EMC MORTGAGE CORPORATION Owner GMAC MORTGAGE CORPORATION Servicer SERVICING AGREEMENT Dated as of May 1, 2001
____________________________________________________________________________________
EMC
MORTGAGE CORPORATION
Owner
GMAC
MORTGAGE CORPORATION
Servicer
Dated
as
of May 1, 2001
____________________________________________________________________________________
[TPW:
NYLEGAL:504985.1] 17297-00440 05/11/2006 05:34 PM
THIS
IS A
SERVICING AGREEMENT, dated as of May 1, 2001, and is executed between EMC
Mortgage Corporation (the "Owner") and GMAC Mortgage Corporation (the
"Servicer").
W
I T N E
S S E T H :
WHEREAS,
the Owner is the owner of the Mortgage Loans;
WHEREAS,
the Owner and the Servicer wish to prescribe the permanent management, servicing
and control of the Mortgage Loans;
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and
for other good and valuable consideration, the receipt and adequacy of which
is
hereby acknowledged, the Owner and the Servicer agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Defined
Terms
Whenever
used in this Agreement, the following words and phrases, unless the context
otherwise requires, shall have the following meaning specified in this
Article:
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, those mortgage servicing practices (including
collection procedures) that are in accordance with the ▇▇▇▇▇▇ ▇▇▇
Guide.
Adjustment
Date:
As to
each ARM Loan, the date on which the Mortgage Interest Rate is adjusted in
accordance with the terms of the related Mortgage Note.
Agreement:
This
Servicing Agreement including all exhibits hereto, amendments hereof and
supplements hereto.
ARM
Loans:
First
lien, conventional, 1-4 family residential Mortgage Loans with interest rates
which adjust from time to time in accordance with the related Index and are
subject to Periodic Rate Caps and Lifetime Rate Caps and which do not permit
conversion to fixed interest rates.
BIF:
The
Bank Insurance Fund, or any successor thereto.
Business
Day:
Any day
other than (i) a Saturday or Sunday, or (ii) a legal holiday in the States
of
New York, Iowa or the Commonwealth of Pennsylvania, or (iii) a day on which
banks in the States of New York, Iowa or Pennsylvania are authorized or
obligated by law or executive order to be closed.
Code:
The
Internal Revenue Code of 1986, as it may be amended from time to time, or any
successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.
Condemnation
Proceeds:
All
awards or settlements in respect of a Mortgaged Property, whether permanent
or
temporary, partial or entire, by exercise of the power of eminent domain or
condemnation, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Mortgage Loan Documents.
Custodial
Account:
The
separate demand account or accounts created and maintained pursuant to Section
4.04 which shall be entitled "GMAC Mortgage Corporation Custodial Account in
trust for [Owner], Owner of Whole Loan Mortgages and various Mortgagors" and
shall be established at a Qualified Depository, each of which accounts shall
in
no event contain funds in excess of the FDIC insurance limits.
Custodian:
▇▇▇▇▇
Fargo Bank Minnesota, N.A., or such other custodian as Owner shall
designate.
Cut-off
Date:
As
identified on the related Confirmation.
Determination
Date:
The
15th day (or if such 15th day is not a Business Day, the Business Day
immediately preceding such 15th day) of the month of the Remittance
Date.
Due
Date:
Each
day on which payments of principal and interest are required to be paid in
accordance with the terms of the related Mortgage Note, exclusive of any days
of
grace.
Due
Period:
With
respect to any Remittance Date, the period commencing on the second day of
the
month preceding the month of such Remittance Date and ending on the first day
of
the month of the Remittance Date.
Effective
Date:
As
identified on the related Confirmation.
Escrow
Account:
The
separate trust account or accounts created and maintained pursuant to Section
4.06 which shall be entitled "GMAC Mortgage Corporation Escrow Account, in
trust
for [Owner], Owner of Whole Loan Mortgages and various Mortgagors" and shall
be
established at a Qualified Depository, each of which accounts shall in no event
contain funds in excess of the FDIC insurance limits.
Escrow
Payments:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and any
other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage or any other document.
Event
of Default:
Any one
of the conditions or circumstances enumerated in Section 9.01.
▇▇▇▇▇▇
▇▇▇:
▇▇▇▇▇▇
▇▇▇, or any successor thereto.
▇▇▇▇▇▇
Mae Guide:
The
▇▇▇▇▇▇ ▇▇▇ Selling Guide and the ▇▇▇▇▇▇ Mae Servicing Guide and all amendments
or additions thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity
Bond:
A
fidelity bond to be maintained by the Servicer pursuant to Section
4.12.
FIRREA:
The
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended
from time to time.
▇▇▇▇▇▇▇
Mac:
▇▇▇▇▇▇▇
Mac, or any successor thereto.
▇▇▇▇▇▇▇
Mac Guide:
The
▇▇▇▇▇▇▇ Mac Selling Guide and the ▇▇▇▇▇▇▇ Mac Servicing Guide and all amendments
or additions thereto.
Full
Principal Prepayment:
A
Principal Prepayment made by a Mortgagor of the entire principal balance of
a
Mortgage Loan.
|
GAAP:
Generally accepted accounting procedures, consistently
applied.
|
HUD:
The
United States Department of Housing and Urban Development or any
successor.
Index:
With
respect to each ARM Loan, on the related Adjustment Date, the index used to
determine the Mortgage Interest Rate on each such ARM Loan.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
Lifetime
Rate Cap:
With
respect to each ARM Loan, the maximum Mortgage Interest Rate over the term
of
such Mortgage Loan, as specified in the related Mortgage Note.
Liquidation
Proceeds:
Cash
received in connection with the liquidation of a defaulted Mortgage Loan,
whether through the sale or assignment of such Mortgage Loan, trustee's sale,
foreclosure sale or otherwise, other than amounts received following the
acquisition of an REO Property pursuant to Section 4.13.
Margin:
With
respect to each ARM Loan, the fixed percentage amount set forth in each related
Mortgage Note which is added to the Index in order to determine the related
Mortgage Interest Rate.
Monthly
Advance:
The
aggregate of the advances made by the Servicer on any Remittance Date pursuant
to Section 5.03.
Monthly
Payment:
With
respect to each Mortgage Loan, the scheduled monthly payment of principal and
interest thereon which is payable by the related Mortgagor under the related
Mortgage Note.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note which
creates a first lien on an unsubordinated estate in fee simple in real property
securing the Mortgage Note.
Mortgage
Interest Rate:
The
annual rate at which interest accrues on any Mortgage Loan in accordance with
the provisions of the related Mortgage Note, and in the case of an ARM Loan,
as
adjusted from time to time on each Adjustment Date for such Mortgage Loan to
equal the Index for such Mortgage Loan plus the Margin for such Mortgage Loan,
and subject to the limitations on such interest rate imposed by the Periodic
Rate Cap and the Lifetime Rate Cap.
Mortgage
Loan:
An
individual Mortgage Loan described herein, and as further identified on the
Mortgage Loan Schedule, which Mortgage Loan includes without limitation the
Mortgage Loan Documents, the Monthly Payments, Principal Prepayments,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition
Proceeds, and all other rights, benefits, proceeds and obligations arising
from
or in connection with such Mortgage Loan.
Mortgage
Loan Documents:
The
original mortgage loan legal documents held by the Custodian.
Mortgage
Loan Remittance Rate:
With
respect to each Mortgage Loan, the annual rate of interest remitted to the
Owner, which shall be equal to the related Mortgage Interest Rate minus the
Servicing Fee Rate.
Mortgage
Loan Schedule:
The
schedule of Mortgage Loans attached hereto as Exhibit
A,
such
schedule being acceptable to the Owner and the Servicer.
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a
Mortgage.
Mortgaged
Property:
The
underlying real property securing repayment of a Mortgage Note, consisting
of a
single parcel of real estate considered to be real estate under the laws of
the
State in which such real property is located, which may include condominium
units and planned unit developments, improved by a residential
dwelling.
Mortgagor:
The
obligor on a Mortgage Note. The Mortgagor is a natural person who is a party
to
the Mortgage Note and Mortgage in an individual capacity.
Nonrecoverable
Advance:
Any
advance previously made by the Servicer pursuant to Section 5.03 or any expenses
incurred pursuant to Section 4.08 which, in the good faith judgment of the
Servicer, may not be ultimately recoverable by the Servicer from Liquidation
Proceeds. The determination by the Servicer that is has made a Nonrecoverable
Advance, shall be evidenced by an Officer’s Certificate of the Servicer
delivered to the Owner and detailing the reasons for such
determination.
OCC:
Office
of the Comptroller of the Currency, its successors and assigns.
Officers'
Certificate:
A
certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
the President, a Senior Vice President or a Vice President or by the Treasurer
or the Secretary or one of the Assistant Treasurers or Assistant Secretaries
of
the Servicer, and delivered to the Owner as required by this
Agreement.
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the party on behalf of
whom the opinion is being given, reasonably acceptable to the
Owner.
OTS:
Office
of Thrift Supervision, its successors and assigns.
Owner:
EMC
Mortgage Corporation, its successors in interest and assigns.
Partial
Principal Prepayment:
A
Principal Prepayment by a Mortgagor of a partial principal balance of a Mortgage
Loan.
Pass-Through
Transfer:
The
sale or transfer of same or all of the Mortgage Loans to a trust as part of
a
publicly issued or privately placed, rated or unrated Mortgage pass-through
transaction.
Periodic
Rate Cap:
With
respect to each ARM Loan, the maximum increase or decrease in the Mortgage
Interest Rate on any Adjustment Date.
Permitted
Investments:
Any one
or more of the following obligations or securities:
(i) direct
obligations of, and obligations fully guaranteed by the United States of America
or any agency or instrumentality of the United States of America the obligations
of which are backed by the full faith and credit of the United States of
America; pro-vided that obligations of ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae shall be
Per-mitted Invest-ments only if, at the time of investment, they are rated
in
one of the two highest rating categories by Standard & Poor's Rating
Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., ▇▇▇▇▇'▇ Investors
Service, Inc. and Fitch IBCA Inc.;
(ii) (a)
demand or time deposits, federal funds or bankers' acceptances issued by any
depository institu-tion or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by federal and/or state banking authorities, provided that the
commercial paper and/or the short-term deposit rating and/or the long-term
unsecured debt obligations or deposits of such depository institution or trust
company at the time of such investment or contractual commitment providing
for
such investment are rated in one of the two highest rating categories by
Standard & Poor's Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies
Inc., ▇▇▇▇▇'▇ Investors Service, Inc. and Fitch IBCA Inc. and (b) any other
demand or time deposit or certificate of deposit that is fully insured by the
Federal Deposit Insurance Cor-poration;
(iii) repurchase
obligations with respect to (a) any security described in clause (i) above
or
(b) any other security issued or guaranteed by an agency or instrumen-tality
of
the United States of America, the obligations of which are backed by the full
faith and credit of the United States of America, in either case entered into
with a depository institution or trust company (acting as principal) described
in clause (ii)(a) above;
(iv) securities
bearing interest or sold at a discount issued by any corporation incorporated
under the laws of the United States of America or any state thereof that are
rated in one of the two highest rating categories by Standard & Poor's
Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., ▇▇▇▇▇'▇ Investors
Service, Inc. and Fitch IBCA Inc. at the time of such in-vestment or contractual
commitment providing for such investment; provided,
however,
that
securities issued by any particular corporation will not be Permitted
Investments to the extent that investments therein will cause the then
outstanding principal amount of secur-ities issued by such corporation and
held
as Permitted Investments to exceed 10% of the aggregate outstand-ing principal
balances and amounts of all the Permitted Investments;
(v) commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obliga-tions payable on demand or on a specified date not
more
than one year after the date of issuance there-of) which are rated in one of
the
two highest rating categories by Standard & Poor's Rating Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., ▇▇▇▇▇'▇ Investors Service, Inc.
and
Fitch IBCA Inc. at the time of such investment;
(vi) any
other
demand, money market or time deposit, obligation, security or investment as
may
be acceptable to each of Standard & Poor's Rating Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇▇▇▇'▇ Investors Service, Inc. and Fitch
IBCA
Inc.;
(vii) any
money
market funds the collateral of which consists of obligations fully guaranteed
by
the United States of America or any agency or instru-ment-al-ity of the United
States of America the obligations of which are backed by the full faith and
credit of the United States of America (which may include repurchase obligations
secured by collateral described in clause (i)) and other securities and which
money market funds are rated in one of the two highest rating categories by
Standard & Poor's Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies
Inc., ▇▇▇▇▇'▇ Investors Service, Inc. and Fitch IBCA Inc.; and
(viii) GMAC
Variable Denomination Adjustable Rate Demand Notes constituting unsecured,
senior debt obligations of General Motors Acceptance Corporation as outlined
in
the prospectus dated June 17, 1998 and rated by Moody’s in its highest
short-term rating category available and rated at least D-1 by
Fitch;
provided,
however,
that no
instrument or security shall be a Permitted Investment if such instrument or
security evidences a right to receive only interest payments with respect to
the
ob-li-ga-tions underlying such instrument or if such security provides for
payment of both principal and interest with a yield to matur-ity in excess
of
120% of the yield to maturity at par.
Person:
Any
individual, corporation, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Prepayment
Interest Shortfall:
The sum
of the differences between interest actually received in a Due Period as a
result of a full or partial prepayment or other unscheduled receipt of principal
(including as a result of a liquidation) on each Mortgage Loan as to which
such
a payment is received and the interest portion of the Monthly Payment of such
Mortgage Loan scheduled to be due at the applicable Mortgage Loan Remittance
Rate; provided, however, Prepayment Interest Shortfalls shall not include Full
Principal Prepayments received on or before the 15th
day of
the month in which a Remittance Date occurs which are remitted by the Servicer
to the Owner on such Remittance Date.
Primary
Mortgage Insurance Policy:
Each
primary policy of mortgage insurance, or any replacement policy therefor
obtained by the Servicer pursuant to Section 4.08.
Prime
Rate:
The
prime rate of U.S. money center banks as published from time to time in
The
Wall Street Journal.
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan, full or partial,
which is received in advance of its scheduled Due Date, including any prepayment
penalty or premium thereon and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Qualified
Appraiser:
An
appraiser, duly appointed by the Servicer, who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security thereof,
and whose compensation is not affected by the approval or disapproval of the
Mortgage Loan, which appraiser and the appraisal made by such appraiser both
satisfy the requirements of Title XI of FIRREA and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified
Depository:
(a) The
Custodian or (b) a depository, the accounts of which are insured by the FDIC
through the BIF or the SAIF and the short term debt ratings and the long term
deposit ratings of which are rated in one of the two highest rating categories
by Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies Inc., ▇▇▇▇▇'▇ Investors Service, Inc., Fitch IBCA Duff &
▇▇▇▇▇▇.
Qualified
Insurer:
An
insurance company duly qualified as such under the laws of the states in which
the Mortgaged Properties are located, duly authorized and licensed in such
states to transact the applicable insurance business and to write the insurance
provided, approved as an insurer by ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac.
REMIC:
A “real
estate mortgage
investment conduit” within the meaning of Section 860D of the Code.
REMIC
Provisions:
The
provisions of the Federal income tax law relating to a REMIC, which appear
at
Section 860A through 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.
Remittance
Date:
The
18th day of any month, or if such 18th day is not a Business Day, the first
Business Day immediately preceding such 18th day.
REO
Disposition:
The
final sale by the Servicer of any REO Property.
REO
Disposition Proceeds:
Amounts
received by the Servicer in connection with a related REO
Disposition.
REO
Property:
A
Mortgaged Property acquired by the Servicer on behalf of the Owner as described
in Section 4.13.
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SAIF:
The Savings Association Insurance Fund, or any successor
thereto.
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Servicer:
GMAC
Mortgage Corporation, or any of its successors in interest or any successor
under this Agreement appointed as herein provided.
Servicing
Advances:
All
customary, reasonable and necessary "out of pocket" costs and expenses
(including reasonable attorneys' fees and disbursements) incurred prior to,
on
and subsequent to the Effective Date in the performance by the Servicer of
its
servicing obligations relating to each Mortgage Loan, including, but not limited
to, the cost of (a) the preservation, restoration and protection of the
Mortgaged Property, (b) any enforcement, administrative or judicial proceedings,
or any legal work or advice specifically related to servicing the Mortgage
Loans, including but not limited to, foreclosures, bankruptcies, condemnations,
drug seizures, elections, foreclosures by subordinate or superior lienholders,
and other legal actions incidental to the servicing of the Mortgage Loans
(provided that such expenses are reasonable and that the Servicer specifies
the
Mortgage Loan(s) to which such expenses relate), (c) the management and
liquidation of the Mortgaged Property if the Mortgaged Property is acquired
in
full or partial satisfaction of the Mortgage, (d) taxes, assessments, water
rates, sewer rates and other charges which are or may become a lien upon the
Mortgaged Property, and Primary Mortgage Insurance Policy premiums and fire
and
hazard insurance coverage and (e) compliance with the obligations under Section
4.08.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee the Owner shall
pay
to the Servicer, which shall, for a period of one full month, be equal to
one--twelfth of the product of (a) the applicable Servicing Fee Rate and (b)
the
outstanding principal balance of such Mortgage Loan. Such fee shall be payable
monthly, computed on the basis of the same principal amount and period
respecting which any related interest payment on a Mortgage Loan is computed.
The obligation of the Owner to pay the Servicing Fee is limited to, and the
Servicing Fee is payable solely from, the interest portion (not including
recoveries of interest from Liquidation Proceeds or otherwise) of such Monthly
Payment collected by the Servicer, or as otherwise provided under Section
4.05.
Servicing
Fee Rate:
The
Servicing Fee Rate shall be a rate per annum equal to 0.25%.
Servicing
File:
The
documents, records and other items pertaining to a particular Mortgage Loan,
and
any additional documents relating to such Mortgage Loan as are in, or as may
from time to time come into, the Servicer's possession.
Servicing
Officer:
Any
officer of the Servicer involved in, or responsible for, the administration
and
servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished by the Servicer to the Owner upon request, as such list
may
from time to time be amended.
Stated
Principal Balance:
As to
each Mortgage Loan as of any date of determination, (i) the principal balance
of
such Mortgage Loan after giving effect to payments of principal due, whether
or
not received, minus (ii) all amounts previously distributed to the Owner with
respect to the Mortgage Loan representing payments or recoveries of principal
or
advances in lieu thereof.
Whole
Loan Transfer:
The
sale or transfer of some or all of the ownership interest in the Mortgage Loans
by the Owner to one or more third parties in whole loan or participation format,
which third party may be ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
ARTICLE
II
SERVICING
OF MORTGAGE LOANS;
POSSESSION
OF SERVICING FILES;
BOOKS
AND RECORDS;
DELIVERY
OF MORTGAGE LOAN DOCUMENTS
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Section
2.01 Servicing
of Mortgage Loans.
|
From
and
after the Effective Date, the Servicer does hereby agree to service the Mortgage
Loans, but subject to the terms of this Agreement. The rights of the Owner
to
receive payments with respect to the Mortgage Loans shall be as set forth in
this Agreement.
Section
2.02 Maintenance
of Servicing Files.
The
Servicer shall maintain a Servicing File consisting of all documents necessary
to service the Mortgage Loans. The possession of each Servicing File by the
Servicer is for the sole purpose of servicing the Mortgage Loan, and such
retention and possession by the Servicer is in a custodial capacity only. The
Servicer acknowledges that the ownership of each Mortgage Loan, including the
Note, the Mortgage, all other Mortgage Loan Documents and all rights, benefits,
proceeds and obligations arising therefrom or in connection therewith, has
been
vested in the Owner. All rights arising out of the Mortgage Loans including,
but
not limited to, all funds received on or in connection with the Mortgage Loans
and all records or documents with respect to the Mortgage Loans prepared by
or
which come into the possession of the Servicer shall be received and held by
the
Servicer in trust for the exclusive benefit of the Owner as the owner of the
related Mortgage Loans. Any portion of the related Servicing Files retained
by
the Servicer shall be appropriately identified in the Servicer's computer system
to clearly reflect the ownership of the related Mortgage Loans by the Owner.
The
Servicer shall release its custody of the contents of the related Servicing
Files only in accordance with written instructions of the Owner, except when
such release is required as incidental to the Servicer's servicing of the
Mortgage Loans, such written instructions shall not be required.
Section
2.03 Books
and Records.
The
Servicer shall be responsible for maintaining, and shall maintain, a complete
set of books and records for the Mortgage Loans which shall be appropriately
identified in the Servicer's computer system to clearly reflect the ownership
of
the Mortgage Loan by the Owner. In particular, the Servicer shall maintain
in
its possession, available for inspection by the Owner, or its designee and
shall
deliver to the Owner upon demand, evidence of compliance with all federal,
state
and local laws, rules and regulations, and requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, as applicable, including but not limited to documentation as to the method
used in determining the applicability of the provisions of the Flood Disaster
Protection Act of 1973, as amended, to the Mortgaged Property, documentation
evidencing insurance coverage and eligibility of any condominium project for
approval by ▇▇▇▇▇▇ Mae and periodic inspection reports as required by Section
4.13. To the extent that original documents are not required for purposes of
realization of Liquidation Proceeds or Insurance Proceeds, documents maintained
by the Servicer may be in the form of microfilm or microfiche or such other
reliable means of recreating original documents, including but not limited
to,
optical imagery techniques so long as the Servicer complies with the
requirements of the ▇▇▇▇▇▇ ▇▇▇ Guide.
The
Servicer shall maintain with respect to each Mortgage Loan and shall make
available for inspection by any Owner or its designee the related Servicing
File
(or copies thereof) upon reasonable request during the time the Owner retains
ownership of a Mortgage Loan and thereafter in accordance with applicable laws
and regulations.
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Section
2.04. Transfer
of Mortgage Loans.
|
The
Servicer shall keep at its servicing office books and records in which, subject
to such reasonable regulations as it may prescribe from time to time, the
Servicer shall note transfers of Mortgage Loans. No transfer of a Mortgage
Loan
may be made unless such transfer is in compliance with the terms hereof. For
the
purposes of this Agreement, the Servicer shall be under no obligation to deal
with any person with respect to this Agreement or any Mortgage Loan unless
a
notice of the transfer of such Mortgage Loan has been delivered to the Servicer
in accordance with this Section 2.04. The Owner may, subject to the terms of
this Agreement, sell and transfer one or more of the Mortgage Loans in
accordance with Sections 10.02 and 11.12, provided,
however, that the transferee will not be deemed to be an Owner hereunder binding
upon the Servicer unless such transferee shall agree in writing to be bound
by
the terms of this Agreement and an assignment and assumption of this Agreement
reasonably acceptable to the Servicer. The Owner also shall advise the Servicer
in writing of the transfer. Upon receipt of notice of the permitted transfer,
the Servicer shall ▇▇▇▇ its books and records to reflect the ownership of the
Mortgage Loans of such assignee, and shall release the previous Owner from
its
obligations hereunder with respect to the Mortgage Loans sold or
transferred.
Section
2.05 Delivery
of Mortgage Loan Documents.
The
Servicer shall forward to the Custodian on behalf of the Owner original
documents evidencing an assumption, modification, consolidation or extension
of
any Mortgage Loan entered into in accordance with Section 4.01 or 6.01 promptly
after their execution; provided, however, that the Servicer shall provide the
Custodian on behalf of the Owner with a certified true copy of any such document
submitted for recordation promptly after its execution, and shall provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a true and complete
copy of the original within 180 days of its execution. If delivery is not
completed within 180 days solely due to delays in making such delivery by reason
of the fact that such documents shall not have been returned by the appropriate
recording office, the Servicer shall continue to use its best efforts to effect
delivery as soon as possible thereafter.
From
time
to time the Servicer may have a need for Mortgage Loan Documents to be released
by the Custodian. If the Servicer shall require any of the Mortgage Loan
Documents, the Servicer shall notify the Custodian in writing of such request
in
the form of the request for release attached hereto as Exhibit
D.
The
Custodian shall deliver to the Servicer promptly, and in no event later than
within five (5) Business Days, any requested Mortgage Loan Document previously
delivered to the Custodian, provided that such documentation is promptly
returned to the Custodian when the Servicer no longer requires possession of
the
document, and provided that during the time that any such documentation is
held
by the Servicer, such possession is in trust for the benefit of the
Owner.
|
Section
2.06 Quality
Control Procedures.
|
The
Servicer must have an internal quality control program that verifies, on a
regular basis, the existence and accuracy of the legal documents, credit
documents, property appraisals, and underwriting decisions. The program must
be
capable of evaluating and monitoring the overall quality of its servicing
activities. The purpose of the program is to ensure that the Mortgage Loans
are
serviced in accordance with prudent mortgage banking practices and accounting
principles; guard against dishonest, fraudulent, or negligent acts; and guard
against errors and omissions by officers, employees, or other authorized
persons.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
OF
THE
SERVICER
The
Servicer represents, warrants and covenants to the Owner that as of the
Effective Date or as of such date specifically provided herein:
(a) The
Servicer is a validly existing corporation in good standing under the laws
of
the State of its organization and is qualified to transact business in, is
in
good standing under the laws of, and possesses all licenses necessary for the
conduct of its business in, each state in which any Mortgaged Property is
located or is otherwise exempt or not required under applicable law to effect
such qualification or license and no demand for such qualification or license
has been made upon the Servicer by any such state, and in any event the Servicer
is in compliance with the laws of each such State to the extent necessary to
ensure the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loans in accordance with the terms of this Agreement;
(b) The
Servicer has full power and authority to execute, deliver and perform, and
to
enter into and consummate all transactions contemplated by this Agreement and
to
conduct its business as presently conducted, has duly authorized the execution,
delivery and performance of this Agreement, has duly executed and delivered
this
Agreement, and this Agreement constitutes a legal, valid and binding obligation
of the Servicer, enforceable against it in accordance with its terms subject
to
bankruptcy laws and other similar laws of general application affecting rights
of creditors and subject to the application of the rules of equity, including
those respecting the availability of specific performance;
(c) None
of
the execution and delivery of this Agreement, the consummation of the
transactions contemplated thereby and hereby, or the fulfillment of or
compliance with the terms and conditions of this Agreement will conflict with
any of the terms, conditions or provisions of the Servicer's articles of
incorporation or by-laws or materially conflict with or result in a material
breach of any of the terms, conditions or provisions of any legal restriction
or
any agreement or instrument to which the Servicer is now a party or by which
it
is bound, or constitute a default or result in an acceleration under any of
the
foregoing, or result in the material violation of any law, rule, regulation,
order, judgment or decree to which the Servicer or its property is
subject;
(d) There
is
no litigation pending or, to the Seller’s knowledge, threatened with respect to
the Servicer which is reasonably likely to have a material adverse effect on
the
execution, delivery or enforceability of this Agreement, or which is reasonably
likely to have a material adverse effect on the financial condition of the
Servicer;
(e) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Servicer
of
or compliance by the Servicer with this Agreement or the consummation of the
transactions contemplated by this Agreement except for consents, approvals,
authorizations and orders which have been obtained;
(f) The
collection and servicing practices used by the Servicer, with respect to each
Mortgage Note and Mortgage have been in all material respects legal. With
respect to escrow deposits and payments that the Servicer collects, all such
payments are in the possession of, or under the control of, the Servicer, and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. No escrow deposits or
other charges or payments due under the Mortgage Note have been capitalized
under any Mortgage or the related Mortgage Note;
(g) The
Servicer is in good standing to service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ and
▇▇▇▇▇▇▇ Mac and no event has occurred which would make the Servicer unable
to
comply with eligibility requirements or which would require notification to
either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(h) No
written statement, report or other document furnished or to be furnished
pursuant to the Agreement contains or will contain any statement that is or
will
be inaccurate or misleading in any material respect or omits to state a material
fact required to be stated therein or necessary to make the information and
statements therein not misleading;
(i) No
fraud
or
misrepresentation of a material fact
with
respect to the servicing of a Mortgage Loan has taken place on the part of
the
Servicer;
(j) At
the
time Servicer commenced servicing the Mortgage Loans, either (i) each
Mortgagor
was properly notified with respect to Servicer's servicing of the related
Mortgage Loan in accordance with the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ National Affordable
Housing Act of 1990, as the same may be amended from time to time, and the
regulations provided
in
accordance with the Real Estate Settlement Procedures Act or (ii) such
notification was not required;
(k) At
the
time
Servicer commenced servicing the Mortgage Loans, all
applicable taxing authorities and insurance companies (including primary
mortgage insurance policy insurers, if applicable) and/or agents were notified
of the transfer of the servicing of the Mortgage Loans to Servicer, or its
designee, and Servicer currently receives all related notices, tax bills and
insurance statements. Additionally, any and all costs, fees and expenses
associated with the Servicer’s commencement of the servicing of the Mortgage
Loans, including the costs of any insurer notifications, the transfer or
implementation of tax service contracts, flood certification contracts, and
any
and all other servicing transfer-related costs and expenses have been paid
for
by the Servicer and will, in no event, be the responsibility of the Owner;
and
(l) The
collection
and servicing practices with respect to each Mortgage Note and Mortgage have
been in all material respects legal. With respect to escrow deposits and
payments that the Servicer collects, all such payments are in the possession
of,
or under the control of, the Servicer, and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof
have
not been made. No escrow deposits or other charges or payments due under the
Mortgage Note have been capitalized under any Mortgage or the related Mortgage
Note.
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
|
Section
4.01 Servicer
to Act as Servicer.
|
The
Servicer, as independent contract servicer, shall service and administer the
Mortgage Loans in accordance with this Agreement and with Accepted Servicing
Practices (giving due consideration to the Owner's reliance on the Servicer),
and shall have full power and authority, acting alone, to do or cause to be
done
any and all things in connection with such servicing and administration which
the Servicer may deem necessary or desirable and consistent with the terms
of
this Agreement and with Accepted Servicing Practices and shall exercise the
same
care that it customarily employs for its own account. Except as set forth in
this Agreement, the Servicer shall service the Mortgage Loans in accordance
with
Accepted Servicing Practices in compliance with the servicing provisions of
the
▇▇▇▇▇▇ ▇▇▇ Guide, which include, but are not limited to, provisions regarding
the liquidation of Mortgage Loans, the collection of Mortgage Loan payments,
the
payment of taxes, insurance and other charges, the maintenance of hazard
insurance with a Qualified Insurer, the maintenance of fidelity bond and errors
and omissions insurance, inspections, the restoration of Mortgaged Property,
the
maintenance of Primary Mortgage Insurance Policies, insurance claims, and title
insurance, management of REO Property, permitted withdrawals with respect to
REO
Property, liquidation reports, and reports of foreclosures and abandonments
of
Mortgaged Property, the transfer of Mortgaged Property, the release of Mortgage
Loan Documents, annual statements, and examination of records and facilities.
In
the event of any conflict, inconsistency or discrepancy between any of the
servicing provisions of this Agreement and any of the servicing provisions
of
the ▇▇▇▇▇▇ Mae Guide, the provisions of this Agreement shall control and be
binding upon the Owner and the Servicer. The Owner shall, upon reasonable
request, deliver powers-of-attorney to the Servicer sufficient to allow the
Servicer as servicer to execute all documentation requiring execution on behalf
of Owner with respect to the servicing of the Mortgage Loans, including
satisfactions, partial releases, modifications and foreclosure documentation
or,
in the alternative, shall as promptly as reasonably possible, execute and return
such documentation to the Servicer.
Consistent
with the terms of this Agreement, the Servicer may waive, modify or vary any
term of any Mortgage Loan or consent to the postponement of any such term or
in
any manner grant indulgence to any Mortgagor if in the Servicer's reasonable
and
prudent determination such waiver, modification, postponement or indulgence
is
not materially adverse to the Owner, provided, however, that unless the Servicer
has obtained the prior written consent of the Owner, the Servicer shall not
permit any modification with respect to any Mortgage Loan that would change
the
Mortgage Interest Rate, forgive the payment of principal or interest, reduce
or
increase the outstanding principal balance (except for actual payments of
principal) or change the final maturity date on such Mortgage Loan. In the
event
of any such modification which has been agreed to in writing by the Owner and
which permits the deferral of interest or principal payments on any Mortgage
Loan, the Servicer shall, on the Business Day immediately preceding the related
Remittance Date in any month in which any such principal or interest payment
has
been deferred, deposit in the Custodial Account from its own funds, in
accordance with Section 4.04 and Section 5.03, the difference between (a) such
month's principal and one month's interest at the related Mortgage Loan
Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b)
the amount paid by the Mortgagor. The Servicer shall be entitled to
reimbursement for such advances to the same extent as for all other advances
pursuant to Section 4.05. Without limiting the generality of the foregoing,
the
Servicer shall continue, and is hereby authorized and empowered, to prepare,
execute and deliver, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged
Properties.
The
Servicer shall perform all of its servicing responsibilities hereunder or may,
with the Owner's prior written approval, cause a subservicer to perform any
such
servicing responsibilities on its behalf, but the use by the Servicer of a
subservicer shall not release the Servicer from any of its obligations hereunder
and the Servicer shall remain responsible hereunder for all acts and omissions
of each subservicer as fully as if such acts and omissions were those of the
Servicer. Any such subservicer that the Owner shall be requested to consent
to
must be a ▇▇▇▇▇▇ ▇▇▇ approved seller/servicer or a ▇▇▇▇▇▇▇ Mac seller/servicer
in good standing and no event shall have occurred, including but not limited
to,
a change in insurance coverage, which would make it unable to comply with the
eligibility requirements for lenders imposed by ▇▇▇▇▇▇ ▇▇▇ or for
seller/servicers by ▇▇▇▇▇▇▇ Mac, or which would require notification to ▇▇▇▇▇▇
▇▇▇ or ▇▇▇▇▇▇▇ Mac. The Servicer shall pay all fees and expenses of each
subservicer from its own funds, and a subservicer's fee shall not exceed the
Servicing Fee.
At
the
cost and expense of the Servicer, without any right of reimbursement from the
Custodial Account, the Servicer shall be entitled to terminate the rights and
responsibilities of a subservicer and arrange, with the Owner's prior written
approval, for any servicing responsibilities to be performed by a successor
subservicer meeting the requirements in the preceding paragraph, provided,
however, that nothing contained herein shall be deemed to prevent or prohibit
the Servicer, at the Servicer's option, from electing to service the related
Mortgage Loans itself. In the event that the Servicer's responsibilities and
duties under this Agreement are terminated pursuant to Section 8.04, 9.01 or
10.01, and if requested to do so by the Owner, the Servicer shall at its own
cost and expense terminate the rights and responsibilities of each subservicer
effective as of the date of termination of the Servicer. The Servicer shall
pay
all fees, expenses or penalties necessary in order to terminate the rights
and
responsibilities of each subservicer from the Servicer's own funds without
reimbursement from the Owner.
Notwithstanding
any of the provisions of this Agreement relating to agreements or arrangements
between the Servicer and a subservicer or any reference herein to actions taken
through a subservicer or otherwise, the Servicer shall not be relieved of its
obligations to the Owner and shall be obligated to the same extent and under
the
same terms and conditions as if it alone were servicing and administering the
Mortgage Loans. The Servicer shall be entitled to enter into an agreement with
a
subservicer for indemnification of the Servicer by the subservicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
Any
subservicing agreement and any other transactions or services relating to the
Mortgage Loans involving a subservicer shall be deemed to be between such
subservicer and Servicer alone, and the Owner shall have no obligations, duties
or liabilities with respect to such Subservicer including no obligation, duty
or
liability of Owner to pay such subservicer's fees and expenses. For purposes
of
distributions and advances by the Servicer pursuant to this Agreement, the
Servicer shall be deemed to have received a payment on a Mortgage Loan when
a
subservicer has received such payment.
Section
4.02 Collection
of Mortgage Loan Payments.
Continuously
from the Effective Date until the date each Mortgage Loan ceases to be subject
to this Agreement, the Servicer will proceed with reasonable diligence to
collect all payments due under each Mortgage Loan when the same shall become
due
and payable and shall, to the extent such procedures shall be consistent with
this Agreement and the terms and provisions of related Primary Mortgage
Insurance Policy, follow such collection procedures as it follows with respect
to mortgage loans comparable to the Mortgage Loans and held for its own account.
Further, the Servicer will take reasonable care in ascertaining and estimating
annual ground rents, taxes, assessments, water rates, fire and hazard insurance
premiums, mortgage insurance premiums, and all other charges that, as provided
in the Mortgage, will become due and payable to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.
Section
4.03 Realization
Upon Defaulted Mortgage Loans.
The
Servicer shall use its reasonable efforts, consistent with the procedures that
the Servicer would use in servicing loans for its own account and the
requirements of the ▇▇▇▇▇▇ Mae Guide, to foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as
come
into and continue in default and as to which no satisfactory arrangements can
be
made for collection of delinquent payments pursuant to Section 4.01. The
Servicer shall use its reasonable efforts to realize upon defaulted Mortgage
Loans in such manner as will maximize the receipt of principal and interest
by
the Owner, taking into account, among other things, the timing of foreclosure
proceedings. The foregoing is subject to the provisions that, in any case in
which Mortgaged Property shall have suffered damage, the Servicer shall not
be
required to expend its own funds toward the restoration of such property unless
it shall determine in its discretion (i) that such restoration will increase
the
proceeds of liquidation of the related Mortgage Loan to the Owner after
reimbursement to itself for such expenses, and (ii) that such expenses will
be
recoverable by the Servicer through Insurance Proceeds or Liquidation Proceeds
from the related Mortgaged Property, as contemplated in Section 4.05. The
Servicer shall notify the Owner in writing of the commencement of foreclosure
proceedings. The Servicer shall be responsible for all costs and expenses
incurred by it in any such proceedings or functions as Servicing Advances;
provided, however, that it shall be entitled to reimbursement therefor from
the
related Mortgaged Property, as contemplated in Section 4.05. Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure
or
acceptance of a deed in lieu of foreclosure, in the event the Servicer has
reasonable cause to believe that a Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, or if the Owner otherwise requests
an
environmental inspection or review of such Mortgaged Property, such an
inspection or review is to be conducted by a qualified inspector. Upon
completion of the inspection, the Servicer shall promptly provide the Owner
with
a written report of the environmental inspection. After reviewing the
environmental inspection report, the Owner shall determine how the Servicer
shall proceed with respect to the Mortgaged Property.
Section
4.04 Establishment
of Custodial Accounts; Deposits in Custodial Accounts.
The
Servicer shall segregate and hold all funds collected and received pursuant
to
each Mortgage Loan separate and apart from any of its own funds and general
assets and shall establish and maintain one or more Custodial Accounts. Each
Custodial Account shall be established with a Qualified Depository. To the
extent such funds are not deposited in a Custodial Account, such funds may
be
invested in Permitted Investments for the benefit of the Owner (with any income
earned thereon for the benefit of the Servicer). Funds deposited in the
Custodial Account may be drawn on by the Servicer in accordance with Section
4.05. The creation of any Custodial Account shall be evidenced by a letter
agreement in the form shown in Exhibit
B
hereto.
The original of such letter agreement shall be furnished to the Owner upon
request. The Servicer acknowledges and agrees that the Servicer shall bear
any
losses incurred with respect to Permitted Investments. The amount of any such
losses shall be immediately deposited by the Servicer in the Custodial Account,
as appropriate, out of the Servicer's own funds, with no right to reimbursement
therefor.
The
Servicer shall deposit in a mortgage clearing account on a daily basis, and
in
the Custodial Account or Accounts no later than the second Business Day after
receipt of funds and retain therein the following payments and
collections:
(i) all
payments on account of principal, including Principal Prepayments, on the
Mortgage Loans received after the Cut-off Date;
(ii) all
payments on account of interest on the Mortgage Loans adjusted to the related
Mortgage Loan Remittance Rate received after the Cut-off Date;
(iii) all
Liquidation Proceeds and REO Disposition Proceeds received after the Cut-off
Date;
(iv) any
net
amounts received by the Servicer after the Cut-off Date in connection with
any
REO Property pursuant to Section 4.13;
(v) all
Insurance Proceeds received after the Cut-off Date including amounts required
to
be deposited pursuant to Sections 4.08 and 4.10, other than proceeds to be
held
in the Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Servicer's normal
servicing procedures, the loan documents or applicable law;
(vi) all
Condemnation Proceeds affecting any Mortgaged Property received after the
Cut-off Date other than proceeds to be held in the Escrow Account and applied
to
the restoration or repair of the Mortgaged Property or released to the Mortgagor
in accordance with the Servicer's normal servicing procedures, the loan
documents or applicable law;
(vii) any
Monthly Advances as provided in Section 5.03;
(viii) any
amounts received after the Cut-off Date and required to be deposited in the
Custodial Account pursuant to 6.02; and
(ix) with
respect to each full or partial Principal Prepayment received after the Cut-off
date, any Prepayment Interest Shortfalls, to the extent of the Servicer’s
aggregate Servicing Fee received with respect to the related Due
Period.
The
foregoing requirements for deposit in the Custodial Account shall be exclusive,
it being understood and agreed that, without limiting the generality of the
foregoing, payments in the nature of late payment charges and assumption fees,
to the extent permitted by Section 6.01, need not be deposited by the Servicer
in the Custodial Account. Any interest paid on funds deposited in the Custodial
Account by the Qualified Depository shall accrue to the benefit of the Servicer
and the Servicer shall be entitled to retain and withdraw such interest from
the
Custodial Account pursuant to Section 4.05(iv).
Section
4.05 Permitted
Withdrawals From the Custodial Account.
The
Servicer may, from time to time, make withdrawals from the Custodial Account
for
the following purposes:
(i)
to
make payments to the Owner in the amounts and in the manner provided for in
Section 5.01;
(ii)
to
reimburse itself for Monthly Advances, the Servicer's right to reimburse itself
pursuant to this subclause (ii) being limited to amounts received on the related
Mortgage Loan which represent late collections (net of the related Servicing
Fees) of principal and/or interest respecting which any such advance was
made;
(iii)
to
reimburse itself for unreimbursed Servicing Advances and unreimbursed Monthly
Advances, the Servicer's right to reimburse itself pursuant to this subclause
(iii) with respect to any Mortgage Loan being limited to Liquidation Proceeds,
Condemnation Proceeds and Insurance Proceeds received after the Cut-off Date
related to such Mortgage Loan;
(iv)
to
pay to itself as servicing compensation (a) any interest earned on funds in
the
Custodial Account (all such interest to be withdrawn monthly not later than
each
Remittance Date) and (b) any payable Servicing Fee;
(v)
to
reimburse itself for any Nonrecoverable Advances:
(vi)
to
transfer funds to another Qualified Depository in accordance with Section 4.09
hereof;
(vii)
to
remove funds inadvertently placed in the Custodial Account in error by the
Servicer; and
(viii)
to
clear and terminate the Custodial Account upon the termination of this
Agreement.
Section
4.06 Establishment
of Escrow Accounts; Deposits in Escrow Accounts.
The
Servicer shall segregate and hold all funds collected and received pursuant
to
each Mortgage Loan which constitute Escrow Payments separate and apart from
any
of its own funds and general assets and shall establish and maintain one or
more
Escrow Accounts. Each Escrow Account shall be established with a Qualified
Depository. To the extent such funds are not deposited in an Escrow Account,
such funds may be invested in Permitted Investments. Funds deposited in an
Escrow Account may be drawn on by the Servicer in accordance with Section 4.07.
The creation of any Escrow Account shall be evidenced by a letter agreement
in
the form shown in Exhibit
C.
The
original of such letter agreement shall be furnished to the Owner upon request.
The Servicer acknowledges and agrees that the Servicer shall bear any losses
incurred with respect to Permitted Investments. The amount of any such losses
shall be immediately deposited by the Servicer in the Escrow Account, as
appropriate, out of the Servicer's own funds, with no right to reimbursement
therefor.
The
Servicer shall deposit in a mortgage clearing account on a daily basis, and
in
the Escrow Account or Accounts no later than the second Business Day after
receipt of funds and retain therein:
(i)
all
Escrow Payments collected on account of the Mortgage Loans, for the purpose
of
effecting timely payment of any items as are required under the terms of this
Agreement;
(ii)
all
Insurance Proceeds which are to be applied to the restoration or repair of
any
Mortgaged Property; and
(iii)
all
Servicing Advances for Mortgagors whose Escrow Payments are insufficient to
cover escrow disbursements.
The
Servicer shall make withdrawals from an Escrow Account only to effect such
payments as are required under this Agreement, and for such other purposes
as
shall be as set forth in and in accordance with Section 4.07. The Servicer
shall
be entitled to retain any interest paid on funds deposited in an Escrow Account
by the Qualified Depository 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 notwithstanding that
the
Escrow Account is non-interest bearing or that interest paid thereon is
insufficient for such purposes.
Section
4.07 Permitted
Withdrawals From Escrow Account.
Withdrawals
from the Escrow Account may be made by the Servicer only:
(i) to
effect
timely payments of ground rents, taxes, assessments, water rates, fire and
hazard insurance premiums, Primary Mortgage Insurance Policy premiums, if
applicable, and comparable items;
(ii) to
reimburse Servicer for any Servicing Advance made by Servicer with respect
to a
related Mortgage Loan but only from amounts received on the related Mortgage
Loan which represent late payments or collections of Escrow Payments
thereunder;
(iii) to
refund
to the Mortgagor any funds as may be determined to be overages;
(iv) for
transfer to the Custodial Account in connection with an acquisition of REO
Property;
(v) for
application to restoration or repair of the Mortgaged Property;
(vi) to
pay to
the Servicer, or to the Mortgagor to the extent required by law, any interest
paid on the funds deposited in the Escrow Account;
(vii) to
pay to
the Mortgagors or other parties Insurance Proceeds deposited in accordance
with
Section 4.06;
(viii) to
remove
funds inadvertently placed in an Escrow Account in error by the Servicer; and
(ix) to
clear
and terminate the Escrow Account on the termination of this Agreement.
As
part
of its servicing duties, the Servicer shall pay to the Mortgagors interest
on
funds in an Escrow Account, to the extent required by law, and to the extent
that interest earned on funds in the Escrow Account is insufficient, shall
pay
such interest from its own funds, without any reimbursement
therefor.
Section
4.08 Payment
of Taxes, Insurance and Other Charges; Maintenance of Primary Mortgage Insurance
Policies; Collections Thereunder.
With
respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates and
other
charges which are or may become a lien upon the Mortgaged Property and the
status of Primary Mortgage Insurance Policy premiums and fire and hazard
insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges, including renewal premiums and shall effect payment
thereof prior to the applicable penalty or termination date and at a time
appropriate for securing maximum discounts allowable, employing for such purpose
deposits of the Mortgagor in the Escrow Account which shall have been estimated
and accumulated by the Servicer in amounts sufficient for such purposes, as
allowed under the terms of the Mortgage or applicable law. To the extent that
the Mortgage does not provide for Escrow Payments, the Servicer shall determine
that any such payments are made by the Mortgagor at the time they first become
due. The Servicer assumes full responsibility for the timely payment of all
such
bills and shall effect timely payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments.
The
Servicer will maintain in full force and effect Primary Mortgage Insurance
Policies issued by a Qualified Insurer with respect to each Mortgage Loan for
which such coverage is herein required. Such coverage will be maintained until
the ratio of the current outstanding principal balance of the related Mortgage
Loan to the appraised value of the related Mortgaged Property, based on the
most
recent appraisal of the Mortgaged Property performed by a Qualified Appraiser,
such appraisal to be included in the Servicing File, is reduced to 80.00% or
less. The Servicer will not cancel or refuse to renew any Primary Mortgage
Insurance Policy that is required to be kept in force under this Agreement
unless a replacement Primary Mortgage Insurance Policy for such canceled or
nonrenewed policy is obtained from and maintained with a Qualified Insurer.
The
Servicer shall not 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 6.01, 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 the 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.
In
connection with its activities as servicer, the Servicer agrees to prepare
and
present, on behalf of itself and the Owner, claims to the insurer under any
Private Mortgage Insurance Policy in a timely fashion in accordance with the
terms of such Primary Mortgage Insurance Policy and, in this regard, to take
such action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policy respecting a defaulted Mortgage Loan. Pursuant to Section
4.04,
any amounts collected by the Servicer under any Primary Mortgage Insurance
Policy shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 4.05.
Section
4.09 Transfer
of Accounts.
The
Servicer may transfer the Custodial Account or the Escrow Account to a different
Qualified Depository from time to time. The Servicer shall notify the Owner
of
any such transfer within 15 Business Days of transfer.
Section
4.10 Maintenance
of Hazard Insurance.
The
Servicer shall cause to be maintained for each Mortgage Loan fire and hazard
insurance with extended coverage as is customary in the area where the Mortgaged
Property is located in an amount which is equal to the lesser of (i) the maximum
insurable value of the improvements securing such Mortgage Loan or (ii) the
greater of (a) the outstanding principal balance of the Mortgage Loan, and
(b)
the percentage such that the proceeds thereof shall be sufficient to prevent
the
Mortgagor and/or the Mortgagee from becoming a co-insurer. If the Mortgaged
Property is in an area identified in the Federal Register by the Federal
Emergency Management Agency as being a special flood hazard area that has
federally-mandated flood insurance requirements, the Servicer will cause to
be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least
of
(i) the outstanding principal balance of the Mortgage Loan, (ii) the maximum
insurable value of the improvements securing such Mortgage Loan or (iii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. The Servicer shall also maintain on the
REO
Property, fire and hazard insurance with extended coverage in an amount which
is
at least equal to the maximum insurable value of the improvements which are
a
part of such property, liability insurance and, to the extent required and
available under the Flood Disaster Protection Act of 1973, as amended, flood
insurance in an amount as provided above. Any amounts collected by the Servicer
under any such policies other than amounts to be deposited in the Escrow Account
and applied to the restoration or repair of the Mortgaged Property or REO
Property, or released to the Mortgagor in accordance with the Servicer's normal
servicing procedures, shall be deposited in the Custodial Account, subject
to
withdrawal pursuant to Section 4.05. It is understood and agreed that no other
additional insurance need be required by the Servicer or the Mortgagor or
maintained on property acquired in respect of the Mortgage Loans, other than
pursuant to the ▇▇▇▇▇▇ ▇▇▇ Guide or such applicable state or federal laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All such policies shall be endorsed with standard
mortgagee clauses with loss payable to the Servicer and its successors and/or
assigns and shall provide for at least thirty days prior written notice of
any
cancellation, reduction in the amount or material change in coverage to the
Servicer. The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies currently reflect a General Policy Rating in
Best's Key Rating Guide currently acceptable to ▇▇▇▇▇▇ Mae and are licensed
to
do business in the state wherein the property subject to the policy is
located.
Section
4.11 Adjustments
to Mortgage Interest Rate and Monthly Payment.
On
each
applicable Adjustment Date, the Mortgage Interest Rate shall be adjusted, in
compliance with the requirements of the related Mortgage and Mortgage Note,
to
equal the sum of the Index plus the Margin (rounded in accordance with the
related Mortgage Note) subject to the applicable Periodic Rate Cap and Lifetime
Rate Cap, as set forth in the Mortgage Note. The Servicer shall execute and
deliver the notices required by each Mortgage and Mortgage Note and applicable
laws and regulations regarding interest rate adjustments.
Section
4.12 Fidelity
Bond, Errors and Omissions Insurance.
The
Servicer shall maintain, at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy, with broad coverage with responsible
companies on all officers, employees or other persons acting in any capacity
with regard to the Mortgage Loans and who handle funds, money, documents and
papers relating to the Mortgage Loans. The Fidelity Bond and errors and
omissions insurance shall be in the form of the Mortgage Banker's Blanket Bond
and shall protect and insure the Servicer against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
persons. Such Fidelity Bond and errors and omissions insurance shall also
protect and insure the Servicer against losses in connection with the failure
to
maintain any insurance policies required pursuant to this Agreement and the
release or satisfaction of a Mortgage Loan without having obtained payment
in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring the 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 minimum coverage under any such Fidelity Bond and insurance
policy shall be at least equal to the corresponding amounts required by ▇▇▇▇▇▇
Mae in the ▇▇▇▇▇▇ ▇▇▇ Guide or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ Mac Guide. The
Servicer shall, upon request of Owner, deliver to the Owner a certificate from
the surety and the insurer as to the existence of the Fidelity Bond and errors
and omissions insurance policy and shall obtain a statement from the surety
and
the insurer that such Fidelity Bond or insurance policy shall in no event be
terminated or materially modified without thirty days prior written notice
to
the Owner. The Servicer shall notify the Owner within five Business Days of
receipt of notice that such Fidelity Bond or insurance policy will be, or has
been, materially modified or terminated. The Owner and its successors or assigns
as their interests may appear must be named as loss payees on the Fidelity
Bond
and as additional insured on the errors and omissions policy.
Section
4.13 Title,
Management and Disposition of REO Property.
In
the
event that title to any Mortgaged Property is acquired in foreclosure or by
deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in the
name of the Owner or its designee. Any such Person or Persons holding such
title
other than the Owner shall acknowledge in writing that such title is being
held
as nominee for the benefit of the Owner.
The
Servicer shall notify the Owner in accordance with prudent servicing practices
of each acquisition of REO Property upon such acquisition, and thereafter assume
the responsibility for marketing such REO Property in accordance with Accepted
Servicing Practices. Thereafter, the Servicer shall continue to provide certain
administrative services to the Owner relating to such REO Property as set forth
in this Section 4.13. The REO Property must be sold within three years following
the end of the calendar year of the date of acquisition, unless a REMIC election
has been made with respect to the arrangement under which the Mortgage Loans
and
REO Property are held and (i) the Owner shall have been supplied with an Opinion
of Counsel to the effect that the holding by the related trust of such Mortgaged
Property subsequent to such three-year period (and specifying the period beyond
such three-year period for which the Mortgaged Property may be held) will not
result in the imposition of taxes on “prohibited transactions” of the related
trust as defined in Section 860F of the Code, or cause the related REMIC to
fail
to qualify as a REMIC, in which case the related trust may continue to hold
such
Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel), or (ii) the Owner (at the Servicer’s expense) or the Servicer shall
have applied for, prior to the expiration of such three-year period, an
extension of such three-year period in the manner contemplated by Section
856(e)(3) of the Code, in which case the three-year period shall be extended
by
the applicable period. If a period longer than three years is permitted under
the foregoing sentence and is necessary to sell any REO Property, (i) the
Servicer shall report monthly to the Owner as to progress being made in selling
such REO Property and (ii) if, with the written consent of the Owner, a purchase
money mortgage is taken in connection with such sale, such purchase money
mortgage shall name the Servicer as mortgagee, and such purchase money mortgage
shall not be held pursuant to this Agreement, but instead a separate
participation agreement between the Servicer and Owner shall be entered into
with respect to such purchase money mortgage.
The
Servicer shall not permit the creation of any “interests” (within the meaning of
Section 860G of the Code) in any REMIC. The Servicer shall not enter into any
arrangement by which a REMIC will receive a fee or other compensation for
services nor permit a REMIC to receive any income from assets other than
“qualified mortgages” as defined in Section 860G(a)(3) of the Code or “permitted
investments” as defined in Section 860G(a)(5) of the Code.
Notwithstanding
any other provision of this Agreement, if a REMIC election has been made, no
Mortgaged Property held by a REMIC shall be rented (or allowed to continue
to be
rented) or otherwise used for the production of income by or on behalf of the
related trust or sold in such a manner or pursuant to any terms that would
(i)
cause such Mortgaged Property to fail to qualify at any time as “foreclosure
property” within a meaning of Section 860G(a)(8) of the Code, (ii) subject the
related trust to the imposition of any federal or state income taxes on “net
income from foreclosure property” with respect to such Mortgaged Property within
the meaning of Section 860G(c) of the Code, or (iii) cause the sale of such
Mortgaged Property to result in the receipt by the related trust or any income
from non-permitted assets as described in Section 860F(a) (2)(B) of the Code,
unless the Servicer has agreed to indemnify and hold harmless the related trust
with respect to the imposition of any such taxes.
The
Servicer shall, either itself or through an agent selected by the Servicer,
and
in accordance with the ▇▇▇▇▇▇ Mae Guide, manage, conserve, protect and operate
each REO Property in the same manner that it manages, conserves, protects and
operates other foreclosed property for its own account, and in the same manner
that similar property in the same locality as the REO Property is managed.
Each
REO Disposition shall be carried out by the Servicer at such price and upon
such
terms and conditions as the Servicer deems to be in the best interest of the
Owner. The REO Disposition Proceeds from the sale of the REO Property shall
be
promptly deposited in the Custodial Account. As soon as practical thereafter,
the expenses of such sale shall be paid and the Servicer shall reimburse itself
for any related Servicing Advances, or Monthly Advances made pursuant to Section
5.03.
The
Servicer shall cause each REO Property to be inspected promptly upon the
acquisition of title thereto and shall cause each REO Property to be inspected
at least monthly thereafter or more frequently as may be required by the
circumstances. The Servicer shall make or cause the inspector to make a written
report of each such inspection. Such reports shall be retained in the Servicing
File and copies thereof shall be forwarded by the Servicer to the
Owner.
Notwithstanding
anything to the contrary set forth in this Section 4.13, the parties hereto
hereby agree that the Owner, at its option, shall be entitled to manage,
conserve, protect and operate each REO Property for its own benefit (such
option, an "REO Option"). In connection with the exercise of an REO Option,
the
prior two paragraphs and the related provisions of Section 4.03 and Section
4.04(iii) (such provisions, the “REO Marketing Provisions”) shall be revised as
follows. Following the acquisition of any Mortgaged Property, the Servicer
shall
submit a detailed invoice to the Owner for all related Servicing Advances and,
upon exercising the REO Option, the Owner shall promptly reimburse the Servicer
for such amounts. In the event the REO Option is exercised with respect to
an
REO Property, Section 4.04 (iii) shall not be applicable thereto. References
made in Section 4.03 with respect to the reimbursement of Servicing Advances
shall, for purposes of such REO Property, be deemed to be covered by this
paragraph. The Owner acknowledges that, in the event it exercises an REO Option,
with respect to the related REO Property, there shall be no breach by the
Servicer based upon or arising out of the Servicer's failure to comply with
the
REO Marketing Provisions.
ARTICLE
V
PAYMENTS
TO THE OWNER
Section
5.01 Remittances.
On
each
Remittance Date, the Servicer shall remit to the Owner (i) all amounts credited
to the Custodial Account as of the close of business on the related preceding
Determination Date, except (a) Partial Principal Prepayments received on or
after the first day of the month in which the Remittance Date occurs shall
be
remitted to the Owner on the next following Remittance Date, (b) Full Principal
Prepayments received on or before the 15th
day of
the month in which a Remittance Date occurs shall be remitted to the Owner
on
the Remittance Date of such month, and (c) Full Principal Prepayments received
after the 15th
day of
the month shall be remitted to the Owner on the next following Remittance Date,
each net of charges against or withdrawals from the Custodial Account pursuant
to Section 4.05, plus, to the extent not already deposited in the Custodial
Account, the sum of (ii) all Monthly Advances, if any, which the Servicer is
obligated to distribute pursuant to Section 5.03 and (iii) all Prepayment
Interest Shortfalls the Servicer is required to make up pursuant to Section
4.04, minus (iv) any amounts attributable to Monthly Payments collected after
the Cut-off Date but due on a Due Date or Dates subsequent to the last day
of
the related Due Period, which amounts shall be remitted on the related
Remittance Date next succeeding the Due Period for such amounts.
With
respect to any remittance received by the Owner after the Business Day on which
such payment was due, the Servicer shall pay to the Owner interest on any such
late payment at an annual rate equal to the Prime Rate, adjusted as of the
date
of each change, plus two percentage points, but in no event greater than the
maximum amount permitted by applicable law. Such interest shall be deposited
in
the Custodial Account by the Servicer on the date such late payment is made
and
shall cover the period commencing with the day following such Business Day
and
ending with the Business Day on which such payment is made, both inclusive.
Such
interest shall be remitted along with the distribution payable on the next
succeeding related Remittance Date. The payment by the Servicer of any such
interest shall not be deemed an extension of time for payment or a waiver of
any
Event of Default by the Servicer.
Section
5.02 Statements
to the Owner.
The
Servicer shall furnish to the Owner an individual Mortgage Loan accounting
report (a “Report”), as of the last Business Day of each month, in the
Servicer's assigned loan number order to document Mortgage Loan payment activity
on an individual Mortgage Loan basis. With respect to each month, such Report
shall be received by the Owner (i) no later than the fifth Business Day of
the
following month of the related Remittance Date on a disk or tape or other
computer-readable format, in such format as may be mutually agreed upon by
both
the Owner and the Servicer, and (ii) no later than the tenth Business Day of
the
following month of the related Remittance Date in hard copy, which Report shall
contain the following:
| (i) |
with
respect to each Monthly Payment, the amount of such remittance allocable
to interest
|
| (ii) |
the
amount of servicing compensation received by the Servicer during
the prior
distribution period;
|
| (iii) |
the
aggregate Stated Principal Balance of the Mortgage Loans;
|
| (iv) |
the
number and aggregate outstanding principal balances of Mortgage Loans
(a)
delinquent (1) 30 to 59 days, (2) 60 to 89 days, (3) 90 days or more;
(b)
as to which foreclosure has commenced; and (c) as to which REO Property
has been acquired; and
|
| (v) |
such
other reports as may reasonably be required by the
Owner.
|
The
Servicer shall also provide a trial balance, sorted in the Owner's assigned
loan
number order, and such other loan level scheduled-scheduled remittance
information as described on Exhibit
E,
in
electronic tape form, with each such Report.
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 the
Owner with such information concerning the Mortgage Loans as is necessary for
the Owner to prepare its federal income tax return as the Owner may reasonably
request from time to time.
In
addition, not more than 60 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 requirements of
applicable federal income tax law as to the aggregate of remittances of
principal and interest for the applicable portion of such year.
Section
5.03 Monthly
Advances by the Servicer.
Not
later
than the close of business on the Business Day preceding each Remittance Date,
the Servicer shall deposit in the Custodial Account an amount equal to all
payments not previously advanced by the Servicer, whether or not deferred
pursuant to Section 4.01, of Monthly Payments, adjusted to the related Mortgage
Loan Remittance Rate, which are delinquent at the close of business on the
related Determination Date; provided, however, that the amount of any such
deposit may be reduced by (i) the Amount Held for Future Distribution (as
defined below) then on deposit in the Custodial Account, plus (ii) with respect
to the initial Remittance Date, the Non-held Early Pay Amount (as defined
below). Any portion of the Amount Held for Future Distribution used to pay
Monthly Advances shall be replaced by the Servicer by deposit into the Custodial
Account on any future Remittance Date to the extent that the funds that are
available in the Custodial Account for remittance to the Owner on such
Remittance Date are less than the amount of payments required to be made to
the
Owner on such Remittance Date.
The
“Amount Held for Future Distribution” as to any Remittance Date shall be the
total of the amounts held in the Custodial Account at the close of business
on
the preceding Determination Date which were received after the Cut-off Date
on
account of (i) Liquidation Proceeds, Insurance Proceeds, and Partial Principal
Prepayments received or made in the month of such Remittance Date, (ii) Full
Principal Payments received after the 15th
day of
the month in the month of such Remittance Date, and (iii) payments which
represent early receipt of scheduled payments of principal and interest due
on a
date or dates subsequent to the related Due Date. The "Non-held Early Pay
Amount" shall be the total of the amounts on account of payments which represent
early receipt of scheduled payments of principal and interest received on or
prior to the Cut-off Date.
The
Servicer's obligation to make such Monthly Advances as to any Mortgage Loan
will
continue through the final disposition or liquidation of the Mortgaged Property,
unless the Servicer deems such advance to be nonrecoverable from Liquidation
Proceeds, REO Disposition Proceeds or Insurance Proceeds with respect to the
applicable Mortgage Loan. In such latter event, the Servicer shall deliver
to
the Owner an Officer's Certificate of the Servicer to the effect that an officer
of the Servicer has reviewed the related Servicing File and has obtained a
recent appraisal and has made the reasonable determination that any additional
advances are nonrecoverable from Liquidation or Insurance Proceeds with respect
to the applicable Mortgage Loan.
Section
5.04 Liquidation
Reports.
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by the
Owner pursuant to a deed-in--lieu of foreclosure, the Servicer shall submit
to
the Owner a liquidation report with respect to such Mortgaged Property in such
form as the Servicer and the Owner shall agree. The Servicer shall also provide
reports on the status of REO Property containing such information as Owner
may
reasonably require.
ARTICLE
VI
GENERAL
SERVICING PROCEDURES
Section
6.01 Assumption
Agreements.
The
Servicer will, to the extent it has knowledge of any conveyance or prospective
conveyance by any Mortgagor of a Mortgaged Property (whether by absolute
conveyance or by contract of, sale, and whether or not the Mortgagor remains
or
is to remain liable under the Mortgage Note and/or the Mortgage), exercise
its
rights to accelerate the maturity of such Mortgage Loan under any "due-on-sale"
clause to the extent permitted by law; provided, however, that the Servicer
shall not exercise any such rights if prohibited by law or the terms of the
Mortgage Note from doing so or if the exercise of such rights would impair
or
threaten to impair any recovery under the related Primary Mortgage Insurance
Policy, if any. If the Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Servicer, with the
approval of the Owner (such approval not to be unreasonably withheld), will
enter into an assumption agreement with the person to whom the Mortgaged
Property has been conveyed or is proposed to be conveyed, pursuant to which
such
person becomes liable under the Mortgage Note and, to the extent permitted
by
applicable state law, the Mortgagor remains liable thereon. Where an assumption
is allowed pursuant to this Section 6.01, the Servicer, with the prior consent
of the primary mortgage insurer, if any, is authorized to enter into a
substitution of liability agreement with the person to whom the Mortgaged
Property has been conveyed or is proposed to be conveyed pursuant to which
the
original mortgagor is released from liability and such Person is substituted
as
mortgagor and becomes liable under the related Mortgage Note. Any such
substitution of liability agreement shall be in lieu of an assumption
agreement.
In
connection with any such assumption or substitution of liability, the Servicer
shall follow the underwriting practices and procedures of the ▇▇▇▇▇▇ ▇▇▇ Guide.
With respect to an assumption or substitution of liability, the Mortgage
Interest Rate borne by the related Mortgage Note and the amount of the Monthly
Payment may not be changed. The Servicer shall notify the Owner that any such
substitution of liability or assumption agreement has been completed by
forwarding to the Owner the original of any such substitution of liability
or
assumption agreement, which document shall be added to the related Mortgage
Loan
Documents and shall, for all purposes, be considered a part of such related
mortgage file to the same extent as all other documents and instruments
constituting a part thereof. All fees collected by the Servicer for entering
into an assumption or substitution of liability agreement shall belong to the
Servicer.
Notwithstanding
the foregoing paragraphs of this section or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of
a
Mortgage Loan by operation of law or any assumption which the Servicer may
be
restricted by law from preventing, for any reason whatsoever. For purposes
of
this Section 6.01, 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
6.02 Satisfaction
of Mortgages and Release of Mortgage Loan Documents.
Upon
the
payment in full of any Mortgage Loan, the Servicer will immediately notify
the
Custodian with a certification and request for release by a Servicing Officer,
which certification shall include a statement to the effect that all amounts
received in connection with such payment which are required to be deposited
in
the Custodial Account pursuant to Section 4.04 have been so deposited, and
a
request for delivery to the Servicer of the portion of the Mortgage Loan
Documents held by the Custodian, and unless the related Mortgage Loans are
the
subject of a Pass-Through Transfer, such request is to be acknowledged by the
Owner. Upon receipt of such certification and request, the Owner shall promptly
release or cause the Custodian to promptly release the related Mortgage Loan
Documents to the Servicer and the Servicer shall prepare and deliver for
execution by the Owner or at the Owner's option execute under the authority
of a
power of attorney delivered to the Servicer by the Owner any satisfaction or
release. No expense incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to the Custodial
Account.
In
the
event the Servicer satisfies or releases a Mortgage without having obtained
payment in full of the indebtedness secured by the Mortgage or should it
otherwise prejudice any right the Owner may have under the mortgage instruments,
the Servicer, upon written demand, shall remit within two Business Days to
the
Owner the then outstanding principal balance of the related Mortgage Loan by
deposit thereof in the Custodial Account. The Servicer shall maintain the
Fidelity Bond insuring the Servicer against any loss it may sustain with respect
to any Mortgage Loan not satisfied in accordance with the procedures set forth
herein.
From
time
to time and as appropriate for the servicing or foreclosure of the Mortgage
Loans, including for the purpose of collection under any Primary Mortgage
Insurance Policy, upon request of the Servicer and delivery to the Custodian
of
a servicing receipt signed by a Servicing Officer (and unless the related
Mortgage Loans are the subject of a Pass-Through Transfer, acknowledged by
the
Owner), the Custodian shall release the portion of the Mortgage Loan Documents
held by the Custodian to the Servicer. Such servicing receipt shall obligate
the
Servicer to promptly return the related Mortgage Loan Documents to the
Custodian, when the need therefor by the Servicer no longer exists, unless
the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to
the
Mortgage Loan have been deposited in the Custodial Account or such documents
have been delivered to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Servicer has promptly delivered to the
Owner or the Custodian a certificate of a Servicing Officer certifying as to
the
name and address of the Person to which such documents were delivered and the
purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated, the servicing
receipt shall be released by the Owner or the Custodian, as applicable, to
the
Servicer.
Section
6.03 Servicing
Compensation.
As
compensation for its services hereunder, the Servicer shall be entitled to
withdraw from the Custodial Account or to retain from interest payments on
the
Mortgage Loans the amounts provided for as the Servicer's Servicing Fee.
Additional servicing compensation in the form of assumption fees, as provided
in
Section 6.01, late payment charges and other ancillary fees shall be retained
by
the Servicer to the extent not required to be deposited in the Custodial
Account. 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.
Section
6.04 Annual
Statement as to Compliance.
The
Servicer will deliver to the Owner not later than 90 days following the end
of
each fiscal year of the Servicer, an Officers' Certificate stating, as to each
signatory thereof, that (i) a review of the activities of the Servicer during
the preceding calendar year and of performance under this Agreement has been
made under such officers' supervision, and (ii) to the best of such officers'
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 officers and the nature and status thereof except for such
defaults as such Officers in their good faith judgment believe to be
immaterial.
Section
6.05 Annual
Independent Certified Public Accountants' Servicing Report.
Not
later
than 90 days following the end of each fiscal year of the Servicer, the Servicer
at its expense shall cause a firm of independent public accountants which is
a
member of the American Institute of Certified Public Accountants to furnish
a
statement to the Owner to the effect that such firm has examined certain
documents and records relating to the Servicer's servicing of mortgage loans
of
the same type as the Mortgage Loans pursuant to servicing agreements
substantially similar to this Agreement, which agreements may include this
Agreement, and that, on the basis of such an examination, conducted
substantially in accordance with the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Servicer's servicing
has
been conducted in compliance with the agreements examined pursuant to this
Section 6.05, except for (i) such exceptions as such firm shall believe to
be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement.
Section
6.06 Owner's
Right to Examine Servicer Records.
The
Owner
shall have the right to examine and audit, at its expense, upon reasonable
notice to the Servicer, during business hours or at such other times as might
be
reasonable under applicable circumstances, any and all of the books, records,
documentation or other information of the Servicer, or held by another for
the
Servicer or on its behalf or otherwise, which relate to the performance or
observance by the Servicer of the terms, covenants or conditions of this
Agreement.
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 but not limited to OTS, FDIC and other similar entities, access
to any documentation regarding the Mortgage Loans in the possession of the
Servicer which may be required by any applicable regulations. Such access shall
be afforded without charge, upon reasonable request, during normal business
hours and at the offices of the Servicer, and in accordance with the applicable
federal government agency, FDIC, OTS, or any other similar
regulations.
Section
6.07 Compliance
with REMIC Provisions.
If
a
REMIC election has been made with respect to the arrangement under which the
Mortgage Loans and REO Property are held, the 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 “contribution” 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 actions) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
Section
6.08 Non-solicitation.
The
Servicer shall not knowingly conduct any solicitation exclusively targeted
to
the Mortgagors for the purpose of inducing or encouraging the early prepayment
or refinancing of the related Mortgage Loans. It is understood and agreed that
promotions undertaken by the Servicer or any agent or affiliate of the Servicer
which are directed to the general public at large, including, without
limitation, mass mailings based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this section. Nothing
contained herein shall prohibit the Servicer from (i) distributing to Mortgagors
any general advertising including information brochures, coupon books, or other
similar documentation which indicates services the Seller offers, including
refinances or (ii) providing financing of home equity loans to Mortgagors at
the
Mortgagor’s request.
ARTICLE
VII
REPORTS
TO BE PREPARED BY SERVICER
Section
7.01 Servicer
Shall Provide Information as Reasonably Required.
The
Servicer shall furnish to the Owner upon request, during the term of this
Agreement, such periodic, special or other reports or information, whether
or
not provided for herein, as shall be necessary, reasonable or appropriate with
respect to the purposes of this Agreement. The Servicer may negotiate with
the
Owner for a reasonable fee for providing such report or information, unless
(i)
the Servicer is required to supply such report or information pursuant to any
other section of this Agreement, or (ii) the report or information has been
requested in connection with Internal Revenue Service, OTS, FDIC or other
regulatory agency requirements. All such reports or information shall be
provided by and in accordance with all reasonable instructions and directions
given by the Owner. The
Servicer agrees to execute and deliver all such instruments and take all such
action as the Owner, from time to time, may reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement.
ARTICLE
VIII
THE
SERVICER
Section
8.01 Indemnification;
Third Party Claims.
The
Servicer agrees to indemnify the Owner and hold it harmless from and against
any
and all claims, losses, damages, penalties, fines, forfeitures, legal fees
and
related costs, judgments, and any other costs, fees and expenses that the Owner
may sustain in any way related to the failure of the Servicer to perform in
any
way its duties and service the Mortgage Loans in strict compliance with the
terms of this Agreement and for breach of any representation or warranty of
the
Servicer contained herein. The Servicer shall immediately notify the Owner
if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans, assume (with the consent of the Owner and with counsel reasonably
satisfactory to the Owner) the defense of any such claim and pay all expenses
in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or the Owner
in
respect of such claim but failure to so notify the Owner shall not limit its
obligations hereunder. The Servicer agrees that it will not enter into any
settlement of any such claim without the consent of the Owner unless such
settlement includes an unconditional release of the Owner from all liability
that is the subject matter of such claim. The provisions of this Section 8.01
shall survive termination of this Agreement. In no event will either Purchaser
or Seller be liable to the other party to this Agreement for incidental or
consequential damages, including, without limitation, loss of profit or loss
of
business or business opportunity, regardless of the form of action whether
in
contract, tort or otherwise.
Section
8.02 Merger
or Consolidation of the Servicer.
The
Servicer will keep in full effect its existence, rights and franchises as a
corporation under the laws of the state of its incorporation except as permitted
herein, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or
shall
be necessary to protect the validity and enforceability of this Agreement or
any
of the Mortgage Loans and to perform its duties under this
Agreement.
Any
Person into which the Servicer may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any Person succeeding to the business of the Servicer
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 successor or surviving Person
shall
be an institution (i) having a GAAP net worth of not less than $25,000,000,
(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, and (iii) which is a ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac
approved seller/servicer in good standing.
|
Section
8.03 Limitation
on Liability of the Servicer and Others.
|
Neither
the Servicer nor any of the officers, employees or agents of the Servicer shall
be under any liability to the Owner for any action taken or for refraining
from
the taking of any action in good faith pursuant to this Agreement, or for errors
in judgment made in good faith; provided, however, that this provision shall
not
protect the Servicer or any such person against any breach of warranties or
representations made herein, or failure to perform in any way its obligations
in
compliance with any standard of care set forth in this Agreement, or any
liability which would otherwise be imposed by reason of negligence or any breach
of the terms and conditions of this Agreement. The Servicer and any officer,
employee or agent of the Servicer may rely in good faith on any document of
any
kind prima facie properly executed and submitted by the Owner respecting any
matters arising hereunder. The Servicer shall not be under any obligation to
appear in, prosecute or defend any legal action which is not incidental to
its
duties to service the Mortgage Loans in accordance with this Agreement and
which
in its opinion may involve it in any expenses or liability; provided, however,
that the Servicer may, with the consent of the Owner, which consent shall not
be
unreasonably withheld, undertake any such action which it may deem necessary
or
desirable with respect to this Agreement and the rights and duties of the
parties hereto. In such event, the reasonable legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and
liabilities for which the Owner will be liable, and the Servicer shall be
entitled to be reimbursed therefor from the Owner upon written
demand.
|
Section
8.04 Servicer
Not to Resign.
|
The
Servicer shall not resign from the obligations and duties hereby imposed on
it
except by mutual consent of the Servicer and the Owner or upon the determination
that its duties hereunder are no longer permissible under applicable law and
such incapacity cannot be cured by the Servicer. Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion
of
Counsel to such effect delivered to the Owner which Opinion of Counsel shall
be
in form and substance acceptable to the Owner. No such resignation shall become
effective until a successor shall have assumed the Servicer's responsibilities
and obligations hereunder in the manner provided in Section 11.01.
Section
8.05 No
Transfer of Servicing.
With
respect to the retention of the Servicer to service the Mortgage Loans
hereunder, the Servicer acknowledges that the Owner has acted in reliance upon
the Servicer's independent status, the adequacy of its 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, the Servicer shall not either assign this Agreement or the
servicing hereunder or delegate its rights or duties hereunder or any portion
thereof, or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written approval of the Owner, which
approval shall not be unreasonably withheld; provided that the Servicer may
assign the Agreement and the servicing hereunder without the consent of Owner
to
an affiliate of the Servicer to which all servicing of the Servicer is assigned
so long as (i) such affiliate is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved servicer
and (ii) if it is intended that such affiliate be spun off to the shareholders
of the Servicer, such affiliate have a GAAP net worth of at least $10,000,000
and (iii) such affiliate shall deliver to the Owner a certification pursuant
to
which such affiliate shall agree to be bound by the terms and conditions of
this
Agreement and shall certify that such affiliate is a ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇
Mac
approved servicer in good standing.
ARTICLE
IX
DEFAULT
Section
9.01 Events
of Default.
In
case
one or more of the following Events of Default by the Servicer shall occur
and
be continuing, that is to say:
(i) any
failure by the Servicer to remit to the Owner any payment required to be made
under the terms of this Agreement which continues unremedied for a period of
three (3) Business Days after written notice thereof
(it
being understood that this subparagraph shall not affect Servicer's obligation
pursuant to Section 5.01 to pay default interest on any remittance received
by
the Owner after the Business Day on which such payment was due); or
(ii) any
failure on the part of the Servicer duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Servicer
set
forth in this Agreement, the breach of which has a material adverse effect
and
which continue unremedied for a period of sixty days (except that such number
of
days shall be fifteen in the case of a failure to pay any premium for any
insurance policy required to be maintained under this Agreement and such failure
shall be deemed to have a material adverse effect) 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; 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,
bankruptcy, 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 days;
or
(iv) the
Servicer shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling
of
assets and liabilities or similar proceedings of or relating to the Servicer
or
of or relating to all or substantially all of its property; or
(v) the
Servicer shall admit in writing its inability to pay its debts generally as
they
become due, file a petition to take advantage of any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors,
or
voluntarily suspend payment of its obligations; or
(vi) the
Servicer ceases to be approved by either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac (to the
extent such entities are then operating in a capacity similar to that in which
they operate on the Closing Date) as a mortgage loan servicer for more than
thirty days to the extent such entities perform similar functions;
or
(vii) the
Servicer attempts to assign its right to servicing compensation hereunder or
the
Servicer attempts, without the consent of the Owner, to sell or otherwise
dispose of all or substantially all of its property or assets or to assign
this
Agreement or the servicing responsibilities hereunder or to delegate its duties
hereunder or any portion thereof except as otherwise permitted
herein.
then,
and
in each and every such case, so long as an Event of Default shall not have
been
remedied, the Owner, by notice in writing to the Servicer may, in addition
to
whatever rights the Owner may have under Section 8.01 and at law or equity
to
damages, including injunctive relief and specific performance, terminate all
the
rights and obligations of the Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Servicer for
the same. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Mortgage Loans or otherwise, shall pass to and be vested in the successor
appointed pursuant to Section 11.01. Upon written request from the Owner, the
Servicer shall prepare, execute and deliver, any and all documents and other
instruments, place in such successor's possession all Servicing Files, and
do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise, at the Servicer's sole expense. The Servicer agrees to cooperate
with
the Owner and such successor in effecting the termination of the Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by the Servicer to the Custodial Account or Escrow
Account or thereafter received with respect to the Mortgage Loans or any REO
Property.
|
Section
9.02 Waiver
of Defaults.
|
The
Owner
may waive only by written notice any default by the Servicer in the performance
of its obligations hereunder and its consequences. Upon any such waiver of
a
past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived
in writing.
ARTICLE
X
TERMINATION
Section
10.01 Termination.
The
respective obligations and responsibilities of the Servicer shall terminate
upon: (i) the later of the final payment or other liquidation (or any advance
with respect thereto) of the last Mortgage Loan or the disposition of all REO
Property and the remittance of all funds due hereunder; or (ii) by mutual
consent of the Servicer and the Owner in writing; or (iii) termination by the
Owner pursuant to Section 9.01. Simultaneously with any such termination and
the
transfer of servicing hereunder, the Servicer shall be entitled to be reimbursed
for any outstanding Servicing Advances and Monthly Advances.
Section
10.02 Removal
of Mortgage Loans from Inclusion under this Agreement upon a Whole
Loan
Transfer or a Pass-Through Transfer.
The
Servicer acknowledges and the Owner agrees that with respect to some or all
of
the Mortgage Loans, the Owner may effect either (1) one or more Whole Loan
Transfers, or (2) one or more Pass-Through Transfers.
The
Servicer shall cooperate with the Owner in connection with any Whole Loan
Transfer or Pass-Through Transfer contemplated by the Owner pursuant to this
Section. In connection therewith, and without limitation, the Owner shall
deliver any reconstitution agreement or other document related to the Whole
Loan
Transfer or Pass-Through Transfer to the Servicer at least 15 days prior to
such
transfer (or 30 days if such transfer is to take place in March, June, September
or December) and the Servicer shall execute any such reconstitution agreement
which contains provisions substantially similar to those herein or otherwise
reasonably acceptable to the Owner and the Servicer and which restates the
representations and warranties contained in Article III as of the date of
transfer (except to the extent any such representation or warranty is not
accurate on such date).
With
respect to each Whole Loan Transfer or Pass--Through Transfer, as the case
may
be, effected by the Owner, Owner (i) shall reimburse Servicer for all reasonable
out-of-pocket third party costs and expenses related thereto and (ii) shall
pay
Servicer a reasonable amount representing time and effort expended by Servicer
related thereto (which amount shall be reasonably agreed upon by Servicer and
Owner prior to the expenditure of such time and effort); provided,
however,
that
for each Whole Loan Transfer and/or Pass--Through Transfer, the sum of such
amounts described in subsections (i) and (ii) above shall in no event exceed
$5,000. For purposes of this paragraph, all Whole Loan Transfers and/or
Pass--Through Transfers made to the same entity within the same accounting
cycle
shall be considered one Whole Loan Transfer or Pass--Through
Transfer.
All
Mortgage Loans not sold or transferred pursuant to a Whole Loan Transfer or
Pass-Through Transfer shall be subject to this Agreement and shall continue
to
be serviced in accordance with the terms of this Agreement and with respect
thereto this Agreement shall remain in full force and effect.
ARTICLE
XI
MISCELLANEOUS
PROVISIONS
Section
11.01 Successor
to the Servicer.
Prior
to
termination of the Servicer's responsibilities and duties under this Agreement
pursuant to Sections 8.04, 9.01 or 10.01(ii), the Owner shall (i) succeed to
and
assume all of the Servicer's responsibilities, rights, duties and obligations
under this Agreement, or (ii) appoint a successor having the characteristics
set
forth in Section 8.02 hereof and which shall succeed to all rights and assume
all of the responsibilities, duties and liabilities of the Servicer under this
Agreement prior to the termination of the Servicer's responsibilities, duties
and liabilities under this Agreement. In connection with such appointment and
assumption, the Owner may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as the Owner and such successor
shall agree. In the event that the Servicer's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to the
aforementioned sections, the Servicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or financial
condition of its successor. The resignation or removal of the Servicer pursuant
to the aforementioned sections shall not become effective until a successor
shall be appointed pursuant to this section and shall in no event relieve the
Servicer of the representations and warranties made pursuant to Article III
and
the remedies available to the Owner under Section 8.01, it being understood
and
agreed that the provisions of such Article III and Section 8.01 shall be
applicable to the Servicer notwithstanding any such resignation or termination
of the Servicer, or the termination of this Agreement.
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Servicer and to the Owner an instrument accepting such appointment,
whereupon such successor shall become fully vested with all the rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer, with
like
effect as if originally named as a party to this Agreement. Any termination
or
resignation of the Servicer or this Agreement pursuant to Section 8.04, 9.01
or
10.01 shall not affect any claims that the Owner may have against the Servicer
arising prior to any such termination or resignation.
The
Servicer shall promptly deliver to the successor the funds in the Custodial
Account and the Escrow Account and the Servicing Files and related documents
and
statements held by it hereunder and the Servicer shall account for all funds.
The Servicer shall execute and deliver such instruments and do such other things
all as may reasonably be required to more fully and definitely vest and confirm
in the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Servicer. The successor shall make such arrangements
as
it may deem appropriate to reimburse the Servicer for unrecovered Servicing
Advances which the successor retains hereunder and which would otherwise have
been recovered by the Servicer pursuant to this Agreement but for the
appointment of the successor servicer.
Upon
a
successor's acceptance of appointment as such, the Servicer shall notify the
Owner of such appointment.
Section
11.02 Amendment.
This
Agreement may be amended from time to time by the Servicer and the Owner by
written agreement signed by the Servicer and the Owner.
Section
11.03 Recordation
of Agreement.
To
the
extent permitted by applicable law, this Agreement is subject to recordation
in
all appropriate public offices for real property records in all the counties
or
other comparable jurisdictions in which any of all the properties subject to
the
Mortgages 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
on direction of the Owner accompanied by an opinion of counsel to the effect
that such recordation materially and beneficially affects the interest of the
Owner or is necessary for the administration or servicing the Mortgage
Loans.
Section
11.04 Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS
OF LAWS. THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section
11.05 Notices.
Any
demands, notices or other communications permitted or required hereunder 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 telecopier and confirmed by a similar mailed
writing, as follows:
(i) if
to the
Servicer:
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇. ▇▇▇▇▇ ▇▇▇▇
Telecopier
No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if
to the
Owner:
Mac
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇,
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier
No.: (▇▇▇) ▇▇▇-▇▇▇▇
or
such
other address as may hereafter be furnished to the other party by like notice.
Any such demand, notice, or communication hereunder shall be deemed to have
been
received on the date delivered to or received at the premises of the address
(as
evidenced, in the case of registered or certified mail, by the date noted on
the
return receipt).
Section
11.06 Severability
of Provisions.
Any
part,
provision, representation or warranty of this Agreement which is prohibited
or
which is held to be void or unenforceable shall be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation or warranty of this
Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability in
any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of
any
part, provision, representation or warranty of this Agreement shall deprive
any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
Section
11.07 Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
Section
11.08 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
11.09 Reproduction
of Documents.
This
Agreement and all documents relating hereto, including, without limitation,
(i)
consents, waivers and modifications which may hereafter be executed, (ii)
documents received by any party at the closing, and (iii) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
Section
11.10 Confidentiality
of Information.
Each
party recognizes that, in connection with this Agreement, it may become privy
to
non-public information regarding the financial condition, operations and
prospects of the other party. Except as required to be disclosed by law, each
party agrees to keep all non-public information regarding the other party
strictly confidential, and to use all such information solely in order to
effectuate the purpose of this Agreement.
Section
11.11 Recordation
of Assignments of Mortgage.
To
the
extent permitted by applicable law, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any
or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the Owner's expense.
Section
11.12 Assignment
by the Owner.
The
Owner
shall have the right, without the consent of the Servicer hereof, to assign,
in
whole or in part, its interest under this Agreement with respect to some or
all
of the Mortgage Loans, and designate any person to exercise any rights of the
Owner hereunder, by executing an assignment and assumption agreement reasonably
acceptable to the Servicer and the assignee or designee shall accede to the
rights and obligations hereunder of the Owner with respect to such Mortgage
Loans. In no event shall Owner sell a partial interest in any Mortgage Loan.
All
references to the Owner in this Agreement shall be deemed to include its
assignees or designees. It is understood and agreed between the Owners and
the
Servicer that no more than five (5) Persons shall have the right of owner under
this Agreement at any one time.
Section
11.13 No
Partnership.
Nothing
herein contained shall be deemed or construed to create a co-partnership or
joint venture between the parties hereto and the services of the Servicer shall
be rendered as an independent contractor and not as agent for
Owner.
Section
11.14 Execution;
Successors and Assigns.
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. Subject to Section 8.04, this Agreement shall inure
to
the benefit of and be binding upon the Servicer and the Owner and their
respective successors and assigns.
Section
11.15 Entire
Agreement.
Each
of
the Servicer and the Owner acknowledge that no representations, agreements
or
promises were made to it by the other party or any of its employees other than
those representations, agreements or promises specifically contained herein.
This Agreement sets forth the entire understanding between the parties hereto
and shall be binding upon all successors of both parties.
[TPW:
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IN
WITNESS WHEREOF, the Servicer and the Owner have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the date
and
year first above written.
GMAC
MORTGAGE CORPORATION
Servicer
By:
________________________________________
Name:
Title:
EMC
MORTGAGE CORPORATION
Owner
By:
[TPW:
NYLEGAL:504985.1] 17297-00440 05/11/2006 05:34 PM
EXHIBIT
A
MORTGAGE
LOAN SCHEDULE
[TPW:
NYLEGAL:504985.1] 17297-00440 05/11/2006 05:34 PM
EXHIBIT
B
CUSTODIAL
ACCOUNT LETTER AGREEMENT
(date)
To:______________________
_________________________
_________________________
(the
"Depository")
As
"Servicer" under the Servicing Agreement, dated as of ,
(the
"Agreement"), we hereby authorize and request you to establish an account,
as a
Custodial Account pursuant to Section 4.04 of the Agreement, to be designated
as
"[Servicer] Custodial Account, in trust for [Owner], Owner of Whole Loan
Mortgages, and various Mortgagors." 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 "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 up to applicable limits by the Federal Deposit Insurance Corporation
through the Bank Insurance Fund or the Savings Association Insurance Fund or
will be invested in Permitted Investments as defined in the
Agreement.
[
]
(name
of
Depository)
By:____________________
Name:__________________
Title:_________________
[TPW:
NYLEGAL:504985.1] 17297-00440 05/11/2006 05:34 PM
EXHIBIT
C
ESCROW
ACCOUNT LETTER AGREEMENT
(date)
To:___________________________
______________________________
______________________________
(the
"Depository")
As
"Servicer" under the Servicing Agreement, dated as of
(the
"Agreement"), we hereby authorize and request you to establish an account,
as an
Escrow Account pursuant to Section 4.06 of the Agreement, to be designated
as
"[Servicer] Escrow Account, in trust for [Owner], Owner of Whole Loan Mortgages,
and various Mortgagors." 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 "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 up to applicable limits by the Federal Deposit Insurance Corporation
through the Bank Insurance Fund or the Savings Association Insurance Fund or
will be invested in Permitted Investments as defined in the
Agreement.
[
]
(name
of
Depository)
By:____________________
Name:__________________
Title:_________________
[TPW:
NYLEGAL:504985.1] 17297-00440 05/11/2006 05:34 PM
EXHIBIT
D
REQUEST
FOR RELEASE
[TPW:
NYLEGAL:504985.1] 17297-00440 05/11/2006 05:34 PM
EXHIBIT
E
LOAN
LEVEL SCHEDULED-SCHEDULED
REMITTANCE
TAPE LAYOUT