BANK OF AMERICA, NATIONAL ASSOCIATION Purchaser and WELLS FARGO BANK, N.A. Company AMENDED AND RESTATED MASTER SELLER’S WARRANTIES AND SERVICING AGREEMENT Dated as of December 1, 2005
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Execution
Copy
12/07/05
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BANK
OF AMERICA, NATIONAL ASSOCIATION
Purchaser
and
▇▇▇▇▇
FARGO BANK, N.A.
Company
AMENDED
AND RESTATED MASTER SELLER’S WARRANTIES
AND
SERVICING AGREEMENT
Dated
as of December 1, 2005
Fixed
Rate and Adjustable Rate Mortgage LoansTABLE
OF CONTENTS
TABLE
OF CONTENTS
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Page
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ARTICLE
I DEFINITIONS
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2
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ARTICLE
II CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF CUSTODIAL MORTGAGE
FILES;
BOOKS AND RECORDS; CUSTODY AGREEMENT; DELIVERY OF
DOCUMENTS
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2
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Section
2.01.
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Conveyance
of Mortgage Loans; Possession of Custodial Mortgage Files; Maintenance
of
Retained Mortgage File and Servicing Files.
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2
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Section
2.02.
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Books
and Records; Transfers of Mortgage Loans.
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2
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Section
2.03.
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Custody
Agreement; Delivery of Documents.
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2
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ARTICLE
III REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
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2
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Section
3.01.
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Company
Representations and Warranties.
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2
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Section
3.02.
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Representations
and Warranties Regarding Individual Mortgage Loans.
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2
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Section
3.03.
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Repurchase.
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2
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ARTICLE
IV ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
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2
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Section
4.01.
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Company
to Act as Servicer.
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2
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Section
4.02.
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Liquidation
of Mortgage Loans.
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2
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Section
4.03.
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Collection
of Mortgage Loan Payments.
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2
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Section
4.04.
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Establishment
of and Deposits to Custodial Account.
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2
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Section
4.05.
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Permitted
Withdrawals From Custodial Account.
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2
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Section
4.06.
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Establishment
of and Deposits to Escrow Account.
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2
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Section
4.07.
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Permitted
Withdrawals From Escrow Account.
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2
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Section
4.08.
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Payment
of Taxes, Insurance and Other Charges.
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2
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Section
4.09.
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Protection
of Accounts.
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2
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Section
4.10.
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Maintenance
of Hazard Insurance.
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2
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Section
4.11.
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Maintenance
of Mortgage Impairment Insurance.
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2
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Section
4.12.
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Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
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2
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Section
4.13.
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Inspections.
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2
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Section
4.14.
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Restoration
of Mortgaged Property.
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2
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Section
4.15.
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Maintenance
of PMI Policy and LPMI Policy; Claims.
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2
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Section
4.16.
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Title,
Management and Disposition of REO Property.
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2
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Section
4.17.
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Real
Estate Owned Reports.
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2
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Section
4.18.
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Liquidation
Reports.
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2
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Section
4.19.
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Reports
of Foreclosures and Abandonments of Mortgaged Property.
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2
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Section
4.20.
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Notification
of Adjustments.
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2
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Section
4.21.
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Credit
Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.
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2
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Section
4.22.
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Confidentiality/Protection
of Customer Information.
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2
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Section
4.23.
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Disaster
Recovery/Business Continuity Plan.
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2
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Section
4.24.
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Quality
Control Procedures.
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2
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Section
4.25.
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Application
of Buydown Funds.
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2
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i
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Section
4.26.
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Establishment
of and Deposits to Subsidy Account.
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2
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Section
4.27.
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Automated
Servicing Systems.
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2
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Section
4.28.
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Prepayment
Penalties.
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2
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Section
4.29.
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Use
of Subservicers and Subcontractors.
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2
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ARTICLE
V PAYMENTS TO PURCHASER
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2
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Section
5.01.
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Remittances.
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2
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Section
5.02.
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Statements
to Purchaser.
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2
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Section
5.03.
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Monthly
Advances by Company.
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2
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ARTICLE
VI GENERAL SERVICING PROCEDURES
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2
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Section
6.01.
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Transfers
of Mortgaged Property.
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2
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Section
6.02.
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Satisfaction
of Mortgages and Release of Retained Mortgage Files.
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2
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Section
6.03.
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Servicing
Compensation.
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2
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Section
6.04.
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Annual
Statement as to Compliance.
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2
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Section
6.05.
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Annual
Independent Public Accountants’ Servicing Report.
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2
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Section
6.06.
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Report
on Assessment of Compliance and Attestation.
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2
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Section
6.07.
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Remedies.
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2
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Section
6.08.
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Right
to Examine Company Records.
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2
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Section
6.09.
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Compliance
with REMIC Provisions.
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2
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ARTICLE
VII COMPANY TO COOPERATE
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2
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Section
7.01.
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Provision
of Information.
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2
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Section
7.02.
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Financial
Statements; Servicing Facility.
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2
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ARTICLE
VIII THE COMPANY
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2
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Section
8.01.
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Indemnification;
Third Party Claims.
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2
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Section
8.02.
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Merger
or Consolidation of the Company.
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2
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Section
8.03.
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Limitation
on Liability of Company and Others.
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2
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Section
8.04.
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Limitation
on Resignation and Assignment by Company.
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2
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ARTICLE
IX REMOVAL OF MORTGAGE LOANS FROM AGREEMENT
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2
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Section
9.01.
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Removal
of Mortgage Loans from Inclusion Under this Agreement.
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2
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ARTICLE
X DEFAULT
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2
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Section
10.01.
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Events
of Default.
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2
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Section
10.02.
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Waiver
of Defaults.
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2
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ARTICLE
XI TERMINATION
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2
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Section
11.01.
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Termination.
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2
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Section
11.02.
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Termination
Without Cause.
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2
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ii
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ARTICLE
XII MISCELLANEOUS PROVISIONS
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2
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Section
12.01.
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Successor
to Company.
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2
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Section
12.02.
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Amendment.
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2
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Section
12.03.
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Governing
Law.
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2
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Section
12.04.
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Arbitration.
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2
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Section
12.05.
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Duration
of Agreement.
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2
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Section
12.06.
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Notices.
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2
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Section
12.07.
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Severability
of Provisions.
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2
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Section
12.08.
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Relationship
of Parties.
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2
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Section
12.09.
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Execution;
Successors and Assigns.
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2
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Section
12.10.
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Recordation
of Assignments of Mortgage.
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2
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Section
12.11.
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Assignment
by Purchaser.
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2
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Section
12.12.
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Solicitation
of Mortgagor.
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2
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Section
12.13.
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Further
Agreements.
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2
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Section
12.14.
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Confidential
Information.
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2
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Section
12.15.
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Counterparts.
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2
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Section
12.16.
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Exhibits.
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2
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Section
12.17.
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General
Interpretive Principles.
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2
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Section
12.18.
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Reproduction
of Documents.
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2
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Section
12.19.
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Buydown
Loan Aggregate Limitation.
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2
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EXHIBITS
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Exhibit
A
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Form
of Assignment and Conveyance Agreement
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Exhibit
B
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Form
of Assignment, Assumption
and Recognition Agreement
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Exhibit
C
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Custody
Agreement
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Exhibit
D
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Contents
of each Retained Mortgage File, Custodial Mortgage File and Servicing
File
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Exhibit
E
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Data
File
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Exhibit
F
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Servicing
System Guidelines and Requirements
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Exhibit
G
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Monthly
Remittance Advice
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Exhibit
H
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Servicing
Criteria
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Exhibit
I
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Sarbanes
Certification
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Exhibit
J
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Form
of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Back-up
Certification
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iii
This
is
an Amended and Restated Master Seller’s Warranties and Servicing Agreement for
fixed rate and adjustable rate residential first lien mortgage loans, dated
and
effective as of December 1, 2005, and is executed between Bank of America,
National Association, as purchaser (the “Purchaser”), and ▇▇▇▇▇ Fargo Bank,
N.A., as seller and servicer (the “Company”).
WITNESSETH
WHEREAS,
the Purchaser has agreed to purchase from the Company and the Company has agreed
to sell to the Purchaser from time to time (each a “Transaction”) on a servicing
retained basis certain first lien fixed rate and adjustable rate residential
mortgage loans (the “Mortgage Loans”) which shall be delivered as whole loans
(each a “Loan Package”) on various dates (each a “Closing Date”) as provided for
in certain Assignment and Conveyance Agreements by and between the Purchaser
and
the Company as executed in conjunction with each Transaction; and
WHEREAS,
each of the Mortgage Loans is secured by a mortgage, deed of trust or other
security instrument creating a first lien on a residential dwelling located
in
the jurisdiction indicated on the related Mortgage Loan Schedule;
and
WHEREAS,
the Purchaser and the Company wish to prescribe the manner of purchase of the
Mortgage Loans and the conveyance, servicing and control of the Mortgage
Loans.
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and
for other good and valuable consideration, the receipt and adequacy of which
is
hereby acknowledged, the Purchaser and the Company agree as
follows:
ARTICLE
I
DEFINITIONS
Whenever
used herein, the following words and phrases, unless the content otherwise
requires, shall have the following meanings:
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, procedures (including collection procedures)
that
comply with applicable federal, state and local law, and that the Company
customarily employs and exercises in servicing and administering mortgage loans
for its own account, the terms of the related Mortgage and Mortgage Note and
accepted mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as the Mortgage Loans in the
jurisdiction where the related Mortgaged Property is located.
Adjustable
Rate Mortgage Loan:
A
Mortgage Loan that contains a provision pursuant to which the Mortgage Interest
Rate is adjusted periodically.
Adjustment
Date:
As to
each Adjustable Rate Mortgage Loan, the date on which the Mortgage Interest
Rate
is adjusted in accordance with the terms of the related Mortgage Note and
Mortgage.
1
Agency/Agencies:
▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇ Mac or GNMA, or any of them as applicable.
Agency
Transfer:
Any
sale or transfer of some or all of the Mortgage Loans by the Purchaser to an
Agency which sale or transfer is not a Securitization Transaction or Whole
Loan
Transfer.
Agreement:
This
Amended and Restated Master Seller’s Warranties and Servicing Agreement and all
exhibits hereto, amendments hereof and supplements hereto.
ALTA:
The
American Land Title Association or any successor thereto.
Appraisal:
A
written appraisal of a Mortgaged Property made by a Qualified Appraiser, which
appraisal must be written, in form and substance, acceptable to ▇▇▇▇▇▇ ▇▇▇
and
▇▇▇▇▇▇▇ Mac, as applicable, and satisfy the requirements of Title XI of the
Financial Institution, Reform, Recovery and Enforcement Act of 1989 and the
regulations promulgated thereunder, in effect as of the date of the
Appraisal.
Appraised
Value:
With
respect to any Mortgage Loan, the lesser of (i) the value set forth on the
Appraisal made in connection with the origination of the related Mortgage Loan
as the value of the related Mortgaged Property, or (ii) the purchase price
paid
for the Mortgaged Property, provided, however, that in the case of a refinanced
Mortgage Loan, such value shall be based solely on the Appraisal made in
connection with the origination of such Mortgage Loan.
Assignment
and Conveyance Agreement:
The
agreement substantially in the form of Exhibit
A
attached
hereto.
Assignment,
Assumption and Recognition Agreement:
The
agreement substantially in the form of Exhibit
B
attached
hereto.
Assignment
of Mortgage:
An
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the sale of the Mortgage to
the
Purchaser or if the related Mortgage has been recorded in the name of MERS
or
its designee, such actions as are necessary to cause the Purchaser to be shown
as the owner of the related Mortgage on the records of MERS for purposes of
the
system of recording transfers of beneficial ownership of mortgages maintained
by
MERS, including assignment of the MIN Number which will appear either on the
Mortgage or the Assignment of Mortgage to MERS.
Assignment
of Mortgage Note and Pledge Agreement:
With
respect to a Cooperative Loan, an assignment of the Mortgage Note and Pledge
Agreement.
Assignment
of Proprietary Lease:
With
respect to a Cooperative Loan, an assignment of the Proprietary Lease sufficient
under the laws of the jurisdiction wherein the related Cooperative Apartment
is
located to effect the assignment of such Proprietary Lease.
Buydown
Agreement:
An
agreement between the Company and a Mortgagor, or an agreement among the
Company, a Mortgagor and a seller of a Mortgaged Property or a third party
with
respect to a Mortgage Loan which provides for the application of Buydown
Funds.
2
Buydown
Funds:
In
respect of any Buydown Mortgage Loan, any amount contributed by the seller
of a
Mortgaged Property subject to a Buydown Mortgage Loan, the buyer of such
property, the Company or any other source, plus interest earned thereon, in
order to enable the Mortgagor to reduce the payments required to be made from
the mortgagor’s funds in the early years of a Mortgage Loan.
Buydown
Mortgage Loan:
Any
Mortgage Loan in respect of which, pursuant to a Buydown Agreement, (i) the
Mortgagor pays less than the full monthly payments specified in the Mortgage
Note for a specified period, and (ii) the difference between the payments
required under such Buydown Agreement and the Mortgage Note is provided from
Buydown Funds.
Buydown
Period:
The
period of time when a Buydown Agreement is in effect with respect to a related
Buydown Mortgage Loan.
Business
Day:
Any day
other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings
and loan institutions in the states where the parties are located are authorized
or obligated by law or executive order to be closed.
Closing
Date:
The
date or dates, set forth in the related Commitment Letter, on which from time
to
time the Purchaser shall purchase and the Company shall sell the Mortgage Loans
listed on the respective Mortgage Loan Schedule for each
Transaction.
Code:
The
Internal Revenue Code of 1986, as it may be amended from time to time or any
successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.
Commission:
The
United States Securities and Exchange Commission.
Commitment
Letter:
The
commitment letter between the Company and the Purchaser which sets forth, among
other things, the Purchaser Price for certain Mortgage Loans described therein
to be sold by the Company and purchased by the Purchaser on the Closing Date
set
forth therein.
Company:
▇▇▇▇▇
Fargo Bank, N.A., or its successor in interest or assigns, or any successor
to
the Company under this Agreement appointed as herein provided.
Company
Employees:
As
defined in Section 4.12.
Company
Information:
As
defined in Section 9.01(f)(i)(A).
Condemnation
Proceeds:
All
awards or settlements in respect of a Mortgaged Property, whether permanent
or
temporary, partial or entire, by exercise of the power of eminent domain or
condemnation, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Mortgage Loan Documents.
Cooperative:
The
entity that holds title (fee or an acceptable leasehold estate) to all of the
real property that the related Project comprises, including the land, separate
dwelling units and all common areas.
3
Cooperative
Apartment:
The
specific dwelling unit relating to a Cooperative Loan.
Cooperative
Lien Search:
A
search for (a) federal tax liens, mechanics’ liens, lis pendens, judgments of
record or otherwise against (i) the Cooperative, (ii) the seller of the
Cooperative Apartment and (iii) the Company, if the Cooperative Loan is a
refinanced Mortgage Loan, (b) filings of financing statements and (c) the deed
of the Project into the Cooperative.
Cooperative
Loan:
A
Mortgage Loan that is secured by Cooperative Shares and a Proprietary Lease
granting exclusive rights to occupy the related Cooperative
Apartment.
Cooperative
Shares:
The
shares of stock issued by a Cooperative, owned by the Mortgagor, and allocated
to a Cooperative Apartment.
Covered
Loan:
A
Mortgage Loan categorized as “Covered” pursuant to the Standard & Poor’s
Glossary for File Format for LEVELS® Version 5.6b, Appendix E, as revised from
time to time and in effect on each related Closing Date.
Custodial
Account:
The
separate account or accounts created and maintained pursuant to
Section 4.04.
Custody
Agreement:
The
agreement governing the retention of the originals of each Mortgage Note,
Assignment of Mortgage and other Mortgage Loan Documents, a form of which is
annexed hereto as Exhibit
C.
Custodial
Mortgage File:
With
respect to each Mortgage Loan, the file consisting of the Mortgage Loan
Documents listed as items 1 through 5 of Exhibit
D
attached
hereto, which have been delivered to the Custodian as of the Closing
Date.
Custodian:
The
custodian under the Custody Agreement, or its successor in interest or assigns,
or any successor to the Custodian under the Custody Agreement as provided
therein.
Cut-off
Date:
With
respect to each Transaction, the first day of the month in which the Closing
Date occurs.
Data
File:
The
electronic data file prepared by the Company and delivered to the Purchaser
including the data fields set forth on Exhibit
E
with
respect to each Mortgage Loan, in relation to each Transaction.
Deleted
Mortgage Loan:
A
Mortgage Loan which is repurchased by the Company in accordance with the terms
of this Agreement and which is, in the case of a substitution pursuant to
Section 3.03, replaced or to be replaced with a Qualified Substitute Mortgage
Loan.
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Determination
Date:
The
Business Day immediately preceding the related Remittance Date.
4
Due
Date:
The day
of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive
of any days of grace, as specified in the related Mortgage Note.
Due
Period:
With
respect to each Remittance Date, the period commencing on the second day of
the
month preceding the month of such Remittance Date and ending on the first day
of
the month of such Remittance Date.
Errors
and Omissions Insurance Policy:
An
errors and omissions insurance policy to be maintained by the Company pursuant
to Section 4.12.
Escrow
Account:
The
separate account or accounts created and maintained pursuant to Section
4.06.
Escrow
Payments:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and any
other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage or any other related document.
Event
of Default:
Any one
of the conditions or circumstances enumerated in
Section 10.01.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇
▇▇▇:
The
Federal National Mortgage Association, or any successor thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity
Bond:
A
fidelity bond to be maintained by the Company pursuant to Section
4.12.
▇▇▇▇▇▇▇
Mac:
The
Federal Home Loan Mortgage Corporation, or any successor thereto.
GNMA:
The
Government National Mortgage Association, or any successor thereto.
Gross
Margin:
With
respect to each Adjustable Rate Mortgage Loan, the fixed percentage amount
set
forth in the related Mortgage Note which is added to the Index in order to
determine the related Mortgage Interest Rate, as set forth in the respective
Mortgage Loan Schedule.
High
Cost Loan:
A
Mortgage Loan classified as (a) a “high cost” loan under the Home Ownership and
Equity Protection Act of 1994, (b) a “high cost home,” “threshold,” “covered,”
(excluding New Jersey “Covered Home Loans” as that term is defined in clause (1)
of the definition of that term in the New Jersey Home Ownership Security Act
of
2002), “high risk home,” “predatory” or similar loan under any other applicable
state, federal or local law or (c) a Mortgage Loan categorized as “High Cost”
pursuant to the Standard & Poor’s Glossary for File Format for LEVELS®
Version 5.6b, Appendix E, as revised from time to time and in effect on each
related Closing Date.
5
Index:
With
respect to any Adjustable Rate Mortgage Loan, the index identified on the
related Mortgage Loan Schedule and set forth in the related Mortgage Note for
the purpose of calculating the interest therein.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property, including LPMI Proceeds, if
applicable.
Interest
Only Mortgage Loan:
A
Mortgage Loan for which an interest-only payment feature is allowed during
the
interest-only period set forth in the related Mortgage Note.
Investor:
With
respect to each MERS Designated Mortgage Loan, the Person named on the MERS
System as the investor pursuant to the MERS Procedures Manual.
Lender
Paid Mortgage Insurance Policy or LPMI Policy:
A PMI
Policy for which the Purchaser or the Company pays all premiums from its own
funds, without reimbursement therefor.
Liquidation
Proceeds:
Cash
received in connection with the liquidation of a defaulted Mortgage Loan,
whether through the sale or assignment of such Mortgage Loan, trustee’s sale,
foreclosure sale or otherwise, or the sale of the related Mortgaged Property
if
the Mortgaged Property is acquired in satisfaction of the Mortgage
Loan.
Loan
Package:
As
defined in the Recitals of this Agreement.
Loan-to-Value
Ratio or LTV:
With
respect to any Mortgage Loan, the ratio of the original loan amount of the
Mortgage Loan at its origination (unless otherwise indicated) to the Appraised
Value of the Mortgaged Property.
LPMI
Proceeds:
Proceeds of any Lender Paid Mortgage Insurance Policy.
Material
Adverse Change:
(a) a
material adverse change in, or a material adverse effect upon, the operations,
business, properties, condition (financial or otherwise) or prospects of the
Company; (b) a material impairment of the ability of the Company to perform
under this Agreement or any related agreements; or (c) a material adverse effect
upon the legality, validity, binding effect or enforceability of this Agreement
against the Company (unless such material adverse effect is directly caused
by
an action of the Purchaser which can be remedied by the Purchaser).
MERS:
MERSCORP, Inc., its successors and assigns.
MERS
Designated Mortgage Loan:
A
Mortgage Loan for which (a) the Company has designated or will designate MERS
as, and has taken or will take such action as is necessary to cause MERS to
be,
the mortgagee of record, as nominee for the Company, in accordance with MERS
Procedures Manual and (b) the Company has designated or will designate the
Custodian as the Investor on the MERS System.
6
MERS
Procedures Manual:
The
MERS Procedures Manual, as it may be amended, supplemented or otherwise modified
from time to time.
MERS
Report:
The
report from the MERS System listing MERS Designated Mortgage Loans and other
information.
MERS
System:
MERS
mortgage electronic registry system, as more particularly described in the
MERS
Procedures Manual.
Monthly
Advance:
The
portion of each Monthly Payment that is delinquent with respect to each Mortgage
Loan at the close of business on the Determination Date required to be advanced
by the Company pursuant to Section 5.03 on the Business Day immediately
preceding the Remittance Date of the related month.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage Loan or in
the
case of an Interest Only Mortgage Loan, payments of (i) interest, or (ii)
principal and interest, as applicable, on a Mortgage Loan.
Moody’s:
▇▇▇▇▇’▇
Investors Service, Inc.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a first lien on an unsubordinated estate in fee simple in real property
securing the Mortgage Note, or the Pledge Agreement securing the Mortgage Note
for a Cooperative Loan.
Mortgage
Impairment Insurance Policy:
A
mortgage impairment or blanket hazard insurance policy as described in Section
4.11.
Mortgage
Interest Rate:
The
annual rate of interest borne on a Mortgage Note in accordance with the
provisions of the Mortgage Note.
Mortgage
Loan:
An
individual Mortgage Loan which is the subject of this Agreement, each Mortgage
Loan originally sold and subject to this Agreement being identified on the
related Mortgage Loan Schedule, which Mortgage Loan includes without limitation
the Retained Mortgage File, the Custodial Mortgage File, the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and all other rights, benefits, proceeds
and
obligations arising from or in connection with such Mortgage Loan.
Mortgage
Loan Documents:
With
respect to a Mortgage Loan, the documents listed on Exhibit
D
attached
hereto.
Mortgage
Loan Remittance Rate:
With
respect to each Mortgage Loan, the annual rate of interest remitted to the
Purchaser, which shall be equal to the related Mortgage Interest Rate minus
the
Servicing Fee Rate.
Mortgage
Loan Schedule:
With
respect to each Transaction, a schedule of Mortgage Loans setting forth the
following information with respect to each Mortgage Loan: (1) the Company’s
Mortgage Loan number; (2) the city, state and zip code of the Mortgaged
Property; (3) a code indicating whether the Mortgaged Property is a single
family residence, two-family residence, three-family residence, four-family
residence, planned unit development, Cooperative Loan, manufactured housing
or
condominium; (4) the current Mortgage Interest Rate; (5) the current net
Mortgage Interest Rate; (6) the current Monthly Payment; (7) with respect to
each Adjustable Rate Mortgage Loan, the Gross Margin; (8) the original term
to
maturity; (9) the scheduled maturity date; (10) the principal balance of the
Mortgage Loan as of the Cut-off Date after deduction of payments of principal
due on or before the Cut-off Date whether or not collected; (11) the
Loan-to-Value Ratio; (12) with respect to each Adjustable Rate Mortgage Loan,
the next Adjustment Date; (13) with respect to each Adjustable Rate
Mortgage Loan, the lifetime Mortgage Interest Rate cap; (14) a
code
indicating whether the Mortgage Loan is convertible or not; (15) a code
indicating the mortgage guaranty insurance company;
(16) a
code indicating whether the Mortgage Loan is an Interest Only Mortgage Loan;
and
(17) the Servicing Fee.
7
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a
Mortgage.
Mortgaged
Property:
The
real property securing repayment of the debt evidenced by a Mortgage Note,
or
with respect to a Cooperative Loan, the related Cooperative
Apartment.
Mortgagor:
The
obligor on a Mortgage Note.
OCC:
The
Office of the Comptroller of the Currency.
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board or the Vice Chairman of the
Board or the President or a Vice President or an Assistant Vice President and
certified by the Treasurer or the Secretary or one of the Assistant Treasurers
or Assistant Secretaries of the Company, and delivered to the Purchaser as
required by this Agreement.
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the Company, reasonably
acceptable to the Purchaser.
Periodic
Interest Rate Cap:
As to
each Adjustable Rate Mortgage Loan, the maximum increase or decrease in the
Mortgage Interest Rate on any Adjustment Date pursuant to the terms of the
Mortgage Note.
Person:
Any
individual, corporation, partnership, joint venture, limited liability company,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
Pledge
Agreement:
With
respect to a Cooperative Loan, the specific agreement creating a first lien
on
and pledge of the Cooperative Shares and the appurtenant Proprietary
Lease.
Pledge
Instruments:
With
respect to a Cooperative Loan, the Stock Power, the Assignment of the
Proprietary Lease and the Assignment of the Mortgage Note and Pledge
Agreement.
8
Pledged
Asset Mortgage Loan:
A
Mortgage Loan for which the Mortgagor has pledged financial assets as partial
collateral for the Mortgage Loan, in lieu of a cash down payment.
PMI
Policy:
A
policy of primary mortgage guaranty insurance issued by a Qualified Insurer,
as
required by this Agreement with respect to certain Mortgage Loans. The premiums
on a PMI Policy may be paid by the Mortgagor or by the Company from its own
funds, without reimbursement. If the premiums are paid by the Company, the
PMI
Policy is an LPMI Policy.
Prepayment
Interest Shortfall:
As to
any Remittance Date and each Mortgage Loan subject to a Principal Prepayment
received during the calendar month preceding such Remittance Date, the amount,
if any, by which one month’s interest at the related Mortgage Loan Remittance
Rate on such Principal Prepayment exceeds the amount of interest paid in
connection with such Principal Prepayment.
Prepayment
Penalty:
The
prepayment charge or penalty interest required to be paid by a Mortgagor as
the
result of a Principal Prepayment in full of the related Mortgage Loan, not
otherwise due thereon in respect of principal or interest, which is intended
to
be a disincentive to prepayment, as provided in the related Mortgage Note or
Mortgage.
Prime
Rate:
The
prime rate announced to be in effect from time to time, as published as the
average rate in The
Wall Street Journal.
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date.
Principal
Prepayment Period:
The
calendar month preceding the month in which the related Remittance Date
occurs.
Project:
With
respect to a Cooperative Loan, all real property owned by the related
Cooperative including the land, separate dwelling units and all common
areas.
Proprietary
Lease:
With
respect to a Cooperative Loan, a lease on a Cooperative Apartment evidencing
the
possessory interest of the Mortgagor in such Cooperative Apartment.
Purchase
Price:
The
purchase price for each Loan Package shall be the percentage of par as stated
in
the related Commitment Letter, multiplied by the aggregate scheduled principal
balance, as of the related Cut-off Date, of the Mortgage Loans in the related
Loan Package, after application of scheduled payments of principal for such
related Loan Package due on or before the related Cut-off Date whether or not
collected. The purchase price for a Loan Package may be adjusted as stated
in
the related Commitment Letter.
Purchaser:
Bank of
America, National Association, or its successor in interest or any successor
or
assignee to the Purchaser under this Agreement as herein provided.
Qualification
Defect:
With
respect to a Mortgage Loan, (a) a defective document in the Custodial Mortgage
File or Retained Mortgage File, (b) the absence of a document in the Custodial
Mortgage File or Retained Mortgage File, or (c) the breach of any
representation, warranty or covenant with respect to the Mortgage Loan made
by
the Company, but, in each case, only if the affected Mortgage Loan would cease
to qualify as a “qualified mortgage” for purposes of the REMIC
Provisions.
9
Qualified
Appraiser:
An
appraiser, duly appointed by the Company, who had no interest, direct or
indirect, in the Mortgaged Property or in any loan made on the security thereof,
and whose compensation was not affected by the approval or disapproval of the
Mortgage Loan, and such appraiser and the appraisal made by such appraiser
both
satisfied the requirements of Title XI of the Financial Institution Reform,
Recovery, and Enforcement Act and the regulations promulgated thereunder, all
as
in effect on the date the Mortgage Loan was originated.
Qualified
Correspondent:
Any
Person from which the Company purchased Mortgage Loans, provided that the
following conditions are satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement between the Company and such Person that contemplated
that such Person would underwrite mortgage loans from time to time, for sale
to
the Company, in accordance with underwriting guidelines designated by the
Company (“Designated Guidelines”) or guidelines that do not vary materially from
such Designated Guidelines; (ii) such Mortgage Loans were in fact underwritten
as described in clause (i) above and were acquired by the Company within 180
days after origination; (iii) either (x) the Designated Guidelines were, at
the
time such Mortgage Loans were originated, used by the Company in origination
of
mortgage loans of the same type as the Mortgage Loans for the Company’s own
account or (y) the Designated Guidelines were, at the time such Mortgage Loans
were underwritten, designated by the Company on a consistent basis for use
by
lenders in originating mortgage loans to be purchased by the Company; and (iv)
the Company employed, at the time such Mortgage Loans were acquired by the
Company, pre-purchased or post-purchased quality assurance procedures (which
may
involve, among other things, review of a sample of mortgage loans purchased
during a particular time period or through particular channels) designed to
ensure that Persons from which it purchased mortgage loans properly applied
the
underwriting criteria designated by the Company.
Qualified
Depository:
A
deposit account or accounts maintained with a federal or state chartered
depository institution the deposits in which are insured by the FDIC to the
applicable limits and the short-term unsecured debt obligations of which (or,
in
the case of a depository institution that is a subsidiary of a holding company,
the short-term unsecured debt obligations of such holding company) are rated
“A-1” by S&P or “Prime-1” by ▇▇▇▇▇’▇ (or a comparable rating if another
rating agency is specified by the Purchaser by written notice to the Company)
at
the time any deposits are held on deposit therein.
Qualified
Insurer:
A
mortgage guaranty insurance company duly authorized and licensed where required
by law to transact mortgage guaranty insurance business and approved as an
insurer by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Qualified
Substitute Mortgage Loan:
A
mortgage loan eligible to be substituted by the Company for a Deleted Mortgage
Loan which must, on the date of such substitution be approved by the Purchaser
and, (i) have an outstanding principal balance, after deduction of all scheduled
payments due in the month of substitution (or in the case of a substitution
of
more than one mortgage loan for a Deleted Mortgage Loan, an aggregate principal
balance), not in excess of the Stated Principal Balance of the Deleted Mortgage
Loan; (ii) have a Mortgage Loan Remittance Rate not less than, and not more
than
two percent (2%) greater than, the Mortgage Loan Remittance Rate of the Deleted
Mortgage Loan; (iii) have a remaining term to maturity not greater than and
not
more than one year less than that of the Deleted Mortgage Loan; (iv) comply
with
each representation and warranty set forth in Sections 3.01 and 3.02; (v) be
of
the same type as the Deleted Mortgage Loan; (vi) have a Gross Margin not less
than that of the Deleted Mortgage Loan; (vii) have the same Index as the
Deleted Mortgage Loan; (viii) have a FICO score not less than that of the
Deleted Mortgage Loan, (ix) have an LTV not greater than that of the Deleted
Mortgage Loan; (x) have a Company credit grade not lower in quality than that
of
the Deleted Mortgage Loan and (xi) have the same lien status as the Deleted
Mortgage Loan.
10
Rating
Agency:
Each of
Fitch, Inc., ▇▇▇▇▇’▇ and S&P, or any successor thereto.
Recognition
Agreement:
An
agreement whereby a Cooperative and a lender with respect to a Cooperative
Loan
(i) acknowledge that such lender may make, or intends to make, such Cooperative
Loan, and (ii) make certain agreements with respect to such Cooperative
Loan.
Reconstitution:
Any
Securitization Transaction or Whole Loan Transfer.
Reconstitution
Agreement:
The
agreement or agreements entered into by the Company and the Purchaser and/or
certain third parties on the Reconstitution Date or Dates with respect to any
or
all of the Mortgage Loans serviced hereunder, in connection with a Whole Loan
Transfer or Securitization Transaction.
Reconstitution
Date:
The
date on which any or all of the Mortgage Loans serviced under this Agreement
may
be removed from this Agreement and reconstituted as part of a Securitization
Transaction, Agency Transfer or Whole Loan Transfer pursuant to Section 9.01
hereof. The Reconstitution Date shall be such date which the Purchaser shall
designate. On such date, except as provided in this Agreement, the Mortgage
Loans transferred may cease to be covered by this Agreement and the Company’s
servicing responsibilities shall cease under this Agreement with respect to
the
related transferred Mortgage Loans.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of the
Code.
REMIC
Provisions:
Provisions of the federal income tax law relating to a REMIC, which appear
at
Section 860A through 860G of Subchapter M of Chapter 1, Subtitle A of the Code,
and related provisions, regulations, rulings or pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time.
Remittance
Date:
The
18th day (or if such 18th day is not a Business Day, the first Business Day
immediately following, except with respect to those Mortgage Loans subject
to a
Securitization Transaction in which case such date shall be the Business Day
immediately preceding the 18th
day) of
any month.
11
REO
Disposition:
The
final sale by the Company of any REO Property.
REO
Disposition Proceeds:
All
amounts received with respect to an REO Disposition pursuant to Section
4.16.
REO
Property:
A
Mortgaged Property acquired by the Company on behalf of the Purchaser through
foreclosure or by deed in lieu of foreclosure, as described in Section
4.16.
Repurchase
Price:
With
respect to any Mortgage Loan, as defined in the related Commitment
Letter.
Retained
Mortgage File:
With
respect to each Mortgage Loan, the file consisting of the Mortgage Loan
Documents listed as items 6 through 10 of Exhibit
D
attached
hereto.
RESPA:
The
Real Estate Settlement Procedures Act, as amended.
S&P:
Standard & Poor’s Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc.
Securities
Act:
The
Securities Act of 1933, as amended.
Securitization
Transaction:
Any
transaction involving (a) a sale or other transfer of some or all of the
Mortgage Loans directly or indirectly to an issuing entity in connection with
an
issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities, (b) an issuance of publicly offered or privately
placed, rated or unrated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage Loans or (c)
a
synthetic securitization in which some or all of the Mortgage Loans are included
as part of the reference portfolio relating to such securitization.
Servicer:
As
defined in Section 9.01(e)(iii).
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses
(including reasonable attorneys’ fees and disbursements) other than Monthly
Advances incurred in the performance by the Company of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property, (b) any enforcement or
judicial proceedings, including foreclosures, (c) the management and liquidation
of any REO Property and (d) compliance with the obligations under Section 4.08
and Section 4.10.
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee the Purchaser shall
pay to the Company, which shall, for a period of one full month, be equal to
one-twelfth of the product of (a) the Servicing Fee Rate and (b) the outstanding
principal balance of such Mortgage Loan. Such fee shall be payable monthly,
computed on the basis of the same principal amount and period respecting which
any related interest payment on a Mortgage Loan is received. The obligation
of
the Purchaser to pay the Servicing Fee is limited to, and the Servicing Fee
is
payable solely from, the interest portion (including recoveries with respect
to
interest from Liquidation Proceeds, to the extent permitted by Section 4.05)
of
such Monthly Payment collected by the Company, or as otherwise provided under
Section 4.05.
12
Servicing
Fee Rate:
The per
annum percentage for each Mortgage Loan, as stated in the related Commitment
Letter.
Servicing
File:
With
respect to each Mortgage Loan, the file consisting of the Mortgage Loan
Documents listed as items 11 through 26 of Exhibit
D
attached
hereto plus copies of all Mortgage Loan Documents contained in the Custodial
Mortgage File and the Retained Mortgage File, which are retained by the
Company.
Servicing
Officer:
Any
officer of the Company involved in or responsible for the administration and
servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished by the Company to the Purchaser upon request, as such list
may from time to time be amended.
Stated
Principal Balance:
As to
each Mortgage Loan and any date of determination, (i) the principal balance
of the Mortgage Loan at the Cut-off Date after giving effect to payments of
principal due on or before such date, whether or not received, minus (ii) all
amounts previously distributed to the Purchaser with respect to the related
Mortgage Loan representing payments or recoveries of principal or advances
in
lieu thereof.
Static
Pool Information:
Static
pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation
AB.
Stock
Certificate:
With
respect to a Cooperative Loan, a certificate evidencing ownership of the
Cooperative Shares issued by the Cooperative.
Stock
Power:
With
respect to a Cooperative Loan, an assignment of the Stock Certificate or an
assignment of the Cooperative Shares issued by the Cooperative.
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
Mortgage Loans under the direction or authority of the Company or a
Subservicer.
Subservicer:
Any
Person that services Mortgage Loans on behalf of the Company or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Company under this Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB.
13
Subservicing
Agreement:
Any
subservicing agreement between the Company and any Subservicer relating to
servicing and/or administration of some or all of the Mortgage Loans included
in
a Mortgage Loan Package.
Subsidy
Account:
An
account maintained by the Company specifically to hold all Subsidy Funds to
be
applied to individual Subsidy Loans.
Subsidy
Funds:
With
respect to any Subsidy Loans, funds contributed by the employer of a Mortgagor
in order to reduce the payments required from the Mortgagor for a specified
period in specified amounts.
Subsidy
Loan:
Any
Mortgage Loan subject to a temporary interest subsidy agreement pursuant to
which the monthly interest payments made by the related Mortgagor will be less
than the scheduled monthly interest payments on such Mortgage Loan, with the
resulting difference in interest payments being provided by the employer of
the
Mortgagor. Each Subsidy Loan will be identified as such in the related Data
File.
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, that originated Mortgage Loans
acquired by the Company.
Time$aver®
Mortgage Loan:
A
Mortgage Loan which has been refinanced pursuant to a Company program that
allows a rate/term refinance of an existing Company-serviced loan with minimal
documentation.
Underwriting
Guidelines:
The
underwriting guidelines of the Company, applicable to each Loan Package, as
provided to the Purchaser by the Company.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans by the Purchaser to a
third party, which sale or transfer is not a Securitization Transaction or
an
Agency Transfer.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF CUSTODIAL MORTGAGE FILES; BOOKS AND RECORDS;
CUSTODY AGREEMENT; DELIVERY OF DOCUMENTS
Section
2.01. Conveyance
of Mortgage Loans; Possession of Custodial Mortgage Files; Maintenance of
Retained Mortgage File and Servicing Files.
Pursuant
to each Assignment and Conveyance Agreement, on the related Closing Date, the
Company, simultaneously with the payment of the Purchase Price by the Purchaser,
shall thereby sell, transfer, assign, set over and convey to the Purchaser,
without recourse, but subject to the terms of this Agreement and the related
Assignment and Conveyance Agreement, all the right, title and interest of the
Company in and to the Mortgage Loans listed on the respective Mortgage Loan
Schedule annexed to such Assignment and Conveyance Agreement, together with
the
Retained Mortgage Files and Custodial Mortgage File and all rights and
obligations arising under the documents contained therein. The Company shall
deliver the related Mortgage Loan Schedule and the related Data File to the
Purchaser at least two (2) Business Days before the Closing Date. Pursuant
to
Section 2.03, the Company shall deliver the Custodial Mortgage File for each
Mortgage Loan comprising the related Loan Package to the Custodian.
14
The
contents of each Retained Mortgage File not delivered to the Custodian are
and
shall be held in trust by the Company for the benefit of the Purchaser as the
owner thereof. Additionally and separate to the Retained Mortgage File, the
Company shall maintain a Servicing File, for the sole purpose of servicing
the
related Mortgage Loans, consisting of a copy of the contents of the Custodial
Mortgage File and the Retained Mortgage File. The possession of each Servicing
File and Retained Mortgage File held by the Company is at the will of the
Purchaser and such retention and possession by the Company is in a custodial
capacity only. Upon the sale of the Mortgage Loans the ownership of each
Mortgage Note, the related Mortgage and the related Custodial Mortgage File,
Retained Mortgage File and Servicing File shall vest immediately in the
Purchaser, and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Company shall vest immediately in the Purchaser and shall be retained and
maintained by the Company, in trust, at the will of the Purchaser and only
in
such custodial capacity. The Company shall release its custody of the contents
of any Retained Mortgage File and Servicing File only in accordance with written
instructions from the Purchaser, unless such release is required as incidental
to the Company’s servicing of the Mortgage Loans, in the case of the Servicing
File, or is in connection with a repurchase of any Mortgage Loan pursuant to
Section 3.03 or 6.02. All such costs associated with the release, transfer
and re-delivery to the Company shall be the responsibility of the Purchaser
(unless in connection with Section 3.03 or 6.02).
Section
2.02. Books
and Records; Transfers of Mortgage Loans.
From
and
after the sale to the Purchaser of the Mortgage Loans in the related Loan
Package on each Closing Date, all rights arising out of such Mortgage Loans,
including, but not limited to, all funds received on or in connection with
such
Mortgage Loans, shall be received and held by the Company in trust for the
benefit of the Purchaser as owner of such Mortgage Loans, and the Company shall
retain record title to the related Mortgages for the sole purpose of
facilitating the servicing and the supervision of the servicing of such Mortgage
Loans.
The
sale
of each Mortgage Loan shall be reflected on the Company’s balance sheet and
other financial statements as a sale of assets by the Company. The Company
shall
be responsible for maintaining, and shall maintain, a complete set of books
and
records for each Mortgage Loan which shall be marked clearly to reflect the
ownership of each Mortgage Loan by the Purchaser. In particular, the Company
shall maintain in its possession, available for inspection by the Purchaser,
or
its designee, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the Flood Disaster Protection Act of 1973, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and eligibility
of any condominium project for approval by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and records
of periodic inspections required by Section 4.13. To the extent that original
documents are not required for purposes of realization of Liquidation Proceeds
or Insurance Proceeds, documents maintained by the Company may be in the form
of
microfilm or microfiche or such other reliable means of recreating original
documents, including but not limited to, optical imagery techniques so long
as
the Company complies with the requirements of the ▇▇▇▇▇▇ Mae Selling and
Servicing Guide, as amended from time to time.
15
The
Company shall maintain with respect to each Mortgage Loan and shall make
available for inspection by the Purchaser or its designee the related Retained
Mortgage File and Servicing File during the time the Purchaser retains ownership
of such Mortgage Loan and thereafter in accordance with applicable laws and
regulations.
The
Company shall keep at its servicing office books and records in which, subject
to such reasonable regulations as it may prescribe, the Company shall note
transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made unless
such transfer is in compliance with the terms hereof. For the purposes of this
Agreement, the Company shall be under no obligation to deal with any person
with
respect to this Agreement or the Mortgage Loans unless the books and records
show such person as the owner of the Mortgage Loan. The Purchaser may, subject
to the terms of this Agreement, sell and transfer one or more of the Mortgage
Loans. The Purchaser also shall advise the Company of the transfer. Upon receipt
of notice of the transfer, the Company shall ▇▇▇▇ its books and records to
reflect the ownership of the Mortgage Loans of such assignee, and shall release
the previous Purchaser from its obligations hereunder with respect to the
Mortgage Loans sold or transferred. Such notification of a transfer, including
a
final schedule of Mortgage Loans subject to transfer, shall be received by
the
Company no fewer than five (5) Business Days before the last Business Day of
the
month. If such notification is not received as specified above, the Company’s
duties to remit and report as required by Section 5 shall begin with the next
Due Period.
Upon
request from the Purchaser, at the Purchaser’s expense, the Company shall
deliver no later than thirty (30) days after such request any Retained Mortgage
File or document therein, or copies thereof, to the Purchaser at the direction
of the Purchaser. The Purchaser shall return any Retained Mortgage File or
document therein delivered pursuant to this Section no later than ten (10)
days
after receipt thereof. In the event that the Company fails to make delivery
of
the requested Retained Mortgage File or document therein, or copies thereof,
as
required under this Section 2.02, the Company shall repurchase, pursuant to
Section 3.03 of this Agreement, the related Mortgage Loan within thirty (30)
days of a request to do so by the Purchaser.
Section
2.03. Custody
Agreement; Delivery of Documents.
On
each
Closing Date with respect to each Mortgage Loan comprising the related Loan
Package, the Company shall have delivered to the Custodian not fewer than five
(5) Business Days prior to such Closing Date those Mortgage Loan Documents
as required by Exhibit D
to this
Agreement with respect to each Mortgage Loan. In addition, in connection with
the assignment of any MERS Designated Mortgage Loan, the Company agrees that
on
or prior to the second Business Day following the Closing Date it will cause,
at
its own expense, the MERS System to indicate that the related Mortgage Loans
have been assigned by the Company to the Purchaser in accordance with this
Agreement by entering in the MERS System the information required by the MERS
System to identify the Purchaser as owner of such Mortgage Loans. The Company
further agrees that it will not alter the information referenced in this
paragraph with respect to any Mortgage Loan during the term of this Agreement
unless and until such Mortgage Loan is repurchased in accordance with the terms
of this Agreement or unless otherwise directed by the Purchaser.
16
The
Custodian shall certify its receipt of all such Mortgage Loan Documents in
each
Custodial Mortgage File required to be delivered pursuant to this Agreement,
as
evidenced by the Initial Certification of the Custodian in the forms annexed
to
the Custody Agreement. The Company shall be responsible for recording the
initial Assignments of Mortgage. The Purchaser will be responsible for the
fees
and expenses of the Custodian.
All
recording fees and other costs associated with the recording of initial
Assignments of Mortgage and other relevant documents to the Purchaser or its
designee will be borne by the Company. For Mortgage Loans not registered under
the MERS System, if the Purchaser requests that the related Assignments of
Mortgage be recorded, the Company shall cause such Assignments of Mortgage
which
were delivered in blank to be completed and to be recorded. The Company shall
be
required to deliver such Assignments of Mortgage for recording within 30 days
of
the date on which the Company is notified that recording will be required
pursuant to this Section 2.03. The Company shall furnish the Custodian with
a
copy of each Assignment of Mortgage submitted for recording. In the event that
any such Assignment is lost or returned unrecorded because of a defect therein,
the Company shall promptly have a substitute Assignment of Mortgage prepared
or
have such defect cured, as the case may be, and thereafter cause such Assignment
of Mortgage to be duly recorded.
The
Company shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 or 6.01 within one week of their
execution, provided, however, that the Company shall provide the Custodian
with
a certified true copy of any such document submitted for recordation within
ten
(10) days of its execution, and shall provide the original of any such document
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within sixty (60) days of its submission for recordation.
If
the
original or a copy of any document submitted for recordation to the appropriate
public recording office is not so delivered to the Custodian with 240 days
following the related Closing Date, and if the Company does not cure such
failure within thirty (30) days after receipt of written notification of such
failure from the Purchaser, the related Mortgage Loan shall, upon the request
of
the Purchaser, be repurchased by the Company at a price and in the manner
specified in Section 3.03; provided, however, that with respect to any Mortgage
Loan, if such defect constitutes a Qualification Defect, any such repurchase
must take place within sixty (60) days of the date such defect is
discovered.
In
the
event the public recording office is delayed in returning any original document,
which the Company is required to deliver at any time to the Custodian in
accordance with the terms of the Custody Agreement or which the Company is
required to maintain in the Retained Mortgage File, the Company shall deliver
to
the Custodian within 270 days of its submission for recordation, a copy of
such
document and an Officer’s Certificate, which shall (i) identify the recorded
document; (ii) state that the recorded document has not been delivered to
the Custodian due solely to a delay by the public recording office, (iii) state
the amount of time generally required by the applicable recording office to
record and return a document submitted for recordation, and (iv) specify the
date the applicable recorded document will be delivered to the Custodian. The
Company will be required to deliver the document to the Custodian by the date
specified in (iv) above. An extension of the date specified in (iv) above may
be
requested from the Purchaser, which consent shall not be unreasonably withheld.
However, if the Company cannot deliver such original or clerk-certified copy
of
any document submitted for recordation to the appropriate public recording
office within the specified time for any reason, within thirty (30) days after
receipt of written notification of such failure from the Purchaser, the Company
shall repurchase the related Mortgage Loan at the price and in the manner
specified in Section 3.03.
17
In
the
event that new, replacement, substitute or additional Stock Certificates are
issued with respect to existing Cooperative Shares, the Company immediately
shall deliver to the Custodian the new Stock Certificates, together with the
related Stock Powers in blank. Such new Stock Certificates shall be subject
to
the related Pledge Instruments and shall be subject to all of the terms,
covenants and conditions of this Agreement.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES REMEDIES AND BREACH
Section
3.01. Company
Representations and Warranties.
The
Company hereby represents and warrants to the Purchaser that, as of the related
Closing Date:
(a) Due
Organization and Authority.
The
Company is a national banking association duly organized, validly existing
and
in good standing under the laws of the United States and has all licenses
necessary to carry on its business as now being conducted and is licensed,
qualified and in good standing in each state where a Mortgaged Property is
located if the laws of such state require licensing or qualification in order
to
conduct business of the type conducted by the Company, and in any event the
Company is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan and the servicing
of
such Mortgage Loan in accordance with the terms of this Agreement; the Company
has the full power and authority to execute and deliver this Agreement and
to
perform in accordance herewith; the execution, delivery and performance of
this
Agreement (including all instruments of transfer to be delivered pursuant to
this Agreement) by the Company and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the Company; and
all
requisite action has been taken by the Company to make this Agreement valid
and
binding upon the Company in accordance with its terms;
(b) Ordinary
Course of Business.
The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Company, who is in the business of selling
and servicing loans, and the transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Company pursuant to this Agreement are not
subject to the bulk transfer or any similar statutory provisions in effect
in
any applicable jurisdiction;
18
(c) No
Conflicts.
Neither
the execution and delivery of this Agreement, the acquisition of the Mortgage
Loans by the Company, the sale of the Mortgage Loans to the Purchaser or the
transactions contemplated hereby, nor the fulfillment of or compliance with
the
terms and conditions of this Agreement will conflict with or result in a breach
of any of the terms, charter documents or by-laws or any legal restriction
or
any agreement or instrument to which the Company is now a party or by which
it
is bound, or constitute a default or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Company or its property
is
subject, or impair the ability of the Purchaser to realize on the Mortgage
Loans, or impair the value of the Mortgage Loans;
(d) Ability
to Service.
The
Company is an approved seller/servicer of conventional residential mortgage
loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, with the facilities, procedures, and
experienced personnel necessary for the sound servicing of mortgage loans of
the
same type as the Mortgage Loans. The Company is a HUD approved mortgagee
pursuant to Section 203 of the National Housing Act and is in good standing
to
sell mortgage loans to and service mortgage loans for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac,
and no event has occurred, including but not limited to a change in insurance
coverage, which would make the Company unable to comply with ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac eligibility requirements or which would require notification to
either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(e) Reasonable
Servicing Fee; Fair Consideration.
The
Company acknowledges and agrees that the Servicing Fee represents reasonable
compensation for performing such services and that the entire Servicing Fee
shall be treated by the Company, for accounting and tax purposes, as
compensation for the servicing and administration of the Mortgage Loans pursuant
to this Agreement. The consideration received by the Company upon the sale
of
the Mortgage Loans under this Agreement constitutes fair consideration and
reasonably equivalent value for the Mortgage Loans;
(f) Ability
to Perform; Solvency.
The
Company does not believe, nor does it have any reason or cause to believe,
that
it cannot perform each and every covenant contained in this Agreement. The
Company is solvent and the sale of the Mortgage Loans will not cause the Company
to become insolvent. The sale of the Mortgage Loans is not undertaken to hinder,
delay or defraud any of the Company’s creditors;
19
(g) No
Litigation Pending.
There
is
no action, suit, proceeding or investigation pending or threatened against
the
Company which, either in any one instance or in the aggregate, may result in
any
material adverse change in the business, operations, financial condition,
properties or assets of the Company, or in any material impairment of the right
or ability of the Company to carry on its business substantially as now
conducted, or in any material liability on the part of the Company, or which
would draw into question the validity of this Agreement or the Mortgage Loans
or
of any action taken or to be contemplated herein, or which would be likely
to
impair materially the ability of the Company to perform under the terms of
this
Agreement;
(h) No
Consent Required.
No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Company
of
or compliance by the Company with this Agreement or the sale of the Mortgage
Loans as evidenced by the consummation of the transactions contemplated by
this
Agreement, or if required, such consent approval, authorization or order has
been obtained prior to the related Closing Date;
(i) Selection
Process.
The
Mortgage Loans were selected from among the outstanding adjustable rate or
fixed
rate one- to four-family mortgage loans in the Company’s mortgage banking
portfolio at the related Closing Date as to which the representations and
warranties set forth in Section 3.02 could be made and such selection was not
made in a manner so as to affect adversely the interests of the
Purchaser;
(j) No
Untrue Information.
Neither
this Agreement nor any statement, report or other document furnished or to
be
furnished pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of fact or omits to state
a
fact necessary to make the statements contained therein not
misleading;
(k) Sale
Treatment.
The
Company has determined that the disposition of the Mortgage Loans pursuant
to
this Agreement will be afforded sale treatment for accounting and tax
purposes;
(l) No
Material Change.
There
has
been no material adverse change in the business, operations, financial condition
or assets of the Company since the date of the Company’s most recent financial
statements;
20
(m) No
Brokers’ Fees.
The
Company has not dealt with any broker, investment banker, agent or other Person
that may be entitled to any commission or compensation in the connection with
the sale of the Mortgage Loans; and
(n) MERS.
The
Company is a member of MERS in good standing.
Section
3.02. Representations
and Warranties Regarding Individual Mortgage Loans.
As
to
each Mortgage Loan, the Company hereby represents and warrants to the Purchaser
that as of the related Closing Date:
(a) Mortgage
Loans as Described.
The
information set forth in the respective Mortgage Loan Schedule and the
information contained on the respective Data File delivered to the Purchaser
is
true and correct;
(b) Payments
Current.
All
payments required to be made up to the Cut-off Date for the Mortgage Loan under
the terms of the Mortgage Note have been made and credited. No payment under
any
Mortgage Loan has been 30 days delinquent more than one time within twelve
months prior to the related Closing Date;
(c) No
Outstanding Charges.
There
are
no defaults in complying with the terms of the Mortgages, and all taxes,
governmental assessments, insurance premiums, leasehold payments, water, sewer
and municipal charges, which previously became due and owing have been paid,
or
an escrow of funds has been established in an amount sufficient to pay for
every
such item which remains unpaid and which has been assessed but is not yet due
and payable. The Company has not advanced funds, or induced, or solicited
directly or indirectly, the payment of any amount required under the Mortgage
Loan, except for interest accruing from the date of the Mortgage Note or date
of
disbursement of the Mortgage Loan proceeds, whichever is later, to the day
which
precedes by one month the Due Date of the first installment of principal and
interest;
(d) Original
Terms Unmodified.
The
terms
of the Mortgage Note and Mortgage have not been impaired, waived, altered or
modified in any respect, except by a written instrument which has been recorded,
if necessary, to protect the interests of the Purchaser and maintain the lien
priority of the Mortgage, and is retained by the Company in the Retained
Mortgage File; the related Mortgage Note has been delivered to the Custodian.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related PMI Policy or LPMI Policy and the title insurer,
to
the extent required by the policy, and its terms are reflected on the respective
Mortgage Loan Schedule. No instrument of waiver, alteration or modification
has
been executed, and no Mortgagor has been released, in whole or in part, except
in connection with an assumption agreement approved by the issuer of any related
PMI Policy or LPMI Policy and the title insurer, to the extent required by
the
policy, and which assumption agreement is part of the Custodial Mortgage File
delivered to the Custodian and the terms of which are reflected in the
respective Mortgage Loan Schedule;
21
(e) No
Defenses.
The
Mortgage Loan is not subject to any right of rescission, set-off, counterclaim
or defense, including without limitation the defense of usury, nor will the
operation of any of the terms of the Mortgage Note or the Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including without limitation
the
defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;
(f) No
Satisfaction of Mortgage.
The
Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such satisfaction, release, cancellation, subordination or
rescission;
(g) Validity
of Mortgage Documents.
The
Mortgage Note and the Mortgage and related documents are genuine, and each
is
the legal, valid and binding obligation of the maker thereof enforceable in
accordance with its terms. All parties to the Mortgage Note and the Mortgage
had
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have
been
duly and properly executed by such parties. The Company has reviewed all of
the
documents constituting the Retained Mortgage File and Custodial Mortgage File
and has made such inquiries as it deems necessary to make and confirm the
accuracy of the representations set forth herein;
With
respect to each Cooperative Loan, the Mortgage Note, the Mortgage, the Pledge
Agreement, and related documents are genuine, and each is the legal, valid
and
binding obligation of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note, the Mortgage, the Pledge Agreement,
the
Proprietary Lease, the Stock Power, Recognition Agreement and the Assignment
of
Proprietary Lease had legal capacity to enter into the Mortgage Loan and to
execute and deliver such documents, and such documents have been duly and
properly executed by such parties;
(h) No
Fraud.
No
error,
omission, misrepresentation, negligence, fraud or similar occurrence with
respect to a Mortgage Loan has taken place on the part of the Company, or the
Mortgagor, or to the best of the Company’s knowledge, any appraiser, any
builder, or any developer, or any other party involved in the origination of
the
Mortgage Loan or in the application of any insurance in relation to such
Mortgage Loan;
22
(i) Compliance
with Applicable Laws.
Any
and
all requirements of any federal, state or local law including, without
limitation, usury, truth-in-lending, real estate settlement procedures, consumer
credit protection and privacy, equal credit opportunity, disclosure or predatory
and abusive lending laws applicable to the origination and servicing of the
Mortgage Loan have been complied with, the Mortgagor received all disclosure
materials required by applicable law with respect to the making of mortgage
loans of the same type as the Mortgage Loan and, if the Mortgage Loan is a
refinanced Mortgage Loan, rescission materials required by applicable laws,
and
the Company shall maintain in its possession, available for the Purchaser’s
inspection, and shall deliver to the Purchaser upon demand, evidence of
compliance with all such requirements. All inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of the Mortgaged Property and, with respect to the use and occupancy of the
same, including, but not limited to, certificates of occupancy and fire
underwriting certificates, have been made or obtained from the appropriate
authorities;
(j) Location
and Type of Mortgaged Property.
The
Mortgaged Property is located in the state identified in the respective Mortgage
Loan Schedule and consists of a contiguous parcel of real property with a
detached single family residence erected thereon, or a two- to four-family
dwelling, or a Cooperative Apartment, or a manufactured dwelling, or an
individual condominium unit in a condominium project, or an individual unit
in a
planned unit development or a townhouse, provided, however, that any condominium
project or planned unit development shall conform to the applicable ▇▇▇▇▇▇
▇▇▇
or ▇▇▇▇▇▇▇ Mac requirements, or the Underwriting Guidelines, regarding such
dwellings, and no residence or dwelling is a mobile home. As of the respective
date of the Appraisal for each Mortgaged Property, any Mortgaged Property being
used for commercial purposes conforms to the Underwriting Guidelines and, to
the
best of the Company’s knowledge, since the date of such Appraisal, no portion of
the Mortgaged Property has been used for commercial purposes outside of the
Underwriting Guidelines;
(k) Valid
First Lien.
The
Mortgage is a valid, subsisting and enforceable first lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of
the
Mortgage is subject only to:
(1) the
lien
of current real property taxes and assessments not yet due and
payable;
(2) covenants,
conditions and restrictions, rights of way, easements and other matters of
the
public record as of the date of recording acceptable to mortgage lending
institutions generally and specifically referred to in the lender’s title
insurance policy delivered to the originator of the Mortgage Loan and (i)
referred to or otherwise considered in the Appraisal made for the originator
of
the Mortgage Loan and (ii) which do not adversely affect the Appraised Value
of
the Mortgaged Property set forth in such Appraisal; and
23
(3) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the
mortgage or the use, enjoyment, value or marketability of the related Mortgaged
Property.
Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable first lien and first priority security interest
on
the property described therein and the Company has full right to sell and assign
the same to the Purchaser;
With
respect to each Cooperative Loan, each Pledge Agreement creates a valid,
enforceable and subsisting first security interest in the Cooperative Shares
and
Proprietary Lease, subject only to (i) the lien of the related Cooperative
for
unpaid assessments representing the Mortgagor’s pro rata share of the
Cooperative’s payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments
to
which like collateral is commonly subject and (ii) other matters to which like
collateral is commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Pledge Agreement;
provided, however, that the appurtenant Proprietary Lease may be subordinated
or
otherwise subject to the lien of any mortgage on the Project;
(l) Full
Disbursement of Proceeds.
The
proceeds of the Mortgage Loan have been fully disbursed, except for escrows
established or created due to seasonal weather conditions, and there is no
requirement for future advances thereunder. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Consolidation
of Future Advances.
Any
future advances made prior to the Cut-off Date, have been consolidated with
the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment
term
reflected on the related Mortgage Loan Schedule. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as having first
lien priority by a title insurance policy, an endorsement to the policy insuring
the mortgagee’s consolidated interest or by other title evidence acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac; the consolidated principal amount does not exceed
the
original principal amount of the Mortgage Loan; the Company shall not make
future advances after the Cut-off Date;
24
(n) Ownership.
The
Company is the sole owner of record and holder of the Mortgage Loan and the
related Mortgage Note and the Mortgage are not assigned or pledged, and the
Company has good and marketable title thereto and has full right and authority
to transfer and sell the Mortgage Loan to the Purchaser. The Company is
transferring the Mortgage Loan free and clear of any and all encumbrances,
liens, pledges, equities, participation interests, claims, agreements with
other
parties to sell or otherwise transfer the Mortgage Loan, charges or security
interests of any nature encumbering such Mortgage Loan;
(o) Origination/Doing
Business.
The
Mortgage Loan was originated by a savings and loan association, a savings bank,
a commercial bank, a credit union, an insurance company, or similar institution
that is supervised and examined by a federal or state authority or by a
mortgagee approved by the Secretary of Housing and Urban Development pursuant
to
Sections 203 and 211 of the National Housing Act. All parties which have had
any
interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (2) either (A) organized under the laws of such state, (B) qualified to
do
business in such state, (C) federal savings and loan associations or national
banks having principal offices in such state, or (D) not doing business in
such
state;
(p) LTV,
PMI Policy; LPMI Policy.
Each
Mortgage Loan has an LTV as specified on the Mortgage Loan Schedule. Except
as
indicated on the Mortgage Loan Schedule, each Mortgage Loan with an LTV greater
than 80%, at the time of origination, a portion of the unpaid principal balance
of each Mortgage Loan is and will be insured as to payment defaults by a PMI
Policy or LPMI Policy. If the Mortgage Loan is insured by a PMI Policy for
which
the Mortgagor pays all premiums, the coverage will remain in place until (i)
the
LTV decreases to 78% or (ii) the PMI Policy is otherwise terminated pursuant
to
the Homeowners Protection Act of 1998, 12 USC §4901, et seq. All provisions of
such PMI Policy or LPMI Policy have been and are being complied with, such
policy is in full force and effect, and all premiums due thereunder have been
paid. The Qualified Insurer has a claims paying ability acceptable to ▇▇▇▇▇▇
Mae
or ▇▇▇▇▇▇▇ Mac. Any Mortgage Loan subject to a PMI Policy or an LPMI Policy
obligates the Mortgagor or the Company to maintain the PMI Policy or LPMI
Policy, as applicable, and to pay all premiums and charges in connection
therewith. The Mortgage Interest Rate for the Mortgage Loan as set forth on
the
related Mortgage Loan Schedule is net of any such insurance
premium;
(q) Title
Insurance.
The
Mortgage Loan is covered by an ALTA lender’s title insurance policy (or in the
case of any Mortgage Loan secured by a Mortgaged Property located in a
jurisdiction where such policies are generally not available, an opinion of
counsel of the type customarily rendered in such jurisdiction in lieu of title
insurance) or other generally acceptable form of policy of insurance acceptable
to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, issued by a title insurer acceptable to ▇▇▇▇▇▇
Mae
or ▇▇▇▇▇▇▇ Mac and qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring the Company, its successors and assigns,
as to the first priority lien of the Mortgage in the original principal amount
of the Mortgage Loan, subject only to the exceptions contained in clauses (1),
(2) and (3) of Paragraph (k) of this Section 3.02, and with respect to
Adjustable Rate Mortgage Loans against any loss by reason of the invalidity
or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment to the Mortgage Interest Rate and Monthly Payment.
Additionally, such lender’s title insurance policy includes no exceptions
regarding ingress, egress or encroachments that impact the value or the
marketability of the Mortgaged Property. The Company is the sole insured of
such
lender’s title insurance policy, and such lender’s title insurance policy is in
full force and effect and will be in force and effect upon the consummation
of
the transactions contemplated by this Agreement. No claims have been made under
such lender’s title insurance policy, and no prior holder of the Mortgage,
including the Company, has done, by act or omission, anything which would impair
the coverage of such lender’s title insurance policy;
25
(r) No
Defaults.
There
is
no default, breach, violation or event of acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time
or
with notice and the expiration of any grace or cure period, would constitute
a
default, breach, violation or event of acceleration, and neither the Company
nor
its predecessors have waived any default, breach, violation or event of
acceleration;
(s) No
Mechanics’ Liens.
There
are
no mechanics’ or similar liens or claims which have been filed for work, labor
or material (and no rights are outstanding that under the law could give rise
to
such liens) affecting the related Mortgaged Property which are or may be liens
prior to, or equal or coordinate with, the lien of the related Mortgage which
are not insured against by the title insurance policy referenced in Paragraph
(q) above;
(t) Location
of Improvements; No Encroachments.
Except
as
insured against by the title insurance policy referenced in Paragraph (q) above,
all improvements which were considered in determining the Appraised Value of
the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part
of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;
(u) Payment
Terms.
Except
with respect to the Interest Only Mortgage Loans, principal payments commenced
no more than 60 days after the funds were disbursed to the Mortgagor in
connection with the Mortgage Loan. The Mortgage Loans have an original term
to
maturity of not more than 30 years, with interest payable in arrears each month.
As to each Adjustable Rate Mortgage Loan on each applicable Adjustment Date,
the
Mortgage Interest Rate will be adjusted to equal the sum of the Index plus
the
applicable Gross Margin, rounded up or down to the nearest multiple of 0.125%
indicated by the Mortgage Note; provided that the Mortgage Interest Rate will
not increase or decrease by more than the Periodic Interest Rate Cap on any
Adjustment Date, and will in no event exceed the maximum Mortgage Interest
Rate
or be lower than the minimum Mortgage Interest Rate listed on the related
Mortgage Loan Schedule for such Mortgage Loan. As to each Adjustable Rate
Mortgage Loan that is not an Interest Only Mortgage Loan, each Mortgage Note
requires a monthly payment which is sufficient, during the period prior to
the
first adjustment to the Mortgage Interest Rate, to fully amortize the
outstanding principal balance as of the first day of such period over the then
remaining term of such Mortgage Note and to pay interest at the related Mortgage
Interest Rate. As to each Adjustable Rate Mortgage Loan, if the related Mortgage
Interest Rate changes on an Adjustment Date or, with respect to an Interest
Only
Mortgage Loan, on an Adjustment Date following the related interest only period,
the then outstanding principal balance will be reamortized over the remaining
life of such Mortgage Loan. No Mortgage Loan contains terms or provisions which
would result in negative amortization;
26
(v) Customary
Provisions.
The
Mortgage and related Mortgage Note contain customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate for
the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (i) in the case of a Mortgage designated as a
deed
of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure. There
is no homestead or other exemption available to a Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee’s sale or
the right to foreclose the Mortgage;
(w) Occupancy
of the Mortgaged Property.
As
of the
date of origination, the Mortgaged Property was lawfully occupied under
applicable law and to the best of the Company’s knowledge, the Mortgaged
Property is lawfully occupied as of the related Closing Date;
(x) No
Additional Collateral.
Except
in
the case of a Pledged Asset Mortgage Loan and as indicated on the related Data
File, the Mortgage Note is not and has not been secured by any collateral,
pledged account or other security except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in Paragraph (k) above;
(y) Deeds
of Trust.
In
the
event the Mortgage constitutes a deed of trust, a trustee, duly qualified under
applicable law to serve as such, has been properly designated and currently
so
serves and is named in the Mortgage, and no fees or expenses are or will become
payable by the Mortgagee to the trustee under the deed of trust, except in
connection with a trustee’s sale after default by the Mortgagor;
27
(z) Acceptable
Investment.
The
Company has no knowledge of any circumstances or conditions with respect to
the
Mortgage Loan, the Mortgaged Property, the Mortgagor or the Mortgagor’s credit
standing that can reasonably be expected to cause private institutional
investors to regard the Mortgage Loan as an unacceptable investment, cause
the
Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan;
(aa) Transfer
of Mortgage Loans.
With
respect to each Mortgage that is not recorded in the name of MERS or its
designee, the Assignment of Mortgage upon the insertion of the name of the
assignee and recording information is in recordable form and is acceptable
for
recording under the laws of the jurisdiction in which the Mortgaged Property
is
located;
(bb) Mortgaged
Property Undamaged.
The
Mortgaged Property is undamaged by waste, fire, earthquake or earth movement,
windstorm, flood, tornado or other casualty so as to affect adversely the value
of the Mortgaged Property as security for the Mortgage Loan or the use for
which
the premises were intended;
(cc) Servicing
and Collection Practices; Escrow Deposits.
The
origination, servicing and collection practices used with respect to the
Mortgage Loan have been in accordance with Accepted Servicing Practices, and
have been in all material respects legal and proper. With respect to escrow
deposits and Escrow Payments, all such payments are in the possession of the
Company and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. All Escrow
Payments have been collected in full compliance with state and federal law.
No
escrow deposits or Escrow Payments or other charges or payments due the Company
have been capitalized under the Mortgage Note;
(dd) No
Condemnation.
There
is
no proceeding pending or to the best of the Company’s knowledge threatened for
the total or partial condemnation of the related Mortgaged
Property;
(ee) The
Appraisal.
The
Mortgage Loan Documents contain an Appraisal of the related Mortgaged Property
by a Qualified Appraiser acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac. As to each
Time$aver® Mortgage Loan, the Appraisal may be from the original of the existing
Company-serviced loan, which was refinanced via such Time$aver® Mortgage
Loan;
28
(ff) Insurance.
The
Mortgaged Property securing each Mortgage Loan is insured by an insurer
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac against loss by fire and such hazards
as
are covered under a standard extended coverage endorsement and such other
hazards as are customary in the area where the Mortgaged Property is located
pursuant to insurance policies conforming to the requirements of Section 4.10,
in an amount which is not less than the lesser of 100% of the insurable value
of
the Mortgaged Property and the outstanding principal balance of the Mortgage
Loan, but in no event less than the minimum amount necessary to fully compensate
for any damage or loss on a replacement cost basis. If the Mortgaged Property
is
a condominium unit, it is included under the coverage afforded by a blanket
policy for the project. If the Mortgaged Property is in an area identified
in
the Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy meeting the requirements of
the
current guidelines of the Federal Insurance Administration is in effect with
a
generally acceptable insurance carrier and such policy conforms to ▇▇▇▇▇▇ Mae
or
▇▇▇▇▇▇▇ Mac requirements, in an amount representing coverage not less than
the
least of (A) the outstanding principal balance of the Mortgage Loan,
(B) the full insurable value and (C) the maximum amount of insurance
which was available under the Flood Disaster Protection Act of 1973, as amended.
All individual insurance policies contain a standard mortgagee clause naming
the
Company and its successors and assigns as mortgagee, and all premiums thereon
have been paid. The Mortgage obligates the Mortgagor thereunder to maintain
a
hazard insurance policy at the Mortgagor’s cost and expense, and on the
Mortgagor’s failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at such Mortgagor’s cost and expense, and to seek
reimbursement therefor from the Mortgagor. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser
upon
the consummation of the transactions contemplated by this Agreement. The Company
has not acted or failed to act so as to impair the coverage of any such
insurance policy or the validity, binding effect and enforceability
thereof;
(gg) Servicemembers
Civil Relief Act.
The
Mortgagor has not notified the Company, and the Company has no knowledge of
any
relief requested by or allowed to the Mortgagor under the Servicemembers Civil
Relief Act, as amended, or similar state laws;
(hh) Balloon
Payments, Graduated Payments or Contingent Interests.
The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature. Except
as indicated on the related Mortgage Loan Schedule, no Mortgage Loan has a
balloon payment feature;
(ii) No
Construction Loans.
No
Mortgage Loan was made in connection with (i) the construction or rehabilitation
of a Mortgaged Property or (ii) facilitating the trade-in or exchange of a
Mortgaged Property other than a construction-to-permanent loan which has
converted to a permanent Mortgage Loan;
29
(jj) Underwriting.
Each
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines
and the Mortgage Note and Mortgage are on forms acceptable to ▇▇▇▇▇▇▇ Mac or
▇▇▇▇▇▇ Mae;
(kk) No
Bankruptcy.
No
Mortgagor was a debtor in any state or federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated and as of the related
Closing Date, the Company has not received notice that any Mortgagor is a debtor
under any state or federal bankruptcy or insolvency proceeding;
(ll) Delivery
of Custodial Mortgage Files.
The
Mortgage Note, Assignment of Mortgage and any other documents required to be
delivered by the Company hereunder have been delivered to the Custodian. The
Company is in possession of a complete Retained Mortgage File in compliance
with
Exhibit
D,
except
for such documents where the originals of which have been sent for recordation.
With respect to each Mortgage Loan for which a lost note affidavit has been
delivered to the Custodian in place of the original Mortgage Note, the related
Mortgage Note is no longer in existence, and, if such Mortgage Loan is
subsequently in default, the enforcement of such Mortgage Loan or of the related
Mortgage by or on behalf of the Purchaser will not be affected by the absence
of
the original Mortgage Note;
(mm) Buydown
Mortgage Loans.
With
respect to each Mortgage Loan that is a Buydown Mortgage Loan:
(i) On
or
before the date of origination of such Mortgage Loan, the Company and the
Mortgagor, or the Company, the Mortgagor and the seller of the Mortgaged
Property or a third party entered into a Buydown Agreement. The Buydown
Agreement provides that the seller of the Mortgaged Property (or third party)
shall deliver to the Company temporary Buydown Funds in an amount equal to
the
aggregate undiscounted amount of payments that, when added to the amount the
Mortgagor on such Mortgage Loan is obligated to pay on each Due Date in
accordance with the terms of the Buydown Agreement, is equal to the full
scheduled Monthly Payment due on such Mortgage Loan. The temporary Buydown
Funds
enable the Mortgagor to qualify for the Buydown Mortgage Loan. The effective
interest rate of a Buydown Mortgage Loan if less than the interest rate set
forth in the related Mortgage Note will increase within the Buydown Period
as
provided in the related Buydown Agreement so that the effective interest rate
will be equal to the interest rate as set forth in the related Mortgage Note.
The Buydown Mortgage Loan satisfies the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac guidelines;
30
(ii) The
Mortgage and Mortgage Note reflect the permanent payment terms rather than
the
payment terms of the Buydown Agreement. The Buydown Agreement provides for
the
payment by the Mortgagor of the full amount of the Monthly Payment on any Due
Date that the Buydown Funds are available. The Buydown Funds were not used
to
reduce the original principal balance of the Mortgage Loan or to increase the
Appraised Value of the Mortgage Property when calculating the Loan-to-Value
Ratios for purposes of the Agreement and, if the Buydown Funds were provided
by
the Company and if required under ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac guidelines, the
terms of the Buydown Agreement were disclosed to the appraiser of the Mortgaged
Property;
(iii) The
Buydown Funds may not be refunded to the Mortgagor unless the Mortgagor makes
a
principal payment for the outstanding balance of the Mortgage Loan;
(iv) As
of the
date of origination of the Mortgage Loan, the provisions of the related Buydown
Agreement complied with the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac regarding
buydown agreements;
(nn) Interest
Calculation.
Interest
on each Mortgage Loan is calculated on the basis of a 360-day year consisting
of
twelve 30-day months. No Mortgage Loan provides for interest payable on a simple
interest basis. No Mortgage Loan provides for an increase in the related
Mortgage Interest Rate upon the occurrence of an event of default under the
related Mortgage Note;
(oo) Violation
of Environmental Laws.
There
is
no pending action or proceeding directly involving any Mortgaged Property of
which the Company is aware in which compliance with any environmental law,
rule
or regulation is an issue; and to the best of the Company’s knowledge, nothing
further remains to be done to satisfy in full all requirements of each such
law,
rule or regulation constituting a prerequisite to use and enjoyment of said
property;
(pp) Texas
Refinance Mortgage Loans.
Each
Mortgage Loan originated in the state of Texas pursuant to Article XVI, Section
50(a)(6) of the Texas Constitution (a “Texas Refinance Loan”) has been
originated in compliance with the provisions of Article XVI, Section 50(a)(6)
of
the Texas Constitution, Texas Civil Statutes and the Texas Finance
Code;
(qq) Conversion
to Fixed Interest Rate.
No
Adjustable Rate Mortgage Loan contains a provision permitting or requiring
conversion to a fixed interest rate Mortgage Loan;
(rr) Homeownership
and Equity Protection Act.
No
Mortgage Loan is a High Cost Loan or Covered Loan;
31
(ss) Due
on
Sale.
The
Mortgage contains an enforceable provision, to the extent not prohibited by
applicable law as of the date of such Mortgage, for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event that
the Mortgaged Property is sold or transferred without the prior written consent
of the mortgagee thereunder;
(tt) Adjustments.
All
of
the terms of the related Mortgage Note pertaining to interest adjustments,
payment adjustments and adjustments of the outstanding principal balance, if
any, are enforceable and such adjustments on such Mortgage Loan have been made
properly and in accordance with the provisions of such Mortgage
Loan;
(uu) Regarding
the Mortgagor.
The
Mortgagor is one or more natural persons and/or trustees for an Illinois land
trust or a trustee under a “living trust” and such “living trust” is in
compliance with ▇▇▇▇▇▇ ▇▇▇ guidelines for such trusts. In the event the
Mortgagor is a trust, the trustee of such trust is a natural person and an
obligor under the related Mortgage Note in his or her individual
capacity;
(vv) Flood
Certification Contract.
Each
Mortgage Loan is covered by a paid in full, life of loan, flood certification
contract and each of these contracts is assignable to the Purchaser and its
assigns;
(ww) Cooperative
Loans.
With
respect to each Cooperative Loan:
(i) The
Cooperative Shares are held by a person as a tenant-stockholder in a
Cooperative. Each original UCC financing statement, continuation statement
or
other governmental filing or recordation necessary to create or preserve the
perfection and priority of the first lien and security interest in the
Cooperative Loan and Proprietary Lease has been timely and properly made. Any
security agreement, chattel mortgage or equivalent document related to the
Cooperative Loan and delivered to Purchaser or its designee establishes in
Purchaser a valid and subsisting perfected first lien on and security interest
in the Mortgaged Property described therein, and Purchaser has full right to
sell and assign the same. The Proprietary Lease term expires no less than five
years after the Mortgage Loan term or such other term acceptable to ▇▇▇▇▇▇
Mae
or ▇▇▇▇▇▇▇ Mac;
(ii) A
Cooperative Lien Search has been made by a company competent to make the same
which company is acceptable to ▇▇▇▇▇▇ Mae or Fredde Mac and qualified to do
business in the jurisdiction where the Cooperative is located;
(iii) (a)
The
term of the related Proprietary Lease is not less than the terms of the
Cooperative Loan; (b) there is no provision in any Proprietary Lease which
requires the Mortgagor to offer for sale the Cooperative Shares owned by such
Mortgagor first to the Cooperative; (c) there is no prohibition in any
Proprietary Lease against pledging the Cooperative Shares or assigning the
Proprietary Lease; (d) the Cooperative has been created and exists in full
compliance with the requirements for residential cooperatives in the
jurisdiction in which the Project is located and qualifies as a cooperative
housing corporation under Section 210 of the Code; (e) the Recognition Agreement
is on a form published by Aztech Document Services, Inc. or includes similar
provisions; and (f) the Cooperative has good and marketable title to the
Project, and owns the Project either in fee simple or under a leasehold that
complies with the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; such title is
free
and clear of any adverse liens or encumbrances, except the lien of any blanket
mortgage;
32
(iv) The
Company has the right under the terms of the Mortgage Note, Pledge Agreement
and
Recognition Agreement to pay any maintenance charges or assessments owed by
the
Mortgagor;
(v) Each
Stock Power (i) has all signatures guaranteed or (ii) if all signatures are
not
guaranteed, then such Cooperative Shares will be transferred by the stock
transfer agent of the Cooperative if the Company undertakes to convert the
ownership of the collateral securing the related Cooperative Loan;
(xx) Contents
of the Retained Mortgage File.
The
Retained Mortgage File contains the documents listed as items 6 through 10
of
Exhibit
D
attached
hereto;
(yy) Single
Premium Credit Life Insurance.
No
Mortgagor was required to purchase any credit life, disability, accident or
health insurance product as a condition of obtaining the extension of credit.
No
Mortgagor was required to obtain a prepaid single premium credit life,
disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan. None of the proceeds of the Mortgage Loan
were
used to finance single premium credit life insurance, disability insurance,
accident or similar insurance policies as part of the origination of, or as
a
condition to closing, the Mortgage Loan;
(zz) Credit
Reporting.
With
respect to each Mortgage Loan, the Company has fully furnished, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information (i.e. favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Company (three
of
the credit repositories), on a monthly basis;
(aaa) No
Arbitration Provisions.
No
Mortgagor agreed to submit to arbitration to resolve any dispute arising out
of
or relating in any way to the related Mortgage Loan or the origination
thereof;
33
(bbb) Anti-Money
Laundering Laws.
With
respect to each Mortgage Loan, the Company has complied with all applicable
anti-money laundering laws and regulations, (the “Anti-Money Laundering Laws”),
and has established an anti-money laundering compliance program as required
by
the applicable Anti-Money Laundering Laws, and maintains, and will maintain,
sufficient information to identify the applicable Mortgagor for purposes of
the
Anti-Money Laundering Laws;
(ccc) Prepayment
Penalties.
With
respect to Mortgage Loans with Prepayment Penalties, all information on the
related Mortgage Loan Schedule, Data File and Underwriting Guidelines regarding
Prepayment Penalties is complete and accurate in all material respects and
except for balloon mortgage loans originated in certain states specified in
the
Underwriting Guidelines with restrictions on collection of Prepayment Penalties,
each prepayment Penalty is permissible and enforceable in accordance with the
terms under applicable law. Prepayment Penalties on the Mortgage Loans are
applicable to prepayments resulting from both refinancings and sales of the
related Mortgaged Properties and the terms of such Prepayment Penalties do
not
provide for a waiver or release (i.e., “holidays”) during the term of the
Prepayment Penalty. No Mortgage Loan originated on or after October 1, 2002
provides for the payment of a Prepayment Penalty beyond the three-year term
following the origination of the Mortgage Loan. No Mortgage Loan originated
prior to such date provides for the payment of a Prepayment Penalty beyond
the
five-year term following the origination of the Mortgage Loan;
(ddd) Leasehold
Estates.
With
respect to Mortgage Loans that are secured by a leasehold estate, the lease
is
valid, in full force and effect and conforms to the Underwriting Guidelines;
and
(eee) Georgia
Fair Lending Act.
No
Mortgage Loan was originated on or after October 1, 2002 and before March 7,
2003, which is secured by property located in the State of Georgia. No Mortgage
Loan originated on or after March 7, 2003 is a “High Cost Home Loan” as defined
in the Georgia Fair Lending Act, as amended.
Section
3.03. Repurchase.
It
is
understood and agreed that the representations and warranties set forth in
Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to the
Purchaser and the delivery of the applicable Mortgage Loan Documents to the
Custodian and shall inure to the benefit of the Purchaser hereunder,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note
or
Assignment of Mortgage or the examination or failure to examine any Custodial
Mortgage File or Retained Mortgage File. Upon discovery by either the Company
or
the Purchaser of a breach of any of the foregoing representations and warranties
that materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser (or that materially and adversely affects the
interests of Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the
other.
34
Within
ninety (90) days after the earlier of either discovery by or notice to the
Company of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein, the Company shall use its best efforts promptly to cure
such
breach in all material respects and, if such breach cannot be cured, the Company
shall, at the Purchaser’s option, repurchase such Mortgage Loan at the
Repurchase Price. In the event that a breach shall involve any representation
or
warranty set forth in Section 3.01, and such breach cannot be cured within
ninety (90) days of the earlier of either discovery by or notice to the Company
of such breach, all of the Mortgage Loans shall, at the Purchaser’s option, be
repurchased by the Company at the Repurchase Price. However, if the breach
shall
involve a representation or warranty set forth in Section 3.02 and the Company
discovers or receives notice of any such breach within ninety (90) days of
the
Closing Date, the Company shall, if the breach cannot be cured, at the
Purchaser’s option and provided that the Company has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a “Deleted Mortgage Loan”) and substitute in its
place a Qualified Substitute Mortgage Loan or Loans, provided that any such
substitution shall be effected not later than one hundred twenty (120) days
after the Closing Date. Notwithstanding the foregoing, however, if a breach
is a
Qualification Defect, such cure or repurchase must take place within sixty
(60)
days of the discovery of or notice of such breach. Notwithstanding anything
to
the contrary herein, within ninety (90) days of the earlier of either discovery
by or notice to the Company of any breach of the representations or warranties
set forth in clauses (rr), (yy) and (aaa) of Section 3.02, the Company shall
repurchase such Mortgage Loan at the Repurchase Price.
If
the
Company has no Qualified Substitute Mortgage Loan, it shall repurchase the
deficient Mortgage Loan within ninety (90) days after the written notice of
the
breach or the failure to cure, whichever is later. Any repurchase of a Mortgage
Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall
be
accomplished by deposit in the Custodial Account of the amount of the Repurchase
Price for distribution to the Purchaser on the Remittance Date immediately
following the Principal Prepayment Period in which such Repurchase Price is
received, after deducting therefrom any amount received in respect of such
repurchased Mortgage Loan or Loans and being held in the Custodial Account
for
future distribution.
At
the
time of repurchase or substitution, the Purchaser and the Company shall arrange
for the reassignment of the Deleted Mortgage Loan to the Company and the
delivery to the Company of any documents held by the Custodian relating to
the
Deleted Mortgage Loan. If the Company repurchases a Mortgage Loan that is a
MERS
Mortgage Loan, the Company shall cause MERS to designate on the MERS System
the
removal of the purchaser as beneficial holder with respect to the Mortgage
Loan.
In the event of a repurchase or substitution, the Company shall, simultaneously
with such reassignment, give written notice to the Purchaser that such
repurchase or substitution has taken place, amend the related Mortgage Loan
Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this
Agreement, and, in the case of substitution, identify a Qualified Substitute
Mortgage Loan and amend the related Mortgage Loan Schedule to reflect the
addition of such Qualified Substitute Mortgage Loan to this Agreement. In
connection with any such substitution, the Company shall be deemed to have
made
as to such Qualified Substitute Mortgage Loan the representations and warranties
set forth in this Agreement except that all such representations and warranties
set forth in this Agreement shall be deemed made as of the date of such
substitution. The Company shall effect such substitution by delivering to the
Custodian for such Qualified Substitute Mortgage Loan the documents required
by
Section 2.03, with the Mortgage Note endorsed as required by Section 2.03.
No substitution will be made in any calendar month after the Determination
Date
for such month. The Company shall deposit in the Custodial Account the Monthly
Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan
or
Loans in the month following the date of such substitution. Monthly Payments
due
with respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Company. With respect to any Deleted Mortgage Loan,
distributions to Purchaser shall include the Monthly Payment due on any Deleted
Mortgage Loan in the month of substitution, and the Company shall thereafter
be
entitled to retain all amounts subsequently received by the Company in respect
of such Deleted Mortgage Loan.
35
For
any
month in which the Company substitutes a Qualified Substitute Mortgage Loan
for
a Deleted Mortgage Loan, the Company shall determine the amount (if any) by
which the aggregate principal balance of all Qualified Substitute Mortgage
Loans
as of the date of substitution is less than the aggregate Stated Principal
Balance of all Deleted Mortgage Loans (after application of scheduled principal
payments due in the month of substitution). The amount of such shortfall shall
be distributed by the Company in the month of substitution pursuant to Section
5.01. Accordingly, on the date of such substitution, the Company shall deposit
from its own funds into the Custodial Account an amount equal to the amount
of
such shortfall.
In
addition to such repurchase or substitution obligation, the Company shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from a breach
of
the representations and warranties contained in this Agreement. It is understood
and agreed that the obligations of the Company set forth in this Section 3.03
to
cure, substitute for or repurchase a defective Mortgage Loan and to indemnify
the Purchaser as provided in this Section 3.03 constitute the sole remedies
of
the Purchaser respecting a breach of the foregoing representations and
warranties.
Any
cause
of action against the Company relating to or arising out of the breach of any
representations and warranties made in Sections 3.01 and 3.02 shall accrue
as to
any Mortgage Loan upon (i) discovery of such breach by the Purchaser or notice
thereof by the Company to the Purchaser, (ii) failures by the Company to cure
such breach or repurchase such Mortgage Loan as specified above, and (iii)
demand upon the Company by the Purchaser for compliance with this
Agreement.
36
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
4.01. Company
to Act as Servicer.
The
Company, as an independent contractor, shall service and administer the Mortgage
Loans on behalf of the Purchaser and shall have full power and authority, acting
alone or through the utilization of a Subervicer or a Subcontractor, to do
any
and all things in connection with such servicing and administration which the
Company may deem necessary or desirable, consistent with the terms of this
Agreement and with Accepted Servicing Practices.
Consistent
with the terms of this Agreement, the Company may waive, modify or vary any
term
of any Mortgage Loan or consent to the postponement of strict compliance with
any such term or in any manner grant indulgence to any Mortgagor if in the
Company’s reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Purchaser, provided,
however, the Company shall not make any future advances with respect to a
Mortgage Loan. The Company shall not permit any modification with respect to
a
Mortgage Loan that would change the Mortgage Interest Rate, defer or forgive
the
payment of principal or change the final maturity date on such Mortgage Loan,
unless the Mortgagor is in default with respect to the Mortgage Loan or such
default is, in the judgment of the Company, imminent. In the event that no
default exists or is imminent, the Company shall request written consent from
the Purchaser to permit such a modification and the Purchaser shall provide
written consent or notify the Company of its objection to such modification
within five (5) Business Days after its receipt of the Company’s request. In the
event of any such modification which permits the deferral of interest or
principal payments on any Mortgage Loan, the Company shall, on the Business
Day
immediately preceding the Remittance Date in any month in which any such
principal or interest payment has been deferred, deposit in the Custodial
Account from its own funds, in accordance with Section 5.03, the difference
between (a) such month’s principal and one month’s interest at the Mortgage Loan
Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b)
the amount paid by the Mortgagor. The Company shall be entitled to reimbursement
for such advances to the same extent as for all other advances made pursuant
to
Section 5.03. Without limiting the generality of the foregoing, the Company
shall continue, and is hereby authorized and empowered, to execute and deliver
on behalf of itself and the Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. If reasonably required by the Company, the Purchaser
shall
furnish the Company with any powers of attorney and other documents necessary
or
appropriate to enable the Company to carry out its servicing and administrative
duties under this Agreement.
In
servicing and administering the Mortgage Loans, the Company shall employ
procedures (including collection procedures) and exercise the same care that
it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
and the Purchaser’s reliance on the Company.
37
The
Company is authorized and empowered by the Purchaser, in its own name, when
the
Company believes it appropriate in its reasonable judgment to register any
Mortgage Loan on the MERS System, or cause the removal from MERS registration
of
any Mortgage Lon on the MERS System, to execute and deliver, on behalf of the
Purchaser, any and all instruments of assignment and other comparable
instruments with respect to such assignment or re-recording of a Mortgage in
the
name of MERS, solely as nominee for the Purchaser and its successors and
assigns.
The
Company shall cause to be maintained for each Cooperative Loan a copy of the
financing statements and shall file and such financing statements and
continuation statements as necessary, in accordance with the Uniform Commercial
Code applicable in the jurisdiction in which the related Cooperative Apartment
is located, to perfect and protect the security interest and lien of the
Purchaser.
The
Company may arrange for the subservicing of any Mortgage Loan it services by
a
Subservicer pursuant to a Subservicing Agreement, a copy of which shall be
provided to the Purchaser; provided, however, that such subservicing arrangement
and the terms of the related Subservicing Agreement must provide for the
servicing of such Mortgage Loan in a manner consistent with the servicing
arrangements contemplated hereunder. The Company shall be solely liable for
all
fees owed to the Subservicer under the Subservicing Agreement, regardless
whether the Company’s compensation hereunder is adequate to pay such fees.
Notwithstanding the provisions of any Subservicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between
the
Company and a Subservicer or reference to actions taken through a Subservicer
or
otherwise, the Company shall remain obligated and liable to the Purchaser for
the servicing and administration of the Mortgage Loans it services in accordance
with the provisions of this Agreement without diminution of such obligation
or
liability by virtue of such Subservicing Agreements or arrangements or by virtue
of indemnification from the Subservicer and to the same extent and under the
same terms and conditions as if the Company alone were servicing and
administering those Mortgage Loans. All actions of each Subservicer performed
pursuant to the related Subservicing Agreement shall be performed as agent
of
the Company with the same force and effect as if performed directly by the
Company. For purposes of this Agreement, the Company shall be deemed to have
received any collections, recoveries or payments with respect to the Mortgage
Loans it services that are received by a Subservicer regardless of whether
such
payments are remitted by the Subservicer to the Company. Any Subservicing
Agreement entered into by the Company shall provide that it may be assumed
or
terminated by the Purchaser, if the Purchaser has assumed the duties of the
Company, at the Purchaser’s option, as applicable, without cost or obligation to
the assuming or terminating party or its assigns. Any Subservicing Agreement,
and any other transactions or services relating to the Mortgage Loans involving
a Subservicer, shall be deemed to be between the Company and such Subservicer
alone, and the Purchaser shall not be deemed parties thereto and shall have
no
claims or rights of action against, rights, obligations, duties or liabilities
to or with respect to the Subservicer or its officers, directors or employees,
except as set forth in this Section 4.01.
Section
4.02. Liquidation
of Mortgage Loans.
38
In
the
event that any payment due under any Mortgage Loan and not postponed pursuant
to
Section 4.01 is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period,
the
Company shall take such action as (1) the Company would take under similar
circumstances with respect to a similar mortgage loan held for its own account
for investment, (2) shall be consistent with Accepted Servicing Practices,
(3)
the Company shall determine prudently to be in the best interest of Purchaser,
and (4) is consistent with any related PMI Policy or LPMI Policy. In the event
that any payment due under any Mortgage Loan is not postponed pursuant to
Section 4.01 and remains delinquent for a period of 90 days or any other default
continues for a period of ninety (90) days beyond the expiration of any grace
or
cure period, the Company shall commence foreclosure proceedings, the Company
shall notify the Purchaser in writing of the Company’s intention to do so and
shall provide such information regarding the Mortgage Loan as the Purchaser
reasonably may request, provided that the Company shall not commence foreclosure
proceedings if the Purchaser objects to such action within three (3) Business
Days after receiving such notice. The Company shall follow any written
directions of the Purchaser with respect to the servicing of such Mortgage
Loan,
as long as such directions are in accordance with Accepted Servicing Practices
and do not violate applicable law. In the event the Purchaser objects to such
foreclosure action, the Company shall not be required to make Monthly Advances
with respect to such Mortgage Loan, pursuant to Section 5.03, and the Company’s
obligation to make such Monthly Advances shall terminate on the 90th day
referred to above. In such connection, the Company shall from its own funds
make
all necessary and proper Servicing Advances, provided, however, that the Company
shall not be required to expend its own funds in connection with any foreclosure
or towards the restoration or preservation of any Mortgaged Property, unless
it
shall determine (a) that such preservation, restoration and/or foreclosure
will
increase the proceeds of liquidation of the Mortgage Loan to Purchaser after
reimbursement to itself for such expenses and (b) that such expenses will be
recoverable by it either through Liquidation Proceeds (respecting which it
shall
have priority for purposes of withdrawals from the Custodial Account pursuant
to
Section 4.05) or through Insurance Proceeds (respecting which it shall have
similar priority).
Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure
or
acceptance of a deed in lieu of foreclosure, in the event the Company has
reasonable cause to believe that a Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, or if the Purchaser otherwise requests
an environmental inspection or review of such Mortgaged Property, such an
inspection or review is to be conducted by a qualified inspector. The cost
for
such inspection or review shall be borne by the Purchaser. Upon completion
of
the inspection or review, the Company shall promptly provide the Purchaser
with
a written report of the environmental inspection.
After
reviewing the environmental inspection report, the Purchaser shall determine
how
the Company shall proceed with respect to the Mortgaged Property. In the event
(a) the environmental inspection report indicates that the Mortgaged Property
is
contaminated by hazardous or toxic substances or wastes and (b) the Purchaser
directs the Company to proceed with foreclosure or acceptance of a deed in
lieu
of foreclosure, the Company shall be reimbursed for all reasonable costs
associated with such foreclosure or acceptance of a deed in lieu of foreclosure
and any related environmental clean up costs, as applicable, from the related
Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully
reimburse the Company, the Company shall be entitled to be reimbursed from
amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event
the Purchaser directs the Company not to proceed with foreclosure or acceptance
of a deed in lieu of foreclosure, the Company shall be reimbursed for all
Servicing Advances made with respect to the related Mortgaged Property from
the
Custodial Account pursuant to Section 4.05 hereof.
39
Section
4.03. Collection
of Mortgage Loan Payments.
Continuously
from the respective Cut-off Date until the principal and interest on all
Mortgage Loans are paid in full or the Mortgage Loans have been fully liquidated
(with respect to Mortgage Loans that remain subject to this Agreement pursuant
to Section 9.01 herein), in accordance with this Agreement and Accepted
Servicing Practices, the Company shall proceed diligently to collect all
payments due under each of the Mortgage Loans when the same shall become due
and
payable and shall take special care in ascertaining and estimating Escrow
Payments and all other charges that will become due and payable with respect
to
the Mortgage Loan and the Mortgaged Property, to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.
Section
4.04. Establishment
of and Deposits to Custodial Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Custodial Accounts, in the form
of
time deposit or demand accounts, titled “▇▇▇▇▇ Fargo Bank, N.A., in trust for
Bank of America, National Association, its successors or assigns, and/or
subsequent purchasers of Mortgage Loans - P & I.” The Custodial Account
shall be established with a Qualified Depository. Upon request of the Purchaser
and within ten (10) days thereof, the Company shall provide the Purchaser with
written confirmation of the existence of such Custodial Account. The Custodial
Account shall at all times be insured to the fullest extent allowed by
applicable law. Funds deposited in the Custodial Account may be drawn on by
the
Company in accordance with Section 4.05.
The
Company shall deposit in the Custodial Account within two (2) Business Days
of
Company’s receipt, and retain therein, the following collections received by the
Company and payments made by the Company after the Cut-off Date, or received
by
the Company prior to the Cut-off Date but allocable to a period subsequent
thereto, other than payments of principal and interest due on or before the
Cut-off Date:
(i) all
payments on account of principal on the Mortgage Loans, including all Principal
Prepayments (including Prepayment Penalties paid by the Mortgagor or other
amounts paid by the Company pursuant to Section 4.21 of this
Agreement);
(ii) all
payments on account of interest on the Mortgage Loans adjusted to the Mortgage
Loan Remittance Rate;
(iii) all
Liquidation Proceeds;
(iv) all
Insurance Proceeds including amounts required to be deposited pursuant to
Section 4.10 (other than proceeds to be held in the Escrow Account and applied
to the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 4.14), Section 4.11 and Section
4.15;
40
(v) all
Condemnation Proceeds which are not applied to the restoration or repair of
the
Mortgaged Property or released to the Mortgagor in accordance with Section
4.14;
(vi) any
amount required to be deposited in the Custodial Account pursuant to Section
4.01, 5.03, 6.01 or 6.02;
(vii) any
amounts payable in connection with the repurchase of any Mortgage Loan pursuant
to Section 3.03 and all amounts required to be deposited by the Company in
connection with a shortfall in principal amount of any Qualified Substitute
Mortgage Loan pursuant to Section 3.03;
(viii) with
respect to each Principal Prepayment, the Prepayment Interest Shortfall (to
be
paid by the Company out of its own funds);
(ix) any
amounts required to be deposited by the Company pursuant to Section 4.11 in
connection with the deductible clause in any blanket hazard insurance
policy;
(x) any
amounts received with respect to or related to any REO Property and all REO
Disposition Proceeds pursuant to Section 4.16; and
(xi) an
amount
from the Subsidy Account that when added to the Mortgagor’s payment will equal
the full monthly amount due under the related Mortgage Note.
The
foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Company into the Custodial Account. Any interest paid on funds deposited in
the
Custodial Account by the depository institution shall accrue to the benefit
of
the Company and the Company shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.05. The Company shall
maintain adequate records with respect to all deposits made pursuant to this
Section 4.04. All funds required to be deposited in the Custodial Account shall
be held in trust for the Purchaser until withdrawn in accordance with Section
4.05.
Section
4.05. Permitted
Withdrawals From Custodial Account.
The
Company shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
(i) to
make
payments to the Purchaser in the amounts and in the manner provided for in
Section 5.01;
(ii) to
reimburse itself for Monthly Advances of the Company’s funds made pursuant to
Section 5.03, the Company’s right to reimburse itself pursuant to this
sub-clause (ii) being limited to amounts received on the related Mortgage Loan
which represent late payments of principal and/or interest respecting which
any
such advance was made, it being understood that, in the case of any such
reimbursement, the Company’s right thereto shall be prior to the rights of
Purchaser, except that, where the Company is required to repurchase a Mortgage
Loan pursuant to Section 3.03 or 6.02, the Company’s right to such reimbursement
shall be subsequent to the payment to the Purchaser of the Repurchase Price
pursuant to such sections and all other amounts required to be paid to the
Purchaser with respect to such Mortgage Loan;
41
(iii) to
reimburse itself for unreimbursed Servicing Advances, and for any unpaid
Servicing Fees, the Company’s right to reimburse itself pursuant to this
sub-clause (iii) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and such other
amounts as may be collected by the Company from the Mortgagor or otherwise
relating to the Mortgage Loan, it being understood that, in the case of any
such
reimbursement, the Company’s right thereto shall be prior to the rights of
Purchaser, except that where the Company is required to repurchase a Mortgage
Loan pursuant to Section 3.03 or 6.02, in which case the Company’s right to such
reimbursement shall be subsequent to the payment to the Purchaser of the
Repurchase Price pursuant to such sections and all other amounts required to
be
paid to the Purchaser with respect to such Mortgage Loan;
(iv) to
pay
itself interest on funds deposited in the Custodial Account if such interest
amount was previously credited;
(v) to
reimburse itself for expenses incurred and reimbursable to it pursuant to
Section 8.01;
(vi) to
pay
any amount required to be paid pursuant to Section 4.16 related to any REO
Property, it being understood that, in the case of any such expenditure or
withdrawal related to a particular REO Property, the amount of such expenditure
or withdrawal from the Custodial Account shall be limited to amounts on deposit
in the Custodial Account with respect to the related REO Property;
(vii) to
reimburse itself for any Servicing Advances or REO expenses after liquidation
of
the Mortgaged Property not otherwise reimbursed above;
(viii) to
remove
funds inadvertently placed in the Custodial Account by the Company;
(ix) to
clear
and terminate the Custodial Account upon the termination of this Agreement;
and
(x) to
transfer funds to another Qualified Depository.
In
the
event that the Custodial Account is interest bearing, on each Remittance Date,
the Company shall withdraw all funds from the Custodial Account except for
those
amounts which, pursuant to Section 5.01, the Company is not obligated to remit
on such Remittance Date. The Company may use such withdrawn funds only for
the
purposes described in this Section 4.05. The Company shall keep and maintain
separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose
of justifying any withdrawal from the Custodial Account, to the extent held
by
or on behalf of it, pursuant to sub-clauses (iii), (v), (vi) and (vii)
above.
42
Section
4.06. Establishment
of and Deposits to Escrow Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan constituting Escrow Payments separate and apart from any of its
own funds and general assets and shall establish and maintain one or more Escrow
Accounts, in the form of time deposit or demand accounts, titled, “▇▇▇▇▇ Fargo
Bank, N.A., in trust for Bank of America, National Association, its successors
or assigns, and/or subsequent purchasers of Residential Mortgage Loans, and
various Mortgagors - T & I.” The Escrow Accounts shall be established with a
Qualified Depository, in a manner which shall provide maximum available
insurance thereunder. Upon request of the Purchaser and within ten (10) days
thereof, the Company shall provide the Purchaser with written confirmation
of
the existence of such Escrow Account. Funds deposited in the Escrow Account
may
be drawn on by the Company in accordance with Section 4.07.
The
Company shall deposit in the Escrow Account or Accounts within two (2) Business
Days of Company’s receipt, and retain therein:
(i) all
Escrow Payments collected on account of the Mortgage Loans, for the purpose
of
effecting timely payment of any such items as required under the terms of this
Agreement;
(ii) all
amounts representing Insurance Proceeds or Condemnation Proceeds which are
to be
applied to the restoration or repair of any Mortgaged Property; and
(iii) all
payments on account of Buydown Funds.
The
Company shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in Section 4.07.
The
Company shall be entitled to retain any interest paid on funds deposited in
the
Escrow Account by the depository institution, other than interest on escrowed
funds required by law to be paid to the Mortgagor. To the extent required by
law, the Company shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes.
Section
4.07. Permitted
Withdrawals From Escrow Account.
Withdrawals
from the Escrow Account or Accounts may be made by the Company
only:
(i) to
effect
timely payments of ground rents, taxes, assessments, water rates, mortgage
insurance premiums, condominium charges, fire and hazard insurance premiums
or
other items constituting Escrow Payments for the related Mortgage;
(ii) to
reimburse the Company for any Servicing Advances made by the Company pursuant
to
Section 4.08 with respect to a related Mortgage Loan, but only from amounts
received on the related Mortgage Loan which represent late collections of Escrow
Payments thereunder;
43
(iii) to
refund
to any Mortgagor any funds found to be in excess of the amounts required under
the terms of the related Mortgage Loan;
(iv) for
transfer to the Custodial Account for application to reduce the principal
balance of the Mortgage Loan in accordance with the terms of the related
Mortgage and Mortgage Note;
(v) for
application to the restoration or repair of the Mortgaged Property in accordance
with the procedures outlined in Section 4.14;
(vi) to
pay to
the Company, or any Mortgagor to the extent required by law, any interest paid
on the funds deposited in the Escrow Account;
(vii) to
remit
to Purchaser payments on account of Buydown Funds as applicable;
(viii) to
remove
funds inadvertently placed in the Escrow Account by the Company;
and
(ix) to
clear
and terminate the Escrow Account on the termination of this
Agreement.
Section
4.08. Payment
of Taxes, Insurance and Other Charges.
With
respect to each Mortgage Loan, the Company shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates, sewer
rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy or LPMI Policy premiums and fire and
hazard insurance coverage and shall obtain, from time to time, all bills for
the
payment of such charges (including renewal premiums) and shall effect payment
thereof prior to the applicable penalty or termination date, employing for
such
purpose deposits of the Mortgagor in the Escrow Account which shall have been
estimated and accumulated by the Company in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage. The Company assumes full
responsibility for the timely payment of all such bills and shall effect timely
payment of all such charges irrespective of each Mortgagor’s faithful
performance in the payment of same or the making of the Escrow Payments, and
the
Company shall make advances from its own funds to effect such payments. To
the
extent that a Mortgage does not provide for Escrow Payments, the Company shall
use its reasonable efforts in accordance with Accepted Servicing Practices
to
determine whether any such payments are made by the Mortgagor at the time they
first become due. The Company shall make advances from its own funds to effect
such delinquent payments within such time period as will avoid the loss of
the
related Mortgaged Property by foreclosure of a tax or other lien. Advances
pursuant to this Section 4.08 shall constitute Servicing Advances hereunder;
provided that the Company shall be required to so advance only to the extent
that the Company, in its good faith judgment, believes the Servicing Advance
to
be recoverable from Insurance Proceeds or Liquidation Proceeds or otherwise.
The
costs incurred by the Company, if any, in effecting the timely payments of
taxes
and assessments on the Mortgaged Properties and related insurance premiums
shall
not be added to the Stated Principal Balances of the related Mortgage Loans,
notwithstanding that the terms of such Mortgage Loans so permit.
44
Section
4.09. Protection
of Accounts.
The
Company may transfer the Custodial Account, Subsidy Account or the Escrow
Account to a different Qualified Depository from time to time, provided that
the
Company shall give notice to the Purchaser of any proposed change of the
location of either Account not later than ten (10) Business Days prior to any
change thereof.
Section
4.10. Maintenance
of Hazard Insurance.
The
Company shall cause to be maintained for each Mortgage Loan hazard insurance
such that all buildings upon the Mortgaged Property are insured by an insurer
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac against loss by fire, hazards of
extended coverage and such other hazards as are customary or required by law
in
the area where the Mortgaged Property is located, in an amount which is at
least
equal to the lesser of (i) 100% of the insurable value, on a replacement cost
basis, of the improvements on the related Mortgaged Property and (ii) the
greater of (a) the outstanding principal balance of the Mortgage Loan and (b)
an
amount such that the proceeds thereof shall be sufficient to prevent the
Mortgagor or the loss payee from becoming a co-insurer. In the event a hazard
insurance policy shall be in danger of being terminated, or in the event the
insurer shall cease to be acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, the Company
shall notify the Purchaser and the related Mortgagor, and shall use its best
efforts, as permitted by applicable law, to obtain from another qualified
insurer a replacement hazard insurance policy substantially and materially
similar in all respects to the original policy. In no event, however, shall
a
Mortgage Loan be without a hazard insurance policy at any time, subject only
to
Section 4.11 hereof.
If
the
related Mortgaged Property is located in an area identified by the Federal
Emergency Management Agency (“FEMA”) as having special flood hazards (and such
flood insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect with a generally acceptable insurance carrier acceptable to ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac in an amount representing coverage equal to the lesser of
(i)
the minimum amount required, under the terms of coverage, to compensate for
any
damage or loss on a replacement cost basis (or the unpaid balance of the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under
the
Flood Disaster Protection Act of 1973, as amended. If at any time during the
term of the Mortgage Loan, the Company determines in accordance with applicable
law and pursuant to the FEMA guides that a Mortgaged Property is located in
a
special flood hazard area and is not covered by flood insurance or is covered
in
an amount less than the amount required by the Flood Disaster Protection Act
of
1973, as amended, the Company shall notify the related Mortgagor to obtain
such
flood insurance coverage, and if said Mortgagor fails to obtain the required
flood insurance coverage within forty-five (45) days after such notification,
the Company shall immediately force place the required flood insurance on the
Mortgagor’s behalf. Any out-of-pocket expenses or advance made by the Company on
such force placed flood insurance coverage shall be deemed a Servicing
Advance.
If
a
Mortgage is secured by a unit in a condominium project, the Company shall verify
that the coverage required of the owner’s association, including hazard, flood,
liability, and fidelity coverage, is being maintained in accordance with then
current ▇▇▇▇▇▇ Mae requirements, and secure from the owner’s association its
agreement to notify the Company promptly of any change in the insurance coverage
or of any condemnation or casualty loss that may have a material effect on
the
value of the Mortgaged Property as security.
45
In
the
event that any Purchaser or the Company shall determine that the Mortgaged
Property should be insured against loss or damage by hazards and risks not
covered by the insurance required to be maintained by the Mortgagor pursuant
to
the terms of the Mortgage, the Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor’s attention the required amount of coverage for the Mortgaged Property
and if the Mortgagor does not obtain such coverage, the Company shall
immediately force place the required coverage on the Mortgagor’s
behalf.
All
policies required hereunder shall name the Company as loss payee and shall
be
endorsed with standard or union mortgagee clauses, without contribution, which
shall provide for at least thirty (30) days prior written notice of any
cancellation, reduction in amount or material change in coverage.
The
Company shall not interfere with the Mortgagor’s freedom of choice in selecting
either his insurance carrier or agent, provided, however, that the Company
shall
not accept any such insurance policies from insurance companies unless such
companies are acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac and are licensed to
do
business in the jurisdiction in which the Mortgaged Property is located. The
Company shall determine that such policies provide sufficient risk coverage
and
amounts, that they insure the property owner, and that they properly describe
the property address. The Company shall furnish to the Mortgagor a formal notice
of expiration, in accordance with the Accepted Servicing Practices, of any
such
insurance in sufficient time for the Mortgagor to arrange for renewal coverage
by the expiration date.
Pursuant
to Section 4.04, any amounts collected by the Company under any such policies
(other than amounts to be deposited in the Escrow Account and applied to the
restoration or repair of the related Mortgaged Property, or property acquired
in
liquidation of the Mortgage Loan, or to be released to the Mortgagor, in
accordance with the Company’s normal servicing procedures as specified in
Section 4.14) shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.05.
Section
4.11. Maintenance
of Mortgage Impairment Insurance.
In
the
event that the Company shall obtain and maintain a blanket policy insuring
against losses arising from fire and hazards covered under extended coverage
on
all of the Mortgage Loans, then, to the extent such policy (1) names the Company
as loss payee, (2) provides coverage in an amount equal to the amount required
pursuant to Section 4.10 without coinsurance and (3) otherwise complies with
Accepted Servicing Practices and all other requirements of Section 4.10, it
shall conclusively be deemed to have satisfied its obligations as set forth
in
Section 4.10. The Company shall prepare and make any claims on the blanket
policy as deemed necessary by the Company in accordance with Accepted Servicing
Practices. Any amounts collected by the Company under any such policy relating
to a Mortgage Loan shall be deposited in the Custodial Account subject to
withdrawal pursuant to Section 4.05. Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained
on
the related Mortgaged Property a policy complying with Section 4.10, and there
shall have been a loss which would have been covered by such policy, the Company
shall deposit in the Custodial Account at the time of such loss the amount
not
otherwise payable under the blanket policy because of such deductible clause,
such amount to be deposited from the Company’s funds, without reimbursement
therefor. Upon request of the Purchaser, the Company shall cause to be delivered
to such Purchaser a certificate of insurance and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without 30 days’ prior written notice to such Purchaser.
46
Section
4.12. Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
The
Company shall maintain with responsible companies, at its own expense, a blanket
Fidelity Bond and an Errors and Omissions Insurance Policy, with broad coverage
on all officers, employees or other persons acting in any capacity requiring
such persons to handle funds, money, documents or papers relating to the
Mortgage Loans (“Company Employees”). Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker’s Blanket
Bond and shall protect and insure the Company against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
Company Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy
also shall protect and insure the Company against losses in connection with
the
release or satisfaction of a Mortgage Loan without having obtained payment
in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the Company from its duties and obligations as set forth
in
this Agreement. The minimum coverage under any such Fidelity Bond and Errors
and
Omissions Insurance Policy shall be acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Upon the request of any Purchaser, the Company shall cause to be delivered
to
such Purchaser a certificate of insurance for such 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 30 days’ prior written notice to
the Purchaser.
Section
4.13. Inspections.
If
any
Mortgage Loan is more than sixty (60) days delinquent, the Company immediately
shall inspect the Mortgaged Property and shall conduct subsequent inspections
in
accordance with Accepted Servicing Practices or as may be required by the
primary mortgage guaranty insurer. The Company shall keep a record of each
such
inspection and, upon request, shall provide the Purchaser with such
information.
Section
4.14. Restoration
of Mortgaged Property.
The
Company need not obtain the approval of the Purchaser prior to releasing any
Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to
the restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. For claims greater than $15,000,
at a minimum the Company shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation
Proceeds:
47
(i) the
Company shall receive satisfactory independent verification of completion of
repairs and issuance of any required approvals with respect
thereto;
(ii) the
Company shall take all steps necessary to preserve the priority of the lien
of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics’ and materialmen’s liens;
(iii) the
Company shall verify that the Mortgage Loan is not in default; and
(iv) pending
repairs or restoration, the Company shall place the Insurance Proceeds or
Condemnation Proceeds in the Escrow Account.
If
the
Purchaser is named as an additional loss payee, the Company is hereby empowered
to endorse any loss draft issued in respect of such a claim in the name of
the
Purchaser.
Section
4.15. Maintenance
of PMI Policy and LPMI Policy; Claims.
Except
as
indicated on the Mortgage Loan Schedule, with respect to each Mortgage Loan
with
an LTV greater than 80% at the time of origination, the Company shall, without
any cost to the Purchaser maintain in full force and effect a PMI Policy or
LPMI
Policy insuring a portion of the unpaid principal balance of the Mortgage Loan
as to payment defaults. If the Mortgage Loan is insured by a PMI Policy for
which the Mortgagor pays all premiums, the coverage will remain in place until
(i) the LTV decreases to 78% or (ii) the PMI Policy is otherwise terminated
pursuant to the Homeowners Protection Act of 1998, 12 USC §4901, et seq. In the
event that such PMI Policy shall be terminated other than as required by law,
the Company shall obtain from another Qualified Insurer a comparable replacement
policy, with a total coverage equal to the remaining coverage of such terminated
PMI Policy. If the insurer shall cease to be a Qualified Insurer, the Company
shall determine whether recoveries under the PMI Policy are jeopardized for
reasons related to the financial condition of such insurer, it being understood
that the Company shall in no event have any responsibility or liability for
any
failure to recover under the PMI Policy for such reason. If the Company
determines that recoveries are so jeopardized, it shall notify the Purchaser
and
the Mortgagor, if required, and obtain from another Qualified Insurer a
replacement insurance policy. The Company will maintain or cause to be
maintained in full force and effect any LPMI Policy issued by a Qualified
Insurer with respect to each Mortgage Loan for which such coverage is in
existence or is obtained. The Purchaser shall notify the Company of any Mortgage
Loan covered under an LPMI Policy. The Company shall not take any action which
would result in noncoverage under any applicable PMI Policy or LPMI Policy
of
any loss which, but for the actions of the Company would have been covered
thereunder. In connection with any assumption or substitution agreement entered
into or to be entered into pursuant to Section 6.01, the Company shall promptly
notify the insurer under the related PMI Policy or LPMI Policy, if any, of
such
assumption or substitution of liability in accordance with the terms of such
PMI
Policy or LPMI Policy and shall take all actions which may be required by such
insurer as a condition to the continuation of coverage under such PMI Policy
or
LPMI Policy. If such PMI Policy or LPMI Policy is terminated as a result of
such
assumption or substitution of liability, the Company shall obtain a replacement
PMI Policy or LPMI Policy as provided above.
48
In
connection with its activities as servicer, the Company agrees to prepare and
present, on behalf of itself and the Purchaser, claims to the insurer under
any
PMI Policy or LPMI Policy in a timely fashion in accordance with the terms
of
such PMI Policy or LPMI Policy and, in this regard, to take such action as
shall
be necessary to permit recovery under any PMI Policy or LPMI Policy respecting
a
defaulted Mortgage Loan. Pursuant to Section 4.04, any amounts collected by
the
Company under any PMI Policy or LPMI Policy shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Section 4.05.
Section
4.16. Title,
Management and Disposition of REO Property.
In
the
event that title to any Mortgaged Property is acquired in foreclosure or by
deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in the
name of the Purchaser, or in the event the Purchaser is not authorized or
permitted to hold title to real property in the state where the REO Property
is
located, or would be adversely affected under the “doing business” or tax laws
of such state by so holding title, the deed or certificate of sale shall be
taken in the name of such Person or Persons as shall be consistent with an
Opinion of Counsel obtained by the Company from any attorney duly licensed
to
practice law in the state where the REO Property is located. The Person or
Persons holding such title other than the Purchaser shall acknowledge in writing
that such title is being held as nominee for the Purchaser.
The
Purchaser shall have the option to manage and operate the REO Property provided
the Purchaser gives written notice of its intention to do so within thirty
(30)
days after such REO Property is acquired in foreclosure or by deed in lieu
of
foreclosure. The election by the Purchaser to manage the REO Property shall
not
constitute a termination of any rights of the Company pursuant to Section
11.02.
In
the
event the Purchaser does not elect to manage its own REO Property, the
Company
shall manage, conserve,
protect and operate each REO Property for the Purchaser solely for the purpose
of its prompt disposition and sale. The Company, either itself or through an
agent selected by the Company, shall manage, conserve, protect and operate
the
REO Property in the same manner that it manages, conserves, protects and
operates other foreclosed property for its own account, and in the same manner
that similar property in the same locality as the REO Property is managed.
The
Company shall attempt to sell the same (and may temporarily rent the same for
a
period not greater than one year, except as otherwise provided below) on such
terms and conditions as the Company deems to be in the best interest of the
Purchaser.
The
Company shall use its best efforts to dispose of the REO Property as soon as
possible and shall sell such REO Property in any event within prior to the
close
of the third calendar year beginning after the year in which title has been
taken to such REO Property, unless (i) a REMIC election has not been made with
respect to the arrangement under which the Mortgage Loans and the REO Property
are held, and (ii) the Company determines, and gives an appropriate notice
to
the Purchaser to such effect, that a longer period is necessary for the orderly
liquidation of such REO Property. If a period longer than three years is
permitted under the foregoing sentence and is necessary to sell any REO
Property, (i) the Company shall report monthly to the Purchaser as to the
progress being made in selling such REO Property and (ii) if, with the written
consent of the Purchaser, a purchase money mortgage is taken in connection
with
such sale, such purchase money mortgage shall name the Company as mortgagee,
and
such purchase money mortgage shall not be held pursuant to this Agreement,
but
instead a separate agreement among the Company and Purchaser shall be entered
into with respect to such purchase money mortgage.
49
The
Company shall also maintain on each REO Property fire and hazard insurance
with
extended coverage in amount which is at least equal to the maximum insurable
value of the improvements which are a part of such property, liability insurance
and, to the extent required and available under the Flood Disaster Protection
Act of 1973, as amended, flood insurance in the amount required
above.
The
disposition of REO Property shall be carried out by the Company at such price,
and upon such terms and conditions, as the Company deems to be in the best
interests of the Purchaser. Notwithstanding any other provision in this Section
4.05, no REO Property shall be marketed for less than the appraisal value of
the
related Mortgaged Property without the prior consent of the Purchaser, and
no
REO Property shall be sold for less than ninety percent (90%) of its appraised
value without the prior written consent of the Purchaser. The proceeds of sale
of the REO Property shall be promptly deposited in the Custodial Account. As
soon as practical thereafter the expenses of such sale shall be paid and the
Company shall reimburse itself for any related unreimbursed Servicing Advances,
unpaid Servicing Fees and unreimbursed advances made pursuant to Section 5.03.
On the Remittance Date immediately following the receipt of such sale proceeds,
the net cash proceeds of such sale remaining in the Custodial Account shall
be
distributed to the Purchaser.
The
Company shall withdraw from the Custodial Account funds necessary for the proper
operation management and maintenance of the REO Property, including the cost
of
maintaining any hazard insurance pursuant to Section 4.10 and the fees of any
third party managing agent of the Company, or the Company itself. The REO
management fee shall be the greater of one percent (1%) of the gross sales
price
of the REO Property or $1500.00 per REO Property, provided however, the REO
management fee shall not exceed the net Liquidation Proceeds. The Company shall
make monthly distributions on each Remittance Date to the Purchaser of the
net
cash flow from the REO Property (which shall equal the revenues from such REO
Property net of the expenses described in this Section 4.16 and of any reserves
reasonably required from time to time to be maintained to satisfy anticipated
liabilities for such expenses).
Section
4.17. Real
Estate Owned Reports.
Together
with the statement furnished pursuant to Section 5.02, the Company shall furnish
to the Purchaser on or before the Remittance Date each month a statement with
respect to any REO Property covering the operation of such REO Property for
the
previous month and the Company’s efforts in connection with the sale of such REO
Property and any rental of such REO Property incidental to the sale thereof
for
the previous month. That statement shall be accompanied by such other
information as the Purchaser shall reasonably request.
50
Section
4.18. Liquidation
Reports.
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by the
Purchaser pursuant to a deed in lieu of foreclosure, the Company shall submit
to
the Purchaser a liquidation report with respect to such Mortgaged
Property.
Section
4.19. Reports
of Foreclosures and Abandonments of Mortgaged Property.
Following
the foreclosure sale or abandonment of any Mortgaged Property, the Company
shall
report such foreclosure or abandonment as required pursuant to Section 6050J
of
the Code. The Company shall file information reports with respect to the receipt
of mortgage interest received in a trade or business and information returns
relating to cancellation of indebtedness income with respect to any Mortgaged
Property as required by the Code. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by the Code.
Section
4.20. Notification
of Adjustments.
With
respect to each Adjustable Rate Mortgage Loan, the Company shall adjust the
Mortgage Interest Rate on the related Adjustment Date in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note.
The
Company shall execute and deliver any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate adjustments. Upon the discovery by the Company or
the
receipt of notice from the Purchaser that the Company has failed to adjust
a
Mortgage Interest Rate in accordance with the terms of the related Mortgage
Note, the Company shall immediately deposit in the Custodial Account from its
own funds the amount of any interest loss or deferral caused the Purchaser
thereby.
Section
4.21. Credit
Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.
(a) The
Company agrees to fully furnish, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete information on
its
borrower credit files to Equifax, Experian, and Trans Union Credit Information
Company (three of the credit repositories), on a monthly basis.
(b) The
Company agrees to transmit full file credit reporting data for each Mortgage
Loan pursuant to ▇▇▇▇▇▇ Mae Guide Announcement 95-19 and for each Mortgage
Loan,
the Company shall report one of the following statuses each month: new
origination, current, delinquent (30, 60, 90 days, etc.), bankruptcy, foreclosed
or charged off.
(c) The
Company shall comply with Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 and
all
applicable regulations promulgated thereunder, relating to the Mortgage Loans
and the related borrowers and shall provide all required notices
thereunder.
Section
4.22. Confidentiality/Protection
of Customer Information.
The
Company shall keep confidential and shall not divulge to any party, without
the
Purchaser’s prior written consent, the price paid by the Purchaser for the
Mortgage Loans, except to the extent that it is reasonable and necessary for
the
Company to do so in working with legal counsel, auditors, taxing authorities
or
other governmental agencies. Each party agrees that it shall comply with all
applicable laws and regulations regarding the privacy or security of Customer
Information and shall maintain appropriate administrative, technical and
physical safeguards to protect the security, confidentiality and integrity
of
Customer Information, including maintaining security measures designed to meet
the objectives of the Interagency Guidelines Establishing Standards for
Safeguarding Customer Information, 66 Fed. Reg. 8616 (the “Interagency
Guidelines”). The Company shall promptly make available to the Purchaser’s
regulators information regarding such security measures as requested by such
regulators. For purposes of this Section, the term “Customer Information” shall
have the meaning assigned to it in the Interagency Guidelines. Each party
further agrees that any Customer Information transmitted electronically by
either party must be encrypted.
51
Section
4.23. Disaster
Recovery/Business Continuity Plan.
The
Company shall maintain contingency plans, recovery plans and proper risk
controls to ensure Company’s continued performance under this Agreement. The
Company agrees to make available to the Purchaser’s regulators information
regarding such plans as requested by such regulators.
Section
4.24. Quality
Control Procedures.
The
Company shall have an internal quality control program that verifies, on a
regular basis, the existence and accuracy of the legal documents, credit
documents, property appraisals, and underwriting decisions. The program shall
include evaluating and monitoring the overall quality of the Company’s loan
production and the servicing activities of the Company in accordance with
industry standards.
Section
4.25. Application
of Buydown Funds.
With
respect to each Buydown Mortgage Loan, the Company shall have deposited into
the
Escrow Account, no later than the last day of the month, Buydown Funds in an
amount equal to the aggregate undiscounted amount of payments that, when added
to the amount the Mortgagor on such Mortgage Loan is obligated to pay on all
Due
Dates in accordance with the terms of the Buydown Agreement, is equal to the
full scheduled Monthly Payments which are required to be paid by the Mortgagor
under the terms of the related Mortgage Note (without regard to the related
Buydown Agreement as if the Mortgage Loan were not subject to the terms of
the
Buydown Agreement). With respect to each Buydown Mortgage Loan, the Company
will
distribute to the Purchaser on each Remittance Date an amount of Buydown Funds
equal to the amount that, when added to the amount required to be paid on such
date by the related Mortgagor, pursuant to and in accordance with the related
Buydown Agreement, equals the full Monthly Payment that would otherwise be
required to be paid on such Mortgage Loan by the related Mortgagor under the
terms of the related Mortgage Note (as if the Mortgage Loan were not a Buydown
Mortgage Loan and without regard to the related Buydown Agreement).
If
the
Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan during
the
Buydown Period and the Mortgaged Property securing such Buydown Mortgage Loan
is
sold in the liquidation thereof (either by the Company or the insurer under
any
related Primary Insurance Policy) the Company shall, on the Remittance Date
following the date upon which Liquidation Proceeds or REO Disposition proceeds
are received with respect to any such Buydown Mortgage Loan, distribute to
the
Purchaser all remaining Buydown Funds for such Mortgage Loan then remaining
in
the Escrow Account. Pursuant to the terms of each Buydown Agreement, any amounts
distributed to the Purchaser in accordance with the preceding sentence will
be
applied to reduce the outstanding principal balance of the related Buydown
Mortgage Loan. If a Mortgagor on a Buydown Mortgage Loan prepays such Mortgage
Loan in it entirety during the related Buydown Period, the Company shall be
required to withdraw from the Escrow Account any Buydown Funds remaining in
the
Escrow Account with respect to such Buydown Mortgage Loan in accordance with
the
related Buydown Agreement. If a principal prepayment by a Mortgagor on a Buydown
Mortgage Loan during the related Buydown Period, together with any Buydown
Funds
then remaining in the Escrow Account related to such Buydown Mortgage Loan,
would result in a principal prepayment of the entire unpaid principal balance
of
the Buydown Mortgage Loan, the Company shall distribute to the Purchaser on
the
Remittance Date occurring in the month immediately succeeding the month in
which
such Principal Prepayment is received, all Buydown Funds related to such
Mortgage Loan so remaining in the Escrow Account, together with any amounts
required to be deposited into the Custodial Account.
52
Section
4.26. Establishment
of and Deposits to Subsidy Account.
(a) The
Company shall segregate and hold all Subsidy Funds collected and received
pursuant to the Subsidy Loans separate and apart from any of its own funds
and
general assets and shall establish and maintain one or more Subsidy Accounts,
in
the form of time deposit or demand accounts, titled “▇▇▇▇▇ Fargo Bank, N.A., in
trust for Bank of America, National Association, its successors or assigns,
and/or subsequent purchasers of Residential Mortgage Loans, and various
Mortgagors.” The Subsidy Account shall be an eligible deposit account
established with an eligible institution.
(b) The
Company shall, from time to time, withdraw funds from the Subsidy Account for
the following purposes:
(i) to
deposit in the Custodial Account in the amounts and in the manner provided
for
in Section 4.04(xi);
(ii) to
transfer funds to another eligible institution in accordance with Section 4.09
hereof;
(iii) to
withdraw funds deposited in error; and
(iv) to
clear
and terminate the Subsidy Account upon the termination of this
Agreement.
53
(c) Notwithstanding
anything to the contrary elsewhere in this Agreement, the Company may employ
the
Custodial Account as the Subsidy Account to the extent that the Company can
separately identify any Subsidy Funds deposited therein.
Section
4.27. Automated
Servicing Systems.
The
Company shall establish, format, maintain and transmit to the Purchaser the
Company’s electronic mortgage servicing files and other electronic data storage
and transmission systems related to the Mortgage Loans (collectively, the
“Servicing Systems”) in accordance with the guidelines and requirements set
forth in Exhibit
F
attached
hereto (the “Servicer Requirements”) and the Company shall cooperate with the
Purchaser to receive data from the Purchaser that is to be incorporated in
the
Servicing Systems in accordance with the Servicer Requirements.
Section
4.28. Prepayment
Penalties.
To
the
extent consistent with the terms of this Agreement, the Company may waive (or
permit a subservicer to waive) a Prepayment Penalty only under the following
circumstances: (i) such waiver relates to a default or a reasonably forseeable
default and would, in the reasonable judgment of the Company, maximize recovery
of total proceeds, taking into account the value of such Prepayment Penalty
and
the related Mortgage Loan, (ii) such waiver is required under state or federal
law or (iii) the mortgage debt has been accelerated as a result of the
Mortgagor’s default in making its Monthly Payments. The Company shall not waive
any Prepayment Penalty unless it is waived in accordance with this Section
4.28.
The
Company shall pay the amount of any Prepayment Penalty (to the extent not
collected and remitted to the Purchaser) to the Purchaser or its assignees
if
(1) the representation in Section 3.02(ccc) is breached and such breach
materially and adversely affects the interests of the Purchaser or its assigns,
or (2) the Company waives any Prepayment Penalty other than as permitted under
this Section 4.28. The Company shall pay the amount of such Prepayment Penalty,
for the benefit of the Purchaser or any assignee of the Purchaser, by depositing
such amount into the Custodial Account at the time that the amount prepaid
on
the related Mortgage Loan is required to be deposited into the Custodial
Account.
Section
4.29. Use
of
Subservicers and Subcontractors.
The
Company shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Company under this Agreement or any
Reconstitution Agreement unless the Company complies with the provisions of
paragraph (a) of this Section 4.29. The Company shall not hire or otherwise
utilize the services of any Subcontractor, and shall not permit any Subservicer
to hire or otherwise utilize the services of any Subcontractor, to fulfill
any
of the obligations of the Company under this Agreement or any Reconstitution
Agreement unless the Company complies with the provisions of paragraph (b)
of
this Section 4.29.
(a) It
shall
not be necessary for the Company to seek the consent of the Purchaser or any
Depositor to the utilization of any Subservicer. The Company shall cause any
Subservicer used by the Company (or by any Subservicer) for the benefit of
the
Purchaser and any Depositor to comply with the provisions of this Section 4.29
and with Sections 6.04, 6.06, 9.01(e)(iii), 9.01(e)(v), 9.01(e)(vi) and 9.01(f)
of this Agreement to the same extent as if such Subservicer were the Company,
and to provide the information required with respect to such Subservicer under
Section 9.01(e)(iv) of this Agreement. The Company shall be responsible for
obtaining from each Subservicer and delivering to the Purchaser and any
Depositor any servicer compliance statement required to be delivered by such
Subservicer under Section 6.04 and any assessment of compliance and attestation
required to be delivered by such Subservicer under Section 6.06 and any
certification required to be delivered to the Person that will be responsible
for signing the Sarbanes Certification under Section 6.06 as and when required
to be delivered.
54
(b) It
shall
not be necessary for the Company to seek the consent of the Purchaser or any
Depositor to the utilization of any Subcontractor. The Company shall promptly
upon request provide to the Purchaser and any Depositor (or any designee of
the
Depositor, such as a master servicer or administrator) a written description
(in
form and substance satisfactory to the Purchaser and such Depositor) of the
role
and function of each Subcontractor utilized by the Company or any Subservicer,
specifying (i) the identity of each such Subcontractor, (ii) which (if any)
of
such Subcontractors are “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the Servicing
Criteria will be addressed in assessments of compliance provided by each
Subcontractor identified pursuant to clause (ii) of this paragraph.
As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 6.06 and 9.01(f) of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance
and
attestation required to be delivered by such Subcontractor under Section 6.06,
in each case as and when required to be delivered.
ARTICLE
V
PAYMENTS
TO PURCHASER
Section
5.01. Remittances.
On
each
Remittance Date, the Company shall remit by wire transfer of immediately
available funds to the Purchaser (a) all amounts deposited in the Custodial
Account as of the close of business on the Determination Date (net of charges
against or withdrawals from the Custodial Account pursuant to Section 4.05),
plus (b) all amounts, if any, which the Company is obligated to distribute
pursuant to Section 5.03, minus (c) any amounts attributable to Principal
Prepayments received after the applicable Principal Prepayment Period which
amounts shall be remitted on the following Remittance Date, together with any
additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 4.04(viii);
and minus (d) any amounts attributable to Monthly Payments collected but due
on
a Due Date or Dates subsequent to the first day of the month of the Remittance
Date, and minus (e) any amounts attributable to Buydown Funds being held in
the
Custodial Account, which amounts shall be remitted on the Remittance Date next
succeeding the Due Period for such amounts.
55
With
respect to any remittance received by the Purchaser after the Business Day
on
which such payment was due, the Company shall pay to the Purchaser interest
on
any such late payment at an annual rate equal to the Prime Rate, adjusted as
of
the date of each change, plus three percentage points, but in no event greater
than the maximum amount permitted by applicable law. Such interest shall be
deposited in the Custodial Account by the Company on the date such late payment
is made and shall cover the period commencing with the day following such
Business Day and ending with the Business Day on which such payment is made,
both inclusive. Such interest shall be remitted along with the distribution
payable on the next succeeding Remittance Date. The payment by the Company
of
any such interest shall not be deemed an extension of time for payment or a
waiver of any Event of Default by the Company.
Section
5.02. Statements
to Purchaser.
Not
later
than the first (1st)
Business Day of each month, the Company shall furnish to the Purchaser, with
respect to the preceding month, a monthly collection report, a monthly paid
in
full report that summarizes Mortgage Loans paid in full during the related
Due
Period and a monthly trial balance report that provides a trial balance as
of
the last day of the month preceding such Remittance Date in electronic format
agreed upon by the Company and the Purchaser.
Not
later
than the fifth (5th)
Business Day of each month, the Company shall furnish to the Purchaser in either
written or electronic format, a delinquency report and a monthly remittance
advice containing the information set forth in Exhibit
G,
attached hereto, each in a form mutually acceptable to the Company and the
Purchaser, as to the period ending on the last day of the preceding
month.
Section
5.03. Monthly
Advances by Company.
No
later
than the close of business on the Determination Date, the Company shall deposit
in the Custodial Account from its own funds or from amounts held for future
distribution an amount equal to all Monthly Payments (with interest adjusted
to
the Mortgage Loan Remittance Rate) which were due on the Mortgage Loans during
the applicable Due Period and which were delinquent at the close of business
on
the immediately preceding Determination Date or which were deferred pursuant
to
Section 4.01. Any amounts held for future distribution and so used shall be
replaced by the Company by deposit in the Custodial Account on or before any
future Remittance Date if funds in the Custodial Account on such Remittance
Date
shall be less than payments to the Purchaser required to be made on such
Remittance Date. The Company’s obligation to make such Monthly Advances as to
any Mortgage Loan will continue through the last Monthly Payment due prior
to
the payment in full of the Mortgage Loan, or through the last Remittance Date
prior to the Remittance Date for the distribution of all Liquidation Proceeds
and other payments or recoveries (including REO Disposition Proceeds, Insurance
Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan; provided,
however, that the Company shall not make Monthly Advances or Servicing Advances
if the Company determines, in its sole reasonable opinion, that advances with
respect to such Mortgage Loan are non-recoverable by the Company from
Liquidation Proceeds, REO Disposition Proceeds, Insurance Proceeds, Condemnation
Proceeds, or otherwise with respect to a particular Mortgage Loan. In the event
that the Company determines that any such advances are non-recoverable, the
Company shall provide the Purchaser with a certificate signed by two officers
of
the Company evidencing such determination.
56
ARTICLE
VI
GENERAL
SERVICING PROCEDURES
Section
6.01. Transfers
of Mortgaged Property.
The
Company shall use its best efforts to enforce any “due-on-sale” provision
contained in any Mortgage or Mortgage Note and to deny assumption by the person
to whom the Mortgaged Property has been or is about to be sold whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note. When the Mortgaged
Property has been conveyed by the Mortgagor, the Company shall, to the extent
it
has knowledge of such conveyance, exercise its rights to accelerate the maturity
of such Mortgage Loan under the “due-on-sale” clause applicable thereto,
provided, however, that the Company shall not exercise such rights if prohibited
by law from doing so or if the exercise of such rights would impair or threaten
to impair any recovery under the related PMI Policy, if any.
If
the
Company reasonably believes it is unable under applicable law to enforce such
“due-on-sale” clause, the Company shall enter into (i) an assumption and
modification agreement with the person to whom such property has been conveyed,
pursuant to which such person becomes liable under the Mortgage Note and the
original Mortgagor remains liable thereon or (ii) in the event the Company
is
unable under applicable law to require that the original Mortgagor remain liable
under the Mortgage Note and the Company has the prior consent of the primary
mortgage guaranty insurer, a substitution of liability agreement with the
purchaser of the Mortgaged Property pursuant to which the original Mortgagor
is
released from liability and the purchaser of the Mortgaged Property is
substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Company for entering into an assumption
agreement the fee will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage
Loan,
the outstanding principal amount of the Mortgage Loan nor any other material
terms shall be changed without Purchaser’s consent.
To
the
extent that any Mortgage Loan is assumable, the Company shall inquire diligently
into the credit worthiness of the proposed transferee, and shall use the
underwriting criteria for approving the credit of the proposed transferee which
are used with respect to underwriting mortgage loans of the same type as the
Mortgage Loan. If the credit worthiness of the proposed transferee does not
meet
such underwriting criteria, the Company diligently shall, to the extent
permitted by the Mortgage or the Mortgage Note and by applicable law, accelerate
the maturity of the Mortgage Loan.
57
|
Section
6.02.
|
Satisfaction
of Mortgages and Release of Retained Mortgage Files.
|
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Company of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Company shall notify the Purchaser in the monthly remittance
advice as provided in Section 5.02, and may request the release of any
Mortgage Loan Documents.
If
the
Company satisfies or releases a Mortgage without first having obtained payment
in full of the indebtedness secured by the Mortgage or should the Company
otherwise prejudice any rights the Purchaser may have under the mortgage
instruments, upon written demand of the Purchaser, the Company shall repurchase
the related Mortgage Loan at the Repurchase Price by deposit thereof in the
Custodial Account within two (2) Business Days of receipt of such demand by
the
Purchaser. The Company shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 4.12 insuring the Company against
any loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
Section
6.03. Servicing
Compensation.
As
compensation for its services hereunder, the Company shall be entitled to
withdraw from the Custodial Account the amount of its Servicing Fee. The
Servicing Fee shall be payable monthly and shall be computed on the basis of
the
same unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is received. The obligation of the Purchaser
to pay the Servicing Fee is limited to, and payable solely from, the interest
portion of such Monthly Payments. Notwithstanding the foregoing, with respect
to
the payment of the Servicing Fee for any month, the aggregate Servicing Fee
shall be reduced (but not below zero) by an amount equal to the Prepayment
Interest Shortfall for such Remittance Date relating to the Mortgage
Loans.
Additional
servicing compensation in the form of assumption fees, to the extent provided
in
Section 6.01, and late payment charges shall be retained by the Company to
the
extent not required to be deposited in the Custodial Account. The Company shall
be required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement thereof except
as specifically provided for herein.
Section
6.04. Annual
Statement as to Compliance.
(i) The
Company shall deliver to the Purchaser, on or before February 28, 2006, an
Officer’s Certificate, stating that (x) a review of the activities of the
Company during the preceding calendar year and of performance under this
Agreement or similar agreements has been made under such officer’s supervision,
and (y) to the best of such officer’s knowledge, based on such review, the
Company has fulfilled all its obligations under this Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and the action being taken by the Company to cure such
default.
58
(ii) On
or
before March 1 of each calendar year, commencing in 2007, the Company shall
deliver to the Purchaser and any Depositor a statement of compliance addressed
to the Purchaser and such Depositor and signed by an authorized officer of
the
Company, to the effect that (a) a review of the Company’s activities during the
immediately preceding calendar year (or applicable portion thereof) and of
its
performance under this Agreement and any applicable Reconstitution Agreement
during such period has been made under such officer’s supervision, and (b) to
the best of such officers’ knowledge, based on such review, the Company has
fulfilled all of its obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar
year
(or applicable portion thereof) or, if there has been a failure to fulfill
any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status
thereof.
Section
6.05. Annual
Independent Public Accountants’ Servicing Report.
Except
with respect to a Securitization Transaction occurring on or after January
1,
2006, on or before February 28, of each year beginning February 28, 2006, the
Company, at its expense, shall cause a firm of independent public accountants
which is a member of the American Institute of Certified Public Accountants
to
furnish a statement to each Purchaser to the effect that such firm has examined
certain documents and records relating to the servicing of the mortgage loans
similar in nature and that such firm is of the opinion that the provisions
of
this or similar agreements have been complied with, and that, on the basis
of
such examination conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, nothing has come to their attention
which would indicate that such servicing has not been conducted in compliance
therewith, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement. By providing the Purchaser a copy of a Uniform Single Attestation
Program Report from their independent public accountant’s on an annual basis,
the Company shall be considered to have fulfilled its obligations under this
Section 6.05. Notwithstanding the foregoing, in connection with the final rules
promulgated by the Securities and Exchange Commission related to asset-backed
securities (Release Nos. 33-8518; 34-50905) (as such rules may be amended or
modified from time to time, the “ABS Rules”), the Company shall cooperate with
the Purchaser in providing such other statements and reports as are required
by
and in conformance with the ABS Rules.
Section
6.06. Report
on Assessment of Compliance and Attestation.
With
respect to any Mortgage Loans that are the subject of a Securitization
Transaction occurring on or after January 1, 2006, on or before March 1 of
each
calendar year, commencing in 2007, the Company shall:
(i) deliver
to the Purchaser and any Depositor a report (in form and substance reasonably
satisfactory to the Purchaser and such Depositor) regarding the Company’s
assessment of compliance with the Servicing Criteria during the immediately
preceding calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed
to
the Purchaser and such Depositor and signed by an authorized officer of the
Company and shall address each of the Servicing Criteria specified substantially
in the form of Exhibit
H
hereto
delivered to the Purchaser at the time of any Securitization
Transaction;
59
(ii) deliver
to the Purchaser and any Depositor a report of a registered public accounting
firm reasonably acceptable to the Purchaser and such Depositor that attests
to,
and reports on, the assessment of compliance made by the Company and delivered
pursuant to the preceding paragraph. Such attestation shall be in accordance
with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act
and
the Exchange Act;
(iii) cause
each Subservicer and each Subcontractor, determined by the Company pursuant
to
Section 4.29(b) to be “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB, to deliver to the Purchaser and any
Depositor an assessment of compliance and accountants’ attestation as and when
provided in paragraphs (i) and (ii) of this Section 6.06; and
(iv) deliver
to the Purchaser, any Depositor and any other Person that will be responsible
for signing the certification (a “Sarbanes Certification”) required by Rules
13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section 302 of
the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002) on behalf of an asset-backed issuer with respect
to
a Securitization Transaction a certification in the form attached hereto as
Exhibit
I.
The
Company acknowledges that the parties identified in clause (iv) above may rely
on the certification provided by the Company pursuant to such clause in signing
a Sarbanes Certification and filing such with the Commission.
Each
assessment of compliance provided by a Subservicer pursuant to Section 6.06(i)
shall address each of the Servicing Criteria specified substantially in the
form
of Exhibit
H
hereto
delivered to the Purchaser concurrently with the execution of this Agreement
or,
in the case of a Subservicer subsequently appointed as such, on or prior to
the
date of such appointment. An assessment of compliance provided by a
Subcontractor pursuant to Section 6.06(iii) need not address any elements of
the
Servicing Criteria other than those specified by the Company pursuant to Section
4.29.
Section
6.07. Remedies.
(i) Any
failure by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under Article IX, Section 4.29,
Section 6.04, Section 6.05 or Section 6.06, or any breach by the Company of
a
representation or warranty set forth in Section 9.01(e)(vi)(A), or in a writing
furnished pursuant to Section 9.01(e)(vi)(B) and made as of a date prior to
the
closing date of the related Securitization Transaction, to the extent that
such
breach is not cured by such closing date, or any breach by the Company of a
representation or warranty in a writing furnished pursuant to Section
9.01(e)(vi)(B) to the extent made as of a date subsequent to such closing date,
shall, except as provided in sub-clause (ii) of this Section, immediately and
automatically, without notice or grace period, constitute an Event of Default
with respect to the Company under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or Depositor, as
applicable, in its sole discretion to terminate the rights and obligations
of
the Company as servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement or any applicable Reconstitution Agreement to the contrary) of any
compensation to the Company; provided that to the extent that any provision
of
this Agreement and/or any applicable Reconstitution Agreement expressly provides
for the survival of certain rights or obligations following termination of
the
Company as servicer, such provision shall be given effect.
60
(ii) Any
failure by the Company, any Subservicer or any Subcontractor to deliver any
information, report, certification or accountants’ letter when and as required
under Section 6.04, Section 6.05 or Section 6.06, including any failure by
the
Company to identify any Subcontractor “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB, which continues unremedied
for
ten (10) calendar days after the date on which such information, report,
certification or accountants’ letter was required to be delivered shall
constitute an Event of Default with respect to the Company under this Agreement
and any applicable Reconstitution Agreement, and shall entitle the Purchaser
or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Company under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement to the contrary) of any compensation to the Company; provided that
to
the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Company as servicer, such provision
shall be given effect.
(iii) The
Company shall promptly reimburse the Purchaser (or any designee of the
Purchaser, such as a master servicer) and any Depositor, as applicable, for
all
reasonable expenses incurred by the Purchaser (or such designee) or such
Depositor, as such are incurred, in connection with the termination of the
Company as servicer and the transfer of servicing of the Mortgage Loans to
a
successor servicer. The provisions of this paragraph shall not limit whatever
rights the Purchaser or any Depositor may have under other provisions of this
Agreement and/or any applicable Reconstitution Agreement or otherwise, whether
in equity or at law, such as an action for damages, specific performance or
injunctive relief.
Section
6.08. Right
to Examine Company Records.
The
Purchaser, or its designee, shall have the right to examine and audit any and
all of the books, records, or other information of the Company, whether held
by
the Company or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during business hours or at such other times
as
may be reasonable under applicable circumstances, upon reasonable advance
notice. The Purchaser shall pay its own travel expenses associated with such
examination.
61
Section
6.09. Compliance
with REMIC Provisions.
If
a
REMIC election has been made with respect to the arrangement under which the
Mortgage Loans and REO Property are held, the Company shall not take any action,
cause the REMIC to take any action or fail to take (or fail to cause to be
taken) any action that, under the REMIC Provisions, if taken or not taken,
as
the case may be, could (i) endanger the status of the REMIC as a REMIC or (ii)
result in the imposition of a tax upon the REMIC (including but not limited
to
the tax on “prohibited transactions” as defined in Section 860F(a) (2) of the
Code and the tax on “contributions” to a REMIC set forth in Section 860G(d) of
the Code) unless the Company has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
ARTICLE
VII
COMPANY
TO COOPERATE
Section
7.01. Provision
of Information.
During
the term of this Agreement, the Company shall furnish to the Purchaser such
periodic, special, or other reports or information, and copies or originals
of
any documents contained in the Servicing File for each Mortgage Loan provided
for herein. All other special reports or information not provided for herein
as
shall be necessary, reasonable, or appropriate with respect to the Purchaser
or
any regulatory agency will be provided at the Purchaser’s expense. All such
reports, documents or information shall be provided by and in accordance with
all reasonable instructions and directions which the Purchaser may give. In
addition, during the term of this Agreement, the Company shall provide to the
OCC and to comparable regulatory authorities supervising the Purchaser or any
of
Purchaser’s assigns (including beneficial owners of securities issued in
Securitization Transactions backed by the Mortgage Loans) and the examiners
and
supervisory agents of the OCC and such other authorities, access to the
documentation required by applicable regulations of the OCC and such other
authorities with respect to the Mortgage Loans. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices designated by the Company.
The
Company shall execute and deliver all such instruments and take all such action
as the Purchaser may reasonably request from time to time, in order to
effectuate the purposes and to carry out the terms of this
Agreement.
Section
7.02. Financial
Statements; Servicing Facility.
In
connection with marketing the Mortgage Loans, the Purchaser may make available
to a prospective Purchaser a Consolidated Statement of Operations of the Company
for the most recently completed two (2) fiscal years for which such a statement
is available, as well as a Consolidated Statement of Condition at the end of
the
last two (2) fiscal years covered by such Consolidated Statement of Operations.
The Company also shall make available any comparable interim statements to
the
extent any such statements have been prepared by or on behalf of the Company
(and are available upon request to members or stockholders of the Company or
to
the public at large).
62
The
Company also shall make available to the Purchaser or prospective purchasers
a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Company or the financial
statements of the Company, and to permit the Purchaser or any prospective
purchaser to inspect the Company’s servicing facilities for the purpose of
satisfying the Purchaser or any prospective purchaser that the Company has
the
ability to service the Mortgage Loans as provided in this
Agreement.
ARTICLE
VIII
THE
COMPANY
Section
8.01. Indemnification;
Third Party Claims.
The
Company shall indemnify the Purchaser (an “Indemnified Party”) and hold them
harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that the Indemnified Party may sustain
in
any way related to the failure of the Company to perform its duties and service
the Mortgage Loans in strict compliance with the terms of this Agreement. The
Company immediately shall notify the Purchaser if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans, assume (with the
prior written consent of the Purchaser) the defense of any such claim and pay
all expenses in connection therewith, including counsel fees, and promptly
pay,
discharge and satisfy any judgment or decree which may be entered against it
or
the Purchaser in respect of such claim. The Company shall follow any written
instructions received from the Purchaser in connection with such claim. The
Purchaser promptly shall reimburse the Company for all amounts advanced by
it
pursuant to the preceding sentence except when the claim is in any way related
to the Company’s indemnification pursuant to Section 3.03, or the failure of the
Company to service and administer the Mortgage Loans in strict compliance with
the terms of this Agreement.
Section
8.02. Merger
or Consolidation of the Company.
The
Company shall keep in full effect its existence, rights and franchises and
shall
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its
duties under this Agreement.
Any
person into which the Company may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Company
shall be a party, or any Person succeeding to the business of the Company,
shall
be the successor of the Company hereunder, without the execution or filing
of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided, however, that the successor
or
surviving Person shall be an institution (i) having a GAAP net worth of not
less
than $15,000,000 and (ii) which is a ▇▇▇▇▇▇ ▇▇▇/▇▇▇▇▇▇▇ Mac-approved company
in
good standing. Furthermore, in the event the Company transfers or otherwise
disposes of all or substantially all of its assets to an affiliate of the
Company, such affiliate shall satisfy the condition above, and shall also be
fully liable to the Purchaser for all of the Company’s obligations and
liabilities hereunder.
63
Section
8.03. Limitation
on Liability of Company and Others.
Neither
the Company nor any of the directors, officers, employees or agents of the
Company shall be under any liability to the Purchaser for any action taken
or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment, provided, however, that this provision
shall not protect the Company or any such person against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with any standard of care set forth in this Agreement
or
any other liability which would otherwise be imposed under this Agreement.
The
Company and any director, officer, employee or agent of the Company may rely
in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Company
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans
in
accordance with this Agreement and which in its opinion may involve it in any
expense or liability, provided, however, that the Company may, with the consent
of the Purchaser, undertake any such action which it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto. In such event, the Company shall be entitled to reimbursement from
the
Purchaser of the reasonable legal expenses and costs of such action, unless
any
such costs result from a breach of the Company’s representations and warranties
made herein or its failure to perform its obligations in strict compliance
with
this Agreement.
Section
8.04. Limitation
on Resignation and Assignment by Company.
The
Purchaser has entered into this Agreement with the Company and subsequent
purchasers will purchase the Mortgage Loans in reliance upon the independent
status of the Company, and the representations as to the adequacy of its
servicing facilities, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore,
the
Company shall neither assign this Agreement or the servicing rights hereunder
or
delegate its rights or duties hereunder (other than pursuant to Section 4.01)
or
any portion hereof or sell or otherwise dispose of all of its property or assets
without the prior written consent of the Purchaser, which consent shall not
be
unreasonably withheld.
The
Company shall not resign from the obligations and duties hereby imposed on
it
except by mutual consent of the Company and the Purchaser or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced
by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion
of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company’s responsibilities and obligations hereunder in the manner provided in
Section 12.01.
Without
in any way limiting the generality of this Section 8.04, in the event that
the
Company either shall assign this Agreement or the servicing responsibilities
hereunder or delegate its rights or duties hereunder (other than pursuant to
Section 4.01) or any portion hereof or sell or otherwise dispose of all or
substantially all of its property or assets, without the prior written consent
of the Purchaser, then the Purchaser shall have the right to terminate this
Agreement upon notice given as set forth in Section 10.01, without any payment
of any penalty or damages and without any liability whatsoever to the Company
or
any third party.
64
ARTICLE
IX
REMOVAL
OF MORTGAGE LOANS FROM AGREEMENT
Section
9.01. Removal
of Mortgage Loans from Inclusion Under this Agreement.
The
Purchaser and the Company agree that with respect to some or all of the Mortgage
Loans, the Purchaser, at its sole option, may effect Whole Loan Transfers,
Agency Transfers or Securitization Transactions, retaining the Company as the
servicer thereof or subservicer if a master servicer is employed, or as
applicable the “seller/servicer.” In the event that any Mortgage Loan
transferred pursuant to this Section 9.01 is rejected by the transferee, the
Company shall continue to service such rejected Mortgage Loan on behalf of
the
Purchaser in accordance with the terms and provisions of this
Agreement.
The
Company shall cooperate with the Purchaser in connection with each Whole Loan
Transfer, Agency Transfer or Securitization Transaction in accordance with
this
Section 9.01; provided that no such Whole Loan Transfer, Agency Transfer or
Securitization Transaction shall create a greater obligation or cost on the
part
of the Company than otherwise set forth in this Agreement. In connection
therewith:
(a) the
Company shall make all representations and warranties with respect to the
Mortgage Loans as of the Closing Date and with respect to the Company itself
as
of the closing date of each Whole Loan Transfer, Agency Transfer or
Securitization Transaction;
(b) the
Company shall negotiate in good faith and execute any seller/servicer agreements
required by the shelf registrant to effectuate the foregoing;
(c) the
Company shall make representations and warranties (1) that the Company has
serviced the Mortgage Loans in accordance with the terms of this Agreement,
provided accurate statements to the Purchaser pursuant to Section 5.02 of this
Agreement, and otherwise complied with all covenants and obligations hereunder
and, (2) that the Company has taken no action nor omitted to take any
required action the omission of which would have the effect of impairing any
mortgage insurance or guarantee on the Mortgage Loans;
(d) the
Company shall provide as applicable:
(i) any
and
all information and appropriate verification of information which may be
reasonably available to the Company, including the Company’s foreclosure,
delinquency experience and the Company’s underwriting standards, whether through
letters of its auditors and counsel or otherwise, as the Purchaser shall
request;
65
(ii) such
additional representations, warranties, covenants, opinions of counsel, letters
from auditors, and certificates of public officials or officers of the Company
as are reasonably believed necessary by the trustee, any rating agency or the
Purchaser, as the case may be, in connection with such Whole Loan Transfers,
Agency Transfers or Securitization Transactions. The Purchaser shall pay all
third party costs associated with the preparation of such information. The
Company shall execute any seller/servicer agreements required within a
reasonable period of time after receipt of such seller/servicer agreements
which
time shall be sufficient for the Company and the Company’s counsel to review
such seller/servicer agreements. Under this Agreement, the Company shall retain
a Servicing Fee for each Mortgage Loan at a Servicing Fee Rate;
(iii) at
any
time as required by any Rating Agency, such additional documents from the
related Retained Mortgage File to the Custodian as may be required by such
Rating Agency.
(e) in
connection with any Securitization Transaction occurring on or after January
1,
2006, the Company shall (1) within five (5) Business Days following request
by
the Purchaser or any Depositor, provide to the Purchaser and such Depositor
(or,
as applicable, cause each Third-Party Originator and each Subservicer to
provide), in writing and in form and substance reasonably satisfactory to the
Purchaser and such Depositor, the information and materials specified in
paragraphs (i), (ii), (iii) and (vii) of this subsection (e), and (2) as
promptly as practicable following notice to or discovery by the Company, provide
to the Purchaser and any Depositor (in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor) the information
specified in paragraph (iv) of this subsection (e).
(i) If
so
requested by the Purchaser or any Depositor, the Company shall provide such
information regarding (1) the Company, as originator of the Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
or
(2) each Third-Party Originator, and (3) as applicable, each Subservicer, as
is
requested for the purpose of compliance with Items 1103(a)(1), 1105, 1110,
1117
and 1119 of Regulation AB. Such information shall include, at a
minimum:
|
(A)
|
the
originator’s form of organization;
|
|
(B)
|
a
description of the originator’s origination program and how long the
originator has been engaged in originating residential mortgage loans,
which description shall include a discussion of the originator’s
experience in originating mortgage loans of a similar type as the
Mortgage
Loans; information regarding the size and composition of the originator’s
origination portfolio; and information that may be material, in the
good
faith judgment of the Purchaser or any Depositor, to an analysis
of the
performance of the Mortgage Loans, including the originators’
credit-granting or underwriting criteria for mortgage loans of similar
type(s) as the Mortgage Loans and such other information as the Purchaser
or any Depositor may reasonably request for the purpose of compliance
with
Item 1110(b)(2) of Regulation AB;
|
66
|
(C)
|
a
description of any material legal or governmental proceedings pending
(or
known to be contemplated) against the Company, each Third-Party Originator
and each Subservicer; and
|
|
(D)
|
a
description of any affiliation or relationship between the Company,
each
Third-Party Originator, each Subservicer and any of the following
parties
to a Securitization Transaction, as such parties are identified to
the
Company by the Purchaser or any Depositor in writing in advance of
a
Securitization Transaction:
|
|
(1)
|
the
sponsor;
|
|
(2)
|
the
depositor;
|
|
(3)
|
the
issuing entity;
|
|
(4)
|
any
servicer;
|
|
(5)
|
any
trustee;
|
|
(6)
|
any
originator;
|
|
(7)
|
any
significant obligor;
|
|
(8)
|
any
enhancement or support provider;
and
|
|
(9)
|
any
other material transaction
party.
|
(ii) If
so
requested by the Purchaser or any Depositor, the Company shall provide (or,
as
applicable, cause each Third-Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (1) the Company, if the Company is an originator of Mortgage
Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (2) each Third-Party Originator. Such Static Pool Information shall
be
prepared by the Company (or Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of Item 1105(a)(1)-(3)
of Regulation AB. To the extent that there is reasonably available to the
Company (or Third-Party Originator) Static Pool Information with respect to
more
than one mortgage loan type, the Purchaser or any Depositor shall be entitled
to
specify whether some or all of such information shall be provided pursuant
to
this paragraph. The content of such Static Pool Information may be in the form
customarily provided by the Company, and need not be customized for the
Purchaser or any Depositor. Such Static Pool Information for each vintage
origination year or prior securitized pool, as applicable, shall be presented
in
increments no less frequently than quarterly over the life of the mortgage
loans
included in the vintage origination year or prior securitized pool. The most
recent periodic increment must be as of a date no later than 135 days prior
to
the date of the prospectus or other offering document in which the Static Pool
Information is to be included or incorporated by reference. The Static Pool
Information shall be provided in an electronic format that provides a permanent
record of the information provided, such as a portable document format (pdf)
file, or other such electronic format reasonably required by the Purchaser
or
the Depositor, as applicable.
Promptly
following notice or discovery of a material error in Static Pool Information
provided pursuant to the immediately preceding paragraph (including an omission
to include therein information required to be provided pursuant to such
paragraph), the Company shall provide corrected Static Pool Information to
the
Purchaser or any Depositor, as applicable, in the same format in which Static
Pool Information was previously provided to such party by the
Company.
67
If
so
requested by the Purchaser or any Depositor, the Company shall provide (or,
as
applicable, cause each Third-Party Originator to provide), at the expense of
the
requesting party (to the extent of any additional incremental expense associated
with delivery pursuant to this Agreement), such agreed-upon procedures letters
of certified public accountants reasonably acceptable to the Purchaser or
Depositor, as applicable, pertaining to Static Pool Information relating to
prior securitized pools for securitizations closed on or after January 1, 2006
or, in the case of Static Pool Information with respect to the Company’s or
Third-Party Originator’s originations or purchases, to calendar months
commencing January 1, 2006, as the Purchaser or such Depositor shall reasonably
request. Such statements and letters shall be addressed to and be for the
benefit of such parties as the Purchaser or such Depositor shall designate,
which may include, by way of example, any sponsor, any Depositor and any broker
dealer acting as underwriter, placement agent or initial purchaser with respect
to a Securitization Transaction. Any such statement or letter may take the
form
of a standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
(iii) If
so
requested by the Purchaser or any Depositor, the Company shall provide such
information regarding the Company, as servicer of the Mortgage Loans, and each
Subservicer (each of the Company and each Subservicer, for purposes of this
paragraph, a “Servicer”), as is requested for the purpose of compliance with
Items 1108 of Regulation AB. Such information shall include, at a
minimum:
|
(A)
|
the
Servicer’s form of organization;
|
|
(B)
|
a
description of how long the Servicer has been servicing residential
mortgage loans; a general discussion of the Servicer’s experience in
servicing assets of any type as well as a more detailed discussion
of the
Servicer’s experience in, and procedures for, the servicing function it
will perform under this Agreement and any Reconstitution Agreements;
information regarding the size, composition and growth of the Servicer’s
portfolio of residential mortgage loans of a type similar to the
Mortgage
Loans and information on factors related to the Servicer that may
be
material, in the good faith judgment of the Purchaser or any Depositor,
to
any analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable, including, without
limitation:
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68
|
(1)
|
whether
any prior securitizations of mortgage loans of a type similar to
the
Mortgage Loans involving the Servicer have defaulted or experienced
an
early amortization or other performance triggering event because
of
servicing during the three-year period immediately preceding the
related
Securitization Transaction;
|
|
(2)
|
the
extent of outsourcing the Servicer
utilizes;
|
|
(3)
|
whether
there has been previous disclosure of material noncompliance with
the
applicable Servicing Criteria with respect to other securitizations
of
residential mortgage loans involving the Servicer as a servicer during
the
three-year period immediately preceding the related Securitization
Transaction;
|
|
(4)
|
whether
the Servicer has been terminated as servicer in a residential mortgage
loan securitization, either due to a servicing default or to application
of a servicing performance test or trigger;
and
|
|
(5)
|
such
other information as the Purchaser or any Depositor may reasonably
request
for the purpose of compliance with Item 1108(b)(2) of Regulation
AB;
|
|
(C)
|
a
description of any material changes during the three-year period
immediately preceding the related Securitization Transaction to the
Servicer’s policies or procedures with respect to the servicing function
it will perform under this Agreement and any Reconstitution Agreements
for
mortgage loans of a type similar to the Mortgage
Loans;
|
|
(D)
|
information
regarding the Servicer’s financial condition, to the extent that there is
a material risk that an adverse financial event or circumstance involving
the Servicer could have a material adverse effect on the performance
by
the Company of its servicing obligations under this Agreement or
any
Reconstitution Agreement;
|
|
(E)
|
information
regarding advances made by the Servicer on the Mortgage Loans and
the
Servicer’s overall servicing portfolio of residential mortgage loans for
the three-year period immediately preceding the related Securitization
Transaction, which may be limited to a statement by an authorized
officer
of the Servicer to the effect that the Servicer has made all advances
required to be made on residential mortgage loans serviced by it
during
such period, or, if such statement would not be accurate, information
regarding the percentage and type of advances not made as required,
and
the reasons for such failure to
advance;
|
69
|
(F)
|
a
description of the Servicer’s processes and procedures designed to address
any special or unique factors involved in servicing loans of a similar
type as the Mortgage Loans;
|
|
(G)
|
a
description of the Servicer’s processes for handling delinquencies,
losses, bankruptcies and recoveries, such as through liquidation
of
mortgaged properties, sale of defaulted mortgage loans or workouts;
and
|
|
(H)
|
information
as to how the Servicer defines or determines delinquencies and
charge-offs, including the effect of any grace period, re-aging,
restructuring, partial payments considered current or other practices
with
respect to delinquency and loss
experience.
|
(iv) If
so
requested by the Purchaser or any Depositor for the purpose of satisfying its
reporting obligation under the Exchange Act with respect to any class of
asset-backed securities, the Company shall (or shall cause each Subservicer
and
Third-Party Originator to) (1) notify the Purchaser and any Depositor in writing
of (A) any material litigation or governmental proceedings pending against
the
Company, any Subservicer or any Third-Party Originator and (B) any affiliations
or relationships that develop following the closing date of a Securitization
Transaction between the Company, any Subservicer or any Third-Party Originator
and any of the parties specified in Section 9.01(e)(i)(D) (and any other parties
identified in writing by the requesting party) with respect to such
Securitization Transaction, and (2) provide to the Purchaser and any Depositor
a
description of such proceedings, affiliations or relationships.
(v) As
a
condition to the succession to the Company or any Subservicer as servicer or
Subservicer under this Agreement or any Reconstitution Agreement by any Person
(i) into which the Company or such Subservicer may be merged or consolidated,
or
(ii) which may be appointed as a successor to the Company or any Subservicer,
the Company shall provide to the Purchaser and any Depositor, at least fifteen
(15) calendar days prior to the effective date of such succession or
appointment, (x) written notice to the Purchaser and any Depositor of such
succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, all information
reasonably requested by the Purchaser or any Depositor in order to comply with
is reporting obligation under Item 6.02 of Form 8-K with respect to any class
of
asset-backed securities.
70
(vi) (A) The
Company shall be deemed to represent to the Purchaser and to any Depositor,
as
of the date on which information is first provided to the Purchaser under this
Section 9.01(e) that, except as disclosed in writing to the Purchaser or such
Depositor prior to such date: (1) the Company is not aware and has not received
notice that any default, early amortization or other performance triggering
event has occurred as to any other securitization due to any act or failure
to
act of the Company; (2) the Company has not been terminated as servicer in
a
residential mortgage loan securitization, either due to a servicing default
or
to application of a servicing performance test or trigger; (3) no material
noncompliance with the applicable Servicing Criteria with respect to other
securitizations of residential mortgage loans involving the Company as servicer
has been disclosed or reported by the Company; (4) no material changes to the
Company’s policies or procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution Agreement for mortgage
loans
of a type similar to the Mortgage Loans have occurred during the three-year
period immediately preceding the related Securitization Transaction; (5) there
are no aspects of the Company’s financial condition that could have a material
adverse effect on the performance by the Company of its servicing obligations
under this Agreement or any Reconstitution Agreement; (6) there are no material
legal or governmental proceedings pending (or known to be contemplated) against
the Company, any Subservicer or any Third-Party Originator; and (7) there are
no
affiliations, relationships or transactions relating to the Company, any
Subservicer or any Third-Party Originator with respect to any Securitization
Transaction and any party thereto identified by the related Depositor of a
type
described in Item 1119 of Regulation AB.
(B) If
so
requested by the Purchaser or any Depositor on any date following the date
on
which information is first provided to the Purchaser or any Depositor under
this
Section 9.01(e), the Company shall, within five (5) Business Days following
such
request, confirm in writing the accuracy of the representations and warranties
set forth in sub clause (A) above or, if any such representation and warranty
is
not accurate as of the date of such request, provide reasonably adequate
disclosure of the pertinent facts, in writing, to the requesting
party.
(vii) In
addition to such information as the Company, as servicer, is obligated to
provide pursuant to other provisions of this Agreement, if so requested by
the
Purchaser or any Depositor, the Company shall provide such information
reasonably available to the Company regarding the performance or servicing
of
the Mortgage Loans as is reasonably required to facilitate preparation of
distribution reports in accordance with Item 1121 of Regulation AB.
(f) The
Company shall indemnify the Purchaser, each affiliate of the Purchaser, and
each
of the following parties participating in a Securitization Transaction: each
sponsor and issuing entity; each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission
with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction; each broker dealer acting as underwriter,
placement agent or initial purchaser, each Person who controls any of such
parties or the Depositor (within the meaning of Section 15 of the Securities
Act
and Section 20 of the Exchange Act); and the respective present and former
directors, officers, employees and agents of each of the foregoing and of the
Depositor, and shall hold each of them harmless from and against any losses,
damages, penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain arising out of or based upon:
71
(i) (A) any
untrue statement of a material fact contained or alleged to be contained in
any
information, report, certification, accountants’ letter or other material
provided under Sections 4.29, 6.04(ii), 6.06, 9.01(d) and (e) by or on behalf
of
the Company, or provided under Sections 4.29, 6.04(ii), 6.06, 9.01(d) and (e)
by
or on behalf of any Subservicer, Subcontractor or Third-Party Originator
(collectively, the “Company Information”), or (B) the omission or alleged
omission to state in the Company Information a material fact required to be
stated in the Company Information or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided,
by way of clarification, that
clause (B) of this paragraph shall be construed solely by reference to the
Company Information and not to any other information communicated in connection
with a sale or purchase of securities, without regard to whether the Company
Information or any portion thereof is presented together with or separately
from
such other information;
(ii) any
failure by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under Sections 4.29, 6.04(ii),
6.06, 9.01(d) and (e), including any failure by the Company to identify any
Subcontractor “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB; or
(iii) any
breach by the Company of a representation or warranty set forth in Section
9.01(e)(vi)(A) or in a writing furnished pursuant to Section 9.01(e)(vi)(B)
and
made as of a date prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by such closing date,
or any breach by the Company of a representation or warranty in a writing
furnished pursuant to Section 9.01(e)(vi)(B) to the extent made as of a date
subsequent to such closing date.
In
the
case of any failure of performance described in sub-clause (ii) of this Section
9.01(f), the Company shall promptly reimburse the Purchaser, any Depositor,
as
applicable, and each Person responsible for the preparation, execution or filing
of any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to
Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by the Company, any Subservicer,
any
Subcontractor or any Third-Party Originator.
(g) The
Purchaser and each Person who controls the Purchaser (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act) shall
indemnify the Company, each affiliate of the Company, each Person who controls
any of such parties or the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act) and the respective present
and former directors, officers, employees and agents of each of the foregoing
and of the Company, and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
72
(i) (A) any
untrue statement of a material fact contained or alleged to be contained in
any
offering materials related to a Securitization Transaction, including without
limitation the registration statement, prospectus, prospectus supplement, any
private placement memorandum, any offering circular, any computational
materials, and any amendments or supplements to the foregoing (collectively,
the
“Securitization Materials”) or (B) the omission or alleged omission to state in
the Securitization Materials a material fact required to be stated in the
Securitization Materials or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
but only to the extent that such untrue statement or alleged untrue statement
or
omission or alleged omission is other than a statement or omission arising
out
of, resulting from, or based upon the Company Information.
(h) the
Company shall cooperate with the Purchaser in servicing the Mortgage Loans
in
accordance with the usual and customary requirements of any credit enhancement,
risk management and other service providers and shall otherwise cooperate with
the Purchaser in connection with such third party service providers and the
provision of third party services relating to a Securitization Transaction;
provided, however, that such requirements are reasonably acceptable to the
Company and pose no greater risk, obligation or expense to the Company than
otherwise set forth in this Agreement. Any additional costs and/or expenses
will
be paid by the requesting party;
(i) with
respect to any Mortgage Loans that are subject to a Securitization Transaction
occurring on or before December 31, 2005, in which the filing of a
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification directly with the Commission is required, by
February 28, 2006, or in connection with any additional ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification required to be filed upon thirty (30) days written request, an
officer of the Seller shall execute and deliver an Officer’s Certificate
substantially in the form attached hereto as Exhibit J, to the Purchaser, any
master servicer or any depositor for the benefit of each such entity and such
entity’s affiliates and the officers, directors and agents of such entity and
such entity’s affiliates, and shall indemnify any such entity or persons arising
out of any breach of Seller’s obligations relating thereto as provided in such
Officer’s Certificate.
The
Purchaser and the Company acknowledge and agree that the purpose of Section
9.01(e) is to facilitate compliance by the Purchaser and any Depositor with
the
provisions of Regulation AB and related rules and regulations of the Commission.
Neither the Purchaser nor any Depositor shall exercise its right to request
delivery of information or other performance under these provisions other than
in good faith, or for purposes other than compliance with the Securities Act,
the Exchange Act and the rules and regulations of the Commission thereunder.
The
Company acknowledges that interpretations of the requirements of Regulation
AB
may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Purchaser or any Depositor in good faith for delivery
of
information under these provisions on the basis of evolving interpretations
of
Regulation AB. In connection with any Securitization Transaction, the Company
shall cooperate fully with the Purchaser to deliver to the Purchaser (including
any of its assignees or designees) and any Depositor, any and all statements,
reports, certifications, records and any other information necessary in the
good
faith determination of the Purchaser or any Depositor to permit the Purchaser
or
such Depositor to comply with the provisions of Regulation AB, together with
such disclosures relating to the Company, any Subservicer, any Third-Party
Originator and the Mortgage Loans, or the servicing of the Mortgage Loans,
reasonably believed by the Purchaser or any Depositor to be necessary in order
to effect such compliance.
73
In
the
event the Purchaser has elected to have the Company hold record title to the
Mortgages, prior to the Reconstitution Date the Company shall prepare an
Assignment of Mortgage in blank for each Mortgage Loan that is a part of a
Whole
Loan Transfer or Agency Transfer or prepare an Assignment of Mortgage in blank
or to the trustee from the Company acceptable to the trustee for each Mortgage
Loan that is part of a Securitization Transaction. The Purchaser shall pay
all
preparation and recording costs associated therewith if the Assignments of
Mortgage have been previously prepared and recorded in Purchaser’s name. The
Company shall execute each Assignment of Mortgage, track such Assignments of
Mortgage to ensure they have been recorded and deliver them as required by
the
trustee upon the Company’s receipt thereof. Additionally, the Company shall
prepare and execute, at the direction of the Purchaser, any note endorsements
in
connection with any and all seller/servicer agreements. If required at any
time
by a rating agency, Purchaser or successor purchaser in connection with any
Whole Loan Transfer, Agency Transfer or Securitization Transaction, the Company
shall deliver such additional document from its Retained Mortgage File within
ten (10) days to the Custodian, successor purchaser or other designee of the
Purchaser as said rating agency, Purchaser or successor purchaser may
require.
All
Mortgage Loans (i) not sold or transferred pursuant to Whole Loan Transfers,
Agency Transfers or Securitization Transactions or (ii) that are subject to
a
Securitization for which the related trust is terminated for any reason, shall
remain subject to this Agreement and shall continue to be serviced in accordance
with the terms of this Agreement and with respect thereto this Agreement shall
remain in full force and effect.
ARTICLE
X
DEFAULT
Section
10.01. Events
of Default.
Each
of
the following shall constitute an Event of Default on the part of the
Company:
(i) any
failure by the Company to remit to the Purchaser any payment required to be
made
under the terms of this Agreement which continues unremedied for a period of
one
Business Day after the date upon which written notice of such failure, requiring
the same to be remedied, shall have been given to the Company by the Purchaser;
or
(ii) failure
by the Company duly to observe or perform in any material respect any other
of
the covenants or agreements on the part of the Company set forth in this
Agreement or in the Custody Agreement which continues unremedied for a period
of
thirty days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Company by the Purchaser
or by the Custodian; or
74
(iii) failure
by the Company to maintain its license to do business in any jurisdiction where
the Mortgaged Property is located if such license is required; or
(iv) a
decree
or order of a court or agency or supervisory authority having jurisdiction
for
the appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, including bankruptcy, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Company and such decree or order shall
have
remained in force undischarged or unstayed for a period of 60 days;
or
(v) the
Company shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Company or of or
relating to all or substantially all of its property; or
(vi) the
Company shall admit in writing its inability to pay its debts generally as
they
become due, file a petition to take advantage of any applicable insolvency,
bankruptcy or reorganization statute, make an assignment for the benefit of
its
creditors, voluntarily suspend payment of its obligations or cease its normal
business operations for three Business Days; or
(vii) the
Company ceases to meet the qualifications of a ▇▇▇▇▇▇ ▇▇▇/▇▇▇▇▇▇▇ Mac servicer;
or
(viii) the
Company attempts to assign its right to servicing compensation hereunder or
to
assign this Agreement or the servicing responsibilities hereunder or to delegate
its duties hereunder or any portion thereof in violation of Section
8.04.
If
the
Company obtains knowledge of an Event of Default, the Company shall promptly
notify the Purchaser. In each and every such case, so long as an Event of
Default shall not have been remedied, in addition to whatever rights the
Purchaser may have at law or equity to damages, including injunctive relief
and
specific performance, the Purchaser, by notice in writing to the Company, may
terminate all the rights and obligations of the Company under this Agreement
and
in and to the Mortgage Loans and the proceeds thereof.
Upon
receipt by the Company of such written notice, all authority and power of the
Company under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant
to
Section 12.01. Upon written request from any Purchaser, the Company shall
prepare, execute and deliver to the successor entity designated by the Purchaser
any and all documents and other instruments, place in such successor’s
possession all Retained Mortgage Files, and do or cause to be done all other
acts or things necessary or appropriate to effect the purposes of such notice
of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, all at the Company’s
sole expense. The Company shall cooperate with the Purchaser and such successor
in effecting the termination of the Company’s responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by
the Company to the Custodial Account or Subsidy Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
75
Section
10.02. Waiver
of Defaults.
By
a
written notice, the Purchaser may waive any default by the Company in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so
waived.
ARTICLE
XI
TERMINATION
Section
11.01. Termination.
This
Agreement shall terminate upon either: (i) the later of the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or the disposition of any REO Property with respect to the last Mortgage
Loan and the remittance of all funds due hereunder; or (ii) mutual consent
of
the Company and the Purchaser in writing. The representations and warranties
and
indemnification provisions contained herein shall survive the termination of
this Agreement.
Upon
written request from the Purchaser in connection with any such termination,
the
Company shall prepare, execute and deliver, any and all documents and other
instruments, place in the Purchaser’s possession all Retained Mortgage Files,
and do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer
and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise, at the Company’s sole expense. The Company agrees to cooperate with
the Purchaser and such successor in effecting the termination of the Company’s
responsibilities and rights hereunder as servicer, including, without
limitation, the transfer to such successor for administration by it of all
cash
amounts which shall at the time be credited by the Company to the Custodial
Account or Subsidy Account or Escrow Account or thereafter received with respect
to the Mortgage Loans.
Section
11.02. Termination
Without Cause.
The
Purchaser may terminate, at its sole option, any rights the Company may have
hereunder, without cause as provided in this Section 11.02. Any such notice
of
termination shall be in writing and delivered to the Company by registered
mail
as provided in Section 12.05.
The
Company shall be entitled to receive, as liquidated damages, upon the transfer
of the servicing rights, an amount equal to 2.25% of the
aggregate outstanding principal amount of the transferred Mortgage Loans as
of
the termination date.
76
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
Section
12.01. Successor
to Company.
Prior
to
termination of the Company’s responsibilities and duties under this Agreement
pursuant to Sections 8.04, 10.01, 11.01 (ii) or pursuant to Section 11.02 the
Purchaser shall, (i) succeed to and assume all of the Company’s
responsibilities, rights, duties and obligations under this Agreement, or (ii)
appoint a successor having the characteristics set forth in Section 8.02 and
which shall succeed to all rights and assume all of the responsibilities, duties
and liabilities of the Company under this Agreement prior to the termination
of
Company’s responsibilities, duties and liabilities under this Agreement. In
connection with such appointment and assumption, the Purchaser may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree. In the event that the Company’s
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to the aforementioned sections, the Company shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Company pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01
and shall in no event relieve the Company of the representations and warranties
made pursuant to Sections 3.01 and 3.02 and the remedies available to the
Purchaser under Section 3.03, it being understood and agreed that the provisions
of such Sections 3.01, 3.02, 3.03 and 8.01 shall be applicable to the Company
notwithstanding any such sale, assignment, resignation or termination of the
Company, or the termination of this Agreement.
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Company and to the Purchaser an instrument accepting such appointment,
wherein the successor shall make the representations and warranties set forth
in
Section 3.01, except for subsection (h) with respect to the sale of the Mortgage
Loans and subsections (i) and (k) thereof, whereupon such successor shall become
fully vested with all the rights, powers, duties, responsibilities, obligations
and liabilities of the Company, with like effect as if originally named as
a
party to this Agreement. Any termination or resignation of the Company or
termination of this Agreement pursuant to Sections 8.04, 10.01, 11.01 or 11.02
shall not affect any claims that any Purchaser may have against the Company
arising out of the Company’s actions or failure to act prior to any such
termination or resignation.
The
Company shall deliver promptly to the successor servicer the funds in the
Custodial Account, Subsidy Account and Escrow Account and all Retained Mortgage
Files and related documents and statements held by it hereunder and the Company
shall account for all funds and shall execute and deliver such instruments
and
do such other things as may reasonably be required to more fully and
definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Company.
77
If
the
Company is terminated pursuant to Sections 8.04 and 10.01, the Purchaser shall
be entitled to be reimbursed from the Company for all costs associated with
the
transfer of servicing, including, without limitation, any costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Purchaser to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Purchaser to service the Mortgage Loans properly and
effectively.
Upon
a
successor’s acceptance of appointment as such, the Company shall notify by mail
the Purchaser of such appointment in accordance with the procedures set forth
in
Section 12.05.
Section
12.02. Amendment.
This
Agreement may be amended from time to time by written agreement signed by the
Company and the Purchaser.
Section
12.03. 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.
Each
of
the Company and the Purchaser hereby knowingly, voluntarily and intentionally
waives any and all rights it may have to a trial by jury in respect of any
litigation based on, or arising out of, under, or in connection with this
Agreement, or any other documents and instruments executed in connection
herewith, or any course of conduct, course of dealing, statements (whether
oral
or written), or actions of the Company or the Purchaser. This provision is
a
material inducement for the Purchaser to enter into this Agreement.
Section
12.04. Arbitration.
In
the
event a claim or controversy arises concerning the interpretation or enforcement
of the terms of this Agreement, the Purchaser and the Company agree that such
claim or controversy may be settled by final, binding arbitration if the
Purchaser and the Company, as applicable, consent to such arbitration at the
time such claim or controversy arises which consent may be withheld by the
Purchaser or the Company in each party’s sole discretion.
Section
12.05. Duration
of Agreement.
This
Agreement shall continue in existence and effect until terminated as herein
provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.
Section
12.06. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
78
(i) if
to the
Company with respect to servicing issues:
▇▇▇▇▇
Fargo Bank, N.A.
1
Home
Campus
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇, MAC X2401-042
Fax:
515/▇▇▇-▇▇▇▇
if
to the
Company with respect to all other issues:
▇▇▇▇▇
Fargo Bank, N.A.
▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Structured Finance Manager, MAC X3906-012
Fax:
(▇▇▇)▇▇▇-▇▇▇▇
In
each
instance with a copy to:
▇▇▇▇▇
Fargo Bank, N.A.
1
Home Campus
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
General Counsel MAC X2401-06T
or
such
other address as may hereafter be furnished to the Purchaser in writing by
the
Company;
(ii) if
to
Purchaser:
Bank
of America, National Association
Hearst
Tower
NC1-027-21-04
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Managing Director
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
or
such
other address as may hereafter be furnished to the Company in writing by the
Purchaser;
Section
12.07. Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this
Agreement.
79
Section
12.08. Relationship
of Parties.
Nothing
herein contained shall be deemed or construed to create a partnership or joint
venture between the parties hereto and the services of the Company shall be
rendered as an independent contractor and not as agent for the
Purchaser.
Section
12.09. Execution;
Successors and Assigns.
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. Subject to Section 8.04, this Agreement shall inure
to
the benefit of and be binding upon the Company and the Purchaser and their
respective successors and assigns.
Section
12.10. Recordation
of Assignments of Mortgage.
To
the
extent permitted by applicable law, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any
or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected at the
Company’s expense in the event recordation is either necessary under applicable
law or requested by the Purchaser at its sole option.
Section
12.11. Assignment
by Purchaser.
The
Purchaser shall have the right, without the consent of the Company to assign,
in
whole or in part, its interest under this Agreement with respect to some or
all
of the Mortgage Loans, and designate any person to exercise any rights of the
Purchaser hereunder, by executing an Assignment, Assumption and Recognition
Agreement, and the assignee or designee shall accede to the rights and
obligations hereunder of the Purchaser with respect to such Mortgage Loans.
All
references to the Purchaser in this Agreement shall be deemed to include its
assignee or designee. In the event the Purchaser assigns this Agreement, and
the
assignee assumes any and all of the Purchaser’s obligations hereunder, the
Company acknowledges and agrees to look solely to such assignee, and not the
Purchaser, for performance of the obligations so assumed and the Purchaser
shall
be relieved from any liability to the Company with respect thereto.
Section
12.12. Solicitation
of Mortgagor.
Neither
party shall, after the related Closing Date, take any action to solicit the
refinancing of any Mortgage Loan. It is understood and agreed that neither
(i)
promotions undertaken by either party or any affiliate which are directed to
the
general public at large, including, without limitation, mass mailings based
upon
commercially acquired mailing lists, newspaper, radio, television advertisements
nor (ii) serving the refinancing needs of a Mortgagor who, without solicitation,
contacts either party in connection with the refinance of such Mortgage or
Mortgage Loan, shall constitute solicitation under this Section.
80
Section
12.13. Further
Agreements.
The
Purchaser and the Company each agree to execute and deliver to the other such
additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement.
Section
12.14. Confidential
Information.
The
Company shall keep confidential and shall not divulge to any party, without
the
Purchaser’s prior written consent, the price paid by the Purchaser for the
Mortgage Loans, except to the extent that it is reasonable and necessary for
the
Company to do so in working with legal counsel, auditors, taxing authorities
or
other governmental agencies.
Section
12.15. Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts shall
constitute one and the same instrument.
Section
12.16. Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
Section
12.17. General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
81
(a) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender herein
shall be deemed to include the other gender;
(b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with GAAP;
(c) references
herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
(d) a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the
words
“herein,” “hereof,” “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(f) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
Section
12.18. Reproduction
of Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(a) consents, waivers and modifications which may hereafter be executed,
(b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
Section
12.19. Buydown
Loan Aggregate Limitation.
The
aggregate outstanding principal balance of all Buydown Mortgage Loans in a
Loan
Package (the “Actual Buydown Balance”) shall not, at any time, be greater than
an amount equal to one-half percent (1/2%) of the aggregate outstanding
principal balance of all Mortgage Loans in such Loan Package (the “Buydown
Limit”). In the event that, at any time, the Actual Buydown Balance is greater
than an amount equal to the Buydown Limit, the Company shall, upon the request
of the Purchaser, repurchase at the Repurchase Price within (10) Business Days
of such request any Buydown Mortgage Loan(s) in such Loan Package; provided,
however, that the Actual Buydown Balance immediately after such repurchase
shall
be no greater than the Buydown Loan Limit. The Company shall promptly provide
notice to the Purchaser whenever the Actual Buydown Balance is greater than
the
Buydown Limit.
[Intentionally
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82
IN
WITNESS WHEREOF, the Company and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
day and year first above written.
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BANK
OF AMERICA, NATIONAL
ASSOCIATION,
Purchaser
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▇▇▇▇▇
FARGO BANK, N.A.
Company
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By:
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/s/
▇▇▇▇▇ ▇. Good
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By:
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/s/
▇▇▇▇▇▇ ▇▇▇▇
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Name:
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▇▇▇▇▇
▇. Good
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Name:
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▇▇▇▇▇▇
▇▇▇▇
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Title:
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Vice
President
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Title:
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Vice
President
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1
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STATE
OF
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)
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)
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ss:
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COUNTY
OF ___________
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)
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On
the
_____ day of _______________, 20___ before me, a Notary Public in and for said
State, personally appeared ______________, known to me to be ___________ of
▇▇▇▇▇ Fargo Bank, N.A., the national banking association that executed the
within instrument and also known to me to be the person who executed it on
behalf of said bank, and acknowledged to me that such bank executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
Notary
Public
My
Commission expires
2
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STATE
OF NORTH
CAROLINA
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)ss:
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COUNTY
OF MECKLENBURG
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)
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On
the
_____ day of _______________, 20___ before me, a Notary Public in and for said
State, personally appeared _____________________________________, known to
me to
be the ______________________________ of Bank of America, National Association,
the national banking association that executed the within instrument and also
known to me to be the person who executed it on behalf of said bank, and
acknowledged to me that such bank executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
Notary
Public
My
Commission expires
3
EXHIBIT
A
FORM
OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On
this _____ day of __________ 20___, for
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, _______________________
(the “Seller”)
as the Seller under that certain Amended and Restated Master Mortgage Loan
Purchase Agreement, (“Purchase Agreement”) and as the Company under that certain
Amended and Restated Master Seller’s Warranties and Servicing Agreement (the
“Servicing Agreement”) each dated as of December 1, 2005, (collectively, the
“Agreements”)
does hereby sell, transfer, assign, set over and convey to
___________________________ as the Purchaser (the “Purchaser”)
under the Purchase Agreement, and Purchaser hereby accepts from Seller, without
recourse, but subject to the terms of the Agreements, all right, title and
interest of, in and to each of the Mortgage Loans listed on the related Mortgage
Loan Schedule attached hereto as Exhibit
A,
together with the Custodial Mortgage Files and all rights and obligations
arising under the documents contained therein. Pursuant to Section 2.03 of
the
Servicing Agreement, the Seller has delivered to the Custodian the documents
required
to be delivered under the Agreements
for each Mortgage Loan to be purchased. The Servicing Files and the Retained
Mortgage Files retained by the Seller pursuant to Section 2.01 of the Servicing
Agreement shall be appropriately marked to clearly reflect the sale of the
related Mortgage Loans to the Purchaser.
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Agreements.
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Purchaser
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Company
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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Exhibit
A-1
EXHIBIT
A
Mortgage
Loan Schedule
Exhibit
A-1
EXHIBIT
B
FORM
OF
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
____________,
20__
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT (this “Agreement”), dated
___________________, 20__ among _________________, a _________________
corporation having an office at _________________ (“Assignor”) and
_________________, having an office at _________________ (“Assignee”) and ▇▇▇▇▇
Fargo Bank, N.A. (the “Company”), having an office at ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇:
For
and
in consideration of the sum of one dollar ($1.00) and other valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
and
of the mutual covenants herein contained, the parties hereto hereby agree as
follows:
1. The
Assignor hereby grants, transfers and assigns to Assignee all of the right,
title and interest of Assignor, as Purchaser, in, to and under (i) that certain
Seller’s Warranties and Servicing Agreement (the “Seller’s Warranties and
Servicing Agreement”), dated as of _________________, by and between
_________________ (the “Purchaser”), and _________________ (the “Company”), (ii)
that certain Mortgage Loan Purchase Agreement (the “Mortgage Loan Purchase
Agreement” and, together with the Seller’s Warranties and Servicing Agreement,
the “Purchase and Servicing Agreements”), dated as of _______, by and between
the Purchaser and the Company, (iii) the mortgage loans delivered thereunder
by
the Company to the Assignor set forth on Exhibit
1
attached
hereto (the “Mortgage Loans”), and (iv) that certain Custody Agreement (the
“Custody Agreement” and, together with the Purchase and Servicing Agreements,
the “Assigned Agreements”), dated as of _________________, by and among the
Purchaser and _________________ (the “Custodian”).
Simultaneously
with the execution of this Agreement, on the date hereof, the Assignee shall
pay
to the Assignor for each Mortgage Loan the purchase price as calculated pursuant
to the [Commitment Letter], dated as of _______, 200_ (the “[Commitment
Letter]”), by and between the Assignee and the Assignor. The Assignee shall pay
the purchase price payable under the Commitment Letter by wire transfer of
immediately available funds to the account specified by the Assignor. The
Assignee shall be entitled to (i) all payments and other recoveries of principal
on the Mortgage Loans received after ______, 200_ or such other date mutually
agreeable to the Assignor and the Assignee (the “Mortgage Loans Cut-off Date”)
and (ii) all payments of interest on the Mortgage Loans at the related Mortgage
Loan Remittance Rate.
2. The
Assignor warrants and represents to, and covenants with, the Assignee
that:
a. The
Assignor is the lawful owner of the Mortgage Loans with the full right to
transfer the Mortgage Loans free from any and all claims and encumbrances
whatsoever;
Exhibit
B-1
b. The
Assignor has not received notice of, and has no knowledge of, any offsets,
counterclaims or other defenses available to the Company with respect to the
Assigned Agreements or the Mortgage Loans;
c. The
Assignor has not waived or agreed to any waiver under, or agreed to any
amendment or other modification of, the Assigned Agreements, the Custody
Agreement or the Mortgage Loans, including without limitation the transfer
of
the servicing obligations under the Seller’s Warranties and Servicing Agreement.
The Assignor has no knowledge of, and has not received notice of, any waivers
under or amendments or other modifications of, or assignments of rights or
obligations under, the Purchase and Servicing Agreements or the Mortgage Loans;
and
d. Neither
the Assignor nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of the Mortgage Loans, any interest
in
the Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security with, any person in any manner, or made
any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act of 1933 (the “1933 Act”) or which would render
the disposition of the Mortgage Loans a violation of Section 5 of the 1933
Act
or require registration pursuant thereto.
3. That
Assignee warrants and represent to, and covenants with, the Assignor and the
Company pursuant to Section 12.10 of the Seller’s Warranties and Servicing
Agreement that:
a. The
Assignee agrees to be bound, as Purchaser, by all of the terms, covenants and
conditions of the Seller’s Warranties and Servicing Agreement, the Mortgage
Loans and the Custody Agreement, and from and after the date hereof, the
Assignee assumes for the benefit of each of the Company and the Assignor all
of
the Assignor’s obligations as purchaser thereunder;
b. The
Assignee understands that the Mortgage Loans have not been registered under
the
1933 Act or the securities laws of any state;
c. The
purchase price being paid by the Assignee for the Mortgage Loans are in excess
of $250,000.00 and will be paid by cash remittance of the full purchase price
within 60 days of the sale;
d. The
Assignee is acquiring the Mortgage Loans for investment for its own account
only
and not for any other person. In this connection, neither the Assignee nor
any
person authorized to act therefor has offered to sell the Mortgage Loans by
means of any general advertising or general solicitation within the meaning
of
Rule 502(c) of U.S. Securities and Exchange Commission Regulation D, promulgated
under the 1933 Act;
e. The
Assignee considers itself a substantial sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
Exhibit
B-2
f. The
Assignee has been furnished with all information regarding the Mortgage Loans
that it has requested from the Assignor or the Company;
g. Neither
the Assignee nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or
accepted a transfer, pledge or other disposition of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security from, or otherwise
approached or negotiated with respect to the Mortgage Loans, any interest in
the
Mortgage Loans or any other similar security with, any person in any manner
which would constitute a distribution of the Mortgage Loans under the 1933
Act
or which would render the disposition of the Mortgage Loans a violation of
Section 5 of the 1933 Act or require registration pursuant thereto, nor will
it
act, nor has it authorized or will it authorize any person to act, in such
manner with respect to the Mortgage Loans; and
h. Either
(1) the Assignee is not an employee benefit plan (“Plan”) within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) or a plan (also a “Plan”) within the meaning of section 4975(e)(1) of
the Internal Revenue Code of 1986 (“Code”), and the Assignee is not directly or
indirectly purchasing the Mortgage Loans on behalf of, investment manager of,
as
named fiduciary of, as Trustee of, or with assets of, a Plan; or (2) the
Assignee’s purchase of the Mortgage Loans will not result in a prohibited
transaction under section 406 of ERISA or section 4975 of the Code.
i. The
Assignee’s address for purposes of all notices and correspondence related to the
Mortgage Loans and the Assigned Agreements is:
Attention:
The
Assignee’s wire transfer instructions for purposes of all remittances and
payments related to the Mortgage Loans and the Seller’s Warranties and Servicing
Agreement is:
Attention:
Exhibit
B-3
4. From
and
after the date hereof, the Company shall note the transfer of the Mortgage
Loans
to the Assignee in its books and records, the Company shall recognize the
Assignee as the owner of the Mortgage Loans and the Company shall service the
Mortgage Loans for the benefit of the Assignee pursuant to the Seller’s
Warranties and Servicing Agreement, the terms of which are incorporated herein
by reference. It is the intention of the Assignor, the Company and the Assignee
that the Assigned Agreements shall be binding upon and inure to the benefit
of
the Company and the Assignee and their respective successors and
assigns.
[Signatures
Follow]
Exhibit
B-4
IN
WITNESS WHEREOF, the parties have caused this Assignment, Assumption and
Recognition Agreement to be executed by their duly authorized officers as of
the
date first above written.
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Assignor
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Assignee
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By:
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By:
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Name:
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Name:
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Its:
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Its:
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Taxpayer
Identification No.:
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Taxpayer
Identification No.:
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Acknowledged
this ___ day of ________________, 20___
▇▇▇▇▇
FARGO BANK, N.A.
Company
By:
Name:
Exhibit
B-5
EXHIBIT
C
CUSTODY
AGREEMENT
Exhibit
C-5
EXHIBIT
D
CONTENTS
OF EACH RETAINED MORTGAGE FILE, CUSTODIAL
MORTGAGE
FILE AND SERVICING FILE
With
respect to each Mortgage Loan, the Retained Mortgage File and Custodial Mortgage
File shall include each of the following items, which shall be available for
inspection by the Purchaser and any prospective Purchaser, and which shall
be
retained by the Company in the Retained Mortgage File or Servicing File or
delivered to the Custodian pursuant to Sections 2.01 and 2.03 of the Master
Seller’s Warranties and Servicing Agreement to which this Exhibit is attached
(the “Agreement”):
With
respect to each Custodial Mortgage File:
1. (a) The
original Mortgage Note bearing all intervening endorsements, endorsed “Pay to
the order of without recourse” and signed in the name of the Company by an
authorized officer (in the event that the Mortgage Loan was acquired by the
Company in a merger, the signature must be in the following form: “[Company],
successor by merger to [name of predecessor]”; and in the event that the
Mortgage Loan was acquired or originated by the Company while doing business
under another name, the signature must be in the following form: “[Company],
formerly known as [previous name]”). The Mortgage Note must contain all
necessary intervening endorsements showing a complete chain of endorsement
from
the originator (each such endorsement being sufficient to transfer all right,
title and interest of the party so endorsing, as noteholder or assignee thereof,
in and to that Mortgage Note); or
(b) With
respect to no more than 1% of the unpaid principal balance of the Mortgage
Loans
as of the related Cut-off Date, a certified copy of the Mortgage Note (endorsed
as provided above) together with a lost note affidavit, providing
indemnification to the holder thereof for any losses incurred due to the fact
that the original Mortgage Note is missing.
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2.
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the
originals or certified true copies of any document sent for recordation
of
all assumption, modification, consolidation or extension agreements,
with
evidence of recording thereon.
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3.
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The
original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording (except for the insertion of the
name
of the assignee and recording information). The Assignment of Mortgage
must be duly recorded only if recordation is either necessary under
applicable law or commonly required by private institutional mortgage
investors in the area where the Mortgaged Property is located or
on
direction of the Purchaser. If the Assignment of Mortgage is to be
recorded, the Mortgage shall be assigned to the Purchaser. If the
Assignment of Mortgage is not to be recorded, the Assignment of Mortgage
shall be delivered in blank. If the Mortgage Loan was acquired by
the
Company in a merger, the Assignment of Mortgage must be made by
“[Company], successor by merger to [name of predecessor].” If the Mortgage
Loan was acquired or originated by the Company while doing business
under
another name, the Assignment of Mortgage must be by “[Company], formerly
know as [previous name].” Subject to the foregoing and where permitted
under the applicable laws of the jurisdiction wherein the Mortgaged
property is located, such Assignments of Mortgage may be made by
blanket
assignments for Mortgage Loans secured by the Mortgaged Properties
located
in the same county. If the related Mortgage has been recorded in
the name
of Mortgage Electronic Registration Systems, Inc. (“MERS”) or its
designee, no Assignment of Mortgage will be required to be prepared
or
delivered and instead, the Company shall take all actions as are
necessary
to cause the Purchaser to be shown as the owner of the related Mortgage
Loan on the records of MERS for purposes of the system of recording
transfers of beneficial ownership of mortgages maintained by
MERS.
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Exhibit
D-1
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4.
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The
original of any guarantee executed in connection with the Mortgage
Note
(if any).
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5.
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Original
or certified copy of power of attorney, if
applicable.
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With
respect to each Retained Mortgage File:
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6.
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The
original Mortgage, with evidence of recording thereon or a certified
true
and correct copy of the Mortgage sent for recordation. If in connection
with any Mortgage Loan, the Company cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon
on or
prior to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation
or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the Company shall
deliver
or cause to be delivered to the Custodian, a photocopy of such Mortgage,
together with (i) in the case of a delay caused by the public recording
office, an Officer’s Certificate of the Company stating that such Mortgage
has been dispatched to the appropriate public recording office for
recordation and that the original recorded Mortgage or a copy of
such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly
delivered
to the Custodian upon receipt thereof by the Company; or (ii) in
the case
of a Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office or by the title insurance
company that issued the title policy to be a true and complete copy
of the
original recorded Mortgage.
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7.
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For
any Mortgage Loan not recorded in the name of MERS, originals or
certified
true copies of documents sent for recordation of all intervening
assignments of the Mortgage with evidence of recording thereon, or
if any
such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office
retains the original recorded assignments of mortgage, the Company
shall
deliver or cause to be delivered to the Custodian, a photocopy of
such
intervening assignment, together with (i) in the case of a delay
caused by
the public recording office, an Officer’s Certificate of the Company
stating that such intervening assignment of mortgage has been dispatched
to the appropriate public recording office for recordation and that
such
original recorded intervening assignment of mortgage or a copy of
such
intervening assignment of mortgage certified by the appropriate public
recording office or by the title insurance company that issued the
title
policy to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian
upon
receipt thereof by the Company; or (ii) in the case of an intervening
assignment where a public recording office retains the original recorded
intervening assignment or in the case where an intervening assignment
is
lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office
to be a
true and complete copy of the original recorded intervening
assignment.
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Exhibit
D-2
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8.
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The
original mortgagee policy of title insurance (or in the case of any
Mortgage Loan secured by a Mortgaged Property located in a jurisdiction
where such policies are generally not available, an opinion of counsel
of
the type customarily rendered in such jurisdiction in lieu of title
insurance).
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9.
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Any
security agreement, chattel mortgage or equivalent executed in connection
with the Mortgage.
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10.
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For
each Cooperative Loan, the original or a seller certified true copy
of the
following:
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The
original Pledge Agreement entered into by the Mortgagor with respect to such
Cooperative Loan;
UCC-3
assignment in blank (or equivalent instrument), sufficient under the laws of
the
jurisdiction where the related Cooperative Apartment is located to reflect
of
record the sale and assignment of the Cooperative Loan to the
Purchaser;
Original
assignment of Pledge Agreement in blank showing a complete chain of assignment
from the originator of the related Cooperative Loan to the Company;
Original
Form UCC-1 and any continuation statements with evidence of filing thereon
with
respect to such Cooperative Loan;
Cooperative
Shares with a Stock Certificate in blank attached;
Original
Proprietary Lease;
Original
Assignment of Proprietary Lease, in blank, and all intervening assignments
thereof;
Exhibit
D-3
Original
recognition agreement of the interests of the mortgagee with respect to the
Cooperative Loan by the Cooperative, the stock of which was pledged by the
related Mortgagor to the originator of such Cooperative Loan; and
Originals
of any assumption, consolidation or modification agreements relating to any
of
the items specified above.
With
respect to each Mortgage Loan, the Servicing File shall include each of the
following items to the extent in the possession of the Company or in the
possession of the Company’s agent(s):
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11.
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The
original hazard insurance policy and, if required by law, flood insurance
policy, in accordance with Section 4.10 of the
Agreement.
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12.
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Fully
executed residential loan
application.
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13.
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Fully
executed Mortgage Loan closing statement (Form HUD-1) and any other
truth
in lending or real estate settlement procedure forms required by
law.
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14.
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Verification
of employment and income, unless originated under the Company’s Limited
Documentation program, ▇▇▇▇▇▇ ▇▇▇ Timesaver
Plus.
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15.
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Verification
of acceptable evidence of source and amount of down
payment.
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16.
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Credit
report on the Mortgagor.
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17.
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Residential
Appraisal report.
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18.
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Photograph
of the Mortgaged Property.
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19.
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Survey
of the Mortgaged Property, if required by the title company or applicable
law.
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20.
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Copy
of each instrument necessary to complete identification of any exception
set forth in the exception schedule in the title policy, i.e. map
or plat,
restrictions, easements, sewer agreements, home association declarations,
etc.
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21.
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All
fully executed required disclosure statements required by state and
federal law.
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22.
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If
available, termite report, structural engineer’s report, water potability
and septic certification.
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23.
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Sales
contract, if applicable.
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24.
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Evidence
of payment of taxes and insurance premiums, insurance claim files,
correspondence, current and historical computerized data files, and
all
other processing, underwriting and closing papers and records which
are
customarily contained in a mortgage loan file and which are required
to
document the Mortgage Loan or to service the Mortgage
Loan.
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Exhibit
D-4
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25.
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Amortization
schedule, if available.
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26.
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Payment
history for any Mortgage Loan that has been closed for more than
90
days.
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In
the
event an Officer’s Certificate of the Company is delivered to the Custodian
because of a delay caused by the public recording office in returning any
recorded document, the Company shall deliver to the Custodian, within 240 days
of the Closing Date, an Officer’s Certificate which shall (i) identify the
recorded document, (ii) state that the recorded document has not been delivered
to the Custodian due solely to a delay caused by the public recording office,
(iii) state the amount of time generally required by the applicable recording
office to record and return a document submitted for recordation, and (iv)
specify the date the applicable recorded document will be delivered to the
Custodian. The Company shall be required to deliver to the Custodian the
applicable recorded document by the date specified in (iv) above. An extension
of the date specified in (iv) above may be requested from the Purchaser, which
consent shall not be unreasonably withheld.
Exhibit
D-5
EXHIBIT
E
DATA
FILE
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Loan
Number
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Channel
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Property
City
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Property
State
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Property
Zip
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Property
County
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Note
Date
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First
Payment Date
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Last
Payment Date
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Maturity
Date
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Original
Loan Amount
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Purchase
Price
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Appraised
Value
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Current
Balance
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Sale
Balance
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Current
Interest Rate
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Current
PANDI
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Product
Type
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Remaining
Term
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LTV
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MI
Code
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Property
Type
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Occupancy
Code
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Purpose
Code
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Stream
Code
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Conforming
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Client
Name
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LEX
Number
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Employer
Name
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Subsidy
Code
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Initial
Interest Rate
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Rate
Change Date
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Margin
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Rate
Cap
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Max
Interest Rate
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Convertible
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Index
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Periodic
Rate Cap
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Relo
Indicator
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Temp
Buydown
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Servicing
Fee
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Exhibit
E-1
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Master
Service Fee
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Servicer
Name
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TLTV
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ECS
Raw Score
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ECS
Score Code
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FICO
Raw Score
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FICO
Score Code
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ECS
Version Number
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Leasehold
Indicator
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No
Ratio Indicator
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Alt
A Indicator
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Citizen
Type Code
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Program
Code
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Credit
Grade
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Lien
Status
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Terminal
Didget
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Prepayment
Penalty Period (years)
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Servicer
Code
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Loan
Term Number
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Loan
MI Certificate Number
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Loan
MI Coverage Percent
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Borrower
Last Name
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Borrower
First Name
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Borrower
Street Address
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Pledged
Asset Indicator
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Loan
Effect LTV Percent
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Timesaver
Indicator
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Interest
Only Indicator
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Exhibit
E-2
EXHIBIT
F
SERVICING
SYSTEM GUIDELINES AND REQUIREMENTS
Loading/Updating
Investor Headers
1. Bank
of America will provide investor header matrix for input on MSP by Servicer.
Updates/additions will occur monthly, including new investor header detail
for
each new deal that is settled.
2. The
Servicer will load investor headers upon receipt or before month end. The
following fields will need to be updated on IN03: MS OPT, MS INV CNTRL NO,
MS MO
DELQ, and MS JUST FL.
3. The
Servicer will update the investor headers on the first business day of the
next/following month to ensure that the correct loan accounts will appear on
the
corresponding 413 file that will represent the new month’s
activity.
Loading
Account Numbers
1. Upon
receipt of a funding schedule, Bank of America will deliver a cross reference
of
Servicer-to-Bank of America account numbers to the servicer. The account numbers
will be delivered in the ▇▇▇▇ 55 layout for loading in the next Servicer MSP
cycle.
2.
The
Servicer will load account numbers on the first business day of the month to
ensure that the correct Bank of America account numbers will appear on the
corresponding 413 file that will represent the new month’s
activity.
Automated
Monetary Transaction File - 413
1. Call
Fidelity PowerCell and request installation of IP 770
2. On
the first business day of the month, the financial transactions for the LSBO
portfolio will transmit from the Servicer MSP system to the Bank of America
MSP
system.
Monthly
Servicer File - Automated
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1.
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Call
Fidelity PowerCell and initiate an SSR for the installation of IP
1804 and
the interchange set-up required to host and transmit this file. This
enhancement will provide an automated month-end feed from the Servicer
to
Bank of America for the LSBO portfolio identified by the corresponding
investor headers. The feed will include all new loans purchased by
Bank of
America in the previous month, as well as a maintenance file for
all
existing loans in the LSBO
portfolio
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2.
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Once
installed, populate XX flag on the IN03 screen. This flag will assist
with
synchronizing the feeds received in the Monthly Servicer File and
the
corresponding 413 file.
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3.
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Bank
of America will receive and process the electronic file on the first
business day of the month for the previous month-end file. Note:
This file comes from the servicer automatically with the installation
of
the IP.
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Exhibit
F-1
Monthly
Servicer File - Manual
For
testing purposes, and in the event that the IP is not installed prior to initial
conversion, a manual process is in place to provide the Monthly Servicer File
data feed for remote
MSP clients.
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1.
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The
Servicer will load/update investor header information received from
Bank
of America.
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2.
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The
Servicer will send an email granting permission to Fidelity to provide
the
manual feed of accounts in the assigned investor headers identified.
The
email will contain the MSP client and corresponding investor/categories
to
be included in the feed.
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3.
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Bank
of America will receive and process the file on the first business
day of
the month for the previous month-end
file.
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Note:
For
licensed
MSP
clients, the servicer will install and use the existing work-around EZTrieve
process. (This will require the installation, testing, and implementation of
the
EZTrieve until the IP is ready.) The servicer will be required to develop a
test
file and production files until the IP is available.
Reporting
Requirements
Required
reports for the LSBO project are as follows:
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·
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S215
- Report summarizes the collections made during the reporting
period
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·
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S214
- Report summarizes paid in full loans made during the reporting
period
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·
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P139
- Monthly
statement of mortgage accounts or a trial balance as of the cutoff
date
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·
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Scheduled
Remittance Reports
- Servicers send on a monthly basis. We would like this report by
the
5th
business day.
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·
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Delinquency
Report
- Report from the servicer to be sent by the 5th
business day. If the servicer is a Fidelity client, we would like
a P4DL
report. Otherwise, a similar report will suffice. LSBO would like
this
report sent via e-mail or fax.
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Note:
These
S215, S214, and P139 reports will be provided in an electronic format. These
reports are automatically generated when the 951/139 cutoff is calendared.
The
reports are required for the LSBO project; reports in addition to these may
be
reasonably required in a format mutually agreed by the Purchaser and the
Company.
Exhibit
F-2
EXHIBIT
G
MONTHLY
REMITTANCE ADVICE
Exhibit
G-1
EXHIBIT
H
SERVICING
CRITERIA TO BE ADDRESSED
IN
ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by [the Company][Name of Subservicer]
shall address, as a minimum, the criteria identified below as “Applicable
Servicing Criteria”
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Reg
AB Reference
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Servicing
Criteria
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Applicable
Servicing Criteria
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Inapplicable
Servicing Criteria
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General
Servicing Considerations
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1122(d)(1)(i)
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Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
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1122(d)(1)(ii)
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If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
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1122(d)(1)(iii)
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Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
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1122(d)(1)(iv)
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A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance with
the
terms of the transaction agreements.
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Cash
Collection and Administration
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1122(d)(2)(i)
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Payments
on mortgage loans are deposited into the appropriate custodial bank
accounts and related bank clearing accounts no more than two business
days
following receipt, or such other number of days specified in the
transaction agreements.
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1122(d)(2)(ii)
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Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
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1122(d)(2)(iii)
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Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction
agreements.
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1122(d)(2)(iv)
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The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
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1122(d)(2)(v)
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Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
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1122(d)(2)(vi)
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Unissued
checks are safeguarded so as to prevent unauthorized
access.
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1122(d)(2)(vii)
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Reconciliations
are prepared on a monthly basis for all asset-backed securities related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.
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Exhibit
H-1
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Investor
Remittances and Reporting
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1122(d)(3)(i)
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Reports
to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
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1122(d)(3)(ii)
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Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
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1122(d)(3)(iii)
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Disbursements
made to an investor are posted within two business days to the Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
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1122(d)(3)(iv)
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Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank
statements.
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Pool
Asset Administration
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1122(d)(4)(i)
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Collateral
or security on mortgage loans is maintained as required by the transaction
agreements or related mortgage loan documents.
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1122(d)(4)(ii)
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Mortgage
loan and related documents are safeguarded as required by the transaction
agreements
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1122(d)(4)(iii)
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Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements in
the
transaction agreements.
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1122(d)(4)(iv)
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Payments
on mortgage loans, including any payoffs, made in accordance with
the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
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1122(d)(4)(v)
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The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal
balance.
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1122(d)(4)(vi)
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Changes
with respect to the terms or status of an obligor’s mortgage loans (e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
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1122(d)(4)(vii)
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Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
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1122(d)(4)(viii)
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Records
documenting collection efforts are maintained during the period a
mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including, for
example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or
unemployment).
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1122(d)(4)(ix)
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Adjustments
to interest rates or rates of return for mortgage loans with variable
rates are computed based on the related mortgage loan
documents.
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1122(d)(4)(x)
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Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period specified
in
the transaction agreements; (B) interest on such funds is paid, or
credited, to obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are returned to the
obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction
agreements.
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Exhibit
H-2
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1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
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1122(d)(4)(xii)
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Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the Servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
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||
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1122(d)(4)(xiii)
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Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
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||
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1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
||
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1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth
in
the transaction agreements.
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Exhibit
H-3
EXHIBIT
I
SARBANES
CERTIFICATION
|
Re:
|
The
[ ] agreement dated as of [ ], 200[ ] (the “Agreement”), among [IDENTIFY
PARTIES]
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I,
________________________________, the _______________________ of [Name of
Servicer] (the “Servicer”), certify to [the Purchaser], [the Depositor], and the
[Master Servicer] [Securities Administrator] [Trustee], and their officers,
with
the knowledge and intent that they will rely upon this certification,
that:
(1) I
have
reviewed the servicer compliance statement of the Servicer provided in
accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the
report on assessment of the Servicer’s compliance with the servicing criteria
set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided
in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of
1934, as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the
“Servicing Assessment”), the registered public accounting firm’s attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB (the “Attestation Report”), and all
servicing reports, officer’s certificates and other information relating to the
servicing of the Mortgage Loans by the Servicer during 200[ ] that were
delivered by the Servicer to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the “Servicer
Servicing Information”);
(2) Based
on
my knowledge, the Servicer Servicing Information, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in the light of the circumstances under
which such statements were made, not misleading with respect to the period
of
time covered by the Servicer Servicing Information;
(3) Based
on
my knowledge, all of the Servicer Servicing Information required to be provided
by the Servicer under the Agreement has been provided to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee];
(4) I
am
responsible for reviewing the activities performed by the Servicer under the
Agreement, and based on my knowledge and the compliance review conducted in
preparing the Compliance Statement and except as disclosed in the Compliance
Statement, the Servicing Assessment or the Attestation Report, the Servicer
has
fulfilled its obligations under the Agreement in all material respects;
and
(5) The
Compliance Statement required to be delivered by the Servicer pursuant to the
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Servicer and by each Subservicer and Subcontractor pursuant
to
the Agreement have been provided to the [Depositor] [Master Servicer]. Any
material instances of noncompliance described in such reports have been
disclosed to the [Depositor] [Master Servicer]. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
Exhibit
I-1
| Date: | ||
| |
|
|
| By: | ||
| Name: | ||
| Title: | ||
Exhibit
I-2
EXHIBIT
J
FORM
OF
▇▇▇▇▇▇▇▇-▇▇▇▇▇ BACK-UP CERTIFICATE
I,
__________________________, certify to ____________________________, and its
officers, directors, agents and affiliates (the “[ ]”) , and with the
knowledge and intent that they will rely upon this certification,
that:
|
(i)
|
Based
on my knowledge, the information relating to the Mortgage Loans and
the
servicing thereof submitted by the Servicer to the [ ] which is
used in connection with preparation of the reports on Form 8-K and
the
annual report on Form 10-K filed with the SEC with respect to the
Transaction, taken as a whole, does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading as of the date of this
certification;
|
|
(ii)
|
The
servicing information required to be provided to the [ ] by the
Servicer under this Servicing Agreement has been provided to the
[ ];
|
|
(iii)
|
I
am responsible for reviewing the activities performed by the Servicer
under the Servicing Agreement and based upon the review required
by this
Servicing Agreement, and except as disclosed in the Annual Statement
of
Compliance, the Annual Independent Public Accountant’s Servicing Report
and all servicing reports, officer’s certificates and other information
relating to the servicing of the Mortgage Loans submitted to the
[ ], the Servicer has, as of the date of this certification
fulfilled its obligations under this Servicing Agreement;
and
|
|
(iv)
|
I
have disclosed to the [ ] all significant deficiencies relating
to the Servicer’s compliance with the minimum servicing standards in
accordance with a review conducted in compliance with the Uniform
Single
Attestation Program for Mortgage Bankers or similar standard as set
forth
in the Servicing Agreement.
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|
(v)
|
The
Servicer shall indemnify and hold harmless the [ ] and its
officers, directors, agents and affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable legal fees and
related
costs, judgments and other costs and expenses arising out of or based
upon
a breach by the Servicer or any of its officers, directors, agents
or
affiliates of its obligations under this Certification or the negligence,
bad faith or willful misconduct of the Servicer in connection therewith.
If the indemnification provided for herein is unavailable or insufficient
to hold harmless the [ ], then the Servicer agrees that it
shall contribute to the amount paid or payable by the [ ] as a
result of the losses, claims, damages or liabilities of the [ ]
in such proportion as is appropriate to reflect the relative fault
of the
[ ] on the one hand and the Servicer on the other in connection
with a breach of the Servicer’s obligations under this Certification or
the Servicer’s negligence, bad faith or willful misconduct in connection
therewith.
|
Exhibit
J-1
IN
WITNESS WHEREOF, I have hereunto signed by name and affixed the seal of the
Company.
| Date: | ||
| |
|
|
| By: | ||
| Name: | ||
| Title: | ||
Exhibit
J-2
AMENDED
AND RESTATED MORTGAGE LOAN PURCHASE AGREEMENT
This
is
an Amended and Restated Master Mortgage Loan Purchase Agreement (the
“Agreement”), dated as of December 1, 2005, by and between Bank of America,
National Association, having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “Purchaser”) and ▇▇▇▇▇ Fargo Bank, N.A., having an
▇▇▇▇▇▇ ▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the
“Seller”).
WITNESSETH
WHEREAS,
the Seller agrees to sell, and the Purchaser agrees to purchase, from time
to
time certain residential adjustable rate and/or fixed rate mortgage loans (the
“Mortgage Loans”) on a servicing retained basis as described
herein:
WHEREAS,
the Mortgage Loans shall be delivered as pools of whole loans (each a “Loan
Package”) on various dates as provided herein (each a “Closing Date”);
and
WHEREAS,
the parties intend hereby to set forth the terms and conditions upon which
the
proposed Transactions will be effected.
NOW
THEREFORE, in consideration of the promises and the mutual agreements set forth
herein, the parties hereto agree as follows:
SECTION
1. All
capitalized terms not otherwise defined herein have the respective meanings
set
forth in the Amended and Restated Master Seller’s Warranties and Servicing
Agreement, dated as of the date herewith (the “Master Seller’s Warranties and
Servicing Agreement”).
SECTION
2. Agreement
to Purchase.
The
Seller agrees to sell, and the Purchaser agrees to purchase from time to time,
Mortgage Loans in Loan Packages having aggregate principal balances on the
related Cut-off Date in amounts as set forth in the respective Commitment
Letters, or in such other amounts as agreed by the Purchaser and the Seller
as
evidenced by the actual aggregate principal balance of the Mortgage Loans in
the
related Loan Package accepted by the Purchaser on the related Closing Date.
The
Mortgage Loans will be delivered pursuant to the Master Seller’s Warranties and
Servicing Agreement, between the Purchaser and the Seller.
SECTION
3. Mortgage
Loan Schedule.
The
Seller will provide the Purchaser with certain information constituting a
listing of the Mortgage Loans to be purchased under this Agreement for each
Transaction (the “Mortgage Loan Schedule”). Each Mortgage Loan Schedule shall
conform to the definition of “Mortgage Loan Schedule” under the Master Seller’s
Warranties and Servicing Agreement.
SECTION
4. Purchase
Price.
The
purchase price for each Loan Package (the “Purchase Price”) shall be the
percentage of par as stated in the related Commitment Letter, multiplied by
the
aggregate scheduled principal balance, as of the related Cut-off Date, of the
Mortgage Loans in the related Loan Package, after application of scheduled
payments of principal for such related Loan Package due on or before such
Cut-off Date whether or not collected. The Purchase Price for a Loan Package
may
be adjusted as stated in the related Commitment Letter.
In
addition to the Purchase Price, the Purchaser shall pay to the Seller, at
closing, accrued interest on the aggregate scheduled principal amount of the
related Mortgage Loans at the weighted average Mortgage Loan Remittance Rate
for
each Loan Package from the related Cut-off Date through the day prior to the
related Closing Date, inclusive.
With
respect to each Loan Package, the Purchaser shall be entitled to (1) all
scheduled principal due after the related Cut-off Date, (2) all other recoveries
of principal collected after the related Cut-off Date (provided, however, that
all scheduled payments of principal due on or before the related Cut-off Date
and collected by the Seller after the related Cut-off Date shall belong to
the
Seller), (3) all payments of interest on the Mortgage Loans at the Mortgage
Loan
Remittance Rate (minus that portion of any such payment which is allocable
to
the period prior to the related Cut-off Date) and (4) all Prepayment Penalties.
The principal balance of each Mortgage Loan as of the related Cut-off Date
is
determined after application of payments of principal due on or before the
related Cut-off Date whether or not collected. Therefore, payments of scheduled
principal and interest prepaid for a Due Date beyond the related Cut-off Date
shall not be applied to the principal balance as of the related Cut-off Date.
Such prepaid amounts (minus interest at the Servicing Fee Rate) shall be the
property of the Purchaser. The Seller shall deposit any such prepaid amounts
into the Custodial Account, which account is established for the benefit of
the
Purchaser for subsequent remittance by the Seller to the Purchaser.
SECTION
5. Examination
of Mortgage Files.
Prior to
the related Closing Date, the Seller shall (a) deliver to the Purchaser in
escrow, for examination, the Custodial Mortgage File for each Mortgage Loan,
including a copy of the Assignment of Mortgage, pertaining to each Mortgage
Loan, or (b) make the Custodial Mortgage Files and the Retained Mortgage Files
available to the Purchaser for examination at the Seller’s offices or such other
location as shall otherwise be agreed upon by the Purchaser and the Seller.
Such
examination may be made by the Purchaser or by any prospective purchaser of
the
Mortgage Loans from the Purchaser, at any time before or after such Closing
Date
upon prior reasonable notice to the Seller. The fact that the Purchaser or
any
prospective purchaser of the Mortgage Loans has conducted or has failed to
conduct any partial or complete examination of the Custodial Mortgage Files
and
the Retained Mortgage Files shall not affect the Purchaser’s (or any of its
successor’s) rights to demand repurchase, substitution or other relief or remedy
as provided under the Master Seller’s Warranties and Servicing
Agreement.
The
Purchaser shall cause the Custodian to act as bailee for the sole and exclusive
benefit of the Seller pursuant to the Custodial Agreement and act only in
accordance with Seller’s instructions. Upon the Seller’s receipt of the Purchase
Price, the Seller shall provide notification to the Custodian to release
ownership of the Mortgage Loan Documents specified above to the Purchaser.
Such
notification shall be in a form of a written notice by facsimile or other
electronic media, with a copy sent to the Purchaser. Subsequent to such release,
such Mortgage Loan Documents shall be retained by the Custodian for the benefit
of the Purchaser. All Mortgage Loan Documents related to Mortgage Loans not
purchased by the Purchaser on the Closing Date, shall be maintained by the
Custodian for the benefit of the Seller and shall be returned to the Seller
within two (2) Business Days after the Closing Date.
SECTION
6. Representations,
Warranties and Agreements of Seller.
The
Seller agrees and acknowledges that it shall, as a condition to the consummation
of the transactions contemplated hereby, make the representations and warranties
specified in Section 3.01 and 3.02 of the Master Seller’s Warranties and
Servicing Agreement, as of each Closing Date. The meaning of the term
“Agreement” as used in Sections 3.01 and 3.02 of the Seller’s Warranties and
Servicing Agreement shall include this Agreement. The Seller, without conceding
that the Mortgage Loans are securities, hereby makes the following additional
representations, warranties and agreements which shall be deemed to have been
made as of the related Closing Date:
a) neither
the Seller nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of any Mortgage Loans, any interest
in
any Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security with, any person in any manner, or made
any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act or which would render the disposition of any
Mortgage Loans a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will it act, nor has it authorized or will
it
authorize any person to act, in such manner with respect to the Mortgage Loans;
and
b) the
Seller has not dealt with any broker or agent or anyone else who might be
entitled to a fee or commission in connection with this transaction other than
the Purchaser.
SECTION
7. Representation,
Warranties and Agreement of Purchaser.
The
Purchaser, without conceding that the Mortgage Loans are securities, hereby
makes the following representations, warranties and agreements, which shall
have
been deemed to have been made as of the related Closing Date.
a) the
Purchaser understands that the Mortgage Loans have not been registered under
the
Securities Act or the securities laws of any state;
b) except
as
contemplated under the Seller’s Warranties and Servicing Agreement, the
Purchaser is acquiring the Mortgage Loans for its own account only and not
for
any other person;
c) the
Purchaser considers itself a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
d) the
Purchaser has been furnished with all information regarding the Mortgage Loans
which it has requested from the Seller; and
e) neither
the Purchaser nor anyone acting on its behalf offered, transferred, pledged,
sold or otherwise disposed of any Mortgage Loan, any interest in any Mortgage
Loan or any other similar security to, or solicited any offer to buy or accept
a
transfer, pledge or other disposition of any Mortgage Loan, any interest in
any
Mortgage Loan or any other similar security from, or otherwise approached or
negotiated with respect to any Mortgage Loan, any interest in any Mortgage
Loan
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act or which would render the disposition of any
Mortgage Loan a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will it act, nor has it authorized or will
it
authorize any person to act, in such manner with respect to the Mortgage
Loans.
SECTION
8. Closing.
The
closing for the purchase and sale of each Loan Package, shall take place on
the
related Closing Date. At the Purchaser’s option, the Closing shall be either: by
telephone, confirmed by letter or wire as the parties shall agree; or conducted
in person, at such place as the parties shall agree.
The
closing shall be subject to each of the following conditions:
a) all
of
the representations and warranties of the Seller under this Agreement and under
the Master Seller’s Warranties and Servicing Agreement shall be true and correct
as of such Closing Date and no event shall have occurred which, with notice
or
the passage of time, would constitute a default under this Agreement or an
Event
of Default under the Master Seller’s Warranties and Servicing
Agreement;
b) the
Purchaser shall have received, or the Purchaser’s attorneys shall have received
in escrow, all Closing Documents as specified in Section 9 of this Agreement,
in
such forms as are agreed upon and acceptable to the Purchaser, duly executed
by
all signatories other than the Purchaser as required pursuant to the respective
terms thereof;
c) the
Seller shall have delivered and released to the Custodian under the Master
Seller’s Warranties and Servicing Agreement all documents required pursuant to
the Master Seller’s Warranties and Servicing Agreement; and
d) all
other terms and conditions of this Agreement and the Master Seller’s Warranties
and Servicing Agreement shall have been complied with.
Subject
to the foregoing conditions, the Purchaser shall pay to the Seller on such
Closing Date the related Purchase Price, plus accrued interest pursuant to
Section 4 of this Agreement, by wire transfer of immediately available funds
to
the account designated by the Seller.
SECTION
9. Closing
Documents.
With
respect to the initial closing date, the Closing Documents shall consist of
fully executed originals of the following documents:
1. the
Master Seller’s Warranties and Servicing Agreement, in two
counterparts;
2. this
Agreement in two counterparts;
|
3.
|
the
Custody Agreement, in three counterparts, in the form attached as
an
exhibit to the Master Seller’s Warranties and Servicing
Agreement;
|
|
4.
|
the
Mortgage Loan Schedule for the related Loan Package, one copy of
each to
be attached to each counterpart of the related Assignment and Conveyance
Agreement, to each counterpart of the Custody Agreement, as the Mortgage
Loan Schedules thereto;
|
5. an
Initial Certification, as required under the Custody Agreement;
6. an
Opinion of Counsel of the Seller, in the form of Exhibit 1 hereto;
and
7. an
Assignment and Conveyance Agreement for the related Mortgage Loans.
On
each
subsequent Closing Date, the following documents:
1. the
Mortgage Loan Schedule for the related Loan Package;
2.
an
Assignment and Conveyance Agreement of Mortgage Loans for the related Loan
Package; and
3. an
Initial Certification, as required under the Custody Agreement.
SECTION
10. Costs.
The
Purchaser shall pay any commissions due its salesmen, the legal fees and
expenses of its attorneys and the costs and expenses associated with the
Custodian. The Seller shall be responsible for reasonable costs and expenses
associated with any preparation and recording of the initial Assignments of
Mortgage. All other costs and expenses incurred in connection with the transfer
and delivery of the Mortgage Loans, including fees for title policy endorsements
and continuations and the Seller’s attorney fees, shall be paid by the
Seller.
SECTION
11. Servicing.
The
Mortgage Loans shall be serviced by the Seller in accordance with the terms
of
the Master Seller’s Warranties and Servicing Agreement. The Seller shall be
entitled to servicing fees calculated as provided therein, at the Servicing
Fee
Rate.
SECTION
12. Financial
Statements.
The
Seller understands that in connection with the Purchaser’s marketing of the
Mortgage Loans, the Purchaser shall make available to prospective purchasers
a
Consolidated Statement of Operations of the Seller for the most recently
completed two fiscal years respecting which such a statement is available,
as
well as a Consolidated Statement of Condition at the end of the last two fiscal
years covered by such Consolidated Statement of Operations. The Purchaser shall
also make available any comparable interim statements to the extent any such
statements have been prepared by the Seller in a format intended or otherwise
suitable for the public at large. The Seller, if it has not already done so,
agrees to furnish promptly to the Purchaser copies of the statements specified
above. The Seller shall also make available information on its servicing
performance with respect to loans in its own portfolio and loans serviced for
others (if any), including loss and delinquency ratios.
The
Seller also agrees to allow access to a knowledgeable (as shall be determined
by
the Seller) financial or accounting officer for the purpose of answering
questions asked by the Purchaser or any prospective purchaser regarding recent
developments affecting the Seller or the financial statements of the
Seller.
SECTION
13. Mandatory
Delivery.
The sale
and delivery on each Closing Date of the related Mortgage Loans described on
the
respective Mortgage Loan Schedules is mandatory, it being specifically
understood and agreed that each Mortgage Loan is unique and identifiable on
such
Closing Date and that an award of money damages would be insufficient to
compensate the Purchaser for the losses and damages incurred by the Purchaser
(including damages to prospective purchasers of the Mortgage Loans) in the
event
of the Seller’s failure to deliver the Mortgage Loans on or before such Closing
Date. All rights and remedies of the Purchaser under this Agreement are distinct
from, and cumulative with, any other rights or remedies under this Agreement
or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
SECTION
14. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed, by registered or certified mail,
return receipt requested, or, if by other means, when received by the other
party at the address shown on the first page hereof, or such other address
as
may hereafter be furnished to the other party by like notice. Any such demand,
notice of communication hereunder shall be deemed to have been received on
the
date delivered to or received at the premises of the addressee (as evidenced,
in
the case of registered or certified mail, by the date noted on the return
receipt).
SECTION
15. Severability
Clause.
Any
part, provision, representation or warranty of this Agreement which is
prohibited or which is held to be void or unenforceable shall be ineffective
to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty
of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability in
any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of
any
part, provision, representation or warranty of this Agreement shall deprive
any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is as close as possible to the economic effect of this Agreement
without regard to such invalidity.
SECTION
16. Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts shall
constitute one and the same instrument.
SECTION
17. Place
of Delivery and Governing Law.
This
Agreement shall be deemed in effect when a fully executed counterpart thereof
is
received by the Purchaser in North Carolina and shall be deemed to have been
made in North Carolina. The 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 the laws of the State
of New York, except to the extent preempted by Federal Law. In the event a
claim
or controversy arises concerning the interpretation or enforcement of the terms
of this Agreement, the Purchaser and the Seller agree that such claim or
controversy may be settled by final, binding arbitration if the Purchaser and
the Seller, as applicable, consent to such arbitration at the time such claim
or
controversy arises which consent may be withheld by the Purchaser or the Seller
in their sole discretion.
Each
of
the Seller and the Purchaser hereby knowingly, voluntarily and intentionally
waives any and all rights it may have to a trial by jury in respect of any
litigation based on, or arising out of, under, or in connection with this
Agreement, or any other documents and instruments executed in connection
herewith, or any course of conduct, course of dealing, statements (whether
oral
or written), or actions of the Seller or the Purchaser. This provision is a
material inducement for the Purchaser to enter into this Agreement.
SECTION
18. Further
Agreements.
The
Purchaser and the Seller each agree to execute and deliver to the other such
additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement.
Without
limiting the generality of the foregoing, the Seller shall reasonably cooperate
with the Purchaser in connection with the initial resales of the Mortgage Loans
by the Purchaser. In that connection, the Seller shall provide to the Purchaser:
(i) any and all information and appropriate verification of information, whether
through letters of its auditors and counsel or otherwise, as the Purchaser
shall
reasonably request, and (ii) such additional representations, warranties,
covenants, opinions of counsel, letters from auditors and certificates of public
officials or officers of the Seller as are reasonably believed necessary by
the
Purchaser in connection with such resales. The requirement of the Seller
pursuant to (ii) above shall terminate on the Closing Date, except as provided
pursuant to Article IX of the Master Seller’s Warranties and Servicing
Agreement. Prior to incurring any out-of-pocket expenses pursuant to this
paragraph, the Seller shall notify the Purchaser in writing of the estimated
amount of such expense. The Purchaser shall reimburse the Seller for any such
expense following its receipt of appropriate details thereof.
SECTION
19. Intention
of the Parties.
It is
the intention of the parties that the Purchaser is purchasing, and the Seller
is
selling, an undivided 100% ownership interest in the Mortgage Loans and not
a
debt instrument of the Seller or another security. Accordingly, the parties
hereto each intend to treat the transaction for Federal income tax purposes
as a
sale by the Seller, and a purchase by the Purchaser, of the Mortgage Loans.
The
Purchaser shall have the right to review the Mortgage Loans and the related
Mortgage Loan Files to determine the characteristics of the Mortgage Loans
which
shall affect the Federal income tax consequences of owning the Mortgage Loans
and the Seller shall cooperate with all reasonable requests made by the
Purchaser in the course of such review.
SECTION
20. Successors
and Assigns; Assignment of Purchase Agreement.
This
Agreement shall bind and inure to the benefit and be enforceable by the Seller
and the Purchaser and the respective successors and assigns of the Seller and
the Purchaser. This Agreement shall not be assigned, pledged or hypothecated
by
the Seller to a third party without the consent of the Purchaser.
SECTION
21. Waivers;
Other Agreements.
No term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced.
SECTION
22. Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
SECTION
23. General
Interpretive Principles.
For purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
a) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender herein
shall be deemed to include the other gender;
b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
c) references
herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
d) a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs and other
subdivisions;
e) the
words
“herein”, “hereof”, “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
f) the
term “include” or “including” shall mean without limitation by reason of
enumeration.
SECTION
24. Reproduction
of Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(a)
consents, waivers and modifications which may hereafter be executed, (b)
documents received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
[Signatures
Follow]
IN
WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
date first above written.
BANK
OF AMERICA, NATIONAL
ASSOCIATION
(Purchaser)
By:
/s/
▇▇▇▇▇ ▇. Good
Name:
▇▇▇▇▇
▇. Good
Title:
Vice
President
▇▇▇▇▇
FARGO BANK, N.A.
(Seller)
By:
/s/
▇▇▇▇▇▇ ▇▇▇▇
Name:
▇▇▇▇▇▇
▇▇▇▇
Title:
Vice
President
EXHIBIT
1
FORM
OF
OPINION OF COUNSEL
@
@
@
@
Re: Mortgage
Loan Sale by ▇▇▇▇▇ Fargo Bank, N.A. (the “Company”) to _________ (the
“Purchaser”) of fixed rate and adjustable rate first lien mortgage loans (the
“Mortgage Loans”) pursuant to that certain Amended and Restated Master Seller’s
Warranties and Servicing Agreement and Amended and Restated Master Mortgage
Loan
Purchase Agreement by and between the Company and the Purchaser, dated as of
December 1, 2005.
Dear
Sir/Madam:
I
am @ of ▇▇▇▇▇ Fargo Bank, N.A. and have acted as counsel to ▇▇▇▇▇ Fargo Bank,
N.A. (the “Company”), with respect to certain matters in connection with the
sale by the Company of Mortgage Loans pursuant to that certain Amended and
Restated Master Seller’s Warranties and Servicing Agreement and Amended and
Restated Master Mortgage Loan Purchase Agreement by and between the Company
and
@ (the “Purchaser”), dated as of December 1, 2005, (the “Agreements”), which
sale is in the form of whole Mortgage Loans. Capitalized terms not otherwise
defined herein have the meanings set forth in the Amended and Restated Master
Seller’s Warranties and Servicing Agreement.
I
have examined the following documents:
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1.
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the
Amended and Restated Master Seller’s Warranties and Servicing
Agreement;
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2.
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the
Amended and Restated Master Mortgage Loan Purchase
Agreement;
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|
3.
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the
Custody Agreement;
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4.
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the
form of endorsement of the Mortgage Notes;
and
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|
5.
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such
other documents, records and papers as I have deemed necessary and
relevant as a basis for this
opinion.
|
To
the extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Agreements.
I
have assumed the authenticity of all documents submitted to me as originals,
the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents.
1
Based
upon the foregoing, it is my opinion that:
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1.
|
The
Company is a national banking association duly organized, validly
existing
and in good standing under the laws of the United
States.
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|
2.
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The
Company has the power to engage in the transactions contemplated
by the
Agreements, the Custody Agreement and all requisite power, authority
and
legal right to execute and deliver the Agreements, the Custody Agreement
and the Mortgage Loans, and to perform and observe the terms and
conditions of such instruments.
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|
3.
|
Each
person who, as an officer or attorney-in-fact of the Company, signed
(a)
the Agreements, each dated as of December 1, 2005, by and between
the
Company and the Purchaser, and (b) any other document delivered prior
hereto or on the date hereof in connection with the sale and servicing
of
the Mortgage Loans in accordance with the Agreements was, at the
respective times of such signing and delivery, and is, as of the
date
hereof, duly elected or appointed, qualified and acting as such officer
or
attorney-in-fact, and the signatures of such persons appearing on
such
documents are their genuine
signatures.
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4.
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Each
of the Agreements, the Custody Agreement, and the Mortgage Loans,
have
been duly authorized, executed and delivered by the Company and are
a
legal, valid and binding agreement enforceable in accordance with
its
terms, subject to the effect of insolvency, liquidation, conservatorship
and other similar laws administered by the Federal Deposit Insurance
Corporation affecting the enforcement of contract obligations of
insured
banks and subject to the application of the rules of equity, including
those respecting the availability of specific performance, none of
which
will materially interfere with the realization of the benefits provided
thereunder or with the Purchaser’s ownership of the Mortgage
Loans.
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|
5.
|
The
Company has been duly authorized to allow any of its officers to
execute
any and all documents by original or facsimile signature in order
to
complete the transactions contemplated by the Agreements and the
Custody
Agreement and in order to execute the endorsements to the Mortgage
Notes
and the assignments of the Mortgages, and the original or facsimile
signature of the officer at the Company executing the Agreements,
the
Custody Agreement, the endorsements to the Mortgage Notes and the
assignments of the Mortgages represents the legal and valid signature
of
said officer of the Company.
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|
6.
|
Either
(i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and
performance by the Company of or compliance by the Company with the
Agreements, the Custody Agreement or the sale and delivery of the
Mortgage
Loans or the consummation of the transactions contemplated by the
Agreements and the Custody Agreement; or (ii) any required consent,
approval, authorization or order has been obtained by the
Company.
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2
|
7.
|
Neither
the consummation of the transactions contemplated by, nor the fulfillment
of the terms of the Agreements and the Custody Agreement, will conflict
with or results in or will result in a breach of or constitutes or
will
constitute a default under the charter or by-laws of the Company,
the
terms of any indenture or other agreement or instrument to which
the
Company is a party or by which it is bound or to which it is subject,
or
violates any statute or order, rule, regulations, writ, injunction
or
decree of any court, governmental authority or regulatory body to
which
the Company is subject or by which it is
bound.
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|
8.
|
There
is no action, suit, proceeding or investigation pending or, to the
best of
my knowledge, threatened against the Company which, in my opinion,
either
in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition,
properties or assets of the Company or in any material impairment
of the
right or ability of the Company to carry on its business substantially
as
now conducted or in any material liability on the part of the Company
or
which would draw into question the validity of the Agreements, and
the
Custody Agreement, or of any action taken or to be taken in connection
with the transactions contemplated thereby, or which would be likely
to
impair materially the ability of the Company to perform under the
terms of
the Agreements and the Custody
Agreement.
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|
9.
|
For
purposes of the foregoing, I have not regarded any legal or governmental
actions, investigations or proceedings to be “threatened” unless the
potential litigant or governmental authority has manifested to the
legal
department of the Company or an employee of the Company responsible
for
the receipt of process a present intention to initiate such proceedings;
nor have I regarded any legal or governmental actions, investigations
or
proceedings as including those that are conducted by state or federal
authorities in connection with their routine regulatory activities.
The
sale of each Mortgage Note and Mortgage as and in the manner contemplated
by the Agreements is sufficient fully to transfer all right, title
and
interest of the Company thereto as noteholder and mortgagee, apart
from
the rights to service the Mortgage Loans pursuant to the
Agreements.
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10.
|
The
form of endorsement that is to be used with respect to the Mortgage
Loans
is legally valid and sufficient to duly endorse the Mortgage Notes
to the
Purchaser. Upon the completion of the endorsement of the Mortgage
Notes
and the completion of the assignments of the Mortgages, and the recording
thereof, the endorsement of the Mortgage Notes, the delivery to the
Custodian of the completed assignments of the Mortgages, and the
delivery
of the original endorsed Mortgage Notes to the Custodian would be
sufficient to permit the entity to which such Mortgage Note is initially
endorsed at the Purchaser’s direction, and to whom such assignment of
Mortgages is initially assigned at the Purchaser’s direction, to avail
itself of all protection available under applicable law against the
claims
of any present or future creditors of the Company, and would be sufficient
to prevent any other sale, transfer, assignment, pledge or hypothecation
of the Mortgages and the Mortgage Notes by the Company from being
enforceable.
|
3
This
opinion is given to you for your sole benefit, and no other person or entity
is
entitled to rely hereon except that the purchaser or purchasers to which you
initially and directly resell the Mortgage Loans may rely on this opinion as
if
it were addressed to them as of its date.
Sincerely,
@
@
@/@
53570.000020
CHARLOTTE 167602v1
4