Exhibit 99.9
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FLOW INTERIM SERVICING AGREEMENT
between
▇▇▇▇▇▇ Brothers Bank, FSB,
Purchaser
and
RBC Mortgage Company,
Seller/Interim Servicer
Dated as of September 8, 2003
CONVENTIONAL FIXED AND ADJUSTABLE RATE RESIDENTIAL MORTGAGE LOANS
Group No. 2003-2
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions................................................................................1
ARTICLE II
SERVICING
Section 2.01 Seller to Act as Servicer..................................................................4
Section 2.02 Liquidation of Mortgage Loans..............................................................6
Section 2.03 Collection of Mortgage Loan Payments.......................................................6
Section 2.04 Establishment of and Deposits to Custodial Account.........................................6
Section 2.05 Permitted Withdrawals From Custodial Account...............................................7
Section 2.06 Establishment of and Deposits to Escrow Account............................................8
Section 2.07 Permitted Withdrawals From Escrow Account..................................................9
Section 2.08 Payment of Taxes, Insurance and Other Charges..............................................9
Section 2.09 PMI Obligations...........................................................................10
Section 2.10 Protection of Accounts....................................................................10
Section 2.11 Maintenance of Hazard Insurance...........................................................10
Section 2.12 Maintenance of Mortgage Impairment Insurance..............................................12
Section 2.13 Maintenance of Fidelity Bond and Errors and Omissions Insurance...........................12
Section 2.14 Inspections...............................................................................13
Section 2.15 Restoration of Mortgaged Property.........................................................13
Section 2.16 Maintenance of PMI Policy; Claims.........................................................13
Section 2.17 Title, Management and Disposition of REO Property.........................................14
Section 2.18 Permitted Withdrawals with respect to REO Property........................................15
Section 2.19 Real Estate Owned Reports.................................................................15
Section 2.20 Liquidation Reports.......................................................................16
Section 2.21 Notification of Adjustments...............................................................16
Section 2.22 Reports of Foreclosures and Abandonments of Mortgaged Property............................16
Section 2.23 Credit Reporting..........................................................................16
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ARTICLE III
PAYMENTS TO PURCHASER
Section 3.01 Remittances...............................................................................16
Section 3.02 Statements to Purchaser...................................................................17
Section 3.03 Principal and Interest Advances by Seller.................................................17
ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property...........................................................17
Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files...................................18
Section 4.03 Servicing Compensation....................................................................18
Section 4.04 Annual Statement as to Compliance.........................................................19
Section 4.05 Annual Independent Public Accountants' Servicing Report...................................19
Section 4.06 Right to Examine Seller Records...........................................................19
ARTICLE V
SELLER TO COOPERATE
Section 5.01 Provision of Information..................................................................19
Section 5.02 Financial Statements; Servicing Facilities................................................20
Section 5.03 Compliance with Safeguarding Customer Information Requirements............................20
ARTICLE VI
TERMINATION
Section 6.01 Agency Suspension.........................................................................20
Section 6.02 Damages...................................................................................20
Section 6.03 Termination Upon Transfer of Servicing....................................................21
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the Transfer Date..................................22
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification...........................................................................22
Section 8.02 Limitation on Liability of Seller and Others..............................................23
Section 8.03 Limitation on Resignation and Assignment by Seller........................................23
Section 8.04 Assignment by Purchaser...................................................................24
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ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
Section 9.01 Authority and Capacity....................................................................24
Section 9.02 Assistance................................................................................24
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 10.01 Due Organization and Authority............................................................24
Section 10.02 Ordinary Course of Business...............................................................25
Section 10.03 No Conflicts..............................................................................25
Section 10.04 Ability to Service........................................................................25
Section 10.05 Ability to Perform........................................................................25
Section 10.06 No Litigation Pending.....................................................................25
Section 10.07 No Consent Required.......................................................................26
Section 10.08 No Untrue Information.....................................................................26
ARTICLE XI
DEFAULT
Section 11.01 Events of Default.........................................................................26
Section 11.02 Waiver of Defaults........................................................................27
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Notices...................................................................................27
Section 12.02 Waivers...................................................................................28
Section 12.03 Entire Agreement; Amendment...............................................................28
Section 12.04 Execution; Binding Effect.................................................................28
Section 12.05 Headings..................................................................................28
Section 12.06 Applicable Law............................................................................28
Section 12.07 Relationship of Parties...................................................................28
Section 12.08 Severability of Provisions................................................................28
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Section 12.09 Recordation of Assignments of Mortgage....................................................29
Section 12.10 Appointment and Designation of Master Servicer............................................29
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EXHIBITS
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EXHIBIT 1 FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT 2 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 3 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 4 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 6 FORM OF ACKNOWLEDGMENT AGREEMENT
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FLOW INTERIM SERVICING AGREEMENT
This Flow Interim Servicing Agreement (the "Agreement") is
entered into as of the 5th day of August 2003, by and between RBC MORTGAGE
COMPANY (the "Seller"), an Illinois corporation and ▇▇▇▇▇▇ BROTHERS BANK, FSB, a
federal savings bank (the "Purchaser").
WHEREAS, the Purchaser and Seller entered into a Flow Mortgage
Loan Purchase and Warranties Agreement dated as of the date hereof (the
"Purchase Agreement") pursuant to which from time to time the Purchaser
purchased from the Seller certain conventional, residential, fixed and
adjustable rate first mortgage loans (the "Mortgage Loans") delivered as whole
loans servicing released; and
WHEREAS, the Purchaser desires to have the Seller service the
Mortgage Loans in each Mortgage Loan Package during the period between the
related Closing Date and the related Transfer Date (the "Interim Period"), the
Seller desires to service and administer such Mortgage Loans on behalf of the
Purchaser during the Interim Period, and the parties desire to provide the terms
and conditions of such interim servicing by the Seller.
NOW, THEREFORE, in consideration of the mutual covenants made
herein and for other good and valuable consideration the sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. All capitalized terms not
otherwise defined herein have the respective meanings set forth in the Purchase
Agreement. The following terms are defined as follows (except as otherwise
agreed by the parties).
Accepted Servicing Practices: With respect to any Mortgage
Loan, those mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the same type as such Mortgage Loan
in the jurisdiction where the related Mortgaged Property is located.
Agreement: This agreement between the Purchaser and the
Seller for the interim servicing and administration of the Mortgage Loans.
Custodial Account: The separate account or accounts created
and maintained pursuant to Section 2.04.
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.
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than the Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed
by, the United States of America, or any agency or instrumentality of
the United States of America the obligations of which are backed by the
full faith and credit of the United States of America; and
(ii) federal funds, demand and time deposits in, certificates
of deposits of, or bankers' acceptances issued by, any depository
institution or trust company incorporated or organized under the laws
of the United States of America or any state thereof and subject to
supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment or contractual
commitment providing for such investment the commercial paper or other
short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution or trust company
which is the principal subsidiary of a holding company, the commercial
paper or other short-term debt obligations of such holding company) are
rated "P-1" by ▇▇▇▇▇'▇ Investors Service, Inc. and the long-term debt
obligations of such holding company) are rated "P-1" by ▇▇▇▇▇'▇
Investors Service, Inc. and the long-term debt obligations of such
depository institution or trust company (or, in the case of a
depository institution or trust company which is the principal
subsidiary of a holding company, the long-term debt obligations of such
holding company) are rated at least "Aa" by ▇▇▇▇▇'▇ Investors Service,
Inc.
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 2.06.
Escrow Payment: 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 document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 11.01.
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Fidelity Bond: A fidelity bond to be maintained by the
Seller pursuant to Section 2.13.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ Selling Guide and the
▇▇▇▇▇▇ Mae Servicing Guide and all amendments or additions thereto.
Insurance Proceeds: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interim Period: The period between the related Closing Date
and the related Transfer Date.
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.
Mortgage Impairment Insurance Policy: A mortgage impairment
or blanket hazard insurance policy as described in Section 2.12.
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 Mortgage Interest Rate minus the Servicing Fee.
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.
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.
Purchase Agreement: The Flow Mortgage Loan Purchase and
Warranties Agreement between the Purchaser and the Seller related to the
purchase of the Mortgage Loans dated as of the date hereof.
Qualified Depository: ______________________ or such other
depository the accounts of which are insured by the FDIC through the BIF or the
SAIF.
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 ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
Remittance Date: The 18th day (or if such 18th day is not a
Business Day, the first Business Day immediately following) of any month,
beginning with the first Remittance Date.
REO Disposition: The final sale by the Seller of any REO
Property.
REO Disposition Proceeds: All amounts received with respect
to an REO Disposition pursuant to Section 2.17.
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REO Property: A Mortgaged Property acquired by the Seller on
behalf of the Purchaser through foreclosure or by deed in lieu of foreclosure,
as described in Section 2.17.
SAIF: The Savings Association Insurance Fund, or any
successor thereto.
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Seller 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 the Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage and (d) compliance with the obligations under Section 2.08.
Servicing Fee: With respect to each Mortgage Loan, an amount
equal to $7.00 per month. Such fee shall be payable monthly and shall be pro
rated for any portion of a month during which the Mortgage Loans is serviced
pursuant to this Agreement. The obligation of the Purchaser to pay the Servicing
Fee is limited to, and the Servicing Fee is payable solely from, the interest
portion (including recoveries with respect to interest from Liquidation
Proceeds, to the extent permitted by Section 2.05) of such Monthly Payment
collected by the Seller, or as otherwise provided under Section 2.05.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the Mortgage
File which are not delivered to the Purchaser and copies of the Mortgage Loan
Documents listed on Exhibit B to the Purchase Agreement.
Servicing Officer: Any officer of the Seller 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 Seller to the
Purchaser upon request, as such list may from time to time be amended.
Transfer Date: Shall have the meaning provided in
Section 6.03 hereof.
ARTICLE II
SERVICING
Section 2.01 Seller to Act as Servicer. With respect to the
Mortgage Loans in each Mortgage Loan Package purchased by the Purchaser, from
and after the related Closing Date, the Seller, as an independent contractor,
shall service and administer the Mortgage Loans during the related Interim
Period, by execution and delivery of the related Acknowledgement Agreement,
which shall contain the related Closing and Transfer Dates therein, in the form
attached hereto as Exhibit 6, and shall have full power and authority, acting
alone, to do any and all things in connection with such servicing and
administration which the Seller may deem necessary or desirable, consistent with
the terms of this Agreement and with Accepted Servicing Practices.
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Consistent with the terms of this Agreement, the Seller 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 Seller's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Purchaser, provided, however, that unless the Seller
has obtained the prior written consent of the Purchaser, the Seller shall not
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Interest Rate, defer or forgive the payment of principal or interest,
reduce or increase the outstanding principal balance (except for actual payments
of principal) or change the final maturity date on such Mortgage Loan. In the
event of any such modification which permits the deferral of interest or
principal payments on any Mortgage Loan, the Seller 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 2.04, 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 Seller shall be entitled to reimbursement
for such advances to the same extent as for all other advances made pursuant to
Section 2.05. Without limiting the generality of the foregoing, the Seller 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 Seller, the Purchaser shall
furnish the Seller with any powers of attorney and other documents necessary or
appropriate to enable the Seller to carry out its servicing and administrative
duties under this Agreement.
In servicing and administering the Mortgage Loans, the Seller
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 Seller.
The Seller shall keep at its servicing office books and
records in which, subject to such reasonable regulations as it may prescribe,
the Seller 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, Seller shall be under no obligation to deal
with any Person with respect to this Agreement or the Mortgage Loans unless the
Seller has been notified of such transfers as provided in this Section 2.01. The
Purchaser may sell and transfer, in whole or in part, the Mortgage Loans,
provided that no such sale and transfer shall be binding upon Seller unless such
transferee shall agree in writing in the form of the Assignment and Assumption
Agreement attached to the Purchase Agreement as Exhibit H, to be bound by the
terms of this Agreement and the Purchase Agreement, and an executed copy of the
same shall have been delivered to the Seller. Upon receipt thereof, Seller shall
▇▇▇▇ its books and records to reflect the ownership of the Mortgage Loans by
such assignee, and the previous Purchaser shall be released from its obligations
hereunder. This Agreement shall be binding upon and inure to the benefit of the
Purchaser and Seller and their permitted successors, assignees and designees.
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Section 2.02 Liquidation of Mortgage Loans. In the event
that any payment due under any Mortgage Loan and not postponed pursuant to
Section 2.01 is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period, the
Seller shall take such action as (1) the Seller 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 Seller shall determine prudently to be in the best interest of Purchaser,
and (4) is consistent with any related PMI Policy. In the event that any payment
due under any Mortgage Loan is not postponed pursuant to Section 2.01 and
remains delinquent for a period of 90 days or any other default continues for a
period of 90 days beyond the expiration of any grace or cure period, the Seller
shall commence foreclosure proceedings, provided that, prior to commencing
foreclosure proceedings, the Seller shall notify the Purchaser in writing of the
Seller's intention to do so, and the Seller shall not commence foreclosure
proceedings if the Purchaser objects to such action within 10 Business Days of
receiving such notice. In such connection, the Seller shall from its own funds
make all necessary and proper Servicing Advances, provided, however, that the
Seller 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 2.05) or through Insurance Proceeds
(respecting which it shall have similar priority).
Section 2.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the related Transfer Date the Seller
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 Loans and each related
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 2.04 Establishment of and Deposits to Custodial
Account. The Seller shall segregate and hold all funds collected and received
pursuant to the Mortgage Loans 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 "RBC Mortgage Company in
trust for ▇▇▇▇▇▇ Brothers Bank, FSB, Residential Fixed and Adjustable Rate
Mortgage Loans, Group No. 2003-2." The Custodial Account shall be established
with a Qualified Depository acceptable to the Purchaser. Any funds deposited in
the Custodial Account shall at all times be fully insured to the full extent
permitted under applicable law. Funds deposited in the Custodial Account may be
drawn on by the Seller in accordance with Section 2.05. The creation of any
Custodial Account shall be evidenced by a certification in the form of Exhibit 2
hereto, in the case of an account established with the Seller, or by a letter
agreement in the form of Exhibit 3 hereto, in the case of an account held by a
depository other than the Seller. A copy of such certification or letter
agreement shall be furnished to the Purchaser and, upon request, to any
subsequent Purchaser.
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The Seller shall deposit in the Custodial Account on a daily
basis, and retain therein, the following collections received by the Seller
after the related Cut-off Date:
(i) all payments on account of principal on the Mortgage
Loans;
(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 2.11 (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 2.15), Section 2.12 and Section 2.16;
(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 2.15;
(vi) any amount required to be deposited in the Custodial
Account pursuant to Section 2.01, 2.10, 2.17, 4.01 or 4.02;
(vii) any amounts payable in connection with the repurchase
of any Mortgage Loan pursuant to Section 8 of the Purchase Agreement;
and
(viii) any amounts required to be deposited by the Seller
pursuant to Section 2.11 in connection with the deductible clause in
any blanket hazard insurance policy.
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 4.01, need not
be deposited by the Seller 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 Seller and the Seller shall be entitled to retain
and withdraw such interest from the Custodial Account pursuant to Section 2.05.
Section 2.05 Permitted Withdrawals From Custodial Account.
The Seller shall, from time to time, withdraw funds from the Custodial Account
for the following purposes:
(i) to make payments to the Purchaser in the amounts and in
the manner provided for in Section 3.01;
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(ii) to reimburse itself for unreimbursed Servicing Advances,
any unpaid Servicing Fees and for unreimbursed advances of Seller funds
made pursuant to Section 2.17, the Seller's right to reimburse itself
pursuant to this subclause (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
Seller from the Mortgagor or otherwise relating to the Mortgage Loan,
it being understood that, in the case of any such reimbursement, the
Seller's right thereto shall be prior to the rights of the Purchaser
except that, where the Seller is required to repurchase a Mortgage Loan
pursuant to Section 8 of the Purchase Agreement or Section 4.02 of this
Agreement, the Seller'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 pay itself interest on funds deposited in the
Custodial Account;
(iv) to reimburse itself for expenses incurred and
reimbursable to it pursuant to Section 4.03;
(v) to clear and terminate the Custodial Account upon the
termination of this Agreement; and
(vi) to withdraw funds deposited in error.
In the event that the Custodial Account is interest bearing,
on each Remittance Date, the Seller shall withdraw all funds from the Custodial
Account except for those amounts which, pursuant to Section 3.01, the Seller is
not obligated to remit on such Remittance Date. The Seller may use such
withdrawn funds only for the purposes described in this Section 2.05.
Section 2.06 Establishment of and Deposits to Escrow
Account. The Seller 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,
"RBC Mortgage Company, in trust for ▇▇▇▇▇▇ Brothers Bank, FSB Residential Fixed
and Adjustable Rate Mortgage Loans, Group No. 2003-2, and various Mortgagors".
The Escrow Accounts shall be established with a Qualified Depository, in a
manner which shall provide maximum available insurance thereunder. Funds
deposited in the Escrow Account may be drawn on by the Seller in accordance with
Section 2.07. The creation of any Escrow Account shall be evidenced by a
certification in the form of Exhibit 4 hereto, in the case of an account
established with the Seller, or by a letter agreement in the form of Exhibit 5
hereto, in the case of an account held by a depository other than the Seller. A
copy of such certification shall be furnished to the Purchaser and, upon
request, to any subsequent Purchaser.
The Seller shall deposit in the Escrow Account or Accounts on
a daily basis, 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; and
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(ii) all amounts representing Insurance Proceeds or
Condemnation Proceeds which are to be applied to the restoration or
repair of any Mortgaged Property.
The Seller shall make withdrawals from the Escrow Account only
to effect such payments as are required under this Agreement, as set forth in
Section 2.07. The Seller 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 Seller 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 2.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the Seller only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, mortgage insurance premiums, condominium
charges, fire and hazard insurance premiums or other items constituting
Escrow Payments for the related Mortgage;
(ii) to reimburse the Seller for any Servicing Advance made
by the Seller pursuant to Section 2.08 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 and 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 restoration or repair of the
Mortgaged Property in accordance with the procedures outlined in
Section 2.15;
(vi) to pay to the Seller, or any Mortgagor to the extent
required by law, any interest paid on the funds deposited in the Escrow
Account;
(vii) to clear and terminate the Escrow Account on the
termination of this Agreement; and
(viii) to withdraw funds deposited in error.
Section 2.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Seller 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 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 Seller in amounts sufficient for such purposes, as allowed
under the terms of the Mortgage. To the extent that a Mortgage does not provide
for Escrow Payments, the Seller shall determine that any such payments are made
by the Mortgagor at the time they first become due. The Seller 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
Seller shall make advances from its own funds to effect such payments.
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Section 2.09 PMI Obligations. The Servicer shall comply with
all provisions of applicable state and federal law relating to the cancellation
of, or collection of premiums with respect to, PMI Policies, including, but not
limited to, the provisions of the Homeowners Protection Act of 1998, and all
regulations promulgated thereunder, as amended from time to time.
Section 2.10 Protection of Accounts. The Seller may transfer
the Custodial Account or the Escrow Account to a different Qualified Depository
from time to time. Such transfer shall be made only upon obtaining the consent
of the Purchaser, which consent shall not be withheld unreasonably.
The Seller shall bear any expenses, losses or damages
sustained by the Purchaser because the Custodial Account and/or the Escrow
Account are not demand deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow
Account may at the option of the Seller be invested in Eligible Investments;
provided that in the event that amounts on deposit in the Custodial Account or
the Escrow Account exceed the amount fully insured by the FDIC (the "Insured
Amount") the Seller shall be obligated to invest the excess amount over the
Insured Amount in Eligible Investments on the same Business Day as such excess
amount becomes present in the Custodial Account or the Escrow Account. Any such
Eligible Investment shall mature no later than the Determination Date next
following the date of such Eligible Investment, provided, however, that if such
Eligible Investment is an obligation of a Qualified Depository (other than the
Seller) that maintains the Custodial Account or the Escrow Account, then such
Eligible Investment may mature on such Remittance Date. Any such Eligible
Investment shall be made in the name of the Seller in trust for the benefit of
the Purchaser. All income on or gain realized from any such Eligible Investment
shall be for the benefit of the Seller and may be withdrawn at any time by the
Seller. Any losses incurred in respect of any such investment shall be deposited
in the Custodial Account or the Escrow Account, by the Seller out of its own
funds immediately as realized.
Section 2.11 Maintenance of Hazard Insurance. The Seller
shall cause to be maintained for each Mortgage Loan, hazard insurance such that
all buildings upon the Mortgaged Property are insured by a generally acceptable
insurer rated A:VI or better in the current Best's Key Rating Guide ("Best's")
against loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, in an amount
which is at least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan 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.
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If upon origination of the Mortgage Loan, the related
Mortgaged Property was located in an area identified in the Federal Register by
the Flood Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) 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 rated A:VI or better
in Best's 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 Seller determines in accordance with applicable
law and pursuant to the ▇▇▇▇▇▇ Mae Guides that a Mortgaged Property is located
in a special flood hazard area and is not covered by flood insurance or is
covered in an amount less than the amount required by the Flood Disaster
Protection Act of 1973, as amended, the Seller shall notify the related
Mortgagor that the Mortgagor must 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 Seller shall immediately force
place the required flood insurance on the Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project,
the Seller 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 ▇▇▇▇▇▇ ▇▇▇ requirements, and secure from the
owner's association its agreement to notify the Seller 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.
The Seller shall cause to be maintained on each Mortgaged
Property earthquake or such other or additional insurance as may be required
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance, or pursuant to the
requirements of any private mortgage guaranty insurer, or as may be required to
conform with Accepted Servicing Practices.
In the event that the Purchaser or the Seller 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 Seller shall communicate
and consult with the Mortgagor with respect to the need for such insurance and
bring to the Mortgagor's attention the desirability of protection of the
Mortgaged Property.
All policies required hereunder shall name the Seller as loss
payee and shall be endorsed with standard or New York mortgagee clauses, without
contribution, which shall provide for at least 30 days prior written notice of
any cancellation, reduction in amount or material change in coverage.
The Seller shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Seller shall not accept any such insurance policies from insurance
companies unless such companies are rated A:VI or better in Best's and are
licensed to do business in the jurisdiction in which the Mortgaged Property is
located. The Seller 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 Seller shall furnish to the
Mortgagor a formal notice of expiration of any such insurance in sufficient time
for the Mortgagor to arrange for renewal coverage by the expiration date.
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Pursuant to Section 2.04, any amounts collected by the Seller
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 Seller's normal servicing
procedures as specified in Section 2.15) shall be deposited in the Custodial
Account subject to withdrawal pursuant to Section 2.05.
Section 2.12 Maintenance of Mortgage Impairment Insurance.
In the event that the Seller 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 provides coverage in
an amount equal to the amount required pursuant to Section 2.11 and otherwise
complies with all other requirements of Section 2.11, it shall conclusively be
deemed to have satisfied its obligations as set forth in Section 2.11. Any
amounts collected by the Seller under any such policy relating to a Mortgage
Loan shall be deposited in the Custodial Account subject to withdrawal pursuant
to Section 2.05. 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 2.11, and there shall have been a loss
which would have been covered by such policy, the Seller 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 Seller's funds, without reimbursement therefor. Upon request
of the Purchaser, the Seller shall cause to be delivered to the Purchaser a
certified true copy of such policy 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 the Purchaser.
Section 2.13 Maintenance of Fidelity Bond and Errors and
Omissions Insurance. The Seller 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 ("Seller 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 Seller against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Seller Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Seller 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 2.13 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Seller from its duties
and obligations as set forth in this Agreement. The minimum coverage under any
such bond and insurance policy shall be at least equal to the corresponding
amounts required by ▇▇▇▇▇▇ Mae in the ▇▇▇▇▇▇ ▇▇▇ Guides or by ▇▇▇▇▇▇▇ Mac in the
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' & Servicers' Guide. Upon the request of the Purchaser, the
Seller shall cause to be delivered to the Purchaser a certified true copy of
such fidelity bond and insurance policy and a statement from the surety and the
insurer that such fidelity bond and insurance policy shall in no event be
terminated or materially modified without 30 days' prior written notice to the
Purchaser.
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Section 2.14 Inspections. The Seller shall inspect the
Mortgaged Property as often as deemed necessary by the Seller to assure itself
that the value of the Mortgaged Property is being preserved. In addition, if any
Mortgage Loan is more than 60 days delinquent, the Seller 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 Seller shall keep a written report of
each such inspection.
Section 2.15 Restoration of Mortgaged Property. The
Seller 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. At a minimum, the Seller shall
comply with the following conditions in connection with any such release of
Insurance Proceeds or Condemnation Proceeds:
(i) the Seller shall receive satisfactory independent
verification of completion of repairs and issuance of any required
approvals with respect thereto;
(ii) the Seller 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 Seller shall verify that the Mortgage Loan is not in
default; and
(iv) pending repairs or restoration, the Seller shall place
the Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the
Seller is hereby empowered to endorse any loss draft issued in respect of such a
claim in the name of the Purchaser.
Section 2.16 Maintenance of PMI Policy; Claims. With
respect to each Mortgage Loan with a LTV in excess of 80%, the Seller shall,
without any cost to the Purchaser, maintain or cause the Mortgagor to maintain
in full force and effect a PMI Policy insuring that portion of the Mortgage Loan
in excess of 75% of value, and shall pay or shall cause the Mortgagor to pay the
premium thereon on a timely basis, until the LTV of such Mortgage Loan is
reduced to 80%. In the event that such PMI Policy shall be terminated, the
Seller 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 Seller
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 Seller shall in no event have any responsibility or liability for any
failure to recover under the PMI Policy for such reason. If the Seller
determines that recoveries are so jeopardized, it shall notify the Purchaser and
the Mortgagor, if required, and obtain from another Qualified Insurer a
replacement insurance policy. The Seller shall not take any action which would
result in noncoverage under any applicable PMI Policy of any loss which, but for
the actions of the Seller would have been covered thereunder. In connection with
any assumption or substitution agreement entered into or to be entered into
pursuant to Section 4.01, the Seller shall promptly notify the insurer under the
related PMI Policy, if any, of such assumption or substitution of liability in
accordance with the terms of such PMI 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. If such PMI Policy is terminated as a result of such
assumption or substitution of liability, the Seller shall obtain a replacement
PMI Policy as provided above.
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In connection with its activities as servicer, the seller
agrees to prepare and present, on behalf of itself and the Purchaser, claims to
the insurer under any PMI Policy in a timely fashion in accordance with the
terms of such PMI Policy and, in this regard, to take such action as shall be
necessary to permit recovery under any PMI Policy respecting a defaulted
Mortgage Loan. Pursuant to Section 2.04, any amounts collected by the Seller
under any PMI Policy shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 2.05.
Section 2.17 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 Seller 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 Seller shall manage, conserve, protect and operate each
REO Property for the Purchaser solely for the purpose of its prompt disposition
and sale. The Seller, either itself or through an agent selected by the Seller,
shall manage, conserve, protect and operate the REO Property in the same manner
that it manages, conserves, protects and operates other foreclosed property for
its own account, and in the same manner that similar property in the same
locality as the REO Property is managed. The Seller 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 Seller
deems to be in the best interest of the Purchaser.
The Seller 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 one year after title has been taken to such REO Property, unless the
Seller 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 one year is permitted under the foregoing
sentence and is necessary to sell any REO Property, (i) the Seller 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 Seller as mortgagee, and such purchase money mortgage
shall not be held pursuant to this Agreement, but instead a separate
participation agreement among the Seller and Purchaser shall be entered into
with respect to such purchase money mortgage.
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The Seller shall also maintain on each REO Property fire and
hazard insurance with extended coverage in an 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
Seller at such price, and upon such terms and conditions, as the Seller deems to
be in the best interests 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 Seller
shall reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and unreimbursed advances made pursuant to this Section, and on
the Remittance Date immediately following the Principal Prepayment Period in
which such sale proceeds are received the net cash proceeds of such sale
remaining in the Custodial Account shall be distributed to the Purchaser.
With respect to each REO Property, the Seller shall hold all
funds collected and received in connection with the operation of the REO
Property in the Custodial Account. The Seller shall cause to be deposited on a
daily basis upon the receipt thereof in each Custodial Account all revenues
received with respect to the conservation and disposition of the related REO
Property.
Notwithstanding the foregoing, at any time and from time to
time, the Purchaser may at its election terminate this Agreement with respect to
one or more REO Properties as provided by Section 6.03(d).
Section 2.18 Permitted Withdrawals with respect to REO
Property. The Seller shall withdraw REO funds on deposit in the Custodial
Account with respect to each related REO Property necessary for the proper
operation, management and maintenance of the REO Property, including the cost of
maintaining any hazard insurance pursuant to Section 2.11 and the fees of any
managing agent acting on behalf of the Seller. The Seller shall make monthly
distributions on each Remittance Date to the Purchaser of the net cash flow from
the REO Property (which shall equal the revenues from such REO Property net of
the expenses described in Section 2.17 and of any reserves reasonably required
from time to time to be maintained to satisfy anticipated liabilities for such
expenses).
Section 2.19 Real Estate Owned Reports. Together with the
statement furnished pursuant to Section 2.20, the Seller shall furnish to the
Purchaser on or before the 15th day of each month a statement with respect to
any REO Property covering the operation of such REO Property for the previous
month and the Seller'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.
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Section 2.20 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 Seller shall submit to the
Purchaser a liquidation report with respect to such Mortgaged Property.
Section 2.21 Notification of Adjustments. With respect to
each Mortgage Loan, the Seller shall adjust the Mortgage Interest Rate on the
related Interest Rate Adjustment Date in compliance with the requirements of
applicable law and the related Mortgage and Mortgage Note. The Seller 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. The Seller shall promptly, upon written request
therefor, deliver to the Purchaser such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate and
implement such adjustments. Upon the discovery by the Seller or the receipt of
notice from the Purchaser that the Seller has failed to adjust a Mortgage
Interest Rate in accordance with the terms of the related Mortgage Note, the
Seller shall immediately deposit in the Custodial Account from its own funds the
amount of any interest loss or deferral caused the Purchaser thereby.
Section 2.22 Reports of Foreclosures and Abandonments of
Mortgaged Property. Following the foreclosure sale or abandonment of any
Mortgaged Property, the Seller shall report such foreclosure or abandonment as
required pursuant to Section 6050J of the Code.
Section 2.23 Credit Reporting. For each Mortgage Loan,
the Servicer shall accurately and fully furnish, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information on its borrower credit files to each of the following credit
repositories: Equifax Credit Information Services, Inc., TransUnion, LLC and
Experian Information Solution, Inc. on a monthly basis.
ARTICLE III
PAYMENTS TO PURCHASER
Section 3.01 Remittances. On each Remittance Date the
Seller shall remit by wire transfer of immediately available funds to the
Purchaser (a) all amounts deposited in the Custodial Account as of the close of
business on the Determination Date (net of charges against or withdrawals from
the Custodial Account pursuant to Section 2.05), plus (b) all amounts, if any,
which the Seller is obligated to distribute pursuant to Section 2.03.
With respect to any remittance received by the Purchaser after
the second Business Day following the Business Day on which such payment was
due, the Seller 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 Seller on the date such late payment is made and shall cover the
period commencing with the day following such second Business Day and ending
with the Business Day on which such payment is made, both inclusive. Such
interest shall be remitted along with the distribution payable on the next
succeeding Remittance Date. The payment by the Seller of any such interest shall
not be deemed an extension of time for payment or a waiver of any Event of
Default by the Seller.
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Section 3.02 Statements to Purchaser. Not later than the
Remittance Date, the Seller shall furnish to the Purchaser a Monthly Remittance
Advice, with a trial balance report attached thereto, in the form of Exhibit 1
annexed hereto in hard copy and electronic medium mutually acceptable to the
parties as to the preceding remittance and the period ending on the preceding
Determination Date.
In addition, not more than 60 days after the end of each
calendar year, the Seller shall furnish to each Person who was a Purchaser at
any time during such calendar year an annual statement in accordance with the
requirements of applicable federal income tax law as to the aggregate of
remittances for the applicable portion of such year.
Such obligation of the Seller shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Seller pursuant to any requirements of the Internal Revenue Code
as from time to time are in force.
The Seller shall prepare and file any and all tax returns,
information statements or other filings required to be delivered to any
governmental taxing authority or to the Purchaser pursuant to any applicable law
with respect to the Mortgage Loans and the transactions contemplated hereby. In
addition, the Seller shall provide the Purchaser with such information
concerning the Mortgage Loans as is necessary for the Purchaser to prepare its
federal income tax return as the Purchaser may reasonably request from time to
time.
Section 3.03 Principal and Interest Advances by Seller.
The Seller shall have no obligation to advance any amounts constituting
delinquent principal and interest payments.
ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property. The Seller
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 Seller 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 Seller 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 Seller reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Seller 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 Seller is unable under applicable law to require that the original
Mortgagor remain liable under the Mortgage Note and the Seller 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 Seller for entering into an assumption
agreement, a portion of such fee, up to an amount equal to one-half of one
percent (0.5%) of the outstanding principal balance of the related Mortgage
Loan, will be retained by the Seller as additional servicing compensation, and
any portion thereof in excess of one-half of one percent (0.5%) shall be
deposited in the Custodial Account for the benefit of the Purchaser. In
connection with any such assumption, neither the Mortgage Interest Rate borne by
the related Mortgage Note, the term of the Mortgage Loan nor the outstanding
principal amount of the Mortgage Loan shall be changed.
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To the extent that any Mortgage Loan is assumable, the Seller
shall inquire diligently into the creditworthiness of the proposed transferee,
and shall use the underwriting criteria for approving the credit of the proposed
transferee which are used by ▇▇▇▇▇▇ ▇▇▇ with respect to underwriting mortgage
loans of the same type as the Mortgage Loans. If the credit of the proposed
transferee does not meet such underwriting criteria, the Seller 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 4.02 Satisfaction of Mortgages and Release of
Mortgage Files. Upon the payment in full of any Mortgage Loan, or the receipt
by the Seller of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Seller shall notify the Purchaser in the
Monthly Remittance Advice as provided in Section 3.02, and may request the
release of any Mortgage Loan Documents from the Purchaser in accordance with
this Section 4.02 hereof.
If the Seller satisfies or releases a Mortgage without first
having obtained payment in full of the indebtedness secured by the Mortgage or
should the Seller otherwise prejudice any rights the Purchaser may have under
the mortgage instruments, upon written demand of the Purchaser, the Seller shall
repurchase the related Mortgage Loan at the Repurchase Price by deposit thereof
in the Custodial Account within 2 Business Days of receipt of such demand by the
Purchaser. The Seller shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 2.13 insuring the Seller against any
loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
Section 4.03 Servicing Compensation. As consideration for
servicing the Mortgage Loans during the period from the related Closing Date up
to but not including the related Transfer Date, the Seller shall retain a
Servicing Fee with respect to each Mortgage Loan in the amount of $7.00 per
month, which amount shall be prorated for any portion of a month during which
the Mortgage Loan is serviced by the Seller pursuant to this Agreement. The
obligation of the Purchaser to pay the Servicing Fee is limited to, and the
Servicing Fee is payable solely from, the interest portion (including recoveries
with respect to interest from Liquidation Proceeds, to the extent permitted by
Section 2.02), of such Monthly Payment collected by the Seller, or as otherwise
provided under Section 2.03.
-18-
Additional servicing compensation in the form of assumption
fees, to the extent provided in Section 4.01, and late payment charges shall be
retained by the Seller to the extent not required to be deposited in the
Custodial Account. The Seller 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 4.04 Annual Statement as to Compliance. The
Seller shall deliver to the Purchaser, on or before March 31 each year beginning
March 31, 2004, and on the related Transfer Date an Officer's Certificate,
stating that (i) a review of the activities of the Seller during the preceding
calendar year and of performance under this Agreement has been made under such
officer's supervision, and (ii) the Seller has complied fully with the
provisions of Article II and Article IV, and (iii) to the best of such officer's
knowledge, based on such review, the Seller has fulfilled all its obligations
under this Agreement throughout such year, or, if there has been a default in
the fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof and the action being taken by the
Seller to cure such default.
Section 4.05 Annual Independent Public Accountants'
Servicing Report. On or before March 31st of each year beginning March 31,
2004, the Seller, 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 and this Agreement and that such firm is of the opinion that the
provisions of Article II and Article III have been complied with, and that, on
the basis of such examination conducted substantially in compliance with the
Single Audit 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.
Section 4.06 Right to Examine Seller Records. The
Purchaser shall have the right to examine and audit any and all of the books,
records, or other information of the Seller, whether held by the Seller 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.
ARTICLE V
SELLER TO COOPERATE
Section 5.01 Provision of Information. During the term of
this Agreement, the Seller shall furnish to the Purchaser such periodic,
special, or other reports or information, whether or not provided for herein, as
shall be necessary, reasonable, or appropriate with respect to the Purchaser or
the purposes of this Agreement. All such reports or information shall be
provided by and in accordance with all reasonable instructions and directions
which the Purchaser may give.
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The Seller 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 5.02 Financial Statements; Servicing Facilities.
In connection with marketing the Mortgage Loans, the Purchaser may make
available to a prospective Purchaser a Consolidated Statement of Operations of
the Seller for the most recently completed five fiscal years for which such a
statement is available, as well as a Consolidated Statement of Condition at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller also shall make available any comparable interim
statements to the extent any such statements have been prepared by or on behalf
of the Seller (and are available upon request to members or stockholders of the
Seller or to the public at large). If it has not already done so, the Seller
shall furnish promptly to the Purchaser copies of the statement specified above.
The Seller shall make available to the Purchaser or any
prospective Purchaser a knowledgeable financial or accounting officer for the
purpose of answering questions respecting recent developments affecting the
Seller or the financial statements of the Seller, and to permit any prospective
Purchaser to inspect the Seller's servicing facilities for the purpose of
satisfying such prospective Purchaser that the Seller has the ability to service
the Mortgage Loans as provided in this Agreement.
Section 5.03 Compliance with Safeguarding Customer
Information Requirements. The Seller has implemented and will maintain security
measures designed to meet the objectives of the Interagency Guidelines
Establishing Standards for Safeguarding Customer Information published in final
form on February 1, 2001, 66 Fed. Reg. 8616, and the rules promulgated
thereunder, as amended from time to time (the "Guidelines"). The Seller shall
promptly provide Purchaser with information regarding such security measures
upon the reasonable request of Purchaser which information shall include, but
not be limited to, any SAS 70 report covering the Seller's operations, and any
other audit reports, summaries of test results or equivalent measures taken by
the Seller with respect to its security measures.
ARTICLE VI
TERMINATION
Section 6.01 Agency Suspension. Should the Seller at any
time during the term of this Agreement have its right to service temporarily or
permanently suspended by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac or otherwise cease to be an
approved seller/servicer of conventional residential mortgage loans for ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac, then the Purchaser may immediately terminate this Agreement
and accelerate performance of the provisions of the Purchase Agreement to
require immediate transfer of the Servicing Rights.
Section 6.02 Damages. The Purchaser shall have the right
at any time to seek and recover from the Seller any damages or losses suffered
by it as a result of any failure by the Seller to observe or perform any duties,
obligations, covenants or agreements herein contained or contained in the
Purchase Agreement, or as a result of a party's failure to remain an approved
▇▇▇▇▇▇ Mae mortgage servicer.
-20-
Section 6.03 Termination Upon Transfer of Servicing.
Termination Procedures. This Agreement shall terminate with respect to the
Mortgage Loans or portion thereof transferred on the related Transfer Date which
shall be the date set forth on the related Acknowledgement Agreement.
The Purchaser may elect to terminate this Agreement and
transfer the servicing from the Seller prior to the related Transfer Date with
respect to all or any portion of the Mortgage Loans by providing written notice
to the Seller at least 10 Business Days prior to the date on which it intends to
transfer the servicing of its intent to transfer the servicing from the Seller.
On or before the date specified by the Purchaser in accordance with this
paragraph (a) for the transfer of servicing from the Seller, the Seller shall
prepare, execute and deliver to the successor entity designated by the Purchaser
any and all documents and other instruments, place in such successor's
possession all Mortgage Loan Documents 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, at the Seller's sole expense. The Seller shall cooperate with the
Purchaser and such successor in effecting the termination of the Seller's
responsibilities and rights hereunder.
On the related Transfer Date, the Seller shall comply with all
of the provisions of Section 5 of the Purchase Agreement to effect a complete
transfer of the Servicing Rights. On the related Transfer Date for each Mortgage
Loan, this Agreement, except for Articles VI, VIII, IX and X which shall survive
the related Transfer Date, shall terminate.
(a) Mortgage Loans in Foreclosure. The servicing with respect
to Mortgage Loans in foreclosure on or before the related Transfer Date shall
not be transferred from the Seller to the Purchaser or the successor servicer,
as the case may be, and such Mortgage Loans shall continue to be serviced by the
Seller pursuant to the terms of this Agreement. However, if the Purchaser so
elects, the Purchaser may waive the provisions of this paragraph (b) and accept
transfer of servicing of such Mortgage Loans and all amounts received by the
Seller thereunder.
(b) Servicing Advances. Notwithstanding the fact that the
related Transfer Date has occurred, the Seller shall not be reimbursed for any
Servicing Advances with respect to any Mortgage Loan until the Seller or the
successor servicer receives a Monthly Payment or Liquidation Proceeds with
respect to such Mortgage Loan. At such time, the Seller shall be entitled to be
reimbursed for all unreimbursed Servicing Advances with respect to such Mortgage
Loan on a first priority basis (but subject to any successor servicer's rights
to reimbursement with respect to Servicing Advances) from the Monthly Payment or
Liquidation Proceeds received with respect to such Mortgage Loan. This Section
6.03(c) shall survive each Transfer Date.
(c) Additional Termination Provisions. Notwithstanding and in
addition to the foregoing, in the event that (i) a Mortgage Loan becomes
delinquent for a period of 90 days or more (a "Delinquent Mortgage Loan") or
(ii) a Mortgage Loan becomes an REO Property, the Purchaser may at its election
terminate this Agreement with respect to such Delinquent Mortgage Loan or REO
Property, upon 15 days' written notice to the Seller.
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ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the
Transfer Date. Prior to the related Transfer Date, the contents of each
Servicing File are and shall be held in trust by the Seller for the benefit of
the Purchaser as the owner thereof. The Seller shall maintain in the Servicing
File a copy of the contents of each Mortgage File and the originals of the
documents in each Mortgage File not delivered to the Purchaser. The possession
of the Servicing File by the Seller is at the will of the Purchaser for the sole
purpose of servicing the related Mortgage Loan, pursuant to this Agreement, and
such retention and possession by the Seller is in its capacity as Servicer only
and at the election of the Purchaser. The Seller shall release its custody of
the contents of any Servicing File only in accordance with written instructions
from the Purchaser, unless such release is required as incidental to the
Seller's servicing of the Mortgage Loans pursuant to this Agreement, or is in
connection with a repurchase of any Mortgage Loan pursuant to Section 8 of the
Purchase Agreement.
The Seller 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 Seller shall maintain in its possession, available
for inspection by the Purchaser or its designee, and shall deliver to the
Purchaser or its designee 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 and periodic inspection reports as required by Section 2.14.
The Seller shall keep at its servicing office books and
records in which, subject to such reasonable regulations as it may prescribe,
the Seller 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 Seller 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 or transfer one or
more of the Mortgage Loans. The Purchaser also shall advise the Seller of the
transfer. Upon receipt of notice of the transfer, the Seller 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.
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification. The Seller agrees to
indemnify the Purchaser and hold it harmless against any and all claims, losses,
damages, penalties, fines, and forfeitures, including, but not limited to
reasonable and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses that the Purchaser may sustain in any way related to
the failure of Seller to (a) perform its duties and service the Mortgage Loans
in strict compliance with the terms of this Agreement and/or (b) comply with
applicable law. The Seller immediately shall notify the Purchaser if a claim is
made by a third party with respect to this Agreement, 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 Seller shall follow any written
instructions received from the Purchaser in connection with such claim. The
Purchaser promptly shall reimburse the Seller for all amounts advanced by it
pursuant to the preceding sentence except when the claim is in any way related
to the Seller's indemnification pursuant to Section 8 of the Purchase Agreement,
or the failure of the Seller to (a) service and administer the Mortgage Loans in
strict compliance with the terms of this Agreement and/or (b) comply with
applicable law.
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Section 8.02 Limitation on Liability of Seller and
Others. Neither the Seller nor any of the directors, officers, employees or
agents of the Seller 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 Seller or any such person against any
breach of warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed by reason of any
breach of the terms and conditions of this Agreement. The Seller and any
director, officer, employee or agent of the Seller 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 Seller 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 Seller 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 Seller shall be entitled to reimbursement from the Purchaser of the
reasonable legal expenses and costs of such action.
Section 8.03 Limitation on Resignation and Assignment by
Seller. The Purchaser has entered into this Agreement with the Seller and
subsequent Purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Seller, and the representations as to the adequacy of
its servicing facilities, plant, personnel, records and procedures, its
integrity, reputation and financial standing, and the continuance thereof.
Therefore, the Seller shall neither assign this Agreement or the servicing
hereunder or delegate its rights or duties hereunder 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, which consent shall be
granted or withheld in the sole discretion of the Purchaser.
The Seller shall not resign from the obligations and duties
hereby imposed on it except by mutual consent of the Seller 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 Seller. Any such
determination permitting the resignation of the Seller 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
Seller's responsibilities and obligations hereunder in the manner provided in
Section 6.03.
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Without in any way limiting the generality of this Section
8.03, in the event that the Seller either shall assign this Agreement or the
servicing responsibilities hereunder or delegate its duties hereunder or any
portion thereof 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 6.03, without any payment of any penalty or damages and
without any liability whatsoever to the Seller or any third party.
Section 8.04 Assignment by Purchaser. The Purchaser shall
have the right, without the consent of the Seller, 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. All references to the Purchaser in this Agreement shall be deemed to
include its assignee or designee with respect to such Mortgage Loans.
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
The Purchaser warrants and represents to, and covenants and
agrees with, the Seller as follows:
Section 9.01 Authority and Capacity. The execution,
delivery and performance by the Purchaser of this Agreement has been and will
remain duly and validly authorized by all necessary corporate action. This
Agreement constitutes and will continue to constitute a legal, valid and
enforceable obligation of the Purchaser.
Section 9.02 Assistance. To the extent possible, the
Purchaser shall cooperate with and assist the Seller as requested by the Seller,
in carrying out Seller's covenants, agreements duties and responsibilities under
the Purchase Agreement and in connection therewith shall execute and deliver all
such papers, documents and instruments as may be necessary and appropriate in
furtherance thereof.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller warrants and represents to, and covenants and
agrees with, the Purchaser as follows:
Section 10.01 Due Organization and Authority. The Seller
is a corporation duly organized, validly existing and in good standing under the
laws of [the United States] [the state of its incorporation] 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 Seller, and in any
event the Seller is in compliance with the laws of any such state to the extent
necessary to ensure the enforceability of the related Mortgage Loan in
accordance with the terms of this Agreement; the Seller has the full corporate
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 or transfer to be delivered pursuant to this
Agreement) by the Seller 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 Seller; and all requisite
corporate action has been taken by the Seller to make this Agreement valid and
binding upon the Seller in accordance with its terms;
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Section 10.02 Ordinary Course of Business. The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Seller;
Section 10.03 No Conflicts. Neither the execution and
delivery of this Agreement, nor the fulfillment of or compliance with the terms
and conditions of this Agreement, will conflict with or result in a breach of
any of the terms, conditions or provisions of the Seller's charter or by-laws or
any legal restriction or any agreement or instrument to which the Seller is now
a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Seller 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;
Section 10.04 Ability to Service. The Seller 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 Seller 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 Seller unable to comply with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility
requirements or which would require notification to either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac;
Section 10.05 Ability to Perform. The Seller 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;
Section 10.06 No Litigation Pending. There is no action,
suit, proceeding or investigation pending or threatened against the Seller
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 Seller, or in any material impairment of the right
or ability of the Seller to carry on its business substantially as now
conducted, or in any material liability on the part of the Seller, or which
would draw into question the validity of this Agreement or the Mortgage Loans or
of any action taken or to be taken in connection with the obligations of the
Seller contemplated herein, or which would be likely to impair materially the
ability of the Seller to perform under the terms of this Agreement;
-25-
Section 10.07 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 Seller of or compliance by
the Seller with this Agreement or the Servicing of the Mortgage Loans as
evidenced by the consummation of the transactions contemplated by this
Agreement, or if required, such approval has been obtained prior to the related
Closing Date;
Section 10.08 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.
ARTICLE XI
DEFAULT
Section 11.01 Events of Default. The following shall
constitute an Event of Default under this Agreement on the part of the Seller:
(a) any failure by the Seller to remit to the Purchaser any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of five days after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Seller by the Purchaser; or
(b) the failure by the Seller duly to observe or perform in
any material respect any other of the covenants or agreements on the part of the
Seller set forth in this Agreement which continues unremedied for a period of 30
days after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Seller by the Purchaser; or
(c) 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, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Seller and such decree or order
shall have remained in force undischarged or unstayed for a period of 60 days;
or
(d) the Seller 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 Seller or of or relating to all or substantially all of its property; or
(e) the Seller shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) the Seller ceases to meet the qualifications of a ▇▇▇▇▇▇
Mae servicer; or
(g) the Seller fails to maintain a minimum net worth of
$25,000,000; or
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(h) the Seller attempts to assign its right to servicing
compensation hereunder or the Seller attempts, without the consent of the
Purchaser, to sell or otherwise dispose of all or substantially all of its
property or assets or to assign this Agreement or the servicing responsibilities
hereunder or to delegate its duties hereunder or any portion thereof.
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 Seller, may terminate
all the rights and obligations of the Seller under this Agreement and in and to
the Mortgage Loans and the proceeds thereof.
Upon receipt by the Seller of such written notice, all
authority and power of the Seller 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 6.03.
Section 11.02 Waiver of Defaults. By a written notice, the
Purchaser may waive any default by the Seller 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 XII
MISCELLANEOUS PROVISIONS
Section 12.01 Notices. All notices, requests, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given upon
the delivery or mailing thereof, as the case may be, sent by registered or
certified mail, return receipt requested:
(a) If to Purchaser to:
▇▇▇▇▇▇ Brothers Bank, FSB
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Contract Finance
(b) If to Seller to:
RBC Mortgage Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(with a copy to Legal Department)
-27-
Section 12.02 Waivers. Either the Seller or Purchaser may
upon consent of all parties, by written notice to the others:
(a) Waive compliance with any of the terms, conditions or
covenants required to be complied with by the others hereunder; and
(b) Waive or modify performance of any of the obligations of
the others hereunder.
The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other
subsequent breach.
Section 12.03 Entire Agreement; Amendment. This Agreement
and the Purchase Agreement constitute the entire agreement between the parties
with respect to servicing of the Mortgages during the Interim Period. This
Agreement may be amended and any provision hereof waived, but, only in writing
signed by the party against whom such enforcement is sought.
Section 12.04 Execution; Binding Effect. 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 8.03, this Agreement shall inure to the benefit of
and be binding upon the Seller and the Purchaser and their respective successors
and assigns.
Section 12.05 Headings. Headings of the Articles and
Sections in this Agreement are for reference purposes only and shall not be
deemed to have any substantive effect.
Section 12.06 Applicable Law. This Agreement shall be
construed in accordance with the laws of the State of New York.
Section 12.07 Relationship of Parties. Nothing herein
contained shall be deemed or construed to create a partnership or joint venture
between the parties. The duties and responsibilities of the Seller shall be
rendered by them as independent contractors and not as an agent of Purchaser.
The Seller shall have full control of all of its acts, doings, proceedings,
relating to or requisite in connection with the discharge of its duties and
responsibilities under this Agreement.
Section 12.08 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.
-28-
Section 12.09 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
Seller's expense in the event recordation is either necessary under applicable
law or requested by the Purchaser at its sole option.
Section 12.10 Appointment and Designation of Master
Servicer. The Purchaser hereby appoints and designates Aurora Loan Services,
Inc. as its master servicer (the "Master Servicer") for the Mortgage Loans
subject to this Agreement. The Seller is hereby authorized and instructed to
take any and all instructions with respect to servicing the Mortgage Loans
hereunder as if the Master Servicer were the Purchaser hereunder. The
authorization and instruction set forth herein shall remain in effect until such
time as the Seller shall receive written instruction from the Purchaser that
such authorization and instruction is terminated.
-29-
IN WITNESS WHEREOF, the parties have executed this Agreement
under seal as of the date and year first above written.
▇▇▇▇▇▇ BROTHERS BANK, FSB
(the Purchaser)
By:
---------------------------
Name:
Title:
RBC MORTGAGE COMPANY
(the Seller)
By:
---------------------------
Name:
Title:
EXHIBIT 1
FORM OF MONTHLY REMITTANCE ADVICE
[INTENTIONALLY OMITTED]
1-1
EXHIBIT 2
FORM OF CUSTODIAL ACCOUNT CERTIFICATION
_______ __, 200_
RBC Mortgage Company hereby certifies that it has established
the account described below as a Custodial Account pursuant to Section 2.04 of
the Flow Interim Servicing Agreement, dated as of September 8, 2003, Fixed and
Adjustable Rate Mortgage Loans, Group 2003-2.
Title of Account:_"RBC Mortgage Company in trust for the
registered Purchaser, Group 2003-2."
Account Number:______________________________________
Address of office or branch
of the Seller at
which Account is maintained:_________________________
RBC MORTGAGE COMPANY
Seller
By: _____________________________
Name:
Title:
2-1
EXHIBIT 3
FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 200_
To: _________________________________________________
_________________________________________________
_________________________________________________
(the "Depository")
As Seller under the Flow Interim Servicing Agreement, dated as
of September 8, 2003, Fixed and Adjustable Rate Mortgage Loans, Group 2003-2
(the "Agreement"), we hereby authorize and request you to establish an account,
as a Custodial Account pursuant to Section 2.04 of the Agreement, to be
designated as "RBC Mortgage Company in trust for the Fixed and Adjustable Rate
Mortgage Loans - Group 2003-2." All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Seller. You may refuse any deposit
which would result in violation of the requirement that the account be fully
insured as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
RBC MORTGAGE COMPANY
Seller
By: ______________________________________
Name:
Title:
Date:
3-2
The undersigned, as Depository, hereby certifies that the
above described account has been established under Account Number __________, at
the office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
__________________________________________
Depository
By: ______________________________________
Name:
Title:
Date:
4-1
EXHIBIT 4
FORM OF ESCROW ACCOUNT CERTIFICATION
_________ ___, 200_
RBC Mortgage Company hereby certifies that it has established
the account described below as an Escrow Account pursuant to Section 2.06 of the
Flow Interim Servicing Agreement, dated as of September 8, 2003, Fixed and
Adjustable Rate Mortgage Loans, Group 2003-2.
Title of Account: "RBC Mortgage Company in trust for the
Purchaser of the Fixed and Adjustable Rate Mortgage Loans, Group 2003-2, and
various Mortgagors."
Account Number:______________________________________
Address of office or branch
of the Seller at
which Account is maintained:_________________________
RBC MORTGAGE COMPANY
Seller
By: _____________________________
Name:
Title:
Date:
4-2
EXHIBIT 5
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
_______ __, 200_
To: _________________________________________________
_________________________________________________
_________________________________________________
(the "Depository")
As Seller under the Flow Interim Servicing Agreement, dated as
of September 8, 2003, Fixed and Adjustable Rate Mortgage Loans, Group 2003-2
(the "Agreement"), we hereby authorize and request you to establish an account,
as an Escrow Account pursuant to Section 2.06 of the Agreement, to be designated
as "RBC Mortgage Company, in trust for the Purchasers of Fixed and Adjustable
Rate Mortgage Loans - Group 2003-2." All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Seller. You may refuse
any deposit which would result in violation of the requirement that the account
be fully insured as described below. This letter is submitted to you in
duplicate. Please execute and return one original to us.
RBC MORTGAGE COMPANY
Seller
By: _____________________________
Name:
Title:
Date:
5-1
The undersigned, as Depository, hereby certifies that the
above described account has been established under Account Number ______, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
________________________________
Depository
By: ____________________________
Name:
Title:
Date:
5-2
EXHIBIT 6
ACKNOWLEDGMENT AGREEMENT
On this ____ day of ____________, 200_, ▇▇▇▇▇▇ Brothers Bank,
FSB, (the "Purchaser") as the Purchaser under that certain Flow Interim
Servicing Agreement dated as of September 8, 2003, (the "Agreement"), does
hereby contract with RBC Mortgage Company (the "Seller") as Seller under the
Agreement, for the servicing responsibilities related to the Mortgage Loans
listed on the Mortgage Loan Schedule attached hereto. The Seller hereby accepts
the servicing responsibilities transferred hereby and on the date hereof assumes
all servicing responsibilities related to the Mortgage Loans identified on the
attached Mortgage Loan Schedule all in accordance with the Agreement. The
contents of each Servicing File required to be delivered to service the Mortgage
Loans pursuant to the Agreement have been or shall be delivered to the Seller by
the Purchaser in accordance with the terms of the Agreement.
With respect to the Mortgage Loans made subject to the
Agreement hereby, the Closing Date shall be ___________________ and the Transfer
Date shall be _______________.
All other terms and conditions of this transaction shall be
governed by the Agreement.
Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Agreement.
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This Acknowledgment 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.
IN WITNESS WHEREOF, the Purchaser and the Seller have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
PURCHASER:
▇▇▇▇▇▇ BROTHERS BANK, FSB
By:_____________________________
Name:___________________________
Title:__________________________
SELLER:
RBC MORTGAGE COMPANY
By:_____________________________
Name:___________________________
Title:__________________________
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