual Certificates (which consent
of such Holders of Notes and Residual Certificates given pursuant to this
Section 9.01 or pursuant to any other provision of this Agreement shall be
conclusive and binding on such Holder and all future Holders of such securities
and of any security issued upon the transfer thereof or in exchange thereof or
in lieu thereof whether or not notation of such consent is made upon the
security) for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders or the Residual Certificateholders;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments on the Notes or distributions or
payments under the Policy which are required to be made on any Note without the
consent of the Holder of such Note or (ii) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of the Holders of
all then outstanding Notes and Residual Certificates or (iii) adversely affect
in any material respect the interests of the Insurer.
Following the execution and delivery of any such amendment hereto or to
the Policy, either the Sponsor, if the Sponsor requested the amendment, or the
Servicer, if the Servicer requested the amendment, shall reimburse the Insurer
for the reasonable out-of-pocket costs and expenses incurred by each in
connection with such amendment.
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Prior to the execution of any such amendment, the party hereto
requesting any such amendment shall furnish written notification of the
substance of such amendment to each Rating Agency. In addition, promptly after
the execution of any such amendment made with the consent of the Noteholders,
the Indenture Trustee shall furnish written notification of the substance of
such amendment to each Noteholder and fully executed original counterparts of
the instruments effecting such amendment to the Insurer.
It shall not be necessary for the consent of Noteholders under this
Section 9.01 to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Noteholders and Residual
Certificateholders shall be subject to such reasonable requirements as the
Indenture Trustee may prescribe.
In executing any amendment permitted by this Section 9.01, the
Indenture Trustee shall be entitled to receive, and shall be fully protected in
relying upon, an Opinion of Counsel stating that such amendment is authorized or
permitted hereby and that all conditions precedent to the execution and delivery
of such amendment have been satisfied. The Indenture Trustee may, but shall not
be obligated to, enter into any such amendment which affects the Indenture
Trustee's own rights, duties or immunities under this Agreement or otherwise.
Section 9.02. Recordation of Agreement. This Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Indenture Trustee, but only upon direction of Noteholders accompanied by an
Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of Noteholders. The Noteholders requesting
such recordation shall bear all costs and expenses of such recordation. The
Indenture Trustee shall have no obligation to ascertain whether such recordation
so affects the interests of the Noteholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 9.03. Limitation on Rights of Noteholders. No Noteholder shall
have any right to vote (except as provided in Sections 6.01, 7.01, and 9.01
herein and Section 5.4 of the Indenture) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the Notes, be
construed so as to constitute the Noteholders from time to time as partners or
members of an association; nor shall any Noteholder be under any liability to
any third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
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No Noteholder shall have any right by virtue or by availing itself of
any provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Indenture Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Notes evidencing more than 50% of the Outstanding Amount of
the Notes shall have made written request upon the Indenture Trustee to
institute such action, suit or proceeding in its own name as Indenture Trustee
hereunder and shall have offered to the Indenture Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Indenture Trustee, for 60 days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding; it being understood
and intended, and being expressly covenanted by each Noteholder with every other
Noteholder and the Indenture Trustee, that no one or more Holders of Notes shall
have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Notes, or to obtain or seek to
obtain priority over or preference to any other such Holder, or to enforce any
right under this Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all Noteholders. For the protection and
enforcement of the provisions of this Section 9.03, each and every Noteholder
and the Indenture Trustee shall be entitled to such relief as can be given
either at law or in equity.
By accepting its Certificate, each Noteholder agrees that unless a
Insurer Default exists, the Insurer shall have the right to exercise all rights
of the Noteholder under this Agreement without any further consent of the
Noteholder.
Section 9.04. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 9.05. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by certified mail, return receipt requested,
to (a) in the case of the Sponsor, GreenPoint Mortgage Securities Inc., ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇
▇. ▇▇▇▇, (b) in the case of the Servicer, GreenPoint Mortgage Funding, Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, (c) in the case of the Indenture Trustee, at the Corporate
Trust Office, (d) in the case of the Insurer, [Insurer], [Address], (e) in the
case of [First Rating Agency], [Address], and (f) in the case of [Second Rating
Agency], [Address], or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party. Any notice
required or permitted to be mailed to a Noteholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Note
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Noteholder or Residual Certificateholder receives such notice. Any notice or
other document required to be delivered or mailed by the Indenture Trustee to
any Rating Agency shall be given on a best efforts basis and only as a matter of
courtesy and accommodation and the Indenture Trustee shall have no liability for
failure to deliver such notice or document to any Rating Agency.
48
Section 9.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Notes or the
rights of the Holders thereof.
Section 9.07. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 5.02 and 5.04, this Agreement
may not be assigned by the Sponsor or the Servicer without the prior written
consent of the Insurer and Holders of the Notes evidencing Percentage Interests
aggregating not less than 66%.
Section 9.08. Third-Party Beneficiaries. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Residual
Certificateholders, the Note Owners or the Insurer and their respective
successors and permitted assigns. Except as otherwise provided in this
Agreement, no other Person will have any right or obligation hereunder.
Section 9.09. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 9.10. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 9.11. Insurance Agreement. The Indenture Trustee is authorized
and directed to execute and deliver the Insurance Agreement and to perform the
obligations of the Indenture Trustee thereunder.
Section 9.12. Nonpetition Covenant. Until one year plus one day shall
have elapsed since the termination of the Trust in accordance with Section 7.01,
none of the Sponsor, the Company, the Servicer, nor the Indenture Trustee shall
petition or otherwise invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Sponsor or the
Trust under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, Indenture Trustee, custodian,
sequestrator or other similar official of the Sponsor or the Trust or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Sponsor or the Trust.
49
IN WITNESS WHEREOF, the Sponsor, the Servicer and the Indenture Trustee
have caused this Agreement to be duly executed by their respective officers all
as of the day and year first above written.
GREENPOINT MORTGAGE SECURITIES INC.,
as Sponsor
By:
----------------------------------
Name:
Title:
GREENPOINT MORTGAGE FUNDING, INC.,
as Company and Servicer
By:
----------------------------------
Name:
Title:
[INDENTURE TRUSTEE], not in its individual
capacity but solely as Indenture Trustee
By:
----------------------------------
Name:
Title:
GREENPOINT HOME EQUITY LOAN TRUST
200_-_, as Issuer
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Indenture Trustee
By:
----------------------------------
Name:
Title:
[Sale and Servicing Agreement]
State of ________ )
) ss.:
County of ________ )
On the ___th day of ________, 200_ before me, a notary public in and
for the State of ________, personally appeared _________________, known to me
who, being by me duly sworn, did depose and say that he resides at
______________________; that he is the _____________________ of GreenPoint
Mortgage Securities Inc., a Delaware corporation, one of the parties that
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation; and that he
signed his name thereto by like order.
-------------------------------------------
Notary Public
[Notarial Seal]
State of ________ )
) ss.:
County of ________ )
On the ___th day of ________, 200_ before me, a notary public in and
for the State of New York, personally appeared __________, known to me who,
being by me duly sworn, did depose and say that he resides at
______________________; that he is the _____________________ of Wilmington Trust
Corporation, a Delaware corporation, one of the parties that executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation; and that he signed his name
thereto by like order.
-------------------------------------------
Notary Public
[Notarial Seal]
State of )
) ss.:
County of )
On the ___th day of ________, 200_ before me, a notary public in and
for the State of ________, personally appeared _____________________, known to
me who, being by me duly sworn, did depose and say that he resides at
_________________, ____________, ________ _____; that he is the ______________
of GreenPoint Mortgage Funding, Inc., a closely-held California corporation, one
of the parties that executed the foregoing instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation; and that he signed his name thereto by like order.
-------------------------------------------
Notary Public
[Notarial Seal]
State of )
) ss.:
County of )
On the ___th day of ________, 200_ before me, a notary public in and
for the State of ________, personally appeared _________________, known to me
who, being by me duly sworn, did depose and say that he resides at
_______________, _______________ _____; that he is the _____________ of
[Indenture Trustee], a _____________, one of the parties that executed the
foregoing instrument; and that he signed his name thereto by order of the Board
of Directors of said corporation.
-------------------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[On file with Indenture Trustee]
A-1
EXHIBIT B
FORM OF OPINION OF COUNSEL
WITH RESPECT TO SECTION 3.11 OF THE
SALE AND SERVICING AGREEMENT
The opinions set forth below may be subject to all the qualifications,
assumptions, limitations and exceptions taken or made in the opinions of counsel
to the Company delivered on the Closing Date. Unless otherwise indicated, all
capitalized terms used herein shall have the meanings ascribed to them in the
Sale and Servicing Agreement dated as of __________, 200_ among GreenPoint
Mortgage Funding, Inc. (the "Company" and the "Servicer"), GreenPoint Mortgage
Securities Inc. (the "Sponsor") and [Indenture Trustee], as Indenture Trustee.
Terms used but not defined herein shall have the meaning given to such terms in
the above-referenced Sale and Servicing Agreement.
The Indenture Trustee has a valid perfected first priority security
interest with respect to the Sponsor's right, title and interest in and to the
Mortgage Loans (including all Eligible Substitute Mortgage Loans), subject to
the exceptions and qualifications set forth in the Opinion of Counsel attached
to the Indenture as Exhibit B.
B-1
EXHIBIT C-1
OFFICER'S CERTIFICATE
REQUEST BY THE SERVICER FOR PERMANENT
RELEASE OF MORTGAGE LOANS AND MORTGAGE FILES
TO: [Indenture Trustee], as Indenture Trustee
[Address]
Gentlemen:
In connection with the payment in full of the Mortgage Loans held by you as
Indenture Trustee, under the Sale and Servicing Agreement dated as of
__________, 200_ among GreenPoint Mortgage Funding, Inc., as Servicer,
GreenPoint Mortgage Securities Inc., as Sponsor, and you, as Indenture Trustee,
the undersigned requests the release of the Mortgage Loans and the Mortgage
Files for the Mortgage Loans identified in the schedule attached to this
Request.
The undersigned hereby certifies that (i) the release of Collateral requested
will not impair the security under the Indenture, (ii) any and all payments
received on the Mortgage Loans identified in the schedule attached to this
Request which are required to be deposited in the Collection Account pursuant to
Section 3.02 of such Sale and Servicing Agreement have been so deposited, (iii)
the information with respect to such factual matters necessary for us to so
certify is in our possession and (iv) I am qualified to make these
certifications.
GREENPOINT MORTGAGE FUNDING, INC.,
as Servicer
By:
------------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Date:
------------------------------------
ACKNOWLEDGED BY:
[INDENTURE TRUSTEE],
as Indenture Trustee
By:
-----------------------------------------------------------
Name:
----------------------------------------------------
Title:
---------------------------------------------------
Date:
----------------------------------------------------
C-1-1
EXHIBIT C-2
OFFICER'S CERTIFICATE
REQUEST BY THE SERVICER FOR TEMPORARY
RELEASE OF MORTGAGE LOANS AND MORTGAGE FILES
TO: [Indenture Trustee], as Indenture Trustee
[Address]
Gentlemen:
In connection with the administration of the Mortgage Loans held by you as
Indenture Trustee, under the Sale and Servicing Agreement dated as of
__________, 200_ among GreenPoint Mortgage Funding, Inc., as Servicer,
GreenPoint Mortgage Securities Inc., as Sponsor, and you, as Indenture Trustee,
the undersigned requests the temporary release of the Mortgage Loans and the
related Mortgage Files for the Mortgage Loans identified in the schedule
attached to this Request.
GREENPOINT MORTGAGE FUNDING, INC.,
as Servicer
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
ACKNOWLEDGED BY:
[INDENTURE TRUSTEE],
as Indenture Trustee
By:
-----------------------------------------------------------
Name:
----------------------------------------------------
Title:
---------------------------------------------------
Date:
----------------------------------------------------
C-2-1
EXHIBIT D
FORM OF CREDIT LINE AGREEMENT
D-1
EXHIBIT E
FORM OF MORTGAGE NOTE FOR
CLOSED END MORTGAGE LOANS
E-1
EXHIBIT F
FORM OF CERTIFICATE:
LOAN LEVEL REPORTING
DETAIL RECORD FIELDS: File Name: T0##MMYY.LNS
----------------------------------------------------------------------------------------------------------------------------
Data: Field
T0nnMMYY.LNS Nbr Format Definition
----------------------------------------------------------------------------------------------------------------------------
Servicer Loan No. 1 13(X) Unique loan number assigned to the mortgage by the Seller/Servicer
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Due Date of Last Paid 2 YYYYMMDD Due Date of last full payment received from the borrower.
Installment (DDLPI)
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Last Payment Received 3 YYYYMMDD Receipt Date of the last fully paid monthly installment of principal,
Date (LPRD) interest, and escrow (if any) that was received from the borrower.
Note: Dates of partial payments should not be entered here. {Data is
when payment was actually received from the borrower) If this
information is not available, then populate the field with the default
value of 19000101.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Unpaid Principal 4 13.2 Unpaid Principal balance as of the end of the current period
Balance (UPB) 100%
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Interest Paid 5 13.2 Gross / Coupon Interest payment amount
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Principal Paid 6 13.2 Total principal paid down on the mortgage balance.
* For approved payment reversals or principal applied incorrectly in a
prior cycle the amount of negative principal to bring the mortgage
balance in line with the correct UPB reported.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Draw Amount 7 13.2 Total draws made against the line of credit for the current month
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
F-1
----------------------------------------------------------------------------------------------------------------------------
Data: Field
T0nnMMYY.LNS Nbr Format Definition
----------------------------------------------------------------------------------------------------------------------------
Exception Code 8 2(x) This field should contain an exception code only when exception activity
occurs for that period, otherwise this field should contain a 0.
DEFAULT VALUE IS 0.
40 Inactivate loan, deemed the loan non-recoverable
60 Payoff - mortgage matured
61 Payoff - mortgage prepaid 65 Payoff - mortgage repurchased
69 Payoff - mortgage liquidated 70 Transfer to REO (status change
exception)
72 Foreclosure (change of status from Active to Foreclosure)
80 Substituted Loan - Loan is added as a substitute for another loan
81 Reinstated Loan - Loan was previously delinquent, but the borrower has
brought it current.
90 Loan Modified - This is an exceptional activity code which is reserved
for future use. Modifications typically require repurchase from the
trust prior to modifying the loan.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Exception Date 9 YYYYMMDD Date the exception occurred. If an exception has not occurred, this
field should contain the default value of 19000101.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Mortgage Note Rate 10 6.3 Rate associated with the borrower's scheduled payment
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Mortgage P&I Amount 11 13.2 Principal and interest portion of the borrowers minimum installment.
Note: 100% of the principal and interest amount should be entered in
this field, including servicing and guarantee fees.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Realized Losses 12 13.2 Amount of realized losses for that period. This field will also include
any supplemental claims or proceeds for loans liquidated in a previous
cycle.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Cumulative Principal 13 13.2 Total principal payments advanced by the Servicer and not repaid by the
Advances borrower.
NOT APPLICABLE--DO NOT REPORT
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Interest Advances 14 13.2 Amount of interest payment advanced by the Servicer for that period.
NOT APPLICABLE--DO NOT REPORT
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Loan Status 15 1(X) Pertains to activity in the prior reporting cycle.
0 - Active
4 - Foreclosure
5 - REO
6 - Closed (PAYOFFS & REPURCHASES)
9 - Bankruptcy (OVERRIDES Active Status)
Note: 30,60 & 90 day delinquency status will be derived from the DDLPI
field.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Subservicer No. 16 6 Subservicer ID# - 6 digits
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Actual Loan Balance 17 13.2 Actual loan balance outstanding from the borrower.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
F-2
----------------------------------------------------------------------------------------------------------------------------
Data: Field
T0nnMMYY.LNS Nbr Format Definition
----------------------------------------------------------------------------------------------------------------------------
Next Interest Rate 18 YYYYMMDD Applies only to ARM loans and reflects the next pending interest rate
Change Date adjustment date. Default is 19000101. Since loans adjust monthly, only
report the first adjustment date for loans with teaser period.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Next Interest Payment 19 YYYYMMDD Applies only to payment capped ARM loans and reflects the next pending
Change Date payment adjustment date. Default is 19000101.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Index Value at Reset 20 6.3 The index rate used in determining the ARM coupon.
Date Default value is 0 for an ARM loan if the index is not changing in the
current period. Also populate 0 if the loan is a fixed rate loan.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Next Mortgage Rate 21 6.3 Should be populated in advance of the rate adjustment.. Default value is
expected at reset date 0 for an ARM loan if the rate is not changing. Default value is 0 if
the loan is a fixed rate loan.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Collateral Group No. # 22 2 This is a collateral grouping number for whole loan directed collateral
deals. Default value is 0. Report the HELOCs and Fixed Rates separately.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Current Arrearage Paid 23 13.2 The current amount of cashflow applied to the arrearage balance.
Applies to loans that have been or are currently in default. Default
value is 0.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Outstanding Arrearage 24 13.2 The total amount of outstanding interest accrued under forbearance
Balance period, after current arrearage payment. Default value is 0.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Loan Number 25 13(X) Loan number assigned to the mortgage by ___. Used for disclosure.
----------------------------------------------------------------------------------------------------------------------------
Blank 1(x)
----------------------------------------------------------------------------------------------------------------------------
Prepayment Premium 26 13.2 The borrowers penalty payment for prepaying his mortgage. This amount
Amount is allocated in aggregate as a directed collateral amount to a specific
bond. Default value is 0.
----------------------------------------------------------------------------------------------------------------------------
The Notes:
o File must be a text file (either space or tab delimited).
o Any dates should be in YYYYMMDD format. They should not contain slashes (/)
or dashes (-).
o Number fields should NOT include commas.
o Any negative number should be denoted by a "-" in front of the number, do not
put the "-" after the number or use parentheses.
F-3