▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, NATIONAL ASSOCIATION
Purchaser
and
▇▇▇▇▇ FARGO BANK, N.A.
Company
SECOND AMENDED AND RESTATED MASTER SELLER'S WARRANTIES
AND SERVICING AGREEMENT
Dated as of May 1, 2006
Fixed Rate and Adjustable Rate Mortgage Loans
================================================================================
TABLE OF CONTENTS
Page
----
Article I Definitions ................................................ 1
Article II Conveyance of Mortgage Loans; Possession of Custodial
Mortgage Files; Books and Records; Custody Agreement;
Delivery of Documents ...................................... 15
Section 2.1 Conveyance of Mortgage Loans; Possession of
Custodial Mortgage Files;
Maintenance of Retained Mortgage File and
Servicing Files .............................. 15
Section 2.2 Books and Records; Transfers of Mortgage
Loans ........................................ 16
Section 2.3 Custody Agreement; Delivery of Documents ..... 17
Article III Representations and Warranties Remedies and Breach ......... 19
Section 3.1 Company Representations and Warranties. ...... 19
Section 3.2 Representations and Warranties Regarding
Individual Mortgage Loans .................... 21
Section 3.3 Repurchase ................................... 34
Article IV Administration and Servicing of Mortgage Loans ............. 37
Section 4.1 Company to Act as Servicer ................... 37
Section 4.2 Liquidation of Mortgage Loans. ............... 38
Section 4.3 Collection of Mortgage Loan Payments. ........ 40
Section 4.4 Establishment of and Deposits to Custodial
Account. ..................................... 40
Section 4.5 Permitted Withdrawals From Custodial
Account. ..................................... 41
Section 4.6 Establishment of and Deposits to Escrow
Account. ..................................... 43
Section 4.7 Permitted Withdrawals From Escrow Account .... 43
Section 4.8 Payment of Taxes, Insurance and Other
Charges. ..................................... 44
Section 4.9 Protection of Accounts ....................... 45
Section 4.10 Maintenance of Hazard Insurance .............. 45
Section 4.11 Maintenance of Mortgage Impairment
Insurance. ................................... 47
Section 4.12 Maintenance of Fidelity Bond and Errors and
Omissions Insurance .......................... 47
Section 4.13 Inspections. ................................. 48
Section 4.14 Restoration of Mortgaged Property ............ 48
Section 4.15 Maintenance of PMI Policy and LPMI Policy;
Claims. ...................................... 48
Section 4.16 Title, Management and Disposition of REO
Property. .................................... 49
Section 4.17 Real Estate Owned Reports .................... 51
Section 4.18 Liquidation Reports. ......................... 51
Section 4.19 Reports of Foreclosures and Abandonments of
Mortgaged Property. .......................... 51
Section 4.20 Notification of Adjustments .................. 51
Section 4.21 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. .... 51
Section 4.22 Confidentiality/Protection of Customer
Information. ................................. 52
Section 4.23 Disaster Recovery/Business Continuity Plan ... 52
Section 4.24 Quality Control Procedures ................... 52
Section 4.25 Application of Buydown Funds. ................ 52
Section 4.26 Establishment of and Deposits to Subsidy
Account. ..................................... 53
Section 4.27 Automated Servicing Systems. ................. 54
Section 4.28 Prepayment Penalties. ........................ 54
Section 4.29 Use of Subservicers and Subcontractors ....... 54
Section 4.30 Letter of Credit Compliance. ................. 55
Section 4.31 Letter of Credit Draws. ...................... 55
i
Section 4.32 Assignment of the Letter of Credit. .......... 56
Section 4.33 Pledge Holder Defaults. ...................... 56
Article V Payments to Purchaser ...................................... 56
Section 5.1 Remittances .................................. 56
Section 5.2 Statements to Purchaser. ..................... 57
Section 5.3 Monthly Advances by Company .................. 57
Article VI General Servicing Procedures ............................... 58
Section 6.1 Transfers of Mortgaged Property .............. 58
Section 6.2 Satisfaction of Mortgages and Release of
Retained Mortgage Files. ..................... 59
Section 6.3 Servicing Compensation. ...................... 59
Section 6.4 Annual Statement as to Compliance. ........... 59
Section 6.5 Annual Independent Public Accountants'
Servicing Report. ............................ 60
Section 6.6 Report on Assessment of Compliance and
Attestation. ................................. 60
Section 6.7 Remedies ..................................... 61
Section 6.8 Right to Examine Company Records ............. 62
Section 6.9 Compliance with REMIC Provisions ............. 63
Article VII Company to Cooperate ....................................... 63
Section 7.1 Provision of Information ..................... 63
Section 7.2 Financial Statements; Servicing Facility ..... 63
Article VIII The Company ................................................ 64
Section 8.1 Indemnification; Third Party Claims. ......... 64
Section 8.2 Merger or Consolidation of the Company. ...... 64
Section 8.3 Limitation on Liability of Company and
Others. ...................................... 65
Section 8.4 Limitation on Resignation and Assignment by
Company. ..................................... 65
Article IX Removal of Mortgage Loans From Agreement ................... 66
Section 9.1 Removal of Mortgage Loans from Inclusion
Under this Agreement ......................... 66
Article X Default .................................................... 76
Section 10.1 Events of Default. ........................... 76
Section 10.2 Waiver of Defaults. .......................... 78
Article XI Termination ................................................ 78
Section 11.1 Termination .................................. 78
Section 11.2 Termination Without Cause. ................... 79
Article XII Miscellaneous Provisions ................................... 79
Section 12.1 Successor to Company. ........................ 79
Section 12.2 Amendment .................................... 80
Section 12.3 Governing Law. ............................... 80
Section 12.4 Arbitration .................................. 80
Section 12.5 Duration of Agreement. ....................... 81
Section 12.6 Notices. ..................................... 81
Section 12.7 Severability of Provisions. .................. 82
Section 12.8 Relationship of Parties. ..................... 82
Section 12.9 Execution; Successors and Assigns. ........... 82
Section 12.10 Recordation of Assignments of Mortgage. ...... 82
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Section 12.11 Assignment by Purchaser ...................... 82
Section 12.12 Solicitation of Mortgagor .................... 83
Section 12.13 Further Agreements. .......................... 83
Section 12.14 Confidential Information ..................... 83
Section 12.15 Counterparts ................................. 83
Section 12.16 Exhibits. .................................... 83
Section 12.17 General Interpretive Principles. ............. 83
Section 12.18 Reproduction of Documents. ................... 84
Section 12.19 Buydown Loan Aggregate Limitation. ........... 84
Section 12.20 Third-Party Beneficiary. ..................... 85
EXHIBITS
Exhibit A Form of Assignment and Conveyance Agreement
Exhibit B Form of Assignment, Assumption and Recognition Agreement
Exhibit C Custody Agreement
Exhibit D Contents of each Retained Mortgage File, Custodial Mortgage File and
Servicing File
Exhibit E Data File
Exhibit F Servicing System Guidelines and Requirements
Exhibit G Monthly Remittance Advice
Exhibit H Servicing Criteria
Exhibit I Sarbanes Certification
iii
This is a Second Amended and Restated Master Seller's Warranties and
Servicing Agreement for fixed rate and adjustable rate residential first lien
mortgage loans, dated and effective as of May 1, 2006, and is executed between
Bank of America, National Association, as purchaser (the "Purchaser"), and ▇▇▇▇▇
Fargo Bank, N.A., as seller and servicer (the "Company").
WITNESSETH
----------
WHEREAS, the Purchaser and the Company are parties to that certain Amended
and Restated Master Seller's Warranties and Servicing Agreement, dated as of
December 1, 2005 (the "Amended and Restated Master Agreement"), between the
Purchaser and the Company; and
WHEREAS, the Company and Purchaser have agreed to amend certain provisions
of the Amended and Restated Master Agreement as set forth in this Second Amended
and Restated Master Seller's Warranties and Servicing Agreement; and
WHEREAS, the Purchaser has agreed to purchase from the Company and the
Company has agreed to sell to the Purchaser from time to time (each a
"Transaction") on a servicing retained basis certain first lien fixed rate and
adjustable rate residential mortgage loans (the "Mortgage Loans") which shall be
delivered as whole loans (each a "Loan Package") on various dates (each a
"Closing Date") as provided for in certain Assignment and Conveyance Agreements
by and between the Purchaser and the Company as executed in conjunction with
each Transaction; and
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of trust
or other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the related Mortgage Loan Schedule; and
WHEREAS, the Purchaser and the Company wish to prescribe the manner of
purchase of the Mortgage Loans and the conveyance, servicing and control of the
Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the Purchaser and the Company agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the content
otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, procedures
(including collection procedures) that comply with applicable federal, state and
local law, and that the Company customarily employs and exercises in servicing
and administering mortgage loans for its own account, the terms of the related
Mortgage and Mortgage Note and accepted mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the
same type as the Mortgage Loans in the jurisdiction where the related Mortgaged
Property is located.
Adjustable Rate Mortgage Loan: A Mortgage Loan that contains a provision
pursuant to which the Mortgage Interest Rate is adjusted periodically.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, the date on
which the Mortgage Interest Rate is adjusted in accordance with the terms of the
related Mortgage Note and Mortgage.
Agency/Agencies: ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or GNMA, or any of them as
applicable.
Agency Transfer: Any sale or transfer of some or all of the Mortgage Loans
by the Purchaser to an Agency which sale or transfer is not a Securitization
Transaction or Whole Loan Transfer.
Agreement: This Second Amended and Restated Master Seller's Warranties and
Servicing Agreement and all exhibits hereto, amendments hereof and supplements
hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraisal: A written appraisal of a Mortgaged Property made by a Qualified
Appraiser, which appraisal must be written, in form and substance, acceptable to
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac, as applicable, and satisfy the requirements of Title
XI of the Financial Institution, Reform, Recovery and Enforcement Act of 1989
and the regulations promulgated thereunder, in effect as of the date of the
Appraisal.
Appraised Value: With respect to any Mortgage Loan, the lesser of (i) the
value set forth on the Appraisal made in connection with the origination of the
related Mortgage Loan as the value of the related Mortgaged Property, or (ii)
the purchase price paid for the Mortgaged Property, provided, however, that in
the case of a refinanced Mortgage Loan, such value shall be based solely on the
Appraisal made in connection with the origination of such Mortgage Loan.
Assignment and Conveyance Agreement: The agreement substantially in the
form of Exhibit A attached hereto.
Assignment, Assumption and Recognition Agreement: The agreement
substantially in the form of Exhibit B attached hereto.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Purchaser or if the related Mortgage has been
recorded in the name of MERS or its designee, such actions as are necessary to
cause the Purchaser to be shown as the owner of the related Mortgage on the
records of MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS, including assignment of the MIN
Number which will appear either on the Mortgage or the Assignment of Mortgage to
MERS.
2
Assignment of Mortgage Note and Pledge Agreement: With respect to a
Cooperative Loan, an assignment of the Mortgage Note and Pledge Agreement.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, an
assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Cooperative Apartment is located to effect the
assignment of such Proprietary Lease.
Balloon Loan: A Mortgage Loan for which the Monthly Payments will not fully
amortize the loan by the end of the term, at which time the balance of the
principal is due in a lump sum.
Buydown Agreement: An agreement between the Company and a Mortgagor, or an
agreement among the Company, a Mortgagor and a seller of a Mortgaged Property or
a third party with respect to a Mortgage Loan which provides for the application
of Buydown Funds.
Buydown Funds: In respect of any Buydown Mortgage Loan, any amount
contributed by the seller of a Mortgaged Property subject to a Buydown Mortgage
Loan, the buyer of such property, the Company or any other source, plus interest
earned thereon, in order to enable the Mortgagor to reduce the payments required
to be made from the mortgagor's funds in the early years of a Mortgage Loan.
Buydown Mortgage Loan: Any Mortgage Loan in respect of which, pursuant to a
Buydown Agreement, (i) the Mortgagor pays less than the full monthly payments
specified in the Mortgage Note for a specified period, and (ii) the difference
between the payments required under such Buydown Agreement and the Mortgage Note
is provided from Buydown Funds.
Buydown Period: The period of time when a Buydown Agreement is in effect
with respect to a related Buydown Mortgage Loan.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day on
which banking and savings and loan institutions in the states where the parties
are located are authorized or obligated by law or executive order to be closed.
Closing Date: The date or dates, set forth in the related Commitment
Letter, on which from time to time the Purchaser shall purchase and the Company
shall sell the Mortgage Loans listed on the respective Mortgage Loan Schedule
for each Transaction.
Code: The Internal Revenue Code of 1986, as it may be amended from time to
time or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.
Commission: The United States Securities and Exchange Commission.
Commitment Letter: The commitment letter between the Company and the
Purchaser which sets forth, among other things, the Purchase Price for certain
Mortgage Loans described therein to be sold by the Company and purchased by the
Purchaser on the Closing Date set forth therein.
3
Company: ▇▇▇▇▇ Fargo Bank, N.A., or its successor in interest or assigns,
or any successor to the Company under this Agreement appointed as herein
provided.
Company Employees: As defined in Section 4.12.
Company Information: As defined in Section 9.01(f)(i)(A).
Company Mortgage Loan: A Mortgage Loan that has been underwritten in
accordance with the Company Underwriting Guidelines.
Company Underwriting Guidelines: The underwriting guidelines of the
Company, applicable to the Company Mortgage Loans in each Loan Package, as
provided to the Purchaser by the Company.
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.
Cooperative: The entity that holds title (fee or an acceptable leasehold
estate) to all of the real property that the related Project comprises,
including the land, separate dwelling units and all common areas.
Cooperative Apartment: The specific dwelling unit relating to a Cooperative
Loan.
Cooperative Lien Search: A search for (a) federal tax liens, mechanics'
liens, lis pendens, judgments of record or otherwise against (i) the
Cooperative, (ii) the seller of the Cooperative Apartment and (iii) the Company,
if the Cooperative Loan is a refinanced Mortgage Loan, (b) filings of financing
statements and (c) the deed of the Project into the Cooperative.
Cooperative Loan: A Mortgage Loan that is secured by Cooperative Shares and
a Proprietary Lease granting exclusive rights to occupy the related Cooperative
Apartment.
Cooperative Shares: The shares of stock issued by a Cooperative, owned by
the Mortgagor, and allocated to a Cooperative Apartment.
Covered Loan: A Mortgage Loan categorized as "Covered" pursuant to the
Standard & Poor's Glossary for File Format for LEVELS(R) Version 5.6d, Appendix
E, as revised from time to time and in effect on each related Closing Date.
Custodial Account: The separate account or accounts created and maintained
pursuant to Section 4.04.
Custody Agreement: The agreement governing the retention of the originals
of each Mortgage Note, Assignment of Mortgage and other Mortgage Loan Documents,
a form of which is annexed hereto as Exhibit C.
4
Custodial Mortgage File: With respect to each Mortgage Loan, the file
consisting of the Mortgage Loan Documents listed as items 1 through 5 of Exhibit
D attached hereto, which have been delivered to the Custodian as of the Closing
Date.
Custodian: The custodian under the Custody Agreement, or its successor in
interest or assigns, or any successor to the Custodian under the Custody
Agreement as provided therein.
Cut-off Date: With respect to each Transaction, the first day of the month
in which the Closing Date occurs.
Data File: The electronic data file prepared by the Company and delivered
to the Purchaser including the data fields set forth on Exhibit E with respect
to each Mortgage Loan, in relation to each Transaction.
Deleted Mortgage Loan: A Mortgage Loan which is repurchased by the Company
in accordance with the terms of this Agreement and which is, in the case of a
substitution pursuant to Section 3.03, replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Determination Date: The Business Day immediately preceding the related
Remittance Date.
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace, as specified in the related
Mortgage Note.
Due Period: With respect to each Remittance Date, the period commencing on
the second day of the month preceding the month of such Remittance Date and
ending on the first day of the month of such Remittance Date.
Errors and Omissions Insurance Policy: An errors and omissions insurance
policy to be maintained by the Company pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 4.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other related
document.
Event of Default: Any one of the conditions or circumstances enumerated in
Section 10.01.
Exception Mortgage Loan: A Mortgage Loan that has been underwritten in
accordance with the Company Underwriting Guidelines, but for which one or more
exceptions to those
5
guidelines have been allowed. Each Exception Mortgage Loan, along with the
applicable exceptions, shall be identified on an exhibit attached to the
respective Assignment and Conveyance Agreement.
Exchange Act: The Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association, or any successor
thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Company pursuant to
Section 4.12.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
GNMA: The Government National Mortgage Association, or any successor
thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the fixed
percentage amount set forth in the related Mortgage Note which is added to the
Index in order to determine the related Mortgage Interest Rate, as set forth in
the respective Mortgage Loan Schedule.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan under
the Home Ownership and Equity Protection Act of 1994, (b) a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002), "high risk home," "predatory" or similar loan
under any other applicable state, federal or local law or (c) a Mortgage Loan
categorized as "High Cost" pursuant to the Standard & Poor's Glossary for File
Format for LEVELS(R) Version 5.6d, Appendix E, as revised from time to time and
in effect on each related Closing Date.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the related Mortgage Loan Schedule and set forth in the related
Mortgage Note for the purpose of calculating the interest therein.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property,
including LPMI Proceeds, if applicable.
Interest Only Mortgage Loan: A Mortgage Loan for which an interest-only
payment feature is allowed during the interest-only period set forth in the
related Mortgage Note.
Investor: With respect to each MERS Designated Mortgage Loan, the Person
named on the MERS System as the investor pursuant to the MERS Procedures Manual.
Lender Paid Mortgage Insurance Policy or LPMI Policy: A PMI Policy for
which the Purchaser or the Company pays all premiums from its own funds, without
reimbursement therefor.
6
Letter of Credit: With respect to a Pledged Asset Mortgage Loan, a guaranty
issued to the Company by the Pledge Holder for the Pledged Value Amount.
Liquidation Proceeds: Cash received in connection with the liquidation of a
defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage
Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the related
Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage Loan.
Loan Package: As defined in the Recitals of this Agreement.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the ratio of
the original loan amount of the Mortgage Loan at its origination (unless
otherwise indicated) to the Appraised Value of the Mortgaged Property.
LPMI Proceeds: Proceeds of any Lender Paid Mortgage Insurance Policy.
Master Servicer: With respect to any Securitization Transaction, the
"master servicer," if any, identified in the related transaction document.
Material Adverse Change: (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, condition (financial
or otherwise) or prospects of the Company; (b) a material impairment of the
ability of the Company to perform under this Agreement or any related
agreements; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability of this Agreement against the Company (unless
such material adverse effect is directly caused by an action of the Purchaser
which can be remedied by the Purchaser).
MERS: MERSCORP, Inc., its successors and assigns.
MERS Designated Mortgage Loan: A Mortgage Loan for which (a) the Company
has designated or will designate MERS as, and has taken or will take such action
as is necessary to cause MERS to be, the mortgagee of record, as nominee for the
Company, in accordance with MERS Procedures Manual and (b) the Company has
designated or will designate the Custodian as the Investor on the MERS System.
MERS Procedures Manual: The MERS Procedures Manual, as it may be amended,
supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more particularly
described in the MERS Procedures Manual.
Monthly Advance: The portion of each Monthly Payment that is delinquent
with respect to each Mortgage Loan at the close of business on the Determination
Date required to be advanced by the Company pursuant to Section 5.03 on the
Business Day immediately preceding the Remittance Date of the related month.
7
Monthly Payment: The scheduled monthly payment of principal and interest on
a Mortgage Loan or in the case of an Interest Only Mortgage Loan, payments of
(i) interest, or (ii) principal and interest, as applicable, on a Mortgage Loan.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note, or the Pledge Agreement
securing the Mortgage Note for a Cooperative Loan.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 4.11.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note in accordance with the provisions of the Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of this
Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the related Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Retained Mortgage File, the Custodial Mortgage
File, the Monthly Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds and all
other rights, benefits, proceeds and obligations arising from or in connection
with such Mortgage Loan. The Mortgage Loans shall include the Company Mortgage
Loans, Exception Mortgage Loans and Third-Party Mortgage Loans.
Mortgage Loan Documents: With respect to a Mortgage Loan, the documents
listed on Exhibit D attached hereto.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Purchaser, which shall be equal to the
related Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: With respect to each Transaction, a schedule or
schedules of Mortgage Loans setting forth the following information with respect
to each Mortgage Loan: (1) the Company's Mortgage Loan number; (2) the city,
state and zip code of the Mortgaged Property; (3) a code indicating whether the
Mortgaged Property is a single family residence, two-family residence,
three-family residence, four-family residence, planned unit development,
Cooperative Apartment, manufactured housing or condominium; (4) the current
Mortgage Interest Rate; (5) the current net Mortgage Interest Rate; (6) the
current Monthly Payment; (7) with respect to each Adjustable Rate Mortgage Loan,
the Gross Margin; (8) the original term to maturity; (9) the scheduled maturity
date; (10) the principal balance of the Mortgage Loan as of the Cut-off Date
after deduction of payments of principal due on or before the Cut-off Date
whether or not collected; (11) the Loan-to-Value Ratio; (12) with respect to
each Adjustable Rate Mortgage Loan, the next Adjustment Date; (13) with respect
to each Adjustable Rate Mortgage Loan, the lifetime Mortgage Interest Rate cap;
(14) a code indicating whether the Mortgage Loan is convertible or not; (15) a
code indicating the mortgage guaranty insurance company; (16) a code indicating
whether the Mortgage Loan is an Interest Only Mortgage Loan; and (17) the
Servicing Fee.
8
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note, or with respect to a Cooperative Loan, the related
Cooperative Apartment.
Mortgagor: The obligor on a Mortgage Note.
Non-Assigned Letter of Credit: A Letter of Credit in which the named
beneficiary is the Company.
OCC: The Office of the Comptroller of the Currency.
Officer's Certificate: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or the President or a Vice President or an
Assistant Vice President and certified by the Treasurer or the Secretary or one
of the Assistant Treasurers or Assistant Secretaries of the Company, and
delivered to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee of
the Company, reasonably acceptable to the Purchaser.
Periodic Interest Rate Cap: As to each Adjustable Rate Mortgage Loan, the
maximum increase or decrease in the Mortgage Interest Rate on any Adjustment
Date pursuant to the terms of the Mortgage Note.
Person: Any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Pledge Agreement: With respect to a Cooperative Loan, the specific
agreement creating a first lien on and pledge of the Cooperative Shares and the
appurtenant Proprietary Lease.
Pledge Holder: With respect to a Pledged Asset Mortgage Loan, the entity
that holds the Pledge Account, manages the Pledge Account and provides the
Letter of Credit.
Pledge Instruments: With respect to a Cooperative Loan, the Stock Power,
the Assignment of the Proprietary Lease and the Assignment of the Mortgage Note
and Pledge Agreement.
Pledged Asset Mortgage Loan: A Mortgage Loan for which the Mortgagor has
pledged financial assets as partial collateral for the Mortgage Loan, in lieu of
a cash down payment.
PMI Policy: A policy of primary mortgage guaranty insurance issued by a
Qualified Insurer, as required by this Agreement with respect to certain
Mortgage Loans. The premiums on a PMI Policy may be paid by the Mortgagor or by
the Company from its own funds, without reimbursement. If the premiums are paid
by the Company, the PMI Policy is an LPMI Policy.
9
Prepayment Interest Shortfall: As to any Remittance Date and each Mortgage
Loan subject to a Principal Prepayment received during the calendar month
preceding such Remittance Date, the amount, if any, by which one month's
interest at the related Mortgage Loan Remittance Rate on such Principal
Prepayment exceeds the amount of interest paid in connection with such Principal
Prepayment.
Prepayment Penalty: The prepayment charge or penalty interest required to
be paid by a Mortgagor as the result of a Principal Prepayment in full of the
related Mortgage Loan, not otherwise due thereon in respect of principal or
interest, which is intended to be a disincentive to prepayment, as provided in
the related Mortgage Note or Mortgage.
Prime Rate: The prime rate announced to be in effect from time to time, as
published as the average rate in The Wall Street Journal.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date.
Principal Prepayment Period: The calendar month preceding the month in
which the related Remittance Date occurs.
Project: With respect to a Cooperative Loan, all real property owned by the
related Cooperative including the land, separate dwelling units and all common
areas.
Proprietary Lease: With respect to a Cooperative Loan, a lease on a
Cooperative Apartment evidencing the possessory interest of the Mortgagor in
such Cooperative Apartment.
Purchase Price: The purchase price for each Loan Package shall be the
percentage of par as stated in the related Commitment Letter, multiplied by the
aggregate scheduled principal balance, as of the related Cut-off Date, of the
Mortgage Loans in the related Loan Package, after application of scheduled
payments of principal for such related Loan Package due on or before the related
Cut-off Date whether or not collected. The purchase price for a Loan Package may
be adjusted as stated in the related Commitment Letter.
Purchaser: Bank of America, National Association, or its successor in
interest or any successor or assignee to the Purchaser under this Agreement as
herein provided.
Qualification Defect: With respect to a Mortgage Loan, (a) a defective
document in the Custodial Mortgage File or Retained Mortgage File, (b) the
absence of a document in the Custodial Mortgage File or Retained Mortgage File,
or (c) the breach of any representation, warranty or covenant with respect to
the Mortgage Loan made by the Company, but, in each case, only if the affected
Mortgage Loan would cease to qualify as a "qualified mortgage" for purposes of
the REMIC Provisions.
Qualified Appraiser: An appraiser, duly appointed by the Company, who had
no interest, direct or indirect, in the Mortgaged Property or in any loan made
on the security thereof, and whose compensation was not affected by the approval
or disapproval of the Mortgage Loan, and such appraiser and the appraisal made
by such appraiser both satisfied the requirements of Title
10
XI of the Financial Institution Reform, Recovery, and Enforcement Act and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
Qualified Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Company and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Company, in accordance with underwriting
guidelines designated by the Company ("Designated Guidelines") or guidelines
that do not vary materially from such Designated Guidelines; (ii) such Mortgage
Loans were in fact underwritten as described in clause (i) above and were
acquired by the Company within one hundred eighty (180) days after origination;
(iii) either (x) the Designated Guidelines were, at the time such Mortgage Loans
were originated, used by the Company in origination of mortgage loans of the
same type as the Mortgage Loans for the Company's own account or (y) the
Designated Guidelines were, at the time such Mortgage Loans were underwritten,
designated by the Company on a consistent basis for use by lenders in
originating mortgage loans to be purchased by the Company; and (iv) the Company
employed, at the time such Mortgage Loans were acquired by the Company,
pre-purchase or post-purchase quality assurance procedures (which may involve,
among other things, review of a sample of mortgage loans purchased during a
particular time period or through particular channels) designed to ensure that
Persons from which it purchased mortgage loans properly applied the underwriting
criteria designated by the Company.
Qualified Depository: A deposit account or accounts maintained with a
federal or state chartered depository institution the deposits in which are
insured by the FDIC to the applicable limits and the short-term unsecured debt
obligations of which (or, in the case of a depository institution that is a
subsidiary of a holding company, the short-term unsecured debt obligations of
such holding company) are rated "A-1" by S&P or "Prime-1" by ▇▇▇▇▇'▇ (or a
comparable rating if another rating agency is specified by the Purchaser by
written notice to the Company) at the time any deposits are held on deposit
therein.
Qualified Insurer: A mortgage guaranty insurance company duly authorized
and licensed where required by law to transact mortgage guaranty insurance
business and approved as an insurer by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Company for a Deleted Mortgage Loan which must, on the date
of such substitution be approved by the Purchaser and, (i) have an outstanding
principal balance, after deduction of all scheduled payments due in the month of
substitution (or in the case of a substitution of more than one mortgage loan
for a Deleted Mortgage Loan, an aggregate principal balance), not in excess of
the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have a Mortgage
Loan Remittance Rate not less than, and not more than two percent (2%) greater
than, the Mortgage Loan Remittance Rate of the Deleted Mortgage Loan; (iii) have
a remaining term to maturity not greater than and not more than one year less
than that of the Deleted Mortgage Loan; (iv) comply with each representation and
warranty set forth in Sections 3.01 and 3.02; (v) be of the same type as the
Deleted Mortgage Loan; (vi) have a Gross Margin not less than that of the
Deleted Mortgage Loan; (vii) have the same Index as the Deleted Mortgage Loan;
(viii) have a FICO score not less than that of the Deleted Mortgage Loan, (ix)
have an LTV not greater than that of
11
the Deleted Mortgage Loan; (x) have a Company credit grade not lower in quality
than that of the Deleted Mortgage Loan and (xi) have the same lien status as the
Deleted Mortgage Loan.
Rating Agency: Each of Fitch, Inc., ▇▇▇▇▇'▇ and S&P, or any successor
thereto.
Recognition Agreement: An agreement whereby a Cooperative and a lender with
respect to a Cooperative Loan (i) acknowledge that such lender may make, or
intends to make, such Cooperative Loan, and (ii) make certain agreements with
respect to such Cooperative Loan.
Reconstitution: Any Securitization Transaction, Agency Transfer or Whole
Loan Transfer.
Reconstitution Agreement: The agreement or agreements entered into by the
Company and the Purchaser and/or certain third parties on the Reconstitution
Date or Dates with respect to any or all of the Mortgage Loans serviced
hereunder, in connection with a Whole Loan Transfer or Securitization
Transaction.
Reconstitution Date: The date on which any or all of the Mortgage Loans
serviced under this Agreement may be removed from this Agreement and
reconstituted as part of a Securitization Transaction, Agency Transfer or Whole
Loan Transfer pursuant to Section 9.01 hereof. The Reconstitution Date shall be
such date which the Purchaser shall designate. On such date, except as provided
in this Agreement, the Mortgage Loans transferred may cease to be covered by
this Agreement and the Company's servicing responsibilities shall cease under
this Agreement with respect to the related transferred Mortgage Loans.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to a
REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately following, except with respect to those
Mortgage Loans subject to a Securitization Transaction in which case such date
shall be the Business Day immediately preceding the 18th day) of any month.
REO Disposition: The final sale by the Company of any REO Property.
12
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Company on behalf of the
Purchaser through foreclosure or by deed in lieu of foreclosure, as described in
Section 4.16.
Repurchase Price: With respect to any Mortgage Loan, as defined in the
related Commitment Letter.
Retained Mortgage File: With respect to each Mortgage Loan, the file
consisting of the Mortgage Loan Documents listed as items 7 through 11 of
Exhibit D attached hereto, which is retained by the Company for the benefit of
the Purchaser in a custodial capacity only.
RESPA: The Real Estate Settlement Procedures Act, as amended.
S&P: Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving (a) a sale or other
transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities, (b) an issuance of publicly
offered or privately placed, rated or unrated securities, the payments on which
are determined primarily by reference to one or more portfolios of residential
mortgage loans consisting, in whole or in part, of some or all of the Mortgage
Loans or (c) a synthetic securitization in which some or all of the Mortgage
Loans are included as part of the reference portfolio relating to such
securitization.
Servicer: As defined in Section 9.01(e)(iii).
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses (including reasonable attorneys' fees and disbursements)
other than Monthly Advances incurred in the performance by the Company of its
servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of any REO Property and (d) compliance with the obligations
under Section 4.08 and Section 4.10.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount of the annual
fee the Purchaser shall pay to the Company, which shall, for a period of one
full month, be equal to one-twelfth of the product of (a) the Servicing Fee Rate
and (b) the outstanding principal balance of such Mortgage Loan. Such fee shall
be payable monthly, computed on the basis of the same principal amount and
period respecting which any related interest payment on a Mortgage Loan is
received. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the
13
Servicing Fee is payable solely from, the interest portion (including recoveries
with respect to interest from Liquidation Proceeds, to the extent permitted by
Section 4.05) of such Monthly Payment collected by the Company, or as otherwise
provided under Section 4.05.
Servicing Fee Rate: The per annum percentage for each Mortgage Loan, as
stated in the related Commitment Letter.
Servicing File: With respect to each Mortgage Loan, the file consisting of
the Mortgage Loan Documents listed as items 12 through 27 of Exhibit D attached
hereto plus copies of all Mortgage Loan Documents contained in the Custodial
Mortgage File and the Retained Mortgage File, which are retained by the Company.
Servicing Officer: Any officer of the Company involved in or responsible
for the administration and servicing of the Mortgage Loans whose name appears on
a list of servicing officers furnished by the Company to the Purchaser upon
request, as such list may from time to time be amended.
Stated Principal Balance: As to each Mortgage Loan and any date of
determination, (i) the principal balance of the Mortgage Loan at the Cut-off
Date after giving effect to payments of principal due on or before such date,
whether or not received, minus (ii) all amounts previously distributed to the
Purchaser with respect to the related Mortgage Loan representing payments or
recoveries of principal or advances in lieu thereof.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Stock Certificate: With respect to a Cooperative Loan, a certificate
evidencing ownership of the Cooperative Shares issued by the Cooperative.
Stock Power: With respect to a Cooperative Loan, an assignment of the Stock
Certificate or an assignment of the Cooperative Shares issued by the
Cooperative.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the
Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Company or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Company under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB.
Subservicing Agreement: Any subservicing agreement between the Company and
any Subservicer relating to servicing and/or administration of some or all of
the Mortgage Loans included in a Mortgage Loan Package.
14
Subsidy Account: An account maintained by the Company specifically to hold
all Subsidy Funds to be applied to individual Subsidy Loans.
Subsidy Funds: With respect to any Subsidy Loans, funds contributed by the
employer of a Mortgagor in order to reduce the payments required from the
Mortgagor for a specified period in specified amounts.
Subsidy Loan: Any Mortgage Loan subject to a temporary interest subsidy
agreement pursuant to which the monthly interest payments made by the related
Mortgagor will be less than the scheduled monthly interest payments on such
Mortgage Loan, with the resulting difference in interest payments being provided
by the employer of the Mortgagor. Each Subsidy Loan will be identified as such
in the related Data File.
Third-Party Mortgage Loan: A Mortgage Loan that has been underwritten in
accordance with the related Third-Party Underwriting Guidelines.
Third-Party Originator: Each Person, other than a Qualified Correspondent,
that originated Mortgage Loans acquired by the Company.
Third-Party Underwriting Guidelines: The underwriting guidelines of a
Third-Party Originator, as amended from time to time, applicable to the related
Third-Party Mortgage Loans in a Loan Package, as provided to the Purchaser by
the Company. The Third-Party Underwriting Guidelines for each Third-Party
Mortgage Loan shall be attached to the respective Assignment and Conveyance
Agreement.
Time$aver(R) Mortgage Loan: A Mortgage Loan which has been refinanced
pursuant to a Company program that allows a rate/term refinance of an existing
Company-serviced loan with minimal documentation.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans by the Purchaser to a third party, which sale or transfer is not a
Securitization Transaction or an Agency Transfer.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF CUSTODIAL
MORTGAGE FILES; BOOKS AND RECORDS; CUSTODY AGREEMENT;
DELIVERY OF DOCUMENTS
SECTION 2.01 CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF CUSTODIAL MORTGAGE
FILES; MAINTENANCE OF RETAINED MORTGAGE FILE AND SERVICING
FILES.
Pursuant to each Assignment and Conveyance Agreement, on the related
Closing Date, the Company, simultaneously with the payment of the Purchase Price
by the Purchaser, shall thereby sell, transfer, assign, set over and convey to
the Purchaser, without recourse, but subject to the terms of this Agreement and
the related Assignment and Conveyance Agreement, all the right, title and
interest of the Company in and to the Mortgage Loans listed on the respective
Mortgage Loan Schedule annexed to such Assignment and Conveyance Agreement,
together
15
with the Retained Mortgage Files and Custodial Mortgage File and all rights and
obligations arising under the documents contained therein. The Company shall
deliver the related Mortgage Loan Schedule and the related Data File to the
Purchaser at least two (2) Business Days before the Closing Date. Pursuant to
Section 2.03, the Company shall deliver the Custodial Mortgage File for each
Mortgage Loan comprising the related Loan Package to the Custodian.
The contents of each Retained Mortgage File not delivered to the Custodian
are and shall be held in trust by the Company for the benefit of the Purchaser
as the owner thereof. Additionally and separate to the Retained Mortgage File,
the Company shall maintain a Servicing File, for the sole purpose of servicing
the related Mortgage Loans, consisting of a copy of the contents of the
Custodial Mortgage File and the Retained Mortgage File. The possession of each
Servicing File and Retained Mortgage File held by the Company is at the will of
the Purchaser and such retention and possession by the Company is in a custodial
capacity only. Upon the sale of the Mortgage Loans the ownership of each
Mortgage Note, the related Mortgage and the related Custodial Mortgage File,
Retained Mortgage File and Servicing File shall vest immediately in the
Purchaser, and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Company shall vest immediately in the Purchaser and shall be retained and
maintained by the Company, in trust, at the will of the Purchaser and only in
such custodial capacity. The Company shall release its custody of the contents
of any Retained Mortgage File and Servicing File only in accordance with written
instructions from the Purchaser, unless such release is required as incidental
to the Company's servicing of the Mortgage Loans, in the case of the Servicing
File, or is in connection with a repurchase of any Mortgage Loan pursuant to
Section 3.03 or 6.02. All such costs associated with the release, transfer and
re-delivery to the Company shall be the responsibility of the Purchaser (unless
in connection with Section 3.03 or 6.02).
SECTION 2.02 BOOKS AND RECORDS; TRANSFERS OF MORTGAGE LOANS.
From and after the sale to the Purchaser of the Mortgage Loans in the
related Loan Package on each Closing Date, all rights arising out of such
Mortgage Loans, including, but not limited to, all funds received on or in
connection with such Mortgage Loans, shall be received and held by the Company
in trust for the benefit of the Purchaser as owner of such Mortgage Loans, and
the Company shall retain record title to the related Mortgages for the sole
purpose of facilitating the servicing and the supervision of the servicing of
such Mortgage Loans.
The sale of each Mortgage Loan shall be reflected on the Company's balance
sheet and other financial statements as a sale of assets by the Company. The
Company shall be responsible for maintaining, and shall maintain, a complete set
of books and records for each Mortgage Loan which shall be marked clearly to
reflect the ownership of each Mortgage Loan by the Purchaser. In particular, the
Company shall maintain in its possession, available for inspection by the
Purchaser, or its designee, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, including but not
limited to documentation as to the method used in determining the applicability
of the provisions of the Flood Disaster Protection Act of 1973, as amended, to
the Mortgaged Property, documentation evidencing insurance coverage and
eligibility of any condominium project for approval by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac
and records
16
of periodic inspections required by Section 4.13. To the extent that original
documents are not required for purposes of realization of Liquidation Proceeds
or Insurance Proceeds, documents maintained by the Company may be in the form of
microfilm or microfiche or such other reliable means of recreating original
documents, including but not limited to, optical imagery techniques so long as
the Company complies with the requirements of the ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac
Selling and Servicing Guide, as amended from time to time.
The Company shall maintain with respect to each Mortgage Loan and shall
make available for inspection by the Purchaser or its designee the related
Retained Mortgage File and Servicing File during the time the Purchaser retains
ownership of such Mortgage Loan and thereafter in accordance with applicable
laws and regulations.
The Company shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe, the Company shall
note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made
unless such transfer is in compliance with the terms hereof. For the purposes of
this Agreement, the Company shall be under no obligation to deal with any person
with respect to this Agreement or the Mortgage Loans unless the books and
records show such person as the owner of the Mortgage Loan. The Purchaser may,
subject to the terms of this Agreement, sell and transfer one or more of the
Mortgage Loans. The Purchaser also shall advise the Company of the transfer.
Upon receipt of notice of the transfer, the Company shall ▇▇▇▇ its books and
records to reflect the ownership of the Mortgage Loans of such assignee, and
shall release the previous Purchaser from its obligations hereunder with respect
to the Mortgage Loans sold or transferred. Such notification of a transfer,
including a final schedule of Mortgage Loans subject to transfer, shall be
received by the Company no fewer than five (5) Business Days before the last
Business Day of the month. If such notification is not received as specified
above, the Company's duties to remit and report as required by Section 5 shall
begin with the next Due Period.
Upon request from the Purchaser, at the Purchaser's expense, the Company
shall deliver no later than thirty (30) days after such request any Retained
Mortgage File or document therein, or copies thereof, to the Purchaser at the
direction of the Purchaser. The Purchaser shall return any Retained Mortgage
File or document therein delivered pursuant to this Section no later than ten
(10) days after receipt thereof. In the event that the Company fails to make
delivery of the requested Retained Mortgage File or document therein, or copies
thereof, as required under this Section 2.02, the Company shall repurchase,
pursuant to Section 3.03 of this Agreement, the related Mortgage Loan within
thirty (30) days of a request to do so by the Purchaser.
SECTION 2.03 CUSTODY AGREEMENT; DELIVERY OF DOCUMENTS.
On each Closing Date with respect to each Mortgage Loan comprising the
related Loan Package, the Company shall have delivered to the Custodian not
fewer than five (5) Business Days prior to such Closing Date those Mortgage Loan
Documents contained in the Custodial Mortgage File as required by this Agreement
with respect to each Mortgage Loan. In addition, in connection with the
assignment of any MERS Designated Mortgage Loan, the Company agrees that on or
prior to the second (2nd) Business Day following the Closing Date it will cause,
at its own expense, the MERS System to indicate that the related Mortgage Loans
have been assigned by the Company to the Purchaser in accordance with this
Agreement by entering in the
17
MERS System the information required by the MERS System to identify the
Purchaser as owner of such Mortgage Loans. The Company further agrees that it
will not alter the information referenced in this paragraph with respect to any
Mortgage Loan during the term of this Agreement unless and until such Mortgage
Loan is repurchased in accordance with the terms of this Agreement or unless
otherwise directed by the Purchaser.
The Custodian shall certify its receipt of all such Mortgage Loan Documents
in each Custodial Mortgage File required to be delivered pursuant to this
Agreement, as evidenced by the trust receipt and initial certification of the
Custodian in the forms annexed to the Custody Agreement. The Company shall be
responsible for recording the initial Assignments of Mortgage. The Purchaser
will be responsible for the fees and expenses of the Custodian.
All recording fees and other costs associated with the recording of initial
Assignments of Mortgage and other relevant documents to the Purchaser or its
designee will be borne by the Company. For Mortgage Loans not registered under
the MERS System, if the Purchaser requests that the related Assignments of
Mortgage be recorded, the Company shall cause such Assignments of Mortgage which
were delivered in blank to be completed and to be recorded. The Company shall be
required to deliver such Assignments of Mortgage for recording within 30 days of
the date on which the Company is notified that recording will be required
pursuant to this Section 2.03. The Company shall furnish the Custodian with a
copy of each Assignment of Mortgage submitted for recording. In the event that
any such Assignment is lost or returned unrecorded because of a defect therein,
the Company shall promptly have a substitute Assignment of Mortgage prepared or
have such defect cured, as the case may be, and thereafter cause such Assignment
of Mortgage to be duly recorded.
The Company shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 or 6.01 within one (1) week of
their execution, provided, however, that the Company shall provide the Custodian
with a certified true copy of any such document submitted for recordation within
ten (10) days of its execution, and shall provide the original of any such
document submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within sixty (60) days of its submission for recordation.
If the original or a copy of any document submitted for recordation to the
appropriate public recording office is not so delivered to the Custodian with
240 days following the related Closing Date, and if the Company does not cure
such failure within thirty (30) days after receipt of written notification of
such failure from the Purchaser, the related Mortgage Loan shall, upon the
request of the Purchaser, be repurchased by the Company at a price and in the
manner specified in Section 3.03; provided, however, that with respect to any
Mortgage Loan, if such defect constitutes a Qualification Defect, any such
repurchase must take place within sixty (60) days of the date such defect is
discovered.
In the event the public recording office is delayed in returning any
original document, which the Company is required to deliver at any time to the
Custodian in accordance with the terms of the Custody Agreement or which the
Company is required to maintain in the Retained Mortgage File, the Company shall
deliver to the Custodian within 270 days of its submission for
18
recordation, a copy of such document and an Officer's Certificate, which shall
(i) identify the recorded document; (ii) state that the recorded document has
not been delivered to the Custodian due solely to a delay by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. The Company will be required to deliver the document
to the Custodian by the date specified in (iv) above. An extension of the date
specified in (iv) above may be requested from the Purchaser, which consent shall
not be unreasonably withheld. However, if the Company cannot deliver such
original or clerk-certified copy of any document submitted for recordation to
the appropriate public recording office within the specified time for any
reason, within thirty (30) days after receipt of written notification of such
failure from the Purchaser, the Company shall repurchase the related Mortgage
Loan at the price and in the manner specified in Section 3.03.
In the event that new, replacement, substitute or additional Stock
Certificates are issued with respect to existing Cooperative Shares, the Company
immediately shall deliver to the Custodian the new Stock Certificates, together
with the related Stock Powers in blank. Such new Stock Certificates shall be
subject to the related Pledge Instruments and shall be subject to all of the
terms, covenants and conditions of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
SECTION 3.01 COMPANY REPRESENTATIONS AND WARRANTIES.
The Company hereby represents and warrants to the Purchaser that, as of the
related Closing Date:
(a) Due Organization and Authority. The Company is a national banking
association duly organized, validly existing and in good standing under the laws
of the United States and has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified and in good standing in each
state where a Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type conducted by
the Company, and in any event the Company is in compliance with the laws of any
such state to the extent necessary to ensure the enforceability of the related
Mortgage Loan and the servicing of such Mortgage Loan in accordance with the
terms of this Agreement; the Company has the full power and authority to execute
and deliver this Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Company and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Company; and all requisite action has been taken by the
Company to make this Agreement valid and binding upon the Company in accordance
with its terms;
(b) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Company, who is
19
in the business of selling and servicing loans, and the transfer, assignment and
conveyance of the Mortgage Notes and the Mortgages by the Company pursuant to
this Agreement are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this Agreement, the
acquisition of the Mortgage Loans by the Company, the sale of the Mortgage Loans
to the Purchaser or the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions of this Agreement will conflict with
or result in a breach of any of the terms, charter documents or by-laws or any
legal restriction or any agreement or instrument to which the Company is now a
party or by which it is bound, or constitute a default or result in the
violation of any law, rule, regulation, order, judgment or decree to which the
Company or its property is subject, or impair the ability of the Purchaser to
realize on the Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Ability to Service. The Company is an approved seller/servicer of
conventional residential mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, with the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The Company
is a HUD approved mortgagee pursuant to Section 203 of the National Housing Act
and is in good standing to sell mortgage loans to and service mortgage loans for
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, and no event has occurred, including but not limited
to a change in insurance coverage, which would make the Company unable to comply
with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility requirements or which would require
notification to either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(e) Reasonable Servicing Fee; Fair Consideration. The Company acknowledges
and agrees that the Servicing Fee represents reasonable compensation for
performing such services and that the entire Servicing Fee shall be treated by
the Company, for accounting and tax purposes, as compensation for the servicing
and administration of the Mortgage Loans pursuant to this Agreement. The
consideration received by the Company upon the sale of the Mortgage Loans under
this Agreement constitutes fair consideration and reasonably equivalent value
for the Mortgage Loans;
(f) Ability to Perform; Solvency. The Company does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Company is solvent and the sale of the
Mortgage Loans will not cause the Company to become insolvent. The sale of the
Mortgage Loans is not undertaken to hinder, delay or defraud any of the
Company's creditors;
(g) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Company which, either in any one
instance or in the aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of the Company,
or in any material impairment of the right or ability of the Company to carry on
its business substantially as now conducted, or in any material liability on the
part of the Company, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be contemplated
herein, or which would be likely to impair materially the ability of the Company
to perform under the terms of this Agreement;
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(h) No Consent Required. No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution, delivery
and performance by the Company of or compliance by the Company with this
Agreement or the sale of the Mortgage Loans as evidenced by the consummation of
the transactions contemplated by this Agreement, or if required, such consent
approval, authorization or order has been obtained prior to the related Closing
Date;
(i) Selection Process. The Mortgage Loans were selected from among the
outstanding adjustable rate or fixed rate one- to four-family mortgage loans in
the Company's mortgage banking portfolio at the related Closing Date as to which
the representations and warranties set forth in Section 3.02 could be made and
such selection was not made in a manner so as to affect adversely the interests
of the Purchaser;
(j) No Untrue Information. Neither this Agreement nor any statement, report
or other document furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any untrue
statement of fact or omits to state a fact necessary to make the statements
contained therein not misleading;
(k) Sale Treatment. The Company has determined that the disposition of the
Mortgage Loans pursuant to this Agreement will be afforded sale treatment for
accounting and tax purposes;
(l) No Material Change. There has been no material adverse change in the
business, operations, financial condition or assets of the Company since the
date of the Company's most recent financial statements;
(m) No Brokers' Fees. The Company has not dealt with any broker, investment
banker, agent or other Person that may be entitled to any commission or
compensation in the connection with the sale of the Mortgage Loans; and
(n) MERS. The Company is a member of MERS in good standing.
SECTION 3.02 REPRESENTATIONS AND WARRANTIES REGARDING INDIVIDUAL MORTGAGE
LOANS.
As to each Mortgage Loan, the Company hereby represents and warrants to the
Purchaser that as of the related Closing Date:
(a) Mortgage Loans as Described. The information set forth in the
respective Mortgage Loan Schedule and the information contained on the
respective Data File delivered to the Purchaser is true and correct;
(b) Payments Current. All payments required to be made up to the Cut-off
Date for the Mortgage Loan under the terms of the Mortgage Note have been made
and credited. No payment under any Mortgage Loan has been thirty (30) days
delinquent more than one (1) time within twelve (12) months prior to the related
Closing Date;
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(c) No Outstanding Charges. There are no defaults in complying with the
terms of the Mortgages, and all taxes, governmental assessments, insurance
premiums, leasehold payments, water, sewer and municipal charges, which
previously became due and owing have been paid, or an escrow of funds has been
established in an amount sufficient to pay for every such item which remains
unpaid and which has been assessed but is not yet due and payable. The Company
has not advanced funds, or induced, or solicited directly or indirectly, the
payment of any amount required under the Mortgage Loan, except for interest
accruing from the date of the Mortgage Note or date of disbursement of the
Mortgage Loan proceeds, whichever is later, to the day which precedes by one (1)
month the Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and Mortgage
have not been impaired, waived, altered or modified in any respect, except by a
written instrument which has been recorded, if necessary, to protect the
interests of the Purchaser and maintain the lien priority of the Mortgage, and
is retained by the Company in the Retained Mortgage File; the related Mortgage
Note has been delivered to the Custodian. The substance of any such waiver,
alteration or modification has been approved by the issuer of any related PMI
Policy or LPMI Policy and the title insurer, to the extent required by the
policy, and its terms are reflected on the respective Mortgage Loan Schedule. No
instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement approved by the issuer of any related PMI Policy or LPMI
Policy and the title insurer, to the extent required by the policy, and which
assumption agreement is part of the Custodial Mortgage File delivered to the
Custodian and the terms of which are reflected in the respective Mortgage Loan
Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto;
(f) No Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such
satisfaction, release, cancellation, subordination or rescission;
(g) Validity of Mortgage Documents. The Mortgage Note and the Mortgage and
related documents are genuine, and each is the legal, valid and binding
obligation of the maker thereof enforceable in accordance with its terms. All
parties to the Mortgage Note and the Mortgage had legal capacity to enter into
the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage,
and the Mortgage Note and the Mortgage have been duly and properly executed by
such parties. The Company has reviewed all of the documents constituting the
Retained Mortgage File and Custodial Mortgage File and has made such inquiries
as it deems necessary to make and confirm the accuracy of the representations
set forth herein;
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With respect to each Cooperative Loan, the Mortgage Note, the Mortgage, the
Pledge Agreement, and related documents are genuine, and each is the legal,
valid and binding obligation of the maker thereof enforceable in accordance with
its terms. All parties to the Mortgage Note, the Mortgage, the Pledge Agreement,
the Proprietary Lease, the Stock Power, Recognition Agreement and the Assignment
of Proprietary Lease had legal capacity to enter into the Mortgage Loan and to
execute and deliver such documents, and such documents have been duly and
properly executed by such parties;
(h) No Fraud. No error, omission, misrepresentation, negligence, fraud or
similar occurrence with respect to a Mortgage Loan has taken place on the part
of the Company, or the Mortgagor, or to the best of the Company's knowledge, any
appraiser, any builder, or any developer, or any other party involved in the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan;
(i) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection
and privacy, equal credit opportunity, disclosure or predatory and abusive
lending laws applicable to the origination and servicing of the Mortgage Loan
have been complied with, the Mortgagor received all disclosure materials
required by applicable law with respect to the making of mortgage loans of the
same type as the Mortgage Loan and, if the Mortgage Loan is a refinanced
Mortgage Loan, rescission materials required by applicable laws, and the Company
shall maintain in its possession, available for the Purchaser's inspection, and
shall deliver to the Purchaser upon demand, evidence of compliance with all such
requirements. All inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including, but not limited to,
certificates of occupancy and fire underwriting certificates, have been made or
obtained from the appropriate authorities;
(j) Location and Type of Mortgaged Property. The Mortgaged Property is
located in the state identified in the respective Mortgage Loan Schedule and
consists of a contiguous parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or a Cooperative
Apartment, or a manufactured dwelling, or an individual condominium unit in a
condominium project, or an individual unit in a planned unit development or a
townhouse, provided, however, that any condominium project or planned unit
development shall conform to the applicable ▇▇▇▇▇▇ Mae guidelines, ▇▇▇▇▇▇▇ Mac
guidelines, the Company Underwriting Guidelines (other than the exceptions
identified for Exception Mortgage Loans on the related Assignment and Conveyance
Agreement) or the Third-Party Underwriting Guidelines, as applicable, regarding
such dwellings, and no residence or dwelling is a mobile home. As of the
respective date of the Appraisal for each Mortgaged Property, any Mortgaged
Property being used for commercial purposes conforms to the Company Underwriting
Guidelines (other than the exceptions identified for Exception Mortgage Loans on
the related Assignment and Conveyance Agreement) or the Third-Party Underwriting
Guidelines, as applicable, and, to the best of the Company's knowledge, since
the date of such Appraisal, no portion of the Mortgaged Property has been used
for commercial purposes outside of the Company Underwriting Guidelines (other
than the exceptions identified for Exception Mortgage Loans on the related
Assignment and Conveyance Agreement) or the Third-Party Underwriting Guidelines,
as applicable;
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(k) Valid First Lien. The Mortgage is a valid, subsisting and enforceable
first lien on the Mortgaged Property, including all buildings on the Mortgaged
Property and all installations and mechanical, electrical, plumbing, heating and
air conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect to the
foregoing. The lien of the Mortgage is subject only to:
(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 the public record as of the date of recording
acceptable to mortgage lending institutions generally and specifically
referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and (i) referred to or otherwise considered
in the Appraisal made for the originator of the Mortgage Loan and (ii)
which do not adversely affect the Appraised Value of the Mortgaged Property
set forth in such Appraisal; and
(iii) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to
and delivered in connection with the Mortgage Loan establishes and creates a
valid, subsisting and enforceable first lien and first priority security
interest on the property described therein and the Company has full right to
sell and assign the same to the Purchaser;
With respect to each Cooperative Loan, each Pledge Agreement creates a
valid, enforceable and subsisting first security interest in the Cooperative
Shares and Proprietary Lease, subject only to (i) the lien of the related
Cooperative for unpaid assessments representing the Mortgagor's pro rata share
of the Cooperative's payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments to
which like collateral is commonly subject and (ii) other matters to which like
collateral is commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Pledge Agreement;
provided, however, that the appurtenant Proprietary Lease may be subordinated or
otherwise subject to the lien of any mortgage on the Project;
(l) Full Disbursement of Proceeds. The proceeds of the Mortgage Loan have
been fully disbursed, except for escrows established or created due to seasonal
weather conditions, and there is no requirement for future advances thereunder.
All costs, fees and expenses incurred in making or closing the Mortgage Loan and
the recording of the Mortgage were paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due under the Mortgage Note or Mortgage;
(m) Consolidation of Future Advances. Any future advances made prior to the
Cut-off Date, have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and
24
single repayment term reflected on the related Mortgage Loan Schedule. The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having first lien priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other title evidence
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac; the consolidated principal amount does
not exceed the original principal amount of the Mortgage Loan; the Company shall
not make future advances after the Cut-off Date;
(n) Ownership. The Company is the sole owner of record and holder of the
Mortgage Loan and the related Mortgage Note and the Mortgage are not assigned or
pledged, and the Company has good and marketable title thereto and has full
right and authority to transfer and sell the Mortgage Loan to the Purchaser. The
Company is transferring the Mortgage Loan free and clear of any and all
encumbrances, liens, pledges, equities, participation interests, claims,
agreements with other parties to sell or otherwise transfer the Mortgage Loan,
charges or security interests of any nature encumbering such Mortgage Loan;
(o) Origination/Doing Business. The Mortgage Loan was originated by a
savings and loan association, a savings bank, a commercial bank, a credit union,
an insurance company, or similar institution that is supervised and examined by
a federal or state authority or by a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act. All parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (1) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (2) either (A) organized under the laws
of such state, (B) qualified to do business in such state, (C) federal savings
and loan associations or national banks having principal offices in such state,
or (D) not doing business in such state;
(p) LTV, PMI Policy; LPMI Policy. Each Mortgage Loan has an LTV as
specified on the Mortgage Loan Schedule. Except as indicated on the Mortgage
Loan Schedule, each Mortgage Loan with an LTV greater than 80%, at the time of
origination, a portion of the unpaid principal balance of each Mortgage Loan is
and will be insured as to payment defaults by a PMI Policy or LPMI Policy. If
the Mortgage Loan is insured by a PMI Policy for which the Mortgagor pays all
premiums, the coverage will remain in place until (i) the LTV decreases to 78%
or (ii) the PMI Policy is otherwise terminated pursuant to the Homeowners
Protection Act of 1998, 12 USC Section4901, et seq. All provisions of such PMI
Policy or LPMI Policy have been and are being complied with, such policy is in
full force and effect, and all premiums due thereunder have been paid. The
Qualified Insurer has a claims paying ability acceptable to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac. Any Mortgage Loan subject to a PMI Policy or an LPMI Policy
obligates the Mortgagor or the Company to maintain the PMI Policy or LPMI
Policy, as applicable, and to pay all premiums and charges in connection
therewith. The Mortgage Interest Rate for the Mortgage Loan as set forth on the
related Mortgage Loan Schedule is net of any such insurance premium;
(q) Title Insurance. The Mortgage Loan is covered by an ALTA lender's title
insurance policy (or in the case of any Mortgage Loan secured by a Mortgaged
Property located in a jurisdiction where such policies are generally not
available, an opinion of counsel of the type customarily rendered in such
jurisdiction in lieu of title insurance) or other generally acceptable
25
form of policy of insurance acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, issued by a
title insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
the Company, its successors and assigns, as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan, subject only to
the exceptions contained in clauses (1), (2) and (3) of Paragraph (k) of this
Section 3.02, and with respect to Adjustable Rate Mortgage Loans against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Additionally, such lender's title insurance policy
includes no exceptions regarding ingress, egress or encroachments that impact
the value or the marketability of the Mortgaged Property. The Company is the
sole insured of such lender's title insurance policy, and such lender's title
insurance policy is in full force and effect and will be in force and effect
upon the consummation of the transactions contemplated by this Agreement. No
claims have been made under such lender's title insurance policy, and no prior
holder of the Mortgage, including the Company, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy;
(r) No Defaults. There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration, and neither the Company nor its predecessors have waived any
default, breach, violation or event of acceleration;
(s) No Mechanics' Liens. There are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are outstanding
that under the law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage which are not insured against by the
title insurance policy referenced in Paragraph (q) above;
(t) Location of Improvements; No Encroachments. Except as insured against
by the title insurance policy referenced in Paragraph (q) above, all
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;
(u) Payment Terms. Except with respect to the Interest Only Mortgage Loans,
principal payments commenced no more than sixty (60) days after the funds were
disbursed to the Mortgagor in connection with the Mortgage Loan. The Mortgage
Loans have an original term to maturity of not more than thirty (30) years, with
interest payable in arrears each month. As to each Adjustable Rate Mortgage Loan
on each applicable Adjustment Date, the Mortgage Interest Rate will be adjusted
to equal the sum of the Index plus the applicable Gross Margin, rounded up or
down to the nearest multiple of 0.125% indicated by the Mortgage Note; provided
that the Mortgage Interest Rate will not increase or decrease by more than the
Periodic Interest Rate Cap on any Adjustment Date, and will in no event exceed
the maximum Mortgage Interest Rate or be lower than the minimum Mortgage
Interest Rate listed on the related Mortgage Loan Schedule or Mortgage Note for
such Mortgage Loan. As to each Adjustable Rate Mortgage Loan that is not an
Interest Only Mortgage Loan or Balloon Loan, each Mortgage Note requires
26
a monthly payment which is sufficient, during the period prior to the first
adjustment to the Mortgage Interest Rate, to fully amortize the outstanding
principal balance as of the first day of such period over the then remaining
term of such Mortgage Note and to pay interest at the related Mortgage Interest
Rate. As to each Adjustable Rate Mortgage Loan, if the related Mortgage Interest
Rate changes on an Adjustment Date or, with respect to an Interest Only Mortgage
Loan, on an Adjustment Date following the related interest only period, the then
outstanding principal balance will be reamortized over the remaining life of
such Mortgage Loan. No Mortgage Loan contains terms or provisions which would
result in negative amortization;
(v) Customary Provisions. The Mortgage and related Mortgage Note contain
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including, (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and (ii)
otherwise by judicial foreclosure. There is no homestead or other exemption
available to a Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage;
(w) Occupancy of the Mortgaged Property. As of the date of origination, the
Mortgaged Property was lawfully occupied under applicable law and to the best of
the Company's knowledge, the Mortgaged Property is lawfully occupied as of the
related Closing Date;
(x) No Additional Collateral. Except in the case of a Pledged Asset
Mortgage Loan and as indicated on the related Data File, the Mortgage Note is
not and has not been secured by any collateral, pledged account or other
security except the lien of the corresponding Mortgage and the security interest
of any applicable security agreement or chattel mortgage referred to in
Paragraph (k);
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses are or will become payable by the Mortgagee to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(z) Acceptable Investment. The Company has no knowledge of any
circumstances or conditions with respect to the Mortgage Loan, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;
(aa) Transfer of Mortgage Loans. With respect to each Mortgage that is not
recorded in the name of MERS or its designee, the Assignment of Mortgage upon
the insertion of the name of the assignee and recording information is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;
27
(bb) Mortgaged Property Undamaged. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended;
(cc) Servicing and Collection Practices; Escrow Deposits. The origination,
servicing and collection practices used with respect to the Mortgage Loan have
been in accordance with Accepted Servicing Practices, and have been in all
material respects legal and proper. With respect to escrow deposits and Escrow
Payments, all such payments are in the possession of the Company and there exist
no deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law. No escrow deposits or Escrow
Payments or other charges or payments due the Company have been capitalized
under the Mortgage Note;
(dd) No Condemnation. There is no proceeding pending or to the best of the
Company's knowledge threatened for the total or partial condemnation of the
related Mortgaged Property;
(ee) The Appraisal. The Mortgage Loan Documents contain an Appraisal of the
related Mortgaged Property by a Qualified Appraiser acceptable to ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac. As to each Time$aver(R) Mortgage Loan, the Appraisal may be from
the original of the existing Company-serviced loan, which was refinanced via
such Time$aver(R) Mortgage Loan;
(ff) Insurance. The Mortgaged Property securing each Mortgage Loan is
insured by an insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac against loss by
fire and such hazards as are covered under a standard extended coverage
endorsement and such other hazards as are customary in the area where the
Mortgaged Property is located pursuant to insurance policies conforming to the
requirements of Section 4.10, in an amount which is at least equal to the lesser
of (a) 100% of the insurable value, on a replacement cost basis, of the
improvements on the related Mortgaged Property, or (b) the greater of either (i)
the outstanding principal balance of the Mortgage Loan, or (ii) an amount such
that the proceeds of such insurance shall be sufficient to avoid the application
to the Mortgagor or loss payee of any coinsurance clause under the policy. If
the Mortgaged Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the project. If the Mortgaged Property is in an
area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards, a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect with a generally acceptable insurance carrier and such policy
conforms to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac requirements, in an amount representing
coverage not less than the least of (A) the outstanding principal balance of the
Mortgage Loan, (B) the full insurable value and (C) the maximum amount of
insurance which was available under the Flood Disaster Protection Act of 1973,
as amended. All individual insurance policies contain a standard mortgagee
clause naming the Company and its successors and assigns as mortgagee, and all
premiums thereon have been paid. The Mortgage obligates the Mortgagor thereunder
to maintain a hazard insurance policy at the Mortgagor's cost and expense, and
on the Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and expense, and to
seek reimbursement therefor from the Mortgagor. The hazard insurance policy is
the valid and binding obligation of the insurer, is in
28
full force and effect, and will be in full force and effect and inure to the
benefit of the Purchaser upon the consummation of the transactions contemplated
by this Agreement. The Company has not acted or failed to act so as to impair
the coverage of any such insurance policy or the validity, binding effect and
enforceability thereof;
(gg) Servicemembers Civil Relief Act. The Mortgagor has not notified the
Company, and the Company has no knowledge of any relief requested by or allowed
to the Mortgagor under the Servicemembers Civil Relief Act, as amended, or
similar state laws;
(hh) Balloon Payments, Graduated Payments or Contingent Interests. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature. No
Mortgage Loan is a Balloon Loan;
(ii) No Construction Loans. No Mortgage Loan was made in connection with
(i) the construction or rehabilitation of a Mortgaged Property or (ii)
facilitating the trade-in or exchange of a Mortgaged Property other than a
construction-to-permanent loan which has converted to a permanent Mortgage Loan;
(jj) Underwriting.
(i) Each Company Mortgage Loan was underwritten in accordance with the
Company Underwriting Guidelines;
(ii) Each Third-Party Mortgage Loan was underwritten in accordance
with the Third-Party Underwriting Guidelines;
(iii) Each Exception Mortgage Loan was underwritten in accordance with
the Company Underwriting Guidelines, subject to the exceptions specified on
the related Assignment and Conveyance Agreement; and
(iv) Each Mortgage Note and Mortgage are on forms acceptable to
▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae;
(kk) No Bankruptcy. No Mortgagor was a debtor in any state or federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was originated
and as of the related Closing Date, the Company has not received notice that any
Mortgagor is a debtor under any state or federal bankruptcy or insolvency
proceeding;
(ll) Delivery of Custodial Mortgage Files. The Mortgage Note, Assignment of
Mortgage and any other documents required to be delivered by the Company
hereunder have been delivered to the Custodian. The Company is in possession of
a complete Retained Mortgage File in compliance with Exhibit D, except for such
documents where the originals of which have been sent for recordation. With
respect to each Mortgage Loan for which a lost note affidavit has been delivered
to the Custodian in place of the original Mortgage Note, the related Mortgage
Note is no longer in existence, and, if such Mortgage Loan is subsequently in
default, the enforcement of such Mortgage Loan or of the related Mortgage by or
on behalf of the Purchaser will not be affected by the absence of the original
Mortgage Note;
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(mm) Buydown Mortgage Loans. With respect to each Mortgage Loan that is a
Buydown Mortgage Loan:
(i) On or before the date of origination of such Mortgage Loan, the
Company and the Mortgagor, or the Company, the Mortgagor and the seller of
the Mortgaged Property or a third party entered into a Buydown Agreement.
The Buydown Agreement provides that the seller of the Mortgaged Property
(or third party) shall deliver to the Company temporary Buydown Funds in an
amount equal to the aggregate undiscounted amount of payments that, when
added to the amount the Mortgagor on such Mortgage Loan is obligated to pay
on each Due Date in accordance with the terms of the Buydown Agreement, is
equal to the full scheduled Monthly Payment due on such Mortgage Loan. The
temporary Buydown Funds enable the Mortgagor to qualify for the Buydown
Mortgage Loan. The effective interest rate of a Buydown Mortgage Loan if
less than the interest rate set forth in the related Mortgage Note will
increase within the Buydown Period as provided in the related Buydown
Agreement so that the effective interest rate will be equal to the interest
rate as set forth in the related Mortgage Note. The Buydown Mortgage Loan
satisfies the requirements of ▇▇▇▇▇▇ ▇▇▇ guidelines, ▇▇▇▇▇▇▇ Mac
guidelines, the Company Underwriting Guidelines with respect to Company
Mortgage Loans (other than the exceptions identified for Exception Mortgage
Loans on the related Assignment and Conveyance Agreement) or the
Third-Party Underwriting Guidelines with respect to Third-Party Mortgage
Loans;
(ii) The Mortgage and Mortgage Note reflect the permanent payment
terms rather than the payment terms of the Buydown Agreement. The Buydown
Agreement provides for the payment by the Mortgagor of the full amount of
the Monthly Payment on any Due Date that the Buydown Funds are available.
The Buydown Funds were not used to reduce the original principal balance of
the Mortgage Loan or to increase the Appraised Value of the Mortgage
Property when calculating the Loan-to-Value Ratios for purposes of the
Agreement and, if the Buydown Funds were provided by the Company and if
required under ▇▇▇▇▇▇ ▇▇▇ guidelines, ▇▇▇▇▇▇▇ Mac guidelines, the Company
Underwriting Guidelines with respect to Company Mortgage Loans (other than
the exceptions identified for Exception Mortgage Loans on the related
Assignment and Conveyance Agreement) or the Third-Party Underwriting
Guidelines with respect to Third-Party Mortgage Loans, the terms of the
Buydown Agreement were disclosed to the appraiser of the Mortgaged
Property;
(iii) The Buydown Funds may not be refunded to the Mortgagor unless
the Mortgagor makes a principal payment for the outstanding balance of the
Mortgage Loan;
(iv) As of the date of origination of the Mortgage Loan, the
provisions of the related Buydown Agreement complied with the ▇▇▇▇▇▇ ▇▇▇
guidelines, ▇▇▇▇▇▇▇ Mac guidelines, the Company Underwriting Guidelines
with respect to Company Mortgage Loans (other than the exceptions
identified for Exception Mortgage Loans on the related Assignment and
Conveyance Agreement) or the Third-Party Underwriting Guidelines with
respect to Third-Party Mortgage Loans regarding buydown agreements;
30
(nn) Interest Calculation. Interest on each Mortgage Loan is calculated on
the basis of a 360-day year consisting of twelve 30-day months. No Mortgage Loan
provides for interest payable on a simple interest basis. No Mortgage Loan
provides for an increase in the related Mortgage Interest Rate upon the
occurrence of an event of default under the related Mortgage Note;
(oo) Violation of Environmental Laws. There is no pending action or
proceeding directly involving any Mortgaged Property of which the Company is
aware in which compliance with any environmental law, rule or regulation is an
issue; and to the best of the Company's knowledge, nothing further remains to be
done to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(pp) Texas Refinance Mortgage Loans. Each Mortgage Loan originated in the
state of Texas pursuant to Article XVI, Section 50(a)(6) of the Texas
Constitution (a "Texas Refinance Loan") has been originated in compliance with
the provisions of Article XVI, Section 50(a)(6) of the Texas Constitution, Texas
Civil Statutes and the Texas Finance Code;
(qq) Conversion to Fixed Interest Rate. No Adjustable Rate Mortgage Loan
contains a provision permitting or requiring conversion to a fixed interest rate
Mortgage Loan;
(rr) Homeownership and Equity Protection Act. No Mortgage Loan is a High
Cost Loan or Covered Loan;
(ss) Due on Sale. The Mortgage contains an enforceable provision, to the
extent not prohibited by applicable law as of the date of such Mortgage, for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder;
(tt) Adjustments. All of the terms of the related Mortgage Note pertaining
to interest adjustments, payment adjustments and adjustments of the outstanding
principal balance, if any, are enforceable and such adjustments on such Mortgage
Loan have been made properly and in accordance with the provisions of such
Mortgage Loan;
(uu) Regarding the Mortgagor. The Mortgagor is one or more natural persons
and/or an Illinois land trust a "living trust" and such "living trust" is in
compliance with ▇▇▇▇▇▇ ▇▇▇ guidelines for such trusts;
(vv) Flood Certification Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, flood certification contract and each of these contracts
is assignable to the Purchaser and its assigns;
(ww) Cooperative Loans. With respect to each Cooperative Loan:
(i) The Cooperative Shares are held by a person as a
tenant-stockholder in a Cooperative. Each original UCC financing statement,
continuation statement or other governmental filing or recordation
necessary to create or preserve the perfection and priority of the first
lien and security interest in the Cooperative Loan and Proprietary Lease
has been timely and properly made. Any security agreement, chattel mortgage
or
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equivalent document related to the Cooperative Loan and delivered to
Purchaser or its designee establishes in Purchaser a valid and subsisting
perfected first lien on and security interest in the Mortgaged Property
described therein, and Purchaser has full right to sell and assign the
same. The Proprietary Lease term expires no less than five years after the
Mortgage Loan term or such other term acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac;
(ii) A Cooperative Lien Search has been made by a company competent to
make the same which company is acceptable to ▇▇▇▇▇▇ Mae or Fredde Mac and
qualified to do business in the jurisdiction where the Cooperative is
located;
(iii) (a) The term of the related Proprietary Lease is not less than
the terms of the Cooperative Loan; (b) there is no provision in any
Proprietary Lease which requires the Mortgagor to offer for sale the
Cooperative Shares owned by such Mortgagor first to the Cooperative; (c)
there is no prohibition in any Proprietary Lease against pledging the
Cooperative Shares or assigning the Proprietary Lease; (d) the Cooperative
has been created and exists in full compliance with the requirements for
residential cooperatives in the jurisdiction in which the Project is
located and qualifies as a cooperative housing corporation under Section
210 of the Code; (e) the Recognition Agreement is on a form published by
Aztech Document Services, Inc. or includes similar provisions; and (f) the
Cooperative has good and marketable title to the Project, and owns the
Project either in fee simple or under a leasehold that complies with the
requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; such title is free and clear of
any adverse liens or encumbrances, except the lien of any blanket mortgage;
(iv) The Company has the right under the terms of the Mortgage Note,
Pledge Agreement and Recognition Agreement to pay any maintenance charges
or assessments owed by the Mortgagor;
(v) Each Stock Power (i) has all signatures guaranteed or (ii) if all
signatures are not guaranteed, then such Cooperative Shares will be
transferred by the stock transfer agent of the Cooperative if the Company
undertakes to convert the ownership of the collateral securing the related
Cooperative Loan;
(xx) Contents of the Retained Mortgage File. The Retained Mortgage File
contains the documents listed as items 7 through 11 of Exhibit D attached
hereto;
(yy) Single Premium Credit Life Insurance. No Mortgagor was required to
purchase any credit life, disability, accident or health insurance product as a
condition of obtaining the extension of credit. No Mortgagor was required to
obtain a prepaid single premium credit life, disability, accident or health
insurance policy in connection with the origination of the Mortgage Loan. None
of the proceeds of the Mortgage Loan were used to finance single premium credit
life insurance, disability insurance, accident or similar insurance policies as
part of the origination of, or as a condition to closing, the Mortgage Loan;
(zz) Credit Reporting. With respect to each Mortgage Loan, the Company has
fully furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations,
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accurate and complete information (i.e. favorable and unfavorable) on its
borrower credit files to Equifax, Experian and Trans Union Credit Information
Company (three of the credit repositories), on a monthly basis;
(aaa) No Arbitration Provisions. No Mortgagor agreed to submit to
arbitration to resolve any dispute arising out of or relating in any way to the
related Mortgage Loan or the origination thereof;
(bbb) Anti-Money Laundering Laws. With respect to each Mortgage Loan, the
Company has complied with all applicable anti-money laundering laws and
regulations, (the "Anti-Money Laundering Laws"), and has established an
anti-money laundering compliance program as required by the applicable
Anti-Money Laundering Laws, and maintains, and will maintain, sufficient
information to identify the applicable Mortgagor for purposes of the Anti-Money
Laundering Laws;
(ccc) Prepayment Penalties. With respect to Mortgage Loans with Prepayment
Penalties, all information on the related Mortgage Loan Schedule, Data File, the
Company Underwriting Guidelines with respect to Company Mortgage Loans (other
than the exceptions identified for Exception Mortgage Loans on the related
Assignment and Conveyance Agreement) or the Third-Party Underwriting Guidelines
with respect to Third-Party Mortgage Loans regarding Prepayment Penalties is
complete and accurate in all material respects and except for Balloon Loans
originated in certain states specified in the Company Underwriting Guidelines
with respect to Company Mortgage Loans (other than the exceptions identified for
Exception Mortgage Loans on the related Assignment and Conveyance Agreement) or
the Third-Party Underwriting Guidelines with respect to Third-Party Mortgage
Loans with restrictions on collection of Prepayment Penalties, each Prepayment
Penalty is permissible and enforceable in accordance with the terms under
applicable law. Prepayment Penalties on the Mortgage Loans are applicable to
prepayments resulting from both refinancings and sales of the related Mortgaged
Properties and the terms of such Prepayment Penalties do not provide for a
waiver or release (i.e., "holidays") during the term of the Prepayment Penalty.
No Mortgage Loan originated on or after October 1, 2002 provides for the payment
of a Prepayment Penalty beyond the three-year term following the origination of
the Mortgage Loan. No Mortgage Loan originated prior to such date provides for
the payment of a Prepayment Penalty beyond the five-year term following the
origination of the Mortgage Loan;
(ddd) Leasehold Estates. With respect to Mortgage Loans that are secured by
a leasehold estate, the lease is valid, in full force and effect and conforms to
the Company Underwriting Guidelines with respect to Company Mortgage Loans
(other than the exceptions identified for Exception Mortgage Loans on the
related Assignment and Conveyance Agreement) or the Third-Party Underwriting
Guidelines with respect to Third-Party Mortgage Loans;
(eee) Georgia Fair Lending Act. No Mortgage Loan was originated on or after
October 1, 2002 and before March 7, 2003, which is secured by property located
in the State of Georgia. No Mortgage Loan originated on or after March 7, 2003
is a "High Cost Home Loan" as defined in the Georgia Fair Lending Act, as
amended;
33
(fff) Indiana. There is no Mortgage Loan that was originated on or after
January 1, 2005, which is a "high cost home loan" as defined under the Indiana
Home Loan Practices Act (I.C. 24-9); and
(ggg) Pledged Asset Mortgage Loan. With respect to a Pledged Asset Mortgage
Loan:
(i) The Pledge Holder has a rating of at least "AA" (or the
equivalent) or better from at least two Rating Agencies and the Pledge
Holder is obligated to give the beneficiary of each Letter of Credit at
least sixty (60) days notice of any non-renewal of any Letter of Credit;
(ii) The Company is the named beneficiary and no Person has drawn any
funds against such Letter of Credit;
(iii) Each Letter of Credit is for an amount at least equal to an LTV
of 20% of the lower of the purchase price or the Appraised Value of the
related Mortgaged Property;
(iv) As of the Closing Date, the Company has complied with all the
requirements of any Letter of Credit, and each Letter of Credit is a valid
and enforceable obligation of the Pledge Holder;
(v) The Company has the right to draw on each Letter of Credit if the
related Pledged Asset Mortgage Loan becomes ninety (90) days or more
delinquent and to apply such proceeds as a partial prepayment thereon;
(vi) The Company has not received notice of any non-renewal of any
Letter of Credit;
(vii) Upon a default by the Pledge Holder, the Company will have a
perfected first priority security interest in the assets pledged to secure
the Letter of Credit and will have the right to obtain possession thereof
and the right to liquidate such assets and apply the proceeds thereof to
prepay the related Pledged Asset Mortgage Loan; and
(viii) The Letter of Credit is required to be in effect (either for
its original term or through renewal) until such time as all amounts owed
under the related Pledged Asset Mortgage Loan by the related Mortgagor are
less than 80% of the lesser of the Purchase Price or the Appraised Value of
the related Mortgaged Property.
SECTION 3.03 REPURCHASE.
It is understood and agreed that the representations and warranties set
forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to
the Purchaser and the delivery of the applicable Mortgage Loan Documents to the
Custodian and shall inure to the benefit of the Purchaser hereunder,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Custodial
Mortgage File or Retained Mortgage File. Upon discovery by either the Company or
the Purchaser of a breach of any of the foregoing representations and warranties
that materially
34
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser (or that materially and adversely affects the interests of Purchaser
in the related Mortgage Loan in the case of a representation and warranty
relating to a particular Mortgage Loan), the party discovering such breach shall
give prompt written notice to the other.
Within ninety (90) days after the earlier of either discovery by or notice
to the Company of any breach of a representation or warranty which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein, the Company shall use its best efforts promptly to cure such
breach in all material respects and, if such breach cannot be cured, the Company
shall, at the Purchaser's option, repurchase such Mortgage Loan at the
Repurchase Price. In the event that a breach shall involve any representation or
warranty set forth in Section 3.01, and such breach cannot be cured within
ninety (90) days of the earlier of either discovery by or notice to the Company
of such breach, all of the Mortgage Loans shall, at the Purchaser's option, be
repurchased by the Company at the Repurchase Price. However, if the breach shall
involve a representation or warranty set forth in Section 3.02 and the Company
discovers or receives notice of any such breach within ninety (90) days of the
Closing Date, the Company shall, if the breach cannot be cured, at the
Purchaser's option and provided that the Company has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans, provided that any such
substitution shall be effected not later than one hundred twenty (120) days
after the Closing Date. Notwithstanding the foregoing, however, if a breach is a
Qualification Defect, such cure or repurchase must take place within sixty (60)
days of the discovery of or notice of such breach. Notwithstanding anything to
the contrary herein, within ninety (90) days of the earlier of either discovery
by or notice to the Company of any breach of the representations or warranties
set forth in clauses (rr), (yy) and (aaa) of Section 3.02, the Company shall
repurchase such Mortgage Loan at the Repurchase Price.
If the Company has no Qualified Substitute Mortgage Loan, it shall
repurchase the deficient Mortgage Loan within ninety (90) days after the written
notice of the breach or the failure to cure, whichever is later. Any repurchase
of a Mortgage Loan or Loans pursuant to the foregoing provisions of this Section
3.03 shall be accomplished by deposit in the Custodial Account of the amount of
the Repurchase Price for distribution to the Purchaser on the Remittance Date
immediately following the Principal Prepayment Period in which such Repurchase
Price is received, after deducting therefrom any amount received in respect of
such repurchased Mortgage Loan or Loans and being held in the Custodial Account
for future distribution.
At the time of repurchase or substitution, the Purchaser and the Company
shall arrange for the reassignment of the Deleted Mortgage Loan to the Company
and the delivery to the Company of any documents held by the Custodian relating
to the Deleted Mortgage Loan. If the Company repurchases a Mortgage Loan that is
a MERS Mortgage Loan, the Company shall cause MERS to designate on the MERS
System the removal of the purchaser as beneficial holder with respect to the
Mortgage Loan. In the event of a repurchase or substitution, the Company shall,
simultaneously with such reassignment, give written notice to the Purchaser that
such repurchase or substitution has taken place, amend the related Mortgage Loan
Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this
Agreement, and, in the case of
35
substitution, identify a Qualified Substitute Mortgage Loan and amend the
related Mortgage Loan Schedule to reflect the addition of such Qualified
Substitute Mortgage Loan to this Agreement. In connection with any such
substitution, the Company shall be deemed to have made as to such Qualified
Substitute Mortgage Loan the representations and warranties set forth in this
Agreement except that all such representations and warranties set forth in this
Agreement shall be deemed made as of the date of such substitution. The Company
shall effect such substitution by delivering to the Custodian for such Qualified
Substitute Mortgage Loan the documents required by Section 2.03, with the
Mortgage Note endorsed as required by Section 2.03. No substitution will be made
in any calendar month after the Determination Date for such month. The Company
shall deposit in the Custodial Account the Monthly Payment less the Servicing
Fee due on such Qualified Substitute Mortgage Loan or Loans in the month
following the date of such substitution. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution shall be
retained by the Company. With respect to any Deleted Mortgage Loan,
distributions to Purchaser shall include the Monthly Payment due on any Deleted
Mortgage Loan in the month of substitution, and the Company shall thereafter be
entitled to retain all amounts subsequently received by the Company in respect
of such Deleted Mortgage Loan.
For any month in which the Company substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Company shall determine the
amount (if any) by which the aggregate principal balance of all Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be distributed by the Company in the month of
substitution pursuant to Section 5.01. Accordingly, on the date of such
substitution, the Company shall deposit from its own funds into the Custodial
Account an amount equal to the amount of such shortfall.
In addition to such repurchase or substitution obligation, the Company
shall indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from a breach of
the representations and warranties contained in this Agreement. It is understood
and agreed that the obligations of the Company set forth in this Section 3.03 to
cure, substitute for or repurchase a defective Mortgage Loan and to indemnify
the Purchaser as provided in this Section 3.03 constitute the sole remedies of
the Purchaser respecting a breach of the foregoing representations and
warranties.
Any cause of action against the Company relating to or arising out of the
breach of any representations and warranties made in Sections 3.01 and 3.02
shall accrue as to any Mortgage Loan upon (i) discovery of such breach by the
Purchaser or notice thereof by the Company to the Purchaser, (ii) failures by
the Company to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Company by the Purchaser for compliance with
this Agreement.
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ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 4.01 COMPANY TO ACT AS SERVICER.
The Company, as an independent contractor, shall service and administer the
Mortgage Loans on behalf of the Purchaser and shall have full power and
authority, acting alone or through the utilization of a Subervicer or a
Subcontractor, to do any and all things in connection with such servicing and
administration which the Company may deem necessary or desirable, consistent
with the terms of this Agreement and with Accepted Servicing Practices.
Consistent with the terms of this Agreement, the Company may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if in the Company's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser, provided, however, the Company shall not make any future advances,
other than Servicing Advances, with respect to a Mortgage Loan. The Company
shall not permit any modification with respect to a Mortgage Loan that would
change the Mortgage Interest Rate, defer or forgive the payment of principal or
reduce or increase the outstanding principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan, unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Company, imminent. In
the event that no default exists or is imminent, the Company shall request
written consent from the Purchaser to permit such a modification and the
Purchaser shall provide written consent or notify the Company of its objection
to such modification within five (5) Business Days after its receipt of the
Company's request. In the event of any such modification which permits the
deferral of interest or principal payments on any Mortgage Loan, the Company
shall, on the Business Day immediately preceding the Remittance Date in any
month in which any such principal or interest payment has been deferred, deposit
in the Custodial Account from its own funds, in accordance with Section 5.03,
the difference between (a) such month's principal and one month's interest at
the Mortgage Loan Remittance Rate on the unpaid principal balance of such
Mortgage Loan and (b) the amount paid by the Mortgagor. The Company shall be
entitled to reimbursement for such advances to the same extent as for all other
advances made pursuant to Section 5.03. Without limiting the generality of the
foregoing, the Company shall continue, and is hereby authorized and empowered,
to execute and deliver on behalf of itself and the Purchaser, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties. If reasonably required by the Company, the
Purchaser shall furnish the Company with any powers of attorney and other
documents necessary or appropriate to enable the Company to carry out its
servicing and administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Company shall employ
procedures (including collection procedures) and exercise the same care that it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
and the Purchaser's reliance on the Company.
37
The Company is authorized and empowered by the Purchaser, in its own name,
when the Company believes it appropriate in its reasonable judgment to register
any Mortgage Loan on the MERS System, or cause the removal from MERS
registration of any Mortgage Loan on the MERS System, to execute and deliver, on
behalf of the Purchaser, any and all instruments of assignment and other
comparable instruments with respect to such assignment or re-recording of a
Mortgage in the name of MERS, solely as nominee for the Purchaser and its
successors and assigns.
The Company shall cause to be maintained for each Cooperative Loan a copy
of the financing statements and shall file and such financing statements and
continuation statements as necessary, in accordance with the Uniform Commercial
Code applicable in the jurisdiction in which the related Cooperative Apartment
is located, to perfect and protect the security interest and lien of the
Purchaser.
The Company may arrange for the subservicing of any Mortgage Loan it
services by a Subservicer pursuant to a Subservicing Agreement, a copy of which
shall be provided to the Purchaser; provided, however, that such subservicing
arrangement and the terms of the related Subservicing Agreement must provide for
the servicing of such Mortgage Loan in a manner consistent with the servicing
arrangements contemplated hereunder. The Company shall be solely liable for all
fees owed to the Subservicer under the Subservicing Agreement, regardless
whether the Company's compensation hereunder is adequate to pay such fees.
Notwithstanding the provisions of any Subservicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Company and a Subservicer or reference to actions taken through a Subservicer or
otherwise, the Company shall remain obligated and liable to the Purchaser for
the servicing and administration of the Mortgage Loans it services in accordance
with the provisions of this Agreement without diminution of such obligation or
liability by virtue of such Subservicing Agreements or arrangements or by virtue
of indemnification from the Subservicer and to the same extent and under the
same terms and conditions as if the Company alone were servicing and
administering those Mortgage Loans. All actions of each Subservicer performed
pursuant to the related Subservicing Agreement shall be performed as agent of
the Company with the same force and effect as if performed directly by the
Company. For purposes of this Agreement, the Company shall be deemed to have
received any collections, recoveries or payments with respect to the Mortgage
Loans it services that are received by a Subservicer regardless of whether such
payments are remitted by the Subservicer to the Company. Any Subservicing
Agreement entered into by the Company shall provide that it may be assumed or
terminated by the Purchaser, if the Purchaser has assumed the duties of the
Company, at the Purchaser's option, as applicable, without cost or obligation to
the assuming or terminating party or its assigns. Any Subservicing Agreement,
and any other transactions or services relating to the Mortgage Loans involving
a Subservicer, shall be deemed to be between the Company and such Subservicer
alone, and the Purchaser shall not be deemed parties thereto and shall have no
claims or rights of action against, rights, obligations, duties or liabilities
to or with respect to the Subservicer or its officers, directors or employees,
except as set forth in this Section 4.01.
SECTION 4.02 LIQUIDATION OF MORTGAGE LOANS.
In the event that any payment due under any Mortgage Loan and not postponed
pursuant to Section 4.01 is not paid when the same becomes due and payable, or
in the event the
38
Mortgagor fails to perform any other covenant or obligation under the Mortgage
Loan and such failure continues beyond any applicable grace period, the Company
shall take such action as (1) the Company would take under similar circumstances
with respect to a similar mortgage loan held for its own account for investment,
(2) shall be consistent with Accepted Servicing Practices, (3) the Company shall
determine prudently to be in the best interest of Purchaser, and (4) is
consistent with any related PMI Policy or LPMI Policy. In the event that any
payment due under any Mortgage Loan is not postponed pursuant to Section 4.01
and remains delinquent for a period of ninety (90) days or any other default
continues for a period of ninety (90) days beyond the expiration of any grace or
cure period, the Company shall commence foreclosure proceedings, the Company
shall notify the Purchaser in writing of the Company's intention to do so and
shall provide such information regarding the Mortgage Loan as the Purchaser
reasonably may request, provided that the Company shall cease or not commence
foreclosure proceedings if the Purchaser objects to such action. The Company
shall follow any written directions of the Purchaser with respect to the
servicing of such Mortgage Loan, as long as such directions are in accordance
with Accepted Servicing Practices and do not violate applicable law. In the
event the Purchaser objects to such foreclosure action, the Company shall not be
required to make Monthly Advances with respect to such Mortgage Loan, pursuant
to Section 5.03, and the Company's obligation to make such Monthly Advances
shall terminate on the 90th day referred to above. In such connection, the
Company shall from its own funds make all necessary and proper Servicing
Advances, provided, however, that the Company shall not be required to expend
its own funds in connection with any foreclosure or towards the restoration or
preservation of any Mortgaged Property, unless it shall determine (a) that such
preservation, restoration and/or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for
such expenses and (b) that such expenses will be recoverable by it either
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or
through Insurance Proceeds (respecting which it shall have similar priority).
Notwithstanding anything to the contrary contained herein, in connection
with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event
the Company has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector. The cost for such inspection or review shall be borne by the
Purchaser. Upon completion of the inspection or review, the Company shall
promptly provide the Purchaser with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Purchaser shall
determine how the Company shall proceed with respect to the Mortgaged Property.
In the event (a) the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes
and (b) the Purchaser directs the Company to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Company shall be reimbursed for
all reasonable costs associated with such foreclosure or acceptance of a deed in
lieu of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Company, the Company shall be entitled to be
reimbursed from amounts in the Custodial Account pursuant to Section 4.05
hereof. In the event the Purchaser directs the Company not to
39
proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the
Company shall be reimbursed for all Servicing Advances made with respect to the
related Mortgaged Property from the Custodial Account pursuant to Section 4.05
hereof.
SECTION 4.03 COLLECTION OF MORTGAGE LOAN PAYMENTS.
Continuously from the respective Cut-off Date until the principal and
interest on all Mortgage Loans are paid in full or the Mortgage Loans have been
fully liquidated (with respect to Mortgage Loans that remain subject to this
Agreement pursuant to Section 9.01 herein), in accordance with this Agreement
and Accepted Servicing Practices, the Company shall proceed diligently to
collect all payments due under each of the Mortgage Loans when the same shall
become due and payable and shall take special care in ascertaining and
estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loan and the Mortgaged Property, to the end
that the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.
SECTION 4.04 ESTABLISHMENT OF AND DEPOSITS TO CUSTODIAL ACCOUNT.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand accounts, titled "▇▇▇▇▇ Fargo Bank, N.A.,
in trust for Bank of America, National Association, its successors or assigns,
and/or subsequent purchasers of Mortgage Loans - P & I." The Custodial Account
shall be established with a Qualified Depository. Upon request of the Purchaser
and within ten (10) days thereof, the Company shall provide the Purchaser with
written confirmation of the existence of such Custodial Account. The Custodial
Account shall at all times be insured to the fullest extent allowed by
applicable law. Funds deposited in the Custodial Account may be drawn on by the
Company in accordance with Section 4.05.
The Company shall deposit in the Custodial Account within two (2) Business
Days of Company's receipt, and retain therein, the following collections
received by the Company and payments made by the Company after the Cut-off Date,
or received by the Company prior to the Cut-off Date but allocable to a period
subsequent thereto, other than payments of principal and interest due on or
before the Cut-off Date:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments (including Prepayment Penalties paid by
the Mortgagor or other amounts paid by the Company pursuant to Section 4.21
of this Agreement);
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Section 4.10 (other than proceeds to be held in the Escrow
Account and applied to the restoration or repair of the Mortgaged Property
or released to the Mortgagor in accordance with Section 4.14), Section 4.11
and Section 4.15;
40
(v) all Condemnation Proceeds which are not applied to the restoration
or repair of the Mortgaged Property or released to the Mortgagor in
accordance with Section 4.14;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 4.01, 5.03, 6.01 or 6.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Section 3.03 and all amounts required to be
deposited by the Company in connection with a shortfall in principal amount
of any Qualified Substitute Mortgage Loan pursuant to Section 3.03;
(viii) with respect to each Principal Prepayment, the Prepayment
Interest Shortfall (to be paid by the Company out of its own funds);
(ix) any amounts required to be deposited by the Company pursuant to
Section 4.11 in connection with the deductible clause in any blanket hazard
insurance policy;
(x) any amounts received with respect to or related to any REO
Property and all REO Disposition Proceeds pursuant to Section 4.16;
(xi) with respect to a Subsidy Loan, an amount from the Escrow Account
that when added to the Mortgagor's payment will equal the full monthly
amount due under the related Mortgage Note;
(xii) with respect to a Pledged Asset Mortgage Loan, any amounts
required to be deposited by the Company pursuant to Section 4.31 of this
Agreement in connection with a Letter of Credit; and
(xiii) with respect to each Buydown Mortgage Loan, an amount from the
Escrow Account that when added to the Mortgagor's payment will equal the
full monthly amount due under the related Mortgage Note.
The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Company into the Custodial Account. Any interest paid on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit of
the Company and the Company shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.05. The Company shall
maintain adequate records with respect to all deposits made pursuant to this
Section 4.04. All funds required to be deposited in the Custodial Account shall
be held in trust for the Purchaser until withdrawn in accordance with Section
4.05.
SECTION 4.05 PERMITTED WITHDRAWALS FROM CUSTODIAL ACCOUNT.
The Company shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
41
(i) to make payments to the Purchaser in the amounts and in the manner
provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances of the Company's funds
made pursuant to Section 5.03, the Company's right to reimburse itself
pursuant to this sub-clause (ii) being limited to amounts received on the
related Mortgage Loan which represent late payments of principal and/or
interest respecting which any such advance was made, it being understood
that, in the case of any such reimbursement, the Company's right thereto
shall be prior to the rights of Purchaser, except that, where the Company
is required to repurchase a Mortgage Loan pursuant to Section 3.03 or 6.02,
the Company's right to such reimbursement shall be subsequent to the
payment to the Purchaser of the Repurchase Price pursuant to such sections
and all other amounts required to be paid to the Purchaser with respect to
such Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances, and for
any unpaid Servicing Fees, the Company's right to reimburse itself pursuant
to this sub-clause (iii) with respect to any Mortgage Loan being limited to
related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and
such other amounts as may be collected by the Company from the Mortgagor or
otherwise relating to the Mortgage Loan, it being understood that, in the
case of any such reimbursement, the Company's right thereto shall be prior
to the rights of Purchaser, except that where the Company is required to
repurchase a Mortgage Loan pursuant to Section 3.03 or 6.02, in which case
the Company's right to such reimbursement shall be subsequent to the
payment to the Purchaser of the Repurchase Price pursuant to such sections
and all other amounts required to be paid to the Purchaser with respect to
such Mortgage Loan;
(iv) to pay itself interest on funds deposited in the Custodial
Account if such interest amount was previously credited;
(v) to reimburse itself for expenses incurred and reimbursable to it
pursuant to Section 8.01;
(vi) to pay any amount required to be paid pursuant to Section 4.16
related to any REO Property, it being understood that, in the case of any
such expenditure or withdrawal related to a particular REO Property, the
amount of such expenditure or withdrawal from the Custodial Account shall
be limited to amounts on deposit in the Custodial Account with respect to
the related REO Property;
(vii) to reimburse itself for any Servicing Advances or REO expenses
after liquidation of the Mortgaged Property not otherwise reimbursed above;
(viii) to remove funds inadvertently placed in the Custodial Account
by the Company;
(ix) to clear and terminate the Custodial Account upon the termination
of this Agreement; and
(x) to transfer funds to another Qualified Depository.
42
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Company shall withdraw all funds from the Custodial Account
except for those amounts which, pursuant to Section 5.01, the Company is not
obligated to remit on such Remittance Date. The Company may use such withdrawn
funds only for the purposes described in this Section 4.05. The Company shall
keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan
basis, for the purpose of justifying any withdrawal from the Custodial Account,
to the extent held by or on behalf of it, pursuant to sub-clauses (iii), (v),
(vi) and (vii) above.
SECTION 4.06 ESTABLISHMENT OF AND DEPOSITS TO ESCROW ACCOUNT.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts, in the form of time deposit or demand accounts, titled,
"▇▇▇▇▇ Fargo Bank, N.A., in trust for Bank of America, National Association, its
successors or assigns, and/or subsequent purchasers of Residential Mortgage
Loans, and various Mortgagors - T & I." The Escrow Accounts shall be established
with a Qualified Depository, in a manner which shall provide maximum available
insurance thereunder. Upon request of the Purchaser and within ten (10) days
thereof, the Company shall provide the Purchaser with written confirmation of
the existence of such Escrow Account. Funds deposited in the Escrow Account may
be drawn on by the Company in accordance with Section 4.07.
The Company shall deposit in the Escrow Account or Accounts within two (2)
Business Days of Company's receipt, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans,
for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement;
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property;
(b) all payments on account of Buydown Funds or Subsidy Funds; and
(i) all Servicing Advances for Mortgagors whose Escrow Payments are
insufficient to cover escrow disbursements.
The Company shall make withdrawals from the Escrow Account only to effect
such payments as are required under this Agreement, as set forth in Section
4.07. The Company shall be entitled to retain any interest paid on funds
deposited in the Escrow Account by the depository institution, other than
interest on escrowed funds required by law to be paid to the Mortgagor. To the
extent required by law, the Company shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes.
SECTION 4.07 PERMITTED WITHDRAWALS FROM ESCROW ACCOUNT.
Withdrawals from the Escrow Account or Accounts may be made by the Company
only:
43
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments for
the related Mortgage;
(ii) to reimburse the Company for any Servicing Advances made by the
Company pursuant to Section 4.08 with respect to a related Mortgage Loan,
but only from amounts received on the related Mortgage Loan which represent
late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan;
(iv) for transfer to the Custodial Account for application to reduce
the principal balance of the Mortgage Loan in accordance with the terms of
the related Mortgage and Mortgage Note;
(v) for application to the restoration or repair of the Mortgaged
Property in accordance with the procedures outlined in Section 4.14;
(vi) to pay to the Company, or any Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow Account;
(vii) to transfer payment on account of Buydown Funds or Subsidy Funds
to the Custodial Account, as applicable;
(viii) to remove funds inadvertently placed in the Escrow Account by
the Company; and
(ix) to clear and terminate the Escrow Account on the termination of
this Agreement.
SECTION 4.08 PAYMENT OF TAXES, INSURANCE AND OTHER CHARGES.
With respect to each Mortgage Loan, the Company shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates,
sewer rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy or LPMI Policy premiums and fire and
hazard insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges (including renewal premiums) and shall effect payment
thereof prior to the applicable penalty or termination date, employing for such
purpose deposits of the Mortgagor in the Escrow Account which shall have been
estimated and accumulated by the Company in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage. The Company assumes full
responsibility for the timely payment of all such bills and shall effect timely
payment of all such charges irrespective of each Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments, and the
Company shall make advances from its own funds to effect such payments. To the
extent that a Mortgage does not provide for Escrow Payments, the Company shall
use its reasonable efforts in accordance with Accepted Servicing Practices to
determine whether any such payments are made by the Mortgagor at the time they
first become due. The Company shall make advances from its
44
own funds to effect such delinquent payments within such time period as will
avoid the loss of the related Mortgaged Property by foreclosure of a tax or
other lien. Advances pursuant to this Section 4.08 shall constitute Servicing
Advances hereunder; provided that the Company shall be required to so advance
only to the extent that the Company, in its good faith judgment, believes the
Servicing Advance to be recoverable from Insurance Proceeds or Liquidation
Proceeds or otherwise. The costs incurred by the Company, if any, in effecting
the timely payments of taxes and assessments on the Mortgaged Properties and
related insurance premiums shall not be added to the Stated Principal Balances
of the related Mortgage Loans, notwithstanding that the terms of such Mortgage
Loans so permit.
SECTION 4.09 PROTECTION OF ACCOUNTS.
The Company may transfer the Custodial Account, Subsidy Account or the
Escrow Account to a different Qualified Depository from time to time, provided
that the Company shall give notice to the Purchaser of any proposed change of
the location of either account not later than ten (10) Business Days prior to
any change thereof.
SECTION 4.10 MAINTENANCE OF HAZARD INSURANCE.
The Company shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by an
insurer acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac against loss by fire, hazards of
extended coverage and such other hazards as are customary or required by law in
the area where the Mortgaged Property is located, in an amount which is at least
equal to the lesser of (i) 100% of the insurable value, on a replacement cost
basis, of the improvements on the related Mortgaged Property and (ii) the
greater of (a) the outstanding principal balance of the Mortgage Loan and (b) an
amount such that the proceeds thereof shall be sufficient to prevent the
Mortgagor or the loss payee from becoming a co-insurer. In the event a hazard
insurance policy shall be in danger of being terminated, or in the event the
insurer shall cease to be acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, the Company
shall notify the Purchaser and the related Mortgagor, and shall use its best
efforts, as permitted by applicable law, to obtain from another qualified
insurer a replacement hazard insurance policy substantially and materially
similar in all respects to the original policy. In no event, however, shall a
Mortgage Loan be without a hazard insurance policy at any time, subject only to
Section 4.11 hereof.
If the related Mortgaged Property is located in an area identified by the
Federal Emergency Management Agency ("FEMA") as having special flood hazards
(and such flood insurance has been made available) a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance carrier
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac in an amount representing coverage equal
to the lesser of (i) the minimum amount required, under the terms of coverage,
to compensate for any damage or loss on a replacement cost basis (or the unpaid
balance of the mortgage if replacement cost coverage is not available for the
type of building insured) and (ii) the maximum amount of insurance which is
available under the Flood Disaster Protection Act of 1973, as amended. If at any
time during the term of the Mortgage Loan, the Company determines in accordance
with applicable law and pursuant to the FEMA guides that a Mortgaged Property is
located in a special flood hazard area and is not covered by flood
45
insurance or is covered in an amount less than the amount required by the Flood
Disaster Protection Act of 1973, as amended, the Company shall notify the
related Mortgagor to obtain such flood insurance coverage, and if said Mortgagor
fails to obtain the required flood insurance coverage within forty-five (45)
days after such notification, the Company shall immediately force place the
required flood insurance on the Mortgagor's behalf. Any out-of-pocket expenses
or advance made by the Company on such force placed flood insurance coverage
shall be deemed a Servicing Advance.
If a Mortgage is secured by a unit in a condominium project, the Company
shall verify that the coverage required of the owner's association, including
hazard, flood, liability, and fidelity coverage, is being maintained in
accordance with then current ▇▇▇▇▇▇ Mae requirements, and secure from the
owner's association its agreement to notify the Company promptly of any change
in the insurance coverage or of any condemnation or casualty loss that may have
a material effect on the value of the Mortgaged Property as security.
In the event that any Purchaser or the Company shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and risks
not covered by the insurance required to be maintained by the Mortgagor pursuant
to the terms of the Mortgage, the Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the required amount of coverage for the Mortgaged Property
and if the Mortgagor does not obtain such coverage, the Company shall
immediately force place the required coverage on the Mortgagor's behalf.
All policies required hereunder shall name the Company as loss payee and
shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least thirty (30) days prior written
notice of any cancellation, reduction in amount or material change in coverage.
The Company shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent, provided, however, that the
Company shall not accept any such insurance policies from insurance companies
unless such companies are acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac and are
licensed to do business in the jurisdiction in which the Mortgaged Property is
located. The Company shall determine that such policies provide sufficient risk
coverage and amounts, that they insure the property owner, and that they
properly describe the property address. The Company shall furnish to the
Mortgagor a formal notice of expiration, in accordance with the Accepted
Servicing Practices, of any such insurance in sufficient time for the Mortgagor
to arrange for renewal coverage by the expiration date.
Pursuant to Section 4.04, any amounts collected by the Company under any
such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Company's normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05.
46
SECTION 4.11 MAINTENANCE OF MORTGAGE IMPAIRMENT INSURANCE.
In the event that the Company shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the Mortgage Loans, then, to the extent such policy (1) names
the Company as loss payee, (2) provides coverage in an amount equal to the
amount required pursuant to Section 4.10 without coinsurance and (3) otherwise
complies with Accepted Servicing Practices and all other requirements of Section
4.10, it shall conclusively be deemed to have satisfied its obligations as set
forth in Section 4.10. The Company shall prepare and make any claims on the
blanket policy as deemed necessary by the Company in accordance with Accepted
Servicing Practices. Any amounts collected by the Company under any such policy
relating to a Mortgage Loan shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05. Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with Section 4.10, and there
shall have been a loss which would have been covered by such policy, the Company
shall deposit in the Custodial Account at the time of such loss the amount not
otherwise payable under the blanket policy because of such deductible clause,
such amount to be deposited from the Company's funds, without reimbursement
therefor. Upon request of the Purchaser, the Company shall cause to be delivered
to such Purchaser a certificate of insurance and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without 30 days' prior written notice to such Purchaser.
SECTION 4.12 MAINTENANCE OF FIDELITY BOND AND ERRORS AND OMISSIONS
INSURANCE.
The Company shall maintain with responsible companies, at its own expense,
a blanket Fidelity Bond and an Errors and Omissions Insurance Policy, with broad
coverage on all officers, employees or other persons acting in any capacity
requiring such persons to handle funds, money, documents or papers relating to
the Mortgage Loans ("Company Employees"). Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker's Blanket
Bond and shall protect and insure the Company against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
Company Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy
also shall protect and insure the Company against losses in connection with the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the Company from its duties and obligations as set forth in
this Agreement. The minimum coverage under any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Upon the request of any Purchaser, the Company shall cause to be delivered to
such Purchaser a certificate of insurance for such Fidelity Bond and Errors and
Omissions Insurance Policy and a statement from the surety and the insurer that
such Fidelity Bond and Errors and Omissions Insurance Policy shall in no event
be terminated or materially modified without 30 days' prior written notice to
the Purchaser.
47
SECTION 4.13 INSPECTIONS.
If any Mortgage Loan is more than sixty (60) days delinquent, the Company
immediately shall inspect the Mortgaged Property and shall conduct subsequent
inspections in accordance with Accepted Servicing Practices or as may be
required by the primary mortgage guaranty insurer. The Company shall keep a
record of each such inspection and, upon request, shall provide the Purchaser
with such information.
SECTION 4.14 RESTORATION OF MORTGAGED PROPERTY.
The Company need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Accepted Servicing Practices. For claims greater than
$15,000, at a minimum the Company shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation Proceeds:
(i) the Company shall receive satisfactory independent verification of
completion of repairs and issuance of any required approvals with respect
thereto;
(ii) the Company shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens;
(iii) the Company shall verify that the Mortgage Loan is not in
default; and
(iv) pending repairs or restoration, the Company shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the Company is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Purchaser.
SECTION 4.15 MAINTENANCE OF PMI POLICY AND LPMI POLICY; CLAIMS.
Except as indicated on the Mortgage Loan Schedule, with respect to each
Mortgage Loan with an LTV greater than 80% at the time of origination, the
Company shall, without any cost to the Purchaser maintain in full force and
effect a PMI Policy or LPMI Policy insuring a portion of the unpaid principal
balance of the Mortgage Loan as to payment defaults. If the Mortgage Loan is
insured by a PMI Policy for which the Mortgagor pays all premiums, the coverage
will remain in place until (i) the LTV decreases to 78% or (ii) the PMI Policy
is otherwise terminated pursuant to the Homeowners Protection Act of 1998, 12
USC Section4901, et seq. In the event that such PMI Policy shall be terminated
other than as required by law, the Company shall obtain from another Qualified
Insurer a comparable replacement policy, with a total coverage equal to the
remaining coverage of such terminated PMI Policy. If the insurer shall cease to
be a Qualified Insurer, the Company shall determine whether recoveries under the
PMI Policy are jeopardized for reasons related to the financial condition of
such insurer, it being understood that the Company shall in no event have any
responsibility or liability for any failure to recover under the PMI Policy for
such reason. If the Company determines that recoveries are so jeopardized, it
48
shall notify the Purchaser and the Mortgagor, if required, and obtain from
another Qualified Insurer a replacement insurance policy. The Company will
maintain or cause to be maintained in full force and effect any LPMI Policy
issued by a Qualified Insurer with respect to each Mortgage Loan for which such
coverage is in existence or is obtained. The Purchaser shall notify the Company
of any Mortgage Loan covered under an LPMI Policy. The Company shall not take
any action which would result in noncoverage under any applicable PMI Policy or
LPMI Policy of any loss which, but for the actions of the Company would have
been covered thereunder. In connection with any assumption or substitution
agreement entered into or to be entered into pursuant to Section 6.01, the
Company shall promptly notify the insurer under the related PMI Policy or LPMI
Policy, if any, of such assumption or substitution of liability in accordance
with the terms of such PMI Policy or LPMI Policy and shall take all actions
which may be required by such insurer as a condition to the continuation of
coverage under such PMI Policy or LPMI Policy. If such PMI Policy or LPMI Policy
is terminated as a result of such assumption or substitution of liability, the
Company shall obtain a replacement PMI Policy or LPMI Policy as provided above.
In connection with its activities as servicer, the Company agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any PMI Policy or LPMI Policy in a timely fashion in accordance
with the terms of such PMI Policy or LPMI Policy and, in this regard, to take
such action as shall be necessary to permit recovery under any PMI Policy or
LPMI Policy respecting a defaulted Mortgage Loan. Pursuant to Section 4.04, any
amounts collected by the Company under any PMI Policy or LPMI Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
SECTION 4.16 TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Purchaser, or in the event the Purchaser is
not authorized or permitted to hold title to real property in the state where
the REO Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an Opinion of Counsel obtained by the Company from any attorney
duly licensed to practice law in the state where the REO Property is located.
The Person or Persons holding such title other than the Purchaser shall
acknowledge in writing that such title is being held as nominee for the
Purchaser.
The Purchaser shall have the option to manage and operate the REO Property
provided the Purchaser gives written notice of its intention to do so within
thirty (30) days after such REO Property is acquired in foreclosure or by deed
in lieu of foreclosure. The election by the Purchaser to manage the REO Property
shall not constitute a termination of any rights of the Company pursuant to
Section 11.02.
In the event the Purchaser does not elect to manage its own REO Property,
the Company shall manage, conserve, protect and operate each REO Property for
the Purchaser solely for the purpose of its prompt disposition and sale. The
Company, either itself or through an agent selected by the Company, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for its
49
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Company shall attempt to sell the same (and
may temporarily rent the same for a period not greater than one year, except as
otherwise provided below) on such terms and conditions as the Company deems to
be in the best interest of the Purchaser.
The Company shall use its best efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event within prior to
the close of the third calendar year beginning after the year in which title has
been taken to such REO Property, unless (i) a REMIC election has not been made
with respect to the arrangement under which the Mortgage Loans and the REO
Property are held, and (ii) the Company determines, and gives an appropriate
notice to the Purchaser to such effect, that a longer period is necessary for
the orderly liquidation of such REO Property. If a period longer than three
years is permitted under the foregoing sentence and is necessary to sell any REO
Property, (i) the Company shall report monthly to the Purchaser as to the
progress being made in selling such REO Property and (ii) if, with the written
consent of the Purchaser, a purchase money mortgage is taken in connection with
such sale, such purchase money mortgage shall name the Company as mortgagee, and
such purchase money mortgage shall not be held pursuant to this Agreement, but
instead a separate agreement among the Company and Purchaser shall be entered
into with respect to such purchase money mortgage.
The Company shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
The disposition of REO Property shall be carried out by the Company at such
price, and upon such terms and conditions, as the Company deems to be in the
best interests of the Purchaser. Notwithstanding any other provision in this
Section 4.05, no REO Property shall be marketed for less than the appraisal
value of the related Mortgaged Property without the prior consent of the
Purchaser, and no REO Property shall be sold for less than ninety percent (90%)
of its appraised value without the prior written consent of the Purchaser. The
proceeds of sale of the REO Property shall be promptly deposited in the
Custodial Account. As soon as practical thereafter the expenses of such sale
shall be paid and the Company shall reimburse itself for any related
unreimbursed Servicing Advances, unpaid Servicing Fees and unreimbursed advances
made pursuant to Section 5.03. On the Remittance Date immediately following the
receipt of such sale proceeds, the net cash proceeds of such sale remaining in
the Custodial Account shall be distributed to the Purchaser.
The Company shall withdraw from the Custodial Account funds necessary for
the proper operation management and maintenance of the REO Property, including
the cost of maintaining any hazard insurance pursuant to Section 4.10 and the
fees of any third party managing agent of the Company, or the Company itself.
The REO management fee shall be the greater of one percent (1%) of the gross
sales price of the REO Property or $1500.00 per REO Property, provided however,
the REO management fee shall not exceed the net Liquidation Proceeds. The
Company shall make monthly distributions on each Remittance Date to the
Purchaser of the net cash flow from the REO Property (which shall equal the
revenues from such REO Property net
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of the expenses described in this Section 4.16 and of any reserves reasonably
required from time to time to be maintained to satisfy anticipated liabilities
for such expenses).
SECTION 4.17 REAL ESTATE OWNED REPORTS.
Together with the statement furnished pursuant to Section 5.02, the Company
shall furnish to the Purchaser on or before the Remittance Date each month a
statement with respect to any REO Property covering the operation of such REO
Property for the previous month and the Company's efforts in connection with the
sale of such REO Property and any rental of such REO Property incidental to the
sale thereof for the previous month. That statement shall be accompanied by such
other information as the Purchaser shall reasonably request.
SECTION 4.18 LIQUIDATION REPORTS.
Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof
by the Purchaser pursuant to a deed in lieu of foreclosure, the Company shall
submit to the Purchaser a liquidation report with respect to such Mortgaged
Property.
SECTION 4.19 REPORTS OF FORECLOSURES AND ABANDONMENTS OF MORTGAGED
PROPERTY.
Following the foreclosure sale or abandonment of any Mortgaged Property,
the Company shall report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code. The Company shall file information reports with
respect to the receipt of mortgage interest received in a trade or business and
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property as required by the Code. Such reports shall be in form
and substance sufficient to meet the reporting requirements imposed by the Code.
SECTION 4.20 NOTIFICATION OF ADJUSTMENTS.
With respect to each Adjustable Rate Mortgage Loan, the Company shall
adjust the Mortgage Interest Rate on the related Adjustment Date in compliance
with the requirements of applicable law and the related Mortgage and Mortgage
Note. The Company shall execute and deliver any and all necessary notices
required under applicable law and the terms of the related Mortgage Note and
Mortgage regarding the Mortgage Interest Rate adjustments. Upon the discovery by
the Company or the receipt of notice from the Purchaser that the Company has
failed to adjust a Mortgage Interest Rate in accordance with the terms of the
related Mortgage Note, the Company shall immediately deposit in the Custodial
Account from its own funds the amount of any interest loss or deferral caused
the Purchaser thereby.
SECTION 4.21 CREDIT REPORTING; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ACT.
(a) The Company agrees to fully furnish, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information on its borrower credit files to Equifax, Experian, and Trans Union
Credit Information Company (three of the credit repositories), on a monthly
basis.
(b) The Company agrees to transmit full file credit reporting data for each
Mortgage Loan pursuant to ▇▇▇▇▇▇ Mae Guide Announcement 95-19 and for each
Mortgage Loan, the
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Company shall report one of the following statuses each month: new origination,
current, delinquent (30, 60, 90 days, etc.), bankruptcy, foreclosed or charged
off.
(c) The Company shall comply with Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of
1999 and all applicable regulations promulgated thereunder, relating to the
Mortgage Loans and the related borrowers and shall provide all required notices
thereunder.
SECTION 4.22 CONFIDENTIALITY/PROTECTION OF CUSTOMER INFORMATION.
The Company shall keep confidential and shall not divulge to any party,
without the Purchaser's prior written consent, the price paid by the Purchaser
for the Mortgage Loans, except to the extent that it is reasonable and necessary
for the Company to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies. Each party agrees that it shall
comply with all applicable laws and regulations regarding the privacy or
security of Customer Information and shall maintain appropriate administrative,
technical and physical safeguards to protect the security, confidentiality and
integrity of Customer Information, including maintaining security measures
designed to meet the objectives of the Interagency Guidelines Establishing
Standards for Safeguarding Customer Information, 66 Fed. Reg. 8616 (the
"Interagency Guidelines"). The Company shall promptly make available to the
Purchaser's regulators information regarding such security measures as requested
by such regulators. For purposes of this Section, the term "Customer
Information" shall have the meaning assigned to it in the Interagency
Guidelines. Each party further agrees that any Customer Information transmitted
electronically by either party must be encrypted.
SECTION 4.23 DISASTER RECOVERY/BUSINESS CONTINUITY PLAN.
The Company shall maintain contingency plans, recovery plans and proper
risk controls to ensure Company's continued performance under this Agreement.
The Company agrees to make available to the Purchaser's regulators information
regarding such plans as requested by such regulators.
SECTION 4.24 QUALITY CONTROL PROCEDURES.
The Company shall have an internal quality control program that verifies,
on a regular basis, the existence and accuracy of the legal documents, credit
documents, property appraisals, and underwriting decisions. The program shall
include evaluating and monitoring the overall quality of the Company's loan
production and the servicing activities of the Company in accordance with
industry standards.
SECTION 4.25 APPLICATION OF BUYDOWN FUNDS.
With respect to each Buydown Mortgage Loan, the Company shall have
deposited into the Escrow Account, no later than the last day of the month,
Buydown Funds in an amount equal to the aggregate undiscounted amount of
payments that, when added to the amount the Mortgagor on such Mortgage Loan is
obligated to pay on all Due Dates in accordance with the terms of the Buydown
Agreement, is equal to the full scheduled Monthly Payments which are required to
be paid by the Mortgagor under the terms of the related Mortgage Note (without
regard to the related Buydown Agreement as if the Mortgage Loan were not subject
to the terms
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of the Buydown Agreement). With respect to each Buydown Mortgage Loan, the
Company will distribute to the Purchaser on each Remittance Date an amount of
Buydown Funds equal to the amount that, when added to the amount required to be
paid on such date by the related Mortgagor, pursuant to and in accordance with
the related Buydown Agreement, equals the full Monthly Payment that would
otherwise be required to be paid on such Mortgage Loan by the related Mortgagor
under the terms of the related Mortgage Note (as if the Mortgage Loan were not a
Buydown Mortgage Loan and without regard to the related Buydown Agreement).
If the Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan
during the Buydown Period and the Mortgaged Property securing such Buydown
Mortgage Loan is sold in the liquidation thereof (either by the Company or the
insurer under any related Primary Insurance Policy) the Company shall, on the
Remittance Date following the date upon which Liquidation Proceeds or REO
Disposition proceeds are received with respect to any such Buydown Mortgage
Loan, distribute to the Purchaser all remaining Buydown Funds for such Mortgage
Loan then remaining in the Escrow Account. Pursuant to the terms of each Buydown
Agreement, any amounts distributed to the Purchaser in accordance with the
preceding sentence will be applied to reduce the outstanding principal balance
of the related Buydown Mortgage Loan. If a Mortgagor on a Buydown Mortgage Loan
prepays such Mortgage Loan in it entirety during the related Buydown Period, the
Company shall be required to withdraw from the Escrow Account any Buydown Funds
remaining in the Escrow Account with respect to such Buydown Mortgage Loan in
accordance with the related Buydown Agreement. If a principal prepayment by a
Mortgagor on a Buydown Mortgage Loan during the related Buydown Period, together
with any Buydown Funds then remaining in the Escrow Account related to such
Buydown Mortgage Loan, would result in a principal prepayment of the entire
unpaid principal balance of the Buydown Mortgage Loan, the Company shall
distribute to the Purchaser on the Remittance Date occurring in the month
immediately succeeding the month in which such Principal Prepayment is received,
all Buydown Funds related to such Mortgage Loan so remaining in the Escrow
Account, together with any amounts required to be deposited into the Custodial
Account.
SECTION 4.26 ESTABLISHMENT OF AND DEPOSITS TO SUBSIDY ACCOUNT.
(a) The Company shall segregate and hold all Subsidy Funds collected and
received pursuant to the Subsidy Loans separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Subsidy
Accounts, in the form of time deposit or demand accounts, titled "▇▇▇▇▇ Fargo
Bank, N.A., in trust for Bank of America, National Association, its successors
or assigns, and/or subsequent purchasers of Residential Mortgage Loans, and
various Mortgagors." The Subsidy Account shall be an eligible deposit account
established with an eligible institution.
(b) The Company shall, from time to time, withdraw funds from the Subsidy
Account for the following purposes:
(i) to deposit in the Custodial Account in the amounts and in the
manner provided for in Section 4.04(xi);
(ii) to transfer funds to another eligible institution in accordance
with Section 4.09 hereof;
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(iii) to withdraw funds deposited in error; and
(iv) to clear and terminate the Subsidy Account upon the termination
of this Agreement.
(c) Notwithstanding anything to the contrary elsewhere in this Agreement,
the Company may employ the Escrow Account as the Subsidy Account to the extent
that the Company can separately identify any Subsidy Funds deposited therein.
SECTION 4.27 AUTOMATED SERVICING SYSTEMS.
The Company shall establish, format, maintain and transmit to the Purchaser
the Company's electronic mortgage servicing files and other electronic data
storage and transmission systems related to the Mortgage Loans (collectively,
the "Servicing Systems") in accordance with the guidelines and requirements set
forth in Exhibit F attached hereto (the "Servicer Requirements") and the Company
shall cooperate with the Purchaser to receive data from the Purchaser that is to
be incorporated in the Servicing Systems in accordance with the Servicer
Requirements.
SECTION 4.28 PREPAYMENT PENALTIES.
To the extent consistent with the terms of this Agreement, the Company may
waive (or permit a subservicer to waive) a Prepayment Penalty only under the
following circumstances: (i) such waiver relates to a default or a reasonably
forseeable default and would, in the reasonable judgment of the Company,
maximize recovery of total proceeds, taking into account the value of such
Prepayment Penalty and the related Mortgage Loan, (ii) such waiver is required
under state or federal law or (iii) the mortgage debt has been accelerated as a
result of the Mortgagor's default in making its Monthly Payments. The Company
shall not waive any Prepayment Penalty unless it is waived in accordance with
this Section 4.28.
The Company shall pay the amount of any Prepayment Penalty (to the extent
not collected and remitted to the Purchaser) to the Purchaser or its assignees
if (1) the representation in Section 3.02(ccc) is breached and such breach
materially and adversely affects the interests of the Purchaser or its assigns,
or (2) the Company waives any Prepayment Penalty other than as permitted under
this Section 4.28. The Company shall pay the amount of such Prepayment Penalty,
for the benefit of the Purchaser or any assignee of the Purchaser, by depositing
such amount into the Custodial Account at the time that the amount prepaid on
the related Mortgage Loan is required to be deposited into the Custodial
Account.
SECTION 4.29 USE OF SUBSERVICERS AND SUBCONTRACTORS.
The Company shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Company under this
Agreement or any Reconstitution Agreement unless the Company complies with the
provisions of paragraph (a) of this Section 4.29. The Company shall not hire or
otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to
fulfill any of the obligations of the Company under this Agreement or any
Reconstitution Agreement unless the Company complies with the provisions of
paragraph (b) of this Section 4.29.
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(a) It shall not be necessary for the Company to seek the consent of the
Purchaser, the Master Servicer or any Depositor to the utilization of any
Subservicer. The Company shall cause any Subservicer used by the Company (or by
any Subservicer) for the benefit of the Purchaser and any Depositor to comply
with the provisions of this Section 4.29 and with Sections 6.04, 6.06,
9.01(e)(iii), 9.01(e)(v), 9.01(e)(vi), 9.01(e)(vii), 9.01(e)(viii) and 9.01(f)
of this Agreement to the same extent as if such Subservicer were the Company,
and to provide the information required with respect to such Subservicer under
Section 9.01(e)(iv) of this Agreement. The Company shall be responsible for
obtaining from each Subservicer and delivering to the Purchaser and any
Depositor any servicer compliance statement required to be delivered by such
Subservicer under Section 6.04 and any assessment of compliance and attestation
required to be delivered by such Subservicer under Section 6.06 and any
certification required to be delivered to the Person that will be responsible
for signing the Sarbanes Certification under Section 6.06 as and when required
to be delivered.
(b) It shall not be necessary for the Company to seek the consent of the
Purchaser, any Master Servicer or any Depositor to the utilization of any
Subcontractor. The Company shall promptly upon request provide to the Purchaser,
any Master Servicer and any Depositor (or any designee of the Depositor, such as
an administrator) a written description (in form and substance satisfactory to
the Purchaser, such Depositor and such Master Servicer) of the role and function
of each Subcontractor utilized by the Company or any Subservicer, specifying (i)
the identity of each such Subcontractor, (ii) which (if any) of such
Subcontractors are "participating in the servicing function" within the meaning
of Item 1122 of Regulation AB, and (iii) which elements of the Servicing
Criteria will be addressed in assessments of compliance provided by each
Subcontractor identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 6.06 and 9.01(f) of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation and other certifications required to be delivered by such
Subcontractor under Section 6.06, in each case as and when required to be
delivered.
SECTION 4.30 LETTER OF CREDIT COMPLIANCE.
Notwithstanding any other provision of this Agreement, the Company
shall comply with all the requirements of any Letter of Credit so as to assure
the full benefit of such Letter of Credit to the Purchaser.
SECTION 4.31 LETTER OF CREDIT DRAWS.
The Company shall take all steps necessary to make draws under any Letter
of Credit in accordance with the provisions thereof and shall draw on each
Letter of Credit all amounts payable thereunder within the time frame required
by the Letter of Credit or such shorter time within which the Company can effect
such draw (not to exceed thirty (30) calendar days)
55
following (i) the date the related Pledged Asset Mortgage Loan becomes ninety
(90) days or more delinquent or (ii) the receipt of notice of non-renewal from
the Pledge Holder at any time prior to the date on which all amounts owed under
the related Pledged Asset Mortgage Loan are less than or equal to 80% of the
Appraised Value of the related Mortgaged Property. The Company shall notify the
Purchaser promptly in writing upon receipt of notice from the Pledge Holder of
non-renewal of any Letter of Credit. Upon receipt of any amounts as a result of
a draw on a Letter of Credit because of the non-renewal of such Letter of Credit
or as a result of the Pledged Asset Mortgage Loan continuing in default for
ninety (90) or more days, the Company shall deposit such amounts in the
Custodial Account and such amount shall be treated as a payment of principal.
SECTION 4.32 ASSIGNMENT OF THE LETTER OF CREDIT.
Notwithstanding anything to the contrary in this Agreement (including,
without limitation, the termination or transfer of the servicing rights and/or
obligations of the Company pursuant to Articles X and XI hereof), the Company,
as beneficiary under any Non-Assigned Letters of Credit, shall transfer and
assign, at no cost to the Purchaser, each Non-Assigned Letter of Credit to the
Purchaser in accordance with the provisions thereof within ten (10) days of such
termination or transfer. In addition, the Company shall forward within one (1)
Business Day of receipt any notice received of non-renewal of any Letter of
Credit. Any funds received by the Company from draws on the Non-Assigned Letters
of Credit after the Company is no longer the servicer hereunder shall be
remitted promptly by the Company to the successor servicer for deposit into the
Custodial Account.
Within thirty (30) days of the related Closing Date, the Company, as
beneficiary under any Letter of Credit, shall assign each Letter of Credit in
blank and then deliver each such Letter of Credit to the Custodian.
SECTION 4.33 PLEDGE HOLDER DEFAULTS.
Upon a default under the Letter of Credit by the Pledge Holder, the Company
shall take possession of the assets securing the Letter of Credit and shall
deposit such assets or the proceeds thereof in the Custodial Account and apply
them as a prepayment of the related Pledged Asset Mortgage Loan. If such default
described in the prior sentence occurs at any time that the Company is no longer
the servicer of the related Pledged Asset Mortgage Loan, the Company shall, upon
knowledge of such default or notice from the successor servicer of such default
with respect to any Non-Assigned Letter of Credit forward such proceeds to the
successor servicer for deposit into the Custodial Account.
ARTICLE V
PAYMENTS TO PURCHASER
SECTION 5.01 REMITTANCES.
On each Remittance Date, the Company shall remit by wire transfer of
immediately available funds to the Purchaser (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net of
charges against or withdrawals from the
56
Custodial Account pursuant to Section 4.05), plus (b) all amounts, if any, which
the Company is obligated to distribute pursuant to Section 5.03, minus (c) any
amounts attributable to Principal Prepayments received after the applicable
Principal Prepayment Period which amounts shall be remitted on the following
Remittance Date, together with any additional interest required to be deposited
in the Custodial Account in connection with such Principal Prepayment in
accordance with Section 4.04(viii); and minus (d) any amounts attributable to
Monthly Payments collected but due on a Due Date or Dates subsequent to the
first day of the month of the Remittance Date, and minus (e) any amounts
attributable to Buydown Funds being held in the Custodial Account, which amounts
shall be remitted on the Remittance Date next succeeding the Due Period for such
amounts.
With respect to any remittance received by the Purchaser after the Business
Day on which such payment was due, the Company shall pay to the Purchaser
interest on any such late payment at an annual rate equal to the Prime Rate,
adjusted as of the date of each change, plus three percentage points, but in no
event greater than the maximum amount permitted by applicable law. Such interest
shall be deposited in the Custodial Account by the Company on the date such late
payment is made and shall cover the period commencing with the day following
such Business Day and ending with the Business Day on which such payment is
made, both inclusive. Such interest shall be remitted along with the
distribution payable on the next succeeding Remittance Date. The payment by the
Company of any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Company.
SECTION 5.02 STATEMENTS TO PURCHASER.
Not later than the first (1st) Business Day of each month, the Company
shall furnish to the Purchaser, with respect to the preceding month, a monthly
collection report, a monthly paid in full report that summarizes Mortgage Loans
paid in full during the related Due Period and a monthly trial balance report
that provides a trial balance as of the last day of the month preceding such
Remittance Date in electronic format agreed upon by the Company and the
Purchaser.
Not later than the fifth (5th) Business Day of each month, the Company
shall furnish to the Purchaser in either written or electronic format, a
delinquency report and a monthly remittance advice containing the information
set forth in Exhibit G, attached hereto, each in a form mutually acceptable to
the Company and the Purchaser, as to the period ending on the last day of the
preceding month.
SECTION 5.03 MONTHLY ADVANCES BY COMPANY.
No later than the close of business on the Determination Date, the Company
shall deposit in the Custodial Account from its own funds or from amounts held
for future distribution an amount equal to all Monthly Payments (with interest
adjusted to the Mortgage Loan Remittance Rate) which were due on the Mortgage
Loans during the applicable Due Period and which were delinquent at the close of
business on the immediately preceding Determination Date or which were deferred
pursuant to Section 4.01. Any amounts held for future distribution and so used
shall be replaced by the Company by deposit in the Custodial Account on or
before any future Remittance Date if funds in the Custodial Account on such
Remittance Date shall be less than payments to the Purchaser required to be made
on such Remittance Date. The Company's
57
obligation to make such Monthly Advances as to any Mortgage Loan will continue
through the last Monthly Payment due prior to the payment in full of the
Mortgage Loan, or through the last Remittance Date prior to the Remittance Date
for the distribution of all Liquidation Proceeds and other payments or
recoveries (including REO Disposition Proceeds, Insurance Proceeds and
Condemnation Proceeds) with respect to the Mortgage Loan; provided, however,
that the Company shall not make Monthly Advances or Servicing Advances if the
Company determines, in its sole reasonable opinion, that advances with respect
to such Mortgage Loan are non-recoverable by the Company from Liquidation
Proceeds, REO Disposition Proceeds, Insurance Proceeds, Condemnation Proceeds,
or otherwise with respect to a particular Mortgage Loan. In the event that the
Company determines that any such advances are non-recoverable, the Company shall
provide the Purchaser with a certificate signed by two officers of the Company
evidencing such determination. The Company shall not have an obligation to
advance amounts in respect to shortfalls relating to the Servicemembers Civil
Relief Act or similar state and local laws.
ARTICLE VI
GENERAL SERVICING PROCEDURES
SECTION 6.01 TRANSFERS OF MORTGAGED PROPERTY.
The Company shall use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Company shall, to the
extent it has knowledge of such conveyance, exercise its rights to accelerate
the maturity of such Mortgage Loan under the "due-on-sale" clause applicable
thereto, provided, however, that the Company shall not exercise such rights if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related PMI Policy, if any.
If the Company reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, the Company shall enter into (i) an
assumption and modification agreement with the person to whom such property has
been conveyed, pursuant to which such person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the event the
Company is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note and the Company has the prior consent of
the primary mortgage guaranty insurer, a substitution of liability agreement
with the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged Property
is substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Company for entering into an assumption
agreement the fee will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage Loan,
the outstanding principal amount of the Mortgage Loan nor any other material
terms shall be changed without Purchaser's consent.
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To the extent that any Mortgage Loan is assumable, the Company shall
inquire diligently into the credit worthiness of the proposed transferee, and
shall use the underwriting criteria for approving the credit of the proposed
transferee which are used with respect to underwriting mortgage loans of the
same type as the Mortgage Loan. If the credit worthiness of the proposed
transferee does not meet such underwriting criteria, the Company diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.
SECTION 6.02 SATISFACTION OF MORTGAGES AND RELEASE OF RETAINED MORTGAGE
FILES.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Company of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Company shall notify the Purchaser in the
monthly remittance advice as provided in Section 5.02, and may request the
release of any Mortgage Loan Documents.
If the Company satisfies or releases the lien of the Mortgage without first
having obtained payment in full of the indebtedness secured by the Mortgage
(other than as a result of a liquidation of the Mortgage Property pursuant to
the terms of this Agreement) or should the Company otherwise prejudice any
rights the Purchaser may have under the mortgage instruments, upon written
demand of the Purchaser, the Company shall repurchase the related Mortgage Loan
at the Repurchase Price by deposit thereof in the Custodial Account within two
(2) Business Days of receipt of such demand by the Purchaser. The Company shall
maintain the Fidelity Bond and Errors and Omissions Insurance Policy as provided
for in Section 4.12 insuring the Company against any loss it may sustain with
respect to any Mortgage Loan not satisfied in accordance with the procedures set
forth herein.
SECTION 6.03 SERVICING COMPENSATION.
As compensation for its services hereunder, the Company shall be entitled
to withdraw from the Custodial Account the amount of its Servicing Fee. The
Servicing Fee shall be payable monthly and shall be computed on the basis of the
same unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is received. The obligation of the Purchaser
to pay the Servicing Fee is limited to, and payable solely from, the interest
portion of such Monthly Payments. Notwithstanding the foregoing, with respect to
the payment of the Servicing Fee for any month, the aggregate Servicing Fee
shall be reduced (but not below zero) by an amount equal to the Prepayment
Interest Shortfall for such Remittance Date relating to the Mortgage Loans.
Additional servicing compensation in the form of assumption fees, to the
extent provided in Section 6.01, and late payment charges shall be retained by
the Company to the extent not required to be deposited in the Custodial Account.
The Company shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
SECTION 6.04 ANNUAL STATEMENT AS TO COMPLIANCE.
On or before March 1 of each calendar year, commencing in 2007, the Company
shall deliver to the Purchaser and any Depositor, or if ▇▇▇▇▇ Fargo Bank, N.A.
is the Master Servicer,
59
to the Master Servicer, a statement of compliance addressed to the Purchaser and
such Depositor or if ▇▇▇▇▇ Fargo Bank, N.A. is the Master Servicer, to the
Master Servicer, and signed by an authorized officer of the Company, to the
effect that (a) a review of the Company's activities during the immediately
preceding calendar year (or applicable portion thereof) and of its performance
under this Agreement and any applicable Reconstitution Agreement during such
period has been made under such officer's supervision, and (b) to the best of
such officers' knowledge, based on such review, the Company has fulfilled all of
its obligations under this Agreement and any applicable Reconstitution Agreement
in all material respects throughout such calendar year (or applicable portion
thereof) or, if there has been a failure to fulfill any such obligation in any
material respect, specifically identifying each such failure known to such
officer and the nature and the status thereof.
SECTION 6.05 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
Except with respect to a Securitization Transaction occurring on or after
January 1, 2006, on or before February 28, of each year beginning February 28,
2006, the Company, at its expense, shall cause a firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants to furnish a statement to each Purchaser to the effect that such
firm has examined certain documents and records relating to the servicing of the
mortgage loans similar in nature and that such firm is of the opinion that the
provisions of this or similar agreements have been complied with, and that, on
the basis of such examination conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers, nothing has come to
their attention which would indicate that such servicing has not been conducted
in compliance therewith, except for (i) such exceptions as such firm shall
believe to be immaterial, and (ii) such other exceptions as shall be set forth
in such statement. By providing the Purchaser a copy of a Uniform Single
Attestation Program Report from their independent public accountant's on an
annual basis, the Company shall be considered to have fulfilled its obligations
under this Section 6.05.
SECTION 6.06 REPORT ON ASSESSMENT OF COMPLIANCE AND ATTESTATION.
With respect to any Mortgage Loans that are the subject of a Securitization
Transaction, on or before March 1 of each calendar year, commencing in 2007, the
Company shall:
(i) deliver to the Purchaser and any Depositor or if ▇▇▇▇▇ Fargo Bank,
N.A. is the Master Servicer, to the Master Servicer, a report (in form and
substance reasonably satisfactory to the Purchaser and such Depositor and
if ▇▇▇▇▇ Fargo Bank, N.A. is the Master Servicer, to such Master Servicer)
regarding the Company's assessment of compliance with the Servicing
Criteria during the immediately preceding calendar year, as required under
Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB.
Such report shall be addressed to the Purchaser and such Depositor or if
▇▇▇▇▇ Fargo Bank, N.A. is the Master Servicer, to the Master Servicer, and
signed by an authorized officer of the Company and shall address each of
the "Applicable Servicing Criteria" specified on Exhibit H hereto (or those
Servicing Criteria otherwise mutually agreed to by the Purchaser, the
Company and any Person that will be responsible for signing any Sarbanes
Certification with respect to a Securitization Transaction in response to
evolving interpretations of Regulation AB);
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(ii) deliver to the Purchaser and any Depositor or if ▇▇▇▇▇ Fargo
Bank, N.A. is the Master Servicer, to the Master Servicer, a report of a
registered public accounting firm reasonably acceptable to the Purchaser
and such Depositor or if ▇▇▇▇▇ Fargo Bank, N.A. is the Master Servicer, to
such Master Servicer, that attests to, and reports on, the assessment of
compliance made by the Company and delivered pursuant to the preceding
paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3)
and 2-02(g) of Regulation S-X under the Securities Act and the Exchange
Act;
(iii) cause each Subservicer and each Subcontractor, determined by the
Company pursuant to Section 4.29(b) to be "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB, to deliver to
the Purchaser and any Depositor an assessment of compliance and
accountants' attestation as and when provided in paragraphs (i) and (ii) of
this Section 6.06; and
(iv) deliver, and cause each Subservicer and each Subcontractor
described in clause (iii) hereof to deliver to the Purchaser, any
Depositor, any Master Servicer and any other Person that will be
responsible for signing the certification (a "Sarbanes Certification")
required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant
to Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002) on behalf of an
asset-backed issuer with respect to a Securitization Transaction a
certification, signed by the appropriate officer, in the form attached
hereto as Exhibit I.
The Company acknowledges that the parties identified in clause (iv) above
may rely on the certification provided by the Company pursuant to such clause in
signing a Sarbanes Certification and filing such with the Commission. Neither
the Purchaser nor any Depositor or Master Servicer will request delivery of a
certification under clause (iv) above unless a Depositor or Master Servicer is
required under the Exchange Act to file an annual report on Form 10-K with
respect to an issuing entity whose asset pool includes the Mortgage Loans.
Each assessment of compliance provided by a Subservicer pursuant to Section
6.06(i) shall address each of the Servicing Criteria specified substantially in
the form of Exhibit H hereto delivered to the Purchaser concurrently with the
execution of this Agreement or, in the case of a Subservicer subsequently
appointed as such, on or prior to the date of such appointment. An assessment of
compliance provided by a Subcontractor pursuant to Section 6.06(iii) need not
address any elements of the Servicing Criteria other than those specified by the
Company pursuant to Section 4.29.
SECTION 6.07 REMEDIES.
(a) Any failure by the Company, any Subservicer, any Subcontractor or any
Third-Party Originator to deliver any information, report, certification,
accountants' letter or other material when and as required under Article IX,
Section 4.29, Section 6.04 or Section 6.06, or any breach by the Company of a
representation or warranty set forth in Section 9.01(e)(vi)(A), or in a writing
furnished pursuant to Section 9.01(e)(vi)(B) and made as of a date prior to the
closing date of the related Securitization Transaction, to the extent that such
breach is not cured by such closing date, or any breach by the Company of a
representation or warranty in a writing furnished pursuant to Section
9.01(e)(vi)(B) to the extent made as of a date subsequent to such
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closing date, shall, except as provided in sub-clause (ii) of this Section,
immediately and automatically, without notice or grace period, constitute an
Event of Default with respect to the Company under this Agreement and any
applicable Reconstitution Agreement, and shall entitle the Purchaser or any
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Company as servicer under this Agreement and/or any
applicable Reconstitution Agreement without payment (notwithstanding anything in
this Agreement or any applicable Reconstitution Agreement to the contrary) of
any compensation to the Company (and, if the Company is servicing any of the
Mortgage Loans in a Securitization Transaction, appoint a successor servicer
reasonably acceptable to any Master Servicer for such Securitization
Transaction); provided that to the extent that any provision of this Agreement
and/or any applicable Reconstitution Agreement expressly provides for the
survival of certain rights or obligations following termination of the Company
as servicer, such provision shall be given effect.
(b) Any failure by the Company, any Subservicer or any Subcontractor to
deliver any information, report, certification or accountants' letter when and
as required under Section 6.04 or Section 6.06, including any failure by the
Company to identify any Subcontractor "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB, which continues unremedied for
ten (10) calendar days after the date on which such information, report,
certification or accountants' letter was required to be delivered shall
constitute an Event of Default with respect to the Company under this Agreement
and any applicable Reconstitution Agreement, and shall entitle the Purchaser,
any Master Servicer or any Depositor, as applicable, in its sole discretion to
terminate the rights and obligations of the Company under this Agreement and/or
any applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement to the contrary) of any compensation to the Company;
provided that to the extent that any provision of this Agreement and/or any
applicable Reconstitution Agreement expressly provides for the survival of
certain rights or obligations following termination of the Company as servicer,
such provision shall be given effect.
(c) The Company shall promptly reimburse the Purchaser (or any designee of
the Purchaser), any Master Servicer and any Depositor, as applicable, for all
reasonable expenses incurred by the Purchaser (or such designee) or such
Depositor, as such are incurred, in connection with the termination of the
Company as servicer and the transfer of servicing of the Mortgage Loans to a
successor servicer. The provisions of this paragraph shall not limit whatever
rights the Purchaser or any Depositor may have under other provisions of this
Agreement and/or any applicable Reconstitution Agreement or otherwise, whether
in equity or at law, such as an action for damages, specific performance or
injunctive relief.
SECTION 6.08 RIGHT TO EXAMINE COMPANY RECORDS.
The Purchaser, or its designee, shall have the right to examine and audit
any and all of the books, records, or other information of the Company, whether
held by the Company or by another on its behalf, with respect to or concerning
this Agreement or the Mortgage Loans, during business hours or at such other
times as may be reasonable under applicable circumstances, upon reasonable
advance notice. The Purchaser shall pay its own travel expenses associated with
such examination.
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SECTION 6.09 COMPLIANCE WITH REMIC PROVISIONS.
If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, the Company shall not take
any action, cause the REMIC to take any action or fail to take (or fail to cause
to be taken) any action that, under the REMIC Provisions, if taken or not taken,
as the case may be, could (i) endanger the status of the REMIC as a REMIC or
(ii) result in the imposition of a tax upon the REMIC (including but not limited
to the tax on "prohibited transactions" as defined in Section 860F(a) (2) of the
Code and the tax on "contributions" to a REMIC set forth in Section 860G(d) of
the Code) unless the Company has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
ARTICLE VII
COMPANY TO COOPERATE
SECTION 7.01 PROVISION OF INFORMATION.
During the term of this Agreement, the Company shall furnish to the
Purchaser such periodic, special, or other reports or information, and copies or
originals of any documents contained in the Servicing File for each Mortgage
Loan provided for herein. All other special reports or information not provided
for herein as shall be necessary, reasonable, or appropriate with respect to the
Purchaser or any regulatory agency will be provided at the Purchaser's expense.
All such reports, documents or information shall be provided by and in
accordance with all reasonable instructions and directions which the Purchaser
may give. In addition, during the term of this Agreement, the Company shall
provide to the OCC and to comparable regulatory authorities supervising the
Purchaser or any of Purchaser's assigns (including beneficial owners of
securities issued in Securitization Transactions backed by the Mortgage Loans)
and the examiners and supervisory agents of the OCC and such other authorities,
access to the documentation required by applicable regulations of the OCC and
such other authorities with respect to the Mortgage Loans. Such access shall be
afforded without charge, but only upon reasonable and prior written request and
during normal business hours at the offices designated by the Company.
The Company shall execute and deliver all such instruments and take all
such action as the Purchaser may reasonably request from time to time, in order
to effectuate the purposes and to carry out the terms of this Agreement.
SECTION 7.02 FINANCIAL STATEMENTS; SERVICING FACILITY.
In connection with marketing the Mortgage Loans, the Purchaser may make
available to a prospective Purchaser a Consolidated Statement of Operations of
the Company for the most recently completed two (2) fiscal years for which such
a statement is available, as well as a Consolidated Statement of Condition at
the end of the last two (2) fiscal years covered by such Consolidated Statement
of Operations. The Company also shall make available any comparable interim
statements to the extent any such statements have been prepared by or on behalf
of the
63
Company (and are available upon request to members or stockholders of the
Company or to the public at large).
The Company also shall make available to the Purchaser or prospective
purchasers a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Company or the
financial statements of the Company, and to permit the Purchaser or any
prospective purchaser to inspect the Company's servicing facilities for the
purpose of satisfying the Purchaser or any prospective purchaser that the
Company has the ability to service the Mortgage Loans as provided in this
Agreement.
ARTICLE VIII
THE COMPANY
SECTION 8.01 INDEMNIFICATION; THIRD PARTY CLAIMS.
The Company shall indemnify the Purchaser (an "Indemnified Party") and hold
them harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that the Indemnified Party may sustain in
any way related to the failure of the Company to perform its duties and service
the Mortgage Loans in strict compliance with the terms of this Agreement. The
Company immediately shall notify the Purchaser if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans, assume (with the
prior written consent of the Purchaser) the defense of any such claim and pay
all expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
the Purchaser in respect of such claim. The Company shall follow any written
instructions received from the Purchaser in connection with such claim. The
Purchaser promptly shall reimburse the Company for all amounts advanced by it
pursuant to the preceding sentence except when the claim is in any way related
to the Company's indemnification pursuant to Section 3.03, or the failure of the
Company to service and administer the Mortgage Loans in strict compliance with
the terms of this Agreement.
SECTION 8.02 MERGER OR CONSOLIDATION OF THE COMPANY.
The Company shall keep in full effect its existence, rights and franchises
and shall obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement or any of the Mortgage Loans and
to perform its duties under this Agreement.
Any person into which the Company may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding, provided, however, that
the successor or surviving Person shall be an institution (i) having a GAAP net
worth of not less than $15,000,000 and (ii) which is a ▇▇▇▇▇▇ ▇▇▇/▇▇▇▇▇▇▇
Mac-approved company in good standing. Furthermore, in the event the Company
transfers or otherwise disposes of all or substantially all
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of its assets to an affiliate of the Company, such affiliate shall satisfy the
condition above, and shall also be fully liable to the Purchaser for all of the
Company's obligations and liabilities hereunder.
SECTION 8.03 LIMITATION ON LIABILITY OF COMPANY AND OTHERS.
Neither the Company nor any of the directors, officers, employees or agents
of the Company shall be under any liability to the Purchaser for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment, provided, however, that this
provision shall not protect the Company or any such person against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with any standard of care set forth in this Agreement or
any other liability which would otherwise be imposed under this Agreement. The
Company and any director, officer, employee or agent of the Company may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Company
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans in
accordance with this Agreement and which in its opinion may involve it in any
expense or liability, provided, however, that the Company may, with the consent
of the Purchaser, undertake any such action which it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto. In such event, the Company shall be entitled to reimbursement from the
Purchaser of the reasonable legal expenses and costs of such action, unless any
such costs result from a breach of the Company's representations and warranties
made herein or its failure to perform its obligations in strict compliance with
this Agreement.
SECTION 8.04 LIMITATION ON RESIGNATION AND ASSIGNMENT BY COMPANY.
The Purchaser has entered into this Agreement with the Company and
subsequent purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Company, and the representations as to the adequacy of
its servicing facilities, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore, the
Company shall neither assign this Agreement or the servicing rights hereunder or
delegate its rights or duties hereunder (other than pursuant to Section 4.01) or
any portion hereof or sell or otherwise dispose of all of its property or assets
without the prior written consent of the Purchaser, which consent shall not be
unreasonably withheld.
The Company shall not resign from the obligations and duties hereby imposed
on it except by mutual consent of the Company and the Purchaser or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company's responsibilities and obligations hereunder in the manner provided in
Section 12.01.
Without in any way limiting the generality of this Section 8.04, in the
event that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or
65
delegate its rights or duties hereunder (other than pursuant to Section 4.01) or
any portion hereof or sell or otherwise dispose of all or substantially all of
its property or assets, without the prior written consent of the Purchaser, then
the Purchaser shall have the right to terminate this Agreement upon notice given
as set forth in Section 10.01, without any payment of any penalty or damages and
without any liability whatsoever to the Company or any third party.
ARTICLE IX
REMOVAL OF MORTGAGE LOANS FROM AGREEMENT
SECTION 9.01 REMOVAL OF MORTGAGE LOANS FROM INCLUSION UNDER THIS AGREEMENT.
The Purchaser and the Company agree that with respect to some or all of the
Mortgage Loans, the Purchaser, at its sole option, may effect Whole Loan
Transfers, Agency Transfers or Securitization Transactions, retaining the
Company as the servicer thereof or subservicer if a master servicer is employed,
or as applicable the "seller/servicer." In the event that any Mortgage Loan
transferred pursuant to this Section 9.01 is rejected by the transferee, the
Company shall continue to service such rejected Mortgage Loan on behalf of the
Purchaser in accordance with the terms and provisions of this Agreement.
The Company shall cooperate with the Purchaser in connection with each
Whole Loan Transfer, Agency Transfer or Securitization Transaction in accordance
with this Section 9.01; provided that no such Whole Loan Transfer, Agency
Transfer or Securitization Transaction shall create a greater obligation or cost
on the part of the Company than otherwise set forth in this Agreement. In
connection therewith:
(a) the Company shall make all representations and warranties with respect
to the Mortgage Loans as of the Closing Date and with respect to the Company
itself as of the closing date of each Whole Loan Transfer, Agency Transfer or
Securitization Transaction;
(b) the Company shall negotiate in good faith and execute any
seller/servicer agreements required by the shelf registrant to effectuate the
foregoing;
(c) the Company shall make representations and warranties (1) that the
Company has serviced the Mortgage Loans in accordance with the terms of this
Agreement, provided accurate statements to the Purchaser pursuant to Section
5.02 of this Agreement, and otherwise complied with all covenants and
obligations hereunder and, (2) that the Company has taken no action nor omitted
to take any required action the omission of which would have the effect of
impairing any mortgage insurance or guarantee on the Mortgage Loans;
(d) the Company shall:
(i) provide such additional representations, warranties, covenants,
opinions of counsel or certificates of officers of the Company as are
reasonably believed necessary by the trustee, any rating agency or the
Purchaser, as the case may be, in connection with such Whole Loan Transfers
or Agency Transfers. The Purchaser shall pay all third party costs
associated with the preparation of such information;
66
(ii) execute any seller/servicer agreements required within a
reasonable period of time after receipt of such seller/servicer agreements
which time shall be sufficient for the Company and the Company's counsel to
review such seller/servicer agreements. Under this Agreement, the Company
shall retain a Servicing Fee for each Mortgage Loan at a Servicing Fee
Rate; and
(iii) at any time as required by any Rating Agency, provide such
additional documents from the related Retained Mortgage File to the
Custodian as may be required by such Rating Agency.
(e) in connection with any Securitization Transaction, the Company shall
(1) within five (5) Business Days following request by the Purchaser or any
Depositor, provide to the Purchaser and such Depositor (or, as applicable, cause
each Third-Party Originator and each Subservicer to provide), in writing and in
form and substance reasonably satisfactory to the Purchaser and such Depositor,
the information and materials specified in paragraphs (i), (ii), (iii) and (vii)
of this subsection (e), and (2) as promptly as practicable following notice to
or discovery by the Company, provide to the Purchaser and any Depositor (in
writing and in form and substance reasonably satisfactory to the Purchaser and
such Depositor) the information specified in paragraph (iv) of this subsection
(e).
(i) If so requested by the Purchaser or any Depositor, the Company
shall provide such information regarding (1) the Company, as originator of
the Mortgage Loans (including as an acquirer of Mortgage Loans from a
Qualified Correspondent), or (2) each Third-Party Originator, and (3) as
applicable, each Subservicer, as is requested for the purpose of compliance
with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation AB. Such
information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and how
long the originator has been engaged in originating residential
mortgage loans, which description shall include a discussion of the
originator's experience in originating mortgage loans of a similar
type as the Mortgage Loans; information regarding the size and
composition of the originator's origination portfolio; and information
that may be material, in the good faith judgment of the Purchaser or
any Depositor, to an analysis of the performance of the Mortgage
Loans, including the originators' credit-granting or underwriting
criteria for mortgage loans of similar type(s) as the Mortgage Loans
and such other information as the Purchaser or any Depositor may
reasonably request for the purpose of compliance with Item 1110(b)(2)
of Regulation AB;
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the Company,
each Third-Party Originator and each Subservicer; and
(D) a description of any affiliation or relationship (of a type
described in Item 1119 of Regulation AB) between the Company, each
Third-Party
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Originator, each Subservicer and any of the following parties to a
Securitization Transaction, as such parties are identified to the
Company by the Purchaser or any Depositor in writing in advance of a
Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(ii) If so requested by the Purchaser or any Depositor, the Company
shall provide (or, as applicable, cause each Third-Party Originator to
provide) Static Pool Information with respect to the mortgage loans (of a
similar type as the Mortgage Loans, as reasonably identified by the
Purchaser as provided below) originated by (1) the Company, if the Company
is an originator of Mortgage Loans (including as an acquirer of Mortgage
Loans from a Qualified Correspondent), and/or (2) each Third-Party
Originator. Such Static Pool Information shall be prepared by the Company
(or Third-Party Originator) on the basis of its reasonable, good faith
interpretation of the requirements of Item 1105(a)(1)-(3) of Regulation AB.
To the extent that there is reasonably available to the Company (or
Third-Party Originator) Static Pool Information with respect to more than
one mortgage loan type, the Purchaser or any Depositor shall be entitled to
specify whether some or all of such information shall be provided pursuant
to this paragraph. The content of such Static Pool Information may be in
the form customarily provided by the Company, and need not be customized
for the Purchaser or any Depositor. Such Static Pool Information for each
vintage origination year or prior securitized pool, as applicable, shall be
presented in increments no less frequently than quarterly over the life of
the mortgage loans included in the vintage origination year or prior
securitized pool. The most recent periodic increment must be as of a date
no later than 135 days prior to the date of the prospectus or other
offering document in which the Static Pool Information is to be included or
incorporated by reference. The Static Pool Information shall be provided in
an electronic format that provides a permanent record of the information
provided, such as a portable document format (pdf) file, or other such
electronic format reasonably required by the Purchaser or the Depositor, as
applicable.
Promptly following notice or discovery of a material error in Static
Pool Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be
provided pursuant to such paragraph), the Company shall provide corrected
Static Pool Information to the Purchaser or any Depositor, as applicable,
in the same format in which Static Pool Information was previously provided
to such party by the Company.
If so requested by the Purchaser or any Depositor, the Company shall
provide (or, as applicable, cause each Third-Party Originator to provide),
at the expense of the
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requesting party (to the extent of any additional incremental expense
associated with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants reasonably acceptable to
the Purchaser or Depositor, as applicable, pertaining to Static Pool
Information relating to prior securitized pools for securitizations closed
on or after January 1, 2006 or, in the case of Static Pool Information with
respect to the Company's or Third-Party Originator's originations or
purchases, to calendar months commencing January 1, 2006, as the Purchaser
or such Depositor shall reasonably request. Such statements and letters
shall be addressed to and be for the benefit of such parties as the
Purchaser or such Depositor shall designate, which may include, by way of
example, any sponsor, any Depositor and any broker dealer acting as
underwriter, placement agent or initial purchaser with respect to a
Securitization Transaction. Any such statement or letter may take the form
of a standard, generally applicable document accompanied by a reliance
letter authorizing reliance by the addressees designated by the Purchaser
or such Depositor.
(iii) If so requested by the Purchaser or any Depositor, the Company
shall provide such information regarding the Company, as servicer of the
Mortgage Loans, and each Subservicer (each of the Company and each
Subservicer, for purposes of this paragraph, a "Servicer"), as is requested
for the purpose of compliance with Items 1108, 1117 and 1119 of Regulation
AB. Such information shall include, at a minimum:
(A) the Servicer's form of organization;
(B) a description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the Servicer's
experience in servicing assets of any type as well as a more detailed
discussion of the Servicer's experience in, and procedures for, the
servicing function it will perform under this Agreement and any
Reconstitution Agreements; information regarding the size, composition
and growth of the Servicer's portfolio of residential mortgage loans
of a type similar to the Mortgage Loans and information on factors
related to the Servicer that may be material, in the good faith
judgment of the Purchaser or any Depositor, to any analysis of the
servicing of the Mortgage Loans or the related asset-backed
securities, as applicable, including, without limitation:
(1) whether any prior securitizations of mortgage loans of a
type similar to the Mortgage Loans involving the Servicer have
defaulted or experienced an early amortization or other
performance triggering event because of servicing during the
three-year period immediately preceding the related
Securitization Transaction;
(2) the extent of outsourcing the Servicer utilizes;
(3) whether there has been previous disclosure of material
noncompliance with the applicable Servicing Criteria with respect
to other securitizations of residential mortgage loans involving
the Servicer as a servicer during the three-year period
immediately preceding the related Securitization Transaction;
69
(4) whether the Servicer has been terminated as servicer in
a residential mortgage loan securitization, either due to a
servicing default or to application of a servicing performance
test or trigger; and
(5) such other information as the Purchaser or any Depositor
may reasonably request for the purpose of compliance with Item
1108(b)(2) of Regulation AB;
(C) a description of any material changes during the three-year
period immediately preceding the related Securitization Transaction to
the Servicer's policies or procedures with respect to the servicing
function it will perform under this Agreement and any Reconstitution
Agreements for mortgage loans of a type similar to the Mortgage Loans;
(D) information regarding the Servicer's financial condition, to
the extent that there is a material risk that an adverse financial
event or circumstance involving the Servicer could have a material
adverse effect on the performance by the Company of its servicing
obligations under this Agreement or any Reconstitution Agreement;
(E) information regarding advances made by the Servicer on the
Mortgage Loans and the Servicer's overall servicing portfolio of
residential mortgage loans for the three-year period immediately
preceding the related Securitization Transaction, which may be limited
to a statement by an authorized officer of the Servicer to the effect
that the Servicer has made all advances required to be made on
residential mortgage loans serviced by it during such period, or, if
such statement would not be accurate, information regarding the
percentage and type of advances not made as required, and the reasons
for such failure to advance;
(F) a description of the Servicer's processes and procedures
designed to address any special or unique factors involved in
servicing loans of a similar type as the Mortgage Loans;
(G) a description of the Servicer's processes for handling
delinquencies, losses, bankruptcies and recoveries, such as through
liquidation of mortgaged properties, sale of defaulted mortgage loans
or workouts;
(H) information as to how the Servicer defines or determines
delinquencies and charge-offs, including the effect of any grace
period, re-aging, restructuring, partial payments considered current
or other practices with respect to delinquency and loss experience;
(I) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the
Servicer; and
(J) a description of any affiliation or relationship between the
Servicer and any of the following parties to a Securitization
Transaction, as such parties
70
are identified to the Servicer by the Purchaser or any Depositor in
writing in advance of a Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(iv) For the purpose of satisfying the reporting obligation under the
Exchange Act with respect to any class of asset-backed securities, the
Company shall (or shall cause each Subservicer and Third-Party Originator
to) (1) provide prompt notice to the Purchaser, any Master Servicer and any
Depositor in writing of (A) any material litigation or governmental
proceedings involving the Company, any Subservicer or any Third-Party
Originator, (B) any affiliations or relationships that develop following
the closing date of a Securitization Transaction between the Company, any
Subservicer or any Third-Party Originator and any of the parties specified
in Section 9.01(e)(i)(D) (and any other parties identified in writing by
the requesting party) with respect to such Securitization Transaction, (C)
any Event of Default under the terms of this Agreement or any
Reconstitution Agreement, (D) any merger, consolidation or sale of
substantially all of the assets of the Company, and (E) the Company's entry
into an agreement with a Subservicer to perform or assist in the
performance of any of the Company's obligations under this Agreement or any
Reconstitution Agreement and (2) provide to the Purchaser and any Depositor
a description of such proceedings, affiliations or relationships.
(v) As a condition to the succession to the Company or any Subservicer
as servicer or Subservicer under this Agreement or any Reconstitution
Agreement by any Person (i) into which the Company or such Subservicer may
be merged or consolidated, or (ii) which may be appointed as a successor to
the Company or any Subservicer, the Company shall provide to the Purchaser
and any Depositor, at least fifteen (15) calendar days prior to the
effective date of such succession or appointment, (x) written notice to the
Purchaser and any Depositor of such succession or appointment and (y) in
writing and in form and substance reasonably satisfactory to the Purchaser
and such Depositor, all information reasonably requested by the Purchaser
or any Depositor in order to comply with is reporting obligation under Item
6.02 of Form 8-K with respect to any class of asset-backed securities.
(vi) (A) The Company shall be deemed to represent to the Purchaser, to
any Master Servicer and to any Depositor, as of the date on which
information is first provided to the Purchaser, any Master Servicer or any
Depositor under this Section 9.01(e) that, except as disclosed in writing
to the Purchaser, such Master Servicer or such Depositor prior to such
date: (1) the Company is not aware and has not received notice that any
default, early amortization or other performance triggering event has
occurred as
71
to any other securitization due to any act or failure to act of the
Company; (2) the Company has not been terminated as servicer in a
residential mortgage loan securitization, either due to a servicing default
or to application of a servicing performance test or trigger; (3) no
material noncompliance with the applicable Servicing Criteria with respect
to other securitizations of residential mortgage loans involving the
Company as servicer has been disclosed or reported by the Company; (4) no
material changes to the Company's policies or procedures with respect to
the servicing function it will perform under this Agreement and any
Reconstitution Agreement for mortgage loans of a type similar to the
Mortgage Loans have occurred during the three-year period immediately
preceding the related Securitization Transaction; (5) there are no aspects
of the Company's financial condition that could have a material adverse
effect on the performance by the Company of its servicing obligations under
this Agreement or any Reconstitution Agreement; (6) there are no material
legal or governmental proceedings pending (or known to be contemplated)
against the Company, any Subservicer or any Third-Party Originator; and (7)
there are no affiliations, relationships or transactions relating to the
Company, any Subservicer or any Third-Party Originator with respect to any
Securitization Transaction and any party thereto identified by the related
Depositor of a type described in Item 1119 of Regulation AB.
(B) If so requested by the Purchaser, any Master Servicer or any
Depositor on any date following the date on which information is first
provided to the Purchaser, any Master Servicer or any Depositor under
this Section 9.01(e), the Company shall, within five (5) Business Days
following such request, confirm in writing the accuracy of the
representations and warranties set forth in sub clause (A) above or,
if any such representation and warranty is not accurate as of the date
of such request, provide reasonably adequate disclosure of the
pertinent facts, in writing, to the requesting party.
(vii) In addition to such information as the Company, as servicer, is
obligated to provide pursuant to other provisions of this Agreement, not
later than ten (10) days prior to the deadline for the filing of any
distribution report on Form 10-D in respect of any Securitization
Transaction that includes any of the Mortgage Loans serviced by the Company
or any Subservicer, the Company or such Subservicer, as applicable, shall,
to the extent the Company or such Subservicer has knowledge, provide to the
party responsible for filing such report (including, if applicable, the
Master Servicer) notice of the occurrence of any of the following events
along with all information, data, and materials related thereto as may be
required to be included in the related distribution report on Form 10-D (as
specified in the provisions of Regulation AB referenced below):
(A) any material modifications, extensions or waivers of pool
asset terms, fees, penalties or payments during the distribution
period or that have cumulatively become material over time (Item
1121(a)(11) of Regulation AB);
(B) material breaches of pool asset representations or warranties
or transaction covenants (Item 1121(a)(12) of Regulation AB); and
72
(C) information regarding new asset-backed securities issuances
backed by the same pool assets, any pool asset changes (such as,
additions, substitutions or repurchases), and any material changes in
origination, underwriting or other criteria for acquisition or
selection of pool assets (Item 1121(a)(14) of Regulation AB).
(viii) The Company shall provide to the Purchaser, any Master Servicer
and any Depositor, evidence of the authorization of the person signing any
certification or statement, copies or other evidence of Fidelity Bond
Insurance and Errors and Omission Insurance policy, financial information
and reports, and such other information related to the Company or any
Subservicer or the Company or such Subservicer's performance hereunder.
(f) The Company shall indemnify the Purchaser, each affiliate of the
Purchaser, and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person (including, but not
limited to, any Master Service, if applicable) responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction; each broker dealer acting as underwriter,
placement agent or initial purchaser, each Person who controls any of such
parties or the Depositor (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act); and the respective present and former
directors, officers, employees, agents and affiliates of each of the foregoing
and of the Depositor (each, an "Indemnified Party"), and shall hold each of them
harmless from and against any claims, losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any other
costs, fees and expenses that any of them may sustain arising out of or based
upon:
(i) (A) any untrue statement of a material fact contained or alleged
to be contained in any information, report, data, certification,
accountants' letter or other material provided under Sections 4.29,
6.04(ii), 6.06, 9.01(d) and (e) by or on behalf of the Company, or provided
under Sections 4.29, 6.04(ii), 6.06, 9.01(d) and (e) by or on behalf of any
Subservicer, Subcontractor or Third-Party Originator (collectively, the
"Company Information"), or (B) the omission or alleged omission to state in
the Company Information a material fact required to be stated in the
Company Information or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, by way of clarification, that clause (B) of this
paragraph shall be construed solely by reference to the Company Information
and not to any other information communicated in connection with a sale or
purchase of securities, without regard to whether the Company Information
or any portion thereof is presented together with or separately from such
other information;
(ii) any breach by the Company of its obligations under this Section
9.01(e), including particularly any failure by the Company, any
Subservicer, any Subcontractor or any Third-Party Originator to deliver any
information, report, certification, accountants' letter or other material
when and as required under Sections 4.29, 6.04(ii), 6.06, 9.01(d) and (e),
including any failure by the Company to identify any Subcontractor
73
"participating in the servicing function" within the meaning of Item 1122
of Regulation AB;
(iii) any breach by the Company of a representation or warranty set
forth in Section 9.01(e)(vi)(A) or in a writing furnished pursuant to
Section 9.01(e)(vi)(B) and made as of a date prior to the closing date of
the related Securitization Transaction, to the extent that such breach is
not cured by such closing date, or any breach by the Company of a
representation or warranty in a writing furnished pursuant to Section
9.01(e)(vi)(B) to the extent made as of a date subsequent to such closing
date; or
(iv) the negligence, bad faith or willful misconduct of the Company in
connection with its performance under Sections 4.29, 6.04, 6.06 or 9.01(e).
If the indemnification provided for herein is unavailable or
insufficient to hold harmless an Indemnified Party, then the Company agrees
that it shall contribute to the amount paid or payable by such Indemnified
Party as a result of any claims, losses, damages or liabilities incurred by
such Indemnified Party in such proportion as is appropriate to reflect the
relative fault of such Indemnified Party on the one hand and the Company on
the other.
In the case of any failure of performance described in sub-clause (ii)
of this Section 9.01(f), the Company shall promptly reimburse the
Purchaser, any Depositor, as applicable, and each Person responsible for
the preparation, execution or filing of any report required to be filed
with the Commission with respect to such Securitization Transaction, or for
execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d)
under the Exchange Act with respect to such Securitization Transaction, for
all costs reasonably incurred by each such party in order to obtain the
information, report, certification, accountants' letter or other material
not delivered as required by the Company, any Subservicer, any
Subcontractor or any Third-Party Originator.
This indemnification shall survive the termination of this Agreement
or the termination of any party to this Agreement.
(g) The Purchaser and each Person who controls the Purchaser (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act)
shall indemnify the Company, each affiliate of the Company, each Person who
controls any of such parties or the Company (within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act) and the respective
present and former directors, officers, employees and agents of each of the
foregoing and of the Company, and shall hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
(i) any untrue statement of a material fact contained or alleged to be
contained in any offering materials related to a Securitization
Transaction, including without limitation the registration statement,
prospectus, prospectus supplement, any private placement memorandum, any
offering circular, any computational materials, and
74
any amendments or supplements to the foregoing (collectively, the
"Securitization Materials"); or
(ii) the omission or alleged omission to state in the Securitization
Materials a material fact required to be stated in the Securitization
Materials or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission is other than a statement or
omission arising out of, resulting from, or based upon the Company
Information.
This indemnification shall survive the termination of this Agreement
or the termination of any party to this Agreement.
(h) the Company shall cooperate with the Purchaser in servicing the
Mortgage Loans in accordance with the usual and customary requirements of any
credit enhancement, risk management and other service providers and shall
otherwise cooperate with the Purchaser in connection with such third party
service providers and the provision of third party services relating to a
Securitization Transaction; provided, however, that such requirements are
reasonably acceptable to the Company and pose no greater risk, obligation or
expense to the Company than otherwise set forth in this Agreement. Any
additional costs and/or expenses will be paid by the requesting party.
The Purchaser and the Company acknowledge and agree that the purpose of
Section 9.01(e) is to facilitate compliance by the Purchaser and any Depositor
with the provisions of Regulation AB and related rules and regulations of the
Commission. Although Regulation AB is applicable by its terms only to offerings
of asset-backed securities that are registered under the Securities Act, the
Company acknowledges that investors in privately offered securities may require
that the Purchaser or any Depositor provide comparable disclosure in
unregistered offerings. References in this Agreement to compliance with
Regulation AB also apply to comparable disclosure in private offerings.
Neither the Purchaser nor any Depositor shall exercise its right to request
delivery of information or other performance under these provisions other than
in good faith, or for purposes other than compliance with the Securities Act,
the Exchange Act and the rules and regulations of the Commission thereunder (or
the provision in a private offering of disclosure comparable to that required
under the Securities Act). The Company acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agrees to comply with requests made by the Purchaser, any Master Servicer or any
Depositor in good faith for delivery of information under these provisions on
the basis of evolving interpretations of Regulation AB. In connection with any
Securitization Transaction, the Company shall cooperate fully with the Purchaser
and any Master Servicer to deliver to the Purchaser (including any of its
assignees or designees), any Master Servicer and any Depositor, any and all
statements, reports, certifications, records and any other information necessary
in the good faith determination of the Purchaser, the Master
75
Servicer or any Depositor to permit the Purchaser, such Master Servicer or such
Depositor to comply with the provisions of Regulation AB, together with such
disclosures relating to the Company, any Subservicer, any Third-Party Originator
and the Mortgage Loans, or the servicing of the Mortgage Loans, reasonably
believed by the Purchaser or any Depositor to be necessary in order to effect
such compliance.
The Purchaser (including any of its assignees or designees) shall cooperate
with the Company by providing timely notice of requests for information under
this Article IX and by reasonably limiting such requests to information
necessary, in the Purchaser's reasonable judgment, to comply with Regulation AB.
In the event the Purchaser has elected to have the Company hold record
title to the Mortgages, prior to the Reconstitution Date the Company shall
prepare an Assignment of Mortgage in blank for each Mortgage Loan that is a part
of a Whole Loan Transfer or Agency Transfer or prepare an Assignment of Mortgage
in blank or to the trustee from the Company acceptable to the trustee for each
Mortgage Loan that is part of a Securitization Transaction. The Purchaser shall
pay all preparation and recording costs associated therewith if the Assignments
of Mortgage have been previously prepared and recorded in Purchaser's name. The
Company shall execute each Assignment of Mortgage, track such Assignments of
Mortgage to ensure they have been recorded and deliver them as required by the
trustee upon the Company's receipt thereof. Additionally, the Company shall
prepare and execute, at the direction of the Purchaser, any note endorsements in
connection with any and all seller/servicer agreements. If required at any time
by a rating agency, Purchaser or successor purchaser in connection with any
Whole Loan Transfer, Agency Transfer or Securitization Transaction, the Company
shall deliver such additional document from its Retained Mortgage File within
ten (10) days to the Custodian, successor purchaser or other designee of the
Purchaser as said rating agency, Purchaser or successor purchaser may require.
All Mortgage Loans (i) not sold or transferred pursuant to Whole Loan
Transfers, Agency Transfers or Securitization Transactions or (ii) that are
subject to a Securitization for which the related trust is terminated for any
reason, shall remain subject to this Agreement and shall continue to be serviced
in accordance with the terms of this Agreement and with respect thereto this
Agreement shall remain in full force and effect.
ARTICLE X
DEFAULT
SECTION 10.01 EVENTS OF DEFAULT.
Each of the following shall constitute an Event of Default on the part of
the Company:
(i) any failure by the Company to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues
unremedied for a period of one (1) Business Day after the date upon which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Company by the Purchaser; or
76
(ii) failure by the Company duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Company
set forth in this Agreement or in the Custody Agreement which continues
unremedied for a period of thirty (30) days, except as otherwise provided
in Section 6.07, after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Company by
the Purchaser or by the Custodian; or
(iii) failure by the Company to maintain its license to do business in
any jurisdiction where the Mortgaged Property is located if such license is
required; or
(iv) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Company and such decree or order shall have remained in force
undischarged or unstayed for a period of sixty (60) days; or
(v) the Company shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling
of assets and liabilities or similar proceedings of or relating to the
Company or of or relating to all or substantially all of its property; or
(vi) the Company shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization statute, make an
assignment for the benefit of its creditors, voluntarily suspend payment of
its obligations or cease its normal business operations for three (3)
Business Days; or
(vii) the Company ceases to meet the qualifications of a ▇▇▇▇▇▇
▇▇▇/▇▇▇▇▇▇▇ Mac servicer; or
(viii) the Company attempts to assign its right to servicing
compensation hereunder or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any
portion thereof in violation of Section 8.04; or
(ix) an Event of Default as defined in Section 6.07.
If the Company obtains knowledge of an Event of Default, the Company shall
promptly notify the Purchaser. In each and every such case, so long as an Event
of Default shall not have been remedied, in addition to whatever rights the
Purchaser may have at law or equity to damages, including injunctive relief and
specific performance, the Purchaser, by notice in writing to the Company, may
terminate all the rights and obligations of the Company under this Agreement and
in and to the Mortgage Loans and the proceeds thereof.
Upon receipt by the Company of such written notice, all authority and power
of the Company under this Agreement, whether with respect to the Mortgage Loans
or otherwise, shall pass to and be vested in the successor appointed pursuant to
Section 12.01. Upon written request from any Purchaser, the Company shall
prepare, execute and deliver to the successor entity
77
designated by the Purchaser any and all documents and other instruments, place
in such successor's possession all Retained Mortgage Files, and do or cause to
be done all other acts or things necessary or appropriate to effect the purposes
of such notice of termination, including but not limited to the transfer and
endorsement or assignment of the Mortgage Loans and related documents, all at
the Company's sole expense. The Company shall cooperate with the Purchaser and
such successor in effecting the termination of the Company's responsibilities
and rights hereunder, including without limitation, the transfer to such
successor for administration by it of all cash amounts which shall at the time
be credited by the Company to the Custodial Account or Subsidy Account or Escrow
Account or thereafter received with respect to the Mortgage Loans.
SECTION 10.02 WAIVER OF DEFAULTS.
By a written notice, the Purchaser may waive any default by the Company in
the performance of its obligations hereunder and its consequences. Upon any
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE XI
TERMINATION
SECTION 11.01 TERMINATION.
This Agreement shall terminate upon either: (i) the later of the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of any REO Property with respect to the last
Mortgage Loan and the remittance of all funds due hereunder; or (ii) mutual
consent of the Company and the Purchaser in writing. The representations and
warranties and indemnification provisions contained herein shall survive the
termination of this Agreement.
Upon written request from the Purchaser in connection with any such
termination, the Company shall prepare, execute and deliver, any and all
documents and other instruments, place in the Purchaser's possession all
Retained Mortgage Files, and do or accomplish all other acts or things necessary
or appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at the Company's sole expense. The Company
agrees to cooperate with the Purchaser and such successor in effecting the
termination of the Company's responsibilities and rights hereunder as servicer,
including, without limitation, the transfer to such successor for administration
by it of all cash amounts which shall at the time be credited by the Company to
the Custodial Account or Subsidy Account or Escrow Account or thereafter
received with respect to the Mortgage Loans.
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SECTION 11.02 TERMINATION WITHOUT CAUSE.
The Purchaser may terminate, at its sole option, any rights the Company may
have hereunder, without cause as provided in this Section 11.02. Any such notice
of termination shall be in writing and delivered to the Company by registered
mail as provided in Section 12.05.
The Company shall be entitled to receive, as liquidated damages, upon the
transfer of the servicing rights, an amount equal to 2.25% of the aggregate
outstanding principal amount of the transferred Mortgage Loans as of the
termination date.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.01 SUCCESSOR TO COMPANY.
Prior to termination of the Company's responsibilities and duties under
this Agreement pursuant to Sections 8.04, 10.01, 11.01 (ii) or pursuant to
Section 11.02 the Purchaser shall, (i) succeed to and assume all of the
Company's responsibilities, rights, duties and obligations under this Agreement,
or (ii) appoint a successor having the characteristics set forth in Section 8.02
and which shall succeed to all rights and assume all of the responsibilities,
duties and liabilities of the Company under this Agreement prior to the
termination of Company's responsibilities, duties and liabilities under this
Agreement. In connection with such appointment and assumption, the Purchaser may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree. In the event that the
Company's duties, responsibilities and liabilities under this Agreement should
be terminated pursuant to the aforementioned sections, the Company shall
discharge such duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective date thereof with the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor. The resignation or
removal of the Company pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01
and shall in no event relieve the Company of the representations and warranties
made pursuant to Sections 3.01 and 3.02 and the remedies available to the
Purchaser under Section 3.03, it being understood and agreed that the provisions
of such Sections 3.01, 3.02, 3.03 and 8.01 shall be applicable to the Company
notwithstanding any such sale, assignment, resignation or termination of the
Company, or the termination of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Company and to the Purchaser an instrument accepting such
appointment, wherein the successor shall acknowledge and assume the Company's
obligation with respect to each Pledged Asset Mortgage Loan, warrant that the
related pledge has been transferred without interference of other liens or loss
of the existing lien and make the representations and warranties set forth in
Section 3.01, except for subsection (h) with respect to the sale of the Mortgage
Loans and subsections (i) and (k) thereof, whereupon such successor shall become
fully vested with all the rights, powers, duties, responsibilities, obligations
and liabilities of the Company, with like effect as if originally named as a
party to this Agreement. Any termination or resignation of the
79
Company or termination of this Agreement pursuant to Sections 8.04, 10.01, 11.01
or 11.02 shall not affect any claims that any Purchaser may have against the
Company arising out of the Company's actions or failure to act prior to any such
termination or resignation.
The Company shall deliver promptly to the successor servicer the funds in
the Custodial Account, Subsidy Account and Escrow Account and all Retained
Mortgage Files and related documents and statements held by it hereunder and the
Company shall account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably be required to more fully
and definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Company.
If the Company is terminated pursuant to Sections 8.04 and 10.01, the
Purchaser shall be entitled to be reimbursed from the Company for all costs
associated with the transfer of servicing, including, without limitation, any
costs or expenses associated with the complete transfer of all servicing data
and the completion, correction or manipulation of such servicing data as may be
required by the Purchaser to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Purchaser to service the Mortgage
Loans properly and effectively.
Upon a successor's acceptance of appointment as such, the Company shall
notify by mail the Purchaser of such appointment in accordance with the
procedures set forth in Section 12.05.
SECTION 12.02 AMENDMENT.
This Agreement may be amended from time to time by written agreement signed
by the Company and the Purchaser.
SECTION 12.03 GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the State
of New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
Each of the Company and the Purchaser hereby knowingly, voluntarily and
intentionally waives any and all rights it may have to a trial by jury in
respect of any litigation based on, or arising out of, under, or in connection
with this Agreement, or any other documents and instruments executed in
connection herewith, or any course of conduct, course of dealing, statements
(whether oral or written), or actions of the Company or the Purchaser. This
provision is a material inducement for the Purchaser to enter into this
Agreement.
SECTION 12.04 ARBITRATION.
In the event a claim or controversy arises concerning the interpretation or
enforcement of the terms of this Agreement, the Purchaser and the Company agree
that such claim or controversy may be settled by final, binding arbitration if
the Purchaser and the Company, as applicable, consent to such arbitration at the
time such claim or controversy arises which consent may be withheld by the
Purchaser or the Company in each party's sole discretion.
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SECTION 12.05 DURATION OF AGREEMENT.
This Agreement shall continue in existence and effect until terminated as
herein provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.
SECTION 12.06 NOTICES.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
(i) if to the Company with respect to servicing issues:
▇▇▇▇▇ Fargo Bank, N.A.
1 Home Campus
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, MAC X2401-042
Fax: 515/▇▇▇-▇▇▇▇
if to the Company with respect to all other issues:
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Structured Finance Manager, MAC X3906-012
Fax: (▇▇▇)▇▇▇-▇▇▇▇
In each instance with a copy to:
▇▇▇▇▇ Fargo Bank, N.A.
1 Home Campus
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel MAC X2401-06T
or such other address as may hereafter be furnished to the Purchaser in
writing by the Company;
(ii) if to Purchaser:
Bank of America, National Association
Hearst Tower
NC1-027-21-04
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Managing Director
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
81
or such other address as may hereafter be furnished to the Company in
writing by the Purchaser;
SECTION 12.07 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement.
SECTION 12.08 RELATIONSHIP OF PARTIES.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of the
Company shall be rendered as an independent contractor and not as agent for the
Purchaser.
SECTION 12.09 EXECUTION; SUCCESSORS AND ASSIGNS.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 8.04, this Agreement
shall inure to the benefit of and be binding upon the Company and the Purchaser
and their respective successors and assigns.
SECTION 12.10 RECORDATION OF ASSIGNMENTS OF MORTGAGE.
To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Company's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 12.11 ASSIGNMENT BY PURCHASER.
The Purchaser shall have the right, without the consent of the Company to
assign, in whole or in part, its interest under this Agreement with respect to
some or all of the Mortgage Loans, and designate any person to exercise any
rights of the Purchaser hereunder, by executing an Assignment, Assumption and
Recognition Agreement, and the assignee or designee shall accede to the rights
and obligations hereunder of the Purchaser with respect to such Mortgage Loans.
All references to the Purchaser in this Agreement shall be deemed to include its
assignee or designee. In the event the Purchaser assigns this Agreement, and the
assignee assumes any and all of the Purchaser's obligations hereunder, the
Company acknowledges and agrees to look solely to such assignee, and not the
Purchaser, for performance of the obligations so assumed and the Purchaser shall
be relieved from any liability to the Company with respect thereto.
82
SECTION 12.12 SOLICITATION OF MORTGAGOR.
Neither party shall, after the related Closing Date, take any action to
solicit the refinancing of any Mortgage Loan. It is understood and agreed that
neither (i) promotions undertaken by either party or any affiliate which are
directed to the general public at large, including, without limitation, mass
mailings based upon commercially acquired mailing lists, newspaper, radio,
television advertisements nor (ii) serving the refinancing needs of a Mortgagor
who, without solicitation, contacts either party in connection with the
refinance of such Mortgage or Mortgage Loan, shall constitute solicitation under
this Section.
SECTION 12.13 FURTHER AGREEMENTS.
The Purchaser and the Company each agree to execute and deliver to the
other such additional documents, instruments or agreements as may be necessary
or appropriate to effectuate the purposes of this Agreement.
SECTION 12.14 CONFIDENTIAL INFORMATION.
The Company shall keep confidential and shall not divulge to any party,
without the Purchaser's prior written consent, the price paid by the Purchaser
for the Mortgage Loans, except to the extent that it is reasonable and necessary
for the Company to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies.
SECTION 12.15 COUNTERPARTS.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 12.16 EXHIBITS.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
SECTION 12.17 GENERAL INTERPRETIVE PRINCIPLES.
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to them
in this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
83
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) a reference to a Subsection without further reference to a Section is a
reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular provision;
and
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
SECTION 12.18 REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
SECTION 12.19 BUYDOWN LOAN AGGREGATE LIMITATION.
The aggregate outstanding principal balance of all Buydown Mortgage Loans
in a Loan Package (the "Actual Buydown Balance") shall not, at any time, be
greater than an amount equal to one-half percent (1/2%) of the aggregate
outstanding principal balance of all Mortgage Loans in such Loan Package (the
"Buydown Limit"). In the event that, at any time, the Actual Buydown Balance is
greater than an amount equal to the Buydown Limit, the Company shall, upon the
request of the Purchaser, repurchase at the Repurchase Price within (10)
Business Days of such request any Buydown Mortgage Loan(s) in such Loan Package;
provided, however, that the Actual Buydown Balance immediately after such
repurchase shall be no greater than the Buydown Loan Limit. The Company shall
promptly provide notice to the Purchaser whenever the Actual Buydown Balance is
greater than the Buydown Limit.
84
SECTION 12.20 THIRD-PARTY BENEFICIARY.
Each Master Servicer shall be considered a third-party beneficiary of this
Agreement, entitled to all the rights and benefits hereof as if it were a direct
party to this Agreement.
[Intentionally Blank - Next Page Signature Page]
85
IN WITNESS WHEREOF, the Company and the Purchaser have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
BANK OF AMERICA, NATIONAL ▇▇▇▇▇ FARGO BANK, N.A.
ASSOCIATION, PURCHASER COMPANY
By: /s/ ▇▇▇▇▇ ▇. Good By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------- ------------------------------------
Name: ▇▇▇▇▇ ▇. Good Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President Title: Vice President
[Signature page to Second Amended and Restated Master Seller's Warranties
and Servicing Agreement]
STATE OF MARYLAND )
) ss:
COUNTY OF ▇▇▇▇▇▇▇▇▇ )
On the 19th day of May, 2006 before me, a Notary Public in and for said
State, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, known to me to be Vice President of
▇▇▇▇▇ Fargo Bank, N.A., the national banking association that executed the
within instrument and also known to me to be the person who executed it on
behalf of said bank, and acknowledged to me that such bank executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the
day and year in this certificate first above written.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Notary Public
My Commission expires January 21, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ )
) ss:
COUNTY OF MECKLENBURG )
On the 19th day of May, 2006 before me, a Notary Public in and for said
State, personally appeared ▇▇▇▇▇ ▇. Good, known to me to be the Vice President
of Bank of America, National Association, the national banking association that
executed the within instrument and also known to me to be the person who
executed it on behalf of said bank, and acknowledged to me that such bank
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the
day and year in this certificate first above written.
E. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Notary Public
My Commission expires October 4, 2010
EXHIBIT A
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this _____ day of __________ 20___, FOR GOOD AND VALUABLE CONSIDERATION,
THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, ▇▇▇▇▇ FARGO BANK,
N.A. (the "Seller") as the Seller under that certain Second Amended and Restated
Master Mortgage Loan Purchase Agreement, ("Purchase Agreement") and as the
Company under that certain Second Amended and Restated Master Seller's
Warranties and Servicing Agreement (the "Servicing Agreement") each dated as of
May 1, 2006, (collectively, the "Agreements"), the terms of which are
incorporated by reference herein, does hereby sell, transfer, assign, set over
and convey to Bank of America, National Association as the Purchaser (the
"Purchaser") under the Agreements, and Purchaser hereby accepts from Seller,
without recourse, but subject to the terms of the Agreements, all right, title
and interest of, in and to each of the (i) Company Mortgage Loans listed on the
related Mortgage Loan Schedule attached hereto as Schedule I, (ii) Exception
Mortgage Loans, identifying the related exceptions, listed on the Mortgage Loan
Schedule attached hereto as Schedule II and (iii) Third-Party Mortgage Loans
listed on the Mortgage Loan Schedule attached hereto as Schedule III
(collectively, the "Mortgage Loan"), together with the Custodial Mortgage Files
and all rights and obligations arising under the documents contained therein.
Pursuant to Section 2.03 of the Servicing Agreement, the Seller has delivered to
the Custodian the documents REQUIRED TO BE DELIVERED UNDER THE AGREEMENTS for
each Mortgage Loan to be purchased. The Servicing Files and the Retained
Mortgage Files retained by the Seller pursuant to Section 2.01 of the Servicing
Agreement shall be appropriately marked to clearly reflect the sale of the
related Mortgage Loans to the Purchaser.
The Company hereby makes the representations and warranties set forth in
Section 3.01 and for each of the Mortgage Loans, Section 3.02 of the Servicing
Agreement as of the date hereof.
Attached hereto as Exhibit A is a copy of the Third-Party Underwriting
Guidelines relating to the Third-Party Mortgage Loans listed on the Mortgage
Loan Schedule attached hereto as Schedule III.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreements.
BANK OF AMERICA, ▇▇▇▇▇ FARGO BANK, N.A.
NATIONAL ASSOCIATION
PURCHASER COMPANY
By: By:
---------------------------------- -----------------------------------
Name: Name:
-------------------------------- ---------------------------------
Title: Title:
------------------------------- --------------------------------
Exhibit A-1
SCHEDULE I
COMPANY MORTGAGE LOANS
MORTGAGE LOAN SCHEDULE
Exhibit A-2
SCHEDULE II
EXCEPTION MORTGAGE LOANS
MORTGAGE LOAN SCHEDULE
Exhibit A-3
SCHEDULE III
THIRD-PARTY MORTGAGE LOANS
MORTGAGE LOAN SCHEDULE
Exhibit A-4
EXHIBIT A
THIRD-PARTY UNDERWRITING GUIDELINES
Exhibit A-5
EXHIBIT B
FORM OF
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
____________, 20__
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (this "Agreement"), dated
___________________, 20__ among _________________, a _________________
corporation having an office at _________________ ("Assignor") and
_________________, having an office at _________________ ("Assignee") and ▇▇▇▇▇
Fargo Bank, N.A. (the "Company"), having an office at ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇:
For and in consideration of the sum of one dollar ($1.00) and other valuable
consideration the receipt and sufficiency of which are hereby acknowledged, and
of the mutual covenants herein contained, the parties hereto hereby agree as
follows:
1. The Assignor hereby grants, transfers and assigns to Assignee all of the
right, title and interest of Assignor, as Purchaser, in, to and under (i) that
certain Seller's Warranties and Servicing Agreement (the "Seller's Warranties
and Servicing Agreement"), dated as of _________________, by and between
_________________ (the "Purchaser"), and _________________ (the "Company"), (ii)
that certain Mortgage Loan Purchase Agreement (the "Mortgage Loan Purchase
Agreement" and, together with the Seller's Warranties and Servicing Agreement,
the "Purchase and Servicing Agreements"), dated as of _______, by and between
the Purchaser and the Company, (iii) the mortgage loans delivered thereunder by
the Company to the Assignor set forth on Exhibit 1 attached hereto (the
"Mortgage Loans"), and (iv) that certain Custody Agreement (the "Custody
Agreement" and, together with the Purchase and Servicing Agreements, the
"Assigned Agreements"), dated as of _________________, by and among the
Purchaser and _________________ (the "Custodian").
Simultaneously with the execution of this Agreement, on the date hereof, the
Assignee shall pay to the Assignor for each Mortgage Loan the purchase price as
calculated pursuant to the [Commitment Letter], dated as of _______, 200_ (the
"[Commitment Letter]"), by and between the Assignee and the Assignor. The
Assignee shall pay the purchase price payable under the Commitment Letter by
wire transfer of immediately available funds to the account specified by the
Assignor. The Assignee shall be entitled to (i) all payments and other
recoveries of principal on the Mortgage Loans received after ______, 200_ or
such other date mutually agreeable to the Assignor and the Assignee (the
"Mortgage Loans Cut-off Date") and (ii) all payments of interest on the Mortgage
Loans at the related Mortgage Loan Remittance Rate.
2. The Assignor warrants and represents to, and covenants with, the Assignee
that:
a. The Assignor is the lawful owner of the Mortgage Loans with the full
right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
Exhibit B-1
b. The Assignor has not received notice of, and has no knowledge of, any
offsets, counterclaims or other defenses available to the Company with respect
to the Assigned Agreements or the Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver under, or agreed to
any amendment or other modification of, the Assigned Agreements, the Custody
Agreement or the Mortgage Loans, including without limitation the transfer of
the servicing obligations under the Seller's Warranties and Servicing Agreement.
The Assignor has no knowledge of, and has not received notice of, any waivers
under or amendments or other modifications of, or assignments of rights or
obligations under, the Purchase and Servicing Agreements or the Mortgage Loans;
and
d. Neither the Assignor nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
from, or otherwise approached or negotiated with respect to the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of the Mortgage Loans under the Securities Act of 1933
(the "1933 Act") or which would render the disposition of the Mortgage Loans a
violation of Section 5 of the 1933 Act or require registration pursuant thereto.
3. That Assignee warrants and represent to, and covenants with, the Assignor and
the Company pursuant to Section 12.10 of the Seller's Warranties and Servicing
Agreement that:
a. The Assignee agrees to be bound, as Purchaser, by all of the terms,
covenants and conditions of the Seller's Warranties and Servicing Agreement, the
Mortgage Loans and the Custody Agreement, and from and after the date hereof,
the Assignee assumes for the benefit of each of the Company and the Assignor all
of the Assignor's obligations as purchaser thereunder;
b. The Assignee understands that the Mortgage Loans have not been
registered under the 1933 Act or the securities laws of any state;
c. The purchase price being paid by the Assignee for the Mortgage Loans are
in excess of $250,000.00 and will be paid by cash remittance of the full
purchase price within 60 days of the sale;
d. The Assignee is acquiring the Mortgage Loans for investment for its own
account only and not for any other person. In this connection, neither the
Assignee nor any person authorized to act therefor has offered to sell the
Mortgage Loans by means of any general advertising or general solicitation
within the meaning of Rule 502(c) of U.S. Securities and Exchange Commission
Regulation D, promulgated under the 1933 Act;
e. The Assignee considers itself a substantial sophisticated institutional
investor having such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of investment in the
Mortgage Loans;
Exhibit B-2
f. The Assignee has been furnished with all information regarding the
Mortgage Loans that it has requested from the Assignor or the Company;
g. Neither the Assignee nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accepted a transfer, pledge or other disposition of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
from, or otherwise approached or negotiated with respect to the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security with, any
person in any manner which would constitute a distribution of the Mortgage Loans
under the 1933 Act or which would render the disposition of the Mortgage Loans a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
nor will it act, nor has it authorized or will it authorize any person to act,
in such manner with respect to the Mortgage Loans; and
h. Either (1) the Assignee is not an employee benefit plan ("Plan") within
the meaning of section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") or a plan (also a "Plan") within the meaning of
section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and the
Assignee is not directly or indirectly purchasing the Mortgage Loans on behalf
of, investment manager of, as named fiduciary of, as Trustee of, or with assets
of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not result
in a prohibited transaction under section 406 of ERISA or section 4975 of the
Code.
i. The Assignee's address for purposes of all notices and correspondence
related to the Mortgage Loans and the Assigned Agreements is:
_________________________
_________________________
_________________________
Attention:
The Assignee's wire transfer instructions for purposes of all remittances and
payments related to the Mortgage Loans and the Seller's Warranties and Servicing
Agreement is:
_________________________
_________________________
Attention:
Exhibit B-3
4. From and after the date hereof, the Company shall note the transfer of the
Mortgage Loans to the Assignee in its books and records, the Company shall
recognize the Assignee as the owner of the Mortgage Loans and the Company shall
service the Mortgage Loans for the benefit of the Assignee pursuant to the
Seller's Warranties and Servicing Agreement, the terms of which are incorporated
herein by reference. It is the intention of the Assignor, the Company and the
Assignee that the Assigned Agreements shall be binding upon and inure to the
benefit of the Company and the Assignee and their respective successors and
assigns.
[Signatures Follow]
Exhibit B-4
IN WITNESS WHEREOF, the parties have caused this Assignment, Assumption and
Recognition Agreement to be executed by their duly authorized officers as of the
date first above written.
Assignor Assignee
By: By:
---------------------------------- ----------------------------------
Name: Name:
-------------------------------- --------------------------------
Its: Its:
---------------------------------- ---------------------------------
Taxpayer Identification No.: _________ Taxpayer Identification No.: _________
Acknowledged this ___ day of ________________ 20___
▇▇▇▇▇ FARGO BANK, N.A.
Company
By:
----------------------------------
Name:
--------------------------------
Exhibit B-5
EXHIBIT C
CUSTODY AGREEMENT
Exhibit C-1
EXHIBIT D
CONTENTS OF EACH RETAINED MORTGAGE FILE, CUSTODIAL
MORTGAGE FILE AND SERVICING FILE
With respect to each Mortgage Loan, the Retained Mortgage File and Custodial
Mortgage File shall include each of the following items, which shall be
available for inspection by the Purchaser and any prospective Purchaser, and
which shall be retained by the Company in the Retained Mortgage File or
Servicing File or delivered to the Custodian pursuant to Sections 2.01 and 2.03
of the Master Seller's Warranties and Servicing Agreement to which this Exhibit
is attached (the "Agreement"):
WITH RESPECT TO EACH CUSTODIAL MORTGAGE FILE:
1. (a) The original Mortgage Note bearing all intervening endorsements, endorsed
"Pay to the order of without recourse" and signed in the name of the Company by
an authorized officer (in the event that the Mortgage Loan was acquired by the
Company in a merger, the signature must be in the following form: "[Company],
successor by merger to [name of predecessor]"; and in the event that the
Mortgage Loan was acquired or originated by the Company while doing business
under another name, the signature must be in the following form: "[Company],
formerly known as [previous name]"). The Mortgage Note must contain all
necessary intervening endorsements showing a complete chain of endorsement from
the originator (each such endorsement being sufficient to transfer all right,
title and interest of the party so endorsing, as noteholder or assignee thereof,
in and to that Mortgage Note); or
(b) With respect to no more than 1% of the unpaid principal balance of the
Mortgage Loans as of the related Cut-off Date, a certified copy of the Mortgage
Note (endorsed as provided above) together with a lost note affidavit, providing
indemnification to the holder thereof for any losses incurred due to the fact
that the original Mortgage Note is missing.
2. the originals or certified true copies of any document sent for recordation
of all assumption, modification, consolidation or extension agreements, with
evidence of recording thereon.
3. The original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording (except for the insertion of the name of the
assignee and recording information). The Assignment of Mortgage must be duly
recorded only if recordation is either necessary under applicable law or
commonly required by private institutional mortgage investors in the area where
the Mortgaged Property is located or on direction of the Purchaser. If the
Assignment of Mortgage is to be recorded, the Mortgage shall be assigned to the
Purchaser. If the Assignment of Mortgage is not to be recorded, the Assignment
of Mortgage shall be delivered in blank. If the Mortgage Loan was acquired by
the Company in a merger, the Assignment of Mortgage must be made by "[Company],
successor by merger to [name of predecessor]." If the Mortgage Loan was acquired
or originated by the Company while doing business under another name, the
Assignment of Mortgage must be by "[Company], formerly know as [previous name]."
Subject to the foregoing and where permitted under the applicable laws of the
jurisdiction wherein the Mortgaged property is located, such Assignments of
Exhibit D-1
Mortgage may be made by blanket assignments for Mortgage Loans secured by the
Mortgaged Properties located in the same county. If the related Mortgage has
been recorded in the name of Mortgage Electronic Registration Systems, Inc.
("MERS") or its designee, no Assignment of Mortgage will be required to be
prepared or delivered and instead, the Company shall take all actions as are
necessary to cause the Purchaser to be shown as the owner of the related
Mortgage Loan on the records of MERS for purposes of the system of recording
transfers of beneficial ownership of mortgages maintained by MERS.
4. The original of any guarantee executed in connection with the Mortgage Note
(if any).
5. Original or certified copy of power of attorney, if applicable.
6. For each Pledged Asset Mortgage Loan, an Assigned Letter of Credit.
WITH RESPECT TO EACH RETAINED MORTGAGE FILE:
7. For any Mortgage Loan not recorded in the name of MERS, the original
Mortgage, with evidence of recording thereon or a certified true and correct
copy of the Mortgage sent for recordation. If in connection with any Mortgage
Loan, the Company cannot deliver or cause to be delivered the original Mortgage
with evidence of recording thereon on or prior to the Closing Date because of a
delay caused by the public recording office where such Mortgage has been
delivered for recordation or because such Mortgage has been lost or because such
public recording office retains the original recorded Mortgage, the Company
shall deliver or cause to be delivered to the Custodian, a photocopy of such
Mortgage, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the Company stating that such
Mortgage has been dispatched to the appropriate public recording office for
recordation and that the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and complete copy of the
original recorded Mortgage will be promptly delivered to the Custodian upon
receipt thereof by the Company; or (ii) in the case of a Mortgage where a public
recording office retains the original recorded Mortgage or in the case where a
Mortgage is lost after recordation in a public recording office, a copy of such
Mortgage certified by such public recording office or by the title insurance
company that issued the title policy to be a true and complete copy of the
original recorded Mortgage.
8. For any Mortgage Loan not recorded in the name of MERS, originals or
certified true copies of documents sent for recordation of all intervening
assignments of the Mortgage with evidence of recording thereon, or if any such
intervening assignment has not been returned from the applicable recording
office or has been lost or if such public recording office retains the original
recorded assignments of mortgage, the Company shall deliver or cause to be
delivered to the Custodian, a photocopy of such intervening assignment, together
with (i) in the case of a delay caused by the public recording office, an
Officer's Certificate of the Company stating that such intervening assignment of
mortgage has been dispatched to the appropriate public recording office for
recordation and that such original recorded intervening assignment of mortgage
or a copy of such intervening assignment of mortgage certified by the
appropriate public recording office or by the title insurance company that
issued the title policy to be a true and complete copy
Exhibit D-2
of the original recorded intervening assignment of mortgage will be promptly
delivered to the Custodian upon receipt thereof by the Company; or (ii) in the
case of an intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an intervening
assignment is lost after recordation in a public recording office, a copy of
such intervening assignment certified by such public recording office to be a
true and complete copy of the original recorded intervening assignment.
9. The original mortgagee policy of title insurance (or in the case of any
Mortgage Loan secured by a Mortgaged Property located in a jurisdiction where
such policies are generally not available, an opinion of counsel of the type
customarily rendered in such jurisdiction in lieu of title insurance).
10. Any security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.
11. For each Cooperative Loan, the original or a seller certified true copy of
the following:
The original Pledge Agreement entered into by the Mortgagor with
respect to such Cooperative Loan;
UCC-3 assignment in blank (or equivalent instrument), sufficient under
the laws of the jurisdiction where the related Cooperative Apartment is located
to reflect of record the sale and assignment of the Cooperative Loan to the
Purchaser;
Original assignment of Pledge Agreement in blank showing a complete
chain of assignment from the originator of the related Cooperative Loan to the
Company;
Original Form UCC-1 and any continuation statements with evidence of
filing thereon with respect to such Cooperative Loan;
Cooperative Shares with a Stock Certificate in blank attached;
Original Proprietary Lease;
Original Assignment of Proprietary Lease, in blank, and all
intervening assignments thereof;
Original recognition agreement of the interests of the mortgagee with
respect to the Cooperative Loan by the Cooperative, the stock of which was
pledged by the related Mortgagor to the originator of such Cooperative Loan; and
Originals of any assumption, consolidation or modification agreements
relating to any of the items specified above.
With respect to each Mortgage Loan, the Servicing File shall include each of the
following items to the extent in the possession of the Company or in the
possession of the Company's agent(s):
Exhibit D-3
12. The original hazard insurance policy and, if required by law, flood
insurance policy, in accordance with Section 4.10 of the Agreement.
13. Fully executed residential loan application.
14. Fully executed Mortgage Loan closing statement (Form HUD-1) and any other
truth in lending or real estate settlement procedure forms required by law.
15. Verification of employment and income, unless originated under the Company's
Limited Documentation program, ▇▇▇▇▇▇ Mae Timesaver Plus.
16. Verification of acceptable evidence of source and amount of down payment.
17. Credit report on the Mortgagor.
18. Residential Appraisal report.
19. Photograph of the Mortgaged Property.
20. Survey of the Mortgaged Property, if required by the title company or
applicable law.
21. Copy of each instrument necessary to complete identification of any
exception set forth in the exception schedule in the title policy, i.e. map or
plat, restrictions, easements, sewer agreements, home association declarations,
etc.
22. All fully executed required disclosure statements required by state and
federal law.
23. If available, termite report, structural engineer's report, water potability
and septic certification.
24. Sales contract, if applicable.
25. Evidence of payment of taxes and insurance premiums, insurance claim files,
correspondence, current and historical computerized data files, and all other
processing, underwriting and closing papers and records which are customarily
contained in a mortgage loan file and which are required to document the
Mortgage Loan or to service the Mortgage Loan.
26. Amortization schedule, if available.
27. Payment history for any Mortgage Loan that has been closed for more than 90
days.
In the event an Officer's Certificate of the Company is delivered to the
Custodian because of a delay caused by the public recording office in returning
any recorded document, the Company shall deliver to the Custodian, within 240
days of the Closing Date, an Officer's Certificate which shall (i) identify the
recorded document, (ii) state that the recorded document has not been
Exhibit D-4
delivered to the Custodian due solely to a delay caused by the public recording
office, (iii) state the amount of time generally required by the applicable
recording office to record and return a document submitted for recordation, and
(iv) specify the date the applicable recorded document will be delivered to the
Custodian. The Company shall be required to deliver to the Custodian the
applicable recorded document by the date specified in (iv) above. An extension
of the date specified in (iv) above may be requested from the Purchaser, which
consent shall not be unreasonably withheld.
Exhibit D-5
EXHIBIT E
DATA FILE
Loan Number
Channel
Property City
Property State
Property Zip
Property County
Note Date
First Payment Date
Last Payment Date
Maturity Date
Original Loan Amount
Purchase Price
Appraised Value
Current Balance
Sale Balance
Current Interest Rate
Current PANDI
Product Type
Remaining Term
LTV
MI Code
Property Type
Occupancy Code
Purpose Code
Stream Code
Conforming
Client Name
LEX Number
Employer Name
Subsidy Code
Initial Interest Rate
Rate Change Date
Margin
Rate Cap
Max Interest Rate
Convertible
Index
Periodic Rate Cap
Relo Indicator
Temp Buydown
Servicing Fee
Exhibit E-1
Master Service Fee
Servicer Name
TLTV
ECS Raw Score
ECS Score Code
FICO Raw Score
FICO Score Code
ECS Version Number
Leasehold Indicator
No Ratio Indicator
Alt A Indicator
Citizen Type Code
Program Code
Credit Grade
Lien Status
Terminal Didget
Prepayment Penalty Period (years)
Servicer Code
Loan Term Number
Loan MI Certificate Number
Loan MI Coverage Percent
Borrower Last Name
Borrower First Name
Borrower Street Address
Pledged Asset Indicator
Loan Effect LTV Percent
Timesaver Indicator
Interest Only Indicator
Exhibit E-2
EXHIBIT F
SERVICING SYSTEM GUIDELINES AND REQUIREMENTS
Loading/Updating Investor Headers
1. Bank of America will provide investor header matrix for input on MSP
by Servicer. Updates/additions will occur monthly, including new
investor header detail for each new deal that is settled.
2. The Servicer will load investor headers upon receipt or before month
end. The following fields will need to be updated on IN03: MS OPT, MS
INV CNTRL NO, MS MO DELQ, and MS JUST FL.
3. The Servicer will update the investor headers on the first business
day of the next/following month to ensure that the correct loan
accounts will appear on the corresponding 413 file that will represent
the new month's activity.
Loading Account Numbers
1. Upon receipt of a funding schedule, Bank of America will deliver a
cross reference of Servicer-to-Bank of America account numbers to the
servicer. The account numbers will be delivered in the ▇▇▇▇ 55 layout
for loading in the next Servicer MSP cycle.
2. The Servicer will load account numbers on the first business day of
the month to ensure that the correct Bank of America account numbers
will appear on the corresponding 413 file that will represent the new
month's activity.
Automated Monetary Transaction File - 413
1. Call Fidelity PowerCell and request installation of IP 770
2. On the first business day of the month, the financial transactions for
the LSBO portfolio will transmit from the Servicer MSP system to the
Bank of America MSP system.
Monthly Servicer File - Automated
1. Call Fidelity PowerCell and initiate an SSR for the installation of IP
1804 and the interchange set-up required to host and transmit this
file. This enhancement will provide an automated month-end feed from
the Servicer to Bank of America for the LSBO portfolio identified by
the corresponding investor headers. The feed will include all new
loans purchased by Bank of America in the previous month, as well as a
maintenance file for all existing loans in the LSBO portfolio
2. Once installed, populate XX flag on the IN03 screen. This flag will
assist with synchronizing the feeds received in the Monthly Servicer
File and the corresponding 413 file.
3. Bank of America will receive and process the electronic file on the
first business day of the month for the previous month-end file. Note:
This file comes from the servicer automatically with the installation
of the IP.
Exhibit F-1
Monthly Servicer File - Manual
For testing purposes, and in the event that the IP is not installed prior to
initial conversion, a manual process is in place to provide the Monthly Servicer
File data feed for REMOTE MSP clients.
1. The Servicer will load/update investor header information received
from Bank of America.
2. The Servicer will send an email granting permission to Fidelity to
provide the manual feed of accounts in the assigned investor headers
identified. The email will contain the MSP client and corresponding
investor/categories to be included in the feed.
3. Bank of America will receive and process the file on the first
business day of the month for the previous month-end file.
Note: For LICENSED MSP clients, the servicer will install and use the existing
work-around EZTrieve process. (This will require the installation, testing, and
implementation of the EZTrieve until the IP is ready.) The servicer will be
required to develop a test file and production files until the IP is available.
Reporting Requirements
Required reports for the LSBO project are as follows:
o S215 - Report summarizes the collections made during the reporting
period
o S214 - Report summarizes paid in full loans made during the reporting
period
o P139 - Monthly statement of mortgage accounts or a trial balance as of
the cutoff date
o SCHEDULED REMITTANCE REPORTS - Servicers send on a monthly basis. We
would like this report by the 5th business day.
o DELINQUENCY REPORT - Report from the servicer to be sent by the 5th
business day. If the servicer is a Fidelity client, we would like a
P4DL report. Otherwise, a similar report will suffice. LSBO would like
this report sent via e-mail or fax.
NOTE: These S215, S214, and P139 reports will be provided in an electronic
format. These reports are automatically generated when the 951/139 cutoff is
calendared. The reports are required for the LSBO project; reports in addition
to these may be reasonably required in a format mutually agreed by the Purchaser
and the Company.
Exhibit F-2
EXHIBIT G
MONTHLY REMITTANCE ADVICE
Exhibit G-1
EXHIBIT H
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company][Name of
Subservicer] shall address, as a minimum, the criteria identified below as
"Applicable Servicing Criteria"
APPLICABLE INAPPLICABLE
REG AB REFERENCE SERVICING CRITERIA SERVICING CRITERIA SERVICING CRITERIA
---------------- --------------------------------------------------------------------- ------------------ ------------------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance or X
other triggers and events of default in accordance with the
transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third parties, X
policies and procedures are instituted to monitor the third party's
performance and compliance with such servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a back-up X
servicer for the mortgage loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the X
party participating in the servicing function throughout the
reporting period in the amount of coverage required by and otherwise
in accordance with the terms of the transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate X
custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such other number of
days specified in the transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to an X
investor are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or X
distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve X
accounts or accounts established as a form of overcollateralization,
are separately maintained (e.g., with respect to commingling of cash)
as set forth in the transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a federally insured X
depository institution as set forth in the transaction agreements.
For purposes of this criterion, "federally insured depository
institution" with respect to a foreign financial institution means a
foreign financial institution that meets the requirements of Rule
13k-1(b)(1) of the Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access. X
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all asset-backed X
securities related bank accounts, including custodial accounts and
related bank clearing accounts. These reconciliations are (A)
mathematically accurate; (B) prepared within 30 calendar days after
the bank statement cutoff date, or such other number of days
specified in the transaction agreements; (C) reviewed and approved by
someone other than the person who prepared the reconciliation; and
(D) contain explanations for reconciling items. These reconciling
items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the
transaction agreements.
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be filed with the X
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically, such
reports (A) are prepared in accordance with timeframes and other
terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in the
transaction agreements; (C) are filed with the Commission as required
by its rules and regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid principal balance and number
of mortgage loans serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance X
with timeframes, distribution priority and other terms set forth in
the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within two business days X
to the Servicer's investor records, or such other number of days
specified in the transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree with X
cancelled checks, or other form of payment, or custodial bank
statements.
Exhibit H-1
APPLICABLE INAPPLICABLE
REG AB REFERENCE SERVICING CRITERIA SERVICING CRITERIA SERVICING CRITERIA
---------------- --------------------------------------------------------------------- ------------------ ------------------
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as required by X
the transaction agreements or related mortgage loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as required by X
the transaction agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made, X
reviewed and approved in accordance with any conditions or
requirements in the transaction agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in accordance X
with the related mortgage loan documents are posted to the Servicer's
obligor records maintained no more than two business days after
receipt, or such other number of days specified in the transaction
agreements, and allocated to principal, interest or other items
(e.g., escrow) in accordance with the related mortgage loan
documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with the X
Servicer's records with respect to an obligor's unpaid principal
balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's mortgage X
loans (e.g., loan modifications or re-agings) are made, reviewed and
approved by authorized personnel in accordance with the transaction
agreements and related pool asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, X
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and concluded
in accordance with the timeframes or other requirements established
by the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are maintained during the X
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency is
deemed temporary (e.g., illness or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage loans X
with variable rates are computed based on the related mortgage loan
documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow X
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or
such other period specified in the transaction agreements; (B)
interest on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or such other
number of days specified in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance X
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the
servicer at least 30 calendar days prior to these dates, or such
other number of days specified in the transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with any payment to be made X
on behalf of an obligor are paid from the Servicer's funds and not
charged to the obligor, unless the late payment was due to the
obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within two X
business days to the obligor's records maintained by the servicer, or
such other number of days specified in the transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are recognized X
and recorded in accordance with the transaction agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified in Item X
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained
as set forth in the transaction agreements.
Exhibit H-2
EXHIBIT I
SARBANES CERTIFICATION
Re: The [_] agreement dated as of [_], 200[_] (the "Agreement"), among
[IDENTIFY PARTIES]
I, ________________________________, the _______________________ of [Name of
Servicer] (the "Servicer"), certify to [the Purchaser], [the Depositor], and the
[Master Servicer] [Securities Administrator] [Trustee], and their officers, with
the knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the Servicer
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Servicer's compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18
under Securities Exchange Act of 1934, as amended (the "Exchange Act") and
Item 1122 of Regulation AB (the "Servicing Assessment"), the registered
public accounting firm's attestation report provided in accordance with
Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
Regulation AB (the "Attestation Report"), and all servicing reports,
officer's certificates and other information relating to the servicing of
the Mortgage Loans by the Servicer during 200[ ] that were delivered by the
Servicer to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee] pursuant to the Agreement (collectively, the "Servicer Servicing
Information");
(2) Based on my knowledge, the Servicer Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in the light
of the circumstances under which such statements were made, not misleading
with respect to the period of time covered by the Servicer Servicing
Information;
(3) Based on my knowledge, all of the Servicer Servicing Information
required to be provided by the Servicer under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee];
(4) I am responsible for reviewing the activities performed by the Servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed in
the Compliance Statement, the Servicing Assessment or the Attestation
Report, the Servicer has fulfilled its obligations under the Agreement in
all material respects; and
(5) The Compliance Statement required to be delivered by the Servicer
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Servicer and by each Subservicer and
Subcontractor pursuant to the Agreement have been provided to the
[Depositor] [Master Servicer]. Any material instances of noncompliance
described in such reports have been disclosed to the [Depositor] [Master
Servicer]. Any material instance of noncompliance with the Servicing
Criteria has been disclosed in such reports.
Exhibit I-1
Date:
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By:
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Name:
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Title:
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Exhibit I-2