Exhibit 99.5
EXECUTION COPY
--------------
================================================================================
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
among
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY,
as Assignor
GS MORTGAGE SECURITIES CORP.,
as Assignee
and
FIRST NATIONAL BANK OF NEVADA,
as Servicer
Dated as of
February 24, 2006
================================================================================
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (this
"Assignment Agreement") made this 24th day of February, 2006, among First
National Bank of Nevada (the "Servicer"), GS Mortgage Securities Corp., as
assignee (the "Assignee") and ▇▇▇▇▇▇▇ Sachs Mortgage Company, as assignor (the
"Assignor").
WHEREAS, the Assignor and the Servicer have entered into the
Amended and Restated Master Mortgage Loan Purchase and Interim Servicing
Agreement, dated as of November 1, 2005 (the "Servicing Agreement") pursuant
to which the Servicer sold certain mortgage loans listed on the mortgage loan
schedule attached as an exhibit to the Servicing Agreement;
WHEREAS, the Assignee has agreed on certain terms and
conditions to purchase from the Assignor certain of the mortgage loans (the
"Mortgage Loans"), which are subject to the provisions of the Servicing
Agreement and are listed on the mortgage loan schedule attached as Exhibit 1
hereto (the "Mortgage Loan Schedule"); and
WHEREAS, pursuant to a Master Servicing and Trust Agreement,
dated as of February 1, 2006 (the "Trust Agreement"), among GS Mortgage
Securities Corp., as depositor, Deutsche Bank National Trust Company, as a
custodian, U.S. Bank National Association, as a custodian and as trustee (the
"Trustee") and JPMorgan Chase Bank, National Association, as master servicer,
securities administrator and a custodian (the "Master Servicer"), the Assignee
will transfer the Mortgage Loans to the Trustee, together with the Assignee's
rights under the Servicing Agreement, to the extent relating to the Mortgage
Loans (other than the rights of the Assignor (and if applicable its
affiliates, officers, directors and agents) to indemnification thereunder).
NOW THEREFORE, in consideration of the mutual promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Assignment and Assumption. (a) The Assignor hereby
assigns to the Assignee, as of the date hereof, all of its right, title and
interest in and to the Mortgage Loans and the Servicing Agreement, to the
extent relating to the Mortgage Loans (other than the rights of the Assignor
(and if applicable its affiliates, officers, directors and agents) to
indemnification thereunder), and the Assignee hereby assumes all of the
Assignor's obligations under the Servicing Agreement, to the extent relating
to the Mortgage Loans, from and after the date hereof, and the Servicer hereby
acknowledges such assignment and assumption and hereby agrees to the release
of the Assignor from any obligations under the Servicing Agreement from and
after the date hereof, to the extent relating to the Mortgage Loans.
(b) The Assignor represents and warrants to the Assignee
that the Assignor has not taken any action which would serve to impair or
encumber the Assignor's ownership interest in the Mortgage Loans since the
date of the Servicing Agreement.
(c) The Servicer and the Assignor shall have the right to
amend, modify or terminate the Servicing Agreement without the joinder of the
Assignee with respect to mortgage
loans not conveyed to the Assignee hereunder; provided, however, that such
amendment, modification or termination shall not affect or be binding on the
Assignee.
2. Accuracy of Sale Agreement and Servicing Agreement. The
Servicer and the Assignor represent and warrant to the Assignee that (i)
attached hereto as Exhibit 2 is a true, accurate and complete copy of the
Servicing Agreement, (ii) the Servicing Agreement is in full force and effect
as of the date hereof, (iii) except as provided in this Agreement, the
Servicing Agreement has not been amended or modified in any respect and (iv)
no notice of termination has been given to the Servicer under the Servicing
Agreement. The Servicer, in its capacity as servicer under the Servicing
Agreement, further represents and warrants that the representations and
warranties contained in Sections 7.01 and 7.02 of the Servicing Agreement are
true and correct as of the Closing Date (as such term is defined in the
Servicing Agreement).
3. Modification of the Servicing Agreement. Only in so far
as it relates to the Mortgage Loans, the Servicer and the Assignor hereby
amend the Servicing Agreement as follows:
(a) Beginning with the sixth sentence in the second
paragraph of Subsection 11.13 through the end of such paragraph, such language
shall be deleted in its entirety and replaced with the following:
"The Company shall use its best efforts to dispose of the REO
Property as soon as possible and shall sell such REO Property in any event
within one year after title has been taken to such REO Property, unless (i) a
REMIC election has not been made with respect to the arrangement under which
the Mortgage Loans and the REO Property are held, and (ii) the Company
determines, and gives an appropriate notice to the Purchaser to such effect,
that a longer period is necessary for the orderly liquidation of such REO
Property; provided however, that the Company agrees not to sell or dispose of
any such Mortgage Loan to a person who acquires such Mortgage Loan using a
purchase money mortgage. If a period longer than one year is permitted under
the foregoing sentence and is necessary to sell any REO Property, the Company
shall report monthly to the Purchaser as to the progress being made in selling
such REO Property, and provided further, that if the Company is unable to sell
such REO Property within three years of acquisition, the Company shall obtain
an extension from the Internal Revenue Servicer."
(b) a new section, Section 33, will be added immediately
following Section 32 which shall read as follows:
"SECTION 33. Third Party Beneficiary.
JPMorgan Chase Bank, N.A. as master servicer and securities
administrator under the Master Servicing and Trust Agreement, dated as of
February 1, 2006, among GS Mortgage Securities Corp., U.S. Bank National
Association, Deutsche Bank National Trust Company and JPMorgan Chase Bank,
N.A., shall be considered a third party beneficiary to this Agreement entitled
to all of the rights and benefits accruing to it as if it were a direct party
to this Agreement."
2
4. Recognition of Assignee. From and after the date hereof,
the Servicer shall note the transfer of the Mortgage Loans to the Assignee in
its books and records, shall recognize the Assignee as the owner of the
Mortgage Loans and, notwithstanding anything herein to the contrary, shall
service all of the Mortgage Loans for the benefit of the Assignee pursuant to
the Servicing Agreement the terms of which are incorporated herein by
reference. It is the intention of the Assignor, Assignee and Servicer that the
Servicing Agreement shall be binding upon and inure to the benefit of the
Servicer and the Assignee and their successors and assigns.
5. Representations and Warranties of the Assignee. The
Assignee hereby represents and warrants to the Assignor as follows:
(a) Decision to Purchase. The Assignee represents and
warrants that it is a sophisticated investor able to evaluate the risks and
merits of the transactions contemplated hereby, and that it has not relied in
connection therewith upon any statements or representations of the Assignor or
the Servicer other than those contained in the Servicing Agreement or this
Assignment Agreement.
(b) Authority. The Assignee hereto represents and warrants
that it is duly and legally authorized to enter into this Assignment Agreement
and to perform its obligations hereunder and under the Servicing Agreement.
(c) Enforceability. The Assignee hereto represents and
warrants that this Assignment Agreement has been duly authorized, executed and
delivered by it and (assuming due authorization, execution and delivery
thereof by each of the other parties hereto) constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
6. Representations and Warranties of the Assignor. The
Assignor hereby represents and warrants to the Assignee as follows:
(a) Organization. The Assignor has been duly organized and
is validly existing as a limited partnership in good standing under the laws
of the State of New York with full power and authority (corporate and other)
to enter into and perform its obligations under the Servicing Agreement and
this Assignment Agreement.
(b) Enforceability. This Assignment Agreement has been duly
executed and delivered by the Assignor, and, assuming due authorization,
execution and delivery by each of the other parties hereto, constitutes a
legal, valid, and binding agreement of the Assignor, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium, or other similar laws affecting creditors' rights generally and to
general principles of equity regardless of whether enforcement is sought in a
proceeding in equity or at law.
(c) No Consent. The execution, delivery and performance by
the Assignor of this Assignment Agreement and the consummation of the
transactions contemplated hereby do
3
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except such as has been
obtained, given, effected or taken prior to the date hereof.
(d) Authorization; No Breach. The execution and delivery of
this Assignment Agreement have been duly authorized by all necessary corporate
action on the part of the Assignor; neither the execution and delivery by the
Assignor of this Assignment Agreement, nor the consummation by the Assignor of
the transactions herein contemplated, nor compliance by the Assignor with the
provisions hereof, will conflict with or result in a breach of, or constitute
a default under, any of the provisions of the governing documents of the
Assignor or any law, governmental rule or regulation or any material judgment,
decree or order binding on the Assignor or any of its properties, or any of
the provisions of any material indenture, mortgage, deed of trust, contract or
other instrument to which the Assignor is a party or by which it is bound.
(e) Actions; Proceedings. There are no actions, suits or
proceedings pending or, to the knowledge of the Assignor, threatened, before
or by any court, administrative agency, arbitrator or governmental body (A)
with respect to any of the transactions contemplated by this Assignment
Agreement or (B) with respect to any other matter that in the judgment of the
Assignor will be determined adversely to the Assignor and will, if determined
adversely to the Assignor, materially adversely affect its ability to perform
its obligations under this Assignment Agreement.
7. Additional Representations and Warranties of the Assignor
With Respect to the Mortgage Loans. The Assignor hereby represents and
warrants to the Assignee as follows:
(a) Prior Assignments; Pledges. Except for the sale to the
Assignee, the Assignor has not assigned or pledged any Mortgage Note or the
related Mortgage or any interest or participation therein.
(b) Releases. The Assignor has not satisfied, canceled or
subordinated in whole or in part, or rescinded any Mortgage, and the Assignor
has not released the related Mortgaged Property from the lien of any Mortgage,
in whole or in part, nor has the Assignor executed an instrument that would
effect any such release, cancellation, subordination, or rescission. The
Assignor has not released any Mortgagor, in whole or in part, except in
connection with an assumption agreement or other agreement approved by the
related federal insurer, to the extent such approval was required.
(c) Compliance with Applicable Laws. With respect to each
Mortgage Loan, any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, predatory
and abusive lending or disclosure laws applicable to such Mortgage Loan,
including without limitation, any provisions relating to prepayment charges,
have been complied with.
(d) High Cost. No Mortgage Loan is categorized as "High
Cost" pursuant to the then current Standard & Poor's Glossary for File Format
for LEVELS(R) Version 5.6(c),
▇
▇▇▇▇▇▇▇▇ ▇, as revised from time to time and in effect as of the Original
Purchase Date. Furthermore, none of the Mortgage Loans sold by the Seller are
classified as (a) a "high cost mortgage" loan under the Home Ownership and
Equity Protection Act of 1994 or (b) a "high cost home," "covered,"
"high-cost," "high-risk home," or "predatory" loan under any other applicable
state, federal or local law.
(e) Georgia Fair Lending Act. No Mortgage Loan is secured by
a property in the state of Georgia and originated between October 1, 2002 and
March 7, 2003.
(f) Credit Reporting. The Assignor will cause to be fully
furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e., favorable
and unfavorable) on Mortgagor credit files to Equifax, Experian and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis.
(g) Bring Down. To the Assignor's knowledge, with respect to
each Mortgage Loan, no event has occurred from and after the closing date set
forth in such Servicing Agreement to the date hereof that would cause any of
the representations and warranties relating to such Mortgage Loan set forth in
Section 7.02 of the Servicing Agreement to be untrue in any material respect
as of the date hereof as if made on the date hereof. With respect to those
representations and warranties which are made to the best of the Assignor's
knowledge, if it is discovered by the Assignor that the substance of such
representation and warranty is inaccurate, notwithstanding the Assignor's lack
of knowledge with respect to the substance of such representation and
warranty, such inaccuracy shall be deemed a breach of the applicable
representation and warranty.
It is understood and agreed that the representations and
warranties set forth in Sections 6 and 7 shall survive delivery of the
respective mortgage loan documents to the Assignee or its designee and shall
inure to the benefit of the Assignee and its assigns notwithstanding any
restrictive or qualified endorsement or assignment. Upon the discovery by the
Assignor or the Assignee and its assigns of a breach of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other parties to this Assignment Agreement, and
in no event later than two (2) Business Days from the date of such discovery.
It is understood and agreed that the obligations of the Assignor set forth in
Section 8 to repurchase or, in limited circumstances, substitute a Mortgage
Loan constitute the sole remedies available to the Assignee and its assigns on
their behalf respecting a breach of the representations and warranties
contained in Sections 6 and 7. It is further understood and agreed that,
except as specifically set forth in Sections 6 and 7, the Assignor shall be
deemed not to have made the representations and warranties in Section 7(g)
with respect to, and to the extent of, representations and warranties made, as
to the matters covered in Section 7(g), by the Servicer in the Servicing
Agreement (or any officer's certificate delivered pursuant thereto).
It is understood and agreed that, with respect to the
Mortgage Loans, the Assignor has made no representations or warranties to the
Assignee other than those contained in Sections 6 and 7, and no other
affiliate of the Assignor has made any representations or warranties of any
kind to the Assignee.
5
8. Repurchase of Mortgage Loans. Upon discovery or notice of
any breach by the Assignor of any representation, warranty or covenant under
this Assignment Agreement that materially and adversely affects the value of
any Mortgage Loan or the interest of the Assignee therein (it being understood
that any such defect or breach shall be deemed to have materially and
adversely affected the value of the related Mortgage Loan or the interest of
the Assignee therein if the Assignee incurs a loss as a result of such defect
or breach), the Assignee promptly shall request that the Assignor cure such
breach and, if the Assignor does not cure such breach in all material respects
within sixty (60) days from the date on which it is notified of the breach,
the Assignee may enforce the Assignor's obligation hereunder to purchase such
Mortgage Loan from the Assignee at the Repurchase Price as defined in the
Servicing Agreement or, in limited circumstances (as set forth below),
substitute such mortgage loan for a Substitute Mortgage Loan (as defined
below).
The Assignor shall have the option, but is not obligated, to
substitute a Substitute Mortgage Loan for a Mortgage Loan, rather than
repurchase the Mortgage Loan as provided above, by removing such Mortgage Loan
and substituting in its place a Substitute Mortgage Loan or Loans and
providing the Substitution Adjustment Amount, provided that any such
substitution shall be effected not later than ninety (90) days from the date
on which it is notified of the breach.
In the event the Servicer has breached a representation or
warranty under the Servicing Agreement that is substantially identical to, or
covers the same matters as, a representation or warranty breached by the
Assignor hereunder, the Assignee shall first proceed against the Servicer to
cure such breach or purchase such mortgage loan from the Trust. If the
Servicer does not within sixty (60) days after notification of the breach,
take steps to cure such breach (which may include certifying to progress made
and requesting an extension of the time to cure such breach, as permitted
under the Servicing Agreement) or purchase the Mortgage Loan, the Trustee
shall be entitled to enforce the obligations of the Assignor hereunder to cure
such breach or to purchase or substitute for the Mortgage Loan from the Trust.
In addition, the Assignor shall have the option, but is not
obligated, to substitute a Substitute Mortgage Loan for a Mortgage Loan with
respect to which the Servicer has breached a representation and warranty and
is obligated to repurchase such Mortgage Loan under the Servicing Agreement,
by removing such Mortgage Loan and substituting in its place a Substitute
Mortgage Loan or Loans, provided that any such substitution shall be effected
not later than ninety (90) days from the date on which it is notified of the
breach.
In the event of any repurchase or substitution of any
Mortgage Loan by the Assignor hereunder, the Assignor shall succeed to the
rights of the Assignee to enforce the obligations of the Servicer to cure any
breach or repurchase such Mortgage Loan under the terms of the Servicing
Agreement with respect to such Mortgage Loan. In the event of a repurchase or
substitution of any Mortgage Loan by the Assignor, the Assignee shall promptly
deliver to the Assignor or its designee the related Mortgage File and shall
assign to the Assignor all of the Assignee's rights under the Servicing
Agreement, but only insofar as such Servicing Agreement relates to such
Mortgage Loan.
6
Except as specifically set forth herein, the Assignee shall
have no responsibility to enforce any provision of this Assignment Agreement,
to oversee compliance hereof or to take notice of any breach or default
thereof.
For purposes of this Section, "Deleted Mortgage Loan" and
"Substitute Mortgage Loan" shall be defined as set forth below.
"Deleted Mortgage Loan" A Mortgage Loan which is to be,
pursuant to this Section 8, replaced or to be replaced by the Assignor with a
Substitute Mortgage Loan.
"Substitute Mortgage Loan" A mortgage loan substituted by
the Assignor for a Deleted Mortgage Loan which must, on the date of such
substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) be accruing interest at a rate no lower than
and not more than 2% per annum higher than that of the Deleted Mortgage Loan;
(iii) have a remaining term to maturity not greater than and not more than one
year less than that of the Deleted Mortgage Loan; (iv) be of the same type as
the Deleted Mortgage Loan (i.e., fixed rate or adjustable rate with same
periodic rate cap, lifetime rate cap, and index); and (v) comply with each
representation and warranty set forth in Section 7.02 of the Servicing
Agreement.
"Substitution Adjustment Amount" means with respect to any
Mortgage Loan, the amount remitted by GSMC on the applicable Distribution Date
which is the difference between the outstanding principal balance on a
Substitute Mortgage Loan as of the date of substitution and the outstanding
principal balance of the Deleted Mortgage Loan as of the date of substitution.
9. Continuing Effect. Except as contemplated hereby, the
Servicing Agreement shall remain in full force and effect in accordance with
their respective terms.
10. Governing Law.
THIS ASSIGNMENT AGREEMENT AND THE RIGHTS AND OBLIGATIONS
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF).
EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS ASSIGNMENT AGREEMENT, OR ANY OTHER DOCUMENTS AND INSTRUMENTS
EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF SUCH PARTY. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS ASSIGNMENT
AGREEMENT.
7
11. Notices. Any notices or other communications permitted
or required hereunder or under the Servicing Agreement shall be in writing and
shall be deemed conclusively to have been given if personally delivered at or
mailed by registered mail, postage prepaid, and return receipt requested or
transmitted by telex, telegraph or telecopier and confirmed by a similar
mailed writing, to:
(a) in the case of the Servicer,
First National Bank of Nevada
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Secondary Marketing
With a copy to:
First National Bank of Nevada
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
or such other address as may hereafter be furnished by the Servicer;
(b) in the case of the Assignee,
GS Mortgage Securities Corp.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
GS Mortgage Securities Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished by the Assignee; and
(c) in the case of the Assignor,
8
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished by the Assignor.
12. Counterparts. This Assignment Agreement may be executed
in counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same instrument.
13. Definitions. Any capitalized term used but not defined
in this Assignment Agreement has the meaning assigned thereto in the Servicing
Agreement or Trust Agreement, as applicable.
14. Third Party Beneficiary. The parties agree that the
Trustee is intended to be, and shall have the rights of, a third party
beneficiary of this Assignment Agreement.
9
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment Agreement the day and year first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE
COMPANY
By: ▇▇▇▇▇▇▇ Sachs Real Estate Funding
Corp., its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
GS MORTGAGE SECURITIES CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
FIRST NATIONAL BANK OF NEVADA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. Groved
Title: SVP, Secondary Marketing
FNBN Step 1 AAR
EXHIBIT 1
---------
Mortgage Loan Schedule
[On File with the Securities Administrator as provided by the Depositor]
1-1
================================================================================
EXECUTION COPY
EXHIBIT 2
Servicing Agreement
-------------------
[See Attached]
================================================================================
AMENDED AND RESTATED MASTER MORTGAGE LOAN PURCHASE AND
INTERIM SERVICING AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY
Purchaser
and
FIRST NATIONAL BANK OF NEVADA
Company
Dated as of November 1, 2005
Fixed and Variable Rate Mortgage Loans
-2-
TABLE OF CONTENTS
Page
SECTION 1. Definitions. 1
SECTION 2. Agreement to Purchase. 13
SECTION 3. Mortgage Loan Schedule. 13
SECTION 4. Purchase Price; Near-term Principal Prepayments. 13
Subsection 4.01. Purchase Price. 13
Subsection 4.02. Near-term Principal Prepayments. 13
SECTION 5. Examination of Mortgage Files. 14
SECTION 6. Conveyance from Company to Purchaser. 14
Subsection 6.01. Conveyance of Mortgage Loans; Possession of Mortgage
Files. 14
Subsection 6.02. Books and Records. 14
Subsection 6.03. Delivery of Mortgage Loan Documents. 15
SECTION 7. Representations, Warranties and Covenants of the Company;
Remedies for Breach. 19
Subsection 7.01. Representations and Warranties Respecting the
Company. 19
Subsection 7.02. Representations and Warranties Regarding Individual
Mortgage Loans. 22
Subsection 7.03. Remedies for Breach of Representations and
Warranties; Post-Closing Due Diligence. 36
SECTION 8. Closing. 37
Subsection 8.01. Conditions to Purchaser's Obligations. 37
Subsection 8.02. Conditions to Company's Obligations. 38
SECTION 9. Closing Documents. 38
SECTION 10. Costs; Assignments. ▇▇
-▇-
▇▇▇▇▇▇▇ ▇▇. Company's Interim Servicing Obligations. 39
SECTION 12. The Company. 39
Subsection 12.01. Indemnification. 39
Subsection 12.02. Merger or Consolidation of the Company. 40
Subsection 12.03. Limitation on Liability of the Company and Others. 41
Subsection 12.04. Company Not to Resign. 41
Subsection 12.05. No Transfer of Servicing. 41
SECTION 13. Default. 42
Subsection 13.01. Events of Default. 42
Subsection 13.02. Waiver of Defaults. 43
SECTION 14. Termination; Servicing Transfer. 43
Subsection 14.01. Obligations of the Company Prior to the Servicing
Transfer Date. 44
Subsection 14.02. Obligations of the Company after the Servicing
Transfer Date.46
Subsection 14.03. Limited Power of Attorney.47
Subsection 14.04. Supplementary Information.47
Subsection 14.05. Reasonable Access. 47
SECTION 15. Successor to the Company. 47
SECTION 16. Notices. 48
SECTION 17. Severability Clause. 48
SECTION 18. Counterparts. 49
SECTION 19. Governing Law. 49
SECTION 20. Intention of the Parties. 49
SECTION 21. Successors and Assigns. 49
SECTION 22. Waivers. 49
-ii-
SECTION 23. Exhibits. 49
SECTION 24. General Interpretive Principles. 49
SECTION 25. Reproduction of Documents.50
SECTION 26. Nonsolicitation. 50
SECTION 27. Survival. 51
SECTION 28. Integration. 51
SECTION 29. Availability of Information. 51
SECTION 30. Loan Sales and Securitization. 51
SECTION 31. Confidential Information. 52
SECTION 32. Compliance with Regulation AB 52
Subsection 32.01. Intent of the Parties; Reasonableness 52
Subsection 32.02. Additional Representations and Warranties of the
Company. 53
Subsection 32.03. Information to Be Provided by the Company. 53
Subsection 32.04. Indemnification. 56
EXHIBITS
EXHIBIT 1 FORM OF TERM SHEET
EXHIBIT 2 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 3 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 4 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 5 SERVICING ADDENDUM
EXHIBIT 6 [RESERVED]
EXHIBIT 7 SERVICING TRANSFER INSTRUCTIONS
EXHIBIT 8 FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
-iii-
EXHIBIT 9 COMPANY'S UNDERWRITING GUIDELINES
EXHIBIT 10 FORM OF POWER OF ATTORNEY
EXHIBIT 11 NEW JERSEY LOAN STIPULATIONS
-iv-
AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT
This AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND INTERIM
SERVICING AGREEMENT (the "Agreement"), is dated as of November 1, 2005, by and
between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, having an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Purchaser") and First National Bank of Nevada,
having an office at ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Company").
W I T N E S S E T H:
WHEREAS, the Company and the Purchasers are parties to that
certain Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
March 24, 2004 (the "Original Agreement"), pursuant to which, from time to
time, the Company desires to sell to the Purchaser, and, from time to time,
the Purchaser desires to purchase from the Company, certain conventional fixed
and variable rate residential first lien mortgage loans as described therein,
including all Servicing Rights (as defined below) related thereto (the
"Mortgage Loans") and certain fixed and adjustable rate first an Co-op Loans
(the "Co-op Loans"), which shall be delivered as whole loans; and
WHEREAS, at the present time, the Purchaser and the Company
desire to amend the Original Agreement to make certain modifications as set
forth herein with respect to all Mortgage Loans acquired pursuant to this
Agreement or the Original Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Purchaser
and the Company agree as follows:
15. Definitions. For purposes of this Agreement the following
capitalized terms shall have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage
Loan, those mortgage servicing practices (including collection procedures) of
prudent mortgage banking institutions which service mortgage loans of the same
type as the Mortgage Loans in the jurisdiction where the related Mortgaged
Property is located.
Adjustment Date: With respect to each adjustable rate
Mortgage Loan, the date set forth in the related Mortgage Note on which the
Mortgage Interest Rate on the Mortgage Loan is adjusted in accordance with the
terms of the Mortgage Note.
Agreement: This Amended and Restated Mortgage Loan Purchase
and Interim Servicing Agreement including all exhibits, schedules, amendments
and supplements hereto.
Appraised Value: With respect to any Mortgaged Property, the
lesser of (i) the value thereof as determined by an appraisal made for the
originator of the Mortgage Loan at the
time of origination of the Mortgage Loan by a Qualified Appraiser, and (ii)
the purchase price paid for the related Mortgaged Property by the Mortgagor
with the proceeds of the Mortgage Loan, provided, however, in the case of a
Refinanced Mortgage Loan, such value of the Mortgaged Property is based solely
upon the value determined by an appraisal made for the originator of such
Refinanced Mortgage Loan at the time of origination of such Refinanced
Mortgage Loan by a Qualified Appraiser.
Assignment of Mortgage: An individual assignment of
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 give record notice of the sale of the Mortgage to the
Purchaser. None of the assignments of Mortgage will be "blanket" assignments
of Mortgage.
Balloon Mortgage Loan: Any Mortgage Loan which by its
original terms or any modifications thereof provides for amortization beyond
its scheduled maturity date.
Business Day: Any day other than a Saturday or Sunday, or a
day on which banking and savings and loan institutions in the State of New
York or in the State of Arizona are authorized or obligated by law or
executive order to be closed.
Cash-Out Refinancing: A Refinanced Mortgage Loan the
proceeds of which were in excess of the principal balance of any existing
first mortgage on the related Mortgaged Property and related closing costs,
and were used to pay any such existing first mortgage, related closing costs
and subordinate mortgages on the related Mortgaged Property.
Closing Date: With respect to any Mortgage Loan, the date
stated on the related Term Sheet.
Closing Documents: The documents required pursuant to
Section 9.
Commission: The United States Securities and Exchange
Commission.
Company: First National Bank of Nevada, their successors in
interest and assigns, as permitted by this Agreement.
Company Information: As defined in Subsection 32.04.
Company's Officer's Certificate: A certificate signed by the
Chairman of the Board, President, any Vice President or Treasurer of the
Company stating the date by which Company expects to receive any missing
documents sent for recording from the applicable recording office.
Condemnation Proceeds: All awards, compensation and
settlements in respect of a taking of all or part of a Mortgaged Property by
exercise of the power of condemnation or the right of eminent domain.
Confirmation: The Trade Confirmation Letter between the
Purchaser and the Company which relates to the Mortgage Loans.
-2-
Co-op Lease: With respect to a Co-op Loan, the lease with
respect to a dwelling unit occupied by the Mortgagor and relating to the stock
allocated to the related dwelling unit.
Co-op Loan: A Mortgage Loan that is secured by a first or
second lien on and a perfected security interest in Cooperative Shares and the
related proprietary lease granting exclusive rights to occupy the related
Cooperative Apartment in the building owned by the related Cooperative.
Co-op Stock: With respect to a Co-op Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related residential cooperative housing corporation.
Cooperative: The private, non profit cooperative apartment
corporation which owns all of the real property that comprises the Project,
including the land, separate dwelling units and all common areas.
Cooperative Unit: With respect to any Co-op Loan, a specific
unit in a Project.
Cooperative Shares: With respect to any Co-op Loan, the
shares of stock issued by a Cooperative and allocated to a Cooperative
Apartment and represented by a stock certificates.
Covered Loan: A Mortgage Loan categorized as Covered
pursuant to Appendix E of Standard & Poor's Glossary.
Current Appraised Value: With respect to any Mortgaged
Property, the value thereof as determined by an appraisal made for the Company
(by a Qualified Appraiser) at the request of a Mortgagor for the purpose of
canceling a Primary Mortgage Insurance Policy in accordance with federal,
state and local laws and regulations.
Current LTV: The ratio of the Stated Principal Balance of a
Mortgage Loan to the Current Appraised Value of the Mortgaged Property.
Custodial Account: Each separate account or accounts, each
of which shall be an Eligible Account, created and maintained pursuant to this
Agreement, which shall be entitled "First National Bank of Nevada, in trust
for the [Purchaser], Owner of Mortgage Loans, P&I Account," and shall be
established in an Eligible Account, in the name of the Person that is the
"Purchaser" with respect to the related Mortgage Loans.
Cut-off Date: With respect to any Mortgage Loan, the date
stated on the related Term Sheet.
Deemed Material Breach Representation: Each representation
and warranty identified as such in Subsection 7.02.
Depositor: The depositor, as such term is defined in
Regulation AB, with respect to any Securitization Transaction.
-3-
Due Date: The day on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace which day is the first day of
the month.
Eligible Account: An account established and maintained: (i)
within FDIC insured accounts created or (ii) as a trust account with the
corporate trust department of a depository institution or trust company
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia which is not affiliated with the
Company (or any sub-servicer).
Escrow Account: Each separate trust account or accounts
created and maintained pursuant to this Agreement which shall be entitled
"First National Bank of Nevada, in trust for the [Purchaser], Owner of
Mortgage Loans, and various Mortgagors, T&I Account," and shall be established
in an Eligible Account, in the name of the Person that is the "Purchaser" with
respect to the related Mortgage Loans.
Escrow Payments: The amounts constituting ground rents,
taxes, assessments, water charges, sewer rents, mortgage insurance premiums,
fire and hazard insurance premiums and other payments as may be required to be
escrowed by the Mortgagor with the Mortgagee pursuant to the terms of any
Mortgage Note or Mortgage.
Estoppel Letter: A document certifying, with respect to a
Co-op Loan, (i) the appurtenant Co-op Lease will be in full force and effect
as of the date of issuance thereof, (ii) the related Co-op Stock was
registered in the Mortgagor's name and there has been no notice of any lien
upon, pledge of, levy of execution on or disposition of such Co-op Stock, and
(iii) the Mortgagor is not in default under the appurtenant Co-op Lease and
all charges due have been paid.
Event of Default: Any one of the events enumerated in
Subsection 13.01.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇ or any successor thereto.
▇▇▇▇▇▇ Mae Guide(s): The ▇▇▇▇▇▇ ▇▇▇ Selling Guide and the
▇▇▇▇▇▇ Mae Servicing Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation or any
successor thereto.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation or
any successor thereto.
▇▇▇▇▇▇▇ Mac Guide: The ▇▇▇▇▇▇▇ Mac Single Family
Seller/Servicer Guide and all amendments or additions thereto.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement act of 1989, as amended and in effect from time to time.
GAAP: Generally accepted accounting principles, consistently
applied.
-4-
Gross Margin: With respect to each adjustable rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note and
the related Mortgage Loan Schedule that is added to the Index on each
Adjustment Date in accordance with the terms of the related Mortgage Note to
determine the new Mortgage Interest Rate for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home
Ownership and Equity Protection Act of 1994, (b) classified as a "high cost
home," "threshold," "covered," "high risk home," "predatory" or similar loan
under any other applicable state, federal or local law (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage
loans having high interest rates, points and/or fees) or (c) categorized as
High Cost pursuant to the applicable Standard & Poor's Glossary.
Home Loan: A Mortgage Loan categorized as a Home Loan
pursuant to Appendix E of Standard & Poor's Glossary.
HMDA: The Home Mortgage Disclosure Act, as amended.
Index: With respect to each adjustable rate Mortgage Loan,
the index identified on the related Mortgage Loan Schedule and set forth in
the related Mortgage Note for the purpose of calculating the interest rate
thereon.
Initial Rate Cap: With respect to each adjustable rate
Mortgage Loan and the first Adjustment Date after the Origination Date, a
number of percentage points per annum that is set forth in the related
Mortgage Loan Schedule and in the related Mortgage Note, which is the maximum
amount by which the Mortgage Interest Rate for such Mortgage Loan may increase
(without regard to the Maximum Mortgage Interest Rate) or decrease (without
regard to the Minimum Mortgage Interest Rate) on such Adjustment Date from the
Mortgage Interest Rate in effect immediately prior to such Adjustment Date.
Insurance Proceeds: With respect to each Mortgage Loan,
proceeds of any insurance policy insuring the Mortgage Loan or the related
Mortgaged Property.
Interest Paid to Date: With respect to a Mortgage Loan, the
last date to which interest has been paid on such Mortgage Loan, as shown on
the books and records of Company as of the related Cut-off Date.
Interim Servicing Period: With respect to any Mortgage Loan,
the period during which the Company shall service the Mortgage Loans in
accordance with the provisions of this Agreement, commencing on the related
Closing Date and ending on the related Servicing Transfer Date.
Lifetime Rate Cap: As to each adjustable rate Mortgage Loan,
the maximum Mortgage Interest Rate over the term of such Mortgage Loan.
Liquidation Proceeds: Amounts, other than Insurance Proceeds
and Condemnation Proceeds, received in connection with the liquidation of a
defaulted Mortgage Loan through trustee's sale, foreclosure sale or otherwise,
other than amounts received following the acquisition of REO Property.
Loan to Value Ratio or LTV: With respect to any Mortgage
Loan as of origination, the ratio on such date of the outstanding principal
amount of the Mortgage
-5-
Loan to the lesser of the Appraised Value of the Mortgaged Property as of the
Origination Date or the purchase price of the Mortgaged Property.
Maximum Mortgage Interest Rate: With respect to each
adjustable rate Mortgage Loan, a rate that is set forth on the related
Mortgage Loan Schedule and in the related Mortgage Note and is the maximum
interest rate to which the Mortgage Interest Rate on such Mortgage Loan may be
increased on any Adjustment Date.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS
on the MERS(R) System.
MERS(R) System: The system of recording transfers of
mortgages electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS
Mortgage Loan.
MOM Loan: Any Mortgage Loan as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns.
Minimum Mortgage Interest Rate: With respect to each
adjustable rate Mortgage Loan, a rate that is set forth on the related
Mortgage Loan Schedule and in the related Mortgage Note and is the minimum
interest rate to which the Mortgage Interest Rate on such Mortgage Loan may be
decreased on any Adjustment Date.
Monthly Payment: With respect to any Mortgage Loan, the
scheduled combined payment of principal and interest payable by a Mortgagor
under the related Mortgage Note on each Due Date.
Mortgage: (a) With respect to any Mortgage Loan that is not
a Co-op Loan, the mortgage, deed of trust or other instrument securing a
Mortgage Note which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note. and (b) with respect to a
Co-op Loan, the related Security Agreement.
Mortgagee: The mortgagee or beneficiary named in the
Mortgage and the successors and assigns of such mortgagee or beneficiary.
Mortgage File: With respect to each Mortgage Loan, the file
consisting of the Mortgage Loan Documents and originals of all other documents
referred to in Exhibit 2 annexed hereto and any additional documents related
to the origination of a particular Mortgage Loan and all documents, files and
other information necessary to service the Mortgage Loans.
-6-
Mortgage Interest Rate: With respect to each Mortgage Loan,
the annual rate at which interest accrues on such Mortgage Loan from time to
time in accordance with the provisions of the related Mortgage Note.
Mortgage Loan: Each mortgage loan sold, assigned and
transferred to the Purchaser pursuant to this Agreement and identified on the
related Mortgage Loan Schedule attached to the related Term Sheet, which
Mortgage Loan includes without limitation the Servicing Rights, 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 listed in Subsection
6.03 pertaining to any Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans
annexed to the related Term Sheet (which shall also be provided in an
electronic format acceptable to Purchaser), such schedule setting forth the
following information with respect to each Mortgage Loan: (1) the Company's
Mortgage Loan identifying number; (2) the Mortgagor's first and last name; (3)
the street address of the Mortgaged Property including the city, state and zip
code; (4) a code indicating whether the Mortgaged Property is owner occupied,
a second home or investor property; (5) the type of Residential Dwelling
constituting the Mortgaged Property; (6) a code indicating the purpose of the
loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);
(7) the original principal amount of the Mortgage Loan; (8) the Mortgage
Interest Rate at origination; (9) the date on which the first Monthly Payment
was due on the Mortgage Loan; (10) the stated maturity date; (11) the amount
of the Monthly Payment at origination; (12) the original months to maturity;
(13) the Origination Date of the Mortgage Loan and the remaining months to
maturity from the Cut off Date, based on the original amortization schedule;
(14) the last Due Date on which a Monthly Payment was actually applied to the
unpaid Stated Principal Balance; (15) the Mortgage Interest Rate in effect
immediately following the Cut off Date; (16) the Stated Principal Balance of
the Mortgage Loan as of the Cut off Date; (17) the amount of the Monthly
Payment as of the Cut off Date; (18) the sales price of the Mortgaged
Property, if applicable, the Appraised Value and the Loan-to-Value Ratio at
origination; (19) the Current Appraised Value and Current LTV, if applicable;
(20) a code indicating the documentation type; (21) credit score and/or
mortgage score, each if applicable; (22) a code indicating whether or not the
Mortgage Loan is the subject of Primary Mortgage Insurance Policy and the name
of the related; (23) loan type (i.e. fixed, adjustable, 3/1 ARM, etc.); (24)
whether the Mortgage Loan is classified as a high cost loan under Section 32
of the Home Ownership and Equity Protection Act of 1994; (25) for any
adjustable rate Mortgage Loan, the first Adjustment Date after the Origination
Date, the Adjustment Date next following the Cut-off Date, the Index, the
Gross Margin, the Initial Rate Cap, if any, the Periodic Rate Cap, if any, the
Lifetime Rate Cap, if any, the Minimum Mortgage Interest Rate and the Maximum
Mortgage Interest Rate; (26) a code indicating whether or not each Mortgage
Loan has a prepayment penalty and if so, the amount and duration of such
penalty; (27) reserved; (28) the debt-to-income ratio; (29) a code indicating
whether or not the Mortgage Loan is a buydown loan; (30) a code indicating
whether or not the Mortgage Loan has "balloon features"; (31) a code
indicating whether the Mortgage Loan is a MERS Mortgage Loan and (32) points
and fees. With respect to the Mortgage Loans in the aggregate, the related
Mortgage Loan Schedule
-7-
attached to the related Term Sheet shall set forth the following information,
as of the related Cut off Date: (1) the number of Mortgage Loans; (2) the
current principal balance of the Mortgage Loans; (3) the weighted average
Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted average
maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the Mortgage
Loan indebtedness of a Mortgagor.
Mortgaged Property: (a) With respect to each Mortgage Loan
which is not a Co-op Loan, the underlying real property securing repayment of
a Mortgage Note, consisting of a single parcel of real estate considered to be
real estate under the laws of the state in which such real property is located
which may include condominium units and planned unit developments, improved by
a Residential Dwelling and (b) with respect to each Co-op Loan, the related
Cooperative Unit.
Mortgagor: The obligor on a Mortgage Note, the owner of the
Mortgaged Property and the grantor or mortgagor named in the related Mortgage
and such grantor's or mortgagor's successor(s) in title to the Mortgaged
Property.
Net Escrow Payments: Escrow Payment balances remaining after
advances by the Company for taxes and insurance to the extent documented under
a detailed statement provided to the Purchaser.
Officer's Certificate: A certificate signed by the Chairman
of the Board or the Vice Chairman of the Board or a President or a Vice
President and by the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Person on behalf of whom such
certificate is being delivered.
Opinion of Counsel: A written opinion of counsel, who may be
salaried counsel for the Person on behalf of whom the opinion is being given,
reasonably acceptable to each Person to whom such opinion is addressed.
Origination Date: The date on which a Mortgage Loan funded.
Periodic Rate Cap: With respect to each adjustable rate
Mortgage Loan and any Adjustment Date (other than the first Adjustment Date)
therefor, a number of percentage points per annum that is set forth in the
related Mortgage Loan Schedule and in the related Mortgage Note, which is the
maximum amount by which the Mortgage Interest Rate for such Mortgage Loan may
increase (without regard to the Maximum Mortgage Interest Rate) or decrease
(without regard to the Minimum Mortgage Interest Rate) on such Adjustment Date
from the Mortgage Interest Rate in effect immediately prior to such Adjustment
Date.
Person: An individual, corporation, partnership, joint
venture, association, joint stock company, limited liability company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
-8-
Primary Mortgage Insurance Policy or PMI Policy: Each
primary policy of mortgage insurance issued by a Qualified Insurer and
represented to be in effect pursuant to Section 7.02.
Principal Prepayment: Any payment or other recovery of
principal on a Mortgage Loan, full or partial, which is received in advance of
its scheduled Due Date, 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.
Project: All real property owned by the Cooperative
including the land, separate dwelling units and all common areas.
"Proprietary Lease" shall mean the lease on a Cooperative
Unit evidencing the possessory interest of the owner in the Cooperative Shares
in such Cooperative Unit.
Purchase Price: The price paid by the Purchaser in exchange
for the Mortgage Loans (including the Servicing Rights thereon) purchased on
the related Closing Date, calculated as provided in Section 4.
Purchase Price Percentage: That certain purchase price
percentage specified in the related Term Sheet with respect to the Mortgage
Loans, as adjusted as provided for therein.
Purchaser: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, a New York
limited partnership, its successors in interest and assigns.
Qualified Appraiser: An appraiser, duly appointed by the
Company, who had no interest, direct or indirect in the Mortgaged Property or
in any loan made on the security thereof, and whose compensation is not
affected by the approval or disapproval of the Mortgage Loan, and such
appraiser and the appraisal made by such appraiser both satisfy the
requirements of Title XI of FIRREA and the regulations promulgated thereunder
and the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Qualified Correspondent: Any Person from which the Company
purchased Mortgage Loans, provided that the following conditions are
satisfied: (i) such Mortgage Loans were originated pursuant to an agreement
between the Company and such Person that contemplated that such Person would
underwrite mortgage loans from time to time, for sale to the Company, in
accordance with underwriting guidelines designated by the Company ("Designated
Guidelines") or guidelines that do not vary materially from such Designated
Guidelines; (ii) such Mortgage Loans were in fact underwritten as described in
clause (i) above and were acquired by the Company within 180 days after
origination; (iii) either (x) the Designated Guidelines were, at the time such
Mortgage Loans were originated, used by the Company in origination of mortgage
loans of the same type as the Mortgage Loans for the Company's own account or
(y) the Designated Guidelines were, at the time such Mortgage Loans were
underwritten, designated by the Company on a consistent basis for use by
lenders in originating mortgage loans to be purchased by the Company; and (iv)
the Company employed, at the time such Mortgage Loans were acquired by the
Company, pre-purchase or post-purchase quality assurance procedures (which may
involve, among other things, review of a sample of mortgage loans purchased
during a particular time period or through particular channels)
-9-
designed to ensure that Persons from which it purchased mortgage loans
properly applied the underwriting criteria designated by the Company.
Qualified Insurer: An insurance company duly qualified as
such under the laws of the states in which the Mortgaged Properties are
located, duly authorized and licensed in such states to transact the
applicable insurance business and to write the insurance provided, approved as
an insurer by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, and whose claims paying ability is
rated in the two highest rating categories by each applicable Rating Agency
with respect to primary mortgage insurance and in the two highest rating
categories in Best's Key Rating Guide with respect to hazard and flood
insurance.
Rate/Term Refinancing: A Refinanced Mortgage Loan, the
proceeds of which are limited to the sum of the unpaid principal balance of
the existing first mortgage, closing costs (including all prepaid items),
points, the amount required to satisfy any subordinate mortgage liens that are
more than one year old (if the borrower plans to satisfy them), and other
funds for the borrower's use (as long as the amount does not exceed 2% of the
principal amount of the new mortgage or $2,000). A property that has
subordinate liens that have been in existence for one year or less also may be
treated as a rate/term refinance transaction as long as the proceeds of the
subordinate lien were used to make documented home improvements.
Rating Agency: Standard & Poor's, ▇▇▇▇▇'▇, Fitch Ratings or,
in the event that some or all of the ownership of the Mortgage Loans is
evidenced by mortgage-backed securities, the nationally recognized rating
agencies issuing ratings with respect to such securities, if any.
Recognition Agreement: shall mean, an agreement among a
Co-op Corporation, a lender and a Mortgagor with respect to a Co-op Loan
whereby such parties (i) acknowledge that such lender may make, or intends to
make, such Co-op Loan, and (ii) make certain agreements with respect to such
Co-op Loan.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
REO Disposition: The final sale by the Company of any REO
Property.
REO Property: A Mortgaged Property acquired as a result of
the liquidation of a Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan, a price
equal to (w) the product of the Purchase Price Percentage multiplied by the
Stated Principal Balance of such Mortgage Loan on the repurchase date, plus
(x) up to ninety (90) days' accrued interest on such Stated Principal Balance
at the Mortgage Interest Rate from the last interest paid to date through
-10-
which interest has been paid by or on behalf of the Mortgagor through the date
prior to the date of repurchase, less (y) amounts received in respect of such
repurchased Mortgage Loan which are being held in the Custodial Account for
distribution in connection with such Mortgage Loan plus (z) any costs and
damages incurred by the related trust with respect to any securitization of
the Mortgage Loan in connection with any violation by such Mortgage Loan of
any predatory- or abusive-lending law up to the time of such repurchase or
substitution that was actually incurred and paid out of or on behalf of the
related trust fund, and that directly resulted from such violation.
Residential Dwelling: Any one of the following: (i) a
detached single family dwelling, (ii) a two-to-four family dwelling, (iii) a
unit in a condominium project, or (iv) a detached single family dwelling in a
planned unit development. Mortgaged Properties that consist of the following
property types are not eligible for sale to the Purchaser: (a) co-operative
units, (b) log homes, (c) earthen homes, (d) underground homes, (e) mobile
homes, (f) homes which are situated on more than ten acres of property and (g)
homes which are secured by a leasehold estate.
SAIF: The Savings Association Insurance Fund, or any
successor thereto.
Securities Act: The Securities Act of 1933, as amended.
Security Agreement: With respect to a Co-op Loan, the
agreement or mortgage creating a security interest in favor of the originator
of the Co-op Loan in the related Co-op Stock.
Servicing Addendum: The terms and conditions attached hereto
as Exhibit 5 which will govern the servicing of the Mortgage Loans by the
Company during the Interim Servicing Period.
Servicing Rights: With respect to each Mortgage Loan, any
and all of the following: (a) all rights to service the Mortgage Loan; (b) all
rights to receive servicing fees, additional servicing compensation (including
without limitation any late fees, assumption fees, prepayment penalties or
premiums due in connection with a Principal Prepayment, other penalties, fees
or similar payments with respect to the Mortgage Loan, and income on escrow
accounts or other receipts on or with respect to the Mortgage Loan),
reimbursements or indemnification for servicing the Mortgage Loan, and any
payments received in respect of the foregoing and proceeds thereof; (c) the
right to collect, hold and disburse Escrow Payments or other similar payments
with respect to the Mortgage Loans, Escrow Accounts and any amounts actually
collected with respect thereto and to receive interest income on such amounts
to the extent permitted by applicable law; (d) all accounts and other rights
to payment related to any of the property described in this paragraph; (e)
possession and use of any and all Mortgage Files pertaining to the Mortgage
Loans or pertaining to the past, present or prospective servicing of the
Mortgage Loans; (f) all rights and benefits relating to the direct
solicitation of the related Mortgagors for refinance or modification of the
Mortgage Loans and attendant right, title and interest in and to the list of
such Mortgagors and data relating to their respective Mortgage Loans; (g) all
rights, powers and privileges incident to any of the foregoing; and (h) all
agreements or documents creating, defining or evidencing any of the foregoing
rights to the
-11-
extent they relate to such rights and all rights of the Company thereunder
including, but not limited to, any clean-up calls and termination options.
Servicing Rights Owner: The Person to whom the Servicing
Rights are transferred at any time, which Person may or may not be the
Purchaser of the Mortgage Loans hereunder, and which Person will, on the
related Closing Date, be the Purchaser.
Servicing Transfer Date: As set forth in the related Term
Sheet; provided however, if a Mortgage Loan is 60 or more days delinquent or
subject to a foreclosure proceeding, then with respect to the Servicing Rights
to such Mortgage Loan the related Servicing Transfer Date shall be the close
of business on the next Business Day if so requested by the Purchaser.
Sponsor: The sponsor, as such term is defined in Regulation
AB, with respect to any Securitization Transaction.
Standard & Poor's: Standard & Poor's Rating Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and its successors in interest.
Standard & Poor's Glossary: Appendix E to the applicable
Standard & Poor's LEVELS Glossary, as attached as an exhibit to the applicable
Purchase Price and Terms Letter
Stated Principal Balance: As to each Mortgage Loan (i) the
principal balance of such Mortgage Loan as of the related Cut off Date after
application of payments actually received on the Mortgage Loans prior to the
related Cut-off Date, minus (ii) all amounts thereafter distributed to the
Purchaser with respect to the related Mortgage Loan representing payments or
recoveries of principal.
Static Pool Information: Static pool information as
described in Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Stock Certificate: shall mean, with respect to a Co-op Loan,
the certificates evidencing ownership of the Cooperative Shares issued by the
Cooperative.
Stock Power: shall mean, with respect to a Co-op Loan, an
assignment of the Stock Certificate or an assignment of the Cooperative Shares
issued by the Cooperative.
Successor Servicer: A servicer designated by the Purchaser
pursuant to Section 12.01 which is entitled to the benefits of the
indemnifications set forth in such Section.
Term Sheet: A supplemental agreement in the form attached
hereto as Exhibit 1 which shall be executed and delivered by the Company and
the Purchaser to provide for the sale pursuant to the terms of this Agreement
of the Mortgage Loans including all Servicing Rights related thereto listed on
Schedule I attached thereto, which supplemental agreement shall contain
certain specific information relating to such sale of such Mortgage Loans and
may contain additional covenants relating to such sale of such Mortgage Loans.
-12-
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Company.
Transaction: As defined in Section 30.
16. Agreement to Purchase. The Company agrees to sell, and
the Purchaser agrees to purchase, Mortgage Loans, together with the Servicing
Rights, having an actual aggregate unpaid principal balance on the related Cut
off Date in an amount set forth on the related Term Sheet or in such other
amount as agreed by the Purchaser and the Company as evidenced by the actual
aggregate principal balance of the Mortgage Loans accepted by the Purchaser on
the related Closing Date.
17. Mortgage Loan Schedule. The Company shall deliver the
related Mortgage Loan Schedule to the Purchaser at least two (2) Business Days
prior to the related Closing Date.
18. Purchase Price; Near-term Principal Prepayments.
(a) Purchase Price. The Purchase Price for the Mortgage
Loans and Servicing Rights listed on the related Mortgage Loan Schedule shall
be the Purchase Price Percentage, multiplied by the Stated Principal Balance
as of the related Cut-off Date.
In addition to the Purchase Price as described above, the
Purchaser shall pay to the Company, on the related Closing Date, accrued
interest on each Mortgage Loan at the Mortgage Interest Rate net of any
applicable LPMI premiums from the related last Interest Paid to Date through
the day prior to the related Closing Date, inclusive; provided, however, with
respect to those Mortgage Loans for which interest has been paid through a
date beyond the related Cut-off Date, such accrued interest owing to Company
shall be reduced by the amount of interest accruing on the Stated Principal
Balance of each such Mortgage Loan at a rate equal to the Mortgage Interest
Rate of such Mortgage Loan, from the related Closing Date to the day prior to
the interest paid through date for such Mortgage Loan, inclusive.
With respect to each Mortgage Loan purchased, the Purchaser
shall own and be entitled to receive (except as otherwise described in this
Agreement during the related Interim Servicing Period): all payments and/or
recoveries of principal collected on or after the related Cut-off Date, all
payments of interest on the Mortgage Loans and all fees, prepayment penalties
or premiums.
(b) Near-term Principal Prepayments. In the event any
Principal Prepayment is made by a Mortgagor on or prior to the date which is
30 days after the related Closing Date occurs, the Company shall remit to the
Purchaser an amount equal to (a) with respect to any Mortgage Loan for which
there is no prepayment penalty, the excess, if any, of the Purchase Price
Percentage for such Mortgage Loan over par multiplied by the amount of such
Principal Prepayment (the "Premium") and (b) with respect to any Mortgage Loan
which has a prepayment penalty, an amount equal to the Premium for such
Mortgage Loan minus the amount of the prepayment penalty received. Such
remittance shall be made by the Company to Purchaser no later than the third
Business Day following receipt of notice of such Principal Prepayment by the
Company. If demand for payment of any amount described in this paragraph is
not made
-13-
prior to ninety (90) days after the date of any Principal Prepayment, the
Company shall have no obligation to pay the amount described in this
paragraph.
19. Examination of Mortgage Files. With regard to the
examination of the Mortgage Loans and Mortgage Files prior to the related
Closing Date, Purchaser and Company shall have such rights as are set forth in
the related Confirmation. If Purchaser declines, in accordance with its rights
under the related Confirmation, to purchase a Mortgage Loan, such Mortgage
Loan shall be deleted from the related Mortgage Loan Schedule. The Purchaser
may, at its option and without notice to Company, purchase all or a portion of
the Mortgage Loans without conducting any partial or complete examination.
20. Conveyance from Company to Purchaser.
(a) Conveyance of Mortgage Loans; Possession of Mortgage
Files. On the related Closing Date, the Company, simultaneously with the
payment of the related Purchase Price, does hereby sell, transfer, assign, set
over and convey to the Purchaser, without recourse, but subject to the terms
of this Agreement, all rights, title and interest of the Company in and to the
Mortgage Loans (including the Servicing Rights thereon) listed on the related
Mortgage Loan Schedule attached to the related Term Sheet, together with the
related Mortgage Files and all rights and obligations arising under the
documents contained therein. Pursuant to Subsection 6.03 of the Agreement, the
Company shall deliver to the Purchaser (or upon Purchaser's request, its
designee) the Mortgage Loan Documents. The contents of each related Mortgage
File required to be retained by the Company to interim service the Mortgage
Loans pursuant to the Agreement and the related Term Sheet and thus not
delivered to the Purchaser prior to the related Closing Date are, and shall
be, held in trust by the Company for the benefit of the Purchaser as the owner
thereof. The Company's possession of any portion of each such Mortgage File is
at the will of the Purchaser for the sole purpose of facilitating interim
servicing of the related Mortgage Loan pursuant to the Agreement and the
related Term Sheet, and such retention and possession by the Company shall be
in a custodial capacity only. The ownership of each Mortgage Note, Mortgage,
and the contents of the Mortgage File is vested in the Purchaser and the
ownership of all records and documents with respect to the related Mortgage
Loan and Servicing Rights prepared by or which come into the possession of the
Company shall immediately vest in the Purchaser and shall be retained and
maintained, in trust, by the Company at the will of the Purchaser in such
custodial capacity only.
The Mortgage File retained by the Company with respect to
each Mortgage Loan pursuant to this Agreement and the related Term Sheet shall
be appropriately identified in the Company's computer system to reflect
clearly the sale of such related Mortgage Loan to the Purchaser. The Company
shall release from its custody the contents of any Mortgage File retained by
it only in accordance with this Agreement.
(b) Books and Records. Record title to each Mortgage and the
related Mortgage Note as of the related Closing Date shall be in the name of
the Company in trust for the benefit of the Purchaser or one or more designees
of the Purchaser, as the Purchaser shall designate, solely for the purpose of
facilitating the interim servicing of the Mortgage Loans as described herein.
Upon Purchaser's request, the Company shall transfer, or cause to be
transferred, record title to each Mortgage and the related Mortgage Note to
the Purchaser.
-14-
Notwithstanding the foregoing, beneficial ownership of each Mortgage, the
related Mortgage Note and the related Servicing Rights shall be vested solely
in the Purchaser or the appropriate designee of the Purchaser, as the case may
be. All rights arising out of the Mortgage Loans including, but not limited
to, all funds received by the Company to which Purchaser is entitled as
provided in Section 4 shall be vested in the Purchaser or one or more
designees of the Purchaser; provided, however, that all such funds shall be
received and held by the Company in trust for the benefit of the Purchaser or
the assignee of the Purchaser, as the case may be, as the owner of the
Mortgage Loans pursuant to the terms of this Agreement.
It is the express intention of the parties that the
transactions contemplated by this Agreement and the related Term Sheet be, and
be construed as, a sale of the Mortgage Loans, and the Servicing Rights by the
Company and not a pledge of the Mortgage Loans or the Servicing Rights by the
Company to the Purchaser to secure a debt or other obligation of the Company.
Consequently, the sale of each Mortgage Loan and the Servicing Rights shall be
reflected as a sale on the Company's business records, tax returns and
financial statements. (c) Delivery of Mortgage Loan Documents. No later than
five Business Days prior to the related Closing Date, the Company shall
deliver to the Purchaser or its agent the following Mortgage Loan Documents
with respect to each Mortgage Loan to be purchased and sold on the related
Closing Date and set forth on the related Mortgage Loan Schedule attached to
the related Term Sheet:
With respect to each Mortgage Loan which is not a Co-op
Loan;
(i) The original Mortgage Note endorsed "Pay to the order of
[________________], without recourse," and signed via original signature in
the name of the Company by an authorized officer, with all intervening
endorsements showing a complete chain of title from the originator to the
Company, together with any applicable riders, or an original lost note
affidavit executed by Company in a form reasonably acceptable to Purchaser. In
no event may an endorsement be a facsimile endorsement. If the Mortgage Loan
was acquired by the Company in a merger, the endorsement must be by
"[Company], successor by merger to the [name of predecessor]". If the Mortgage
Loan was acquired or originated by the Company while doing business under
another name, the endorsement must be by "[Company] formerly known as
[previous name]";
(ii) In the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original Assignment of Mortgage, from the Company to blank,
or otherwise in accordance with Purchaser's instructions, which assignment of
mortgage shall, but for any blanks requested by Purchaser, be in form and
substance acceptable for recording. If the Mortgage Loan was acquired or
originated by the Company while doing business under another name, the
Assignment must be by "[Company] formerly known as [previous name]". If the
Mortgage Loan was acquired by the Company in a merger, the endorsement must be
by "[Company], successor by merger to the [name of predecessor]". None of the
Assignments are blanket assignments of mortgage;
(iii) The original of any guarantee executed in connection
with the Mortgage Note;
-15-
(iv) Except as provided below and for each Mortgage Loan
that is not a MERS Mortgage Loan, the original Mortgage with evidence of
recording thereon; provided, that if the mortgage has been delivered to the
applicable recording office for recordation, Company may deliver a copy
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Company (or certified by the title
company, escrow agent, or closing attorney) stating that such Mortgage has
been dispatched to the appropriate public recording office for recordation and
that the original recorded Mortgage or a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the original
recorded Mortgage will be promptly delivered to the Custodian upon receipt
thereof by the Company; or (ii) in the case of a Mortgage where a public
recording office retains the original recorded Mortgage or in the case where a
Mortgage is lost after recordation in a public recording office, a copy of
such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage, and deliver the original upon
receipt from the appropriate recording office within 180 days of the Closing
Date. With respect to each MERS Mortgage Loan, the original Mortgage, noting
the presence of the MIN of the Mortgage Loans and either language indicating
that the Mortgage Loan is a MOM Loan or if the Mortgage Loan was not a MOM
Loan at origination, the original Mortgage and the assignment thereof to MERS,
with evidence of recording indicated thereon, or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded;
(v) Originals, or copies thereof certified by the public
recording office in which such documents have been recorded, of each
assumption, extension, modification, written assurance or substitution
agreements, if applicable, or if the original of such document has not been
returned from the applicable public recording office, a true certified copy,
certified by the Company;
(vi) In the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the originals of all intervening assignments of mortgage with
evidence of recording thereon, or if any such intervening assignment of
mortgage has not been returned from the applicable recording office or has
been lost or if such public recording office retains the original recorded
assignment of mortgage, the Company shall deliver or cause to be delivered to
the Purchaser, a photocopy of such intervening assignment of mortgage together
with (i) in the case of a delay caused by the public recording office, an
Officer's Certificate of the title insurer insuring the Mortgage stating that
such intervening assignment of mortgage has been delivered to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening assignment of
mortgage certified by the appropriate public recording office to be a true and
complete copy of the original recorded intervening assignment of mortgage will
be promptly delivered to the Purchaser upon receipt thereof by the Company; or
(ii) in the case of an intervening assignment of mortgage where a public
recording office retains the original recorded intervening assignment of
mortgage or in the case where an intervening assignment of mortgage is lost
after recordation in a public recording office, a copy of such intervening
assignment of mortgage with recording information thereon certified by such
public recording office to be a true and complete copy of the original
recorded intervening assignment of mortgage;
(vii) The original mortgagee policy of title insurance,
including riders and endorsements thereto, or if the policy has not yet been
issued, (a) a written commitment or
-16-
interim binder for title issued by the title insurance or escrow company dated
as of the date the Mortgage Loan was funded, with a statement by the title
insurance company or closing attorney that the priority of the lien of the
related Mortgage during the period between the date of the funding of the
related Mortgage Loan and the date of the related title policy (which title
policy shall be dated the date of recording of the related Mortgage) is
insured or (b) a preliminary title report issued by a title insurer in
anticipation of issuing a title insurance policy which evidences existing
liens and gives a preliminary opinion as to the absence of any encumbrance on
title to the Mortgaged Property, except liens to be removed on or before
purchase by the Mortgagor or which constitute customary exceptions acceptable
to lenders generally; the original policy of title insurance shall be
delivered promptly upon receipt thereof by the Company;
(viii) The original of any security agreement, chattel
mortgage or equivalent document executed in connection with the Mortgage;
(ix) If the Mortgage Note or Mortgage or any other material
document or instrument relating to the Mortgage Loan has been signed by a
person on behalf of the Mortgagor, the original or copy of power of attorney
or other instrument that authorized and empowered such person to sign bearing
evidence that such instrument has been recorded, if so required in the
appropriate jurisdiction where the Mortgaged Property is located, or a copy
thereof certified by the public recording office in which such instrument has
been recorded or, if the original instrument has not been returned from the
applicable public recording office, a true certified copy, certified by the
Company;
(x) The original Primary Mortgage Insurance Policy, if
applicable
With respect to each Mortgage Loan which is not a Co-op Loan;
The original Mortgage Note endorsed "Pay to the order of
[________________], without recourse," and signed via original signature in
the name of the Company by an authorized officer, with all intervening
endorsements showing a complete chain of title from the originator to the
Company, together with any applicable riders, or an original lost note
affidavit executed by Company in a form reasonably acceptable to Purchaser. In
no event may an endorsement be a facsimile endorsement. If the Mortgage Loan
was acquired by the Company in a merger, the endorsement must be by
"[Company], successor by merger to the [name of predecessor]". If the Mortgage
Loan was acquired or originated by the Company while doing business under
another name, the endorsement must be by "[Company] formerly known as
[previous name]";
(xi) The original Assignment of Proprietary Lease for each
Mortgage Loan, from the Seller signed by original or by facsimile signature to
__________________, which assignment shall be in form and substance acceptable
for recording (except for the recording information);
(xii) the original Stock Certificate and related Stock
Power, in blank, executed by the Mortgagor with such signature guaranteed and
original Stock Power, in blank executed by the related Seller;
-17-
(xiii) the original Proprietary Lease and the assignment of
Proprietary Lease executed by the Mortgagor in blank or if the Proprietary
Lease has been assigned by the Mortgagor to the related Seller, then such
Seller must execute an assignment of the assignment of Proprietary Lease in
blank;
(xiv) the original Recognition Agreement and the original
assignment of Recognition Agreement;
(xv) the recorded state and county financing statements and
changes thereto;
(xvi) an estoppel letter and/or consent;
(xvii) the co op lien search; and
(xviii) the guaranty of the Mortgage Note and Co-op Loan, if
any; and the original of any security agreement or similar document executed
in connection with the Co-op Loan.
If the Company cannot deliver the original recorded Mortgage
Loan Documents on the related Closing Date, the Company shall, promptly upon
receipt thereof and in any case not later than 120 days from the related
Closing Date, deliver such original documents, including original recorded
documents, to the Purchaser (unless the Company is delayed in making such
delivery by reason of the fact that such documents shall not have been
returned by the appropriate recording office). If delivery is not completed
within 120 days of the related Closing Date, solely due to delays in making
such delivery by reason of the fact that such documents shall not have been
returned by the appropriate recording office, Company shall deliver such
document to Purchaser within such time period as specified in a Company's
Officer's Certificate or, if delivery is not made by the expiration of such
time period, Company shall use commercially reasonable efforts to cause
delivery as soon as possible thereafter.
The Company shall forward to the Purchaser original
documents evidencing an assumption, modification, consolidation or extension
of any Mortgage Loan entered into in accordance with this Agreement within two
(2) weeks of their execution, provided, however, that the Company shall
provide the Purchaser with a certified true copy of any such document
submitted for recordation within two (2) weeks 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 ninety (90) days of its
submission for recordation.
Company shall provide an original or duplicate original of
the title insurance policy to Purchaser within ninety (90) days of the receipt
of the recorded documents (required for issuance of such policy) from the
applicable recording office.
In addition, in connection with the assignment of any MERS
Mortgage Loan, the Company agrees that it will cause, at its own expense, the
MERS(R) System to indicate that such Mortgage Loans have been assigned by the
Company to the Purchaser in accordance with this Agreement by including (or
deleting, in the case of Mortgage Loans which are repurchased in accordance
with this Agreement) in such computer files the information required by the
MERS(R)
-18-
System to identify the Purchaser of such Mortgage Loans. The Company further
agrees that it will not alter the information referenced in this paragraph
with respect to any Mortgage Loan during the term of this Agreement unless and
until such Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
For any Mortgage Loan that is not a MERS Mortgage Loan, the
Company shall prepare the Assignments of Mortgage and shall pay to the
Purchaser any recording fees or costs in transferring all original documents
to the Purchaser.
On the date which is two days prior to the related Closing
Date (the "Scheduled Delivery Date",) the Company shall deliver to the
Purchaser the Mortgage Loan Schedule.
21. Representations, Warranties and Covenants of the Company;
Remedies for Breach.
(a) Representations and Warranties Respecting the Company.
The Company hereby represents and warrants to the Purchaser, its successors
and assigns and the Servicing Rights Owner as of the related Closing Date that:
The Company is a national association duly organized,
validly existing and in good standing under the laws of the United
States of America and is and will remain in compliance with the laws
of each state in which any Mortgaged Property is located to the
extent necessary to ensure the enforceability of each Mortgage Loan
and the servicing of the Mortgage Loan in accordance with the terms
of this Agreement. The Company has all licenses necessary to carry
out its business as now being conducted, and is licensed and
qualified to transact business in and is in good standing under the
laws of each state in which any Mortgaged Property is located or is
otherwise exempt under applicable law from such licensing or
qualification or is otherwise not required under applicable law to
effect such licensing or qualification, and in any event the Company
is in compliance with the laws of any such state to the extent
necessary to ensure the enforceability of each Mortgage Loan and the
sale of the Mortgage Loans and Servicing Rights in accordance with
the terms of this Agreement and the related Term Sheet;
The Company has the full power and authority and legal right
to hold, transfer and convey each Mortgage Loan (including the
Servicing Rights), to sell each Mortgage Loan and the Servicing
Rights, and to execute, deliver and perform, and to enter into and
consummate, all transactions contemplated by this Agreement and the
related Term Sheet and to conduct its business as presently
conducted. The Company has duly authorized the execution, delivery
and performance of this Agreement and any agreements contemplated
hereby, has duly executed and delivered this Agreement, and any
agreements contemplated hereby, and this Agreement and the related
Term Sheet, assuming due authorization, execution and delivery by the
Purchaser, and each Assignment of Mortgage and any agreements
contemplated hereby, constitutes a legal, valid and binding
obligation of the Company, enforceable against it in accordance with
its terms and all requisite corporate action has been taken by the
Company to make this Agreement and all agreements contemplated hereby
valid and binding upon the Company in accordance with their terms;
-19-
Neither the execution and delivery of this Agreement or the
related Term Sheet by the Company, nor the origination or purchase of
the Mortgage Loans by the Company, the sale of the Mortgage Loans or
the Servicing Rights to the Purchaser, the consummation of the
transactions contemplated hereby, or the performance of or compliance
with the terms and conditions of this Agreement or the related Term
Sheet will conflict with any of the terms, conditions or provisions
of the Company's articles of incorporation or by-laws, or constitute
a default under or result in a breach or acceleration of, any
material contract, agreement or other instrument to which the Company
is a party or which may be applicable to the Company or its assets,
or result in the material violation of any law, rule, regulation,
order, judgment or decree to which the Company or its properties are
subject, or impair the ability of the Purchaser to realize on the
Mortgage Loans;
The Company is not in violation of, and the execution and
delivery of this Agreement or the related Term Sheet by the Company
and its performance and compliance with the terms of this Agreement
will not constitute a violation with respect to, any order or decree
of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Company
or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or
otherwise) or the operation of the Company or its assets or might
have consequences that would materially and adversely affect the
performance of its obligations and duties hereunder;
The Company does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant
contained in this Agreement or the related Term Sheet. The Company is
solvent and the sale of the Mortgage Loans and the Servicing Rights
will not cause the Company to become insolvent. The sale of the
Mortgage Loans and Servicing Rights is not undertaken with the intent
to hinder, delay or defraud any of the Company's creditors;
The Company is properly qualified to service the Mortgage
Loans and has been servicing the Mortgage Loans prior to the related
Closing Date;
Immediately prior to the payment of the related Purchase
Price for each Mortgage Loan and the Servicing Rights thereto, the
Company was the owner of the related Mortgage and the indebtedness
evidenced by the related Mortgage Note and the related Servicing
Rights and upon the payment of the related Purchase Price by the
Purchaser, in the event that the Company retains record title, the
Company shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto in
trust for the Purchaser as the owner thereof and only for the purpose
of interim servicing and supervising the interim servicing of each
Mortgage Loan;
There are no actions or proceedings against, or, to
Company's knowledge, investigations of, the Company before any court,
administrative or other tribunal (A) that might prohibit its entering
into this Agreement or the related Term Sheet, (B) seeking to prevent
the sale of the Mortgage Loans, the sale of the Servicing Rights or
the
-20-
consummation of the transactions contemplated by this Agreement, (C)
that might prohibit or materially and adversely affect the
performance by the Company of its obligations under, or the validity
or enforceability of, this Agreement or (D) that is reasonably likely
to have a material adverse effect on the financial condition of the
Company. There is no action, suit, proceeding or investigation
pending against the Company with respect to the Mortgage Loans
relating to fraud, predatory lending, servicing or closing practices;
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Company of, or compliance by the Company with,
this Agreement or the sale of the Mortgage Loans and Servicing Rights
and delivery of the Mortgage Files to the Purchaser or the
consummation of the transactions contemplated by this Agreement,
except for such consents, approvals, authorizations or orders, if
any, that have been obtained prior to the related Closing Date;
The consummation of the transactions contemplated by this
Agreement and the related Term Sheet are in the ordinary course of
business of the Company, and the transfer, assignment and conveyance
of the Mortgage Notes, the Mortgages and/or the Servicing Rights by
the Company pursuant to this Agreement are not subject to the bulk
transfer or any similar statutory provisions in effect in any
applicable jurisdiction;
In the opinion of Company, the consideration received by
Company upon the sale of the Mortgage Loans and the Servicing Rights
to Purchaser under this Agreement and the related Term Sheet
constitutes fair consideration for the Mortgage Loans and Servicing
Rights under current market conditions. The Company will treat the
sale of the Mortgage Loans and the Servicing Rights to the Purchaser
as a sale for reporting and accounting purposes and, to the extent
appropriate, for federal income tax purposes;
The Company has delivered to the Purchaser financial
statements for its last two complete fiscal years. All such financial
information fairly presents the pertinent results of operations and
financial position for the period identified and has been prepared in
accordance with GAAP 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 Company since the date of the Company's financial
information that would have a material adverse effect on its ability
to perform its obligations under this Agreement and the related Term
Sheet;
The Company 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 or
the Servicing Rights; and
Insured Depository Institution Representations. The Company
is an "insured depository institution" as that term is defined in
Section 1813(c)(2) of Title 12 of the United States Code, as amended,
and accordingly, the Company makes the following additional
representations and warranties:
-21-
This Agreement between the Purchaser and the Company
conforms to all applicable statutory and regulatory requirements; and
This Agreement is (1) executed contemporaneously with the
agreement reached by the Purchaser and the Company, (2) approved by a
specific corporate or banking association resolution by the Company's
board of directors, which approval shall be reflected in the minutes
of said board, and (3) an official record of the Company. A copy of
such resolution, certified by a vice president or higher officer of
the Company has been provided to the Purchaser.
(b) Representations and Warranties Regarding Individual
Mortgage Loans. The Company hereby represents and warrants to the Purchaser,
its successors and assigns and the Servicing Rights Owner, with respect to
each Mortgage Loan, as of the related Closing Date or such other date
specified herein:
The information set forth in the related Mortgage Loan
Schedule is complete, true and correct;
No payment under any Mortgage Loan is delinquent as of the
related Closing Date nor has any scheduled payment been delinquent
for more than thirty (30) days at any time prior to the related
Closing Date. The Mortgage Loan has not been dishonored. There are no
material defaults under the terms of the Mortgage Loan. Each Mortgage
Loan has a monthly Due Date of the first day of each month. For
purposes of this paragraph, a Mortgage Loan will be deemed delinquent
if any payment due thereunder was not paid by the Mortgagor in the
month such payment was due;
There is no valid offset, right of rescission, defense or
counterclaim of any obligor under any Mortgage Note, Mortgage or
Proprietary Lease, if applicable, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note, and any applicable right of rescission has expired, nor will
the operation of any of the terms of such Mortgage Note or Mortgage,
or the exercise of any right thereunder, render either the Mortgage
Note or the Mortgage unenforceable, in whole or in part, or subject
to any right of rescission, set-off, recoupment, counterclaim or
defense, including, without limitation, the defense of usury, and no
such right of rescission, set-off, recoupment, counterclaim or
defense has been asserted with respect thereto. No Mortgage Loan is
subject to any pending bankruptcy, insolvency, reorganization or
moratorium;
There are no mechanics' liens or similar liens or claims for
work, labor or material affecting any Mortgaged Property which have
been filed (and no rights are outstanding that under law could give
rise to such liens), which are or may be a lien prior to, or equal
with, the lien of such Mortgage, except those which are insured
against by the title insurance policy referred to in clause (ix)
below;
As of the date of origination of the Mortgage Loan, there
was no damage to any Mortgaged Property. At origination of the
Mortgage Loan there was not any proceeding pending for the total or
partial condemnation of the Mortgaged Property. The
-22-
Company has not received notification that any such proceedings are
scheduled to commence at a future date.
Each Mortgage is a valid, subsisting, enforceable and
perfected first lien on the Mortgaged Property securing the related
Mortgage Note, including all buildings on the Mortgaged Property and
all installations and mechanical, electrical, plumbing, heating and
air conditioning systems affixed to such buildings, and all
additions, alterations and replacements made at any time with respect
to the foregoing securing the Mortgage Note's original principal
balance subject to principles of equity, bankruptcy, insolvency and
other laws of general application affecting the rights of creditors.
The Mortgage and the Mortgage Note do not contain any evidence of any
security interest or other interest or right thereto. Each Mortgaged
Property is owned by the Mortgagor in fee simple and is free and
clear of all adverse claims, encumbrances and liens having priority
over the first lien of the Mortgage, subject only to (1) the lien of
nondelinquent current real property taxes and assessments not yet due
and payable, (2) covenants, conditions and restrictions, rights of
way, easements and other matters of public record as of the date of
recording of such Mortgage, such exceptions appearing of record being
acceptable to mortgage lending institutions generally and
specifically reflected in the appraisal made in connection with the
origination of the related Mortgage Loan or referred to in the
lender's title insurance policy delivered to the originator of the
related Mortgage Loan, and (3) other matters to which like properties
are commonly subject which do not individually or in the aggregate
materially interfere with the benefits of the security intended to be
provided by such Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. to each Second Lien
Mortgage Loan a prior mortgage lien on the Mortgaged Property. Except
with respect to each Co-op Loan, any security agreement, chattel
mortgage or equivalent document related to and delivered in
connection with the Mortgage Loan establishes and creates a valid,
subsisting enforceable, and perfected first lien and first priority
security interest on the property described therein, and immediately
prior to the sale of such Mortgage Loan to the Purchaser pursuant to
this Agreement and the related Term Sheet, the Company had full right
to sell and assign the same to the Purchaser;
Each Mortgage Loan complies with, and the Company has
complied with, applicable local, state and federal laws, regulations
and other requirements including, without limitation, usury, equal
credit opportunity, real estate settlement procedures, the Federal
Truth-In-Lending Act, consumer credit protection, all applicable
predatory and abusive lending laws, all applicable unfair and
deceptive practices laws and disclosure laws, including, without
limitation, any provisions relating to prepayment penalties, and the
consummation of the transactions contemplated hereby, including
without limitation, the receipt of interest by the owner of such
Mortgage Loan, will not involve the violation of any such laws, rules
or regulations. Each Mortgage Loan at the time it was made complied
in all material respects with applicable local, state and federal
laws, including, but not limited to, all applicable predatory and
abusive lending laws. Each Mortgage Loan is being (and has been)
serviced in accordance with Accepted Servicing Practices and
applicable state and federal laws, including, without limitation, the
Federal Truth-In-Lending Act and other consumer protection laws, real
estate settlement procedures,
-23-
usury, equal credit opportunity and disclosure laws. This
representation and warranty is a Deemed Material Breach
Representation;
Neither the Company nor any prior holder of any Mortgage
Loan has impaired, waived, altered or modified the Mortgage, the
Mortgage Note or the assignment of Proprietary Lease, if applicable
(except that a Mortgage Loan may have been modified by a written
instrument (a copy of which is in the Mortgage File and the terms of
which are reflected on the Mortgage Loan Schedule) which has been
recorded, if necessary to protect the interests of the owner of such
Mortgage Loan; the substance of any such waiver, alteration or
modification has been approved by the issuer of any related Primary
Mortgage Insurance Policy and title insurance policy, to the extent
required by the related policies); satisfied, canceled, rescinded or
subordinated such Mortgage in whole or in part; released the
applicable Mortgaged Property in whole or in part from the lien of
such Mortgage; or executed any instrument of cancellation, rescission
or satisfaction with respect thereto. No instrument of release or
waiver has been executed in connection with any Mortgage Loan, and no
Mortgagor has been released, in whole or in part from its obligations
in connection with a Mortgage Loan. No Mortgage Loan has been
modified so as to restructure the payment obligations or re-age the
Mortgage Loan;
Except with respect to each Co-op Loan, each Mortgage Loan
is covered by an ALTA lender's title insurance policy or equivalent
form of policy or insurance acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac
in a form acceptable to, and issued by a title insurer acceptable to,
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, together with all applicable ALTA
endorsements, including without limitation, an adjustable rate
mortgage loan endorsement, if applicable, a condominium endorsement,
a planned unit development endorsement, an extended coverage
endorsement, and an 8.1 ALTA or equivalent environmental endorsement,
insuring the Company, its successors and assigns, as to the first
lien priority of the Mortgage (subject to the exceptions contained in
(vi) (1), (2), and (3) above), in an amount at least equal to the
original principal balance of each such Mortgage Loan and against any
loss by reason of the invalidity or unenforceability of the lien
resulting from the provisions of the Mortgage providing for
adjustment in the Mortgage Interest Rate and Monthly Payment. Each
title insurance policy affirmatively insures ingress and egress and
insures against encroachments by or upon the Mortgaged Property and
each such policy was issued on the date of the origination of each
related Mortgage Loan by a title insurer qualified to do business in
the jurisdiction where the Mortgaged Property is located. The
Company, its successors and assigns, are the sole insured of such
lender's title insurance policy, such title insurance policy has been
duly and validly endorsed to the Purchaser or the assignment to the
Purchaser of the Company's interest therein does not require the
consent of or notification to the insurer and such lender's title
insurance policy is in full force and effect and will be in full
force and effect upon the consummation of the transactions
contemplated by this Agreement. Where required by law or regulation,
the Mortgagor has been given the opportunity to choose the carrier of
the required mortgage title insurance. No claims have been made under
such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Company, nor any Mortgagor, has done,
by act or omission, anything which would materially impair the
coverage of such lender's title insurance policy;
-24-
All of the improvements which were included for the purpose
of determining the Appraised Value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of such
property (and wholly within the project with respect to a condominium
unit), and no improvements on adjoining properties encroach upon the
Mortgaged Property;
No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation,
subdivision law or ordinance. All inspections, licenses and
certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the
use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have
been made or obtained from the appropriate authorities, and the
Mortgaged Property is lawfully occupied under applicable law;
Each Mortgage Note and the applicable Mortgage are original
and genuine, and each is the legal, valid and binding obligation of
the maker thereof, enforceable in accordance with its terms, except
as limited by bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws relating to creditors' rights
generally or by equitable principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law) and
the Company has taken all action necessary to transfer such rights of
enforceability to the Purchaser. All parties to the Mortgage Note and
the Mortgage had legal capacity to execute the Mortgage Note and the
Mortgage and each Mortgage Note and Mortgage has been duly and
properly executed by such parties. The Mortgage Loan Documents are on
forms acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac. Either the Mortgagor
or the guarantor of a Mortgage Loan is a natural person;
The proceeds of the Mortgage Loan have been fully disbursed;
there is no requirement for future advances thereunder and any and
all requirements as to completion of any on-site or off-site
improvements and as to disbursement of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making,
closing or recording the Mortgage Loan were paid and the Mortgagor is
not entitled to any refund of amounts paid or due under the Mortgage
Note or Mortgage;
Each Mortgage contains customary and enforceable provisions
that render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of
the security, including (i) in the case of a Mortgage designated as a
deed of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure or if applicable, non-judicial foreclosure. Upon default
by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee's
sale of, the Mortgaged Property pursuant to the proper procedures,
the holder of the Mortgage Loan will be able to deliver good and
merchantable title to the property. There is no homestead or other
exemption available to the Mortgagor which would interfere with such
right to foreclose;
With respect to each Mortgage constituting a deed of trust,
either a trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is
named in such Mortgage or if no duly qualified trustee has been
properly designated and so serves, the Mortgage contains satisfactory
provisions for the
-25-
appointment of such trustee by the holder of the Mortgage at no cost
or expense to such holder, and no fees or expenses are or will become
payable by the Purchaser to the trustee under the deed of trust,
except in connection with a trustee's sale after default by the
Mortgagor;
There are no defaults by Company in complying with the terms
of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground rents or other outstanding charges affecting the Mortgaged
Property which previously became due and owing have been paid, or
escrow funds have been established in an amount sufficient to pay for
every such escrowed item which remains unpaid and which has been
assessed but is not yet due and payable. With respect to each Co-op
Loan, there is no default in complying with the terms of the Mortgage
Note, the assignment of Proprietary Lease and the Proprietary Lease
and all maintenance charges and assessments (including assessments
payable in the future installments, which previously became due and
owing) have been paid, and the Sellers have the right under the terms
of the Mortgage Loan Documents, to pay any maintenance charges or
assessments owed by the Mortgagor. There exist no deficiencies with
respect to escrow deposits and payments, if such are required, for
which customary arrangements for repayment thereof have not been
made, and no escrow deficits or payments of other charges or payments
due the Company have been capitalized under the Mortgage or the
applicable Mortgage Note;
The Mortgage Note is not and has not been secured by any
collateral, pledged account or other security other than the lien of
the corresponding Mortgage and the security interest of any
applicable security agreement or chattel mortgage referred to above
and such collateral does not serve as security for any other
obligation and no Mortgage Loan is secured by more than one Mortgaged
Property;
The buildings and improvements upon each Mortgaged Property
are insured by a Qualified Insurer pursuant to a standard, valid and
existing hazard insurance policy acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac which policy insures against loss by fire, hazards of extended
coverage and such other hazards as are provided for in the ▇▇▇▇▇▇ Mae
Guides or ▇▇▇▇▇▇▇ Mac Guide representing coverage in an amount not
less than the lesser of (A) the maximum insurable value of the
improvements securing such Mortgage Loan and (B) the outstanding
principal balance of the related Mortgage Loan, but in no event an
amount less than an amount that is required to prevent the Mortgagor
from being deemed to be a co-insurer thereunder. If the Mortgaged
Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards,
a flood insurance policy in a form meeting the requirements of the
current guidelines of the Flood Insurance Administration (which
policy conforms to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac requirements) is in
effect with respect to such Mortgaged Property with a Qualified
Insurer in an amount representing coverage not less than the least of
(A) the outstanding Stated Principal Balance of the Mortgage Loan,
(B) the maximum insurable value of the improvements securing such
Mortgage Loan or (C) the maximum amount of insurance that is
available under federal law. All individual insurance policies
contain a standard mortgagee clause naming the Company or the
original holder of the Mortgage, and its successors in interest, as
loss payee, and all of the premiums due and payable
-26-
thereon have been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and
expense, and upon the Mortgagor's failure to do so, authorizes the
holder of the Mortgage to obtain and maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from
the Mortgagor. Neither the Company (nor any prior originator or
servicer of any of the Mortgage Loans) nor any Mortgagor has engaged
in any act or omission which has impaired or would impair the
coverage of any such policy, the benefits of the endorsement provided
for herein, or the validity and binding effect of either; All such
insurance policies contain a clause that the insurer will notify the
named mortgagee at least ten (10) days prior to any reduction in
coverage or cancellation of the policy;
There is no default, breach or event of acceleration
existing under the Mortgage or the applicable Mortgage Note; and no
event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration, and none of (i) the
Company and any of its affiliates (ii) any servicer or subservicer
and (iii) any prior mortgagee, of any Mortgage Loan has waived any
default, breach or event of acceleration; no foreclosure action is
threatened or has been commenced with respect to the Mortgage Loan,
and, if the Mortgage Loan is a Co-op Loan, no foreclosure action or
private or public sale under the Uniform Commercial Code has ever to
the knowledge of the Sellers, been threatened or commenced with
respect to the Co-op Loan;];
The Company has caused or will cause to be performed any and
all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans
including, without limitation, any necessary notifications of
insurers, assignments of policies or interests therein, and
establishments of coinsured, joint loss payee and mortgagee rights in
favor of the Purchaser;
The Company has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount
required by the Mortgage Loan;
The Mortgage File contains an appraisal of the Mortgaged
Property signed prior to the final approval of the mortgage loan
application by a Qualified Appraiser, approved by the Company, who
had no interest, direct or indirect, in the Mortgaged Property or in
any loan made on the security thereof, and whose compensation is not
affected by the approval or disapproval of the Mortgage Loan, and the
appraisal and appraiser both satisfy the requirements of ▇▇▇▇▇▇ ▇▇▇
or ▇▇▇▇▇▇▇ Mac and Title XI of the Federal Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was
originated and conforms to the underwriting requirements of the
Company. The appraisal is in a form acceptable to ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac and was made by a Qualified Appraiser;
The Mortgaged Property is located in the state identified in
the related Mortgage Loan Schedule and consists of real property with
a detached single family residence erected thereon, or a two- to
four-family dwelling, or an individual condominium unit in a
condominium project, or an individual unit in a planned unit
-27-
development or a de minimis planned unit development which is in each
case four stories or less, provided, however, that any mobile home
(double wide only) or manufactured dwelling shall conform with the
applicable ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac requirements regarding such
dwellings and that no Mortgage Loan is secured by a single parcel of
real property with a cooperative housing corporation, a log home or a
mobile home erected thereon or by a mixed-use property, a property in
excess of 10 acres, or other unique property types. As of the date of
origination, no portion of the Mortgaged Property was used for
commercial purposes, and since the date of origination, no portion of
the Mortgaged Property has been used for commercial purposes;
provided, that Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as
the Mortgaged Property has not been altered for commercial purposes
and is not storing any chemicals or raw materials other than those
commonly used for homeowner repair, maintenance and/or household
purposes. With respect to any Mortgage Loan secured by a Mortgaged
Property improved by manufactured housing, (i) the related
manufactured housing unit is permanently affixed to the land, (ii)
the related manufactured housing unit and the related land are
subject to a Mortgage properly filed in the appropriate public
recording office and naming the Seller as mortgagee, (iii) the
related Mortgaged Property is not located in the state of New Jersey
and (iv) as of the origination date of the related Mortgage Loan, the
related Mortgagor occupied the related manufactured home as its
primary residence. This representation and warranty is a Deemed
Material Breach Representation;
None of the Mortgage Loans provide for deferred interest or
negative amortization. None of the Mortgage Loans are simple interest
Mortgage Loans; No Mortgaged Property is a timeshare;
No Mortgage Loan contains any provisions currently in effect
which may constitute a "buydown" provision. The Mortgage Loan is not
a graduated payment Mortgage Loan. Any Mortgage Loan containing a
"balloon" feature is marked as such on the related Mortgage Loan
Schedule. No Mortgage Loan is a balloon mortgage loan that has an
original stated maturity of less than seven (7) years;
Company is the sole owner of record and is the holder of the
Mortgage Loan and the indebtedness evidenced by the Mortgage Note and
the related Servicing Rights thereto (and with respect to any Co-op
Loan, the sole owner of the related assignment of Proprietary Lease).
Upon the sale of the Mortgage Loan to the Purchaser, and prior to the
transfer of Servicing Rights to the Purchaser, the Company will
retain the Mortgage File or any part thereof with respect thereto not
delivered to the Purchaser or if requested by the Purchaser, it's
designee, in trust only for the purpose of servicing and supervising
the servicing of the Mortgage Loan. Immediately prior to the transfer
and assignment to the Purchaser, the Mortgage Loan, including the
Mortgage Note and the Mortgage, were not subject to an assignment
sale or pledge to any person other than Purchaser and the Company had
good and marketable title to and was the sole owner thereof and had
full right to transfer and sell the Mortgage Loan to the Purchaser
free and clear of any encumbrance, equity, lien, pledge, charge,
claim or security interest and has the full right and authority
subject to no interest or participation of, or agreement with, any
other party, to sell and assign the Mortgage Loan pursuant to this
Agreement and the related Term
-28-
Sheet and following the sale of the Mortgage Loan, the Purchaser will
own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security
interest. The Company intends to relinquish all rights to possess,
control and monitor the Mortgage Loan, except for the purposes of
interim servicing the Mortgage Loan as set forth in this Agreement.
After the related Closing Date, the Company will not have any right
to modify or alter the terms of the sale of the Mortgage Loan and the
Company will not have any obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided
in this Agreement or the related Term Sheet, or as otherwise agreed
to by the Company and the Purchaser. The Company acquired any right,
title and interest in and to the Mortgage Loans in good faith and
without notice of any adverse claim;
The Mortgage Note is payable on the first day of each month.
Principal payments on the Mortgage Loan commenced no more than sixty
(60) days after the funds were disbursed in connection with the
Mortgage Loan. Monthly payments of interest are calculated on the
basis of a year comprised of twelve 30-day months;
The Mortgage contains a provision for the acceleration of
the payment of the unpaid principal balance of the Mortgage Loan in
the event that the Mortgaged Property is sold or transferred without
the prior written consent of the mortgagee thereunder, at the option
of the mortgagee and such provision is enforceable;
Each of the Mortgage and the Assignment of Mortgage (for
each Mortgage Loan that is not a MERS Mortgage Loan) is in recordable
form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;
The Mortgagor has not notified the Company, and the Company
has no knowledge of any relief requested or allowed to the Mortgagor
under the Servicemembers' Civil Relief Act;
There exists no violation of any local, state, or federal
environmental law, rule or regulation with respect to the Mortgaged
Property which violation has or could have a material adverse effect
on the market value of such Mortgaged Property. The Company has no
knowledge of any pending action or proceeding directly involving the
related Mortgaged Property in which compliance with any environmental
law, rule or regulation is an issue; and nothing further remains to
be done to satisfy in full all requirements of each such law, rule or
regulation constituting a prerequisite to the use and enjoyment of
such Mortgaged Property;
For each Mortgage Loan, the related Mortgage File is
complete and contains a true, accurate and correct copy of each of
the documents and instruments specified to be included therein;
Each Mortgage Note, each Mortgage, each Assignment of
Mortgage and any other documents required pursuant to this Agreement
to be delivered by the Company hereunder has been delivered to the
Purchaser or its agent;
-29-
No Mortgage Loan was originated based on an appraisal of the
related Mortgaged Property made prior to completion of construction
of the improvements thereon. No Mortgage Loan was made in connection
with the construction or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
The Company used no selection procedures that identified the
Mortgage Loans as being less desirable or valuable than other
comparable mortgage loans in the Company's portfolio. No statement,
tape, diskette, form, report or other document furnished or to be
furnished by Company pursuant to this Agreement or the related Term
Sheet or in connection with the transactions contemplated hereby
contains or will contain any statement that is or will be inaccurate
or misleading in any material respect or omits to state a material
fact required to be stated therein or necessary to make the
information and statements therein not misleading;
No error, omission, misrepresentation, negligence, fraud or
similar occurrence with respect to a Mortgage Loan has taken place on
the part of the Company or the Mortgagor or any other party,
including, without limitation, the Mortgagor, any appraiser, any
builder or developer, or any other party involved in the origination
or servicing of the Mortgage Loan or in the application of any
insurance in relation to such Mortgage Loan; no predatory or
deceptive lending practices, including, without limitation, the
extension of credit without regard to the ability of the borrower to
repay and the extension of credit which has no apparent benefit to
the borrower, were employed in the origination of the Mortgage Loan;
The Mortgagor has received and has executed, where
applicable, prior to origination of the Mortgage Loan, all disclosure
and rescission materials required by applicable law with respect to
the making of the Mortgage Loan;
Each Mortgage Loan was originated by or for the Company
pursuant to, and conforms with, the Company's underwriting guidelines
attached as Exhibit 9 hereto;
No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable, and no Mortgage Loan originated on or after October 1,
2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994 and no Mortgage Loan is in violation of any
comparable state or local law. The Mortgaged Property is not located
in a jurisdiction where a breach of this representation with respect
to the related Mortgage Loan may result in additional assignee
liability to the Purchaser, as determined by Purchaser in its
reasonable discretion. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard
to the ability of the Mortgagor to repay and the extension of credit
which has no apparent benefit to the Mortgagor, were employed in the
origination of the Mortgage Loan. This representation and warranty is
a Deemed Material Breach Representation;
All Mortgage Loans originated in New Jersey comply with the
Purchaser's standards for purchasing New Jersey mortgage loans, set
forth on Exhibit 11 hereto;
-30-
[Reserved];
[Reserved];
The Mortgage Loan is not subject to any outstanding
litigation for fraud, origination, predatory lending, servicing or
closing practices;
[Reserved];
The Mortgage Loans were originated by a mortgagee approved
by the Secretary of Housing and Urban Development pursuant to
Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union,
insurance company or similar institution which is supervised and
examined by a federal or state authority;
Each Mortgage Loan has been serviced in all material
respects in strict compliance with Accepted Servicing Practices and
the Interim Servicer has reported the Mortgagor credit files to each
of the three credit repositories in a timely manner;
As to each consumer report (as defined in the Fair Credit
Reporting Act, Public Law 91-508) or other credit information
furnished by the Company to the Purchaser, that Company has full
right and authority and is not precluded by law or contract from
furnishing such information to the Purchaser and the Purchaser is not
precluded by the terms of the Mortgage Loan Documents from furnishing
the same to any subsequent or prospective purchaser of such Mortgage.
The Company shall hold the Purchaser harmless from any and all
damages, losses, costs and expenses (including attorney's fees)
arising from disclosure of credit information in connection with the
Purchaser's secondary marketing operations and the purchase and sale
of mortgages. The Company has in its capacity as servicer, for each
Mortgage Loan, fully furnished, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Company
(three of the credit repositories), on a monthly basis. This
representation and warranty is a Deemed Material Breach
Representation;
With respect to each Mortgage Loan for which the related
Mortgage Loan Schedule indicates there is a prepayment penalty
feature (a "Prepayment Penalty Mortgage Loan"), the Prepayment
Penalty Mortgage Loan is subject to a prepayment penalty as provided
in the related Mortgage Note. With respect to each Prepayment Penalty
Mortgage Loan, each such prepayment penalty is enforceable and will
be enforced by the Company for the benefit of the Purchaser, and each
prepayment penalty is permitted pursuant to federal, state and local
law. Each such prepayment penalty is in an amount not more than the
maximum amount permitted under applicable law and no such prepayment
penalty may be imposed for a term in excess of five (5) years. With
respect to any Mortgage Loan that contains a provision permitting
imposition of a premium upon a prepayment prior to maturity: (i)
prior to the Mortgage Loan's origination, the Mortgagor agreed to
such premium in exchange for a monetary benefit,
-31-
including but not limited to a rate or fee reduction, (ii) prior to
the Mortgage Loan's origination, the Mortgagor was offered the option
of obtaining a mortgage loan that did not require payment of such a
premium and (iii) the prepayment premium is disclosed to the
Mortgagor in the loan documents pursuant to applicable state, local
and federal law. This representation and warranty is a Deemed
Material Breach Representation;
The LTV of the Mortgage Loan either is not more than 80% or
the excess over 75% of the Appraised Value is and will be insured as
to payment defaults by a PMI Policy until the LTV of such Mortgage
Loan is reduced to 80%. All provisions of such PMI Policy have been
and are being complied with, such policy is in full force and effect,
and all premiums due thereunder have been paid. No action, inaction,
or event has occurred and no state of facts exists that has, or will
result in the exclusion from, denial of, or defense to coverage. Any
Mortgage Loan subject to a PMI Policy (other than a lender paid PMI
Policy) obligates the Mortgagor thereunder to maintain the PMI Policy
and to pay all premiums and charges in connection therewith. The
Mortgage Interest Rate for the Mortgage Loans as set forth on the
Mortgage Loan Schedule accurately reflects the Mortgage Interest Rate
of the Mortgage Loans, net of any such insurance premium;
The Company represents and warrants to the Purchaser that as
of the related Closing Date or as of such date specifically provided
herein:
[Reserved];
[Reserved];
No borrower was encouraged or required to select a
Mortgage Loan product offered by the Mortgage Loan's
originator which is a higher cost product designed for less
creditworthy borrowers, unless at the time of the Mortgage
Loan's origination, such borrower did not qualify taking
into account credit history and debt-to-income ratios for a
lower-cost credit product then offered by the Mortgage
Loan's originator or any affiliate of the Mortgage Loan's
originator. If, at the time of loan application, the
borrower may have qualified for a lower-cost credit product
then offered by any mortgage lending affiliate of the
Mortgage Loan's originator, the Mortgage Loan's originator
referred the borrower's application to such affiliate for
underwriting consideration. This representation and warranty
is a Deemed Material Breach Representation;
The methodology used in underwriting the extension
of credit for each Mortgage Loan employs, in part, objective
mathematical principles which relate the borrower's income,
assets, liabilities and past credit history to the proposed
payment and such underwriting methodology does not rely on
the extent of the borrower's equity in the collateral as the
principal determining factor in approving such credit
extension. Such underwriting methodology confirmed that at
the time of origination (application/approval) the borrower
had a reasonable ability to make
-32-
timely payments on the Mortgage Loan. This representation
and warranty is a Deemed Material Breach Representation;
With respect to any Mortgage Loan that contains a
provision permitting imposition of a premium upon a
prepayment prior to maturity: (i) prior to the loan's
origination, the borrower agreed to such premium in exchange
for a monetary benefit, including but not limited to a rate
or fee reduction, (ii) prior to the loan's origination, the
borrower was offered the option of obtaining a mortgage loan
that did not require payment of such a premium, (iii) the
prepayment premium is disclosed to the borrower in the loan
documents pursuant to applicable state and federal law, and
(iv) notwithstanding any state or federal law to the
contrary, the Company shall not impose such prepayment
premium in any instance when the mortgage debt is
accelerated as the result of the borrower's default in
making the loan payments. This representation and warranty
is a Deemed Material Breach Representation;
In connection with the origination of any Mortgage
Loan, no proceeds from any Mortgage Loan were used to
finance or acquire a single-premium credit life insurance
policy. No borrower was required to purchase any
single-premium credit insurance policy (e.g., life,
mortgage, disability, accident, unemployment, or health
insurance product) or debt cancellation agreement as a
condition of obtaining the extension of credit. No borrower
obtained a prepaid single-premium credit insurance policy
(e.g., life, mortgage, disability, accident, unemployment,
mortgage, or health insurance) in connection with the
origination of the Mortgage Loan; no proceeds from any
Mortgage Loan were used to purchase single-premium credit
insurance policies or debt cancellation agreements as part
of the origination of, or as a condition to closing, such
Mortgage Loan. This representation and warranty is a Deemed
Material Breach Representation;
No borrower was charged "points and fees" (whether
or not financed) in an amount greater than (i) $1,000, or
(ii) 5% of the principal amount of such Mortgage Loan,
whichever is greater. For purposes of this representation,
such 5% limitation is calculated in accordance with ▇▇▇▇▇▇
Mae's anti-predatory lending requirements as set forth in
the ▇▇▇▇▇▇ Mae Guides and "points and fees," attached as an
exhibit to the related Term Sheet, (x) include origination,
underwriting, broker and finder fees and charges that the
mortgagee imposed as a condition of making the Mortgage
Loan, whether they are paid to the mortgagee or a third
party, and (y) exclude bona fide discount points, fees paid
for actual services rendered in connection with the
origination of the Mortgage Loan (such as attorneys' fees,
notaries fees and fees paid for property appraisals, credit
reports, surveys, title examinations and extracts, flood and
tax certifications, and home inspections), the cost of
mortgage insurance or credit-risk price adjustments, the
costs of title, hazard, and flood insurance
-33-
policies, state and local transfer taxes or fees, escrow
deposits for the future payment of taxes and insurance
premiums, and other miscellaneous fees and charges that, in
total, do not exceed 0.25% of the principal amount of such
Mortgage Loan. This representation and warranty is a Deemed
Material Breach Representation;
All fees and charges (including finance charges)
and whether or not financed, assessed, collected or to be
collected in connection with the origination and servicing
of each Mortgage Loan has been disclosed in writing to the
borrower in accordance with applicable state and federal law
and regulation. This representation and warranty is a Deemed
Material Breach Representation; and
The Company will transmit full-file credit
reporting data for each Mortgage Loan and that for each
Mortgage Loan the Company agrees it shall report one of the
following statuses each month as follows: new origination,
current, delinquent (30-, 60-, 90-days, etc.), foreclosed,
or charged-off. This representation and warranty is a Deemed
Material Breach Representation.
The gross proceeds of the related Mortgage Loan to the
related Mortgagor at origination did not exceed the non-contingent
principal amount of the Mortgage Loan and either: (a) such Mortgage
Loan is secured by an interest in real property having, an Appraised
Value (i) at the date the Mortgage Loan was originated, at least
equal to 80 percent of the original principal balance of the Mortgage
Loan or (ii) at the Closing Date, at least equal to 80 percent of the
principal balance of the Mortgage Loan on such date; provided that
for purposes hereof, the fair market value of the real property
interest must first be reduced by (x) the amount of any lien on the
real property interest that is senior to the Mortgage Loan and (y) a
proportionate amount of any lien that is in parity with the Mortgage
Loan (unless such other lien secures a Mortgage Loan that is
cross-collateralized with such Mortgage Loan, in which event the
computation described in clauses (a)(i) and (a)(ii) of this paragraph
shall be made on a pro rata basis in accordance with the fair market
values of the Mortgaged Properties securing such cross-collateralized
Mortgage Loans); or (b) substantially all the proceeds of such
Mortgage Loan were used to acquire, improve or protect the real
property that served as the only real property collateral for such
Mortgage Loan (other than a recourse feature or other third party
credit enhancement). This representation and warranty is a Deemed
Material Breach Representation.
With respect to any Mortgage Loan originated on or after
August 1, 2004, neither the related Mortgage nor the related Mortgage
Note requires the Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan
transaction. This representation and warranty is a Deemed Material
Breach Representation; and
With respect to each Second Lien Mortgage Loan: (1) the
related first lien Mortgage Loan does not permit negative
amortization; (2) where required or customary
-34-
in the jurisdiction in which the Mortgaged Property is located, the
original lender has filed for record a request for notice of any
action by the related senior lienholder, and the Company has notified
such second lienholder in writing of the existence of the Second Lien
Mortgage Loan and requested notification of any action to be taken
against the Mortgagor by such senior lienholder; either (a) no
consent for the Second Lien Mortgage Loan is required by the holder
of the related first lien Mortgage Loan or (b) such consent has been
obtained and is contained in the related Mortgage File; (3) to the
best of Company's knowledge, the related first lien Mortgage Loan is
in full force and effect, and there is no default, lien, breach,
violation or event which would permit acceleration existing under
such first lien Mortgage Loan or Mortgage Note, and no event which,
with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation
or event which would permit acceleration under such first lien
Mortgage Loan; (4) the related first lien Mortgage contains a
provision which provide for giving notice of default or breach to the
mortgagee under the Mortgage Loan and allows such mortgagee to cure
any default under the related first lien Mortgage; and (5) the
related Mortgaged Property was the borrower's principal residence at
the time of the origination of the such Second Lien Mortgage Loan.
This representation and warranty is a Deemed Material Breach
Representation.
With respect to each Co-op Loan, the related Mortgage is a
valid, enforceable and subsisting first or second security interest
on the related Cooperative Shares securing the related cooperative
note, subject only to (a) liens of the Cooperative for unpaid
assessments representing the Mortgagor's pro rata share of the
Cooperative's payments for its blanket mortgage, current and future
real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly subject and (b)
other matters to which like collateral is commonly subject which do
not materially interfere with the benefits of the security intended
to be provided by the Security Agreement. There are no liens against
or security interest in the cooperative shares relating to each Co-op
Loan (except for unpaid maintenance, assessments and other amounts
owed to the related cooperative which individually or in the
aggregate will not have a material adverse effect on such Co-op
Loan), which have priority over the Seller's security interest in
such Cooperative Shares;
With respect to each Co-op Loan, a search for filings of
financing statements has been made by a company competent to make the
same, which company is acceptable to ▇▇▇▇▇▇ ▇▇▇ and qualified to do
business in the jurisdiction where the cooperative unit is located,
and such search has not found anything which would materially and
adversely affect the Co-op Loan;
With respect to each Co-op Loan, the related cooperative
that owns title to the related Cooperative Apartment building is a
"cooperative housing corporation" within the meaning of Section 216
of the Code, and is in material compliance with applicable federal,
state and local laws which, if not complied with, could have a
material adverse effect on the Mortgaged Property;
With respect to each Co-op Loan, there is no prohibition
against pledging the shares of the Cooperative or assigning the Co-op
Lease;
-35-
(c) Remedies for Breach of Representations and Warranties;
Post-Closing Due Diligence. It is understood and agreed that the covenants,
representations and warranties of Company set forth in this Agreement and the
related Term Sheet shall survive the sale of the Mortgage Loans and the
Servicing Rights to the Purchaser and shall inure to the benefit of the
Purchaser, its successors and assigns and the Servicing Rights Owner for a
period of ten (10) years after the applicable Closing Date, notwithstanding
any restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination or lack of examination of any Mortgage File. Upon
discovery by either the Company or the Purchaser of a breach of any of the
foregoing representations and warranties which materially and adversely
affects the value of the Mortgage Loans (or the Servicing Rights) or the
interest of the Purchaser therein (or which materially and adversely affects
the value of a Mortgage Loan (or related Servicing Rights) or the interests of
the Purchaser in the related Mortgage Loan (including the Servicing Rights
thereon)) in the case of a representation and warranty relating to a
particular Mortgage Loan), the party discovering such breach shall give prompt
written notice to the other.
Within sixty (60) days after the earlier of either discovery
by or notice to the Company of any breach of a representation or warranty
which materially and adversely affects the value of a Mortgage Loan or the
Mortgage Loans, or the interest of the Purchaser therein, the Company shall
use its best efforts promptly to cure such breach in all material respects
and, if such breach cannot be cured, the Company shall, at the Purchaser's or
Servicing Right's Owner's option, repurchase such Mortgage Loan (including the
related Servicing Rights) at the Repurchase Price. Notwithstanding the above
sentence, any breach of a Deemed Material Breach Representation shall
automatically be deemed to materially and adversely affect the value of the
Mortgage Loan and the interest of the Purchaser therein. Any repurchase of a
Mortgage Loan or Mortgage Loans (including the corresponding Servicing Rights)
pursuant to the foregoing provisions of this Subsection 7.03 shall occur on a
date designated by the Purchaser or the Servicing Rights Owner and shall be
accomplished by wire transfer of immediately available funds on the repurchase
date to an account designated by the Purchaser in writing; provided that the
Company is given adequate notice of such information to comply with such
instructions.
If pursuant to the foregoing provisions the Company
repurchases a Mortgage Loan that is a MERS Mortgage Loan, the Company shall
either (a) cause MERS to execute and deliver an assignment of the Mortgage in
recordable form to transfer the Mortgage from MERS to the Company and shall
cause such Mortgage to be removed from registration on the MERS(R) System in
accordance with MERS' rules and regulations or (b) cause MERS to designate on
the MERS(R) System the Company as the beneficial holder of such Mortgage Loan.
At the time of repurchase, the Purchaser, the Servicing
Rights Owner, as applicable, and the Company shall arrange for the
reassignment of the repurchased Mortgage Loan and/or the related Servicing
Rights, as applicable, to the Company and the delivery to the Company of any
documents held by the Purchaser and/or the Servicing Rights Owner and their
respective designees relating to the repurchased Mortgage Loan or Servicing
Rights, as applicable. Upon the repurchase of a Mortgage Loan, the Mortgage
Loan Schedule shall be amended to reflect the withdrawal of the repurchased
Mortgage Loan from this Agreement.
Any cause of action against the Company relating to or
arising out of the breach of any representations and warranties made in
Subsections 7.01 or 7.02 shall accrue as to any
-36-
Mortgage Loan or Servicing Rights upon (i) discovery of such breach by the
Purchaser or notice thereof by the Company to the Purchaser and Servicing
Rights Owner, (ii) failure by the Company to cure such breach or repurchase
such Mortgage Loan and/or Servicing Rights as specified above, and (iii)
demand upon the Company by the Purchaser or Servicing Rights Owner for
compliance with the relevant provisions of this Agreement.
In the event that any Mortgage Loan prepays in full on or
prior to the date which is thirty days after the related Closing Date occurs,
the Company shall pay the Purchaser, within three Business Days of such
prepayment in full, (a) with respect to any Mortgage Loan without a prepayment
penalty, the difference between the Purchase Price for such Mortgage Loan and
the outstanding principal balance of such Mortgage Loan as of the Cut-off Date
(the "Premium") and (b) with respect to any Mortgage Loan with a prepayment
penalty, the difference between the Premium and the amount of the prepayment
penalty collected with respect to the Mortgage Loan.
22. Closing. The closing for the Mortgage Loans shall take
place on the related Closing Date. At the Purchaser's option, the closing
shall be either by telephone and facsimile, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties
shall agree.
(a) Conditions to Purchaser's Obligations. The obligation of
Purchaser to purchase the Mortgage Loans and the Servicing Rights on the
related Closing Date is subject to the satisfaction at or prior to the related
Closing Date of each of the following conditions (any or all of which may be
waived by Purchaser):
(i) Representations and Warranties Correct. Each of the
representations and warranties of Company contained in this Agreement and the
related Term Sheet shall be true and correct in all material respects as of
the related Closing Date.
(ii) Compliance with Covenants. Company shall have performed
and be in compliance with, in all material respects, all of its respective
covenants, acts, and obligations to be performed on or prior to the related
Closing Date under this Agreement and the related Term Sheet.
(iii) Closing Documents. Company shall have executed and
delivered this Agreement and the related Term Sheet and all other Closing
Documents and all other documents required to be delivered by Company
hereunder.
(iv) Corporate Actions. All corporate, partnership and other
acts necessary to authorize the execution, delivery, and performance of this
Agreement and the related Term Sheet and the consummation of the transactions
contemplated hereunder shall have been taken by Company.
(v) Mortgage File. The Company shall have delivered to the
Purchaser or its designee all of the Mortgage Loan Documents in accordance
with Section 6.03 and a complete Mortgage File with respect to each Mortgage
Loan.
(vi) Material Adverse Effect. There is no pending action,
suit, proceeding or governmental investigation or inquiry against the Company,
which would have a material
-37-
adverse effect on the business, operations, financial condition, properties or
assets of the Company, the mortgage loans contemplated herein, or would likely
impair materially the ability of the Company to perform under the terms of
this Agreement.
(b) Conditions to Company's Obligations. The obligation of
Company to sell the Mortgage Loans and the Servicing Rights on the related
Closing Date is subject to the satisfaction at or prior to the related Closing
Date of each of the following conditions (any or all of which may be waived by
Company):
(i) Purchase Price. The related Purchase Price, plus accrued
interest pursuant to Section 4, shall have been delivered to Company by wire
transfer of immediately available funds pursuant to Company's reasonable
instructions.
(ii) Compliance with Covenants. Purchaser shall have
performed and be in compliance with, in all material respects, all of its
respective covenants, acts, and obligations to be performed under this
Agreement and the related Term Sheet.
(iii) Closing Documents. Purchase shall have executed and
delivered this Agreement and the related Term Sheet.
(iv) Corporate Actions. All corporate and other acts
necessary to authorize the execution, delivery, and performance of this
Agreement and the related Term Sheet and the consummation of the transactions
contemplated hereunder shall have been taken by Purchaser.
23. Closing Documents. The Closing Documents for the Mortgage
Loans and the Servicing Rights to be purchased on the related Closing Date
shall consist of fully executed originals of the following documents:
1. this Agreement (which shall only be required on the
initial Closing Date), in two (2) counterparts;
2. upon the request of Purchaser, a Custodial Account
Letter Agreement in the form attached as Exhibit 3
hereto;
3. Upon the request of Purchaser, an Escrow Account
Letter Agreement in the form attached as Exhibit 4
hereto;
4. the related Mortgage Loan Schedule, one copy to be
attached to the related Term Sheet;
5. the related Term Sheet; and
6. such other documents related to the purchase and
sale of the Mortgage Loans and the Servicing Rights
as the Purchaser may reasonably request.
24. Costs; Assignments. The Purchaser shall pay any
commissions due its salesmen, the expenses of its accountants and attorneys
and the expenses and fees of any broker retained by the Purchaser with respect
to the transaction covered by this Agreement. All other
-38-
costs and expenses incurred in connection with the transfer and delivery of
the Mortgage Loans and related Servicing Rights including, without limitation,
fees for the preparation of intervening assignments of Mortgage and
Assignments of Mortgage, any termination fees owed to Company's document
custodian, any costs relating to transfer of the Mortgage File, and other
Mortgage Loan records to Purchaser, the costs of delivering complete master
file tape information and other electronically stored information to the
Purchaser, the costs of notifying the Mortgagors, hazard and flood insurance
companies and other third parties as required, the costs of transferring
"lifetime" tax service contracts (as described in Section 14.01) to the
Purchaser, the costs of transferring "lifetime" flood certification contracts
(as described in Section 14.02) to the Purchaser, and the legal fees and
expenses of its attorneys shall be paid by the Company.
25. Company's Interim Servicing Obligations. Company, as
independent contract servicer, shall service and administer the Mortgage Loans
during the related Interim Servicing Period in accordance with the terms and
provisions set forth in this Agreement, the related Term Sheet and in the
Servicing Addendum attached hereto as Exhibit 5, which Servicing Addendum is
incorporated herein by reference. The Company shall not take, or fail to take,
any action which would result in the Purchaser's interest in the Mortgage
Loans being adversely affected.
26. The Company.
(a) Indemnification. (i) The Company agrees to indemnify the
Purchaser, the Successor Servicer and the Servicing Rights Owner and hold them
harmless from and against any and all claims, losses, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, fees and expenses (including, without limitation, reasonable attorney's
fees and expenses) that the Purchaser, the Successor Servicer or the Servicing
Rights Owner may sustain in any way related to (i) any act, negligence or
omission on the part of the Company or its designees in receiving, processing,
funding or servicing any Mortgage Loan prior to the related Servicing Transfer
Date or otherwise arising from the transfer of the Servicing Rights provided
for in this Agreement; (ii) any negligence, act or omission by Company or its
designees to cause the transfer of the Mortgage Loans or Servicing Rights to
Purchaser unless such inability is the sole result of any act or omission of
the Purchaser; (iii) the failure of the Company to perform in any way its
duties and interim service the Mortgage Loans in strict compliance with the
terms of this Agreement; and (iv) for breach of any covenant, representation
or warranty of the Company contained herein. In addition to the obligations of
the Company set forth in this Subsection 12.01(a), the Purchaser, the
Successor Servicer and Servicing Rights Owner may pursue any and all remedies
otherwise available at law or in equity, including, but not limited to, the
right to seek damages. The Company shall immediately notify the Purchaser and
Servicing Rights Owner if a claim is made by a third party with respect to
this Agreement or the Mortgage Loans, assume (with the consent of the
Purchaser and Servicing Rights Owner and with counsel reasonably satisfactory
to the Purchaser and Servicing Rights Owner) the defense of any such claim and
pay all expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be entered against
it or the Purchaser or Servicing Rights Owner in respect of such claim but
failure to so notify the Purchaser and Servicing Rights Owner shall not limit
its obligations hereunder. The Company agrees that it will not enter into any
settlement of any such claim without the
-39-
consent of the Purchaser and Servicing Rights Owner, as applicable. The
provisions of this Section 12.01 shall survive termination of this Agreement.
For purposes of this paragraph, "Purchaser" shall mean the Person then acting
as the Purchaser under this Agreement and any and all Persons who previously
were "Purchasers" under this Agreement and "Successor Servicer" shall mean the
Person then acting as the Successor Servicer under this Agreement and any and
all Persons who previously were "Successor Servicers" under this Agreement.
Upon the request of the Purchaser, the Company hereby agrees to execute a
recognition agreement recognizing the servicer designated by the Purchaser
therein as the Successor Servicer.
(ii) The Purchaser agrees to indemnify the Company and hold
it harmless from and against any and all claims, losses, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, fees and expenses (including, without limitation, reasonable attorney's
fees and expenses) that the Company may sustain in any way related to (i) the
breach of any covenant, representation or warranty of the Purchaser contained
herein; (ii) any negligence, act or omission on the part of Purchaser or its
designees in receiving, processing, funding or servicing any Mortgage Loan
after the Servicing Transfer Date; and (iii) any negligence, act or omission
of the Purchaser or its designees to cause the transfer of the Mortgage Loans
or the Servicing Rights unless such inability is the sole result of any act or
omission of the Company. In addition to the obligations of the Purchaser set
forth in this Subsection 12.01(b), the Company may pursue any and all remedies
otherwise available at law or in equity, including, but not limited to, the
right to seek damages. The Purchaser shall immediately notify the Company if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans, assume (with the consent of the Company and with counsel reasonably
satisfactory to the Company) 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 Company in respect of such claim but failure to so notify the Company
shall not limit its obligations hereunder. The Purchaser agrees that it will
not enter into any settlement of any such claim without the consent of the
Company. The provisions of this Section 12.01 shall survive termination of
this Agreement.
(b) Merger or Consolidation of the Company. The Company
shall keep in full force and effect its existence, rights and franchises as a
national association under the laws of its formation except as permitted
herein, 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 enable the Company to perform
its duties under this Agreement.
Any Person into which the Company may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Company shall be a party, or any Person succeeding
to the business of the Company, shall be the successor of the Company
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person
shall satisfy any requirements of Section 15 with respect to the
qualifications of a successor to the Company.
(c) Limitation on Liability of the Company and Others.
Neither the Company nor any of the officers, employees or agents of the
Company shall be under any liability to the
-40-
Purchaser for any action taken, or for refraining from the taking of any
action, in good faith in connection with the interim servicing of the Mortgage
Loans pursuant to this Agreement, or for errors in judgment in connection with
the interim servicing of the Mortgage Loans; provided, however, that this
provision shall not protect the Company or any such person against any breach
of warranties or representations made herein, or failure to perform its
obligations materially in 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 Company and any
officer, employee or agent of the Company may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Company shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its obligation to sell, or duty to interim service, the Mortgage
Loans in accordance with this Agreement and which in its opinion may involve
it in any expenses or liability; provided, however, that the Company may, with
the consent of the Purchaser, undertake any such action which it may deem
necessary or desirable in respect to this Agreement and the rights and duties
of the parties hereto. In such event, the legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and
liabilities for which the Purchaser shall be liable, the Company shall be
entitled to reimbursement therefor from the Purchaser upon written demand
except when such expenses, costs and liabilities are subject to the Company's
indemnification under Subsections 7.03 or 12.01.
(d) Company Not to Resign. The Company shall not assign this
Agreement or resign from the obligations and duties hereby imposed on it
except by mutual consent of the Company and the Purchaser or upon the
determination that its servicing duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Company in
which event the Company may resign as interim servicer. Any such determination
permitting the resignation of the Company as interim servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Purchaser
which Opinion of Counsel shall be in form and substance reasonably acceptable
to the Purchaser. No such resignation shall become effective until a successor
shall have assumed the Company's responsibilities and obligations hereunder in
the manner provided in Section 15.
(e) No Transfer of Servicing. With respect to the retention
of the Company to service the Mortgage Loans during the Interim Servicing
Period, the Company acknowledges that the Purchaser has acted in reliance upon
the Company's independent status, the adequacy of its servicing facilities,
plant, personnel, records and procedures, its integrity, reputation and
financial standing and the continuance thereof. Without in any way limiting
the generality of this Section, during the Interim Servicing Period, the
Company shall not either assign this Agreement or the servicing hereunder or
delegate its rights or 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 approval of the Purchaser, which consent will not be
unreasonably withheld.
27. Default.
(a) Events of Default. In case one or more of the following
Events of Default by the Company shall occur and be continuing, that is to
say:
-41-
any failure by the Company to remit to the Purchaser any
payment required to be made under the terms of this Agreement which
continues unremedied for a period of two (2) Business Days after the
date in which written notice of such failure, requiring the same to
be remedied, shall have been given to the Company by the Purchaser or
the Servicing Rights Owner; or
failure on the part of the Company duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Company set forth in this Agreement or
the related Term Sheet which continues unremedied for a period of
thirty (30) days (except that such number of days shall be fifteen
(15) in the case of a failure to pay any premium for any insurance
policy required to be maintained under this Agreement) after the date
on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Company by the Purchaser; or
a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of
debt, marshalling of assets and liabilities or similar proceedings,
or for the winding up or liquidation of its affairs, shall have been
entered against the Company and such decree or order shall have
remained in force undischarged or unstayed for a period of sixty (60)
days; or
the Company shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings of, or relating to, the Company or of, or
relating to, all or substantially all of its property; or
the Company shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations; or
failure by the Company to be in compliance with the "doing
business" or licensing laws of any jurisdiction where a Mortgaged
Property is located; or
the Company ceases to be approved by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac as a mortgage loan servicer for more than thirty days; or
the Company attempts to assign, sell, pledge or hypothecate
its right to servicing compensation hereunder.
then, and in each and every such case, so long as an Event of Default shall
not have been remedied, the Purchaser, by notice in writing to the Company
may, in addition to whatever rights the Purchaser may have at law or equity to
damages, including injunctive relief and specific performance, terminate all
the rights and obligations of the Company as interim servicer under this
Agreement. On or after the receipt by the Company of such written notice, all
authority and power of the Company to interim service the Mortgage Loans under
this Agreement shall on the date set forth in such notice pass to and be
vested in the successor appointed pursuant to Section 15.
-42-
If any of the Mortgage Loans are MERS Mortgage Loans, in
connection with the termination or resignation (as described in Subsection
12.04) of the Company hereunder, either (i) the successor to the Company shall
represent and warrant that it is a member of MERS in good standing and shall
agree to comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Mortgage Loans that are registered
with MERS, or (ii) the predecessor Company shall cooperate with the successor
either (x) in causing MERS to execute and deliver an assignment of Mortgage in
recordable form to transfer the Mortgage from MERS to the Purchaser and to
execute and deliver such other notices, documents and other instruments as may
be necessary or desirable to effect a transfer of such Mortgage Loan or
servicing of such Mortgage Loan on the MERS(R) System to the successor or (y)
in causing MERS to designate on the MERS(R) System the successor as the
servicer of such Mortgage Loan.
(b) Waiver of Defaults. The Purchaser may waive any default
by the Company in the performance of its obligations hereunder and
its consequences. Upon any such 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.
28. Termination; Servicing Transfer. With respect to a
Mortgage Loan, the respective obligations and responsibilities of the Company,
as interim servicer, shall terminate at the expiration of the related Interim
Servicing Period unless earlier terminated in accordance with the terms of
this Agreement or the related Term Sheet, without the payment of any
termination fee. Upon request from the Purchaser in connection with any such
termination, the Company shall prepare, execute and deliver, any and all
documents and other instruments, place in the Purchaser's possession all
Mortgage Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, to prepare notices to the mortgagors and related insurance
companies, or otherwise, at the Company's sole expense. The Company agrees to
cooperate with the Purchaser and such successor in effecting the termination
of the Company's responsibilities and rights hereunder as interim servicer,
including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by the Company to the Custodial Account or Escrow Account or thereafter
received with respect to the Mortgage Loans. The Company shall follow the
servicing transfer instructions of the Purchaser contained herein and attached
hereto as Exhibit 7 with respect to servicing transfer procedures. Company and
Purchaser will each, at the request of the other, execute and deliver to each
other all such documents that either may reasonably request in order to
perfect the transfer, assignment and delivery to Purchaser of the Servicing
Rights to be sold, transferred, assigned and delivered as of the consummation
of this Agreement. The Company shall not be entitled to any transfer fee.
(a) Obligations of the Company Prior to the Servicing
Transfer Date. The Company shall take, or cause to be taken, the following
actions with respect to the Mortgage Loans prior to the related Servicing
Transfer Date (or within such time as may otherwise be specified below) in
order to effect the transfer of the Servicing Rights to the Purchaser on the
related Servicing Transfer Date:
-43-
(i) Preliminary Test Tape. On or prior to the related
Closing Date, the Company shall forward to the Purchaser a preliminary test
tape (including master file, escrow file, payee file, ARM master file, ARM
history, all HMDA data required by the Agencies, etc.) containing all of the
Mortgage Loans as of the date mutually agreed upon by the Company and the
Purchaser. The preliminary test tape shall include all field descriptions and
record layouts;
(ii) Notice to Hazard Insurers. The Company shall inform by
written notice all hazard insurance companies and/or their agents of the
transfer and request a change in the loss payee mortgage endorsement clause to
the Purchaser's name. The Company shall provide the Purchaser with a copy of
the notification letter and an officer's written certification that all hazard
insurance companies have been notified by an identical letter;
(iii) Notice to Mortgage Insurance Companies. The Company
shall inform by written notice all mortgage insurance companies providing any
Primary Mortgage Insurance Policy of the change in insured's name on each such
policy to the Purchaser's name. The Company shall provide the Purchaser with a
copy of one notification letter and an officer's written certification that
all such mortgage insurance companies have been notified by an identical
letter;
(iv) Tax Service Contracts. The Company shall have obtained
a life of loan, transferable real estate tax service contract with a tax
service company reasonably acceptable to the Purchaser on all of the Mortgage
Loans and shall assign all such contracts to the Purchaser or, in the
alternative, the Company shall notify the Purchaser as to any Mortgage Loans
for which it has not procured the requisite contract and shall pay to the
Purchaser a fee for each such Mortgage Loan equal to the fee or premium that
is customarily charged for each such contract, as determined by the Purchaser
in its reasonable discretion;
(v) Flood Certifications. The Company shall have obtained a
life of loan, transferable flood certification contract for each Mortgage Loan
and shall assign all such contracts to the Purchaser or, in the alternative,
the Company shall notify the Purchaser as to any Mortgage Loans for which it
has not procured the flood certification referenced above and shall pay to the
Purchaser a fee for each such Mortgage Loan equal to the fee that is
customarily charged for each such contract, as determined by the Purchaser in
its reasonable discretion;
(vi) Notice to Mortgagors. The Company shall, no later than
fifteen (15) days prior to the related Servicing Transfer Date, inform in
writing all Mortgagors of the change in servicer from the Company to the
Purchaser, all in accordance with applicable law. The Company shall obtain the
Purchaser's approval of the form of such notifications prior to their mailing.
The Company acknowledges that the Purchaser's review of this notice shall not
be a review for statutory or regulatory compliance purposes, and that the
Company shall have the sole responsibility for such compliance. The Company
shall provide the Purchaser with a copy of one notification letter and an
officer's written certification that all Mortgagors have been notified by an
identical letter;
(vii) Payment of Real Estate Taxes. The Company shall make
or cause to be made all payments of all real estate taxes on the Mortgage
Loans which (i) will be delinquent on or prior to the related Servicing
Transfer Date, (ii) are required to be paid within thirty (30) days
-44-
after the related Servicing Transfer Date to receive a discount, or (iii) will
be delinquent within thirty (30) days after the related Servicing Transfer
Date. If tax bills have not been received by the Company by the related
Servicing Transfer Date on any Mortgage Loans subject to this subsection, the
Company shall obtain and pay all tax bills subsequent to the related Servicing
Transfer Date and the Purchaser will promptly reimburse the Company upon
receipt from the Company of documentation evidencing such payment. On
non-impounded accounts, the Company shall ensure that all taxes which would
otherwise be delinquent by the related Servicing Transfer Date, if not paid by
such date, have been paid. With respect to each of the Mortgage Loans which do
not have an impound or escrow account maintained for the payment of taxes and
insurance, the Company shall hold harmless and indemnify the Purchaser against
any and all costs, expenses, penalties, fines, damages and judgments of
whatever kind arising from the Company's failure to pay, or cause to be paid,
any delinquent taxes or tax penalties outstanding as of the related Servicing
Transfer Date;
(viii) Payment of Insurance Premiums. The Company shall pay
all hazard and flood insurance and Primary Mortgage Insurance Policy premiums
required to be paid prior to the related Servicing Transfer Date or within
thirty (30) days after the related Servicing Transfer Date on all impounded
accounts relating to the Mortgage Loans and shall ensure that all premiums
required to be paid prior to the related Servicing Transfer Date by the
Mortgagors on non-impounded accounts have been paid. With respect to each of
the Mortgage Loans which do not have an impound or escrow account maintained
for the payment of taxes and insurance, the Company shall hold harmless and
indemnify the Purchaser against any and all costs, expenses, penalties, fines,
damages and judgments of whatever kind arising from the Company's failure to
ensure that the related Mortgagor is maintaining adequate insurance coverage
on the Mortgaged Property at all times prior to the related Servicing Transfer
Date in accordance with the terms of any document contained in the Mortgage
File or any applicable law or regulation including, without limitation,
adequate flood insurance coverage for all Mortgaged Properties located within
an "A" or "V" flood hazard area;
(ix) ARM Adjustments. With respect to each adjustable rate
Mortgage Loan whose index value for any Interest Adjustment Date is available
on or prior to the related Servicing Transfer Date, the Company shall make all
such adjustments and shall inform the related Mortgagors of such adjustments;
and
(x) Notice to Sub-servicers. On or prior to the related
Closing Date, the Company shall inform by written notice all sub-servicers who
perform servicing obligations with respect to the Mortgage Loans of the sale
of the Mortgage Loans to the Purchaser and of the transfer of the Servicing
Rights to the Purchaser on the related Servicing Transfer Date. The Company
shall provide the Purchaser with a copy of the notification letter and an
officer's certification that all sub servicers have been notified by an
identical letter.
(b) Obligations of the Company after the Servicing Transfer
Date. Without limiting the generality of Section 14, the Company shall take,
or cause to be taken, the following actions with respect to the Mortgage Loans
within three (3) Business Days following the related Servicing Transfer Date
(or within such time as may otherwise be specified below):
-45-
(i) Tape. The Company shall furnish to the Purchaser all
available computer or like records requested by the Purchaser reflecting the
status of payments, balances and other pertinent information with respect to
the Mortgage Loans as of the related Servicing Transfer Date (including,
without limitation, (i) master file, (ii) escrow file, (iii) payee file, which
includes comprehensive tax and insurance information identifying payee, payee
address, next payment due date, next amount payable and policy number/parcel
number, (iv) ARM master file, (v) ARM history, and (vi) all HMDA data required
by the Agencies). Such records shall include magnetic tapes reflecting all
computer files maintained on the Mortgage Loans and shall include reports in
electronic format as specifically requested by the Purchaser;
(ii) Mortgage File. If the Company has not already done so,
the Company shall have forwarded a complete Mortgage File with respect to each
Mortgage Loan;
(iii) Accounting Reports. The Company shall furnish to the
Purchaser copies of all accounting reports relating to the Mortgage Loans as
of the related Servicing Transfer Date including, without limitation, a trial
balance and reports of collections, delinquencies, prepaids, curtailments,
escrow payments, escrow balances, partial payments, partial payment balances
and other like information with respect to the Mortgage Loans;
(iv) Other Documentation. The Company shall provide the
Purchaser any and all further documents reasonably required by the Purchaser
in order to fully transfer to the Purchaser possession of all tangible
evidence of the Servicing Rights and escrow, impound and trust funds
transferred hereunder;
(v) Transfer of Escrow Funds and Other Proceeds. The Company
shall transfer to the Purchaser, by wire transfer to the account designated by
the Purchaser, an amount equal to the sum of (i) the Net Escrow Payments, (ii)
all undistributed insurance loss draft funds, (iii) all unapplied funds
received by the Company, (iv) all unapplied interest on escrow balances
accrued through the related Servicing Transfer Date, (v) all buydown funds
held by the Company as of the related Servicing Transfer Date, and (vi) all
other amounts held by the Company with respect to the Mortgage Loans as of the
related Servicing Transfer Date for which the Company is not entitled to
retain (collectively, the "Escrow Proceeds"). Within five (5) Business Days
following the Purchaser's receipt of the Escrow Proceeds, the Company and the
Purchaser shall resolve any discrepancies between the Company's accounting
statement and the Purchaser's reconciliation with respect thereto. No later
than ten (10) Business Days following the related Servicing Transfer Date, the
Company or the Purchaser, as the case may be, shall transfer to the other, by
wire transfer to the designated account, any amounts to which the other party
is entitled; and
(vi) Mortgage Payments Received After Servicing Transfer
Date. The Company shall promptly forward to the Purchaser any payment received
by it after the related Servicing Transfer Date with respect to any of the
Mortgage Loans, whether such payment is in the form of principal, interest,
taxes, insurance, loss drafts, insurance refunds, etc., in the original form
received, unless such payment has been received in cash or by the Company's
lock box facility, in which case the Company shall forward such payment in a
form acceptable to the Purchaser. The Company shall notify the Purchaser of
the particulars of the payment, which
-46-
notification shall set forth sufficient
information to permit timely and appropriate processing of the payment by the
Purchaser.
(c) Limited Power of Attorney. If requested by Purchaser,
Company shall furnish to Purchaser a limited power of attorney in the form
attached here as Exhibit 10 appointing Purchaser and any of its employees to
act as Company's attorney in fact to execute documents pertaining to the
discharge and satisfaction of Mortgages which were recorded in Company's name
and to endorse checks received by the Purchaser from Mortgagor after the
related Servicing Transfer Date in the Company's name.
(d) Supplementary Information. From time to time prior to
the related Servicing Transfer Date for the servicing of any given Mortgage
Loan, Company shall furnish to Purchaser such information supplementary to the
information contained in the documents and schedules delivered pursuant hereto
and file such reports as purchaser may reasonably request.
(e) Reasonable Access. Between the date of this Agreement
and the related Servicing Transfer Date, Company shall give Purchaser its
authorized representatives reasonable access to all documents, files, books,
records, accounts, offices and other facilities of Company related to the
Mortgage Loans and Servicing Rights transferred hereby, and permit Purchaser
to make such inspections thereof as Purchaser may reasonably request during
normal business hours, provided, however, that such investigation or
inspection shall be conducted in such a manner as to not interfere
unreasonably with Company's business operations.
29. Successor to the Company. Prior to termination of the
Company's responsibilities and duties as interim servicer under this Agreement
pursuant to Section 13 or 14, the Purchaser shall (i) succeed to and assume
all of the Company's responsibilities, rights, duties and obligations as
interim servicer under this Agreement, or (ii) appoint a successor which shall
succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Company as interim servicer under this Agreement provided,
however, that the successor or surviving Person shall have a net worth of at
least $25,000,000. In connection with such appointment and assumption, the
Purchaser may make such arrangements for the compensation of such successor
out of payments on Mortgage Loans as it and such successor shall agree. In the
event that the Company's duties, responsibilities and liabilities as interim
servicer under this Agreement should be terminated pursuant to the
aforementioned Sections, the Company shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or
financial condition of the Purchaser or such successor. The termination of the
Company as interim servicer pursuant to the aforementioned Sections shall not
become effective until a successor shall be appointed pursuant to this Section
15 and shall in no event relieve the Company of the representations and
warranties made pursuant to Subsections 7.01 and 7.02 and the remedies
available to the Purchaser under Subsection 7.03 or 12.01, it being understood
and agreed that the provisions of such Subsections 7.01, 7.02, 7.03 or 12.01
shall be applicable to the Company notwithstanding any such resignation or
termination of the Company, or the termination of this Agreement. The
Successor Servicer shall be an intended third party beneficiary of this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of this Agreement.
-47-
30. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed, by registered or certified mail, return receipt requested, or by
overnight courier or facsimile, when received by the other party at the
address as follows:
(i) if to the Company:
First National Bank of Nevada
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secondary Marketing
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
First National Bank of Nevada
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Purchaser:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt, by signed receipt if by overnight courier,
or by written electronic confirmation if by facsimile).
31. Severability Clause. Any part, provision, representation
or warranty of this Agreement which is prohibited or which is held to be void
or unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any
part, provision, representation or warranty of this Agreement which is
prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereto waive any provision of law
which prohibits or renders void or unenforceable any provision hereof. If the
invalidity of any part, provision, representation or warranty of this
Agreement shall deprive any party of the economic benefit intended to be
-48-
conferred by this Agreement, the parties shall negotiate, in good faith, to
develop a structure the economic effect of which is nearly as possible the
same as the economic effect of this Agreement without regard to such
invalidity.
32. Counterparts. This Agreement and each Term Sheet 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.
33. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York without regard to any
conflicts of laws provisions.
34. Intention of the Parties. It is the intention of the
parties that the Purchaser is purchasing, and the Company is selling the
Mortgage Loans and the Servicing Rights, and not a debt instrument of the
Company or another security. Accordingly, the parties hereto each intend to
treat the transaction for federal income tax purposes as a sale by the
Company, and a purchase by the Purchaser, of the Mortgage Loans and the
Servicing Rights. The Purchaser shall have the right to review the Mortgage
Loans and the related Mortgage Loan Files to determine the characteristics of
the Mortgage Loans which shall affect the federal income tax consequences of
owning the Mortgage Loans and the Servicing Rights and the Company shall
cooperate with all reasonable requests made by the Purchaser in the course of
such review.
35. Successors and Assigns. This Agreement shall bind and
inure to the benefit of and be enforceable by the Company and the Purchaser
and the respective successors and assigns of the Company and the Purchaser.
The Purchaser may assign this Agreement to any Person to whom any Mortgage
Loan is transferred whether pursuant to a sale or financing and to any Person
to whom the servicing or master servicing of any Mortgage Loan is sold or
transferred. Upon any such assignment, the Person to whom such assignment is
made shall succeed to all rights and obligations of the Purchaser under this
Agreement. A form of such assignment is attached as Exhibit 8 hereto. This
Agreement shall not be assigned, pledged or hypothecated by the Company to a
third party without the consent of the Purchaser.
36. Waivers. No term or provision of this Agreement and a
Term Sheet may be waived or modified unless such waiver or modification is in
writing and signed by the party against whom such waiver or modification is
sought to be enforced.
37. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this
Agreement.
38. General Interpretive Principles. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(i) 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;
(ii) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
-49-
(iii) 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;
(iv) 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;
(v) the words "herein," "hereof," "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular provision;
(vi) the term "include" or "including" shall mean without
limitation by reason of enumeration; and
(vii) the headings used in this Agreement are for reference
purposes only and shall not have any effect on the substantive interpretation
of the provisions of this Agreement.
39. Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
40. Nonsolicitation. From and after the Closing Date, the
Company 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 on the Company's behalf, to personally, by telephone or mail,
solicit the borrower or obligor under any Mortgage Loan to refinance a
Mortgage Loan, in whole or in part, without (i) the prior written consent of
the Purchaser; or (ii) written notice from the related borrower or obligor
under a Mortgage Loan of such party's intention to refinance such Mortgage
Loan. It is understood and agreed that all rights and benefits relating to the
solicitation of any mortgagors to refinance any Mortgage Loans shall be
transferred to the Purchaser pursuant to this Purchase Agreement on the
Closing Date and the Company shall take no action to undermine these rights
and benefits. The Company shall (a) not sell the name of any Mortgagor, and
(b) use its best efforts to prevent the sale of the name of any Mortgagor by
the Company's wholly owned subsidiaries and affiliates, to any person or
entity for the direct or indirect purpose of allowing such person or entity to
solicit the refinancing of any Mortgage Loan. Notwithstanding the foregoing,
it is understood and agreed that promotions undertaken by the Company or any
affiliate of the Company which are directed to the general public at large,
including, without limitation, mass mailing, internet, and email solicitations
based, in all instances, on commercially acquired mailing lists (which may not
be specifically targeted at the Mortgagors,) and newspaper, radio and
television advertisements shall not constitute solicitation under this Section
26.
-50-
41. Survival. All covenants, agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement.
42. Integration. This Agreement and the applicable Term
Sheet contain the entire understanding and agreement of the parties hereto
with respect to the subject matter hereof and supercede any prior or
contemporaneous understandings, agreements, covenants, statements,
representations or warranties, if any, with regard to the subject matter
hereof. If there is any conflict between the terms of this Agreement and any
Term Sheet dated subsequent to this Agreement, the provisions of such Term
Sheet shall control with respect to Mortgage Loans sold pursuant to such Term
Sheet.
43. Availability of Information. The Purchaser agrees to
make available, or to cause any servicer of the Mortgage Loans to make
available, to the Company on a monthly basis, any information relating to the
performance of the Mortgage Loans, including, without limitation, delinquency,
default and prepayment information. Such information may be provided in a form
convenient to Purchaser or servicer, as the case may be.
44. Loan Sales and Securitization. With respect to the
Mortgage Loans, the Company and the Purchaser acknowledge and agree that the
Purchaser or any prospective purchaser may sell or transfer from time to time
some or all of the Mortgage Loans or the related Servicing Rights to one or
more purchasers in connection with whole loan sales, servicing rights sales
and/or securitizations of the Mortgage Loans (each, a "Transaction"). With
respect to any such Transaction, the Company shall use its reasonable best
efforts to assist the Purchaser, and any prospective purchaser, if the
Purchaser or such prospective purchaser so requests, in connection with each
Transaction, which assistance shall include, but not be limited to, (i)
providing any information relating to the Mortgage Loans necessary to assist
in the preparation of any disclosure documents, and (ii) restating certain
representations and warranties as set forth in the Purchase Agreement as to
the Company and the Mortgage Loans on the date of the Transaction as of the
related Closing Date. The Company agrees to enter into an assignment,
assumption and recognition agreement pursuant to which the Company assigns the
certain restated representations and warranties and remedies to the
Transaction as of the related Closing Date. The Company shall indemnify the
Purchaser, each Affiliate of the Purchaser participating in any such
Transaction, each person who controls the Purchaser or such Affiliate, and the
successor servicer and hold them harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that the Purchaser or
the successor servicer may sustain in any way related to the provision by the
Company of any information regarding the Company, the Mortgage Loans, or the
servicing thereof, or the Company's Underwriting Guidelines attached hereto in
connection with any Transaction. For purposes of the previous sentence,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement.
45. Confidential Information. The Company understands and
agrees that this Agreement, any other agreements executed in connection with
the sale contemplated hereunder, any agreements executed in connection with
the securitization of the Mortgage Loans, and any offering circulars or other
disclosure documents produced in connection with such securitization are
confidential and proprietary to the Purchaser, and the Company agrees to hold
such
-51-
documents confidential and not to divulge such documents to anyone except (a)
to the extent required by law or judicial order or to enforce its rights or
remedies under this letter agreement or the Agreements, (b) to the extent such
information enters into the public domain other than through the wrongful act
of the Company, or (c) as is necessary in working with legal counsel,
auditors, agents, taxing authorities or other governmental agencies. The
rights and obligations set forth in this paragraph shall survive the Closing
Date and shall not merge into the closing documents but shall be independently
enforceable by the parties hereto.
46. Compliance with Regulation AB
(a) Intent of the Parties; Reasonableness. T The Purchaser
and the Company acknowledge and agree that the purpose of Section 32 of this
Agreement is, by cooperating in good faith with the Purchaser, to enable the
Purchaser and any Depositor designated by the Purchaser to comply with the
provisions of Regulation AB and related rules and regulations of the
Commission. Although Regulation AB is applicable by its terms only to
offerings of asset-backed securities that are registered under the Securities
Act, the Company acknowledges that investors in privately offered securities
may require that the Purchaser or any Depositor provide comparable disclosure
in unregistered offerings. References in this Agreement to compliance with
Regulation AB include provision of comparable disclosure in private offerings.
Neither the Purchaser nor any Depositor shall exercise its
right to request delivery of information or other performance under these
provisions other than in good faith, or for purposes other than compliance
with the Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder (or the provision in a private offering of disclosure
comparable to that required under the Securities Act). The Company
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to cooperate
in good faith to comply with requests made by the Purchaser or any Depositor
in good faith for delivery of information under these provisions on the basis
of evolving interpretations of Regulation AB. In connection with any
Securitization Transaction, the Company shall cooperate in good faith with the
Purchaser to deliver to the Purchaser (including any of its assignees or
designees) and any Depositor, any and all statements, reports, certifications,
records and any other information necessary in the good faith determination of
the Purchaser or any Depositor to permit the Purchaser or such Depositor to
comply with the provisions of Regulation AB, together with such disclosures
relating to the Company, any Third-Party Originator and the Mortgage Loans, or
the servicing of the Mortgage Loans, reasonably believed by the Purchaser or
any Depositor to be necessary in order to effect such compliance.
The Purchaser (including any of its assignees or designees)
shall cooperate with the Company by providing timely notice of requests for
information under these provisions and by reasonably limiting such requests to
information required, in the Purchaser's reasonable judgment, to strictly
comply with Regulation AB.
-52-
(b) Additional Representations and Warranties of the
Company.
(i) If the mortgage loans of the Company in a single
Securitization Transaction constitute 20% or more of the applicable pool of
mortgage loans, the Company shall, if so requested by the Purchaser, represent
to the Purchaser and to any Depositor, as of the date on which information is
first provided to the Purchaser or any Depositor under Subsection 32.03 that,
except as disclosed in writing to the Purchaser or such Depositor prior to
such date: (i) there are no material legal or governmental proceedings pending
(or known to be contemplated) against the Company or any Third-Party
Originator; which would be material to a securityholder under the related
Securitization Transaction and (ii) there are no affiliations, relationships
or transactions relating to the Company or any Third-Party Originator with
respect to any Securitization Transaction and any party thereto identified by
the related Depositor of a type described in Item 1119 of Regulation AB.
(ii) If so requested by the Purchaser or any Depositor on
any date following the date on which information is first provided to the
Purchaser or any Depositor under Subsection 32.03, the Company shall, within
five Business Days following such request, confirm in writing the accuracy of
the representations and warranties set forth in paragraph (a) of this Section
or, if any such representation and warranty is not accurate as of the date of
such request, provide reasonably adequate disclosure of the pertinent facts,
in writing, to the requesting party.
(c) Information to Be Provided by the Company. In connection
with any Securitization Transaction the Company shall (i) within five Business
Days following request by the Purchaser or any Depositor, provide to the
Purchaser and such Depositor (or, as applicable, cause each Third-Party
Originator to provide), in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor, the information and
materials specified in paragraphs (a) and (b) of this Section, and (ii) as
promptly as practicable following notice to or discovery by the Company,
provide to the Purchaser and any Depositor (in writing and in form and
substance reasonably satisfactory to the Purchaser and such Depositor) the
information specified in paragraph (d) of this Section.
(i) If so requested by the Purchaser in connection with a
pool of Mortgage Loans of the Company in a single Securitization Transaction
which constitute 20% or more of the applicable pool of Mortgage Loans, the
Company shall provide such information regarding (i) the Company, as
originator of the Mortgage Loans (including as an acquirer of Mortgage Loans
from a Qualified Correspondent), or (ii) each Third-Party Originator, as is
requested for the purpose of compliance with Items 1103(a)(1), 1105, 1110,
1117 and 1119 of Regulation AB. Such information shall include, at a minimum:
the originator's form of organization;
a description of the originator's origination
program and how long the originator has been engaged in
originating residential mortgage loans, which description
shall include a discussion of the originator's experience in
originating mortgage loans of a similar type as the Mortgage
Loans; information regarding the size and composition of the
originator's origination portfolio; and information that may
be material, in the good faith judgment of the Purchaser or
any
-53-
Depositor, to an analysis of the performance of the Mortgage
Loans, including the originators' credit-granting or
underwriting criteria for mortgage loans of similar type(s)
as the Mortgage Loans and such other information as the
Purchaser or any Depositor may reasonably request for the
purpose of compliance with Item 1110(b)(2) of Regulation AB;
a description of any legal or governmental
proceedings pending (or known to be contemplated) against
the Company and each Third-Party Originator which would be
material to a securityholder under the related
Securitization Transaction; and
a description of any affiliation or relationship
between the Company, each Third-Party Originator and any of
the following parties to a Securitization Transaction, as
such parties are identified to the Company by the Purchaser
or any Depositor in writing in advance of such
Securitization Transaction:
the sponsor;
the depositor;
the issuing entity;
any servicer;
any trustee;
any originator;
any significant obligor;
any enhancement or support provider; and
any other material transaction party.
(ii) If so requested by the Purchaser or any Depositor, the
Company shall provide (or, as applicable, cause each Third-Party Originator to
provide) Static Pool Information, to the extent it can obtain such Static Pool
Information with commercially reasonable efforts, respect to the mortgage
loans (of a similar type as the Mortgage Loans, as reasonably identified by
the Purchaser as provided below) originated by (i) the Company, if the Company
is an originator of Mortgage Loans (including as an acquirer of Mortgage Loans
from a Qualified Correspondent), and/or (ii) each Third-Party Originator. Such
Static Pool Information shall be prepared by the Company (or Third-Party
Originator) on the basis of its reasonable, good faith interpretation of the
requirements of Item 1105(a)(1)-(3) of Regulation AB. To the extent that there
is reasonably available to the Company (or Third-Party Originator) Static Pool
Information with respect to more than one mortgage loan type, the Purchaser or
any Depositor shall be entitled to specify whether some or all of such
information shall be provided pursuant to this paragraph. The content of such
Static Pool Information may be in the form customarily provided by the
Company, and need not be customized for the Purchaser or any Depositor. Such
Static Pool Information for each vintage origination year or prior securitized
pool, as applicable, shall be presented in increments no less frequently than
quarterly over the life of the mortgage loans included in the vintage
origination year or prior securitized pool. The most recent periodic increment
must be as of a date no later than 135 days prior to the date of the
prospectus or other offering document in which the Static Pool Information is
to be included or incorporated by reference. The Static Pool Information shall
be provided in an electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf) file, or
-54-
other such electronic format reasonably required by the Purchaser or the
Depositor, as applicable.
Promptly following notice or discovery of a material error
in Static Pool Information provided pursuant to the immediately preceding
paragraph (including an omission to include therein information required to be
provided pursuant to such paragraph), the Company shall provide corrected
Static Pool Information to the Purchaser or any Depositor, as applicable, in
the same format in which Static Pool Information was previously provided to
such party by the Company.
If so requested by the Purchaser or any Depositor, the
Company shall provide (or, as applicable, cause each Third-Party Originator to
provide), at the expense of the requesting party (to the extent of any
additional incremental expense associated with delivery pursuant to this
Agreement), such agreed-upon procedures letters of certified public
accountants reasonably acceptable to the Purchaser or Depositor, as
applicable, pertaining to Static Pool Information relating to prior
securitized pools for securitizations closed on or after January 1, 2006 or,
in the case of Static Pool Information with respect to the Company's or
Third-Party Originator's originations or purchases, to calendar months
commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such statements and letters shall be addressed to and be
for the benefit of such parties as the Purchaser or such Depositor shall
designate, which may include, by way of example, any Sponsor, any Depositor
and any broker dealer acting as underwriter, placement agent or initial
purchaser with respect to a Securitization Transaction. Any such statement or
letter may take the form of a standard, generally applicable document
accompanied by a reliance letter authorizing reliance by the addressees
designated by the Purchaser or such Depositor.
(iii) [Reserved]
(iv) If so requested by the Purchaser or any Depositor for
the purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Company shall (or shall
cause each Third-Party Originator to) (i) notify the Purchaser and any
Depositor in writing of (A) any litigation or governmental proceedings pending
against the Company or any Third-Party Originator which would be material to a
securityholder and (B) any affiliations or relationships that develop
following the closing date of a Securitization Transaction between the Company
or any Third-Party Originator and any of the parties specified in clause (D)
of paragraph (a) of this Section (and any other parties identified in writing
by the requesting party) with respect to such Securitization Transaction, and
(ii) provide to the Purchaser and any Depositor a description of such
proceedings, affiliations or relationships.
(d) Indemnification. The Company shall indemnify the
Purchaser, each affiliate of the Purchaser, and each of the following parties
participating in a Securitization Transaction: each sponsor and issuing
entity; each Person responsible for the preparation, execution or filing of
any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to
Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction; each broker dealer acting as underwriter,
placement agent or initial purchaser, each Person who controls any
-55-
of such parties or the Depositor (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); and the respective present
and former directors, officers, employees and agents of each of the foregoing
and of the Depositor, and shall hold each of them harmless from and against
any losses, damages, penalties, fines, forfeitures, legal fees and expenses
and related costs, judgments, and any other costs, fees and expenses that any
of them may sustain arising out of or based upon:
any untrue statement of a material fact contained in any
information, report, certification, accountants' letter or other
material provided under this Section 32 by or on behalf of the
Company, or provided under this Section 32 by or on behalf of any
Third-Party Originator (collectively, the "Company Information"), or
(B) the omission to state in the Company Information a material fact
required to be stated in the Company Information or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
by way of clarification, that clause (B) of this paragraph shall be
construed solely by reference to the Company Information and not to
any other information communicated in connection with a sale or
purchase of securities, without regard to whether the Company
Information or any portion thereof is presented together with or
separately from such other information;
any failure by the Company or any Third-Party Originator to
deliver any information, report, certification, accountants' letter
or other material when and as required under this Section 32; or
any breach by the Company of a representation or warranty
set forth in Subsection 32.02(a) or in a writing furnished pursuant
to Subsection 32.02(b) and made as of a date prior to the closing
date of the related Securitization Transaction, to the extent that
such breach is not cured by such closing date, or any breach by the
Company of a representation or warranty in a writing furnished
pursuant to Subsection 32.02(b) to the extent made as of a date
subsequent to such closing date.
In the case of any failure of performance described in
clause (a)(ii) of this Section, the Company shall promptly reimburse the
Purchaser, any Depositor, as applicable, and each Person responsible for the
preparation, execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or for execution
of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with respect to such Securitization Transaction, for all costs
reasonably incurred by each such party in order to obtain the information,
report, certification, accountants' letter or other material not delivered as
required by the Company or any Third-Party Originator.
-56-
IN WITNESS WHEREOF, the Company and the Purchaser have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the date first above written.
FIRST NATIONAL BANK OF NEVADA
Company
By: ____________________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY, a New York
limited partnership
Purchaser
By: ▇▇▇▇▇▇▇ SACHS REAL ESTATE FUNDING
CORP., a New York corporation, as
General Partner
By: ________________________________________
Name:
Title:
EXHIBIT 1
---------
FORM OF TERM SHEET
This TERM SHEET (the "Term Sheet") dated _____________,
between First National Bank of Nevada, a national association, located at
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Company") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, a New York limited partnership,
located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Purchaser") is made
pursuant to the terms and conditions of that certain Amended and Restated
Mortgage Loan Purchase and Interim Servicing Agreement (the "Agreement") dated
as of November 1, 2005, between the Company and the Purchaser, the provisions
of which are incorporated herein as if set forth in full herein, as such terms
and conditions may be modified or supplemented hereby. All initially
capitalized terms used herein unless otherwise defined shall have the meanings
ascribed thereto in the Agreement.
The Purchaser hereby purchases from the Company and the
Company hereby sells to the Purchaser, all of the Company's right, title and
interest in and to the Mortgage Loans described on the Mortgage Loan Schedule
annexed hereto as Schedule I, pursuant to and in accordance with the terms and
conditions set forth in the Agreement, as same may be supplemented or modified
hereby. Hereinafter, the Company shall service the Mortgage Loans for the
benefit of the Purchaser and all subsequent transferees of the Mortgage Loans
pursuant to and in accordance with the terms and conditions set forth in the
Agreement.
1._______Definitions
For purposes of the Mortgage Loans to be sold pursuant to
this Term Sheet, the following terms shall have the following meanings:
Aggregate Principal Balance
(as of the Cut-Off Date): $[________]
------------------------
Closing Date: [__________]
------------
Cut-off Date: [__________]
------------
Initial Weighted Average
Mortgage Loan Remittance Rate: [__________]
-----------------------------
Mortgage Loan: [__________]
-------------
Purchase Price Percentage: [__________]
-------------------------
Servicing Transfer Date: [__________]
-----------------------
Additional Closing Conditions: [__________]
-----------------------------
Exh. 1-1
In addition to the conditions specified in the Agreement, the obligation of
each of the Company and the Purchaser is subject to the fulfillment, on or
prior to the applicable Closing Date, of the following additional conditions:
[None].
Additional Loan Documents: [__________]
-------------------------
In addition to the contents of the Mortgage File specified in the Agreement,
the following documents shall be delivered with respect to the Mortgage Loans:
[None]
[Additional] [Modification] of Representations and Warranties:
-------------------------------------------------------------
[In addition to the representations and warranties set forth in the Agreement,
as of the date hereof, the Company makes the following additional
representations and warranties with respect to the Mortgage Loans: [None].
[Notwithstanding anything to the contrary set forth in the Agreement, with
respect to each Mortgage Loan to be sold on the Closing Date, the
representation and warranty set forth in Section ______ of the Agreement shall
be modified to read as follows:]
[(a) As of the related Closing Date, all of the Mortgage Loans will have an
actual paid-to-date of [____________] (or later) and will be due for the
[__________] scheduled monthly payment (or later).]
Except as modified herein, Section ______ of the Agreement shall remain in
full force and effect as of the date hereof.
Exh. 1-2
IN WITNESS WHEREOF, the parties hereto have caused their
names to be signed hereto by their respective duly authorized officers as of
the date first above written.
FIRST NATIONAL BANK OF NEVADA
By: ____________________________________________
Name:
Title:
▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY, a New York
limited partnership
Purchaser
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ REAL ESTATE FUNDING
CORP., a New York corporation, as
General Partner
By: ________________________________________
Name:
Title:
Exh. 1-3
SCHEDULE I
----------
MORTGAGE LOAN SCHEDULE
Sch. I-1
EXHIBIT 2
---------
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include each of
the following items, which shall be available for inspection by the Purchaser
and which shall be delivered to the Purchaser or upon Purchaser's request its
designee:
1._______Mortgage Loan Documents.
2. Residential loan application.
3. Mortgage Loan closing statement.
4. Verification of employment and income, if applicable.
5. Verification of acceptable evidence of source and amount of
down payment, if applicable.
6. Credit report on Mortgagor.
7. Residential appraisal report.
8. Photograph of the Mortgaged Property.
9. Survey of the Mortgaged Property.
10. Copy of each instrument necessary to complete identification
of any exception set forth in the exception schedule in the
title policy, i.e., map or plat, restrictions, easements,
sewer agreements, home association declarations, etc.
11. All required disclosure statements and statement of
Mortgagor confirming receipt thereof.
12. If available, termite report, structural engineer's report,
water portability and septic certification.
13. Sales Contract, if applicable.
14. Hazard insurance policy.
15. Tax receipts, insurance premium receipts, ledger sheets,
payment history from date of origination, insurance claim
files, correspondence, current and historical computerized
data files, and all other processing, underwriting and
closing papers and records which are customarily contained
in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
16. Amortization schedule, if available.
17. Payment history for each of the Mortgage Loans.
Exh. 2-1
EXHIBIT 3
---------
FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
____________________ __, 2004
To: ____________________
(the "Depository")
As the Company under the Amended and Restated Mortgage Loan
Purchase and Interim Servicing Agreement, dated as of November 1, 2005, we
hereby authorize and request you to establish an account, as a Custodial
Account, to be designated as "__________, in trust for the Purchaser and
various Mortgagors, Mortgage Loans, P&I Account." All deposits in the account
shall be subject to withdrawal therefrom by order signed by the Company. 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.
[_________________]
By: ___________________________________________
Name:
Title:
Date:
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.
Depository
By: ____________________________________________
Name:
Title:
Date:
Exh. 3-1
EXHIBIT 4
--------
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
____________________ __, 2004
To: ____________________
(the "Depository")
As the Company under the Amended and Restated Mortgage Loan
Purchase and Interim Servicing Agreement, dated as of November 1, 2005, we
hereby authorize and request you to establish an account, as an Escrow
Account, to be designated as "_____________, in trust for the Purchaser and
various Mortgagors, Mortgage Loans, T&I Account." All deposits in the account
shall be subject to withdrawal therefrom by order signed by the Company. 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.
[_________________]
By: ___________________________________________
Name:
Title:
Date:
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.
Depository
By: ____________________________________________
Name:
Title:
Date:
Exh. 4-1
EXHIBIT 5
---------
SERVICING ADDENDUM
SECTION 11. Servicing.
---------
Subsection 11.00 Additional Definitions.
----------------------
Ancillary Income: Additional servicing compensation in the
form of assumption fees, late payment charges and other miscellaneous fees.
Prepayment penalties or premiums due in connection with a Principal Prepayment
shall not constitute Ancillary Income and shall be deposited in the Custodial
Account as set forth in Subsection 11.04. The Company's right to Ancillary
Income shall terminate on the Servicing Transfer Date.
BIF: The Bank Insurance Fund, or any successor thereto.
Code: The Internal Revenue Code of 1986, or any successor
statute thereto.
Determination Date: With respect to each Distribution Date,
the close of business of the last day of the month preceding the month in
which such Distribution Date occurs.
Distribution Date: The fifth (5th) Business Day of each
month, commencing on the fifth (5th) Business Day of the month next following
the month in which the Cut-off Date occurs.
Final Recovery Determination: With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Company pursuant to this Agreement), a determination made by
the Company that all Insurance Proceeds, Liquidation Proceeds and other
payments or recoveries which the Company, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Company shall maintain records, prepared by a servicing officer
of the Company, of each Final Recovery Determination.
Interim Servicing Fee: With respect to each Mortgage Loan,
the amount of the servicing fee the Purchaser shall pay to the Company, which
shall, for each month, be equal to $12.00 per Mortgage Loan per month plus.
Such fee shall be payable monthly. If the Interim Servicing Period includes
any partial calendar month, the Interim Servicing Fee for such month shall be
pro rated at a per diem rate based upon a 30 day month. For each Mortgage
Loan, such servicing fee will be payable solely from amounts representing
interest actually received by the Company from the related Mortgagor.
Permitted Investments: Any one or more of the following
obligations or securities:
(i) direct obligations of, and obligations fully guaranteed
by the United States of
▇▇▇. ▇-▇
▇▇▇▇▇▇▇ 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;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated 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, provided that the commercial paper
and/or the short-term deposit rating and/or the long-term unsecured
debt obligations or deposits of such depository institution or trust
company at the time of such investment or contractual commitment
providing for such investment are rated in one of the two highest
rating categories by each Rating Agency and (b) any other demand or
time deposit or certificate of deposit that is fully insured by the
FDIC;
(iii) repurchase obligations with a term not to exceed
thirty (30) days and with respect to (a) any security described in
clause (i) above and entered into with a depository institution or
trust company (acting as principal) described in clause (ii)(a)
above;
(iv) securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States of America or any state thereof that are rated in one of the
two highest rating categories by each Rating Agency at the time of
such investment or contractual commitment providing for such
investment; provided, however, that securities issued by any
particular corporation will not be Permitted Investments to the
extent that investments therein will cause the then outstanding
principal amount of securities issued by such corporation and held as
Permitted Investments to exceed 10% of the aggregate outstanding
principal balances of all of the Mortgage Loans and Permitted
Investments;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than one year after the date
of issuance thereof) which are rated in one of the two highest rating
categories by each Rating Agency at the time of such investment;
(vi) any other demand, money market or time deposit,
obligation, security or investment as may be acceptable to each
Rating Agency as evidenced in writing by each Rating Agency; and
(vii) any money market funds the collateral of which
consists of 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 (which may include repurchase
obligations secured by collateral described in clause (i)) and other
securities and which money market funds are rated in one of the two
highest rating categories by each Rating Agency.
Exh. 5-2
provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument
or if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
investment or security is purchased at a price greater than par.
Prime Rate: The prime rate announced to be in effect from
time to time as published as the average rate in the Wall Street Journal
(Northeast Edition).
Qualified Depository: A depository, the accounts of which
are insured by the FDIC through the BIF or the SAIF and the short term debt
ratings and the long term deposit ratings of which are rated in the highest
rating category by each Rating Agency.
REMIC: A "real estate mortgage investment conduit" as such
term is defined in the Code, as amended.
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Company of its interim
servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement, administrative or judicial proceedings, or any legal work or
advice specifically related to servicing the Mortgage Loans, including but not
limited to, foreclosures, bankruptcies, condemnations, drug seizures,
elections, foreclosures by subordinate or superior lienholders, and other
legal actions incidental to the interim servicing of the Mortgage Loans
(provided that such expenses are reasonable and that the Company specifies the
Mortgage Loan(s) to which such expenses relate and, upon Purchaser's request,
provides documentation supporting such expense (which documentation would be
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac), and provided further that any such
enforcement, administrative or judicial proceeding does not arise out of a
breach of any representation, warranty or covenant of the Company hereunder),
(c) the management and liquidation of the Mortgaged Property if the Mortgaged
Property is acquired in full or partial satisfaction of the Mortgage, (d)
taxes, assessments, water rates, sewer rates and other charges which are or
may become a lien upon the Mortgaged Property, and Primary Mortgage Insurance
Policy premiums and fire and hazard insurance coverage, (e) any expenses
reasonably sustained by the Company with respect to the liquidation of the
Mortgaged Property in accordance with the terms of this Agreement and (f)
compliance with the obligations under this Agreement.
Subsection 11.01 Company to Act as Servicer.
Company, as independent contract servicer, shall interim
service and administer the Mortgage Loans in accordance with Accepted
Servicing Practices and this Agreement and shall have full power and
authority, acting alone, to do or cause to be done any and all things in
connection with such servicing and administration which the Company may deem
necessary or desirable and consistent with the terms of this Agreement.
Without limiting the generality of the foregoing, the Company shall not take,
or fail to take, any action which would result in the Purchaser's interest in
the Mortgage Loans being adversely affected.
Exh. 5-3
Consistent with the terms of this Agreement and Accepted
Servicing Practices, the Company may waive, modify or vary any term of any
Mortgage Loan or consent to the postponement of strict compliance with any
such term or in any manner grant indulgence to any Mortgagor if in the
Company's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Purchaser;
provided, however, that unless the Company has obtained the prior written
consent of the Purchaser, the Company shall not permit any modification with
respect to any Mortgage Loan that would change the Mortgage Interest Rate,
defer or forgive the payment thereof or of any principal or interest payments,
reduce the outstanding principal amount (except for actual payments of
principal), make additional advances of additional principal or extend the
final maturity date on such Mortgage Loan. Without limiting the generality of
the foregoing, during the Interim Servicing Period the Company shall continue,
and is hereby authorized and empowered, to execute and deliver on behalf of
itself, and the Purchaser, all instruments of satisfaction or cancellation, or
of partial or full release, discharge and all other comparable instruments,
with respect to the Mortgage Loans and with respect to the Mortgaged Property.
If required by the Company, the Purchaser shall furnish the Company with
powers of attorney at the Purchaser's option and other documents necessary or
appropriate to enable the Company to carry out its servicing and
administrative duties under this Agreement.
In interim servicing and administering the Mortgage Loans,
the Company shall employ procedures including collection procedures and
exercise the same care that it customarily employs and exercises in servicing
and administering mortgage loans for its own account giving due consideration
to Accepted Servicing Practices. If Company elects to utilize a subservicer to
perform any or all of Company's duties hereunder, Company shall remain liable
as though such duties were performed directly by Company and Company shall be
responsible for the payment of any and all fees of any such subservicer.
Subsection 11.02 Collection of Mortgage Loan Payments.
Continuously from the related Closing Date until the related
Servicing Transfer Date, the Company shall proceed diligently to collect all
payments due under each Mortgage Loan when the same shall become due and
payable and shall, to the extent such procedures shall be consistent with this
Agreement and the terms and provisions of any related Primary Mortgage
Insurance Policy, follow such collection procedures as it follows with respect
to mortgage loans comparable to the Mortgage Loans and held for its own
account. Further, the Company shall take special care in ascertaining and
estimating annual ground rents, taxes, assessments, water rates, fire and
hazard insurance premiums, mortgage insurance premiums, and all other charges
that, as provided in the Mortgage, will become due and payable 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.
Subsection 11.03 Realization Upon Defaulted Mortgage Loans.
(a) The Company shall use its best efforts, consistent with
the procedures that the Company would use in servicing loans for its own
account, to foreclose upon or otherwise comparably convert the ownership of
such Mortgaged Properties as come into and continue in default and as to which
no satisfactory arrangements can be made for collection of delinquent
Exh. 5-4
payments pursuant to Subsection 11.01. The Company shall use its best efforts
to realize upon defaulted Mortgage Loans in such a manner as will maximize the
receipt of principal and interest by the Purchaser, taking into account, among
other things, the timing of foreclosure proceedings. The foregoing is subject
to the provisions that, in any case in which Mortgaged Property shall have
suffered damage, the Company shall not be required to expend its own funds
toward the restoration of such property unless it shall determine in its
discretion (i) that such restoration will increase the proceeds of liquidation
of the related Mortgage Loan to the Purchaser after reimbursement to itself
for such expenses, and (ii) that such expenses will be recoverable by the
Company through Insurance Proceeds or Liquidation Proceeds from the related
Mortgaged Property, as contemplated in Subsection 11.05. In the event that any
payment due under any Mortgage Loan 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 Company shall take such action as it shall deem
to be in the best interest of the Purchaser. If a Mortgage Loan becomes sixty
(60) or more days delinquent or subject to a foreclosure proceeding, then with
respect to the Servicing Rights to such Mortgage Loan the related Servicing
Transfer Date shall be the close of business on the next Business Day if so
requested by the Purchaser. In the event that any payment due under any
Mortgage Loan remains delinquent for a period of ninety (90) days or more, and
the Purchaser has not exercised its right to accelerate the related Servicing
Transfer Date as described in the previous sentence, the Company shall
commence foreclosure proceedings, provided that prior to commencing
foreclosure proceedings, the Company shall notify the Purchaser in writing of
the Company's intention to do so, and the Company shall not commence
foreclosure proceedings if the Purchaser objects to such action within ten
(10) Business Days of receiving such notice. The Company shall notify the
Purchaser in writing of the commencement of foreclosure proceedings. In such
connection, the Company shall be responsible for all costs and expenses
incurred by it in any such proceedings; provided, however, that it shall be
entitled to reimbursement thereof from the related Mortgaged Property, as
contemplated in Subsection 11.05.
(b) Notwithstanding the foregoing provisions of this Subsection
11.03, with respect to any Mortgage Loan as to which the Company has received
actual notice of, or has actual knowledge of, the presence of any toxic or
hazardous substance on the related Mortgaged Property, the Company shall not
either (i) obtain title to such Mortgaged Property as a result of or in lieu
of foreclosure or otherwise, or (ii) otherwise acquire possession of, or take
any other action, with respect to, such Mortgaged Property if, as a result of
any such action, the Purchaser would be considered to hold title to, to be a
mortgagee-in-possession of, or to be an owner or operator of such Mortgaged
Property within the meaning of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, or any
comparable law, unless the Company has received approval from the Purchaser
and has also previously determined, based on its reasonable judgment and a
prudent report prepared by a Person who regularly conducts environmental
audits using customary industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Purchaser to take such actions as are necessary to
bring the Mortgaged Property into compliance therewith; and
Exh. 5-5
(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based
materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any federal, state or
local law or regulation, or that if any such materials are present
for which such action could be required, that it would be in the best
economic interest of the Purchaser to take such actions with respect
to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by
this Subsection 11.03 shall be advanced by the Company, subject to the
Company's right to be reimbursed therefor from the Custodial Account as
provided in Subsection 11.05(vii).
If the Company determines, in consultation with the
Purchaser, as described above, that it is in the best economic interest of the
Purchaser to take such actions as are necessary to bring any such Mortgaged
Property into compliance with applicable environmental laws, or to take such
action with respect to the containment, clean-up or remediation of hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based
materials affecting any such Mortgaged Property, then the Company shall take
such action as it deems to be in the best economic interest of the Purchaser.
The cost of any such compliance, containment, cleanup or remediation shall be
advanced by the Company, subject to the Company's right to be reimbursed
therefor from the Custodial Account as provided in Subsection 11.05(vii).
(c) The Company shall also promptly notify the Purchaser
upon learning of any state insolvency or federal bankruptcy proceedings in
which any Mortgagor is seeking relief or is the defendant debtor, or of the
death or incapacity or any Mortgagor or guarantor.
Subsection 11.04 Establishment of Custodial Accounts;
Deposits in Custodial Accounts.
The Company shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more
Custodial Accounts, with a Qualified Depository, in the form of time deposit
or demand accounts. Funds deposited in the Custodial Account shall at all
times be insured by the FDIC up to the FDIC insurance limits, or must be
invested in Permitted Investments for the benefit of the Purchaser. Upon the
request of the Purchaser, the Company shall deliver to the Purchaser a
Custodial Account Letter Agreement in the form of Exhibit 3.
The Company shall deposit in the Custodial Account on a
daily basis within two Business Days of receipt, and retain therein the
following payments and collections received by it subsequent to the related
Cut off Date:
(i) all payments on account of principal including Principal
Prepayments (and any prepayment penalty fees collected from Mortgagors for any
Principal Prepayments) on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage
Loans;
Exh. 5-6
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Subsections 11.10 and 11.11, other than proceeds to be
held in the Escrow Account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with Accepted
Servicing Practices, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged
Property which are not released to the Mortgagor in accordance with Accepted
Servicing Practices, the loan documents or applicable law;
(vi) all proceeds of any Mortgage Loan repurchased in
accordance with Subsection 7.03;
(vii) any amounts required to be deposited by the Company
pursuant to Subsection 11.11 in connection with the deductible clause in any
blanket hazard insurance policy. Such deposit shall be made from the Company's
own funds, without reimbursement therefor;
(viii) any amounts required to be deposited by the Company
in connection with any REO Property pursuant to Subsection 11.13; and
(ix) any amounts required to be deposited in the Custodial
Account pursuant to Subsections 11.19 or 11.20.
The foregoing requirements for deposit in the Custodial
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, Ancillary Income need not be
deposited by the Company in the Custodial Account. Such Custodial Account
shall be an Eligible Account. Any interest or earnings on funds deposited in
the Custodial Account by the depository institution shall accrue to the
benefit of the Company and the Company shall be entitled to retain and
withdraw such interest from the Custodial Account pursuant to Subsection
11.05(iv). The Company shall give notice to the Purchaser of the location of
the Custodial Account when established and prior to any change thereof.
Subsection 11.05 Permitted Withdrawals From the Custodial
Account.
The Company may, from time to time, withdraw from the
Custodial Account for the following purposes:
(i) to make distributions to the Servicing Rights Owner in
the amounts and in the manner provided for in Subsection 11.14;
(ii) to reimburse itself for unreimbursed Servicing
Advances, the Company's right to reimburse itself pursuant to this subclause
(ii) with respect to any Mortgage Loan being limited to related Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds and such other amounts as
may be collected by the Company from the Mortgagor or otherwise relating to
the Mortgage Loan, it being understood that, in the case of such
reimbursement, the Company's right thereto shall be prior to the rights of the
Purchaser, except that, where the Company is
Exh. 5-7
required to repurchase a Mortgage Loan, pursuant to Subsection 7.03, the
Company's right to such reimbursement shall be subsequent to the payment to
the Purchaser of the Repurchase Price pursuant to Subsection 7.03 and all
other amounts required to be paid to the Purchaser with respect to such
Mortgage Loans;
(iii) to pay to itself pursuant to Subsection 11.21 as
servicing compensation (a) any interest earned on funds in the Custodial
Account (all such interest to be withdrawn monthly not later than each
Distribution Date), and (b) the Interim Servicing Fee;
(iv) to pay to itself with respect to each Mortgage Loan
that has been repurchased pursuant to Subsection 7.03, all amounts received
thereon and not distributed as of the date on which the related Repurchase
Price is determined;
(v) to pay, or to reimburse the Company for advances in
respect of, expenses incurred in connection with any Mortgage Loan pursuant to
Subsection 11.03(b), but only to the extent of amounts received in respect of
the Mortgage Loans to which such expense is attributable;
(vi) to reimburse itself for any expenses that are
reimbursable pursuant to Subsection 11.03; and
(vii) to clear and terminate the Custodial Account on the
termination of this Agreement.
The Company shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Custodial Account pursuant to such subclauses (ii), (iv),
(v) and (vi) above. The Company shall provide written notification in the form
of an Officers' Certificate to the Purchaser, on or prior to the next
succeeding Distribution Date, upon making any withdrawals from the Custodial
Account pursuant to subclause (v) above.
Subsection 11.06 Establishment of Escrow Accounts; Deposits
in Escrow Accounts.
The Company shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts, with a Qualified
Depository, in the form of time deposit or demand accounts. Upon the request
of the Purchaser, the Company shall deliver to the Purchaser an Escrow Account
Letter Agreement in the form of Exhibit 4.
The Company 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
Insurance Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property. The Company shall make withdrawals therefrom only to
effect such payments as are required under this Agreement, and for such other
purposes as shall be as set forth or in accordance with Subsection 11.08. The
Company shall be entitled to retain any
Exh. 5-8
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 and, to the extent required by law, the Company shall pay
interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account is non interest bearing or that interest paid thereon is insufficient
for such purposes.
Subsection 11.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the
Company (i) to effect timely payments of ground rents, taxes, assessments,
water rates, hazard insurance premiums, Primary Mortgage Insurance Policy
premiums, if applicable, and comparable items, (ii) to reimburse the Company
for any Servicing Advance made by the Company with respect to a related
Mortgage Loan but only from amounts received on the related Mortgage Loan
which represent late payments or collections of Escrow Payments thereunder,
(iii) to refund to the Mortgagor any funds as may be determined to be
overages, (iv) for transfer to the Custodial Account in accordance with the
terms of this Agreement, (v) for application to the restoration or repair of
the Mortgaged Property, (vi) to pay to the Company, or to the Mortgagor to the
extent required by law, any interest paid on the funds deposited in the Escrow
Account, or (vii) to clear and terminate the Escrow Account on the termination
of this Agreement.
Subsection 11.08 Payment of Taxes, Insurance and Other
Charges.
With respect to each Mortgage Loan, the Company shall
maintain accurate records reflecting the status of ground rents, taxes,
assessments, water rates and other charges which are or may become a lien upon
the Mortgaged Property and the status of Primary Mortgage Insurance Policy
premiums and fire and hazard insurance coverage and shall obtain, from time to
time, all bills for the payment of such charges, including insurance renewal
premiums and shall effect payment thereof prior to the applicable penalty or
termination date and at a time appropriate for securing maximum discounts
allowable, employing for such purpose deposits of the Mortgagor in the Escrow
Account which shall have been estimated and accumulated by the Company in
amounts sufficient for such purposes, as allowed under the terms of the
Mortgage and applicable law. To the extent that the Mortgage does not provide
for Escrow Payments, the Company shall determine that any such payments are
made by the Mortgagor at the time they first become due. The Company assumes
full responsibility for the timely payment of all such bills and shall effect
timely payments of all such bills irrespective of the Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments and
shall make advances from its own funds to effect such payments.
Subsection 11.09 Transfer of Accounts.
The Company may transfer the Custodial Account or the Escrow
Account to a different Qualified Depository institution from time to time.
Such transfer shall be made only upon obtaining the prior written consent of
the Purchaser.. In any case, the Custodial Account and Escrow Account shall be
Eligible Accounts.
Exh. 5-9
Subsection 11.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage
Loan fire, and hazard insurance with extended coverage as is customary in the
area where the Mortgaged Property is located in an amount which is at least
equal to the lesser of (i) the amount necessary to fully compensate for any
damage or loss to the improvements which are a part of such property on a
replacement cost basis or (ii) the outstanding principal balance of the
Mortgage Loan, in each case in an amount not less than such amount as is
necessary to prevent the Mortgagor and/or the Mortgagee from becoming a co
insurer. If the Mortgaged Property is in an area identified on a Flood Hazard
Boundary Map or Flood Insurance Rate Map issued by the Flood Emergency
Management Agency as having special flood hazards and such flood insurance has
been made available, the Company will cause to be maintained a flood insurance
policy meeting the requirements of the current guidelines of the Federal
Insurance Administration with a generally acceptable insurance carrier, in an
amount representing coverage not less than the lesser of (i) the outstanding
principal balance of the Mortgage Loan or (ii) the maximum amount of insurance
which is available under the National Flood Insurance Act of 1968 or the Flood
Disaster Protection Act of 1973, as amended. The Company also shall maintain
on any REO Property, fire and hazard insurance with extended coverage in an
amount which is at least equal to the lesser of (i) the maximum insurable
value of the improvements which are a part of such property and (ii) the
outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property plus accrued interest at the Mortgage Interest Rate and
related Servicing Advances, liability insurance and, to the extent required
and available under the National Flood Insurance Act of 1968 or the Flood
Disaster Protection Act of 1973, as amended, flood insurance in an amount as
provided above. Pursuant to Subsection 11.04, any amounts collected by the
Company under any such policies other than amounts to be deposited in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or REO Property, or released to the Mortgagor in accordance with the
Company's normal servicing procedures, shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Subsection 11.05. Any cost incurred
by the Company in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Purchaser, be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake or
other additional insurance need be required by the Company of the Mortgagor or
maintained on property acquired in respect of the Mortgage Loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. All such policies shall
be endorsed with standard mortgagee clauses with loss payable to the Company,
or upon request to the Purchaser, and shall provide for at least thirty (30)
days' prior written notice of any cancellation, reduction in the amount of, or
material change in, coverage to the Company. The Company shall not interfere
with the Mortgagor's freedom of choice in selecting either his insurance
carrier or agent, provided, however, that the Company shall not accept any
such insurance policies from insurance companies unless such companies
currently reflect a General Policy Rating of A:VI or better in Best's Key
Rating Guide and are licensed to do business in the state wherein the property
subject to the policy is located.
Exh. 5-10
Subsection 11.11 Maintenance of Mortgage Impairment
Insurance Policy.
In the event that the Company shall obtain and maintain a
mortgage impairment or blanket policy issued by an issuer that has an A.M.
Best rating of A:VI or better insuring against hazard losses on all of
Mortgaged Properties securing the Mortgage Loans, then, to the extent such
policy provides coverage in an amount equal to the amount required pursuant to
Subsection 11.10 and otherwise complies with all other requirements of
Subsection 11.10, the Company shall conclusively be deemed to have satisfied
its obligations as set forth in Subsection 11.10, it being understood and
agreed that such policy may contain a deductible clause, in which case the
Company shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with Subsection
11.10, and there shall have been one or more losses which would have been
covered by such policy, deposit in the Custodial Account the amount not
otherwise payable under the blanket policy because of such deductible clause.
In connection with its activities as servicer of the Mortgage Loans, the
Company agrees to prepare and present, on behalf of the Purchaser, claims
under any such blanket policy in a timely fashion in accordance with the terms
of such policy. Upon request of the Purchaser, the Company shall cause to be
delivered to the Purchaser a certified true copy of such policy and a
statement from the insurer thereunder that such policy shall in no event be
terminated or materially modified without thirty (30) days' prior written
notice to the Purchaser.
Subsection 11.12 Fidelity Bond, Errors and Omissions
Insurance.
The Company shall maintain, at its own expense, a blanket
fidelity bond and an errors and omissions insurance policy, with broad
coverage with responsible companies that would meet the requirements of ▇▇▇▇▇▇
▇▇▇ or ▇▇▇▇▇▇▇ Mac on all officers, employees or other persons acting in any
capacity with regard to the Mortgage Loans to handle funds, money, documents
and papers relating to the Mortgage Loans. The fidelity bond and errors and
omissions insurance shall be in the form of the Mortgage Banker's Blanket Bond
and shall protect and insure the Company against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
persons. Such fidelity bond shall also protect and insure the Company against
losses in connection with the failure to maintain any insurance policies
required pursuant to this Agreement and the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Subsection 11.12 requiring the fidelity
bond and errors and omissions insurance shall diminish or relieve the Company
from its duties and obligations as set forth in this Agreement. The minimum
coverage under any such bond and insurance policy shall be at least equal to
the corresponding amounts required by ▇▇▇▇▇▇ Mae in the ▇▇▇▇▇▇ ▇▇▇ Servicing
Guide or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ Mac Seller's and Servicers' Guide. Upon
request of the Purchaser, the Company shall cause to be delivered to the
Purchaser a certified true copy of the fidelity bond and insurance policy and
a statement from the surety and the insurer that such fidelity bond or
insurance policy shall in no event be terminated or materially modified
without thirty (30) days' prior written notice to the Purchaser.
Exh. 5-11
Subsection 11.13 Title, Management and Disposition of REO
Property.
In the event that title to the Mortgaged Property is
acquired in foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale shall be taken in the name of the Purchaser or its
designee. Any Person or Persons holding such title other than the Purchaser
shall acknowledge in writing that such title is being held as nominee for the
benefit of the Purchaser.
The Company shall either itself or through an agent selected
by the Company, manage, conserve, protect and operate each REO Property (and
may temporarily rent the same) 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. If a REMIC election is or is to be made with respect to the
arrangement under which the Mortgage Loans and any REO property are held, the
Company shall manage, conserve, protect and operate each REO Property in a
manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by such REMIC of any "income from non permitted assets"
within the meaning of Section 860F(a)(2)(B) of the Code or any "net income
from foreclosure property" within the meaning of Section 860G(c)(2) of the
Code. The Company shall cause each REO Property to be inspected promptly upon
the acquisition of title thereto and shall cause each REO Property to be
inspected at least annually thereafter. The Company shall make or cause to be
made a written report of each such inspection. Such reports shall be retained
in the Mortgage File and copies thereof shall be forwarded by the Company to
the Purchaser. The Company shall use its best efforts to dispose of the REO
Property as soon as possible and shall sell such REO Property in any event
within three (3) years after title has been taken to such REO Property, unless
the Company determines, and gives appropriate notice to the Purchaser, that a
longer period is necessary for the orderly liquidation of such REO Property.
If a period longer than three years is necessary to sell any REO property, (i)
the Company shall report monthly to the Purchaser as to the progress being
made in selling such REO Property and (ii) if, with the written consent of the
Purchaser, a purchase money mortgage is taken in connection with such sale,
such purchase money mortgage shall name the Company as mortgagee, and a
separate servicing agreement among the Company and the Purchaser shall be
entered into with respect to such purchase money mortgage. Notwithstanding the
foregoing, if a REMIC election is made with respect to the arrangement under
which the Mortgage Loans and the REO Property are held, such REO Property
shall be disposed of within three (3) years or such other period as may be
permitted under Section 860G(a)(8) of the Code.
With respect to each REO Property, the Company shall
segregate and hold all funds collected and received in connection with the
operation of the REO Property separate and apart from its own funds or general
assets and shall deposit or cause to be deposited, on a daily basis within one
Business Day of receipt in the Custodial Account all revenues received with
respect to the related REO Property and shall withdraw therefrom funds
necessary for the proper operation, management and maintenance of the REO
Property, including the cost of maintaining any hazard insurance pursuant to
Subsection 11.10 hereof and the fees of any managing agent acting on behalf of
the Company.
Exh. 5-12
The Company shall furnish to the Purchaser on each
Distribution Date, an operating statement for each REO Property covering the
operation of each REO Property for the previous month. Such operating
statement shall be accompanied by such other information as the Purchaser
shall reasonably request.
Each REO Disposition shall be carried out by the Company at
such price and upon such terms as the Purchaser shall direct. If as of the
date title to any REO Property was acquired by the Company there were
outstanding unreimbursed Servicing Advances with respect to the REO Property,
the Company, upon an REO Disposition of such REO Property, shall be entitled
to reimbursement for any related unreimbursed Servicing Advances from proceeds
received in connection with such REO Disposition. The proceeds from the REO
Disposition, net of any payment to the Company as provided above, shall be
deposited in the Custodial Account within one Business Day of receipt.
Subsection 11.14 Distributions.
On each Distribution Date, the Company shall distribute to
the Servicing Rights Owner all amounts credited to the Custodial Account as of
the close of business on the preceding Determination Date, net of charges
against or withdrawals from the Custodial Account pursuant to Subsection
11.05.
All distributions made to the Purchaser on each Distribution
Date shall be based on the Mortgage Loans owned and held by the Purchaser, and
shall be made by wire transfer of immediately available funds to the account
of the Purchaser at a bank or other entity having appropriate facilities
therefor, if the Purchaser shall have so notified the Company or by check
mailed to the address of the Purchaser.
With respect to any remittance received by the Purchaser on
or after the second Business Day following the Business Day on which such
payment was due, the Company shall pay to the Purchaser interest on any such
late payment at an annual rate equal to Prime Rate, adjusted as of the date of
each change, plus three percentage points, but in no event greater than the
maximum amount permitted by applicable law. Such interest shall be paid by the
Company to the Purchaser on the date such late payment is made and shall cover
the period commencing with the day following such second Business Day and
ending with the Business Day on which such payment is made, both inclusive.
Such interest shall be remitted along with such late payment. The payment by
the Company of any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Company.
Subsection 11.15 Remittance Reports.
No later than the fifth Business Day each month, the Company
shall furnish to the Purchaser or its designee a computer tape and a hard copy
of the monthly data, together with such other information with respect to the
Mortgage Loans as the Purchaser may reasonably require to allocate
distributions made pursuant to this Agreement and provide appropriate
statements with respect to such distributions. On the same date, the Company
shall forward to the Purchaser by overnight mail a computer readable magnetic
tape containing the information set forth in the remittance report with
respect to the related Distribution Date.
Exh. 5-13
Subsection 11.16 Statements to the Purchaser.
No later than the Distribution Date, the Company shall
forward to the Purchaser or its designee a statement prepared by the Company
setting forth the status of the Custodial Account as of the close of business
on such Distribution Date and showing, for the period covered by such
statement, the aggregate amount of deposits into and withdrawals from the
Custodial Account of each category of deposit specified in Subsection 11.04
and each category of withdrawal specified in Subsection 11.05.
Upon the request of the Purchaser, in connection with any
Transaction, the Company shall furnish to the Purchaser a complete, true and
correct Mortgage Loan Schedule with respect to the related Mortgage Loans.
In addition, not more than ninety (90) days after the end of
each calendar year, the Company shall furnish to each Person who was the
Purchaser at any time during such calendar year, (i) as to the aggregate of
remittances for the applicable portion of such year, an annual statement in
accordance with the requirements of applicable federal income tax law, and
(ii) listing of the principal balances of the Mortgage Loans outstanding at
the end of such calendar year.
The Company 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 Purchaser pursuant to any applicable
law with respect to the Mortgage Loans and the transactions contemplated
hereby. In addition, the Company shall provide the Purchaser with such
information concerning the Mortgage Loans as is necessary for the Purchaser to
prepare its federal income tax return as any Purchaser may reasonably request
from time to time.
Subsection 11.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Subsection
11.13, with respect to any REO Property, the Company shall furnish to the
Purchaser a statement covering the Company's efforts in connection with the
sale of such REO Property and any rental of such REO Property incidental to
the sale thereof for the previous month, together with the operating
statement. Such statement shall be accompanied by such other information as
the Purchaser shall reasonably request.
Subsection 11.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Purchaser pursuant to a deed in lieu of
foreclosure, the Company shall deliver to the Purchaser within three Business
Days after completion of the foreclosure sale a liquidation report with
respect to such Mortgaged Property.
Subsection 11.19 Assumption Agreements.
The Company shall, to the extent it has knowledge of any
conveyance or prospective conveyance by any Mortgagor of the Mortgaged
Property (whether by absolute conveyance or by contract of sale, and whether
or not the Mortgagor remains or is to remain
Exh. 5-14
liable under the Mortgage Note and/or the Mortgage), exercise its rights to
accelerate the maturity of such Mortgage Loan under any "due on sale" clause
applicable thereto; provided, however, that the Company shall not exercise any
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
Primary Mortgage Insurance Policy, if any. If the Company reasonably believes
it is unable under applicable law to enforce such "due on sale" clause, the
Company, upon prior Purchaser consent, shall enter into an assumption
agreement with the person to whom the Mortgaged Property has been conveyed or
is proposed to be conveyed, pursuant to which such person becomes liable under
the Mortgage Note and, to the extent permitted by applicable state law, the
Mortgagor remains liable thereon. Where an assumption is allowed pursuant to
this Subsection 11.19, the Company, with the prior written consent of the
insurer under the Primary Mortgage Insurance Policy, if any, is authorized to
enter into a substitution of liability agreement with the person to whom the
Mortgaged Property has been conveyed or is proposed to be conveyed pursuant to
which the original Mortgagor is released from liability and such Person is
substituted as Mortgagor and becomes liable under the related Mortgage Note.
Any such substitution of liability agreement shall be in lieu of an assumption
agreement.
In connection with any such assumption or substitution of
liability, the Company shall follow the underwriting guidelines of Company
attached as Exhibit 9 hereto. With respect to an assumption or substitution of
liability, the Mortgage Interest Rate, the amount of the Monthly Payment, and
the final maturity date of such Mortgage Note may not be changed. The Company
shall notify the Purchaser that any such substitution of liability or
assumption agreement has been completed by forwarding to the Purchaser the
original of any such substitution of liability or assumption agreement, which
document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraphs of this Subsection
or any other provision of this Agreement, the Company shall not be deemed to
be in default, breach or any other violation of its obligations hereunder by
reason of any assumption of a Mortgage Loan by operation of law or any
assumption which the Company may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Subsection 11.19, the term
"assumption" is deemed to also include a sale of the Mortgaged Property
subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.
Subsection 11.20 Satisfaction of Mortgages and Release of
Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the
receipt by the Company of a notification that payment in full will be escrowed
in a manner customary for such purposes, the Company will immediately notify
the Purchaser by a certification of a servicing officer of the Company (a
"Servicing Officer"), which certification shall include a statement to the
effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Custodial Account pursuant
to Subsection 11.04 have been or will be so deposited, and shall request
execution of any document necessary to satisfy the Mortgage Loan and delivery
to it of the portion of the Mortgage File held by the Purchaser or the
Purchaser's designee. Upon receipt of such certification and request, the
Purchaser, shall promptly release the related mortgage documents to the
Company and the Company shall prepare and process any
Exh. 5-15
satisfaction or release. No expense incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account or the Purchaser.
In the event the Company satisfies or releases a Mortgage
without having obtained payment in full of the indebtedness secured by the
Mortgage or should it otherwise prejudice any right the Purchaser may have
under the mortgage instruments, the Company, upon written demand, shall remit
to the Purchaser the then outstanding principal balance of the related
Mortgage Loan by deposit thereof in the Custodial Account. The Company shall
maintain the fidelity bond insuring the Company against any loss it may
sustain with respect to any Mortgage Loan not satisfied in accordance with the
procedures set forth herein.
From time to time and as appropriate for the interim
servicing or foreclosure of any Mortgage Loan, including for this purpose
collection under any Primary Mortgage Insurance Policy, the Purchaser shall,
upon request of the Company and delivery to the Purchaser of a servicing
receipt signed by a Servicing Officer, release the requested portion of the
related Mortgage File held by the Purchaser to the Company. Such servicing
receipt shall obligate the Company to return the related Mortgage documents to
the Purchaser when the need therefor by the Company no longer exists, unless
the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to
the Mortgage Loan have been deposited in the Custodial Account or the Mortgage
File or such document has been delivered to an attorney, or to a public
trustee or other public official as required by law, for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non judicially, and the Company
has delivered to the Purchaser a certificate of a Servicing Officer certifying
as to the name and address of the Person to which such Mortgage File or such
document was delivered and the purpose or purposes of such delivery. Upon
receipt of a certificate of a Servicing Officer stating that such Mortgage
Loan was liquidated, the servicing receipt shall be released by the Purchaser
to the Company.
Subsection 11.21 Servicing Compensation.
As compensation for its services hereunder, the Company
shall be entitled to receive on the Mortgage Loans the amounts provided for as
the Company's Interim Servicing Fee and Ancillary Income. Ancillary Income
shall be retained by the Company to the extent not required to be deposited in
the Custodial Account. The Company shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder and shall
not be entitled to reimbursement therefor except as specifically provided for.
Subsection 11.22 Notification of Adjustments.
On each Adjustment Date, the Company shall make interest
rate adjustments for each Mortgage Loan in compliance with the requirements of
the related Mortgage and Mortgage Note. The Company shall execute and deliver
the notices required by each Mortgage and Mortgage Note regarding interest
rate adjustments. The Company also shall provide timely notification to the
Purchaser of all applicable data and information regarding such interest rate
adjustments and the Company's methods of implementing such interest rate
adjustments. Upon the discovery by the Company or the Purchaser that the
Company has failed to adjust a Mortgage Interest Rate or a Monthly Payment
pursuant to the terms of the related Mortgage Note and
Exh. 5-16
Mortgage, the Company shall immediately deposit in the Custodial Account from
its own funds the amount of any interest loss caused thereby without
reimbursement therefor.
Subsection 11.23 Access to Certain Documentation.
The Company shall provide to any federal or state banking or
insurance regulatory authority that may exercise authority over the Purchaser
access to the documentation regarding the Mortgage Loans interim serviced by
the Company required by applicable laws and regulations. Such access shall be
afforded without charge, but only upon reasonable request and during normal
business hours at the offices of the Company.
Subsection 11.24 Reports and Returns to be Filed by the
Company.
The Company shall file information reports with respect to
the receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and information
returns relating to cancellation of indebtedness income with respect to any
Mortgaged Property as required by Sections 6050H, 6050J and 6050P of the Code.
Such reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.
Subsection 11.25 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the
arrangement under which the Mortgage Loans and REO Property are held, the
Company shall not take any action, cause the REMIC to take any action or fail
to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of the REMIC as a REMIC or (ii) result in the imposition of a tax upon
the REMIC (including but not limited to the tax on "prohibited transactions"
as defined in Section 860F(a)(2) of the Code and the tax on "contributions" to
a REMIC set forth in Section 860G(d) of the Code) unless the Company has
received an Opinion of Counsel (at the expense of the party seeking to take
such action) to the effect that the contemplated action will not endanger such
REMIC status or result in the imposition of any such tax.
Exh. 5-17
EXHIBIT 6
---------
[RESERVED]
Exh. 6-1
EXHIBIT 7
---------
SERVICING TRANSFER INSTRUCTIONS
Exh. 7-1
EXHIBIT 8
----------
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This Assignment, Assumption and Recognition Agreement (the "Agreement")
is made and entered into as of [___________], 200[_] (the "Closing Date"),
among [__________________________], a [__________] corporation, having an
address at [___________________] (the "Assignor"),
[_____________________________], a [___________________] corporation, having
an address at [_________________________________] (the "Assignee"), and
[__________________], a [___________] corporation, having an address at
[_________________] (the "Company"). Any capitalized term used and not
otherwise defined herein shall have the meaning assigned to such term in the
Purchase Agreement (as defined below).
In consideration of the mutual promises and agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Assignment and Assumption. Except as expressly provided for herein, the
Assignor hereby grants, transfers and assigns to the Assignee (a) all of
its right, title and interest as "Purchaser" in, to and under that
certain Amended and Restated Mortgage Loan Purchase and Interim Servicing
Agreement dated as of November 1, 2005, and duly executed by the Company
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company ("Purchaser") (the "Purchase
Agreement") attached hereto as Exhibit A, only with respect to the
Mortgage Loans, and (b) all of its right, title and interest in and to
each of the mortgage loans identified in Exhibit B hereto (the "Mortgage
Loans"). Notwithstanding anything to the contrary contained herein, the
Assignor is not assigning to the Assignee any of its right, title and
interest as "Purchaser" in, to and under the Purchase Agreement with
respect to any other mortgage loan other than those set forth on Exhibit
B and furthermore, the Assignor is not assigning to the Assignee, but
instead is expressly reserving for the Servicing Rights Owner's exclusive
right and benefit only, the following:
a) any of the Servicing Rights relating to the Mortgage Loans, as
the term "Servicing Rights" is defined in the Purchase Agreement
and further described herein;
b) all rights and benefits accorded the Servicing Rights Owner under
the Purchase Agreement;
Except as is otherwise expressly provided herein, the Assignor makes
no representations, warranties or covenants to the Assignee and the
Assignee acknowledges that the Assignor has no obligations to the
Assignee under the terms of the Purchase Agreement, or otherwise
relating to the transaction contemplated herein (including, but not
limited to, any obligation to repurchase any of the Mortgage Loans or
to indemnify the Assignee), and that all such obligations are assumed
by the Company.
The Assignor acknowledges and agrees that upon execution of this
Agreement, [____________] shall become the "Purchaser" under the
Purchase Agreement, and all
Exh. 8-1
representations, warranties and covenants by the "Company" to the
"Purchaser" under such Purchase Agreement including, but not limited
to, the rights to require repurchase of any Mortgage Loan and to
receive indemnification, shall accrue to Assignee by virtue of this
Agreement.
2. Consideration. In consideration for the sale of the Mortgage Loans to the
Assignee, the Assignee agrees to pay to the Assignor the amount
referenced in that certain trade confirmation dated as of [____________],
200[__] (the "Confirmation"), and duly executed by the Assignor and the
Assignee (the "Purchase Price"). The Assignee shall pay the Purchase
Price to the Assignor by wire transfer of immediately available funds to
the account designated by the Assignor on or before the Closing Date, as
defined in this Confirmation.
3. Servicing of the Mortgage Loans. [From and after the related Servicing
Transfer Date, the Servicing Rights Owner shall service the Mortgage
Loans for the Assignee in accordance with that certain Servicing
Agreement dated as of [________________], by and between the Servicing
Rights Owner and the Assignee (the "Servicing Agreement").] Prior to the
related Servicing Transfer Date, the Company shall service the Mortgage
Loans on an interim basis on behalf of the Assignee and the Servicing
Rights Owner in accordance with the Purchase Agreement. The address of
the "Purchaser" set forth in Section 16 of the Purchase Agreement shall
be changed to read as follows:
[___________________]
[___________________]
[___________________]
Attention: [___________]
The wire transfer instructions for distributions to the
Assignee on each Distribution Date shall be as follows:
Bank:
ABA Routing Number:
For Credit to:
Attn:
4. Status of Purchase Agreement. The Assignor represents and warrants that
(a) the Purchase Agreement attached hereto as Exhibit A is a true,
complete and accurate copy of the Purchase Agreement, (b) the Purchase
Agreement with respect to each of the Mortgage Loans is in full force and
effect as of the date hereof, (c) the Purchase Agreement has not been
amended or modified in any respect, (d) there has been no waiver or
modification or any agreement to waive or modify any provision, nor has
any notice of termination been given, under the Purchase Agreement, (e)
the Assignor is not in default, and has received no notice of default,
under the Purchase Agreement, and, to the best of the Assignor's
knowledge, the Company is not in default under the Purchase Agreement,
and (f) to the best of the Assignor's knowledge, there are no offsets,
claims or defenses available to the Company with respect to the Purchase
Agreement or Mortgage Loans.
Exh. 8-2
5. Covenants, Representations and Warranties of the Assignor. The Assignor
represents and warrants to, and covenants with, the Assignee that:
a. The Assignor is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation, and has all requisite corporate power and authority
to acquire, own and sell the Mortgage Loans;
b. The Assignor has full corporate power and authority to execute,
deliver and perform under this Agreement, and to consummate the
transactions set forth herein. The execution, delivery and
performance of the Assignor of this Agreement, and the consummation
by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action of the Assignor. This
Agreement has been fully executed and delivered by the Assignor and
constitutes the valid and legally binding obligation of the Assignor
enforceable against the Assignor in accordance with its respective
terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights and to the application of equitable
principles in any proceeding, whether at law or in equity;
c. No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is
required to be obtained or made by the Assignor in connection with
the execution, delivery or performance by the Assignor of this
Agreement, or the consummation by it of the transactions
contemplated hereby;
d. There is no action, suit, proceeding, investigation or litigation
pending or, to the Assignor's knowledge, threatened, which either in
any instance or in the aggregate, if determined adversely to the
Assignor, would adversely affect the sale of the Mortgage Loans to
the Assignee, the execution, delivery or enforceability of this
Agreement, or the Assignor's ability to perform its obligations
under this Agreement;
e. Immediately prior to payment of the Purchase Price for the Mortgage
Loans, the Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans free from any and all
claims and encumbrances whatsoever.
f. The Assignor shall use its reasonable commercial efforts to cause to
be delivered to the Assignee all of the Mortgage Loan Documents in
accordance with Section 6.03 of the Purchase Agreement.
g. Each of the terms and conditions set forth in the Purchase Agreement
which are required to be satisfied on or before the Closing Date by
the Assignor in order for the Assignor to acquire title to the
Mortgage Loans has been satisfied unless waived by the prejudiced
party(ies).
h. The Assignor shall deliver to the Assignee on or before the Closing
Date the following documents:
(1) a fully executed Agreement and Purchase Agreement; and
(2) the Mortgage Loan Schedule;
Exh. 8-3
6. Covenants, Representations and Warranties of the Company. The Company
represents and warrants to, and covenants with, the Assignee that:
a. The representations and warranties made by the Company under
Subsection 7.01 and Subsection 7.02 of the Purchase Agreement are
true and correct in all material respects as of the related Closing
Date and no event has occurred which, with notice or the passage of
time, would constitute a default under the Purchase Agreement.
b. The Company acknowledges and agrees that upon execution of this
Agreement, [___________] shall become the "Purchaser" under the
Purchase Agreement but not the Servicing Rights Owner, and all
representations, warranties and covenants by the Company as the
"Seller" thereunder, including, but not limited to, the
representations, warranties and covenants to repurchase any Mortgage
Loan and to indemnify the "Purchaser", shall accrue to [__________]
by virtue of this Agreement.
7. Covenants, Representations and Warranties of Assignee. The Assignee
agrees to be bound, as "Purchaser", by all of the terms, covenants and
conditions of the Agreement and the Mortgage Loans, and from and after
the date hereof, the Assignee assumes for the benefit of each of the
Company and the Assignor all of the Assignor's obligations as "Purchaser"
thereunder, with respect to the Mortgage Loans (except for any
obligations relating to the Servicing Rights);
8. Governing Law. This Agreement shall be construed in accordance with the
laws of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with the laws of
[________________], except to the extent preempted by federal law.
9. Conflict with Purchase Agreement. To the extent there is any conflict
between the terms of the Purchase Agreement and this Agreement, the
latter shall be controlling, notwithstanding anything to the contrary
contained in the Purchase Agreement.
10. Capitalized Terms. All capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the
Purchase Agreement.
11. Counterparts. This Agreement may be executed 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.
Exh. 8-4
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first above written.
[Assignor ________________] [Assignee ________________]
the Assignor the Assignee
By: _________________________________ By: __________________________
Its: Its:
[Company ________________]
the Company
By: _________________________________
Its:
Exh. 8-5
EXHIBIT 9
---------
COMPANY'S UNDERWRITING GUIDELINES
Exh. 9-1
EXHIBIT 10
----------
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, pursuant to the terms of the Amended and Restated Mortgage Loan
Purchase and Interim Servicing Agreement dated as of November 1, 2005 (the
"Agreement"), between First National Bank of Nevada ("Company") and ▇▇▇▇▇▇▇
Sachs Mortgage Company ("Purchaser"), Company is selling certain mortgage
loans (the "Mortgage Loans") to Purchaser;
AND WHEREAS, Company is providing this Limited Power of Attorney pursuant
to the Agreement;
NOW, THEREFORE, ______ does hereby make, constitute and appoint
Purchaser, Company's true and lawful agent and attorney-in-fact with respect
to each Mortgage Loan in Company's name, place and stead: (i) to complete (to
the extent necessary) and to cause to be submitted for filing or recording in
the appropriate public filing or recording offices, all assignments of
mortgage, deeds of trust or similar documents, assignments or reassignments of
rents, leases and profits, in each case in favor of Purchaser, and all Form
UCC-2 or UCC-3 assignments of financing statements and all other comparable
instruments or documents with respect to the Mortgage Loans which are
customarily and reasonably necessary or appropriate to assign agreements,
documents and instruments pertaining to the Mortgage Loans, and to evidence,
provide notice of and perfect such assignments and conveyances in favor of
Purchaser in the public records of the appropriate filing and recording
offices; (ii) to file or record in the appropriate public filing or recording
offices, all other Mortgage Loan documents to be recorded under the terms of
the Agreement or any such Mortgage Loan which have not been submitted for
filing or recordation by Company on or before the date hereof or which have
been so submitted but are subsequently lost or returned unrecorded or unfiled
as a result of actual or purported defects therein, in order to evidence,
provide notice of and perfect such documents in the public records of the
appropriate filing and recording offices; and (iii) to do and perform all acts
in connection with the servicing, administration and management of the
Mortgage Loans, including but not limited to:
(1) execute and deliver customary consents or waivers and other instruments
and documents,
(2) consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages,
(3) collect any insurance proceeds and other liquidation proceeds,
(4) effectuate foreclosure or other conversion of the ownership of the
Mortgaged Property securing any Mortgage Loan,
(5) execute and deliver any and all instruments of satisfaction or
cancellation or of partial or full release or discharge and all other
comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties, and
Exh. 10-1
(6) execute all documents customarily and reasonably necessary and
appropriate for the transfer post-foreclosure of the previously Mortgaged
Properties to third parties, and then to collect the sales proceeds from
that transfer.
The enumeration of particular powers herein is not intended in any way to
limit the grant to Purchaser as Company's attorney-in-fact of full power and
authority with respect to the Mortgage Loans to complete (to the extent
necessary), file and record any documents, instruments or other writings
referred to above as fully, to all intents and purposes, as Company might or
could do if personally present, hereby ratifying and confirming whatsoever
such attorney-in-fact shall and may do by virtue hereof; and Company agrees
and represents to those dealing with such attorney-in-fact that they may rely
upon this Limited Power of Attorney until termination thereof under the
provisions of Article III below. Any and all third parties dealing with
Purchaser as Company's attorney-in-fact may rely completely, unconditionally
and conclusively on the authority of Purchaser, as applicable, and need not
make any inquiry about whether Purchaser is acting pursuant to the Agreement.
Any purchaser, title insurance company or other third party may rely upon a
written statement by Purchaser that any particular Mortgage Loan or related
mortgaged real property in question is subject to and included under this
Limited Power of Attorney and the Agreement.
Any act or thing lawfully done hereunder by Purchaser shall be binding on
Company and Company's successors and assigns.
This Limited Power of Attorney shall continue in full force and effect
until the earliest occurrence of any of the following events:
(i) the transfer by Purchaser of its servicing obligations under the
Agreement to another servicer;
(ii) with respect to any Mortgage Loan, such Mortgage Loan is no longer a
part of the Agreement; and
(iii) the termination of the Agreement in accordance with its terms.
Nothing herein shall be deemed to amend or modify the Agreement or
the respective rights, duties or obligations of Company under the Agreement,
and nothing herein shall constitute a waiver of any rights or remedies
thereunder.
Capitalized terms used but not defined herein have the respective
meanings assigned thereto in the Agreement.
Exh. 10-2
IN WITNESS WHEREOF, Company has caused this instrument to be executed and
its corporate seal to be affixed hereto by its officer duly authorized as of
_____ ___, 200_.
___________________________
By: ____________________________________________
Name:
Title:
▇▇▇. ▇▇-▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ OF ___________________________)
) ss.:
COUNTY OF __________________________)
On this ___ day of __________, 200__, before me appeared
_______________________, to me personally known, who, being by me duly sworn
did say that he/she is the _____________________ of _____________, and that
the seal affixed to the foregoing instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed in behalf of said
corporation by authority of its board of directors, and said ____________
acknowledged said instrument to be the free act and deed of said corporation.
Name: _________________________________________
Notary Public in and for said County and
State:
My commission expires:
______________________________________
Exh. 10-4
EXHIBIT 11
----------
NEW JERSEY LOAN STIPULATIONS
▇▇▇▇▇▇▇ will purchase the following loans subject to the New Jersey Home
Ownership Act of 2002 ("Act"), predicated upon the acceptance of the below
outlined stipulations:
Home Loans
Purchase Money
Rate-term refinances
Cash-out refinances
Junior Liens
Rate-term refinances
Cash-out refinances
Stipulations:
__ No Mortgage Loan is a 'high cost home loan', 'home improvement loan',
'manufactured home loan', or junior lien 'covered loan' as defined under the
Act.
__ 'Covered' Rate-term refinances and 'Covered' Cash-out refinances do not
comprise more than 5% of the pool, in the aggregate.
__ The points and fees threshold calculations under the Act include
yield-spread premiums.
__ All loans originated under the Act will be subject to up to 100% due
diligence subject to the 20% due diligence maximum.
__ Mortgage Loan files must contain tangible net benefit and high-cost
worksheets.
__ Seller will make the Representation that all Mortgage Loans subject to New
Jersey's 'flipping' prohibition, as defined under the Act, are in compliance
with the 'reasonable, tangible net benefit' standard, as defined under the
Act.
2-1