ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This is an Assignment, Assumption and Recognition Agreement (this "AAR
Agreement") made as of December 1, 2006, among HSBC Bank USA, National
Association (the "Assignor"), HSI Asset Securitization Corporation (the
"Depositor"), Countrywide Home Loans Servicing LP (the "Servicer") and
Countrywide Home Loans, Inc. (the "Company"), CitiMortgage, Inc., as master
servicer (in such capacity, the "Master Servicer") and Deutsche Bank National
Trust Company, not individually but solely as trustee on behalf of the HSI Asset
Loan Obligation Trust 2006-2 (the "Assignee").
In consideration of the mutual promises contained herein the parties hereto
agree that the residential mortgage loans (the "Assigned Loans") listed on
Exhibit 1 annexed hereto (the "Assigned Loan Schedule") purchased by Assignor
from Company pursuant to (a) the Master Mortgage Loan Purchase Agreement, dated
as of September 1, 2006, between Assignor and Company (the "Purchase Agreement")
and (b) that certain Servicing Agreement, dated as of September 1, 2006, between
the Assignor and the Company, as amended by that certain Amendment Reg AB dated
as of September 1, 2006 (the "Servicing Agreement") ((a) and (b) shall
collectively be referred to herein as the "Purchase and Servicing Agreements"),
shall be subject to the terms of this AAR Agreement. Capitalized terms used
herein but not defined shall have the meanings ascribed to them in the Purchase
Agreement or Servicing Agreement, as applicable.
The Servicer shall service the Assigned Loans in accordance with the
Servicing Agreement as modified by this AAR Agreement.
Assignment and Assumption
1. Assignor hereby grants, transfers and assigns to the Depositor all of
the right, title, interest and obligations of Assignor in the Assigned Loans
and, as they relate to the Assigned Loans, all of its right, title, interest and
obligations in, to and under the Purchase and Servicing Agreements and the
Depositor hereby assumes all rights and obligations with respect to the Assigned
Loans under the Purchase and Servicing Agreements. Assignor specifically
reserves and does not assign to the Depositor any right title and interest in,
to or under any Mortgage Loans subject to the Purchase and Servicing Agreements
other than those set forth on Exhibit l.
Recognition of the Assignee and Assumption by the Assignee
2. From and after the date hereof, each of the Servicer and the Company
shall and does hereby recognize that the Depositor will transfer the Assigned
Loans and assign its rights and obligations under the Purchase and Servicing
Agreements (solely to the extent set forth herein) and this AAR Agreement to the
Assignee pursuant to a Pooling and Servicing Agreement, dated as of December 1,
2006 (the "Pooling Agreement"), among the Depositor, Deutsche Bank National
Trust Company, as trustee (the "Trustee") (including its successors in interest
and any successor trustees under the Pooling Agreement), the Master Servicer,
Citibank, N.A., as securities administrator (the "Securities Administrator") and
▇▇▇▇▇ Fargo Bank, N.A., as custodian. The Assignee acknowledges that all such
rights and obligations (insofar as such obligations related to (1) the covenants
of the Purchaser under the Purchase and Servicing
Agreements with respect to the Assigned Loans and (2) the obligations of the
Purchaser under Section 5.01 of the Servicing Agreement with respect to the
Assigned Loans) are hereby assumed by the Assignee. The Servicer hereby
acknowledges and agrees that from and after the date hereof (i) the Assignee
will be the owner of the Assigned Loans, (ii) the Servicer shall look solely to
the Assignee for performance of any obligations of the Assignor insofar as they
relate to (1) the covenants of the Purchaser under the Purchase and Servicing
Agreements with respect to the Assigned Loans and (2) the obligations of the
Purchaser under Section 5.01 of the Servicing Agreement with respect to the
Assigned Loans, (iii) the Assignee shall have all the rights and remedies
available to the Assignor, insofar as they relate to the Assigned Loans, under
the Purchase and Servicing Agreements, including, without limitation, the
enforcement of the document delivery requirements and remedies with respect to
breaches of representations and warranties set forth in the Purchase Agreement
or Servicing Agreement, as applicable, and shall be entitled to enforce all of
the obligations of the Company and the Servicer thereunder insofar as they
relate to the Assigned Loans, and (iv) all references to the Purchaser (insofar
as they relate to the rights, title and interest and, with respect to
obligations of the Purchaser, only insofar as they relate to (1) the covenants
of the Purchaser under the Purchase and Servicing Agreements with respect to the
Assigned Loans and (2) the obligations of the Purchaser under Section 5.01 of
the Servicing Agreement) under the Purchase and Servicing Agreements insofar as
they relate to the Assigned Loans, shall be deemed to refer to the Assignee.
None of the Servicer, the Company nor the Assignor shall amend or agree to
amend, modify, waiver, or otherwise alter any of the terms or provisions of the
Purchase and Servicing Agreements which amendment, modification, waiver or other
alteration would in any way affect the Assigned Loans or the Servicer's
performance under the Servicing Agreement with respect to the Assigned Loans
without the prior written consent of the Assignee. The Servicer hereby
acknowledges that CitiMortgage, Inc. has been appointed as the Master Servicer
of the Assigned Loans pursuant to this AAR Agreement and therefore has the right
to enforce all obligations of the Servicer, as they relate to the Assigned
Loans, under the Servicing Agreement and this AAR Agreement. Notwithstanding the
foregoing, it is understood that the Servicer shall not be obligated to defend,
indemnify and hold harmless the Master Servicer, the Securities Administrator,
the Assignee, the Assignor and the Depositor against any losses, damages,
penalties, fines, forfeitures, judgments and any related costs including,
without limitation, reasonable and necessary legal fees, solely and directly
resulting from (i) actions or inactions of the Servicer which were taken or
omitted upon the instruction or direction of the Master Servicer, the Securities
Administrator, the Assignee, as applicable, or (ii) the failure of the Master
Servicer, the Securities Administrator or the Trustee, as applicable, to perform
the obligations of the Assignee with respect to this AAR Agreement, or as the
"Owner" or "Purchaser" with respect to the servicing provisions of the Servicing
Agreement.
Representations; Warranties and Covenants
3. Assignor warrants and represents to the Depositor, the Servicer, the
Company and the Assignee as of the date hereof:
a. Attached hereto as Exhibit 2 is a true and accurate copy of the
Servicing Agreement, which agreement is in full force and effect as
of the date hereof and the provisions of which have not been waived,
amended or modified in any respect, nor has any notice of
termination been given thereunder;
b. Assignor is the lawful owner of the Assigned Loans with full right
to transfer the Assigned Loans and any and all of its interests,
rights and obligations under the Purchase and Servicing Agreement as
they relate to the Assigned Loans, free and clear of any and all
liens, claims and encumbrances; and upon the transfer of the
Assigned Loans to Assignee as contemplated herein, Assignee shall
have good title to each and every Assigned Loan, as well as any and
all of Assignor's interests, rights and obligations under the
Purchase and Servicing Agreements as they relate to the Assigned
Loans, free and clear of any and all liens, claims and encumbrances;
c. Assignor has not received notice of, and has no knowledge of, any
offsets, counterclaims or other defenses available to the Servicer
or the Company with respect to the Assigned Loans or the Purchase
and Servicing Agreements;
d. Assignor is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its formation,
and has all requisite power and authority to acquire, own and sell
the Assigned Loans;
e. Assignor has full power and authority to execute, deliver and
perform its obligations under this AAR Agreement, and to consummate
the transactions set forth herein. The consummation of the
transactions contemplated by this AAR Agreement is in the ordinary
course of Assignor's business and will not conflict with, or result
in a breach of, any of the terms, conditions or provisions of
Assignor's charter or by-laws or any legal restriction, or any
material agreement or instrument to which Assignor is now a party or
by which it is bound, or result in the violation of any law, rule,
regulation, order, judgment or decree to which Assignor or its
property is subject. The execution, delivery and performance by
Assignor of this AAR Agreement and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all
necessary action on the part of Assignor. This AAR Agreement has
been duly executed and delivered by Assignor and, upon the due
authorization, execution and delivery by Assignee and the parties
hereto, will constitute the valid and legally binding obligation of
Assignor enforceable against Assignor in accordance with its terms
except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
f. No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is
required to be obtained or made by Assignor in connection with the
execution, delivery or performance by Assignor of this AAR
Agreement, or the consummation by it of the transactions
contemplated hereby; and
g. There is no action, suit, proceeding, investigation or litigation
pending or, to Assignor's knowledge, threatened, which either in any
instance or in the aggregate, if determined adversely to Assignor,
would adversely affect Assignor's execution or delivery of, or the
enforceability of, this AAR Agreement, or the Assignor's ability to
perform its obligations under this AAR Agreement.
4. Assignee warrants and represents to, and covenants with, Assignor, the
Depositor, the Servicer and the Company as of the date hereof:
a. Decision to Purchase. The Assignee is a sophisticated investor able
to evaluate the risks and merits of the transactions contemplated
hereby, and that it has not relied in connection therewith upon any
statements or representations of the Assignor or the Servicer other
than those contained in the Servicing Agreement or this AAR
Agreement.
b. Authority. The Assignee is duly and legally authorized to enter into
this AAR Agreement and to perform its obligations hereunder and
under the Servicing Agreement.
c. Enforceability. This AAR Agreement has been duly authorized,
executed and delivered by the Assignee and (assuming due
authorization, execution and delivery thereof by each of the other
parties hereto) constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether
such enforcement is considered in a proceeding in equity or at law).
5. Each of the Servicer and the Company, as applicable, warrants and
represents to, and covenants with, the Assignor and the Assignee as of the date
hereof:
a. The Purchase and Servicing Agreement is in full force and effect as
of the date hereof and the provisions of which have not been waived,
amended or modified in any respect, nor has any notice of
termination been given thereunder, except as contemplated herein;
b. Each of the Servicer and the Company is duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its formation or incorporation, as the case may be, and has all
requisite power and authority to perform its obligations under the
Purchase and Servicing Agreements;
c. Each of the Servicer and the Company has full corporate or limited
partnership, as applicable, power and authority to execute, deliver
and perform its obligations under this AAR Agreement, and to
consummate the transactions set forth herein. The consummation of
the transactions contemplated by this AAR Agreement is in the
ordinary course of each of the Servicer's and the Company's business
and will not conflict with, or result in a breach of, any of the
terms, conditions or provisions of the Servicer's or the Company's
organizational documentation or any legal restriction, or any
material agreement or instrument to which the Servicer or the
Company is now a party or by which it is bound, or result in the
violation of any law, rule, regulation, order, judgment or decree to
which the Servicer or the Company or its property is subject, except
in such case where the conflict, breach or violation would not have
a material adverse effect on the Servicer or the Company or its
ability to perform its obligations under this AAR Agreement. The
execution, delivery and performance by the Servicer and the Company
of this AAR Agreement and the consummation by it of the transactions
contemplated hereby, have been duly authorized by all necessary
corporate or limited partnership, as applicable, action on the part
of the Servicer and the Company. This AAR Agreement has been duly
executed and delivered by the Servicer and the Company, and, upon
the due authorization, execution and delivery by Assignor and
Assignee, will constitute the valid and legally binding obligation
of the Servicer and the Company, enforceable against the Servicer
and the Company in accordance with its terms except as
enforceability may be limited by bankruptcy, reorganization,
insolvency, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and by general
principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
d. No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to
be obtained or made by the Servicer or the Company in connection
with the execution, delivery or performance by the Servicer or the
Company of this AAR Agreement, or the consummation by it of the
transactions contemplated hereby;
e. There is no action, suit, proceeding, investigation or litigation
pending or, to the Servicer's or the Company's knowledge,
threatened, which either in any instance or in the aggregate, if
determined adversely to the Servicer or the Company, would adversely
affect the Servicer's or the Company's execution or delivery of, or
the enforceability of, this AAR Agreement, or the Servicer's or the
Company's ability to perform its obligations under this AAR
Agreement;
f. The Company hereby represents and warrants, for the benefit of the
Assignor and the Assignee, that the representations and warranties
set forth in Section 3.01 of the Purchase Agreement, are true and
correct in all material respects as of the date hereof, and the
representations and warranties set forth in Section 3.02 of the
Purchase Agreement are true and correct in all material respects as
of the related Closing Date; and
g. The Servicer hereby represents and warrants, for the benefit of the
Assignor and the Assignee, that the representations and warranties
set forth in Section 2.01 of the Servicing Agreement, are true and
correct in all material respects as of the date hereof.
Amendment of the Servicing Agreement
6. In connection with the transfer of the Mortgage Loans hereunder, the
Servicer agrees that, from and after the date hereof, each Mortgage Loan
transferred hereunder will be subject to, and serviced under, the Servicing
Agreement, provided that, solely with respect to the Mortgage Loans transferred
hereunder, the following modifications shall be made:
a. The definition of "Business Day" in Section 1 is hereby amended in
its entirety to read as follows:
Business Day: Any day other than a Saturday or Sunday, or a day
on which banks and savings and loan institutions in California,
Maryland, Massachusetts, Minnesota, New York or Texas are
authorized or obligated by law or executive order to be closed.
b. A new definition of "Permitted Investments" is hereby added to
Article 1 immediately following the definition of "Periodic Rate
Cap" to read as follows:
Permitted Investments: Any one or more of the following
obligations or securities acquired at a purchase price of not
greater than par, regardless of whether issued or managed by the
Depositor, the Securities Administrator, the Assignee or any of
their respective affiliates or for which an affiliate of the any
of the foregoing serves as an advisor:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest
by, the United States or any agency or instrumentality
thereof, provided such obligations are backed by the full
faith and credit of the United States;
(ii) (A) such depository institution or trust company
or its ultimate parent has a short-term uninsured debt
rating in one of the two highest available rating
categories of the Rating Agency and (B) any other demand or
time deposit or deposit which is fully insured by the FDIC;
(iii) repurchase obligations with respect to any
security described in clause (i) above and entered into
with a depository institution or trust company (acting as
principal) rated A or higher by the Rating Agency;
(iv) securities bearing interest or sold at a discount
that are issued by any corporation incorporated under the
laws of the United States of America, the District of
Columbia or any State thereof and that are rated by the
Rating Agency in its highest long-term unsecured rating
categories at the time of such investment or contractual
commitment providing for such investment;
(v) commercial paper (including both
non-interest-bearing discount obligations and
interest-bearing obligations) that is rated by the Rating
Agency in its highest short-term unsecured debt rating
available at the time of such investment;
(vi) units of money market funds (which may be 12b-1
funds, as contemplated by the Commission under the
Investment Company Act of 1940) registered under the
Investment Company Act of 1940 including funds managed or
advised by the Assignee or an affiliate thereof having the
highest applicable rating from the Rating Agency; and
(vii) if previously confirmed in writing to the
Securities Administrator, any other demand, money market or
time deposit, or any other obligation, security or
investment, as may be acceptable to the Rating Agency in
writing as a permitted investment of funds backing
securities having ratings equivalent to its highest initial
ratings of the senior certificates;
(viii) provided, however, that no instrument described
hereunder shall evidence either the right to receive (a)
only interest with respect to the obligations underlying
such instrument or (b) both principal and interest payments
derived from obligations underlying such instrument and the
interest and principal payments with respect to such
instrument provide a yield to maturity at par greater than
120% of the yield to maturity at par of the underlying
obligations.
c. A new definition of "Rating Agency" is hereby added to Article 1
immediately following the definition of "Qualified Substitute
Mortgage Loan" to read as follows:
Rating Agency: Any nationally recognized statistical rating
agency rating the securities issued in the applicable
Pass-Through Transfer.
d. Section 3.04 of the Servicing Agreement (Establishment of Custodial
Accounts; Deposits in Custodial Accounts) is hereby amended as
follows:
(i) by adding the words ", entitled `in trust for the Trustee on
behalf of the HSI Asset Loan Obligation Trust 2006-2 Trust'" at
the end of the first sentence of the first paragraph;
(ii) by adding a new paragraph at the end of the section to read as
follows:
"Funds in the Custodial Account shall, if invested, be invested
in Permitted Investments; provided, however, that the Servicer
shall be under no obligation or duty to invest (or otherwise
pay interest on) amounts held in the Custodial Account. All
Permitted Investments shall mature or be subject to redemption
or withdrawal no later than one Business Day prior to the next
succeeding Remittance Date (except that if such Permitted
Investment is an obligation of the Servicer, then such
Permitted Investment shall mature not later than such
applicable Remittance Date). Any and all investment earnings
from any such Permitted Investment shall be for the benefit of
the Servicer and shall be subject to its withdrawal or order
from time to time, and shall not be part of the Trust. The risk
of loss of moneys required to be remitted to the Securities
Administrator resulting from such investments shall be borne by
and be the risk of the Servicer. The Servicer shall deposit the
amount of any such loss in the Custodial Account immediately as
realized, but in no event later than the related Remittance
Date."
e. Section 3.06 of the Servicing Agreement (Establishment of Escrow
Accounts; Deposits in Escrow Accounts) is hereby amended as follows:
(i) by adding the words ", entitled `in trust for the Trustee on
behalf of the HSI Asset Loan Obligation Trust 2006-2 Trust'" after
the phrase "demand accounts" in the fourth line of the first
paragraph;
f. Section 3.08 shall be amended so that any consent for the transfer
of the Custodial Account or Escrow Account must be obtained from the
Master Servicer and the Depositor.
g. Sections 4.04 and 4.05 are hereby deleted in their entirety.
h. Section 5.04 (Countrywide Not to Resign) is hereby amended by
replacing each reference to "the Purchaser" with "the Master
Servicer."
i. Section 6.01 (Termination Due to an Event of Default) is hereby
amended by replacing each reference to "the Purchaser" with "the
Master Servicer."
j. Section 6.01(a)(i) is hereby amended to replace the reference to
"two (2) Business Day" with "one (1) Business Day."
k. Section 7.13 (Successor to Countrywide) is hereby amended by adding
the following proviso at the end of the second sentence of the first
paragraph immediately before the period to read as follows:
; provided, however, that no such compensation shall be in
excess of that permitted the Servicer under this Agreement.
l. A new Section 7.14 (Amendment) is hereby added to the Servicing
Agreement to read as follows:
SECTION 7.14. Amendment. This Agreement may be amended but only
to the extent such amendment affects the Mortgage Loans by
written agreement signed by the Seller, the Assignee and the
Master Servicer (in furtherance of the Master Servicer's rights,
duties and obligations as Master Servicer for the Trust). In
respect of any such amendment, the Assignee and the Master
Servicer agree to be bound by the requirements for entering into
such amendment provided in Section 12.01 of the pooling and
servicing agreement, including the delivery of any opinion of
counsel required therein.
m. Section 2(g) of Amendment Reg AB is hereby amended by adding the
following subpart:
(vi) The Master Servicer shall be considered a third-party
beneficiary of 2(d), 2(e) and 2(g) of this Amendment Reg AB
(with regard to Section 2(g), solely with respect to
noncompliance under 2(d) and 2(e) of this Amendment Reg AB),
entitled to all the rights and benefits hereof as if it were a
direct party to this Agreement
7. Pursuant to Section 4.02(a) of the Servicing Agreement, the Servicer
shall furnish to the Master Servicer (i)(a) monthly loan data in a mutually
agreed-upon format, (b) default loan data in a mutually agreed-upon format and
(c) information regarding the realized losses and gains in a mutually
agreed-upon format, (ii) all such information required pursuant to clause (i)(a)
above on a magnetic tape, electronic mail, or other similar media reasonably
acceptable to the Master Servicer and the Servicer, and (iii) all supporting
documentation reasonably necessary and available with respect to the information
required above. Notwithstanding the foregoing, the Servicer is not required to
report data relating to prepayment charges or penalties to the extent such
prepayment charges or penalties are retained by the Servicer.
8. All remittances required to be made by the Servicer to the Purchaser
under the Servicing Agreement shall be made to the Securities Administrator by
wire transfer to the following account, or to such other account as may be
specified by the Securities Administrator from time to time:
Citibank, N.A.
ABA #▇▇▇-▇▇▇-▇▇▇
Acct Name: Structured Finance Incoming Wire
Acct. No: [ ]
Ref: HALO 2006-2 A/C# [ ]
9. The Company hereby acknowledges and agrees that the remedies available
to the Assignor and the Assignee in connection with any breach of the
representations and warranties made by the Company set forth in Section 5(f)
hereof shall be as set forth in Subsection 3.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
10. Notwithstanding any term hereof to the contrary, the execution and
delivery of this AAR Agreement by the Trustee is solely in its capacity as
trustee for the Trust and not individually, and any recourse against the Trustee
in respect of any obligations it may have under or pursuant to the terms of this
AAR Agreement shall be limited solely to the assets it may hold as trustee of
the Trust. It is expressly understood and agreed by the parties hereto that (i)
this AAR Agreement is executed and delivered by the Trustee, not individually or
personally but solely as trustee on behalf of the Trust, in the exercise of the
powers and authority conferred and vested in it, (ii) each of the
representations, undertakings and agreements by the Assignee is made and
intended for the purpose of binding only the Trust, (iii) nothing herein
contained shall be construed as creating any liability on the part of the
Trustee, individually or personally, to perform any covenant (either express or
implied) contained herein, and all such liability, if any, is hereby expressly
waived by the parties hereto, and such waiver shall bind any third party making
a claim by or through one of the parties hereto, and (iv) under no circumstances
shall the Trustee be personally liable for the payment of any indebtedness or
expenses of the Trust (including, but not limited to, any amounts to be paid
under the Purchase and Servicing Agreements), or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this AAR Agreement, the Pooling Agreement or any
related document.
Miscellaneous
11. All demands, notices and communications related to the Assigned Loans,
the Purchase and Servicing Agreements and this AAR Agreement shall be in writing
and shall be deemed to have been duly given if personally delivered or mailed by
registered mail, postage prepaid, as follows:
a. In the case of Company,
Countrywide Home Loans, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
b. In the case of the Servicer,
Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇
c. In the case of Assignor,
HSBC Bank USA, National Association
Re: HALO 2006-2
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Head of MBS Principal Finance
d. In the case of Depositor,
HSI Asset Securitization Corporation
Re: HALO 2006-2
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Head of MBS Principal Finance
e. In the case of the Trustee,
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Trust Administration - [ ]
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
f. In the case of the Master Servicer,
CitiMortgage, Inc..
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Master Servicing Division,
Compliance Manager - HALO 2006-2
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
g. In the case of the Securities Administrator
Citibank, N.A.
[contact information to be provided]
12. This AAR Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
13. No term or provision of this AAR Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
14. This AAR Agreement shall inure to the benefit of (i) the successors and
assigns of the parties hereto and (ii) the Assignee. Any entity into which
Assignor, Assignee, Depositor, Servicer or Company may be merged or consolidated
shall without the requirement for any further writing, be deemed Assignor,
Assignee, Depositor, Servicer or Company, respectively hereunder.
15. This AAR Agreement shall survive the conveyance of the Assigned Loans
as contemplated in this AAR Agreement.
16. This AAR Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
17. In the event that any provision of this AAR Agreement conflicts with
any provision of the Purchase and Servicing Agreements with respect to the
Assigned Loans, the terms of this AAR Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have executed this AAR Agreement as
of the day and year first above written.
HSBC BANK USA, NATIONAL ASSOCIATION
Assignor
By:
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director #14311
HSI ASSET SECURITIZATION CORPORATION
Depositor
By:
---------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
Company
By:
---------------------------------------------------
Name:
Title:
COUNTRYWIDE HOME LOANS SERVICING LP
By: Countrywide GP, Inc., its General Partner
Servicer
By:
---------------------------------------------------
Name:
Title:
Agreed to and acknowledged by:
DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity, but solely as Trustee on behalf
of HSI Asset Loan Obligation Trust 2006-2
under the Pooling Agreement
By: ____________________________
Name:
Title:
CITIMORTGAGE, INC., as Master Servicer
By: ________________________________
Name:
Title:
CITIBANK, N.A., as Securities Administrator
By: ________________________________
Name:
Title:
EXHIBIT l
ASSIGNED LOAN SCHEDULE
EXHIBIT 2
SERVICING AGREEMENT
EXECUTION VERSION
SERVICING AGREEMENT
between
COUNTRYWIDE HOME LOANS INC.
(Countrywide)
and
HSBC BANK USA, NATIONAL ASSOCIATION
(Purchaser)
Dated as of September 1, 2006
Conventional Residential Mortgage Loans
TABLE OF CONTENT
Page
----
ARTICLE I. DEFINITIONS......................................................1
ARTICLE II. REPRESENTATIONS AND WARRANTIES..................................11
Section 2.01 Representations and Warranties Respecting Countrywide.........11
ARTICLE III. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS..................13
Section 3.01 Countrywide to Act as Servicer................................13
Section 3.02 Collection of Mortgage Loan Payments..........................14
Section 3.03 Realization Upon Defaulted Mortgage Loans.....................14
Section 3.04 Establishment of Custodial Accounts; Deposits in Custodial
Accounts......................................................16
Section 3.05 Permitted Withdrawals From the Custodial Account..............18
Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow Accounts.19
Section 3.07 Permitted Withdrawals From Escrow Account.....................19
Section 3.08 Transfer of Accounts..........................................20
Section 3.09 Payment of Taxes, Insurance and Other Charges; Maintenance of
PMI Policies; Collections Thereunder..........................19
Section 3.10 Maintenance of Hazard Insurance...............................20
Section 3.11 [Reserved]....................................................21
Section 3.12 Fidelity Bond; Errors and Omissions Insurance.................21
Section 3.13 Title, Management and Disposition of REO Property.............21
Section 3.14 Notification of Adjustments...................................23
Section 3.15 Notification of Maturity Date.................................23
Section 3.16 Assumption Agreements.........................................23
Section 3.17 Satisfaction of Mortgages and Release of Collateral Files.....24
Section 3.18 Servicing Compensation........................................25
Section 3.19 Superior Liens................................................25
Section 3.20 Compliance with REMIC Provisions..............................26
ARTICLE IV. PROVISIONS OF PAYMENTS AND REPORTS TO PURCHASER.................26
Section 4.01 Distributions.................................................26
Section 4.02 Periodic Reports to the Purchaser.............................27
Section 4.03 Monthly Advances by Countrywide...............................27
Section 4.04 Annual Statement as to Compliance.............................28
Section 4.05 Annual Independent Certified Public Accountants' Servicing
Report........................................................29
Section 4.06 Purchaser's Access to Countrywide's Records...................29
ARTICLE V. COVENANTS BY COUNTRYWIDE........................................29
Section 5.01 Indemnification by Countrywide................................29
Section 5.02 Merger or Consolidation of Countrywide........................30
Section 5.03 Limitation on Liability of Countrywide and Others.............30
Section 5.04 Countrywide Not to Resign.....................................31
i
Section 5.05 No Transfer of Servicing......................................31
ARTICLE VI. TERMINATION OF COUNTRYWIDE AS SERVICER..........................31
Section 6.01 Termination Due to an Event of Default.
[Under review by HSBC]........................................31
Section 6.02 Termination by Other Means....................................33
ARTICLE VII. MISCELLANEOUS...................................................34
Section 7.01 Notices.......................................................34
Section 7.02 Exhibits......................................................35
Section 7.03 General Interpretive Principles...............................35
Section 7.04 Reproduction of Documents.....................................35
Section 7.05 Further Agreements............................................36
Section 7.06 Assignment of Mortgage Loans by the Purchaser; Pass-Through
Transfers.....................................................36
Section 7.07 Conflicts between Transaction Documents.......................37
Section 7.08 Governing Law.................................................37
Section 7.09 Severability Clause...........................................38
Section 7.10 Successors and Assigns........................................38
Section 7.11 Confidentiality...............................................38
Section 7.12 Entire Agreement..............................................38
Section 7.13 Successor to Countrywide......................................39
ii
SERVICING AGREEMENT
THIS SERVICING AGREEMENT (this "Agreement") dated as of September 1, 2006, is by
and between COUNTRYWIDE HOME LOANS INC., in its capacity as servicer
("Countrywide"), and HSBC Bank USA, National Association, and its permitted
successors and assigns, as Purchaser (the "Purchaser").
PRELIMINARY STATEMENT
WHEREAS, the Purchaser and Countrywide Home Loans, Inc. have entered into
that certain Master Mortgage Loan Purchase Agreement dated as of September 1,
2006 between the Purchaser and Countrywide, as seller (the "Purchase
Agreement"), pursuant to which the Purchaser will purchase and Countrywide will
sell from time to time, certain conventional Mortgage Loans (as hereinafter
defined) identified in a Purchase Confirmation;
WHEREAS, Countrywide is in the business of providing primary servicing of
mortgage loans and owns the right to service the Mortgage Loans listed on the
Mortgage Loan Schedule (as hereinafter defined);
WHEREAS, Countrywide has agreed to service the Mortgage Loans for the
Purchaser on the terms and conditions set forth herein; and
WHEREAS, Countrywide and the Purchaser desire to prescribe the terms and
conditions regarding the management, servicing, and control of such Mortgage
Loans.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Countrywide and the Purchaser
agree as follows:
ARTICLE I.
DEFINITIONS
Unless the context requires otherwise, all capitalized terms used herein
shall have the meanings assigned to such terms in this Article I unless defined
elsewhere herein. Any capitalized term used but not defined herein shall have
the meaning specified in the Purchase Agreement. Any capitalized term used or
defined in a Purchase Confirmation that conflicts with the corresponding
definition set forth herein shall supersede such term.
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices (including collection procedures) that (i)
Countywide applies to similar mortgage loans serviced for third parties or for
its own account, (ii) conform to the customary and usual standards of practice
of prudent mortgage banking institutions which service mortgage loans of a
similar type as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located and (iii) are in accordance with ▇▇▇▇▇▇ ▇▇▇
servicing practices and procedures for MBS pool mortgages, as defined in the
applicable ▇▇▇▇▇▇ Mae Servicing Guide, the terms of the Collateral Documents and
all applicable federal, state and local law.
1
Adjustable Rate Mortgage Loan: Any Mortgage Loan in which the related
Mortgage Note contains a provision whereby the Mortgage Interest Rate is
adjusted from time to time in accordance with the terms of such Mortgage Note.
Agency: Either ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
Agreement: This Servicing Agreement, including all exhibits and
supplements hereto, and all amendments hereof.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan wherein the Mortgage Note
matures prior to full amortization and requires a final and accelerated payment
of principal.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day
on which banking and savings and loan institutions in the State of California,
the State of New York, or the State of Texas are authorized or obligated by law
or executive order to be closed.
Cash Liquidation: Recovery of all cash proceeds by Countrywide with
respect to the termination of any defaulted Mortgage Loan other than a Mortgage
Loan which became an REO Property, including any PMI Proceeds, Other Insurance
Proceeds, Liquidation Proceeds, Condemnation Proceeds and other payments or
recoveries whether made at one time or over a period of time which Countrywide
deems to be finally recoverable, in connection with the sale or assignment of
such Mortgage Loan, trustee's sale, foreclosure sale or otherwise.
Closing: The consummation of the sale and purchase of each Mortgage Loan
Package.
Closing Date: The date on which the purchase and sale of the Mortgage
Loans constituting a Mortgage Loan Package is consummated, as set forth in the
Trade Confirmation or Purchase Confirmation.
Code: The Internal Revenue Code of 1986, or any successor statute
thereto.
Collateral Documents: The collateral documents pertaining to each
Mortgage Loan as set forth in Exhibit of the Purchase Agreement.
Collateral File: With respect to each Mortgage Loan, a file containing
each of the Collateral Documents.
Condemnation Proceeds: All awards or settlements in respect of a taking
of an entire Mortgaged Property by exercise of the power of eminent domain or
condemnation.
Countrywide: Countrywide Home Loans, Inc., or any successor or assign to
Countrywide under this Agreement as provided herein.
2
Credit File: The file retained by Countrywide that includes the mortgage
loan documents pertaining to a Mortgage Loan including copies of the Collateral
Documents together with the credit documentation relating to the origination of
such Mortgage Loan, which Credit File may be maintained by Countrywide on
microfilm or any other comparable medium.
Custodial Account: The account or accounts created and maintained
pursuant to Section 3.04 herein, each of which shall be an Eligible Account.
Custodial Agreement: The agreement governing the retention of the
originals of the Collateral Documents, annexed hereto as Exhibit C to the
Purchase Agreement.
Custodian: ▇▇▇▇▇ Fargo Bank, National Association, its successor in
interest or assign, or such other custodian that may be designated by
Countrywide from time to time.
Determination Date: The Business Day immediately preceding the related
Remittance Date.
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period commencing
on the second day of the month preceding the month of the Remittance Date and
ending on the first day of the month of the Remittance Date.
Eligible Account: An account or accounts (i) maintained with a
depository institution the short term debt obligations of which are rated by a
nationally recognized statistical rating agency in one of its two (2) highest
rating categories at the time of any deposit therein or, (ii) maintained with an
institution and in a manner acceptable to an Agency.
Escrow Account: The separate trust account or accounts created and
maintained pursuant to Section 3.06 herein, each of which shall be an Eligible
Account.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments, water rates, fire and hazard insurance premiums, flood insurance
premiums, if applicable, and other payments required to be escrowed by the
Mortgagor with the Mortgagee pursuant to any Mortgage Loan.
Exchange Act. The Securities Exchange Act of 1934, as amended.
Event of Default: Any one of the conditions or circumstances enumerated
in Section 6.01 of this Agreement.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association or any successor
organization.
▇▇▇▇▇▇ Mae Servicing Guide: The ▇▇▇▇▇▇ ▇▇▇ Servicing Guide and all
amendments or additions thereto, as applicable.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
3
FHA: The Federal Housing Administration.
Final Recovery Determination: With respect to any defaulted Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property purchased by
Countrywide pursuant to this Agreement), a determination made by Countrywide
that all Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which Countrywide, in its reasonable good faith judgment, expects to
be finally recoverable in respect thereof have been so recovered. Countrywide
shall maintain records, prepared by a servicing officer of Countrywide, of each
Final Recovery Determination.
Fidelity Bond: A fidelity bond to be maintained by Countrywide pursuant
to Section 3.12 of this Agreement.
First Lien Mortgage Loan: Any Mortgage Loan secured by a first lien on
the related Mortgaged Property.
Fixed Rate Mortgage Loan: Any Mortgage Loan wherein the Mortgage Interest
Rate set forth in the Mortgage Note is fixed for the term of such Mortgage Loan.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation or any successor
organization.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note, which amount is
added to the index in accordance with the terms of the related Mortgage Note to
determine on each Interest Adjustment Date, the Mortgage Interest Rate for such
Mortgage Loan.
HUD: The Department of Housing and Urban Development or any federal
agency or official thereof which may from time to time succeed to the functions
thereof.
Interest Adjustment Date: With respect to an Adjustable Rate Mortgage
Loan, the date on which an adjustment to the Mortgage Interest Rate on a
Mortgage Note becomes effective.
LTV: With respect to any Mortgage Loan, the ratio (expressed as a
percentage) of the Stated Principal Balance (or the original principal balance,
if so indicated) of such Mortgage Loan as of the date of determination to the
Appraised Value of the related Mortgaged Property.
Late Collections: With respect to any Mortgage Loan, all amounts received
during any Due Period, whether as late payments of Monthly Payments or as
Liquidation Proceeds, Condemnation Proceeds, PMI Proceeds (if applicable), Other
Insurance Proceeds, proceeds of any REO Disposition or otherwise, which
represent late payments or collections of Monthly Payments due but delinquent
for a previous Due Period and not previously recovered.
Lifetime Rate Cap: With respect to each Adjustable Rate Mortgage Loan,
the absolute maximum Mortgage Interest Rate payable, above which the Mortgage
Interest Rate shall not be adjusted, as set forth in the related Mortgage Note
and Mortgage Loan Schedule.
4
Liquidation Proceeds: Amounts, other than PMI Proceeds, Condemnation
Proceeds and Other Insurance Proceeds, received by Countrywide in connection
with the liquidation of a defaulted Mortgage Loan through trustee's sale,
foreclosure sale or otherwise, other than amounts received following the
acquisition of an REO Property pursuant to Section 3.13 of this Agreement.
LPMI Fee: The portion of the Mortgage Interest Rate relating to an LPMI
Loan, which is set forth on the related Mortgage Loan Schedule, to be retained
by Countrywide to pay the premium due on the PMI Policy with respect to such
LPMI Loan.
LPMI Loan: Any Mortgage Loan with respect to which Countrywide is
responsible for paying the premium due on the related PMI Policy with the
proceeds generated by the LPMI Fee relating to such Mortgage Loan, as set forth
on the related Mortgage Loan Schedule.
MIC: A mortgage insurance certificate issued by HUD.
Monthly Advance: The advances made or required to be made.
Monthly Payment: The scheduled monthly payment of principal and interest
on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Mortgage
Loan, or a second lien, in the case of a Second Lien Mortgage Loan, on an
unsubordinated estate in fee simple in real property securing the Mortgage Note.
Mortgage Interest Rate: The annual rate at which interest accrues on any
Mortgage Loan and, with respect to an Adjustable Rate Mortgage Loan, as adjusted
from time to time in accordance with the provisions of the related Mortgage
Note.
Mortgage Loan: Any mortgage loan that is sold pursuant to this Agreement,
as evidenced by such mortgage loan's inclusion on the related Mortgage Loan
Schedule, which mortgage loan includes the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, PMI Proceeds (if
applicable), Other Insurance Proceeds, REO Disposition proceeds, and all other
rights, benefits, proceeds and obligations arising from or in connection with
such Mortgage Loan, excluding the servicing rights relating thereto. Unless the
context requires otherwise, any reference to the Mortgage Loans in this
Agreement shall refer to the Mortgage Loans constituting a Mortgage Loan
Package.
Mortgage Loan Package: The Mortgage Loans sold to the Purchaser pursuant
to a Purchase Confirmation.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
interest rate payable to the Purchaser on each Remittance Date which shall equal
the Mortgage Interest Rate less the Servicing Fee and the LPMI Fee, if
applicable.
Mortgage Loan Schedule: With respect to each Mortgage Loan Package, the
schedule of Mortgage Loans included therein and made a part of the related
Purchase Confirmation, which
5
schedule shall include, the following information with respect to each Mortgage
Loan: (i) Countrywide's loan number identifying such Mortgage Loan; (ii) the
Mortgage Interest Rate as of the Cut-off Date; (iii) with respect to any
Adjustable Rate Mortgage Loan, the Gross Margin, the Periodic Rate Cap, the
Lifetime Rate Cap, the next Interest Adjustment Date, the first Interest
Adjustment Date, the minimum Mortgage Interest Rate and the Index, (iv) with
respect to each First Lien Mortgage Loan, the LTV at origination and, with
respect to each Second Lien Mortgage Loan, the Combined LTV at origination; (v)
the original term of such Mortgage Loan, (vi) whether such Mortgage Loan is a
First Lien Mortgage Loan or a Second Lien Mortgage Loan; (vii) the Mortgagor's
first and last name; (viii) the street address of the Mortgaged Property
including the city, state and zip code; (ix) a code indicating whether the
Mortgaged Property is owner-occupied; (x) the type of Residential Dwelling
constituting the Mortgaged Property; (xi) the original months to maturity; (xii)
the date on which the first Monthly Payment was due on the Mortgage Loan;
(xiiii) the stated maturity date; (xiv) the amount of the Monthly Payment as of
the Cut-off Date; (xv) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance; (xvi) the original principal
amount of the Mortgage Loan and, with respect to a Second Lien Mortgage Loan,
the CLTV; (xvii) the Stated Principal Balance of the Mortgage Loan; (xviii) a
code indicating the purpose of the loan (i.e., purchase financing, Rate/Term
Refinancing, Cash-Out Refinancing); (xix) the date on which the first Monthly
Payment was due on the Mortgage Loan and, if such date is not consistent with
the Due Date currently in effect, such Due Date; (xx) a code indicating the
documentation style; (xxi) a code indicating whether the Mortgage Loan is an
Adjustable Rate Mortgage Loan or a Fixed Rate Mortgage Loan; (xxii) the
Appraised Value of the Mortgaged Property; (xxiii) the sale price of the
Mortgaged Property, if applicable; (xxiv) a code indicating whether the Mortgage
Loan is subject to a Prepayment Charge or penalty; (xxv) the amount and the term
of any Prepayment Charge or penalty; (xxvi) with respect to each MERS Mortgage
Loan, the related MIN; (xxvii) a code indicating if the Mortgage Loan is an
interest-only Mortgage Loan and, if so, the term of the interest-only period of
such Mortgage Loan; (xxix) a code indicating whether the Mortgage Loan is a
Balloon Mortgage Loan; (xxx) the points and fees charged in connection with the
origination of such Mortgage Loan as qualified by an Agency flag; (xxxi) a code
indicating if the Mortgage Loan is subject to an LPMI Policy, and if so, the
LPMI Fee; and (xxxii) with respect to any PMI Policy or LPMI Policy, the
provider of such insurance and the coverage percentage of such insurance.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and the
successors and assigns of such mortgagee or beneficiary.
Mortgagor: The obligor on a Mortgage Note.
Opinion of Counsel: A written opinion of counsel, who may be an employee
of the party on behalf of whom the opinion is being given.
6
Other Insurance Proceeds: Proceeds of any title policy, hazard policy,
pool policy or other insurance policy covering a Mortgage Loan, to the extent
such proceeds are not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that
Countrywide would follow in servicing mortgage loans held for its own account.
Pass-Through Transfer: Any transaction involving either (1) a sale or
other transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (2) an issuance of
publicly offered or privately placed, rated or unrated securities, the payments
on which are determined primarily by reference to one or more portfolios of
residential mortgage loans consisting, in whole or in part, of some or all of
the Mortgage Loans.
Payment Adjustment Date: As to each Mortgage Loan, the date on which an
adjustment to the Monthly Payment on a Mortgage Note becomes effective.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan,
the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase or decrease on
an Adjustment Date above or below the Mortgage Interest Rate previously in
effect, equal to the rate set forth on the Mortgage Loan Schedule per
adjustment.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, limited liability corporation,
unincorporated organization or government or any agency or political subdivision
thereof.
Prepayment Charge: With respect to each Mortgage Loan, the fee, if any,
payable upon the prepayment of principal, in whole or in part, of such Mortgage
Loan, as set forth in the related Mortgage Note.
Prepayment Interest Shortfall Amount: With respect to any Remittance Date
and Mortgage Loan that was subject to a Principal Prepayment in full or in part
during the related Principal Prepayment Period, which Principal Prepayment was
applied to such Mortgage Loan prior to such Mortgage Loan's Due Date in such
calendar month, the amount of interest (at the Mortgage Loan Remittance Rate)
that would have accrued on the amount of such Principal Prepayment during the
period commencing on the date as of which such Principal Prepayment was applied
to such Mortgage Loan and ending on the day immediately preceding such Due Date,
inclusive.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date (excluding
any Prepayment Charge, unless the related Purchase Confirmation provides
otherwise), which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent to
the month of prepayment.
Principal Prepayment Period: As to any Remittance Date, the calendar
month preceding the month of distribution.
7
Purchase Agreement: The Master Mortgage Loan Purchase Agreement, dated as
of September 1, 2006, by and between the Purchaser and Countrywide.
Purchase Confirmation: A letter agreement, substantially in the form of
an exhibit to the Purchase Agreement, executed by Countrywide and the Purchaser
in connection with the purchase and sale of each Mortgage Loan Package, which
sets forth the terms relating thereto including a description of the related
Mortgage Loans (including the Mortgage Loan Schedule), the purchase price for
such Mortgage Loans, the Closing Date and the Servicing Fee Rate.
Purchaser: The Person identified as the "Purchaser" in the preamble to
this Agreement or its successor in interest or any successor or assign to the
Purchaser under this Agreement as herein provided. Any reference to "Purchaser"
as used herein shall be deemed to include any designee of the Purchaser, so long
as such designation was made in accordance with the limitations set forth in
Section 7.06 of this Agreement.
Qualified Insurer: An insurance company duly qualified as such under the
laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided with a rating category as set forth
in the applicable Underwriting Guidelines.
Qualified Substitute Mortgage Loan: A mortgage loan that must, on the
date of such substitution, (i) have an unpaid principal balance, after deduction
of all scheduled payments due in the month of substitution (or if more than one
(1) mortgage loan is being substituted, an aggregate principal balance), not in
excess of the unpaid principal balance of the repurchased Mortgage Loan (the
amount of any shortfall will be deposited in the Custodial Account by
Countrywide in the month of substitution); (ii) have a Mortgage Interest Rate
not less than, and not more than 1% greater than, the Mortgage Interest Rate of
the repurchased Mortgage Loan; (iii) have a remaining term to maturity not
greater than, and not more than one year less than, the maturity date of the
repurchased Mortgage Loan; (iv) comply with each representation and warranty
(respecting individual Mortgage Loans) set forth in Section 3.02 hereof; (v)
shall be the same type of Mortgage Loan (i.e., a Convertible Mortgage Loan or a
Fixed Rate Mortgage Loan); (vi) have the same Due Date as the Due Date on the
substituted Mortgage Loan; and (vii) have a LTV, and in the case of a Second
Lien Mortgage Loan, a Combined LTV Ratio as of the date of substitution equal to
or lower than the LTV or Combined LTV Ratio of the related substituted Mortgage
Loan as of such date. In the event that one or more mortgage loans are
substituted for one or more substituted Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate principal
balances, the Mortgage Interest Rates described in clause (ii) hereof shall be
determined on the basis of weighted average Mortgage Interest Rates and shall be
satisfied as to each such mortgage loan, the terms described in clause (iii)
shall be determined on the basis of weighted average remaining terms to
maturity, the LTV, and in the case of Second Lien Mortgage Loans the Combined
LTV Ratios described in clause (v) hereof shall be satisfied as to each such
Qualified Substitute Mortgage Loan and, except to the extent otherwise provided
in this sentence, the representations and warranties described in clause (iv)
hereof must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.
8
Reconstitution Date: The date or dates on which any or all of the
Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and reconstituted as part of a Pass-Through Transfer or Whole Loan
Transaction pursuant to Section 7.06 hereof. The Reconstitution Date shall be
such date which the Purchaser shall designate. On such date, the Mortgage Loans
transferred shall cease to be covered by this Agreement and Countrywide's
servicing responsibilities shall cease under this Agreement with respect to the
related transferred Mortgage Loans.
REMIC: A "real estate mortgage investment conduit within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to
REMICs, which appear in Sections 860A through 860G of the Code, and related
provisions, and proposed, temporary and final regulations and published rulings,
notices and announcements promulgated thereunder, as applicable, as the
foregoing may be in effect from time to time.
Remittance Date: The eighteenth (18th) day of any month, beginning with
the month next following the month in which the related Cut-off Date occurs, or
if such eighteenth (18th) day is not a Business Day, the first Business Day
immediately following.
REO Disposition: The final sale by Countrywide of any REO Property or the
transfer of the management of such REO Property to the Purchaser as set forth in
Section 3.13 of this Agreement.
REO Property: A Mortgaged Property acquired by Countrywide on behalf of
the Purchaser as described in Section 3.13 of this Agreement.
Repurchase Price: With respect to any Mortgage Loan, a price equal to (i)
the Stated Principal Balance of the Mortgage Loan plus (ii) interest on such
Stated Principal Balance at the Mortgage Loan Remittance Rate from the last date
through which interest has been paid and distributed to the Purchaser to the
date of repurchase, less amounts received or advanced in respect of such
repurchased Mortgage Loan which such amounts are being held in the Custodial
Account for distribution in the month of repurchase, plus (iii) any costs and
expenses incurred by the Purchaser in respect of a material breach of Section
3.01 or 3.02 of this Agreement, including without limitation, any costs and
damages incurred by the Purchaser, the servicer, master servicer or any trustee
for any costs and damages incurred by any such party in connection with a
violation by any such Mortgage Loan of any applicable anti-predatory or abusive
lending law.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second lien on
the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Seller: Countrywide Home Loans, Inc.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by Countrywide of its
servicing obligations, including the
9
cost of (i) the preservation, restoration and protection of the Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
(iii) the management and liquidation of the REO Property and (iv) compliance
with the obligations under this Agreement including Section 3.09 hereof.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to Countrywide, which shall, for a period of
one full month, be equal to one-twelfth of the product of (i) the Servicing Fee
Rate and (ii) the Stated Principal Balance of such Mortgage Loan. Such fee shall
be payable monthly, computed on the basis of the same principal amount and
period respecting which any related interest payment on a Mortgage Loan is
computed. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds and
other proceeds) of such Monthly Payment collected by Countrywide, or as
otherwise provided herein. Subject to the foregoing, and with respect to each
Mortgage Loan, Countrywide shall be entitled to receive its Servicing Fee
through the disposition of any related REO Property and the Servicing Fee
payable with respect to any REO Property shall be based on the Stated Principal
Balance of the related Mortgage Loan at the time of foreclosure.
Servicing Fee Rate: With respect to any Mortgage Loan, the rate per annum
set forth in the applicable Trade Confirmation or Purchase Confirmation.
Servicing LP: Countrywide Home Loans Servicing LP, a Texas limited
partnership, and its successors and assigns.
Servicing Officer: Any officer of Countrywide involved in, or responsible
for, the administration and servicing of the Mortgage Loans whose name appears
on a list of servicing officers furnished by Countrywide to Purchaser upon
request, as such list may from time to time be amended.
Stated Principal Balance: With respect to each Mortgage Loan as of any
date of determination: (i) the unpaid principal balance of the Mortgage Loan at
the Cut-off Date after giving effect to payments of principal due on or before
such date, whether or not received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal or advances in lieu thereof.
Trade Confirmation: A letter agreement substantially in the form of an
exhibit attached to the Purchase Agreement executed by Countrywide and the
Purchaser prior to the applicable Closing Date confirming the terms of a
prospective purchase and sale of a Mortgage Loan Package.
Transaction Documents: With respect to any Mortgage Loan, the related
Trade Confirmation, the related Purchase Confirmation, this Agreement and the
Purchase Agreement.
Updated LTV: With respect to any Mortgage Loan, the outstanding principal
balance of such Mortgage Loan as of the date of determination divided by the
value of the related Mortgaged Property as determined by a recent appraisal of
the Mortgaged Property.
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Whole Loan Transfer: The sale or transfer by the Purchaser of some or all
of the Mortgage Loans, other than in a Pass-Through Transfer.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01 Representations and Warranties Respecting Countrywide.
Countrywide represents, warrants and covenants to the Purchaser that, as
of each Closing Date:
(a) Countrywide is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized and is
qualified and licensed to transact business in and is in good standing under the
laws of each state where each Mortgaged Property is located to the extent
necessary to ensure the enforceability of each Mortgage Loan and the servicing
of the Mortgage Loan in accordance with the terms of this Agreement and no
demand for such licensing or qualification has been made upon Countrywide by any
such state.
(b) Countrywide has the full power and authority to (i) perform and
enter into and consummate all transactions contemplated by this Agreement and
(ii) to service each Mortgage Loan. Countrywide has duly authorized the
execution, delivery and performance of this Agreement, has duly executed and
delivered this Agreement, and this Agreement, assuming due authorization,
execution and delivery by the Purchaser, constitutes a legal, valid and binding
obligation of Countrywide, enforceable against it in accordance with its terms
except as the enforceability thereof may be limited by bankruptcy, insolvency or
reorganization;
(c) Neither the servicing of the Mortgage Loans for the Purchaser,
the consummation of the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions of this Agreement, will conflict
with or result in a breach of any of the terms, conditions or provisions of
Countrywide's organizational documents or result in a material breach of any
legal restriction or any material agreement or instrument to which Countrywide
is now a party or by which it is bound, or constitute a material default or
result in an acceleration under any of the foregoing, or result in the violation
of any material law, rule, regulation, order, judgment or decree to which
Countrywide or its property is subject;
(d) Countrywide is an approved servicer for each Agency in good
standing. No event has occurred, including a change in insurance coverage, which
would make Countrywide unable to comply with ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac
eligibility requirements;
(e) There is no action, suit, proceeding, investigation or
litigation pending or, to Countrywide's knowledge, threatened, which either in
any one instance or in the aggregate, if determined adversely to Countrywide
would materially and adversely affect the servicing of the Mortgage Loans to the
Purchaser or Countrywide's ability to perform its obligations under this
Agreement;
(f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Countrywide of, or
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compliance by Countrywide, with this Agreement or the consummation of the
transactions contemplated by this Agreement, or if required, such consent,
approval, authorization or order has been obtained prior to the related Closing
Date;
(g) The execution and delivery of this Agreement by Countrywide and
its performance and compliance with the terms of this Agreement will not
constitute a violation with respect to, any order or decree of any court or any
order or regulation of any federal, state, municipal or governmental agency
having jurisdiction over Countrywide or its assets, which violation would
materially and adversely affect the performance of its obligations and duties
hereunder;
(h) Countrywide does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained in
this Agreement;
(i) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of Countrywide;
(j) Countrywide acknowledges and agrees that the Servicing Fee
represents reasonable compensation for performing such services and that the
entire Servicing Fee shall be treated by Countrywide, for accounting and tax
purposes, as compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement;
(k) Neither this Agreement nor any written statement, report or
other document prepared and furnished by Countrywide pursuant to this Agreement
or in connection with the transactions contemplated hereby contains any untrue
statement of material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading; and
(l) Countrywide is a member of MERS, and is current in payment of
all fees and assessments imposed by MERS.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Countrywide to Act as Servicer.
Countrywide, as an independent contract servicer, shall service and
administer Mortgage Loans sold pursuant to this Agreement in accordance with the
terms of this Agreement and shall have full power and authority, acting alone,
to do or cause to be done any and all things, in connection with such servicing
and administration, that Countrywide may deem necessary or desirable and
consistent with the terms of this Agreement. In servicing and administering the
Mortgage Loans, Countrywide shall employ procedures in accordance with Accepted
Servicing Practices. Countrywide shall be responsible for any and all acts of a
subservicer and a subcontractor, and the utilization of a subservicer or a
subcontractor contracted by Countrywide shall in no way relieve the liability of
Countrywide under this Agreement.
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Consistent with the terms of this Agreement, Countrywide may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in Countrywide's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser; provided, however, that Countrywide shall not permit any modification
with respect to any Mortgage Loan that would decrease the Mortgage Interest Rate
(other than by adjustments required by the terms of the Mortgage Note), forgive
the payment thereof or of any principal or interest payments, reduce the
outstanding principal amount (except for actual payments of principal) or extend
the final maturity date on such Mortgage Loan without the Purchaser's consent.
Countrywide may permit forbearance or allow for suspension of Monthly Payments
for up to one hundred and eighty (180) days if the Mortgagor is in default or
Countrywide determines in its reasonable discretion, that default is imminent
and if Countrywide determines that granting such forbearance or suspension is in
the best interest of the Purchaser. If any modification, forbearance or
suspension permitted hereunder allows the deferral of interest or principal
payments on any Mortgage Loan, Countrywide shall include in each remittance for
any month in which any such principal or interest payment has been deferred
(without giving effect to such modification, forbearance or suspension) an
amount equal to such month's principal and one (1) month's interest at the
Mortgage Loan Remittance Rate on the then unpaid principal balance of the
Mortgage Loan and shall be entitled to reimbursement for such advances only to
the same extent as for Monthly Advances made pursuant to Section 4.03 of this
Agreement. Without limiting the generality of the foregoing, Countrywide shall
continue, and is hereby authorized and empowered to execute and deliver on
behalf of itself and the Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Property. If reasonably required by Countrywide, the Purchaser shall
furnish Countrywide with any powers of attorney and other documents necessary or
appropriate to enable Countrywide to carry out its servicing and administrative
duties under this Agreement.
Countrywide or its designee will furnish, with respect to each Mortgage
Loan, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and requisite information on its borrower credit files to
Equifax Credit Information Service, Inc., Experian Information Solution, Inc.,
and Trans Union, LLC, on a monthly basis. Countrywide will also comply in all
material respects with the rules and procedures of MERS in connection with the
servicing of the Mortgage Loans that are registered with MERS.
If the Mortgage Loans or any REO Properties are included in a
Pass-Through Transfer or transferred to an Agency (an "Agency Transfer"), that
is a REMIC, Countrywide shall not take any action or fail to take any action
that could materially and adversely affect the status of any REMIC related to
the Mortgage Loans, or impose upon the REMIC a tax on prohibited transactions or
contributions, unless Countrywide has received an Opinion of Counsel (at the
expense of the party seeking to take such action) to the effect that the
contemplated action will not materially and adversely affect such REMIC status
or result in the imposition of any tax on the REMIC.
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Countrywide shall monitor the Mortgage Loans on an ongoing basis, in
compliance with the regulations promulgated by the Office of Foreign Assets
Control of the United States Department of the Treasury (the "OFAC
Regulations").
Section 3.02 Collection of Mortgage Loan Payments.
Countrywide shall collect all payments due under each Mortgage Loan in
accordance with Accepted Servicing Practices. Further, Countrywide shall take
care in ascertaining and estimating annual ground rents, taxes, assessments,
water rates, fire and hazard insurance premiums, and all other charges that are
required to be escrowed in accordance with Accepted Servicing Practices.
Section 3.03 Realization Upon Defaulted Mortgage Loans.
(a) Foreclosure. Countrywide shall act in accordance with Accepted
Servicing Practices, to foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments. Countrywide shall use reasonable efforts to
realize upon defaulted Mortgage Loans, in such manner as will maximize the
receipt of principal and interest by the Purchaser, taking into account, among
other things, the timing of foreclosure proceedings. The foregoing is subject to
the provisions that, in any case in which Mortgaged Property shall have suffered
damage, Countrywide shall not be required to expend its own funds toward the
restoration of such Mortgaged Property unless it shall determine in its
discretion (i) that such restoration will increase the proceeds of liquidation
of the related Mortgage Loan to the Purchaser after reimbursement to itself for
such expenses, and (ii) that such expenses will be recoverable by Countrywide
through PMI Proceeds, Other Insurance Proceeds or Liquidation Proceeds from the
related Mortgaged Property. Countrywide shall notify the Purchaser in writing of
the commencement of foreclosure proceedings. Such notice may be contained in the
reports prepared by Countrywide and delivered to the Purchaser pursuant to the
terms and conditions of this Agreement. Countrywide shall be responsible for all
costs and expenses incurred by it in any foreclosure proceedings; provided,
however, that it shall be entitled to reimbursement thereof from proceeds from
the related Mortgaged Property.
(b) Notwithstanding the foregoing provisions of this Section 3.03
or any other provision of this Agreement, with respect to any Mortgage Loan as
to which Countrywide has received actual notice of, or has actual knowledge of,
the presence of any toxic or hazardous substance on the related Mortgaged
Property, Countrywide shall not, on behalf of the Purchaser, either (i) obtain
title to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action,
with respect to, such Mortgaged Property if, as a result of any such action, the
Purchaser would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless Countrywide has also previously determined, based
on its reasonable judgment and a report prepared by a Person who regularly
conducts environmental audits using customary industry standards, that:
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(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best
economic interest of the Purchaser to take such actions as are
necessary to bring the Mortgaged Property into compliance
therewith; and
(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any
hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required
under any federal, state or local law or regulation, or that if any
such materials are present for which such action could be required,
that it would be in the best economic interest of the Purchaser to
take such actions with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this Section
3.03 shall be advanced by Countrywide, subject to Countrywide's right to be
reimbursed therefor from the Custodial Account.
If Countrywide determines, as described above, that it is in the best
economic interest of the Purchaser to take such actions as are necessary to
bring any such Mortgaged Property into compliance with applicable environmental
laws, or to take such action with respect to the containment, clean-up or
remediation of hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials affecting any such Mortgaged Property, then
Countrywide shall take such action as it deems to be in the best economic
interest of the Purchaser, provided, however, that Countrywide shall not proceed
with foreclosure or acceptance of a deed in lieu of foreclosure if the estimated
costs of the environmental clean up, as estimated in the environmental audit
report, together with the Servicing Advances and Monthly Advances made by
Countrywide and the estimated costs of foreclosure or acceptance of a deed in
lieu of foreclosure exceeds the estimated value of the Mortgaged Property. The
cost of any such compliance, containment, cleanup or remediation shall be
advanced by Countrywide, subject to Countrywide's right to be reimbursed
therefor from the Custodial Account.
(c) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds in respect of any Mortgage Loan, will
be applied in the following order of priority: first, to reimburse Countrywide
for any related unreimbursed Servicing Advances, pursuant to Section 3.05(c);
second, to accrued and unpaid interest on the Mortgage Loan, to the date of the
Final Recovery Determination, or to the Due Date prior to the Remittance Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by Countrywide as follows: first, to unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
The portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to Countrywide pursuant to Section 3.05(c).
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Section 3.04 Establishment of Custodial Accounts; Deposits in Custodial
Accounts.
Countrywide shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one (1) or more Custodial
Accounts, in the form of time deposit or demand accounts. Countrywide shall
provide the Purchaser with written evidence of the creation of the Custodial
Account upon request.
Countrywide shall deposit in the Custodial Account within two (2)
Business Days, and retain therein, the following payments and collections
received or made by it subsequent to the Cut-off Date, or received by it prior
to the Cut-off Date but allocable to a period subsequent thereto, other than in
respect of principal and interest on the Mortgage Loans due on or before the
Cut-off Date:
(a) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(b) all payments on account of interest on the Mortgage Loans,
adjusted to the Mortgage Loan Remittance Rate;
(c) all proceeds from a Cash Liquidation;
(d) all PMI Proceeds, Other Insurance Proceeds, including amounts
required to be deposited pursuant to Sections 3.08 and 3.10 of this Agreement,
other than proceeds to be held in Escrow Account and applied to the restoration
or repair of the Mortgaged Property or released to the Mortgagor in accordance
with Countrywide's normal servicing procedures, the loan documents or applicable
law;
(e) all Condemnation Proceeds affecting any Mortgaged Property that
are not released to the Mortgagor in accordance with Countrywide's normal
servicing procedures, the loan documents or applicable law;
(f) all Monthly Advances;
(g) all proceeds of any Mortgage Loan repurchased in accordance
with Section 3.03 or 3.04 of the Purchase Agreement, and any amount required to
be deposited by Countrywide in connection with any shortfall in principal amount
of the Qualified Substitute Mortgage Loans and the repurchased Mortgage Loans as
required pursuant to Section 3.03 of the Purchase Agreement;
(h) any amounts required to be deposited by Countrywide pursuant to
Section 3.10 of this Agreement in connection with the deductible clause in any
blanket hazard insurance policy (such deposit shall be made from Countrywide's
own funds, without reimbursement therefor);
(i) the Prepayment Interest Shortfall Amount, if any, for the month
of distribution (such deposit shall be made from Countrywide's own funds,
without reimbursement therefor up to a maximum amount per month equal to the
lesser of one half of (a) one-twelfth of the product of (i) the Servicing Fee
Rate and (ii) the Stated Principal Balance of such Mortgage
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Loans, or (b) the aggregate Servicing Fee actually received for such month for
the Mortgage Loans);
(j) any amounts required to be deposited by Countrywide in
connection with any REO Property pursuant to Section 3.13 of this Agreement; and
(k) any amounts required to be deposited in the Custodial Account
pursuant to Sections 3.17.
The foregoing requirements for deposit in the Custodial Account are
exclusive. The Purchaser understands and agrees that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
Prepayment Charges and assumption fees (to the extent permitted by Section 3.16
of this Agreement) shall not be deposited by Countrywide in the Custodial
Account. Any interest or earnings paid by the depository institution on funds
deposited in the Custodial Account shall accrue to the benefit of Countrywide
and Countrywide shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 3.05(d) of this Agreement.
Section 3.05 Permitted Withdrawals From the Custodial Account.
Countrywide may, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(a) to make payments to the Purchaser in the amounts and in the
manner provided for in Sections 4.01 and 4.03 of this Agreement;
(b) to reimburse itself for Monthly Advances (Countrywide's
reimbursement for Monthly Advances shall be limited to amounts received on the
related Mortgage Loan (or to amounts received on the Mortgage Loans as a whole
if the Monthly Advance is made due to a shortfall in a Monthly Payment made by a
Mortgagor entitled to relief under the Soldiers' and Sailors' Civil Relief Act
of 1940) which represent Late Collections, net of the related Servicing Fee and
the LPMI Fee, if applicable. Countrywide's right to reimbursement hereunder
shall be prior to the rights of the Purchaser, except that, where Countrywide is
required to repurchase a Mortgage Loan pursuant to Section 3.03 or 3.04 of the
Purchase Agreement, Countrywide's right to such reimbursement shall be
subsequent to the payment to the Purchaser of the Repurchase Price and all other
amounts required to be paid to the Purchaser with respect to such Mortgage
Loans. Notwithstanding the foregoing, Countrywide may reimburse itself for
Monthly Advances from any funds in the Custodial Account if it has determined
that such funds are nonrecoverable advances or if all funds, with respect to the
related Mortgage Loan, have previously been remitted to the Purchaser).
(c) to reimburse itself for unreimbursed Servicing Advances and any
unpaid Servicing Fees (Countrywide's reimbursement for Servicing Advances and/or
Servicing Fees hereunder with respect to any Mortgage Loan shall be limited to
proceeds from Cash Liquidation, Liquidation Proceeds, Condemnation Proceeds, PMI
Proceeds and Other Insurance Proceeds; provided, however, that Countrywide may
reimburse itself for Servicing Advances and
17
Servicing Fees from any funds in the Custodial Account if all funds, with
respect to the related Mortgage Loan, have previously been remitted to the
Purchaser;
(d) to pay to itself as servicing compensation (i) any interest
earned on funds in the Custodial Account (all such interest to be withdrawn
monthly not later than each Remittance Date), and (ii) the Servicing Fee and the
LPMI Fee, if applicable, from that portion of any payment or recovery of
interest on a particular Mortgage Loan;
(e) to pay to itself, with respect to each Mortgage Loan that has
been repurchased pursuant to Section 3.03 or 3.04 of the Purchase Agreement, all
amounts received but not distributed as of the date on which the related
Repurchase Price is determined;
(f) to reimburse itself for any amounts deposited in the Custodial
Account in error; and
(g) to clear and terminate the Custodial Account upon the
termination of this Agreement.
Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
Countrywide shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one (1) or more Escrow Accounts in the form of time deposit or demand
accounts, which accounts shall be Eligible Accounts. Countrywide shall provide
the Purchaser with written evidence of the creation of such Escrow Account(s)
upon request.
Countrywide shall deposit in the Escrow Account(s) within two (2)
Business Days, and retain therein, (a) all Escrow Payments collected on account
of the Mortgage Loans, for the purpose of effecting timely payment of any such
items as required under the terms of this Agreement, and (b) all Other Insurance
Proceeds that are to be applied to the restoration or repair of any Mortgaged
Property. Countrywide shall make withdrawals therefrom only to effect such
payments as are required under this Agreement, and for such other purposes in
accordance with Section 3.07 of this Agreement. Countrywide shall be entitled to
retain any interest paid by the depository institution on funds deposited in the
Escrow Account except interest on escrowed funds required by law to be paid to
the Mortgagor. Countrywide shall pay Mortgagor interest on the escrowed funds at
the rate required by law notwithstanding that the Escrow Account is non-interest
bearing or the interest paid by the depository institution thereon is
insufficient to pay the Mortgagor interest at the rate required by law.
Section 3.07 Permitted Withdrawals From Escrow Account.
Countrywide may, from time to time, withdraw funds from the Escrow
Account(s) for the following purposes: (a) to effect timely payments of ground
rents, taxes, assessments, water rates, mortgage insurance premiums, PMI Policy
premiums, if applicable, and comparable items; (b) to reimburse Countrywide for
any Servicing Advance made by Countrywide with respect to a related Mortgage
Loan; provided, however, that such reimbursement shall only be made from
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amounts received on the related Mortgage Loan that represent late payments or
collections of Escrow Payments thereunder; (c) to refund to the Mortgagor any
funds as may be determined to be overages; (d) for transfer to the Custodial
Account in accordance with the terms of this Agreement; (e) for application to
restoration or repair of the Mortgaged Property; (f) to pay to Countrywide, or
to the Mortgagors to the extent required by law, any interest paid on the funds
deposited in the Escrow Account; (g) to reimburse itself for any amounts
deposited in the Escrow Account in error; or (h) to clear and terminate the
Escrow Account on the termination of this Agreement. As part of its servicing
duties, Countrywide shall pay to the Mortgagors interest on funds in Escrow
Account, to the extent required by law, and to the extent that interest earned
on funds in the Escrow Account is insufficient, shall pay such interest from its
own funds, without any reimbursement therefor.
Section 3.08 Transfer of Accounts.
Countrywide may transfer the Custodial Account or the Escrow Account to a
different depository institution from time to time provided that such Custodial
Account and Escrow Account shall be Eligible Accounts and Countrywide shall
notify the Purchaser in writing within a reasonable period of time after such
transfer has taken place.
Section 3.09 Payment of Taxes, Insurance and Other Charges; Maintenance
of PMI Policies; Collections Thereunder.
With respect to each Mortgage Loan, Countrywide shall maintain accurate
records reflecting the status of (a) ground rents, taxes, assessments, water
rates and other charges that are or may become a lien upon the Mortgaged
Property; (b) PMI Policy premiums and (c) fire and hazard insurance premiums.
Countrywide shall obtain, from time to time, all bills for the payment of such
charges, including renewal premiums, and shall effect payment thereof prior to
the applicable penalty or termination date and at a time appropriate for
securing maximum discounts allowable using Escrow Payments which shall have been
estimated and accumulated by Countrywide in amounts sufficient for such
purposes. To the extent that the Mortgage does not provide for Escrow Payments,
Countrywide shall determine that any such payments are made by the Mortgagor at
the time they first become due. Countrywide assumes full responsibility for the
timely payment of all such bills and shall effect timely payments of all such
bills, irrespective of the Mortgagor's faithful performance in the payment of
same or the making of the Escrow Payments, and shall make advances from its own
funds to effect such payments.
Countrywide will maintain in full force and effect, a PMI Policy
conforming in all respects to the description set forth in Section 3.02(v) of
the Purchase Agreement, issued by an insurer described in that Section, with
respect to each Mortgage Loan for which such coverage is herein required. Such
coverage will be maintained until the LTV or the Updated LTV of the related
Mortgage Loan is reduced to 80% or less in the case of a Mortgage Loan having a
LTV at origination in excess of 80% or Countrywide, as applicable, will not
cancel or refuse to renew any PMI Policy in effect on the Closing Date that is
required to be kept in force under this Agreement unless a replacement PMI
Policy is obtained from and maintained with an insurer approved by an Agency.
Countrywide shall not take any action that would result in non-coverage under
any applicable PMI Policy of any loss that, but for the actions of Countrywide
would have been covered thereunder. In connection with any assumption or
substitution
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agreement entered into or to be entered into pursuant to Section 3.16 herein,
Countrywide shall promptly notify the insurer under the related PMI Policy, if
any, of such assumption or substitution of liability in accordance with the
terms of such policy and shall take all actions that may be required by such
insurer as a condition to the continuation of coverage under the PMI Policy. If
such PMI Policy is terminated as a result of such assumption or substitution of
liability, Countrywide shall obtain a replacement PMI Policy as provided above.
Unless otherwise provided in the related Purchase Confirmation, no
Mortgage Loan has in effect as of the Closing Date any mortgage pool insurance
policy or other credit enhancement, except for any PMI Policy and the insurance
or guarantee relating thereto, as applicable (excluding such exception, the
"Credit Enhancement"), and Countrywide shall not be required to take into
consideration the existence of any such Credit Enhancement for the purposes of
performing its servicing obligations hereunder. If the Purchaser shall at any
time after the related Closing Date notify Countrywide in writing of its desire
to obtain any such Credit Enhancement, the Purchaser and Countrywide shall
thereafter negotiate in good faith for the procurement and servicing of such
Credit Enhancement.
In connection with its activities as servicer, Countrywide agrees to
prepare and present, on behalf of itself, and the Purchaser, claims to the
insurer under any PMI Policy in a timely fashion in accordance with the terms of
such PMI Policy and Acceptable Servicing Practices. Pursuant to Subsection 3.04,
PMI Proceeds shall be deposited in the Custodial Account.
Section 3.10 Maintenance of Hazard Insurance.
Countrywide shall cause to be maintained, for each Mortgage Loan, fire
and hazard insurance with extended coverage as is customary in the area where
the Mortgaged Property is located in an amount set forth in the Underwriting
Guidelines. If the Mortgaged Property is in an area identified in the Federal
Register by the Flood Emergency Management Agency as having special flood
hazards and such flood insurance has been made available, Countrywide shall
cause to be maintained a flood insurance policy meeting the requirements of the
current guidelines of the National Flood Insurance Administration program (or
any successor thereto) with a Qualified Insurer and with coverage set forth in
the Underwriting Guidelines. Countrywide shall also maintain on REO Property,
(1) fire and hazard insurance with extended coverage in an amount that is not
less than (i) the maximum insurable value of the improvements that are a part of
such property and (ii) the unpaid principal balance of the related Mortgage Loan
(including any cumulative related Negative Amortization) at the time it became
an REO Property plus accrued interest at the Mortgage Interest Rate and related
Servicing Advances, liability insurance and, to the extent required and
available under the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended, flood insurance in an amount as provided
above; (2) liability insurance; and (3) to the extent required and available
under the National Flood Insurance Reform Act of 1994, flood insurance in an
amount as provided above. Countrywide shall deposit in the Custodial Account all
amounts collected under any such policies except (A) amounts to be deposited in
the Escrow Account and applied to the restoration or repair of the Mortgaged
Property or REO Property and (B) amounts to be released to the Mortgagor in
accordance with Countrywide's normal servicing procedures. The Purchaser
understands and agrees that no earthquake or other additional insurance on
property acquired in respect of the Mortgage Loan shall be maintained by
Countrywide or Mortgagor. All such policies shall be
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endorsed with standard mortgagee clauses with loss payable to Countrywide and
shall provide for at least thirty (30) days prior written notice to Countrywide
of any cancellation, reduction in the amount of coverage or material change in
coverage. Countrywide shall not interfere with the Mortgagor's freedom of choice
in selecting either the insurance carrier or agent; provided, however, that
Countrywide shall only accept insurance policies from a Qualified Insurer.
Section 3.11 [Reserved].
Section 3.12 Fidelity Bond; Errors and Omissions Insurance.
Countrywide shall cause to be maintained a blanket Fidelity Bond and an
errors and omissions insurance policy with responsible companies with broad
coverage of all officers, employees or other persons acting in any capacity with
regard to the Mortgage Loan who handle funds, money, documents or papers
relating to the Mortgage Loan. The Fidelity Bond and errors and omissions
insurance shall be in the form of the Mortgage Banker's Blanket Bond and shall
protect and insure Countrywide against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of its officers,
employees and agents. Such Fidelity Bond shall also protect and insure
Countrywide against losses in connection with the failure to maintain any
insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 3.12 shall diminish
or relieve Countrywide from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such Fidelity Bond and errors and
omissions insurance policy shall be at least equal to the corresponding amounts
required by an Agency for an approved seller/servicer. Upon request of the
Purchaser, Countrywide shall provide to the Purchaser a certificate of insurance
which certifies coverage of such Fidelity Bond and errors and omissions
insurance policy under this Section 3.12.
Section 3.13 Title, Management and Disposition of REO Property.
(a) Title. In the event that title to the Mortgaged Property is acquired
in foreclosure or by deed in lieu of foreclosure, the deed or certificate of
sale shall be taken in the name of Countrywide for the benefit of the Purchaser,
or in the event the Purchaser is not authorized or permitted to hold title to
real property in the state where the REO Property is located, or would be
adversely affected under the "doing business" or tax laws of such state by so
holding title, the deed or certificate of sale shall be taken in the name of
such Person(s) as shall be consistent with an Opinion of Counsel obtained by
Countrywide from an attorney duly licensed to practice law in the state where
the REO Property is located. Any Person(s) holding such title other than the
Purchaser shall acknowledge in writing that such title is being held as nominee
for the benefit of the Purchaser.
(b) Management.
Countrywide shall either itself or through an agent selected by
Countrywide, manage, conserve, protect and operate each REO Property in the same
manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in accordance with Accepted Servicing
Practices. Countrywide shall cause each REO Property to be inspected
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promptly upon the acquisition of title thereto and shall cause each REO Property
to be inspected at least annually thereafter or more frequently as required by
the circumstances. Countrywide shall make or cause to be made a written report
of each such inspection. Such reports shall be retained in the Credit File and
copies thereof shall be forwarded by Countrywide to the Purchaser within five
(5) days of the Purchaser's request therefore. Countrywide shall attempt to sell
the REO Property (and may temporarily rent the same) on such terms and
conditions as Countrywide deems to be in the best interest of the Purchaser.
Countrywide shall deposit, or cause to be deposited, within two (2) Business
Days of receipt, in each REO Account all revenues received with respect to each
REO Property and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of each REO Property, including the cost
of maintaining any hazard insurance pursuant to Section 3.10 hereof and the fees
of any managing agent acting on behalf of Countrywide. Notwithstanding anything
contained in this Agreement to the contrary, upon written notice to Countrywide,
the Purchaser may elect to assume the management and control of any REO
Property; provided, however, that prior to giving effect to such election, the
Purchaser shall reimburse Countrywide for all previously unreimbursed or unpaid
Monthly Advances, Servicing Advances and Servicing Fees related to such REO
Property.
(c) Disposition.
Subject to the following paragraph, Countrywide shall use its best
efforts to dispose of each REO Property as soon as possible and shall sell each
REO Property no later than one (1) year after title to such REO Property has
been obtained, unless Countrywide determines, and gives an appropriate notice to
the Purchaser, that a longer period is necessary for the orderly disposition of
any REO Property. If a period longer than one (1) year is necessary to sell any
REO Property, Countrywide shall report monthly to the Purchaser as to the
progress being made in selling such REO Property. Notwithstanding the foregoing,
if a REMIC election is made with respect to the arrangement under which the REO
Property is held, such REO Property shall be disposed of before the close of the
third taxable year following the taxable year in which the Mortgage Loan became
an REO Property, unless Countrywide provides to the Purchaser under such REMIC
an Opinion of Counsel to the effect that the holding of such REO Property
subsequent to the close of the third taxable year following the taxable year in
which the Mortgage Loan became an REO Property, will not result in the
imposition of taxes on "prohibited transactions" as defined in Section 860F of
the Code, or cause the transaction to fail to qualify as a REMIC at any time
that certificates are outstanding. Additionally, Countrywide shall perform the
tax withholding and reporting as required by 6050J of the Code.
Each REO Disposition shall be carried out by Countrywide at such price
and upon such terms and conditions as Countrywide deems to be in a manner that
maximizes the net present value of the recovery to the Purchaser. If, as of the
date title to any REO Property was acquired by Countrywide there were
outstanding unreimbursed Servicing Advances, Monthly Advances or Servicing Fees
with respect to the REO Property or the related Mortgage Loan, Countrywide upon
an REO Disposition of such REO Property, shall be entitled to reimbursement for
any related unreimbursed Servicing Advances, Monthly Advances and Servicing Fees
from proceeds received in connection with such REO Disposition. The proceeds
from the REO Disposition, net
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of any payment to Countrywide as provided above, shall be deposited in the
Custodial Account and distributed to the Purchaser in accordance with Section
4.01 of this Agreement.
Section 3.14 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, Countrywide shall
adjust the Mortgage Interest Rate on the related Interest Adjustment Date and
shall adjust the Monthly Payment on the related Payment Adjustment Date in
compliance with the requirements of applicable law and the related Mortgage and
Mortgage Note. If, pursuant to the terms of the Mortgage Note, another index is
selected for determining the Mortgage Interest Rate because the original index
is no longer available, the same index will be used with respect to each
Mortgage Note which requires a new index to be selected, provided that such
selection does not conflict with the terms of the related Mortgage Note.
Countrywide shall execute and deliver any and all necessary notices required
under applicable law and the terms of the related Mortgage Note and Mortgage
regarding the Mortgage Interest Rate and the Monthly Payment adjustments.
Countrywide shall promptly, upon the written request therefor, deliver to the
Purchaser such notifications and any additional applicable data regarding such
adjustments and the methods used to calculate and implement such adjustments.
Upon the discovery by Countrywide or the Purchaser that Countrywide has failed
to adjust a Mortgage Interest Rate or a Monthly Payment pursuant to the terms of
the related Mortgage Note and Mortgage, Countrywide shall immediately deposit in
the Custodial Account, from its own funds, the amount of any interest loss
caused the Purchaser thereby without reimbursement therefor.
Section 3.15 Notification of Maturity Date.
With respect to each Balloon Mortgage Loan, Countrywide shall execute
and deliver to the Mortgagor any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the maturity date and final balloon payment.
Section 3.16 Assumption Agreements.
Countrywide shall, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of the Mortgaged Property (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause to the extent permitted by law; provided, however, that
Countrywide shall not exercise any such right if prohibited from doing so by law
or the terms of the Mortgage Note or if the exercise of such right would impair
or threaten to impair any recovery under the related PMI Policy, if any. If
Countrywide reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause, Countrywide shall enter into an assumption agreement
with the Person to whom the Mortgaged Property has been conveyed or is proposed
to be conveyed, pursuant to which such Person becomes liable under the Mortgage
Note and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. Where an assumption is allowed pursuant to this Section 3.16,
the Purchaser authorizes Countrywide, with the prior written consent of the
insurer under the related PMI Policy, if any, to enter into a substitution of
liability agreement with the Person to whom the Mortgaged Property has been
conveyed or is proposed to be conveyed pursuant to which the original
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Mortgagor is released from liability and such Person is substituted as Mortgagor
and becomes liable under the related Mortgage Note. Any such substitution of
liability agreement shall be in lieu of an assumption agreement.
In connection with any such assumption or substitution of liability,
Countrywide shall follow the underwriting practices and procedures employed by
Countrywide for mortgage loans originated by Countrywide for its own account in
effect at the time such assumption or substitution is made. With respect to an
assumption or substitution of liability, the Mortgage Interest Rate borne by the
related Mortgage Note, the term of the Mortgage Loan, the outstanding principal
amount of the Mortgage Loan and the final maturity date of such Mortgage Loan
shall not be changed. Countrywide shall notify the Purchaser that any such
substitution of liability or assumption agreement has been completed by
forwarding to the Purchaser or its designee the original of any such
substitution of liability or assumption agreement, which document shall be added
to the related Collateral File and shall, for all purposes, be considered a part
of such Collateral File to the same extent as all other documents and
instruments constituting a part thereof.
Notwithstanding anything to the contrary contained herein, Countrywide
shall not be deemed to be in default, breach or any other violation of its
obligations hereunder by reason of any assumption of a Mortgage Loan by
operation of law or any assumption that Countrywide may be restricted by law
from preventing, for any reason whatsoever. For purposes of this Section 3.16,
the term "assumption" is deemed to also include a sale of the Mortgaged Property
subject to the Mortgage that is not accompanied by an assumption or substitution
of liability agreement.
Section 3.17 Satisfaction of Mortgages and Release of Collateral Files.
Upon the payment in full of any Mortgage Loan, or the receipt by
Countrywide of a notification that payment in full will be escrowed in a manner
customary for such purposes, Countrywide shall immediately notify the Purchaser.
Such notice shall include a statement to the effect that all amounts received or
to be received in connection with such payment, which are required to be
deposited in the Custodial Account pursuant to Section 3.04 of this Agreement,
have been or will be so deposited and shall request delivery to it of the
portion of the Collateral File held by the Purchaser. Upon receipt of such
notice and request, the Purchaser, or the Custodian, shall within five (5)
Business Days release or cause to be released to Countrywide the related
Collateral Documents and Countrywide shall prepare and process any satisfaction
or release. In the event that the Purchaser or the Custodian fails to release or
cause to be released to Countrywide the related Collateral Documents within five
(5) Business Days of Countrywide's request therefor, the Purchaser shall be
liable to Countrywide for any additional expenses or costs, including, but not
limited to, outsourcing fees and penalties, incurred by Countrywide resulting
from such failure. No expense incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account.
In the event Countrywide satisfies or releases a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage or should
it otherwise prejudice any right the Purchaser may have under the mortgage
instruments, Countrywide, upon written demand, shall remit to the Purchaser the
then unpaid principal balance of the related Mortgage
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Loan by deposit thereof in the Custodial Account. Countrywide shall maintain the
Fidelity Bond insuring Countrywide against any loss it may sustain with respect
to any Mortgage Loan not satisfied in accordance with the procedures set forth
herein.
From time to time and as appropriate for the service or foreclosure of a
Mortgage Loan, including for the purpose of collection under any PMI Policy, the
Purchaser shall, within five (5) Business Days of Countrywide's request and
delivery to the Custodian of a servicing receipt signed by a Servicing Officer,
release or cause to be released to Countrywide the portion of the Collateral
File held by the Purchaser or its designee. Pursuant to the servicing receipt,
Countrywide shall be obligated to return to the Purchaser the related Collateral
File when Countrywide no longer needs such file, unless the Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Custodial Account or the Collateral File or such document
has been delivered to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially. In the event that the Purchaser or the Custodian
fails to release or cause to be released to Countrywide the related Collateral
Documents within five (5) Business Days of Countrywide's request therefor, the
Purchaser shall be liable to Countrywide for any additional expenses or costs,
including, but not limited to, outsourcing fees and penalties, incurred by
Countrywide resulting from such failure. Upon receipt of notice from Countrywide
stating that such Mortgage Loan was liquidated, the Purchaser shall release
Countrywide from its obligations under the related servicing receipt.
Section 3.18 Servicing Compensation.
As compensation for its services hereunder, Countrywide shall be entitled
to withdraw from the Custodial Account the amount of its Servicing Fee. The
Servicing Fee shall be payable monthly and shall be computed on the basis of the
unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is received. The obligation of the Purchaser
to pay the Servicing Fee is limited to, and payable solely from, the interest
portion (including recoveries with respect to interest from Liquidation
Proceeds, to the extent permitted by Section 3.05) of such Monthly Payments.
Additional servicing compensation in the form of assumption fees (as
provided in Section 3.16 of this Agreement), Prepayment Charges, late payment
charges and other ancillary fees shall be retained by Countrywide to the extent
not required to be deposited in the Custodial Account. Countrywide shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement therefor except
as specifically provided herein.
Section 3.19 Superior Liens.
In the event that Countrywide has reasonable cause to believe or has been
notified that either a senior or junior lien is in default, Countrywide shall
attempt to determine the status of the related senior lien, if applicable.
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If Countrywide discovers, upon investigation of the status of the senior
lien pursuant to the previous paragraph, that any superior lienholder has
accelerated or intends to accelerate the obligations secured by the first lien,
or has declared or intends to declare a default under the mortgage or promissory
note secured thereby, or has filed or intends to file an election to have the
related Mortgaged Property sold or foreclosed, Countrywide shall take, on behalf
of the Purchaser, whatever actions are necessary to protect the interests of the
Purchaser in accordance with Accepted Servicing Practices, including advancing
an amount that is greater than the then outstanding principal balance of the
related Second Lien Mortgage Loan. Notwithstanding anything to the contrary set
forth herein, Countrywide shall not be required to make any Servicing Advance
(including those contemplated in this Section 3.19) if it determines in its
reasonable good faith judgment that such Servicing Advance would not be
recoverable pursuant to the Agreement.
Section 3.20 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, Countrywide shall not take
any action, cause the REMIC to take any action or fail to take (or fail to cause
to be taken) any action that, under the REMIC Provisions, if taken or not taken,
as the case may be, could (i) materially and adversely affect the status of the
REMIC as a REMIC or (ii) result in the imposition of a tax upon the REMIC
(including but not limited to the tax on "prohibited transactions" as defined in
Section 860F(a)(2) of the Code and the tax on "contributions" to a REMIC set
forth in Section 860G(d) of the Code) unless Countrywide has received an Opinion
of Counsel (at the expense of the party seeking to take such action) to the
effect that the contemplated action will not endanger such REMIC status or
result in the imposition of any such tax.
ARTICLE IV.
PROVISIONS OF PAYMENTS AND REPORTS TO PURCHASER
Section 4.01 Distributions.
On each Remittance Date, Countrywide shall distribute to the Purchaser
(a) all amounts credited to the Custodial Account as of the close of business on
the preceding Determination Date, net of charges against or withdrawals from the
Custodial Account pursuant to Section 3.05 hereof; plus (b) all Monthly
Advances, if any, that Countrywide is obligated to distribute pursuant to
Section 4.03 of this Agreement; minus (c) any amounts attributable to Principal
Prepayments received after the related Principal Prepayment Period; minus (d)
any amounts attributable to Monthly Payments collected but due on a Due Date or
Dates subsequent to the preceding Determination Date. It is understood that, by
operation of Section 3.04 hereof, the remittance on the first Remittance Date is
to include principal collected after the Cut-off Date through the preceding
Determination Date plus interest, adjusted to the Mortgage Loan Remittance Rate,
collected through such Determination Date exclusive of any portion thereof
allocable to the period prior to the Cut-off Date, with the adjustments
specified in (b), (c) and (d) above.
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All distributions made to the Purchaser on each Remittance Date will be
made to the Purchaser and shall be based on the Mortgage Loans owned and held by
the Purchaser, and shall be made by wire transfer of immediately available funds
to the account of the Purchaser.
With respect to any remittance received by the Purchaser on or after the
first Business Day following the Business Day on which such payment was due,
Countrywide shall pay to the Purchaser interest on any such late payment at an
annual rate equal to the rate of interest as is publicly announced from time to
time at its principal office by JPMorgan Chase Bank, New York, New York, as its
prime lending rate, adjusted as of the date of each change, plus two percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be paid by Countrywide to the Purchaser on the date
such late payment is made and shall cover the period commencing with the day
following such second Business Day and ending with the Business Day on which
such payment is made. Such interest shall be remitted along with such late
payment. The payment by Countrywide of any such interest shall not be deemed an
extension of time for payment or a waiver of any Event of Default by
Countrywide.
Section 4.02 Periodic Reports to the Purchaser.
(a) Monthly Reports. Not later than each Remittance Date, Countrywide
will furnish to the Purchaser a monthly report ("Monthly Remittance Advice") in
an electronic form mutually agreeable to the Purchaser and Countrywide as to the
upcoming remittance and the related Due Period
(b) Miscellaneous Reports. Upon the foreclosure sale of any Mortgaged
Property or the acquisition thereof by the Purchaser pursuant to a deed-in-lieu
of foreclosure, Countrywide shall submit to the Purchaser a liquidation report
with respect to such Mortgaged Property, which report may be included with any
other reports prepared by Countrywide and delivered to the Purchaser pursuant to
the terms and conditions of this Agreement. With respect to any REO Property,
and upon the request of the Purchaser, Countrywide shall furnish to the
Purchaser a statement describing Countrywide's efforts during the previous month
in connection with the sale of such REO Property, including any rental of such
REO Property incidental to the sale thereof and an operating statement.
Countrywide shall also provide the Purchaser with such information concerning
the Mortgage Loans as is necessary for the Purchaser to prepare its federal
income tax return and as the Purchaser may reasonably request from time to time.
The Purchaser agrees to pay for all reasonable out-of-pocket expenses incurred
by Countrywide in connection with complying with any request made by the
Purchaser hereunder if such information is not customarily provided by
Countrywide in the ordinary course of servicing mortgage loans similar to the
Mortgage Loans.
Section 4.03 Monthly Advances by Countrywide.
Not later than the close of business on the Determination Date preceding
each Remittance Date, Countrywide shall deposit in the Custodial Account an
amount equal to all payments not previously advanced by Countrywide, whether or
not deferred pursuant to Section 4.01 of this Agreement, of principal (due after
the Cut-off Date) and interest not allocable to the period prior to the Cut-off
Date, adjusted to the Mortgage Loan Remittance Rate, which were due on a
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Mortgage Loan and delinquent as of the close of business on the Business Day
prior to the related Determination Date. Notwithstanding anything to the
contrary herein, Countrywide may use amounts on deposit in the Custodial Account
for future distribution to the Purchaser to satisfy its obligation, if any, to
deposit delinquent amounts pursuant to the preceding sentence. To the extent
Countrywide uses any funds being held for future distribution to the Purchaser
to satisfy its obligations under this Section 4.03 hereof, Countrywide shall
deposit in the Custodial Account an amount equal to such used funds no later
than the Determination Date prior to the following Remittance Date to the extent
that funds in the Custodial Account on such Remittance Date are less than the
amounts to be remitted to the Purchaser pursuant to Section 4.01 of this
Agreement.
Countrywide's obligation to make such advances as to any Mortgage Loan
(if deemed recoverable) will continue through the earliest of: (a) the last
Monthly Payment due prior to the payment in full of the Mortgage Loan; (b) the
Remittance Date prior to the Remittance Date for the distribution of any
Liquidation Proceeds. Other Insurance Proceeds or Condemnation Proceeds which,
in the case of Other Insurance Proceeds and Condemnation Proceeds, satisfy in
full the indebtedness of such Mortgage Loan; or (c) the Remittance Date prior to
the date the Mortgage Loan is converted to REO Property. In no event shall
Countrywide be obligated to make an advance under this Section 4.03 if at the
time of such advance it reasonably determines that such advance will be
unrecoverable. In such event, Countrywide shall deliver to the Purchaser an
Officer's Certificate of Countrywide to the effect that an officer of
Countrywide has reviewed the related Mortgage File and has made the reasonable
determination that any additional advances are nonrecoverable.
Section 4.04 Annual Statement as to Compliance.
(a) On or before March 5th of each calendar year, commencing in
2007, Countrywide shall deliver to the Purchaser a statement of compliance
addressed to the Purchaser and signed by an authorized officer of Countrywide,
to the effect that (i) a review of Countrywide's servicing activities during the
immediately preceding calendar year (or applicable portion thereof) and of its
performance under the servicing provisions of this Agreement and any applicable
reconstitution agreement during such period has been made under such officer's
supervision, and (ii) to the best of such officers' knowledge, based on such
review, Countrywide has fulfilled all of its servicing obligations under this
Agreement and any applicable reconstitution agreement in all material respects
throughout such calendar year (or applicable portion thereof) or, if there has
been a failure to fulfill any such obligation in any material respect,
specifically identifying each such failure known to such officer and the nature
and the status thereof. Copies of such statement shall be provided by the
Purchaser to any Person identified as a prospective purchaser of the Mortgage
Loans. The Purchaser shall notify Countrywide prior to providing any such
copies. In the event that Countrywide has delegated any servicing
responsibilities with respect to the Mortgage Loans to a subservicer,
Countrywide shall deliver an officer's certificate of the subservicer as
described above as to each subservicer as and when required with respect to
Countrywide.
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Section 4.05 Annual Independent Certified Public Accountants' Servicing
Report.
Countrywide shall, on or before March 5th of each year, beginning in the
year following the Closing Date, cause, at its sole cost and expense, a firm of
independent public accountants, which is a member of the American Institute of
Certified Public Accountants, to furnish a statement to the Purchaser to the
effect that such firm has examined certain documents and records and performed
certain other procedures relating to the servicing of the Mortgage Loans during
the immediately preceding fiscal year of Countrywide and that such firm is of
the opinion that, on the basis of such examination conducted substantially in
accordance with the Uniform Single Attestation Program for Mortgage Bankers,
such servicing has been conducted in compliance therewith, except for such
exceptions as shall be set forth in such statement.
Section 4.06 Purchaser's Access to Countrywide's Records.
The Purchaser shall have access upon reasonable notice to Countrywide,
during regular business hours or at such other times as might be reasonable
under applicable circumstances, to any and all of the books and records of
Countrywide that relate to the performance or observance by Countrywide of the
terms, covenants or conditions of this Agreement. Further, Countrywide hereby
authorizes the Purchaser, in connection with a sale of the Mortgage Loans, to
make available to prospective purchasers a Consolidated Statement of Operations
of Countrywide, or its parent company, prepared by or at the request of
Countrywide for the most recently completed three (3) fiscal years for which
such a statement is available as well as a Consolidated Statement of Condition
at the end of the last two (2) fiscal years covered by such Consolidated
Statement of Operations. Countrywide also agrees to make available to any
prospective purchaser, upon reasonable notice and during normal business hours,
a knowledgeable financial or accounting officer for the purpose of answering
questions respecting Countrywide's ability to perform under this Agreement. The
Purchaser agrees to reimburse Countrywide for any out-of-pocket costs incurred
by Countrywide in connection with its obligations under this Section 4.06.
ARTICLE V.
COVENANTS BY COUNTRYWIDE
Section 5.01 Indemnification by Countrywide.
Countrywide shall indemnify the Purchaser and hold it harmless against
any and all claims, losses, damages, penalties, fines, forfeitures, reasonable
and necessary attorneys' fees and related costs, judgments, and any other costs,
fees and expenses that the Purchaser may sustain in any way related to (a) a
material breach of any of the representations or warranties made by Countrywide
in Section 2.01 of this Agreement, or (b) the failure of Countrywide to perform
its obligations hereunder including its obligations to service and administer
the Mortgage Loans in compliance with the terms of this Agreement or any
Reconstitution Agreement. Notwithstanding the foregoing, the Purchaser shall
indemnify Countrywide and hold it harmless against any and all claims, losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and any other costs, fees and expenses that
Countrywide may sustain in any way related to (a) actions or inactions of
Countrywide with respect to any Mortgage Loan which are inconsistent with the
obligations imposed on Countrywide pursuant to the terms of the Agreement, taken
or omitted upon the
29
written direction of the Purchaser, (b) the failure of the Purchaser or the
Custodian to perform its obligations under Section 3.17 of this Agreement, (c)
the failure of the Purchaser to perform its obligations in subsections (i) and
(ii) in Section 5.03 of this Agreement, or (d) the failure of the Purchaser to
perform its obligations in Sections 3.01, 3.13(b), 4.02(b), 4.06, 5.02, 5.05,
6.02, 7.05, 7.06, 7.11, and 7.13 of this Agreement.
Section 5.02 Merger or Consolidation of Countrywide.
Countrywide shall keep in full effect its existence, rights and
franchises as a corporation under the laws of the United States or under the
laws of one of the states thereof, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans, and to perform
its duties under this Agreement.
Notwithstanding anything to the contrary contained herein, any Person
into which Countrywide may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which Countrywide
shall be a party, or any Person succeeding to the business of Countrywide, shall
be the successor of Countrywide hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto; provided,
however, that the successor or surviving Person shall be an institution whose
deposits are insured by FDIC or a company whose business is the servicing of
mortgage loans, unless otherwise consented to by the Purchaser, which consent
shall not be unreasonably withheld, and shall be qualified to service mortgage
loans on behalf of an Agency.
Section 5.03 Limitation on Liability of Countrywide and Others.
Neither Countrywide nor any of the officers, employees or agents of
Countrywide shall be under any liability to the Purchaser for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect Countrywide or any such person against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with any standard of care set forth in this Agreement, or
any liability which would otherwise be imposed by reason of any breach of the
terms and conditions of this Agreement. Countrywide and any officer, employee or
agent of Countrywide may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. Notwithstanding anything to the contrary contained in this
Agreement, unless one or more Event of Default by Countrywide shall occur and
shall not have been remedied within the time limits set forth in Section 6.01(a)
of this Agreement, the Purchaser shall not record or cause to be recorded an
Assignment of Mortgage with the recording office. To the extent the Purchaser
records with the recording office as permitted herein an Assignment of Mortgage
which designates the Purchaser as the holder of record of the Mortgage, the
Purchaser agrees that it shall (i) provide Countrywide with immediate notice of
any action with respect to the Mortgage or the related Mortgaged Property and
ensure that the proper department or person at Countrywide receives such notice;
and (ii) immediately complete, sign and return to Countrywide any document
reasonably requested by Countrywide to comply with its servicing obligations,
including without limitation, any instrument required to release the Mortgage
upon payment in full of the obligation or take any other action reasonably
required by
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Countrywide. The Purchaser further agrees that Countrywide shall have no
liability for the Purchaser's failure to comply with the subsections (i) or (ii)
in the foregoing sentence. Countrywide shall have no liability to the Purchaser
and shall not be under any obligation to appear in, prosecute or defend any
legal action which is not incidental to its duties to service the Mortgage Loans
in accordance with this Agreement and which in its opinion may involve it in any
expenses or liability; provided, however, that Countrywide may, with the consent
of the Purchaser, undertake any such action which it may deem necessary or
desirable to protect the Purchaser's interests in the Mortgage Loans. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities for which the Purchaser will
be liable, and Countrywide shall be entitled to be reimbursed therefor from the
Purchaser upon written demand except when such expenses, costs and liabilities
are subject to Countrywide's indemnification under Section 5.01 of this
Agreement.
Section 5.04 Countrywide Not to Resign.
Countrywide shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of Countrywide and the Purchaser or upon
the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by Countrywide. Any such
determination permitting the resignation of Countrywide shall be evidenced by
Countrywide's delivery of an Opinion of Counsel to the Purchaser in a form
reasonably acceptable to the Purchaser. No such resignation shall become
effective until a successor shall have assumed the Countrywide's
responsibilities and obligations hereunder.
Section 5.05 No Transfer of Servicing.
Countrywide acknowledges that the Purchaser acts in reliance upon
Countrywide's independent status, the adequacy of its servicing facilities,
plant, personnel, records and procedures, its integrity, reputation and
financial standing and the continuance thereof. Without in any way limiting the
generality of this Section, Countrywide shall not assign this Agreement or the
servicing rights hereunder, without the prior written approval of the Purchaser,
which consent may not be unreasonably withheld; provided, however, that nothing
in this Agreement shall limit the right of Countrywide to assign the servicing
rights hereunder to Servicing LP.
ARTICLE VI.
TERMINATION OF COUNTRYWIDE AS SERVICER
Section 6.01 Termination Due to an Event of Default.
(a) Each of the following shall be an Event of Default by
Countrywide if it shall occur and, if applicable, be continuing for the period
of time set forth therein:
(i) any failure by Countrywide to remit to the Purchaser any
payment required to be made under the terms of this Agreement which such failure
continues unremedied for a period of two (2) Business Days after the date upon
which written notice of such failure, requiring the same to be remedied, shall
have been given to Countrywide by the Purchaser; or
31
(ii) any failure on the part of Countrywide to duly observe or
perform in any material respect any of the covenants or agreements on the part
of Countrywide set forth in this Agreement, Purchase Agreement or in the
Custodial Agreement, if any, which continues unremedied for a period of thirty
(30) days (except that such number of days shall be fifteen (15) in the case of
a failure to pay any premium for any insurance policy required to be maintained
under this Agreement) after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to Countrywide by the
Purchaser; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against Countrywide and such
decree or order shall have remained in force undischarged or unstayed for a
period of sixty (60) days; or
(iv) Countrywide shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to Countrywide or of or relating to all or
substantially all of its property; or
(v) Countrywide shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations.
(vi) Countrywide shall cease to be an Agency approved
servicer; or
(vii) Countrywide attempts to assign its right to servicing
compensation hereunder, except as permitted under this Agreement or to any
Countrywide affiliate or to assign this Agreement or the servicing
responsibilities hereunder, except as permitted under this Agreement or to any
Countrywide affiliate; or
(viii) Countrywide fails to duly perform, within the required
time period, its obligations under Sections 4.04 and 4.05 of this Agreement,
which failure continues unremedied for a period of nine (9) days after the date
on which written notice of such failure, requiring the same to be remedied,
shall have been received by. Such written notice may be given to Countrywide
by any party to this Agreement or by any master servicer responsible for master
servicing the Mortgage Loans pursuant to a securitization of such Mortgage
Loans.
In case one or more Events of Default by Countrywide shall occur and
shall not have been remedied, the Purchaser, by notice in writing to Countrywide
may, in addition to whatever rights the Purchaser may have at law or equity to
damages, including injunctive relief and specific performance, terminate all the
rights and obligations of Countrywide under this Agreement, the Purchase
Agreement and in and to the Mortgage Loans and the proceeds thereof. On or after
the receipt by Countrywide of such written notice, all authority and power of
32
Countrywide under this Agreement and the Purchase Agreement, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
Purchaser. Upon written request from the Purchaser, Countrywide shall prepare,
execute and deliver, any and all documents and other instruments and do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise, at Countrywide's sole expense. Countrywide agrees to cooperate with
the Purchaser in effecting the termination of Countrywide's responsibilities and
rights hereunder, including the transfer to the Purchaser, for administration by
it, of all cash amounts which shall at the time be credited by Countrywide to
the Custodial Account or Escrow Account or thereafter received with respect to
the Mortgage Loans.
(b) Waiver of Event of Default. The Purchaser may waive any default
by Countrywide in the performance of Countrywide's obligations hereunder and its
consequences. Upon any such waiver of a past default, such default shall cease
to exist, and any Events of Default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereto except
to the extent expressly so waived.
Section 6.02 Termination by Other Means.
The respective obligations and responsibilities of Countrywide shall
terminate with respect to any Mortgage Loan Package upon the first to occur of:
(a) the later of the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or the disposition of all REO
Property in such Mortgage Loan Package and the remittance of all funds due
hereunder; (b) by mutual consent of Countrywide and the Purchaser in writing;
(c) the purchase by Countrywide of all outstanding Mortgage Loans and REO
Property in a Mortgage Loan Package at a price equal to (i) in the case of a
Mortgage Loan, 100% of the Stated Principal Balance of each Mortgage Loan on the
date of such repurchase plus accrued interest thereon through the last day of
the month of repurchase, and (ii) in the case of REO Property, the lesser of (1)
100% of the Stated Principal Balance of the Mortgage Loan encumbering the
Mortgaged Property at the time such Mortgaged Property was acquired and became
REO Property or (2) the fair market value of such REO Property at the time of
repurchase; or (d) the Pass-Through Transfer of the last Mortgage Loan in such
Mortgage Loan Package.
Upon written request from the Purchaser in connection with any such
termination pursuant to (a) and (b) above, Countrywide shall prepare, execute
and deliver, any and all documents and other instruments, place in the
Purchaser's possession all Mortgage Files, and do or accomplish all other acts
or things reasonably necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise, at
Countrywide's sole expense. Countrywide agrees to cooperate with the Purchaser
and such successor in effecting the termination of Countrywide's
responsibilities and rights hereunder, including, without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by Countrywide to the Custodial Account, REO
Account or Escrow Account or thereafter received with respect to the Mortgage
Loans.
33
In the event that Countrywide is terminated without cause, (i) with
regard to any Mortgage Loan that is more than ninety (90) days delinquent
("Non-Performing Mortgage Loan"), the Purchaser shall pay to Countrywide a
termination fee in an amount equal to (A) if such termination without cause
occurs within eighteen (18) months after the related Closing Date ("18 Month
Period"), 1.0% of the Stated Principal Balance of the Non-Performing Mortgage
Loans, or (B) if such termination without cause occurs within six (6) months
after such 18 Month Period ("Subsequent 6 Month Period"), .50% of the Stated
Principal Balance of the Non-Performing Mortgage Loans, or (C) if such
termination without cause occurs after such Subsequent 6 Month Period, the
Purchaser shall not have to pay any termination fee with respect to the related
Non-Performing Mortgage Loans, or (ii) with regard to any other Mortgage Loan
("Performing Mortgage Loan"), the Purchaser shall pay to Countrywide a
termination fee in an amount equal to the greater of (A) 2.5% of the Stated
Principal Balance of the Performing Mortgage Loans and (B) fair market value of
the servicing rights for such Performing Mortgage Loans as of the date of such
termination. Notwithstanding anything to the contrary set forth herein, it is
understood and agreed upon by Countrywide and the Purchaser that in the event
Countrywide is terminated without cause pursuant to this paragraph, the
Purchaser shall reimburse Countrywide for all outstanding and unreimbursed
Servicing Advances and Monthly Advances made pursuant to this Agreement and
shall pay all transfer costs related to the transfer of servicing to the
Purchaser or its designee.
ARTICLE VII.
MISCELLANEOUS
Section 7.01 Notices.
All demands, notices and communications required to be provided hereunder
shall be in writing and shall be deemed to have been duly given if mailed, by
registered or certified mail, postage prepaid, and return receipt requested, or,
if by other means, when received by the other party at the address as follows:
(i) to Countrywide:
Countrywide Home Loans, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇
With a copy to: General Counsel
(ii) the Purchaser:
HSBC Bank USA, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
34
To the address and contact set forth in the related Purchase Confirmation
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
Section 7.02 Exhibits.
The Exhibits to this Agreement and each Trade Confirmation and Purchase
Confirmation executed by Countrywide and the Purchaser are hereby incorporated
and made a part hereof and are an integral part of this Agreement.
Section 7.03 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other Subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Section without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision;
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration; and
(g) reference to the Transaction Documents or any other document
referenced herein shall include all exhibits, schedules or other supplements
thereto.
Section 7.04 Reproduction of Documents.
This Agreement and all documents relating thereto, including (a)
consents, waivers and modifications which may hereafter be executed, (b)
documents received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction
35
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding, whether or not the original is in existence and
whether or not such reproduction was made by a party in the regular course of
business, and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
Section 7.05 Further Agreements.
Countrywide shall execute and deliver to the Purchaser and the Purchaser
shall be required to execute and deliver to Countrywide such reasonable and
appropriate additional documents, instruments or agreements as may be necessary
or appropriate to effectuate the purposes of this Agreement.
Section 7.06 Assignment of Mortgage Loans by the Purchaser; Pass-Through
Transfers.
(a) The Purchaser may, subject to the terms of this Agreement, sell
and transfer one or more of the Mortgage Loans in a Whole Loan Transfer or
Pass-Through Transfer and may assign this Agreement; provided, however, that the
transferee will not be deemed to be the Purchaser hereunder unless such
transferee shall agree in writing to be bound by the terms of this Agreement in
the form of an assignment, assumption and recognition agreement ("AAR")
reasonably acceptable to the Purchaser and Countrywide and an original
counterpart of the AAR shall have been executed by the Purchaser and the
transferee and delivered to Countrywide. Notwithstanding the foregoing, no
transfer shall be effective if such transfer would result in there being more
than three (3) "Purchasers" outstanding hereunder with respect to any Mortgage
Loan Package. Any Person or trust to which Mortgage Loans may be transferred
pursuant to this Section 7.06(a) or Section 7.06(b) hereunder shall constitute a
single Purchaser for the purposes of the preceding sentence.
(b) The Purchaser and Countrywide agree that with respect to some
or all of the Mortgage Loans, the Purchaser, at its sole option, but subject to
the limitations set forth in Section 7.06(a) hereof, may effect Pass-Through
Transfers, retaining Countrywide, as the servicer thereof or subservicer if a
master servicer is employed, or as applicable the "seller/servicer." On the
related Reconstitution Date, the Mortgage Loans transferred shall cease to be
covered by this Agreement; provided, however, that, in the event that any
Mortgage Loan transferred pursuant to this Section 7.06 is rejected by the
related transferee, Countrywide shall continue to service such rejected Mortgage
Loan on behalf of the Purchaser in accordance with the terms and provisions of
this Agreement. Countrywide shall cooperate with the Purchaser in connection
with each Pass-Through Transfer in accordance with this Section 7.06. In
connection therewith Countrywide shall:
(i) negotiate in good faith an AAR required to effectuate the
Pass-Through Transfer, provided such AAR creates no greater obligation
or cost on the part of Countrywide than otherwise set forth in this
Agreement, and provided further that Countrywide shall be entitled to a
servicing fee under that agreement at a rate per annum no less than the
Servicing Fee Rate; and
(ii) provide as applicable:
36
(A) information pertaining to Countrywide of the type and
scope customarily included in offering documents for residential
mortgage-backed securities transactions involving multiple loan
originators; and
(B) such opinions of counsel, letters from auditors, and
certificates of public officials or officers of Countrywide as are
reasonably believed necessary by the trustee, any rating agency or the
Purchaser, as the case may be, in connection with such Pass-Through
Transfer. The Purchaser shall pay all third party costs associated with
the preparation and delivery of any information, excluding any in-house
opinions, described in this clause (ii) (B). Countrywide shall not be
required to execute any AAR unless a draft of such AAR is provided to
Countrywide at least 5 days before the Reconstitution Date, or such
longer period as may reasonably be required for Countrywide and its
counsel to review and comment on the agreement.
(c) In connection with any Pass-Through Transfer, Countrywide shall
not be required to "bring down" any of the representations and warranties in
this Agreement (i.e., the representations and warranties only speak as of the
applicable date set forth in the Purchase Agreement), or, except as provided in
the following sentence, to make any other representations or warranties
whatsoever. Upon request, Countrywide will bring down the representations and
warranties in Section 2.01 of this Agreement to a date no later than the related
Reconstitution Date.
(d) All Mortgage Loans not sold or transferred pursuant to
Pass-Through Transfers shall remain subject to this Agreement and shall continue
to be serviced in accordance with the terms of this Agreement and with respect
thereto this Agreement shall remain in full force and effect.
Section 7.07 Conflicts between Transaction Documents.
In the event of any conflict, inconsistency or ambiguity between the
terms and conditions of this Agreement, the Purchase Agreement and either the
related Trade Confirmation or the related Purchase Confirmation, the terms of
the related Purchase Confirmation shall control. In the event of any conflict,
inconsistency or ambiguity between the terms and conditions of the Trade
Confirmation and the Purchase Confirmation, the terms of the Purchase
Confirmation shall control. In the event of any conflict, inconsistency or
ambiguity between the terms and conditions of this Agreement and the Purchase
Agreement, the terms of this Agreement shall control.
Section 7.08 Governing Law.
The Agreement shall be construed in accordance with the laws of the State
of New York without giving effect to principles of conflicts of laws and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the laws of the State of New York, except to the extent
preempted by Federal law.
37
Section 7.09 Severability Clause.
Any part, provision, representation or warranty of this Agreement which
is prohibited or which is held to be void or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to an amendment to this Agreement which
places each party in the same or as economic position as each party would have
been in except for such invalidity.
Section 7.10 Successors and Assigns.
This Agreement shall bind and inure to the benefit of and be enforceable
by Countrywide, the Purchaser and the respective permitted successors and
assigns of Countrywide and the Purchaser. This Agreement shall not be assigned,
pledged or hypothecated by Countrywide to a third party except as provided for
in this Agreement. Subject to Section 7.06 of this Agreement, the Purchaser
shall have the right to assign, in whole or in part, its interests under the
Agreement with respect to some or all of the Mortgage Loans, and designate any
person to exercise any rights of the Purchaser hereunder and such assignee or
designee shall accede to or exercise the rights and obligations, as applicable,
hereunder of the Purchaser with respect to such Mortgage Loans.
Section 7.11 Confidentiality.
Countrywide and the Purchaser acknowledge and agree that the terms of the
Transaction Documents shall be kept confidential and their contents will not be
divulged to any party without the other party's consent, except to the extent
that it is appropriate for Countrywide and the Purchaser to do so in working
with legal counsel, auditors, taxing authorities, or other governmental
agencies.
Section 7.12 Entire Agreement.
This Agreement, the Purchase Agreement and the Purchase Confirmation
constitute the entire understanding between the Countrywide and the Purchaser
with respect to each Mortgage Loan Package and supersede all prior or
contemporaneous oral or written communications regarding same. Countrywide and
the Purchaser understand and agree that no employee, agent or other
representative of Countrywide or the Purchaser has any authority to bind such
party with regard to any statement, representation, warranty or other expression
unless said statement, representation, warranty or other expression is
specifically included within the express terms of this Agreement or the related
Purchase Confirmation. Neither this Agreement nor the related
38
Purchase Confirmation shall be modified, amended or in any way altered except by
an instrument in writing signed by both parties.
Section 7.13 Successor to Countrywide.
Prior to termination of Countrywide's responsibilities and duties under
this Agreement pursuant to Sections 5.04, 6.01 or 6.02(b), the Purchaser shall
(i) succeed to and assume all of Countrywide's responsibilities, rights, duties
and obligations under this Agreement, or (ii) appoint a successor having a net
worth of not less than $30,000,000 and which shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of Countrywide under
this Agreement prior to the termination of Countrywide's responsibilities,
duties and liabilities under this Agreement. In connection with such appointment
and assumption, the Purchaser may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor shall
agree. In the event that Countrywide's duties, responsibilities and liabilities
under this Agreement should be terminated pursuant to the aforementioned
Sections, Countrywide shall discharge such duties and responsibilities during
the period from the date it acquires knowledge of such termination until the
effective date thereof with the same degree of diligence and prudence which it
is obligated to exercise under this Agreement. The resignation or removal of
Countrywide pursuant to the aforementioned Sections shall not become effective
until a successor shall be appointed pursuant to this Section and shall in no
event relieve Countrywide of the representations and warranties made under this
Agreement and the remedies available to the Purchaser thereunder.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to Countrywide and to the Purchaser an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of
Countrywide, with like effect as if originally named as a party to this
Agreement. Any termination of this Agreement pursuant to Sections 5.04, 6.01 or
6.02(b) shall not affect any claims that the Purchaser may have against
Countrywide arising prior to any such termination or resignation.
Countrywide shall timely deliver to the successor the funds in the
Custodial Account and the Escrow Account and the Mortgage Files and related
documents and statements held by it hereunder and Countrywide shall account for
all funds. Countrywide shall execute and deliver such instruments and do such
other things all as may reasonably be required to more fully and definitely vest
and confirm in the successor all such rights, powers, duties, responsibilities,
obligations and liabilities of Countrywide. The Purchaser shall reimburse
Countrywide for all amounts owed to Countrywide pursuant to this Agreement and
which would otherwise have been recovered by Countrywide pursuant to this
Agreement.
(SIGNATURE PAGE FOLLOWS)
39
IN WITNESS WHEREOF, Countrywide and the Purchaser have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the date first above written.
COUNTRYWIDE HOME LOANS INC.,
Countrywide
By:___________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President
HSBC BANK USA, NATIONAL ASSOCIATION,
the Purchaser
By:_____________________________
Name:
Title:
40
EXHIBIT 1
INDEMNIFICATION AND CONTRIBUTION AGREEMENT
[AS AGREED UPON BY THE PARTIES]
41
EXECUTION VERSION
COUNTRYWIDE HOME LOANS, INC.,
as Countrywide
and
HSBC BANK USA, NATIONAL ASSOCIATION,
as Purchaser
----------------------------------------
MASTER MORTGAGE LOAN PURCHASE AGREEMENT
DATED AS OF SEPTEMBER 1, 2006
----------------------------------------
Conventional Residential Mortgage Loans
(SERVICING RETAINED)
TABLE OF CONTENTS
ARTICLE I.
DEFINITIONS....................................................................1
ARTICLE II.
PRE-CLOSING AND CLOSING PROCEDURES............................................10
Section 2.01 Agreement to Purchase; Conveyance from
Countrywide to Purchaser....................................10
Section 2.02 Due Diligence by the Purchaser..............................11
Section 2.03 Identification of Mortgage Loan Package.....................12
Section 2.04 Credit Document Deficiencies Identified
During Due Diligence........................................12
Section 2.05 Delivery of Collateral Files................................12
Section 2.06 Purchase Confirmation.......................................13
Section 2.07 Closing.....................................................13
Section 2.08 Purchase Proceeds...........................................13
Section 2.09 Closing Documents...........................................14
Section 2.10 [Reserved]..................................................15
Section 2.11 Payment of Costs and Expenses...............................15
Section 2.12 MERS Mortgage Loans and the MERS System.....................15
Section 2.13 Books and Records...........................................15
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH...........................16
Section 3.01 Representations and Warranties Respecting Countrywide.......16
Section 3.02 Representations and Warranties Regarding
Individual Mortgage Loans...................................17
Section 3.03 Remedies for Breach of Representations and Warranties.......27
Section 3.04 [Reserved]..................................................29
Section 3.05 Representations and Warranties Respecting the Purchaser.....29
Section 3.06 Indemnification by the Purchaser............................30
ARTICLE IV.
MISCELLANEOUS.................................................................30
Section 4.01 Notices.....................................................30
Section 4.02 Sale Treatment..............................................30
Section 4.03 Exhibits....................................................31
Section 4.04 General Interpretive Principles.............................31
Section 4.05 Reproduction of Documents...................................31
Section 4.06 Further Agreements..........................................32
i
Section 4.07 Assignment of Mortgage Loans by the
Purchaser; Successors and Assigns...........................32
Section 4.08 Conflicts between Transaction Documents.....................32
Section 4.09 Governing Law...............................................32
Section 4.10 Severability Clause.........................................32
Section 4.11 Confidentiality.............................................33
Section 4.12 Mandatory Delivery..........................................33
Section 4.13 Entire Agreement............................................33
Exhibit A Schedule of Collateral Documents...........................A-1
Exhibit B Form of Purchase Confirmation..............................B-1
Exhibit C Form of Custodial Agreement................................C-1
Exhibit D Form of Trade Confirmation.................................D-1
Exhibit E Reserved...................................................E-1
Exhibit F Reserved...................................................F-1
Exhibit G Countrywide's Officer's Certificate........................G-1
Exhibit H Security Release Certification.............................H-1
Exhibit I Form of Assignment, Assumption and Recognition Agreement...I-1
ii
MASTER MORTGAGE LOAN PURCHASE AGREEMENT
This Master Mortgage Loan Purchase Agreement is made and
entered into as of September 1, 2006 (the "Agreement"), between Countrywide Home
Loans, Inc., having an address at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Countrywide"), and HSBC Bank USA, National Association, having an address at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ the "Purchaser").
R E C I T A L S
The Purchaser has agreed to purchase from Countrywide and
Countrywide has agreed to sell from time to time to the Purchaser all of
Countrywide's right, title and interest, excluding servicing rights, in and to
those certain conventional mortgage loans as identified in a Purchase
Confirmation (as defined below) executed by Countrywide and the Purchaser. This
Agreement is intended to set forth the terms and conditions by which Countrywide
shall transfer and the Purchaser shall acquire such mortgage loans.
In consideration of the promises and mutual agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Countrywide and the Purchaser
agree as follows:
ARTICLE I.
DEFINITIONS
Unless the context requires otherwise, all capitalized terms
used herein shall have the meanings assigned to such terms in this Article I
unless defined elsewhere herein. Any capitalized term used or defined in a
Purchase Confirmation that conflicts with the corresponding definition set forth
herein shall supersede such term.
Accepted Servicing Practices: With respect to any Mortgage
Loan, those mortgage servicing practices (including collection procedures) that
(i) Countrywide applies to similar mortgage loans serviced for its own account,
(ii) conform to the customary and usual standards of practice of prudent
mortgage banking institutions which service mortgage loans of a similar type as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property is
located and (iii) are in accordance with ▇▇▇▇▇▇ Mae servicing practices and
procedures for MBS pool mortgages, as defined in the applicable ▇▇▇▇▇▇ ▇▇▇
Servicing Guide, the terms of the Collateral Documents and all applicable
federal, state and local law.
Adjustable Rate Mortgage Loan: Any Mortgage Loan in which the
related Mortgage Note contains a provision whereby the Mortgage Interest Rate is
adjusted from time to time in accordance with the terms of such Mortgage Note.
Agency: Either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Agreement: This Master Mortgage Loan Purchase Agreement,
including all exhibits, schedules and supplements hereto, and all amendments
hereof.
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Appraised Value: With respect to any Mortgaged Property, the
lesser of (i) the value thereof as determined by an appraisal made for the
originator of the Mortgage Loan at the time of origination of the Mortgage Loan
by an appraiser who met the minimum requirements of the Agencies and the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, and (ii)
the purchase price paid for the related Mortgaged Property by the Mortgagor with
the proceeds of the Mortgage Loan, provided, however, in the case of a
Refinanced Mortgage Loan, such value of the Mortgaged Property is based solely
upon the value determined by an appraisal made for the originator of such
Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage
Loan by an appraiser who met the minimum requirements of the Agencies and the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
Assignment of Mortgage: An assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan wherein the Mortgage
Note matures prior to full amortization and requires a final and accelerated
payment of principal.
Business Day: Any day other than (i) a Saturday or Sunday, or
(ii) a day on which banking and savings and loan institutions in the State of
California, the State of New York, or the State of Texas are authorized or
obligated by law or executive order to be closed.
Closing: The consummation of the sale and purchase of each
Mortgage Loan Package.
Closing Date: The date on which the purchase and sale of the
Mortgage Loans constituting a Mortgage Loan Package is consummated, as set forth
in the Trade Confirmation or Purchase Confirmation.
Closing Documents: With respect to any Closing Date, the
documents required pursuant to Section 2.09.
Collateral Documents: The collateral documents pertaining to
each Mortgage Loan as set forth in Exhibit A hereto.
Collateral File: With respect to each Mortgage Loan, a file
containing each of the Collateral Documents.
Combined LTV Ratio: As of any date and as to any Mortgage
Loan, the ratio, expressed as a percentage, of the (a) sum of (i) the Stated
Principal Balance (or the original principal balance, if so indicated) of such
Mortgage Loan and (ii) the Stated Principal Balance (or the original principal
balance, if so indicated) as of such date of any mortgage loan or mortgage loans
that are senior or equal in priority to the Mortgage Loan and which are secured
by the same Mortgaged Property to (b) the Appraised Value of the related
Mortgaged Property.
Condemnation Proceeds: All awards, compensation or settlements
in respect of a taking of an entire Mortgaged Property by exercise of the power
of eminent domain or condemnation.
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Conventional Mortgage Loan: A Mortgage Loan that is not
insured by the FHA or guaranteed by the VA.
Convertible Mortgage Loan: Any Adjustable Rate Mortgage Loan
that contains a provision whereby the Mortgagor is permitted to convert the
Mortgage Loan to a fixed-rate mortgage loan in accordance with the terms of the
related Mortgage Note.
Countrywide: Countrywide Home Loans, Inc., or any successor or
assign to Countrywide under this Agreement as provided herein.
Credit File: The file retained by Countrywide that includes
the mortgage loan documents pertaining to a Mortgage Loan including copies of
the Collateral Documents together with the credit documentation relating to the
origination of such Mortgage Loan, which Credit File may be maintained by
Countrywide on microfilm or any other comparable medium.
Custodial Account: The account or accounts created and
maintained pursuant to Section 3.04 of the Servicing Agreement, each of which
shall be an Eligible Account.
Custodial Agreement: The agreement governing the retention of
the originals of the Collateral Documents.
Custodian: ▇▇▇▇▇ Fargo Bank, National Association, its
successor in interest or assign, or such other custodian that may be designated
by Countrywide from time to time.
Cut-off Date: The first day of the month in which the related
Closing Date occurs or such other date as may be set forth in the related Trade
Confirmation or Purchase Confirmation.
Cut-off Date Balance: The aggregate scheduled unpaid principal
balance of the Mortgage Loans in a Mortgage Loan Package as of the Cut-off Date,
after application of (i) scheduled payments of principal due on such Mortgage
Loans on or before such Cut-off Date, whether or not collected, and (ii) any
Principal Prepayments received from the Mortgagor prior to the Cut-off Date.
Determination Date: The Business Day immediately preceding the
related Remittance Date.
Due Date: The day of the month on which the Monthly Payment
is due on a Mortgage Loan, exclusive of any days of grace.
Eligible Account: An account or accounts (i) maintained with a
depository institution the short term debt obligations of which are rated by a
nationally recognized statistical rating agency in one of its two (2) highest
rating categories at the time of any deposit therein, or (ii) maintained with an
institution and in a manner acceptable to an Agency.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments, water rates, fire and hazard insurance premiums, flood insurance
premiums, and other payments required to be escrowed by the Mortgagor with the
Mortgagee pursuant to any Mortgage Loan.
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FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association or any
successor organization.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ Selling Guide, as
applicable.
First Lien Mortgage Loan: Any Mortgage Loan secured by a first
lien on the related Mortgaged Property.
Fixed Rate Mortgage Loan: Any Mortgage Loan wherein the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for the term of
such Mortgage Loan.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation or any
successor organization.
Funding Deadline: With respect to each Closing Date, five
o'clock (5:00) p.m. New York time.
Gross Margin: With respect to each Adjustable Rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note, which
amount is added to the index in accordance with the terms of the related
Mortgage Note to determine on each Interest Adjustment Date, the Mortgage
Interest Rate for such Mortgage Loan.
HUD: The Department of Housing and Urban Development or any
federal agency or official thereof which may from time to time succeed to the
functions thereof.
Index: With respect to any Adjustable Rate Mortgage Loan on
each Interest Adjustment Date the applicable index as set forth in the related
Mortgage Note.
Initial Closing Date: The Closing Date on which the Purchaser
purchases and Countrywide sells the first Mortgage Loan Package hereunder.
Interest Adjustment Date: With respect to an Adjustable Rate
Mortgage Loan, the date on which an adjustment to the Mortgage Interest Rate on
a Mortgage Note becomes effective.
Lifetime Rate Cap: With respect to each Adjustable Rate
Mortgage Loan, the absolute maximum Mortgage Interest Rate payable, above which
the Mortgage Interest Rate shall not be adjusted, as set forth in the related
Mortgage Note and Mortgage Loan Schedule.
Liquidation Proceeds: Amounts, other than PMI Proceeds,
Condemnation Proceeds and Other Insurance Proceeds, received by Countrywide in
connection with the liquidation of a defaulted Mortgage Loan through trustee's
sale, foreclosure sale or otherwise, other than amounts received following the
acquisition of an REO Property pursuant to Section 3.13 of the Servicing
Agreement.
LPMI Fee: The portion of the Mortgage Interest Rate relating
to an LPMI Loan, which is set forth on the related Mortgage Loan Schedule, to be
retained by Countrywide to pay the premium due on the PMI Policy with respect to
such LPMI Loan.
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LTV: With respect to any Mortgage Loan, the ratio (expressed
as a percentage) of the Stated Principal Balance (or the original principal
balance, if so indicated) of such Mortgage Loan as of the date of determination
to the Appraised Value of the related Mortgaged Property.
MERS: Mortgage Electronic Registration Systems, Inc. or any
successor or assign thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the MERS System.
MERS System: The electronic system of recording transfers of
mortgages maintained by MERS.
MIC: A mortgage insurance certificate issued by HUD.
MIN: The Mortgage Identification Number of Mortgage Loans
registered with MERS on the MERS(R) System.
Missing Credit Documents: As defined in Section 2.04 hereof.
MOM Loan: Any Mortgage Loan where MERS acts as the mortgagee
of record of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Payment: The scheduled monthly payment of principal
and interest on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument
securing a Mortgage Note, which creates a first lien, in the case of a First
Lien Mortgage Loan, or a second lien, in the case of a Second Lien Mortgage
Loan, on an unsubordinated estate in fee simple in real property securing the
Mortgage Note;
Mortgage Interest Rate: The annual rate at which interest
accrues on any Mortgage Loan and, with respect to an Adjustable Rate Mortgage
Loan, as adjusted from time to time in accordance with the provisions of the
related Mortgage Note.
Mortgage Loan: Any mortgage loan that is sold pursuant to this
Agreement, as evidenced by such mortgage loan's inclusion on the related
Mortgage Loan Schedule, which mortgage loan includes the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, PMI Proceeds
(if applicable), Other Insurance Proceeds, REO Disposition proceeds, and all
other rights, benefits, proceeds and obligations arising from or in connection
with such Mortgage Loan, excluding the servicing rights relating thereto. Unless
the context requires otherwise, any reference to the Mortgage Loans in this
Agreement shall refer to the Mortgage Loans constituting a Mortgage Loan
Package.
Mortgage Loan Package: The Mortgage Loans sold to the
Purchaser pursuant to a Purchase Confirmation.
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Mortgage Loan Remittance Rate: With respect to each Mortgage
Loan, the interest rate payable to the Purchaser on each Remittance Date which
shall equal the Mortgage Interest Rate less the Servicing Fee and the LPMI Fee,
if applicable.
Mortgage Loan Schedule: With respect to each Mortgage Loan
Package, the schedule of Mortgage Loans included therein and made a part of the
related Purchase Confirmation, which schedule shall include, the following
information with respect to each Mortgage Loan: (i) Countrywide's loan number
identifying such Mortgage Loan; (ii) the Mortgage Interest Rate as of the
Cut-off Date; (iii) with respect to any Adjustable Rate Mortgage Loan, the Gross
Margin, the Periodic Rate Cap, the Lifetime Rate Cap, the next Interest
Adjustment Date, the first Interest Adjustment Date, the minimum Mortgage
Interest Rate and the Index, (iv) with respect to each First Lien Mortgage Loan,
the LTV at origination and, with respect to each Second Lien Mortgage Loan, the
Combined LTV at origination; (v) the original term of such Mortgage Loan, (vi)
whether such Mortgage Loan is a First Lien Mortgage Loan or a Second Lien
Mortgage Loan; (vii) the Mortgagor's first and last name; (viii) the street
address of the Mortgaged Property including the city, state and zip code; (ix) a
code indicating whether the Mortgaged Property is owner-occupied; (x) the type
of Residential Dwelling constituting the Mortgaged Property; (xi) the original
months to maturity; (xii) the date on which the first Monthly Payment was due on
the Mortgage Loan; (xiii) the stated maturity date; (xiv) the amount of the
Monthly Payment as of the Cut-off Date; (xv) the original principal amount of
the Mortgage Loan and, with respect to a Second Lien Mortgage Loan, the CLTV;
(xvi) the Stated Principal Balance of the Mortgage Loan; (xvii) a code
indicating the purpose of the loan (i.e., purchase financing, Rate/Term
Refinancing, Cash-Out Refinancing); (xviii) the date on which the first Monthly
Payment was due on the Mortgage Loan and, if such date is not consistent with
the Due Date currently in effect, such Due Date; (xix) a code indicating the
documentation style; (xx) a code indicating whether the Mortgage Loan is an
Adjustable Rate Mortgage Loan or a Fixed Rate Mortgage Loan; (xxi) the Appraised
Value of the Mortgaged Property; (xxii) the sale price of the Mortgaged
Property, if applicable; (xxiii) a code indicating whether the Mortgage Loan is
subject to a Prepayment Charge or penalty; (xxiv) the amount and the term of any
Prepayment Charge or penalty; (xxv) with respect to each MERS Mortgage Loan, the
related MIN; (xxvi) a code indicating if the Mortgage Loan is an interest-only
Mortgage Loan and, if so, the term of the interest-only period of such Mortgage
Loan; (xxvii) a code indicating whether the Mortgage Loan is a Balloon Mortgage
Loan; (xxviii) the points and fees charged in connection with the origination of
such Mortgage Loan as qualified by an Agency flag; (xxix) a code indicating if
the Mortgage Loan is subject to an LPMI Policy and, if so, the LPMI Fee; and
(xxx) with respect to any PMI Policy or LPMI Policy, the provider of such
insurance and the coverage percentage of such insurance.
Mortgage Note: The note or other evidence of the indebtedness
of a Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of
the debt evidenced by a Mortgage Note.
Mortgagee: The mortgagee or beneficiary named in the Mortgage
and the successors and assigns of such mortgagee or beneficiary.
Mortgagor: The obligor on a Mortgage Note.
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Opinion of Counsel: A written opinion of counsel, who may be
an employee of the party on behalf of whom the opinion is being given.
Other Insurance Proceeds: Proceeds of any title policy, hazard
policy, pool policy or other insurance policy covering a Mortgage Loan, other
than the PMI Policy, if any, to the extent such proceeds are not to be applied
to the restoration of the related Mortgaged Property or released to the
Mortgagor in accordance with the procedures that Countrywide would follow in
servicing mortgage loans held for its own account.
Pass-Through Transfer: Any transaction involving either (1) a
sale or other transfer of some or all of the Mortgage Loans directly or
indirectly to an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed securities or (2)
an issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by reference to one
or more portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage Loan, the provision of each Mortgage Note which provides for an
absolute maximum amount by which the Mortgage Interest Rate therein may increase
or decrease on an Adjustment Date above or below the Mortgage Interest Rate
previously in effect, equal to the rate set forth on the Mortgage Loan Schedule
per adjustment.
Person: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, limited liability corporation,
unincorporated organization or government or any agency or political subdivision
thereof.
PMI Policy: A policy of private mortgage guaranty insurance
relating to a Mortgage Loan and issued by a Qualified Insurer.
PMI Proceeds: Proceeds of any PMI Policy.
Preliminary Mortgage Loan Package: The mortgage loans
identified or described in a Trade Confirmation, which, subject to the
Purchaser's due diligence as contemplated in Section 2.02 of this Agreement, are
intended to be sold under this Agreement as a Mortgage Loan Package.
Preliminary Mortgage Loans: The mortgage loans constituting
a Preliminary Mortgage Loan Package.
Prepayment Charge: With respect to each Mortgage Loan, the
fee, if any, payable upon the prepayment of principal, in whole or in part, of
such Mortgage Loan, as set forth in the related Mortgage Note.
Principal Prepayment: Any payment or other recovery of
principal on a Mortgage Loan which is received in advance of its scheduled Due
Date (excluding any Prepayment Charge, unless the related Purchase Confirmation
provides otherwise), which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
7
Principal Prepayment Period: As to any Remittance Date, the
calendar month preceding the month of distribution.
Purchase Confirmation: A letter agreement, substantially in
the form of Exhibit B hereto, executed by Countrywide and the Purchaser in
connection with the purchase and sale of each Mortgage Loan Package, which sets
forth the terms relating thereto including a description of the related Mortgage
Loans (including the Mortgage Loan Schedule), the purchase price for such
Mortgage Loans, the Closing Date and the Servicing Fee Rate.
Purchase Proceeds: The amount paid on the related Closing Date
by the Purchaser to Countrywide in exchange for the Mortgage Loan Package
purchased on such Closing Date as set forth in the applicable Purchase
Confirmation.
Purchaser: The Person identified as the "Purchaser" in the
preamble to this Agreement or its successor in interest or any successor or
assign to the Purchaser under this Agreement as herein provided. Any reference
to "Purchaser" as used herein shall be deemed to include any designee of the
Purchaser, so long as such designation was made in accordance with the
limitations set forth in Section 4.07 hereof.
Qualified Insurer: An insurance company duly qualified as such
under the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided with a rating category as set forth
in the applicable Underwriting Guidelines.
Qualified Substitute Mortgage Loan: A mortgage loan that must,
on the date of such substitution, (i) have an unpaid principal balance, after
deduction of all scheduled payments due in the month of substitution (or if more
than one (1) mortgage loan is being substituted, an aggregate principal
balance), not in excess of the unpaid principal balance of the repurchased
Mortgage Loan (the amount of any shortfall will be deposited in the Custodial
Account by Countrywide in the month of substitution); (ii) have a Mortgage
Interest Rate not less than, and not more than 1% greater than, the Mortgage
Interest Rate of the repurchased Mortgage Loan; (iii) have a remaining term to
maturity not greater than, and not more than one year less than, the maturity
date of the repurchased Mortgage Loan; (iv) comply with each representation and
warranty (respecting individual Mortgage Loans) set forth in Section 3.02
hereof; (v) shall be the same type of Mortgage Loan (i.e., a Convertible
Mortgage Loan or a Fixed Rate Mortgage Loan); (vi) have the same Due Date as the
Due Date on the substituted Mortgage Loan; and (vii) have a LTV, and in the case
of a Second Lien Mortgage Loan, a Combined LTV Ratio as of the date of
substitution equal to or lower than the LTV or Combined LTV Ratio of the related
substituted Mortgage Loan as of such date. In the event that one or more
mortgage loans are substituted for one or more substituted Mortgage Loans, the
amounts described in clause (i) hereof shall be determined on the basis of
aggregate principal balances, the Mortgage Interest Rates described in clause
(ii) hereof shall be determined on the basis of weighted average Mortgage
Interest Rates and shall be satisfied as to each such mortgage loan, the terms
described in clause (iii) shall be determined on the basis of weighted average
remaining terms to maturity, the LTV, and in the case of Second Lien Mortgage
Loans the Combined LTV Ratios described in clause (v) hereof shall be satisfied
as to each such Qualified Substitute Mortgage Loan and, except to the extent
otherwise provided in this sentence, the representations and warranties
8
described in clause (iv) hereof must be satisfied as to each Qualified
Substitute Mortgage Loan or in the aggregate, as the case may be.
Remittance Date: The eighteenth (18th) day of any month,
beginning with the month next following the month in which the related Cut-off
Date occurs, or if such eighteenth (18th) day is not a Business Day, the first
Business Day immediately following.
REO Disposition: The final sale by Countrywide of any REO
Property or the transfer of the management of such REO Property to the Purchaser
as set forth in Section 3.13 of the Servicing Agreement.
REO Property: A Mortgaged Property acquired by Countrywide on
behalf of the Purchaser as described in Section 3.13 of the Servicing Agreement.
Repurchase Price: Unless otherwise stated in the related
Purchaser Confirmation, with respect to any Mortgage Loan, a price equal to (i)
the Stated Principal Balance of the Mortgage Loan plus (ii) interest on such
Stated Principal Balance at the Mortgage Loan Remittance Rate from the last date
through which interest has been paid and distributed to the Purchaser to the
date of repurchase, less amounts received or advanced in respect of such
repurchased Mortgage Loan which such amounts are being held in the Custodial
Account for distribution in the month of repurchase, plus (iii) any costs and
expenses incurred by the Purchaser in respect of a material breach of Section
3.01 or 3.02 of this Agreement, including without limitation, any costs and
damages incurred by the Purchaser, the servicer, master servicer or any trustee
for any costs and damages incurred by any such party in connection with a
violation by any such Mortgage Loan of any applicable anti-predatory or abusive
lending law.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a ▇▇▇▇▇▇ ▇▇▇ eligible condominium project, or (iv) a
detached one-family dwelling in a planned unit development, none of which is a
co-operative, mobile or manufactured home.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second
lien on the related Mortgaged Property.
Servicer: Countrywide, its successors and assigns.
Servicing Agreement: The agreement dated as of September 1,
2006 and signed by the Purchaser and Countrywide with respect to the
administration and servicing of the Mortgage Loans.
Servicing Fee: With respect to each Mortgage Loan, the amount
of the annual fee the Purchaser shall pay to Countrywide, which shall, for a
period of one full month, be equal to one-twelfth of the product of (i) the
Servicing Fee Rate and (ii) the Stated Principal Balance of such Mortgage Loan.
Such fee shall be payable monthly, computed on the basis of the same principal
amount and period respecting which any related interest payment on a Mortgage
Loan is computed. The obligation of the Purchaser to pay the Servicing Fee is
limited to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds and
other proceeds) of such Monthly Payment collected by Countrywide, or as
otherwise provided herein. Subject to the foregoing, and with respect to each
9
Mortgage Loan, Countrywide shall be entitled to receive its Servicing Fee
through the disposition of any related REO Property and the Servicing Fee
payable with respect to any REO Property shall be based on the Stated Principal
Balance of the related Mortgage Loan at the time of foreclosure.
Servicing Fee Rate: With respect to any Mortgage Loan, the
rate per annum set forth in the applicable Trade Confirmation or Purchase
Confirmation.
Servicing File: With respect to each Mortgage Loan, the file
retained by Countrywide consisting of all documents in the Credit File which are
not delivered to the Purchaser or the Custodian and copies of the Collateral
Documents.
Stated Principal Balance: With respect to each Mortgage Loan
as of any date of determination: (i) the unpaid principal balance of the
Mortgage Loan at the Cut-off Date after giving effect to payments of principal
due on or before such date, whether or not received, minus (ii) all amounts
previously distributed to the Purchaser with respect to the related Mortgage
Loan representing payments or recoveries of principal or advances in lieu
thereof.
Trade Confirmation: A letter agreement substantially in the
form of Exhibit D hereto executed by Countrywide and the Purchaser prior to the
applicable Closing Date confirming the terms of a prospective purchase and sale
of a Mortgage Loan Package.
Transaction Documents: With respect to any Mortgage Loan, the
related Trade Confirmation, the related Purchase Confirmation, this Agreement
and the Servicing Agreement.
Updated LTV: With respect to any Mortgage Loan, the
outstanding principal balance of such Mortgage Loan as of the date of
determination divided by the value of the related Mortgaged Property as
determined by a recent appraisal of the Mortgaged Property.
Underwriting Guidelines: Countrywide's written underwriting
guidelines in the form delivered to the Purchaser, in effect with respect to the
Mortgage Loans purchased by the Purchaser at the time of origination of the
Mortgage Loans, as amended, supplemented or modified from time to time.
VA: The Department of Veterans Affairs.
Whole Loan Transfer: The sale or transfer by the Purchaser
of some or all of the Mortgage Loans, other than in a Pass-Through Transfer.
ARTICLE II.
PRE-CLOSING AND CLOSING PROCEDURES
Section 2.01 Agreement to Purchase; Conveyance from Countrywide to
Purchaser.
Countrywide agrees to sell, and the Purchaser agrees to purchase, from
time-to-time, Mortgage Loans having a Cut-off Date Balance in an amount as set
forth in the related Trade Confirmation, or in such other amount as agreed by
the Purchaser and Countrywide as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on the related Closing
Date.
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Countrywide, simultaneously with the payment of the Purchase Proceeds,
shall execute and deliver to the Purchaser a Purchase Confirmation with respect
to the related Mortgage Loan Package in the form attached hereto as Exhibit B.
The Servicing File retained by Countrywide with respect to each Mortgage Loan
pursuant to this Agreement shall be appropriately identified in Countrywide's
computer system to reflect clearly the sale of such related Mortgage Loan to the
Purchaser. Countrywide shall release from its custody the contents of any
Servicing File retained by it only in accordance with the Servicing Agreement,
except when such release is required in connection with a repurchase of any such
Mortgage Loan pursuant to Section 3.03 of this Agreement.
Section 2.02. Due Diligence by the Purchaser.
In addition to the rights granted to the Purchaser under the related
Purchase Confirmation to underwrite the Mortgage Loans and review the Credit
Files prior to the Closing Date, prior to the related Closing Date, Countrywide,
shall, at the Purchaser's option (a) deliver to the Custodian in escrow, for
examination with respect to each Mortgage Loan to be purchased on such Closing
Date, the related Credit File, including the Assignment of Mortgage, pertaining
to each Mortgage Loan, or (b) make the related Credit File available to the
Purchaser for examination at Countrywide's offices or such other location as
shall otherwise be agreed upon by the Purchaser and Countrywide. Such
examination may be made by the Purchaser or its designee at any reasonable time
prior to the related Closing Date. If the Purchaser makes such examination prior
to the related Closing Date and reasonably identifies any Mortgage Loans that do
not conform to the terms of the related Purchase Confirmation or the
Underwriting Guidelines, such Mortgage Loans may, at the Purchaser's option, be
rejected for purchase by the Purchaser; provided, however, that in the event
that the Purchaser rejects any Mortgage Loan pursuant to this sentence,
Countrywide shall have the right, in its sole discretion, to substitute
replacement Mortgage Loans, and the Purchaser shall have the right to review any
such replacement Mortgage Loan(s) in the manner contemplated above. If not
purchased by the Purchaser, such Mortgage Loans shall be deleted from the
related Mortgage Loan Schedule. The Purchaser shall use its reasonable best
efforts to conduct its due diligence, and to convey the results thereof to
Countrywide, within the time and in the manner necessary to permit Countrywide
to rebut or cure any Mortgage Loan or to substitute replacement Mortgage Loans
as permitted herein. The Purchaser may, at its option and without notice to
Countrywide, purchase all or part of any Mortgage Loan Package without
conducting any partial or complete examination. The fact that the Purchaser has
conducted or has determined not to conduct any partial or complete examination
of the Mortgage Files shall not affect the Purchaser's (or any of its
successors') rights to demand repurchase or other relief or remedy provided for
in this Agreement.
Without limiting the generality of the foregoing, in the event that the
Purchaser rejects Preliminary Mortgage Loans (i) comprising more than ten
percent (10%) of the related Preliminary Mortgage Loan Package (as measured by
unpaid principal balance), or (ii) for reasons other than as permitted under
this Agreement or the Trade Confirmation, the parties shall mutually agree to
re-price such Mortgage Loan Package.
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Section 2.03 Identification of Mortgage Loan Package.
The Purchaser shall identify those Preliminary Mortgage Loans the
Purchaser intends to be included in the Mortgage Loan Package at least two (2)
Business Days prior to the related Closing Date.
Section 2.04 Credit Document Deficiencies Identified During Due
Diligence.
If, with respect to a Mortgage Loan Package, the related Purchase
Confirmation identifies any Mortgage Loan for which the related Credit File is
missing material documentation (as used therein, the "Missing Credit
Documents"), Countrywide agrees to use its best efforts to procure each such
Missing Credit Document within sixty (60) days following the related Closing
Date. In the event of a default by a Mortgagor or any material impairment of the
Mortgaged Property, in either case directly arising from a breach of
Countrywide's obligation to deliver the Missing Credit Document within the time
specified above, Countrywide shall repurchase such Mortgage Loan at the
Repurchase Price.
Section 2.05 Delivery of Collateral Files.
Countrywide shall from time to time in connection with each Closing
Date, at least three (3) Business Days prior to such Closing Date, deliver to
the Custodian those Collateral Documents set forth on Exhibit A hereto with
respect to each Mortgage Loan to be purchased and sold on the related Closing
Date and set forth on the related Mortgage Loan Schedule delivered with such
Collateral Documents.
In the event that any of the original Collateral Documents set forth in
clauses (3) through (7) of Exhibit A hereto are not delivered to the Custodian
on or before the Closing Date (each, a "Missing Collateral Document"), then
Countrywide shall have (i) with respect to any Missing Collateral Document sent
for recording, twelve (12) months from the related Closing Date, or (ii) with
respect to all other Missing Collateral Documents, one-hundred twenty (120) days
from the Closing Date, to deliver to the Purchaser such Missing Collateral
Documents. Notwithstanding the foregoing, Countrywide shall not be deemed to be
in breach of this Agreement if its failure to deliver to the Purchaser any
Missing Collateral Document within the time specified above is due solely to (i)
the failure of the applicable recorder's office to return a Missing Collateral
Document that was sent for recording or (ii) the failure of the title insurer to
issue and deliver the original mortgagee title policy, except where such refusal
to issue the policy is based on a claim that the title insurer is under no
obligation to issue such policy. In the event Countrywide is unable to deliver
any Missing Collateral Document after one-hundred twenty (120) days from the
related Closing Date due to (i) the failure of the applicable recorder's office
to return such Missing Collateral Document sent for recording or (ii) the
failure of the title insurer to issue and deliver the original mortgagee title
policy, Countrywide shall, upon the written request of the Purchaser, provide an
Officer's Certificate certifying that such Missing Collateral Document has not
been delivered as a result of (i) or (ii) set forth in this sentence, as
applicable.
Countrywide shall provide to each of the Purchaser and the Custodian a
notice containing a list of authorized servicing officers (each, an "Authorized
Representative") for the purpose of giving and receiving notices, requests and
instructions and delivering certificates and documents in connection with this
Agreement. Such notice shall contain the specimen signature for each
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Authorized Representative. From time to time, Countrywide may, by delivering to
the others a revised notice, change the information previously given pursuant to
this Section, but each of the parties hereto shall be entitled to rely
conclusively on the then current notice until receipt of a superseding notice.
Section 2.06 Purchase Confirmation.
Upon confirmation with the Purchaser of a Mortgage Loan Package,
Countrywide shall prepare and deliver to the Purchaser for execution the related
Purchase Confirmation, executed by an authorized signatory of Countrywide.
Section 2.07 Closing.
The Closing of each Mortgage Loan Package shall take place on the
related Closing Date and shall be subject to the satisfaction of each of the
following conditions, unless otherwise waived by the prejudiced party(ies):
(a) All of the representations and warranties of Countrywide under
this Agreement shall be true and correct in all material respects as of the
Closing Date and no event shall have occurred that, with notice or the passage
of time, would constitute a default under this Agreement;
(b) All of the representations and warranties of the Purchaser under
this Agreement shall be true and correct in all material respects as of the
Closing Date and no event shall have occurred that, with notice or the passage
of time, would constitute a default under this Agreement;
(c) Both parties shall have executed the related Purchase
Confirmation and Custodial Agreement;
(d) the Purchaser shall have received, or the Purchaser's attorneys
shall have received in escrow, all Closing Documents as specified in Section
2.09, in such forms as are mutually agreed upon by the parties, duly executed by
all signatories as required pursuant to the terms hereof; and
Countrywide shall have delivered to the Custodian the Collateral Documents in
accordance with Section 2.05.
Section 2.08 Purchase Proceeds.
Subject to the conditions set forth in Section 2.07 hereof, and in
consideration for the Mortgage Loan Package to be purchased by the Purchaser on
the related Closing Date, the Purchaser shall pay to Countrywide on such Closing
Date the Purchase Proceeds by wire transfer of immediately available funds to
the account designated by Countrywide on or before the Funding Deadline..
The Purchaser shall be entitled to (l) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
after the related Cut-off Date (provided, however, that all scheduled payments
of principal due on or before the related Cut-off Date and
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collected by Countrywide after the related Cut-off Date shall belong to
Countrywide), and (4) all payments of interest on the Mortgage Loans net of
interest at the Servicing Fee Rate (minus that portion of any such payment which
is allocable to the period prior to the related Cut-off Date).
Section 2.09 Closing Documents.
(a) On or before the Initial Closing Date, originals of the
following documents shall be executed by both the Purchaser and Countrywide:
1. this Agreement;
2. evidence of the creation of the Custodial Account;
3. evidence of the creation of the Escrow Account;
4. an Officer's Certificate, in the form of Exhibit G
hereto, including all attachments thereto; and
5. Countrywide's Underwriting Guidelines.
(b) The Closing Documents for the Mortgage Loans to be purchased on
each Closing Date shall consist of originals of the following documents executed
by both the Purchaser and Countrywide:
1. the related Purchase Confirmation;
2. the related Mortgage Loan Schedule, one copy to be
attached hereto and one copy to be attached to the related
Purchase Confirmation;
3. a Custodian's Trust Receipt and Initial
Certification, as required under the Custodial Agreement, in a
form agreed upon pursuant to the Custodial Agreement;
4. a Security Release Certification, in the form of
Exhibit H hereto executed by any Person, as requested by the
Purchaser, if any of the Mortgage Loans are subject to any
security interest, pledge or hypothecation for the benefit of
such Person;
5. a certificate or other evidence of merger or change
of name, signed or stamped by the applicable regulatory
authority, if any of the Mortgage Loans were acquired by
Countrywide by merger or acquired or originated by Countrywide
while conducting business under a name other than its present
name, if applicable; and
6. in the event that Countrywide's Underwriting
Guidelines have been modified following delivery to the
Purchaser, an updated copy of such Underwriting Guidelines.
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Section 2.10 [Reserved].
Section 2.11 Payment of Costs and Expenses.
The Purchaser and Countrywide shall each bear its own costs and
expenses in connection with the purchase and sale of the Mortgage Loans
including any commissions due its sales personnel, the legal fees and expenses
of its attorneys and any due diligence expenses. Without limiting the generality
of the foregoing, any costs and expenses incurred in connection with recording
the Assignment of Mortgage or any subsequent assignment thereof shall be paid
for by the Purchaser.
Section 2.12 MERS Mortgage Loans and the MERS System.
(a) Notwithstanding anything contained in this Agreement to the
contrary, with respect to any MERS Mortgage Loan sold to the Purchaser by
Countrywide pursuant to this Agreement, Countrywide shall cause the
registration of such MERS Mortgage Loan to be changed on the MERS System to
reflect the Purchaser as the beneficial owner of such MERS Mortgage Loan.
The foregoing obligation of Countrywide shall be in lieu of Countrywide
delivering to the Purchaser an Assignment of Mortgage for such MERS Mortgage
Loan. With respect to the Mortgage and intervening assignments related to any
MERS Mortgage Loan, Countrywide shall, in accordance with Section 2.05 of this
Agreement, provide the Purchaser with the original Mortgage with evidence of
registration with MERS and, as applicable, the originals of all intervening
assignments of the Mortgage with evidence of recording thereon prior to the
registration of the Mortgage Loan with the MERS System.
(b) In connection with the MERS System, Countrywide is hereby
authorized and empowered, in its own name, to register, or change the
registration of any MERS Mortgage Loan to effectuate such registration. Further,
Countrywide is authorized to cause the removal of any MERS Mortgage Loan from
such registration, and to execute and deliver on behalf of itself and the
Purchaser, any and all instruments of assignment and comparable instruments with
respect to any registration and/or removal of such MERS Mortgage Loan on or from
the MERS System.
Section 2.13 Books and Records.
In the event Countrywide retains record title, Countrywide shall retain
such record title to each Mortgage, each related Mortgage Note and the related
Collateral Files with respect thereto in trust for the Purchaser as the owner
thereof and only for the purpose of servicing and supervising the servicing of
each Mortgage Loan. Beneficial ownership of each Mortgage and the related
Mortgage Note shall be vested solely in the Purchaser. It is the express
intention of the parties that the transactions contemplated by this Agreement
be, and be construed as, a sale of the Mortgage Loans by Countrywide and not a
pledge of the Mortgage Loans by Countrywide to the Purchaser to secure a debt or
other obligation of Countrywide. Consequently, the sale of each Mortgage Loan
shall be reflected as a sale on Countrywide's applicable business records, tax
returns and financial statements.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Representations and Warranties Respecting Countrywide.
Countrywide represents, warrants and covenants to the Purchaser that,
as of each Closing Date:
(a) Countrywide is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized and is
qualified and licensed to transact business in and is in good standing under
the laws of each state where each Mortgaged Property is located to the extent
necessary to ensure the enforceability of each Mortgage Loan in accordance with
the terms of this Agreement and no demand for such licensing or qualification
has been made upon Countrywide by any such state;
(b) Countrywide has the full power and authority to (i) hold each
Mortgage Loan, (ii) perform and enter into and consummate all transactions
contemplated by this Agreement and (iii) to sell each Mortgage Loan. Countrywide
has duly authorized the execution, delivery and performance of this Agreement,
has duly executed and delivered this Agreement, and this Agreement, assuming
due authorization, execution and delivery by the Purchaser, constitutes a legal,
valid and binding obligation of Countrywide, enforceable against it in
accordance with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization;
(c) Neither the acquisition or origination of the Mortgage Loans by
Countrywide, the sale of the Mortgage Loans to the Purchaser, the consummation
of the transactions contemplated hereby, nor the fulfillment of or compliance
with the terms and conditions of this Agreement, will conflict with or result in
a breach of any of the terms, conditions or provisions of Countrywide's
certificate of incorporation or by-laws or result in a material breach of any
legal restriction or any material agreement or instrument to which Countrywide
is now a party or by which it is bound, or constitute a material default
or result in an acceleration under any of the foregoing, or result in the
violation of any material law, rule, regulation, order, judgment or decree to
which Countrywide or its property is subject;
(d) Countrywide is an approved seller/servicer for each Agency in
good standing and is a mortgagee approved by the Secretary of HUD. No event
has occurred, including a change in insurance coverage, which would make
Countrywide unable to comply with ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or HUD eligibility
requirements;
(e) There is no action, suit, proceeding, investigation or
litigation pending or, to Countrywide's knowledge, threatened, which either in
any one instance or in the aggregate, if determined adversely to Countrywide
would materially and adversely affect the sale of the Mortgage Loans to the
Purchaser, or Countrywide's ability to perform its obligations under this
Agreement;
(f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Countrywide, of or compliance by Countrywide
with, this Agreement or the consummation of the transactions
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contemplated by this Agreement, or if required, such consent, approval,
authorization or order has been obtained prior to the related Closing Date;
(g) The execution and delivery of this Agreement by Countrywide
and its performance and compliance with the terms of this Agreement will not
constitute a violation with respect to, any order or decree of any court or any
order or regulation of any federal, state, municipal or governmental agency
having jurisdiction over Countrywide or its assets, which violation might have
consequences that would materially and adversely affect the performance of its
obligations and duties hereunder;
(h) Countrywide does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained
in this Agreement;
(i) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of Countrywide, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
Countrywide pursuant to this Agreement are not subject to the bulk transfer or
any similar statutory provisions;
(j) The transfer of the Mortgage Loans shall be treated as a sale
on the applicable books and records of Countrywide, and Countrywide has
determined that, and will treat, the disposition of the Mortgage Loans pursuant
to this Agreement for applicable tax and accounting purposes as a sale.
Countrywide shall maintain a complete set of books and records for each Mortgage
Loan which shall be clearly marked to reflect the ownership of each Mortgage
Loan by the Purchaser;
(k) The consideration received by Countrywide upon the sale of the
Mortgage Loans constitutes fair consideration and reasonably equivalent value
for such Mortgage Loans;
(l) Countrywide is solvent and will not be rendered insolvent
by the consummation of the transactions contemplated hereby. Countrywide is not
transferring any Mortgage Loan with any intent to hinder, delay or defraud any
of its creditors;
(m) Neither this Agreement nor any written statement, report or other
document prepared and furnished by Countrywide pursuant to this Agreement
or in connection with the transactions contemplated hereby contains any
untrue statement of material fact or omits to state a material fact necessary to
make the statements contained herein or therein not misleading;
(n) Countrywide is a member of MERS and is current in payment of all
fees and assessments imposed by MERS; and
(o) Countrywide has not dealt with any third party broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans.
Section 3.02 Representations and Warranties Regarding Individual
Mortgage Loans.
With respect to each Mortgage Loan (unless otherwise specified below),
Countrywide represents and warrants to the Purchaser as of the related Closing
Date that:
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(a) The information contained in the Mortgage Loan Schedule is
complete, true and correct;
(b) All payments required to be made prior to the related Cut-off
Date for such Mortgage Loan under the terms of the Mortgage Note have been made;
Countrywide has not advanced funds, or induced, solicited or knowingly received
any advance of funds from a party other than the owner of the Mortgaged Property
subject to the Mortgage, directly or indirectly, for the payment of any amount
required by the Mortgage Loan; no Mortgage Loan is thirty (30) or more days
delinquent as of the related Closing Date;
(c) There are no delinquent taxes, ground rents, water charges, sewer
rents, assessments, insurance premiums, leasehold payments, including
assessments payable in future installments or other outstanding charges
affecting the related Mortgaged Property;
(d) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments that have been or will be recorded in the applicable recording
office, if necessary to protect the lien priority of the Mortgage and the
interests of the Purchaser, and that have been or will be delivered to the
Purchaser, all in accordance with this Agreement. The substance of any such
waiver, alteration or modification has been approved by the primary mortgage
insurer, if any, and by the title insurer, to the extent required by the related
policy and its terms are reflected on the Mortgage Loan Schedule. No other
instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement approved by the primary mortgage insurer, if any, and the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Collateral File and the terms of which are reflected in
the Mortgage Loan Schedule if executed prior to the Closing Date;
(e) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the defense
of usury, nor will the operation of any of the terms of the Mortgage Note
and the Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) All buildings upon the Mortgaged Property are insured by a
Qualified Insurer against loss by fire, hazards of extended coverage and such
other hazards as are customary in the area where the Mortgaged Property is
located, pursuant to an insurance policy conforming to the requirements of
Accepted Servicing Practices and the Underwriting Guidelines and providing
coverage as set forth in the Underwriting Guidelines. Such insurer is licensed
to do business in the state where the Mortgaged Property is located. All such
insurance policies contain a standard mortgagee clause naming Countrywide, its
successors and assigns as mortgagee, and all premiums thereon have been paid.
If, upon the origination of the Mortgage Loan, the Mortgaged Property was, or
was subsequently deemed to be, in an area identified in the Federal Register
by the Federal Emergency Management Agency as having special flood hazards
(and such flood insurance has been made available), a flood insurance policy
that meets the requirements of the current guidelines of the Federal Insurance
Administration (or any successor thereto) and conforms to the requirements of an
Agency is in effect. The Mortgage obligates the Mortgagor
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thereunder to maintain all such insurance at the Mortgagor's expense and, upon
the failure of the Mortgagor to do so, the holder of the Mortgage is authorized
to maintain such insurance at the Mortgagor's expense and to seek reimbursement
therefor from the Mortgagor;
(g) Each Mortgage Loan complies with any applicable federal, state or
local law including, without limitation, usury, truth in lending, real estate
settlement procedures, anti-predatory and abusive lending, consumer credit
protection, equal credit opportunity or disclosure laws applicable to the
origination and servicing of the Mortgage Loans; Countrywide maintains, and
shall maintain, evidence of such compliance as required by applicable law or
regulation;
(h) The Mortgage has not been satisfied, canceled, subordinated, or
rescinded, in whole or in part, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such satisfaction, release, cancellation,
subordination or rescission;
(i) The Mortgage Note and the related Mortgage are genuine and each
is the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization or similar laws;
(j) Each related Mortgage is a valid, subsisting and enforceable
First Lien (with respect to a First Lien Mortgage Loan and reflected on the
related Mortgage Loan Schedule) and first priority interest or Second Lien (with
respect to a Second Lien Mortgage Loan and reflected on the related Mortgage
Loan Schedule) and second priority interest with respect to each Mortgage Loan
on the related Mortgaged Property, including all improvements on the Mortgaged
Property. The lien of the Mortgage is subject only to:
(i) the lien of current real property taxes and assessments
not yet due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of
recording that are acceptable to mortgage lending institutions
generally and specifically referred to in the lender's title insurance
policy delivered to the originator of the Mortgage Loan and that do not
adversely affect the Appraised Value (as evidenced by an appraisal
referred to in such definition) of the Mortgaged Property set forth in
such appraisal;
(iii) with respect to a Second Lien Mortgage Loan only, the
lien of the first mortgage on the Mortgaged Property; and
(iv) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment,
value or marketability of the related Mortgaged Property;
Any security agreement, chattel mortgage or equivalent document related
to and delivered in connection with the Mortgage Loan establishes and creates a
valid, existing and enforceable first or second lien and first or second
priority security interest (in each case, as indicated on the
related Mortgage Loan Schedule, as applicable) on the property described
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therein and Countrywide has full right to sell and assign the same to the
Purchaser subject only to (i) - (iv) above.
(k) The proceeds of the Mortgage Loan have been fully disbursed to
or for the account of the Mortgagor, and there is no requirement for future
advances thereunder, and any and all requirements as to completion of any
on-site or off-site improvement and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses incurred in
making or closing the Mortgage Loan and recording the Mortgage were paid, and
the Mortgagor is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage;
(l) Countrywide is the sole legal, beneficial and equitable owner and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
Countrywide has good and marketable title thereto, and has full right to
transfer and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest not
specifically set forth in the related Mortgage Loan Schedule and has full right
and authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to the terms of this
Agreement;
(m) Each Mortgage Loan that is a First Lien Mortgage Loan and each
Mortgage Loan that is a Second Lien Mortgage Loan with an original principal
balance greater than $100,000, in either case, is covered by an American Land
Title Association ("ALTA") a lender's title insurance policy acceptable to the
Agencies (which, in the case of an Adjustable Rate Mortgage Loan has an
adjustable rate mortgage endorsement), issued by a Qualified Insurer, insuring
(subject to the exceptions contained in Section 3.02(j)(i)-(iv) above)
Countrywide, its successors and assigns as to the first or second priority lien
of the Mortgage, as applicable. Where required by applicable state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein.
Countrywide is the sole insured of such lender's title insurance policy, and
such lender's title insurance policy is in full force and effect and will be in
full force and effect upon the consummation of the transactions contemplated by
this Agreement. No claims have been made under such lender's title insurance
policy, and no prior holder of the related Mortgage, including Countrywide, has
done, by act or omission, anything which would impair the coverage of such
lender's title insurance policy;
(n) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note and no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration,
and Countrywide has not waived any default, breach, violation or event
of acceleration, and with respect to any Second Lien Mortgage Loan, (i) there is
no default, breach, violation or event of acceleration existing under such First
Lien mortgage or the related mortgage note for which Countrywide has been
notified of, and (ii) either (A) the First Lien mortgage contains a provision
which allows or (B) applicable law requires, the mortgagee under the Second Lien
Mortgage Loan to receive notice of, and affords such mortgagee an opportunity to
cure any default by payment in full or otherwise under the
First Lien mortgage, or (C) may neither have a provision which
allows or where applicable law requires the mortgagee under the
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Second Lien Mortgage Loan to receive notice of any default by payment in full or
otherwise under the First Lien mortgage.
(o) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
law could give rise to such lien) affecting the related Mortgaged Property which
are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(p) The origination, servicing and collection practices used by
Countrywide with respect to each Mortgage Note and Mortgage including, without
limitation, the establishment, maintenance and servicing of the Escrow Accounts
and Escrow Payments, if any, since origination, have been in all respects legal,
proper, prudent and customary in the mortgage origination and servicing
business. The Mortgage Loan has been serviced by Countrywide and any
predecessor servicer in accordance with the terms of the Mortgage Note and
Accepted Servicing Practices. With respect to escrow deposits and Escrow
Payments, if any, all such payments are in the possession of, or under the
control of, Countrywide and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. No
escrow deposits or Escrow Payments or other charges or payments due Countrywide
have been capitalized under any Mortgage or the related Mortgage Note. With
respect to Adjustable Rate Mortgage Loans, all Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited;
(q) The Mortgaged Property is free of material damage and waste and
there is no proceeding pending for the total or partial condemnation thereof;
(r) The Mortgage contains customary and enforceable provisions such
as to render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
provided thereby including (a) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (b) otherwise by judicial foreclosure.
The Mortgaged Property is not subject to any bankruptcy proceeding or
foreclosure proceeding and the Mortgagor has not filed for protection under
applicable bankruptcy laws. There is no homestead or other similar exemption
under applicable law available to the Mortgagor which would interfere with the
right to sell the Mortgaged Property at a trustee's sale or the right to
foreclose the Mortgage. The Mortgagor has not notified Countrywide and
Countrywide has no knowledge of any relief requested or allowed to the Mortgagor
under the Servicemembers' Civil Relief Act;
(s) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (j) above;
(t) Unless the Mortgage Loan was underwritten pursuant to one of
Countrywide's streamline documentation programs, the Credit File contains an
appraisal of the related Mortgaged Property signed prior to the approval of the
Mortgage Loan application by an appraiser who meets the minimum requisite
qualifications of an Agency for appraisers, duly appointed by the originator,
that had no interest, direct or indirect in the Mortgaged
Property, and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan; the
21
appraisal is in a form acceptable to an Agency, with such riders as
are acceptable to such Agency. Each appraisal of the Mortgage Loan was made
in accordance with the relevant provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;
(u) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees
or expenses are or will become payable by the Purchaser to the trustee under
the deed of trust, except in connection with a trustee's sale after default
by the Mortgagor;
(v) Private Mortgage Insurance. Each Conventional Mortgage Loan,
except a Second Lien Mortgage Loan or a Mortgage Loan underwritten in accordance
with sub-prime credit underwriting guidelines, with an LTV at origination in
excess of eighty percent (80%) is and will be subject to a PMI Policy, which
insures that portion of the Mortgage Loan over seventy-five percent (75%) of
the Appraised Value of the related Mortgaged Property. All provisions of such
PMI Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. Any Mortgage
subject to any such PMI Policy obligates the Mortgagor thereunder to maintain
such insurance and to pay all premiums and charges in connection therewith or,
in the case of a lender paid mortgage insurance policy, the premiums and charges
are included in the Mortgage Interest Rate for the Mortgage Loan;
(w) The Mortgaged Property is lawfully occupied under applicable
law. All inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the appropriate
authorities and, at origination of the Mortgage Loan, no improvement located
on or part of the Mortgaged Property is in violation of any applicable zoning
law, subdivision law or regulation;
(x) The Assignment of Mortgage is in recordable form, except for the
name of the assignee which is blank, and is acceptable for recording under the
laws of the jurisdiction in which the Mortgaged Property is located;
(y) Any future advances made to the Mortgagor prior to the Cut-off
Date have been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having first or second (as
indicated on the related Mortgage Loan Schedule) lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to an Agency. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;
(z) The Mortgage Loan was underwritten in accordance with the
Underwriting Guidelines in effect at the time the Mortgage Loan was originated.
The Mortgage Note and Mortgage are on forms acceptable to an Agency;
(aa) No Mortgage Loan is (i) a Section 32 Mortgage Loan under the
Homeownership and Equity Protection Act of 1994 as amended ("HOEPA"), (ii)
classified as a "high cost" or similarly defined mortgage loan under any
applicable federal, state or local law or (iii)
22
categorized as a High Cost Loan (as such term is defined in the then current
Standard & Poor's LEVELS(R) Glossary, applicable at the time of origination of
the Mortgage Loan; any breach of this representation shall be deemed to
materially and adversely affect the value of the Mortgage Loan and shall require
a repurchase of the affected Mortgage Loan;
(bb) All parties to the Mortgage Note and the Mortgage had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly and
properly executed by such parties. The Mortgagor is one or more natural persons
(or the related co-borrower or guarantor is a natural person) and/or trustees
for an Illinois land trust or a trustee under a "living trust" and such "living
trust" is acceptable pursuant to the Underwriting Guidelines;
(cc) All parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (i) (a) in compliance
with any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located, and (b) organized under the laws of
such state, or (ii) qualified to do business in such state, or (iii) a federal
savings and loan association or national bank having principal offices in such
state, or (iv) not deemed to be doing business in such state under applicable
law;
(dd) All improvements subject to the Mortgage which were considered in
determining the Appraised Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of the Mortgaged Property (and wholly
within the project with respect to a condominium unit) and no improvements on
adjoining properties encroach upon the Mortgaged Property except those which are
insured against by the title insurance policy referred to in (m) above;
(ee) The Mortgage Loan was originated by Countrywide or by a savings
and loan association, a savings bank, a commercial bank, credit union, insurance
company or similar institution which is supervised and examined by a federal
or state authority, or by a mortgagee approved as such by the Secretary of HUD;
(ff) Principal payments on the Mortgage Loan commenced no more than
sixty (60) days after the proceeds of the Mortgage Loan were disbursed. The
Mortgage Loan bears interest at the Mortgage Interest Rate. The Mortgage Note
is payable on the day stated on the related Mortgage Note, which, in the case of
a Fixed Rate Mortgage Loan, are sufficient to fully amortize the original
principal balance over the original term thereof (other than with respect
to a Mortgage Loan identified on the related Mortgage Loan Schedule as an
interest-only Mortgage Loan during the interest-only period or a Mortgage Loan
which is identified on the related Mortgage Loan Schedule as a Balloon Mortgage
Loan) and to pay interest at the related Mortgage Interest Rate, and, in
the case of an Adjustable Rate Mortgage Loan, are changed on each Adjustment
Date, and in any case, are sufficient to fully amortize the original principal
balance over the original term thereof (other than with respect to a Mortgage
Loan identified on the related Mortgage Loan Schedule as an interest-only
Mortgage Loan during the interest-only period or a Mortgage Loan which is
identified on the related Mortgage Loan Schedule as a Balloon Mortgage Loan)
and to pay interest at the related Mortgage Interest Rate. With respect to each
Mortgage Loan identified on the Mortgage Loan Schedule as an
interest-only Mortgage Loan, the interest-only period shall
not exceed ten (10) years (or such other period specified on
23
the related Mortgage Note) and following the expiration of such interest-only
period, the remaining Monthly Payments shall be sufficient to fully amortize the
original principal balance over the remaining term of the Mortgage Loan and to
pay interest at the related Mortgage Interest Rate. With respect to each Balloon
Mortgage Loan, the Mortgage Note requires a monthly payment which is sufficient
to fully amortize the original principal balance over the original term thereof
and to pay interest at the related Mortgage Interest Rate and requires a final
payment substantially greater than the preceding monthly payment which is
sufficient to repay the remaining unpaid principal balance of the Balloon
Mortgage Loan at the Due Date of such final payment. The Index for each
Adjustable Rate Mortgage Loan is as set forth on the related Mortgage Note. No
Mortgage Loan is a Convertible Mortgage Loan. No Balloon Mortgage Loan has an
original stated maturity of less than five (5) years;
(gg) No Mortgage Loan contains provisions pursuant to which Monthly
Payments are (a) paid or partially paid with funds deposited in any separate
account established by Countrywide, the Mortgagor, or anyone on behalf of the
Mortgagor, (b) paid by any source other than the Mortgagor or (c) contains any
other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(hh) The Mortgagor has received all disclosure materials required by
applicable law;
(ii) No Mortgage Loan was made in connection with (i) the construction
or rehabilitation of a Mortgaged Property or (ii) facilitating the trade-in or
exchange of a Mortgaged Property;
(jj) No error, omission, misrepresentation, fraud or similar occurrence
with respect to a Mortgage Loan has taken place on the part of Countrywide or,
to the best of Countrywide's knowledge, the Mortgagor, any appraiser, any
builder or developer, or any other party involved in the origination or
servicing of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan;
(kk) If the Residential Dwelling on the Mortgaged Property is a
condominium unit or a unit in a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project meets the eligibility requirements of the Underwriting Guidelines and an
Agency;
(ll) Interest on each Mortgage Loan is calculated on the basis of a
360-day year consisting of twelve 30-day months;
(mm) To the best of Countrywide's knowledge, there is no pending action
or proceeding directly involving any Mortgaged Property of which Countrywide is
aware in which compliance with any environmental law, rule or regulation is an
issue and nothing further remains to be done to satisfy in full all requirements
of each such law, rule or regulation constituting a prerequisite to use and
enjoyment of said property. To the best of Countrywide's knowledge, the
Mortgaged Property is free from any and all toxic or hazardous substances and
there exists no violation of any local, state or federal environmental law, rule
or regulation;
(nn) No Mortgagor was required to purchase any single premium credit
insurance policy (e.g., life, mortgage, disability, accident, unemployment, or
health insurance product) or
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debt cancellation agreement as a condition of obtaining the extension of credit.
No Mortgagor obtained a prepaid single-premium credit insurance policy (e.g.,
life, mortgage, disability, accident, unemployment, or health insurance product)
in connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies or
debt cancellation agreements as part of the origination of, or as a condition to
closing, such Mortgage Loan; any breach of this representation shall be deemed
to materially and adversely affect the value of the Mortgage Loan and shall
require a repurchase of the affected Mortgage Loan;
(oo) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder;
(pp) No Mortgage Loan is secured by manufactured housing, cooperative
housing, commercial property or mixed use property;
(qq) Countrywide has established an anti-money laundering compliance
program to the extent required by applicable anti-money laundering laws and
regulations, including without limitation, the USA Patriot Act of 2003, and the
laws and regulations administered by the U.S. Department of Treasury's Office of
Foreign Assets Control ("OFAC"), which prohibit dealings with certain countries,
territories, entities and individuals named in OFAC's Sanction Programs and on
the Specially Designated Nationals and Blocked Persons List. The Mortgage Loans
have been originated, and documentation related thereto shall be maintained, in
material compliance with such program;
(rr) Solely with respect to any conforming balance Mortgage Loan, the
Mortgagor was not encouraged or required to select a mortgage loan product
offered by the Mortgage Loan's originator which is a higher cost product
designed for less creditworthy borrowers, taking into account such facts as,
without limitation, the Mortgage Loan's requirements and the Mortgagor's credit
history, income, assets and liabilities. Solely with respect to any conforming
balance Mortgage Loan, if, at the time of Mortgage Loan application, the
Mortgagor may have qualified for a lower cost credit product then offered by any
mortgage lending affiliate of the Mortgage Loan's originator, the Mortgage
Loan's originator referred the Mortgagor's application to such affiliate for
underwriting consideration. Solely with respect to any conforming balance
Mortgage Loan, the Mortgagor was assigned the highest credit grade available
with respect to a mortgage loan product offered by such Mortgage Loan's
originator, based on a comprehensive assessment of risk factors, including the
Mortgagor's credit history;
(ss) Solely with respect to any conforming balance Mortgage Loan, the
methodology used in underwriting the extension of credit for each Mortgage Loan
did not rely solely on the extent of the Mortgagor's equity in the collateral as
the principal determining factor in approving such extension of credit. Such
methodology employed objective criteria such as the Mortgagor's income, assets
and liabilities, to the proposed mortgage payment and, based on such
methodology, the Mortgage Loan's originator made a reasonable determination that
at the time of origination the Mortgagor had the ability to make timely payments
on the Mortgage Loan;
(tt) For each Mortgage Loan, Countrywide or its designee has furnished,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and requisite information on its borrower credit files to
each of the following credit repositories:
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Equifax Credit Information Services, Inc., Experian Information Solution, Inc.,
and Trans Union, LLC, on a monthly basis;
(uu) Each Mortgage Loan constitutes a "qualified mortgage" under
Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1);
(vv) No Mortgage Loan is secured by real property or secured by a
manufactured home located in the state of Georgia unless (x) such Mortgage Loan
was originated prior to October 1, 2002 or after March 6, 2003, or (y) the
property securing the Mortgage Loan is not, nor will be, occupied by the
Mortgagor as the Mortgagor's principal dwelling. No Mortgage Loan is a "High
Cost Home Loan" as defined in the Georgia Fair Lending Act, as amended (the
"Georgia Act"). Each Mortgage Loan that is a "Home Loan" under the Georgia Act
complies with all applicable provisions of the Georgia Act. No Mortgage Loan
secured by owner occupied real property or an owner occupied manufactured home
located in the State of Georgia was originated (or modified) on or after October
1, 2002 through and including March 6, 2003;
(ww) The sale or transfer of the Mortgage Loan by Countrywide complies
with all applicable federal, state, and local laws, rules, and regulations
governing such sale or transfer, including, without limitation, the Fair and
Accurate Credit Transactions Act ("FACT Act") and the Fair Credit Reporting Act,
each as may be amended from time to time, and Countrywide has not received any
actual notice of any identity theft in connection with such Mortgage Loan;
(xx) With respect to any conforming balance Mortgage Loan, if the
related Mortgage or the related Mortgage Note, or any other Collateral Document
contains a mandatory arbitration clause, Countrywide (i) has or will notify the
related Mortgagor in writing within 60 days after the Closing Date that neither
Countrywide, as seller or servicer, nor any entity that acquires an interest in
the Mortgage Loan nor any successor servicer shall enforce such arbitration
clause against the Mortgagor, but that the Mortgagor will continue to have the
right to submit a dispute to arbitration;
(yy) No Mortgage Loan had an LTV in excess of 100% at origination;
(zz) Each Mortgage Loan originated in the State of Texas pursuant
to Article XVI, Section 50(a)(6) of the Texas Constitution (a "Texas Refinance
Loan") has been originated in compliance with the provisions of Article XVI,
Section 50(a)(6) of the Texas Constitution, Texas Civil Statutes and the Texas
Finance Code. With respect to each Texas Refinance Loan that is a Cash-Out
Refinancing, the related Mortgage Loan Documents state that the Mortgagor may
prepay such Texas Refinance Loan in whole or in part without incurring a
prepayment penalty;
(aaa) With respect to any Mortgage Loan that contains a provision
permitting imposition of a Prepayment Charge: (i) prior to the Mortgage Loan's
origination, the borrower agreed to such Prepayment Charge in exchange for a
monetary benefit, including but not limited to a rate or fee reduction, (ii)
prior to the Mortgage Loan's origination, the Mortgagor was offered the option
of obtaining a mortgage loan that did not require payment of such Prepayment
Charge, and (iii) the Prepayment Charge is disclosed to the related Mortgagor as
required by applicable local, state and federal law. With respect to each
Mortgage Loan that has a Prepayment Charge, each such Prepayment Charge is
enforceable and collectible by Countrywide and each Prepayment Charge is
permitted pursuant to applicable federal, state or local law. Notwithstanding
the above, Countrywide may waive a Prepayment Charge without
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such waiver operating as a breach of this representation and warranty 3.02(ccc)
if (i) the Mortgage Loan is in default and such waiver would maximize recovery
of total proceeds taking into account the value of such Prepayment Charge and
the related Mortgage Loan, and the waiver of such Prepayment Charge is standard
and customary in servicing similar Mortgage Loans (including the waiver of a
Prepayment Charge in connection with a refinancing of the Mortgage Loan related
to a default or a reasonably foreseeable default), (ii) the collection of the
Prepayment Charge would be in violation of applicable laws, (iii) the collection
of such Prepayment Charge would be considered "predatory" pursuant to written
guidance published or issued by any applicable federal, state or local
regulatory authority acting in its official capacity and having jurisdiction
over such matters and (iv) notwithstanding any state or federal law to the
contrary, any instance when a Mortgage Loan is in foreclosure; and
(bbb) No Mortgage Loan is secured by a lien on a "condo hotel".
Section 3.03 Remedies for Breach of Representations and Warranties.
(a) Notice of Breach. The representations and warranties set forth in
Sections 3.01 and 3.02 of this Agreement shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Collateral
Documents or Credit File. Upon discovery by either Countrywide or the Purchaser
of a breach of any of the foregoing representations and warranties that
materially and adversely affects the value of one or more of the related
Mortgage Loans or the interest of the Purchaser therein, the party discovering
such breach shall give prompt written notice to the other.
(b) Cure or Repurchase. Within ninety (90) days from the earlier of
either discovery by or notice to Countrywide of a breach of a representation or
warranty that materially and adversely affects the value of a Mortgage Loan or
the Mortgage Loans or the Purchaser's interest therein, Countrywide shall use
its best efforts to cure such breach in all material respects, and, if such
breach cannot be cured, Countrywide shall, at the Purchaser's option, repurchase
such Mortgage Loan at the Repurchase Price. In the event that a breach shall
involve any representation or warranty set forth in Section 3.01 hereof and such
breach cannot be cured within ninety (90) days of the earlier of either
discovery by or notice to Countrywide of such breach, all of the Mortgage Loans
shall, at the Purchaser's option, be repurchased by Countrywide at the
Repurchase Price.
(c) Substitution or Repurchase. If the breach shall involve a
representation or warranty set forth in Section 3.02 of this Agreement,
Countrywide may, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan and substitute in its place a Qualified Substitute
Mortgage Loan or Loans. If Countrywide has no Qualified Substitute Mortgage
Loan, it shall repurchase the deficient Mortgage Loan. Any repurchase of a
Mortgage Loan(s) pursuant to the provisions of this Section 3.03 shall occur on
a reasonable date which shall be mutually agreed upon by the parties, but in any
event, not to exceed 90 days from the receipt of notice, and shall be
accomplished by deposit in the Custodial Account of the amount of the Repurchase
Price for distribution to the Purchaser on the next scheduled Remittance Date,
after deducting therefrom any amount received in respect of such repurchased
Mortgage Loan or Loans and being held in the Custodial Account for future
distribution. At the time of repurchase or substitution, the Purchaser and
Countrywide shall arrange for the reassignment of such
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Mortgage Loan and release of the related Collateral File to Countrywide and the
delivery to Countrywide of any documents held by the Purchaser or its designee
relating to such Mortgage Loan. In the event Countrywide determines to
substitute a Qualified Substitute Mortgage Loan for a repurchased Mortgage Loan,
Countrywide shall, simultaneously with such reassignment, give written notice to
the Purchaser that such repurchase or substitution has taken place, amend the
Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan
from this Agreement, and in the case of substitution, identify a Qualified
Substitute Mortgage Loan (or Loans) and amend the Mortgage Loan Schedule to
reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, Countrywide shall be deemed
to have made as to such Qualified Substitute Mortgage Loan(s) the
representations and warranties except that all such representations and
warranties set forth in this Agreement shall be deemed made as of the date of
such substitution. Countrywide shall effect such substitution by delivering to
the Purchaser the Collateral Documents for such Qualified Substitute Mortgage
Loan(s). Countrywide shall deposit in the Custodial Account the Monthly Payment
less the Servicing Fee due on such Qualified Substitute Mortgage Loan(s) in the
month following the date of such substitution. Monthly Payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution shall be
retained by Countrywide. For the month of substitution, distributions to the
Purchaser shall include the Monthly Payment due on any substituted Mortgage Loan
in the month of substitution, and Countrywide shall thereafter be entitled to
retain all amounts subsequently received by Countrywide in respect of such
substituted Mortgage Loan.
For any month in which Countrywide substitutes a Qualified Substitute
Mortgage Loan for a repurchased Mortgage Loan, Countrywide shall determine the
amount (if any) by which the aggregate principal balance of all Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all substituted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be distributed by Countrywide in the month of
substitution pursuant to Section 4.01 of the Servicing Agreement. Accordingly,
on the date of such substitution, Countrywide shall deposit from its own funds
into the Custodial Account an amount equal to the amount of such shortfall.
In addition to such cure, repurchase and substitution obligation,
Countrywide shall indemnify the Purchaser and any subsequent Purchaser and hold
them harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
costs and expenses resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a breach of Countrywide's
representations and warranties, respectively, contained in Section 3.01 and 3.02
(which shall not include any costs and expenses that have already been included
in the related Repurchase Price in the event Countrywide has repurchased the
affected Mortgage Loan pursuant to Section 3.03 herein). The indemnification
obligation of the Seller set forth herein shall survive the termination of this
Agreement.
(d) Sole Remedy. With respect to the breach of a representation and
warranty set forth in Sections 3.01 and 3.02 hereof with respect to a Mortgage
Loan, the obligation under this Section 3.03 of Countrywide to cure, repurchase
or replace such Mortgage Loan and to indemnify the Purchaser as provided in
Section 3.03 shall constitute the sole remedy against Countrywide respecting
such breach available to the Purchaser.
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(e) Accrual of Cause of Action. Any cause of action against Countrywide
relating to or arising out of the breach of any representations and warranties
made in Sections 3.01 or 3.02 hereof shall accrue as to any Mortgage Loan upon
(i) discovery of such breach by the Purchaser or notice thereof by Countrywide
to the Purchaser, (ii) failure by Countrywide to cure such breach or repurchase
such Mortgage Loan as specified above, and (iii) demand upon Countrywide by the
Purchaser for compliance with the relevant provisions of this Agreement.
Section 3.04 [Reserved].
Section 3.05 Representations and Warranties Respecting the Purchaser
The Purchaser represents, warrants and covenants to Countrywide that,
as of each Closing Date:
(a) Organization and Standing. The Purchaser is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized and is qualified to transact business in and is in good standing under
the laws of each state in which the nature of the business transacted by it or
the character of the properties owned or leased by it requires such
qualification;
(b) Due Authority. The Purchaser has the full power and authority to
perform, and to enter into and consummate, all transactions contemplated by this
Agreement; the Purchaser has the full power and authority to purchase and hold
each Mortgage Loan;
(c) No Conflict. Neither the acquisition of the Mortgage Loans by the
Purchaser pursuant to this Agreement, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement, will conflict with or result in a breach of any of
the terms, conditions or provisions of the Purchaser's charter or by-laws or
result in a material breach of any legal restriction or any material agreement
or instrument to which the Purchaser is now a party or by which it is bound, or
constitute a material default or result in an acceleration under any of the
foregoing, or result in the violation of any material law, rule, regulation,
order, judgment or decree to which the Purchaser or its property is subject;
(d) No Pending Litigation. There is no action, suit, proceeding,
investigation or litigation pending or, to the Purchaser's knowledge,
threatened, which either in any one instance or in the aggregate, if determined
adversely to the Purchaser would adversely affect the purchase of the Mortgage
Loans by the Purchaser hereunder, or the Purchaser's ability to perform its
obligations under this Agreement; and
(e) No Consent Required. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by the Purchaser of or compliance by the Purchaser with
this Agreement or the consummation of the transactions contemplated by this
Agreement (including, but not limited to, any approval from HUD), or if
required, such consent, approval, authorization or order has been obtained prior
to the related Closing Date;
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Section 3.06 Indemnification by the Purchaser.
(a) The Purchaser shall indemnify Countrywide and hold it harmless
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and expenses resulting from, a breach of any representation
or warranty contained in Sections 3.05. With respect to the breach of a
representation and warranty set forth in Section 3.05 hereof, the obligation
under this Section 3.06 of the Purchaser to indemnify Countrywide shall
constitute the sole remedy against the Purchaser respecting such breach
available to Countrywide.
ARTICLE IV.
MISCELLANEOUS
Section 4.01 Notices.
All demands, notices and communications required to be provided
hereunder shall be in writing and shall be deemed to have been duly given if
mailed, by registered or certified mail, postage prepaid, and return receipt
requested, or, if by other means, when received by the other party at the
address as follows:
(i) to Countrywide:
Countrywide Home Loans, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇
With copy to: General Counsel
(ii) the Purchaser:
HSBC Bank USA, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
To the address and contact set forth in the related Purchase
Confirmation or such other address as may hereafter be furnished to the other
party by like notice. Any such demand, notice or communication hereunder shall
be deemed to have been received on the date delivered to or received at the
premises of the addressee (as evidenced, in the case of registered or certified
mail, by the date noted on the return receipt).
Section 4.02 Sale Treatment.
It is the express intention of the parties that the transactions
contemplated by this Agreement be, and be construed as, a sale of the Mortgage
Loans by Countrywide and not a pledge of the Mortgage Loans by Countrywide to
the Purchaser to secure a debt or other obligation of Countrywide. Consequently,
the sale of each Mortgage Loan shall be reflected as a sale on Countrywide's
business records, tax returns and financial statements. Accordingly, Countrywide
and the Purchaser shall each treat the transaction for federal income tax
purposes as a sale by Countrywide, and a purchase by the Purchaser, of the
Mortgage Loans.
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Section 4.03 Exhibits.
The Exhibits to this Agreement and each Trade Confirmation and Purchase
Confirmation executed by Countrywide and the Purchaser are hereby incorporated
and made a part hereof and are an integral part of this Agreement.
Section 4.04 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other Subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section is
a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision;
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration; and
(g) reference to the Transaction Documents or any other document
referenced herein shall include all exhibits, schedules or other supplements
thereto.
Section 4.05 Reproduction of Documents.
This Agreement and all documents relating thereto, including (a)
consents, waivers and modifications which may hereafter be executed, (b)
documents received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
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Section 4.06 Further Agreements.
Countrywide shall execute and deliver to the Purchaser and the
Purchaser shall be required to execute and deliver to Countrywide such
reasonable and appropriate additional documents, instruments or agreements as
may be necessary or appropriate to effectuate the purposes of this Agreement.
Section 4.07 Assignment of Mortgage Loans by the Purchaser;
Successors and Assigns.
This Agreement shall bind and inure to the benefit of and be
enforceable by Countrywide, the Purchaser and the respective permitted
successors and assigns of Countrywide and the Purchaser. The Purchaser shall
have the right, without the consent of Countrywide, to assign, in whole or in
part, its interest under this Agreement with respect to some or all of the
Mortgage Loans and designate any person to exercise any rights of the Purchaser
hereunder by executing an Assignment, Assumption and Recognition Agreement
substantially in the form annexed hereto as Exhibit I, and such assignee or
designee shall accede to the rights and obligations of the Purchaser hereunder
with respect to such Mortgage Loans. All references to the Purchaser in this
Agreement shall be deemed to includes such assignee or designee. This Agreement
shall not be assigned, pledged or hypothecated by Countrywide to a third party
without the prior written consent of the Purchaser, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, no transfer shall be
effective if such transfer would result in there being more than three (3)
"Purchasers" outstanding hereunder with respect to any Mortgage Loan Package.
Section 4.08 Conflicts between Transaction Documents.
In the event of any conflict, inconsistency or ambiguity between the
terms and conditions of this Agreement and either the related Trade Confirmation
or the related Purchase Confirmation, the terms of the related Purchase
Confirmation shall control. In the event of any conflict, inconsistency or
ambiguity between the terms and conditions of the Trade Confirmation and the
Purchase Confirmation, the terms of the Purchase Confirmation shall control. In
the event of any conflict, inconsistency or ambiguity between the terms and
conditions of this Agreement and the Servicing Agreement, the terms of this
Agreement shall control.
Section 4.09 Governing Law.
The Agreement shall be construed in accordance with the laws of the
State of New York without giving effect to principles of conflicts of laws and
the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with the laws of the State of New York, except to the
extent preempted by Federal law.
Section 4.10 Severability Clause.
Any part, provision, representation or warranty of this Agreement which
is prohibited or which is held to be void or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the
32
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to an amendment to this Agreement which
places each party in the same or as economic position as each party would have
been in except for such invalidity.
Section 4.11 Confidentiality.
Countrywide and the Purchaser acknowledge and agree that the terms of
the Transaction Documents shall be kept confidential and their contents will not
be divulged to any party without the other party's consent, except to the extent
that it is appropriate for Countrywide and the Purchaser to do so in working
with legal counsel, auditors, taxing authorities, or other governmental
agencies.
Section 4.12 Mandatory Delivery
The sale and delivery of each Mortgage Loan on or before the related
Closing Date is mandatory from and after the date of the execution of the
related Purchase Confirmation, it being specifically understood and agreed that
each Mortgage Loan is unique and identifiable on the date hereof and that an
award of money damages would be insufficient to compensate the Purchaser for the
losses and damages incurred by the Purchaser in the event of Countrywide's
failure to deliver each of the related Mortgage Loans or one or more Mortgage
Loans otherwise acceptable to the Purchaser on or before the related Closing
Date. All rights and remedies of the Purchaser under this Agreement are distinct
from, and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
Section 4.13 Entire Agreement.
This Agreement and the related Trade Confirmation and Purchase
Confirmation constitute the entire understanding between the parties hereto with
respect to the sale of each Mortgage Loan Package and supersede all prior or
contemporaneous oral or written communications regarding same. Countrywide and
the Purchaser understand and agree that no employee, agent or other
representative of Countrywide or the Purchaser has any authority to bind such
party with regard to any statement, representation, warranty or other expression
unless said statement, representation, warranty or other expression is
specifically included within the express terms of this Agreement or the related
Trade Confirmation or Purchase Confirmation. Neither this Agreement nor the
related Trade Confirmation or Purchase Confirmation shall be modified, amended
or in any way altered except by an instrument in writing signed by both parties.
[SIGNATURE PAGE FOLLOWS]
33
IN WITNESS WHEREOF, Countrywide and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
COUNTRYWIDE HOME LOANS, INC.,
as Countrywide
By: ______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
HSBC BANK USA, NATIONAL ASSOCIATION,
as Purchaser
By: ______________________________
Name:
Title:
34
EXHIBIT A
COLLATERAL DOCUMENTS
1. Mortgage Note: The original Mortgage Note (or a lost note affidavit in
a form acceptable to an Agency) bearing all intervening endorsements,
endorsed "Pay to the order of _____________, without recourse" and
signed in the name of Countrywide by an authorized officer.
2. Assignment of Mortgage: The original Assignment of Mortgage in blank.
3. Guarantee: The original of any guarantee executed in connection with
the Mortgage Note.
4. Mortgage: The original Mortgage with evidence of recording thereon or,
if such original Mortgage has not been returned to Countrywide on or
prior to the Closing Date by the public recording office where such
Mortgage has been delivered for recordation, a copy of such Mortgage
certified by Countrywide to be a true and complete copy of the original
Mortgage sent for recordation.
5. Modifications: The originals of all assumption, modification,
consolidation or extension agreements, with evidence of recording
thereon, if any.
6. Intervening Assignments: The originals of all intervening assignments
of Mortgage with evidence of recording thereon, provided that such
originals have been returned to Countrywide by the public recording
office where such intervening assignment of Mortgage has been delivered
for recordation.
7. Title Policy: If applicable, the original mortgagee title insurance
policy (or the equivalent thereof with respect to any Mortgage Loan in
which the related Mortgaged Property is located in a jurisdiction where
such title insurance is not customarily provided) if such title
insurance policy has been issued by the related title company on or
prior to the Closing Date.
8. Loan Guaranty Certificate: The original Loan Guaranty Certificate, if
applicable.
9. Mortgage Insurance Certificate: The original Mortgage Insurance
Certificate, if applicable.
A-1
EXHIBIT B
FORM OF PURCHASE CONFIRMATION
[COUNTRYWIDE LETTERHEAD]
[DATE]
HSBC Bank USA, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Re: Purchase Confirmation ($x.xmm) (Deal No. xxxx-xxx)
Ladies and Gentlemen:
This purchase confirmation (the "Purchase Confirmation")
between Countrywide Home Loans, Inc. ("Countrywide") and HSBC Bank USA, National
Association ("Purchaser") sets forth our agreement pursuant to which Purchaser
is purchasing, and Countrywide is selling those certain mortgage loans
identified in Exhibit A hereto and more particularly described herein, excluding
the servicing rights related thereto (the "Mortgage Loans").
The purchase, sale and servicing of the Mortgage Loans as
contemplated herein shall be governed by that certain Master Mortgage Loan
Purchase Agreement dated as of [DATE], between Countrywide and Purchaser (as
amended herein and otherwise, the "Purchase Agreement") and that certain
Servicing Agreement dated as of [DATE] between Countrywide and Purchaser (both
the Purchase Agreement and the Servicing Agreement shall be referred to herein,
as applicable, as the "Agreement"). By executing this Purchase Confirmation,
each of Countrywide and Purchaser again makes, with respect to itself and each
Mortgage Loan, as applicable, all of the covenants, representations and
warranties made by each such party in the Agreement, except as the same may be
amended by this Purchase Confirmation.
All exhibits hereto are incorporated herein in their entirety.
In the event there exists any inconsistency between the Agreement and this
Purchase Confirmation, the latter shall be controlling notwithstanding anything
contained in the Agreement to the contrary. All capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned to such terms
in the Agreement.
1. Assignment and Conveyance of Mortgage Loans. Upon Purchaser's
payment of the Purchase Proceeds in accordance with Section 2.08 of the Purchase
Agreement, Countrywide shall sell, transfer, assign and convey to Purchaser,
without recourse, but subject to the terms of the Purchase Confirmation and the
Purchase Agreement, all of the right, title and interest of Countrywide in and
to the Mortgage Loans, excluding the servicing rights relating thereto. Each
Mortgage Loan shall be serviced by Countrywide pursuant to the terms of the
Servicing Agreement.
2. Defined Terms. As used in the Agreement, the following defined
terms shall have meanings set forth below with respect to the related Mortgage
Loan Package.
a. Closing Date: [DATE].
b. Cut-off Date: [DATE].
c. Cut-off Date Balance:
d. Index: On each Interest Adjustment Date, the applicable
index rate shall be a rate per annum equal to [the weekly average yield on U.S.
Treasury securities adjusted to a constant maturity of one year, as published by
the Board of Governors of the Federal Reserve System in Statistical Release No.
H.15] [the average of interbank offered rates for six-month U.S. dollar
denominated deposits in the London market (LIBOR), as published [in the Wall
Street Journal] [by ▇▇▇▇▇▇ ▇▇▇] [the 11th District Cost of Funds as made
available by the Federal Home Loan Bank] [the weekly average yield on
certificates of deposit adjusted to a constant maturity of six months as
published by the Board of Governors of the Federal Reserve System in Statistical
Release No. H.15 or a similar publication.]]
e. Missing Credit Documents: As set forth in Exhibit [C]
hereto.
Notwithstanding anything contained in Section 2.04 of the
Purchase Agreement to the contrary, Countrywide's obligation to repurchase from
the Purchaser the Mortgage Loan related to a Missing Credit Document shall occur
only in the event of a default by a Mortgagor or any material impairment of the
Mortgaged Property directly arising a breach of Countrywide's obligation to
deliver the Missing Credit Document within the time specified in Section 2.04 of
the Purchase Agreement.
f. Purchase Proceeds: With respect to [the Mortgage Loans]
[each Mortgage Loan], and as set forth in Exhibit [A] and Exhibit [B] hereto,
the sum of (a) the product of (i) the Cut-off Date Balance of [such Mortgage
Loan] [such Mortgage Loans], and (ii) the purchase price percentage set forth in
Exhibit [A] hereto for such [Mortgage Loan] [Mortgage Loans], and (b) accrued
interest from the Cut-off Date through the day prior to the Closing Date,
inclusive.
g. Servicing Fee Rate: [xx%].
3. Description of Mortgage Loans. Each Mortgage Loan complies
with the specifications set forth below in all material respects.
a. Loan Type: Each Mortgage Loan is a [Conventional] Mortgage
Loan and a [Adjustable Rate] [Balloon] [Convertible] [Fixed
Rate] Mortgage Loan.
▇. ▇▇▇▇ Position: Each Mortgage Loan is secured by a perfected
[first] [second] lien Mortgage.
c. Underwriting Criteria: Each Mortgage Loan [was underwritten
generally in accordance with Countrywide's credit underwriting guidelines in
effect at the time such Mortgage Loan was originated] [conforms to the ▇▇▇▇▇▇
▇▇▇ or ▇▇▇▇▇▇▇ Mac mortgage eligibility criteria (as such criteria applies to
Countrywide) and is eligible for sale to, and securitization by, ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac] [conforms in all material respects to the GNMA mortgage eligibility
criteria and is eligible for sale and securitization into a GNMA
mortgage-backed security] [at the time of origination was underwritten to
guidelines which are consistent with an institutional investor-quality
mortgage loan.]
Kindly acknowledge your agreement to the terms of this
Purchase Confirmation by signing in the appropriate space below and returning
this Purchase Confirmation to the undersigned. Telecopy signatures shall be
deemed valid and binding to the same extent as the original.
Sincerely, Agreed to and Accepted by:
COUNTRYWIDE HOME LOANS, INC. HSBC BANK USA, NATIONAL ASSOCIATION
By: ______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇ By: ______________________________
Title: Name:
Title:
EXHIBIT A
to
PURCHASE CONFIRMATION
MORTGAGE LOAN SCHEDULE
(attached)
EXHIBIT B
to
PURCHASE CONFIRMATION
CALCULATION OF PURCHASE PROCEEDS
(attached)
EXHIBIT C
to
PURCHASE CONFIRMATION
MISSING CREDIT DOCUMENTS
LOAN COUNT LOAN NUMBER DOCUMENT
_________________ __________________________ ______________________
_________________ __________________________ ______________________
_________________ __________________________ ______________________
_________________ __________________________ ______________________
_________________ __________________________ ______________________
_________________ __________________________ ______________________
EXHIBIT C
FORM OF CUSTODIAL AGREEMENT
[ATTACHED]
EXHIBIT D
FORM OF TRADE CONFIRMATION
[COUNTRYWIDE LETTERHEAD]
[DATE]
HSBC Bank USA, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Re: Sale of $[AMOUNT] Million of Mortgage Loans to [PURCHASER]
(Deal No. yrmm-xxx)
Ladies and Gentlemen:
This Trade Confirmation confirms the agreement between HSBC
Bank USA, National Association ("Purchaser") and Countrywide Home Loans, Inc.
("Countrywide") pursuant to which Purchaser has agreed to purchase, and
Countrywide has agreed to sell, those certain mortgage loans
[identified][summarized] in Exhibit A hereto (the "Mortgage Loans"), subject to
the terms set forth herein.
Closing Date: _________ __, [year][, provided,
however, that the parties shall use their best efforts to consummate the
transaction prior to [DATE].
Commitment Amount: $______________.
Purchase Price: $______________.
Percentage: ____%, subject to adjustment as set
forth in Exhibit A. [Loan-level pricing as set forth in Exhibit A.]
Product: [Conventional][First Lien/Second Lien]
[[fixed][adjustable] rate mortgage loans] (undefined terms should not be
capitalized)
Underwriting Criteria:
Servicing Rights: RETAINED: Retained by Countrywide
and serviced on a [scheduled/scheduled][actual/actual] [scheduled][actual] basis
for the servicing fee rate of [ xx%].
Prepayment Penalties: Countrywide [Purchaser] shall be
entitled to any penalties resulting from the prepayment of any Mortgage Loans by
the related mortgagor(s).
Documentation: [Assignment of a [type of agreement]]
[Industry standard purchase and servicing agreement.]
Conditions: [Review of Mortgage Loans by Purchaser
to confirm conformance with this Trade Confirmation. Countrywide may, at its
option, elect to substitute comparable mortgage loans for any Mortgage Loans
rejected by Purchaser pursuant to the preceding sentence.]
[Countrywide's sale of the Mortgage Loans is expressly subject
to (a) the review of the Mortgage Loans by Purchaser to confirm conformance with
the Trade Confirmation, and (b) purchase of the Mortgage Loans by Countrywide on
or before the Closing Date from the current owner of the Mortgage Loans (the
"Current Owner"). If either of the foregoing conditions are not satisfied,
Countrywide shall have no liability to Purchaser.]
Non-Circumvent: Countrywide and Purchaser understand and agree
that Countrywide may introduce the owner of the Mortgage Loans to Purchaser,
that the Current Owner is a customer of Countrywide and that such relationship
of Countrywide is confidential. Purchaser agrees, with respect to the Current
Owner, Purchaser will not, for the purpose of purchasing other mortgage loans
[for a period of one year from the Closing Date], communicate with or purchase
such other mortgage loans from the Current Owner unless the Current Owner has
had previous business dealings (other than any transactions involving
Countrywide) with the Current Owner in a similar context.
Please acknowledge your agreement to the terms and conditions
of this Trade Confirmation by signing in the appropriate space below and
returning a copy of the same to the undersigned. Telecopy signatures shall be
deemed valid and binding to the same extent as the original.
Sincerely, Agreed to and Accepted by:
COUNTRYWIDE HOME LOANS, INC. HSBC BANK USA, NATIONAL ASSOCIATION
By: ______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇ By: ______________________________
Title: Title:
Name:
EXHIBIT A
to
TRADE CONFIRMATION
MORTGAGE LOAN SCHEDULE AND PRICING INFORMATION
(attached)
EXHIBIT B
to
TRADE CONFIRMATION
UNDERWRITING GUIDELINES
(ATTACHED)
EXHIBIT E
[RESERVED]
EXHIBIT F
[RESERVED]
EXHIBIT G
COUNTRYWIDE HOME LOANS, INC.
OFFICER'S CERTIFICATE
I, [NAME], hereby certify that I am the duly elected [TITLE]
of Countrywide Home Loans, Inc., a corporation organized under the laws of the
State of New York ( "Countrywide") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and
complete copy of the Certificate of Incorporation of Countrywide which
is in full force and effect on the date hereof.
2. Attached hereto as Exhibit 2 is a true, correct and
complete copy of the By-laws of Countrywide which are in effect on the
date hereof.
3. Attached hereto as Exhibit 3 is a Certificate of Good
Standing of Countrywide issued within ten days of the date hereof, and
no event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and
complete copy of the corporate resolutions of the Board of Directors of
Countrywide authorizing Countrywide to execute and deliver each of the
[Mortgage Loan Sale and Servicing Agreement], dated as of [DATE], by
and among [PARTY] (the "Purchaser"), and Countrywide (the "Sale and
Servicing Agreement")] and to endorse the [Mortgage Notes and execute
the Assignments of Mortgages by facsimile signature], and such
resolutions are in effect on the date hereof.
5. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of Countrywide, signed (a) the [Sale and
Servicing Agreement], and (b) any other document delivered or on the
date hereof in connection with any purchase described in the agreements
set forth above was, at the respective times of such signing and
delivery, and is now, a duly elected or appointed, qualified and acting
officer or representative of Countrywide, who holds the office set
forth opposite his or her name on Exhibit 5, and the signatures of such
persons appearing on such documents are their genuine signatures.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of Countrywide.
Dated: [DATE]
By:
______________________________________
Name: [NAME]
Title: [TITLE]
[SEAL]
I, [NAME OF ASSISTANT SECRETARY], an Assistant Secretary of
Countrywide, hereby certify that [NAME] is the duly elected, qualified and
acting [TITLE] of Countrywide and that the signature appearing above is her
genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: [DATE]
By:
______________________________________
Name: [NAME]
Title: Assistant Secretary
[SEAL]
EXHIBIT 1
to
OFFICER'S CERTIFICATE
EXHIBIT 2
to
OFFICER'S CERTIFICATE
EXHIBIT 3
to
OFFICER'S CERTIFICATE
EXHIBIT 4
to
OFFICER'S CERTIFICATE
RESOLUTIONS ADOPTED BY
THE BOARD OF DIRECTORS OF
COUNTRYWIDE HOME LOANS, INC.
AS OF [DATE]
EXHIBIT 5
to
OFFICER'S CERTIFICATE
NAME TITLE SIGNATURE
_____________________ _____________________ _______________________
_____________________ _____________________ _______________________
_____________________ _____________________ _______________________
_____________________ _____________________ _______________________
_____________________ _____________________ _______________________
_____________________ _____________________ _______________________
_____________________ _____________________ _______________________
_____________________ _____________________ _______________________
EXHIBIT H
SECURITY RELEASE CERTIFICATION
I Release of Security Interest
___________________________, hereby relinquishes any and all
right, title and interest it may have in and to the Mortgage Loans described in
Exhibit A attached hereto upon purchase thereof by HSBC Bank USA, National
Association from the Seller named below pursuant to that certain Master Mortgage
Loan Purchase and Servicing Agreement, dated as of [Month] 1, 2006, as of the
date and time of receipt by ______________________________ of $__________ for
such Mortgage Loans (the "Date and Time of Sale"), and certifies that all notes,
mortgages, assignments and other documents in its possession relating to such
Mortgage Loans have been delivered and released to the Seller named below or its
designees as of the Date and Time of Sale.
Name and Address of Financial Institution
(Name)
(Address)
By:_________________________________
II Certification of Release
The Seller named below hereby certifies to HSBC Bank USA,
National Association that, as of the Date and Time of Sale of the above
mentioned Mortgage Loans to HSBC Bank USA, National Association, the security
interests in the Mortgage Loans released by the above named corporation comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Seller warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
[SELLER]
By: __________________________
Name: ________________________
Title: _______________________
EXHIBIT I
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This is an Assignment, Assumption and Recognition Agreement (this "AAR
Agreement") made as of _____, 200_, among HSBC Bank, National Association (the
"Assignor"), ____________________ (the "Assignee") [not individually but solely
as trustee on behalf of the holders of the ___________, Series ____,
Asset-Backed Certificates] and Countrywide Home Loans, Inc. (the "Company").
In consideration of the mutual promises contained herein the parties
hereto agree that the residential mortgage loans (the "Assigned Loans") listed
on Attachment 1 annexed hereto (the "Assigned Loan Schedule") purchased by
Assignor from Company pursuant to (a) the Master Mortgage Loan Purchase
Agreement, dated as of _____, 200_, between Assignor and Company (the "Purchase
Agreement") and (b) that certain Servicing Agreement, dated as of _____, 200_,
between the Assignor and Company (the "Servicing Agreement") ((a) and (b) shall
collectively be referred to herein as the "Purchase and Servicing Agreements"),
shall be subject to the terms of this AAR Agreement. Capitalized terms used
herein but not defined shall have the meanings ascribed to them in the Purchase
Agreement or Servicing Agreement, as applicable.
Assignment and Assumption
1. Assignor hereby grants, transfers and assigns to Assignee all of
the right, title, interest and obligations of Assignor in the Assigned Loans
and, as they relate to the Assigned Loans, all of its right, title, interest and
obligations in, to and under the Purchase and Servicing Agreements and Assignee
hereby assumes all rights and obligations with respect to the Assigned Loans
under the Purchase and Servicing Agreements. Assignor specifically reserves and
does not assign to Assignee any right title and interest in, to or under any
Mortgage Loans subject to the Purchase and Servicing Agreements other than those
set forth on Attachment l.
Recognition of the Company
2. [For Pass-Through Transfers include this sentence: From and after
the date hereof, the Company shall and does hereby recognize that the Assignee
will transfer the Assigned Loans and assign its rights under the Purchase and
Servicing Agreements (solely to the extent set forth herein) and this AAR
Agreement to ______________________________ (the "Trust") created pursuant to a
Pooling and Servicing Agreement, dated as of _______________, 200__ (the
"Pooling Agreement"), among the Assignee as trustee (including its successors in
interest and any successor trustees under the Pooling Agreement) and the
Assignor.] The Company hereby acknowledges and agrees that from and after the
date hereof (i) the [Trust][Assignee] will be the owner of the Assigned Loans,
(ii) the Company shall look solely to the [Trust][Assignee] for performance of
any obligations of the Assignor insofar as they relate to the enforcement of the
representations, warranties and covenants with respect to the Assigned Loans,
(iii) the [Assignee][Trust] shall have all the rights and remedies available to
the Assignor, insofar as they relate to the Assigned Loans, under the Purchase
and Servicing Agreements, including, without limitation, the enforcement of the
document delivery requirements and remedies with respect to breaches of
representations and warranties set forth in the Purchase
Agreement or Servicing Agreement, as applicable, and shall be entitled to
enforce all of the obligations of the Company thereunder insofar as they relate
to the Assigned Loans, and (iv) all references to the Purchaser (insofar as they
relate to the rights, title and interest and, with respect to obligations of the
Purchaser, only insofar as they relate to the enforcement of the
representations, warranties and covenants of the Company) under the Purchase and
Servicing Agreements insofar as they relate to the Assigned Loans, shall be
deemed to refer to the [Assignee] [Trust]. Neither the Company nor the Assignor
shall amend or agree to amend, modify, waiver, or otherwise alter any of the
terms or provisions of the Purchase and Servicing Agreements which amendment,
modification, waiver or other alteration would in any way affect the Assigned
Loans or the Company's performance under the Purchase Agreement with respect to
the Assigned Loans without the prior written consent of the Assignee. [Only in
the event there is a Master Servicer - Notwithstanding the foregoing, it is
understood that Countrywide shall not be obligated to defend and indemnify and
hold harmless the Master Servicer, the Assignor and the Assignee against any
losses, damages, penalties, fines, forfeitures, judgments and any related costs
including, without limitation, reasonable and necessary legal fees, resulting
from (i) actions or inactions of Countrywide which were taken or omitted upon
the instruction or direction of the Master Servicer or Assignee, as applicable,
or (ii) the failure of the Master Servicer or the Assignee, as applicable, to
perform the obligations of the Assignee with respect to this Agreement or of the
"Owner" or "Purchaser" with respect to the servicing provisions of the Servicing
Agreement.]
Representations; Warranties and Covenants
3. Assignor warrants and represents to Assignee and Company as of the date
hereof: [For Pass-Through Transfers, only attach Servicing Agreement. For Whole
Loan Transfers, may include both the Purchase Agreement and the Servicing
Agreement]
a. Attached hereto as Attachment 2 is a true and
accurate copy of the Servicing Agreement, which
agreement is in full force and effect as of the date
hereof and the provisions of which have not been
waived, amended or modified in any respect, nor has
any notice of termination been given thereunder;
b. Assignor is the lawful owner of the Assigned Loans
with full right to transfer the Assigned Loans and
any and all of its interests, rights and obligations
under the Purchase and Servicing Agreement as they
relate to the Assigned Loans, free and clear of any
and all liens, claims and encumbrances; and upon the
transfer of the Assigned Loans to Assignee as
contemplated herein, Assignee shall have good title
to each and every Assigned Loan, as well as any
and all of Assignor's interests, rights and
obligations under the Purchase and Servicing
Agreements as they relate to the Assigned Loans, free
and clear of any and all liens, claims and
encumbrances;
c. Assignor has not received notice of, and has [no
knowledge] of, any offsets, counterclaims or other
defenses available to Company with respect to the
Assigned Loans or the Purchase and Servicing
Agreements;
d. Assignor is a corporation duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its formation, and has all requisite
power and authority to acquire, own and sell the
Assigned Loans;
e. Assignor has full power and authority to execute,
deliver and perform its obligations under this AAR
Agreement, and to consummate the transactions set
forth herein. The consummation of the transactions
contemplated by this AAR Agreement is in the ordinary
course of Assignor's business and will not conflict
with, or result in a breach of, any of the terms,
conditions or provisions of Assignor's charter or
by-laws or any legal restriction, or any material
agreement or instrument to which Assignor is now a
party or by which it is bound, or result in the
violation of any law, rule, regulation, order,
judgment or decree to which Assignor or its property
is subject. The execution, delivery and performance
by Assignor of this AAR Agreement and the
consummation by it of the transactions contemplated
hereby, have been duly authorized by all necessary
action on the part of Assignor. This AAR Agreement
has been duly executed and delivered by Assignor and,
upon the due authorization, execution and delivery
by Assignee and Company, will constitute the valid
and legally binding obligation of Assignor
enforceable against Assignor in accordance with its
terms except as enforceability may be limited by
bankruptcy, reorganization, insolvency, moratorium
or other similar laws now or hereafter in effect
relating to creditors' rights generally, and by
general principles of equity regardless of whether
enforceability is considered in a proceeding in
equity or at law;
f. No material consent, approval, order or authorization
of, or declaration, filing or registration with, any
governmental entity is required to be obtained or
made by Assignor in connection with the execution,
delivery or performance by Assignor of this AAR
Agreement, or the consummation by it of the
transactions contemplated hereby; and
g. There is no action, suit, proceeding, investigation
or litigation pending or, to [Assignor's knowledge,]
threatened, which either in any instance or in the
aggregate, if determined adversely to Assignor, would
adversely affect Assignor's execution or delivery of,
or the enforceability of, this AAR Agreement, or the
Assignor's ability to perform its obligations under
this AAR Agreement.
4. Assignee warrants and represents to, and covenants with,
Assignor and Company as of the date hereof:
a. Assignee is duly organized, validly existing and in
good standing under the laws of the jurisdiction of
its organization and has all requisite power and
authority to acquire and [own] [hold] the Assigned
Loans [as trustee on behalf of the Trust];
b. Assignee has full power and authority to execute,
deliver and perform its obligations under this AAR
Agreement, and to consummate the transactions set
forth herein. The consummation of the transactions
contemplated by this AAR Agreement is in the ordinary
course of Assignee's business and will not conflict
with, or result in a breach of, any of the terms,
conditions or provisions of Assignee's organizational
documentation or any legal restriction, or any
material agreement or instrument to which Assignee is
now a party or by which it is bound, or result in
the violation of any law, rule, regulation, order,
judgment or decree to which Assignee or its property
is subject. The execution, delivery and performance
by Assignee of this AAR Agreement and the
consummation by it of the transactions contemplated
hereby, have been duly authorized by all necessary
action on the part of Assignee. This AAR Agreement
has been duly executed and delivered by Assignee and,
upon the due authorization, execution and delivery
by Assignor and Company, will constitute the valid
and legally binding obligation of Assignee
enforceable against Assignee in accordance with its
terms except as enforceability may be limited by
bankruptcy, reorganization, insolvency, moratorium
or other similar laws now or hereafter in effect
relating to creditors' rights generally, and by
general principles of equity regardless of whether
enforceability is considered in a proceeding in
equity or at law;
c. No material consent, approval, order or authorization
of, or declaration, filing or registration with, any
governmental entity is required to be obtained or
made by Assignee in connection with the execution,
delivery or performance by Assignee of this AAR
Agreement, or the consummation by it of the
transactions contemplated hereby;
d. There is no action, suit, proceeding, investigation
or litigation pending or, to [Assignee's knowledge,]
threatened, which either in any instance or in the
aggregate, if determined adversely to Assignee, would
adversely affect Assignee's execution or delivery of,
or the enforceability of, this AAR Agreement, or the
Assignee's ability to perform its obligations under
this AAR Agreement; and
e. The Assignee agrees to be bound, as Owner or
Purchaser, as applicable, by all of the terms,
covenants and conditions of the Servicing Agreement
and the Sale Agreement, as applicable, with respect
to the Mortgage Loans, and from and after the date
hereof, the Assignee assumes for the benefit of each
of the Company and the Assignor all of the Assignor's
obligations as Owner and Purchaser, as applicable
under the Servicing Agreement and the Sale Agreement,
as applicable, with respect to the Mortgage Loans.
5. Company warrants and represents to, and covenants with, Assignor
and Assignee as of the date hereof:
a. The Purchase and Servicing Agreement is in full force
and effect as of the date hereof and the provisions
of which have not been waived, amended or modified in
any respect, nor has any notice of termination been
given thereunder, except as contemplated herein;
b. Company is duly organized, validly existing and in
good standing under the laws of the jurisdiction of
its incorporation, and has all requisite power and
authority to perform its obligations under the
Purchase and Servicing Agreements;
c. Company has full corporate power and authority to
execute, deliver and perform its obligations under
this AAR Agreement, and to consummate the
transactions set forth herein. The consummation of
the transactions contemplated by this AAR Agreement
is in the ordinary course of Company's business and
will not conflict with, or result in a breach of,
any of the terms, conditions or provisions of
Company's organizational documentation or any legal
restriction, or any material agreement or instrument
to which Company is now a party or by which it is
bound, or result in the violation of any law, rule,
regulation, order, judgment or decree to which
Company or its property is subject, except in such
case where the conflict, breach or violation would
not have a material adverse effect on the Company or
its ability to perform its obligations under this
AAR Agreement. The execution, delivery and
performance by Company of this AAR Agreement and the
consummation by it of the transactions contemplated
hereby, have been duly authorized by all necessary
corporate action on the part of Company. This AAR
Agreement has been duly executed and delivered
by Company, and, upon the due authorization,
execution and delivery by Assignor and Assignee, will
constitute the valid and legally binding obligation
of Company, enforceable against Company in accordance
with its terms except as enforceability may be
limited by bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally,
and by general principles of equity regardless of
whether enforceability is considered in a proceeding
in equity or at law;
d. No consent, approval, order or authorization of, or
declaration, filing or registration with, any
governmental entity is required to be obtained or
made by Company in connection with the execution,
delivery or performance by Company of this AAR
Agreement, or the consummation by it of the
transactions contemplated hereby;
e. There is no action, suit, proceeding, investigation
or litigation pending or, to Company's knowledge,
threatened, which either in any instance or in the
aggregate, if determined adversely to Company, would
adversely affect Company's execution or delivery of,
or the enforceability of, this AAR Agreement, or the
Company's ability to perform its obligations under
this AAR Agreement; and
f. The Company hereby represents and warrants, for the
benefit of the Assignor, the Assignee [and the
Trust,] that the representations and warranties set
forth in Section 3.01 of the Purchase Agreement, are
true and correct in all material respects as of the
date hereof, and the representations and warranties
set forth in Section 3.02 of the Purchase Agreement
are true and correct in all material respects as of
the related Closing Date.
[Additional Representations and Warranties Necessary for
Securitization, as agreed upon by the parties]
6. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee [and the Trust] in connection with any
breach of the representations and warranties made by the Company set forth in
Section 5 hereof shall be as set forth in Subsection 3.03 of the Purchase
Agreement as if they were set forth herein (including without limitation the
repurchase and indemnity obligations set forth therein).
7. [Notwithstanding any term hereof to the contrary, the execution
and delivery of this AAR Agreement by the Assignee is solely in its capacity as
trustee for the Trust and not individually, and any recourse against the
Assignee in respect of any obligations it may have under or pursuant to the
terms of this AAR Agreement shall be limited solely to the assets it may hold as
trustee of the Trust.]
Miscellaneous
8. All demands, notices and communications related to the Assigned
Loans, the Purchase and Servicing Agreements and this AAR Agreement shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by registered mail, postage prepaid, as follows:
a. In the case of Company,
Countrywide Home Loans, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
b. In the case of Assignor,
HSBC Bank USA, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [__________]
c. In the case of Assignee,
[Assignee]
____________________
______________, ___________ ______
Attn: _____________
9. This AAR Agreement shall be construed in accordance with the laws
of the State of New York, without regard to conflicts of law principles, and
the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
10. No term or provision of this AAR Agreement may be waived or
modified unless such waiver or modification is in writing and signed by the
party against whom such waiver or modification is sought to be enforced.
11. This AAR Agreement shall inure to the benefit of the successors
and assigns of the parties hereto. Any entity into which Assignor, Assignee or
Company may be merged or consolidated shall without the requirement for any
further writing, be deemed Assignor, Assignee or Company, respectively
hereunder.
12. This AAR Agreement shall survive the conveyance of the Assigned
Loans as contemplated in this AAR Agreement.
13. This AAR Agreement may be executed simultaneously in any number
of counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
14. In the event that any provision of this AAR Agreement conflicts
with any provision of the Purchase and Servicing Agreements with respect to the
Assigned Loans, the terms of this AAR Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have executed this AAR Agreement
as of the day and year first above written.
HSBC BANK USA, NATIONAL ASSOCIATION
Assignor
By:______________________________________
Name:
Title:
[ASSIGNEE]
By:______________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.
Company
By:______________________________________
Name:____________________________________
Title:___________________________________
ATTACHMENT l
to
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNED LOAN SCHEDULE
ATTACHMENT 2
to
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
SERVICING AGREEMENT