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EXHIBIT 4.3
MASTER SERVICING AGREEMENT
Dated as of __________ __, 1997
among
AMERICAN RESIDENTIAL EAGLE BOND TRUST 199__-__, Issuer
and
___________________________, Master Servicer
and
_____________________________, Trustee
Relating to the Mortgage Loans
Pledged as Collateral for the Issuer's
Collateralized Mortgage Bonds,
in the Aggregate Initial
Principal Amount of $___________
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TABLE OF CONTENTS
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PRELIMINARY STATEMENT..............................................................................
1. Defined Terms.........................................................................
2. Mortgage Documents....................................................................
(a) Trustee to Retain Possession of Documents..................................
(b) Trustee to Cooperate; Release of Trustee Mortgage Files....................
(c) Documents, Records and Funds in Possession of Master Servicer to be Held
for Trustee................................................................
(d) Representations, Warranties and Covenants of the Issuer and the Master
Servicer...................................................................
(e) Covenants of the Master Servicer...........................................
3. General Duties of the Master Servicer.................................................
(a) Master Servicer to Service Mortgage Loans..................................
(b) Subservicing; Enforcement of the Obligations of Servicers..................
(c) Successor Servicers........................................................
(d) Liability of the Master Servicer...........................................
(e) No Contractual Relationship Between Servicers and the Trustee..............
(f) Rights of the Issuer and the Trustee in Respect of the Master Servicer.....
(g) Trustee to Act as Master Servicer..........................................
(h) Collection of Mortgage Loan Payments; Eligible Accounts; Servicing
Accounts; Bond Account.....................................................
(i) Collection of Taxes, Assessments and Similar Items; Escrow Accounts........
(j) Access to Certain Documentation and Information Regarding the Mortgage
Loans......................................................................
(k) Permitted Withdrawals from the Bond Account................................
(l) Maintenance of Hazard Insurance; Maintenance of Primary Insurance Policies.
(m) Enforcement of Due-On-Sale Clauses; Assumption Agreements..................
(n) Realization Upon Defaulted Mortgage Loans; Purchase of Certain Mortgage
Loans......................................................................
(o) Access to Certain Documentation............................................
(p) Annual Statement as to Compliance..........................................
(q) Annual Independent Public Accountants' Servicing Statement; Financial
Statements.................................................................
(r) Errors and Omissions Insurance; Fidelity Bonds.............................
4. Advances..............................................................................
5. Servicing Compensation and Expenses...................................................
6. The Master Servicer...................................................................
(a) Liabilities of the Master Servicer.........................................
(b) Merger or Consolidation of the Master Servicer.............................
(c) Limitation on Liability of the Master Servicer and Others..................
(d) Limitation on Resignation of the Master Servicer...........................
7. Servicing Default; Termination and Liabilities........................................
(a) Servicing Default..........................................................
(b) Trustee to Act; Appointment of Successor...................................
(c) Notification to Bondholders................................................
8. Miscellaneous.........................................................................
(a) Term of Master Servicing Agreement.........................................
(b) Assignment.................................................................
(c) Notices....................................................................
(d) Inspection and Audit Rights................................................
(e) Governing Law..............................................................
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(f) Amendments.................................................................
(g) Severability...............................................................
(h) No Joint Venture...........................................................
(i) Execution in Counterparts..................................................
(j) Limitation of Liability of Wilmington Trust Company........................
(k) Nonpetition Covenants......................................................
SCHEDULE I: Schedule of Mortgage Loans.................................................
SCHEDULE II: Representations and Warranties of
the Master Servicer........................................................
SCHEDULE III: Representations and Warranties as
to the Mortgage Loans......................................................
SCHEDULE IV: Representations and Warranties of
the Issuer.................................................................
EXHIBITS
EXHIBIT A FORM OF INITIAL CERTIFICATION OF TRUSTEE................................... A-1
EXHIBIT B FORM OF FINAL CERTIFICATION OF TRUSTEE..................................... B-1
EXHIBIT C REQUEST FOR RELEASE
(for Trustee).............................................................. C-1
EXHIBIT D REQUEST FOR RELEASE (Mortgage Loan
Paid in Full, Repurchased and Released).................................... D-1
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MASTER SERVICING AGREEMENT
THIS MASTER SERVICING AGREEMENT is made and entered into as of ________
__, 19__, by and among American Residential Eagle Bond Trust [199__-__], a
statutory business trust formed under the laws of the State of Delaware (the
"Issuer"), ________ _________________, a _______ corporation (the "Master
Servicer") and _______________________________, a _________________ _______
corporation (in its capacity as trustee under the Indenture referred to below,
the "Trustee").
PRELIMINARY STATEMENT
The Issuer was formed for the purpose of issuing bonds secured by
mortgage collateral. The Issuer has entered into a trust indenture, dated as of
________ __, 19__ (the "Indenture"), between the Issuer and the Trustee,
pursuant to which the Issuer intends to issue its Collateralized Mortgage Bonds,
in the aggregate initial principal amount of $___________ (the "Bonds").
Pursuant to the Indenture, as security for the indebtedness represented by such
Bonds, the Issuer is and will be pledging to the Trustee, or granting the
Trustee a security interest in, among other things, certain Mortgage Loans, its
rights under this Agreement, the Bond Account, the Distribution Account and
certain Insurance Policies (as each such term is defined herein).
The parties desire to enter into this Agreement to provide, among other
things, for the servicing of the Mortgage Loans by the Master Servicer. The
Master Servicer acknowledges that, in order further to secure the Bonds, the
Issuer is and will be granting to the Trustee a security interest in, among
other things, its rights under this Agreement, and the Master Servicer agrees
that all covenants and agreements made by the Master Servicer herein with
respect to the Mortgage Loans shall also be for the benefit and security of the
Trustee and Holders of the Bonds. For its services hereunder, the Master
Servicer will receive a Master Servicing Fee (as defined herein) with respect to
each Mortgage Loan serviced hereunder.
The Master Servicer has entered into or been assigned Servicing
Agreements (as defined herein) with Servicers (as defined herein) to perform, as
independent contractors, servicing functions for the Master Servicer with
respect to the Mortgage Loans. For its services under a Servicing Agreement,
each Servicer will receive a Servicing Fee (as defined herein) with respect to
each Mortgage Loan serviced by it thereunder.
In addition, the Issuer will enter into a Management Agreement, dated as
of the date hereof, with American Residential Investment Trust, Inc. (in such
capacity, the "Manager"), pursuant to which the Manager will conduct certain
operations of the Issuer. Actions by or required of the Issuer hereunder may be
performed on its behalf by the Manager or any sub-manager appointed to act for
the Issuer.
1. Defined Terms.
Except as otherwise specified or as the context may otherwise require,
the following terms have the respective meanings set forth below for all
purposes of this Agreement, and the definitions of such terms are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms:
"ADJUSTED NET MORTGAGE RATE" means, as to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the sum of the Master
Servicing Fee Rate and the related Servicing Fee Rate.
["ADJUSTMENT DATE" means, as to any Mortgage Loan, the date on which the
related Mortgage Rate adjusts annually after a period of ten years following
origination, in accordance with the terms of the related Mortgage Note.]
"ADVANCE" means the payment required to be made by the Master Servicer
with respect to any Distribution Date pursuant to Section 4, the amount of any
such payment being equal to the aggregate of payments of principal and interest
(net of the Master Servicing Fee and the applicable Servicing Fee and net of any
net income in the case of any REO Property) on the Mortgage Loans that were due
on the related Due Date and not received as of the close of business on the
related Determination Date, less the aggregate amount of any such delinquent
payments that the Master Servicer has determined would constitute a
Nonrecoverable Advance if advanced.
"AGREEMENT" means this Master Servicing Agreement, as the same may be
amended or supplemented from time to time.
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"AMERICAN RESIDENTIAL" means American Residential Investment Trust,
Inc., a Maryland corporation, and its successors and assigns.
"AMOUNT HELD FOR FUTURE DISTRIBUTION" means, as to any Distribution
Date, the aggregate amount held in the Bond Account at the close of business on
the related Determination Date on account of (i) Principal Prepayments and
Liquidation Proceeds received in the month of such Distribution Date and (ii)
all Scheduled Payments due after the related Due Date.
"APPRAISED VALUE" means (i) with respect to a Mortgage Loan other than a
Refinancing Mortgage Loan, the lesser of (a) the value of the Mortgaged Property
based upon the appraisal made at the time of the origination of such Mortgage
Loan and (b) the sales price of the Mortgaged Property at the time of the
origination of such Mortgage Loan; or (ii) with respect to a Refinancing
Mortgage Loan, the value of the Mortgaged Property based upon the appraisal made
at the time of the origination of such Refinancing Mortgage Loan.
"AVAILABLE FUNDS" means, as to any Distribution Date, the sum of (i) all
scheduled installments of interest (net of the related Expense Fees) and
principal due [on the Due Date in the month] in which such Distribution Date
occurs and received prior to the related Determination Date, together with any
Advances in respect thereof; (ii) all Insurance Proceeds and all Liquidation
Proceeds for the [month] preceding the month of such Distribution Date, net of
unreimbursed expenses incurred in connection with a liquidation or foreclosure
and unreimbursed Advances; (iii) all partial or full prepayments received during
the related Prepayment Period; and (iv) amounts received with respect to such
Distribution Date as the Substitution Adjustment Amount or purchase price in
respect to such Distribution Date as the Substitution Adjustment Amount or
purchase price in respect of a Deleted Mortgage Loan or a Mortgage Loan
purchased by American Residential [or by the Master Servicer] as of such
Distribution Date, reduced by amounts in reimbursement for Advances previously
made and other amounts as to which the applicable Servicer or the Master
Servicer is entitled to be reimbursed pursuant to the Master Servicing
Agreement.
"BANKRUPTCY CODE" means the United States Bankruptcy Reform Act of 1978,
as amended.
"BLANKET MORTGAGE" means the mortgage or mortgages encumbering the
Cooperative Property.
"BOND ACCOUNT" means, with respect to the Bonds, the separate Eligible
Account created and maintained by the Master Servicer pursuant to Section
3(h)(v) with a depository institution in the name of the Master Servicer for the
benefit of the Trustee on behalf of the Bondholders and designated
"_________________________________________ in trust for the registered holders
of American Residential Eagle Bond Trust 199_-_ Collateralized Mortgage Bonds."
"BOND DISTRIBUTION AMOUNT" means, as to any Distribution Date, the sum
of (i) the Senior Interest Payment Amount, (ii) the Senior Principal Payment
Amount, (iii) the Class B-1 Interest Payment Amount, (iv) the Class B-1
Principal Payment Amount, (v) the Class B-2 Interest Payment Amount and (vi) the
Class B-2 Principal Payment Amount.
"BONDHOLDER" or "HOLDER" means the Person in whose name a Bond is
registered in the Bond Register (as defined in the Indenture).
"BONDS" mean the Issuer's Collateralized Mortgage Bonds.
"BUSINESS DAY" means any day other than (i) a Saturday or a Sunday, or
(ii) a day on which banking institutions in the City of New York, New York, the
State of California or the city in which the Corporate Trust Office (as defined
in the Indenture) of the Trustee is located are authorized or obligated by law
or executive order to be closed.
"CERTIFICATE INTEREST PAYMENT AMOUNT" means, as to any Distribution
Date, one month's interest accrued during the related Interest Accrual Period at
the Certificate Interest Rate on the Invested Amount, subject to reduction
pursuant to Section 3(h)(viii). The Certificate Interest Payment Amount shall be
calculated on the basis of a 360-day year of twelve 30-day months.
"CERTIFICATE INTEREST RATE" means, for any Interest Accrual Period
beginning prior to the Interest Conversion Date _____________________.
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"CERTIFICATE PAYING AGENT" has the meaning assigned thereto in the
Deposit Trust Agreement.
"CLASS B-1 BOND INTEREST RATE" means, with respect to any Interest
Accrual Period, the annual rate at which interest accrues on the Subordinated
Bonds as specified in such Bonds and in Section 2.03(c) of the Indenture.
"CLASS B-1 INTEREST CARRYOVER SHORTFALL" means, the amount by which sum
of (i) the interest at the Class B-1 Bond Interest Rate on the Class B-1
Principal Amount and (ii) the interest at the Class B-1 Bond Interest Rate on
any Class B-1 Principal Carryover Shortfall, on each prior Distribution Date,
exceeded the amount actually distributed as interest on such prior Distribution
Dates and not subsequently distributed.
"CLASS B-1 INTEREST PAYMENT AMOUNT" means, as of any Distribution Date,
the sum of (i) interest at the Class B-1 Bond Interest Rate on the Class ▇-▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇) interest at the Class B-1 Bond Interest Rate on any Class
B-1 Principal Carryover Shortfall, (iii) the Class B-1 Interest Carryover
Shortfall and (iv) interest at the Class B-1 Bond Interest Rate on any Class B-1
Interest Carryover Shortfall.
"CLASS B-1 PERCENTAGE" means, as to any Distribution Date, the
percentage equivalent of a fraction the numerator of which is the Class B-1
Principal Amount immediately prior to such date and the denominator of which is
the sum of (i) the Senior Class Principal Amount, (ii) the Class ▇-▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, (▇▇▇) the Class B-2 Principal Amount and (iv) the Invested Amount, in
each case immediately prior to such date.
"CLASS B-1 PRINCIPAL AMOUNT" means, as of any Distribution Date, the
lesser of (i)_the aggregate of the Stated Principal Balances of the Mortgage
Loans, less the Senior Class Principal Amount immediately prior to such date,
and (ii) the Original Class B-1 Principal Amount reduced by all amounts
previously distributed to holders of the Class B-1 bonds as payments of
principal.
"CLASS B-1 PRINCIPAL CARRYOVER SHORTFALL" means, as to any Distribution
Date, the excess of (i) the Original Class B-1 Principal Amount reduced by all
amounts previously distributed to holders of the Class B-1 Bonds as payments of
principal or Class B-1 Principal Carryover Shortfall, over (ii) the Class B-1
Principal Amount immediately prior to such date.
"CLASS B-1 PRINCIPAL PAYMENT AMOUNT" means, as to any Distribution Date,
the sum of (i) the Class B-1 Percentage of the sum of (a) the principal portion
of the Schedules Payment due on each Mortgage Loan [on the related Due Date],
(b) the principal portion of the purchase price of each Mortgage Loan that was
purchased by American Residential or another person pursuant to the Mortgage
Loan Purchase Agreement [or by the Master Servicer in connection with any
optional purchase by the Master Servicer of a defaulted Mortgage Loan] as of
such Distribution Date, (c) the Substitution Adjustment Amount in connection
with any Deleted Mortgage Loan received with respect to such Distribution Date,
(d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of
principal of Mortgage Loans that are not yet Liquidated Mortgage Loans received
during the related Prepayment Period, (e) with respect to each Mortgage Loan
that became a Liquidated Mortgage Loan during the [calendar month] preceding the
month of such Distribution Date, the Stated Principal Balance of such Mortgage
Loan and (f) all partial and full principal prepayments by borrowers received
during the related Prepayment Period and (ii) any Class B-1 Principal Carryover
Shortfall.
"CLASS B-2 BOND INTEREST RATE" means, with respect to any Interest
Accrual Period, the annual rate at which interest accrues on the Subordinated
Bonds as specified in such Bonds and in Section 2.03(c) of the Indenture.
"CLASS B-2 INTEREST CARRYOVER SHORTFALL" means, the amount by which sum
of (i) the interest at the Class B-2 Bond Interest Rate on the Class B-2
Principal Amount and (ii) the interest at the Class B-2 Bond Interest Rate on
any Class B-2 Principal Carryover Shortfall, on each prior Distribution Date,
exceeded the amount actually distributed as interest on such prior Distribution
Dates and not subsequently distributed.
"CLASS B-2 INTEREST PAYMENT AMOUNT" means, as to any Distribution Date,
the sum of (i) interest at the Class B-2 Bond Interest Rate on the Class ▇-▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇) interest at the Class B-2 Bond Interest Rate on any Class
B-2 Principal Carryover Shortfall, (iii) the Class B-2 Interest Carryover
Shortfall and (iv) interest at the Class B-2 Bond Interest Rate on any Class B-2
Interest Carryover Shortfall.
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"CLASS B-2 PERCENTAGE" means, as to any Distribution Date, the
percentage equivalent of a fraction the numerator of which is the Class B-2
Principal Amount immediately prior to such date and the denominator of which is
the sum of (i) the Senior Class Principal Amount, (ii) the Class ▇-▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, (▇▇▇) the Class B-2 Principal Amount and (iv) the Invested Amount, in
each case immediately prior to such date.
"CLASS B-2 PRINCIPAL AMOUNT" means, as of any Distribution Date, the
lesser of (i) the aggregate of the Stated Principal Balances of the Mortgage
Loans, less the sum of the Senior Class Principal Amount and the Class B-2
Principal Amount, in each case immediately prior to such date, and (i) the
Original Class B-2 Principal Amount reduced by all amounts previously
distributed to holders of the Class B-2 Bonds as payments of principal.
"CLASS B-2 PRINCIPAL CARRYOVER SHORTFALL" means, as to any Distribution
Date, the excess of (i) the Original Class B-2 Principal Amount reduced by all
amounts previously distributed to holders of the Class B-2 Bonds as payments of
principal or Class B-2 Principal Carryover Shortfall, over (ii) the Class B-2
Principal Amount immediately prior to such date.
"CLASS B-2 PRINCIPAL PAYMENT AMOUNT" means, as to any Distribution Date,
the sum of (i) the Class B-2 Percentage of the sum of (a) the principal portion
of the Schedules Payment due on each Mortgage Loan [on the related Due Date],
(b) the principal portion of the purchase price of each Mortgage Loan that was
purchased by American Residential or another person pursuant to the Mortgage
Loan Purchase Agreement [or by the Master Servicer in connection with any
optional purchase by the Master Servicer of a defaulted Mortgage Loan] as of
such Distribution Date, (c) the Substitution Adjustment Amount in connection
with any Deleted Mortgage Loan received with respect to such Distribution Date,
(d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of
principal of Mortgage Loans that are not yet Liquidated Mortgage Loans received
during the [calendar month] preceding the month of such Distribution Date, (e)
with respect to each Mortgage Loan that became a Liquidated Mortgage Loan during
the [calendar month] preceding the month of such Distribution Date, the Stated
Principal Balance of such Mortgage Loan and (f) all partial and full principal
prepayments by borrowers received during the related Prepayment Period and (ii)
any Class B-2 Principal Carryover Shortfall.
"CLASS PRINCIPAL AMOUNT" shall have the meaning ascribed thereto in the
Indenture.
"CLOSING DATE" means _______ __, 199__.
"CODE" means the Internal Revenue Code of 1986, including any successor
or amendatory provisions.
"COLLECTION ACCOUNT" means the Eligible Account or Accounts established
and maintained by the Master Servicer in accordance with Section 3(h)(iii).
"COMPANY" means American Residential Eagle, Inc., a Delaware
corporation, which, as of the Closing Date, owns all of the outstanding
beneficial interests in the Issuer.
"CONTROLLING CLASS" means the Class A-1 Bonds or, if the Class A-1 Bonds
are no longer Outstanding, the most senior Class of Subordinated Bonds then
Outstanding.
"COOPERATIVE CORPORATION" means 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" means any Mortgage Loan secured by Cooperative Shares
and a Proprietary Lease.
"COOPERATIVE PROPERTY" means the real property and improvements owned by
the Cooperative Corporation, including the allocation of individual dwelling
units to the holders of the Cooperative Shares of the Cooperative Corporation.
"COOPERATIVE SHARES" means shares issued by a Cooperative Corporation.
"COOPERATIVE UNIT" means a single family dwelling located in a
Cooperative Property.
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"CUT-OFF DATE" means, with respect to the Mortgage Loans, ________ __,
199__.
"CUT-OFF DATE POOL PRINCIPAL BALANCE" means $________________.
"CUT-OFF DATE PRINCIPAL BALANCE" means, as to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the Cut-off
Date.
"DEBT SERVICE REDUCTION" means, with respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness of principal.
"DEBT SERVICE REDUCTION MORTGAGE LOAN" means any Mortgage Loan that
became the subject of a Debt Service Reduction.
"DEFECTIVE MORTGAGE LOAN" means any Mortgage Loan required to be
purchased by the Master Servicer pursuant to Section 2(a) hereof.
"DEFICIENT VALUATION" means, with respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under the Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court which is final and
non-appealable in a proceeding under the Bankruptcy Code.
"DELETED MORTGAGE LOAN" has the meaning ascribed thereto in Section 5.
"DEPOSIT TRUST AGREEMENT" means the Amended and Restated Deposit Trust
Agreement, dated as of _______ __, 199__, between the Company and the Owner
Trustee, as such Deposit Trust Agreement may be amended or supplemented from
time to time.
"DETERMINATION DATE" means, as to any Distribution Date, the __th day of
the [month] in which such Distribution Date occurs or, if such __th day is not a
Business Day, the next succeeding Business Day; provided, however, that if such
next succeeding Business Day is less than two Business Days prior to the related
Distribution Date, then the Determination Date shall be the next Business Day
preceding the __th day of such [month].
"DISTRIBUTION ACCOUNT" means the Eligible Account or Accounts created
and maintained with the Trustee pursuant to Section 8.02 of the Indenture, to
which shall be remitted from time to time certain of the funds the Master
Servicer has collected and deposited in the Bond Account with respect to the
Mortgage Loans, as required hereunder and under the Indenture.
"DISTRIBUTION ACCOUNT DEPOSIT DATE" means, as to any Distribution Date,
[12:30 p.m. Pacific time] on the Business Day immediately preceding such
Distribution Date.
"DISTRIBUTION DATE" means, with respect to the Bonds and the Investor
Certificate, the __th day of each [calendar month] after the initial issuance of
the Bonds and the Investor Certificate or, if such __th day is not a Business
Day, the next succeeding Business Day, commencing in ________ 199__.
"DUE DATE" means the first day of the month.
"DUFF & ▇▇▇▇▇▇" means Duff & ▇▇▇▇▇▇ Credit Rating Company, or any
successor thereto. If Duff & ▇▇▇▇▇▇ is designated as a Rating Agency in the
Indenture, for purposes of Section 8(c) the address for notices to Duff & ▇▇▇▇▇▇
shall be Duff & ▇▇▇▇▇▇ Credit Rating Company, ▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: MBS Monitoring, or such other address as
Duff & ▇▇▇▇▇▇ may hereafter furnish to the Issuer and the Master Servicer.
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"ELIGIBLE ACCOUNT" means any of (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company, but only if ▇▇▇▇▇'▇ is
not a Rating Agency) have the highest short-term ratings of each Rating Agency
at the time any amounts are held on deposit therein, or (ii) an account or
accounts in a depository institution or trust company in which such accounts are
insured by the FDIC or the SAIF (to the limits established by the FDIC or the
SAIF) and the uninsured deposits in which accounts are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each
Rating Agency, the Bondholders have a claim with respect to the funds in such
account or a perfected first priority security interest against any collateral
(which shall be limited to Permitted Investments) securing such funds that is
superior to claims of any other depositors or creditors of the depository
institution or trust company in which such account is maintained, or (iii) a
trust account or accounts maintained with the trust department of a federal or
state chartered depository institution or trust company, acting in its fiduciary
capacity or (iv) any other account acceptable to each Rating Agency. Eligible
Accounts may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee.
"ESCROW ACCOUNT" means the Eligible Account or Accounts established and
maintained pursuant to Section 3(i) hereof.
"EXCESS PROCEEDS" means, with respect to any Liquidated Mortgage Loan,
the amount, if any, by which the sum of any Liquidation Proceeds of such
Mortgage Loan received in the calendar month in which such Mortgage Loan became
a Liquidated Mortgage Loan, net of any amounts previously reimbursed to the
Master Servicer as Nonrecoverable Advance(s) with respect to such Mortgage Loan
pursuant to Section 3(k)(iii), exceeds (a) the unpaid principal balance of such
Liquidated Mortgage Loan as of the Due Date in the month in which such Mortgage
Loan became a Liquidated Mortgage Loan plus (b) accrued interest at the Mortgage
Rate from the Due Date as to which interest was last paid or advanced (and not
reimbursed) to Bondholders up to the Due Date applicable to the Distribution
Date immediately following the calendar month during which such liquidation
occurred.
"EXPENSE RATE" means, as to each Mortgage Loan, the sum of the related
Servicing Fee Rate, the related Master Servicing Fee Rate and Trustee Fee Rate.
"FDIC" means the Federal Deposit Insurance Corporation, or any successor
thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
"FIRREA" means the Financial Institutions Reform, Recovery and
Enforcement Act of 1989.
"FITCH" means Fitch Investors Service, L.P., or any successor thereto.
If Fitch is designated as a Rating Agency in the Indenture, for purposes of
Section 8(c) the address for notices to Fitch shall be Fitch Investors Service,
L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential
Mortgage Surveillance Group, or such other address as Fitch may hereafter
furnish to the Issuer and the Master Servicer.
"FNMA" means the Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
"INDENTURE" means the trust indenture, dated as of the date hereof,
between the Issuer and the Trustee, as such Indenture may be amended or
supplemented from time to time in accordance with its terms.
"INDEPENDENT ACCOUNTANTS" shall have the meaning ascribed to such term
under the Indenture.
"INDEX" means, as to each Mortgage Loan, the index from time to time in
effect for the adjustment of the Mortgage Rate set forth as such on the related
Mortgage Note.
"INSURANCE POLICY" means, with respect to any Mortgage Loan, any
insurance policy, including all riders and endorsements thereto in effect,
including any replacement policy or policies for any Insurance Policies.
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"INSURANCE PROCEEDS" means proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses.
"INSURED EXPENSES" means expenses covered by an Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
"INTEREST ACCRUAL PERIOD" means, with respect to each Class of Bonds,
the Investor Certificate and any Distribution Date _______________.
["INTEREST CONVERSION DATE" means, as to the Mortgage Loans, the date on
which the first Adjustment Date occurs.]
"INVESTED AMOUNT" means, as of any Distribution Date, the lesser of (i)
the aggregate of the Stated Principal Balances of the Mortgage Loans, less the
sum of (x) the Senior Class Principal Amount (y) the Class B-1 Principal Amount
and (z) the Class B-2 Principal Amount, in each case immediately prior to such
date, and (ii) the Original Invested Amount reduced by all amounts previously
distributed to the Holder of the Investor Certificate in reduction of the
Invested Amount.
"INVESTED AMOUNT PAYMENT" means, as to any Distribution Date, the sum of
(i) the Investor Percentage of the sum of (a) the principal portion of the
Scheduled Payment due on each Mortgage Loan [on the related Due Date], (b) the
principal portion of the purchase price of each Mortgage Loan that was purchased
by the American Residential or another Person pursuant to the Mortgage Loan
Purchase Agreement as of such Distribution Date, (c) the Substitution Adjustment
Amount in connection with any Deleted Mortgage Loan received with respect to
such Distribution Date and (d) any Insurance Proceeds or Liquidation Proceeds
allocable to recoveries of principal of Mortgage Loans that are not yet
Liquidated Mortgage Loans received during the [calendar month] preceding the
month of such Distribution Date, and (e) all partial and full principal
prepayments by borrowers received during the related Prepayment Period, and (ii)
with respect to each Mortgage Loan that became a Liquidated Mortgage Loan during
the [calendar month] preceding the month of such Distribution Date, the
Liquidation Proceeds allocable to principal received with respect to such
Mortgage Loan, after application of such amounts pursuant to clause (e) of the
definition of Senior Principal Payment Amount clause (e) of the definition of
Class B-1 Principal Payment Amount and clause (e) of the definition of Class B-2
Principal Payment Amount.
"INVESTOR CERTIFICATE" shall have the meaning ascribed thereto in the
Deposit Trust Agreement.
"INVESTOR PERCENTAGE" means, as of any Distribution Date, the difference
between 100% and the sum of the Senior Percentage, the Class B-1 Percentage and
the Class B-2 Percentage.
"LIQUIDATED MORTGAGE LOAN" means with respect to any Distribution Date,
a defaulted Mortgage Loan (including any REO Property) which was liquidated in
the [calendar month] preceding the month of such Distribution Date and as to
which the Master Servicer has certified (in accordance with this Agreement) that
it has received all amounts it expects to receive in connection with the
liquidation of such Mortgage Loan including the final disposition of an REO
Property.
"LIQUIDATION PROCEEDS" means amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of defaulted
Mortgage Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property, less the sum of related unreimbursed Master Servicing Fees, Servicing
Advances and Advances.
"LOAN-TO-VALUE RATIO" means, with respect to any Mortgage Loan and as to
any date of determination, the fraction (expressed as a percentage) the
numerator of which is the principal balance of the related Mortgage Loan at such
date of determination and the denominator of which is the Appraised Value of the
related Mortgaged Property.
"MAINTENANCE" means with respect to any Cooperative Unit, the rent paid
by the Mortgagor to the Cooperative Corporation pursuant to the Proprietary
Lease.
"MARGIN" means as to each Mortgage Loan, the percentage amount set forth
on the related Mortgage Note added to the Index in calculating the Mortgage Rate
thereon.
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"MASTER SERVICER" means _____________________, a _______ corporation,
and its successors and assigns, in its capacity as master servicer hereunder.
"MASTER SERVICER ADVANCE DATE" means as to any Distribution Date, [12:30
p.m. Pacific time] on the Business Day immediately preceding such Distribution
Date.
"MASTER SERVICING FEE" means as to each Mortgage Loan and any
Distribution Date, an amount equal to [one month's] interest at the related
Master Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan
or, in the event of any payment of interest which accompanies a Principal
Prepayment in Full made by the Mortgagor, interest at the Master Servicing Fee
Rate on the Stated Principal Balance of such Mortgage Loan for the period
covered by such payment of interest, subject to reduction as provided in Section
5(a).
"MASTER SERVICING FEE RATE" means with respect to each Mortgage Loan,
______% per annum.
"MAXIMUM RATE" means as to any Mortgage Loan, the maximum rate set forth
on the related Mortgage Note at which interest can accrue on such Mortgage Loan.
"MINIMUM RATE" means as to any Mortgage Loan, the minimum rate set forth
on the related Mortgage Note at which interest can accrue on such Mortgage Loan.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
thereto. If ▇▇▇▇▇'▇ is designated as a Rating Agency in the Indenture, for
purposes of Section 8(c) the address for notices to Moody's shall be ▇▇▇▇▇'▇
Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
[Residential Pass-Through Monitoring], or such other address as Moody's may
hereafter furnish to the Issuer and the Master Servicer.
"MORTGAGE" means the mortgage, deed of trust or other instrument
creating a first lien on an estate in fee simple or leasehold interest in real
property securing a Mortgage Note.
"MORTGAGE DOCUMENTS" mean the mortgage documents listed in Section
2(a)(i) pertaining to a particular Mortgage Loan and any additional documents
delivered to the Trustee to be added to the Mortgage Documents pursuant to this
Agreement.
"MORTGAGE LOAN" means such of the mortgage loans granted by the Issuer
to the Trustee under the Indenture as security for the Bonds, as from time to
time are held as part of the Trust Estate (including any REO Property), the
mortgage loans so held being identified in the Schedule of Mortgage Loans,
notwithstanding foreclosure or other acquisition of title of the related
Mortgaged Property.
"MORTGAGE NOTE" means the original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"MORTGAGE RATE" means the annual rate of interest borne by a Mortgage
Note from time to time.
"MORTGAGED PROPERTY" means the underlying property securing a Mortgage
Loan, which, with respect to a Cooperative Loan, is the related Cooperative
Shares and Proprietary Lease.
"MORTGAGOR" means the obligor(s) on a Mortgage Note.
"NET INTEREST SHORTFALL" means, as to any Distribution Date, the amount
by which the sum of (i) the amount of interest which would otherwise have been
received with respect to any Mortgage Loan that was the subject of a Relief Act
Reduction and (ii) any Prepayment Interest Shortfalls, in each case during the
calendar month preceding the month of such Distribution Date, exceeds the sum of
(i) the Master Servicing Fee for such period and (ii) the Certificate Interest
Payment Amount, the Invested Amount Payment and the amounts otherwise payable on
such Distribution Date to the holder of the Investor Certificate.
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"NET MORTGAGE RATE" means, as to any Mortgage Loan and Distribution
Date, the related Mortgage Rate as of the Due Date in the month preceding the
month of such Distribution Date reduced by the related Expense Rate.
"NONRECOVERABLE ADVANCE" means any portion of an Advance or Servicer
Advance previously made or proposed to be made by the Master Servicer or the
related Servicer, as the case may be, that, in the good faith judgment of the
Master Servicer or such Servicer, will not be ultimately recoverable by the
Master Servicer from the related Mortgagor, related Liquidation Proceeds or
otherwise.
"OFFICER'S CERTIFICATE" means a certificate (i) signed by the Chairman
of the Board, the Vice Chairman of the Board, the President, a Managing
Director, a Vice President (however denominated), an Assistant Vice President,
the Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Master Servicer, or (ii) if provided for in this Agreement,
signed by a Servicing Officer, as the case may be, and delivered to the Trustee
as required by this Agreement.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Master Servicer, including, in-house counsel, reasonably
acceptable to the Trustee.
"ORIGINAL CLASS B-1 PRINCIPAL AMOUNT" means $____________.
"ORIGINAL CLASS B-2 PRINCIPAL AMOUNT" means $_________.
"ORIGINAL INVESTED AMOUNT" means $____________.
"ORIGINAL MORTGAGE LOAN" means the Mortgage Loan refinanced in
connection with the origination of a Refinancing Mortgage Loan.
"ORIGINAL SENIOR CLASS PRINCIPAL AMOUNT" means $______________.
"ORIGINAL SUBORDINATION AMOUNT" means the sum of the Original Class B-1
Principal Amount the Original Class B-2 Principal Amount and the Original
Invested Amount.
"OTS" means the Office of Thrift Supervision.
"OUTSTANDING" shall have the meaning ascribed thereto in the Indenture.
"OUTSTANDING MORTGAGE LOAN" means, as of any Due Date, a Mortgage Loan
with a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
"OWNER TRUSTEE" means ________________________, a Delaware banking
corporation, not in its individual capacity but solely as Owner Trustee under
the Deposit Trust Agreement, until a successor Person shall have become the
Owner Trustee pursuant to the applicable provisions of the Deposit Trust
Agreement, and thereafter "Owner Trustee" shall mean such successor Person.
["PERIODIC RATE CAP" means, as to any Mortgage Loan and any Adjustment
Date, the maximum percentage increase or decrease to the related Mortgage Rate
on any such Adjustment Date, as specified in the related Mortgage Note.]
"PERMITTED INVESTMENTS" means, at the time, any one or more of the
following obligations and securities.
(i) obligations of the United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the United States;
(ii) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving the highest long-term
debt rating of each Rating Agency, or such lower rating which will not result in
a change in the rating assigned to the Bonds by each Rating Agency;
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(iii) commercial paper or finance company paper which is then receiving
the highest commercial or finance company paper rating of each Rating Agency, or
such lower rating as will not result in a change in the rating assigned to the
Bonds by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company incorporated
under the laws of the United States or of any state thereof and subject to
supervision and examination by federal and/or state banking authorities,
provided that the commercial paper and/or long-term unsecured debt obligations
of such depository institution or trust company (or in the case of the principal
depository institution in a holding company system, the commercial paper or
long-term unsecured debt obligations of such holding company, but only if
▇▇▇▇▇'▇ Investors Service, Inc. ("▇▇▇▇▇'▇") is a Rating Agency) are then rated
one of the two highest long-term and the highest short-term ratings of each
Rating Agency for such securities, or such lower ratings as will not result in a
change in the rating assigned to the Bonds by each Rating Agency;
(v) demand or time deposits or certificates of deposit issued by any
bank or trust company or savings institution by any bank, insurance company or
other corporation containing, at the time of issuance of such agreements, such
terms and conditions as will not result in a change in the rating then assigned
to the Bonds by each Rating Agency;
(vi) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation containing, at the time of the issuance of such
agreements, such terms and conditions as will not result in a change in the
rating then assigned to the Bonds by each Rating Agency;
(vii) repurchase obligations with respect to any security described in
clauses (i) and (ii) above, in either case entered into with a depository
institution or trust company (acting as principal) described in clause (iv)
above;
(viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the face amount
thereof) bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state thereof which, at
the time of such investment, have one of the two highest ratings of each Rating
Agency (except if the Rating Agency is Moody's, such rating shall be the highest
commercial paper rating of Moody's for any such securities), or such lower
rating as will not result in a change in the rating then assigned to the Bonds
by each Rating Agency, as evidenced by a signed writing delivered by each such
Rating Agency;
(ix) interests in any money market fund which at the date of acquisition
of the interests in such fund and throughout the time such interests are held in
such fund has the highest applicable rating by each applicable Rating Agency or
such lower rating as will not result in a change in the rating then assigned to
the Bonds by each Rating Agency;
(x) short term investment funds sponsored by any trust company or
national banking association incorporated under the laws of the United States or
any state thereof which on the date of acquisition has been rated by each
applicable Rating Agency in their respective highest applicable rating category
or such lower rating as will not result in a change assigned to the Bonds by
each Rating Agency; and
(xi) such other investments having a specified stated maturity and
bearing interest or sold at a discount acceptable to each applicable Rating
Agency as will not result in a change in the rating then assigned to the Bonds
by each Rating Agency, as evidenced by a signed writing delivered by each Rating
Agency;
provided, that no such instrument shall be a Permitted Investment if (i)
such instrument evidences the right to receive interest only payments with
respect to the obligations underlying such instrument or (ii) such instrument
would require the Issuer to register as an investment company under the
Investment Company Act of 1940, as amended.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
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"POOL STATED PRINCIPAL BALANCE" means, as to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans on the Due Date in the month preceding the month of
such Distribution Date.
"PREPAYMENT INTEREST SHORTFALL" means, as to any Distribution Date,
Mortgage Loan and Principal Prepayment, the amount, if any, by which one month's
interest at the related Mortgage Rate on such Principal Prepayment exceeds the
amount of interest paid in connection with such Principal Prepayment.
"PREPAYMENT PERIOD" means, as to any Distribution Date, the calendar
month preceding the month of such Distribution Date.
"PRIMARY INSURANCE POLICY" means each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.
"PRINCIPAL PREPAYMENT" means any payment of principal by a Mortgagor on
a Mortgage Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Master Servicer in accordance with
the terms of the related Mortgage Note.
"PRINCIPAL PREPAYMENT IN FULL" means any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
"PROPRIETARY LEASE" means, with respect to any Cooperative Unit, a lease
or occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
"PROSPECTUS SUPPLEMENT" means the Prospectus Supplement dated
____________, 199__ relating to the Bonds.
"PUD" means Planned Unit Development.
"PURCHASE PRICE" means, with respect to any Mortgage Loan required to be
purchased by the Master Servicer pursuant to Section 2(a)(ii) or 2(d)(iv) or
purchased at the option of the Master Servicer pursuant to Section 3(n), an
amount equal to the sum of (i) 100% of the unpaid principal balance of the
Mortgage Loan on the date of such purchase, and (ii) accrued interest thereon at
the applicable Mortgage Rate (or at the applicable Adjusted Net Mortgage Rate if
the purchaser is the Master Servicer) from the date through which interest was
last paid by the Mortgagor to the Due Date in the month in which the Purchase
Price is to be distributed to Bondholders and the holder of the Investor
Certificate.
"QUALIFIED INSURER" means a mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a
FNMA- or FHLMC-approved mortgage insurer or having a claims paying ability
rating of at least "AA" or equivalent rating by a nationally recognized
statistical rating organization. Any replacement insurer with respect to a
Mortgage Loan must have at least as high a claims paying ability rating as the
insurer it replaces had on the Closing Date.
"RATING AGENCY" shall mean each of the Rating Agencies specified in the
Indenture. If either such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the Issuer, notice
of which designation shall be given to the Trustee. References herein to a given
rating or rating category of a Rating Agency shall mean such rating category
without giving effect to any modifiers.
"REALIZED LOSS" means, with respect to each Liquidated Mortgage Loan, an
amount (not less than zero or more than the Stated Principal Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus (ii) interest at the Net Mortgage Rate from the Due Date as to
which interest was last paid or advanced (and not reimbursed) to Bondholders up
to the Due Date in the month in which Liquidation Proceeds are required to be
distributed on the Stated Principal Balance of such Liquidated Mortgage Loan
from time to time, minus
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(iii) the Liquidation Proceeds, if any, received during the month in which such
liquidation occurred, to the extent applied as recoveries of interest at the
Adjusted Net Mortgage Rate and to principal of the Liquidated Mortgage Loan.
With respect to each Mortgage Loan which has become the subject of a Deficient
Valuation, if the principal amount due under the related Mortgage Note has been
reduced, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the principal
balance of the Mortgage Loan as reduced by the Deficient Valuation. With respect
to each Mortgage Loan which has become the subject of a Debt Service Reduction
and any Distribution Date, the amount, if any, by which the principal portion of
the related Scheduled Payment has been reduced.
"RECOGNITION AGREEMENT" means, with respect to any Cooperative Loan, an
agreement between the Cooperative Corporation and the originator of such
Mortgage Loan which establishes the rights of such originator in the Cooperative
Property.
"REFINANCING MORTGAGE LOAN" means any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
"RELIEF ACT" means the Soldiers' and Sailors' Civil Relief Act of 1940,
as amended.
"RELIEF ACT REDUCTIONS" means, with respect to any Distribution Date and
any Mortgage Loan as to which there has been a reduction in the amount of
interest collectible thereon for the most recently ended calendar month as a
result of the application of the Relief Act, the amount, if any, by which (i)
interest collectible on such Mortgage Loan for the most recently ended calendar
month is less than (ii) interest accrued thereon for such month pursuant to the
Mortgage Note.
"REO PROPERTY" means a Mortgaged Property acquired by the Trust Estate
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
"REPLACEMENT MORTGAGE LOAN" means a Mortgage Loan substituted by the
Master Servicer for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit C, (i) have a principal balance, after deduction of the principal
portion of the Scheduled Payment due in the month of substitution, not in excess
of, and not more than __% less than, the Stated Principal Balance of the Deleted
Mortgage Loan; (ii) be accruing interest at a rate no lower than and not more
than __% per annum higher than, that of the Deleted Mortgage Loan; (iii) have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (iv) have
a Mortgage Rate not lower than, and not more than ___% per annum higher than
that of the Deleted Mortgage Loan; (v) have a remaining term to maturity no
greater than (and not more than _______ less than that of the Deleted Mortgage
Loan; and (vi) comply with each representation and warranty set forth in Section
2(d)(ii).
"REQUEST FOR RELEASE" means the Request for Release submitted by the
Master Servicer to the Trustee, substantially in the form of Exhibits C and D,
as appropriate.
"REQUIRED INSURANCE POLICY" means with respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
"SAIF" means the Savings Association Insurance Fund, or any successor
thereto.
"S&P" means Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇
Inc. If S&P is designated as a Rating Agency in the Indenture, for purposes of
Section 8(c) the address for notices to S&P shall be Standard & Poor's Ratings
Group, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage
Surveillance Monitoring, or such other address as S&P may hereafter furnish to
the Issuer and the Master Servicer.
"SCHEDULE OF MORTGAGE LOANS" means the schedule attached hereto as
Schedule A listing the Mortgage Loans to be serviced by the Master Servicer
pursuant to this Agreement (as from time to time amended by the Master Servicer
to reflect the addition of Replacement Mortgage Loans and the deletion of
Deleted Mortgage Loans pursuant to the provisions of this Agreement and Section
8.04 of the Indenture) pledged to the Trustee as part of the Trust Estate and
from time to time subject to this Agreement and the Indenture, setting forth the
following information with respect to each Mortgage Loan:
(i) the loan number;
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(ii) the Mortgagor's name and the street address of the Mortgaged
Property, including the zip code;
(iii) the maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the first payment date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the Cut-off Date;
(viii) the Loan-to-Value Ratio at origination;
(ix) a code indicating whether the residential dwelling at the time
of origination was represented to be owner-occupied;
(x) a code indicating whether the residential dwelling is either (a)
a detached single family dwelling, (b) a dwelling in a PUD, (c)
a condominium unit, (d) a two- to four-unit residential property
or (e) a Cooperative Unit;
(xi) the Mortgage Rate in effect as of the Cut-off Date;
(xii) the Master Servicing Fee Rate;
(xiii) the Maximum Rate and the Minimum Rate;
(xiv) the Periodic Rate Cap;
(xv) the Adjustment Date;
(xvi) the Margin;
(xvii) the purpose for the Mortgage Loan; and
(xviii) the type of documentation program pursuant to which the Mortgage
Loan was originated.
Such schedule shall also set forth (a) the total of the amounts
described under (v) and (vii) above and (b) the weighted average, weighted on
the basis of the Cut-off Date Principal Balance, of the amounts described under
(xi) and (xii) above, in each case for all of the Mortgage Loans.
"SCHEDULED PAYMENT" means the scheduled [monthly payment] on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan which, unless otherwise specified herein, shall give effect to any related
Debt Service Reduction and any Deficient Valuation that affects the amount of
the monthly payment due on such Mortgage Loan.
"SECURITY AGREEMENT" means with respect to any Cooperative Loan, the
agreement between the owner of the related Cooperative Shares and the originator
of the related Mortgage Note, which defines the terms of the security interest
in such Cooperative Shares and the related Proprietary Lease.
"SENIOR BOND INTEREST RATE" means, with respect to any Interest Accrual
Period, the annual rate at which interest accrues on the Senior Bonds as
specified in such Bonds in Section 2.03(c) of the Indenture.
"SENIOR BONDS" means the Class A-1 Bonds.
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"SENIOR CLASS PRINCIPAL AMOUNT" means, as of any Distribution Date, the
Original Senior Class Principal Amount reduced by all amounts previously
distributed to Holders of the Senior Bonds as payments of principal.
"SENIOR INTEREST PAYMENT AMOUNT" means, as to any Distribution Date, the
sum of (i) [one month's] interest accrued during the related Interest Accrual
Period at the Senior Bond Interest Rate on the Senior Class Principal Amount,
subject to reduction pursuant to Section 5 and (ii) the sum of the amounts, if
any, by which the amounts described in clause (i) above on each prior
Distribution Date exceeded the amount actually distributed as interest on such
prior Distribution Dates and not subsequently distributed.
"SENIOR PERCENTAGE" means, as to any Distribution Date, the percentage
equivalent of a fraction the numerator of which is the Senior Class Principal
Amount immediately prior to such date and the denominator of which is the sum of
(i) the Senior Class Principal Amount, (ii) the Class B-1 Principal Amount (iii)
the Class B-2 Principal Amount and (iv) the Invested Amount, in each case
immediately prior to such date.
"SENIOR PRINCIPAL PAYMENT AMOUNT" means, as to any Distribution Date,
the Senior Percentage of the sum of (a) the principal portion of each Scheduled
Payment due on each Mortgage Loan [on the related Due Date], (b) the principal
portion of the purchase price of each Mortgage Loan that was purchased by
American Residential or another Person pursuant to the Mortgage Loan Purchase
Agreement [or any optional purchase by the Master Servicer of a defaulted
Mortgage Loan] as of such Distribution Date, (c) the Substitution Adjustment
Amount in connection with any Deleted Mortgage Loans received with respect to
such Distribution Date (d) any Insurance Proceeds or Liquidation Proceeds
allocable to recoveries of principal of Mortgage Loans that are not yet
Liquidated Mortgage Loans received during the [calendar month] preceding the
month of such Distribution Date, (e) with respect to any Mortgage Loans that
became a Liquidated Mortgage Loans during the [calendar month] preceding the
month of such Distribution Date, the Stated Principal Balance of such Mortgage
Loan and (f) all partial and full principal prepayments by borrowers received
during the related Prepayment Period.
"SERVICER" means any person with which the Master Servicer has entered
into a Servicing Agreement for the servicing of all or a portion of the Mortgage
Loans pursuant to Section 3(b).
"SERVICER ADVANCE" means the meaning ascribed to such term in Section
3(h)(iv).
"SERVICING ACCOUNT" means the separate Eligible Account or Accounts
created and maintained pursuant to Section 3(h)(ii).
"SERVICING ADVANCES" means all customary, reasonable and necessary "out
of pocket" costs and expenses incurred in the performance by the Master Servicer
of its servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
expenses reimbursable to the Master Servicer pursuant to Section 3(n) and any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3(l).
"SERVICING AGREEMENT" means any agreement between the Master Servicer
and the related Servicer relating to servicing and/or administration of certain
Mortgage Loans as provided in Section 3(b).
"SERVICING DEFAULT" means a servicing default as described under Section
7(a) of this Agreement.
"SERVICING FEE" means, as to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the applicable Servicing Fee
Rate on the Stated Principal Balance of such Mortgage Loan.
"SERVICING FEE RATE" means, with respect to any Mortgage Loan, the per
annum rate set forth in the Schedule of Mortgage Loans for such Mortgage Loan.
"SERVICING OFFICER" means any officer of the Master Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loan
whose name and facsimile signature appear on a list of servicing officers
furnished to the Trustee by the Master Servicer on the Closing Date pursuant to
this Agreement, as such list may from time to time be amended.
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"STATED PRINCIPAL BALANCE" means, as to any Mortgage Loan and Due Date,
the unpaid principal balance of such Mortgage Loan as of such Due Date as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period) after giving effect to any previous partial Principal
Prepayments and Liquidation Proceeds allocable to principal (other than with
respect to any Liquidated Mortgage Loan) and to the payment of principal due on
such Due Date and irrespective of any delinquency in payment by the related
Mortgagor.
"SUBORDINATED BONDS" means the Class B-1 Bonds and the Class B-2 Bonds.
"SUBSTITUTION ADJUSTMENT AMOUNT" has the meaning ascribed to such term
pursuant to Section 2(d)(iv).
"TRUST ESTATE" shall have the meaning ascribed to such term in the
Indenture.
"TRUSTEE FEE" means, as to any Distribution Date, the fee payable to the
Trustee pursuant to Section 6.07(1) of the Indenture, in an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the Pool Stated Principal
Balance with respect to such Distribution Date.
"TRUSTEE FEE RATE" means, with respect to each Mortgage Loan, the per
annum rate agreed upon in writing on or prior to the Closing Date by the Trustee
and the Issuer.
"TRUSTEE MORTGAGE FILE" means, with respect to each Mortgage Loan, the
original documents and instruments relating thereto to be retained in the
custody and possession of the Trustee, as set forth and enumerated in Section
2(a) of this Agreement.
"WITHDRAWAL DATE" means the __th day of each month, or if such day is
not a Business Day, the next preceding Business Day.
2. Mortgage Documents.
(a) Trustee to Retain Possession of Documents.
(i) Concurrently with the execution and delivery hereof, the
Issuer has pledged, transferred and assigned to the Trustee for the benefit of
the Bondholders, as collateral for the payment of principal and interest on the
Bonds, all right, title and interest of the Issuer in and to the Trust Estate
for the Bonds, including the Mortgage Loans. Prior to or contemporaneous with
the execution of this Agreement, or within the applicable time periods specified
below, the Issuer shall have delivered or caused to be delivered to the Trustee,
or its custodian, with respect to each Mortgage Loan all originals of the
Mortgage Documents and any other instruments relating thereto specified below,
which shall be referred to in this Agreement as the "Trustee Mortgage File"
relating to such Mortgage Loan:
(A) the original Mortgage Note, endorsed by manual or
facsimile signature in blank in the following form: "Pay to the
order of ________________________________ without recourse", with
all intervening endorsements showing a complete chain of
endorsement from the originator to the Person endorsing it to the
Trustee (each such endorsement being sufficient to transfer all
right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note);
(B) except as provided below, the original recorded
Mortgage or a copy of such Mortgage certified by the Master
Servicer as being a true and complete copy of the Mortgage;
(C) a duly executed assignment of the Mortgage (which may
be included in a blanket assignment or assignments), together
with, except as provided below, all interim recorded assignments
of such mortgage (each such assignment, when duly and validly
completed, to be in recordable form and sufficient to effect the
assignment of and transfer to the assignee thereof, under the
Mortgage to which the assignment relates); provided that, if the
related Mortgage has not been returned from the applicable public
recording office, such assignment of the Mortgage may exclude the
information to be provided by the recording office;
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(D) the original or copies of each assumption,
modification, written assurance or substitution agreement, if
any;
(E) except as provided below, the original or duplicate
original lender's title policy and all riders thereto; and
(F) In the case of a Cooperative Loan, the originals of
the following documents or instruments:
(a) The Cooperative Shares, together with a
stock power in blank;
(b) The executed Security Agreement;
(c) The executed Proprietary Lease;
(d) The executed Recognition Agreement;
(e) The executed assignment of Recognition
Agreement;
(f) The executed UCC-1 financing statement
with evidence of recording thereon which have been
filed in all places required to perfect the
Trustee's and the Bondholder's interest in the
Cooperative Shares and the Proprietary Lease; and
(g) Executed UCC-3 financing statements or
other appropriate UCC financing statements required
by state law, evidencing a complete and unbroken
line from the mortgagee to the Trustee with
evidence of recording thereon (or in a form
suitable for recordation).
In the event that in connection with any Mortgage Loan the Issuer cannot
deliver (i) the original recorded Mortgage, (ii) all interim recorded
assignments or (iii) the lender's title policy (together with all riders
thereto) satisfying the requirements of clause (B), (C) or (E) above,
respectively, concurrently with the execution and delivery hereof because such
document or documents have not been returned from the applicable public
recording office in the case of clause (B) or (C) above, or because the title
policy has not been delivered to either the Master Servicer or the Issuer by the
applicable title insurer in the case of clause (E) above, the Issuer shall
promptly deliver to the Trustee, in the case of clause (B) or (C) above, such
original Mortgage or such interim assignment, as the case may be, with evidence
of recording indicated thereon upon receipt thereof from the public recording
office, or a copy thereof, certified, if appropriate, by the relevant recording
office, but in no event shall any such delivery of the original Mortgage Loan
and each such interim assignment or a copy thereof, certified, if appropriate,
by the relevant recording office, be made later than one year following the
Closing Date, or, in the case of clause (E) above, later than 120 days following
the Closing Date; provided, however, that in the event the Issuer is unable to
deliver by such date each Mortgage and each such interim assignment by reason of
the fact that any such documents have not been returned by the appropriate
recording office, or, in the case of each such interim assignment, because the
related Mortgage has not been returned by the appropriate recording office, the
Issuer shall deliver such documents to the Trustee as promptly as possible upon
receipt thereof and, in any event, within ___ days following the Closing Date.
The Issuer shall forward or cause to be forwarded to the Trustee (a) from time
to time additional original documents evidencing an assumption or modification
of a Mortgage Loan and (b) any other documents required to be delivered by the
Issuer or the Master Servicer to the Trustee. In the event that the original
Mortgage is not delivered and in connection with the payment in full of the
related Mortgage Loan the public recording office requires the presentation of a
"lost instruments affidavit and indemnity" or any equivalent document, because
only a copy of the Mortgage can be delivered with the instrument of satisfaction
or reconveyance, the Master Servicer shall execute and deliver or cause to be
executed and delivered such a document to the public recording office. In the
case where a public recording office retains the original recorded Mortgage or
in the case where a Mortgage is lost after recordation in a public recording
office, the Issuer shall deliver to the Trustee a copy of such Mortgage
certified by such public recording office to be a true and complete copy of the
original recorded Mortgage.
As promptly as practicable subsequent to such pledge, transfer and
assignment, and in any event within thirty (30) days thereafter, the Master
Servicer shall (i) affix the Trustee's name to each assignment of Mortgage, as
the assignee thereof, (ii) cause such assignment to be in proper form for
recording in the appropriate public office for real property records within
thirty (30) days after receipt thereof and (iii) cause to be delivered for
recording in the appropriate public office for real property records the
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assignments of the Mortgages to the Trustee, except that, with respect to any
assignment of a Mortgage as to which the Master Servicer has not received the
information required to prepare such assignment in recordable form, the Master
Servicer's obligation to do so and to deliver the same for such recording shall
be as soon as practicable after receipt of such information and in any event
within thirty (30) days after the receipt thereof, and the Master Servicer need
not cause to be recorded any assignment which relates to a Mortgage Loan (a) the
Mortgaged Property and Trustee Mortgage File relating to which are located in
California or (b) in any other jurisdiction under the laws of which, as
evidenced by an Opinion of Counsel delivered by the Issuer (at the Issuer's
expense) to the Trustee in accordance with Section 3.11 of the Indenture, the
recordation of such assignment is not necessary to protect the Trustee's and the
Bondholders' interest in the related Mortgage Loan.
In the case of Mortgage Loans that have been prepaid in full as of the
Closing Date, the Issuer, in lieu of delivering the above documents to the
Trustee, will deposit in the Bond Account the portion of such payment that is
required to be deposited in the Bond Account pursuant to Section 3(h).
Until the Bonds have been paid in full and the Issuer has otherwise
fulfilled its obligations under the Indenture, the Trustee shall retain
possession and custody of each Trustee Mortgage File in accordance with and
subject to the terms and conditions set forth in the Indenture and this
Agreement.
(ii) The Trustee acknowledges receipt of the documents identified
in the Initial Certification in the form annexed hereto as Exhibit A and
declares that it holds and will hold such documents and the other documents
delivered to it constituting the Trustee Mortgage Files, and that it holds or
will hold such other assets as are included in the Trust Estate, in trust for
the exclusive use and benefit of all present and future Bondholders. The Trustee
acknowledges that it will maintain possession of the Mortgage Notes in the State
of _______________, unless otherwise permitted by the Rating Agencies.
The Trustee agrees to execute and deliver on the Closing Date to the
Issuer and the Master Servicer an Initial Certification in the form annexed
hereto as Exhibit A. Based on its review and examination required by and in
accordance with Sections 6.16 and 8.04 of the Indenture, and only as to the
documents identified in such Initial Certification, the Trustee acknowledges
that such documents appear regular on their face and relate to such Mortgage
Loan; provided that the Trustee shall be under no obligation to ascertain that,
except the information set forth in items (i) through (iv) and (vi) of the
Schedule of Mortgage Loans, any information set forth in said schedule is
accurate. The Trustee shall be under no duty or obligation to inspect, review or
examine said documents, instruments, certificates or other papers to determine
that the same are genuine, enforceable or appropriate for the represented
purpose or that they have actually been recorded in the real estate records or
that they are other than what they purport to be on their face.
Not later than 90 days after the Closing Date, the Trustee shall deliver
to the Issuer and the Master Servicer a Final Certification in the form annexed
hereto as Exhibit B, with any applicable exceptions noted thereon.
If, in the course of such review, the Trustee finds any document
constituting a part of a Trustee Mortgage File which does not meet the
requirements of Section 2(a)(i), the Trustee shall list such as an exception in
the Final Certification; provided, however, that the Trustee shall not make any
determination as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note or (ii) that any assignment is in
recordable form or is sufficient to effect the assignment of and transfer to the
assignee thereof under the mortgage to which the assignment relates. [American
Residential] shall promptly correct or cure such defect within 90 days from the
date it was so notified of such defect and, if [American Residential] does not
correct or cure such defect within such period, [American Residential] shall
either (a) substitute for the related Mortgage Loan a Replacement Mortgage Loan,
which substitution shall be accomplished in the manner and subject to the
conditions set forth in Section 2(d)(iv), or (b) purchase such Mortgage Loan
from the Trustee within 90 days from the date [American Residential] was
notified of such defect in writing at the Purchase Price of such Mortgage Loan.
Any such substitution pursuant to (a) above shall not be effected prior to the
delivery to the Trustee of a Request for Release substantially in the form of
Exhibit D. No substitution is permitted to be made in any calendar month after
the Determination Date for such month. The Purchase Price for any such Mortgage
Loan shall be deposited by [American Residential] in the Bond Account on or
prior to the Distribution Account Report Date in the month following the month
of purchase and, upon receipt of such deposit and certification with respect
thereto in the form of Exhibit D hereto, the Trustee shall release the related
Trustee Mortgage File to [American Residential] and shall execute and deliver at
[American Residential]'s request such instruments of transfer or assignment
prepared by [American Residential], in each case without recourse, as shall be
necessary to vest in [American Residential], or a designee, the Trustee's
interest in any Mortgage Loan released pursuant hereto.
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The Trustee shall retain possession and custody of each Trustee Mortgage
File in accordance with and subject to the terms and conditions set forth
herein. [American Residential] shall promptly deliver to the Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Trustee Mortgage File as come into the possession
of [American Residential] from time to time.
It is understood and agreed that the obligation of [American
Residential] to substitute for or to purchase any Mortgage Loan which does not
meet the requirements of Section 2(a)(i) shall constitute the sole remedy
respecting such defect available to the Trustee and any Bondholder against
[American Residential].
(b) Trustee to Cooperate; Release of Trustee Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
the Trustee by delivering, or causing to be delivered, a "Request for Release"
substantially in the form of Exhibit D, all in accordance with Section 8.08(c)
of the Indenture. Upon receipt of such request, the Trustee shall promptly
release the related Trustee Mortgage File to the Master Servicer, and the
Trustee shall at the Master Servicer's direction execute and deliver to the
Master Servicer the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
in each case provided by the Master Servicer, together with the Mortgage Note
with written evidence of cancellation thereon, all in accordance with Section
8.08(c) of the Indenture. Expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the related
Mortgagor. From time to time and as shall be appropriate for the servicing or
foreclosure of any Mortgage Loan, including for such purpose collection under
any policy of flood insurance, any fidelity bond or errors or omissions policy,
or for the purposes of effecting a partial release of any Mortgaged Property
from the lien of the Mortgage or the making of any corrections to the Mortgage
Note or the Mortgage or any of the other documents included in the Trustee
Mortgage File, the Trustee shall, upon delivery to the Trustee in accordance
with Section 8.08(c) of the Indenture of a Request for Release in the form of
Exhibit C signed by a Servicing Officer, release the Trustee Mortgage File to
the Master Servicer or, at the Master Servicer's direction, to the related
Servicer. Subject to the further limitations set forth below, the Master
Servicer shall cause the Trustee Mortgage File or documents so released to be
returned to the Trustee when the need therefor by the Master Servicer no longer
exists, unless the Mortgage Loan is liquidated and the proceeds thereof are
deposited in the Bond Account, in which case the Master Servicer shall deliver
to the Trustee a Request for Release in the form of Exhibit D, signed by a
Servicing Officer.
If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
the Master Servicer shall deliver or cause to be delivered to the Trustee, for
signature, as appropriate, any court pleadings, requests for trustee's sale or
other documents necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity.
(c) Documents, Records and Funds in Possession of Master Servicer to be
Held for Trustee.
(i) Notwithstanding any other provisions of this Agreement, the
Master Servicer shall deliver to the Trustee as required by this Agreement and
the Indenture all documents and instruments relating to the Mortgage Loans
coming into the possession of the Master Servicer from time to time and shall
account fully to the Trustee for any funds received by the Master Servicer or
which otherwise are collected by the Master Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan. All Trustee Mortgage Files,
including without limitation the Mortgage Documents contained therein, funds
collected or held by, or under the control of, the Master Servicer from time to
time in respect of any Mortgage Loans, whether from the collection of principal
and interest payments or from Liquidation Proceeds or Insurance Proceeds,
including but not limited to any funds on deposit in any Eligible Account and
any other items constituting a part of the Trust Estate which from time to time
come into the possession of the Master Servicer, shall be held by the Master
Servicer for and on behalf of the Trustee and the Bondholders as specified in
Section 8.10 of the Indenture, and shall be and remain the sole and exclusive
property of the Trustee, subject to the applicable provisions of this Agreement
and the Indenture. The Master Servicer also agrees that it shall not create,
incur or subject any Trustee Mortgage File, Mortgage Documents or other
documents relating to a Mortgage Loan which are in the possession of the Master
Servicer with respect to each Mortgage Loan (each a "Master Servicer Mortgage
File") or any funds that are deposited in the Distribution Account, the Bond
Account, any Eligible Account, Servicing Account or Escrow Account, or any funds
that otherwise are or may become due or payable to the Trustee for the benefit
of the Bondholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set-off against any Master
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Servicer Mortgage File or Trustee Mortgage File or any funds collected or held
by, or under the control of, the Master Servicer from time to time in respect of
a Mortgage Loan; provided, however, that the Master Servicer shall be entitled
to set-off against and deduct from any such funds any amounts that are properly
due and payable to the Master Servicer under this Agreement.
(ii) The Master Servicer hereby acknowledges that concurrently
with the execution of this Agreement, the Trustee has acquired and holds a
security interest in the Trustee Mortgage Files and in all Mortgage Loans
represented by such Master Servicer Mortgage Files and Trustee Mortgage Files
and in all funds now or hereafter held by, or under the control of, the Master
Servicer that are collected by the Master Servicer in connection with the
Mortgage Loans, whether as Scheduled Payments, as Principal Prepayments, or as
Liquidation Proceeds or Insurance Proceeds, and in all proceeds of the foregoing
and proceeds of proceeds (but excluding any Master Servicing Fees, [Servicing
Fees], Trustee Fees and any other amounts or reimbursements to which the Master
Servicer is entitled under this Agreement). The Master Servicer agrees that so
long as the Mortgage Loans are assigned to the Trustee, all Master Servicer
Mortgage Files and Trustee Mortgage Files (and any documents or instruments
constituting a part of such files), and such funds which come into the
possession or custody of, or which are subject to the control of, the Master
Servicer shall be held by the Master Servicer for and on behalf of the Trustee
as the Trustee's agent and bailee for purposes of perfecting the Trustee's
security interest therein, as provided by Section 9-305 of the Uniform
Commercial Code of the state in which such property is located, or by other
laws, as specified in Section 8.10 of the Indenture. The Master Servicer hereby
accepts such agency and acknowledges that the Trustee, as secured party, will be
deemed to have possession at all times of all Master Servicer Mortgage Files,
Trustee Mortgage Files and any other documents or instruments constituting a
part of such files, such funds and other items for purposes of Section 9-305 of
the Uniform Commercial Code of the state in which such property is held by the
Master Servicer.
(d) Representations, Warranties and Covenants of the Issuer and the
Master Servicer.
(i) ________________________, in its capacity as Master Servicer,
hereby makes the representations and warranties set forth in Schedule II hereto,
and by this reference incorporated herein, to the Issuer and the Trustee, as of
the Closing Date, or if so specified therein, as of the Cut-off Date.
(ii) [American Residential] in its capacity as [Seller], has made
the representations and warranties set forth in Schedule III hereto, and such
representations and warranties, and the obligations associated therewith, have
been assigned to the Issuer and the Trustee, and by this reference are hereby
incorporated herein, as of the Closing Date, or if so specified therein, as of
the Cut-off Date.
(iii) The Issuer hereby makes the representations and warranties
set forth in Schedule IV hereto, and by this reference incorporated herein, to
the Trustee and the Master Servicer, as of the Closing Date.
(iv) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Section 2(d)(ii) that materially and
adversely affects the interests of the Bondholders in any Mortgage Loan, the
party discovering such breach shall give prompt notice thereof to the other
parties. [American Residential] hereby covenants that within 90 days of the
earlier of its discovery or its receipt of written notice from any party of a
breach of any representation or warranty made pursuant to Section 2(d)(ii) which
materially and adversely affects the interests of the Bondholders, in any
Mortgage Loan, it shall cure such breach in all material respects, and if such
breach is not so cured, shall, (i) remove such Mortgage Loan (a "Deleted
Mortgage Loan") from the Trust Estate and substitute in its place a Replacement
Mortgage Loan, in the manner and subject to the conditions set forth in this
Section 2(d); or (ii) purchase the affected Mortgage Loan or Mortgage Loans from
the Trustee at the Purchase Price in the manner set forth below; provided,
however, that any such substitution pursuant to (i) above shall not be effected
prior to the delivery to the Trustee of a Request for Release substantially in
the form of Exhibit D, and the Trustee Mortgage File for any such Replacement
Mortgage Loan. The Issuer shall promptly reimburse the Master Servicer and the
Trustee for any expenses reasonably incurred by the Master Servicer or the
Trustee in respect of enforcing the remedies for such breach. With respect to
the representations and warranties described in this Section 2(d) which are made
to the best of the Issuer's knowledge, if it is discovered by either the Issuer
or the Trustee that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the interests of
the Bondholders therein, notwithstanding the Issuer's lack of knowledge with
respect to the substance of such representation or warranty, such inaccuracy
shall be deemed a breach of the applicable representation or warranty.
With respect to any Replacement Mortgage Loan or Mortgages, the Issuer
shall deliver to the Trustee for the benefit of the Bondholders the Mortgage
Note, the Mortgage, the related assignment of the Mortgage, and such other
documents and agreements as
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are required by Section 2(a), with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2(a). No substitution is permitted to be made in
any calendar month after the Determination Date for such month. Scheduled
Payments due with respect to Replacement Mortgage Loans in the month of
substitution shall not be part of the Trust Estate and will be retained by
[American Residential] on the next succeeding Distribution Date. For the month
of substitution, Available Funds will include the monthly payment due on any
Deleted Mortgage Loan for such month and thereafter [American Residential] shall
be entitled to retain all amounts received in respect of such Deleted Mortgage
Loan.
The Master Servicer shall amend the Schedule of Mortgage Loans for the
benefit of the Bondholders to reflect the removal of such Deleted Mortgage Loan
or Mortgages and the substitution of the Replacement Mortgage Loan or Mortgages
and the Master Servicer shall deliver the amended Schedule of Mortgage Loans to
the Trustee. Upon such substitution, the Replacement Mortgage Loan or Mortgages
shall be subject to the terms of this Agreement in all respects, and [American
Residential] shall be deemed to have made with respect to such Replacement
Mortgage Loan or Mortgages, as of the date of substitution, the representations
and warranties made pursuant to Section 2(d)(ii) with respect to such Mortgage
Loan or Mortgages. Upon any such substitution and the deposit to the Bond
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Trustee shall release
the Trustee Mortgage File held for the benefit of the Bondholders relating to
such Deleted Mortgage Loan or Mortgages to [American Residential] and shall
execute and deliver at the [American Residential's] direction such instruments
of transfer or assignment prepared by [American Residential], in each case
without recourse, as shall be necessary to vest title in [American Residential],
or its designee, the Trustee's interest in any Deleted Mortgage Loan or
Mortgages substituted for pursuant to this Section 2(d).
For any month in which [American Residential] substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans, [American
Residential] will determine the amount (if any) by which the aggregate principal
balance of all such Replacement 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 the scheduled principal portion of the monthly
payments due in the month of substitution). The amount of such shortage (the
"Substitution Adjustment Amount") shall be deposited into the Bond Account by
[American Residential] on or before the Distribution Account Deposit Date for
the Distribution Date in the month succeeding the calendar month during which
the related Mortgage Loan became required to be purchased or replaced hereunder.
In the event that [American Residential] shall have purchased a Mortgage
Loan, the Purchase Price therefor shall be deposited in the Bond Account
pursuant to Section 3(h) and in compliance with the provisions of Section 8.04
of the Indenture on or before the Distribution Account Deposit Date for the
Distribution Date in the month following the month during which [American
Residential] became obligated hereunder to purchase or replace such Mortgage
Loan and upon such deposit of the Purchase Price and receipt of a Request for
Release in the form of Exhibit D hereto, the Trustee shall release the related
Trustee Mortgage File held for the benefit of the Bondholders to such Person,
and the Trustee shall execute and deliver at such Person's direction such
instruments of transfer or assignment prepared by such Person, in each case
without recourse, as shall be necessary to transfer title from the Trustee
pursuant to Sections 8.08(c) and 8.12 of the Indenture. It is understood and
agreed that the obligation under this Agreement of any Person to cure, purchase
or replace any Mortgage Loan as to which a breach has occurred and is continuing
shall constitute the sole remedy against such Persons respecting such breach
available to Bondholders or the Trustee on their behalf.
The representations and warranties made pursuant to this Section 2(d)
shall survive delivery of the respective Trustee Mortgage Files to the Trustee
for the benefit of the Bondholders.
(e) Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Issuer and the Trustee as
follows:
(i) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy; and
(ii) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Issuer, any affiliate of
the Issuer or the Trustee and prepared by the Master Servicer pursuant to this
Agreement will contain any untrue statement of a material fact or omit to state
a material fact necessary to make such information, certificate, statement or
report not misleading.
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3. General Duties of the Master Servicer.
The parties agree that, subject to the provisions of Section 7 hereof,
the Master Servicer shall service the Mortgage Loans in the manner and on the
terms and conditions set forth below:
(a) Master Servicer to Service Mortgage Loans.
For and on behalf of the Issuer, the Trustee and the Bondholders, the
Master Servicer shall service and administer the Mortgage Loans in accordance
with the terms of this Agreement and customary and usual standards of practice
of prudent mortgage loan servicers. In connection with such servicing and
administration, the Master Servicer shall have full power and authority, acting
alone and/or through Servicers as provided in Section 3(b), to do or cause to be
done any and all things that it may deem necessary or desirable in connection
with such servicing and administration, including but not limited to, the power
and authority, subject to the terms hereof, (i) to execute and deliver, on
behalf of the Bondholders and the Trustee, customary consents or waivers and
other instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) to effectuate foreclosure or
other conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan; provided that the Master Servicer shall not take, or permit any
Servicer to take, any action that is inconsistent with or prejudices the
interests of the Trustee or the Bondholders in any Mortgage Loan or the rights
and interests of the Issuer, the Trustee and the Bondholders under this
Agreement. The Master Servicer shall represent and protect the interests of the
Trustee in the same manner as it protects its own interests in mortgage loans in
its own portfolio in any claim, proceeding or litigation regarding a Mortgage
Loan. Without limiting the generality of the foregoing, the Master Servicer, in
its own name or in the name of any Servicer or the Issuer and the Trustee, is
hereby authorized and empowered by the Issuer and the Trustee, when the Master
Servicer or the Servicer, as the case may be, believes it appropriate in its
reasonable judgment, to execute and deliver, on behalf of the Trustee, the
Issuer, the Bondholders or any of them, any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and with respect to
the Mortgaged Properties held for the benefit of the Trustee and the
Bondholders. The Master Servicer shall prepare and deliver to the Issuer and/or
the Trustee such documents requiring execution and delivery by either or both of
them as are necessary or appropriate to enable the Master Servicer to service
and administer the Mortgage Loans to the extent that the Master Servicer is not
permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents, the Issuer and/or the Trustee shall
execute such documents and deliver them to the Master Servicer.
In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3(i), and further as
provided in Section 3(k). The costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating payments to the Bondholders, be added to the Stated Principal
Balances of the related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loans so permit.
(b) Subservicing; Enforcement of the Obligations of Servicers.
(i) The Master Servicer may arrange for the servicing of any
Mortgage Loan by a Servicer pursuant to a Servicing Agreement; provided,
however, that such servicing arrangement and the terms of the related Servicing
Agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder. Each Servicer
of a Mortgage Loan shall be entitled to receive and retain, as provided in the
related Servicing Agreement and in Section 5(a), the related Servicing Fee from
payments of interest received on such Mortgage Loan after payment of all amounts
required to be remitted to the Master Servicer in respect of such Mortgage Loan.
Unless the context otherwise requires, references in this Agreement to actions
taken or to be taken by the Master Servicer in servicing the Mortgage Loans
include actions taken or to be taken by a Servicer on behalf of the Master
Servicer. With the approval of the Master Servicer, a Servicer may delegate its
servicing obligations to third-party servicers, but such Servicer will remain
obligated under the related Servicing Agreement. The Master Servicer and
Servicer may enter into amendments to the related Servicing Agreement or a
different form of Servicing Agreement; provided, however, that any such
amendments or different forms shall be consistent with and not violate the
provisions of this Agreement in a manner which would materially and adversely
affect the interests of the Trustee and the Bondholders.
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(ii) For purposes of this Agreement, the Master Servicer shall be
deemed to have received any collections, recoveries or payments with respect to
the Mortgage Loans that are received by a Servicer regardless of whether such
payments are remitted by the Servicer to the Master Servicer.
(iii) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the Bondholders, shall use its best
reasonable efforts to enforce the obligations of each Servicer under the related
Servicing Agreement, to the extent that the non-performance of any such
obligation would have material and adverse effect on a Mortgage Loan. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Servicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement to the
extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loan or (ii) from a specific recovery of costs, expenses or
attorneys fees against the party against whom such enforcement is directed.
(c) Successor Servicers.
The Master Servicer shall be entitled to terminate any Servicing
Agreement that may exist in accordance with the terms and conditions of such
Servicing Agreement and without any limitation by virtue of this Agreement;
provided, however, that in the event of termination of any Servicing Agreement
by the Master Servicer or the Servicer, the Master Servicer shall either act as
servicer of the related Mortgage Loan or enter into a Servicing Agreement with a
successor Servicer which will be bound by the terms of the related Servicing
Agreement. If the Master Servicer or any affiliate of the Master Servicer acts
as servicer, it will not assume liability for the representations and warranties
of the Servicer which it replaces. If the Master Servicer enters into a
Servicing Agreement with a successor Servicer, the Master Servicer shall use
reasonable efforts to have the successor Servicer assume liability for the
representations and warranties made by the terminated Servicer in respect of the
related Mortgage Loans and, in the event of any such assumption by the successor
Servicer, the Master Servicer may, in the exercise of its business judgment,
release the terminated Servicer from liability for such representations and
warranties.
(d) Liability of the Master Servicer.
Notwithstanding any Servicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer or
a Servicer or references to actions taken through a Servicer or otherwise, the
Master Servicer shall remain obligated and liable to the Trustee and Bondholders
for the servicing and administering of the Mortgage Loans in accordance with the
provisions of Section 3(a) without diminution of such obligation or liability by
virtue of such Servicing Agreements or arrangements or by virtue of
indemnification from the Servicer and to the same extent and under the same
terms and conditions as if the Master Servicer alone were servicing and
administering the Mortgage Loans. The Master Servicer shall be entitled to enter
into any agreement with a Servicer for indemnification of the Master Servicer
and nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
(e) No Contractual Relationship Between Servicers and the Trustee.
Any Servicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Servicer in
its capacity as such and not as an originator shall be deemed to be between the
Servicer and the Master Servicer alone and the Trustee and Bondholders shall not
be deemed parties thereto and shall have no claims, rights, obligations, duties
or liabilities with respect to the Servicer in its capacity as such except as
set forth in Section 3(g).
(f) Rights of the Issuer and the Trustee in Respect of the Master
Servicer.
The Issuer may, but is not obligated to, enforce the obligations of the
Master Servicer hereunder and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer hereunder
and in connection with any such defaulted obligation to exercise the related
rights of the Master Servicer hereunder; provided that the Master Servicer shall
not be relieved of any of its obligations hereunder by virtue of such
performance by the Issuer or its designee. Neither the Trustee nor the Issuer
shall have any responsibility or liability for any action or failure to act by
the Master Servicer nor shall the Trustee or the Issuer be obligated to
supervise the performance of the Master Servicer hereunder or otherwise.
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(g) Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no longer be
the Master Servicer hereunder (including by reason of a Servicing Default), the
Trustee or its successor shall thereupon assume all of the rights and
obligations of the Master Servicer hereunder arising thereafter, except that the
Trustee shall not be (i) liable for losses of the Master Servicer pursuant to
Section 3(l) or any acts or omissions of the predecessor Master Servicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate purchases or substitutions of
Mortgage Loans hereunder, including but not limited to purchases or
substitutions pursuant to Section 2(a)(ii) or 2(d)(iv), (iv) responsible for
expenses of the Master Servicer pursuant to Section 2(d)(iv) or (v) deemed to
have made any representations and warranties of the Master Servicer hereunder.
Any such assumption shall be subject to Section 7(b). If the Master Servicer
shall for any reason no longer be the Master Servicer (including by reason of
any Servicing Default), the Trustee or its successor shall succeed to any rights
of the Master Servicer under each Servicing Agreement and any obligations of the
Master Servicer under each Servicing Agreement arising thereafter. The Trustee
or the successor Master Servicer shall be deemed to have assumed all of the
Master Servicer's interest therein and to have replaced the Master Servicer as a
party to any Servicing Agreement entered into by the Master Servicer as
contemplated by Section 3(b) to the same extent as if such Servicing Agreement
had been assigned to the assuming party except that the Master Servicer shall
not be relieved of any liability or obligations under any such Servicing
Agreement.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each Servicing Agreement or substitute servicing agreement
and the Mortgage Loans then being serviced thereunder and an accounting of
amounts collected or held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of the substitute Servicing Agreement to the
assuming party.
(h) Collection of Mortgage Loan Payments; Eligible Accounts; Servicing
Accounts; Bond Account.
(i) The Master Servicer shall make reasonable efforts in
accordance with the customary and usual standards of practice of prudent
mortgage servicers to collect all payments called for under the terms and
provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Master Servicer
may in its discretion (i) waive any late payment charge or any prepayment charge
or penalty interest in connection with the prepayment of a Mortgage Loan and
(ii) extend the due dates for payments due on a Mortgage Note for a period not
greater than 120 days; provided, however, that the Master Servicer cannot extend
the maturity of any such Mortgage Loan past the date on which the final payment
is due on the latest maturing Mortgage Loan as of the Cut-off Date. In the event
of any such arrangement, the Master Servicer shall make Advances on the related
Mortgage Loan in accordance with the provisions of Section 4 during the
scheduled period in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangements. The Master
Servicer shall not be required to institute or join in litigation with respect
to collection of any payment (whether under a Mortgage, Mortgage Note or
otherwise or against any public or governmental authority with respect to a
taking or condemnation) if it reasonably believes that enforcing the provision
of the Mortgage or other instrument pursuant to which such payment is required
is prohibited by applicable law.
(ii) In those cases where a Servicer is servicing Mortgage Loans
pursuant to a Servicing Agreement, the Master Servicer shall cause each
Servicer, pursuant to the respective Servicing Agreement, to establish and
maintain one or more Servicing Accounts, each of which shall be an Eligible
Account. The Servicer will be required under its Servicing Agreement to deposit
into the Servicing Account on a daily basis no later than the Business Day
following receipt all proceeds of Mortgage Loans received by the Servicer, less
its Servicing Fees and unreimbursed Servicer Advances and expenses, to the
extent permitted by the Servicing Agreement. The Servicer shall not be required
to deposit in the Servicing Account payments or collections in the nature of
prepayment charges or late charges.
(iii) The Master Servicer shall establish and maintain a
Collection Account, which shall be an Eligible Account, into which the Master
Servicer shall deposit or cause to be deposited on or before each Withdrawal
Date payments, collections and Servicer Advances remitted by Servicers in
respect of the Mortgage Loans.
(iv) On or before the Withdrawal Date in each calendar month, the
Master Servicer shall cause each Servicer, pursuant to its Servicing Agreement,
to remit to the Master Servicer for deposit in the Collection Account all funds
held in the Servicing Account with respect to each Mortgage Loan serviced by
such Servicer that are required to be remitted to the Master Servicer. The
Servicer will also be required, pursuant to the Servicing Agreement, to advance
on or before each such Withdrawal
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Date amounts equal to any Scheduled Payments (net of its Servicing Fees with
respect thereto) not received on any Mortgage Loans by the Servicer (such
amount, a "Servicer Advance"). The Servicer's obligation to advance with respect
to each Mortgage Loan will continue up to and including the first day of the
month following the date on which the related Mortgaged Property is sold at a
foreclosure sale or is acquired by the Issuer by deed in lieu of foreclosure or
otherwise. All such Servicer Advances received by the Master Servicer shall be
deposited promptly by it in the Collection Account or the Bond Account, as
appropriate.
Within five Business Days after the receipt by a Servicer of a Principal
Prepayment in Full or any Liquidation Proceeds or Insurance Proceeds (not
required to be applied to the restoration or repair of the related Mortgaged
Property), the Master Servicer shall cause such Servicer, pursuant to the
related Servicing Agreement, to remit such amounts to the Master Servicer for
deposit in the Collection Account.
(v) The Master Servicer shall establish and maintain a Bond
Account, which shall be an Eligible Account, into which the Master Servicer
shall deposit or cause to be deposited on a daily basis within one Business Day
of receipt, except as otherwise specifically provided herein, the following
payments and collections remitted by Servicers or received by it in respect of
Mortgage Loans subsequent to the Cut-off Date (other than in respect of
principal and interest due on the Mortgage Loans on or before the Cut-off Date)
and the following amounts required to be deposited hereunder:
(A) all payments on account of principal on the Mortgage
Loans, including Principal Prepayments and the principal
component of any Servicer Advance;
(B) all payments on account of interest on the Mortgage
Loans, net of the sum of the related Master Servicing Fee and
related Servicing Fee, and the interest component of any Servicer
Advance;
(C) all Insurance Proceeds and Liquidation Proceeds (net
of any related expenses of the related Servicer), other than
proceeds to be applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance
with the Master Servicer's normal servicing procedures;
(D) any amount required to be deposited by the Master
Servicer pursuant to Section 3(h)(vii) in connection with any
losses on Permitted Investments;
(E) any amounts required to be deposited by the Master
Servicer pursuant to Sections 3(l) and 3(n);
(F) all Purchase Prices from the Master Servicer and all
Substitution Adjustment Amounts;
(G) all Advances made by the Master Servicer pursuant to
Section 4; and
(H) any other amounts required to be deposited hereunder.
[In addition, on or prior to the last day of the month in which the
Closing Date occurs, the Issuer shall cause an amount equal to $__________ to be
deposited in the Bond Account, such amount to be treated as a Principal
Prepayment in Full of a Mortgage Loan.]
(vi) In addition, with respect to any Mortgage Loan that is
subject to a buydown agreement, on each Due Date for such Mortgage Loan, in
addition to the monthly payment remitted by the Mortgagor, the Master Servicer
shall cause funds to be deposited into the Bond Account in an amount required to
cause an amount of interest to be paid with respect to such Mortgage Loan equal
to the amount of interest that has accrued on such Mortgage Loan from the
preceding Due Date at the Mortgage Rate net of the Master Servicing Fee on such
date.
The foregoing requirements for remittance by the Master Servicer shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of prepayment penalties,
late payment charges or assumption fees, if collected, need not be remitted by
the Master Servicer. In the event that the Master Servicer shall remit any
amount not required to be remitted, it may at any time withdraw or direct the
institution maintaining the Bond Account to withdraw such amount from the Bond
Account, any provision herein to the contrary notwithstanding. Such withdrawal
or direction may be accomplished by delivering written notice thereof to the
Trustee or such other institution maintaining the Bond Account which describes
the amounts
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deposited in error in the Bond Account. The Master Servicer shall maintain
adequate records with respect to all withdrawals made pursuant to this Section
3(h)(vi). All funds deposited in the Bond Account shall be held in trust for the
Bondholders until withdrawn in accordance with Section 3(k).
(vii) On or prior to each Distribution Account Deposit Date,
after payment of any amount described in Section 6.17 of the Indenture, as well
as any amounts owed to the Trustee pursuant to Section 6.07 of the Indenture,
the Master Servicer will withdraw from the Bond Account the Bond Distribution
Amount, to the extent of Available Funds, and will deposit such amount in the
Distribution Account.
(viii) On each Distribution Date, after payment of any amount
described in Section 6.17 of the Indenture, as well as any amounts owed to the
Trustee pursuant to Section 6.07 of the Indenture, the Master Servicer shall
withdraw the Available Funds remaining on deposit in the Bond Account, after
giving effect to the withdrawal therefrom pursuant to Section 3(h)(vii) above,
and pay such funds to the Certificate Paying Agent for application in the
following order of priority and, in each case, to the extent of funds remaining:
(1) to the Investor Certificates, an amount allocable to
interest equal to the Certificate Interest Payment Amount for
such Distribution Date;
(2) to the Investor Certificates, an amount allocable to
principal equal to the Invested Amount Payment for such
Distribution Date; and
(3) to the holders of the Investor Certificates, the
balance of any Available Funds remaining in the Bond Account.
With respect to each Distribution Date, the amounts described in clause
(1) of this Section 3(h)(viii) for such Distribution Date shall be reduced by
the Investor Certificates' pro rata share (based on the Interest Payment Amount
of the Investor Certificates before reduction pursuant to this Section
3(h)(viii)) of each (A) Relief Act Reduction incurred during the calendar month
preceding the month of such Distribution Date and (B) Prepayment Interest
Shortfalls. In addition, with respect to each Distribution Date, the amounts
described in clauses (2) and (3) of this Section 3(h)(viii) for such
Distribution Date shall be reduced by an amount equal to the excess, if any, of
Prepayment Interest Shortfalls, after giving effect to the reduction described
in the immediately preceding sentence, over the Master Servicing Fee for such
payment date.
(ix) Each institution at which the Bond Account, the Distribution
Account or the Collection Account is maintained shall invest the funds therein
as directed in writing by the Master Servicer in Permitted Investments, which
shall mature not later than (i) in the case of the Bond Account, the second
Business Day next preceding the related Distribution Account Deposit Date
(except that if such Permitted Investment is an obligation of the institution
that maintains such account, then such Permitted Investment shall mature not
later than the Business Day next preceding such Distribution Account Deposit
Date), (ii) in the case of the Collection Account, the next Business Day and
(iii) in the case of the Distribution Account, the Business Day next preceding
the related Distribution Date (except that if such Permitted Investment is an
obligation of the institution that maintains such account, then such Permitted
Investment shall mature not later than such Distribution Date) and, in each
case, shall not be sold or disposed of prior to its maturity. All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Bondholders. All income and gain (net of any losses) realized from any such
investment of funds on deposit in the Bond Account, the Distribution Account or
the Collection Account shall be for the benefit of the Master Servicer as
servicing compensation and shall be remitted to it monthly as provided herein.
The amount of any realized losses in the Bond Account, the Distribution Account
or the Collection Account incurred in any such account in respect of any such
investments shall promptly be deposited by the Master Servicer in the Bond
Account, the Distribution Account or the Collection Account, as applicable. The
Trustee in its fiduciary capacity shall not be liable for the amount of any loss
incurred in respect of any investment or lack of investment of funds held in the
Bond Account, the Distribution Account or the Collection Account and made in
accordance with this Section 3(h)(ix).
(x) The Master Servicer shall give notice to the Trustee, the
Issuer and each Rating Agency of any proposed change of the location of the Bond
Account not later than 30 days and not more than 45 days prior to any change
thereof.
(i) Collection of Taxes, Assessments and Similar Items; Escrow Accounts.
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(i) To the extent required by the related Mortgage Note and not
violative of current law, the Master Servicer shall cause each Servicer to
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Master Servicer or any Servicer to compel a Mortgagor to establish
an Escrow Account in violation of applicable law.
(ii) Withdrawals of amounts so collected from the Escrow Accounts
may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, condominium or PUD association dues, or comparable items, to
reimburse the Master Servicer or the related Servicer out of related collections
for any payments made pursuant to Sections 3(l) (with respect to taxes and
assessments and insurance premiums) and 3(m) (with respect to hazard insurance),
to refund to any Mortgagors any sums determined to be overages, to pay interest,
if required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
8(a). The Escrow Accounts shall not be a part of the Trust Estate.
(iii) The Master Servicer shall advance any payments referred to
in Section 3(i)(i) that are not timely paid by the Mortgagors or advanced by the
Servicers on the date when the tax, premium or other cost for which such payment
is intended is due, but the Master Servicer shall be required so to advance only
to the extent that such advances, in the good faith judgment of the Master
Servicer, will be recoverable by the Master Servicer out of Insurance Proceeds,
Liquidation Proceeds or otherwise.
(j) Access to Certain Documentation and Information Regarding the
Mortgage Loans.
The Master Servicer shall afford, or shall cause the Servicers to
afford, the Issuer and the Trustee reasonable access to all records and
documentation regarding the Mortgage Loans and all accounts, insurance
information and other matters relating to this Agreement, such access being
afforded without charge, but only upon reasonable request and during normal
business hours at the office designated by the Master Servicer.
Upon reasonable advance notice in writing, the Master Servicer will
provide, or will cause the Servicers to provide, to each Bondholder which is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Bondholder to comply with applicable regulations of
the OTS or other regulatory authorities with respect to investment in the Bonds;
provided that the Master Servicer and any Servicer shall be entitled to be
reimbursed by each such Bondholder for actual expenses incurred by the Master
Servicer or such Servicer in providing such reports and access.
(k) Permitted Withdrawals from the Bond Account.
The Master Servicer may from time to time make withdrawals from the Bond
Account for the following purposes:
(i) to pay to the Master Servicer or the related Servicer (to the
extent not previously retained), the servicing compensation to which it is
entitled pursuant to Section 5(a), and to pay to the Master Servicer, as
additional master servicing compensation, earnings on or investment income with
respect to funds in or credited to the Bond Account;
(ii) to reimburse the Master Servicer or the related Servicer for
unreimbursed Advances or Servicer Advances made by it, such right of
reimbursement pursuant to this subclause (ii) being limited to amounts received
on the Mortgage Loan(s) in respect of which any such Advance or Servicer Advance
was made;
(iii) to reimburse the Master Servicer for any Nonrecoverable
Advance previously made;
(iv) to reimburse the Master Servicer for Insured Expenses from
the related Insurance Proceeds;
(v) to reimburse the Master Servicer for (A) unreimbursed
Servicing Advances, the Master Servicer's right to reimbursement pursuant to
this clause (A) with respect to any Mortgage Loan being limited to amounts
received on such Mortgage Loan(s) which represent late recoveries of the
payments for which such advances were made pursuant to Section 3(a) or Section
3(i) and (B) for unpaid Master Servicing Fees as provided in Section 3(n);
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(vi) to pay to the purchaser, with respect to each Mortgage Loan
or property acquired in respect thereof that has been purchased pursuant to
Section 2(a)(ii), 2(d)(iv) or 3(n), all amounts received thereon after the date
of such purchase;
(vii) to reimburse the Master Servicer for expenses incurred by
it and reimbursable pursuant to Section 6(c) and to pay the Trustee amounts due
to it pursuant to Section 6.07(2) and (3) of the Indenture;
(viii) to withdraw any amount deposited in the Bond Account and
not required to be deposited therein;
(ix) on or prior to the Distribution Account Deposit Date, to
withdraw an amount equal to the related Bond Distribution Amount and the Trustee
Fee for such Distribution Date, to the extent on deposit, and remit such amount
to the Trustee for deposit in the Distribution Account; and
(x) to clear and terminate the Bond Account upon termination of
this Agreement pursuant to Section 8(a).
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Bond Account pursuant to such subclauses (i), (ii), (iv),
(v) and (vi). Prior to making any withdrawal from the Bond Account pursuant to
subclause (iii), the Master Servicer shall deliver to the Trustee an Officer's
Certificate of a Servicing Officer indicating the amount of any previous Advance
determined by the Master Servicer to be a Nonrecoverable Advance and identifying
the related Mortgage Loan(s) and their respective portions of such
Nonrecoverable Advance.
(l) Maintenance of Hazard Insurance; Maintenance of Primary Insurance
Policies.
(i) The Master Servicer shall cause to be maintained, for each
Mortgage Loan, hazard insurance with extended coverage in an amount that is at
least equal to the lesser of (A) the maximum insurable value of the improvements
securing such Mortgage Loan or (B) the greater of (y) the outstanding principal
balance of the Mortgage Loan and (z) an amount such that the proceeds of such
policy shall be sufficient to prevent the Mortgagor and/or the mortgagee from
becoming a co-insurer. Each such policy of standard hazard insurance shall
contain, or have an accompanying endorsement that contains, a standard mortgagee
clause. To the extent it may do so without breaching the related Servicing
Agreement, the Master Servicer shall replace any Servicer that does not cause
such insurance, to the extent it is available, to be maintained. Any amounts
collected by the Master Servicer under any such policies (other than the amounts
to be applied to the restoration or repair of the related Mortgaged Property or
amounts released to the Mortgagor in accordance with the Master Servicer's
normal servicing procedures) shall be deposited in the Bond Account or the
related Servicing Account, as applicable. Any cost incurred by the Master
Servicer or any Servicer in maintaining any such insurance shall not, for the
purpose of calculating payments to the Bondholders or remittances to the Trustee
for their benefit, be added to the principal balance of the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Master Servicer out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section
3(k). It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area and such area is participating in the national flood insurance program, the
Master Servicer shall cause flood insurance to be maintained with respect to
such Mortgage Loan. Such flood insurance shall be in an amount equal to the
least of (A) the original principal balance of the related Mortgage Loan, (B)
the replacement value of the improvements which are part of such Mortgaged
Property, and (C) the maximum amount of such insurance available for the related
Mortgaged Property under the national flood insurance program.
In the event that the Master Servicer shall obtain and maintain a
blanket policy insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first sentence of this Section 3(l)(i), it being understood and agreed that
such policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Master Servicer shall, in the event
that there shall not have been maintained on the related Mortgaged Property a
policy complying with the first sentence of this Section 3(l)(i), and there
shall have been a loss that would have been covered by such policy, deposit in
the Bond Account the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as Master
Servicer of the Mortgage Loans, the Master Servicer agrees to present, on behalf
of itself, the Issuer and the Trustee for the benefit of the Bondholders, claims
under any such blanket policy.
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(ii) The Master Servicer shall not take, or permit any Servicer
to take, any action which would result in non-coverage under any applicable
Primary Insurance Policy of any loss which, but for the actions of the Master
Servicer or any Servicer, would have been covered thereunder. The Master
Servicer shall not cancel or refuse to renew any such Primary Insurance Policy
that is in effect at the date of the initial issuance of the Bonds and is
required to be kept in force hereunder unless the replacement Primary Insurance
Policy for such canceled or non-renewed policy is maintained with a Qualified
Insurer. The Master Servicer shall not be required to maintain any Primary
Insurance Policy with respect to any Mortgage Loan with a Loan-to-Value Ratio
less than or equal to 80% as of any date of determination or, based on a new
appraisal, the principal balance of such Mortgage Loan represents 80% or less of
the new Appraised Value. The Master Servicer agrees to effect the timely payment
of the premiums on each Primary Insurance Policy, and such costs not otherwise
recoverable shall be recoverable by the Master Servicer from the related
liquidation proceeds.
In connection with its activities as Master Servicer of the Mortgage
Loans, the Master Servicer agrees to present, or cause the related Servicer to
present, on behalf of itself, the Trustee and the Bondholders, claims to the
insurer under any Primary Insurance Policies and, in this regard, to take such
reasonable action as shall be necessary to permit recovery under any Primary
Insurance Policies respecting defaulted Mortgage Loans. Any amounts collected by
a Servicer or the Master Servicer under any Primary Insurance Policies shall be
deposited in the Servicing Account, the Collection Account or the Bond Account,
as applicable.
(m) Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(i) Except as otherwise provided in this Section 3(m), when any
property subject to a Mortgage has been conveyed by the Mortgagor, the Master
Servicer or the related Servicer shall, to the extent that it has knowledge of
such conveyance, enforce any due-on-sale clause contained in any Mortgage Note
or Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, neither the Master Servicer nor the related
Servicer is required to exercise such rights with respect to a Mortgage Loan if
the Person to whom the related Mortgaged Property has been conveyed or is
proposed to be conveyed satisfies the terms and conditions contained in the
Mortgage Note and Mortgage related thereto and the consent of the mortgagee
under such Mortgage Note or Mortgage is not otherwise so required under such
Mortgage Note or Mortgage as a condition to such transfer. In the event that (A)
the Master Servicer or the related Servicer is prohibited by law from enforcing
any such due-on-sale clause, (B) coverage under any Required Insurance Policy
would be adversely affected, (C) the Mortgage Note does not include a
due-on-sale clause or (D) nonenforcement is otherwise permitted hereunder, the
Master Servicer is authorized, subject to Section 3(m)(ii), to take or enter
into an assumption and modification agreement from or with the person to whom
such property has been or is about to be conveyed, pursuant to which such person
becomes liable under the Mortgage Note and, unless prohibited by applicable
state law, the Mortgagor remains liable thereon, provided that the Mortgage Loan
shall continue to be covered (if so covered before the Master Servicer enters
such agreement) by the applicable Required Insurance Policies. The Master
Servicer, subject to Section 3(m)(ii), is also authorized with the prior
approval of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Master Servicer shall not be deemed to be in default under this
Section 3(m) by reason of any transfer or assumption which the Master Servicer
reasonably believes it is restricted by law from preventing, for any reason
whatsoever.
(ii) Subject to the Master Servicer's duty to enforce any
due-on-sale clause to the extent set forth in Section 3(m)(i), in any case in
which a Mortgaged Property has been conveyed to a Person by a Mortgagor, and
such Person is to enter into an assumption agreement or modification agreement
or supplement to the Mortgage Note or Mortgage that requires the signature of
the Trustee, or if an instrument of release signed by the Trustee is required
releasing the Mortgagor from liability on the Mortgage Loan, the Master Servicer
shall prepare and deliver or cause to be prepared and delivered to the Trustee
for signature and shall direct, in writing, the Trustee to execute the
assumption agreement with the Person to whom the Mortgaged Property is to be
conveyed and such modification agreement or supplement to the Mortgage Note or
Mortgage or other instruments as are reasonable or necessary to carry out the
terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged Property
to such Person. In connection with any such assumption, no material term of the
Mortgage Note may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Master Servicer in accordance with
its underwriting standards as then in effect. Together with each such
substitution, assumption or other agreement or instrument delivered to the
Trustee for execution by it, the Master Servicer shall deliver an Officer's
Certificate signed by a Servicing Officer stating that the requirements of this
subsection have been met in connection therewith. The Master Servicer shall
notify, or cause the related Servicer to notify, the Trustee that any such
substitution or assumption agreement has been completed by forwarding
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to the Trustee the original of such substitution or assumption agreement, which
in the case of the original shall be added to the related Trustee Mortgage File
and shall, for all purposes, be considered a part of such Trustee Mortgage File
to the same extent as all other documents and instruments constituting a part
thereof. Any fee collected by the Master Servicer or any Servicer for entering
into an assumption or substitution of liability agreement will be retained by
the Master Servicer as additional master servicing compensation.
(n) Realization Upon Defaulted Mortgage Loans; Purchase of Certain
Mortgage Loans.
The Master Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Master Servicer shall
follow such practices and procedures as it shall deem necessary or advisable, as
shall be normal and usual in its general mortgage servicing activities and as
shall meet the requirements of the insurer under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer shall not be required to
expend its own funds in connection with any foreclosure or towards the
restoration of any property unless it shall determine (A) that such restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan after reimbursement to itself of such expenses and (B) that such expenses
will be recoverable to it through Liquidation Proceeds (respecting which it
shall have priority for purposes of withdrawals from the Bond Account). The
Master Servicer shall be responsible for all other costs and expenses incurred
by it in any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof from the liquidation proceeds with respect to the related
Mortgaged Property, as provided in the definition of Liquidation Proceeds. If
the Master Servicer has knowledge that a Mortgaged Property which the Master
Servicer is contemplating acquiring in foreclosure or by deed in lieu of
foreclosure is located within a 1 mile radius of any site listed in the
Expenditure Plan for the Hazardous Substance Clean Up Bond Act of 1984 or other
site with environmental or hazardous waste risks known to the Master Servicer,
the Master Servicer will, prior to acquiring the Mortgaged Property, consider
such risks and only take action in accordance with its established environmental
review procedures.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Bondholders, or its
nominee, on behalf of the Bondholders. The Trustee's name shall be placed on the
title to such REO Property solely as the Trustee under the Indenture and not in
its individual capacity. The Master Servicer shall ensure that the title to such
REO Property references the Indenture and the Trustee's capacity thereunder.
Pursuant to its efforts to sell such REO Property, the Master Servicer shall
either itself or through an agent selected by the Master Servicer protect and
conserve such REO Property in the same manner and to such extent as is customary
in the locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Bondholders, rent the same,
or any part thereof, as the Master Servicer deems to be in the best interest of
the Bondholders for the period prior to the sale of such REO Property. The net
monthly rental income, if any, from such REO Property shall be deposited in the
Bond Account no later than the close of business on each Determination Date. The
Master Servicer shall perform the tax reporting and withholding required by
Sections 1445 and 6050J of the Code with respect to foreclosures and
abandonments, the tax reporting required by Section 6050H of the Code with
respect to the receipt of mortgage interest from individuals and, if required by
Section 6050P of the Code with respect to the cancellation of indebtedness by
certain financial entities, by preparing such tax and information returns as may
be required, in the form required, and delivering the same to the Trustee for
filing.
The decision of the Master Servicer to foreclose on a defaulted Mortgage
Loan shall be subject to a determination by the Master Servicer that the
proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any REO Properties,
net of reimbursement to the Master Servicer for expenses incurred (including any
property or other taxes) in connection with such management and net of
unreimbursed Master Servicing Fees, Servicing Fees, Advances, Servicer Advances
and Servicing Advances, shall be applied to the payment of principal of and
interest on the related defaulted Mortgage Loans (with interest accruing as
though such Mortgage Loans were still current and adjustments, if applicable, to
the Mortgage Rate were being made in accordance with the terms of the Mortgage
Note) and all such income shall be deemed, for all purposes in this Agreement,
to be payments on account of principal and interest on the related Mortgage
Notes and shall be deposited into the Bond Account. To the extent the net income
received during any calendar month is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan for such calendar month, such excess shall be considered
to be a partial prepayment of principal of the related Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of priority:
first, to reimburse the Master Servicer or the related Servicer for any related
unreimbursed Advances or Servicing Advances, Master Servicing Fees and Servicing
Fees, as applicable; second, to reimburse the Master Servicer or the related
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Servicer for any unreimbursed Advances or Servicer Advances, as applicable, and
to reimburse the Bond Account for any Nonrecoverable Advances (or portions
thereof) that were previously withdrawn by the Master Servicer pursuant to
Section 3(k)(iii) that related to such Mortgage Loan; third, to accrued and
unpaid interest (to the extent no Advance or Servicer Advance has been made for
such amount or any such Advance or Servicer Advance has been reimbursed) on the
Mortgage Loan or related REO Property at the Net Mortgage Rate to the Due Date
occurring in the month in which such amounts are required to be distributed; and
fourth, as a recovery of principal of the Mortgage Loan. Excess Proceeds, if
any, from the liquidation of a Liquidated Mortgage Loan will be retained by the
Master Servicer as additional servicing compensation pursuant to Section 5(a).
The Master Servicer, in its sole discretion, shall have the right to
purchase for its own account from the Issuer any Mortgage Loan which is 91 days
or more delinquent at a price equal to the Purchase Price. The Purchase Price
for any Mortgage Loan purchased hereunder shall be deposited in the Bond Account
and the Trustee, upon receipt of a certificate from the Master Servicer in the
form of Exhibit D hereto, shall release or cause to be released to the purchaser
of such Mortgage Loan the related Trustee Mortgage File and shall execute and
deliver such instruments of transfer or assignment prepared by the purchaser of
such Mortgage Loan, in each case without recourse, as shall be necessary to vest
in the purchaser of such Mortgage Loan any Mortgage Loan released pursuant
hereto and the purchaser of such Mortgage Loan shall succeed to all the Issuer's
and the Trustee's right, title and interest in and to such Mortgage Loan and all
security and documents related thereto. Such assignment shall be an assignment
outright and not for security. The purchaser of such Mortgage Loan shall
thereupon own such Mortgage Loan, and all security and documents, free of any
further obligation to the Issuer, the Trustee or the Bondholders with respect
thereto.
(o) Access to Certain Documentation.
The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of Subordinated Bonds and
the examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the Mortgage Loans required
by applicable regulations of the OTS and the FDIC. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices designated by the Master Servicer. Nothing
in this Section 3(o) shall limit the obligation of the Master Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Master Servicer or any Servicer to provide
access as provided in this Section 3(o) as a result of such obligation shall not
constitute a breach of this Section 3(o).
(p) Annual Statement as to Compliance.
The Master Servicer shall deliver to the Issuer and the Trustee on or
before 120 days after the end of the Master Servicer's fiscal year, commencing
with its [1997] fiscal year, an Officer's Certificate stating, as to the signer
thereof, that (i) a review of the activities of the Master Servicer during the
preceding calendar year and of the performance of the Master Servicer under this
Agreement has been made under such officer's supervision, (ii) to the best of
such officer's knowledge, based on such review, the Master 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
(iii) to the best of such officer's knowledge, each Servicer has fulfilled all
its obligations under its Servicing 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. The
Trustee shall forward a copy of each such statement to each Rating Agency.
(q) Annual Independent Public Accountants' Servicing Statement;
Financial Statements.
On or before 120 days after the end of the Master Servicer's fiscal
year, commencing with its [1997] fiscal year, the Master Servicer at its expense
shall cause a nationally recognized firm of independent public accountants (who
may also render other services to the Master Servicer or any affiliate thereof)
which is a member of the American Institute of Certified Public Accountants to
furnish a statement to the Trustee and the Issuer to the effect that such firm
has examined certain documents and records relating to the servicing of the
Mortgage Loans under this Agreement or of mortgage loans under servicing
agreements substantially similar to this Agreement (such statement to have
attached thereto a schedule setting forth the servicing agreements covered
thereby) and that, on the basis of such examination, conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
the Audit Program for Mortgages serviced for FNMA and FHLMC, such servicing has
been conducted in compliance with such servicing agreements except for such
significant exceptions or errors in records that, in the opinion of such firm,
the Uniform Single Attestation Program for Mortgage Bankers or the Audit Program
for Mortgages serviced for FNMA and FHLMC requires it to report. In rendering
such statement, such firm may rely, as to matters relating to direct servicing
of mortgage loans by Servicers, upon
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comparable statements for examinations conducted substantially in compliance
with the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Program for Mortgages serviced for FNMA and FHLMC (rendered within one year of
such statement) of independent public accountants with respect to the related
Servicer. Copies of such statement shall be provided by the Trustee to any
Bondholder upon request at the Master Servicer's expense, provided that such
statement is delivered by the Master Servicer to the Trustee.
(r) Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall obtain and maintain in force, and shall cause
each Servicer to obtain and maintain in force, (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
Master Servicer hereunder or as Servicer under its Servicing Agreement, as the
case may be, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of FNMA or FHLMC for persons performing servicing
for mortgage loans purchased by FNMA or FHLMC. In the event that any such policy
or bond ceases to be in effect, the Master Servicer shall obtain a comparable
replacement policy or bond from an insurer or issuer meeting the requirements
set forth above as of the date of such replacement.
(s) Master Servicer Monthly Data.
On or before [noon California time] on the Determination Date, the
Master Servicer shall provide by modem to the Trustee with respect to the
Mortgage Loans, an electronic data file (accompanied by a hardcopy report) in a
format which is mutually agreed upon by the Master Servicer and the Trustee. The
Trustee shall be under no duty to recalculate, verify or recompute the
information provided to it by the Master Servicer hereunder.
4. Advances.
The Master Servicer shall determine on or before each Master Servicer
Advance Date whether it is required to make an Advance pursuant to the
definition thereof. If the Master Servicer determines it is required to make an
Advance, it shall, on or before the Master Servicer Advance Date, either (i)
deposit into the Bond Account an amount equal to the Advance or (ii) make an
appropriate entry in its records relating to the Bond Account that any Amount
Held for Future Distribution has been used by the Master Servicer in discharge
of its obligation to make any such Advance. Any funds so applied shall be
replaced by the Master Servicer by deposit in the Bond Account no later than the
close of business on the next Master Servicer Advance Date. The Master Servicer
shall be entitled to be reimbursed from the Bond Account for all Advances of its
own funds made pursuant to this Section 4 as provided in Section 3(k). The
obligation to make Advances with respect to any Mortgage Loan shall continue if
such Mortgage Loan has been foreclosed or otherwise terminated and the related
Mortgaged Property has not been liquidated. The Master Servicer shall inform the
Trustee of the amount of the Advance to be made on each Master Servicer Advance
Date no later than the Second Business Day before the related Distribution Date.
The Master Servicer shall deliver to the Trustee on the related Master
Servicer Advance Date an Officer's Certificate of a Servicing Officer indicating
the amount of any proposed Advance determined by the Master Servicer to be a
Nonrecoverable Advance.
5. Servicing Compensation and Expenses.
As compensation for its activities hereunder, the Master Servicer shall
be entitled out of each payment of interest on a Mortgage Loan (or portion
thereof) to retain or withdraw from the Bond Account an amount equal to the
Master Servicing Fee for such Distribution Date.
Additional master servicing compensation in the form of Excess Proceeds,
prepayment penalties, assumption fees, late payment charges and all income and
gain net of any losses realized from Permitted Investments shall be retained by
the Master Servicer to the extent not required to be deposited in the Bond
Account pursuant to Section 3(h). The Master Servicer shall be required to pay
all expenses incurred by it in connection with its servicing activities
hereunder (including payment of any premiums for hazard insurance and any
Primary Insurance Policy and maintenance of the other forms of insurance
coverage required by this Agreement) and shall not be entitled to reimbursement
therefor except as specifically provided in this Agreement.
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As compensation for its activities under its Servicing Agreement, each
Servicer shall be entitled to retain out of each payment of interest on a
Mortgage Loan (or portion thereof) an amount equal to interest at the applicable
Servicing Fee Rate on the Stated Principal Balance of the related Mortgage Loan
for the period covered by such interest payment.
Additional servicing compensation in the form of prepayment penalties,
assumption fees and late payment charges shall be retained by the Servicers to
the extent not required to be deposited in the Servicing Accounts pursuant to
the related Servicing Agreement. Each Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities under its
Servicing Agreement (including payment of any premium for hazard insurance and
any Primary Insurance Policy and maintenance of the other forms of insurance
coverage required by this Agreement and its Servicing Agreement) and shall not
be entitled to reimbursement therefor except as specifically provided in its
Servicing Agreement and not inconsistent with this Agreement.
In the event of any Prepayment Interest Shortfalls, the aggregate Master
Servicing Fee for such Distribution Date shall be reduced (but not below zero)
by an amount equal to such Prepayment Interest Shortfalls.
6. The Master Servicer.
(a) Liabilities of the Master Servicer.
The Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by it herein.
(b) Merger or Consolidation of the Master Servicer.
The Master Servicer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the United States or under the
laws of one of the states thereof and will obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Master Servicer may be merged or consolidated,
or any Person resulting from any merger or consolidation to which the Master
Servicer shall be a party, or any person succeeding to the business of the
Master Servicer, shall be the successor of the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or surviving Person to the Master Servicer
shall be qualified to sell mortgage loans to, and to service mortgage loans on
behalf of, FNMA or FHLMC.
(c) Limitation on Liability of the Master Servicer and Others.
Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Issuer or the Bondholders for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Master
Servicer or any such Person against any breach of representations or warranties
made by it herein or protect the Master Servicer or any such Person from any
liability which would otherwise be imposed by reasons of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. The Master Servicer and
any director, officer, employee or agent of the Master Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Master Servicer and any
director, officer, employee or agent of the Master Servicer shall be indemnified
by the Issuer and held harmless against any loss, liability or expense incurred
in connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to this Agreement or
the Bonds, other than any loss, liability or expense related to any specific
Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) and any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. The Master Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its respective duties hereunder and which in its opinion may
involve it in any expense or liability; provided, however, that the Master
Servicer may in its discretion undertake any such action that it may deem
necessary or desirable in respect of this Agreement and the rights and duties of
the parties hereto and interests of the Issuer, the Trustee and the Bondholders
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hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Issuer, and the Master Servicer shall be entitled to be reimbursed therefor out
of the Bond Account.
(d) Limitation on Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (a) upon appointment of a successor servicer and
receipt by the Trustee of a letter from each Rating Agency that such a
resignation and appointment will not result in a downgrading of the rating of
any of the Bonds or (b) upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination under clause (b)
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee. No such resignation
shall become effective until the Trustee or a successor master servicer shall
have assumed the Master Servicer's responsibilities, duties, liabilities and
obligations hereunder.
7. Servicing Default; Termination and Liabilities.
(a) Servicing Default.
Any of the following acts or occurrences shall constitute a Servicing
Default by the Master Servicer under this Agreement:
(i) any failure by the Master Servicer to deposit in the Bond
Account or remit to the Trustee any payment (other than a payment required to be
made under Section 4) required to be made under the terms of this Agreement,
which failure shall continue unremedied for five days after the date upon which
written notice of such failure shall have been given to the Master Servicer by
the Trustee or the Issuer or to the Master Servicer, the Trustee and the Issuer
by the Holders of Bonds representing more than 50% of the aggregate Class
Principal Amount of the Controlling Class; or
(ii) any failure by the Master Servicer to observe or perform in
any material respect any other of the covenants or agreements on the part of the
Master Servicer contained in this Agreement, which failure shall continue
unremedied for a period of 60 days after the date on which written notice of
such failure shall have been given to the Master Servicer by the Trustee or the
Issuer or to the Master Servicer, the Trustee and the Issuer by the Holders of
Bonds representing more than 50% of the aggregate Class Principal Amount of the
Controlling Class; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a receiver
or liquidator in any insolvency, 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 Master Servicer and such decree or
order shall have remained in force undischarged or unstayed for a period of 60
consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Master
Servicer or all or substantially all of the property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations; or
(vi) any failure of the Master Servicer to make any Advance in
the manner and at the time required to be made pursuant to Section 4 which
continues unremedied for a period of one Business Day after the date of such
failure.
If a Servicing Default described in clauses (i) to (v) of this Section
7(a) shall occur, then, and in each and every such case, so long as such
Servicing Default shall not have been remedied the Trustee may (subject to
Section 3.07 and Section 8.11 of the Indenture), by notice in writing to the
Master Servicer (with a copy to each Rating Agency), and in addition to any
other rights the Trustee may have on behalf of the Bondholders as a result of
such Servicing Default, terminate all of the rights and obligations of the
Master Servicer thereafter arising under this Agreement and in and to the
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Mortgage Loans and the proceeds thereof, other than its rights as a Bondholder
under the Indenture and its obligations which are not assumed by the Trustee
pursuant to clauses (i), (iii) and (v) of Section 3(g). If a Servicing Default
described in clause (vi) shall occur, the Trustee shall, by notice in writing to
the Master Servicer and the Issuer, terminate all of the rights and obligations
of the Master Servicer under this Agreement and in and to the Mortgage Loans and
the proceeds thereof, other than its rights as a Bondholder under the Indenture
and its obligations which are not assumed by the Trustee pursuant to clauses
(i), (iii) and (v) of Section 3(g). On and after the receipt by the Master
Servicer of such written notice, all authority and power of the Master Servicer
hereunder, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Trustee. The Trustee shall thereupon make any Advance
described in clause (vi) subject to clause (ii) of the first sentence of Section
3(g). The Trustee is hereby authorized and empowered to execute and deliver, on
behalf of the Master Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to 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. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee of all cash amounts which shall at the time be
credited to the Bond Account or thereafter be received with respect to the
Mortgage Loans.
Notwithstanding any termination of the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan which was due prior to the
notice terminating such Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
such Master Servicer would have been entitled pursuant to Sections 3(k)(i)
through (viii), and any other amounts payable to such Master Servicer hereunder
the entitlement to which arose prior to the termination of its activities
hereunder.
(b) Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7(a), the Trustee shall, subject to and to the
extent provided in Section 3(g), be the successor to the Master Servicer in its
capacity as master servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof and applicable law including the obligation to make Advances
pursuant to Section 4. As compensation therefor, the Trustee shall be entitled
to all funds relating to the Mortgage Loans that the Master Servicer would have
been entitled to charge to the Bond Account or Distribution Account if the
Master Servicer had continued to act hereunder. Notwithstanding the foregoing,
if the Trustee has become the successor to the Master Servicer in accordance
with Section 7(a), the Trustee may, if it shall be unwilling to so act, or
shall, if it is prohibited by applicable law from making Advances pursuant to
Section 4 or if it is otherwise unable to so act, appoint, or petition a court
of competent jurisdiction to appoint, any established mortgage loan servicing
institution the appointment of which does not adversely affect the then current
rating of the Bonds by each Rating Agency as the successor to the Master
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Master Servicer hereunder. Any successor to the
Master Servicer shall be an institution which is a FNMA and FHLMC approved
seller/servicer in good standing, which has a net worth of at least $15,000,000,
which is willing to service the Mortgage Loans and which executes and delivers
to the Issuer and the Trustee an agreement accepting such delegation and
assignment, containing an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Master Servicer
(other than liabilities of the Master Servicer under Section 6(c) incurred prior
to termination of the Master Servicer under Section 7(a)), with like effect as
if originally named as a party to this Agreement; provided that each Rating
Agency acknowledges that its rating of the Bonds in effect immediately prior to
such assignment and delegation will not be qualified or reduced as a result of
such assignment and delegation. Pending appointment of a successor to the Master
Servicer hereunder, the Trustee, unless the Trustee is prohibited by law from so
acting, shall, subject to Section 3(g), act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided, however, that no
such compensation shall be in excess of the Master Servicing Fee permitted the
Master Servicer hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other successor master servicer
shall be deemed to be in default hereunder by reason of any failure to make, or
any delay in making, any distribution hereunder or any portion thereof or any
failure to perform, or any delay in performing, any duties or responsibilities
hereunder, in either case caused by the failure of the Master Servicer to
deliver or provide, or any delay in delivering or providing, any cash,
information, documents or records to it.
Any successor to the Master Servicer as master servicer shall give
notice to the Mortgagors of such change of servicer and shall, during the term
of its service as master servicer, maintain in force the policy or policies that
the Master Servicer is required to maintain pursuant to Section 3(r).
(c) Notification to Bondholders.
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(i) Upon any termination of or appointment of a successor to the
Master Servicer, the Trustee shall give prompt written notice thereof to
Bondholders and to each Rating Agency.
(ii) Within 60 days after the occurrence of any Servicing
Default, the Trustee shall transmit by mail to all Bondholders notice of each
such Servicing Default hereunder known to the Trustee, unless such Servicing
Default shall have been cured or waived.
8. Miscellaneous.
(a) Term of Master Servicing Agreement.
The obligations to be performed by the Master Servicer under this
Agreement shall commence on and as of the date on which the Issuer issues the
Bonds and shall terminate as to each Mortgage Loan upon (i) the payment in full
of all principal and interest due under such Mortgage Loan or other liquidation
of such Mortgage Loan as contemplated by this Agreement, (ii) the termination of
the Master Servicer's rights and powers under this Agreement by the Trustee as
provided in Section 7(a) of this Agreement, or (iii) the release by the Trustee
of its security interest in any Mortgage Loan.
(b) Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided in Section 6(a), this Agreement may not be assigned by the Master
Servicer without the prior written consent of the Trustee.
(c) Notices.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered at the following
addresses of the parties:
The Master Servicer
The Issuer: American Residential Eagle Bond Trust
[199_-_] c/o ________________ Trust Company
With a copy to
American Residential Eagle, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇
The Trustee:
Attention: Corporate Trust Department
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Any Rating Agency: The address specified therefor in the
definition corresponding to the name
of such Rating Agency.
Any of the parties may at any time give notice in writing to the others
of a change of its address for the purpose of this Section 8(c).
(d) Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice, it will
permit and will cause each Servicer to permit any representative of the Issuer
or the Trustee during the Master Servicer's normal business hours, to examine
all the books of account, records, reports and other papers of the Master
Servicer relating to the Mortgage Loans, to make copies and extracts therefrom,
to cause such books to be audited by independent certified public accountants
selected by the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Master Servicer hereby authorizes
said accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense incident to the exercise by the Issuer or
the Trustee of any right under this Section 8(d) shall be borne by the party
requesting such inspection; all other such expenses shall be borne by the Master
Servicer or the related Servicer.
(e) Governing Law.
This Agreement shall be construed in accordance with and governed by the
substantive laws of the State of New York applicable to agreements made and to
be performed in the State of New York and the obligations, rights and remedies
of the parties hereto and the Bondholders shall be determined in accordance with
such laws.
(f) Amendments.
This Agreement shall not be amended, changed, modified, terminated or
discharged in whole or in part except (i) by an instrument in writing signed by
all parties hereto, or their respective successors or assigns and (ii) in
compliance with Section 8.10 of the Indenture.
(g) Severability.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement.
(h) No Joint Venture.
The Servicer and the Issuer are not partners or joint venturers with
each other and nothing herein shall be construed to make them such partners or
joint venturers or impose any liability as such of either of them.
(i) Execution in Counterparts.
This Agreement may be executed in one or more counterparts, any of which
shall constitute an original as against any party whose signature appears on it,
and all of which shall together constitute a single instrument. This Agreement
shall become binding when one or more counterparts, individually or taken
together, bear the signatures of all parties.
(j) Limitation of Liability of _______________________
________________________.
It is expressly understood and agreed by the parties hereto that (a)
this Agreement is executed and delivered by _________________________
_____________________________, not individually or personally but solely as
owner trustee of American Residential Eagle Bond Trust [199__-__] under the
Deposit Trust Agreement, in the exercise of the powers and authority
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conferred and vested in it, (b) each of the representations, undertakings and
agreements herein made on the part of the Trust is made and intended not as
personal representations, undertakings and agreements by _____________________
but is made and intended for the purpose for binding only the Trust, (c) nothing
herein contained shall be construed as creating any liability on
__________________________________, other than any liability arising out of its
gross negligence, bad faith or willful misconduct, and (d) under no
circumstances shall _____________________________ be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Agreement or the other Operative Documents.
(k) Nonpetition Covenants.
Notwithstanding any prior termination of this Agreement, the Master
Servicer shall not, prior to the date which is one year and one day after the
termination of this Agreement with respect to the Issuer or the Depositor,
acquiesce, petition or otherwise invoke or cause the Issuer or the Depositor (or
any assignee) to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer or the Depositor
under any federal or state bankruptcy, insolvency or similar law, or appointing
a receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Issuer or the Depositor or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the Issuer
or the Depositor.
IN WITNESS WHEREOF, each party has caused this Master Servicing
Agreement to be executed by its duly authorized officer or officers as of the
day and year first above written.
AMERICAN RESIDENTIAL EAGLE BOND TRUST
[199__-__], as Issuer
By: _____________________ TRUST COMPANY,
By:
--------------------------------------------
Its:
-------------------------------------------
------------------------------------------------
By:
--------------------------------------------
Its:
-------------------------------------------
------------------------------------------------
By:
--------------------------------------------
Its:
-------------------------------------------
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SCHEDULE I
Schedule of Mortgage Loans
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SCHEDULE II
AMERICAN RESIDENTIAL EAGLE BOND TRUST [199__-__]
Collateralized Mortgage Bonds
Representations and Warranties of the Master Servicer
_______________________ ("___") hereby makes the representations and
warranties set forth in this Schedule II to the Issuer and the Trustee, as of
the Closing Date, or if so specified herein, as of the Cut-off Date. Capitalized
terms used but not otherwise defined in this Schedule II shall have the meanings
ascribed thereto in the Master Servicing Agreement (the "Master Servicing
Agreement") relating to the above-referenced Series, among ____________ ____, as
Master Servicer, American Residential Eagle Bond Trust [199__-__], as Issuer,
and __________________________________________, as Trustee.
(1) _________________ is duly organized as a Delaware corporation and is
validly existing and in good standing under the laws of the State of ________
and is duly authorized and qualified to transact any and all business
contemplated by the Master Servicing Agreement to be conducted by
________________ in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such qualification and, in
any event, is in compliance with the doing business laws of any such state, to
the extent necessary to ensure its ability to enforce each Mortgage Loan, to
service the Mortgage Loans in accordance with the terms of the Master Servicing
Agreement and to perform any of its other obligations under the Master Servicing
Agreement in accordance with the terms thereof.
(2) _________________ has the full corporate power and authority to sell
and service each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by the Master Servicing
Agreement and has duly authorized by all necessary corporate action on the part
of _________________ the execution, delivery and performance of the Master
Servicing Agreement; and the Master Servicing Agreement, assuming the due
authorization, execution and delivery thereof by the other parties thereto,
constitutes a legal, valid and binding obligation of _________________,
enforceable against _________________ in accordance with its terms, except that
(a) the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors' rights
generally and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(3) The execution and delivery of the Master Servicing Agreement by
_________________, the servicing of the Mortgage Loans by _________________
under the Master Servicing Agreement, the consummation of any other of the
transactions contemplated by the Master Servicing Agreement, and the fulfillment
of or compliance with the terms thereof are in the ordinary course of business
of _________________ and will not (A) result in a material breach of any term or
provision of the charter or by-laws of ________________ or (B) materially
conflict with, result in a material breach, violation or acceleration of, or
result in a material default under, the terms of any other material agreement or
instrument to which ________________ is a party or by which it may be bound, or
(C) constitute a material violation of any statute, order or regulation
applicable to _________________ of any court, regulatory body, administrative
agency or governmental body having jurisdiction over ________________; and
_________________ is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or governmental
body having jurisdiction over it which breach or violation may materially impair
________________'s ability to perform or meet any of its obligations under the
Master Servicing Agreement.
(4) Each Servicer is an approved servicer of conventional mortgage loans
for FNMA or FHLMC or is a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to Sections 203 and 211 of the National Housing Act.
(5) No litigation is pending or, to the best of ______'s knowledge,
threatened against ____ _______that would materially and adversely affect the
execution, delivery or enforceability of the Master Servicing Agreement or the
ability of __________ to service the Mortgage Loans or to perform any of its
other obligations under the Master Servicing Agreement in accordance with the
terms thereof.
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(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by _________________ of, or compliance by _________ _______with, the
Master Servicing Agreement or the consummation of the transactions contemplated
thereby, or if any such consent, approval, authorization or order is required,
_________________ has obtained the same.
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SCHEDULE III
AMERICAN RESIDENTIAL EAGLE BOND TRUST [199__-__]
Collateralized Mortgage Bonds
Representations and Warranties as to the Mortgage Loans
[American Residential] ("___") hereby makes the representations and
warranties set forth in this Schedule III to the Trustee, as of the Closing
Date, or if so specified herein, as of the Cut-off Date. Capitalized terms used
but not otherwise defined in this Schedule III shall have the meanings ascribed
thereto in the Master Servicing Agreement (the "Master Servicing Agreement")
relating to the above-referenced Series, among _____________ as Master Servicer,
American Residential Eagle Bond Trust [199__-__], as Issuer, and
____________________________________________________, as Trustee.
(1) The information set forth on Schedule I to the Master Servicing
Agreement with respect to each Mortgage Loan is true and correct in all material
respects as of the Closing Date.
(2) As of the Closing Date, all payments due with respect to each
Mortgage Loan prior to the Cut-off Date have been made; and as of the Cut-off
Date, [no Mortgage Loan has been contractually delinquent for 30 or more days
during the twelve months prior to the Cut-off Date].
(3) No Mortgage Loan had a Loan-to-Value Ratio at origination in excess
of ____%.
(4) With respect to any Mortgage Loan that is not a Cooperative Loan,
each Mortgage is a valid and enforceable first lien on the Mortgaged Property
subject only to (a) the lien of non-delinquent current real property taxes and
assessments, (b) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to mortgage
lending institutions generally or specifically reflected in the appraisal made
in connection with the origination of the related Mortgage Loan, and (c) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by such
Mortgage.
(5) Immediately prior to the pledge of the Mortgage Loans to the Trustee
for the benefit of the Bondholders, the Issuer had good title to, and was the
sole owner of, each Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and had full right and authority, subject to no
interest or participation of, or agreement with, any other party, to pledge and
assign the same pursuant to the Indenture.
(6) There is no delinquent tax or assessment lien against any Mortgaged
Property.
(7) There is no valid offset, defense or counterclaim to any Mortgage
Note or Mortgage, including the obligation of the Mortgagor to pay the unpaid
principal of or interest on such Mortgage Note.
(8) There are no mechanics' liens or claims for work, labor or material
affecting any Mortgaged Property which are or may be a lien prior to, or equal
with, the lien of such Mortgage, except those which are insured against by the
title insurance policy referred to in item (12) below.
(9) To the best of the _______'s knowledge, each Mortgaged Property is
free of material damage, and is in good repair.
(10) Each Mortgage Loan at origination complied in all material respects
with applicable state and federal laws, including, without limitation, usury,
equal credit opportunity, real estate settlement procedures, truth-in-lending
and disclosure laws, and consummation of the transactions contemplated hereby
will not involve the violation of any such laws.
(11) As of the Closing Date, no prior holder of any Mortgage has
modified the Mortgage in any material respect (except that a Mortgage Loan may
have been modified by a written instrument which has been recorded or submitted
for recordation, if necessary, to protect the interests of the Bondholders and
which has been delivered to the Trustee); satisfied, cancelled or
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subordinated such Mortgage in whole or in part; released the related Mortgaged
Property in whole or in part from the lien of such Mortgage; or executed any
instrument of release, cancellation, modification or satisfaction with respect
thereto.
(12) A lender's policy of title insurance together with a condominium
endorsement and an extended coverage endorsement, if applicable, and a variable
rate endorsement in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Mortgage Loan or a commitment (binder) to issue
the same was effective on the date of the origination of each Mortgage Loan,
each such policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the Mortgaged Property is located and acceptable to FNMA or
FHLMC and is in a form acceptable to FNMA or FHLMC, which policy insures the
Master Servicer and successor owners of indebtedness secured by the insured
Mortgage, (a) as to the first priority lien of the Mortgage subject to the
exceptions set forth in paragraph (4) above and (b) against loss by reason of
the invalidity or unenforceability of the lien resulting from the provisions of
the Mortgage Note and Mortgage with respect to adjustment in the Mortgage Rate
and Scheduled Payment; to the best of the Issuer's knowledge, no claims have
been made under such mortgage title insurance policy and no prior holder of the
related Mortgage, including the Master Servicer or the Issuer, has done, by act
or omission, anything which would impair the coverage of such mortgage title
insurance policy.
(13) Each Mortgage Loan was originated by an entity that satisfied at
the time of origination the requirements of Section 3(a)(41) of the Securities
Exchange Act of 1934, as amended.
(14) To the best of _______'s knowledge, all of the improvements which
were included for the purpose of determining the Appraised Value of the
Mortgaged Property lie wholly within the boundaries and building restriction
lines of such property, and no improvements on adjoining properties encroach
upon the Mortgaged Property.
(15) To the best of _______'s knowledge, no improvement located on or
being part of the Mortgaged Property is in violation of any applicable zoning
law or regulation. To the best of _______'s knowledge, all inspections, licenses
and certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property and, with respect to the use and occupancy of
the same, including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the appropriate
authorities, unless the lack thereof would not have a material adverse effect on
the value of such Mortgaged Property, and the Mortgaged Property is lawfully
occupied under applicable law.
(16) The Mortgage Note and the related Mortgage are genuine, and each is
the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms and under applicable law. To the best of _______'s
knowledge, all parties to the Mortgage Note and the Mortgage had legal capacity
to execute the Mortgage Note and the Mortgage and each Mortgage Note and
Mortgage have been duly and properly executed by such parties.
(17) The proceeds of the Mortgage Loan have been fully disbursed, there
is no requirement for future advances thereunder and any and all requirements as
to completion of any on-site or off-site improvements and as to disbursements of
any escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making, or closing or recording the Mortgage Loans were paid.
(18) The related Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure.
(19) With respect to each Mortgage constituting 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 such Mortgage, and no fees or
expenses are or will become payable by the Trust Estate to the trustee under the
deed of trust, except in connection with a trustee's sale after default by the
Mortgagor.
(20) Each Mortgage Note and each Mortgage is in substantially one of the
forms acceptable to FNMA or FHLMC, with such riders as have been acceptable to
FNMA or FHLMC, as the case may be.
(21) There exist no deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for repayment
thereof have not been made, and no escrow deposits or payments of other charges
or payments due _______ have been capitalized under the Mortgage or the related
Mortgage Note.
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(22) The origination, underwriting and collection practices used by the
Master Servicer with respect to each Mortgage Loan have been in all respects
legal, prudent and customary in the mortgage lending and servicing business.
(23) There is no pledged account or other security other than real
estate securing the Mortgagor's obligations.
(24) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature.
(25) Each Mortgage Loan is assumable if the proposed transferee submits
certain information required to evaluate the transferee's ability to repay the
Mortgage Loan and the holder of the Mortgage Note reasonably determines that the
security for the Mortgage Loan would not be impaired by the assumption.
(26) None of the Mortgage Loans provides for a prepayment penalty.
(27) Except with respect to ____ Mortgage Loans representing
approximately _____% of the Cut-off Date Pool Principal Balance, each Mortgage
Loan which had a Loan-to-Value Ratio at origination in excess of 80% is the
subject of a Primary Insurance Policy that insures that portion of the original
principal balance of the related Mortgage Loan equal to the product of the
original principal balance thereof and a fraction, the numerator of which is the
excess of the original principal balance of the related Mortgage Loan over 75%
of the lesser of the appraised value and selling price of the related Mortgaged
Property and the denominator of which is the original principal balance of the
related Mortgage Loan, plus accrued interest thereon and related foreclosure
expenses. Each such Primary Insurance Policy is issued by a Qualified Insurer
acceptable to each of the Rating Agencies. All provisions of any such Primary
Insurance Policy have been and are being complied with, any such policy is in
full force and effect, and all premiums due thereunder have been paid. Any
Mortgage subject to any such Primary Insurance Policy obligates the Mortgagor
thereunder to maintain such insurance and to pay all premiums and charges in
connection therewith. The Mortgage Rate for each Mortgage Loan is net of any
such insurance premium.
(28) At the Cut-off Date, the improvements upon each Mortgaged Property
are covered by a valid and existing hazard insurance policy with a generally
acceptable carrier that provides for fire and extended coverage and coverage for
such other hazards as are customary in the area where the Mortgaged Property is
located in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements securing such Mortgage Loan or (ii) the
greater of (a) the outstanding principal balance of the Mortgage Loan and (b) an
amount such that the proceeds of such policy shall be sufficient to prevent the
Mortgagor and/or the mortgagee from becoming a co-insurer. If the Mortgaged
Property is a condominium unit, it is included under the coverage afforded by a
blanket policy for the condominium unit. All such individual insurance policies
and all flood policies referred to in item (29) below contain a standard
mortgagee clause naming ___________ or the original mortgagee, and its
successors in interest, as mortgagee, and _________ has received no notice that
any premiums due and payable thereon have not been paid; the Mortgage obligates
the Mortgagor thereunder to maintain all such insurance including flood
insurance at the Mortgagor's cost and expense, and upon the Mortgagor's failure
to do so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement therefor
from the Mortgagor.
(29) If the Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, a flood insurance policy in a form meeting the requirements of the
current guidelines of the Flood Insurance Administration is in effect with
respect to such Mortgaged Property with a generally acceptable carrier in an
amount representing coverage not less than the least of (A) the original
outstanding principal balance of the Mortgage Loan, (B) the minimum amount
required to compensate for damage or loss on a replacement cost basis, or (C)
the maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973, as amended.
(30) To the best of _______'s knowledge, there is no proceeding pending
or threatened for the total or partial condemnation of any Mortgaged Property,
nor is such a proceeding currently occurring.
(31) There is no material monetary default existing under any Mortgage
or the related Mortgage Note and, to the best of the Issuer's knowledge, there
is no material event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration under the Mortgage or the related Mortgage
Note; and _______ has not waived any default, breach, violation or event of
acceleration.
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(32) Other than with respect to Mortgaged Property underlying a
Cooperative Loan, each Mortgaged Property is improved by a one- to four-family
residential dwelling including condominium units and dwelling units in PUDs,
which, to the best of _______'s knowledge, does not include mobile homes and
does not constitute other than real property under state law.
(33) Each Mortgage Loan is being serviced by the Master Servicer or a
Servicer as provided in Section 3(b) of the Master Servicing Agreement.
(34) There is no obligation on the part of the Issuer or any other party
under the terms of the Mortgage or related Mortgage Note to make payments in
addition to those made by the Mortgagor.
(35) Any future advances made prior to the 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 reflected on the Schedule of Mortgage Loans. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan. The Mortgage Note does not permit or obligate the Master
Servicer to make future advances to the Mortgagor at the option of the
Mortgagor.
(36) There are no defaults in complying with the terms of the Mortgage,
and all taxes, governmental assessments, insurance premiums, water, sewer and
municipal charges, leasehold payments or ground rents which previously became
due and owing have been paid, or an escrow of funds has been established in an
amount sufficient to pay for every such item which remains unpaid and which has
been assessed, but is not yet due and payable. Except for (A) payments in the
nature of escrow payments, and (B) interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage proceeds, whichever is
later, to the day which precedes by one month the Due Date of the first
installment of principal and interest, including without limitation taxes and
insurance payments, _______ has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required by the Mortgage.
[(37) Each Mortgage Loan was underwritten in all material respects in
accordance with the underwriting guidelines set forth in the Prospectus
Supplement.]
(38) Prior to the approval of the Mortgage Loan application, an
appraisal of the related Mortgaged Property was obtained from a qualified
appraiser, duly appointed by the originator, who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security thereof,
and whose compensation is not affected by the approval or disapproval of the
Mortgage Loan; such appraisal is in a form acceptable to FNMA or FHLMC.
(39) None of the Mortgage Loans is a graduated payment mortgage loan or
a growing equity mortgage loan or subject to a buy down or similar arrangement.
(40) Any leasehold estate securing a Mortgage Loan has a term of not
less than five years in excess of the term of the related Mortgage Loan.
(41) All of the Mortgage Loans have a payment date on or before the Due
Date in the month of the first Distribution Date.
(42) [None] of the Mortgage Loans are Convertible Mortgage Loans.
[(43) As of the Closing Date, the Index for the adjustment of the
Mortgage Rate of each Mortgage Loan is __________________________________.]
(44) The Mortgage Loans, individually and in the aggregate, conform in
all material respects to the descriptions thereof in the Prospectus Supplement.
(45) [None] of the Mortgage Loans are Cooperative Loans.
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SCHEDULE IV
AMERICAN RESIDENTIAL EAGLE BOND TRUST [199__-__]
Collateralized Mortgage Bonds
Representations and Warranties of the Issuer.
American Residential Eagle Bond Trust [199__-__] (the "Issuer") hereby
makes the representations and warranties set forth in this Schedule IV to the
Master Servicer and the Trustee, as of the Closing Date. Capitalized terms used
but not otherwise defined in this Schedule IV shall have the meanings ascribed
thereto in the Master Servicing Agreement (the "Master Servicing Agreement")
relating to the above-referenced Series, among _________________________, as
Master Servicer, American Residential Eagle Bond Trust [199__-__], as Issuer,
and _________________________________, as Trustee.
(1) The Issuer is a statutory business trust duly organized, validly
existing and in good standing under the laws of the State of Delaware, and
possesses all requisite authority, power, licenses, permits and franchises to
conduct any and all business contemplated by the Master Servicing Agreement and
to comply with its obligations under the terms of this Agreement, the
performance of which have been duly authorized by all necessary action.
(2) Neither the execution and delivery of the Master Servicing Agreement
by the Issuer, nor the performance and compliance with the terms thereof by the
Issuer will (A) result in a material breach of any term or provision of the
instruments creating the Issuer or governing its operations, or (B) materially
conflict with, result in a material breach, violation or acceleration of, or
result in a material default under, the terms of any other material agreement or
instrument to which the Issuer is a party or by which it may be bound, or (C)
constitute a material violation of any statute, order or regulation applicable
to the Issuer of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Issuer; and the Issuer is not in
breach or violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair the Issuer's ability to
perform or meet any of its obligations under the Master Servicing Agreement.
(3) This Agreement, and all documents and instruments contemplated
hereby, which are executed and delivered by the Issuer, will, assuming due
authorization, execution by and delivery to the other parties hereto and
thereto, constitute valid, legal and binding obligations of the Issuer,
enforceable in accordance with their respective terms, except that (a) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(4) No litigation is pending or, to the best of the Issuer's knowledge,
threatened against the Issuer that would materially and adversely affect the
execution, delivery or enforceability of the Master Servicing Agreement or the
ability of the Issuer to perform its obligations thereunder.
(5) Immediately prior to the transfer and assignment of the Mortgage
Loans to the Trustee, the Issuer had good title to, and was the sole owner of,
each Mortgage Loan free and clear of any liens, charges or encumbrances or any
ownership or participation interests in favor of any other Person.
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EXHIBIT A
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Master Servicer]
[Issuer]
-------------------------------------
-------------------------------------
Re: Master Servicing Agreement among American Residential Eagle Bond
Trust [199__-__], as Issuer, ______________, as Master Servicer,
and ____________________, as Trustee, Collateralized Mortgage
Bonds
Gentlemen:
In accordance with Section 2(b) of the above-captioned Master Servicing
Agreement (the "Master Servicing Agreement"), the undersigned, as Trustee,
hereby certifies that, as to each Mortgage Loan listed in the Schedule of
Mortgage Loans (other than any Mortgage Loan listed in the attached schedule),
it has received:
(i) the original Mortgage Note, endorsed as provided in the following
form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed assignment of the Mortgage (which may be included
in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Trustee Mortgage File beyond the review specifically required
in the Master Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any of
the documents contained in each Trustee Mortgage File of any of the Mortgage
Loans identified on the Schedule of Mortgage Loans, (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan or (iii)
the correctness of any information set forth in the Schedule of Mortgage Loans,
other than the information specified in items (i) through (iv) and (vi) thereof.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Master Servicing Agreement.
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as Trustee
By:
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Name:
------------------------------------------
Title:
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EXHIBIT B
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
[Master Servicer]
[Issuer]
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-------------------------------------
Re: Master Servicing Agreement among American Residential Eagle Bond
Trust [199__-__], as Issuer, ___________________ _, as Master
Servicer, and ________________________, as Trustee,
Collateralized Mortgage Bonds,
Gentlemen:
In accordance with Section 2(b) of the above-captioned Master Servicing
Agreement (the "Master Servicing Agreement"), the undersigned, as Trustee,
hereby certifies that as to each Mortgage Loan listed in the Schedule of
Mortgage Loans (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided in Section
2(a) of the Master Servicing Agreement, with all intervening endorsements
showing a complete chain of endorsement from the originator to the Issuer.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form provided in
Section 2(a) of the Master Servicing Agreement, or, if the Master Servicer has
certified or the Trustee otherwise knows that the related Mortgage has not been
returned from the applicable recording office, a copy of the assignment of the
Mortgage (excluding information to be provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from the
originator to the Issuer.
(v) The original or duplicate original lender's title policy and all
riders thereto or, any one of an original title binder, an original preliminary
title report or an original title commitment, or a copy thereof certified by the
title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (i), (ii), (iii),
(iv), (vi) and (xi) of the definition of the "Schedule of Mortgage Loans" in
Section 1.01 of the Master Servicing Agreement accurately reflects information
set forth in the Trustee Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Trustee Mortgage File beyond the review specifically required
in the Master Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any of
the documents contained in each Trustee Mortgage File of any of the Mortgage
Loans identified on the Schedule of Mortgage Loans, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Notwithstanding anything herein to the contrary, the Trustee has made no
determination and makes no representations as to whether (i) any endorsement is
sufficient to transfer all right, title and interest of the party so endorsing,
as noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
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Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Master Servicing Agreement.
-------------------------------------------
as Trustee
By:
------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
48
52
EXHIBIT C
REQUEST FOR RELEASE
(for Trustee)
American Residential Eagle Bond Trust [199__-__]
Collateralized Mortgage Bonds
Loan Information
Name of Mortgagor: ______________________________
Servicer
Loan No.: _______________________________
Trustee
Name: _______________________________
Address: _______________________________
_______________________________
Trustee
Mortgage File No.: _______________________________
The undersigned Master Servicer hereby acknowledges that it has received
from ___________________________, as Trustee for the Holders of Bonds of the
above-referenced Series, the documents referred to below (the "Documents"). All
capitalized terms not otherwise defined in this Request for Release shall have
the meanings given them in the Master Servicing Agreement (the "Master Servicing
Agreement") relating to the above-referenced Series among the Trustee, _______
________________________________________, as Master Servicer, and American
Residential Eagle Bond Trust [199__-__], as Issuer.
( ) Mortgage Note dated ____________, 19__, in the
original principal sum of $__________, made by ________________,
payable to, or endorsed to the order of, the Trustee.
( ) Mortgage recorded on _________________ as instrument
no. _____________________ in the County Recorder's Office of the
County of ___________________, State of _______________ in
book/reel/docket ________________ of official records at
page/image ________________.
( ) Deed of Trust recorded on __________________ as
instrument no. _________________ in the County Recorder's Office
of the County of _______________, State of _______________ in
book/reel/docket _______________ of official records at
page/image _______________.
( ) Assignment of Mortgage or Deed of Trust to the
Trustee, recorded on _________________ as instrument no.
________ ___ in the County Recorder's Office of the County of
__________, State of ________________ in book/reel/docket
_____________ of official records at page/image______________.
( ) Other documents, including any amendments,
assignments or other assumptions of the Mortgage Note or
Mortgage.
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( ) ___________________________________________________________
( ) ___________________________________________________________
( ) ___________________________________________________________
( ) ___________________________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the purposes
provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim, liens, security
interest, charges, writs of attachment or other impositions nor shall the Master
Servicer assert or seek to assert any claims or rights of setoff to or against
the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document previously
requested from the Trustee Mortgage File to the Trustee when the need therefor
no longer exists, unless the Mortgage Loan relating to the Documents has been
liquidated and the proceeds thereof have been remitted to the Bond Account and
except as expressly provided in the Master Servicing Agreement.
(4) The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Master Servicer shall at
all times be earmarked for the account of the Trustee, and the Master Servicer
shall keep the Documents and any proceeds separate and distinct from all other
property in the Master Servicer's possession, custody or control.
---------------------------------------------------
By
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Its
------------------------------------------------
Date:_____________, ________19
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EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To:
Re: The Master Servicing Agreement dated ________ __, 19__ among
____________________ ("_____"), as Master Servicer, American
Residential Eagle Bond Trust [199__-__], as Issuer, and
____________________, as Trustee
Ladies and Gentlemen:
In connection with the administration of the Mortgage Loans held by you
as Trustee for American Residential Eagle Bond Trust [199__-__], as Issuer, we
request the release of the Trustee Mortgage File for the Mortgage Loan(s)
described below, for the reason indicated.
FT Account#: Pool #:
Mortgagor's Name, Address and Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
_______1. Mortgage Loan paid in full (__________ hereby
certifies that all amounts have been received.)
_______2. Mortgage Loan Liquidated (_____ hereby
certifies that all proceeds of foreclosure, insurance, or other
liquidation have been finally received.)
_______3. Mortgage Loan in Foreclosure.
_______4. Other (explain):_____________________________
If item 1 or 2 above is checked, and if all or part of the Trustee
Mortgage File was previously released to us, please release to us our previous
receipt on file with you, as well as an additional documents in your possession
relating to the above-specified Mortgage Loan. If item 3 or 4 is checked, upon
return of all of the above documents to you as Trustee, please acknowledge your
receipt by signing in the space indicated below, and returning this form.
------------------------------ -----------------------------------
-----------------------------------
-----------------------------------
By:
---------------------------
Name:
-------------------------
Title:
-------------------------
Date:
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TRUSTEE CONSENT TO RELEASE AND
ACKNOWLEDGEMENT OF RECEIPT
By:
---------------------------
Name:
-------------------------
Title:
------------------------
Date:
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