Exhibit 10.79
SUBSERVICING AGREEMENT
THIS SUBSERVICING AGREEMENT, dated effective as of December 1, 1997,
is entered into between Pan American Bank, FSB (the "Master Servicer") and Ocwen
Federal Bank FSB (the "Subservicer").
WHEREAS, the Master Servicer has entered into that certain Pooling and
Servicing Agreement, dated as of December 1, 1997 (the "Pooling and Servicing
Agreement"), among the Master Servicer, ▇▇▇▇▇▇ ABS Corporation, as Depositor,
United PanAm Mortgage Corp., as Seller, and Bankers Trust Company of California,
N.A., as Trustee;
WHEREAS, each of the Master Servicer and the Subservicer desire that
the Subservicer perform certain servicing functions on behalf of the Master
Servicer with respect to the Mortgage Loans to be serviced by the Master
Servicer pursuant to the Pooling and Servicing Agreement;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for other good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. Definitions. All capitalized words and terms in this
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Agreement not otherwise defined herein shall have the respective meanings
ascribed thereto in the Pooling and Servicing Agreement.
Section 2. Subservicing of Mortgage Loans. The Subservicer hereby
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agrees to perform all obligations of the Master Servicer under the Pooling and
Servicing Agreement with respect to the servicing of the Mortgage Loans,
including, without limitation, making such advances with respect to such
Mortgage Loans as are required under the Pooling and Servicing Agreement, and to
observe, and perform the duties of the Master Servicer (in its capacity as
master servicer) in accordance with, the provisions of the Pooling and Servicing
Agreement relating to sub-servicing of the Mortgage Loans, including, without
limitation, Section 3.08 of the Pooling and Servicing Agreement.
Notwithstanding the foregoing, the Subservicer shall (i) have no responsibility
relating to (a) a Master Servicer Event of Default which is not directly caused
by a Subservicer Event of Default, (b) the repurchase, or substitution of a
Mortgage Loan, (c) the Master Servicer's obligations to pay the Trustee's fees
and/or expenses, under Section 8.05 of the Pooling and Servicing Agreement or
otherwise, (d) the payment of the Termination Price, (e) any obligations of
United PanAm Mortgage Corporation under the Pooling and Servicing Agreement or
any other agreement, or (f) any other obligation of the Master Servicer not
related to the servicing of the Mortgage Loans or REO Properties, and (ii) not
clear and terminate the Collection Account without the prior written consent of
the Master Servicer.
Section 4. Subservicer Not to Resign. The Subservicer shall not
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resign from the obligations and duties hereby imposed on it except upon
determination that the performance of its obligations or duties hereunder are no
longer permissible under applicable law or are in material
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conflict by reason of applicable law with any other activities carried on by it
or its subsidiaries or affiliates, the other activities of the Subservicer so
causing such a conflict being of a type and nature carried on by the Subservicer
or its subsidiaries or affiliates at the date of this Agreement; provided,
however, that no such resignation by the Subservicer shall become effective
until the Trustee with the consent of the Certificate Insurer shall have
designated a successor subservicer acceptable to the Rating Agencies, as
evidenced by a letter to the effect that the ratings then assigned to the
Certificates will not be lowered or withdrawn, without taking into account the
benefit of the Policy, or the Certificate Insurer shall have otherwise consented
to the resignation of the Subservicer. Any such determination by the Subservicer
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Master Servicer, the Trustee and the Certificate Insurer.
Section 5. Subservicer Events of Default; Termination.
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(a) If any one of the following events ("Subservicer Events of Default")
shall occur and be continuing:
(i) (A) The failure by the Subservicer to make any Monthly Advance;
or (B) any other failure by the Subservicer to deposit in the Collection Account
or Distribution Account any deposit required to be made under the terms of this
Agreement which continues unremedied for a period of one Business Day after the
date upon which written notice of such failure shall have been given to the
Subservicer by the Master Servicer or Trustee or to the Subservicer, the Master
Servicer and the Trustee by the Certificate Insurer or by any holder of a
Regular Certificate evidencing an aggregate undivided interest in the Trust of a
Percentage Interest of at least 25%; or
(ii) The failure by the Subservicer to make any required Servicing
Advance which failure continues unremedied for a period of 30 days, or the
failure by the Subservicer duly to observe or perform, in any material respect,
any other covenants, obligations or agreements of the Subservicer as set forth
in this Agreement, which failure 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 Subservicer by the Master Servicer or
Trustee or to the Subservicer, Master Servicer and the Trustee by the
Certificate Insurer or by any holder of a Regular Certificate evidencing an
aggregate undivided interest in the Trust of a Percentage Interest of at least
25%; or
(iii) The entry against the Subservicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the premises for
the appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(iv) The Subservicer shall voluntarily go into liquidation, consent to
the appointment of a conservator or receiver or liquidator or similar person in
any insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to the Subservicer or of or relating to all
or substantially all of its property, or a decree or order of a court
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or agency or supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, liquidator or similar person 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 Subservicer and such decree or order shall have
remained in force undischarged, unbonded or unstayed for a period of 60 days; or
the Subservicer 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.
(b) then, and in each and every such case, so long as a Subservicer Event
of Default shall not have been remedied within the applicable grace period, (x)
subject to the succeeding paragraph, with respect solely to clause (i)(A) above,
if such Monthly Advance is not made by 4:00 P.M., New York time, on the second
Business Day following written notice to the Subservicer of such event the
Master Servicer shall terminate all of the rights and obligations of the
Subservicer under this Agreement, and (y) in the case of (i)(B), (ii), (iii) and
(iv) above , the Master Servicer shall, at the direction of the Trustee or
Certificate Insurer or the Holders of each Class of Class A Certificates
evidencing Percentage Interests aggregating not less than 51% with the consent
of the Certificate Insurer, by notice then given in writing to the Subservicer
and to the Master Servicer (and to the Trustee if given by Holders of
Certificates), terminate all of the rights and obligations of the Subservicer as
subservicer under this Agreement. Any such notice to the Subservicer shall also
be given to each Rating Agency, the Depositor and the Certificate Insurer. On
or after the receipt by the Subservicer of such written notice, all authority
and power of the Subservicer under this Agreement, whether with respect to the
Certificates or the Mortgage Loans or otherwise, shall pass to and be vested in
the Master Servicer pursuant to and under this section; and, without limitation,
the Master Servicer is hereby authorized and empowered to execute and deliver,
on behalf of the Subservicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of each Mortgage
Loan and related documents or otherwise. The Subservicer agrees to cooperate
with the Master Servicer and/or Trustee in effecting the termination of the
responsibilities and rights of the Subservicer hereunder, including, without
limitation, the transfer to the Trustee for the administration by it of all cash
amounts that shall at the time be held by the Subservicer and to be deposited by
it in the Collection Account, or that have been deposited by the Subservicer in
the Collection Account or thereafter received by the Subservicer with respect to
the Mortgage Loans. All reasonable costs and expenses (including attorneys'
fees) incurred in connection with transferring the Mortgage Files to the
successor servicer occasioned by a Subservicer Event of Default to reflect such
succession as servicer pursuant to this Section shall be paid by the Subservicer
upon presentation of reasonable documentation of such costs and expenses.
Section 6. Termination Relating to a Termination of the Master
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Servicer. In connection with the termination of the Subservicer occasioned by a
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termination of the Master Servicer under the Pooling and Servicing Agreement or
occasioned by any event other than a Subservicer Event of Default, the
Subservicer shall be entitled to payment of all of Subservicer's reasonable
third party costs and expenses (including, without limitation, any reasonable
attorneys' fees
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and fees associated with the transfer of servicing and the sending of "goodbye"
letters); provided, however, in no event shall such amounts be taken out of the
Collection Account nor shall the Trustee, the Certificate Insurer or any
successor servicer (other than Master Servicer) be liable for any such fees and
the Subservicer shall look solely to the Master Servicer for payment of such
fees. The Subservicer hereby covenants and agrees to act as the Subservicer
under this Agreement for an initial term, commencing on the Closing Date and
ending on March 30, 1998, which term shall be extendable by the Certificate
Insurer for successive terms of three calendar months thereafter, until the
termination of the Subservicer's obligations and responsibilities pursuant to
Article X of the Pooling and Servicing Agreement. A Servicer Extension Notice
sent by the Certificate Insurer with respect to the Master Servicer under
Section 7.01(b) of the Pooling and Servicing Agreement shall be deemed to
automatically serve as an extension of the Subservicer's term hereunder. The
Subservicer hereby agrees that, upon its receipt of any such Servicer Extension
Notice, the Subservicer shall become bound for the duration of the term covered
by such Servicer Extension Notice to continue as the Subservicer subject to and
in accordance with the other provisions of this Agreement.
Section 7. Assignment. The Subservicer shall not assign its
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rights or delegate its duties and obligations except to the extent that (and
subject to the same conditions under which) the Master Servicer may do so with
respect to its rights, duties and/or obligations under Section 3.21 of the
Pooling and Servicing Agreement.
Section 8. Subservicing Compensation. As monthly compensation for
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its activities hereunder, the Subservicer shall be entitled to retain with
respect to each Mortgage Loan and any calendar month an amount equal to one
month's interest (or in the event of any payment of interest which accompanies a
Principal Prepayment in full made by the Mortgage during such calendar month,
interest for the number of days covered by such payment of interest) at the rate
of [Material omitted pursuant to a request for confidential treatment and filed
separately with the Securities and Exchange Commission.] per annum on the same
principal amount on which the payment of interest due for such Mortgage Loan
during such calendar month accrues. The Subservicer shall be entitled to retain
additional servicing compensation in the form of [Material omitted pursuant to a
request for confidential treatment and filed separately with the Securities and
Exchange Commission.] and any other service-related fees to the extent collected
from Mortgagors.
Section 9. Representations, Warranties and Covenants. The
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Subservicer hereby represents, warrants and covenants to the Master Servicer
that as of the Closing Date or as of such date specifically provided herein:
(i) The Subservicer is duly organized, validly existing and in
good standing as a federal savings bank under the laws of the United States
and is and will remain in compliance with the laws of each state in which
any Mortgaged Property is located to the extent necessary to ensure the
enforceability of each Mortgage Loan and the servicing of the Mortgage Loan
in accordance with the terms of this Agreement;
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(ii) The Subservicer has the full power and authority to conduct
its business as presently conducted by it and to execute, deliver and
perform, and to enter into and consummate, all transactions contemplated by
this Agreement. The Subservicer has duly authorized the execution,
delivery and performance of this Agreement, has duly executed and delivered
this Agreement, and this Agreement, assuming due authorization, execution
and delivery by the Master Servicer, constitutes a legal, valid and binding
obligation of the Subservicer, enforceable against it in accordance with
its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity;
(iii) The execution and delivery of this Agreement by the
Subservicer and the performance of and compliance with the terms of this
Agreement will not (a) violate the Subservicer's charter or by-laws or any
law, rule, regulation, order, judgment, award, administrative
interpretation, injunction, writ, decree or the like affecting the
Subservicer or by which the Subservicer is bound or (b) result in a breach
of or constitute a default under any indenture or other material agreement
to which the Subservicer is a party or by which the Subservicer is bound,
which in the case of either clause (a) or (b) will have a material adverse
effect on the Subservicer's ability to perform its obligations under this
Agreement;
(iv) The Subservicer is an approved servicer for FHLMC or FNMA in
good standing and is a HUD approved mortgagee pursuant to Section 203 of
the National Housing Act; no event has occurred, including but not limited
to a change in insurance coverage, which would make the Subservicer unable
to comply with FHLMC, FNMA or HUD eligibility requirements or which would
require notification to FHLMC, FNMA or HUD;
(v) The Subservicer 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;
(vi) There are no actions or proceedings against, investigations
known to it of, the Subservicer before any court, administrative or other
tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the consummation of the transactions contemplated by
this Agreement or (C) that might prohibit or materially and adversely
affect the performance by the Subservicer of its obligations under, or
validity or enforceability of, this Agreement; and
(vii) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Subservicer of, or compliance by the Subservicer with,
this Agreement or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders,
if any, that have been obtained prior to the Closing Date.
Upon discovery by any of the Subservicer of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan or
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the interests therein of the Certificateholders and the Certificate Insurer, the
Subservicer shall give prompt written notice (but in no event later than two
Business Days following such discovery) to the Master Servicer, the Trustee and
Certificate Insurer.
Section 10. Notices. All notices and other communications
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hereunder shall be in writing and shall be deemed given and received: (a) upon
receipt if delivered personally (unless subject to clause (b)) or if mailed by
registered or certified mail return receipt requested, postage prepaid; (b) at
5:00 p.m. local time on the business day after dispatch if sent by a nationally
recognized overnight courier; or (c) upon the completion of transmission (which
is confirmed by telephone or by a statement generated by the transmitting
machine) if transmitted by telecopy or other means of facsimile which provides
immediate or near immediate transmission to compatible equipment in the
possession of the recipient, in any case to the parties at the following
addresses or telecopy numbers (or at such other address or telecopy number for a
party as will be specified by like notice):
If to Subservicer: Ocwen Federal Bank FSB
The Forum, Suite 1002
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secretary
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Master Servicer: Pan American Bank, FSB
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation Number: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇
Section 11. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
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ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 12. Assignment. This Agreement may not be assigned by the
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Subservicer without the prior written consent of the Master Servicer, the
Trustee and the Certificate Insurer.
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IN WITNESS WHEREOF, each of the undersigned parties has caused this
Agreement to be duly executed by one of its duly authorized officers, all as of
the date first above written.
PAN AMERICAN BANK, FSB
By: /s/
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Name:
---------------------------------
Title:
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OCWEN FEDERAL BANK FSB
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
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