EXHIBIT 99.8
Execution Version
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SECOND AMENDED AND RESTATED FLOW MORTGAGE LOAN
SALE AND SERVICING AGREEMENT
between
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Seller and as Servicer,
and
▇▇▇▇▇▇ BROTHERS BANK, FSB,
as Purchaser
June 1, 2005
Performing, Conventional, Residential Mortgage Loans
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS...........................................................................................1
SECTION 2. PURCHASE AND CONVEYANCE...............................................................................14
SECTION 3. MORTGAGE LOAN SCHEDULE................................................................................15
SECTION 4. PURCHASE PRICE........................................................................................15
SECTION 5. EXAMINATION OF MORTGAGE FILES.........................................................................15
SECTION 6. DELIVERY OF MORTGAGE LOAN DOCUMENTS...................................................................15
Subsection 6.01 Possession of Mortgage Files................................................................15
Subsection 6.02 Books and Records...........................................................................16
Subsection 6.03 Delivery of Mortgage Loan Documents.........................................................16
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS; REMEDIES FOR BREACH........................................17
Subsection 7.01 Representations and Warranties Regarding Individual Mortgage Loans..........................17
Subsection 7.02 Seller and Servicer Representations.........................................................28
Subsection 7.03 Remedies for Breach of Representations and Warranties.......................................30
SECTION 8. CLOSING CONDITIONS....................................................................................32
SECTION 9. CLOSING DOCUMENTS.....................................................................................32
Subsection 9.01 Initial Closing Date........................................................................32
Subsection 9.02 Subsequent Closing Dates....................................................................33
SECTION 10. COSTS................................................................................................35
SECTION 11. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.......................................................35
Subsection 11.01 Servicer to Act as Servicer; Subservicing..................................................35
Subsection 11.02 Liquidation of Mortgage Loans..............................................................35
Subsection 11.03 Collection of Mortgage Loan Payments.......................................................36
Subsection 11.04 Establishment of Custodial Account; Deposits in Custodial Account..........................36
Subsection 11.05 Withdrawals From the Custodial Account.....................................................38
Subsection 11.06 Establishment of Escrow Account; Deposits in Escrow Account................................39
Subsection 11.07 Withdrawals From Escrow Account............................................................39
Subsection 11.08 Payment of Taxes, Insurance and Other Charges; Collections Thereunder......................40
Subsection 11.09 Transfer of Accounts.......................................................................40
Subsection 11.10 Maintenance of Hazard Insurance............................................................40
Subsection 11.11 Maintenance of Primary Mortgage Insurance Policy; Claims...................................41
Subsection 11.12 Fidelity Bond; Errors and Omissions Insurance..............................................42
Subsection 11.13 Title, Management and Disposition of REO Property..........................................42
Subsection 11.14 Servicing Compensation.....................................................................43
Subsection 11.15 Distributions..............................................................................44
Subsection 11.16 Statements to the Purchaser................................................................44
Subsection 11.17 Advances by the Servicer...................................................................45
Subsection 11.18 Assumption Agreements......................................................................45
Subsection 11.19 Satisfaction of Mortgages and Release of Mortgage Files....................................46
Subsection 11.20 Annual Statement as to Compliance..........................................................46
Subsection 11.21 Annual Independent Public Accountants' Servicing Report....................................46
Subsection 11.22 Servicer Shall Provide Access and Information as Reasonably Required.......................47
Subsection 11.23 Restoration of Mortgaged Property..........................................................47
Subsection 11.24 Master Servicer............................................................................47
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Page
Subsection 11.25 Fair Credit Reporting Act..................................................................48
Subsection 11.26 Compliance with Safeguarding Customer Information Requirements.............................48
Subsection 11.27 BPP Mortgage Loans.........................................................................48
SECTION 12. THE SERVICER........................................................................................49
Subsection 12.01 Indemnification; Third Party Claims........................................................49
Subsection 12.02 Merger or Consolidation of the Servicer....................................................49
Subsection 12.03 Limitation on Liability of the Servicer and Others.........................................49
Subsection 12.04 Seller and Servicer Not to Resign..........................................................50
SECTION 13. DEFAULT..............................................................................................50
Subsection 13.01 Events of Default..........................................................................50
Subsection 13.02 Waiver of Default..........................................................................51
SECTION 14. TERMINATION..........................................................................................51
Subsection 14.01 Termination................................................................................52
Subsection 14.02 Termination of the Servicer Without Cause..................................................52
Subsection 14.03 Successors to the Servicer.................................................................52
SECTION 15. NOTICES..............................................................................................53
SECTION 16. SEVERABILITY CLAUSE..................................................................................54
SECTION 17. NO PARTNERSHIP.......................................................................................55
SECTION 18. COUNTERPARTS.........................................................................................55
SECTION 19. GOVERNING LAW........................................................................................55
SECTION 20. INTENTION OF THE PARTIES.............................................................................55
SECTION 21. WAIVERS..............................................................................................56
SECTION 22. EXHIBITS.............................................................................................56
SECTION 23. GENERAL INTERPRETIVE PRINCIPLES......................................................................56
SECTION 24. REPRODUCTION OF DOCUMENTS............................................................................57
SECTION 25. AMENDMENT............................................................................................57
SECTION 26. CONFIDENTIALITY......................................................................................57
SECTION 27. ENTIRE AGREEMENT.....................................................................................58
SECTION 28. FURTHER AGREEMENTS; TRANSFERS........................................................................58
SECTION 29. SUCCESSORS AND ASSIGNS...............................................................................58
SECTION 30. NON-SOLICITATION.....................................................................................59
SECTION 31. PROTECTION OF CONSUMER INFORMATION...................................................................60
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EXHIBITS
EXHIBIT 1 MORTGAGE LOAN DOCUMENTS
EXHIBIT 2 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 3 UNDERWRITING GUIDELINES
EXHIBIT 4 FORM OF OFFICER'S CERTIFICATE
EXHIBIT 5 FORM OF LOST NOTE AFFIDAVIT
EXHIBIT 6 FORM OF MONTHLY REMITTANCE REPORT
EXHIBIT 7 FORM OF ACKNOWLEDGMENT AND CONVEYANCE AGREEMENT
EXHIBIT 8 FORM OF CERTIFICATION TO BE PROVIDED BY THE SERVICER
EXHIBIT 9 FORM OF OPINION
EXHIBIT 10 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 11 FORM OF ESCROW ACCOUNT CERTIFICATION
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SECOND AMENDED AND RESTATED FLOW MORTGAGE LOAN
SALE AND SERVICING AGREEMENT
THIS SECOND AMENDED AND RESTATED FLOW MORTGAGE LOAN SALE AND SERVICING
AGREEMENT (the "Agreement"), dated June 1, 2005, is hereby executed by and
between ▇▇▇▇▇▇ BROTHERS BANK, FSB, a federally chartered savings bank, as
purchaser (the "Purchaser"), and BANK OF AMERICA, NATIONAL ASSOCIATION, a
national banking association, as seller (the "Seller") and as servicer (the
"Servicer").
WITNESSETH:
WHEREAS, the Seller, the Servicer and the Purchaser are parties to an
Amended and Restated Flow Mortgage Loan Sale and Servicing Agreement, dated as
of November 1, 2004 (the "Existing Flow Agreement"), by and among the Seller,
the Servicer and the Purchaser; and
WHEREAS, the Seller, the Servicer and the Purchaser have determined to
amend and restate the Existing Flow Agreement in its entirety; and
WHEREAS, the Seller has agreed to sell from time to time to the
Purchaser, and the Purchaser has agreed to purchase from time to time from the
Seller, certain performing, conventional, residential, first lien mortgage loans
(the "Mortgage Loans") as described herein on a servicing-retained basis, and
which shall be delivered as whole loans as provided herein; and
WHEREAS, the Mortgage Loans will be sold by the Seller and purchased by
the Purchaser as pools or groups of whole loans, servicing retained (each, a
"Mortgage Loan Package") on the various Closing Dates as provided herein; and
WHEREAS, each of the Mortgage Loans will be secured by a mortgage, deed
of trust or other security instrument creating a first lien on a residential
dwelling located in the jurisdiction indicated on the related Mortgage Loan
Schedule which will be annexed to an Acknowledgment and Conveyance Agreement (as
defined herein) on the related Closing Date; and
WHEREAS, the Purchaser, the Seller and the Servicer wish to prescribe
the manner of the conveyance, servicing and control of the Mortgage Loans;
NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser, the Seller and the
Servicer agree as follows:
SECTION 1. DEFINITIONS.
For purposes of this Agreement, the following capitalized terms shall
have the respective meanings set forth below.
Acknowledgment and Conveyance Agreement: The agreement, substantially
in the form of Exhibit 7 hereto, to be prepared by the Purchaser and executed by
the Seller and the Purchaser on each Closing Date.
Adjustable Rate Mortgage Loan: A Mortgage Loan that contains a
provision pursuant to which the Mortgage Interest Rate is adjusted periodically.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, the date on
which the Mortgage Interest Rate is adjusted in accordance with the terms of the
related Mortgage Note and Mortgage.
Agency Transfer: An exchange of the Mortgage Loans for agency
securities.
Agreement: This Second Amended and Restated Flow Mortgage Loan Sale and
Servicing Agreement including all exhibits, schedules, amendments and
supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: With respect to any Mortgaged Property, the lesser of
(i) the value thereof as determined by a Qualified Appraiser or as otherwise
determined in accordance with the Underwriting Guidelines at the time of
origination of the Mortgage Loan, and (ii) the purchase price paid for the
related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage
Loan; provided, however, that in the case of a Refinanced Mortgage Loan, such
value of the Mortgaged Property is based solely upon the value determined by an
appraisal made for the originator of such Refinanced Mortgage Loan at the time
of origination of such Refinanced Mortgage Loan by a Qualified Appraiser.
Assignment and Assumption: An assignment and assumption of the
Custodial Agreement, prepared by the Purchaser and executed by the Seller and
the Purchaser on each Closing Date, assigning all of the Purchaser's rights as
the "Servicer" thereunder to the Servicer.
Assignment of Mortgage: An individual assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form and in blank,
sufficient under the laws of the jurisdiction in which the related Mortgaged
Property is located to give record notice of the sale of the Mortgage to the
Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms or
any modifications thereof provides for amortization beyond its scheduled
maturity date.
BPP Addendum: With respect to any BPP Mortgage Loan, a Borrowers
Protection Plan(R) addendum to the related Mortgage Note pursuant to which the
Servicer agrees to cancel (i) certain payments of principal and interest on the
related Mortgage Loan for up to twelve (12) months upon the disability or
involuntary unemployment of the Mortgagor or (ii) the outstanding principal
balance of such Mortgage Loan upon the accidental death of the Mortgagor,
subject to the terms thereof. When used herein, a Mortgage Loan to which such
BPP Addendum relates is a BPP Mortgage Loan, to the extent not so stated.
BPP Fees: With respect to any BPP Mortgage Loan, any fees payable by a
Mortgagor for the right to cancel any portion of principal or interest of a BPP
Mortgage Loan pursuant to the terms of the related BPP Addendum.
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BPP Mortgage Loan: Any Mortgage Loan which includes a BPP Addendum,
provided that such BPP Addendum has not been terminated in accordance with its
terms.
BPP Mortgage Loan Payment: With respect to any BPP Mortgage Loan, the
Monthly Covered Amount or Total Covered Amount, if any, payable by the Servicer
pursuant to Subsection 11.27.
BPO: A broker's price opinion with respect to a Mortgaged Property.
Business Day: Any day other than a Saturday or Sunday, or a day on
which banking and savings and loan institutions in the state in which (i) the
Servicer is located or (ii) the Custodial Account is maintained are authorized
or obligated by law or executive order to be closed.
Closing Date: The date or dates, set forth in the related
Acknowledgment and Conveyance Agreement and/or Purchase Price and Terms
Agreement, on which the Purchaser from time to time shall purchase and the
Seller from time to time shall sell the Mortgage Loans identified on the related
Mortgage Loan Schedule attached thereto.
CLTA: The California Land Title Association.
Code: The Internal Revenue Code of 1986, as amended, or any successor
statute thereto.
Condemnation Proceeds: All awards, compensation and settlements in
respect of a taking (whether permanent or temporary) of all or part of a
Mortgaged Property by exercise of the power of condemnation or the right of
eminent domain, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Mortgage Loan Documents.
Consumer Information: Information including but not limited to all
personal information about the Mortgagors that is supplied to the Seller by or
on behalf of the Mortgagors.
Convertible Mortgage Loan: An Adjustable Rate Mortgage Loan that by its
terms and subject to certain conditions allows the Mortgagor to convert the
adjustable Mortgage Interest Rate thereon to a fixed Mortgage Interest Rate.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares and a
Proprietary Lease.
Cooperative Loan Documents: With respect to any Cooperative Loan, (i)
the Cooperative Shares, together with a stock power in blank; (ii) the original
executed Security Agreement and the assignment of the Security Agreement
endorsed in blank; (iii) the original executed Proprietary Lease and the
assignment of the Proprietary Lease endorsed in blank; (iv) the original
executed Recognition Agreement and the assignment of the Recognition Agreement
(or a blanket assignment of all Recognition Agreements) endorsed in blank; (v)
the executed UCC-1 financing statement with evidence of recording thereon, which
has been filed in all places required to perfect the security interest in the
Cooperative Shares and the Proprietary Lease; and (vi) the Seller's executed
UCC-3 financing statements (or copies thereof) or other appropriate UCC
financing statements required by state law, evidencing a complete and unbroken
chain of title from the mortgagee to the Seller with evidence of recording
thereon (or in a form suitable for recordation).
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Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the Cooperative Shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a Cooperative
Property.
Custodial Account: As defined in Subsection 11.04.
Custodial Account Certification: As defined in Subsection 11.04.
Custodial Agreement: That certain Custodial Agreement between Purchaser
and Custodian dated as of September 1, 1999.
Custodian: U.S. Bank Trust National Association, or any successor under
the Custodial Agreement.
Customary Servicing Procedures: Procedures (including collection
procedures) that the Servicer customarily employs and exercises in servicing and
administering mortgage loans for its own account that are similar to the
Mortgage Loans and which are in accordance with accepted mortgage servicing
practices of prudent lending institutions and the ▇▇▇▇▇▇ ▇▇▇ Guides.
Cut-off Date: With respect to each Mortgage Loan, the first day of the
month of the related Closing Date as set forth in the related Acknowledgment and
Conveyance Agreement and/or the related Purchase Price and Terms Agreement.
Cut-off Date Principal Balance: The aggregate Stated Principal Balance
of the Mortgage Loans as of the related Cut-off Date which is determined after
the application, to the reduction of principal, of payments of principal due on
or before the related Cut-off Date, whether or not collected, and of Principal
Prepayments received before the related Cut-off Date.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with
a Substitute Mortgage Loan in accordance with this Agreement.
Determination Date: With respect to each Remittance Date, the 15th day
(or, if such 15th day is not a Business Day, the following Business Day) of the
month in which such Remittance Date occurs.
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Due Date: With respect to each Remittance Date, the first day of the
calendar month in which such Remittance Date occurs, which is the day on which
the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period beginning
on the second day of the month preceding the month of such Remittance Date, and
ending on the first day of the month of such Remittance Date.
Eligible Investments: Any one or more of the following obligations or
securities:
(i) obligations of or guaranteed as to principal and interest by
▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇ or any agency or instrumentality of the United
States when such obligations are backed by the full faith and credit of
the United States; provided, however, that such obligations of ▇▇▇▇▇▇▇
Mac or ▇▇▇▇▇▇ ▇▇▇ shall be limited to senior debt obligations and
mortgage participation certificates except that investments in
mortgage-backed or mortgage participation securities with yields
evidencing extreme sensitivity to the rate of principal payments on the
underlying mortgages shall not constitute Eligible Investments
hereunder;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than one month from the date of acquisition thereof;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an
original maturity of not more than ninety (90) days and, in the case of
bankers' acceptances, shall in no event have an original maturity of
more than 365 days or a remaining maturity of more than thirty (30)
days) denominated in United States dollars of any United States
depository institution or trust company incorporated under the laws of
the United States or any state thereof or of any domestic branch of a
foreign depository institution or trust company;
(iv) commercial paper (having original maturities of not more than
365 days) of any corporation incorporated under the laws of the United
States or any state thereof which is rated not lower than "P-2" by
▇▇▇▇▇'▇ Investors Service, Inc. and rated not lower than "A-2" by
Standard & Poor's Ratings Service, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.; and
(v) a money market fund; provided, however, that no instrument
shall be an Eligible Investment if it represents, either (1) the right
to receive only interest payments with respect to the underlying debt
instrument or (2) the right to receive both principal and interest
payments derived from obligations underlying such instrument and the
principal and interest with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such
underlying obligations.
Escrow Account: As defined in Subsection 11.06.
Escrow Account Certification: As defined in Subsection 11.06.
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Escrow Payments: The amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, Primary Mortgage
Insurance Policy premiums (if any), fire and hazard insurance premiums, flood
insurance premiums, condominium charges and other payments as may be required to
be escrowed by the Mortgagor with the Mortgagee pursuant to the terms of any
Mortgage Note or Mortgage.
Event of Default: Any one of the conditions or circumstances enumerated
in Subsection 13.01.
▇▇▇▇▇▇ Mae: The entity formerly known as the Federal National Mortgage
Association or any successor thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ ▇▇▇
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
Fidelity Bond: The fidelity bond required to be obtained by the
Servicer pursuant to Subsection 11.12.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, as amended and in effect from time to time.
First Remittance Date: With respect to each Mortgage Loan Package, the
18th day (or if such 18th day is not a Business Day, the Business Day
immediately following such 18th day) of the month following the related Closing
Date.
▇▇▇▇▇▇▇ Mac: The entity formerly known as the Federal Home Loan
Mortgage Corporation or any successor thereto.
▇▇▇▇▇▇▇ Mac Guide: The ▇▇▇▇▇▇▇ Mac Single Family Seller/Servicer Guide
and all amendments or additions thereto.
GAAP: Generally accepted accounting principles consistently applied.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in each related Mortgage Note and Mortgage
which is added to the Index on each Adjustment Date in accordance with the terms
of the Mortgage Note in order to determine the related Mortgage Interest Rate.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the Mortgage Loan Schedule and set forth in the related Mortgage
Note for the purpose of calculating interest thereon.
Initial Rate Cap: As to each Adjustable Rate Mortgage Loan, the maximum
increase or decrease in the Mortgage Interest Rate on the first Adjustment Date
as provided in the related Mortgage Note.
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Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Only Mortgage Loan: A Mortgage Loan that only requires
payments of interest for a period of time specified in the related Mortgage
Note.
Lifetime Rate Cap: As to each Adjustable Rate Mortgage Loan, the
maximum Mortgage Interest Rate which shall be as permitted in accordance with
the provisions of the related Mortgage Note.
Liquidation Proceeds: The proceeds received in connection with the
liquidation of a defaulted Mortgage Loan through trustee's sale, foreclosure
sale or otherwise, other than amounts received following the acquisition of REO
Property, Insurance Proceeds and Condemnation Proceeds.
Loan-to-Value Ratio: With respect to any Mortgage Loan as of any date
of determination, the ratio, expressed as a percentage, the numerator of which
is the outstanding principal balance of the Mortgage Loan at origination (or on
such date, if a current Loan-to-Value Ratio is being calculated), and the
denominator of which is the Appraised Value of the related Mortgaged Property.
LTV: Loan-to-Value Ratio.
Monthly Covered Amount: With respect to any BPP Mortgage Loan, the
amount of any principal and interest due by a Mortgagor and cancelled for any
month pursuant to the terms of the related BPP Addendum upon the disability or
involuntary unemployment of such Mortgagor.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
payment of principal and interest payable by a Mortgagor under the related
Mortgage Note on each Due Date, which such payment may change on any Adjustment
Date as provided in the related Mortgage Note and Mortgage for any Adjustable
Rate Mortgage Loan.
Mortgage: With respect to any Mortgage Loan that is not a Cooperative
Loan, the mortgage, deed of trust or other instrument creating a first lien on
the Mortgaged Property securing the Mortgage Note and, with respect to a
Cooperative Loan, the related Security Agreement.
Mortgage File: With respect to any Mortgage Loan, the items listed in
Exhibit 2 hereto and any additional documents required to be added to the
Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: With respect to each Mortgage Loan, the annual
rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, including, but not
limited to, the limitations on such interest rate imposed by the Initial Rate
Cap, the Periodic Rate Cap/Floor and the Lifetime Rate Cap, if any.
Mortgage Loan: Each mortgage loan sold, assigned and transferred
pursuant to this Agreement and identified on the Mortgage Loan Schedule annexed
to the related Acknowledgment and Conveyance Agreement, including, without
limitation, the Mortgage File, the Monthly Payments, Principal Prepayments,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition
Proceeds, any escrow accounts related to the Mortgage Loan and all other rights,
benefits, proceeds and obligations arising from or in connection with such
mortgage loan.
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Mortgage Loan Documents: With respect to any Mortgage Loan, the
documents listed in Exhibit 1 hereto.
Mortgage Loan Package: The pool or group of whole loans purchased on a
Closing Date, as described in the Mortgage Loan Schedule annexed to the related
Acknowledgment and Conveyance Agreement.
Mortgage Loan Remittance Rate: With respect to any Mortgage Loan, the
annual rate of interest payable to the Purchaser, which shall be equal to the
related Mortgage Interest Rate minus the related Servicing Fee Rate.
Mortgage Loan Schedule: With respect to each Mortgage Loan Package, the
schedule of Mortgage Loans annexed to the related Acknowledgment and Conveyance
Agreement (and delivered in electronic format to the Purchaser), setting forth
the following information with respect to each Mortgage Loan: (1) the Servicer's
Mortgage Loan identifying number; (2) the Mortgagor's and Co-Mortgagor's (if
applicable) names; (3) the street address of the Mortgaged Property, including
the city, state, zip code, county, lot number, block number and section number;
(4) a code indicating whether the Mortgaged Property is a single family
residence, a 2 family dwelling, a 3-4 family dwelling, a manufactured home, a
planned unit development, a townhouse, a unit in a condominium project, a
Cooperative Property, a mixed-use property, land, or a non-residential property;
(5) a code indicating the loan is a fixed rate or Adjustable Rate Mortgage Loan
(to be provided in accordance with Standard and Poor's loan type
requirements-Field 14); (6) product description (to be provided in accordance
with Standard and Poor's description categories-Field 7); (7) a code indicating
the lien status of the Mortgage Loan; (8) the original months to maturity and
the remaining months to maturity from the Cut-off Date, in any case based on the
original amortization schedule, and if different, the maturity expressed in the
same manner but based on the actual amortization schedule; (9) the LTV at
origination; (10) the combined LTV at origination; (11) the Mortgage Interest
Rate as of the Cut-off Date; (12) the payment and rate adjustment frequencies
(if applicable); (13) the Index (if applicable); (14) the initial Adjustment
Date (if applicable); (15) the initial payment Adjustment Date (if applicable);
(16) the next interest rate Adjustment Date (if applicable); (17) the next
payment Adjustment Date (if applicable); (18) the Gross Margin (if applicable);
(19) the minimum Mortgage Interest Rate under the terms of the Mortgage Note (if
applicable); (20) Mortgage Interest Rate adjustment frequencies (if applicable);
(21) the maximum Mortgage Interest Rate under the terms of the Mortgage Note (if
applicable); (22) the Mortgage Interest Rate adjustment cap at the initial
interest rate Adjustment Date (if applicable); (23) the Mortgage Interest Rate
adjustment cap at all subsequent interest rate Adjustment Dates (if applicable);
(24) the Lifetime Rate Cap (if applicable); (25) the rounding provisions under
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the terms of the Mortgage Note (if applicable); (26) the lookback provisions (#
of days) under the terms of the Mortgage Note (if applicable); (27) negative
amortization indicator and limit; (28) the date on which the first payment is
due; (29) the original term of the Mortgage Loan; (30) the stated maturity date;
(31) the amount of the Monthly Payment; (32) the annual payment cap expressed as
a percentage (for Adjustable Rate Mortgage Loans only); (33) the next due date
as of the Cut-off Date; (34) the original principal amount of the Mortgage Loan;
(35) the senior and subordinate balances (if applicable); (36) the closing date
of the Mortgage Loan; (37) the principal balance of the Mortgage Loan as of the
close of business on the Cut-off Date; after deduction of payments of principal
actually received on or before the Cut-off Date; (38) monthly payment histories
on current and prior mortgages (24 months if available); (39) prior foreclosure
history (for the past 24 months); (40) prior bankruptcy history (for the past 24
months); (41) the loan purpose code; (42) the occupancy code; (43) the loan
documentation type, (to be provided in conformance with Standard and Poor's
documentation categories - Field 5); (44) asset verification (purchase money
loans only), (yes or no); (45) a code indicating the credit grade of the
Mortgage Loan; (46) the debt to income ratio; (47) the Mortgagor's and
co-Mortgagor's (if applicable) social security numbers; (48) the Mortgagor's and
co-Mortgagor's (if applicable) original FICO score and the next generation FICO
score for new credit scores; (49) the date of the FICO score; (50) the
Mortgagor's mailing address if different from number (3) above; (51) the
Mortgagor's home telephone number; (52) the Mortgagor's business telephone
number; (53) the purchase price of the Mortgaged Property (if a purchase); (54)
the Appraisal date and the Appraised Value of the Mortgaged Property; (55) the
Mortgagor's and co-Mortgagor's (if applicable) race; (56) the Mortgagor's and
co-Mortgagor's (if applicable) gender; (57) the Mortgagor's and co-Mortgagor's
(if applicable) date of birth; (58) the number of bedrooms; (59) rental income
per unit; (60) the combined annual income; (61) the application date; (62) the
broker's name; (63) the broker's firm name; (64) the appraiser's name; (65) the
appraiser's firm name; (66) the settlement agent; (67) the origination channel
(wholesale, retail, or correspondent); (68) flood insurance contract provider;
(69) tax service contract provider; (70) number of units; (71) as of date; (72)
amortization term; (73) balloon flag; (74) prepayment penalty flag; (75)
prepayment penalty term and prepayment penalty description (i.e., 6 months
interest, set percentage of UPB); (76) payment history current loan; (77)
payment history previous loan and all refinanced loans; (78) mortgage insurance
provider, or code for LPMI; (79) mortgage insurance coverage percentage; (80)
mortgage insurance cost; (81) mortgage insurance certificate number; (82) number
of borrowers; (83) first time home buyer flag; (84) the year in which the
Mortgaged Property was built; (85) the monthly tax and insurance payment; (86)
the monthly servicing fee; (87) the escrow balance as of the Cut-off Date; (88)
a code indicating whether the Mortgage Loan is an Interest Only Mortgage Loan;
(89) with respect to each Interest Only Mortgage Loan, the duration of the
related interest only period; (90) a code indicating the Appraisal Type (Tax
Assessment, BPO, Drive-By Form 704, URAR, Form 2065, Form 2055 (Exterior only),
Form 2055 (Interior Inspection), or AVM; (91) if the Appraisal Type in #90 is an
AVM, then a description of the AVM type; (92) a code indicating whether the
borrower(s) is self-employed (yes or no); (93) a section 32 flag and the
origination points and or fees; (94) a code indicating if a loan is assumable
(yes or no); (95) code indicating whether the borrower's assets were verified;
(96) a code indicating whether the loan is a high cost or covered loan under
applicable state/jurisdiction anti-predatory lending laws; and (97) Annual
Percentage Rate (APR). With respect to the Mortgage Loans on the Mortgage Loan
Schedule in the aggregate, the Mortgage Loan Schedule shall set forth the
following information, as of the Cut-off Date: (i) the number of Mortgage Loans;
(ii) the Cut-off Date Principal Balance; (iii) the weighted average Mortgage
Interest Rate of the Mortgage Loans; (iv) the weighted average months to
maturity of the Mortgage Loans; (v) with respect to each Adjustable Rate
Mortgage Loan, the weighted average Lifetime Rate Cap; and (vi) with respect to
each Adjustable Rate Mortgage Loan, the weighted average Gross Margin.
9
Mortgage Note: The original executed note or other evidence of the
Mortgage Loan indebtedness of a Mortgagor, including any riders or addenda
thereto.
Mortgaged Property: With respect to each Mortgage Loan that is not a
Cooperative Loan, the Mortgagor's real property securing repayment of a related
Mortgage Note, consisting of an unsubordinated estate in fee simple or, with
respect to real property located in jurisdictions in which the use of leasehold
estates for residential properties is a widely accepted practice, a leasehold
estate, in a single parcel or multiple parcels of real property improved by a
Residential Dwelling. With respect to each Cooperative Loan, the Cooperative
Shares allocated to a Cooperative Unit in the related Cooperative Corporation
that were pledged to secure such Cooperative Loan and the related Proprietary
Lease.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and the
successors and assigns of such mortgagee or beneficiary.
Mortgagor: The obligor on a Mortgage Note, who is an owner of the
Mortgaged Property and the grantor or mortgagor named in the Mortgage and such
grantor's or mortgagor's successors in title to the Mortgaged Property.
NAIC: The National Association of Insurance Commissioners or any
successor organization.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, a President or a Vice President of the
Person on behalf of whom such certificate is being delivered.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the Seller or the Servicer, reasonably acceptable to the Purchaser.
OTS: The Office of Thrift Supervision or any successor thereto.
Owner: As defined in Subsection 11.13.
P&I Advance: As defined in Subsection 11.17.
Periodic Rate Cap/Floor: As to each Adjustable Rate Mortgage Loan, the
maximum increase or decrease in the Mortgage Interest Rate, on any Adjustment
Date as provided in the related Mortgage Note.
Person: An individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Primary Mortgage Insurance Policy: A policy of primary mortgage
guaranty insurance issued by an insurer acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
10
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date that 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.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller pursuant to this Agreement in exchange for the Mortgage
Loans included in the related Mortgage Loan Package, as calculated pursuant to
Section 4 and the related Purchase Price and Terms Agreement.
Purchase Price and Terms Agreement: With respect to each purchase of a
Mortgage Loan Package hereunder, that certain letter agreement by and between
the Seller and the Purchaser, prepared by the Purchaser substantially identical
to the form delivered in connection with the purchase and sale of the Mortgage
Loans on the initial Closing Date hereunder, setting forth the general terms,
conditions and portfolio characteristics for each Mortgage Loan Package to be
purchased hereunder as of the related Closing Date.
Purchase Price Percentage: For each Mortgage Loan included in a
Mortgage Loan Package, the percentage of par set forth in the related Purchase
Price and Terms Agreement that is used to calculate the Purchase Price of the
Mortgage Loans included in such Mortgage Loan Package.
Purchaser: The Person listed as such in the initial paragraph of this
Agreement, together with its successors and assigns as permitted under the terms
of this Agreement.
Qualified Appraiser: An appraiser of a Mortgaged Property duly
appointed by the originator of the related Mortgage Loan, who had no interest,
direct or indirect, in such Mortgaged Property or in any loan made on the
security thereof, whose compensation is not affected by the approval or
disapproval of the related Mortgage Loan and who met the minimum qualifications
of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and satisfied the requirements of Title XI of
FIRREA.
Qualified Depository: A deposit account or accounts maintained with a
federal or state chartered depository institution the deposits in which are
insured by the FDIC to the applicable limits and the long-term unsecured debt
obligations of which (or, in the case of a depository institution that is a
subsidiary of a holding company, the long-term unsecured debt obligations of
such holding company) are rated AA by Standard & Poor's Ratings Group or Aa by
▇▇▇▇▇'▇ Investors Service, Inc. (or a comparable rating if another rating agency
is specified by the Purchaser by written notice to the Seller) at the time any
deposits are held on deposit therein.
Recognition Agreement: With respect to any Cooperative Loan, an
agreement between the related Cooperative Corporation and the originator of such
Mortgage Loan to establish the rights of such originator in the related
Cooperative Property.
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Record Date: The close of business of the last Business Day of the
month preceding the month of the related Remittance Date.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property.
Remittance Date: The 18th day (or if such 18th day is not a Business
Day, the first Business Day immediately following such 18th day) of any month,
beginning with the First Remittance Date.
REO Disposition: The final sale by the Servicer of an REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Subsection 11.13.
REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed in lieu of foreclosure, as described in Subsection 11.13.
Repurchase Price: With respect to any Mortgage Loan, an amount equal to
(A) the Stated Principal Balance of such Mortgage Loan as of the date of
repurchase plus (B) interest on such Stated Principal Balance at the Mortgage
Loan Remittance Rate from and including the last Due Date through which interest
has been paid on behalf of the Mortgagor or advanced by the Servicer to the day
prior to such date of repurchase, less amounts received in respect of such
repurchased Mortgage Loan which are being held in the Custodial Account for
distribution in connection with such Mortgage Loan.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project or (iv) a one-family dwelling
in a planned unit development, except as set forth in the related Purchase Price
and Terms Agreement, none of which is a Cooperative Property, mobile home or
manufactured home.
Securities: The securities issued in connection with a Securitization
evidencing beneficial ownership interests in a trust the assets of which include
the Mortgage Loans.
Securitization: The transfer of the Mortgage Loans to a trust formed as
part of a publicly issued and/or privately placed, rated securitization,
including the issuance of the related Securities.
Security Agreement: With respect to any Cooperative Loan, the agreement
between the owner of the related Cooperative Shares and the originator of the
related Mortgage Note that defines the terms of the security interest in such
Cooperative Shares and the related Proprietary Lease.
Seller: Bank of America, National Association, a national banking
association, or its successor in interest or any successor to the Seller under
this Agreement appointed as herein provided.
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Servicer: Bank of America, National Association, a national banking
association, or its successor in interest or any successor to the Servicer under
this Agreement appointed as herein provided.
Servicing Advances: All customary, reasonable and necessary
out-of-pocket costs and expenses incurred in the performance by the Servicer of
its servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of the Mortgaged Property if the Mortgaged Property is acquired
in satisfaction of the Mortgage, and (d) payments made by the Servicer with
respect to a Mortgaged Property pursuant to Subsection 11.08.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Servicer, which shall, for each month,
be equal to one-twelfth of the product of (i) the applicable Servicing Fee Rate
and (ii) the Stated 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 Purchaser to pay the Servicing Fee is limited to, and
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds and other proceeds, to the extent permitted
by Subsection 11.05) of related Monthly Payments collected by the Servicer, or
as otherwise provided under Subsection 11.05.
Servicing Fee Rate: With respect to each Mortgage Loan, the per annum
rate set forth on the related Mortgage Loan Schedule, or if not specified
thereon, in the related Purchase Price and Terms Agreement.
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 to the Purchaser by the
Servicer, as such list may be amended from time to time.
Standard & Poor's: Standard & Poor's Rating Service, a division of the
McGraw Hill Companies, Inc., or any successor thereto.
Stated Principal Balance: As to each Mortgage Loan as to any date of
determination, (i) the principal balance of the Mortgage Loan at the related
Cut-off Date after giving effect to the principal portion of any Monthly
Payments due on or before such date, whether or not received, as well as any
Principal Prepayments received before such date, minus (ii) all amounts
previously distributed to the Purchaser with respect to the Mortgage Loan
representing payments or recoveries of principal, or advances in lieu thereof.
Substitute Mortgage Loan: A mortgage loan substituted by the Seller for
a Deleted Mortgage Loan which must, on the date of such substitution, (i) have a
Stated Principal Balance, after deduction of the principal portion of the
Monthly Payment due in the month of substitution, not in excess of, and not
materially greater or less than, the Stated Principal Balance of the Deleted
Mortgage Loan; (ii) have a Mortgage Interest Rate, Gross Margin, Initial Rate
Cap, Periodic Rate Cap/Floor and Lifetime Rate Cap equal to that of the Deleted
Mortgage Loan; (iii) have a Loan-to-Value Ratio not higher than that of the
Deleted Mortgage Loan; (iv) have a remaining term to maturity not greater than
(and not more than one year less than) that of the Deleted Mortgage Loan; (v)
comply with each representation and warranty set forth in Subsection 7.01; (vi)
be current in the payment of principal and interest; and (vii) be secured by a
Mortgaged Property of the same type and occupancy status as secured the Deleted
Mortgage Loan.
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Total Covered Amount: With respect to any BPP Mortgage Loan, the
outstanding principal balance of the Mortgage Loan cancelled pursuant to the
terms of the related BPP Addendum upon the accidental death of the related
Mortgagor.
Transfers: As defined in Section 28.
Underwriting Guidelines: The underwriting guidelines of the Seller
attached hereto as Exhibit 3, as may be updated and incorporated into Exhibit 3
from time to time by providing such updates to the Purchaser; provided, however,
any such updates shall apply to the Mortgage Loans in the related Mortgage Loan
Package which are subject to purchases and sales occurring after such updates.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a third party, which sale or transfer is not
an Agency Transfer or a Securitization.
SECTION 2. PURCHASE AND CONVEYANCE.
On each related Closing Date, the Seller, simultaneously with the
execution and delivery of the related Acknowledgment and Conveyance Agreement,
in exchange for the payment of the applicable Purchase Price by the Purchaser,
receipt of which is hereby acknowledged, hereby sells, transfers, assigns, sets
over and conveys to the Purchaser, without recourse, but subject to the terms of
this Agreement, all of its rights, title and interest in and to the Mortgage
Loans in the related Mortgage Loan Package having an aggregate principal balance
on the related Cut-off Date in an amount as set forth in the related Purchase
Price and Terms Agreement, or in such other amount as agreed by the Purchaser
and the Seller as evidenced by the actual aggregate principal balance of the
Mortgage Loan Package accepted by the Purchaser on the related Closing Date,
together with the related Mortgage Files and all rights and obligations arising
under the documents contained therein, but excluding any BPP Fees.
With respect to each Mortgage Loan purchased, the Purchaser shall own
and be entitled to receive: (a) all scheduled principal due after the applicable
Cut-off Date, (b) all other payments and/or recoveries of principal collected on
or after the applicable Cut-off Date (provided, however, that all scheduled
payments of principal due on or before the applicable Cut-off Date and collected
by the Servicer after the applicable Cut-off Date shall belong to the Seller),
(c) all payments of interest on the Mortgage Loans net of the Servicing Fee
(minus that portion of any such interest payment that is allocable to the period
prior to the applicable Cut-off Date) and (d) all BPP Mortgage Loan Payments
payable by the Servicer pursuant to Subsection 11.27 with respect to scheduled
principal and interest due after the applicable Cut-off Date.
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SECTION 3. MORTGAGE LOAN SCHEDULE.
The Seller shall deliver the Mortgage Loan Schedule (which will be
annexed to the related Acknowledgment and Conveyance Agreement) to the Purchaser
at least two (2) Business Days prior to the related Closing Date.
SECTION 4. PURCHASE PRICE.
The Purchase Price shall be the percentage of par as stated in the
related Purchase Price and Terms Agreement (subject to the adjustments as
provided therein), multiplied by the aggregate Cut-off Date Principal Balance of
the Mortgage Loans included in the related Mortgage Loan Package, plus accrued
interest on the aggregate scheduled principal balance of the Mortgage Loan
Package at the weighted average Mortgage Loan Remittance Rate from the related
Cut-off Date through the day immediately prior to the related Closing Date,
inclusive. The initial principal amount of the Mortgage Loans shall be the
aggregate principal balance of the Mortgage Loans, so computed as of the related
Cut-off Date, after application of scheduled payments of principal due on or
before the related Cut-off Date, whether or not collected. Subject to
satisfaction or waiver of the conditions set forth in Section 8 hereof, the
Purchaser shall pay the Purchase Price to the Seller by 4:00 p.m. Eastern Time
on the related Closing Date. Such payment shall be made to the account
designated by the Seller by wire transfer of immediately available funds.
SECTION 5. EXAMINATION OF MORTGAGE FILES.
In addition to any rights granted to the Purchaser hereunder to
underwrite the Mortgage Loans and review the Mortgage Loan Documents prior to
the related Closing Date, the Seller shall, prior to the related Closing Date,
make the Mortgage Files available to the Purchaser for examination at the
Seller's offices. Such examination may be made by the Purchaser or its designee,
at its expense, at any reasonable time before the related Closing Date. Such
underwriting by the Purchaser or its designee shall not impair or diminish the
rights of the Purchaser or any of its successors under this Agreement with
respect to a breach of the representations and warranties contained in this
Agreement. The fact that the Purchaser or its designee has conducted or has
failed to conduct any partial or complete examination of the Mortgage Files
shall not affect the Purchaser's or any of its successors' rights to demand
repurchase or other relief or remedy provided for in this Agreement.
SECTION 6. DELIVERY OF MORTGAGE LOAN DOCUMENTS.
Subsection 6.01 Possession of Mortgage Files.
The contents of each Mortgage File required to be retained by the
Servicer to service the Mortgage Loans pursuant to this Agreement and thus not
delivered to the Purchaser or its designee are and shall be held in trust by the
Servicer for the benefit of the Purchaser as the owner thereof. The Servicer
shall be permitted to maintain the Mortgage Files in imaged, rather than
physical, form consistent with the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
The Servicer's possession of any portion of each such Mortgage File is at the
will of the Purchaser for the sole purpose of facilitating servicing of the
Mortgage Loans pursuant to this Agreement, and such retention and possession by
the Servicer shall be in a custodial capacity only. The ownership of each
Mortgage Note, each Mortgage and the contents of each Mortgage File is vested in
the Purchaser and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Servicer shall immediately vest in the Purchaser and shall be retained and
maintained, in trust, by the Servicer at the will of the Purchaser in such
custodial capacity only. The Mortgage File retained by the Servicer with respect
to each Mortgage Loan pursuant to this Agreement shall be appropriately
identified in the Servicer's computer system to reflect clearly the ownership of
such related Mortgage Loan by the Purchaser. The Servicer shall release from its
custody the contents of any Mortgage File retained by it only in accordance with
this Agreement, except when such release is required in connection with a
repurchase of any such Mortgage Loan pursuant to Subsection 7.03 of this
Agreement or if required under applicable law or court order. The Servicer shall
deliver to the Purchaser physical copies of any documents in a Mortgage File
reasonably requested by the Purchaser within five (5) Business Days after the
date of such request at the expense of the Purchaser.
15
Subsection 6.02 Books and Records.
All rights arising out of the Mortgage Loans including, but not limited
to, all funds received by the Servicer after the Cut-off Date on or in
connection with a Mortgage Loan as provided in Section 2 shall be vested in the
Purchaser, subject to this Agreement; provided, however, that all such funds
received on or in connection with a Mortgage Loan as provided in Section 2 shall
be received and held by the Servicer in trust for the benefit of the Purchaser
as the owner of the Mortgage Loans pursuant to the terms of this Agreement.
As more fully set forth in Section 20, it is the express intention of
the parties that the transactions contemplated by this Agreement be, and be
construed as, a sale of the Mortgage Loans by the Seller and not a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller. Consequently, the sale of each Mortgage Loan shall be
reflected as a purchase on the Purchaser's business records, tax returns and
financial statements, and as a sale of assets on the Seller's business records,
tax returns and financial statements.
Subsection 6.03 Delivery of Mortgage Loan Documents.
With respect to each Mortgage Loan, the Seller shall deliver and
release to the Purchaser, its designee or the Custodian, (a) at least five (5)
Business Days prior to the related Closing Date (or such later date as the
Purchaser may reasonably request), the original Mortgage Note endorsed in blank
and the original Assignment of Mortgage assigned in blank and (b) the other
Mortgage Loan Documents no later than sixty (60) days following the related
Closing Date, subject to the following paragraph. All documents shall be
original documents or, in the case of Mortgage Loan Documents delivered for
recording, either the original recorded documents or clerk-certified copies.
In the event that such original or copy of any Mortgage Loan Document
is not so delivered to the Purchaser or its designee within one hundred eighty
(180) days following the related Closing Date, and in the event that the Seller
does not cure such failure within sixty (60) days after receipt of written
notification of such failure from the Purchaser, the related Mortgage Loan
shall, upon the request of the Purchaser, be repurchased by the Seller at a
price and in the manner specified in Subsection 7.03. The foregoing repurchase
obligation shall not apply in the event the Seller cannot cause the Servicer to
deliver such original or clerk-certified copy of any document submitted for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided that the Seller shall cause the Servicer instead to
deliver a recording receipt of such recording office or, if such recording
receipt is not available, an Officer's Certificate of a servicing officer of the
Servicer, confirming that such document has been accepted for recording and that
the Servicer shall immediately deliver such document upon receipt; and, provided
further, that if the Seller cannot cause the Servicer to deliver such original
or clerk-certified copy of any document submitted for recordation to the
appropriate public recording office within the specified time for any reason
within one hundred eighty (180) days after receipt of written notification of
such failure from the Purchaser, the Seller shall repurchase the related
Mortgage Loan at the price and in the manner specified in Subsection 7.03.
16
To the extent received by it, the Servicer shall promptly forward to
the Purchaser, or its designee, original documents evidencing an assumption,
modification, consolidation or extension of any Mortgage Loan entered into in
accordance with this Agreement.
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS; REMEDIES FOR
BREACH.
Subsection 7.01 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller and, solely if specified below, the Servicer, hereby
represent and warrant to the Purchaser that, as to each Mortgage Loan included
in the related Mortgage Loan Package, as of the related Closing Date or such
other date specified herein:
(a) The information set forth in the Mortgage Loan Schedule
annexed to the related Acknowledgment and Conveyance Agreement and the
related Mortgage Loan Documents is true, correct and complete in all
material respects.
(b) There are no defaults by the Seller, the Servicer or any prior
originator in complying with the terms of the Mortgage, and all taxes,
ground rents, governmental assessments, insurance premiums, leasehold
payments, water, sewer and municipal charges which previously became
due and owing have been paid, or escrow funds have been established in
an amount sufficient to pay for every such escrowed item which remains
unpaid and which has been assessed but is not yet due and payable.
(c) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded in the applicable public recording
office required by law or if necessary to maintain the lien priority of
the Mortgage, and which have been delivered to the Purchaser; the
substance of any such waiver, alteration or modification has been
approved by the insurer under the Primary Mortgage Insurance Policy, if
any, by the title insurer, to the extent required by the related
policy, and is reflected on the related Mortgage Loan Schedule. No
other instrument of waiver, alteration or modification has been
executed, and no Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement approved by the
insurer under the Primary Mortgage Insurance Policy, if any, by the
title insurer, to the extent required by the policy, and which
assumption agreement is a part of the Mortgage File and is reflected on
the related Mortgage Loan Schedule.
17
(d) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including,
without limitation, the defense of usury, nor will the operation of any
of the terms of the Mortgage Note and the Mortgage, or the exercise of
any right thereunder, render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect
thereto; and the Mortgagor was not a debtor in any state or federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated.
(e) All buildings or other customarily insured improvements upon
the Mortgaged Property are insured by an insurer generally acceptable
to ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac and prudent mortgage lending institutions
against loss by fire, hazards of extended coverage and such other
hazards as are provided for in the ▇▇▇▇▇▇ Mae Guides and ▇▇▇▇▇▇▇ Mac
Guide as well as all additional requirements set forth herein, pursuant
to an insurance policy conforming to the requirements of Customary
Servicing Procedures and providing coverage in an amount equal to the
lesser of (i) the full insurable value of the Mortgaged Property or
(ii) the outstanding principal balance owing on the Mortgage Loan. If
the Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy. All such insurance policies are
in full force and effect and contain a standard mortgagee clause naming
the originator of the Mortgage Loan, its successors and assigns as
mortgagee and all premiums thereon have been paid. If the Mortgaged
Property is in an area identified on a flood hazard map or flood
insurance rate map issued by the Federal Emergency Management Agency as
having special flood hazards (and such flood insurance has been made
available), a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect
which policy conforms to the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
The Mortgage obligates the Mortgagor thereunder to maintain all such
insurance at the Mortgagor's cost and expense, and on the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
(f) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity, fair housing or disclosure laws applicable to the
origination and servicing of the Mortgage Loans have been complied
with; the Servicer maintains, and shall maintain, evidence of such
compliance as required by applicable law or regulation and shall make
such evidence available for inspection at the Servicer's office during
normal business hours upon reasonable advance notice.
18
(g) The Mortgage has not been satisfied, canceled, subordinated or
rescinded, in whole or in part (other than as to Principal Prepayments
in full which may have been received on or after the related Cut-off
Date and prior to the related Closing Date), and the Mortgaged Property
has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such
satisfaction, cancellation, subordination, rescission or release.
Neither the Seller nor the Servicer has waived the performance by the
Mortgagor of any action, if the Mortgagor's failure to perform such
action would cause the Mortgage Loan to be in default, and neither the
Seller nor the Servicer has waived any default resulting from any
action or inaction by the Mortgagor.
(h) The Mortgage is a valid, existing, perfected and enforceable
first lien on the Mortgaged Property, including all improvements on the
Mortgaged Property, free and clear of all adverse claims, liens and
encumbrances having priority over the lien of the Mortgage, subject
only to (i) the lien of current real property taxes and assessments not
yet due and payable, (ii) covenants, conditions and restrictions,
rights of way, easements and other matters of the public record as of
the date of recording being acceptable to mortgage lending institutions
generally and either (A) specifically referred to in the lender's title
insurance policy, if any, delivered to the originator of the Mortgage
Loan or (B) which do not adversely affect the Appraised Value of the
Mortgaged Property and (iii) other matters to which like properties are
commonly subject which do not individually or in the aggregate
materially interfere with the benefits of the security intended to be
provided by the Mortgage or the use, enjoyment, value or marketability
of the related Mortgaged Property. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection
with the Mortgage Loan establishes and creates a valid, existing and
enforceable first lien and first priority security interest on the
property described therein and the Seller has the full right to sell
and assign the same to the Purchaser. With respect to any Cooperative
Loan, the Security Agreement is a valid, subsisting and enforceable
first priority security interest on the related Cooperative Shares
securing the Mortgage Note, subject only to (a) liens of the related
residential Cooperative Corporation for unpaid assessments representing
the Mortgagor's pro rata share of the related residential Cooperative
Corporation's payments for its blanket mortgage, current and future
real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly subject and (b) other
matters to which like collateral is commonly subject which do not
materially interfere with the benefits of the security interest
intended to be provided by such Security Agreement.
(i) The Mortgage Note, the related Mortgage and, in the case of a
Cooperative Loan, the related Security Agreement, are original and
genuine and each is the legal, valid and binding obligation of the
maker thereof, enforceable in all respects in accordance with its terms
except as enforceability may be limited by (i) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other similar
laws affecting the enforcement of the rights of creditors and (ii)
general principles of equity, whether enforcement is sought in a
proceeding in equity or at law and the Seller has taken all action
necessary to transfer such rights of enforceability to the Purchaser.
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(j) All parties to the Mortgage Note, the Mortgage and, in the
case of a Cooperative Loan, the related Security Agreement, had the
legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note and the Mortgage, and the Mortgage Note and
the Mortgage have been duly and properly executed by such parties.
Either the Mortgagor is a natural person or the related co-borrower or
guarantor is a natural person.
(k) The proceeds of the Mortgage Loan have been fully disbursed to
or for the account of the Mortgagor and there is no obligation for the
Mortgagee to advance additional funds thereunder and any and all
requirements as to completion of any on-site or off-site improvement
and as to disbursements of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in making or closing the
Mortgage Loan and the recording of the Mortgage have been paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due to
the Mortgagee pursuant to the Mortgage Note or Mortgage.
(l) The Seller and all other parties which have had any interest
in the Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and disposed
of such interest, were) in compliance with any and all applicable
"doing business" and licensing requirements of the laws of the state
wherein the Mortgaged Property is located.
(m) With respect to each Mortgage Loan, (i) the Mortgage Loan is
covered by an ALTA or CLTA lender's title insurance policy, acceptable
to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, issued by a title insurer acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject
to the exceptions contained in (h)(i), (ii) and (iii) above) the
Seller, its successors and assigns as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan and,
with respect to any Adjustable Rate Mortgage Loan, against any loss by
reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment in the Mortgage
Interest Rate or Monthly Payment, (ii) with respect to certain
Refinanced Mortgage Loans, a title search has been done showing no lien
(other than the exceptions contained in (h)(i), (ii) or (iii) above) on
the related Mortgaged Property senior to the lien of the Mortgage or
(iii) in the case of any Mortgage Loan secured by a Mortgaged Property
located in a jurisdiction where title insurance policies are generally
not available, an opinion of counsel of the type customarily rendered
in such jurisdiction in lieu of title insurance is instead received.
For each Mortgage Loan covered by a title insurance policy, (i) the
Seller and its successors and assigns are the sole insureds of such
lender's title insurance policy, and such lender's title insurance
policy is in full force and effect and will be in full force and effect
upon the consummation of the transactions contemplated by this
Agreement and will inure to the benefit of the Purchaser and its
assigns without any further act and (ii) no claims have been made under
such lender's title insurance policy, and the Seller has not done, by
act or omission, anything which would impair the coverage of such
lender's title insurance policy..
20
(n) Other than Mortgage Loans delinquent less than thirty (30)
days as of the related Cut-off Date (so long as delinquent Mortgage
Loans are to be included in the related Mortgage Loan Package as agreed
to by the parties pursuant to the related Purchase Price and Terms
Agreement), there is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no
event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach,
violation or event permitting acceleration, and neither the Seller nor
the Servicer has waived any default, breach, violation or event
permitting acceleration.
(o) There are no, and, as of the related Closing Date, neither the
Seller nor the Servicer has received any notice of any, mechanics' or
similar liens or claims filed for work, labor or material (and no
rights are outstanding that under law could give rise to such lien)
affecting the related Mortgaged Property which are or may be liens
prior to, or equal or coordinate with, the lien of the related
Mortgage.
(p) All improvements which were considered in determining the
Appraised Value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property,
and no improvements on adjoining properties encroach upon the Mortgaged
Property.
(q) The Mortgage Loan was originated by a commercial bank or
similar banking institution which is supervised and examined by a
federal or state authority, or by a mortgagee approved by the Secretary
of HUD.
(r) Except with respect to Interest Only Mortgage Loans, principal
payments on the Mortgage Loan commenced no more than sixty (60) days
after the proceeds of the Mortgage Loan were disbursed. The Mortgage
Loans identified on the related Mortgage Loan Schedule have an original
term to maturity of not more than thirty (30) years, with interest
payable in arrears on the first day of the month. As to each Adjustable
Rate Mortgage Loan, on each applicable Adjustment Date, the Mortgage
Interest Rate will be adjusted to equal the sum of the Index plus the
applicable Gross Margin, rounded up or down as provided in the Mortgage
Note; provided, however, that the Mortgage Interest Rate will not
increase or decrease by more than the Initial Rate Cap on the first
Adjustment Date or the Periodic Rate Cap on any subsequent Adjustment
Date, and will in no event exceed the Lifetime Rate Cap. Each Mortgage
Note evidencing a Mortgage Loan that is not both an Adjustable Rate
Mortgage Loan and a Balloon Mortgage Loan requires a Monthly Payment
which is sufficient to amortize the original principal balance fully
over the original term thereof and to pay interest at the related
Mortgage Interest Rate. Each Mortgage Note evidencing an Adjustable
Rate Mortgage Loan that is not a Balloon Mortgage Loan requires a
Monthly Payment which is sufficient (i) during the period prior to the
first adjustment to the Mortgage Interest Rate, to amortize the
original principal balance fully over the original term thereof and to
pay interest at the related Mortgage Interest Rate, and (ii) during the
period following each Adjustment Date, to amortize the outstanding
principal balance fully as of the first day of such period over the
then remaining term of such Mortgage Note and to pay interest at the
related Mortgage Interest Rate. No Mortgage Note evidencing an
Adjustable Rate Mortgage Loan permits negative amortization. Interest
on the Mortgage Note is calculated on the basis of a 360-day year
consisting of twelve 30-day months. Unless otherwise indicated on the
Mortgage Loan Schedule, no Mortgage Loan is a Convertible Mortgage
Loan.
21
(s) There is no proceeding pending or, to the Seller's knowledge,
threatened for the total or partial condemnation of the Mortgaged
Property and such property is in good repair and is undamaged by waste,
fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty, so as to affect adversely the value of the Mortgaged Property
as security for the Mortgage Loan or the use for which the premises
were intended.
(t) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including
(i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure. To the best
of the Seller's knowledge, following the date of origination of the
Mortgage Loan, the Mortgaged Property has not been subject to any
bankruptcy proceeding or foreclosure proceeding and the Mortgagor has
not filed for protection under applicable bankruptcy laws. There is no
homestead or other exemption or right available to the Mortgagor or any
other person which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law.
(u) The Mortgage Note and Mortgage are on forms acceptable to
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
(v) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the
Mortgaged Property and the security interest of any applicable security
agreement or chattel mortgage referred to in (h) above.
(w) The Mortgage File contains an appraisal of the related
Mortgaged Property, in a form acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac,
and such appraisal complies with the requirements of FIRREA and, to the
extent required in the Underwriting Guidelines with respect to mortgage
loans of the same type as the Mortgage Loan, was made and signed, prior
to the approval of the Mortgage Loan application, by a Qualified
Appraiser.
(x) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the
Purchaser to the trustee under the deed of trust, except in connection
with a trustee's sale after default by the Mortgagor.
22
(y) The Mortgage Loan is not a graduated payment mortgage loan and
the Mortgage Loan does not have a shared appreciation or other
contingent interest feature, nor does it contain any "buydown"
provision which is currently in effect.
(z) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the
Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee
thereunder.
(aa) The Mortgagor has received all disclosure materials required
by applicable law with respect to the making of mortgage loans of the
same type as the Mortgage Loan and rescission materials required by
applicable law if the Mortgage Loan is a Refinanced Mortgage Loan and
has acknowledged receipt of such materials to the extent required by
applicable law and such documents will remain in the Mortgage File.
(bb) Each Mortgage Loan with an LTV at origination in excess of
80%, if any, will be subject to a Primary Mortgage Insurance Policy,
issued by an insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac at the
time of origination, which insures that portion of the Mortgage Loan in
excess of the portion of the Appraised Value of the Mortgaged Property
as required by ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac guidelines. All provisions of
such Primary Mortgage Insurance Policy have been and are being complied
with, such policy is in full force and effect, and all premiums due
thereunder have been paid. Any Mortgage subject to any such Primary
Mortgage Insurance Policy obligates the Mortgagor thereunder to
maintain such insurance and to pay all premiums and charges in
connection therewith at least until the LTV of such Mortgage Loan is
reduced to less than 80%. The Mortgage Interest Rate for the Mortgage
Loan does not include any such insurance premium. No Mortgage Loan
requires payment of such premiums, in whole or in part, by the
Purchaser.
(cc) As of the date of origination of the Mortgage Loan, (i) the
Mortgaged Property is lawfully occupied under applicable law, (ii) all
inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of the Mortgaged Property and,
with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy, have been made or obtained from
the appropriate authorities and (iii) no improvement located on or part
of the Mortgaged Property is in violation of any zoning law or
regulation.
(dd) The Assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which
the Mortgaged Property is located.
(ee) All payments required to be made prior to the related Cut-off
Date for such Mortgage Loan under the terms of the Mortgage Note have
been made, the Mortgage Loan has not been dishonored, other than
Mortgage Loans delinquent less than thirty (30) days as of the related
Cut-off Date (so long as delinquent Mortgage Loans are to be included
in the related Mortgage Loan Package as agreed to by the parties
pursuant to the related Purchase Price and Terms Agreement), there are
no material defaults under the terms of the Mortgage Loan and no
Mortgage Loan has been thirty (30) days or more delinquent in the
twelve (12) month period immediately prior to the related Cut-off Date.
23
(ff) None of the Seller, the Servicer or any prior originator or
servicer has advanced funds, or induced, solicited or knowingly
received any advance from any party other than the Mortgagor, directly
or indirectly, for the payment of any amount due under the Mortgage
Loan.
(gg) With respect to each Mortgage Loan, the Seller is in
possession of a complete Mortgage File except for the documents which
have been delivered to the Purchaser or which have been submitted for
recording and not yet returned.
(hh) Immediately prior to the payment of the related Purchase
Price, the Seller was the sole owner and holder of the Mortgage Loans
and the indebtedness evidenced by the Mortgage Note. The Mortgage
Loans, including the Mortgage Note and the Mortgage, were not assigned
or pledged by the Seller and the Seller had good and marketable title
thereto, and the Seller had full right to transfer and sell the
Mortgage Loans to the Purchaser free and clear of any encumbrance,
participation interest, lien, equity, pledge, claim or security
interest and had full right and authority subject to no interest or
participation in, or agreement with any other party to sell or
otherwise transfer the Mortgage Loans. Following the sale of the
Mortgage Loans, the Purchaser will own such Mortgage Loan free and
clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest. The Seller intends to relinquish
all rights to monitor, possess and control the Mortgage Loan except in
connection with the servicing of the Mortgage Loan by the Servicer as
set forth in this Agreement. After the related Closing Date, neither
the Seller nor the Servicer will have any right to modify or alter the
terms of the sale of the Mortgage Loans and neither the Seller nor the
Servicer will have any obligation or right to repurchase the Mortgage
Loans, except as provided in this Agreement or as otherwise agreed to
by the Seller, the Servicer and the Purchaser.
(ii) Any future advances made prior to the related Cut-off Date
have been consolidated with the outstanding principal amount secured by
the Mortgage, and the secured principal amount, as consolidated, bears
a single interest rate and single repayment term. The lien of the
Mortgage securing the consolidated principal amount is expressly
insured as having first lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated
interest or by other title evidence acceptable to ▇▇▇▇▇▇ Mae and
▇▇▇▇▇▇▇ Mac. The consolidated principal amount does not exceed the
original principal amount of the Mortgage Loan.
(jj) The Mortgage Loan was underwritten in accordance with the
Underwriting Guidelines in effect at the time of origination with
exceptions thereto exercised in a reasonable manner, which exceptions
will have no material adverse effects on the Purchaser.
(kk) With respect to a Mortgage Loan that is not a Cooperative
Loan and is not secured by an interest in a leasehold estate, the
Mortgaged Property is located in the state identified in the related
Mortgage Loan Schedule and consists of a single parcel of real property
with a detached single family residence erected thereon, or a two- to
four-family dwelling, or an individual condominium unit, or an
individual unit in a planned unit development; provided, however, that
any condominium project or planned unit development generally conforms
with the Underwriting Guidelines regarding such dwellings (or
underlying Cooperative Property, in the case of a Cooperative Loan),
and except as set forth in the related Mortgage Loan Schedule, no
residence or dwelling is a mobile home or manufactured dwelling. As of
the date of origination, no portion of the Mortgaged Property was used
for commercial purposes and, to the Seller's knowledge, since the date
of origination, no portion of the Mortgaged Property has been used for
commercial purposes; provided, that Mortgaged Properties which contain
a home office shall not be considered as being used for commercial
purposes as long as the Mortgaged Property has not been altered for
commercial purposes and is not storing any chemicals or raw materials
other than those commonly used for homeowner repair, maintenance and/or
household purposes.
24
(ll) If the Mortgaged Property is a condominium unit or a planned
unit development (other than a de minimis planned unit development)
such condominium or planned unit development project meets ▇▇▇▇▇▇ ▇▇▇
or ▇▇▇▇▇▇▇ Mac eligibility requirements for sale to ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac, as the case may be, or is located in a condominium or
planned unit development project which has received ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac project approval or as to which ▇▇▇▇▇▇ Mae's and ▇▇▇▇▇▇▇
Mac's eligibility requirements have been waived.
(mm) The Seller used no adverse selection procedures in selecting
the Mortgage Loan from among the outstanding first lien, residential
mortgage loans owned by it which were available for inclusion in the
Mortgage Loans.
(nn) Each Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code.
(oo) With respect to each Mortgage where a lost note affidavit has
been delivered to the Purchaser or its designee in place of the related
Mortgage Note, the related Mortgage Note is no longer in existence.
Each such lost note affidavit is substantially in the form attached
hereto as Exhibit 5.
(pp) No fraud was committed by the Seller or the Servicer or, to
the Seller's or the Servicer's knowledge, any other person in
connection with the origination of the Mortgage Loan.
(qq) The origination practices used by the Seller and the
collection and servicing practices used by the Servicer with respect to
each Mortgage Loan have been in all respects legal, proper, prudent and
customary in the mortgage origination and servicing industry and the
collection and servicing practices used by the Servicer have been
acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac.
(rr) The Mortgagor is not in bankruptcy and is not insolvent, and
neither the Seller nor the Servicer has any knowledge of any
circumstances or condition with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that could
reasonably be expected to cause investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become
delinquent or materially adversely affect the value or the
marketability of the Mortgage Loan.
25
(ss) The Mortgagor has not notified the Seller or the Servicer,
and neither the Seller nor the Servicer has knowledge of any relief
requested by the Mortgagor under the Servicemembers Civil Relief Act.
(tt) No Mortgage Loan was made in connection with (i) the
construction or rehabilitation of a Mortgaged Property or (ii)
facilitating the trade-in or exchange of a Mortgaged Property.
(uu) To the best of the Seller's knowledge, there exists no
violation of any local, state or federal environmental law, rule or
regulation in respect of the Mortgaged Property which violation has had
or would have a material adverse effect on the market value of such
Mortgaged Property. There is no pending action or proceeding directly
involving any Mortgaged Property of which the Seller or the Servicer is
aware in which compliance with any environmental law, rule or
regulation is an issue.
(vv) No action, inaction, or event has occurred and no state of
affairs exists or has existed that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any applicable
special hazard insurance policy, Primary Mortgage Insurance Policy (if
any) or bankruptcy bond, irrespective of the cause of such failure of
coverage. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received by
the Seller or the Servicer or any designee of the Seller or the
Servicer or any corporation in which the Seller, the Servicer or any
officer, director, or employee of the Seller or the Servicer had a
financial interest at the time of placement of such insurance.
(ww) With respect to any ground lease to which a Mortgaged
Property may be subject: (A) the Mortgagor is the owner of a valid and
subsisting leasehold interest under such ground lease; (B) such ground
lease is in full force and effect, unmodified and not supplemented by
any writing or otherwise; (C) all rent, additional rent and other
charges reserved therein have been fully paid to the extent payable as
of the related Closing Date; (D) the Mortgagor enjoys the quiet and
peaceful possession of the leasehold estate; (E) the Mortgagor is not
in default under any of the terms of such ground lease, and, to the
best of the Seller's knowledge, there are no circumstances which, with
the passage of time or the giving of notice, or both, would result in a
default under such ground lease; (F) the lessor under such ground lease
is not in default under any of the terms or provisions of such ground
lease on the part of the lessor to be observed or performed; (G) the
lessor under such ground lease has satisfied any repair or construction
obligations due as of the related Closing Date pursuant to the terms of
such ground lease; and (H) the execution, delivery and performance of
the Mortgage do not require the consent (other than those consents
which have been obtained and are in full force and effect) under, and
will not contravene any provision of or cause a default under, such
ground lease.
26
(xx) With respect to escrow deposits and payments that the
Servicer is entitled to collect, 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. All escrow payments have been
collected in full compliance with state and federal law and the
provisions of the related Mortgage Note and Mortgage. As to any
Mortgage Loan that is the subject of an escrow, escrow of funds is not
prohibited by applicable law and has been established in an amount
sufficient to pay for every escrowed item that remains unpaid and has
been assessed but is not yet due and payable. No escrow deposits or
other charges or payments due under the Mortgage Note have been
capitalized under any Mortgage or the related Mortgage Note.
(yy) The Mortgage Loan characteristics set forth in Section 4 of
the related Purchase Price and Terms Agreement are true and complete in
all material respects.
(zz) No Mortgage Loan is (i) covered by the Home Ownership and
Equity Protection Act of 1994, as amended ("HOEPA"), (ii) in violation
of any comparable state law or (iii) considered a "high cost" mortgage
loan under Section 32 of HOEPA or a "high cost," "predatory" or similar
loan under any other applicable state, federal or local law (or a
similarly classified loan using different terminology under a law
imposing heightened regulatory scrutiny or additional legal liability
for residential mortgage loans having high interest rates, points
and/or fees). (aaa) There is no Mortgage Loan that was originated on or
after October 1, 2002 and before March 7, 2003, which is secured by
property located in the State of Georgia. There is no Mortgage Loan
that was originated on or after March 7, 2003, which is a "high cost
home loan" as defined under the Georgia Fair Lending Act.
(bbb) No Mortgage Loan originated on or after October 1, 2002 will
impose a prepayment premium for a term in excess of three years after
its origination. No Mortgage Loan originated before October 1, 2002
will impose a prepayment premium for a term in excess of five years
after its origination.
(ccc) The Servicer, in its capacity as servicer for each Mortgage
Loan, has fully furnished, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete information
(e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company (three of
the credit repositories), on a monthly basis.
(ddd) With respect to a Mortgage Loan that is a Cooperative Loan,
the Cooperative Shares that are pledged as security for the Mortgage
Loan are held by a person as a tenant-stockholder (as defined in
Section 216 of the Code) in a cooperative housing corporation (as
defined in Section 216 of the Code).
(eee) None of the Mortgage Loans are daily simple interest loans.
(fff) No Mortgagor agreed to submit to mandatory arbitration to
resolve any dispute arising out of or relating in any way to the
Mortgage transaction.
27
(ggg) None of the proceeds of the Mortgage Loan were used to
finance single-premium credit life insurance policies.
Subsection 7.02 Seller and Servicer Representations.
The Seller and the Servicer hereby represent and warrant to the
Purchaser that, as to itself as of the related Closing Date:
(a) It is a national banking association, duly organized, validly
existing, and in good standing under the laws of the United States of
America and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good standing in the
states where the Mortgaged Property is located if the laws of such
state require licensing or qualification in order to conduct business
of the type conducted by it. It is an approved seller/servicer in good
standing of conventional residential mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac and is a HUD-approved mortgagee under Section 203 of the
National Housing Act. It has corporate power and authority to execute
and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by
it and the consummation of the transactions contemplated hereby have
been duly and validly authorized. This Agreement, assuming due
authorization, execution and delivery by the Purchaser, evidences the
legal, valid, binding and enforceable obligation of it, subject to
applicable law except as enforceability may be limited by (i)
bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the
rights of creditors and (ii) general principles of equity, whether
enforcement is sought in a proceeding in equity or at law. All
requisite corporate action has been taken by it to make this Agreement
valid and binding upon it in accordance with the terms of this
Agreement.
(b) No consent, approval, authorization or order of, or
registration or filing with, or notice to any court or governmental
agency or body is required for the execution, delivery and performance
by the Seller of or compliance by the Seller with this Agreement or the
Mortgage Loans or the sale of the Mortgage Loans or the consummation of
the transactions contemplated by this Agreement or, if required, such
approval has been obtained prior to the Closing Date.
(c) The consummation of the transactions contemplated by this
Agreement are in its ordinary course of business and will not result in
the breach of any term or provision of its charter or by-laws or result
in the breach of any term or provision of, or conflict with or
constitute a default under or result in the acceleration of any
obligation under, any agreement, indenture or loan or credit agreement
or other instrument to which it or its property is subject, or result
in the violation of any law, rule, regulation, order, judgment or
decree to which it or its property is subject.
(d) Its transfer, assignment and conveyance of the Mortgage Notes
and the Mortgages pursuant to this Agreement are not subject to the
bulk transfer or any similar statutory provisions in effect in any
applicable jurisdiction.
28
(e) There is no action, suit, proceeding or investigation pending
or, to its best knowledge, threatened against it which, either
individually or in the aggregate, would result in any material adverse
change in its business, operations, financial condition, properties or
assets, or in any material impairment of its right or ability to carry
on its business substantially as now conducted or which would draw into
question the validity of this Agreement or the Mortgage Loans or of any
action taken or to be taken in connection with its obligations
contemplated herein, or which would materially impair its ability to
perform under the terms of this Agreement.
(f) It does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in
this Agreement.
(g) It acknowledges and agrees that the Servicing Fee shall be
treated by the Servicer, for accounting and tax purposes, as
compensation for the servicing and administration of the Mortgage Loans
pursuant to this Agreement.
(h) It has determined that the disposition of the Mortgage Loans
pursuant to this Agreement will be afforded sale treatment for
accounting and tax purposes.
(i) It is solvent and the sale of the Mortgage Loans will not
cause it to become insolvent. The sale of the Mortgage Loans is not
undertaken with the intent to hinder, delay or defraud any of its
creditors.
(j) It has not dealt with any broker, investment banker, agent or
other person that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans.
(k) None of this Agreement, the Mortgage Loan Schedule or the
Mortgage Loan Documents furnished in connection with this transaction
contain any untrue statement of fact by the Seller or the Servicer, or
omits to state a fact, necessary to make the statements of the Seller
or the Servicer herein or therein, in the light of the circumstances
under which they were made, not materially misleading; provided,
however, that the Purchaser acknowledges that it had the opportunity to
dictate the contents of the Mortgage Loan Schedule and, therefore, the
Seller and the Servicer shall not be liable for any omitted fields on
the Mortgage Loan Schedule that were not requested by the Purchaser.
(l) The Seller has complied with all applicable anti-money
laundering laws and regulations, including without limitation the USA
Patriot Act of 2001 (collectively, the "Anti-Money Laundering Laws");
the Seller has established an anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, has conducted the
requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including
with respect to the legitimacy of the applicable Mortgagor and the
origin of the assets used by the said Mortgagor to purchase the
property in question, and maintains, and will maintain, sufficient
information to identify the applicable Mortgagor for purposes of the
Anti-Money Laundering Laws.
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Subsection 7.03 Remedies for Breach of Representations and Warranties.
It is understood and agreed that the representations and warranties set
forth in Subsections 7.01 and 7.02 shall survive the sale of the Mortgage Loans
to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or lack of examination of any Mortgage
File. Upon discovery by the Seller, the Servicer or the Purchaser of a breach of
any of the foregoing representations and warranties which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the interest of the
Purchaser in or the value of the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the others.
Within sixty (60) days after the earlier of either discovery by or
notice to either the Seller or the Servicer of any breach of a representation or
warranty set forth in Subsections 7.01 or 7.02 which materially and adversely
affects the value of a Mortgage Loan or the Mortgage Loans or the interest of
the Purchaser therein, the Seller or the Servicer, as the case may be, shall use
its best efforts promptly to cure such breach in all material respects and, if
such breach cannot be cured within sixty (60) day period, the Seller shall
repurchase such Mortgage Loan or Mortgage Loans at the Repurchase Price.
However, the Seller may, at its option and assuming that the Seller has a
Substitute Mortgage Loan, rather than repurchase the Mortgage Loan as provided
above, remove such Mortgage Loan and substitute in its place a Substitute
Mortgage Loan or Substitute Mortgage Loans; provided, however, that any such
substitution shall be effected not later than ninety (90) days after the related
Closing Date. If the Seller has no Substitute Mortgage Loan, it shall repurchase
the deficient Mortgage Loan. Any repurchase of a Mortgage Loan pursuant to the
foregoing provisions of this Subsection 7.03 shall occur on a date designated by
the Purchaser, and acceptable to the Seller, and shall be accomplished by the
Seller remitting to the Servicer the amount of the related Repurchase Price for
distribution to the Purchaser on the next scheduled Remittance Date.
At the time of repurchase of any deficient Mortgage Loan (or removal of
any Deleted Mortgage Loan), the Purchaser and the Seller shall arrange for the
assignment of the repurchased Mortgage Loan (or Deleted Mortgage Loan) to the
Seller or its designee and the delivery to the Seller of any documents held by
the Purchaser relating to the repurchased Mortgage Loan in the manner required
by this Agreement with respect to the purchase and sale of such Mortgage Loan on
the related Closing Date. In the event a deficient Mortgage Loan is repurchased,
the Seller shall, simultaneously with its remittance to the Servicer for
distribution to the Purchaser of such related Repurchase Price, give written
notice to the Purchaser that such repurchase has taken place. Upon such
repurchase, the related Mortgage Loan Schedule shall simultaneously be amended
to reflect the withdrawal of the repurchased Mortgage Loan from this Agreement.
As to any Deleted Mortgage Loan for which the Seller substitutes one or
more Substitute Mortgage Loans, the Seller shall effect such substitution by
delivering to the Purchaser for each Substitute Mortgage Loan the Mortgage Note,
the Mortgage, the Assignment of Mortgage and such other documents and agreements
as are required by Subsection 6.03. The Seller shall remit to the Servicer for
distribution the Monthly Payment due on each Substitute Mortgage Loan in the
month following the date of such substitution. Monthly Payments due with respect
to Substitute Mortgage Loans in the month of substitution will be retained by
the Seller. For the month of substitution, distributions to the Purchaser will
include the Monthly Payment due on such Deleted Mortgage Loan in the month of
substitution, and the Seller shall thereafter be entitled to retain all amounts
subsequently received by it in respect of such Deleted Mortgage Loan. The Seller
shall give written notice to the Purchaser that such substitution has taken
place and shall amend the related Mortgage Loan Schedule to reflect the removal
of such Deleted Mortgage Loan from the terms of this Agreement and the
substitution of the Substitute Mortgage Loan. Upon such substitution, each
Substitute Mortgage Loan shall be subject to the terms of this Agreement in all
respects, and the Seller shall be deemed to have made with respect to such
Substitute Mortgage Loan, as of the date of substitution, the covenants,
representations and warranties set forth in Subsections 7.01 and 7.02.
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For any month in which the Seller substitutes one or more Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Seller will determine
the amount (if any) by which the aggregate principal balance of all such
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all such Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall, plus an amount equal to the aggregate of any P&I
Advances made with respect to such Deleted Mortgage Loans, shall be remitted to
the Servicer by the Seller for distribution by the Servicer to the Purchaser in
the month of substitution.
In addition to such cure, repurchase and substitution obligations, the
Seller or the Servicer shall indemnify the Purchaser and hold it harmless
against any out-of-pocket losses, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and other costs and expenses
resulting from any claim, demand, defense or assertion by any third party that
is based on or grounded upon, or resulting from, a breach of the Seller or the
Servicer, as applicable, representations and warranties contained in this
Agreement; provided, however, indemnification shall not be available for any
economic losses of the Purchaser due to reinvestment losses, loss of investment
income or any other special, indirect or consequential losses or damages.
No action may be brought against the Seller or the Servicer, as
applicable, relating to or arising out of the breach of any representations and
warranties made in Subsections 7.01 or 7.02 with respect to any Mortgage Loan
unless and until (i) discovery of such breach by the Purchaser or notice thereof
by the Seller or the Servicer to Purchaser, (ii) failure by the Seller or the
Servicer, as applicable, to cure such breach, repurchase such Mortgage Loan as
specified above, substitute a Substitute Mortgage Loan for such Mortgage Loan as
specified above and/or indemnify the Purchaser and (iii) demand upon the Seller
or the Servicer, as applicable, by the Purchaser for compliance with the terms
of this Agreement.
It is understood and agreed that the obligations of the Seller or the
Servicer, as applicable, set forth in this Subsection 7.03 to cure, repurchase
or substitute for a defective Mortgage Loan and/or to indemnify the Purchaser
constitute the sole remedies of the Purchaser respecting a breach of the
representations and warranties set forth in Subsections 7.01 and 7.02.
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SECTION 8. CLOSING CONDITIONS.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the respective Closing Date. The closing shall be either by
telephone, confirmed by letter or wire as the parties hereto shall agree, or
conducted in person, at such place as the parties hereto shall agree.
The closing for each Mortgage Loan Package shall be subject to the
satisfaction of each of the following conditions:
(a) the Seller shall have delivered to the Purchaser the related
Mortgage Loan Schedule and an electronic data file containing information on a
loan-level basis;
(b) all of the representations and warranties of the Seller and the
Servicer under this Agreement shall be true and correct as of the related
Closing Date (or, with respect to Subsection 7.01, such other date specified
therein) in all material respects and no event shall have occurred hereunder
which, with notice or the passage of time or both, would constitute an Event of
Default hereunder;
(c) the Purchaser shall have received from the Purchaser's bailee or
the Custodian an initial certification with respect to its receipt of the
Mortgage Loan Documents for the related Mortgage Loans;
(d) the Purchaser shall have received in escrow all Closing Documents
as specified in Section 9, in such forms as are agreed upon and acceptable to
the Purchaser, duly executed by all signatories as required pursuant to the
terms hereof; and
(e) all other terms and conditions of this Agreement, the related
Purchase Price and Terms Agreement and the related Acknowledgment and Conveyance
Agreement to be satisfied by the Seller shall have been complied with in all
material respects.
Upon satisfaction of the foregoing conditions, the Purchaser shall pay
to the Seller on such Closing Date the Purchase Price for the related Mortgage
Loan Package, plus accrued interest pursuant to Section 4 of this Agreement.
SECTION 9. CLOSING DOCUMENTS.
Subsection 9.01 Initial Closing Date.
On the initial Closing Date, the Seller and the Servicer shall deliver
to its attorneys in escrow fully executed originals of:
(a) this Agreement, executed by the Seller and the Servicer, including
all exhibits;
(b) an Officer's Certificate, in the form of Exhibit 4 hereto, for the
Seller and the Servicer including all attachments thereto;
(c) an Escrow Account Certification; and
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(d) a Custodial Account Certification.
Subsection 9.02 Subsequent Closing Dates.
The closing documents for the Mortgage Loans to be purchased on each
Closing Date under this Agreement (including the initial Closing Date) shall
consist of fully executed originals of the following documents:
(a) the related Purchase Price and Terms Agreement;
(b) the related Acknowledgment and Conveyance Agreement, including all
annexes thereto;
(c) the related Assignment and Assumption.;
(d) upon request, an Officer's Certificate, in the form of Exhibit 4
hereto, for the Seller and the Servicer including all attachments thereto;
provided, however, that such Officer's Certificate shall not be required to be
delivered by the Seller and the Servicer more than once in any calendar year;
and
(e) upon request, an opinion of in-house counsel for the Seller and the
Servicer, substantially in the form of Exhibit 9 attached hereto; provided,
however, that such opinion shall not be required to be delivered by the Seller
and the Servicer more than once in any calendar year.
SECTION 10. COSTS.
The Seller shall pay any commissions due its salesmen and the legal
fees and expenses of its attorneys. The Purchaser shall pay the cost of
preparing and recording the Assignments of Mortgage (and, if any Assignment of
Mortgage is missing, the reasonable cost of securing a copy of such Assignment
of Mortgage). The Purchaser shall pay the Seller's cost of delivering the
Mortgage Loan Documents for each related Closing Date to a location designated
by the Purchaser (if other than the Custodian). All other costs and expenses
incurred in connection with the sale of the Mortgage Loans by the Seller to the
Purchaser, including without limitation the fees and expenses of the Custodian,
all costs and expenses of the Seller, the Servicer and the Purchaser incurred in
connection with any Transfer or further assignment of the Mortgage Loans and the
Purchaser's attorneys' fees shall be paid by the Purchaser.
SECTION 11. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.
Subsection 11.01 Servicer to Act as Servicer; Subservicing.
The Servicer, as an independent contractor, shall service and
administer the Mortgage Loans in accordance with this Agreement and Customary
Servicing Procedures and the terms of the Mortgage Notes and Mortgages, and
shall have full power and authority, acting alone or through subservicers or
agents, 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. The Servicer shall service the
Mortgage Loans in accordance with the guidelines of the applicable governing
agency and shall comply with all of the rules and regulations as set forth by
each applicable agency. The Servicer may perform its servicing responsibilities
through agents or independent contractors, but shall not thereby be released
from any of its responsibilities hereunder. Notwithstanding anything to the
contrary, the Servicer may delegate any of its duties under this Agreement to
one or more of its affiliates without regard to any of the requirements of this
section; provided, however, that the Servicer shall not be released from any of
its responsibilities hereunder by virtue of such delegation. The Mortgage Loans
may be subserviced by one or more unaffiliated subservicers on behalf of the
Servicer provided each subservicer is a ▇▇▇▇▇▇ ▇▇▇ approved seller/servicer or a
▇▇▇▇▇▇▇ Mac approved seller/servicer in good standing, and no event has
occurred, including but not limited to a change in insurance coverage, that
would make it unable to comply with the eligibility for seller/servicers imposed
by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, or which would require notification to ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac. The Servicer shall pay all fees and expenses of the subservicer
from its own funds (provided that any such expenditures that would constitute
Servicing Advances if made by the Servicer hereunder shall be reimbursable to
the Servicer as Servicing Advances), and the subservicer's fee shall not exceed
the Servicing Fee.
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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 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.
If the Servicer's responsibilities and duties under this Agreement are
terminated and if requested to do so by the Purchaser, the Servicer shall at its
own cost and expense terminate the rights and responsibilities of the
subservicer as soon as is reasonably possible. The Servicer shall pay all fees,
expenses or penalties necessary in order to terminate the rights and
responsibilities of the subservicer from the Servicer's own funds without
reimbursement from the Purchaser.
The Servicer shall be entitled to enter into an agreement with the
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 the subservicer shall be deemed to be
between the subservicer and Servicer alone, and the Purchaser shall have no
obligations, duties or liabilities with respect to the subservicer including no
obligation, duty or liability of the Purchaser to pay the 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 the subservicer has received such payment.
Consistent with the terms of this Agreement and Customary Servicing
Procedures, the Servicer may waive, modify or vary any term of any Mortgage Loan
or consent to the postponement of strict compliance with any such term or in any
manner grant indulgence to any Mortgagor; provided, however, that (unless the
Mortgagor is in default with respect to the Mortgage Loan, or such default is,
in the judgment of the Servicer, imminent, and the Servicer has the consent of
the Purchaser) the Servicer shall not permit any modification with respect to
any Mortgage Loan which would materially and adversely affect the Mortgage Loan,
including without limitation, any modification that would change the Mortgage
Interest Rate, the Lifetime Rate Cap (if applicable), the Initial Rate Cap (if
applicable), the Periodic Rate Cap/Floor (if applicable) or the Gross Margin (if
applicable), defer or forgive the payment of any principal or interest, change
the outstanding principal amount (except for actual payments of principal), make
any future advances or extend the final maturity date, as the case may be, with
respect to such Mortgage Loan. Without limiting the generality of the foregoing,
the Servicer in its own name or acting through subservicers or agents is hereby
authorized and empowered by the Purchaser when the Servicer believes it
appropriate and reasonable in its best judgment, to execute and deliver, on
behalf of itself and the Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and the Mortgaged Properties and
to institute foreclosure proceedings or obtain a deed-in-lieu of foreclosure so
as to convert the ownership of such properties, and to hold or cause to be held
title to such properties, on behalf of the Purchaser pursuant to the provisions
of Subsection 11.13.
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The Servicer shall make all required Servicing Advances and shall
service and administer the Mortgage Loans in accordance with all applicable
laws, rules and regulations and shall provide to the Mortgagors any reports
required to be provided to them thereby. The Purchaser shall furnish to the
Servicer any powers of attorney and other documents reasonably necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties under this Agreement.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed-in-lieu of foreclosure, if
the Servicer has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or waste, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector at the Purchaser's expense. Upon completion of the inspection, the
Servicer shall promptly provide the Purchaser with a written report of the
environmental inspection. After reviewing the inspection, the Purchaser shall
determine how the Servicer shall proceed with respect to the Mortgaged Property.
Subsection 11.02 Liquidation of Mortgage Loans.
If any payment due under any Mortgage Loan is not paid when the same
becomes due and payable, or in the event the Mortgagor fails to perform any
other covenant or obligation under the Mortgage Loan and such failure continues
beyond any applicable grace period, the Servicer shall take such action as it
shall deem to be in the best interest of the Purchaser. If any payment due under
any Mortgage Loan remains delinquent for a period of ninety (90) days or more,
the Servicer shall commence foreclosure proceedings in accordance with Customary
Servicing Procedures and the guidelines set forth by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
In such connection, the Servicer shall from its own funds make all necessary and
proper Servicing Advances. If the portion of any Liquidation Proceeds or REO
Disposition Proceeds allocable as a recovery of interest on any Mortgage Loan is
less than the full amount of accrued and unpaid interest on such Mortgage Loan
as of the date such proceeds are received, then the applicable Servicing Fees
with respect to such Mortgage Loan shall be paid first and any amounts remaining
thereafter shall be distributed to the Purchaser.
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Subsection 11.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on
all Mortgage Loans are paid in full, the Servicer will proceed diligently, in
accordance with this Agreement, to collect all payments due under each of the
Mortgage Loans when the same shall become due and payable. Further, the Servicer
will in accordance with Customary Servicing Procedures ascertain and estimate
taxes, assessments, fire and hazard insurance premiums, premiums for Primary
Mortgage Insurance Policies (if any), and all other charges that, as provided in
any Mortgage, will become due and payable to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.
Subsection 11.04 Establishment of Custodial Account; Deposits in
Custodial Account.
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
(collectively, the "Custodial Account"), titled "Bank of America, National
Association, in trust for ▇▇▇▇▇▇ Brothers Bank, FSB as Purchaser of Mortgage
Loans and various Mortgagors." Such Custodial Account shall be established with
a Qualified Depository. In any case, the Custodial Account shall be insured by
the FDIC in a manner which shall provide maximum available insurance thereunder
and which may be drawn on by the Servicer. The creation of the Custodial Account
shall be evidenced by a certificate delivered by the Servicer (the "Custodial
Account Certification") substantially in the form of Exhibit 10 hereto.
The Servicer shall deposit in the Custodial Account on a daily basis,
and retain therein the following payments and collections received or made by it
subsequent to the related Cut-off Date (other than in respect of principal and
interest on the Mortgage Loans due on or before the related Cut-off Date):
(a) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(b) all payments on account of interest on the Mortgage Loans
adjusted to the related Mortgage Loan Remittance Rate;
(c) all Liquidation Proceeds;
(d) all proceeds received by the Servicer under any title
insurance policy, hazard insurance policy, Primary Mortgage Insurance
Policy (if any) or other insurance policy 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
Customary Servicing Procedures;
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(e) all awards or settlements in respect of condemnation
proceedings or eminent domain affecting any Mortgaged Property which
are not released to the Mortgagor in accordance with Customary
Servicing Procedures;
(f) any amount required to be deposited in the Custodial Account
pursuant to Subsections 11.15, 11.17 and 11.19;
(g) any amount required to be deposited by the Servicer in
connection with any REO Property pursuant to Subsection 11.13;
(h) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Subsection 7.03, and all amounts required to
be deposited by the Servicer in connection with shortfalls in principal
amount of Substitute Mortgage Loans pursuant to Subsection 7.03;
(i) with respect to each Principal Prepayment in full, an amount
(to be paid by the Servicer out of its own funds) which, when added to
all amounts allocable to interest received in connection with the
Principal Prepayment in full, equals one month's interest on the amount
of principal so prepaid for the month of prepayment at the applicable
Mortgage Loan Remittance Rate; provided, however, that the Servicer's
aggregate obligations under this paragraph for any month shall be
limited to the total amount of Servicing Fees actually received with
respect to the Mortgage Loans by the Servicer during such month;
(j) amounts required to be deposited by the Servicer in connection
with the deductible clause of any hazard insurance policy; and
(k) any BPP Mortgage Loan Payments payable by the Servicer
pursuant to Subsection 11.27.
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,
assumption fees, BPP Fees and other ancillary fees need not be deposited by the
Servicer in the Custodial Account.
The Servicer may invest the funds in the Custodial Account in Eligible
Investments designated in the name of the Servicer for the benefit of the
Purchaser, which shall mature not later than the Business Day next preceding the
Remittance Date next following the date of such investment (except that (A) any
investment in the institution with which the Custodial Account is maintained may
mature on such Remittance Date and (B) any other investment may mature on such
Remittance Date if the Servicer shall advance funds on such Remittance Date,
pending receipt thereof to the extent necessary to make distributions to the
Purchaser) and shall not be sold or disposed of prior to maturity.
Notwithstanding anything to the contrary herein and above, all income and gain
realized from any such investment shall be for the benefit of the Servicer and
shall be subject to withdrawal by the Servicer. The amount of any losses
incurred in respect of any such investments shall be deposited in the Custodial
Account by the Servicer out of its own funds immediately as realized.
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Subsection 11.05 Withdrawals From the Custodial Account.
The Servicer shall, from time to time, withdraw funds from the
Custodial Account for the following purposes:
(a) to make payments to the Purchaser in the amounts and in the
manner provided for in Subsection 11.15;
(b) to reimburse itself for P&I Advances, the Servicer's right to
reimburse itself pursuant to this subclause (b) with respect to any
Mortgage Loan being limited to related Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds and
such other amounts as may be collected by the Servicer from the
Mortgagor or otherwise relating to the Mortgage Loan, it being
understood that, in the case of any such reimbursement, the Servicer's
right thereto shall be prior to the rights of the Purchaser with
respect to such Mortgage Loan, except that, where the Seller is
required to repurchase a Mortgage Loan, pursuant to Subsection 6.03 or
7.03, the Servicer's right to such reimbursement shall be subsequent to
the payment to the Purchaser of the Repurchase Price pursuant to
Subsection 6.03 or 7.03, and all other amounts required to be paid to
the Purchaser with respect to such Mortgage Loan;
(c) to reimburse itself for any unpaid Servicing Fees and for
unreimbursed Servicing Advances, the Servicer's right to reimburse
itself pursuant to this subclause (c) with respect to any Mortgage Loan
being limited to related Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, REO Disposition Proceeds and such other amounts as
may be collected by the Servicer from the Mortgagor or otherwise
relating to the Mortgage Loan, it being understood that, in the case of
any such reimbursement, the Servicer's right thereto shall be prior to
the rights of the Purchaser unless the Seller is required to repurchase
a Mortgage Loan pursuant to Subsection 6.03 or 7.03, in which case the
Servicer's right to such reimbursement shall be subsequent to the
payment to the Purchaser of the related Repurchase Price pursuant to
Subsection 6.03 or 7.03 and all other amounts required to be paid to
the Purchaser with respect to such Mortgage Loan;
(d) to reimburse itself for unreimbursed Servicing Advances and
for ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, to the extent that such amounts are
nonrecoverable (as certified by the Servicer to the Purchaser in an
Officer's Certificate) by the Servicer pursuant to subclause (b) or (c)
above, provided that the Mortgage Loan for which such advances were
made is not required to be repurchased by a Seller pursuant to
Subsection 7.03;
(e) to reimburse itself for expenses incurred by and reimbursable
to it pursuant to Subsection 12.01;
(f) to withdraw amounts to make P&I Advances in accordance with
Subsection 11.17;
(g) to pay to itself any interest earned or any investment
earnings on funds deposited in the Custodial Account, net of any losses
on such investments;
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(h) to withdraw any amounts inadvertently deposited in the
Custodial Account; and
(i) to clear and terminate the Custodial Account upon the
termination of this Agreement.
Subsection 11.06 Establishment of Escrow Account; Deposits in Escrow
Account.
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 (collectively, the "Escrow Account"),
titled "Bank of America, National Association, in trust for ▇▇▇▇▇▇ Brothers
Bank, FSB as Purchaser of Mortgage Loans and various Mortgagors." The Escrow
Account shall be established with a Qualified Depository. In any case, the
Escrow Account shall be insured by the FDIC in a manner which shall provide
maximum available insurance thereunder and which may be drawn on by the
Servicer. The creation of the Escrow Account shall be evidenced by a certificate
delivered by the Servicer (the "Escrow Account Certification") substantially in
the form of Exhibit 11 hereto.
The Servicer shall deposit in the Escrow Account on a daily basis, and
retain therein: (a) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement, (b) all amounts representing proceeds of any
hazard insurance policy which are to be applied to the restoration or repair of
any Mortgaged Property and (c) all amounts representing proceeds of any Primary
Mortgage Insurance Policy (if any). The Servicer shall make withdrawals
therefrom only in accordance with Subsection 11.07 hereof. As part of its
servicing duties, the Servicer shall pay to the Mortgagors interest on funds in
the Escrow Account, to the extent required by law.
Subsection 11.07 Withdrawals From Escrow Account.
Withdrawals from the Escrow Account shall be made by the Servicer only
(a) to effect timely payments of ground rents, taxes, assessments, premiums for
Primary Mortgage Insurance Policies (if any), fire and hazard insurance premiums
or other items constituting Escrow Payments for the related Mortgage, (b) to
reimburse the Servicer for any Servicing Advance made by Servicer pursuant to
Subsection 11.08 hereof with respect to a related Mortgage Loan, (c) to refund
to any Mortgagor any funds found to be in excess of the amounts required under
the terms of the related Mortgage Loan, (d) for transfer to the Custodial
Account upon default of a Mortgagor or in accordance with the terms of the
related Mortgage Loan and if permitted by applicable law, (e) for application to
restore or repair of the Mortgaged Property, (f) to pay to the Mortgagor, to the
extent required by law, any interest paid on the funds deposited in the Escrow
Account, (g) to pay to itself any interest earned on funds deposited in the
Escrow Account (and not required to be paid to the Mortgagor), (h) to the extent
permitted under the terms of the related Mortgage Note and applicable law, to
pay late fees with respect to any Monthly Payment which is received after the
applicable grace period, (i) to withdraw suspense payments that are deposited
into the Escrow Account, (j) to withdraw any amounts inadvertently deposited in
the Escrow Account, (k) to pay the Mortgagors or other parties Insurance
Proceeds deposited in accordance with Section 11.06 or (l) to clear and
terminate the Escrow Account upon the termination of this Agreement.
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Subsection 11.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder.
With respect to each Mortgage Loan, the Servicer shall maintain
accurate records reflecting the status of ground rents, taxes, assessments and
other charges which are or may become a lien upon the Mortgaged Property and the
status of premiums for Primary Mortgage Insurance Policies (if any) 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. If a Mortgage does not provide for
Escrow Payments, the Servicer shall determine that any such payments are made by
the Mortgagor. The Servicer assumes full responsibility for the timely payment
of all such bills and shall effect timely payments of all such bills
irrespective of each Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make Servicing Advances to effect
such payments, subject to its ability to recover such Servicing Advances
pursuant to Subsections 11.05(c), 11.05(d) and 11.07(b). No costs incurred by
the Servicer or subservicers in effecting the payment of taxes and assessments
on the Mortgaged Properties shall, for the purpose of calculating remittances to
the Purchaser, be added to the amount owing under the related Mortgage Loans,
notwithstanding that the terms of such Mortgage Loans so permit.
Subsection 11.09 Transfer of Accounts.
The Servicer may transfer the Custodial Account or the Escrow Account
to a different Qualified Depository. Such transfer shall be made only upon
providing notice to the Purchaser.
Subsection 11.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage customary in the area where the
Mortgaged Property is located by an insurer acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac in an amount which is at least equal to the lesser of (a) the full insurable
value of the Mortgaged Property or (b) the greater of (i) the outstanding
principal balance owing on the Mortgage Loan and (ii) an amount such that the
proceeds of such insurance shall be sufficient to avoid the application to the
Mortgagor or loss payee of any coinsurance clause under the policy. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as a special flood hazard area (and such
flood insurance has been made available) the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of the National
Flood Insurance Program, in an amount representing coverage not less than the
lesser of (A) the minimum amount required under the terms of the coverage to
compensate for any damage or loss to the Mortgaged Property on a
replacement-cost basis (or the outstanding principal balance of the Mortgage
Loan if replacement-cost basis is not available) or (B) the maximum amount of
insurance available under the National Flood Insurance Program. The Servicer
shall also maintain on 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 National Flood Insurance Program,
flood insurance in an amount required 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 property subject
to the related Mortgage or property acquired in liquidation of the Mortgage
Loan, or to be released to the Mortgagor in accordance with Customary Servicing
Procedures) shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Subsection 11.05. It is understood and agreed that no earthquake or
other additional insurance need be required by the Servicer of any Mortgagor or
maintained on REO Property other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All policies required hereunder shall be endorsed with
standard mortgagee clauses with loss payable to Servicer, and shall provide for
at least thirty (30) days prior written notice of any cancellation, reduction in
amount or material change in coverage to the Servicer. The Servicer shall not
interfere with the Mortgagor's freedom of choice in selecting either its
insurance carrier or agent; provided, however, that the Servicer shall not
accept any such insurance policies from insurance companies unless such
companies are acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, and are licensed to do
business in the state wherein the property subject to the policy is located.
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The hazard insurance policies for each Mortgage Loan secured by a unit
in a condominium development or planned unit development shall be maintained
with respect to such Mortgage Loan and the related development in a manner which
is consistent with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac requirements.
Subsection 11.11 Maintenance of Primary Mortgage Insurance Policy;
Claims.
With respect to each Mortgage Loan with a LTV in excess of 80%, the
Servicer shall, without any cost to the Purchaser, maintain or cause the
Mortgagor to maintain in full force and effect a Primary Mortgage Insurance
Policy insuring the portion over 78% (or such other percentage in conformance
with then current ▇▇▇▇▇▇ Mae requirements) until terminated pursuant to the
Homeowners Protection Act of 1998, 12 USC ss. 4901, et seq. or any other
applicable federal, state or local law or regulation. The Servicer shall pay or
shall cause the Mortgagor to pay the premium thereon on a timely basis, at least
until the LTV of such Mortgage Loan is reduced to an amount acceptable to ▇▇▇▇▇▇
▇▇▇ requirements. In the event that such Primary Mortgage Insurance Policy shall
be terminated other than as required by law, the Servicer shall obtain from
another insurer a comparable replacement policy, with a total coverage equal to
the remaining coverage of such terminated Primary Mortgage Insurance Policy. If
the insurer shall cease to be a qualified insurer, the Servicer shall obtain
from another qualified insurer a replacement Primary Mortgage Insurance Policy.
The Servicer shall not take any action which would result in noncoverage 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 Subsection 11.18, 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 Primary
Mortgage Insurance Policy and shall take all actions which may be required by
such insurer as a condition to the continuation of coverage under such Primary
Mortgage Insurance Policy. If such Primary Mortgage Insurance Policy is
terminated as a result of such assumption or substitution of liability, the
Servicer shall obtain a replacement Primary Mortgage Insurance Policy as
provided above.
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In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any Primary Mortgage Insurance Policy (if any) 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 Subsection 11.06, any amounts collected by the Servicer under any
Primary Mortgage Insurance Policy (if any) shall be deposited in the Escrow
Account, subject to withdrawal pursuant to Subsection 11.07.
Subsection 11.12 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 on all
officers, employees or other persons acting in any capacity requiring such
persons to handle funds, money, documents or papers relating to the Mortgage
Loans. These policies must insure the Servicer against losses resulting from
fraud, theft, errors, omissions, negligence, dishonest or fraudulent acts
committed by the Servicer's personnel, any employees of outside firms that
provide data processing services for the Servicer, and temporary contract
employees or student interns. The Fidelity Bond shall also protect and insure
the Servicer against losses in connection with the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Subsection 11.12 requiring such Fidelity
Bond and errors and omissions insurance shall diminish or relieve the Servicer
from its duties and obligations as set forth in this Agreement. The minimum
coverage under any such Fidelity Bond and insurance policy shall be at least
equal to the corresponding amounts required by ▇▇▇▇▇▇ Mae in the ▇▇▇▇▇▇ ▇▇▇
Guides or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ Mac Guide, as amended or restated from
time to time, as applicable, or in an amount as may be permitted to the Servicer
by express waiver of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, as applicable. Upon request of
the Purchaser, the Servicer shall cause to be delivered to the Purchaser a
certified true copy of such Fidelity Bond or a certificate evidencing the same
with a statement that the Servicer shall endeavor to provide written notice to
the Purchaser thirty (30) days prior to modification or any material change.
Subsection 11.13 Title, Management and Disposition of REO Property.
If title to the Mortgaged Property is acquired in foreclosure or by
deed in lieu of foreclosure, the deed or certificate of sale shall be taken in
the name of the Servicer or its nominee, in either case as nominee, for the
benefit of the Purchaser of record on the date of acquisition of title (the
"Owner"). If the Servicer is not authorized or permitted to hold title to real
property in the state where the REO Property is located, or would be adversely
affected under the "doing business" or tax laws of such state by so holding
title, the deed or certificate of sale shall be taken in the name of such Person
or Persons as shall be consistent with an opinion of counsel obtained by the
Servicer, at the expense of the Purchaser, from an attorney duly licensed to
practice law in the state where the REO Property is located. The Person or
Persons holding such title other than the Owner shall acknowledge in writing
that such title is being held as nominee for the Owner.
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The Servicer shall cause to be deposited on a daily basis in the
Custodial Account all revenues received with respect to the conservation and
disposition of the related REO Property and shall withdraw therefrom funds
necessary for the proper operation, management and maintenance of the REO
Property, including the cost of maintaining any hazard insurance pursuant to
Subsection 11.10 and the fees of any managing agent acting on behalf of the
Servicer. Any disbursement in excess of $10,000 shall be made only with the
written approval of the Purchaser. The Servicer shall make distributions as
required on each Remittance Date to the Purchaser of the net cash flow from the
REO Property (which shall equal the revenues from such REO Property net of the
expenses described above and of any reserves reasonably required from time to
time to be maintained to satisfy anticipated liabilities for such expenses).
The disposition of REO Property shall be carried out by the Servicer in
accordance with the provisions of this Agreement and shall be made at such
price, and upon such terms and conditions, as the Servicer deems to be in the
best interests of the Owner. The Servicer shall be entitled to withdraw from the
Custodial Account a fee of $1,500 for such REO Property to reimburse itself for
services associated with managing the REO Property through its disposition. Upon
the request of the Owner, and at the Owner's expense, the Servicer shall cause
an appraisal of the REO Property to be performed for the Owner. The proceeds of
sale of the REO Property shall be promptly deposited in the Custodial Account
and, as soon as practical thereafter, the expenses of such sale shall be paid,
the Servicer shall reimburse itself for any related unreimbursed Servicing
Advances, unpaid Servicing Fees, unreimbursed advances made pursuant to
Subsection 11.17 and any appraisal performed pursuant to this paragraph and the
net cash proceeds of such sale remaining in the Custodial Account shall be
distributed to the Purchaser.
The Servicer shall either itself or through an agent selected by the
Servicer, manage, conserve, protect and operate the REO Property in the same
manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Servicer shall attempt to
sell the same within a three-year period (and may temporarily rent the same) on
such terms and conditions as the Servicer deems to be in the best interest of
the Owner.
Upon request, with respect to any REO Property, the Servicer shall
furnish to the Owner a statement covering the Servicer's efforts in connection
with the sale of that REO Property and any rental of the REO Property incidental
to the sale thereof for the previous month (together with an operating
statement).
Subsection 11.14 Servicing Compensation.
As compensation for its services hereunder, the Servicer shall be
entitled to retain the Servicing Fee from interest payments actually collected
on the Mortgage Loans. Additional servicing compensation in the form of
assumption fees, late payment charges, prepayment penalties, BPP Fees, fees
related to the disposition of REO Property and other ancillary income 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 herein.
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Subsection 11.15 Distributions.
On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the account designated in writing by the
Purchaser of record on the preceding Record Date (a) all Monthly Payments due in
the Due Period prior to such Remittance Date and received by the Servicer prior
to the related Determination Date, plus (b) all amounts, if any, which the
Servicer is obligated to distribute pursuant to Subsection 11.17, plus (c) any
amounts attributable to Principal Prepayments received in the calendar month
preceding the month in which the Remittance Date occurs, together with any
additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayments in accordance with Subsection
11.04(i), minus (d) all amounts that may be withdrawn from the Custodial Account
pursuant to Subsections 11.05(b) through (e).
With respect to any remittance received by the Purchaser after the
Business Day on which such payment was due, the Servicer shall pay to the
Purchaser interest on any such late payment at an annual rate equal to the rate
of interest as is publicly announced from time to time at its principal office
by Bank of America, National Association, or its successor, as its prime lending
rate, adjusted as of the date of each change, plus two percent (2%), but in no
event greater than the maximum amount permitted by applicable law. Such interest
shall be paid by the Servicer to the Purchaser on the date such late payment is
made and shall cover the period commencing with the Business Day on which such
payment was due and ending with the Business Day immediately preceding the
Business Day on which such payment is made, both inclusive. 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.
Subsection 11.16 Statements to the Purchaser.
Not later than the tenth day of each calendar month, the Servicer shall
forward to the Purchaser a statement, substantially in the form of Exhibit 6 and
certified by a Servicing Officer, setting forth on a loan-by-loan basis: (a) the
amount of the distribution made on such Remittance Date which is allocable to
principal and allocable to interest; (b) the amount of servicing compensation
received by the Servicer during the prior calendar month; and (c) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the
preceding month. Such statement shall also include information regarding
delinquencies on Mortgage Loans, indicating the number and aggregate principal
amount of Mortgage Loans which are either one (1), two (2) or three (3) or more
months delinquent and the book value of any REO Property. The Servicer shall
submit to the Purchaser monthly a liquidation report with respect to each
Mortgaged Property sold in a foreclosure sale as of the related Record Date and
not previously reported. Such liquidation report shall be incorporated into the
remittance report delivered to Purchaser in the form of Exhibit 6 hereto. Upon
the written request of the Purchaser, the Servicer shall also provide such
information as set forth above to the Purchaser in electronic form in the
Servicer's standard format.
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The Servicer shall prepare and file any and all tax returns,
information statements or other filings required to be delivered to any
governmental taxing authority, the Mortgagor or to the Purchaser pursuant to any
applicable law with respect to the Mortgage Loans and the transactions
contemplated hereby. In addition, the Servicer shall provide the Purchaser with
such information concerning the Mortgage Loans as is necessary for such
Purchaser to prepare federal income tax returns as the Purchaser may reasonably
request from time to time.
Subsection 11.17 Advances by the Servicer.
On the Business Day immediately preceding each related Remittance Date,
the Servicer shall either (a) deposit in the Custodial Account from its own
funds an amount equal to the aggregate amount of all Monthly Payments (with
interest adjusted to the Mortgage Loan Remittance Rate) which were due on the
Mortgage Loans during the applicable Due Period and which were delinquent at the
close of business on the immediately preceding Determination Date (each such
advance, a "P&I Advance"), (b) cause to be made an appropriate entry in the
records of the Custodial Account that amounts held for future distribution have
been, as permitted by this Subsection 11.17, used by the Servicer in discharge
of any such P&I Advance or (c) make P&I Advances in the form of any combination
of (a) or (b) aggregating the total amount of advances to be made. Any amounts
held for future distribution and so used shall be replaced by the Servicer by
deposit in the Custodial Account on or before any future Remittance Date if
funds in the Custodial Account on such Remittance Date shall be less than
payments to the Purchaser required to be made on such Remittance Date. The
Servicer's obligation to make P&I Advances as to any Mortgage Loan will continue
through the last Monthly Payment due prior to the payment in full of a Mortgage
Loan, or through the last related Remittance Date prior to the Remittance Date
for the distribution of all other payments or recoveries (including proceeds
under any title, hazard or other insurance policy, or condemnation awards) with
respect to a Mortgage Loan; provided, however, that such obligation shall cease
if the Servicer, in its good faith judgment, determines that such P&I Advances
would not be recoverable pursuant to Subsection 11.05(d). The determination by
the Servicer that a P&I Advance, if made, would be nonrecoverable, shall be
evidenced by an Officer's Certificate of the Servicer, delivered to the
Purchaser, which details the reasons for such determination. The Servicer shall
not have any obligation to advance amounts in respect of shortfalls relating to
the Servicemembers Civil Relief Act and similar state and local laws.
Subsection 11.18 Assumption Agreements.
The Servicer will use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note; provided that, subject to
the Purchaser's prior approval, the Servicer shall permit such assumption if so
required in accordance with the terms of the Mortgage or the Mortgage Note. When
the Mortgaged Property has been conveyed by the Mortgagor, the Servicer will, to
the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto; provided, however, the Servicer will not exercise such
rights if prohibited by law from doing so or if the exercise of such rights
would impair or threaten to impair any recovery under the related Primary
Mortgage Insurance Policy. In connection with any such assumption, the
outstanding principal amount, the Monthly Payment, the Mortgage Interest Rate,
the Lifetime Rate Cap (if applicable), the Gross Margin (if applicable), the
Initial Rate Cap (if applicable) or the Periodic Rate Cap/Floor (if applicable)
of the related Mortgage Note shall not be changed, and the term of the Mortgage
Loan will not be increased or decreased. If an assumption is allowed pursuant to
this Subsection 11.18, the Servicer with the prior consent of the issuer of the
Primary Mortgage Insurance Policy, if any, is authorized to enter into a
substitution of liability agreement with the purchaser of the Mortgaged Property
pursuant to which the original Mortgagor is released from liability and the
purchaser of the Mortgaged Property is substituted as Mortgagor and becomes
liable under the Mortgage Note.
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Subsection 11.19 Satisfaction of Mortgages and Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will obtain the portion of the
Mortgage File that is in the possession of the Purchaser or its designee,
prepare and process any required satisfaction or release of the Mortgage and
notify the Purchaser in accordance with the provisions of this Agreement. The
Purchaser or its designee agrees to deliver to the Servicer the original
Mortgage Note for any Mortgage Loan not later than five (5) Business Days
following its receipt of a notice from the Servicer that such a payment in full
has been received or that a notification has been received that such a payment
in full shall be made. Such Mortgage Note shall be held by the Servicer, in
trust, for the purpose of canceling such Mortgage Note and delivering the
canceled Mortgage Note to the Mortgagor in a timely manner as and to the extent
provided under applicable state law.
If the Servicer grants a satisfaction or release of a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage or
should the Servicer otherwise prejudice any right the Purchaser may have under
the mortgage instruments, the Servicer, upon written demand of the Purchaser,
shall remit to the Purchaser the Stated Principal Balance of the related
Mortgage Loan by deposit thereof in the Custodial Account. The Fidelity Bond
shall insure the Servicer against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth herein.
Subsection 11.20 Annual Statement as to Compliance.
Within ninety (90) days after the Servicer's fiscal year end, beginning
with the fiscal year end 2005, the Servicer will deliver to the Purchaser an
Officer's Certificate stating that (a) a review of the activities of the
Servicer during the preceding calendar year and if performance under this
Agreement has been made under such officer's supervision, and (b) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement throughout such year, or, if there has been
a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof and the action
being taken by the Servicer to cure such default.
Subsection 11.21 Annual Independent Public Accountants' Servicing
Report.
Within ninety (90) days after the Servicer's fiscal year end, beginning
with the fiscal year end 2005, 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 Purchaser to the
effect that such firm has, with respect to the Servicer's overall servicing
operations, examined such operations in accordance with the requirements of the
Uniform Single Attestation Program for Mortgage Bankers, stating such firm's
conclusions relating thereto.
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Subsection 11.22 Servicer Shall Provide Access and Information as
Reasonably Required.
The Servicer shall provide to the Purchaser, and for any Purchaser
insured by FDIC or NAIC, the supervisory agents and examiners of FDIC and OTS or
NAIC, access to any documentation regarding the Mortgage Loans which may be
required by applicable regulations. Such access shall be afforded without
charge, but only upon reasonable request, during normal business hours and at
the offices of the Servicer.
In addition, the Servicer shall furnish upon request by the Purchaser,
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 and appropriate with respect to the purposes of this Agreement and
applicable regulations. All such reports or information shall be provided by and
in accordance with all reasonable instructions and directions the Purchaser may
require. The Servicer agrees to execute and deliver all such instruments and
take all such action as the Purchaser, from time to time, may reasonably request
in order to effectuate the purposes and to carry out the terms of this
Agreement.
Subsection 11.23 Restoration of Mortgaged Property.
The Servicer need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Customary Servicing Procedures. At a minimum, the Servicer
shall comply with the following conditions in connection with any such release
of Insurance Proceeds or Condemnation Proceeds:
(a) the Servicer shall receive satisfactory independent
verification of completion of repairs and issuance of any required
approvals with respect thereto;
(b) the Servicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens;
(c) the Servicer shall verify that the Mortgage Loan is not in
default; and
(d) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the Servicer is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Purchaser.
Subsection 11.24 Master Servicer.
The Purchaser has designated Aurora Loan Services, Inc. ("Aurora") as
its master servicer for the Mortgage Loans being sold by the Seller and
purchased by the Purchaser from time to time pursuant to this Agreement. The
Purchaser has empowered and given the authority to Aurora, in its capacity as
the Purchaser's master servicer, to conduct and administer certain servicing and
pool administration activities of the Servicer on the Purchaser's behalf. The
parties hereto agree that this interaction between Aurora and the Servicer will
occur when Aurora deals with the Servicer in its capacity of servicer of the
Mortgage Loans pursuant to the terms hereof. The parties hereto expect that
subsequent to the respective closings of the purchase and sale contemplated
hereunder, representatives of Aurora will contact the Servicer (a) to discuss
the reporting and remittance timing and requirements relative to the
servicing/master servicing function and (b) to provide the Servicer with any
forms which the Servicer will be required to produce in connection with the
monthly reporting process.
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Subsection 11.25 Fair Credit Reporting Act.
The Servicer, in its capacity as servicer for each Mortgage Loan,
agrees to fully furnish, in accordance with the Fair Credit Reporting Act and
its implementing regulations, accurate and complete information (e.g., favorable
and unfavorable) on its borrower credit files to Equifax, Experian and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis.
Subsection 11.26 Compliance with Safeguarding Customer Information
Requirements.
The Servicer has implemented and shall maintain security measures
designed to meet the objectives of the Interagency Guidelines Establishing
Standards for Safeguarding Customer Information published in final form on
February 1, 2001, 66 Fed. Reg. 8616, and the rules promulgated thereunder, as
amended from time to time. The Servicer shall provide the Purchaser with
information regarding such security measures upon the reasonable request of the
Purchaser, which information shall include, but not be limited to, any audit
reports, summaries of test results or equivalent measures taken by the Servicer
and relating to the applicable Mortgage Loans with respect to its security
measures, as agreed upon by the parties.
Subsection 11.27 BPP Mortgage Loans.
With respect to any BPP Mortgage Loan, the Servicer hereby agrees to
deposit in the Custodial Account and remit to the Purchaser any BPP Mortgage
Loan Payment due pursuant to a BPP Addendum. Any Monthly Covered Amount payable
by the Servicer pursuant to this Subsection 11.27 shall be remitted to the
Purchaser on or prior to the Remittance Date relating to the Determination Date
immediately following the Due Date as to which such Monthly Covered Amount
relates. Any Total Covered Amount payable by the Servicer pursuant to this
Subsection 11.27 shall be remitted to the Purchaser on or prior to the
Remittance Date relating to the Determination Date in the month following the
month in which the cancellation to which such Total Covered Amount relates
occurs. For the avoidance of any doubt, no duty of the Servicer to remit or
advance funds hereunder (including, without limitation, Servicing Advances)
shall include remittances or advances of or with respect to BPP Fees.
Notwithstanding any provision in this Agreement to the contrary, in the event
servicing is transferred from the Servicer, the BPP Addendum shall be of no
further force and effect and the Servicer shall not have obligations to make BPP
Mortgage Loan Payments or otherwise with respect to the BPP Addendum; provided,
however, that the Servicer would be required to make any payments required under
the BPP Addendum with respect to protected events that occur on or prior to the
effective date of termination as set forth in the BPP Addendum.
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SECTION 12. THE SERVICER.
Subsection 12.01 Indemnification; Third Party Claims.
The Servicer agrees to indemnify and hold harmless the Purchaser
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and expenses that the
Purchaser may sustain in any way related to the failure of the Servicer to
service the Mortgage Loans in compliance with the terms of this Agreement. The
Servicer shall immediately notify the Purchaser if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans, and the Servicer
shall assume (with the consent of the Purchaser, which consent shall not be
unreasonably withheld or delayed) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees. The Servicer shall
provide the Purchaser with a written report of all expenses and advances
incurred by the Servicer, if any, pursuant to this Subsection 12.01 and the
Purchaser shall promptly reimburse the Servicer for all amounts advanced by it
pursuant to the preceding sentence except when the claim in any way relates to
the failure of the Servicer to service the Mortgage Loans in accordance with the
terms of this Agreement.
Subsection 12.02 Merger or Consolidation of the Servicer.
The Servicer will keep in full effect its existence, rights and
franchises as a national banking association, and will obtain and preserve its
qualification to do business 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 entity resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, or any Person succeeding to substantially all of 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.
Subsection 12.03 Limitation on Liability of the Servicer and Others.
The duties and obligations of the Servicer shall be determined solely
by the express provisions of this Agreement, the Servicer shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Agreement and no implied covenants or obligations shall be
read into this Agreement against the Servicer. Neither the Servicer nor any of
the directors, officers, employees or agents of the Servicer shall be under any
liability to the Purchaser for any action taken or for refraining from the
taking of any action in accordance with Customary Servicing Procedures and
otherwise in good faith pursuant to this Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Servicer against
any liability resulting from any breach of any representation or warranty made
herein, or from any liability specifically imposed on the Servicer herein; and,
provided further, that this provision shall not protect the Servicer against any
liability that would otherwise be imposed by reason of the willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of the obligations or duties hereunder. The Servicer and any
director, officer, employee or agent of the Servicer may rely on any document of
any kind which it in good faith reasonably believes to be genuine and to have
been adopted or signed by the proper authorities respecting any matters arising
hereunder. Subject to the terms of Subsection 12.01, the Servicer shall have no
obligation to appear with respect to, prosecute or defend any legal action which
is not incidental to the Servicer's duty to service the Mortgage Loans in
accordance with this Agreement.
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Subsection 12.04 Seller and Servicer Not to Resign.
Neither the Seller nor the Servicer shall assign this Agreement or
resign from the obligations and duties hereby imposed on it except by mutual
consent of the Servicer or the Seller, as the case may be, and the Purchaser or
upon the determination that the Servicer's duties hereunder are no longer
permissible under applicable law and such incapacity cannot be cured by the
Servicer. Any such determination permitting the unilateral resignation of the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Purchaser, which Opinion of Counsel shall be in form and substance
acceptable to the Purchaser. No such resignation or assignment shall become
effective until a successor has assumed the Servicer's responsibilities and
obligations hereunder in accordance with Subsection 14.02.
SECTION 13. DEFAULT.
Subsection 13.01 Events of Default.
In case one or more of the following Events of Default by the Servicer
shall occur and be continuing:
(a) any failure by the Servicer to remit to the Purchaser any
payment required to be made under the terms of this Agreement which
continues unremedied for a period of two (2) Business Days after the
date upon which written notice of such failure, requiring the same to
be remedied, shall have been given to the Servicer by the Purchaser;
(b) failure by the Servicer to duly observe or perform, in any
material respect, any other covenants, obligations or agreements of the
Servicer as set forth in this Agreement which failure continues
unremedied for a period of thirty (30) days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Purchaser;
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or
for the winding-up or liquidation of its affairs, shall have been
entered against the Servicer and such decree or order shall have
remained in force, undischarged or unstayed for a period of sixty (60)
days;
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(d) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment
of debt, marshalling of assets and liabilities or similar proceedings
of or relating to the Servicer or relating to all or substantially all
of the Servicer's property;
(e) the Servicer shall admit in writing its inability to pay its
debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment of its
obligations;
(f) the Servicer shall cease to be qualified to do business under
the laws of any state in which a Mortgaged Property is located, but
only to the extent such qualification is necessary to ensure the
enforceability of each Mortgage Loan and to perform the Servicer's
obligations under this Agreement; or
(g) the Servicer shall fail to meet the servicer eligibility
qualifications of ▇▇▇▇▇▇ ▇▇▇ or the Servicer shall fail to meet the
servicer eligibility qualifications of ▇▇▇▇▇▇▇ Mac;
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Purchaser, by notice in writing to the Servicer, may, in
addition to whatever rights the Purchaser may have at law or equity to damages,
including injunctive relief and specific performance, commence termination of
all the rights and obligations of the Servicer under this Agreement and in and
to the Mortgage Loans and the proceeds thereof. Upon receipt by the Servicer of
such written notice from the Purchaser stating that it intends to terminate the
Servicer as a result of such Event of Default, 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
Subsection 14.02. Upon written request from the Purchaser, the Servicer shall
prepare, execute and deliver to a successor any and all documents and other
instruments, place in such successor's possession all Mortgage Files and do or
cause to be done all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, including, but not limited to, the
transfer and endorsement or assignment of the Mortgage Loans and related
documents to the successor at the Servicer's sole expense. The Servicer agrees
to cooperate with the Purchaser 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
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.
Subsection 13.02 Waiver of Default.
The Purchaser may waive any default by the Servicer in the performance
of its obligations hereunder and its consequences. Upon any waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto except to the extent expressly so waived.
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SECTION 14. TERMINATION.
Subsection 14.01 Termination.
The respective obligations and responsibilities of the Servicer, as
servicer, shall terminate upon (a) the distribution to the Purchaser of the
final payment or liquidation with respect to the last Mortgage Loan (or advances
of same by the Servicer), (b) the mutual consent of the Servicer and the
Purchaser in writing or (c) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure with respect to the last Mortgage
Loan and the remittance of all funds due hereunder, unless terminated with
respect to all or a portion of the Mortgage Loans on an earlier date pursuant to
Section 13. Upon written request from the Purchaser in connection with any such
termination, the Servicer shall prepare, execute and deliver, any and all
documents and other instruments, place in the Purchaser's possession all
Mortgage Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at the Purchaser's sole expense. The Servicer
agrees to cooperate with the Purchaser and such successor in effecting the
termination of the Servicer's responsibilities and rights hereunder as servicer,
including, without limitation, the transfer to such successor for administration
by it of all cash amounts which shall at the time be credited by the Servicer to
the Custodial Account or Escrow Account or thereafter received with respect to
the Mortgage Loans.
Subsection 14.02 Termination of the Servicer Without Cause.
Notwithstanding anything herein to the contrary, the Purchaser may
terminate the obligations and responsibilities of the Servicer in its capacity
as Servicer with respect to one or more Mortgage Loan Packages, without cause,
upon payment to the Servicer of a termination fee equal to two percent (2.00%)
of the aggregate outstanding principal balance of the Mortgage Loans included in
such terminated Mortgage Loan Packages as of the date of such termination. In
addition, the Purchaser shall reimburse the Servicer for any and all
out-of-pocket costs incurred by the Servicer in connection with such
termination; provided, however, that the Purchaser's reimbursement obligation
for such out-of-pocket costs shall not exceed Fifty Dollars ($50.00) per
Mortgage Loan. The termination fee provided for in this Subsection 14.02 shall
be paid by the Purchaser within ten (10) Business Days of any such termination
without cause by the Purchaser, and the Purchaser shall reimburse the Servicer
for its out-of-pocket costs resulting from such termination within ten (10)
Business Days following the Purchaser's receipt of an invoice for such costs.
Subsection 14.03 Successors to the Servicer.
Prior to the termination of the Servicer's responsibilities and duties
under this Agreement pursuant to Subsections 12.04, 13.01 or 14.01, the
Purchaser shall, (a) succeed to and assume all of the Servicer's
responsibilities, rights, duties and obligations under this Agreement or (b)
appoint a successor which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this Agreement
upon such termination. In connection with such appointment and assumption, the
Purchaser may make such arrangements for the compensation of such successor out
of payments on Mortgage Loans as it and such successor shall agree. If the
Servicer's duties, responsibilities and liabilities under this Agreement shall
be terminated pursuant to the aforementioned Subsections, 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 Subsections shall not
become effective until a successor shall be appointed pursuant to this
Subsection and shall in no event relieve the Seller of the representations and
warranties made pursuant to Subsections 7.01 and 7.02 and the remedies available
to the Purchaser under Subsection 7.03, it being understood and agreed that the
provisions of such Subsections 7.01 and 7.02 shall be applicable to the Seller
notwithstanding any such resignation or termination of the Servicer, or the
termination of this Agreement.
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Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Servicer and to the Purchaser 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
Subsections 12.04, 13.01 or 14.01 shall not affect any claims that the Purchaser
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 Escrow Account and all Mortgage Files and related
documents and statements held by it hereunder and the Servicer shall account for
all funds and shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and definitively vest in the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer.
Upon a successor's acceptance of appointment as such, the Servicer
shall notify by mail the Purchaser of such appointment.
SECTION 15. NOTICES.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
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(a) if to the Purchaser:
▇▇▇▇▇▇ Brothers Bank, FSB
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Head
(b) if to the Seller:
Bank of America, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secondary Marketing Manager
(c) if to the Servicer:
Bank of America, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Servicing Manager
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 16. SEVERABILITY CLAUSE.
Any part, provision, representation or warranty of this Agreement which
is prohibited or which is held to be void or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be 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.
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SECTION 17. 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
the Purchaser.
SECTION 18. COUNTERPARTS.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 19. GOVERNING LAW.
EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW, THE AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICTS OF LAWS PROVISIONS OF NEW YORK OR ANY OTHER JURISDICTION.
SECTION 20. INTENTION OF THE PARTIES.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling, the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. The Purchaser shall have the
right to review the Mortgage Loans and the related Mortgage Files to determine
the characteristics of the Mortgage Loans which shall affect the federal income
tax consequences of owning the Mortgage Loans and the Seller and the Servicer
shall cooperate with all reasonable requests made by the Purchaser in the course
of such review.
It is not the intention of the parties that such conveyances be deemed
a pledge thereof. However, in the event that, notwithstanding the intent of the
parties, such assets are held to be the property of the Seller or if for any
other reason this Agreement is held or deemed to create a security interest in
either such assets, then (a) this Agreement shall be deemed to be a security
agreement within the meaning of the Uniform Commercial Code of the State of New
York and (b) the conveyances provided for in this Agreement shall be deemed to
be an assignment and a grant by the Seller to the Purchaser of a security
interest in all of the assets transferred, whether now owned or hereafter
acquired.
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SECTION 21. WAIVERS.
No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing and signed by the party against whom
such waiver or modification is sought to be enforced.
SECTION 22. EXHIBITS.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
SECTION 23. GENERAL INTERPRETIVE PRINCIPLES.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include
the other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs" and other subdivisions without reference to a document are
to designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;
(d) reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same
Section in which the reference appears, and this rule shall also apply
to Paragraphs and other subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
SECTION 24. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by any party at the closing and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
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 hereto
in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
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SECTION 25. AMENDMENT.
This Agreement may be amended from time to time by the Purchaser, the
Seller and the Servicer by written agreement signed by the parties hereto.
SECTION 26. CONFIDENTIALITY.
Each of the Purchaser, the Seller and the Servicer shall employ proper
procedures and standards designed to maintain the confidential nature of the
terms of this Agreement, except to the extent (a) the disclosure of which is
reasonably believed by such party to be required in connection with regulatory
requirements or other legal requirements relating to its affairs; (b) disclosed
to any one or more of such party's employees, officers, directors, agents,
attorneys or accountants who would have access to the contents of this Agreement
and such data and information in the normal course of the performance of such
person's duties for such party, to the extent such party has procedures in
effect to inform such person of the confidential nature thereof; (c) that is
disclosed in a prospectus, prospectus supplement or private placement memorandum
relating to a Securitization of the Mortgage Loans by the Purchaser (or an
affiliate assignee thereof) or to any person in connection with the resale or
proposed resale of all or a portion of the Mortgage Loans by such party in
accordance with the terms of this Agreement; and (d) that is reasonably believed
by such party to be necessary for the enforcement of such party's rights under
this Agreement.
The Seller and the Servicer each shall comply with all provisions of
the Privacy Laws relating to the Mortgage Loans, the related borrowers and any
"nonpublic personal information" (as defined in the Privacy Laws) received by
the Seller or the Servicer incidental to the performance of its obligations
under this Agreement, including maintaining adequate information security
procedures to protect such nonpublic personal information and providing all
privacy notices required by the Privacy Laws. As used herein, "Privacy Laws"
shall mean Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999, as amended, and all
applicable regulations promulgated thereunder.
SECTION 27. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement and understanding
relating to the subject matter hereof between the parties hereto and any prior
oral or written agreements between them shall be deemed to have merged herewith.
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SECTION 28. FURTHER AGREEMENTS; TRANSFERS.
The Seller, the Servicer and the Purchaser each agree to execute and
deliver to the other such reasonable and appropriate additional documents,
instruments or agreements as may be necessary or appropriate to effectuate the
purposes of this Agreement.
The Purchaser shall provide the Seller and the Servicer with at least
ten (10) days' prior written notice prior to effecting a Whole-Loan Transfer,
Agency Transfer or Securitization (each, a "Transfer"). The Seller and the
Servicer each agree to enter into additional documents, instruments or
agreements as may be reasonably necessary to effect each Transfer; provided that
the Seller and the Servicer shall have reasonable opportunity to review such
documents. The parties also agree that the servicing provisions set forth in
this Agreement may be altered in a manner reasonably acceptable to the Servicer
if necessary to effect a Transfer (including, but not limited to, any changes
required to satisfy rating agency requirements or the requirements of ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac). If the Purchaser sells any Mortgage Loans as part of a Whole
Loan Transfer, the Purchaser may assign this Agreement, to the extent it relates
to those Mortgage Loans, to any subsequent purchaser pursuant to the provisions
of Section 29. Notwithstanding the foregoing, the Servicer shall not be required
to service the Mortgage Loans for more than three (3) Persons at any time and
shall not recognize any Transfer if following such Transfer more than three (3)
Persons would be Purchasers hereunder. As used herein and in Section 29, the
trust formed in connection with a Securitization shall be deemed to constitute a
single "Person." All reasonable out-of-pocket costs actually incurred by the
Seller or the Servicer, including reasonable attorney's fees and accountant's
fees in connection with performing its obligations under this Section 28 with
respect to a Transfer shall be reimbursed by the Purchaser upon demand therefor.
With respect to any Mortgage Loans sold in a Transfer where the
Servicer is the servicer, the Servicer agrees that on or before March 20th of
each year beginning March 20, 2006, the Servicer shall deliver to the master
servicer, the depositor and the trustee, and their officers, directors and
affiliates, a certification in a form mutually agreed upon which is
substantially similar to that attached as Exhibit 8 hereto, executed by the
senior officer in charge of servicing at the Servicer for use in connection with
any Form 10-K to be filed with the Securities and Exchange Commission with
respect to the securitization trust so long as such certification is required
pursuant to the terms of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as such may be in
effect and amended from time to time.
SECTION 29. SUCCESSORS AND ASSIGNS.
This Agreement shall bind and inure to the benefit of and be
enforceable by the initial Purchaser, the Seller and the Servicer, and the
respective successors and assigns of the initial Purchaser, the Seller and the
Servicer. The initial Purchaser and any subsequent Purchasers may assign this
Agreement to any Person to whom any Mortgage Loan is transferred pursuant to a
sale or financing upon prior written notice to the Servicer in accordance with
the following paragraph; provided, however, that with respect to each Mortgage
Loan Package, the Servicer shall not be required to service the Mortgage Loans
for more than three (3) Persons at any time and shall not recognize any
assignment of this Agreement to the extent that following such assignment more
than three (3) Persons would be Purchasers hereunder. As used herein, all of the
trusts formed in connection with a Securitization shall be deemed to constitute
single "Person." . Upon any such assignment and written notice thereof to the
Servicer, the Person to whom such assignment is made shall succeed to all rights
and obligations of the Purchaser under this Agreement to the extent of the
related Mortgage Loan or Mortgage Loans and this Agreement, to the extent of the
related Mortgage Loan or Mortgage Loans, shall be deemed to be a separate and
distinct agreement between the Servicer and such purchaser, and a separate and
distinct agreement between the Servicer and each other purchaser to the extent
of the other related Mortgage Loan or Mortgage Loans.
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At least five (5) Business Days prior to the end of the month preceding
the date upon which the first remittance is to be made to an assignee of the
Purchaser, the Purchaser shall provide to the Servicer written notice of any
assignment setting forth: (a) the Servicer's applicable Mortgage Loan
identifying number for each of the Mortgage Loans affected by such assignment;
(b) the aggregate scheduled transfer balance of such Mortgage Loans; and (c) the
full name, address and wiring instructions of the assignee and the name and
telephone number of an individual representative for such assignee, to whom the
Servicer should: (i) send remittances; (ii) send any notices required by or
provided for in this Agreement; and (iii) deliver any legal documents relating
to the Mortgage Loans (including, but not limited to, contents of any Mortgage
File obtained after the effective date of any assignment).
If the Purchaser has not provided the notice of assignment required by
this Section 29, the Servicer shall not be required to treat any other Person as
a "Purchaser" hereunder and may continue to treat the Purchaser which purports
to assign the Agreement as the "Purchaser" for all purposes of this Agreement.
SECTION 30. NON-SOLICITATION.
From and after the Closing Date, the Seller hereby agrees that it will
not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on its behalf, to
personally, by telephone or mail, solicit a Mortgagor under any Mortgage Loan
for the purpose of refinancing a Mortgage Loan, in whole or in part, without the
prior written consent of the Purchaser. It is understood and agreed that all
rights and benefits relating to the solicitation of any Mortgagors and the
attendant rights, title and interest in and to the list of such Mortgagors and
data relating to their Mortgages (including insurance renewal dates) shall be
transferred to the Purchaser pursuant hereto on the Closing Date and the Seller
shall not take any action to undermine these rights and benefits.
Notwithstanding the foregoing, it is understood and agreed that the
Seller:
(a) may advertise its availability for handling refinancings of
mortgages in its portfolio, including the promotion of terms it has
available for such refinancings, through the sending of letters or
promotional material, so long as it does not specifically target
Mortgagors and so long as such promotional material either is sent to
the mortgagors for all of the mortgages in the A-quality servicing
portfolio of the Seller (those it owns as well as those serviced for
others) or sent to all of the mortgagors who have specific types of
mortgages (such as conventional fixed-rate or conventional
adjustable-rate, or sent to those mortgagors whose mortgages fall
within specific interest rate ranges;
59
(b) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact it about prepaying their mortgages by
advising them of refinancing terms and streamlined origination
arrangements that are available; and
(c) may offer to refinance a Mortgage Loan made within thirty (30)
days following receipt by it of a pay-off request from the related
Mortgagor.
Promotions undertaken by the Seller or any affiliate of the Seller
which are directed to the general public at large (including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements), shall not constitute
solicitation under this Section 30.
SECTION 31. PROTECTION OF CONSUMER INFORMATION.
The Purchaser agrees that the Purchaser (i) shall not disclose Consumer
Information to third parties except at the specific written direction of the
Seller or the Servicer; provided, however, that the Purchaser may disclose
Consumer Information to third parties in connection with secondary market
transactions to the extent not prohibited by applicable law, (ii) shall maintain
reasonable protection to protect Consumer Information from unauthorized access
and (iii) shall immediately notify the Seller of any actual or suspected breach
of the confidentiality of Consumer Information of which the Purchaser has
knowledge.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Purchaser, the Seller and the Servicer have
caused their names to be signed hereto by their respective officers thereunto
duly authorized on the date first above written.
▇▇▇▇▇▇ BROTHERS BANK, FSB,
as Purchaser
By: _____________________________________
Name: _____________________________________
Title: _____________________________________
By: _____________________________________
Name: _____________________________________
Title: _____________________________________
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Seller and as Servicer
By: _____________________________________
Name: _____________________________________
Title: _____________________________________
[Signature Page to Second Amended and Restated Flow Mortgage Loan
Sale and Servicing Agreement, dated as of June 1, 2005]
EXHIBIT 1
MORTGAGE LOAN DOCUMENTS
With respect to each Mortgage Loan, the Mortgage Loan Documents shall consist of
the following:
(a) the original Mortgage Note bearing all intervening
endorsements, endorsed in blank and signed in the name of the Seller by
an officer thereof together with any applicable original BPP Addendum
or, if the original Mortgage Note has been lost or destroyed, a lost
note affidavit substantially in the form of Exhibit 5 hereto;
(b) the original Assignment of Mortgage with assignee's name left
blank;
(c) the original of any guarantee executed in connection with the
Mortgage Note;
(d) the original Mortgage with evidence of recording thereon, or
if any such mortgage has not been returned from the applicable
recording office or has been lost, or if such public recording office
retains the original recorded mortgage, a photocopy of such mortgage
certified by the Seller to be a true and complete copy of the original
recorded mortgage;
(e) the originals of all assumption, modification, consolidation
or extension agreements, if any, with evidence of recording thereon;
(f) the originals of all intervening assignments of mortgage with
evidence of recording thereon, or if any such intervening assignment of
mortgage has not been returned from the applicable recording office or
has been lost or if such public recording office retains the original
recorded assignments of mortgage, a photocopy of such intervening
assignment of mortgage, certified by the Seller to be a true and
complete copy of the original recorded intervening assignment of
mortgage;
(g) (i) the original mortgagee title insurance policy or
attorney's opinion of title and abstract or a title commitment or title
binder if an original title insurance policy has not been issued, or a
duplicate copy of an original title insurance policy, including an
Environmental Protection Agency Endorsement and, with respect to any
Adjustable Rate Mortgage Loan, an adjustable-rate endorsement, (ii)
with respect to certain Refinanced Mortgage Loans, a title search
report or other evidence of title or (iii) in the case of any
jurisdiction where title insurance policies are generally not
available, an opinion of counsel of the type customarily rendered in
such jurisdictions in lieu of title insurance;
(h) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage;
(i) a copy of any applicable power of attorney; and
1-1
(j) with respect to any Cooperative Loan, the applicable
Cooperative Loan Documents.
1-2
EXHIBIT 2
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items in physical or imaged form, unless otherwise
disclosed to the Purchaser on the data tape, which shall be available for
inspection by the Purchaser and which shall be retained by the Servicer or
delivered to the Purchaser:
(a) Copies of the Mortgage Loan Documents.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income, if required.
(e) Verification of acceptable evidence of source and amount of
down payment.
(f) Credit report on Mortgagor, in a form acceptable to either
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
(g) Residential appraisal report.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property, unless a survey is not
required by the title insurer.
(j) Copy of each instrument necessary to complete identification
of any exception set forth in the exception schedule in the title
policy, i.e., map or plat, restrictions, easements, home owner
association declarations, etc.
(k) Copies of all required disclosure statements.
(l) If applicable, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales Contract, if applicable.
(n) The Primary Mortgage Insurance Policy or certificate of
insurance or electronic notation of the existence of such policy, where
required pursuant to the Agreement.
(o) Evidence of electronic notation of the hazard insurance
policy, and, if required by law, evidence of the flood insurance
policy.
2-1
EXHIBIT 3
UNDERWRITING GUIDELINES
[ON FILE WITH THE PURCHASER]
3-1
EXHIBIT 4
FORMS OF SELLER'S AND SERVICER'S OFFICER'S CERTIFICATE
I, [______________], hereby certify that I am a duly elected
[______________] of Bank of America, National Association, a national banking
association (the "Bank"), and further certify, on behalf of the Bank as follows:
1. Attached hereto as Attachment I are a true and correct copy
of the Articles of Association and by-laws of the Bank as are in full force and
effect on the date hereof. No event has occurred which has affected the good
standing of the Bank under the laws of the United States.
2. No proceedings looking toward liquidation, dissolution or
bankruptcy of the Bank or a merger pursuant to which the Bank would not be the
surviving entity are pending or contemplated.
3. Each person who, as an officer or attorney-in-fact of the
Bank, signed (a) the Second Amended and Restated Flow Mortgage Loan Sale and
Servicing Agreement (the "Sale Agreement"), dated June 1, 2005, by and between
the Bank, as seller and as servicer, and ▇▇▇▇▇▇ Brothers Bank, FSB, as
purchaser, and (b) any other document delivered prior hereto or on the date
hereof in connection with the sale and servicing of the Mortgage Loans in
accordance with the Sale Agreement was, at the respective times of such signing
and delivery, and is, as of the date hereof, duly elected or appointed,
qualified and acting as such officer or attorney-in-fact, and the signatures of
such persons appearing on such documents are their genuine signatures.
4. All of the representations and warranties of the Bank
contained in Subsections 7.01 and 7.02 of the Sale Agreement were true and
correct in all material respects as of the Closing Date.
5. The Bank has performed all of its duties and has satisfied
all the material conditions on its part to be performed or satisfied prior to
the Closing Date pursuant to the Sale Agreement.
4-1
All capitalized terms used herein and not otherwise defined
shall have the meaning assigned to them in the Sale Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name on this
__th day of November, 2004.
BANK OF AMERICA, NATIONAL
ASSOCIATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
I, ____________________, a _____________________ of Bank of
America, National Association, hereby certify that ____________________ is a
duly elected, qualified and acting ____________________ of the Seller and the
Servicer and that the signature appearing above is such person's genuine
signature.
IN WITNESS WHEREOF, I have hereunto signed my name on this
__th day of November, 2004.
BANK OF AMERICA, NATIONAL
ASSOCIATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
4-2
EXHIBIT 5
FORM OF LOST NOTE AFFIDAVIT
________________________________________, being first duly sworn upon
oath deposes and states:
That he/she is authorized by Bank of America, National Association ("B
of A") to execute this Lost Note Affidavit on behalf of B of A. Notwithstanding
anything contained herein, he/she shall have no personal liability pursuant to
this Lost Note Affidavit.
That the note dated ______________, executed by _______________ in the
original principal sum of $____________, payable to the order of
__________________ and secured by a mortgage (or deed of trust or other
instrument creating a lien securing the Note (as defined below)) of even date on
premises commonly known as ________________________________
____________________________, a copy of which is attached hereto as Exhibit A
(the "Note") was lost and /or destroyed and the affiant herein has no knowledge
of the location or whereabouts of said Note and said Note has not been paid,
satisfied, transferred, assigned, pledged, or hypothecated in any way.
NOW THEREFORE, for and in consideration of _______________and its
successors and/or assigns, accepting a certified copy of the Note identified on
Exhibit "A" in lieu of the original Note, B of A does hereby agree to defend,
indemnify and hold harmless __________ _______________ its respective
transferees, and their respective assigns (the "Indemnified") from and against
any and all loss or damage, together with all reasonable costs, charges and
expenses (whether or not a lawsuit is filed) (collectively, the "Loss") incurred
as a result of the inability to enforce the Note in accordance with its terms
due to the lack of an original Note or incurred by reason of any claim, demand,
suit, cause of action or proceeding by a third party arising out of the
Indemnified's inability to enforce the Note according to its terms or the
inability to receive any related insurance proceeds due to the lack of an
original Note by a third party. B of A shall pay any such Loss upon demand
provided that B of A is notified of any such Loss in writing, after __________
or transferee becomes aware of same, at the following address: Bank of America,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Attention:
Secondary Marketing Manager; with copy to _______________________; Attention:
________________. B of A does hereby further agree that should the original Note
ever be found by it, it will promptly notify _________________ or its respective
transferees, or their respective assigns, as applicable, and upon receipt by B
of A of the original Note, will endorse to _______________ or its designee or
transferee, as applicable, without recourse, such original Note and promptly
forward said Note to_______________ or its designee or transferee, as
applicable. Upon receipt to the original Note by __________________ this
indemnification agreement shall become null and void as to any loss accruing
subsequent to _____________ ___________'s receipt of such original Note,
however, B of A shall remain liable as to any loss accruing on or prior to
__________________'s receipt of such original Note.
5-1
Executed this _______day of _________________, 200__.
BANK OF AMERICA, NATIONAL
ASSOCIATION
By:__________________________________
Witness:_____________________________
Subscribed and sworn to before me this _______ day of_________________,
200__.
-----------------------------------
Notary Public
5-2
EXHIBIT 6
FORM OF MONTHLY REMITTANCE REPORT
6-1
EXHIBIT 7
FORM OF ACKNOWLEDGMENT AND CONVEYANCE AGREEMENT
This is an Acknowledgment and Conveyance Agreement delivered pursuant
to that certain Second Amended and Restated Flow Mortgage Loan Sale and
Servicing Agreement, dated as of June 1, 2005 (the "Agreement"), between ▇▇▇▇▇▇
BROTHERS BANK, FSB, as purchaser (the "Purchaser"), BANK OF AMERICA, NATIONAL
ASSOCIATION, as seller (the "Seller") and BANK OF AMERICA, NATIONAL ASSOCIATION,
as servicer (the "Servicer"). All capitalized terms used herein without
definition shall have the respective meanings ascribed thereto in the Agreement.
The Purchaser, the Servicer and the Seller hereby confirm that they
have reached agreement on the purchase, sale and servicing of the Mortgage Loans
described on the Mortgage Loan Schedule attached as Annex 1 hereto on the terms
and conditions set forth in the Agreement (which terms and conditions are
incorporated herein by this reference) and the Purchase Price and Terms
Agreement, dated as of ___________ __, 200_ between the parties hereto.
Accordingly, on this [___ day of _________, 200_], the Seller does
hereby sell, transfer, assign, set over and convey to the Purchaser without
recourse, except as provided in the Agreement, and on a servicing retained
basis, all right, title and interest of the Seller in and to the Mortgage Loans
listed on the Mortgage Loan Schedule attached as Annex 1 hereto, including all
interest and principal received by the Seller on or with respect to the Mortgage
Loans after the related Cut-off Date, together with all of the Seller's right,
title and interest in and to each Custodial Account and all amounts from time to
time credited to and the proceeds of such Custodial Account, all amounts from
time to time credited to and the proceeds of any Escrow Account, any Liquidation
Proceeds or Condemnation Proceeds, any REO Disposition Proceeds, the Seller's
rights under any insurance policies related to the Mortgage Loans, the Primary
Mortgage Insurance Policy related to each Mortgage Loan and all rights of the
Seller thereunder, any Insurance Proceeds, the Seller's security interest in any
collateral pledged to secure the Mortgage Loans, including the Mortgaged
Properties, and any proceeds of the foregoing. Pursuant to Section 6 the
Agreement, the Seller has delivered to the Custodian the documents for each
Mortgage Loan to be purchased as set forth in the Agreement. The ownership of
each Mortgage Note, Mortgage, and the contents of each Mortgage File is vested
in the Purchaser and the ownership of all records and documents with respect to
the related Mortgage Loan prepared by or which come into the possession of the
Seller shall immediately vest in the Purchaser.
By its execution and delivery of this Acknowledgment and Conveyance
Agreement, the Seller and the Servicer hereby represent and warrant to the
Purchaser that each of the representations and warranties contained in
Subsections 7.01 and 7.02 of the Agreement hereto is true and correct as of the
date hereof (or such other date specified therein) with respect to the Seller
and the Servicer (as applicable) and each of the Mortgage Loans listed on the
Mortgage Loan Schedule attached as Annex 1 hereto.
7-1
By its execution and delivery of this Acknowledgment and Conveyance
Agreement, the Servicer agrees that it shall service the Mortgage Loans on
behalf of the Purchaser in accordance with the terms and conditions contained in
the Agreement.
[SIGNATURES ON FOLLOWING PAGE]
7-2
This Acknowledgment and Conveyance Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
an original, and all such counterparts shall constitute one and the same
instrument.
BANK OF AMERICA, NATIONAL
ASSOCIATION, as Seller and Servicer
By: ____________________________________
Name:
Title:
▇▇▇▇▇▇ BROTHERS BANK, FSB, as Purchaser
By: ____________________________________
Name:
Title:
7-3
Annex 1 to
Acknowledgment and Conveyance Agreement
Mortgage Loan Schedule
EXHIBIT 8
FORM OF CERTIFICATION TO BE PROVIDED BY THE SERVICER
Re: [______________] (the "Trust"), Mortgage Pass-Through
Certificates, Series [_____], issued pursuant to the Pooling and
Servicing Agreement, dated as of [_____], 200[_] (the "Pooling and
Servicing Agreement"), among [_____], as depositor (the
"Depositor"), [_____], as trustee (the "Trustee"), [_____], as
servicer (the "Servicer"), and [_____], as responsible party
I, [identify the certifying individual], certify to the Depositor
and the Trustee, and their officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. The servicing information required to be provided to the Trustee
by the Servicer under the Pooling and Servicing Agreement has been
so provided;
2. I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement and based upon
my knowledge and the annual compliance review required under the
Pooling and Servicing Agreement, and except as disclosed in the
annual compliance statement required to be delivered to the
Trustee in accordance with the terms of the Pooling and Servicing
Agreement (which has been so delivered to the Trustee), the
Servicer has fulfilled its obligation under the Pooling and
Servicing Agreement; and
3. All significant deficiencies relating to the Servicer's compliance
with the minimum servicing standards for purpose of the report
provided by an independent public accountant, after conducting a
review conducted in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar procedure, as set forth in
the Pooling and Servicing Agreement, have been disclosed to such
accountant.
Date:
---------------------
---------------------------
[Signature]
[Title]
8-1
EXHIBIT 9
FORM OF OPINION OF COUNSEL
November __, 2004
▇▇▇▇▇▇ Brothers Bank, FSB
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am Assistant General Counsel to Bank of America Corporation
and have acted as special counsel to Bank of America, National Association (the
"Bank") in connection with the transactions referred to herein. In that
capacity, I am familiar with the sale by the Bank of the Mortgage Loans pursuant
to that certain Second Amended and Restated Flow Mortgage Loan Sale and
Servicing Agreement by and between the Bank, as Seller and as Servicer, and
▇▇▇▇▇▇ Brothers Bank, FSB, as Purchaser, dated as of June 1, 2005 (the "Sale
Agreement"). Capitalized terms not otherwise defined herein have the meanings
set forth in the Sale Agreement.
In connection with rendering this opinion letter, I have
examined the Sale Agreement and such other records and other documents as I have
deemed necessary and relevant. As to matters of fact, I have examined and relied
upon representations of the parties contained in the Sale Agreement and, where I
have deemed appropriate, representations and certifications of officers of the
Bank or public officials. I have assumed the authenticity of all documents
submitted to me as originals, the genuineness of all signatures, the legal
capacity of natural persons and the conformity to the originals of all documents
submitted to me as copies. I have assumed that all parties, except for the Bank,
had the corporate power and authority to enter into and perform all obligations
under such documents, and, as to such parties, I also have assumed the due
authorization by all requisite corporate action, the due execution and delivery
and the validity, binding effect and enforceability of such documents. I have
not examined the Mortgages, the Mortgage Loan Documents or other documents in
the Mortgage Files (such documents, collectively, the "Mortgage Documents"), and
I express no opinion concerning the conformity of any of the Mortgage Documents
to the requirements of the Sale Agreement.
The opinions set forth herein are limited to matters governed
by the laws of the State of North Carolina and the federal laws of the United
States of America, and no opinion is expressed herein as to the laws of any
other jurisdiction. For purposes of these opinions, I have disregarded the
choice of law provision in the Sale Agreement and, instead, have assumed that
the Sale Agreement is governed exclusively by the internal, substantive laws and
judicial interpretation of the State of North Carolina. I assume no obligation
to supplement this opinion if any applicable laws change after the date of this
opinion, or if I become aware of any facts that might change the opinions
expressed herein after the date of this opinion. I do not express any opinion,
either implicitly or otherwise, on any issue not expressly addressed below.
9-1
Based upon the foregoing, I am of the opinion that:
1. The Bank is duly organized and validly existing as a
national banking association in good standing under the federal laws of the
United States and has the requisite power and authority, corporate or other, to
own its own properties and conduct its own business, as presently conducted by
it, and to enter into and perform its obligations under the Sale Agreement.
2. The Bank has authorized the execution, delivery and
performance of the Sale Agreement by all necessary corporate action and the Sale
Agreement has been duly executed and delivered by the Bank.
3. No consent, approval, authorization or order of any State
of North Carolina or federal court or governmental agency or body is required
for the execution, delivery and performance by the Bank of the Sale Agreement or
the consummation by the Bank of the transactions contemplated by the terms of
the Sale Agreement, except for those consents, approvals, authorizations or
orders which previously have been obtained.
4. The Sale Agreement constitutes the legal, valid and binding
obligation of the Bank, enforceable against the Bank in accordance with its
terms, subject to the following:
(a) This opinion is subject to the effect of applicable
bankruptcy, insolvency, receivership, reorganization,
fraudulent conveyance, moratorium and similar laws affecting
the enforcement of creditors' rights generally.
(b) The opinion is subject to the effect of general principles
of equity (regardless of whether considered in a proceeding in
equity or at law), which may, among other things, deny rights
of specific performance.
5. The consummation of the transactions contemplated by, and
the performance by the Bank of any other of the terms of, the Sale Agreement,
will not result in a breach of any term or provision of the articles of
association or by-laws of the Bank or, to the best of my knowledge, conflict
with, result in a breach, violation or acceleration of, or constitute a default
under, the terms of any material indenture or other material agreement or
instrument to which the Bank is a party of by which it is bound or any order of
any State of North Carolina or federal court, regulatory body, administrative
agency or governmental body having jurisdiction over the Bank.
6. To the best of my knowledge, there are no actions,
proceedings or investigations pending or threatened before any court,
administrative agency or other tribunal (a) asserting the invalidity of the Sale
Agreement or (b) seeking to prevent the consummation of any of the transactions
contemplated by the Sale Agreement, which might materially and adversely affect
the performance by the Bank of its obligations under, or the validity or
enforceability of, the Sale Agreement.
This opinion letter is rendered for the sole benefit of the
persons or entities to which it is addressed, and no other person or entity is
entitled to rely hereon without my prior written consent. Copies of this opinion
letter may note be furnished to any other person or entity, nor may any portion
of this opinion letter be quoted, circulated or referred to in any other
document without my prior written consent.
Very truly yours,
▇▇▇▇ ▇. ▇▇▇▇
Assistant General Counsel
9-2
EXHIBIT 10
FORM OF CUSTODIAL ACCOUNT CERTIFICATION
_________ __, 2005
Bank of America, National Association hereby certifies that it has established
the account described below as a Custodial Account pursuant to Subsection 11.04
of the Second Amended and Restated Flow Mortgage Loan Sale and Servicing
Agreement, dated June 1, 2005, Performing, Conventional, Residential Mortgage
Loans.
Title of Account: "Bank of America, National Association, in trust for ▇▇▇▇▇▇
Brothers Bank, FSB, as Purchaser of Mortgage Loans and various Mortgagors."
Account Number: __________________________
Address of office or branch of
Bank of America, National Association
at which the Custodial Account is
maintained: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
BANK OF AMERICA, NATIONAL ASSOCIATION
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
10-1
EXHIBIT 11
FORM OF ESCROW ACCOUNT CERTIFICATION
_________ __, 2005
Bank of America, National Association hereby certifies that it has established
the account described below as an Escrow Account pursuant to Subsection 11.06 of
the Second Amended and Restated Flow Mortgage Loan Sale and Servicing Agreement,
dated June 1, 2005, Performing, Conventional, Residential Mortgage Loans.
Title of Account: "Bank of America, National Association, in trust for ▇▇▇▇▇▇
Brothers Bank, FSB, as Purchaser of Mortgage Loans and various Mortgagors."
Account Number: __________________________
Address of office or branch of
Bank of America, National Association
at which the Escrow Account is
maintained: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
BANK OF AMERICA, NATIONAL ASSOCIATION
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
11-1