Exhibit 99.6
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CORRESPONDENT SERVICING AGREEMENT
between
▇▇▇▇▇▇ BROTHERS BANK, FSB, Owner
AURORA LOAN SERVICES INC., Master Servicer
and
COLONIAL SAVINGS, F.A., Servicer
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Residential Fixed and Adjustable Rate Mortgage Loans
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; DELIVERY OF DOCUMENTS
Section 2.01 Contract for Servicing; Maintenance of
Servicing Files. 11
Section 2.02 Books and Records. 11
Section 2.03 Commencement of Servicing Responsibilities. 12
Section 2.04 Delivery of Documents. 13
Section 2.05 Record Title. 13
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES AND BREACH
Section 3.01 Servicer Representations and Warranties. 14
Section 3.02 Remedies for Breach of Representations and
Warranties. 17
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Servicer to Act as Servicer. 17
Section 4.02 Liquidation of Mortgage Loans. 19
Section 4.03 Collection of Mortgage Loan Payments. 20
Section 4.04 Establishment of and Deposits to Custodial
Account. 20
Section 4.05 Permitted Withdrawals From Custodial
Account. 22
Section 4.06 Establishment of and Deposits to Escrow
Account. 23
Section 4.07 Permitted Withdrawals From Escrow Account. 24
Section 4.08 Payment of Taxes, Insurance and Other
Charges. 24
Section 4.09 Protection of Accounts. 25
Section 4.10 Maintenance of Hazard Insurance. 25
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Section 4.11 Maintenance of Mortgage Impairment
Insurance. 27
Section 4.12 Maintenance of Fidelity Bond and Errors and
Omissions Insurance. 27
Section 4.13 Inspections. 28
Section 4.14 Restoration of Mortgaged Property. 28
Section 4.15 Servicing and Administration of Mortgage
Insurance Policies. 29
Section 4.16 Title, Management and Disposition of REO
Property. 30
Section 4.17 Real Estate Owned Reports. 32
Section 4.18 Liquidation Reports. 32
Section 4.19 Notification of Adjustments. 32
Section 4.20 Reports of Foreclosures and Abandonments of
Mortgaged Property. 32
Section 4.21. MERS. 32
Section 4.22 Waiver of Prepayment Charges. 33
Section 4.23. Compliance With REMIC Provisions 33
ARTICLE V
PAYMENTS TO THE OWNER
Section 5.01 Remittances. 34
Section 5.02 Statements to Master Servicer. 35
Section 5.03 Monthly Advances by Servicer. 36
Section 5.04 Failure to Provide Timely Reports. 36
Section 5.05 Credit Reporting. 37
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property. 37
Section 6.02 Satisfaction of Mortgages and Release of
Mortgage Files. 38
Section 6.03 Servicing Compensation. 38
Section 6.04 Annual Statement as to Compliance. 39
Section 6.05 Annual Independent Public Accountants'
Servicing Report. 39
Section 6.06 Right to Examine Servicer Records. 39
ARTICLE VII
RECONSTITUTION; MASTER SERVICER
Section 7.01 Reconstitution. 40
Section 7.02 Master Servicer; Servicer's Guide. 41
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ARTICLE VIII
SERVICER TO COOPERATE
Section 8.01 Provision of Information. 42
Section 8.02 Financial Statements; Servicing Facility. 43
ARTICLE IX
THE SERVICER
Section 9.01 Indemnification; Third Party Claims. 43
Section 9.02 Merger or Consolidation of the Servicer. 44
Section 9.03 Limitation on Liability of Servicer and
Others. 44
Section 9.04 Limitation on Resignation and Assignment by
Servicer. 44
Section 9.05 Indemnification with Respect to Certain
Taxes and Loss of REMIC Status. 45
ARTICLE X
DEFAULT
Section 10.01 Events of Default. 46
Section 10.02 Waiver of Defaults. 48
Section 10.03. Survival of Obligations and Liabilities of
the Servicer. 48
ARTICLE XI
TERMINATION
Section 11.01 Termination. 48
Section 11.02 Termination Without Cause. 48
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Servicer. 49
Section 12.02 Amendment. 50
Section 12.03 Governing Law. 50
Section 12.04 Duration of Agreement. 51
Section 12.05 Notices. 51
Section 12.06 Severability of Provisions. 51
Section 12.07 Relationship of Parties. 52
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Section 12.08 Execution; Successors and Assigns. 52
Section 12.09 Recordation of Assignments of Mortgage. 52
Section 12.10 Assignment by Owner. 52
Section 12.11 No Personal Solicitation. 52
Section 12.12 Protection of Confidential Information. 53
Section 12.13 Further Agreements. 53
Section 12.14 Counterparts. 53
Section 12.15 Exhibits. 53
Section 12.16 General Interpretive Principles. 53
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EXHIBITS
EXHIBIT A-1 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT A-2 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT B-1 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT B-2 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT C-1 FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT C-2 FORM OF MONTHLY DELINQUENT LOAN REPORT
EXHIBIT D FORM OF OFFICER'S CERTIFICATE
EXHIBIT E FORM OF OPINION OF COUNSEL
EXHIBIT F FORM OF TRANSFER NOTICE
EXHIBIT G FORM OF REQUEST FOR RELEASE
EXHIBIT H AUTHORIZED REPRESENTATIVES OF THE SERVICER
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This Correspondent Servicing Agreement, dated as of June 26, 2002
(this "Agreement"), is entered into among ▇▇▇▇▇▇ BROTHERS BANK, FSB, a federal
savings bank, as owner (in such capacity, the "Owner"), AURORA LOAN SERVICES
INC., a Delaware corporation, as master servicer (in such capacity, the
"Master Servicer") and COLONIAL SAVINGS, F.A., as servicer (the "Servicer").
W I T N E S S E T H:
WHEREAS, the Servicer, pursuant to the Loan Purchase Agreement by and
between the Owner and the Servicer, dated as of the date hereof (the "Loan
Purchase Agreement"), from time to time sells to the Owner certain adjustable
and/or fixed rate residential mortgage loans on a servicing retained basis;
WHEREAS, the Servicer and the Owner desire to set forth the terms and
conditions of the servicing responsibilities of the Servicer with respect to
all loans transferred from the Servicer to the Owner pursuant to the Loan
Purchase Agreement (each a "Mortgage Loan" and collectively, the "Mortgage
Loans");
WHEREAS, the Master Servicer shall serve as a master servicer on
behalf of the Owner with respect to the Mortgage Loans to supervise, manage
and coordinate the servicing activities of the Servicer hereunder; and
WHEREAS, the Owner may sell, transfer and assign some or all of the
Mortgage Loans from time to time (a) to ▇▇▇▇▇▇ ▇▇▇ under its Cash Purchase
Program or MBS SWAP Program (Special Servicing Option); or (b) to ▇▇▇▇▇▇▇ Mac
under its ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ Program or Gold PC Program; or (c) to one or more
third party purchasers in one or more whole loan pools; or (d) directly or
indirectly, to certain trusts to be formed as part of publicly-issued or
privately placed, rated or unrated, mortgage pass-through transactions, in any
or all cases (subject to the terms of this Agreement) retaining the Servicer
to service the Mortgage Loans;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Owner and the Servicer agree as
follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage servicing institutions that
service mortgage loans of the same type and quality as such Mortgage Loan in
the jurisdiction where the related
Mortgaged Property is located, but without regard to: (i) any relationship
that the Servicer or any affiliate of the Servicer may have with the related
Mortgagor; (ii) the Servicer's obligation to make Monthly Advances or
Servicing Advances; or (iii) the servicer's right to receive compensation for
its services hereunder with respect to any particular transaction.
Agency Transfer: The sale or transfer by Owner of some or all of the
Mortgage Loans to ▇▇▇▇▇▇ Mae under its Cash Purchase Program or its MBS Swap
Program (Special Servicing Option) or to ▇▇▇▇▇▇▇ Mac under its ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ Program or Gold PC Program, retaining the Servicer as "servicer
thereunder".
Agreement: This Correspondent Servicing Agreement and all amendments
hereof and supplements hereto.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of
the Mortgaged Property.
Appropriate Federal Banking Agency: Appropriate Federal Banking Agency
shall have the meaning ascribed to such term by Section 1813(q) of Title 12 of
the United States Code, as amended from time to time.
ARM Mortgage Loan: A Mortgage Loan pursuant to which the interest rate
shall be adjusted from time to time in accordance with the related Mortgage
Note.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Owner or, in the case of a MERS
Mortgage Loan, a confirmed electronic transmission to MERS, identifying a
transfer of ownership of the related Mortgage to the Owner or its designee.
Best's: The meaning ascribed thereto in Section 4.10.
BIF: The Bank Insurance Fund, or any successor thereto.
Breach: The meaning ascribed thereto in Section 3.02.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions in the State of New
York and the states in which the principal servicing offices of the Servicer
and the Master Servicer are located are authorized or obligated by law or
executive order to be closed.
Code: The Internal Revenue Code of 1986, as it may be amended from
time to time or any successor statute thereto, and applicable U.S. Department
of the Treasury regulations issued pursuant thereto.
Commencement Date: With respect to each Mortgage Loan, the Purchase
Date (as such term is defined in the Loan Purchase Agreement) related to such
Mortgage Loan.
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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.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 4.04.
Custodian: The entity designated by the Owner from time to time to
hold some or all original Mortgage Loan Documents on behalf of the Owner of
the related Mortgage Loan.
Cut-Off Date: With respect to any Mortgage Loan included in a
Reconstitution, the cut-off date applicable to such Reconstitution, as set
forth in the related Transfer Notice.
Delinquent Mortgage Loan: The meaning ascribed thereto in Section
11.02.
Determination Date: The 15th day (or if such 15th day is not a
Business Day, the Business Day immediately preceding such 15th day) of the
month of the related Remittance Date.
Due Date: The day of the month on which the Monthly Payment is due on
a Mortgage Loan, exclusive of any days of grace. With respect to any Mortgage
Loans for which payment from the Mortgagor is due on a day other than the
first day of the month, such Mortgage Loans will be treated as if the Monthly
Payment is due on the first day of the month of the actual Due Date.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of the
Remittance Date and ending on the first day of the month of the Remittance
Date.
Eligible 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
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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.
Errors and Omissions Insurance Policy: An errors and omissions
insurance policy to be maintained by the Servicer pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 4.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the mortgagee pursuant to the Mortgage or any other
related document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 10.01.
▇▇▇▇▇▇ Mae: ▇▇▇▇▇▇ ▇▇▇, or any successor thereto.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ Mae
Servicers' Guide and all amendments or additions thereto.
FASIT: A "financial asset securitization investment trust" within the
meaning of Section 860L of the Code.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer
pursuant to Section 4.12.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Initial Owner: ▇▇▇▇▇▇ Brothers Bank, FSB.
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Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Insured Amount: The meaning ascribed thereto in Section 4.09.
Insured Depository Institution: Insured Depository Institution shall
have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of
the United States Code, as amended from time to time.
Interest Rate Adjustment Date: With respect to an ARM Mortgage Loan,
the date on which an adjustment to the Mortgage Interest Rate on a Mortgage
Note becomes effective.
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, including any amounts remaining in the
related Escrow Account.
Loan Purchase Agreement: The Loan Purchase Agreement described in the
Recitals to this Agreement, which Loan Purchase Agreement incorporates the
terms of the Aurora Loan Services Seller Guide, as the same may be amended
from time to time.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio of the Stated Principal Balance of the Mortgage Loan as of the
Commencement Date (unless otherwise indicated) to the lesser of (a) the
Appraised Value of the Mortgaged Property and (b) if the Mortgage Loan was
made to finance the acquisition of the related Mortgaged Property, the
purchase price of the Mortgaged Property, expressed as a percentage.
LPMI Policy: A policy of primary mortgage guaranty insurance issued by
a Qualified Insurer pursuant to which the related premium is to be paid by the
Servicer of the related Mortgage Loan from payments of interest made by the
Mortgagor.
Master Servicer: Aurora Loan Services Inc., in its capacity as master
servicer hereunder, or its successors in interest or assigns in such capacity
or its successor as Master Servicer under this Agreement or any Reconstitution
Agreement, or such other master servicer as may be designated in a Transfer
Notice.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS Eligible Mortgage Loan: Any Mortgage Loan that under applicable
law and investor requirements is recordable in the name of MERS in the
jurisdiction in which the related Mortgaged Property is located.
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MERS Mortgage Loan: Any Mortgage Loan as to which the related
Mortgage, or an Assignment of Mortgage, has been recorded in the name of MERS,
as agent for the holder from time to time of the Mortgage Note.
Monthly Advance: With respect to each Mortgage Loan, the portion of
Monthly Payment delinquent at the close of business on the Determination Date
and required to be advanced by the Servicer pursuant to Section 5.03 on the
Business Day immediately preceding the Remittance Date of the related month.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Mortgage: The mortgage, deed of trust, deed to secure debt or other
instrument securing a Mortgage Note, which creates a lien on an unsubordinated
estate in fee simple in real property securing the Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan held
by the Custodian, and any additional documents required to be delivered to the
Custodian pursuant to this Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 4.11.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note, in the case of an ARM Mortgage Loan, as adjusted from time to
time in accordance with the provisions of the Mortgage Note, as the same may
reduced by the applications of the Relief Act.
Mortgage Loan: An individual mortgage loan that is the subject of this
Agreement and as defined in the Recitals to this Agreement, which Mortgage
Loan includes without limitation the Mortgage File, the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and all other rights, benefits, proceeds
and obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The documents delivered in respect of a
Mortgage Loan in accordance with the Loan Purchase Agreement.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Owner, which shall be equal to the
Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.
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Mortgagor: The obligor on a Mortgage Note.
Non-MERS Eligible Mortgage Loan: Any Mortgage Loan other than a MERS
Eligible Mortgage Loan.
Non-MERS Mortgage Loan: Any Mortgage Loan other than a MERS Mortgage
Loan.
Notice of Sale: The meaning ascribed thereto in Section 4.16.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or the President or a Vice President
or an assistant Vice President and by the Treasurer or the Secretary or one of
the Assistant Treasurers or Assistant Secretaries of the Servicer, and
delivered to the Owner as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the Servicer, reasonably acceptable to the Owner, provided that
any Opinion of Counsel relating to (a) qualification of the Mortgage Loans in
a REMIC or (b) compliance with the REMIC Provisions, must be an opinion of
counsel who (i) is in fact independent of the Servicer and any master servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Servicer or any master servicer of the Mortgage
Loans or in an affiliate of either and (iii) is not connected with the
Servicer or any master servicer of the Mortgage Loans as an officer, employee,
director or person performing similar functions.
Owner: With respect to any Mortgage Loan, ▇▇▇▇▇▇ Brothers Bank, FSB or
its successor in interest or any successor owner of the related Mortgage Loan
as herein provided.
Pass-Through Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust to be formed as part of a publicly-issued and/or
privately placed, rated or unrated, mortgage pass-through transaction,
retaining the Servicer as "servicer" (with or without a master servicer)
thereunder.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued by
a Qualified Insurer, as required by this Agreement or in connection with a
Reconstitution with respect to certain Mortgage Loans, whether acquired by the
Mortgagor, the Servicer, the lender, the Owner or any Reconstitution Party.
Prepayment Charge: Any prepayment or yield maintenance fees, penalties
or charges to be paid by the Mortgagor in connection with a Principal
Prepayment on a Mortgage Loan.
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Prepayment Interest Shortfall Amount: With respect to any Remittance
Date and any Mortgage Loan that was subject to a Principal Prepayment in full
or in part during the related Principal Prepayment Period, the difference
between (i) one full month's interest at the applicable Mortgage Loan
Remittance Rate on the outstanding principal balance of such Mortgage Loan
immediately prior to such Principal Prepayment and (ii) the amount of interest
actually received with respect to such Mortgage Loan in connection with such
Principal Prepayment.
Prime Rate: The prime rate announced to be in effect from time to
time, as published as the average rate in the "Money Rates" section of The
Wall Street Journal.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Charge, and which is not accompanied by an amount of
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment.
Principal Prepayment Period: The month preceding the month in which
the related Remittance Date occurs.
Qualified Depository: A depository the accounts of which are insured
by the FDIC through the BIF or the SAIF and the debt obligations of which are
rated AA or better by Standard & Poor's, a division of the ▇▇▇▇▇▇-▇▇▇▇
Companies.
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.
Rating Agency: Any of Fitch, Inc., ▇▇▇▇▇'▇ Investors Service, Inc., or
Standard & Poor's Ratings Services, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies,
or their respective successors designated by the Owner.
Reconstituted Mortgage Loan: Any Mortgage Loan that has been
transferred by the initial Owner hereunder in connection with a
Reconstitution.
Reconstitution: Any Agency Transfer, Pass-Through Transfer or Whole
Loan Transfer.
Reconstitution Party or Reconstitution Parties: Any and all of ▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇ Mac, trustee, trust fund, master servicer, depositor, issuer,
securities administrator, any certificateholders or bondholders, credit risk
manager, guarantor, insurer, or third party purchaser, as the case may be, and
the Owner, that are related to a Reconstitution.
Record Date: The close of business of the last Business Day of the
month preceding the month of the related Remittance Date.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
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REIT: A "real estate investment trust" within the meaning of Section
856 of the Code.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Documents: The document or documents creating and governing the
administration of a REMIC.
REMIC Eligible Mortgage Loan: A Mortgage Loan held by a REMIC which
satisfies and/or complies with all applicable REMIC Provisions.
REMIC Provisions: Provisions of the federal income tax law relating to
a REMIC, which appear at Section 860A through 86OG of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 18th day (or if such 18th day is not a Business
Day, the Business Day immediately preceding such day) of any month, beginning
with the 18th day (or if such 18th day is not a Business Day, the Business Day
immediately preceding such day) of the month following the first Commencement
Date hereunder.
Reporting Date: The fifth Business Day of any month, beginning with
the fifth Business Day of the month following the first Commencement Date
hereunder.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Servicer on behalf
of the Owner through foreclosure or by deed in lieu of foreclosure, as
described in Section 4.16.
Repurchase Price: With respect to any Mortgage Loan, a price equal to
(i) the Stated Principal Balance of the Mortgage Loan plus (ii) interest on
such Stated Principal Balance at the Mortgage Loan Remittance Rate from the
date on which interest has last been paid and distributed to the Owner to the
date of repurchase, less amounts received or advanced in respect of such
repurchased Mortgage Loan which are being held in the Custodial Account for
distribution in the month of repurchase.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Securities Act of 1933 or the 1933 Act: The Securities Act of 1933, as
amended.
Servicer: COLONIAL SAVINGS, F.A., or its successor in interest or
assigns, or any successor to the Servicer under this Agreement appointed as
herein provided.
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Servicer Employees: The meaning ascribed thereto in Section 4.12.
Servicer's Guide: The meaning ascribed thereto in Section 7.02.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses other than Monthly Advances (including reasonable
attorneys' fees and disbursements) incurred in the performance by the Servicer
of its servicing obligations, including, but not limited to, the cost of (a)
the preservation, restoration and protection of the Mortgaged Property, (b)
any enforcement or judicial proceedings, including foreclosures, (c) the
management and liquidation of any REO Property and (d) compliance with the
obligations under Section 4.08.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Owner shall pay to the Servicer, which shall, for a period of
one full month, be equal to one-twelfth of the product of (a) the Servicing
Fee Rate and (b) the outstanding principal balance of such Mortgage Loan. Such
fee shall be payable monthly, computed on the basis of the same principal
amount and period respecting which any related interest payment on a Mortgage
Loan is computed. The obligation of the Owner 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 4.05) of such Monthly Payment collected by the
Servicer, or as otherwise provided under Section 4.05.
Servicing Fee Rate: For each Mortgage Loan, the Servicing Fee Rate
specified in the related Purchase Advice provided at the time the Owner has
approved the purchase of such Mortgage Loan.
Servicing File: With respect to each Mortgage Loan, the file retained
by the Servicer containing all documents in Servicer's possession or control,
whether on hard copy, computer record, microfiche or any other format,
evidencing and pertaining to a particular Mortgage Loan and relating to the
processing, origination, servicing, collection, payment and foreclosure of
such Mortgage Loan or the bankruptcy of the related Mortgagor, including (i)
copies of the Mortgage Loan Documents delivered to the Custodian pursuant to
Section 2.04 to the extent customarily included by mortgage loan servicers in
their servicing files, and (ii) any servicing documentation which relates to
such Mortgage Loan of the type customarily included by mortgage loan servicers
in their servicing files.
Stated Principal Balance: As to each Mortgage Loan, (i) the principal
balance of the Mortgage Loan at the Commencement Date after giving effect to
payments of principal due on or before such date, whether or not received,
minus (ii) all amounts previously distributed to the Owner with respect to the
related Mortgage Loan representing payments or recoveries of principal or
advances in lieu thereof.
Transfer Notice: A notice in the form attached hereto as Exhibit F,
notifying the Servicer of a Reconstitution, identifying the related Mortgage
Loans and specifying certain terms applicable to such Reconstitution.
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Well Capitalized: Well Capitalized shall mean, with respect to any
Insured Depository Institution, the maintenance by such Insured Depository
Institution of capital ratios at or above the required minimum levels for such
capital category under the regulations promulgated pursuant to Section 1831(o)
of the United States Code, as amended from time to time, by the Appropriate
Federal Banking Agency for such institution, as such regulation may be amended
from time to time.
Whole Loan Transfer: The sale or transfer of some or all of the
Mortgage Loans to a third party purchaser in a whole loan transaction pursuant
to a seller's warranties and servicing agreement or a participation and
servicing agreement, retaining the Servicer as "servicer" thereunder.
ARTICLE II
POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; DELIVERY OF DOCUMENTS
Section 2.01 Contract for Servicing; Maintenance of Servicing Files.
The Owner does hereby contract with the Servicer, subject to the terms
of this Agreement for the servicing of the Mortgage Loans. In respect of all
Mortgage Loans sold to the Owner pursuant to the Loan Purchase Agreement, the
Servicer shall maintain a Servicing File, available for inspection by the
Owner, consisting of a copy of the contents of each Mortgage File and the
originals of the documents in each Mortgage File not delivered to the
Custodian, as well as all other documents and records related to each Mortgage
Loan. The possession of each Servicing File by the Servicer is at the will of
the Owner for the sole purpose of servicing the related Mortgage Loan, and
such retention and possession by the Servicer is in a custodial capacity only.
Upon the sale of each Mortgage Loan pursuant to the Loan Purchase Agreement
the ownership of each Mortgage Note, the related Mortgage and the related
Mortgage File and Servicing File shall vest immediately in the Owner, and the
ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Servicer shall vest
immediately in the Owner and shall be retained and maintained by the Servicer,
in trust, at the will of the Owner and only in such custodial capacity. Each
Servicing File shall be segregated from the other books and records of the
Servicer and shall be marked appropriately to reflect clearly the sale of the
related Mortgage Loan to the Owner. The Servicer shall release its custody of
the contents of any Servicing File only in accordance with written
instructions from the Owner, unless such release is required as incidental to
the Servicer's servicing of the Mortgage Loans or is in connection with a
repurchase of any Mortgage Loan pursuant to Section 6.02.
Section 2.02 Books and Records.
From and after the sale of any Mortgage Loans to the Owner all rights
arising out of such Mortgage Loan including but not limited to all funds
received on or in connection with such Mortgage Loan, shall be received and
held by the Servicer in trust for the benefit of the
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Owner as owner of the Mortgage Loans, and subject to the following paragraph,
the Servicer (or MERS) shall retain record title to the related Mortgages for
the sole purpose of facilitating the servicing and the supervision of the
servicing of the Mortgage Loans.
The Servicer 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 Owner. In
particular, the Servicer shall maintain in its possession, available for
inspection by the Owner, or its designee and shall deliver to the Owner 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 4.13. To the extent
that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the
Servicer may be in the form of microfilm or microfiche or such other reliable
means of recreating original documents, including but not limited to, optical
imagery techniques so long as the Servicer complies with the requirements of
the ▇▇▇▇▇▇ ▇▇▇ Selling and Servicing Guide, as amended from time to time.
This Agreement continuously, from the time of its execution, shall be
an official record of the Servicer and Servicer will maintain a copy of this
Agreement and each agreement related hereto in its official books and records.
The Servicer shall maintain with respect to each Mortgage Loan and shall make
available for inspection by any Owner or its designee the related Servicing
File during the time the Owner retains ownership of a Mortgage Loan and
thereafter in accordance with applicable laws and regulations.
The Servicer shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe, the
Servicer shall note transfers of Mortgage Loans. Upon receipt of notice of any
transfer of a Mortgage Loan, the Servicer shall ▇▇▇▇ its books and records to
reflect the ownership of the Mortgage Loans of such assignee, and shall
release the previous Owner from its obligations hereunder with respect to the
Mortgage Loans sold or transferred.
Section 2.03 Commencement of Servicing Responsibilities.
In accordance with the terms and conditions set forth in this
Agreement, the Servicer shall service the Mortgage Loans for and on behalf of
the Owner from and after the Commencement Date for each Mortgage Loan. By
selling each Mortgage Loan to the Purchaser under the Loan Purchase Agreement,
the Servicer shall be deemed to agree to service the related Mortgage Loans
for and on behalf of the Owner in accordance with the terms and conditions set
forth in this Agreement and in such confirmation. Effective upon the
Commencement Date for each Mortgage Loan, the Owner hereby appoints the
Servicer to perform, and the Servicer hereby assumes and accepts such
appointment for, all servicing responsibilities for the Mortgage Loans.
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On or prior to the initial Commencement Date hereunder, the Servicer
shall provide to the Owner: (i) an Officer's Certificate of the Servicer, in
the form of Exhibit E hereto, including all attachments thereto, and (ii) an
opinion of counsel to the Servicer in the form of Exhibit F hereto.
Section 2.04 Delivery of Documents.
The Servicer, as the Seller under the Loan Purchase Agreement, shall
deliver to the Owner or its designee all Mortgage Loan Documents required to
be delivered pursuant to the Loan Purchase Agreement. Except for documents
required to be delivered directly to the Owner pursuant to the Loan Purchase
Agreement, the Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within one week
of their execution, provided, however, that the Servicer shall provide the
Custodian with a certified true copy of any such document submitted for
recordation within one week of its execution, and shall provide the original
of any document submitted for recordation or a copy of such document certified
by the appropriate public recording office to be a true and complete copy of
the original within sixty (60) days of its submission for recordation.
Upon becoming aware of the payment in full of any Mortgage Loan, the
Servicer shall request the Custodian, on the request for release substantially
in the form annexed hereto as Exhibit G (or such other form as may be provided
to the Servicer from time to time), to deliver to the Servicer the related
Mortgage File. Each individual designated as an authorized representative of
the Servicer (an "Authorized Representative") on Exhibit H hereto, is
authorized to give and receive notices, requests and instructions and to
deliver certificates and documents in connection with this Servicing Agreement
on behalf of the Servicer and the specimen signature for each such Authorized
Representative of the Servicer initially authorized hereunder is set forth on
Exhibits H. From time to time, the Servicer may, by delivering to the Master
Servicer and the Custodian a revised exhibit, change the information
previously given pursuant to this Section, but each of the parties hereto
shall be entitled to rely conclusively on the then current exhibit until
receipt of a superseding exhibit.
Section 2.05 Record Title.
Within thirty days after each Commencement Date (except to the extent
delays are caused by the applicable recording office), the Servicer, at the
Servicer's expense, shall cause the Mortgage or Assignment of Mortgage, as
applicable, with respect to each MERS Eligible Mortgage Loan, to be properly
recorded in the name of MERS in the public recording office in the applicable
jurisdiction, or shall ascertain that such have previously been so recorded
and the Servicer shall take such actions as are necessary to cause the Owner
to be clearly identified as the owner of each MERS Mortgage Loan on the
records of MERS for
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purposes of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS.
An Assignment of Mortgage in favor of the Owner or such Person as the
Owner may designate shall be recorded as to each Non-MERS Mortgage Loan unless
instructions to the contrary are delivered to the Servicer in writing by the
Master Servicer. Subject to the preceding sentence, as soon as practicable
after the Master Servicer instructs the Servicer to record Assignments of
Mortgage (but in no event more than 30 days thereafter except to the extent
delays are caused by the applicable recording office), the Servicer, at the
Servicer's expense, shall cause to be properly recorded in each public
recording office where such Non-MERS Eligible Mortgage Loans are recorded each
Assignment of Mortgage.
In connection with each Reconstitution, the Servicer, at the expense
of the Owner and at the direction of the Owner or the Master Servicer, shall
cause an Assignment of Mortgage as to each Non-MERS Mortgage Loan in favor of
the new Owner identified in a Transfer Notice to be prepared and properly
recorded in each public recording office where such Non-MERS Mortgage Loans
are recorded as soon as practicable after the related Effective Date (but in
no event more than 90 days thereafter except to the extent delays are caused
by the applicable recording office). The Servicer shall track such Assignments
of Mortgage to ensure they have been recorded. Additionally, the Servicer
shall prepare and execute, at the direction of the Owner or the Master
Servicer, any note endorsements relating to any of the Non-MERS Mortgage
Loans. The Servicer shall be entitled to be reimbursed by the Owner or its
designee, on behalf of the Depositor, its out-of-pocket costs for the
preparation and recordation of the Assignments of Mortgage under this
paragraph. After the expenses of such recording costs shall have been paid by
the Servicer, the Servicer shall submit to the Master Servicer a reasonably
detailed invoice for reimbursement of recording costs incurred hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES AND BREACH
Section 3.01 Servicer Representations and Warranties.
The Servicer, as a condition to the consummation of the transactions
contemplated hereby, hereby represents and warrants to the Owner that as of
each Commencement Date:
(a) Due Organization and Authority. The Servicer is duly organized,
validly existing and in good standing under the laws of the United States or
the jurisdiction of its formation, as applicable, and has and shall continue
to maintain all licenses necessary to carry on its business as now being
conducted and is and will continue to be 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 Servicer, and in any event the Servicer is and will
continue to be in compliance with the laws of
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any such state to the extent necessary to ensure the enforceability of the
related Mortgage Loan and the servicing of such Mortgage Loan in accordance
with the terms of this Agreement; the Servicer has the full power and
authority to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Servicer 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 Servicer; and all requisite action has been
taken by the Servicer to make this Agreement valid and binding upon the
Servicer in accordance with its terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Servicer;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition of the Mortgage Loans and the servicing
responsibilities by the Servicer, or the transactions contemplated hereby, nor
the fulfillment of or compliance with the terms and conditions of this
Agreement, will conflict with or result in a breach of any of the terms,
conditions or provisions of the Servicer's charter or by-laws or any legal
restriction or any agreement or instrument to which the Servicer 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 Servicer or its
property is subject, or impair the ability of the Servicer to service the
Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Ability to Service. The Servicer is an approved servicer of
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 Servicer is in good
standing to 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 Servicer unable to comply with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac
eligibility requirements or which would require notification to either ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac;
(e) Reasonable Servicing Fee. The Servicer acknowledges and agrees
that the Servicing Fee, as calculated at the Servicing Fee Rate, represents
reasonable compensation for performing such services and that the entire
Servicing Fee shall be treated by the Servicer, for accounting and tax
purposes, as compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement;
(f) Ability to Perform. The Servicer does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Servicer is solvent and the sale of
the Mortgage Loans is not undertaken to hinder, delay or defraud any of the
Servicer's creditors;
(g) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Servicer which, either in any
one instance or in the aggregate, may result in any material adverse change in
the business, operations, financial
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condition, properties or assets of the Servicer, or in any material impairment
of the right or ability of the Servicer to carry on its business substantially
as now conducted, or in any material liability on the part of the Servicer, 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 Servicer contemplated herein, or which would be likely to impair
materially the ability of the Servicer to perform under the terms of this
Agreement;
(h) No Consent Required. No consent, approval, authorization or
order of any court or governmental agency or body is required for the
execution, delivery and performance by the Servicer of or compliance by the
Servicer with this Agreement, or if required, such approval has been obtained
prior to the Commencement Date;
(i) 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 materially misleading;
(j) Financial Statements. The Servicer has delivered to the Owner
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations
and changes in financial position at the end of each such period of the
Servicer and its subsidiaries and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as set forth in the notes thereto. There has been no
change in the business, operations, financial condition, properties or assets
of the Servicer since the date of the Servicer's financial statements that
would have a material adverse effect on its ability to perform its obligations
under this Agreement. The Servicer has completed any forms requested by the
Owner in a timely manner and in accordance with the provided instructions;
(k) No Brokers' Fees. The Servicer has not dealt with any broker,
investment banker, agent or other person that may be entitled to any
commission or compensation in connection with the sale of the Mortgage Loans;
and
(l) Insured Depository Institution Representations. If the Servicer
is an Insured Depository Institution, the Servicer makes the following
additional representations and warranties:
(i) This Agreement between the Owner and the Servicer
conforms to all applicable statutory and regulatory requirements; and
(ii) This Agreement is (1) executed contemporaneously with
the Loan Purchase Agreement, (2) approved by a specific corporate or
banking association resolution by the Servicer's board of directors,
which approval shall be reflected in the minutes of said board, and
(3) an official record of the Servicer. A copy of such resolution,
certified by a vice president or higher officer of the Servicer has
been provided to the Owner.
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Section 3.02 Remedies for Breach of Representations and Warranties.
It is understood and agreed that the representations and warranties
set forth in Section 3.01 shall survive the engagement of the Servicer to
perform the servicing responsibilities as of each Commencement Date and the
delivery of the Servicing Files to the Servicer and shall inure to the benefit
of the Owner. Upon discovery by either the Servicer or the Owner of a breach
of any of the foregoing representations and warranties which materially and
adversely affects the ability of the Servicer to perform its duties and
obligations under this Agreement or otherwise materially and adversely affects
the value of the Mortgage Loans, the Mortgaged Property or the priority of the
security interest on such Mortgaged Property or the interest of the Owner (in
the case of any of the foregoing, a "Breach"), the party discovering such
Breach shall give prompt written notice to the other.
Within sixty (60) days of the earlier of either discovery by or notice
to the Servicer of any Breach of a representation or warranty, the Servicer
shall use its best efforts promptly to cure such Breach in all material
respects and, if such Breach cannot be cured, the Servicer shall, at the
Owner's option, assign the Servicer's rights and obligations under this
Agreement (or respecting the affected Mortgage Loans) to a successor servicer,
subject to the approval of the Owner, which approval shall be in the Owner's
sole discretion. Such assignment shall be in accordance with Section 12.01.
In addition, the Servicer shall indemnify the Owner, the Master
Servicer and each Reconstitution Party and hold each of them harmless against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and other costs and expenses
resulting from any claim, demand, defense or assertion based on or grounded
upon, or resulting from, a Breach of the Servicer representations and
warranties contained in this Agreement.
Any cause of action against the Servicer relating to or arising out of
the Breach of any representations and warranties made in Section 3.01 shall
accrue as to any Mortgage Loan upon (i) discovery of such Breach by the Owner
or the Master Servicer or notice thereof by the Servicer to the Owner or the
Master Servicer, (ii) failure by the Servicer to cure such Breach as specified
above, and (iii) demand upon the Servicer by the Owner or the Master Servicer
for compliance with this Agreement.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Servicer to Act as Servicer.
From and after each Commencement Date, the Servicer, as an independent
contractor, shall service and administer the related Mortgage Loans and shall
have full power and authority, acting alone, to do any and all things in
connection with such servicing and administration which the Servicer may deem
necessary or desirable, consistent with the terms of
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this Agreement and with Accepted Servicing Practices; provided that the
Servicer shall not take any action that is inconsistent with or prejudices the
rights and interests of the Owner in any Mortgage Loan or under this
Agreement.
The Servicer shall not make any future advances with respect to a
Mortgage Loan and (unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Servicer, imminent
and the Servicer has obtained the prior written consent of the Master
Servicer) the Servicer shall not permit any modification of any material term
of any Mortgage Loan including any modifications 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. Except with the written permission of the Master Servicer, no
modification, recast, extension, or capitalization of delinquent payments of a
Mortgage Loan shall be permitted. Where applicable, the Servicer must satisfy
all requirements under the applicable PMI Policy and/or any applicable LPMI
Policy regarding the relief granted with respect to a delinquent Mortgage
Loan, including, without limitation, securing the prior written consent of the
respective Qualified Insurer regarding any change in any term of such Mortgage
Loan, the release of the related Mortgagor from any liability related to such
Mortgage Loan, or the release of any portion of, or interest in, the Mortgaged
Property from the lien of the related Mortgage. In the event of any
modification permitted hereunder which permits the deferral of interest or
principal payments on any Mortgage Loan, the Servicer shall, on the Business
Day immediately preceding the Remittance Date in any month in which any such
principal or interest payment has been deferred, deposit in the Custodial
Account from its own funds, in accordance with Section 5.03, the difference
between (a) such month's principal and one month's interest at the Mortgage
Loan Remittance Rate on the unpaid principal balance of such Mortgage Loan and
(b) the amount paid by the Mortgagor. The Servicer shall be entitled to
reimbursement for such advances to the same extent as for all other advances
made pursuant to Section 5.03. Without limiting the generality of the
foregoing, the Servicer shall continue, and is hereby authorized and
empowered, to execute and deliver on behalf of itself and the Owner, 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 Servicer, the Owner shall furnish the Servicer with any powers of attorney
and other documents necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties under this Agreement.
Promptly after the execution of any assumption, modification,
consolidation or extension of any Mortgage Loan, but in no event later than
the Reporting Date in the month following the date of execution of such
instrument, the Servicer shall forward to the Master Servicer copies of any
documents evidencing such assumption, modification, consolidation or
extension.
In servicing and administering the Mortgage Loans, the Servicer 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
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due consideration to Accepted Servicing Practices where such practices do not
conflict with the requirements of this Agreement, and the Owner's reliance on
the Servicer.
Section 4.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 4.01 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Servicer shall take such action as (1) the
Servicer 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 Servicer shall determine prudently
to be in the best interest of the Owner, and (4) is consistent with any
related PMI Policy or LPMI Policy. In the event that any payment due under any
Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent
for a period of ninety (90) days or any other default continues for a period
of 90 days beyond the expiration of any grace or cure period, the Servicer
shall commence foreclosure proceedings, provided that, prior to commencing
foreclosure proceedings, the Servicer shall notify the Master Servicer in
writing of the Servicer's intention to do so, and the Servicer shall not
commence foreclosure proceedings if the Master Servicer objects to such action
within 10 Business Days of receiving such notice. In such connection, the
Servicer shall from its own funds make all necessary and proper Servicing
Advances, provided, however, that the Servicer 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 Owner after reimbursement to itself for
such expenses and (b) that such expenses will be recoverable by it either
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account pursuant to Section 4.05)
or through Insurance Proceeds (respecting which it shall have similar
priority).
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure,
in the event the Servicer has reasonable cause to believe that a Mortgaged
Property is contaminated by hazardous or toxic substances or wastes, or if the
Owner or the Master Servicer otherwise requests an environmental inspection or
review of such Mortgaged Property to be conducted by a qualified inspector,
the Servicer shall cause such an environmental inspection or review to be made
by a qualified inspector. Upon completion of the inspection, the Servicer
shall promptly provide the Owner with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Master
Servicer shall determine how the Servicer shall proceed with respect to the
Mortgaged Property. In the event (a) the environmental inspection report
indicates that the Mortgaged Property is contaminated by hazardous or toxic
substances or wastes and (b) the Master Servicer directs the Servicer to
proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the
Servicer shall be reimbursed for all reasonable costs associated with such
foreclosure or acceptance of a deed in lieu of foreclosure and any related
environmental clean up costs, as applicable, from the related
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Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully
reimburse the Servicer, the Servicer shall be entitled to be reimbursed from
amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event
the Master Servicer directs the Servicer not to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
for all Servicing Advances made with respect to the related Mortgaged Property
from the Custodial Account pursuant to Section 4.05 hereof.
Section 4.03 Collection of Mortgage Loan Payments.
Continuously from the related Commencement Date until the date each
Mortgage Loan ceases to be subject to this Agreement, the Servicer shall
proceed diligently to collect all payments due under each of the Mortgage
Loans when the same shall become due and payable and shall take special care
in ascertaining and estimating Escrow Payments and all other charges that will
become due and payable with respect to the Mortgage Loan and the Mortgaged
Property, to the end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and payable.
Section 4.04 Establishment of and Deposits to Custodial Account.
The Servicer shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain two (2) separate Custodial
Accounts, each in the form of time deposit or demand accounts, one account for
funds collected and relating to Reconstituted Mortgage Loans and one for funds
collected and relating to all Mortgage Loans that are not subject to a
Reconstitution. The Custodial Account relating to all Mortgage Loans that are
not then subject to a Reconstitution shall be titled "[Name of Servicer] in
trust for the benefit of Aurora Loan Services Inc., as Master Servicer and the
Owner of Residential Mortgage Loans". The Custodial Account relating to all
Reconstituted Mortgage Loans shall be titled "[Name of Servicer] in trust for
the benefit of Aurora Loan Services Inc., as Master Servicer and the various
Owners of Residential Mortgage Loans." The Custodial Account shall be
established with a Qualified Depository acceptable to the Owner. 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 Servicer in accordance with Section 4.05. The
creation of any Custodial Account shall be evidenced by a certification in the
form of Exhibit A-1 hereto, in the case of an account established with the
Servicer, or by a letter agreement in the form of Exhibit A-2 hereto, in the
case of an account held by a depository other than the Servicer. A copy of
such certification or letter agreement shall be furnished to the Owner and,
upon request, to any subsequent Owner.
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The Servicer shall deposit in the Custodial Account on a daily basis,
and retain therein, the following collections received by the Servicer and
payments made by the Servicer after the related Commencement Date with respect
to the Mortgage Loans (including payments received by the Servicer prior to
the related Commencement Date but allocable to a period subsequent thereto):
(i) all payments on account of principal on the Mortgage
Loans, including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage
Loans adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 4.10 (other than proceeds to be held in
the Escrow Account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with
Section 4.14), Section 4.11 and Section 4.15;
(v) all Condemnation Proceeds which are not applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 4.14;
(vi) any amount required to be deposited in the Custodial
Account pursuant to Section 4.01, 4.09, 4.19, 4.22, 5.03, 6.01 or
6.02;
(vii) with respect to each Principal Prepayment in full or in
part, the Prepayment Interest Shortfall Amount, if any, for the month
of distribution. Such deposit shall be made from the Servicer's own
funds, without reimbursement therefor;
(viii) any amounts required to be deposited by the Servicer
pursuant to Section 4.11 in connection with the deductible clause in
any blanket hazard insurance policy;
(ix) any amounts received with respect to or related to any
REO Property and all REO Disposition Proceeds pursuant to Section
4.16; and
(x) any other amount required hereunder to be deposited by
the Servicer in the Custodial Account.
The foregoing requirements for deposit into the Custodial Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges
and assumption fees, to the extent permitted by Section 6.01, need not be
deposited by the Servicer 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 Servicer and the Servicer shall be entitled to
retain and withdraw such interest from the Custodial Account pursuant to
Section 4.05.
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Section 4.05 Permitted Withdrawals From Custodial Account.
The Servicer shall, from time to time, withdraw funds from the
Custodial Account for the following purposes:
(i) to make payments to the Owner in the amounts and in the
manner provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances of the
Servicer's funds made pursuant to Section 5.03, the Servicer's right
to reimburse itself pursuant to this subclause (ii) being limited to
amounts received on the related Mortgage Loan which represent late
payments of principal and/or interest respecting which any such
advance was made, it being understood that, in the case of any such
reimbursement, the Servicer's right thereto shall be prior to the
rights of the Owner, except that, where the Servicer is required to
repurchase a Mortgage Loan pursuant to Section 6.02, the Servicer's
right to such reimbursement shall be subsequent to the payment to the
Owner of the Repurchase Price pursuant to such section and all other
amounts required to be paid to the Owner with respect to such Mortgage
Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances,
and for any unpaid Servicing Fees, the Servicer'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 Servicer from the Mortgagor or otherwise relating to
the Mortgage Loan, it being understood that, in the case of any such
reimbursement, the Servicer's right thereto shall be prior to the
rights of the Owner except where the Servicer is required to
repurchase a Mortgage Loan pursuant to Section 6.02, in which case the
Servicer's right to such reimbursement shall be subsequent to the
payment to the Owner of the Repurchase Price pursuant to such section
and all other amounts required to be paid to the Owner with respect to
such Mortgage Loan;
(iv) to pay itself interest earned on funds deposited in the
Custodial Account;
(v) to reimburse itself for expenses incurred and
reimbursable to it pursuant to Section 9.01, but only to the extent
such amounts are determined to be reimbursable by the Owner pursuant
to Section 9.01;
(vi) with respect to each Mortgage Loan that is covered by an
LPMI Policy, in the amount of the related premiums for the LPMI Policy
(if applicable);
(vii) to clear and terminate the Custodial Account upon the
termination of this Agreement; and
(viii) to withdraw funds deposited in error.
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In connection with withdrawals pursuant to subclauses (ii) and (iii)
above, the Servicer's entitlement thereto is limited to collections or other
recoveries on the related Mortgage Loan. The Servicer shall therefore keep and
maintain a separate accounting for each Mortgage Loan it services for the
purpose of justifying any withdrawal from the Collection Account it maintains
pursuant to such subclause (ii), (iii), (iv) and (v).
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Servicer shall withdraw all funds from the Custodial
Account except for those amounts which, pursuant to Section 5.01, the Servicer
is not obligated to remit on such Remittance Date. The Servicer may use such
withdrawn funds only for the purposes described in this Section 4.05.
Section 4.06 Establishment of and Deposits to Escrow Account.
The Servicer 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
two (2) separate Escrow Accounts, each in the form of time deposit or demand
accounts, one account for Escrow Payments relating to Reconstituted Mortgage
Loans and one for Escrow Payments relating to all Mortgage Loans that are not
subject to a Reconstitution. The Escrow Account relating to all Mortgage Loans
that are not then subject to a Reconstitution shall be titled "[Name of
Servicer] in trust for the benefit of Aurora Loan Services Inc., as Master
Servicer and the Owner of Residential Mortgage Loans and various Mortgagors".
The Escrow Account relating to all Reconstituted Mortgage Loans shall be
titled "[Name of Servicer] in trust for the benefit of Aurora Loan Services
Inc., as Master Servicer and the various Owners of Residential Mortgage Loans
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 Servicer in accordance with Section 4.07. The creation of any Escrow
Account shall be evidenced by a certification in the form of Exhibit B-1
hereto, in the case of an account established with the Servicer, or by a
letter agreement in the form of Exhibit B-2 hereto, in the case of an account
held by a depository other than the Servicer. A copy of such certification
shall be furnished to the Owner and, upon request, to any subsequent Owner.
The Servicer 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
(ii) all amounts representing Insurance Proceeds or
Condemnation Proceeds which are to be applied to the restoration or
repair of any Mortgaged Property.
The Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 4.07. The Servicer 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
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the extent required by law, the Servicer shall pay interest on escrowed funds
to the Mortgagor notwithstanding that the Escrow Account may be non-interest
bearing or that interest paid thereon is insufficient for such purposes.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Servicer 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 Servicer for any Servicing Advances
made by the Servicer pursuant to Section 4.08 with respect to a
related Mortgage Loan, but only from amounts received on the related
Mortgage Loan which represent late collections of Escrow Payments
thereunder;
(iii) to refund to any Mortgagor any funds found to be in
excess of the amounts required under the terms of the related Mortgage
Loan;
(iv) for transfer to the Custodial Account 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 4.14;
(vi) to pay to the Servicer, 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 4.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Servicer 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 and LPMI Policy
premiums and fire and hazard insurance coverage and shall obtain, from time to
time, all bills for the payment of such charges (including renewal premiums)
and shall effect payment thereof prior to the applicable penalty or
termination date, employing for such purpose deposits of the Mortgagor in the
Escrow Account which shall have been estimated and accumulated by the Servicer
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
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Servicer shall determine that any such payments are made by the Mortgagor at
the time they first become due. The Servicer 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 Servicer shall
make advances from its own funds to effect such payments; provided, however,
that the Servicer shall not be required to make an advance of its own funds
for any such payments if such advance would, if made, be, in the Servicer's
reasonable judgment, non-recoverable from future recoveries in respect of the
Mortgage Loan or Mortgaged Property. The determination by the Servicer that
any advance of funds is or would be non-recoverable shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Master Servicer.
Section 4.09 Protection of Accounts.
The Servicer 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 Owner and the Master Servicer,
which consent shall not be withheld unreasonably.
The Servicer shall bear any expenses, losses or damages sustained by
the Owner 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 Servicer 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 Servicer 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 Servicer) 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 Servicer in trust for the
benefit of the Owner. All income on or gain realized from any such Eligible
Investment shall be for the benefit of the Servicer and may be withdrawn at
any time by the Servicer. Any losses incurred in respect of any such
investment shall be deposited in the Custodial Account or the Escrow Account,
by the Servicer out of its own funds immediately as realized.
Section 4.10 Maintenance of Hazard Insurance.
The Servicer 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 replacement 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
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proceeds thereof shall be sufficient to prevent the Mortgagor or the loss
payee from becoming a co-insurer.
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 Servicer determines in accordance
with applicable law and pursuant to the ▇▇▇▇▇▇ ▇▇▇ 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 Servicer 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 Servicer
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
Servicer shall verify that the coverage required of the owner's association,
including hazard, flood, liability, and fidelity coverage, is being maintained
in accordance with then current ▇▇▇▇▇▇ Mae requirements, and secure from the
owner's association its agreement to notify the Servicer 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 Servicer 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 any Owner or the Servicer 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 Servicer 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 Servicer as loss payee
and shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for
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at least 30 days prior written notice of any cancellation, reduction in amount
or material change in coverage.
The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Servicer 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 Servicer 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 Servicer 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.
Pursuant to Section 4.04, any amounts collected by the Servicer 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 Servicer's normal servicing procedures
as specified in Section 4.14) shall be deposited in the Custodial Account
subject to withdrawal pursuant to Section 4.05.
Section 4.11 Maintenance of Mortgage Impairment Insurance.
In the event that the Servicer 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 4.10 and otherwise complies with all other requirements of Section
4.10, it shall conclusively be deemed to have satisfied its obligations as set
forth in Section 4.10. Any amounts collected by the Servicer under any such
policy relating to a Mortgage Loan shall be deposited in the Custodial Account
subject to withdrawal pursuant to Section 4.05. Such policy may contain a
deductible clause, in which case, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with Section
4.10, and there shall have been a loss which would have been covered by such
policy, the Servicer 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 deposited from the Servicer's funds,
without reimbursement therefor. Upon request of the Master Servicer, the
Servicer shall cause to be delivered to the Master Servicer 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 Master Servicer.
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
The Servicer 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 ("Servicer Employees"). Any such Fidelity Bond
and Errors and Omissions Insurance Policy shall be in the form of the
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Mortgage Banker's Blanket Bond and shall protect and insure the Servicer
against losses, including forgery, theft, embezzlement, fraud, errors and
omissions and negligent acts of such Servicer Employees. Such Fidelity Bond
and Errors and Omissions Insurance Policy also shall protect and insure the
Servicer against losses in connection with the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 4.12 requiring such Fidelity
Bond and Errors and Omissions Insurance Policy shall diminish or relieve the
Servicer 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 the Master Servicer in the
Servicer's Guide, or, in the absence of such requirement, the corresponding
amounts required by ▇▇▇▇▇▇ ▇▇▇ in the ▇▇▇▇▇▇ Mae Mortgage-Backed Securities
Selling and Servicing Guide and by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' &
Servicers' Guide. Upon the request of the Master Servicer, the Servicer shall
cause to be delivered to the Master Servicer certificates evidencing that such
policy and bond is in effect and shall furnish to the Master Servicer 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 Master Servicer.
Section 4.13 Inspections.
The Servicer shall inspect the Mortgaged Property as often as deemed
necessary by the Servicer 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 Servicer 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
Servicer shall keep a written report of each such inspection.
Section 4.14 Restoration of Mortgaged Property.
The Servicer need not obtain the approval of the Owner 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 and in an amount
not in excess of $5,000. At a minimum, the Servicer shall comply with the
following conditions in connection with any such release of Insurance Proceeds
or Condemnation Proceeds:
(i) the Servicer shall receive satisfactory independent
verification of completion of repairs and issuance of any required
approvals with respect thereto;
(ii) the Servicer 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 Servicer shall verify that the Mortgage Loan is not
in default; and
(iv) pending repairs or restoration, the Servicer shall place
the Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
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If the Owner is named as an additional loss payee, the Servicer is
hereby empowered to endorse any loss draft issued in respect of such a claim
in the name of the Owner.
Section 4.15 Servicing and Administration of Mortgage Insurance
Policies.
(a) With respect to each Mortgage Loan covered by a PMI Policy, the
Servicer shall, without any cost to the Owner, maintain or cause the Mortgagor
to maintain in full force and effect such PMI Policy and shall pay or shall
cause the Mortgagor to pay the premium thereon on a timely basis. In the event
that such PMI Policy shall be terminated, the Servicer shall obtain from
another Qualified Insurer a comparable replacement policy, with a total
coverage equal to the remaining coverage of such terminated PMI Policy.
Subject to Accepted Servicing Practices and applicable law (including the
Homeowner's Protection Act of 1998, as amended, and its implementing
regulations), the Servicer may cancel a PMI Policy, provided all requirements
of applicable law are met for the cancellation of such policy. If the insurer
shall cease to be a Qualified Insurer, the Servicer 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 Servicer
shall in no event have any responsibility or liability for any failure to
recover under the PMI Policy for such reason. If the Servicer determines that
recoveries are so jeopardized, it shall notify the Owner and the Mortgagor, if
required, and obtain from another Qualified Insurer a replacement insurance
policy. The Servicer 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 Servicer would have been covered thereunder. In connection with
any assumption or substitution agreement entered into or to be entered into
pursuant to Section 6.01, the Servicer 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
Servicer shall obtain a replacement PMI Policy as provided above.
(b) With respect to each Mortgage Loan which has an LPMI Policy, the
Servicer shall maintain in full force and effect such LPMI Policy, and from
time to time, withdraw the premium with respect to such Mortgage Loans from
the Custodial Account in order to pay the premium thereon on a timely basis.
In the event that the interest payments made with respect to the Mortgage Loan
are less than the premium with respect to the LPMI Policy, the Servicer shall
advance from its own funds the amount of any such shortfall in the LPMI Policy
premiums, in payment of such premium. Any such advance shall be a Servicing
Advance subject to reimbursement pursuant to the provisions on Section 4.05.
In the event that such LPMI Policy shall be terminated, the Servicer shall
obtain from another Qualified Insurer a comparable replacement policy, with a
total coverage equal to the remaining coverage of such terminated LPMI Policy,
at substantially the same fee level. If the insurer shall cease to be a
Qualified Insurer, the Servicer shall determine whether recoveries under the
LPMI Policy are jeopardized for reasons related to the financial condition of
such insurer, it being understood that the Servicer shall in no event have any
responsibility or liability for any failure to recover under the LPMI Policy
for such reason. If the Servicer determines that recoveries are so
jeopardized, it shall notify the Master Servicer and obtain from another
Qualified Insurer a replacement
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insurance policy. The Servicer shall not take any action which would result in
noncoverage under any applicable LPMI Policy of any loss which, but for the
actions of the Servicer would have been covered thereunder. In connection with
any assumption or substitution agreement entered into or to be entered into
pursuant to Section 6.01, the Servicer shall promptly notify the insurer under
the related LPMI Policy, if any, of such assumption or substitution of
liability in accordance with the terms of such LPMI Policy and shall take all
actions which may be required by such insurer as a condition to the
continuation of coverage under such LPMI Policy. If such LPMI Policy is
terminated as a result of such assumption or substitution of liability, the
Servicer shall obtain a replacement LPMI Policy as provided above.
(c) In connection with its activities as servicer, the Servicer
agrees to prepare and present, on behalf of itself and the Owner, claims to
the insurer under any PMI Policy or LPMI Policy in a timely fashion in
accordance with the terms of such PMI Policy or LPMI Policy and, in this
regard, to take such action as shall be necessary to permit recovery under any
PMI Policy or LPMI Policy respecting a defaulted Mortgage Loan. Any amounts
collected by the Servicer under any PMI Policy or LPMI Policy shall be
deposited in the Custodial Account.
(d) The Owner, in its sole discretion, at any time, may (i) either
obtain an additional PMI Policy on any Mortgage Loan which already has an PMI
Policy in place, or (ii) obtain a PMI Policy for any Mortgage Loan which does
not already have a PMI Policy in place. In any event, the Servicer agrees to
administer such PMI Policies or LPMI Policies in accordance with this
Agreement.
Section 4.16 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Servicer or its designee (or MERS, as
applicable) or such other Person as may be designated by the Master Servicer,
or in the event the Servicer or its designee (or MERS, as applicable) 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 Servicer 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 Owner
shall acknowledge in writing that such title is being held as nominee for the
Owner.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Owner solely for the purpose of its prompt disposition and
sale. The Servicer, either itself or through an agent selected by the
Servicer, 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 Servicer 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 Servicer deems to be in the best interest of the Owner.
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The Servicer 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 three
years after title has been taken to such REO Property, unless (i) a REMIC,
FASIT or REIT election has not been made with respect to the arrangement under
which the Mortgage Loans and the REO Property are held and (ii) the Servicer
determines, and gives an appropriate notice to the Master Servicer to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than three years is permitted under the
foregoing sentence and is necessary to sell any REO Property, the Servicer
shall report monthly to the Master Servicer as to the progress being made in
selling such REO Property. Notwithstanding anything herein to the contrary,
the Servicer shall not be required to provide financing for the sale of any
REO Property.
The Servicer shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
Subject to the approval of the Master Servicer as described in this
paragraph, the disposition of REO Property shall be carried out by the
Servicer at such price, and upon such terms and conditions, as the Servicer
deems to be in the best interests of the Owner. Prior to acceptance by the
Servicer of an offer to sell any REO Property, the Servicer shall notify the
Master Servicer of such offer in writing which notification shall set forth
all material terms of said offer (each a "Notice of Sale"). The Master
Servicer shall be deemed to have approved the sale of any REO Property unless
the Master Servicer notifies the Servicer in writing, within five (5) days
after its receipt of the related Notice of Sale, that it disapproves of the
related sale, in which case the Servicer shall not proceed with such sale. 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 Servicer shall reimburse itself for any related
unreimbursed Servicing Advances, unpaid Servicing Fees and unreimbursed
advances made pursuant to Section 5.03, 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 Owner.
With the prior consent of the Master Servicer, the Servicer shall
withdraw from the Custodial Account funds necessary to reimburse the Servicer
for costs and expenses approved by the Master Servicer and incurred by the
Servicer in connection with the proper operation, management and maintenance
of the REO Property, including the cost of maintaining any hazard insurance
pursuant to Section 4.10. The Servicer shall make monthly distributions on
each Remittance Date to the Owner of the net cash flow from the REO Property
(which shall equal the revenues from such REO Property net of the expenses
described in this Section 4.16 and of any reserves reasonably required from
time to time to be maintained to satisfy anticipated liabilities for such
expenses).
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Notwithstanding the foregoing, at any time and from time to time, the
Owner may at its election terminate this Agreement with respect to one or more
REO Properties as provided by Section 11.02.
Section 4.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 5.02, the
Servicer shall furnish to the Master Servicer on or before the Reporting Date
of each month a statement with respect to any REO Property covering the
operation of such REO Property for the previous month and the Servicer'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 Master
Servicer or the Owner shall reasonably request.
Section 4.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Owner pursuant to a deed in lieu of foreclosure, the Servicer
shall submit to the Master Servicer a liquidation report with respect to such
Mortgaged Property.
Section 4.19 Notification of Adjustments.
With respect to each Mortgage Loan that is an ARM Mortgage Loan, the
Servicer 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 Servicer 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 Servicer shall promptly, upon written request therefor,
deliver to the Owner 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 Servicer or the receipt of notice
from the Owner that the Servicer has failed to adjust a Mortgage Interest Rate
in accordance with the terms of the related Mortgage Note, the Servicer shall
immediately deposit in the Custodial Account from its own funds the amount of
any interest loss or deferral caused the Owner thereby.
Section 4.20 Reports of Foreclosures and Abandonments of Mortgaged
Property.
Following the foreclosure sale or abandonment of any Mortgaged
Property, the Servicer shall report such foreclosure or abandonment as
required pursuant to Section 6050J of the Code.
Section 4.21. MERS.
In the case of each MERS Eligible Mortgage Loan, at the request of the
Master Servicer, the Servicer shall record the Assignment of Mortgage into
MERS and shall create
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MERS identification numbers relating to each Mortgage Loan in the manner
required by MERS. The Servicer shall pay all MERS registration fees. As soon
as practicable after the Master Servicer's request from time to time (but in
no event more than 30 days thereafter with respect to each Mortgage Loan that
was a MERS Mortgage Loan as of the Commencement Date, or 90 days thereafter
with respect to each Mortgage Loan that was a MERS Eligible Mortgage Loan as
of the Commencement Date), the Servicer shall take such actions as are
necessary to cause the Owner or any successor Owner to be clearly identified
as the owner of each MERS Mortgage Loan on the records of MERS for purposes of
the system of recording transfers of beneficial ownership of mortgages
maintained by MERS. The Servicer shall maintain in good standing its
membership in MERS. In addition, the Servicer shall comply with all rules,
policies and procedures of MERS, including the Rules of Membership, as
amended, and the MERS Procedures Manual, as amended. With respect to all MERS
Mortgage Loans serviced hereunder, the Servicer shall promptly notify MERS as
to any transfer of beneficial ownership or release of any security interest in
such Mortgage Loans. The Servicer shall cooperate with the Owner, the Master
Servicer and any successor owner or successor servicer to the extent necessary
to ensure that any transfer of ownership or servicing is appropriately
reflected on the MERS system.
Section 4.22 Waiver of Prepayment Charges.
Except as provided below, the Servicer or any designee of the Servicer
shall not waive any Prepayment Charge with respect to any Mortgage Loan. If
the Servicer or its designee fails to collect a Prepayment Charge at the time
of the related prepayment of any Mortgage Loan subject to such Prepayment
Charge, the Servicer shall pay to the Owner at such time (by deposit to the
Custodial Account) an amount equal to the amount of the Prepayment Charge not
collected. Notwithstanding the above, the Servicer or its designee may waive a
Prepayment Charge without paying to the Owner the amount of such Prepayment
Charge only if the related prepayment is not the result of a refinancing by
the Servicer or its designee and such waiver (i) relates to a defaulted
Mortgage Loan or a reasonably foreseeable default, such waiver is standard and
customary in servicing similar mortgage loans to the Mortgage Loans, and such
waiver, in the reasonable judgment of the Servicer, would maximize recovery of
total proceeds from the Mortgage Loan, taking into account the amount of such
Prepayment Charge and the related Mortgage Loan, or (ii) relates to a
Prepayment Charge the collection of which, in the reasonable judgment of the
Servicer, would be a violation of applicable laws.
Section 4.23. Compliance With REMIC Provisions
If a REMIC election has been made with respect to the arrangement
under which any Mortgage Loans and REO Property are held, the Servicer shall
not take any action, cause the REMIC to take any action or fail to take (or
fail to cause to be taken) any action that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of the
REMIC as a REMIC, or (ii) result in the imposition of a tax upon the REMIC
(including but not limited to the tax on "prohibited transactions" as defined
in Section 860F(a)(2) of the Code and the tax on "contributions" to a REMIC
set forth in Section 860G(d) of the Code) unless the Servicer has received an
Opinion of Counsel (at the expense of the party seeking to take such action)
to the effect that the contemplated action will not endanger such REMIC status
or result
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in the imposition of any such tax.
ARTICLE V
PAYMENTS TO THE OWNER
Section 5.01 Remittances.
On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the Owner (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 4.05), plus (b) all amounts, if any, which the Servicer is obligated
to distribute pursuant to Section 5.03, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Principal Prepayment
Period which amounts shall be remitted on the following Remittance Date,
together with any additional interest required to be deposited in the
Custodial Account in connection with such Principal Prepayment in accordance
with Section 4.04(vii), and minus (d) any amounts attributable to Monthly
Payments collected but due on a Due Date or Dates subsequent to the first day
of the month of the Remittance Date, which amounts shall be remitted on the
Remittance Date next succeeding the Due Period for such amounts.
With respect to any month in which the Servicer is servicing both
Reconstituted Mortgage Loans and Mortgage Loans that have not been subject to
a Reconstitution, the Servicer shall submit two (2) separate remittance wire
transfers to the Master Servicer, one relating to Reconstituted Mortgage Loans
and one relating to all Mortgage Loans that are not then subject to a
Reconstitution.
All remittances required to be made to the Master Servicer relating to
Reconstituted Mortgage Loans shall be made on a scheduled/scheduled basis to
the following wire account or to such other account as may be specified by the
Master Servicer from time to time:
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank
New York, New York
ABA# ▇▇▇-▇▇▇-▇▇▇
Account Name: Aurora Loan Services Inc.
Master Servicing Payment Clearing Account
Account Number: 066-611059
Beneficiary: Aurora Loan Services Inc.
For further credit to: [Servicer Reference Number] Correspondent
Reconstitution Account
All remittances required to be made to the Master Servicer relating to
Mortgage Loans that are not then subject to a Reconstitution shall be made on
a scheduled/scheduled basis
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to the following wire account or to such other account as may be specified by
the Master Servicer from time to time:
▇▇ ▇▇▇▇▇▇ Chase Bank
New York, New York
ABA# ▇▇▇-▇▇▇-▇▇▇
Account Name: Aurora Loan Services Inc.
Master Servicing Payment Clearing Account
Account Number: 066-611059
Beneficiary: Aurora Loan Services Inc.
For further credit to: [Servicer Reference Number] Correspondent Whole
Loan Account
With respect to any remittance received by the Owner after the second
Business Day following the Business Day on which such payment was due, the
Servicer shall pay to the Owner interest on any such late payment at an annual
rate equal to the Prime Rate, adjusted as of the date of each change, plus
four 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 Servicer 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 Servicer of any such
interest shall not be deemed an extension of time for payment or a waiver of
any Event of Default by the Servicer.
Section 5.02 Statements to Master Servicer.
Not later than the Reporting Date of each month, the Servicer shall
furnish to the Master Servicer a monthly remittance advice, with a trial
balance report attached thereto, in the form of Exhibit D-1 annexed hereto,
together with a delinquency report in the form of Exhibit D-2 annexed hereto,
in hard copy and electronic medium mutually acceptable to the parties as to
the period ending on the Record Date in the preceding calendar month. Such
monthly remittance advice shall also be accompanied with a supplemental report
provided to the Master Servicer and any other party designated by the Master
Servicer which includes on an aggregate basis for the previous Due Period (i)
the amount of claims filed under PMI Policies and LPMI Policies, (ii) the
amount of any claim payments made under PMI Policies and LPMI Policies, (iii)
the amount of claims denied or curtailed under PMI Policies and LPMI Policies
and (iv) PMI Policies canceled with respect to those Mortgage Loans covered by
any PMI Policy purchased by the Owner.
With respect to any month in which the Servicer is servicing both
Reconstituted Mortgage Loans and Mortgage Loans that have not been subject to
a Reconstitution, the Servicer shall submit all information required hereunder
in two (2) separate reports, one relating to Reconstituted Mortgage Loans and
one relating to all Mortgage Loans that are not then subject to
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a Reconstitution.
Upon reasonable advance notice, the Servicer shall provide to any
Owner that is a savings and loan association, a bank, an insurance company or
other regulated or supervised entity reports and access to information and
documentation regarding the Mortgage Loans and the transactions contemplated
hereby sufficient to permit the Owner to comply with the applicable
regulations of relevant regulatory or supervisory authorities with respect to
its investment in the Mortgage Loans and the Owner's internal and third-party
audit requirements.
The Servicer 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 any Owner pursuant to any applicable law
with respect to the Mortgage Loans and the transactions contemplated hereby.
In addition, the Servicer shall provide each Owner and the Master Servicer
with such information concerning the Mortgage Loans as is necessary for such
Owner to prepare its federal income tax return as any Owner or the Master
Servicer may reasonably request from time to time.
Section 5.03 Monthly Advances by Servicer.
On the Business Day immediately preceding each Remittance Date, the
Servicer shall deposit in the Custodial Account from its own funds an amount
equal to all Monthly Payments (with interest adjusted to the Mortgage Loan
Remittance Rate) which were due on the Mortgage Loans during the applicable
Due Period and which were delinquent at the close of business on the
immediately preceding Determination Date or which were deferred pursuant to
Section 4.01. The Servicer's obligation to make such Monthly Advances as to
any Mortgage Loan will continue through the last Monthly Payment due prior to
the payment in full of the Mortgage Loan, or through the last Remittance Date
prior to the Remittance Date for the distribution of all Liquidation Proceeds
and other payments or recoveries (including Insurance Proceeds and
Condemnation Proceeds) with respect to the Mortgage Loan. Notwithstanding the
foregoing, the Servicer shall not be required to make a Monthly Advance with
respect to a Mortgage Loan if such advance would, if made, be, in the
Servicer's reasonable judgment, non-recoverable from future recoveries in
respect of the Mortgage Loan or Mortgaged Property. The determination by the
Servicer that any advance of funds is or would be non-recoverable shall be
evidenced by an Officer's Certificate of the Servicer delivered to the Master
Servicer.
Section 5.04 Failure to Provide Timely Reports.
In the event the Services fails to provide any reports required
hereunder to the Owner and Master Servicer accurately, completely and timely,
in order to compensate the Master servicer for the additional administrative
burden of processing such inaccurate, incomplete or untimely reports, and in
addition to any other rights or remedies that the Owner or the Master Servicer
may have, the Servicer shall pay the following fees to the Master Servicer.
1. For the first such failure, the amount of
$1,000;
2. For the second such failure, the amount of
$1,500; and
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3. For the third such failure and each failure
thereafter, the amount of $2,500;
Notwithstanding anything herein to the contrary, the fourth such
failure in any successive twenty-four month period shall, at the option of the
Master Servicer, constitute an Event of Default under this Agreement without
any cure period available to the Servicer.
Section 5.05 Credit Reporting.
For each Mortgage Loan, in accordance with Accepted Servicing
Practices, the Servicer will accurately and fully report its underlying
borrower credit files to each of the following credit repositories or their
successors: Equifax Credit Information Services, Inc., Trans Union, LLC and
Experian Information Solution, Inc., on a monthly basis in a timely manner.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property.
The Servicer 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 Servicer 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 Servicer 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 or LPMI Policy, if any.
If the Servicer reasonably believes it is unable under applicable law
to enforce such "due-on-sale" clause, the Servicer 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 Servicer is unable under applicable law to require that the original
Mortgagor remain liable under the Mortgage Note and the Servicer 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 Servicer for entering
into an assumption agreement, a portion of such fee, up to an amount equal to
one-half of one percent
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(0.5%) of the outstanding principal balance of the related Mortgage Loan, will
be retained by the Servicer 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 Owner. 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.
To the extent that any Mortgage Loan is assumable, the Servicer 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 Servicer diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer shall notify the Owner and the
Master Servicer in the Monthly Remittance Advice as provided in Section 5.02,
and may request the release of any Mortgage Loan Documents.
If the Servicer satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Servicer otherwise prejudice any rights the Owner may have under the
mortgage instruments, upon written demand of the Owner, the Servicer shall
repurchase the related Mortgage Loan at the Repurchase Price by deposit
thereof in the Custodial Account within two (2) Business Days of receipt of
such demand by the Owner. The Servicer shall maintain the Fidelity Bond and
Errors and Omissions Insurance Policy as provided for in Section 4.12 insuring
the Servicer against any loss it may sustain with respect to any Mortgage Loan
not satisfied in accordance with the procedures set forth herein.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Servicer shall be
entitled to withdraw from the Custodial Account or to retain from interest
payments on the Mortgage Loans the amount of its Servicing Fee. The Servicing
Fee shall be payable monthly and shall be computed on the basis of the same
unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is computed. The Servicing Fee shall be
payable only at the time of and with respect to those Mortgage Loans for which
payment is in fact made of the entire amount of the Monthly Payment. The
obligation of the Owner to pay the Servicing Fee is limited to, and payable
solely from, the interest portion of such Monthly Payments collected by the
Servicer.
Additional servicing compensation in the form of assumption fees, to
the extent provided in Section 6.01, and late payment charges shall be
retained by the Servicer to the extent not required to be deposited in the
Custodial Account. Prepayment Charges shall be the property of the Owner and
shall be deposited in the Custodial Account in accordance with Section 4.22.
The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing
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activities hereunder and shall not be entitled to reimbursement thereof except
as specifically provided for herein.
Section 6.04 Annual Statement as to Compliance.
The Servicer shall deliver to the Master Servicer, on or before March
31 each year beginning with March 31 of the year following the date of the
execution and delivery of this Agreement, an Officer's Certificate, stating
that (i) a review of the activities of the Servicer during the preceding
calendar year and of performance under this Agreement has been made under such
officer's supervision, (ii) the Servicer 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 Servicer 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 Servicer to cure such default.
Section 6.05 Annual Independent Public Accountants' Servicing Report.
On or before March 31st of each year beginning with March 31 of the
year following the date of the execution and delivery of this Agreement, the
Servicer, 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 the Master Servicer to the effect that, with respect to
the most recently ended fiscal year, such firm has examined certain documents
and records relating to the servicing of the Mortgage Loans and the Servicer's
performance of its servicing obligations under this Agreement and that such
firm is of the opinion that the provisions of Article II and Article IV have
been complied with, and that, on the basis of such examination conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers, nothing has come to their attention which would indicate
that such servicing has not been conducted in compliance therewith, except for
(i) such exceptions as such firm shall believe to be immaterial; and (ii) such
other exceptions as shall be set forth in such statement.
Section 6.06 Right to Examine Servicer Records.
The Owner and the Master Servicer shall have the right to examine and
audit any and all of the books, records, or other information of the Servicer,
whether held by the Servicer or by another on its behalf, with respect to or
concerning this Agreement or the Mortgage Loans or the performance by the
Servicer of its obligations hereunder, during business hours or at such other
times as may be reasonable under applicable circumstances, upon reasonable
advance notice.
The Servicer shall provide to the Owner, the Master Servicer and any
supervisory agents or examiners representing a state or federal governmental
agency having jurisdiction over the Owner or the Master Servicer, including
without limitation the OTS, the FDIC and other similar entities, access to any
documentation regarding the Mortgage Loans in the possession of the Servicer
that is required by any applicable regulations. Such access shall be afforded
without
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charge, upon reasonable request, during normal business hours, at the offices
of the Servicer and in accordance with any applicable regulations.
ARTICLE VII
RECONSTITUTION; MASTER SERVICER
Section 7.01 Reconstitution.
The Owner and the Servicer agree that with respect to some or all of
the Mortgage Loans, from time to time the Owner shall effect an Agency
Transfer, a Pass-Through Transfer or a Whole Loan Transfer, in each case
retaining the Servicer as the servicer thereof, or as applicable, the "seller/
servicer". Any Mortgage Loans that have been transferred by the initial Owner
pursuant to an Agency Transfer, a Pass-Through Transfer or a Whole Loan
Transfer may be referred to as "Reconstituted Mortgage Loans",
The Servicer shall cooperate fully with the Owner in connection with
any Reconstitution contemplated by the Owner pursuant to this Section 7.01,
including without limitation providing requested information and reports to,
and otherwise cooperating with, rating agencies, trustees, securities
administrators, guarantors, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, third party purchasers or
credit risk managers, as applicable. In that connection, the Servicer shall
provide to ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, the trustee, master servicer or a third
party purchaser, as the case may be, and/or the Owner: (i) any and all
information and appropriate verification of information which may be
reasonably available to the Servicer, including the Servicer's foreclosure and
delinquency experience, whether through letters of its auditors and counsel or
otherwise, as the Owner shall request; and (ii) such additional
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Servicer as
are reasonably believed necessary by any Reconstitution Party, rating agency
or the Owner, as the case may be, in connection with such Reconstitution
transactions. In addition, the Servicer shall indemnify the Owner and any
Reconstitution Party for any material misstatements contained in the
information provided pursuant to the preceding sentence that the Owner may
disclose in any securitization offering materials.
The Owner or the Master Servicer shall provide the Servicer with
notice with respect to any such Reconstitution in the form of Exhibit F hereto
(each, a "Transfer Notice"), including a schedule of Mortgage Loans which have
been transferred and the effective date of the Reconstitution (the "Effective
Date"), the Cut-Off Date, the Master Servicer, the new Owner, and whether or
not the Mortgage Loans are owned by a REMIC. Upon receipt of a Transfer
Notcie, the Servicer shall promptly countersign and return the Transfer Notice
to the Master Servicer. Upon the Effective Date of such a transfer, (A) the
Servicer and Owner agree that the provisions of this Agreement shall remain in
effect, and (B) the Servicer agrees to recognize ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, the
trustee, trust or third party purchaser of the transferred Mortgage Loans in
such Reconstitution as the "Owner" of such Mortgage Loans, having the same
rights under this Agreement as the initial Owner with respect to such
transferred Mortgage Loans.
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In connection with any Reconstitution and at the request of the Owner
or the Master Servicer, on not less than five (5) days notice, the Servicer
shall execute and deliver a certificate, in form and substance acceptable to
the Owner, acknowledging and certifying to the Owner and the Master Servicer
that: (i) the Servicer has received the Transfer Notice, and attaching the
related schedule of Mortgage Loans included in such Reconstitution (which
schedule shall include such Mortgage Loan data as may reasonably be requested
by the Owner or the Master Servicer), (ii) this Agreement is in full force and
effect in accordance with its terms, (iii) no Event of Default has occurred
under this Agreement, nor does there exist any state of facts that, with the
giving of notice or passage of time, or both, would constitute an Event of
Default under this Agreement, (iv) each of the representations and warranties
of the Servicer contained in Section 3.01 are true and correct as of the
related Effective Date as if made on such date and (v) the Servicer agrees to
recognize ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ ▇▇▇▇, the trustee, trust or third party
purchaser of the transferred Mortgage Loans in such Agency Transfer, Whole
Loan Transfer or Pass-Through Transfer as the "Owner" of the related Mortgage
Loans, having the same rights under this Agreement as the initial Owner with
respect to such Mortgage Loans
With respect to each MERS Mortgage Loan, the Servicer shall take such
actions as are necessary to cause ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, the trustee or such
third party, as the case may be, to be clearly identified as the owner of each
MERS Mortgage Loan on the records of MERS for purposes of the system of
recording transfers of beneficial ownership of mortgages maintained by MERS.
Section 7.02 Master Servicer; Servicer's Guide.
(a) The Owner has appointed Aurora Loan Services Inc., or such other
master servicer as may be identified in a Transfer Notice, to act as master
servicer of the Mortgage Loans. The Servicer shall correspond, communicate and
report solely to the Master Servicer, as if the Master Servicer were the
"Owner" hereunder. All amounts due to the Owner under this Agreement shall be
remitted to the Master Servicer in accordance with the Master Servicer's
instructions. Furthermore, the Master Servicer shall have all rights as
designee of the Owner to enforce the representations and warranties, and all
other covenants and conditions set forth in this Agreement, and the Servicer
shall follow and shall be entitled to rely on the instructions of the Master
Servicer under this Agreement as if such instructions were the instructions of
the Owner. The Master Servicer shall have the right to give any waivers or
consents required or allowed under this Agreement on behalf of the Owner, and
the Servicer shall have the right to rely on all such waivers and consents.
The Master Servicer shall be empowered to enter into and execute and deliver
any amendments or modifications to this Agreement as the Owner's designee
hereunder, and such amendments or modifications shall be binding upon the
Owner as if the Owner had executed and delivered the same. The Master Servicer
may, at any time, without the Servicer's consent, direct in writing that all
or part of the functions of the Master Servicer be performed by another entity
designated by the Master Servicer for such functions and time periods as the
Master Servicer deems appropriate. The Owner may, at any time (but subject to
any agreements between the Owner and the Master Servicer), without the
Servicer's consent, appoint a successor master servicer to act as master
servicer with respect to some or all of the Mortgage Loans serviced by the
Servicer hereunder. In such case, any successor Master Servicer
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has the right to assume the Master Servicer's rights and obligations and to
enforce Servicer's obligations hereunder.
(b) Upon thirty (30) days' prior written notice to the Servicer, the
Master Servicer may publish a Servicer's Guide (as the same may be modified or
amended from time to time, the "Servicer's Guide"), which shall set forth
various terms, provisions and procedures governing the administration and
servicing of the Mortgage Loans; provided, that the Servicer's Guide shall not
materially and adversely increase the obligations of the Servicer arising
under this Agreement. If the Servicer does not notify the Master Servicer in
writing within such thirty (30) day period that the Servicer objects to the
Servicer's Guide or any provisions thereof, the Servicer shall be deemed to
have agreed to be bound and abide by the procedures, terms and conditions set
forth in the Servicer's Guide. Thereafter, the Master Servicer may amend the
Servicer's Guide from time to time to: (i) correct ambiguous or erroneous
provisions; (ii) make changes necessary or helpful to maintain compliance with
Acceptable Servicing Practices; or (iii) make such other modifications that
the Master Servicer deems advisable that do not materially and adversely
increase the obligations of, or decrease the benefits to, the Servicer. Each
such amendment will be made by means of a written notice to the Servicer. The
written notice will specify the terms of the amendment and the effective date.
If the Servicer does not notify the Master Servicer in writing that the
Servicer objects to such amendment prior to the proposed effective date
specified in the Notice, the Servicer shall be deemed to have agreed to the
amendment, and such amendment shall automatically become effective without any
further notice or action on the part of the Master Servicer or the Servicer.
Amendments to the Servicer's Guide shall be made with the consent of the Owner
of the Mortgage Loans, which consent shall not unreasonably be withheld or
delayed; provided, that the failure of the Master Servicer to obtain the
consent of the Owner to any amendment shall not impair the enforceability of
any such amendment against the Servicer. To the extent of any conflict between
the express provisions of this Agreement and the provisions of the Servicer's
Guide, the express provisions of this Agreement shall control. The failure by
the Servicer to perform obligations under the Servicer's Guide shall
constitute an Event of Default under this Agreement.
ARTICLE VIII
SERVICER TO COOPERATE
Section 8.01 Provision of Information.
During the term of this Agreement, the Servicer shall furnish to the
Owner such periodic, special, or other reports or information and copies or
originals of any documents contained in the Servicing File for each Mortgage
Loan, whether or not provided for herein, as shall be necessary, reasonable,
or appropriate with respect to the Owner, any regulatory requirement
pertaining to the Owner or the purposes of this Agreement. All such reports,
documents or information shall be provided by and in accordance with all
reasonable instructions and directions which the Owner may give.
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The Servicer shall execute and deliver all such instruments and take
all such action as the Owner may reasonably request from time to time, in
order to effectuate the purposes and to carry out the terms of this Agreement.
Section 8.02 Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the Owner may make
available to a prospective Owner a Consolidated Statement of Operations of the
Servicer for the most recently completed three 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 Servicer also shall make available any comparable interim
statements to the extent any such statements have been prepared by or on
behalf of the Servicer (and are available upon request to members or
stockholders of the Servicer or to the public at large). If it has not already
done so, the Servicer shall furnish promptly to the Owner copies of the
statement specified above.
The Servicer also shall make available to the Owner or prospective
Owner a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Servicer or
the financial statements of the Servicer, and to permit any prospective Owner
to inspect the Servicer's servicing facilities for the purpose of satisfying
such prospective Owner that the Servicer have the ability to service the
Mortgage Loans as provided in this Agreement.
ARTICLE IX
THE SERVICER
Section 9.01 Indemnification; Third Party Claims.
The Servicer shall indemnify the Owner, the Master Servicer and each
Reconstitution Party, and hold each of them harmless against any and all
claims, losses, damages, penalties, fines, and forfeitures, including, but not
limited to reasonable legal fees and related costs, judgments, and any other
costs, fees and expenses that either of them may sustain in any way related to
(i) the failure of the Servicer to perform its duties and service the Mortgage
Loans in material compliance with the terms of this Agreement or (ii) the
failure of the Servicer to cause any event to occur which would have occurred
if the Servicer were applying Accepted Servicing Practices under this
Agreement. The Servicer immediately shall notify the Owner and the Master
Servicer if a claim is made by a third party with respect to this Agreement or
the Mortgage Loans, assume (with the prior written consent of the Master
Servicer) 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 Owner, the Master
Servicer or any Reconstitution Party in respect of such claim. The
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Servicer shall follow any written instructions received from the Owner or the
Master Servicer in connection with such claim.
Section 9.02 Merger or Consolidation of the Servicer.
The Servicer shall keep in full effect its existence, rights and
franchises as a corporation, and shall obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Servicer shall be a party, or any Person succeeding to the business
of the Servicer, shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding, provided,
however, that the successor or surviving Person shall be an institution (i)
having a net worth of not less than $15,000,000 and (ii) which is a ▇▇▇▇▇▇ Mae
and ▇▇▇▇▇▇▇ Mac-approved servicer in good standing.
Section 9.03 Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to the Owner 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 Servicer 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 Servicer and any
director, officer, employee or agent of the Servicer 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 Servicer 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 Servicer may, with the consent of the
Owner, 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 Servicer shall be entitled to reimbursement from the Owner the
reasonable legal expenses and costs of such action.
Section 9.04 Limitation on Resignation and Assignment by Servicer.
The Owner has entered into this Agreement with the Servicer and
subsequent Owners will purchase the Mortgage Loans in reliance upon the
independent status of the Servicer, 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 Servicer shall neither assign this Agreement or the servicing
hereunder or
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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 Owner, which consent shall be granted
or withheld in the sole discretion of the Owner. For purposes hereof, a
merger, consolidation or sale of a majority of the equity interests or voting
power of the Servicer shall be deemed an assignment of this Agreement.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer and the Owner or upon
the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner which Opinion of
Counsel shall be in form and substance acceptable to the Owner. No such
resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder in the manner provided
in Section 12.01.
Without in any way limiting the generality of this Section 9.04, in
the event that the Servicer 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 Owner, then
the Owner shall have the right to terminate this Agreement upon notice given
as set forth in Section 10.01, without any payment of any penalty or damages
and without any liability whatsoever to the Servicer or any third party.
Section 9.05 Indemnification with Respect to Certain Taxes and Loss
of REMIC Status.
In the event that any REMIC under which any of the Mortgage Loans are
held from time to time fails to qualify as a REMIC, loses its status as a
REMIC, or incurs federal, state or local taxes as a result of a prohibited
transaction or prohibited contribution under the REMIC Provisions due to the
negligent performance by the Servicer of its duties and obligations set forth
herein, the Servicer shall indemnify the Reconstitution Parties against any
and all losses, claims, damages, liabilities or expenses ("Losses") resulting
from such negligence; provided, however, that the Servicer shall not be liable
for any such Losses attributable to the action or inaction of the
Reconstitution Parties, nor for any such Losses resulting from misinformation
provided by the Reconstitution Parties on which the Servicer has relied. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Reconstitution Parties now or hereafter existing at law or in equity or
otherwise. Notwithstanding the foregoing, however, in no event shall the
Servicer have any liability (1) for any action or omission that is taken in
accordance with and in compliance with the express terms of, or which is
expressly permitted by the terms of, this Agreement, (2) for any Losses other
than arising out of a negligent performance by the Servicer of its duties and
obligations set forth herein, and (3) for any special or consequential
damages.
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ARTICLE X
DEFAULT
Section 10.01 Events of Default.
Each of the following shall constitute an Event of Default on the part
of the Servicer:
(i) any failure by the Servicer to remit to the Owner any
payment required to be made under the terms of this Agreement which
continues unremedied for a period of two days after the date when such
payment is due hereunder; or
(ii) failure by the Servicer duly to observe or perform in
any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement which continues
unremedied for a period of 20 days (or (x) 5 days, in the case of a
failure to provide any monthly reports required pursuant to this
Agreement and (y)10 days, in the case of a failure to maintain any
insurance policy required to be maintained pursuant to this Agreement)
after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Servicer by the
Master Servicer, the Owner or by the Custodian; or
(iii) failure by the Servicer to maintain its license to do
business in any jurisdiction where the Mortgage Property is located;
or
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
including bankruptcy, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of
60 days; or
(v) the Servicer 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 Servicer or of or relating to all or
substantially all of its property; or
(vi) the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of any applicable insolvency, bankruptcy or reorganization
statute, make an assignment for the benefit of its creditors,
voluntarily suspend payment of its obligations or cease its normal
business operations for three (3) Business Days; or
(vii) the Servicer ceases to meet the qualifications of a
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac approved servicer; or
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(viii) the Servicer fails to maintain a minimum net worth,
determined in accordance with United States Generally Accepted
Accounting Principles, of $15,000,000 as of any date; or
(ix) the Servicer, if it is an Insured Depository
Institution, shall become the subject of a cease and desist order of
the Appropriate Federal Banking Agency or enter into a memorandum of
understanding, consent agreement or any similar agreement with the
Appropriate Federal Banking Agency, any of which, would have or is
purportedly the result of, any condition which would have a material
adverse effect on the Mortgage Loans, the Servicer, or the Servicer's
ability to service the Mortgage Loans as provided hereunder; or
(x) the Servicer, if it is an Insured Depository
Institution, shall fail to maintain its status as Well Capitalized; or
(xi) the Servicer attempts to assign its right to servicing
compensation hereunder or the Servicer attempts, without the consent
of the Owner, 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 violation of Section 9.04; or
(xii) an Event of Default arising under Section 5.04 hereof.
In each and every such case, so long as an Event of Default shall not
have been remedied, in addition to whatsoever rights the Owner or the Master
Servicer may have at law or equity to damages, including injunctive relief and
specific performance, the Owner or the Master Servicer, by notice in writing
to the Servicer, may terminate all the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds
thereof.
Upon receipt by the Servicer of such written notice, all authority and
power of the Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the successor
appointed pursuant to Section 12.01. Upon written request from any Owner or
the Master Servicer, the Servicer shall prepare, execute and deliver to the
successor entity designated by the Owner or the Master Servicer any and all
documents and other instruments, place in such successor's possession all
Mortgage Files, and do or cause to be done all other acts or things necessary
or appropriate to effect the purposes of such notice of termination, including
but not limited to the transfer and endorsement or assignment of the Mortgage
Loans and related documents, at the Servicer's sole expense. The Servicer
shall cooperate with the Owner, the Master Servicer and such successor in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by the Servicer to the Custodial Account or Escrow Account or thereafter
received with respect to the Mortgage Loans.
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Section 10.02 Waiver of Defaults.
By a written notice, the Owner may waive any default by the Servicer
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.
Section 10.03. Survival of Obligations and Liabilities of the
Servicer.
The representations, warranties, covenants, indemnities and agreements
of the parties provided in this Agreement and the parties' obligations
hereunder shall survive the execution and delivery and the termination or
expiration of this Agreement. Notwithstanding any termination of the rights
and obligations of the Servicer pursuant to this Article 10, the Servicer
shall remain liable for any actions of the Servicer taken prior to the
effective time of such termination. Any cause of action against the Servicer
relating to or arising out of the breach of its obligations under this
Agreement shall accrue upon (i) discovery of such Breach by the Servicer or
notice thereof by the Owner to the Servicer, (ii) failure by the Servicer to
cure such breach within the applicable cure period, and (iii) demand upon the
Servicer by the Owner for compliance with this Agreement.
ARTICLE XI
TERMINATION
Section 11.01 Termination.
This Agreement shall terminate upon either: (i) the later of the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of any REO Property with respect to the last
Mortgage Loan and the remittance of all funds due hereunder; (ii) mutual
consent of the Servicer and the Owner in writing; or (iii) termination with or
without cause under the terms of this Agreement.
Section 11.02 Termination Without Cause.
The Initial Owner may terminate, at its sole option, any rights the
Servicer may have hereunder, without cause, as provided in this Section 11.02.
Any such notice of termination shall be in writing and delivered to the
Servicer by mail as provided in Section 12.05. The Owner and the Servicer
shall comply with the termination procedures set forth in Section 12.01
hereof, provided that, in the event that the Initial Owner terminates this
Agreement without cause in accordance with this Section, the Initial Owner
shall pay to the Servicer a termination fee equal to two percent (2.0%) of the
aggregate unpaid principal balance of the Mortgage Loans as of the termination
date. Notwithstanding and in addition to the foregoing, in the event that (i)
a Mortgage Loan becomes delinquent for a period of 120 days or more (a
"Delinquent Mortgage
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Loan"), (ii) a Mortgage Loan becomes an REO Property or (iii) at any time
after the second anniversary of the date hereof there are fewer than [20]
Mortgage Loans that are not Reconstituted Mortgage Loans serviced hereunder,
the Owner may at its election terminate this Agreement with respect to such
Delinquent Mortgage Loan or REO Property or, in the case of (iii) above, all
of the remaining Mortgage Loans that are not Reconstituted Mortgage Loans,
without payment of a termination fee therefor, upon 15 days' written notice to
the Servicer.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Servicer.
Prior to termination of the Servicer's responsibilities and duties
under this Agreement pursuant to Sections 9.04, 10.01, 11.01(ii) or 11.02, the
Master Servicer shall (i) succeed to and assume all of the Servicer's
responsibilities, rights, duties and obligations under this Agreement or (ii)
appoint a successor having the characteristics set forth in clauses (i) and
(ii) of Section 9.02 and which shall succeed to all rights and assume all of
the responsibilities, duties and liabilities of the Servicer under this
Agreement prior to the termination of the Servicer's responsibilities, duties
and liabilities under this Agreement. In connection with such appointment and
assumption, the Master Servicer may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree. In the event that the Servicer's duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the aforementioned sections, the Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01
and shall in no event relieve the Servicer of the representations and
warranties made pursuant to Sections 3.01 and the remedies available to the
Owner under Section 3.02, it being understood and agreed that the provisions
of such Sections 3.01 and 3.02 shall be applicable to the Servicer
notwithstanding any such sale, assignment, resignation or termination of the
Servicer, or the termination of this Agreement.
Within a reasonable period of time, but in no event longer than 30
days of the appointment of a successor entity, the Servicer shall prepare,
execute and deliver to the successor entity any and all documents and other
instruments, place in such successor's possession all Servicing Files, and do
or cause to be done all other acts or things necessary or appropriate to
effect the purposes of such notice of termination. The Servicer shall
cooperate with the Owner and the Master Servicer, as applicable, and such
successor in effecting the termination of the Servicer's responsibilities and
rights hereunder and the transfer of servicing responsibilities to the
successor Servicer, including without limitation, the transfer to such
successor for administration by it of all cash amounts which shall at the time
be credited by the Servicer to the
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Custodial Account or any Escrow Account or thereafter received with respect to
the Mortgage Loans.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Servicer and to the Owner an instrument accepting such
appointment, wherein the successor shall make the representations and
warranties set forth in Section 3.01, whereupon such successor shall become
fully vested with all the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer, with like effect as if originally
named as a party to this Agreement. Any termination or resignation of the
Servicer or termination of this Agreement pursuant to Section 9.04, 10.01,
11.01 or 11.02 shall not affect any claims that any Owner or the Master
Servicer may have against the Servicer arising out of the Servicer's actions
or failure to act prior to any such termination or resignation.
The Servicer shall deliver promptly (but in all events within ten (10)
Business Days) to the successor servicer the funds in the Custodial Account
and Escrow Account and all Mortgage Files and related documents and statements
held by it hereunder and the Servicer shall account for all funds and shall
execute and deliver such instruments and do such other things as may
reasonably be required to more fully and definitively vest in the successor
all such rights, powers, duties, responsibilities, obligations and liabilities
of the Servicer.
Upon a successor's acceptance of appointment as such, the Servicer
shall notify the Owner and Master Servicer of such appointment in accordance
with the procedures set forth in Section 12.05.
Except as otherwise provided in this Agreement, all reasonable costs
and expenses incurred in connection with any transfer of servicing as a
consequence of termination or removal of the Servicer pursuant to Section
10.01, including, without limitation, the costs and expenses of the Owner or
Master Servicer or any other Person in appointing a successor servicer, or of
the Master Servicer in assuming the responsibilities of the Servicer
hereunder, or of transferring the Servicing Files and the other necessary data
to the successor servicer shall be paid by the terminated, removed or
resigning Servicer from its own funds without reimbursement.
Section 12.02 Amendment.
This Agreement may be amended from time to time by the Servicer, the
Master Servicer and the Owner by written agreement signed by the Servicer, the
Master Servicer and the Owner.
Section 12.03 Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
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Section 12.04 Duration of Agreement.
This Agreement shall continue in existence and effect until terminated
as herein provided. This Agreement shall continue notwithstanding transfers of
the Mortgage Loans by the Owner.
Section 12.05 Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or
mailed by registered mail, postage prepaid, addressed as follows:
(i) if to the Servicer, to the Servicer's address set forth
on the signature page hereto, or such other address as may hereafter
be furnished to the Owner in writing by the Servicer;
(ii) if to the Owner:
▇▇▇▇▇▇ Brothers Bank, FSB
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Correspondent Division
(iii) if to the Master Servicer:
Aurora Loan Services Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: E. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Master Servicing Division
Section 12.06 Severability of Provisions.
Any part, provision, representation or warranty of this Agreement
which is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable
any provision hereof. If the invalidity of any part, provision, representation
or warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is as close as
possible to the economic effect of this Agreement without regard to such
invalidity.
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Section 12.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of
the Servicer shall be rendered as an independent contractor and not as agent
for the Owner.
Section 12.08 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together,
shall constitute one and the same agreement. Subject to Section 9.04, this
Agreement shall inure to the benefit of and be binding upon the Servicer and
the Owner and their respective successors and assigns.
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 Owner's expense in the event recordation is either necessary
under applicable law or requested by the Owner at its sole option.
Section 12.10 Assignment by Owner.
The Owner shall have the right, without the consent of the Servicer
but subject to Section 7.01 hereof, 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 Owner hereunder.
Upon such assignment of rights and assumption of obligations, the assignee or
designee shall accede to the rights and obligations hereunder of the Owner
with respect to such Mortgage Loans and the Owner as assignor shall be
released from all obligations hereunder with respect to such Mortgage Loans
from and after the date of such assignment and assumption. All references to
the Owner in this Agreement shall be deemed to include its assignee or
designee.
Section 12.11 No Personal Solicitation.
From and after the related Commencement Date, the Servicer hereby
agrees that it will not take any action or permit or cause any action to be
taken by any of its agents or affiliates, or by any independent contractors or
independent mortgage brokerage companies on the Servicer's behalf, to
personally, by telephone, by e-mail or mail, solicit the Mortgagor under any
Mortgage Loan for the purpose of refinancing such Mortgage Loan.
Notwithstanding the foregoing, it is understood and agreed that promotions
undertaken by the Servicer or any affiliate of the Servicer which are directed
to the general public at large, including, without limitation, mass mailing
based on commercially acquired mailing lists, newspaper, radio and television
advertisements shall not constitute solicitation under this Section.
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Section 12.12 Protection of Confidential Information.
The Servicer shall keep confidential and shall not divulge to any
party, without the Owner's prior written consent, any information pertaining
to the Mortgage Loans or any borrower thereunder, except to the extent that it
is appropriate for the Servicer to do so in working with legal counsel,
auditors, taxing authorities or other governmental agencies.
Section 12.13 Further Agreements.
The Owner and the Servicer each agree to execute and deliver to the
other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement.
Section 12.14 Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
Section 12.15 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 12.16 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
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(f) the term "include" or "including" shall mean by reason of
enumeration.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Servicer, the Master Servicer and the Owner
have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the day and year first above written.
▇▇▇▇▇▇ BROTHERS BANK, FSB,
as Owner
By:__________________________
Name:_________________________
Title:________________________
AURORA LOAN SERVICES INC.,
as Master Servicer
By:__________________________
Name:_________________________
Title:________________________
COLONIAL SAVINGS, F.A.,
as Servicer
By:__________________________
Name:_________________________
Title:________________________
Servicer Notice Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇ ▇-▇
CUSTODIAL ACCOUNT CERTIFICATION
_____________________, 200_
COLONIAL SAVINGS, F.A. (the "Servicer") hereby certifies that it has
established the account described below as a Custodial Account pursuant to
Section 4.04 of the Correspondent Servicing Agreement, dated as of [Date] by
and between the Servicer, the Master Servicer and the Owner specified therein.
Title of Account: ["COLONIAL SAVINGS, F.A. in trust for the benefit of
Aurora Loan Services Inc., as Master Servicer and the
Owner of Residential Mortgage Loans"]
[or]
["COLONIAL SAVINGS, F.A. in trust for the benefit of
Aurora Loan Services Inc., as Master Servicer and the
various Owners of Residential Mortgage Loans."]1
Account Number: _______________
Address of office or branch
of the Servicer at
which Account is maintained: ______________________________
______________________________
______________________________
______________________________
____________________
1 See Section 4.04 for appropriate designation for account.
-A1-1-
COLONIAL SAVINGS, F.A.
Servicer
By:___________________________
Name:_________________________
Title:________________________
-2-
EXHIBIT A-2
CUSTODIAL ACCOUNT LETTER AGREEMENT
_________________, 200_
To: ______________________________
______________________________
______________________________
(the "Depository")
As the Servicer under the Correspondent Servicing Agreement, dated as
of [Date], (the "Agreement"), we hereby authorize and request you to establish
an account, as a Custodial Account pursuant to Section 4.04 of the Agreement,
to be designated as ["COLONIAL SAVINGS, F.A. in trust for the benefit of
Aurora Loan Services Inc., as Master Servicer and the Owner of Residential
Mortgage Loans"] [or] ["COLONIAL SAVINGS, F.A. in trust for the benefit of
Aurora Loan Services Inc., as Master Servicer and the various Owners of
Residential Mortgage Loans."]2 All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Servicer. 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.
COLONIAL SAVINGS, F.A.
Servicer
By:__________________________
Name:________________________
Title:_______________________
Date:________________________
____________________
2 See Section 4.04 for appropriate designation for account.
-A2-1-
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:_________________________
-A2-2-
EXHIBIT B-1
ESCROW ACCOUNT CERTIFICATION
__________________, 200_
COLONIAL SAVINGS, F.A. hereby certifies that it has established the
account described below as an Escrow Account pursuant to Section 4.06 of the
Correspondent Servicing Agreement, dated as of [Date], by and between the
Servicer, the Master Servicer and the Owner specified therein.
Title of Account: ["COLONIAL SAVINGS, F.A. in trust for the benefit of
Aurora Loan Services Inc., as Master Servicer and the
Owner of Residential Mortgage Loans and various
Mortgagors"]
[or]
["COLONIAL SAVINGS, F.A. in trust for the benefit of
Aurora Loan Services Inc., as Master Servicer and the
various Owners of Residential Mortgage Loans and various
Mortgagors."]3
Account Number: _______________
Address of office or branch
of the Servicer at
which Account is maintained: ______________________________
______________________________
______________________________
______________________________
____________________
3 See Section 4.06 for appropriate designation for account.
-B1-1-
COLONIAL SAVINGS, F.A.
Servicer
By:___________________________
Name:_________________________
Title:________________________
-B1-1-
EXHIBIT B-2
ESCROW ACCOUNT LETTER AGREEMENT
___________________, 200_
To: ______________________________
______________________________
______________________________
(the "Depository")
As Servicer under the Correspondent Servicing Agreement, dated as of
[Date] ____ (the "Agreement"), we hereby authorize and request you to
establish an account, as an Escrow Account pursuant to Section 4.07 of the
Agreement, to be designated as ["COLONIAL SAVINGS, F.A. in trust for the
benefit of Aurora Loan Services Inc., as Master Servicer and the Owner of
Residential Mortgage Loans and various Mortgagors"] [or] ["COLONIAL SAVINGS,
F.A. in trust for the benefit of Aurora Loan Services Inc., as Master Servicer
and the various Owners of Residential Mortgage Loans and various Mortgagors."]4
All deposits in the account shall be subject to withdrawal therefrom by order
signed by the Servicer. 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.
COLONIAL SAVINGS, F.A.
Servicer
By:__________________________
Name:________________________
Title:_______________________
Date:________________________
____________________
4 See Section 4.06 for appropriate designation for account.
-B2-1-
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:_________________________
-B2-2-
EXHIBIT C-1
MONTHLY REMITTANCE ADVICE
[Intentionally Omitted]
-C1-1-
STANDARD LAYOUT
FIELD NAME DESCRIPTION FORMAT
INVNUM INVESTOR LOAN NUMBER Number no decimals
SERVNUM SERVICER LOAN NUMBER, REQUIRED Number no decimals
BEGSCHEDBAL BEGINNING SCHEDULED BALANCE FOR SCHED/SCHED Number two decimals
BEGINNING TRAIL BALANDE FOR ACTUAL/ACTUAL,
REQUIRED
SCHEDPRIN SCHEDULED PRINCIPAL AMOUNT FOR SCHEDULED/SCHEDULED Number two decimals
ACTUAL PRINCIPAL COLLECTED FOR ACTUAL/ACTUAL,
REQUIRED, .00 IF NO COLLECTIONS
CURT1 CURTAILMENT 1 ▇▇▇▇▇▇, .▇▇ IF NOT APPLICABLE Number two decimals
CURT1DATE CURTAILMENT 1 DATE, BLANK IF NOT APPLICABLE DD-MMM-YY
CURT1ADJ CURTAILMENT 1 ADJUSTMENT, .00 IF NOT APPLICABLE Number two decimals
CURT2 CURTAILMENT 2 ▇▇▇▇▇▇, .▇▇ IF NOT APPLICABLE Number two decimals
CURT2DATE CURTAILMENT 2 DATE, BLANK IF NOT APPLICABLE DD-MMM-YY
CURT2ADJ CURTAILMENT 2 ADJUSTMENT, .00 IF NOT APPLICABLE Number two decimals
LIQPRIN PAYOFF, LIQUIDATION PRINCIPAL, .00 IF NOT APPLICABLE Number two decimals
OTHPRIN OTHER PRINCIPAL, .00 IF NOT APPLICABLE Number two decimals
PRINREMIT TOTAL PRINCIPAL REMITTANCE AMOUNT, .00 IF NOT APPLICABLE Number two decimals
INTREMIT NET INTEREST REMIT, INCLUDE PAYOFF INTEREST, Number two decimals
.00 IF NOT APPLICABLE
TOTREMIT TOTAL REMITTANCE AMOUNT, .00 IF NOT APPLICABLE Number two decimals
ENDSCHEDBAL ENDING SCHEDULED BALANCE FOR SCHEDULED/SCHEDULED Number two decimals
ENDING TRIAL BALANCE FOR ACTUAL/ACTUAL
.00 IF PAIDOFF, LIQUIDATED OR FULL CHARGEOFF
ENDACTBAL ENDING TRIAL BALANCE Number two decimals
.00 IF PAIDOFF, LIQUIDATED OR FULL CHARGEOFF
ENDDUEDATE ENDING ACTUAL DUE DATE, NOT LAST PAID INSTALLMENT DD-MMM-YY
ACTCODE 60 IF PAIDOFF, BLANK IF NOT APPLICABLE Number no decimals
ACTDATE ACTUAL PAYOFF DATE, BLANK IF NOT APPLICABLE DD-MMM-YY
INTRATE INTEREST RATE, REQUIRED Number seven decimals
Example .0700000 for
7.00%
SFRATE SERVICE FEE RATE, REQUIRED Number seven decimals
Example .0025000 for .25%
PTRATE PASS THRU RATE, REQUIRED Number seven decimals
Example .0675000 for
6.75%
PIPMT P&I CONSTANT, REQUIRED Number two decimals
.00 IF PAIDOFF
-C1-1-
EXHIBIT C-2
MONTHLY DELINQUENT LOAN ADVICE
1. Deal Identifier by Loan
2. SBO Loan Number
3. Loan Number
4. Investor Loan Number
5. Street Address
6. City
7. State
8. Zip Code
9. Original Loan Amount
10. Origination Date
11. First Payment Date
12. Current Loan Amount
13. Current Interest Rate
14. Current P&I Payment Amount
15. Scheduled Balance
16. Scheduled Due Date
17. Next Rate Adjustment Date
18. Next Payment Adjustment Date
19. Loan Term
20. Loan Type
21. Servicing Fee
22. Product Type
23. Property Type
24. Ownership Code
25. Actual Due Date
26. Delinquency Status
27. Reason for Default
28. FC Flag
29. Date Loan Reinstated
30. FC Suspended Date
31. Reason Suspended
32. FC Start Date (referral date)
33. Actual Notice of Intent Date
34. Actual First Legal Date
35. Date Bid Instructions Sent
36. Date F/C Sale Scheduled
37. Foreclosure Actual Sale Date
38. Actual Redemption End Date
-C2-1-
39. Occupancy Status
40. Occupancy Status Date
41. Actual Eviction Start Date
42. Actual Eviction Complete Date
43. Loss Mit Workstation Status
44. Loss Mit Flag
45. Loss Mit Type
46. Loss Mit Start Date
47. Loss Mit Approval Date
48. Loss Mit Removal Date
49. REO Flag
50. Actual REO Start Date
51. REO List Date
52. REO List Price
53. Date REO Offer Received
54. Date REO Offer Accepted
55. REO Scheduled Close Date
56. REO Actual Closing Date
57. REO Net Sales proceeds
58. REO Sales Price
59. Paid Off Code
60. Paid in Full Date
61. MI Certificate Number
62. MI Cost
63. Other Advance Expenses
64. T&I Advances
65. Interest Advances
66. Liquidation Status
67. BK Atty Fees & Costs
68. FC Atty Fees & Costs
69. Eviction Atty Fees & Costs
70. Appraisal, BPO Costs
71. Property Preservation Fees
72. Actual Claim Filed Date
73. Actual Claim Amount Filed
74. Claim Amount Paid
75. Claim Funds Received Date
76. Realized Gain or Loss
77. BK Flag
78. Bankruptcy Chapter
79. Actual Bankruptcy Start Date
80. Actual Payment Plan Start Date
81. Actual Payment Plan End Date
82. Date POC Filed
83. Date Filed Relief/Dismissal
-C2-2-
84. Relief/Dismissal Hearing Date
85. Date Relief/Dismissal Granted
86. Post Petition Due Date
87. Prepayment Flag
88. Prepayment Waived
89. Prepayment Premium Collected
90. Partial Prepayment Amount Collected
91. Prepayment Expiration Date
92. Origination Value Date
93. Origination Value Source
94. Original Value Amount
95. FC Valuation Amount
96. FC Valuation Source
97. FC Valuation Date
98. REO Value Source
99. REO Value(As-is)
100. REO Repaired Value
101. REO Value Date
102. Investor/Security Billing Date Sent
-C2-3-
EXHIBIT D
FORM OF
OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected [Vice]
President of [_______________], a corporation organized under the laws of the
State of [_________], (the "Servicer") and further as follows:
1. Attached hereto as Attachment 1 is a true, correct and
complete copy of the Articles of Incorporation of the Servicer which
is in full force and effect on the date hereof and which has been in
effect without amendment, waiver, rescission or modification since
____________.
2. Attached hereto as Attachment 2 is a true, correct and
complete copy of the bylaws of the Servicer which are in effect on the
date hereof and which have been in effect without amendment, waiver,
rescission or modification.
3. Attached hereto as Attachment 3 is an original
certificate of good standing of the Servicer, issued within ____ days
of the date hereof by the secretary of State of the state of
________________, and no event has occurred since the date thereof
which would impair such standing.
4. Each person who, as an officer or representative of the
Servicer, signed the Correspondent Servicing Agreement, dated as of
[DATE] (the "Servicing Agreement"), by and between the Servicer,
▇▇▇▇▇▇ Brothers Bank, FSB (the "Owner") and Aurora Loan Services Inc.
(the "Master Servicer"), and any other document delivered prior hereto
or on the date hereof in connection with the Agreement, was, at the
respective times of such signing and delivery, and is now, a duly
elected or appointed, qualified and acting officer or representative
of the Servicer, and the signatures of such persons appearing on such
documents are their genuine signatures.
5. To the best of my knowledge, either (i) no consent,
approval, authorization or order of any court or governmental agency
or body is required for the execution, delivery and performance by the
Servicer of or compliance by the Servicer with the Agreement or the
consummation of the transactions contemplated by the Agreement; or
(ii) any required consent, approval, authorization or order has been
obtained by the Servicer.
6. To the best of my knowledge, neither the consummation of
the transactions contemplated by, nor the fulfillment of the terms of
the Servicing Agreement, conflicts or will conflict with or results or
will result in a breach of or constitutes or will constitute a default
under the charter or by-laws of the Servicer, the terms of any
indenture or other agreement or instrument to which the Servicer is a
party or by which it is bound or to which it is subject, or any
statute or order, rule, regulations,
-D-1-
writ, injunction or decree of any court, governmental authority or
regulatory body to which the Servicer is subject or by which it is
bound.
7. To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the Servicer
which, in my judgment, 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 Servicer or in any
material impairment of the right or ability of the Servicer to carry
on its business substantially as now conducted or in any material
liability on the part of the Servicer or which would draw into
question the validity of the Agreement or of any action taken or to be
taken in connection with the transactions contemplated hereby, or
which would be likely to impair materially the ability of the Servicer
to perform under the terms of the Agreement.
9. The Servicer is duly authorized to engage in the
transactions described and contemplated in the Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Servicer.
Dated:_______________________________ By:______________________________
Name:____________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of [_______________],
hereby certify that ____________ is the duly elected, qualified and acting
[Vice] President of the Servicer and that the signature appearing above is
[her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:_______________________________ By:______________________________
Name:____________________________
[Seal] Title: [Vice] President
-D-2-
EXHIBIT E
FORM OF
OPINION OF COUNSEL
[DATE]
▇▇▇▇▇▇ Brothers Bank, FSB
Three World Financial Center
New York, New York 10285
Aurora Loan Services Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
You have requested my opinion, as legal counsel to COLONIAL SAVINGS, F.A. (the
"Servicer"), with respect to certain matters in connection with the servicing
by the Servicer of the Mortgage Loans pursuant to that certain Correspondent
Servicing Agreement, dated as of [DATE] (the "Servicing Agreement"), by and
between the Servicer, ▇▇▇▇▇▇ Brothers Bank, FSB (the "Owner") and Aurora Loan
Services Inc. (the "Master Servicer"). Capitalized terms not otherwise defined
herein have the meanings set forth in the Agreement.
I have examined the Servicing Agreement and such other documents, records and
papers as I have deemed necessary and relevant as a basis for this opinion.
To the extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Servicer contained in the Servicing
Agreement. I have assumed the authenticity of all documents submitted to me as
originals, the genuineness of all signatures, the legal capacity of natural
persons and the conformity to the originals of all documents.
Subject to the foregoing, it is my opinion that:
1. The Servicer is a duly organized, validly existing corporation in good
standing under the laws of the State of [____________] and is authorized to
service and administer the Mortgage Loans in the states where the Mortgaged
Properties are located.
2. The Servicer has the power to engage in the transactions contemplated by
the Servicing Agreement and all requisite power, authority and legal right to
execute and deliver the Servicing
-E-1-
Agreement, and to perform and observe the terms and conditions of such
instrument.
3. The Servicing Agreement has been duly authorized, executed and delivered
by the Servicer and is a legal, valid and binding agreement enforceable in
accordance with its respective terms against the Servicer, subject to
bankruptcy laws and other similar laws of general application affecting rights
of creditors and subject to the application of the rules of equity, including
those respecting the availability of specific performance.
4. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with the
Servicing Agreement, or the servicing of the Mortgage Loans or the
consummation of the transactions contemplated by the Servicing Agreement; or
(ii) any required consent, approval, authorization or order has been obtained
by the Servicer.
5. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of, the Servicing Agreement conflicts or will
conflict with or results or will result in a breach of, or constitutes or will
constitute a default under, the organization documents of the Servicer, the
terms of any material indenture or other agreement or instrument to which the
Servicer is a party or by which it is bound or to which it is subject, or
violates any statute or order, rule, regulations, writ, injunction or decree
of any court, governmental authority or regulatory body to which the Servicer
is subject or by which it is bound.
6. There is no action, suit, proceeding or investigation pending or, to the
best of my knowledge, threatened against the Servicer which, in my judgment,
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 Servicer or in any material impairment of the right or ability
of the Servicer to carry on its business substantially as now conducted or in
any material liability on the part of the Servicer or which would draw into
question the validity of the Servicing Agreement or of any action taken or to
be taken in connection with the transactions contemplated thereby, or which
would be likely to impair materially the ability of the Servicer to perform
under the terms of the Servicing Agreement.
Very truly yours,
-E-2-
EXHIBIT F
FORM OF
TRANSFER NOTICE
[DATE]
COLONIAL SAVINGS, F.A.
____________________________
____________________________
____________________________
We refer to that certain Correspondent Servicing Agreement, dated as
of [DATE] (the "Servicing Agreement"), by and between the [[NAME OF
CORRESPONDNET]] (the "Servicer"), ▇▇▇▇▇▇ Brothers Bank, FSB (the "Owner") and
Aurora Loan Services Inc. (the "Master Servicer"). This notice constitutes a
"Transfer Notice" as contemplated by Section 7.01 of the Servicing Agreement.
Capitalized terms used herein without definition and defined in the Servicing
Agreement are used herein as defined therein.
You are hereby notified that the Owner has effected a Reconstitution
with respect to the mortgage loans listed on the attached schedule (the
"Mortgage Loans"). You are hereby advised of the following with respect to
such Reconstitution and the related Mortgage Loans:
Effective Date of Reconstitution: ___________ __, 200_
Cut-Off Date: ___________ __, 200_
New Owner: [_______________________]
Master Servicer: Aurora Loan Services Inc.
[You are also hereby advised that a REMIC election has been made with
respect to the Mortgage Loans subject to the Reconstitution.]
By countersigning this notice and returning it to the Master Servicer
named above, you hereby acknowledge and agree that, from and after the
Effective Date, you shall service the Mortgage Loans in accordance with the
terms of the Servicing Agreement for the benefit of the New Owner named above,
as the Owner of the Mortgage Loans. From and after the Effective Date, the New
Owner named above shall have the same rights under the Servicing Agreement as
the Initial Owner named therein with respect to the Mortgage Loans.
▇▇▇▇▇▇ BROTHERS BANK, FSB, as Owner
-F-1-
By:________________________________
Acknowledged by:
COLONIAL SAVINGS, F.A.,
as Servicer
By:_______________________________
Name:
Title:
-F-2-
EXHIBIT G
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
_______________
[Date]
LaSalle Bank, N.A.
▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Collateral Services Manager
In connection with the administration of the mortgages held by you as
Custodian under a certain Custodial Agreement, between ▇▇▇▇▇▇ Brothers Bank,
FSB, as Owner, Aurora Loan Services Inc., as Master Servicer and you, as
Custodian (the "Custodial Agreement"), the undersigned Servicer hereby
requests a release of the Mortgage File held by you as Custodian with respect
to the following described Mortgage Loan for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
_____ Mortgage Loan paid in full. (The Servicer hereby certifies that
all amounts received in connection with the loan have been or will
be credited to the Custodial Account pursuant to the Servicing
Agreement.)
_____ The Mortgage Loan is being foreclosed.
_____ Mortgage Loan substituted. (NOT APPLICABLE)
_____ Mortgage Loan repurchased. (The Servicer hereby certifies that the
Repurchase Price has been credited to the Custodial Account
pursuant to the Servicing Agreement.)
_____ Other. (Describe)
_____ California Mortgage Loan expected to be paid in full.
The undersigned acknowledges that the above Mortgage File will be held by the
undersigned in
-G-1-
accordance with the provisions of the Servicing Agreement and will be returned
to you within ten (10) days of our receipt of the Mortgage File, except if the
Mortgage Loan has been paid in full, or repurchased (in which case the
Mortgage File will be retained by us permanently) and except if the Mortgage
Loan is being foreclosed or is a California Mortgage Loan specified above (in
which case the Mortgage File will be returned when no longer required by us
for such purpose).
Capitalized terms used herein shall have the meanings ascribed to them in the
Custodial Agreement.
___________________________________
[Name of Servicer]
By:________________________________
Name:
Title: Servicing Officer
-G-2-
EXHIBIT H
AUTHORIZED REPRESENTATIVES OF THE SERVICER
(COLONIAL SAVINGS, F.A.)
NAME TITLE SIGNATURE
_________________________ _________________________ ______________________
_________________________ _________________________ ______________________
_________________________ _________________________ ______________________
_________________________ _________________________ ______________________
[Master Servicer's Copy]
-H-1-
AUTHORIZED REPRESENTATIVES OF THE SERVICER
(COLONIAL SAVINGS, F.A.)
NAME TITLE SIGNATURE
_________________________ _________________________ ______________________
_________________________ _________________________ ______________________
_________________________ _________________________ ______________________
_________________________ _________________________ ______________________
[Custodian's Copy]
-E-2-