EXHIBIT 4.2
FORM OF SERIES SUPPLEMENT
RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC.,
Company,
RESIDENTIAL FUNDING COMPANY, LLC,
Master Servicer,
and
[________________________________],
Trustee
SERIES SUPPLEMENT,
Dated as of [_________________] 1, 20[__]
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
Dated as of [_________________] 1, 20[__]
Mortgage Pass-Through Certificates
Series 20[__]-S[___]
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................................................................... 3
Section 1.01 Definitions...................................................................... 3
Section 1.02 Use of Words and Phrases......................................................... 12
ARTICLE II ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES................ 13
Section 2.01 Conveyance of Mortgage Loans..................................................... 13
Section 2.02 Acceptance by Trustee............................................................ 13
Section 2.03 Representations, Warranties and Covenants of the Master Servicer and the
Company.......................................................................... 13
Section 2.04 Representations and Warranties of Residential Funding............................ 15
Section 2.05 Execution and Authentication of Class R Certificates............................. 16
Section 2.06 [RESERVED]....................................................................... 16
Section 2.07 [RESERVED]....................................................................... 16
Section 2.08 Purposes and Powers of the Trust................................................. 16
Section 2.09 Agreement Regarding Ability to Disclose.......................................... 16
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............................................ 17
Section 3.01 Master Servicer to Act as Servicer............................................... 17
Section 3.02 Subservicing Agreements Between Master Servicer and Subservicers;
Enforcement of Subservicers' and Sellers' Obligations............................ 17
Section 3.03 Successor Subservicers........................................................... 18
Section 3.04 Liability of the Master Servicer................................................. 18
Section 3.05 No Contractual Relationship Between Subservicer and Trustee or
Certificateholders............................................................... 18
Section 3.06 Assumption or Termination of Subservicing Agreements by Trustee.................. 18
Section 3.07 Collection of Certain Mortgage Loan Payments; Deposits to Custodial
Account.......................................................................... 18
Section 3.08 Subservicing Accounts; Servicing Accounts........................................ 18
Section 3.09 Access to Certain Documentation and Information Regarding the Mortgage
Loans............................................................................ 18
Section 3.10 Permitted Withdrawals from the Custodial Account................................. 18
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TABLE OF CONTENTS
(continued)
Page
Section 3.11 Maintenance of the Primary Insurance Policies; Collections Thereunder............ 18
Section 3.12 Maintenance of Fire Insurance and Omissions and Fidelity Coverage................ 18
Section 3.13 Enforcement of Due-on-Sale Clauses; Assumption and Modification
Agreements; Certain Assignments.................................................. 18
Section 3.14 Realization Upon Defaulted Mortgage Loans........................................ 18
Section 3.15 Trustee to Cooperate; Release of Custodial Files................................. 18
Section 3.16 Servicing and Other Compensation; Compensating Interest.......................... 18
Section 3.17 Reports to the Trustee and the Company........................................... 18
Section 3.18 Annual Statement as to Compliance................................................ 19
Section 3.19 Annual Independent Public Accountants' Servicing Report.......................... 19
Section 3.20 Rights of the Company in Respect of the Master Servicer.......................... 19
Section 3.21 Administration of Buydown Funds.................................................. 19
Section 3.22 Advance Facility................................................................. 19
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS............................................................ 20
Section 4.01 Certificate Account.............................................................. 20
Section 4.02 Distributions.................................................................... 20
Section 4.03 Statements to Certificateholders; Statements to Rating Agencies; Exchange
Act Reporting.................................................................... 28
Section 4.04 Distribution of Reports to the Trustee and the Company; Advances by the
Master Servicer.................................................................. 28
Section 4.05 Allocation of Realized Losses.................................................... 28
Section 4.06 Reports of Foreclosures and Abandonment of Mortgaged Property.................... 29
Section 4.07 Optional Purchase of Defaulted Mortgage Loans.................................... 29
Section 4.08 Surety Bond...................................................................... 29
ARTICLE V THE CERTIFICATES (SEE ARTICLE V OF THE STANDARD TERMS).................................... 30
ARTICLE VI THE COMPANY AND THE MASTER SERVICER (SEE ARTICLE VI OF THE STANDARD TERMS)................ 31
ARTICLE VII DEFAULT (SEE ARTICLE VII OF THE STANDARD TERMS)........................................... 32
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ARTICLE VIII CONCERNING THE TRUSTEE (SEE ARTICLE VIII OF THE STANDARD TERMS)........................... 33
ARTICLE IX TERMINATION OR OPTIONAL PURCHASE OF ALL CERTIFICATES (SEE ARTICLE IX OF THE
STANDARD TERMS)........................................................................... 34
ARTICLE X REMIC PROVISIONS.......................................................................... 35
Section 10.01 REMIC Administration............................................................. 35
Section 10.02 Master Servicer; REMIC Administrator and Trustee Indemnification................. 35
Section 10.03 Designation of REMIC(s).......................................................... 35
Section 10.04 Distributions on the Uncertificated Class A-V REMIC Regular Interests............ 35
Section 10.05 Compliance with Withholding Requirements......................................... 36
ARTICLE XI MISCELLANEOUS PROVISIONS.................................................................. 37
Section 11.01 Amendment........................................................................ 37
Section 11.02 Recordation of Agreement, Counterparts........................................... 37
Section 11.03 Limitation on Rights of Certificateholders....................................... 37
Section 11.04 Governing Laws................................................................... 37
Section 11.05 Notices.......................................................................... 37
Section 11.06 Required Notices to Rating Agency and Subservicer................................ 38
Section 11.07 Severability of Provisions....................................................... 38
Section 11.08 Supplemental Provisions for Resecuritization..................................... 38
Section 11.09 Allocation of Voting Rights...................................................... 38
Section 11.10 No Petition...................................................................... 38
ARTICLE XII COMPLIANCE WITH REGULATION AB (SEE ARTICLE XII OF THE STANDARD TERMS)..................... 39
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EXHIBITS
Exhibit One: Mortgage Loan Schedule (Available from the Company upon request.)
Exhibit Two: Schedule of Discount Fractions (Available from the Company upon
request.)
Exhibit Three: Information to be Included in Monthly Distribution Date Statement
Exhibit Four: Standard Terms of Pooling and Servicing Agreement dated as of
[___________________] 1, 20[__]
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This is a Series Supplement, dated as of [ ] 1, 20[ ] (the "Series
Supplement"), to the Standard Terms of Pooling and Servicing Agreement, dated as
of [ ] 1, 20[ ] and attached as Exhibit Four hereto (the "Standard Terms" and,
together with this Series Supplement, the "Pooling and Servicing Agreement" or
"Agreement"), among RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC., as the
company (together with its permitted successors and assigns, the "Company"),
RESIDENTIAL FUNDING COMPANY, LLC, as master servicer (together with its
permitted successors and assigns, the "Master Servicer"), and [ ], as Trustee
(together with its permitted successors and assigns, the "Trustee").
PRELIMINARY STATEMENT
The Company intends to sell Mortgage Pass-Through Certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund. As provided herein, the REMIC Administrator will make an
election to treat the entire segregated pool of assets described in the
definition of Trust Fund, and subject to this Agreement (including the Mortgage
Loans but excluding the Initial Monthly Payment Fund), as a real estate mortgage
investment conduit (the "REMIC") for federal income tax purposes.
The terms and provisions of the Standard Terms are hereby incorporated by
reference herein as though set forth in full herein. If any term or provision
contained herein shall conflict with or be inconsistent with any provision
contained in the Standard Terms, the terms and provisions of this Series
Supplement shall govern. Any cross-reference to a section of the Pooling and
Servicing Agreement, to the extent the terms of the Standard Terms and Series
Supplement conflict with respect to that section, shall be a cross-reference to
the related section of the Series Supplement. All capitalized terms not
otherwise defined herein shall have the meanings set forth in the Standard
Terms. The Pooling and Servicing Agreement shall be dated as of the date of the
Series Supplement.
The following table sets forth the designation, type, Pass-Through Rate,
aggregate Initial Certificate Principal Balance, Maturity Date, initial ratings
and certain features for each Class of Certificates comprising the interests in
the Trust Fund created hereunder.
Aggregate
Initial
Pass- Certificate
Through Principal Maturity Minimum
Designation Rate Balance Features(1) Date [S&P/Fitch] Denominations(2)
----------- ---- ------- ----------- ------------------- ----------- ----------------
[Class A-1 [ ]% $[ ] Senior/Fixed Rate [ ] 20[ ] AAA/AAA $[100,000.00
Class A-2 [ ]% $[ ] Senior/Fixed Rate [ ] 20[ ] AAA/AAA $100,000.00
Class A-3 [ ]% $[ ] Senior /Fixed Rate [ ] 20[ ] AAA/AAA $100,000.00
Class A-4 [ ]% $[ Senior/Lockout/Fixed Rate [ ] 20[ ] AAA/AAA $100,000.00
Class A-P 0.00% $[ ] Senior/Principal Only [ ] 20[ ] AAA/AAA $100,000.00
Class A-V Variable Notional Senior/Interest Only/Variable Rate [ ] 20[ ] AAA/AAA $2,000,000.00
Rate
Class R [ ]% $[ Senior/Residual/Fixed Rate [ ] 20[ ] AAA/AAA (3)
Class M-1 [ ]% $[ ] Mezzanine/Fixed Rate [ ] 20[ ] NA/AA $100,000.00
Class M-2 [ ]% $[ ] Mezzanine/Fixed Rate [ ] 20[ ] NA/A $250,000.00
Class M-3 [ ]% $[ ] Mezzanine/Fixed Rate [ ] 20[ ] NA/BBB $250,000.00
Class B-1 [ ]% $[ ] Subordinate/Fixed Rate [ ] 20[ ] NA/BB $250,000.00
Class B-2 [ ]% $[ ] Subordinate/Fixed Rate [ ] 20[ ] NA/B $250,000.00
Class B-3] [ ]% $[ ] Subordinate/Fixed Rate [ ] 20[ ] NA/NA] $250,000.00]
The Mortgage Loans have an aggregate principal balance as of the Cut-off
Date of $[ ].
In consideration of the mutual agreements herein contained, the Company,
the Master Servicer and the Trustee agree as follows:
--------
(1) The Certificates, other than the Class B and Class R Certificates shall be
Book-Entry Certificates. The Class B Certificates and the Class R
Certificates shall be delivered to the holders thereof in physical form.
(2) The Certificates, other than the Class R Certificates, shall be issuable
in minimum dollar denominations as indicated above (by Certificate
Principal Balance or Notional Amount, as applicable) and integral
multiples of $1 (or $1,000 in the case of the Class B-1, Class B-2 and
Class B-3 Certificates) in excess thereof, except that one Certificate of
any of the Class B-1, Class B-2 and Class B-3 Certificates that contain an
uneven multiple of $1,000 shall be issued in a denomination equal to the
sum of the related minimum denomination set forth above and such uneven
multiple for such Class or the sum of such denomination and an integral
multiple of $1,000.
(3) The Class R Certificates shall be issuable in minimum denominations of not
less than a 20% Percentage Interest; provided, however, that one Class R
Certificate will be issuable to Residential Funding as "tax matters
person" pursuant to Section 10.01(c) and (e) in a minimum denomination
representing a Percentage Interest of not less than 0.01%
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the meanings specified in this
Article.
Bankruptcy Amount: As of any date of determination prior to the first
anniversary of the Cut-off Date, an amount equal to the excess, if any, of (A)
$[ ] over (B) the aggregate amount of Bankruptcy Losses allocated solely
to one or more specific Classes of Certificates in accordance with Section 4.05
of this Series Supplement. As of any date of determination on or after the first
anniversary of the Cut-off Date, an amount equal to the excess, if any, of
(1) the lesser of (a) the Bankruptcy Amount calculated as of the
close of business on the Business Day immediately preceding the most
recent anniversary of the Cut-off Date coinciding with or preceding such
date of determination (or, if such date of determination is an anniversary
of the Cut-off Date, the Business Day immediately preceding such date of
determination) (for purposes of this definition, the "Relevant
Anniversary") and (b) the greater of
(A) the greater of (i) [ ] times the aggregate
principal balance of all the Mortgage Loans in the Mortgage Pool as
of the Relevant Anniversary (other than Additional Collateral Loans,
if any) having a Loan-to-Value Ratio at origination which exceeds
75% and (ii) $[ ]; and
(B) the greater of (i) the product of (x) an amount equal to
the largest difference in the related Monthly Payment for any
Non-Primary Residence Loan remaining in the Mortgage Pool (other
than Additional Collateral Loans, if any) which had an original
Loan-to-Value Ratio of 80% or greater that would result if the Net
Mortgage Rate thereof was equal to the weighted average (based on
the principal balance of the Mortgage Loans as of the Relevant
Anniversary) of the Net Mortgage Rates of all Mortgage Loans as of
the Relevant Anniversary less 1.25% per annum, (y) a number equal to
the weighted average remaining term to maturity, in months, of all
Non-Primary Residence Loans remaining in the Mortgage Pool as of the
Relevant Anniversary, and (z) one plus the quotient of the number of
all Non-Primary Residence Loans remaining in the Mortgage Pool
divided by the total number of Outstanding Mortgage Loans in the
Mortgage Pool as of the Relevant Anniversary, and (ii) $[ ],
over
(2) the aggregate amount of Bankruptcy Losses allocated solely to
one or more specific Classes of Certificates in accordance with Section
4.05 since the Relevant Anniversary.
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The Bankruptcy Amount may be further reduced by the Master Servicer
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in the State of New York, the State of Michigan,
the State of California, the State of Illinois or the City of St. ▇▇▇▇,
Minnesota (and such other state or states in which the Custodial Account or the
Certificate Account are at the time located) are required or authorized by law
or executive order to be closed.
Certificate: Any Class A, Class M, Class B or Class R Certificate.
Certificate Account: The separate account or accounts created and
maintained pursuant to Section 4.01 of the Standard Terms, which shall be
entitled "[ ], as trustee, in trust for the registered holders of Residential
Funding Mortgage Securities I, Inc., Mortgage Pass-Through Certificates, Series
20[ ]-S[ ]" and which must be an Eligible Account.
Class A Certificate: Any one of the Class [A-1, Class A-2, Class A-3,
Class A-4, Class A-P or Class A-V] Certificates, executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed to
the Standard Terms as Exhibit A.
Class A-P Principal Distribution Amount: As defined in Section 4.02(b)(i).
Class R Certificate: Any one of the Class R Certificates executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form
annexed to the Standard Terms as Exhibit D and evidencing an interest designated
as a "residual interest" in the related REMIC for purposes of the REMIC
Provisions.
Closing Date: [ ], 20[ ].
Corporate Trust Office: The principal office of the Trustee at which at
any particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
Agreement is located at [ ], [Trustee Address], Attention:
Structured Finance/RFMSI 2006-S11.
Cut-off Date: [ ] 1, 20[ ].
Determination Date: With respect to any Distribution Date, the second
Business Day prior to such Distribution Date.
Discount Net Mortgage Rate: [ ]% per annum.
Due Period: With respect to each Distribution Date and any Mortgage Loan,
the calendar month of such Distribution Date.
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Eligible Funds: On any Distribution Date, the portion, if any, of the
Available Distribution Amount remaining after reduction by the sum of (i) the
aggregate amount of Accrued Certificate Interest on the Senior Certificates,
(ii) the Senior Principal Distribution Amount (determined without regard to
Section 4.02(a)(ii)(Y)(D) of this Series Supplement), (iii) the Class A-P
Principal Distribution Amount (determined without regard to Section
4.02(b)(i)(E) of this Series Supplement) and (iv) the aggregate amount of
Accrued Certificate Interest on the Class M, Class B-1 and Class B-2
Certificates.
Fraud Loss Amount: As of any date of determination after the Cut-off Date,
an amount equal to: (X) prior to the first anniversary of the Cut-off Date, an
amount equal to [ ]% of the aggregate outstanding principal balance of all
of the Mortgage Loans as of the Cut-off Date minus the aggregate amount of Fraud
Losses allocated solely to one or more specific Classes of Certificates in
accordance with Section 4.05 of this Series Supplement since the Cut-off Date up
to such date of determination, (Y) prior to the second anniversary of the
Cut-off Date, an amount equal to [ ]% of the aggregate outstanding
principal balance of all of the Mortgage Loans as of the Cut-off Date minus the
aggregate amount of Fraud Losses allocated solely to one or more specific
Classes of Certificates in accordance with Section 4.05 of this Series
Supplement since the Cut-off Date up to such date of determination and (Z) from
the third to the fifth anniversary of the Cut-off Date, an amount equal to (1)
the lesser of (a) the Fraud Loss Amount as of the most recent anniversary of the
Cut-off Date and (b) [ ]% of the aggregate outstanding principal balance of
all of the Mortgage Loans as of the most recent anniversary of the Cut-off Date
minus (2) the aggregate amount of Fraud Losses allocated solely to one or more
specific Classes of Certificates in accordance with Section 4.05 of this Series
Supplement since the most recent anniversary of the Cut-off Date up to such date
of determination. On and after the fifth anniversary of the Cut-off Date, the
Fraud Loss Amount shall be zero.
The Fraud Loss Amount may be further reduced by the Master Servicer
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
Initial Monthly Payment Fund: $[ ] representing scheduled
principal amortization and interest at the Net Mortgage Rate during the month of
[ ] 20[ ], for those Mortgage Loans for which the Trustee will not
be entitled to receive such payment in accordance with the definition of "Trust
Fund". The Initial Monthly Payment Fund will not be part of any REMIC.
Initial Notional Amount: With respect to any Class A-V Certificates or
Subclass thereof issued pursuant to Section 5.01(c), the aggregate Cut-off Date
Principal Balance of the Mortgage Loans relating to the Uncertificated Class A-V
REMIC Regular Interests corresponding to such Class or Subclass on such date.
Initial Subordinate Class Percentage: With respect to each Class of
related Subordinate Certificates, an amount which is equal to the initial
aggregate Certificate Principal Balance of
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such related Class of Subordinate Certificates divided by the aggregate Stated
Principal Balance of all the Mortgage Loans as of the Cut-off Date as follows:
Class M-1: [ ]% Class B-1: [ ]%
Class M-2: [ ]% Class B-2: [ ]%
Class M-3: [ ]% Class B-3: [ ]%
Interest Accrual Period: With respect to any Certificates and any
Distribution Date, the calendar month preceding the month in which such
Distribution Date occurs.
Interest Only Certificates: Any one of the Class A-V Certificates. The
Interest Only Certificates will have no Certificate Principal Balance.
Lockout Amount: With respect to any Distribution Date, an amount equal to
the product of (i) the Lockout Percentage for that Distribution Date, (ii) the
Lockout Priority Percentage for that Distribution Date, and (iii) the portion of
the Senior Principal Distribution Amount available for distribution pursuant to
Section 4.02(b)(ii)(B).
Lockout Percentage: With respect to any Distribution Date, a fraction,
expressed as a percentage, (i) the numerator of which is the Certificate
Principal Balance of the Class A-4 Certificates and (ii) the denominator of
which is the aggregate Certificate Principal Balance of the Class A-2, Class A-3
and Class A-4 Certificates.
Lockout Priority Percentage: For any Distribution Date occurring prior to
the Distribution Date in [ ] 20[ ], 0%. For any Distribution Date
occurring after the first five years following the Closing Date, a percentage
determined as follows: (i) for any Distribution Date during the sixth year after
the Closing Date, [30]%; (ii) for any Distribution Date during the seventh year
after the Closing Date, [40]%; (iii) for any Distribution Date during the eighth
year after the Closing Date, [60]%; (iv) for any Distribution Date during the
ninth year after the Closing Date, [80]%; and (v) for any Distribution Date
thereafter, 100%.
Maturity Date: With respect to each Class of Certificates, the
Distribution Date in [ ] 20[ ], which is the Distribution Date in the
month immediately following the latest scheduled maturity date of any Mortgage
Loan.
Mortgage Loan Schedule: The list or lists of the Mortgage Loans attached
hereto as Exhibit One (as amended from time to time to reflect the addition of
Qualified Substitute Mortgage Loans), which list or lists shall set forth the
following information as to each Mortgage Loan:
(a) the Mortgage Loan identifying number ("RFC LOAN #");
(b) the maturity of the Mortgage Note ("MATURITY DATE");
(c) the Mortgage Rate ("ORIG RATE");
(d) the Subservicer pass-through rate ("CURR NET");
(e) the Net Mortgage Rate ("NET MTG RT");
(f) the Pool Strip Rate ("STRIP");
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(g) the initial scheduled monthly payment of principal, if any, and
interest ("ORIGINAL P & I");
(h) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(i) the Loan-to-Value Ratio at origination ("LTV");
(j) the rate at which the Subservicing Fee accrues ("SUBSERV FEE") and
at which the Servicing Fee accrues ("MSTR SERV FEE");
(k) a code "T," "BT" or "CT" under the column "LN FEATURE," indicating
that the Mortgage Loan is secured by a second or vacation residence;
and
(l) a code "N" under the column "OCCP CODE," indicating that the
Mortgage Loan is secured by a non-owner occupied residence.
Such schedule may consist of multiple reports that collectively set forth all of
the information required.
Non-Discount Mortgage Loan: The mortgage loans other than the Discount
Mortgage Loans.
Notional Amount: As of any Distribution Date with respect to any Class A-V
Certificates, an amount equal to the aggregate Stated Principal Balance of the
Mortgage Loans as of the day immediately preceding such Distribution Date (or,
with respect to the initial Distribution Date, at the close of business on the
Cut-off Date). For federal income tax purposes, as of any Distribution Date,
with respect to any Class A-V Certificates or Subclass thereof issued pursuant
to Section 5.01(c), the aggregate Stated Principal Balance of the Mortgage Loans
corresponding to the Uncertificated Class A-V REMIC Regular Interests
corresponding to such Class or Subclass as of the day immediately preceding such
Distribution Date (or, with respect to the initial Distribution Date, at the
close of business on the Cut-off Date).
Pass-Through Rate: With respect to the Class A Certificates (other than
the Class A-V Certificates and the Principal Only Certificates), Class M
Certificates, Class B Certificates and Class R Certificates and any Distribution
Date, the per annum rates set forth in the Preliminary Statement hereto. With
respect to the Class A-V Certificates (other than any Subclass thereof) and any
Distribution Date other than the initial Distribution Date, a rate equal to the
weighted average, expressed as a percentage, of the Pool Strip Rates of all
Mortgage Loans as of the Due Date in the related Due Period, weighted on the
basis of the respective Stated Principal Balances of such Mortgage Loans as of
the day immediately preceding such Distribution Date. With respect to the Class
A-V Certificates and the initial Distribution Date, the Pass-Through Rate
is equal to [ ]% per annum. With respect to any Subclass of Class A-V
Certificates and any Distribution Date, a rate equal to the weighted average,
expressed as a percentage, of the Pool Strip Rates of all Mortgage Loans
corresponding to the Uncertificated Class A-V REMIC Regular Interests
represented by such Subclass as of the Due Date in the related Due Period,
weighted on the basis of the respective Stated Principal Balances of such
Mortgage Loans as of the day immediately preceding such Distribution Date (or
with respect to the initial Distribution Date, at the close of business on the
Cut-Off Date). The Principal Only Certificates have no Pass-Through Rate and are
not entitled to Accrued Certificate Interest.
Pool Strip Rate: With respect to each Mortgage Loan, a per annum rate
equal to the excess of (a) the Net Mortgage Rate of such Mortgage Loan over (b)
the Discount Net Mortgage Rate (but not less than 0.00%) per annum.
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Prepayment Assumption: A prepayment assumption of [350]% of the prepayment
speed assumption, used for determining the accrual of original issue discount
and market discount and premium on the Certificates for federal income tax
purposes. The prepayment speed assumption assumes a constant rate of prepayment
of Mortgage Loans of [0.2]% per annum of the then outstanding principal balance
of such Mortgage Loans in the first month of the life of the Mortgage Loans,
increasing by an additional [0.2]% per annum in each succeeding month until the
thirtieth month, and a constant [6]% per annum rate of prepayment thereafter for
the life of the Mortgage Loans.
Prepayment Distribution Percentage: With respect to any Distribution Date
and each Class of Subordinate Certificates, under the applicable circumstances
set forth below, the respective percentages set forth below:
(i) For any Distribution Date prior to the Distribution Date in [ ]
20[ ] (unless the Certificate Principal Balances of the Senior
Certificates (other than the Class A-P Certificates) have been
reduced to zero), 0%.
(ii) For any Distribution Date for which clause (i) above does not apply,
and on which any Class of Subordinate Certificates is outstanding
with a Certificate Principal Balance greater than zero:
(a) in the case of the Class of Subordinate Certificates then
outstanding with the Highest Priority and each other Class of
Subordinate Certificates for which the related Prepayment
Distribution Trigger has been satisfied, a fraction, expressed as a
percentage, the numerator of which is the Certificate Principal
Balance of such Class immediately prior to such date and the
denominator of which is the sum of the Certificate Principal
Balances immediately prior to such date of (1) the Class of
Subordinate Certificates then outstanding with the Highest Priority
and (2) all other Classes of Subordinate Certificates for which the
respective Prepayment Distribution Triggers have been satisfied; and
(b) in the case of each other Class of Subordinate
Certificates for which the Prepayment Distribution Triggers have not
been satisfied, 0%; and
(iii) Notwithstanding the foregoing, if the application of the foregoing
percentages on any Distribution Date as provided in Section 4.02 of
this Series Supplement (determined without regard to the proviso to
the definition of "Subordinate Principal Distribution Amount") would
result in a distribution in respect of principal of any Class or
Classes of Subordinate Certificates in an amount greater than the
remaining Certificate Principal Balance thereof (any such class, a
"Maturing Class"), then: (a) the Prepayment Distribution Percentage
of each Maturing Class shall be reduced to a level that, when
applied as described above, would exactly reduce the Certificate
Principal Balance of such Class to zero; (b) the Prepayment
Distribution Percentage of each other Class of Subordinate
Certificates (any such Class, a "Non-Maturing Class") shall be
recalculated in accordance with the provisions in paragraph (ii)
above, as if the Certificate
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Principal Balance of each Maturing Class had been reduced to zero
(such percentage as recalculated, the "Recalculated Percentage");
(c) the total amount of the reductions in the Prepayment
Distribution Percentages of the Maturing Class or Classes pursuant
to clause (a) of this sentence, expressed as an aggregate
percentage, shall be allocated among the Non-Maturing Classes in
proportion to their respective Recalculated Percentages (the portion
of such aggregate reduction so allocated to any Non-Maturing Class,
the "Adjustment Percentage"); and (d) for purposes of such
Distribution Date, the Prepayment Distribution Percentage of each
Non-Maturing Class shall be equal to the sum of (1) the Prepayment
Distribution Percentage thereof, calculated in accordance with the
provisions in paragraph (ii) above as if the Certificate Principal
Balance of each Maturing Class had not been reduced to zero, plus
(2) the related Adjustment Percentage.
Principal Only Certificates: Any one of the Class A-P Certificates.
Record Date: With respect to each Distribution Date and each Class of
Certificates, the close of business on the last Business Day of the month next
preceding the month in which the related Distribution Date occurs.
Senior Certificate: Any one of the Class A Certificates or Class R
Certificates, executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed to the Standard Terms as Exhibit A
and Exhibit D, respectively.
Senior Percentage: As of any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the aggregate
Certificate Principal Balance of the Senior Certificates (other than the Class
A-P Certificates) immediately prior to such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of all of the
Mortgage Loans (or related REO Properties) (other than the related Discount
Fraction of each Discount Mortgage Loan) immediately prior to such Distribution
Date.
Senior Principal Distribution Amount: As to any Distribution Date, the
lesser of (a) the balance of the Available Distribution Amount remaining after
the distribution of all amounts required to be distributed pursuant to Section
4.02(a)(i) and Section 4.02(a)(ii)(X) (excluding any amount distributable
pursuant to Section 4.02(b)(i)(E)) (or, on or after the Credit Support Depletion
Date, the amount required to be distributed to the Class A-P Certificateholders
pursuant to Section 4.02(c)) and (b) the sum of the amounts required to be
distributed to the Senior Certificateholders on such Distribution Date pursuant
to Section 4.02(a)(ii)(Y).
Special Hazard Amount: As of any Distribution Date, an amount equal to
$[ ] minus the sum of (i) the aggregate amount of Special Hazard Losses
allocated solely to one or more specific Classes of Certificates in accordance
with Section 4.05 of this Series Supplement and (ii) the Adjustment Amount (as
defined below) as most recently calculated. For each anniversary of the Cut-off
Date, the Adjustment Amount shall be equal to the amount, if any, by which the
amount calculated in accordance with the preceding sentence (without giving
effect to the deduction of the Adjustment Amount for such anniversary) exceeds
the greater of (A) the greatest of (i) twice the outstanding principal balance
of the Mortgage Loan in the Trust Fund which has the largest outstanding
principal balance on the Distribution Date immediately preceding such
anniversary, (ii) the product of [ ]% multiplied by the
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outstanding principal balance of all Mortgage Loans on the Distribution Date
immediately preceding such anniversary and (iii) the aggregate outstanding
principal balance (as of the immediately preceding Distribution Date) of the
Mortgage Loans in any single five-digit California zip code area with the
largest amount of Mortgage Loans by aggregate principal balance as of such
anniversary and (B) the greater of (i) the product of [ ]% multiplied by
the outstanding principal balance of all Mortgage Loans on the Distribution Date
immediately preceding such anniversary multiplied by a fraction, the numerator
of which is equal to the aggregate outstanding principal balance (as of the
immediately preceding Distribution Date) of all of the Mortgage Loans secured by
Mortgaged Properties located in the State of California divided by the aggregate
outstanding principal balance (as of the immediately preceding Distribution
Date) of all of the Mortgage Loans, expressed as a percentage, and the
denominator of which is equal to [ ]% (which percentage is equal to the
percentage of Mortgage Loans initially secured by Mortgaged Properties located
in the State of California) and (ii) the aggregate outstanding principal balance
(as of the immediately preceding Distribution Date) of the largest Mortgage Loan
secured by a Mortgaged Property located in the State of California.
The Special Hazard Amount may be further reduced by the Master Servicer
(including accelerating the manner in which coverage is reduced) provided that
prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
Subordinate Principal Distribution Amount: With respect to any
Distribution Date and each Class of Subordinate Certificates, (a) the sum of (i)
the product of (x) the related Subordinate Class Percentage for such Class and
(y) the aggregate of the amounts calculated for such Distribution Date under
clauses (1), (2) and (3) of Section 4.02(a)(ii)(Y)(A) of this Series Supplement
(without giving effect to the Senior Percentage) to the extent not payable to
the Senior Certificates; (ii) such Class's pro rata share, based on the
Certificate Principal Balance of each Class of Subordinate Certificates then
outstanding, of the principal collections described in Section
4.02(a)(ii)(Y)(B)(b) of this Series Supplement (without giving effect to the
Senior Accelerated Distribution Percentage) to the extent such collections are
not otherwise distributed to the Senior Certificates; (iii) the product of (x)
the related Prepayment Distribution Percentage and (y) the aggregate of all
Principal Prepayments in Full received in the related Prepayment Period and
Curtailments received in the preceding calendar month (other than the related
Discount Fraction of such Principal Prepayments in Full and Curtailments with
respect to a Discount Mortgage Loan) to the extent not payable to the Senior
Certificates; (iv) if such Class is the Class of Subordinate Certificates with
the Highest Priority, any Excess Subordinate Principal Amount for such
Distribution Date; and (v) any amounts described in clauses (i), (ii) and (iii)
as determined for any previous Distribution Date, that remain undistributed to
the extent that such amounts are not attributable to Realized Losses which have
been allocated to a Class of Subordinate Certificates minus (b) the sum of (i)
with respect to the Class of Subordinate Certificates with the Lowest Priority,
any Excess Subordinate Principal Amount for such Distribution Date; and (ii) the
Capitalization Reimbursement Amount for such Distribution Date, other than the
related Discount Fraction of any portion of that amount related to each Discount
Mortgage Loan, multiplied by a fraction, the numerator of which is the
Subordinate Principal Distribution Amount for such Class of Subordinate
Certificates, without giving effect to this
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clause (b)(ii), and the denominator of which is the sum of the principal
distribution amounts for all Classes of Certificates other than the Class A-P
Certificates, without giving effect to any reductions for the Capitalization
Reimbursement Amount.
Trust Fund: The segregated pool of assets consisting of:
(i) the Mortgage Loans and the related Mortgage Files and collateral
securing such Mortgage Loans,
(ii) all payments on and collections in respect of the Mortgage Loans due
after the Cut-off Date (other than Monthly Payments due in the month
of the Cut-off Date) as shall be on deposit in the Custodial Account
or in the Certificate Account and identified as belonging to the
Trust Fund but not including amounts on deposit in the Initial
Monthly Payment Fund,
(iii) property that secured a Mortgage Loan and that has been acquired for
the benefit of the Certificateholders by foreclosure or deed in lieu
of foreclosure,
(iv) the hazard insurance policies and Primary Insurance Policies, if
any,
(v) the Initial Monthly Payment Fund, and
(vi) all proceeds of clauses (i) through (vi) above.
Uncertificated Accrued Interest: With respect to each Distribution Date,
as to each Uncertificated Class A-V REMIC Regular Interest, an amount equal to
the aggregate amount of Accrued Certificate Interest that would result under the
terms of the definition thereof on the related classes of Certificates if the
Pass-Through Rate on such Classes were equal to the related Uncertificated Class
A-V REMIC Pass-Through Rate and the notional amount of such uncertificated
interest were equal to the related Uncertificated Class A-V REMIC Notional
Amount, and any reduction in the amount of Accrued Certificate Interest
resulting from the allocation of Prepayment Interest Shortfalls, Realized Losses
or other amounts to the Class A-V Certificateholders pursuant to Section 4.05
hereof shall be allocated to the Uncertificated Class A-V REMIC Regular
Interests pro rata in accordance with the amount of interest accrued with
respect to each related Uncertificated REMIC Notional Amount and such
Distribution Date.
Uncertificated Class A-V REMIC Notional Amount: With respect to each
Uncertificated Class A-V REMIC Regular Interest, the Stated Principal Balance of
the related Mortgage Loan.
Uncertificated Class A-V REMIC Pass-Through Rate: With respect to each
Uncertificated Class A-V REMIC Regular Interest, a per annum rate equal to the
Pool Strip Rate with respect to the related Mortgage Loan.
Uncertificated Class A-V REMIC Regular Interest Distribution Amounts: With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated Class A-V REMIC Regular Interests for such
Distribution Date pursuant to Section 4.08(a).
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Uncertificated Class A-V REMIC Regular Interests: The [1161]
uncertificated partial undivided beneficial ownership interests in the Trust
Fund, numbered sequentially from [1 to 1161], each relating to the particular
Non-Discount Mortgage Loan identified by sequential number on the Mortgage Loan
Schedule, each having no principal balance, and each bearing interest at the
respective Pool Strip Rate on the Stated Principal Balance of the related
Mortgage Loan.
Section 1.02 Use of Words and Phrases.
"Herein," "hereby," "hereunder," "hereof," "hereinbefore," "hereinafter"
and other equivalent words refer to the Pooling and Servicing Agreement as a
whole. All references herein to Articles, Sections or Subsections shall mean the
corresponding Articles, Sections and Subsections in the Pooling and Servicing
Agreement. The definitions set forth herein include both the singular and the
plural.
References in the Pooling and Servicing Agreement to "interest" on and
"principal" of the Mortgage Loans shall mean, with respect to the Sharia
Mortgage Loans, amounts in respect profit payments and acquisition payments,
respectively.
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ARTICLE II
ARTICLE II CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans. (See Section 2.01 of the
Standard Terms)
Section 2.02 Acceptance by Trustee. (See Section 2.02 of the Standard
Terms)
Section 2.03 Representations, Warranties and Covenants of the Master
Servicer and the Company.
(a) For representations, warranties and covenants of the Master Servicer,
see Section 2.03(a) of the Standard Terms.
(b) The Company hereby represents and warrants to the Trustee for the
benefit of Certificateholders that as of the Closing Date (or, if otherwise
specified below, as of the date so specified):
(i) No Mortgage Loan is 30 or more days Delinquent in payment of
principal and interest as of the Cut-off Date and no Mortgage Loan has
been so Delinquent more than once in the 12-month period prior to the
Cut-off Date;
(ii) The information set forth in Exhibit One hereto with respect to
each Mortgage Loan or the Mortgage Loans, as the case may be, is true and
correct in all material respects at the date or dates respecting which
such information is furnished;
(iii) The Mortgage Loans are fully-amortizing (subject to interest
only periods, if applicable), fixed-rate mortgage loans with level Monthly
Payments due, with respect to a majority of the Mortgage Loans, on the
first day of each month and terms to maturity at origination or
modification of not more than 30 years;
(iv) To the best of the Company's knowledge, if a Mortgage Loan is
secured by a Mortgaged Property with a Loan-to-Value Ratio at origination
in excess of 80%, such Mortgage Loan is the subject of a Primary Insurance
Policy that insures that (a) at least 30% of the Stated Principal Balance
of the Mortgage Loan at origination if the Loan-to-Value Ratio is between
95.00% and 90.01%, (b) at least 25% of such balance if the Loan-to-Value
Ratio is between 90.00% and 85.01%, and (c) at least 12% of such balance
if the Loan-to-Value Ratio is between 85.00% and 80.01%. To the best of
the Company's knowledge, each such Primary Insurance Policy is in full
force and effect and the Trustee is entitled to the benefits thereunder;
(v) The issuers of the Primary Insurance Policies are insurance
companies whose claims-paying abilities are currently acceptable to each
Rating Agency;
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(vi) No more than [ ]% of the Mortgage Loans by aggregate Cut-off
Date Principal Balance are secured by Mortgaged Properties located in any
one zip code area in the State of [Virginia] and no more than [ ]% of the
Mortgage Loans by aggregate Cut-off Date Principal Balance are secured by
Mortgaged Properties located in any one zip code area outside the State of
[Virginia];
(vii) The improvements upon the Mortgaged Properties are insured
against loss by fire and other hazards as required by the Program Guide,
including flood insurance if required under the National Flood Insurance
Act of 1968, as amended. The Mortgage requires the Mortgagor to maintain
such casualty insurance at the Mortgagor's expense, and on the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to obtain and
maintain such insurance at the Mortgagor's expense and to seek
reimbursement therefore from the Mortgagor;
(viii) Immediately prior to the assignment of the Mortgage Loans to
the Trustee, the Company had good title to, and was the sole owner of,
each Mortgage Loan free and clear of any pledge, lien, encumbrance or
security interest (other than rights to servicing and related
compensation) and such assignment validly transfers ownership of the
Mortgage Loans to the Trustee free and clear of any pledge, lien,
encumbrance or security interest;
(ix) No more than [ ]% of the Mortgage Loans by aggregate Cut-off
Date Principal Balance were underwritten under a reduced loan
documentation program;
(x) [Each] Mortgagor represented in its loan application with
respect to the related Mortgage Loan that the Mortgaged Property would be
owner-occupied and therefore would not be an investor property as of the
date of origination of such Mortgage Loan. No Mortgagor is a corporation
or a partnership;
(xi) [None] of the Mortgage Loans are Buydown Mortgage Loans;
(xii) Each Mortgage Loan constitutes a qualified mortgage under
Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1);
(xiii) A policy of title insurance was effective as of the closing
of each Mortgage Loan and is valid and binding and remains in full force
and effect, unless the Mortgaged Properties are located in the State of
Iowa and an attorney's certificate has been provided as described in the
Program Guide;
(xiv) Except with respect to approximately [ ]% of the Mortgage
Loans, none of the Mortgage Loans are Cooperative Loans;
(xv) Except with respect to approximately [ ]% of the Mortgage
Loans, none of the Mortgage Loans were originated under a "streamlined"
Mortgage Loan program (through which no new or updated appraisals of
Mortgaged Properties are obtained in connection with the refinancing
thereof), the related Seller has represented that either (a) the value of
the related Mortgaged Property as of the date the Mortgage Loan was
originated was not less than the appraised value of such property at the
time of origination of the refinanced Mortgage Loan or (b) the
Loan-to-Value Ratio of the
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Mortgage Loan as of the date of origination of the Mortgage Loan generally
meets the Company's underwriting guidelines;
(xvi) Interest on each Mortgage Loan is calculated on the basis of a
360-day year consisting of twelve 30-day months;
(xvii) [None] of the Mortgage Loans contains in the related Mortgage
File a Destroyed Mortgage Note; and
(xviii) [None] of the Mortgage Loans are Pledged Asset Loans or
Additional Collateral Loans.
It is understood and agreed that the representations and warranties set forth in
this Section 2.03(b) shall survive delivery of the respective Custodial Files to
the Trustee or the Custodian.
Upon discovery by any of the Company, the Master Servicer, the Trustee, or
the Custodian of a breach of any of the representations and warranties set forth
in this Section 2.03(b) that materially and adversely affects the interests of
the Certificateholders in any Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties (any Custodian being so
obligated under a Custodial Agreement); provided, however, that in the event of
a breach of the representation and warranty set forth in Section 2.03(b)(xii),
the party discovering such breach shall give such notice within five days of
discovery. Within 90 days of its discovery or its receipt of notice of breach,
the Company shall either (i) cure such breach in all material respects or (ii)
purchase such Mortgage Loan from the Trust Fund at the Purchase Price and in the
manner set forth in Section 2.02; provided that the Company shall have the
option to substitute a Qualified Substitute Mortgage Loan or Loans for such
Mortgage Loan if such substitution occurs within two years following the Closing
Date; provided that if the omission or defect would cause the Mortgage Loan to
be other than a "qualified mortgage" as defined in Section 860G(a)(3) of the
Code, any such cure or repurchase must occur within 90 days from the date such
breach was discovered. Any such substitution shall be effected by the Company
under the same terms and conditions as provided in Section 2.04 for
substitutions by Residential Funding. It is understood and agreed that the
obligation of the Company to cure such breach or to so purchase or substitute
for any Mortgage Loan as to which such a breach has occurred and is continuing
shall constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on behalf of the Certificateholders.
Notwithstanding the foregoing, the Company shall not be required to cure
breaches or purchase or substitute for Mortgage Loans as provided in this
Section 2.03(b) if the substance of the breach of a representation set forth
above also constitutes fraud in the origination of the Mortgage Loan.
Section 2.04 Representations and Warranties of Residential Funding. (See
Section 2.04 of the Standard Terms)
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Section 2.05 Execution and Authentication of Class R Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery of the Custodial Files to it, or any Custodian on its behalf,
subject to any exceptions noted, together with the assignment to it of all other
assets included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such delivery and in exchange therefore, the Trustee, pursuant
to the written request of the Company executed by an officer of the Company has
executed and caused to be authenticated and delivered to or upon the order of
the Company the Class R Certificates in authorized denominations which evidence
ownership of the entire Trust Fund.
Section 2.06 [RESERVED].
Section 2.07 [RESERVED].
Section 2.08 Purposes and Powers of the Trust. (See Section 2.08 of the
Standard Terms).
Section 2.09 Agreement Regarding Ability to Disclose.
The Company, the Master Servicer and the Trustee hereby agree,
notwithstanding any other express or implied agreement to the contrary, that any
and all Persons, and any of their respective employees, representatives, and
other agents may disclose, immediately upon commencement of discussions, to any
and all Persons, without limitation of any kind, the tax treatment and tax
structure of the transaction and all materials of any kind (including opinions
or other tax analyses) that are provided to any of them relating to such tax
treatment and tax structure. For purposes of this paragraph, the terms "tax
treatment" and "tax structure" are defined under Treasury Regulation ss.
1.6011-4(c).
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Master Servicer to Act as Servicer. (See Section 3.01 of the
Standard Terms)
Section 3.02 Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' and Sellers'
Obligations.
(a) The Master Servicer may continue in effect Subservicing Agreements
entered into by Residential Funding and Subservicers prior to the execution and
delivery of this Agreement, and may enter into new Subservicing Agreements with
Subservicers, for the servicing and administration of all or some of the
Mortgage Loans. Each Subservicer shall be either (i) an institution the accounts
of which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans, and in either case shall be
authorized to transact business in the state or states in which the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Subservicer to perform its obligations
hereunder and under the Subservicing Agreement, and in either case shall be a
Freddie Mac, ▇▇▇▇▇▇ ▇▇▇ or HUD approved mortgage servicer. In addition, any
Subservicer of a Mortgage Loan insured by the FHA must be an FHA-approved
servicer, and any Subservicer of a Mortgage Loan guaranteed by the VA must be a
VA-approved servicer. Each Subservicer of a Mortgage Loan shall be entitled to
receive and retain, as provided in the related Subservicing Agreement and in
Section 3.07, the related Subservicing Fee from payments of interest received on
such Mortgage Loan after payment of all amounts required to be remitted to the
Master Servicer in respect of such Mortgage Loan. For any Mortgage Loan that is
a Nonsubserviced Mortgage Loan, the Master Servicer shall be entitled to receive
and retain an amount equal to the Subservicing Fee from payments of interest.
Unless the context otherwise requires, references in this Agreement to actions
taken or to be taken by the Master Servicer in servicing the Mortgage Loans
include actions taken or to be taken by a Subservicer on behalf of the Master
Servicer. Each Subservicing Agreement will be upon such terms and conditions as
are generally required by, permitted by or consistent with the Program Guide and
are not inconsistent with this Agreement and as the Master Servicer and the
Subservicer have agreed; provided that, the Subservicing Agreement between the
Master Servicer and [▇▇▇▇▇ Fargo], if any, will be upon such terms and
conditions as are consistent with this Agreement and as the Master Servicer and
the Subservicer have agreed, which may not be consistent with the Program Guide.
With the approval of the Master Servicer, a Subservicer may delegate its
servicing obligations to third-party servicers, but such Subservicer will remain
obligated under the related Subservicing Agreement. The Master Servicer and a
Subservicer may enter into amendments thereto or a different form of
Subservicing Agreement, and the form referred to or included in the Program
Guide is merely provided for information and shall not be deemed to limit in any
respect the discretion of the Master Servicer to modify or enter into different
Subservicing Agreements; provided, however, that any such amendments or
different forms shall be consistent with and not violate the provisions of
either this Agreement or the Program Guide in a manner which would materially
and adversely affect the interests of the Certificateholders. The Program Guide
and any other Subservicing Agreement entered into between the Master Servicer
and any
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Subservicer shall require the Subservicer to accurately and fully report its
borrower credit files to each of the Credit Repositories in a timely manner.
(b) (See Section 3.02(b) of the Standard Terms)
Section 3.03 Successor Subservicers. (See Section 3.03 of the Standard
Terms)
Section 3.04 Liability of the Master Servicer. (See Section 3.04 of the
Standard Terms)
Section 3.05 No Contractual Relationship Between Subservicer and Trustee
or Certificateholders. (See Section 3.05 of the Standard
Terms)
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee. (See Section 3.06 of the Standard Terms)
Section 3.07 Collection of Certain Mortgage Loan Payments; Deposits to
Custodial Account. (See Section 3.07 of the Standard Terms)
Section 3.08 Subservicing Accounts; Servicing Accounts. (See Section 3.08
of the Standard Terms)
Section 3.09 Access to Certain Documentation and Information Regarding the
Mortgage Loans. (See Section 3.09 of the Standard Terms)
Section 3.10 Permitted Withdrawals from the Custodial Account. (See
Section 3.10 of the Standard Terms)
Section 3.11 Maintenance of the Primary Insurance Policies; Collections
Thereunder. (See Section 3.11 of the Standard Terms)
Section 3.12 Maintenance of Fire Insurance and Omissions and Fidelity
Coverage. (See Section 3.12 of the Standard Terms)
Section 3.13 Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments. (See
Section 3.13 of the Standard Terms)
Section 3.14 Realization Upon Defaulted Mortgage Loans. (See Section 3.14
of the Standard Terms)
Section 3.15 Trustee to Cooperate; Release of Custodial Files. (See
Section 3.15 of the Standard Terms)
Section 3.16 Servicing and Other Compensation; Compensating Interest. (See
Section 3.16 of the Standard Terms)
Section 3.17 Reports to the Trustee and the Company. (See Section 3.17 of
the Standard Terms)
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Section 3.18 Annual Statement as to Compliance. (See Section 3.18 of the
Standard Terms)
Section 3.19 Annual Independent Public Accountants' Servicing Report. (See
Section 3.19 of the Standard Terms)
Section 3.20 Rights of the Company in Respect of the Master Servicer. (See
Section 3.20 of the Standard Terms)
Section 3.21 Administration of Buydown Funds. (See Section 3.21 of the
Standard Terms)
Section 3.22 Advance Facility. (See Section 3.22 of the Standard Terms)
-19-
ARTICLE IV
PAYMENTS TO
CERTIFICATEHOLDERS
Section 4.01 Certificate Account. (See Section 4.01 of the Standard Terms)
Section 4.02 Distributions.
(a) On each Distribution Date, (x) the Master Servicer on behalf of the
Trustee or (y) the Paying Agent appointed by the Trustee, shall distribute (I)
to the Master Servicer or a sub-servicer, in the case of a distribution pursuant
to Section 4.02(a)(iii) below, the amount required to be distributed to the
Master Servicer or a sub-servicer pursuant to Section 4.02(a)(iii) below, and
(II) to each Certificateholder of record on the next preceding Record Date
(other than as provided in Section 9.01 respecting the final distribution),
either (1) in immediately available funds (by wire transfer or otherwise) to the
account of such Certificateholder at a bank or other entity having appropriate
facilities therefore, if such Certificateholder has so notified the Master
Servicer or the Paying Agent, as the case may be, or (2) if such
Certificateholder has not so notified the Master Servicer or the Paying Agent by
the Record Date, by check mailed to such Certificateholder at the address of
such Holder appearing in the Certificate Register, such Certificateholder's
share (which share (A) with respect to each Class of Certificates (other than
any Subclass of the Class A-V Certificates), shall be based on the aggregate of
the Percentage Interests represented by Certificates of the applicable Class
held by such Holder or (B) with respect to any Subclass of the Class A-V
Certificates, shall be equal to the amount (if any) distributed pursuant to
Section 4.02(a)(i) below to each Holder of a Subclass thereof) of the following
amounts, in the following order of priority (subject to the provisions of
Section 4.02(b) below), in each case to the extent of the Available Distribution
Amount:
(i) to the Senior Certificates (other than the Principal Only
Certificates) on a pro rata basis based on the Accrued Certificate
Interest payable on such Certificates with respect to such Distribution
Date, Accrued Certificate Interest on such Classes of Certificates (or
Subclasses, if any, with respect to the Class A-V Certificates) for such
Distribution Date, plus any Accrued Certificate Interest thereon remaining
unpaid from any previous Distribution Date, except as provided in the last
paragraph of this Section 4.02(a);
(ii) (X) to the Class A-P Certificates, the Class A-P Principal
Distribution Amount (as defined in Section 4.02(b)(i) herein), until the
Certificate Principal Balance of the Class A-P Certificates has been
reduced to zero; and
(Y) to the Senior Certificates (other than the Class A-P
Certificates), in the priorities and amounts set forth in Sections
4.02(b)(ii) through 4.02(d), the sum of the following (applied to
reduce the Certificate Principal Balances of such Senior
Certificates, as applicable):
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(A) the Senior Percentage for such Distribution Date times the
sum of the following:
(1) the principal portion of each Monthly Payment due
during the related Due Period on each Outstanding Mortgage
Loan (other than the related Discount Fraction of the
principal portion of such payment with respect to a Discount
Mortgage Loan), whether or not received on or prior to the
related Determination Date, minus the principal portion of any
Debt Service Reduction (other than the related Discount
Fraction of the principal portion of such Debt Service
Reductions with respect to each Discount Mortgage Loan) which
together with other Bankruptcy Losses exceeds the Bankruptcy
Amount;
(2) the Stated Principal Balance of any Mortgage Loan
repurchased during the preceding calendar month (or deemed to
have been so repurchased in accordance with Section 3.07(b) of
the Standard Terms) pursuant to Sections 2.02, 2.03, 2.04 or
4.07 and the amount of any shortfall deposited in the
Custodial Account in connection with the substitution of a
Deleted Mortgage Loan pursuant to Section 2.03 or 2.04 during
the preceding calendar month (other than the related Discount
Fraction of such Stated Principal Balance or shortfall with
respect to each Discount Mortgage Loan); and
(3) the principal portion of all other unscheduled
collections (other than Principal Prepayments in Full and
Curtailments and amounts received in connection with a Cash
Liquidation or REO Disposition of a Mortgage Loan described in
Section 4.02(a)(ii)(Y)(2)(B) of this Series Supplement,
including without limitation Insurance Proceeds, Liquidation
Proceeds and REO Proceeds) including Subsequent Recoveries
received during the preceding calendar month (or deemed to
have been so received in accordance with Section 3.07(b) of
the Standard Terms) to the extent applied by the Master
Servicer as recoveries of principal of the related Mortgage
Loan pursuant to Section 3.14 of the Standard Terms (other
than the related Discount Fraction of the principal portion of
such unscheduled collections, with respect to each Discount
Mortgage Loan);
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(B) with respect to each Mortgage Loan for which a Cash
Liquidation or a REO Disposition occurred during the preceding
calendar month (or was deemed to have occurred during such period in
accordance with Section 3.07(b) of the Standard Terms) and did not
result in any Excess Special Hazard Losses, Excess Fraud Losses,
Excess Bankruptcy Losses or Extraordinary Losses, an amount equal to
the lesser of (a) the Senior Percentage for such Distribution Date
times the Stated Principal Balance of such Mortgage Loan (other than
the related Discount Fraction of such Stated Principal Balance, with
respect to each Discount Mortgage Loan) and (b) the Senior
Accelerated Distribution Percentage for such Distribution Date times
the related unscheduled collections (including without limitation
Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the
extent applied by the Master Servicer as recoveries of principal of
the related Mortgage Loan pursuant to Section 3.14 of the Standard
Terms (in each case other than the portion of such unscheduled
collections, with respect to a Discount Mortgage Loan, included in
Section 4.02(b)(i)(C) of this Series Supplement);
(C) the Senior Accelerated Distribution Percentage for such
Distribution Date times the aggregate of all Principal Prepayments
in Full received in the related Prepayment Period and Curtailments
received in the preceding calendar month (other than the related
Discount Fraction of such Principal Prepayments in Full and
Curtailments, with respect to each Discount Mortgage Loan);
(D) any Excess Subordinate Principal Amount for such
Distribution Date;
(E) any amounts described in subsection (ii)(Y), clauses (A),
(B) and (C) of this Section 4.02(a), as determined for any previous
Distribution Date, which remain unpaid after application of amounts
previously distributed pursuant to this clause (E) to the extent
that such amounts are not attributable to Realized Losses which have
been allocated to the Subordinate Certificates; minus
(F) the Capitalization Reimbursement Amount for such
Distribution Date, other than the related Discount Fraction of any
portion of that amount related to each Discount Mortgage Loan,
multiplied by a fraction, the numerator of which is the Senior
Principal Distribution Amount, without giving effect to this clause
(F), and the denominator of which is the sum of the principal
distribution amounts for all Classes of Certificates other than the
Class A-P Certificates, without giving effect to any reductions for
the Capitalization Reimbursement Amount;
-22-
(iii) if the Certificate Principal Balances of the Subordinate
Certificates have not been reduced to zero, to the Master Servicer or a
Sub-Servicer, by remitting for deposit to the Custodial Account, to the
extent of and in reimbursement for any Advances or Sub-Servicer Advances
previously made with respect to any Mortgage Loan or REO Property which
remain unreimbursed in whole or in part following the Cash Liquidation or
REO Disposition of such Mortgage Loan or REO Property, minus any such
Advances that were made with respect to delinquencies that ultimately
constituted Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses or Extraordinary Losses;
(iv) to the Holders of the Class M-1 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(v) to the Holders of the Class M-1 Certificates, an amount equal to
(x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, minus (y) the amount of any Class
A-P Collection Shortfalls for such Distribution Date or remaining unpaid
for all previous Distribution Dates, to the extent the amounts available
pursuant to clause (x) of Sections 4.02(a)(vii), (ix), (xi), (xiii), (xiv)
and (xv) of this Series Supplement are insufficient therefore, applied in
reduction of the Certificate Principal Balance of the Class M-1
Certificates;
(vi) to the Holders of the Class M-2 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(vii) to the Holders of the Class M-2 Certificates, an amount equal
to (x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, minus (y) the amount of any Class
A-P Collection Shortfalls for such Distribution Date or remaining unpaid
for all previous Distribution Dates, to the extent the amounts available
pursuant to clause (x) of Sections 4.02(a)(ix), (xi), (xiii), (xiv) and
(xv) of this Series Supplement are insufficient therefore, applied in
reduction of the Certificate Principal Balance of the Class M-2
Certificates;
(viii) to the Holders of the Class M-3 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(ix) to the Holders of the Class M-3 Certificates, an amount equal
to (x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date minus (y) the amount of any Class
A-P Collection Shortfalls for such Distribution Date or remaining unpaid
for all previous Distribution Dates, to the extent the amounts available
pursuant to clause (x) of Sections 4.02(a)(xi), (xiii), (xiv) and (xv) of
this Series Supplement are insufficient therefore, applied in reduction of
the Certificate Principal Balance of the Class M-3 Certificates;
(x) to the Holders of the Class B-1 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
-23-
(xi) to the Holders of the Class B-1 Certificates, an amount equal
to (x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date minus (y) the amount of any Class
A-P Collection Shortfalls for such Distribution Date or remaining unpaid
for all previous Distribution Dates, to the extent the amounts available
pursuant to clause (x) of Sections 4.02(a)(xiii), (xiv) and (xv) of this
Series Supplement are insufficient therefore, applied in reduction of the
Certificate Principal Balance of the Class B-1 Certificates;
(xii) to the Holders of the Class B-2 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(xiii) to the Holders of the Class B-2 Certificates, an amount equal
to (x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date minus (y) the amount of any Class
A-P Collection Shortfalls for such Distribution Date or remaining unpaid
for all previous Distribution Dates, to the extent the amounts available
pursuant to clause (x) of Sections 4.02(a)(xiv) and (xv) of this Series
Supplement are insufficient therefore, applied in reduction of the
Certificate Principal Balance of the Class B-2 Certificates;
(xiv) to the Holders of the Class B-3 Certificates, an amount equal
to (x) the Accrued Certificate Interest thereon for such Distribution
Date, plus any Accrued Certificate Interest thereon remaining unpaid from
any previous Distribution Date, except as provided below, minus (y) the
amount of any Class A-P Collection Shortfalls for such Distribution Date
or remaining unpaid for all previous Distribution Dates, to the extent the
amounts available pursuant to clause (x) of Section 4.02(a)(xv) of this
Series Supplement are insufficient therefore;
(xv) to the Holders of the Class B-3 Certificates, an amount equal
to (x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date minus (y) the amount of any Class
A-P Collection Shortfalls for such Distribution Date or remaining unpaid
for all previous Distribution Dates, applied in reduction of the
Certificate Principal Balance of the Class B-3 Certificates;
(xvi) to the Senior Certificates, in the priority set forth in
Section 4.02(b) of this Series Supplement, the portion, if any, of the
Available Distribution Amount remaining after the foregoing distributions,
applied to reduce the Certificate Principal Balances of such Senior
Certificates, but in no event more than the aggregate of the outstanding
Certificate Principal Balances of each such Class of Senior Certificates,
and thereafter, to each Class of Subordinate Certificates then outstanding
beginning with such Class with the Highest Priority, any portion of the
Available Distribution Amount remaining after the Senior Certificates have
been retired, applied to reduce the Certificate Principal Balance of each
such Class of Subordinate Certificates, but in no event more than the
outstanding Certificate Principal Balance of each such Class of
Subordinate Certificates; and
(xvii) to the Class R Certificates, the balance, if any, of the
Available Distribution Amount.
-24-
Notwithstanding the foregoing, on any Distribution Date, with respect to
the Class of Subordinate Certificates outstanding on such Distribution Date with
the Lowest Priority, or in the event the Subordinate Certificates are no longer
outstanding, the Senior Certificates, Accrued Certificate Interest thereon
remaining unpaid from any previous Distribution Date will be distributable only
to the extent that (1) a shortfall in the amounts available to pay Accrued
Certificate Interest on any Class of Certificates results from an interest rate
reduction in connection with a Servicing Modification, or (2) such unpaid
Accrued Certificate Interest was attributable to interest shortfalls relating to
the failure of the Master Servicer to make any required Advance, or the
determination by the Master Servicer that any proposed Advance would be a
Nonrecoverable Advance with respect to the related Mortgage Loan where such
Mortgage Loan has not yet been the subject of a Cash Liquidation or REO
Disposition or the related Liquidation Proceeds, Insurance Proceeds and REO
Proceeds have not yet been distributed to the Certificateholders.
(b) Distributions of principal on the Senior Certificates on each
Distribution Date occurring prior to the Credit Support Depletion Date will be
made as follows:
(i) to the Class A-P Certificates, until the Certificate Principal
Balance thereof is reduced to zero, an amount (the "Class A-P Principal
Distribution Amount") equal to the aggregate of:
(A) the related Discount Fraction of the principal portion of
each Monthly Payment on each Discount Mortgage Loan due during the
related Due Period, whether or not received on or prior to the
related Determination Date, minus the Discount Fraction of the
principal portion of any related Debt Service Reduction which
together with other Bankruptcy Losses exceeds the Bankruptcy Amount;
(B) the related Discount Fraction of the principal portion of
all unscheduled collections on each Discount Mortgage Loan received
during the preceding calendar month or, in the case of Principal
Prepayments in Full, during the related Prepayment Period (other
than amounts received in connection with a Cash Liquidation or REO
Disposition of a Discount Mortgage Loan described in clause (C)
below), including Principal Prepayments in Full, Curtailments,
Subsequent Recoveries and repurchases (including deemed repurchases
under Section 3.07(b) of the Standard Terms) of Discount Mortgage
Loans (or, in the case of a substitution of a Deleted Mortgage Loan,
the Discount Fraction of the amount of any shortfall deposited in
the Custodial Account in connection with such substitution);
(C) in connection with the Cash Liquidation or REO Disposition
of a Discount Mortgage Loan that did not result in any Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses
or Extraordinary Losses, an amount equal to the lesser of (1) the
applicable Discount Fraction of the Stated Principal Balance of such
Discount Mortgage Loan immediately prior to such Distribution Date
and (2) the aggregate amount of the collections on such Discount
Mortgage Loan to the extent applied as recoveries of principal;
-25-
(D) any amounts allocable to principal for any previous
Distribution Date (calculated pursuant to clauses (A) through (C)
above) that remain undistributed; and
(E) the amount of any Class A-P Collection Shortfalls for such
Distribution Date and the amount of any Class A-P Collection
Shortfalls remaining unpaid for all previous Distribution Dates, but
only to the extent of the Eligible Funds for such Distribution Date;
minus
(F) the related Discount Fraction of the portion of the
Capitalization Reimbursement Amount for such Distribution Date, if
any, related to each Discount Mortgage Loan; and
(ii) the Senior Principal Distribution Amount shall be distributed
in the following manner and priority:
(A) first, to the Class R Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(B) second, the balance of the Senior Principal Distribution
Amount remaining after the distributions, if any, described in
section 4.02(b)(ii)(A) above will be distributed concurrently as
follows:
(1) [ ]% of the amount described in Section
4.02(b)(ii)(B) will be distributed to the Class A-1
Certificates until the Certificate Principal Balance thereto
has been reduced to zero; and
(2) [ ]% of the amount described in Section
4.02(b)(ii)(B) will be distributed in the following manner and
priority:
i. first, to the Class A-4 Certificates, an amount
up to the Lockout Amount for that Distribution
Date, until the Certificate Principal Balance
thereof has been reduced to zero;
ii. second, to the Class A-2 and Class A-3
Certificates, sequentially, in that order, until
the Certificate Principal Balances thereof have
been reduced to zero; and
iii. third, to the Class A-4 Certificates, without
regard to the Lockout Amount for that distribution
date, until the Certificate Principal Balance
thereof has been reduced to zero.
-26-
(c) On or after the occurrence of the Credit Support Depletion Date, all
priorities relating to distributions as described in Section 4.02(b) of this
Series Supplement in respect of principal among the Senior Certificates (other
than the Class A-P Certificates) will be disregarded, and (i) an amount equal to
the Discount Fraction of the principal portion of scheduled payments and
unscheduled collections received or advanced in respect of the Discount Mortgage
Loans minus the Discount Fraction of the portion of the Capitalization
Reimbursement Amount for such Distribution Date will be distributed to the Class
A-P Certificates, (ii) the Senior Principal Distribution Amount will be
distributed to the remaining Senior Certificates (other than the Class A-P
Certificates) pro rata in accordance with their respective outstanding
Certificate Principal Balances and (iii) the amount set forth in Section
4.02(a)(i) herein will be distributed as set forth therein.
(d) After the reduction of the Certificate Principal Balances of the
Senior Certificates (other than the Class A-P Certificates) to zero but prior to
the Credit Support Depletion Date, the Senior Certificates (other than the Class
A-P Certificates) will be entitled to no further distributions of principal
thereon and the Available Distribution Amount will be paid solely to the holders
of the Class A-P Certificates, Class A-V Certificates, Class M Certificates and
Class B Certificates, in each case as described herein.
(e) In addition to the foregoing distributions, with respect to any
Subsequent Recoveries, the Master Servicer shall deposit such funds into the
Custodial Account pursuant to Section 3.07(b)(iii). If, after taking into
account such Subsequent Recoveries, the amount of a Realized Loss is reduced,
the amount of such Subsequent Recoveries will be applied to increase the
Certificate Principal Balance of the Class of Subordinate Certificates with the
Highest Priority to which Realized Losses, other than Excess Bankruptcy Losses,
Excess Fraud Losses, Excess Special Hazard Losses and Extraordinary Losses, have
been allocated, but not by more than the amount of Realized Losses previously
allocated to that Class of Certificates pursuant to Section 4.05. The amount of
any remaining Subsequent Recoveries will be applied to increase the Certificate
Principal Balance of the Class of Certificates with the next Lower Priority, up
to the amount of such Realized Losses previously allocated to that Class of
Certificates pursuant to Section 4.05. Any remaining Subsequent Recoveries will
in turn be applied to increase the Certificate Principal Balance of the Class of
Certificates with the next Lower Priority up to the amount of such Realized
Losses previously allocated to that Class of Certificates pursuant to Section
4.05, and so on. Holders of such Certificates will not be entitled to any
payment in respect of Accrued Certificate Interest on the amount of such
increases for any Interest Accrual Period preceding the Distribution Date on
which such increase occurs. Any such increases shall be applied to the
Certificate Principal Balance of each Certificate of such Class in accordance
with its respective Percentage Interest.
(f) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be solely
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Company or the Master Servicer
-27-
shall have any responsibility therefore except as otherwise provided by this
Series Supplement or applicable law.
(g) Except as otherwise provided in Section 9.01, if the Master Servicer
anticipates that a final distribution with respect to any Class of Certificates
will be made on a future Distribution Date, the Master Servicer shall, no later
than 40 days prior to such final distribution, notify the Trustee and the
Trustee shall, not earlier than the 15th day and not later than the 25th day of
the month next preceding the month of such final distribution, distribute, or
cause to be distributed to each Holder of such Class of Certificates a notice to
the effect that: (i) the Trustee anticipates that the final distribution with
respect to such Class of Certificates will be made on such Distribution Date but
only upon presentation and surrender of such Certificates at the office of the
Trustee or as otherwise specified therein, and (ii) no interest shall accrue on
such Certificates from and after the end of the related Interest Accrual Period.
In the event that Certificateholders required to surrender their Certificates
pursuant to Section 9.01(c) do not surrender their Certificates for final
cancellation, the Trustee shall cause funds distributable with respect to such
Certificates to be withdrawn from the Certificate Account and credited to a
separate escrow account for the benefit of such Certificateholders as provided
in Section 9.01(d).
Section 4.03 Statements to Certificateholders; Statements to Rating
Agencies; Exchange Act Reporting. (See Section 4.03 of
the Standard Terms and Exhibit Three hereto)
Section 4.04 Distribution of Reports to the Trustee and the Company;
Advances by the Master Servicer. (See Section 4.04 of the
Standard Terms)
Section 4.05 Allocation of Realized Losses.
Prior to each Distribution Date, the Master Servicer shall determine the
total amount of Realized Losses, if any, that resulted from any Cash
Liquidation, Servicing Modification, Debt Service Reduction, Deficient Valuation
or REO Disposition that occurred during the related Prepayment Period or, in the
case of a Servicing Modification that constitutes a reduction of the interest
rate on a Mortgage Loan, the amount of the reduction in the interest portion of
the Monthly Payment due during the related Due Period. The amount of each
Realized Loss shall be evidenced by an Officers' Certificate. All Realized
Losses, other than Excess Special Hazard Losses, Extraordinary Losses, Excess
Bankruptcy Losses or Excess Fraud Losses, shall be allocated as follows: first,
to the Class B-3 Certificates until the Certificate Principal Balance thereof
has been reduced to zero; second, to the Class B-2 Certificates until the
Certificate Principal Balance thereof has been reduced to zero; third, to the
Class B-1 Certificates until the Certificate Principal Balance thereof has been
reduced to zero; fourth, to the Class M-3 Certificates until the Certificate
Principal Balance thereof has been reduced to zero; fifth, to the Class M-2
Certificates until the Certificate Principal Balance thereof has been reduced to
zero; sixth, to the Class M-1 Certificates until the Certificate Principal
Balance thereof has been reduced to zero; and, thereafter, if any such Realized
Losses are on a Discount Mortgage Loan, to the Class A-P Certificates in an
amount equal to the Discount Fraction of the principal portion thereof, and the
remainder of such Realized Losses on the Discount Mortgage Loans and the entire
amount of such Realized Losses on Non-Discount Mortgage Loans will be allocated
among all the Senior Certificates (other than the Class A-V Certificates and
Class A-P Certificates) in the case of the principal portion of such loss on a
pro rata basis and among all of
-28-
the Senior Certificates (other than the Class A-P Certificates) in the case of
the interest portion of such loss on a pro rata basis, as described below.
On any Distribution Date, Realized Losses will be allocated as set forth
herein after distributions of principal on the Certificates as set forth herein.
As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date in the case of the principal portion of a Realized Loss or based on the
Accrued Certificate Interest thereon payable on such Distribution Date (without
regard to any Compensating Interest for such Distribution Date) in the case of
an interest portion of a Realized Loss. Except as provided in the following
sentence, any allocation of the principal portion of Realized Losses (other than
Debt Service Reductions) to a Class of Certificates shall be made by reducing
the Certificate Principal Balance thereof by the amount so allocated, which
allocation shall be deemed to have occurred on such Distribution Date; provided
that no such reduction shall reduce the aggregate Certificate Principal Balance
of the Certificates below the aggregate Stated Principal Balance of the Mortgage
Loans. Any allocation of the principal portion of Realized Losses (other than
Debt Service Reductions) to the Subordinate Certificates then outstanding with
the Lowest Priority shall be made by operation of the definition of "Certificate
Principal Balance" and by operation of the provisions of Section 4.02(a).
Allocations of the interest portions of Realized Losses (other than any interest
rate reduction resulting from a Servicing Modification) shall be made in
proportion to the amount of Accrued Certificate Interest and by operation of the
definition of "Accrued Certificate Interest" and by operation of the provisions
of Section 4.02(a). Allocations of the interest portion of a Realized Loss
resulting from an interest rate reduction in connection with a Servicing
Modification shall be made by operation of the provisions of Section 4.02(a).
Allocations of the principal portion of Debt Service Reductions shall be made by
operation of the provisions of Section 4.02(a). All Realized Losses and all
other losses allocated to a Class of Certificates hereunder will be allocated
among the Certificates of such Class in proportion to the Percentage Interests
evidenced thereby; provided that if any Subclasses of the Class A-V Certificates
have been issued pursuant to Section 5.01(c), such Realized Losses and other
losses allocated to the Class A-V Certificates shall be allocated among such
Subclasses in proportion to the respective amounts of Accrued Certificate
Interest payable on such Distribution Date that would have resulted absent such
reductions.
Section 4.06 Reports of Foreclosures and Abandonment of Mortgaged
Property. (See Section 4.06 of the Standard Terms)
Section 4.07 Optional Purchase of Defaulted Mortgage Loans. (See
Section 4.07 of the Standard Terms)
Section 4.08 Surety Bond. (See Section 4.08 of the Standard Terms)
-29-
ARTICLE V
THE CERTIFICATES
(SEE ARTICLE V OF THE STANDARD TERMS)
-30-
ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
(SEE ARTICLE VI OF THE STANDARD TERMS)
-31-
ARTICLE VII
DEFAULT
(See Article VII of the Standard Terms)
-32-
ARTICLE VIII
CONCERNING THE TRUSTEE
(SEE ARTICLE VIII OF THE STANDARD TERMS)
-33-
ARTICLE IX
TERMINATION OR OPTIONAL PURCHASE OF ALL CERTIFICATES
(See Article IX of the Standard Terms)
-34-
ARTICLE X
REMIC PROVISIONS
Section 10.01 REMIC Administration. (See Section 10.01 of the Standard
Terms).
Section 10.02 Master Servicer; REMIC Administrator and Trustee
Indemnification. (See Section 10.02 of the Standard Terms).
Section 10.03 Designation of REMIC(s).
The REMIC Administrator will make an election to treat the entire
segregated pool of assets (including the Mortgage Loans but excluding the
Initial Monthly Payment Fund) described in the definition of Trust Fund, and
subject to this Agreement, as a REMIC for federal income tax purposes.
The Class [A-1, Class A-2, Class A-3, Class A-4, Class A-P, Class M-1,
Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3] Certificates and the
Uncertificated Class A-V REMIC Regular Interests, the rights in and to which
will be represented by the Class A-V Certificates, will be "regular interests"
in the REMIC, and the Class R Certificates will be the sole class of "residual
interests" therein for purposes of the REMIC Provisions (as defined in the
Standard Terms) under federal income tax law. On and after the date of issuance
of any Subclass of Class A-V Certificates pursuant to Section 5.01(c) of the
Standard Terms, any such Subclass will represent the Uncertificated Class A-V
REMIC Regular Interest or Interests specified by the initial Holder of the Class
A-V Certificates pursuant to said Section.
Section 10.04 Distributions on the Uncertificated Class A-V REMIC Regular
Interests.
(a) On each Distribution Date the Trustee shall be deemed to distribute to
itself, as the holder of the Uncertificated Class A-V REMIC Regular Interests,
Uncertificated Accrued Interest on the Uncertificated Class A-V REMIC Regular
Interests for such Distribution Date, plus any Uncertificated Accrued Interest
thereon remaining unpaid from any previous Distribution Date.
(b) In determining from time to time the Uncertificated Class A-V REMIC
Regular Interest Distribution Amounts, Realized Losses allocated to the Class
A-V Certificates under Section 4.05 shall be deemed allocated to Uncertificated
Class A-V REMIC Regular Interests on a pro rata basis based on the
Uncertificated Class A-V REMIC Accrued Interest for the related Distribution
Date.
(c) On each Distribution Date, the Trustee shall be deemed to distribute
from the Trust Fund, in the priority set forth in Section 4.02(a), to the Class
A-V Certificates, the amounts distributable thereon from the Uncertificated
Class A-V REMIC Regular Interest Distribution Amounts deemed to have been
received by the Trustee from the Trust Fund under this Section 10.04. The amount
deemed distributable hereunder with respect to the Class A-V Certificates shall
equal 100% of the amounts payable with respect to the Uncertificated Class A-V
REMIC Regular Interests.
-35-
(d) Notwithstanding the deemed distributions on the Uncertificated Class
A-V REMIC Regular Interests described in this Section 10.04, distributions of
funds from the Certificate Account shall be made only in accordance with Section
4.02.
Section 10.05 Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Trustee or any
Paying Agent, as applicable, shall comply with all federal withholding
requirements respecting payments to Certificateholders, including interest or
original issue discount payments or advances thereof that the Trustee or any
Paying Agent, as applicable, reasonably believes are applicable under the Code.
The consent of Certificateholders shall not be required for such withholding. In
the event the Trustee or any Paying Agent, as applicable, does withhold any
amount from interest or original issue discount payments or advances thereof to
any Certificateholder pursuant to federal withholding requirements, the Trustee
or any Paying Agent, as applicable, shall indicate the amount withheld to such
Certificateholder pursuant to the terms of such requirements.
-36-
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment. (See Section 11.01 of the Standard Terms)
Section 11.02 Recordation of Agreement, Counterparts. (See Section 11.02
of the Standard Terms)
Section 11.03 Limitation on Rights of Certificateholders. (See
Section 11.03 of the Standard Terms)
Section 11.04 Governing Laws. (See Section 11.04 of the Standard Terms)
Section 11.05 Notices.
All demands and notices 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 (except for notices to the Trustee which shall be deemed to have
been duly given only when received), to the appropriate address for each
recipient listed in the table below or, in each case, such other address as may
hereafter be furnished in writing to the Master Servicer, the Trustee and the
Company, as applicable:
Recipient Address
---------------------------- ---------------------------------------
Company ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: President
Master Servicer ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Managing Director/Master Servicing
Trustee [________________]
[Trustee Address]
Attention: Structured Finance/RFMSI 2006-S11
[Fitch Ratings ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Standard & Poor's ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇]
Any notice required or permitted to be mailed to a Certificateholder shall be
given by first class mail, postage prepaid, at the address of such Holder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Certificateholder receives such notice.
-37-
Section 11.06 Required Notices to Rating Agency and Subservicer. (See
Section 11.06 of the Standard Terms)
Section 11.07 Severability of Provisions. (See Section 11.07 of the
Standard Terms)
Section 11.08 Supplemental Provisions for Resecuritization. (See Section
11.08 of the Standard Terms)
Section 11.09 Allocation of Voting Rights.
[98.0]% of all Voting Rights shall be allocated among Holders of
Certificates, other than the Interest Only Certificates and the Class R
Certificates, in proportion to the outstanding Certificate Principal Balances of
their respective Certificates, [1.0]% of all Voting Rights shall be allocated
among the Holders of the Class A-V Certificates in accordance with their
respective Percentage Interests and [1.0]% of all Voting Rights shall be
allocated among the Holders of the Class R Certificates, respectively, in
accordance with their respective Percentage Interests.
Section 11.10 No Petition. (See Section 11.10 of the Standard Terms).
-38-
ARTICLE XII
COMPLIANCE WITH REGULATION AB
(SEE ARTICLE XII OF THE STANDARD TERMS)
-39-
IN WITNESS WHEREOF, the Company, the Master Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized and their respective seals, duly attested, to be hereunto
affixed, all as of the day and year first above written.
[Seal] RESIDENTIAL FUNDING MORTGAGE
SECURITIES I, INC.
Attest: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
[Seal] RESIDENTIAL FUNDING COMPANY, LLC
Attest: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
[Seal] [_________________],
as Trustee
Attest: By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the _____ day of [_______] 20[__]before me, a notary public in and for
said State, personally appeared __________________, known to me to be a
____________ of Residential Funding Mortgage Securities I, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
-----------------------------------
[Notarial Seal]
-40-
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the ____ day of [_________] 20[__] before me, a notary public in and
for said State, personally appeared ____________, known to me to be an
____________ of Residential Funding Company, LLC, one of the companies that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said company, and acknowledged to me that such company
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
-----------------------------------
[Notarial Seal]
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of [_________] 20[__] before me, a notary public in and for
said State, personally appeared ____________, known to me to be an ____________
of [_________________], a [national banking association that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said [national banking association] and acknowledged to me that such [national
banking association] executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
-----------------------------------
[Notarial Seal]
EXHIBIT ONE
MORTGAGE LOAN SCHEDULE
(Available from the Company upon request)
EXHIBIT 1
EXHIBIT TWO
SCHEDULE OF DISCOUNT FRACTIONS
(Available from the Company upon request)
EXHIBIT 2
EXHIBIT THREE
INFORMATION TO BE INCLUDED IN
MONTHLY DISTRIBUTION DATE STATEMENT
(i) the applicable Record Date, Determination Date and Distribution Date;
(ii) the aggregate amount of payments received with respect to the
Mortgage Loans, including prepayment amounts;
(iii) the Servicing Fee and Subservicing Fee payable to the Master
Servicer and the Subservicer;
(iv) the amount of any other fees or expenses paid;
(v) (a) the amount of such distribution to the Certificateholders of such
Class applied to reduce the Certificate Principal Balance thereof, and (b) the
aggregate amount included therein representing Principal Prepayments;
(vi) the amount of such distribution to Holders of such Class of
Certificates allocable to interest;
(vii) if the distribution to the Holders of such Class of Certificates is
less than the full amount that would be distributable to such Holders if there
were sufficient funds available therefore, the amount of the shortfall;
(viii) the aggregate Certificate Principal Balance of each Class of
Certificates and the Senior Percentage, before and after giving effect to the
amounts distributed on such Distribution Date, separately identifying any
reduction thereof due to Realized Losses other than pursuant to an actual
distribution of principal;
(ix) the weighted average remaining term to maturity of the Mortgage Loans
after giving effect to the amounts distributed on such Distribution Date;
(x) the weighted average Mortgage Rates of the Mortgage Loans after giving
effect to the amounts distributed on such Distribution Date;
(xi) if applicable, the Special Hazard Amount, Fraud Loss Amount and
Bankruptcy Amount as of the close of business on the applicable Distribution
Date;
(xii) the number and Stated Principal Balance of the Mortgage Loans after
giving effect to the distribution of principal on such Distribution Date and the
number of Mortgage Loans at the beginning and end of the preceding Due Period;
(xiii) on the basis of the most recent reports furnished to it by
Sub-Servicers, the number and Stated Principal Balances of Mortgage Loans that
are Delinquent (A) 30-59 days, (B) 60-89 days and (C) 90 or more days and the
number and Stated Principal Balance of Mortgage Loans that are in foreclosure;
EXHIBIT 3-1
(xiv) the aggregate amount of Realized Losses for such Distribution Date;
(xv) the amount, terms and general purpose of any Advance by the Master
Servicer pursuant to Section 4.04;
(xvi) any material modifications, extensions or waivers to the terms of
the Mortgage Loans during the Due Period or that have cumulatively become
material over time;
(xvii) any material breaches of Mortgage Loan representations or
warranties or covenants in the Agreement.
(xviii) the related Subordinate Principal Distribution Amount;
(xix) the number, Stated Principal Balance and actual principal balance of
REO Properties;
(xx) the aggregate Accrued Certificate Interest remaining unpaid, if any,
for each Class of Certificates, after giving effect to the distribution made on
such Distribution Date;
(xxi) the Pass-Through Rate with respect to the Class A-V Certificates;
(xxii) the Notional Amount with respect to each class of Interest Only
Certificates;
(xxiii) the occurrence of the Credit Support Depletion Date;
(xxiv) the Senior Accelerated Distribution Percentage for applicable to
such distribution;
(xxv) the Senior Percentage for such Distribution Date; and
(xxvi) the aggregate amount of any recoveries on previously foreclosed
loans from Sellers.
In the case of information furnished pursuant to clauses (v) and (vi) above, the
amounts shall be expressed as a dollar amount per Certificate with a $1,000
denomination.
The Trustee's internet website will initially be located at
[______________].com. To receive this statement via first class mail, telephone
the Trustee at 1 (800) [_________].
EXHIBIT 3-2
EXHIBIT FOUR
STANDARD TERMS OF POOLING AND SERVICING
AGREEMENT DATED AS OF [______________] 1, 20[____]
EXHIBIT 4-1