SERVICING AGREEMENT By and Between WASHINGTON MUTUAL BANK, FA (Servicer) and GOLDMAN SACHS MORTGAGE COMPANY (Owner) Dated as of December 1, 2003 Residential First Lien Mortgage Loans Schedule/Schedule Flow Delivery Program
By
and Between
WASHINGTON
MUTUAL BANK, FA
(Servicer)
and
▇▇▇▇▇▇▇
▇▇▇▇▇ MORTGAGE COMPANY
(Owner)
Dated
as of December
1, 2003
Residential
First Lien Mortgage Loans
Schedule/Schedule
Flow Delivery Program
TABLE
OF CONTENTS
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PAGE
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ARTICLE
1. DEFINITIONS
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1
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ARTICLE
2. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
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7
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Section
2.1.
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Identification
of Mortgage Loans; Servicer to Act as Servicer
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7
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Section
2.2.
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Liquidation
of Mortgage Loans
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9
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Section
2.3.
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Collection
of Mortgage Loan Payments
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10
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Section
2.4.
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Establishment
of Account; Deposits in Account
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10
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Section
2.5.
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Permitted
Withdrawals from the Account
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12
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Section
2.6.
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Establishment
of Escrow Account; Deposits in Escrow Account; Escrow
Analysis
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13
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Section
2.7.
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Permitted
Withdrawals from the Escrow Account
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13
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Section
2.8.
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Payment
of Taxes, Insurance and Other Charges
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14
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Section
2.9.
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Transfer
of Accounts
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14
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Section
2.10.
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Maintenance
of Hazard Insurance
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14
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Section
2.11.
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Fidelity
Bond; Errors and Omissions Insurance
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15
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Section
2.12.
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Title,
Management and Disposition of Real Estate Owned
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16
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Section
2.13.
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Application
of Proceeds of Insurance to Repair or Restoration
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18
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Section
2.14.
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Inspections
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18
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Section
2.15.
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Maintenance
of Primary Mortgage Insurance Policies; Collections
Thereunder
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18
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Section
2.16.
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Monthly
Advances by the Servicer
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19
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Section
2.17.
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Compliance
With REMIC Provisions
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19
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Section
2.18.
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Owner
to Cooperate; Release of Collateral Files
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20
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ARTICLE
3. PAYMENTS TO THE OWNER
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20
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Section
3.1.
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Distributions
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20
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Section
3.2.
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Reports
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21
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Section
3.3.
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Delinquency
and Foreclosure Statements
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22
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ARTICLE
4. GENERAL SERVICING PROCEDURE; COVENANTS; REPRESENTATIONS AND
WARRANTIES
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23
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Section
4.1.
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Assumption
Agreements
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23
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Section
4.2.
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Satisfaction
of Mortgages and Release of Collateral Files
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23
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Section
4.3.
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Servicing
Compensation
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24
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Section
4.4.
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Statements
as to Compliance
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25
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Section
4.5.
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Annual
Independent Public Accountants’ Servicing Report
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26
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Section
4.6.
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Owner’s
Right to Examine Servicer Records, etc.
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26
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Section
4.7.
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Cooperation
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27
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Section
4.8.
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Consents
and Approvals
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27
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Section
4.9.
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Reporting
to Credit Repositories
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27
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i
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ARTICLE
5. THE SERVICER
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27
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Section
5.1.
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Indemnification;
Third Party Claims
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27
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Section
5.2.
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Servicer
Covenants; Merger or Consolidation of the Servicer
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28
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Section
5.3.
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Limitation
on Liability of the Servicer and Others
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29
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Section
5.4.
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Servicer
Not to Resign
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29
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Section
5.5.
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Transfer
of Servicing
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30
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Section
5.6.
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Transfer
of Mortgage Loans
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30
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Section
5.7.
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Representations
and Warranties of the Servicer
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30
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ARTICLE
6. DEFAULT
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32
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Section
6.1.
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Events
of Default
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32
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Section
6.2.
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Waiver
of Defaults
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33
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Section
6.3.
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Survival
of Certain Obligations and Liabilities of the Defaulted
Servicer
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33
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ARTICLE
7. TERMINATION
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34
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Section
7.1.
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Termination
of Agreement
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34
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Section
7.2.
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Termination
of the Servicer Upon Unremedied Event of Default
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34
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ARTICLE
8. PASS-THROUGH AND WHOLE LOAN TRANSFERS
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34
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Section
8.1.
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Pass-Through
Transfers or Whole-Loan Transfers
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34
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Section
8.2.
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Designation
of a Master Servicer
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36
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Section
8.3.
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Servicer’s
Purchase Right
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37
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ARTICLE
9. MISCELLANEOUS PROVISIONS
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37
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Section
9.1.
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Successor
to the Servicer
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37
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Section
9.2.
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Amendment
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38
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Section
9.3.
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Recordation
of Agreement; Perfection of Security Interest; Further
Assurances
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38
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Section
9.4.
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Duration
of Agreement
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38
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Section
9.5.
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Governing
Law
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38
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Section
9.6.
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General
Interpretive Principles
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39
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Section
9.7.
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Reproduction
of Documents
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39
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Section
9.8.
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Notices
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39
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Section
9.9.
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Severability
of Provisions
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41
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Section
9.10.
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Exhibits
and Schedules
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41
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Section
9.11.
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Counterparts;
Successors and Assigns
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41
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Section
9.12.
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Effect
of Headings
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41
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Section
9.13.
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Other
Agreements Superseded; Entire Agreement
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41
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Section
9.14.
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Attorneys’
Fees
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41
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Section
9.15.
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Non-Solicitation
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42
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ii
DESCRIPTION
OF ATTACHMENTS
Exhibit
A FORM
OF
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
Exhibit
B ACCOUNT
LETTER AGREEMENT
Exhibit
C ESCROW
ACCOUNT LETTER AGREEMENT
Exhibit
D FORM
OF
OFFICER’S CERTIFICATE
iii
This
SERVICING
AGREEMENT (this
“Agreement”)
dated
as of December
1, 2003,
is
between Washington Mutual Bank, FA, a savings association organized under the
laws of the United States, in its capacity as servicer (the “Servicer”),
and
▇▇▇▇▇▇▇
Sachs Mortgage Company, a New York limited partnership,
and its
successors and assigns, in its capacity as owner (the “Owner”).
PRELIMINARY
STATEMENT
WHEREAS,
pursuant to that certain Mortgage Loan Purchase and Sale Agreement of even
date
herewith among the Servicer, Washington Mutual Bank fsb and Washington Mutual
Bank, each as a seller (the “Sellers”)
and
the Owner as purchaser (the “Purchase
Agreement”),
and
in reliance upon the representations, warranties and covenants of the Servicer
contained herein and of the Sellers contained in the Purchase Agreement, the
Owner has agreed to purchase from the Sellers, and the Sellers have agreed
to
sell to the Owner, without recourse and on a servicing-retained basis, certain
residential, first lien mortgage loans;
WHEREAS,
the
Servicer has agreed to act as Servicer and, on behalf of each of the Sellers
as
agent and subservicer, to service such mortgage loans for the Owner from and
after the purchase by the Owner of such mortgage loans; and
WHEREAS,
the
Servicer and the Owner desire to prescribe the terms and conditions regarding
the management, servicing, and control of the mortgage loans purchased by the
Owner pursuant to the Purchase Agreement;
NOW,
THEREFORE,
in
consideration of the mutual agreements and covenants herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Servicer and the Owner agree as follows:
ARTICLE
1.
DEFINITIONS
Capitalized
terms used in this Agreement shall have the meanings specified in the Purchase
Agreement, except that, whenever used herein, the following words and phrases
shall have the following meanings, unless the context otherwise
requires:
Acceptable
Servicing Procedures:
The
procedures, including prudent collection and loan administration procedures,
and
the standard of care employed by prudent mortgage servicers that service
mortgage loans of the same type as the Mortgage Loans in the jurisdictions
in
which the related Mortgaged Properties are located. Such standard of care shall
not be lower than that the Servicer customarily employs and exercises in
servicing and administering similar mortgage loans for its own account and
shall
be in full compliance with all applicable federal, state and local laws,
ordinances, rules and regulations.
1
Account:
The
account or accounts created and maintained pursuant to Section 2.4 of this
Agreement.
Agreement:
This
Servicing Agreement, including all exhibits and schedules hereto, and all
amendments hereof and supplements hereto.
Applicable
Requirements:
With
respect to each Mortgage Loan, (i) the terms of the related Mortgage and
Mortgage Note, (ii) the federal, state, local and foreign laws, statutes,
rules, regulations, ordinances, standards, requirements, administrative rulings,
orders and processes pertaining to such Mortgage Loan, including but not limited
to those pertaining to the processing, origination and servicing of the Mortgage
Loan, (iii) the requirements of the Owner as set forth in this Agreement
and (iv) Acceptable Servicing Procedures.
BIF:
The
Bank Insurance Fund.
Business
Day:
Any day
other than (i) a Saturday or Sunday, or (ii) a day on which banking or
savings and loan institutions in the States of Washington, California, Illinois,
or New York are authorized or obligated by law or executive order to be
closed.
Code:
The
Internal Revenue Code of 1986, as amended from time to time, or any successor
statute thereto.
Compensating
Interest Cap:
An
amount equal to 1/12 of the sum of:
(i) the
aggregate Unpaid Principal Balance of all (A) fixed rate Mortgage Loans and
(B)
Hybrid ARM Loans that bear interest at the initial fixed rate (other than 3/1
Hybrid Arm Loans), multiplied by 0.25%, and
(ii) the
aggregate Unpaid Principal Balance of all (A) ARM Loans, (B) Hybrid ARM Loans
that bear interest at an adjustable rate and (C) 3/1 Hybrid Arm Loans,
multiplied by 0.375%.
Condemnation
Proceeds:
All
awards or settlements in respect of a taking of all or part of a Mortgaged
Property by exercise of the power of eminent domain or
condemnation.
Cut-off
Date:
With
respect to any Mortgage Loan purchased on a Closing Date, the cut-off date
specified in the Commitment Letter relating to the purchase and sale of the
related Loan Pool.
Defaulted
Servicer:
As
defined in Section 6.1.
Determination
Date:
The
thirteenth (13th) day of each month (or if such day is not a Business Day,
the
next Business Day), commencing in the month following the end of the calendar
month in which the initial Cut-off Date occurs. A Determination Date is related
to a Monthly Remittance Date if such Determination Date and such Monthly
Remittance Date occur in the same calendar month.
2
Disclosure
Document:
As
defined in Section 8.1(d).
Due
Date:
With
respect to any Mortgage Loan, the day of the month on which Monthly Payments on
such Mortgage Loan are due, exclusive of any days of grace, which day shall
be
the first day of the month unless otherwise specified on the related Mortgage
Loan Schedule.
Due
Period:
With
respect to any Mortgage Loan, the period beginning on the first day of any
month
and ending on the last day of such month.
Eligible
Account:
An
account or accounts maintained with a Qualified Depository.
Escrow
Account:
The
separate account or accounts created and maintained pursuant to
Section 2.6.
Escrow
Payments:
The
amounts constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, Primary Mortgage Insurance Policy premiums, if any, fire
and
hazard insurance premiums, condominium charges and other payments required
to be
escrowed by the Mortgagor with the mortgagee pursuant to any Mortgage Loan
or
this Agreement.
Event
of Default:
Any one
of the conditions or circumstances enumerated in Section 6.1.
▇▇▇▇▇▇
▇▇▇:
▇▇▇▇▇▇
▇▇▇ (formerly known as the Federal National Mortgage Association) and any
successor thereto.
FDIC:
The
Federal Deposit Insurance Corporation or any successor thereto.
Fidelity
Bond:
A
fidelity bond to be obtained by the Servicer pursuant to
Section 2.11.
Final
Recovery Determination:
With
respect to any defaulted Mortgage Loan or any REO Property, a determination
made
by the Servicer that all related Condemnation Proceeds, Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries that the Servicer, in
its
reasonable good faith judgment, expects to be finally recoverable have been
so
recovered. The Servicer shall maintain records, prepared by a servicing officer
of the Servicer, of each Final Recovery Determination.
Fitch:
Fitch
Ratings, Inc. or any successor thereto.
GAAP:
Generally Accepted Accounting Principles, as promulgated by the Financial
Accounting Standards Board from time to time.
Indemnified
Party:
As
defined in Section 8.1(d).
Initial
Closing Date:
December
23, 2003.
Insurance
Proceeds:
Proceeds of any Primary Mortgage Insurance Policy, title policy, hazard
insurance policy or any other insurance policy covering a Mortgage Loan or
the
related Mortgaged Property, including any amounts required to be deposited
in
the Account pursuant to Section 2.10, to the extent such proceeds are not
to be applied to the restoration of the related Mortgaged Property or released
to the Mortgagor in accordance with Applicable Requirements.
3
Late
Collections:
With
respect to any Mortgage Loan, all amounts received during any Due Period,
whether as late payments of Monthly Payments, or as Insurance Proceeds,
Liquidation Proceeds, Condemnation Proceeds or otherwise, which amounts
represent late payments or collections of Monthly Payments due but delinquent
for a previous Due Period and not previously recovered.
Liquidation
Proceeds:
Cash
received in connection with (i) the liquidation of a defaulted Mortgage Loan
(whether through the sale or assignment of the Mortgage Loan, trustee’s sale,
foreclosure sale or otherwise) or (ii) the sale of the Mortgaged Property,
if
the Mortgaged Property is acquired in satisfaction of the Mortgage.
Master
Servicer:
As
defined in Section 8.2(a).
Master
Servicing Agreement:
As
defined in Section 8.2(a).
Monthly
Advance:
The
aggregate of the advances made by the Servicer on any Monthly Remittance Date
pursuant to Section 2.16(a).
Monthly
Remittance Date:
The
eighteenth (18th) day of each month (or if such day is not a Business Day,
the
next Business Day) commencing in the month following the end of the calendar
month in which the initial Cut-off Date occurs. A Determination Date is related
to a Monthly Remittance Date if such Determination Date and such Monthly
Remittance Date occur in the same calendar month.
Moody’s:
▇▇▇▇▇’▇
Investors Service, Inc. or any successor thereto.
Mortgage
Interest Rate:
With
respect to each Mortgage Loan, the annual rate at which interest accrues on
such
Mortgage Loan.
Net
Rate:
With
respect to each Mortgage Loan, the annual rate at which interest thereon shall
be remitted to the Owner (in each case computed on the basis of a 360-day year
consisting of twelve 30-day months), which annual rate shall be equal to the
Mortgage Interest Rate less the Servicing Fee Rate.
Nonrecoverable
Advance:
Any
portion of any Servicing Advance or Monthly Advance previously made or proposed
to be made in respect of a Mortgage Loan by the Servicer hereunder that the
Servicer determines in its good faith judgment will not be ultimately
recoverable from Late Collections.
Officer’s
Certificate:
A
certificate signed by a Vice President or other authorized officer and delivered
to the Owner as required by this Agreement.
4
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the Servicer, reasonably
acceptable to the Owner.
OTS:
The
Office of Thrift Supervision, or any successor thereto.
Owner:
▇▇▇▇▇▇▇
Sachs Mortgage Company, a New York limited partnership,
and any
successor owner of any of the Mortgage Loans.
Pass-Through
Transfer:
The
sale or transfer of some or all of the Mortgage Loans by the Owner to a trust
to
be formed as part of a publicly issued or privately placed mortgage backed
securities transaction.
Permitted
Investments:
Any one
or more of the following obligations or securities:
(i) direct
obligations of, or obligations fully guaranteed as to principal and interest
by,
the United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United
States;
(ii) repurchase
obligations with respect to any security described in clause (i) above,
provided that the unsecured long-term obligations of the party agreeing to
repurchase such obligations are at the time rated by S&P or Moody’s in one
of its two highest long-term rating categories;
(iii) federal
funds, certificates of deposit, time deposits, and bankers’ acceptances of any
bank or trust company incorporated under the laws of the United States or any
state, provided that the long-term debt obligations of such bank or trust
company (or, in the case of the principal bank in a bank holding company system,
the long-term debt obligations of the bank holding company) at the date of
acquisition thereof have been rated by S&P or Moody’s in one of its two
highest rating categories; and
(iv) commercial
paper of any corporation incorporated under the laws of the United States or
any
state thereof which on the date of acquisition has been rated by S&P or
Moody’s in its highest short-term rating category.
Portfolio
Loans:
As
defined in Section 8.3.
Prepayment
Charge:
With
respect to any Mortgage Loan, the prepayment premium or charge, if any, required
under the terms of the related Mortgage Note to be paid in connection with
a
Principal Prepayment in Full or a Principal Prepayment in Part, to the extent
permitted by applicable law.
Primary
Mortgage Insurance Policy:
With
respect to each Mortgage Loan, the policy of primary mortgage insurance
(including all endorsements thereto) issued with respect to such Mortgage Loan,
if any, or any replacement policy.
5
Prime:
As of
any date of determination, the annual interest rate, adjusted daily, published
from time to time in The Wall Street Journal (Western Edition) as the “PRIME
RATE” in the “MONEY RATES” section. In the event that more than one such rate is
specified, “Prime” shall mean the greatest of such rates.
Principal
Prepayment:
Any
payment or other recovery of principal in full ( a “Principal
Prepayment in Full”)
or in
part (a “Principal
Prepayment in Part”)
of the
then-outstanding principal on a Mortgage Loan (other than Condemnation Proceeds,
Insurance Proceeds, and Liquidation Proceeds) that is received in advance of
its
scheduled Due Date and 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. The term “Principal Prepayment” shall not refer to any
related Prepayment Charge.
Purchase
Agreement:
That
certain Mortgage Loan Purchase and Sale Agreement of even date herewith among
Washington Mutual Bank, FA, Washington Mutual Bank fsb and Washington Mutual
Bank as the sellers and the Owner as the purchaser.
Qualified
Depository:
Any of
the following: (i) a depository, the long-term unsecured debt obligations
of which are rated by Moody’s or S&P (or a comparable rating agency) in one
of its three highest rating categories, (ii) the corporate trust department
of a national bank, (iii) a depository that fully insures the Account and
the Escrow Account with insurance provided by the FDIC, or (iv) a depository
that is otherwise acceptable to any Rating Agency.
Rating
Agencies:
Fitch,
Moody’s and S&P.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of
the Code.
REMIC
Provisions:
Provisions of the federal income tax law relating to REMICs, which appear at
Section 860A through Section 860G of Subchapter M of Chapter 1,
Subtitle A of the Code and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
REO
Management Fee:
With
respect to each REO Property, an amount equal to the greater of (i) $1,000
and
(ii) 1.0% of the net cash proceeds of the sale of such REO
Property.
REO
Property:
A
Mortgaged Property acquired in foreclosure or by deed in lieu of foreclosure,
as
described in Section 2.12.
SAIF:
The
Savings Association Insurance Fund.
S&P:
Standard & Poor’s Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., or its successor in interest.
6
Servicer:
Washington Mutual Bank, FA, a savings association organized under the laws
of
the United States, or its permitted successor in interest, or any successor
to
the Servicer under this Agreement appointed as herein provided.
Servicer’s
Information:
As
defined in Section 8.1(d).
Servicing
Advances:
All
customary, reasonable, and necessary “out of pocket” costs and expenses,
including reasonable attorneys’ fees and disbursements, incurred by the Servicer
in the performance of its servicing obligations hereunder, including, without
limitation, costs related to (i) the preservation, restoration, and
protection of the Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures, (iii) the management and liquidation
of the Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage and (iv) Servicer’s compliance with the obligations set
forth in Sections 2.2, 2.3, 2.8, 2.10, 2.12 and 2.15 of this
Agreement.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee payable to the
Servicer pursuant to Section 4.3 as compensation for servicing and
administering such Mortgage Loan. Such fee shall, for a period of one full
month, be equal to one-twelfth of the product of (i) the related Servicing
Fee Rate, multiplied by (ii) the outstanding Unpaid Principal Balance of
such Mortgage Loan. Such fee shall be payable monthly and shall be computed
on
the basis of the same principal amount and period respecting which any related
interest payment on such Mortgage Loan is computed.
Transferred
Loans:
As
defined in Section 8.3.
USAP:
As
defined in Section 4.5.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans by the Owner to a third
party, which sale or transfer is not a Pass-Through Transfer.
ARTICLE
2.
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
2.1. Identification
of Mortgage Loans; Servicer to Act as Servicer
(a) As
of the
related Closing Date, the Servicer, as independent contract servicer, shall
service and administer the Mortgage Loans in accordance with this Agreement
and
Acceptable Servicing Procedures. Except as otherwise expressly provided in
this
Agreement, the Servicer shall have full power and authority, acting alone,
to do
any and all things in connection with such servicing and administration that
the
Servicer may deem necessary or desirable and consistent with the terms of this
Agreement, including, without limitation, all action permitted or required
to be
taken under any related Primary Mortgage Insurance Policy. In servicing and
administering the Mortgage Loans, the Servicer shall employ Acceptable Servicing
Procedures, except that the Servicer shall employ the procedures set forth
in
this Agreement whenever the Acceptable Servicing Procedures conflict with the
requirements under this Agreement (provided that in no event shall this Section
2.1 be interpreted to permit the Servicer to act in conflict with any applicable
federal, state and local laws, ordinances, rules or regulations). The Servicer
shall at all times act in the best interests of the Owner in performing
hereunder.
7
(b) The
documents comprising the Collateral File and the Credit File with respect to
each Mortgage Loan serviced hereunder and that are delivered to the Servicer,
together with all other documents with respect to each such Mortgage Loan that
are prepared by or which come into the possession of the Servicer, shall
immediately vest in the Owner and shall be held and maintained in trust by
the
Servicer at the will of the Owner and in a custodial capacity only for the
sole
purpose of servicing or supervising the servicing of the related Mortgage Loans.
The documents comprising each Collateral File and each Credit File and all
related documents that come into the possession of the Servicer and are so
held
by the Servicer shall be appropriately marked to clearly reflect the ownership
interest of the Owner in such Collateral File and Credit File and related
documents. The Servicer shall release its custody of any such documents only
in
accordance with written instructions from the Owner, unless such release is
required as incidental to the Servicer’s servicing of the Mortgage Loans or is
in connection with a repurchase or substitution of any Mortgage Loan pursuant
to
Section 3.3 of the Purchase Agreement.
(c) Consistent
with the terms of this Agreement and subject to Section 2.17, the Servicer
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 Servicer’s reasonable and prudent
determination, such waiver, modification, variation, postponement or indulgence
is in the best interests of the Owner; provided, however, that the Servicer
shall not permit any modification with respect to any Mortgage Loan that would
change the Mortgage Interest Rate, defer or forgive the payment of any principal
or interest payments, reduce the outstanding principal amount (except for actual
payments of principal received by the Servicer) or extend the related Maturity
Date (unless the Mortgagor is in default with respect to the Mortgage Loan
or
such default is, in the judgment of the Servicer, imminent and the Servicer
has
obtained the prior written consent of the Owner). Without limiting the
generality of the foregoing, the Servicer is hereby authorized and empowered
to
execute and deliver on behalf of itself and the Owner all instruments of
satisfaction, cancellation, full release, or partial release or discharge,
and
all other comparable instruments with respect to the Mortgage Loans and the
Mortgaged Properties. If reasonably required by the Servicer, the Owner shall
furnish the Servicer with any powers of attorney and other documents necessary
or appropriate to enable the Servicer to carry out its servicing and
administrative duties under this Agreement.
(d) As
to
each ARM Loan, the Servicer shall make periodic Mortgage Interest Rate and
Monthly Payment adjustments, as applicable, and execute and deliver all
appropriate notices regarding the same, in strict compliance with Applicable
Requirements. The Servicer shall establish procedures to monitor the Index
in
order to ensure that it uses the appropriate value for the Index in determining
an interest rate change. If the Servicer fails to make a timely and correct
Mortgage Interest Rate adjustment or Monthly Payment adjustment, the Servicer
shall use its own funds to satisfy any shortage in the Mortgagor’s Monthly
Payment for so long as such shortage continues. In the event the Index, as
specified in the related Mortgage Note, becomes unavailable for any reason,
the
Servicer shall select an alternative index based on comparable information,
in
accordance with the terms of the Mortgage Note, and such alternative index
shall
thereafter be the Index for such Mortgage Loan. In such event, the Servicer
shall also determine a new Gross Margin. The new Gross Margin shall be the
difference between (x) the average of the original Index for the most recent
three-year period that ends on the last date the original Index was available
plus the Gross Margin on the last date the original Index was available and
(y)
the average of the new Index for the most recent three-year period that ends
on
that date (or if not available for such three-year period, for such time as
it
is available), rounded as provided in the Mortgage Note.
8
(e) In
connection with the servicing and administration of the Mortgage Loans and
consistent with Acceptable Servicing Procedures, this Agreement and the Purchase
Agreement, the Servicer shall have full power and authority to execute and
deliver or cause to be executed and delivered on behalf of the Owner such
instruments of assignment or other comparable instruments as the Servicer shall
deem appropriate in order to register any Mortgage Loan on the MERS® System or
cause the removal of any Mortgage Loan from registration on the MERS®
System.
Section
2.2. Liquidation
of Mortgage Loans
(a) 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 Servicer shall proceed diligently to
collect all payments due and shall take such action, including commencing
foreclosure, as it shall reasonably deem to be in the best interests of the
Owner.
(b) Notwithstanding
the foregoing provisions of this Section 2.2, with respect to any Mortgage
Loan as to which the Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Servicer shall neither (i) obtain title to such
Mortgaged Property as a result of or in lieu of foreclosure or otherwise, (ii)
acquire possession of, nor (iii) take any other action with respect to, such
Mortgaged Property if, as a result of any such action, the Owner 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 Servicer has either
(x) obtained the written consent of the Owner, or (y) 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:
(i) such
Mortgaged Property is in compliance with applicable environmental laws or,
if
not, that it would be in the best economic interest of the Owner to take such
actions as are necessary to bring the Mortgaged Property into compliance
therewith; and
(ii) 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 Owner to take such actions with respect to the affected
Mortgaged Property.
9
The
cost
of the environmental audit report contemplated by this Section 2.2(b) shall
be advanced by the Servicer as a Servicing Advance, subject to the Servicer’s
right to be reimbursed therefor from the Account and the Servicer’s right to
make a judgment about whether any such advance would be a Nonrecoverable
Advance.
(c) If
the
Servicer has (i) determined that it is in the best economic interest of the
Owner 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, or (ii) obtained the written consent of the Owner,
in each case as described above, then the Servicer shall take such action as
it
deems to be in the best economic interest of the Owner (or as otherwise directed
by the Owner). The cost of any such compliance, containment, clean-up or
remediation shall be advanced by the Servicer as a Servicing Advance, subject
to
the Servicer’s right to be reimbursed therefor from the Account and the
Servicer’s right to make a judgment about whether any such advance would be a
Nonrecoverable Advance.
Section
2.3. Collection
of Mortgage Loan Payments
Continuously
from the related Closing Date until the principal and interest on all of the
Mortgage Loans are paid in full, the Servicer shall proceed diligently to
collect all payments due under each of the Mortgage Loans when the same shall
become due and payable. With respect to those Mortgage Loans, if any, as to
which the Servicer collects Escrow Payments, the Servicer shall ascertain or
estimate annual ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, fire and hazard insurance premiums, condominium charges,
Primary Mortgage Insurance Policy premiums and all other charges that, as
provided in any Mortgage, shall become due and payable, to the end that the
Escrow Payments payable by the Mortgagors shall be sufficient to pay such
charges as and when they become due and payable. The Servicer shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note, Primary Mortgage Insurance
Policy or otherwise or against any public or governmental authority with respect
to a taking or condemnation) if in the Servicer’s reasonable judgment the
Servicer believes that the costs and expenses relating thereto would be
Nonrecoverable Advances. The Servicer shall be entitled to be reimbursed from
the Account for any costs, expenses or other liabilities incurred by the
Servicer in connection with any such litigation solely from the proceeds of
the
related Mortgage Loan. The Servicer’s right to such reimbursement shall be prior
to the Owner’s right to such proceeds.
Section
2.4. Establishment
of Account; Deposits in Account
(a) The
Servicer shall establish and maintain one or more Accounts (collectively, the
“Account”)
entitled “Washington Mutual Bank, FA, in trust for ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Company,
as
Owner, and any successor Owner.” The Account shall be an Eligible Account,
established with an institution that is a Qualified Depository and maintained
as
a segregated account separate and apart from any of the Servicer’s own funds and
general assets. If the Account is established with an institution other than
the
Servicer, (i) the Account shall be evidenced by a letter agreement substantially
in the form of Exhibit B
attached
hereto and (ii) the Servicer shall deliver a copy of such letter agreement
to
the Owner on or prior to the Initial Closing Date.
10
(b) The
Servicer shall, upon receipt (and in all events by not later than the end of
the
second Business Day following receipt thereof), deposit in the Account and
retain therein, the following payments and collections either received or made
by the Servicer subsequent to the related Cut-off
Date (other than payments due on or before such Cut-off Date), or otherwise
allocable to a period subsequent to such Cut-off
Date:
(i) the
principal portion of all Monthly Payments on the Mortgage Loans;
(ii) the
interest portion of all Monthly Payments on the Mortgage Loans less the
Servicing Fee;
(iii) all
Principal Prepayments in Part and Principal Prepayments in Full;
(iv) all
Liquidation Proceeds;
(v) all
Insurance Proceeds, other than Insurance Proceeds to be held in the Escrow
Account and applied to the restoration and repair of the Mortgaged Property
or
released to the Mortgagor in accordance with Applicable
Requirements;
(vi) all
Condemnation Proceeds which are not released to the Mortgagor in accordance
with
the Owner’s written consent and Applicable Requirements;
(vii) any
amount required to be deposited in the Account pursuant to Sections 2.4(d),
2.10, 2.12(c), 2.12(e) or 4.2(b);
(viii) any
amounts payable in connection with the repurchase of any Mortgage Loan pursuant
to Section 3.3 of the Purchase Agreement and all amounts required to be
deposited in connection with the substitution of any Qualified Substitute
Mortgage Loan pursuant to the Purchase Agreement; and
(ix) with
respect to each Principal Prepayment, an amount (to be paid by the Servicer
out
of its own funds without reimbursement therefor) which, when added to all
amounts allocable to interest received in connection with such Principal
Prepayment, equals one month’s interest on the amount of principal so prepaid at
the Net Rate, provided, however, that the aggregate of deposits made by the
Servicer pursuant to this clause (ix) in respect of any Monthly Remittance
Date
shall not exceed the Compensating Interest Cap.
11
(c)
The
Servicer shall, no later than 24 hours prior to the next Monthly Remittance
Date, deposit in the Account all Monthly Advances.
(d) The
Servicer may cause the funds on deposit from time to time in the Account to
be
invested in Permitted Investments, which Permitted Investments shall mature
not
later than the Business Day immediately preceding the next Monthly Remittance
Date following the date such funds are invested. All Permitted Investments
shall
be made in the name of the Servicer or its nominee. All income and gain realized
from any Permitted Investment shall be for the benefit of the Servicer and
shall
be subject to its withdrawal or order from time to time. The Servicer shall
indemnify the Owner for any loss incurred in respect of any Permitted Investment
by such Servicer, and the amount of such loss shall be deposited in the Account
by the Servicer out if its own funds, without reimbursement therefor, no later
than 24 hours prior to the next Monthly Remittance Date following the date
of
such loss.
Section
2.5. Permitted
Withdrawals from the Account
The
Servicer may, from time to time, withdraw funds from the Account for the
following purposes:
(i) to
make
payments and distributions to the Owner in the amounts and in the manner
provided for in Section 3.1, and to pay itself any unpaid Servicing Fees,
unpaid REO Management Fees and other servicing compensation in accordance with
Section 4.3;
(ii) to
reimburse itself for any unreimbursed Servicing Advances or Monthly Advances
made with respect to any Mortgage Loan; provided that the Servicer’s right to
reimburse itself pursuant to this clause (ii) is limited to any amounts
collected or received by the Servicer with respect to such Mortgage
Loan;
(iii) to
pay to
itself any interest earned on funds deposited in the Account;
(iv) to
make
any payment or reimburse itself for any amount pursuant to Sections 2.12(c),
2.12(e), 5.1(a) or 5.3;
(v) to
reimburse itself for any Monthly Advance or Servicing Advance previously made
that it has determined to be a Nonrecoverable Advance;
(vi) if
there
shall be amounts deposited in error or there shall be amounts deposited in
the
Account not required to be deposited therein, including the Servicing Fee and
other servicing compensation, to withdraw such amount from the Account any
provision herein to the contrary notwithstanding;
(vii) to
transfer funds to another Qualified Depository in accordance with
Section 2.9; and
(viii) to
clear
and terminate the Account upon the termination of this Agreement in accordance
with Article 7.
12
Section
2.6. Establishment
of Escrow Account;
Deposits in Escrow Account; Escrow Analysis
(a) The
Servicer shall segregate and hold separate and apart from any of its own funds
and general assets all Escrow Payments collected and received pursuant to the
Mortgage Loans and shall establish and maintain one or more Escrow Accounts
(collectively, the “Escrow
Account”),
in
the form of time deposit or demand accounts, which may be interest bearing,
entitled “Washington Mutual Bank, FA, in trust for ▇▇▇▇▇▇▇
Sachs Mortgage Company,
as
Owner, and any successor Owner, and certain Mortgagors.” The Escrow Account
shall be an Eligible Account established with a Qualified Depository. If the
Escrow Account is established with an institution other than the Servicer,
(i)
the Escrow Account shall be evidenced by a letter agreement substantially in
the
form of Exhibit C
attached
hereto and (ii) the Servicer shall deliver a copy of such letter agreement
to
the Owner on or prior to the Initial Closing Date.
(b) The
Servicer shall, upon receipt (and in all events by not later than the end of
the
second Business Day following receipt thereof, or sooner if required by
applicable law), deposit in the Escrow Account and retain therein: (i) all
Escrow Payments collected on account of the Mortgage Loans for the purpose
of
effecting timely payment of escrow items as required under the terms of this
Agreement and (ii) all amounts representing proceeds of any hazard
insurance policy that are to be applied to the restoration or repair of the
related Mortgaged Property. The Servicer shall make withdrawals from the Escrow
Account only in accordance with Section 2.7. The Servicer shall be entitled
to retain any interest earned on funds deposited in the Escrow Account other
than interest on escrowed funds required by law to be paid to the Mortgagor
and,
to the extent required by law, the Servicer shall pay interest on escrowed
funds
to the Mortgagor without right of reimbursement therefor notwithstanding that
the Escrow Account maintained by the Servicer may not bear interest or that
the
interest earned on such escrowed funds is insufficient for such
purpose.
Section
2.7. Permitted
Withdrawals from the Escrow Account
Withdrawals
from the Escrow Account maintained by the Servicer may be made by the Servicer
only (i) to effect timely payments of ground rents, taxes, assessments,
sewer rents, municipal charges, water rates, insurance premiums, condominium
charges, fire and hazard insurance premiums or other items constituting Escrow
Payments for the related Mortgage, (ii) to reimburse the Servicer for any
Servicing Advance made by the Servicer pursuant to Sections 2.8 and 2.10 with
respect to a related Mortgage Loan, (iii) to refund to any Mortgagor any
funds found to be in excess of the amounts required under the terms of the
related Mortgage Loan, (iv) for transfer to the Account in accordance with
the terms of this Agreement, (v) for restoration or repair of a Mortgaged
Property, provided the provisions of Section 2.13 have been complied with,
(vi) to pay to the Mortgagor, to the extent required by Applicable
Requirements, interest on the funds deposited in the Escrow Account,
(vii) to pay to itself any interest earned on funds deposited in the Escrow
Account (and not required to be paid to the Mortgagor), (viii) to remove funds
inadvertently placed in the Escrow Account by the Servicer, or (ix) to
clear and terminate the Escrow Account upon the termination of this Agreement,
in accordance with Article 7.
13
Section
2.8. Payment
of Taxes, Insurance and Other Charges
With
respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of property taxes, assess-ments and other charges that
are
or may become a lien upon the related Mortgaged Property, the status of Primary
Mortgage Insurance premiums, if any, and the status of fire and hazard insurance
coverage and flood insurance, all as required hereunder. If a Mortgage Loan
requires Escrow Payments, the Servicer shall obtain, from time to time, all
bills for the payment of such charges (including renewal premiums) and shall
effect payment thereof prior to the applicable penalty or termination date
in a
manner consistent with Acceptable Servicing Procedures, employing for such
purpose deposits of the Mortgagor in the Escrow Account that shall have been
estimated and accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage. If a Mortgage Loan does
not require Escrow Payments, or if there are insufficient funds in the related
Escrow Account, the Servicer shall cause all such bills to be paid on a timely
basis and shall from its own funds (if necessary) make a Servicing Advance
for
timely payment of all such bills. The Servicer shall monitor the payment status
of such charges (including renewal premiums) by the related Mortgagor. The
Servicer shall effect payment of such charges in a manner consistent with
Acceptable Servicing Procedures and, in all events, prior to the foreclosure
of
any lien against the Mortgaged Property resulting from non-payment of such
property taxes, assess-ments and other charges and prior to the termination
of
any such insurance coverage.
Section
2.9. Transfer
of Accounts
The
Servicer may, from time to time, transfer the Account or the Escrow Account
to a
different Qualified Depository. The Servicer shall notify the Owner of any
such
transfer within ten (10) Business Days of transfer.
Section
2.10. Maintenance
of Hazard Insurance
(a) The
Servicer shall cause to be maintained for each Mortgage Loan serviced by it
fire
and hazard insurance with extended coverage customary in the area where the
related Mortgaged Property is located, in an amount which is at least equal
to
the lesser of (i) 100% of the replacement value of the improvements
securing the Mortgage Loan, or (ii) the Unpaid Principal Balance of the
Mortgage Loan (so long as it equals at least 80% of the insurable value of
the
improvements); provided that in any case such amount shall be sufficient to
prevent the Mortgagor and/or Mortgagee from becoming a co-insurer. If the
Mortgaged Property is in an area that, at the time of origination of the related
Mortgage Loan, is identified on a flood hazard boundary map or flood insurance
rate map issued by the Federal Emergency Management Agency as having special
flood hazards (and such flood insurance was then available), the Servicer shall
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, if such insurance is available. Such flood
insurance shall be in an amount representing coverage not less than the least
of
(i) the Unpaid Principal Balance of the Mortgage Loan, (ii) the full
insurable value of the improvements securing such Mortgage Loan and
(iii) the maximum amount of insurance available under the National Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, each as
amended. The Servicer shall also maintain on REO Property (x) fire and hazard
insurance with extended coverage in an amount that is at least equal to the
maximum insurable value of the improvements that are a part of such property,
(y) liability insurance and (z) to the extent required and available under
the
National Flood Insurance Act of 1968 and the Flood Disaster Protection Act
of
1973, each as amended, flood insurance in an amount as provided above. Any
amounts collected by the Servicer under any such policies shall be paid over
or
applied by the Servicer in accordance with Applicable Requirements whether
(i)
for the restoration or repair of the Mortgaged Property, subject to the related
Mortgage, (ii) for release to the Mortgagor, or (iii) for application in
reduction of the Mortgage Loan, in which event such amounts shall be deposited
in the Account, as provided in Section 2.4. It is understood and agreed
that no earthquake or other additional insurance need be maintained by the
Servicer on any Mortgage Loan or property acquired in respect of a Mortgage
Loan, other than as required under applicable laws and regulations as shall
at
any time be in force. All policies required hereunder shall be endorsed with
standard mortgagee clauses with loss payable to the Servicer and shall provide
for at least 30 days prior written notice to the Servicer of any cancellation,
reduction in amount, or material change in coverage. The Servicer shall not
interfere with the Mortgagor’s freedom of choice in selecting either the
Mortgagor’s insurance carrier or agent upon any policy renewal; provided,
however, that upon any such policy renewal, the Servicer shall accept such
insurance policies only from insurance companies that (A) have a rating of
B:III
or better in Best’s Key Rating Guide or a financial performance index rating of
6 or better in Best’s Insurance Reports and (B) are licensed to do business in
the jurisdiction in which the related Mortgaged Property is
located.
14
(b) If
the
Servicer, as servicer for the benefit of the Owner, shall obtain and maintain
a
blanket policy that would meet the requirements of ▇▇▇▇▇▇ ▇▇▇ if ▇▇▇▇▇▇ ▇▇▇
were
the purchaser of the Mortgage Loans, insuring against loss to the Owner as
mortgagee from damage to any or all of the Mortgaged Properties, then, to the
extent such blanket policy (i) provides coverage, without coinsurance, in
an amount equal to the aggregate outstanding Unpaid Principal Balance of the
Mortgage Loans, (ii) otherwise complies with the requirements of
Section 2.10(a) and (iii) contains a deductible not greater than
$10,000, the Servicer shall be deemed conclusively to have satisfied its
obligations under Section 2.10(a); provided, however, that if there shall
have been one or more of such losses the Servicer shall deposit in the Account,
as provided in Section 2.4, out of the Servicer’s own funds and without
reimbursement therefor, the difference, if any, between the amount that would
have been payable under a policy complying with Section 2.10(a) and
the amount paid under the blanket policy permitted under this
Section 2.10(b). At the request of the Owner, the Servicer shall cause to
be delivered to the Owner a certified true copy of such policy and a statement
from the insurer thereunder that such policy shall not be terminated or
materially modified without 30 days’ prior written notice to the
Owner.
Section
2.11. Fidelity
Bond; Errors and Omissions Insurance
The
Servicer shall maintain, at its own expense, with companies that meet the
requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, a blanket fidelity bond and an errors
and omissions insurance policy, with broad coverage on all officers, employees,
agents and other persons acting in any capacity that would require such persons
to handle funds, money, documents or papers relating to the Mortgage Loans
(collectively, the “Servicer
Employees”).
Any
such 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 Servicer
against losses relating to forgery, theft, embezzlement, fraud, errors and
omissions, failure to maintain any insurance policies required under this
Agreement and negligent acts of Servicer Employees. Such fidelity bond shall
also protect and insure the Servicer against losses relating to the release
or
satisfaction of a Mortgage without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 2.11 requiring
such fidelity bond and errors and omissions insurance shall diminish or relieve
the Servicer from its duties and obligations as set forth in this Agreement.
The
terms of any such fidelity bond and errors and omissions insurance policy shall
be at least equal to the corresponding amounts required by ▇▇▇▇▇▇ Mae in the
▇▇▇▇▇▇ ▇▇▇ MBS Selling and Servicing Guide or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇
Mac
Seller’s and Servicer’s Guide, as amended or restated from time to time. At the
request of the Owner, the Servicer shall cause to be delivered to the Owner
a
certified true copy of such fidelity bond and errors and omissions insurance
policy and a statement from the surety and the insurer that such fidelity bond
and errors and omissions insurance policy shall not be terminated or materially
modified without 30 days’ prior written notice to the Owner.
15
Section
2.12. Title,
Management and Disposition of Real Estate Owned
(a) If
title
to any Mortgaged Property is acquired in foreclosure or by deed in lieu of
foreclosure (“REO
Property”),
the
deed or certificate of sale shall be taken in the name of the Owner, or in
the
name of such Person or Persons designated by the Owner; provided, however,
that
(i) the Owner shall not designate the Servicer as holder without the Servicer’s
prior written consent and (ii) such designated Person or Persons shall
acknowledge in writing that such title is to be held as nominee for the Owner.
The Servicer shall provide written notice to the Owner after any REO Property
is
acquired in foreclosure or by deed in lieu of foreclosure.
(b) The
Servicer, shall manage, conserve, protect, and operate each REO Property solely
for the purpose of its prompt disposition and sale. The Servicer shall either
itself, or through an agent selected by the Servicer, manage, conserve, protect
and operate the REO Property in accordance with Acceptable Servicing Procedures.
The Servicer shall attempt to sell the same (and may temporarily rent the same)
on such terms and conditions as the Servicer deems to be in the best interests
of the Owner. If a REMIC election has been made with respect to the arrangement
under which the related Mortgage Loan is held, the Servicer shall use its best
efforts to dispose of the REO Property as soon as practicable and shall sell
such REO Property, in any event, within three (3) years after title has
been taken to such REO Property (unless the Servicer determines, and gives
the
Owner appropriate notice that a longer period is necessary for the orderly
liquidation of such REO Property).
(c) The
Servicer shall collect all revenues arising from the operation of REO Property.
The Servicer shall deposit, or cause to be deposited, all such revenues in
the
Account in accordance with Section 2.4. The Servicer may use all such
revenues and, if any thereof have been deposited in the Account, withdraw such
revenues therefrom as is necessary for the proper operation, management and
maintenance of any REO Property, including, but not limited to, the cost of
maintaining any hazard insurance pursuant to Section 2.10 and the fees of
any managing agent acting on behalf of the Servicer.
16
(d) The
Servicer shall also maintain on each REO Property fire and hazard insurance
with
extended coverage, liability insurance, and flood insurance in accordance with
the provisions of Section 2.10.
(e) The
proceeds of sale of an REO Property shall be deposited in the Account in
accordance with Section 2.4. The Servicer shall apply the sale proceeds of
any REO Property (i) first to pay the expenses of such sale, (ii) second to
reimburse itself for any related unpaid Servicing Fees, unpaid REO Management
Fees and unreimbursed Servicing Advances and Monthly Advances and (iii) the
balance to be distributed to the Owner. If the sale proceeds have been deposited
in the Account, the Servicer may withdraw from the Account the amounts necessary
to make such payments and reimbursements.
(f) Upon
request, with respect to any REO Property, the Servicer shall furnish to the
Owner a statement covering the Servicer’s efforts in connection with the sale of
that REO Property and any rental of the REO Property incidental to the sale
thereof for the previous month (together with an operating statement for such
REO Property). Such statement shall be accompanied by such other information
as
the Owner shall reasonably request. The Servicer shall maintain separate
accounting for each REO Property.
(g) The
Owner
hereby constitutes and appoints the Servicer as its true and lawful
attorney-in-fact, with full power and authority to sign, execute, acknowledge,
deliver, file for record and record any instrument on its behalf and to perform
such other act or acts as may be customarily and reasonably necessary and
appropriate to effectuate the transactions contemplated by this
Section 2.12, in each case as fully as the Owner might or could do. The
Owner ratifies and confirms each action that the Servicer, as such
attorney-in-fact, shall lawfully take or cause to be taken by authority hereof.
Third parties without actual notice may rely upon the exercise of the power
granted under this power of attorney, and may be satisfied that this power
of
attorney shall continue in full force and effect and has not been revoked unless
this Agreement is terminated as provided herein. If requested by the Servicer,
the Owner shall furnish the Servicer with any instrument or document necessary
or appropriate to evidence or confirm the power of attorney granted in this
Section 2.12(g), including one or more separate instruments or documents in
recordable form for recordation in any jurisdiction in which any Mortgaged
Property is located.
(h) Notwithstanding
anything to the contrary contained in this Agreement, the Owner may, at the
Owner’s sole option, terminate the Servicer as servicer of any such REO Property
without payment of any termination fee, provided that the Servicer shall on
the
date said termination takes effect be reimbursed for any unreimbursed advances
of the Servicer’s funds made pursuant to Section 2.16 and any unreimbursed
Servicing Advances and Servicing Fees in each case relating to the Mortgage
Loan
underlying such REO Property. In the event of any such termination, the
provisions of Section 9.1 shall apply to said termination and the transfer
of servicing responsibilities with respect to such REO Property to the Owner
or
its designees.
17
Section
2.13. Application
of Proceeds of Insurance to Repair or Restoration
The
Servicer shall collect the proceeds from all policies of insurance required
to
be maintained pursuant to Section 2.10 with respect to all losses that may
occur. The Servicer may remit such proceeds to the Mortgagor for the restoration
or repair of the related property and shall otherwise take such actions in
connection with such restoration and repair in a manner consistent with
Acceptable Servicing Procedures.
Section
2.14. Inspections
The
Servicer shall conduct inspections of the Mortgaged Properties at such times
and
in a manner consistent with Acceptable Servicing Procedures and shall maintain
a
written report of all such inspections.
Section
2.15. Maintenance
of Primary Mortgage Insurance Policies; Collections
Thereunder
The
parties acknowledge that, as of any Closing Date, not all Mortgage Loans
purchased on such Closing Date are covered by Primary Mortgage Insurance. In
the
event that any Mortgage Loans are covered by a Primary Mortgage Insurance Policy
on the related Closing Date or subsequently become covered by a Primary Mortgage
Insurance Policy, the provisions set forth below shall apply.
(a) The
Servicer shall maintain in full force and effect any Primary Mortgage Insurance
Policy covering a Mortgage Loan serviced by the Servicer. The Servicer shall
cause the premium for any such Primary Mortgage Insurance Policy to be paid
on a
timely basis and shall from its own funds, if necessary, make a Servicing
Advance to pay the premium on a timely basis. The Servicer shall not cancel
or
refuse to renew any such Primary Mortgage Insurance Policy in effect on the
related Closing Date, unless cancellation or non-renewal is required by
applicable law or regulation. The Servicer shall not take any action or fail
to
take any action which would result in non-coverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of the
Servicer, would have been covered thereunder. In connection with any assumption
or substitution agreement entered into or to be entered into pursuant to
Section 4.1, the Servicer shall promptly notify the insurer under the
related Primary Mortgage Insurance Policy, if any, of such assumption or
substitution of liability in accordance with the terms of such policy and shall
take all actions which may be required by such insurer as a condition to the
continuation of coverage under such Primary Mortgage Insurance Policy. If such
Primary Mortgage Insurance Policy is terminated as a result of such assumption
or substitution of liability, the Servicer shall obtain a replacement Primary
Mortgage Insurance Policy as provided above.
(b) As
part
of its activities as servicer of the Mortgage Loans, the Servicer shall prepare
and present, on behalf of itself and the Owner, claims under any Primary
Mortgage Insurance Policy in a timely fashion in accordance with the terms
thereof and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any Primary Mortgage Insurance Policy
respecting a defaulted Mortgage Loan.
18
Section
2.16. Monthly
Advances by the Servicer
(a) Not
later
than the close of business on the Business Day preceding each Monthly Remittance
Date, the Servicer shall deposit in the Account an amount equal to all payments
not previously advanced by the Servicer of principal and interest at the Net
Rate that were (i) due on any Mortgage Loan during the Due Period that commences
in the same month in which such Monthly Remittance Date occurs, (ii) not
received as of the close of business on the related Determination Date (whether
or not deferred) and (iii) not due on or prior to the related Cut-off Date
(the
aggregate of all such amounts, the “Monthly
Advance”).
In
lieu of making all or a portion of any Monthly Advance, the Servicer may cause
to be made an appropriate entry in its records relating to the Account that
funds in such account, including but not limited to any amounts received in
respect of scheduled principal and interest on any Mortgage Loan due after
the
related Due Period for the related Monthly Remittance Date, have been used
by
the Servicer in discharge of its obligation to make any such Monthly Advance.
Any funds so applied shall be replaced by the Servicer by deposit, in the manner
set forth above, in the Account no later than the close of business on the
Business Day immediately preceding the next Monthly Remittance Date to the
extent that funds in the Account on such date are less than the amounts required
to be distributed on such Monthly Remittance Date. The Servicer shall be
entitled to be reimbursed from the Account for all Monthly Advances of its
own
funds made pursuant to this Section as provided in
Section 2.5.
(b) The
obligation of the Servicer to make such Monthly Advances is mandatory, and,
with
respect to any Mortgage Loan or REO Property, shall continue through the earlier
of (i) the date on which a Final Recovery Determination in connection with
such
Mortgage Loan is made and (ii) the due date of the last Monthly Payment due
prior to the payment in full of such Mortgage Loan.
(c) Notwithstanding
anything herein to the contrary, no Monthly Advance shall be required to be
made
hereunder by the Servicer if such Monthly Advance would, if made, constitute
a
Nonrecoverable Advance.
Section
2.17. Compliance
With REMIC Provisions
If
the
Servicer has received written notice from the Owner that a REMIC election has
been made with respect to the arrangement under which any Mortgage Loans and
REO
Property are held, the Servicer shall not take any action, cause the REMIC
to
take any action or fail to take (or fail to cause to be taken) any action that,
under the REMIC Provisions, if taken or not taken, as the case may be, could
(i) endanger the status of the REMIC as a REMIC, or (ii) result in the
imposition of a tax upon the REMIC (including but not limited to the tax on
“prohibited transactions” as defined in Section 860F(a)(2) of the Code and
the tax on “contributions” to a REMIC set forth in Section 860G(d) of the
Code) unless the Servicer has received an Opinion of Counsel (at the expense
of
the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
19
Section
2.18. Owner
to
Cooperate; Release of Collateral Files
If,
at
any time prior to termination of this Agreement, the Servicer shall require
the
use of any Collateral File (or any portion thereof) to perform its servicing
activities as set forth in this Agreement, the Owner, within five (5) Business
Days of the written request of the Servicer in the form of Exhibit A
hereto
or such form or manner mutually agreed to by the Servicer and the Custodian
(or
within such shorter period as may be necessary for the Servicer to perform
its
obligations hereunder in compliance with all Acceptable Servicing Procedures),
shall release or shall cause the Custodian to release such Collateral File,
or
portion thereof, to the Servicer. Within
five (5) Business Days of the Servicer’s request therefor (or, within such
shorter period as may be necessary for the Servicer to perform obligations
hereunder in compliance with all Acceptable Servicing Procedures), the Owner
shall execute and deliver to the Servicer, in the form supplied to the Owner
by
the Servicer, any court pleadings, requests for trustee’s sale or other
documents reasonably necessary to perform the servicing activities with respect
to any Mortgage Loan, including the foreclosure or sale in respect of any
Mortgaged Property, the commencement and prosecution of any legal action to
enforce the related Mortgage Note and Mortgage and the defense of any legal
action or counterclaim filed against the Owner or the Servicer. The Servicer
may
execute and deliver any or all of such pleadings or documents on behalf of
the
Owner pursuant to the power of attorney granted pursuant to
Section 2.12(g).
ARTICLE
3.
PAYMENTS
TO THE OWNER
Section
3.1. Distributions
(a) On
each
Monthly Remittance Date, the Servicer shall distribute to the Owner all amounts
credited to the Account as of the close of business on the preceding
Determination Date, net of charges against or withdrawals from the Account
pursuant to Section 2.5, plus all Monthly Advances deposited in the Account
prior to such Monthly Remittance Date pursuant to Section 2.4, minus
(i) any amounts attributable to Principal Prepayments received after the
last day of the Due Period immediately preceding the related Monthly Remittance
Date and (ii) any amounts attributable to Monthly Payments collected but
due on a Due Date(s) subsequent to the preceding Determination
Date.
(b) All
distributions made to the Owner on each Monthly Remittance Date shall be made
to
the Owner of record, based on the Mortgage Loans owned and held by the Owner.
All distributions shall be made by wire transfer of immediately available funds
to the account of the Owner at a bank or other entity having appropriate
facilities therefor, if the Owner shall have so notified the Servicer, or by
check mailed to the address of the Owner. Distributions on each Monthly
Remittance Date may be made by more than one (1) wire transfer or check, as
the
case may be.
(c) With
respect to any remittance received by the Owner on or after the second Business
Day following the Business Day on which such payment was due, the Owner shall
send written notice thereof to the Servicer. The Servicer shall pay to the
Owner
interest on any such late payment at an annual rate equal to Prime plus one
percentage point, but in no event greater than the maximum amount permitted
by
applicable law. Such interest shall be paid by the Servicer to the Owner 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. The payment by the Servicer of any such
interest, or the failure of the Owner to notify the Servicer of such interest,
shall not be deemed an extension of time for payment or a waiver of any Event
of
Default by the Servicer.
20
Section
3.2. Reports
(a) On
or
before the tenth (10th) day of each month (or if such day is not a Business
Day,
the next Business Day), the Servicer shall provide to the Owner or its designee
by means of an electronic or other agreed upon medium, with respect to the
Due
Period immediately preceding such Monthly Remittance Date, the data set forth
below on an individual loan basis:
(i) mortgage
loan number;
(ii) interest
rate;
(iii) pending
rate;
(iv) scheduled
principal and interest payment;
(v) scheduled
principal;
(vi) gross
interest;
(vii) curtailment
collected;
(viii) curtailment
adjustment;
(ix) PIF
principal;
(x) PIF
interest difference;
(xi) ARM
Index;
(xii) pending
Index;
(xiii) ending
scheduled balance;
(xiv) investor
loan number;
(xv) Servicing
Fee Rate;
(xvi) due
date;
21
(xvii) yield
rate;
(xviii) beginning
balance;
(xix) ending
balance;
(xx) beginning
scheduled balance;
(xxi) principal
collected;
(xxii) scheduled
net interest;
(xxiii) scheduled
buydown;
(xxiv) Servicing
Fee collected; and
(xxv) remittance
amount.
The
Servicer may submit the foregoing information in more than one (1) report.
Requests for additional data regarding the Mortgage Loans or alternative means
for delivering such reports shall be accommodated at the discretion of the
Servicer and at the Owner’s expense.
(b) Upon
reasonable advance notice in writing, the Servicer shall provide to any Owner
which is a savings and loan association, a bank, an insurance company or other
regulated or supervised entity reports and access to information and
documentation regarding the Mortgage Loans and the transactions contemplated
hereby sufficient to permit the Owner to comply with the applicable regulations
of relevant regulatory or supervisory authorities with respect to its investment
in the Mortgage Loans and Owner’s internal and third-party audit
requirements.
(c) The
Servicer shall prepare and file any and all information statements or other
filings required to be delivered to any governmental taxing authority or to
Owner pursuant to any applicable law with respect to the Mortgage Loans and
the
transactions contemplated hereby. In addition, the Servicer shall provide Owner
with such information concerning the Mortgage Loans as is necessary for Owner
to
prepare its federal income tax return as Owner may reasonably request from
time
to time. In addition, not more than 120 days after the end of each calendar
year, the Servicer shall furnish to each Person who was an Owner at any time
during such calendar year an annual statement in accordance with the requirement
of applicable federal income tax law as to the aggregate of remittances for
the
applicable portion of such year.
Section
3.3. Delinquency
and Foreclosure Statements
The
Servicer shall provide a monthly statement of delinquents and a delinquency
report on all Mortgage Loans more than 30 days delinquent. The Servicer shall
also provide a monthly statement regarding foreclosure status.
22
ARTICLE
4.
GENERAL
SERVICING PROCEDURE; COVENANTS;
REPRESENTATIONS
AND WARRANTIES
Section
4.1. Assumption
Agreements
(a) The
Servicer shall use its best efforts to enforce any “due-on-sale” provision
contained in any Mortgage or Mortgage Note and to deny assumption by the person
to whom the Mortgaged Property has been or is about to be sold, whether by
absolute conveyance or by contract of sale and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note, provided that in
accordance with the terms of the Mortgage Note, the Servicer may permit an
assumption (i) if the Servicer reasonably believes it is unable under Applicable
Requirements to enforce such “due-on-sale” clause, or (ii) if the enforcement of
such rights would impair or threaten to impair any recovery under the related
Primary Mortgage Insurance Policy, if any. In connection with any such
assumption, the related Mortgage Interest Rate, the Unpaid Principal Balance
and
the term of the Mortgage Loan may not be changed. If an assumption is allowed
pursuant to this Section 4.1(a), the Servicer is authorized, at the
Servicer’s discretion, to prepare a substitution of liability agreement to be
entered into by the Owner and the purchaser of the Mortgaged Property pursuant
to which the original Mortgagor is released from liability and the purchaser
of
the Mortgaged Property is substituted as Mortgagor and becomes liable under
the
Mortgage Note. Any such substitution of liability agreement shall be in lieu
of
an assumption agreement. If an assumption fee is collected by the Servicer
for
entering into an assumption agreement the entire amount of such fee may be
retained by the Servicer as additional servicing compensation.
(b) The
Servicer shall follow Acceptable Servicing Procedures with respect to any such
assumption or substitution of liability (taking into account the applicable
Seller’s then current underwriting guidelines applicable to mortgage loans of
the same type as the related Mortgage Loan). The Servicer shall forward to
the
related Custodian either (i) a duplicate original or (ii) a certified true
copy
of any such assumption or substitution of liability agreement, entered into
pursuant to this Section 4.1 within a reasonable time after execution
thereof. Such document shall be added to the related Collateral File and shall
for all purposes be considered a part of such Collateral File to the same extent
as all other documents and instruments constituting a part thereof.
(c) For
purposes of this Section 4.1, 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.
Section
4.2. Satisfaction
of Mortgages and Release of Collateral Files
(a) Upon
the
payment in full of any Mortgage Loan or the receipt by the Servicer of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Servicer shall prepare the appropriate documents and
instruments required to satisfy or release the lien of the Mortgage in
accordance with applicable state law requirements. The Servicer, promptly and
within the applicable legal deadlines appropriate to process the satisfaction
or
release, shall notify the Owner of such event.
23
(b) The
Servicer shall not grant a satisfaction or release of a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage. In the
event the Servicer grants a satisfaction or release of a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage, the
Servicer, upon becoming aware of the foregoing, shall remit to the Owner the
Unpaid Principal Balance of the related Mortgage Loan plus accrued and unpaid
interest by deposit thereof in the Account pursuant to Section 2.4. The
Owner shall assign the related Mortgage and endorse the related Mortgage Note
to
the Servicer and shall do all things necessary to transfer ownership of the
Mortgage Loan to the Servicer. The Servicer shall maintain the Fidelity Bond
as
provided for in Section 2.11 protecting and insuring the Servicer against,
losses sustained with respect to any Mortgage Loan satisfied or released other
than in accordance with the procedures set forth herein.
(c) The
Owner
shall, within five (5) Business Days following receipt of any request from
the
Servicer (or within such shorter period as is necessary for the Servicer to
perform its obligations hereunder in compliance with all Applicable Servicing
Procedures) deliver or cause to be delivered to the Servicer the Collateral
File
(or any portion thereof) required by the Servicer to process any satisfaction
or
release of any Mortgage pursuant to this Section 4.2. In addition, if any
Mortgage Loan has been paid in full and, pursuant to Section 2.2(b) of the
Purchase Agreement, the Owner has recorded the related Assignment of Mortgage
designating the Owner as the holder of record of the Mortgage, the Servicer
shall prepare and deliver to the Owner, together with a request for execution,
the documents and instruments necessary to satisfy or release the lien of the
Mortgage. The Owner shall, within five (5) Business Days following its
receipt of any such request, send to the Servicer the fully-executed documents
that were prepared and requested by the Servicer. In the event that applicable
state law requires that a satisfaction or release be recorded within a shorter
time period than the foregoing procedure permits, the Servicer shall advise
the
Owner accordingly and shall use its best efforts to ensure that the lien of
the
Mortgage is released or satisfied in accordance with applicable state law
requirements, and the Owner shall assist therewith by, to the extent reasonably
practicable, returning to the Servicer the required portion of the Collateral
File and, if applicable, the executed satisfaction and release documents and
instruments within the time periods reasonably specified by the
Servicer.
(d) If
a
Mortgage Loan that has been paid in full is a MERS Loan, the Servicer may cause
the removal of such Mortgage Loan from registration on the MERS® System and
execute and deliver, on behalf of the Owner, any and all related instruments
of
satisfaction or release. No expense incurred in connection with the delivery
of
any instrument of satisfaction or deed or reconveyance shall be chargeable
to
the Account or the Owner.
Section
4.3. Servicing
Compensation
The
Servicer shall be entitled to pay itself a Servicing Fee for each Mortgage
Loan
serviced hereunder. The obligation of the Owner to pay such Servicing Fee is
limited to, and payable solely from, the interest portion of the Monthly
Payments and Late Collections collected by the Servicer with respect to the
related Mortgage Loan. Additional servicing compensation in the form of
non-sufficient funds check fees, assumption fees, conversion fees, other related
administrative fees, late payment charges, Prepayment Charges (except as
otherwise specified in the relevant Commitment Letter) and other similar types
of ancillary fees and charges that are actually received by the Servicer may
be
retained by the Servicer to the extent not required to be deposited into the
Account pursuant to the terms of this Agreement. In addition to the Servicing
Fee payable hereunder, the Servicer shall be entitled to pay itself an REO
Management Fee for each REO Property managed by the Servicer or its agent.
The
Servicer 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 in this Agreement. Any Late
Collections shall be applied by the Servicer in the following order of priority:
(i) first to pay the expenses incurred in connection with collection of such
Late Collections, (ii) second to reimburse itself for any related unpaid
Servicing Fees, unpaid REO Management Fees and unreimbursed Servicing Advances
and Monthly Advances and (iii) the balance to be distributed to the
Owner.
24
Section
4.4. Statements
as to Compliance
(a) Not
later
than March 15 of each year (or if such day is not a Business Day, the next
succeeding Business Day), the Servicer will deliver to the Owner and, with
respect to any Mortgage Loans subject to a Pass-Through Transfer, each other
Person entitled to receive servicing reports provided pursuant to Section 3.2(a)
an Officer’s Certificate for the prior calendar year, beginning with the
calendar year ending December 31, 2003, stating (i) a review of the activities
of the Servicer during the preceding year and of performance under this
Agreement has been made under such officer’s supervision, and (ii) to the best
of such officer’s knowledge, based on such review, the Servicer has fulfilled
all of its obligations under this Agreement throughout such year or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officer and the nature and status
thereof.
(b) Not
later
than March 15 of each year (or if such day is not a Business Day, the next
succeeding Business Day), with respect to any Mortgage Loans subject to a
Pass-Through Transfer, the Servicer will deliver to the Owner and each other
Person entitled to receive servicing reports provided pursuant to Section 3.2(a)
an Officer’s Certificate for the prior calendar year, beginning with the
calendar year ending December 31, 2003, in substantially the form of
Exhibit D
to this
Agreement.
(c) The
Servicer shall indemnify and hold harmless each of the Owner, each other Person
entitled to receive servicing reports provided pursuant to Section 3.2(a),
each
Person, if any, who “controls” the Owner or such other Person within the meaning
of the Securities Act of 1933, as amended, and their respective present and
former officers, directors, employees and assignees against any and all losses,
penalties, damages, fines, forfeitures, legal fees and related costs, judgments
and any other costs, fees and expenses that such Person may sustain (for
avoidance of doubt, including those resulting in amounts payable by such
indemnitee to any third party, including affiliates of such indemnitee) arising
out of third party claims based on (i) the failure of the Servicer to deliver
or
cause to be delivered when required any Officer’s Certificate required pursuant
to Section 4.4(a) or Section 4.4(b), or the accountants’ statement required
pursuant to Section 4.5, or (ii) any material misstatement or omission in any
certification pursuant to Section 302(a) of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002
and
Rules 13a-14 and 15d-14 promulgated by the Securities and Exchange Commission
thereunder made in reliance on any material misstatement or omission contained
in any Officer’s Certificate provided pursuant to Section 4.4(a) or Section
4.4(b).
If the
indemnification provided for in this Section 4.4 is unavailable or insufficient
to hold harmless any indemnitee, then the Servicer agrees that it shall
contribute to the amount paid or payable by such indemnitee as a result of
the
losses, claims, damages or liabilities of such indemnitee arising out of clause
(i) or (ii) of the preceding sentence in such proportion as is appropriate
to
reflect the relative fault of the indemnitee on the one hand and the Servicer
on
the other.
25
Section
4.5. Annual
Independent Public Accountants’ Servicing Report
Not
later
than March 15 of each year (or if such day is not a Business Day, the next
succeeding Business Day), the Servicer will, at its expense, cause a firm of
independent public accountants that is a member of the American Institute of
Certified Public Accountants to furnish to the Owner and, with respect to any
Mortgage Loans subject to a Pass-Through Transfer, each other Person entitled
to
receive servicing reports provided pursuant to Section 3.2(a), a statement
to
the effect that, based on an examination conducted by such firm in compliance
with the Uniform Single Attestation Program for Mortgage Bankers (“USAP”),
the
assertion of management of the Servicer that it has complied with the minimum
servicing standards identified in the USAP is fairly stated in all material
respects, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement. No
later
than such time as to enable such firm of independent public accountants to
deliver its statement as provided in this Section 4.5, the Servicer shall
disclose to such firm of independent public accountants and to the Owner all
significant deficiencies relating to the Servicer's compliance with the minimum
servicing standards in accordance with a review conducted in compliance with
the
USAP.
Section
4.6. Owner’s
Right to Examine Servicer Records, etc.
(a) The
Owner
shall have the right, at its expense, to (i) examine and audit the
Servicer’s books of account, records, reports and other papers relating to
(x) the performance by the Servicer of its obligations and duties under
this Agreement, or (y) the Mortgage Loans, (ii) make copies and
extracts therefrom and (iii) discuss the affairs, finances, and accounts of
the
Servicer relating to such performance with the Servicer’s officers and
employees, all at such times and places, and with such frequency, as may be
reasonably requested.
(b) The
Servicer shall provide to the Owner and any supervisory agents or examiners
representing a state or federal governmental agency having jurisdiction over
the
Owner, including without limitation the OTS, the FDIC and other similar
entities, access to any documentation regarding the Mortgage Loans in the
possession of the Servicer that is required by any applicable regulations.
Such
access shall be afforded without charge, upon reasonable request, during normal
business hours, at the offices of the Servicer and in accordance with any
applicable regulations.
26
Section
4.7. Cooperation
The
Servicer and the Owner shall cooperate fully with one another and their
respective counsel and other representatives and advisors in connection with
the
steps required to be taken as part of their respective obligations under this
Agreement.
Section
4.8. Consents
and Approvals
The
Servicer shall timely obtain, at its sole cost and expense, the consents and
approvals required by law or pursuant to contract to consummate the transactions
contemplated hereby. All such consents shall be obtained without any cost or
expense to the Owner and will be obtained without any adverse modification
in
the terms of any of the agreements relating to the Mortgage Loans or the
imposition of any burdensome provisions or conditions on the Owner.
Section
4.9. Reporting
to Credit Repositories
With
respect to each Mortgage Loan, the Servicer will furnish information regarding
its borrower credit files to Equifax, Experian, and Trans Union Credit
Information Company (three of the credit repositories) in compliance with the
provisions of the Fair Credit Reporting Act and its implementing regulations
applicable to the Servicer.
ARTICLE
5.
THE
SERVICER
Section
5.1. Indemnification;
Third Party Claims
(a) The
Servicer shall indemnify and hold harmless the Owner (including any prior
Owner), its present and former directors, officers, employees and assignees
(each, an “Indemnified Party”) against any and all third party claims, losses,
penalties, damages, fines, forfeitures, legal fees and related costs, judgments
and any other costs, fees and expenses that the Indemnified Party may sustain
(for avoidance of doubt, including those resulting in amounts payable by such
Indemnified Party to any third party, including affiliates of such Indemnified
Party) in any way related to the failure of the Servicer to service the Mortgage
Loans in compliance with the terms of this Agreement; provided, however, the
Servicer shall not be liable hereunder with respect to (i) any action or
inaction resulting from the written direction or consent of an Indemnified
Party, (ii) any action or inaction resulting from an Indemnified Party’s failure
to cause any Collateral File (or portion thereof) to be released to the Servicer
pursuant to Sections 2.18 or 4.2(c), or (iii) any action or inaction
resulting from an Indemnified Party’s failure to comply with Section 5.1(b)
or Section 5.6. The Servicer shall notify the Indemnified Party if a claim
is
made by a third party with respect to this Agreement or the Mortgage Loans
that
the Servicer determines in its good faith judgment will materially affect the
Indemnified Party’s interest in such Mortgage Loans. The Servicer shall assume
(with the written consent of the Indemnified Party) the defense of any such
claim and, subject to the last sentence of this paragraph, pay all reasonable
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against the
Servicer or the Indemnified Party in respect of such claim. The Servicer shall
follow any written instructions received from the Indemnified Party in
connection with any such claim. The Servicer shall have the right to reimburse
itself from the Account for all expenses, advances and liabilities incurred
by
the Servicer in respect of any such claim (whether or not the Servicer has
assumed the defense thereof), except when the claim (x) is related to the
Servicer’s obligations to indemnify the Indemnified Party pursuant hereto,
(y) results from the failure of the Servicer to service the Mortgage Loans
in compliance with the terms of this Agreement, or (z) results from the
Servicer’s willful misconduct, bad faith or negligence in performing its duties
under this Agreement.
27
(b) With
respect to any Mortgage Loan, if the Owner records or causes to be recorded
the
related Assignment of Mortgage designating the Owner as the holder of record
of
the Mortgage in the appropriate public recording office of the jurisdiction
in
which the related Mortgaged Property is located, and the Owner, in its capacity
as the holder of record, receives written notice of any action with respect
to
the related Mortgage or Mortgaged Property, the Owner shall promptly send a
copy
of such notice to the Servicer in accordance with Section 9.8. The Servicer
shall have no liability to the Owner for claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, or any other costs or
expenses, that result from the Owner’s failure to comply with the provisions set
forth in this paragraph.
Section
5.2. Servicer
Covenants; Merger or Consolidation of the Servicer
(a) The
Servicer covenants that, subject to Section 5.2(b), it shall keep in full
force and effect its existence, rights and franchises as a corporation and
its
status as a ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac approved servicer in good standing and
shall obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement or any
of
the Mortgage Loans and to perform its duties under this Agreement.
(b) Any
Person into which the Servicer may be merged or consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any Person succeeding to all, or substantially all, of
the
business or assets of the Servicer (whether or not related to loan servicing),
shall be the successor of the Servicer hereunder, without the execution or
filing of any paper, or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however,
that
the Servicer shall not be a party to any such merger, consolidation or
conversion, or sell or otherwise dispose of all, or substantially all, of its
business or assets, unless (i)
as a
result of and immediately after such merger, conversion, consolidation, sale
or
other disposition, no Event of Default under Section 6.1 hereof would exist
with
respect to such successor servicer and (ii) the
successor or surviving Person shall be an institution that is a ▇▇▇▇▇▇ Mae
or
▇▇▇▇▇▇▇ Mac approved servicer in good standing and a member of MERS in good
standing. In addition, the successor or surviving Person shall be an institution
(i) having a GAAP net worth of not less than $25,000,000 and (ii) the
deposits of which are insured by the FDIC, SAIF and/or BIF, or which is a
HUD-approved mortgagee whose primary business is in origination and servicing
of
first lien mortgage loans. The
Servicer shall use its best efforts to give 90 days’ prior written notice to the
Owner of any such merger, conversion, consolidation, sale or other disposition
to which the Servicer proposes to be a party. In the event that any successor
entity to the Servicer fails to meet the requirements set forth in this Section
5.2(b) and the Owner does not consent to such successor becoming Servicer
hereunder, then the Owner shall have the right to terminate this Agreement
with
respect to the Servicer and any such successor upon notice given as set forth
in
Section 6.1 and in the manner specified in Sections 6.1 and 7.2, without any
payment of any termination penalty or termination damages and without any
additional liability whatsoever to the Servicer or any third party, except
for
liabilities accrued under this Agreement prior to the date of termination and
for liabilities resulting from Owner’s obligations hereunder, including the
payment of the Servicing Fee pursuant to Section 7.2.
28
Section
5.3. Limitation
on Liability of the Servicer and Others
The
Servicer and the directors, officers, employees or agents of the Servicer shall
not be under any liability to the Owner (i) for any action taken, or for
refraining from the taking of any action, in good faith pursuant to this
Agreement, (ii) for errors in judgment made in good faith, (iii) for any action
or inaction in accordance with the written direction or consent of the Owner,
(iv) for any action or inaction resulting from the Owner’s failure to cause any
Collateral File (or portion thereof) to be released to the Servicer pursuant
to
Sections 2.18 or 4.2(c), or (v) for any action or inaction resulting from
the Owner’s failure to comply with Section 5.1(b) or Section 5.6; provided,
however, this provision shall not protect the Servicer against any breach of
warranties or representations made herein, any failure to perform its
obligations in accordance with any standard of care set forth in this Agreement
(unless in accordance with the written direction or consent of the Owner) or
any
liability that would otherwise be imposed by reason of willful misconduct,
bad
faith or negligence in the performance of duties or reckless disregard of its
obligations under this Agreement. The Servicer and any officer, employee or
agent of the Servicer may rely in good faith on any document of any kind
reasonably believed by the Servicer to be prima
facie
properly
executed and submitted by any Person respecting any matters arising hereunder.
Subject to Section 5.1(a), the Servicer shall not be under any obligation
to appear in, prosecute or defend any legal action that is not incidental to
its
duties under this Agreement and that may result in any expense or liability
to
the Servicer; provided, however, that the Servicer may, with the written consent
of the Owner, undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights, duties, and the interests 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 Owner shall be liable and the Servicer shall be entitled to be
reimbursed therefor from the Account,
unless
any such costs or liabilities shall result from the negligence, bad faith or
willful misfeasance of the Servicer in performing such action.
Section
5.4. Servicer
Not to Resign
The
Servicer shall not resign from the obligations and duties hereby imposed on
it
except upon the determination that such Servicer’s duties hereunder are no
longer permissible under Applicable Requirements and such incapacity cannot
be
cured by such Servicer. Any such determination permitting the resignation of
the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered
to
the Owner. No such resignation shall become effective until a successor that
satisfies the requirements set forth in Section 9.1 has assumed the
Servicer’s responsibilities and obligations hereunder in accordance with such
Section.
29
Section
5.5. Transfer
of Servicing
The
Servicer acknowledges that the Owner has entered into this Agreement in reliance
upon the adequacy of the Servicer’s servicing facilities, plan, personnel,
records and procedures, its integrity, reputation and financial standing and
the
continuance thereof. Without in any way limiting the generality of this
Section 5.5, the Servicer shall not either assign this Agreement or any of
the servicing rights or obligations hereunder except (i) in connection with
a merger or consolidation permitted under Section 5.2(b), or (ii) with
the prior written consent of the Owner, which consent shall not be unreasonably
withheld or delayed.
Section
5.6. Transfer
of Mortgage Loans
(a) The
Owner
shall have the right, without the consent of the Servicer, to assign its
interest under this Agreement with respect to any Mortgage Loans that have
been
assigned in accordance with Article 6 of the Purchase Agreement; provided,
however, that the Owner shall give the Servicer written notice 15 days prior
to
any such assignment of its interest under this Agreement. If
the
assignment of the Owner’s interest under this Agreement with respect to any
Mortgage Loan is proposed to be effected pursuant to an assignment, assumption
and recognition agreement containing rights, duties, obligations, and
liabilities of the Servicer that do not differ in any material respect from
the
rights, duties, obligations, and liabilities of the Servicer in the form
assignment, assumption and recognition agreement attached hereto as Exhibit
E,
and the
conditions set forth in the preceding sentence are satisfied, the Servicer
shall
execute, deliver and perform the obligations of the Servicer under such
assignment, assumption and recognition agreements and recognize the assignee
thereunder as the owner of the assigned Mortgage Loans. The
Owner
shall also have the right to designate any Person to exercise the rights of
Owner hereunder to the extent provided in Section 8.2 of this Agreement. In
any such case, all references to the Owner shall be deemed to include such
assignee or designee.
(b) The
Servicer shall keep books and records in which, subject to such reasonable
regulations as it may prescribe, the Servicer shall note transfers of Mortgage
Loans. For the purposes of this Agreement, the Servicer shall be under no
obligation to deal with any Person with respect to this Agreement or any
Mortgage Loan unless the books and records show such person as the owner of
such
Mortgage Loan. Upon receipt of a written notice from the Owner of any assignment
of any Mortgage Loan permitted under the Purchase Agreement, the Servicer shall
▇▇▇▇ its books and records to reflect the ownership of such Mortgage Loan by
such assignee, and, except with respect to the indemnity set forth in
Section 8.1(f) hereof, the previous Owner shall be released from its
obligations hereunder to the extent such obligations relate to Mortgage Loans
sold by the Owner and arise after the date of such sale.
Section
5.7. Representations
and Warranties of the Servicer
The
Servicer hereby represents and warrants to the Owner as of each Closing Date
as
follows:
30
(a) The
Servicer is a federally chartered savings association, duly organized, validly
existing and in good standing under the laws of the United States, has all
licenses necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in the states where the Mortgaged
Properties are located, if the laws of such states require licensing or
qualification in order to conduct business of the type conducted by the Servicer
and to the extent necessary to ensure the servicing of each Mortgage Loan in
accordance with this Agreement. The Servicer has the corporate power and
authority to enter into, execute and deliver this Agreement and all documents
and instruments executed and delivered pursuant hereto and to perform its
obligations in accordance therewith. The execution, delivery and performance
of
this Agreement by the Servicer and the consummation of the transactions
contemplated hereby have been duly and validly authorized. This Agreement
evidences the valid, binding and enforceable obligations of the Servicer,
subject as to enforcement, (i) to bankruptcy, insolvency, receivership,
conservatorship, reorganization, arrangement, moratorium and other laws of
general applicability relating to or affecting creditors’ rights and (ii) to
general principles of equity, whether such enforcement is considered in a
proceeding in equity or at law. All requisite corporate action has been taken
by
the Servicer to make this Agreement valid and binding upon the Servicer in
accordance with its terms.
(b) No
consent, approval, authorization, or order of any court or governmental agency
or body relating to the transactions contemplated by this Agreement is required
as to the Servicer or, if required, such consent, approval, authorization,
or
order has been obtained.
(c) The
consummation of the transactions contemplated by this Agreement, including
without limitation the fulfillment of, or compliance with, the terms and
conditions of this Agreement, are in the ordinary course of business of the
Servicer and shall not (i) result in the breach of any term or provision of
the charter or by-laws of the Servicer, (ii) result in the breach of any
term or provision of, or conflict with or constitute a default under, or result
in the acceleration of any obligation under, any material agreement, indenture,
loan or credit agreement, or other instrument to which the Servicer or its
property is subject, or (iii) result in the violation of any law, rule,
regulation, order, judgment, or decree to which the Servicer or its property
is
subject.
(d) There
is
no action, suit, proceeding or investigation pending or, to the best of the
Servicer’s knowledge, threatened against the Servicer that, either in any one
instance or in the aggregate, is likely (in the Servicer’s judgment), to result
in any material impairment of the right or ability of the Servicer to carry
on
its business substantially as now conducted, or that would adversely affect
the
validity of this Agreement, or of any action taken or to be taken in connection
with the obligations of the Servicer contemplated herein, or that would be
likely to materially impair the ability of the Servicer to perform its
obligations hereunder.
(e) The
Servicer is an approved servicer of mortgage loans for ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇
Mac, in good standing. No event has occurred, including but not limited to
a
change in insurance coverage, that would make the Servicer unable to comply
with
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac eligibility requirements.
(f) The
Servicer is a member of MERS in good standing. The Servicer shall comply in
all
material respects with the rules and procedures of MERS in connection with
the
servicing of each MERS Loan for as long as each such Mortgage Loan is registered
on the MERS® System.
31
ARTICLE
6.
DEFAULT
Section
6.1. Events
of
Default
In
case
one or more of the following Events of Default by the Servicer shall occur
and
be continuing:
(i) any
failure by the Servicer to remit to the Owner when due any payment required
to
be made under the terms of this Agreement, which failure continues unremedied
for a period of three (3) Business Days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been received
by
the Servicer, from the Owner; or
(ii) any
failure by the Servicer to duly observe or perform, in any material respect,
any
other covenant, obligation or agreement of the Servicer as set forth in this
Agreement, which failure continues unremedied for a period of sixty (60) (or,
in
the case of any failure to pay the premium for any insurance policy which is
required to be maintained hereunder, thirty (30)) days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Owner; provided that any failure by the
Servicer to duly perform its obligations under Section 4.4 or Section 4.5 shall
be deemed to be a material breach of this Agreement; or
(iii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
for
the appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities, or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Servicer and such decree or order shall have remained
in force, undischarged or unstayed for a period of sixty (60) days;
or
(iv) the
Servicer shall consent to the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Servicer or relating
to
all, or substantially all, of the Servicer’s property; or
(v) the
Servicer shall admit in writing its inability to pay its debts 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
(vi) the
Servicer shall fail to be an approved servicer of mortgage loans for ▇▇▇▇▇▇
Mae
and ▇▇▇▇▇▇▇ Mac, in good standing; or
32
(vii) the
Servicer shall fail to be in compliance with the “doing business” or licensing
laws of any jurisdiction where a Mortgaged Property is located; or
(viii) the
Servicer shall attempt to assign this Agreement or the servicing
responsibilities hereunder in contravention of this Agreement;
then,
and
in each and every such case, so long as such Event of Default shall not have
been remedied, the Owner, by notice in writing to the Servicer (in each such
instance, the “Defaulted
Servicer”),
may,
in addition to whatever rights the Owner may have at law or equity, including
injunctive relief and specific performance, commence termination of all of
the
rights and obligations of the Defaulted Servicer under this Agreement pursuant
to Section 7.2, and may exercise any and all other remedies available at
law or at equity. Upon receipt by the Defaulted Servicer of such written notice
from the Owner stating the intent to terminate the Defaulted Servicer as
servicer under this Agreement as a result of such Event of Default, all
authority and power of the Defaulted Servicer under this Agreement, whether
with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in
the
successor appointed pursuant to Section 9.1. Upon written request from the
Owner, the Defaulted Servicer shall, at its sole expense, prepare, execute,
and
place in such successor’s possession or control all Collateral Files and Credit
Files, and do or cause to be done all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, all of which
shall be undertaken immediately and shall be completed as soon as possible
and
in all events by not later than forty-five (45) Business Days following the
Owner’s request therefor. The Defaulted Servicer shall cooperate with the Owner
and such successor in effecting the termination of the Defaulted Servicer’s
responsibilities and rights hereunder, including, without limitation, the
transfer to such successor of all cash amounts that have been credited by the
Defaulted Servicer to the Account or the Escrow Account at the time of transfer,
and all other amounts that may thereafter be received with respect to the
Mortgage Loans and to which the Defaulted Servicer is not entitled pursuant
to
the terms of this Agreement.
Section
6.2. Waiver
of
Defaults
The
Owner
may waive any default by the Defaulted Servicer in the performance of its
obligations hereunder and its consequences. Any such waiver must be in writing
to be effective. Upon any waiver of a past default, such default shall cease
to
exist, and any Event of Default arising therefrom shall, unless otherwise
specified in such waiver, be deemed to have been remedied for every purpose
of
this Agreement unless the Defaulted Servicer fails to comply with the terms
of
such waiver. No such waiver shall extend to any subsequent or other default
or
impair any right consequent thereto except to the extent expressly so
waived.
Section
6.3. Survival
of Certain Obligations and Liabilities of the
Defaulted Servicer
The
representations, warranties, covenants, indemnities and agreements of the
parties provided in this Agreement and the parties’ obligations hereunder shall
survive the execution and delivery and the termination or expiration of this
Agreement. Notwithstanding any termination of the rights and obligations of
the
Servicer pursuant to this Article 6, the Defaulted Servicer shall remain
liable for any actions of the Defaulted Servicer taken prior to the effective
time of such termination.
33
ARTICLE
7.
TERMINATION
Section
7.1. Termination
of Agreement
This
Agreement shall terminate upon either (i) the later of the distribution to
the Owner of final payment or liquidation with respect to the last Mortgage
Loan
subject to this Agreement and each REO Property or the disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure with respect
to the last Mortgage Loan subject to this Agreement and the remittance of all
funds due hereunder, or (ii) the mutual written consent
of
the parties.
Section
7.2. Termination
of the Servicer
Upon
Unremedied Event of Default
The
Owner
may, at its sole option, following an unremedied Event of Default and in
accordance with Section 6.1, terminate any rights the Servicer may have
hereunder. The Owner, with full cooperation of the Servicer, shall arrange
for
the transfer of servicing, at the Owner’s option, to the Owner or a third party
successor servicer pursuant to Section 9.1, and the Servicer shall continue
servicing the Mortgage Loans under this Agreement, for the Servicing Fee
provided herein, until the Owner gives the Servicer notice of such
transfer.
ARTICLE
8.
PASS-THROUGH
AND WHOLE LOAN TRANSFERS
Section
8.1. Pass-Through
Transfers or Whole-Loan Transfers
(a) The
Owner
and the Servicer agree that in connection with any Whole Loan Transfer or
Pass-Through Transfer permitted under Article 6 of the Purchase Agreement,
the
Owner, in its sole discretion, may assign its rights under this Agreement with
respect to the Mortgage Loans subject to such Whole Loan Transfer or
Pass-Through Transfer.
(b) The
Owner
shall reimburse the Servicer for all reasonable out-of-pocket expenses,
including attorneys’ fees, incurred by the Servicer in connection with any Whole
Loan Transfer or Pass-Through Transfer.
(c) In
connection with each Whole Loan Transfer or Pass-Through Transfer permitted
under Article 6 of the Purchase Agreement, the Servicer shall: (i) provide
the
Owner with information and appropriate verification of information in its
possession or control as may reasonably be necessary in order to effect such
Whole Loan Transfer or Pass-Through Transfer (and, to the extent any such
information is in the possession or control of any third party, use commercially
reasonable efforts to cause such third party to provide such information);
and
(ii) cooperate with all reasonable requests and due diligence procedures not
otherwise addressed herein.
34
(d) With
respect to any Whole Loan Transfer or Pass-Through Transfer permitted under
Article 6 of the Purchase Agreement in which a prospectus, prospectus supplement
or other disclosure document (a “Disclosure
Document”)
is
prepared in connection therewith, and in which a substantial portion of the
mortgage loans in the related transaction consist of Mortgage Loans, the
Servicer shall:
(i) provide
for inclusion as part of such Disclosure Document (A) the regulatory status
of
the Servicer and its affiliates, (B) delinquency and foreclosure information
of
the type typically provided by the Servicer in connection with mortgage loans
originated by the Sellers and securitized by third parties and (C) updated
information with respect to the Mortgage Loans as of the related Whole Loan
Transfer or Pass-Through Transfer (the information referred to in this sentence,
in the form provided to the Owner, being “Servicer’s
Information”);
and
(ii) execute
and deliver an Indemnification Agreement in substantially the form attached
to
Exhibit C
of the
Purchase Agreement.
(e) With
respect to any Pass-Through Transfer permitted under Article 6 of the Purchase
Agreement in which all or substantially all of the mortgage loans in the related
transaction consist of Mortgage Loans, the Servicer shall:
(i) execute
and deliver a pooling and servicing agreement containing terms and conditions
that are consistent with the terms and conditions set forth herein and in the
Purchase Agreement and that are customary for public, rated transactions for
the
issuance of pass-through certificates backed by mortgage loans similar to the
Mortgage Loans included in such Pass-Through Transfer, provided, that (A) any
servicing reporting requirements must be consistent with the standard practices
of the Servicer and (B) each of the parties to such pooling and servicing
agreement negotiates in good faith any terms or conditions in such pooling
and
servicing agreement not specifically referenced or provided for under this
Agreement or the Purchase Agreement; and
(ii) provide
Owner with opinions of counsel as to the Servicer’s corporate authority and the
enforceability of the pooling and servicing agreement against the Servicer,
audit letters addressing the delinquency and foreclosure statistics of the
Servicer and certificates from public officials, each as the Servicer shall
reasonably determine to be necessary to effect such Pass-Through
Transfer.
(f) With
respect to any Whole Loan Transfer or Pass-Through Transfer in which a
Disclosure Document is prepared in connection therewith, the Owner
shall:
(i) provide
the Servicer with all drafts of the Servicer’s Information when produced and
revise the Servicer’s Information in accordance with the Servicer’s comments to
correct any information therein at the Owner’s cost; and
(ii) (A)
indemnify and hold harmless the Servicer against any losses, claims, damages
or
liabilities to which the Servicer may become subject, under the Securities
Act
of 1933, as amended, or otherwise, insofar as such losses, claims, damages
or
liabilities (or actions in respect thereof) (x) arise out of or are based upon
any untrue statement of any material fact contained in such Disclosure Document
(other than an untrue statement of material fact contained in the Servicer’s
Information), or (y) arise out of or are based upon the omission to state in
such Disclosure Document a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (unless the material fact omitted
would constitute Servicer’s Information) and (B) reimburse the Servicer for any
legal or other expenses reasonably incurred by the Servicer in connection with
investigating or defending any such loss, claim, damage, liability or
action.
35
Section
8.2. Designation
of a Master Servicer
(a) Notwithstanding
anything to the contrary contained in this Agreement, the Owner shall have
the
right, in its sole discretion, upon 30 days’ prior written notice to the
Servicer, to appoint and designate a master servicer (the “Master
Servicer”),
as
master servicer of Mortgage Loans subject to a permitted Whole Loan Transfer
or
Pass-Through Transfer. Upon receipt of written notice of such appointment,
the
Servicer shall promptly enter into a servicing agreement (a “Master
Servicing Agreement”)
to
service the Mortgage Loans for the Master Servicer in accordance with the Master
Servicer’s requirements as set forth in the Master Servicer’s servicing guide;
provided, however, that the Servicer shall be under no obligation to enter
into
any Master Servicing Agreement unless the obligations and duties of the Servicer
as a subservicer thereunder (i) are not materially different from than those
set
forth herein, (ii) do not cause undue burden on the Servicer, (iii) do not
expand in any material respect any of the obligations, duties or liabilities
of
the Servicer hereunder and (iv) will not result in any increased cost to the
Servicer. If the Servicer and the Master Servicer enter into a Master Servicing
Agreement, the Servicer shall service the Mortgage Loans, and remit and report
to the Master Servicer, in accordance with the terms of the Master Servicing
Agreement and, to the extent inconsistent therewith, the servicing provisions
set forth in this Agreement shall be superseded by the Master Servicing
Agreement. If the Servicer and the Master Servicer do not enter into a Master
Servicing Agreement, the Servicer shall service the Mortgage Loans, and remit
and report to the Master Servicer, in accordance with the terms of this
Agreement.
(b) Upon
appointment of a Master Servicer in accordance with Section 8.2(a), the
Servicer shall correspond and communicate solely with the Master Servicer,
as if
the Master Servicer were the “Owner” hereunder. The Master Servicer shall have
all rights as designee of the Owner to enforce the covenants and conditions
set
forth in this Agreement, and the Servicer shall follow and shall be entitled
to
rely on the instructions of the Master Servicer under this Agreement as if
such
instructions were the instructions of the Owner. The Master Servicer shall
have
the right to give any waivers or consents required or allowed under this
Agreement on behalf of the Owner, and the Servicer shall be entitled to rely
on
such waivers and consents as if such waivers or consents were the waivers or
consents of the Owner. The Master Servicer is empowered to enter into and
execute and deliver any amendments or modifications to this Agreement as the
Owner’s designee hereunder, and such amendments or modifications shall be
binding upon the Owner as if the Owner had executed and delivered the same.
The
Servicer shall treat the Master Servicer as “Owner” hereunder until the Servicer
receives written notice from the Owner that the Owner has terminated the Master
Servicer.
36
(c) Upon
receipt of notice of termination of the Master Servicer, the Servicer shall
no
longer deal with the Master Servicer and shall instead deal directly with the
Owner. From and after receipt of such notice of termination of the Master
Servicer, the Servicer shall service the applicable Mortgage Loans in accordance
with the provisions of this Agreement and shall give no effect to any Master
Servicing Agreement entered into with the Master Servicer.
Section
8.3. Servicer’s
Purchase Right
If,
at
any time, either (i) the aggregate Unpaid Principal Balance of any pool of
Mortgage Loans that are transferred pursuant to a Whole Loan Transfer
(“Transferred
Loans”)
is
less than or equal to one percent (1%) of the Unpaid Principal Balance of such
Transferred Loans on the date of such Whole Loan Transfer, or (ii) the aggregate
Unpaid Principal Balance of any Mortgage Loans purchased hereunder and retained
by the Owner (“Portfolio
Loans”)
is
less than or equal to one percent (1%) of the Unpaid Principal Balance of such
Portfolio Loans on the date of purchase from the applicable Seller, the Servicer
may elect, in its sole discretion, to purchase such Transferred Loans or
Portfolio Loans, as the case may be. The purchase price of Mortgage Loans
purchased by the Servicer pursuant to this Section 8.3 shall equal the
lesser of (i) the aggregate fair market value of such Mortgage Loans at the
time
of purchase by the Servicer and (ii) the aggregate Unpaid Principal Balance
of
such Mortgage Loans, plus the amount of interest on such Unpaid Principal
Balance at the applicable Net Rate from the date to which interest has last
been
paid and distributed to the Owner to, and including, the last day of the month
in which such purchase occurs; provided,
that the Servicer may exercise this purchase right only if the fair market
value
of the related Mortgage Loans is greater than or equal to the Unpaid Principal
Balance of such Mortgage Loans at the time of purchase.
ARTICLE
9.
MISCELLANEOUS
PROVISIONS
Section
9.1. Successor
to the Servicer
(a) Prior
to
termination of the Servicer’s responsibilities and duties under this Agreement
pursuant to Sections 5.4, 6.1, 7.1, or 7.2, the Owner shall either
(i) succeed to and assume all of the Servicer’s responsibilities, rights,
duties, and obligations under this Agreement from and after the date of such
succession, or (ii) appoint a successor to the Servicer that shall succeed
to all rights and assume all of the responsibilities, duties and liabilities
of
the Servicer under this Agreement prior to the termination of the Servicer’s
responsibilities, duties, and liabilities under this Agreement. If the
Servicer’s duties, responsibilities, and liabilities under this Agreement shall
be terminated pursuant to any of the foregoing Sections, the Servicer shall
discharge such duties and responsibilities with the same degree of diligence
and
prudence that it is obligated to exercise under this Agreement, from the date
it
acquires knowledge of such termination until the effective date
thereof.
(b) The
Servicer shall promptly deliver to its successor (i) the funds in the Account
and the Escrow Account to which the Owner is entitled pursuant to the terms
of
this Agreement and all other amounts which may thereafter be received with
respect to the Mortgage Loans and to which the Servicer is not entitled pursuant
to the terms of this Agreement and (ii) all Collateral Files and Credit Files
and related documents and statements held by it hereunder. The Servicer shall
account for all funds and shall execute and deliver such instruments and do
such
other things as may reasonably be required to more fully and definitively vest
in the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Servicer.
37
(c) Upon
a
successor’s acceptance of appointment as such, the Owner shall notify the
Servicer of such appointment.
(d) Notwithstanding
any termination pursuant to this Agreement, the Servicer shall continue to
be
entitled to receive all amounts accrued or owing to it under this Agreement
on
or prior to the effective date of such termination, whether in respect of (i)
unreimbursed Servicing Advances or Monthly Advances, (ii) unpaid Servicing
Fees
or REO Management Fees, or (iii) other servicing compensation, and shall
continue to be entitled to the benefits of Section 5.3 notwithstanding any
such termination, with respect to events occurring prior to such
termination.
Section
9.2. Amendment
This
Agreement may be amended from time to time solely by written agreement signed
by
both of the parties.
Section
9.3. Recordation
of Agreement; Perfection of Security Interest; Further
Assurances
(a) To
the
extent necessary under applicable law to protect the interests of the Owner,
this Agreement, or a memorandum thereof, is subject to recordation in all
appropriate public offices for real property records in all the counties or
other comparable jurisdictions in which any or all of the Mortgaged Properties
are situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Owner at the Owner’s
expense.
(b) The
Servicer shall execute or cause to be executed such documents and take or cause
to be taken such actions as may be necessary to effect the intent of this
Agreement, including, without limitation, the execution and delivery of
instruments of further assurance and the execution and delivery of such other
documents, and the taking of such other actions, as may be reasonably requested
by the Owner.
Section
9.4. Duration
of Agreement
This
Agreement shall continue in existence and effect until terminated as herein
provided.
Section
9.5. Governing
Law
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York (including Section 5-1401 of the New York General
Obligations Law) and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws without giving effect
to conflict of laws principles other than Section 5-1401 of the New York
General Obligations Law.
38
Section
9.6. 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 generally accepted accounting principles;
(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) a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(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; and
(vi) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
Section
9.7. Reproduction
of Documents
This
Agreement and all documents relating hereto, including, without limitation,
(i) consents, waivers, and modifications that may hereafter be executed,
(ii) documents received by any party on any Closing Date, and
(iii) financial statements, certificates, and other information previously
or hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, microcard, miniature photographic, or other similar process. 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. Any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence.
Section
9.8. Notices
All
demands, notices, consents, waivers and other communications hereunder shall
be
in writing and shall be deemed to have been duly given upon receipt (x) in
the
case of any notice of an Event of Default, if mailed by registered mail, postage
prepaid and (y) in the case of any other demand, notice, consent, waiver or
other communication, if personally delivered, mailed by registered mail, postage
prepaid, delivered by air courier or sent by facsimile to:
39
(i) in
the
case of the Servicer, at the address set forth below or such other address
as
may hereafter be furnished to the Owner in writing by the Servicer:
Washington
Mutual Bank, FA
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇. (Mail Stop N070205)
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Vice President, Investor Reporting
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
(ii) in
the
case of the Owner, at the address set forth below, or such other address as
may
hereafter be furnished to the Servicer by the Owner:
▇▇▇▇▇▇▇
Sachs Mortgage Company
▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
With
a
copies to:
Legal
Department
▇▇▇▇▇▇▇
Sachs Mortgage Company
▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
and
▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Company
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
and
in
the case of any subsequent Owner, as set forth in written notice supplied to
the
Servicer by such subsequent Owner.
40
Notwithstanding
the foregoing any demand, notice, consent, waiver or communication (other than
those referred to in clause (x) above) may be given by any other means if the
parties hereto agree to such alternative means in writing.
Section
9.9. Severability
of Provisions
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect
the
validity or enforceability of the other covenants, agreements, provisions or
terms of this Agreement or the rights of the Owner hereunder. If the invalidity
of any part, provision, representation or warranty of this Agreement shall
deprive any party of the economic benefit intended to be conferred by this
Agreement, the parties shall negotiate in good faith to develop a new structure,
the economic effect of which is nearly as possible the same as the economic
effect of this Agreement without regard to such invalidity.
Section
9.10. Exhibits
and
Schedules
The
exhibits and schedules to this Agreement are hereby incorporated and made an
integral part of this Agreement.
Section
9.11. Counterparts;
Successors and Assigns
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. Subject to Sections 5.4, 5.5, 5.6, 6.1, 7.1 and
8.1, this Agreement shall inure to the benefit of and be binding upon the
Servicer, the Owner and their respective successors and assigns.
Section
9.12. Effect
of
Headings
The
headings in this Agreement are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof.
Section
9.13. Other
Agreements Superseded;
Entire
Agreement
This
Agreement supersedes all prior agreements and understandings relating to the
subject matter hereof. This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof.
Section
9.14. Attorneys’
Fees
If
either
party retains an attorney to enforce any of the provisions of this Agreement,
the prevailing party shall be entitled to reasonable attorneys’ fees from the
other party, including, without limitation, fees incurred in arbitration and
in
trial and appellate courts, fees incurred without suit, and all arbitration,
court and accounting costs.
41
Section
9.15. Non-Solicitation
Following
the related Closing Date, the Servicer shall not take any action to solicit
the
refinancing of any Mortgage Loan, or provide information to any other entity
to
solicit the refinancing of any Mortgage Loan; provided that, the foregoing
shall
not preclude the Servicer, or any of its affiliates, from (a) engaging in
general solicitations to its customer base, including by mass mailing or as
part
of monthly or periodic statements mailed to its borrowers or to holders of
deposit or other accounts, (b) engaging in solicitations to the general public,
including without limitation by mass mailing, newspaper, radio, television
or
other media which are not specifically directed toward the Mortgagors, (c)
engaging in solicitations of optional insurance or other bank products (not
including mortgage loans) (d) refinancing the Mortgage Loan of any Mortgagor
who, without solicitation, contacts the Servicer to request the refinancing
of
the related Mortgage Loan, or (e) engaging in any action to solicit the
refinancing of any Mortgage Loan to the extent such action would be permitted
under the ▇▇▇▇▇▇ ▇▇▇ Selling Guide or the ▇▇▇▇▇▇ Mae Servicing
Guide.
[signatures
follow]
42
TO
WITNESS THIS,
the
Servicer and the Owner have caused their names to be signed to this Servicing
Agreement by their respective officers duly authorized as of the day and year
first written above.
| SERVICER: | ||
|
WASHINGTON
MUTUAL BANK, FA
a
federally chartered savings association
|
||
| |
|
|
| By: | ||
|
Name:
|
||
|
Title:
|
||
| OWNER: | ||
|
▇▇▇▇▇▇▇
▇▇▇▇▇ MORTGAGE COMPANY
a
New York limited partnership
|
||
| |
|
|
|
By:
|
▇▇▇▇▇▇▇
Sachs Real Estate Funding Corp., General Partner
|
|
| By: | ||
|
Name:
|
||
|
Title:
|
||
STATE
OF
WASHINGTON______ )
)
ss.
COUNTY
OF
KING____________ )
This
instrument was acknowledged before me on ______________________, 200_, by
_____________________ as _________________________ of Washington Mutual Bank,
FA.
___________________________________
[Print
Name]_________________________
NOTARY
PUBLIC in and for the State of
Washington,
residing at _____________________
My commission expires ______________________
STATE
OF
___________________ )
)
ss.
COUNTY
OF
__________________ )
This
instrument was acknowledged before me on ______________________, 200_, by
_____________________ as _________________________ of
[___________________].
_________________________________
[Print
Name]_________________________
NOTARY
PUBLIC in and for the State of
_________,
residing at ___________________
My
commission expires
___________________
EXHIBIT
A
FORM
OF REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
To: [Name/Address
of Owner]
Attention:
_________________________
Telephone:
____________
Facsimile:
_____________
|
Re:
|
Servicing
Agreement dated as of __________, 200_ (the “Servicing Agreement”) between
[_______________________________] (the “Owner”) and Washington Mutual
Bank, FA (the “Servicer”)
|
In
connection with the administration of the Mortgage Loans that we service on
your
behalf pursuant to the Servicing Agreement, we request the release, and
acknowledge receipt of the Collateral File/[specify documents]) for the Mortgage
Loan described below, for the reason indicated.
Mortgagor’s
Name, Address and Zip Code:
Mortgage
Loan Number:
Reason
for Requesting Documents:
(check
one)
|
_____
|
1.
|
Mortgage
Loan paid in full. (The Servicer hereby certifies that all amounts
received in connection therewith have been credited to the Account
as
provided in the Servicing
Agreement.)
|
|
_____
|
2.
|
Mortgage
Loan in foreclosure.
|
|
_____
|
3.
|
Repurchase
pursuant to the Servicing Agreement or the Purchase Agreement. (The
Servicer hereby certifies that the repurchase price has been credited
to
the Account.)
|
|
_____
|
4.
|
Mortgage
Loan liquidated by_____________________ .
(The Servicer hereby certifies that all proceeds of the foreclosure,
insurance, condemnation or other liquidation have been finally received
and credited to the Account pursuant to the Servicing
Agreement.)
|
|
_____
|
5.
|
Other
(Explain):
|
A-1
If
box 1,
2 or 3 above is checked, and if all or part of the Collateral File was
previously released to us, please release to us our previous request and receipt
on file with you, as well as any additional documents in your possession
relating to the specified Mortgage Loan.
If
box 4
or 5 above is checked, upon our return of all of the above documents to you,
please acknowledge your reception by signing in the space indicated below and
returning this form.
| WASHINGTON MUTUAL BANK, FA | |||
| |
|
|
|
| By: | |||
| Name: | |||
| Title: | |||
|
Acknowledgment
of Documents
returned
to the Owner:
|
|||
| [_____________________________] | |||
| By: | |||
| Name: | |||
| Title: | |||
| Date: | |||
A-2
EXHIBIT B
ACCOUNT
LETTER AGREEMENT
_______________,
______
To:
_______________
_______________
_______________
_______________
(the “Depository”)
As
the
“Servicer” under the Servicing Agreement dated as of _________________, 200_,
between the Servicer and the Owner named therein (the “Agreement”), we hereby
authorize and request you to establish an account, as an Account pursuant to
Section 2.4 of the Agreement, to be designated as “Washington Mutual Bank,
FA, in trust for ______________________, as Owner, and any successor Owner.” All
deposits in the account shall be subject to withdrawal therefrom by order signed
by the Servicer. You may refuse any deposit which would result in violation
of
the requirement that the account be fully insured as described below. This
letter is submitted to you in duplicate. Please execute and return one original
to us.
| By: | |||
| Name: | |||
| Title: | |||
The
undersigned, as the “Depository,” hereby certifies that the above-described
account has been established under Account Number _________________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance
Corporation.
| (Name of Depository) | |||
| |
|
|
|
| By: | |||
| Name: | |||
| Title: | |||
B-1
EXHIBIT C
ESCROW
ACCOUNT LETTER AGREEMENT
____________________,
___
To:
_______________
_______________
_______________
_______________
(the “Depository”)
As
the
“Servicer” under the Servicing Agreement dated as of _________________, 200_,
between the Servicer and the Owner named therein (the “Agreement”), we hereby
authorize and request you to establish an account, as an Escrow Account pursuant
to Section 2.6 of the Agreement, to be designated as “Washington Mutual
Bank, FA, in trust for ___________________________, as Owner, and any successor
Owner, and certain Mortgagors.” All deposits in the account pursuant to the
Agreement shall be subject to withdrawal therefrom by order signed by the
Servicer. You may refuse any deposit which would result in violation of the
requirement that the account by fully insured as described below. This letter
is
submitted to you in duplicate. Please execute and return one original to
us.
| By: | |||
| Name: | |||
| Title: | |||
The
undersigned, as the “Depository,” hereby certifies that the above-described
account has been established under Account Number _________________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance
Corporation.
| (Name of Depository) | |||
| |
|
|
|
| By: | |||
| Name: | |||
| Title: | |||
C-1
EXHIBIT D
FORM
OF OFFICER’S CERTIFICATE
I,
[name
of certifying individual], a duly elected and acting officer of Washington
Mutual Bank, FA (the “Servicer”),
certify pursuant to Section 4.4(b) of the Servicing Agreement dated as of
December 1, 2003 (as from time to time amended or replaced by a
reconstituted servicing or other successor servicing agreement, the
“Servicing
Agreement”)
between the Servicer and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company (the “Owner”)
to the
Owner and each other Person entitled to receive servicing reports provided
pursuant to Section 3.2(a) of the Servicing Agreement (the “Servicing
Reports”),
each
Person, if any, who “controls” the Owner or such other Person within the meaning
of the Securities Act of 1933, as amended, and their respective officers and
directors, with respect to the calendar year immediately preceding the date
of
this Certificate (the “Relevant
Year”),
as
follows:
1. For
purposes of this Certificate, “Relevant
Information”
means
the information in the certificate provided pursuant to Section 4.4(a) of the
Servicing Agreement (the “Annual
Compliance Certificate”)
for
the Relevant Year and the information in all Servicing Reports provided by
the
Servicer during the Relevant Year. Based on my knowledge, the Relevant
Information, taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
which is necessary to make the statements made therein, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the Relevant Year.
2. The
Relevant Information has been provided to those Persons entitled to receive
it.
3. I
am
responsible for reviewing the activities performed by the Servicer under the
Servicing Agreement during the Relevant Year. Based upon the review required
by
the Servicing Agreement and except as disclosed in the Annual Compliance
Certificate or the accountants’ statement provided pursuant to Section 4.5, to
the best of my knowledge, the Servicer has fulfilled its obligations under
the
Servicing Agreement throughout the Relevant Year.
| DATED as of ________ __. 200_. | |||
| Name: | |||
| Title: | |||
D-1
EXHIBIT
E
FORM
OF ASSIGNMENT, ASSUMPTION AND RECOGNITION
AGREEMENT
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT
among
[___________________],
as
Assignor
[___________________],
as
Assignee
[___________________],
as
Seller
and
WASHINGTON
MUTUAL BANK, FA,
as
Servicer
and
as acknowledged by
[___________________],
as
Master Servicer
Dated
as of
[___________________],
E-1
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT (this “Assignment Agreement”) made this
[__] day of [_____________], 200[_], among Washington Mutual Bank, FA (the
“Servicer”), [____________________] (the “Seller”), [____________________] (the
“Assignee”), and [____________________] (the “Assignor”), and as acknowledged by
[____________________], as master servicer (the “Master Servicer”).
WHEREAS,
▇▇▇▇▇▇▇ Sachs Mortgage Company (“GSMC”) and the Servicer have entered into the
Servicing Agreement dated as of December 1, 2003 (the “Servicing Agreement”) and
GSMC and the Seller are parties to the Mortgage Loan Purchase and Sale Agreement
dated as of December 1, 2003 (the “Purchase Agreement”);
WHEREAS,
the Assignee has agreed on certain terms and conditions to purchase from GSMC
certain mortgage loans (the “Mortgage Loans”) serviced under the Servicing
Agreement which Mortgage Loans 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”);
WHEREAS,
pursuant to a Master Servicing and Trust Agreement, dated as of
[________________] (together with the [__] Edition of the Standard Terms
thereto, the “Trust Agreement”), among the Assignor, as depositor, the Master
Servicer, as master servicer, and [__], as trustee (the “Trustee”), the Assignor
will transfer the Mortgage Loans to the Trustee, together with the Assignor’s
rights in the Servicing Agreement;
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 all of its right, title and interest
in
and to the Mortgage Loans, the Purchase Agreement and the Servicing Agreement,
to the extent relating to the Mortgage Loans (other than the rights of the
Assignor to indemnification thereunder), and the Assignee hereby assumes all
of
the Assignor's obligations under the Purchase Agreement and the Servicing
Agreement, to the extent relating to the Mortgage Loans from and after the
date
hereof, and the Servicer and the Seller hereby acknowledge such assignment
and
assumption and hereby agree to the release of the Assignor from any obligations
under the Servicing Agreement and the Purchase Agreement, respectively, 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 and the Seller and the Assignor shall have the right to
amend, modify or terminate the Purchase Agreement, in each case, 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.
E-2
2. Accuracy
of Servicing Agreement and the Purchase Agreement.
(a) 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) the Servicing Agreement has not been amended or
modified in any respect except by an amendment attached hereto as part of
Exhibit 2 and (iv) no notice of termination has been given to the Servicer
under
the Servicing Agreement.
(b) The
Seller and the Assignor represent and warrant to the Assignee that (i) attached
hereto as Exhibit 3 is a true, accurate and complete copy of the Purchase
Agreement, (ii) the Purchase Agreement is in full force and effect as of the
date hereof and (iii) the Purchase Agreement has not been amended or modified
in
any respect except by an amendment attached hereto as part of Exhibit
3.
3. Recognition
of Assignee; Recognition of the Master Servicer.
(a) 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 shall, subject to clause (b) below, service
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, Servicer and Assignee that the Servicing Agreement
shall be binding upon and inure to the benefit of the Servicer and the Assignee
and their successors and assigns. It is the intention of the Assignor, Seller
and Assignee that the Purchase Agreement shall be binding upon and inure to
the
benefit of the Seller and the Assignee and their successors and
assigns.
(b) The
Servicer further acknowledges that, from and after the date hereof, it will
be
subject to the supervision of the Master Servicer (except that the Master
Servicer shall not be responsible for supervising the servicing of defaulted
Mortgage Loans and REO Properties) and that the Master Servicer, acting on
behalf of the Trustee as the owner of the Mortgage Loans, shall have the right
to enforce all obligations of the Servicer, as they relate to the Mortgage
Loans, under the Servicing Agreement and this Assignment Agreement. Subject
to
the terms and conditions of the Servicing Agreement, such rights will include,
without limitation, the right to terminate the Servicer under the Servicing
Agreement upon the occurrence of an event of default thereunder, the right
to
receive all remittances required to be made by the Servicer under the Servicing
Agreement, the right to receive all monthly reports and other data required
to
be delivered by the Servicer under the Servicing Agreement and the right to
exercise certain rights of consent and approval relating to actions taken by
the
Servicer. Notwithstanding anything to the contrary herein, the Master Servicer
hereby acknowledges and agrees that in no event shall the Master Servicer be
entitled to receive indemnification rights from the Servicer.
E-3
(c) All
reports and other data required to be delivered by the Servicer to the “Owner”
under the Servicing Agreement shall be delivered to the Master Servicer or
the
Trustee, as designated by the Trustee, at the address set forth in Section
10
hereof. All remittances required to be made to the Trustee, as the successor
in
interest to GSMC and the Assignor under the Servicing Agreement, shall be made
instead to the Master Servicer by wire transfer to the following
account:
[____________________]
ABA#
[____________________]
Account
Name: [____________________]
Account
Number: [____________________]
For
further credit to: [____________________]
4. Representations
and Warranties of the Assignee.
The
Assignee hereby represents and warrants to the Assignor, the Seller and the
Servicer 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, the Seller or the Servicer other than those contained in the
Purchase Agreement, 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, the Purchase Agreement 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).
5. Representations
and Warranties of the Assignor.
The
Assignor hereby represents and warrants to the Assignee, the Seller and the
Servicer as follows:
(a) Organization.
The
Assignor has been duly organized and is validly existing as a corporation in
good standing under the laws of the State of Delaware with full power and
authority (corporate and other) to enter into and perform its obligations under
the Purchase Agreement, 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.
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(c) No
Consent.
The
execution, delivery and performance by the Assignor of this Assignment Agreement
and the consummation of the transactions contemplated thereby do 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 thereof.
(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 therein contemplated, nor
compliance by the Assignor with the provisions thereof, 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.
(f) 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.
(g) Releases.
The
Assignor has not satisfied, canceled, or subordinated in whole or in part,
or
rescinded the Mortgage, and the Assignor has not released the Mortgaged Property
from the lien of the 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.
It
is
understood and agreed that the representations and warranties set forth in
this
Section 5 shall survive delivery of the respective Collateral Files to the
Custodian and shall inure to the benefit of the Assignee, the Seller, the
Servicer and their respective assigns notwithstanding any restrictive or
qualified endorsement or assignment. Upon the discovery by the Assignor, the
Master Servicer 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
6 to repurchase 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 this Section 5.
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It
is
understood and agreed that the Assignor has made no representations or
warranties to the Assignee other than those contained in this Section 5, and
no
other affiliate of the Assignor has made any representations or warranties
of
any kind to the Assignee.
6. 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 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. Notwithstanding the foregoing, however, if
such
breach is a Qualification Defect, such cure or repurchase must take place within
75 days of the date such defect is discovered.
The
Seller agrees that the Assignee shall have the right to enforce all obligations
of the Seller, as they relate to the Mortgage Loans, under the Purchase
Agreement and this Assignment Agreement. Notwithstanding anything to the
contrary herein, the Assignee hereby acknowledges and agrees that in no event
shall the Assignee be entitled to receive indemnification rights from the
Seller.
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.
7. Indemnification
by Servicer.
The
Servicer shall indemnify and hold harmless the Assignee, its present and former
directors, officers, employees and assignees (each, an “Indemnified Party”)
against any and all third party claims, losses, penalties, damages, fines,
forfeitures, legal fees and related costs, judgments and any other costs, fees
and expenses that the Indemnified Party may sustain (for avoidance of doubt,
including those payable by an Indemnified Party to any third party, including
affiliates of such Indemnified Party) in any way related to the failure of
the
Servicer to service the Mortgage Loans in compliance with the terms of the
Servicing Agreement and this Agreement; provided, however, the Servicer shall
not be liable hereunder with respect to (i) any action or inaction resulting
from the written direction or consent of an Indemnified Party, (ii) any action
or inaction resulting from an Indemnified Party’s failure to cause any
Collateral File (or portion thereof) to be released to the Servicer pursuant
to
Sections 2.18 or 4.2(c) of the Servicing Agreement, or (iii) any action or
inaction resulting from an Indemnified Party’s failure to comply with
Section 5.1(b) or Section 5.6 of the Servicing Agreement.
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8. Continuing
Effect.
Except
as
contemplated hereby, the Servicing Agreement and the Purchase Agreement shall
remain in full force and effect in accordance with their respective
terms.
9. 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.
10. 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: (i) in the case of
the
Servicer, Washington Mutual Bank, FA, [ ], Attention: [ ] with a copy to [
],
Attention: [ ], or such address as may hereafter be furnished by the Servicer;
(ii) in the case of the Assignee, [ ], Attention: [ ], Telecopier No.: [ ],
or
such other address as may hereafter be furnished by the Assignee, (iii) in
the
case of the Assignor, [ ], Attention: [ ], Telecopier No.: [ ], or such other
address as may hereafter be furnished by the Assignor, (iv) in the case of
the
Master Servicer, [ ], Attn: [ ] (with a copy to [ ], Attn: [ ]), or such other
address as may hereafter be furnished by the Master Servicer, and (v) in the
case of the Seller, [ ], Attn: [ ] (with a copy to [ ], Attn: [ ]), or such
other address as may hereafter be furnished by the Seller.
11. 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.
12. Definitions.
Any
capitalized term used but not defined in this Assignment Agreement has the
same
meaning as in the Servicing Agreement.
[13. Obligations
of the Sellers.
The
obligations and liability of each of the Sellers under this Assignment Agreement
are several, and no Seller shall be responsible for the obligations of any
other
Seller under this Assignment Agreement. Each representation, warranty, indemnity
and covenant made by one Seller under the Assignment Agreement is made by,
or on
behalf of, and with respect to, that Seller only and not any other
Seller.]
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IN
WITNESS WHEREOF, the parties hereto have executed this Assignment Agreement
the
day and year first above written.
|
ASSIGNEE:
[_______________________],
not in its
individual
capacity but solely as Trustee
|
||
|
By:
________________________________
Name:
______________________________
Title:
_______________________________
|
||
|
ASSIGNOR:
[_________________________]
By:
________________________________
Name:
______________________________
Title:
_______________________________
|
||
|
Acknowledged
by:
SERVICER:
WASHINGTON
MUTUAL BANK, FA
By:
________________________________
Name:
______________________________
Title:
_______________________________
|
|
|
|
SELLER:
[___________________________]
By:
________________________________
Name:
______________________________
Title:
_______________________________
|
||
|
MASTER
SERVICER:
[___________________________]
By:
________________________________
Name:
______________________________
Title:
_______________________________
|
||
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EXHIBIT
2
Servicing
Agreement
E-10
EXHIBIT
3
Purchase
Agreement
E-11