MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT GREENPOINT MORTGAGE FUNDING, INC. Seller and Servicer CITIGROUP GLOBAL MARKETS REALTY CORP. Initial Purchaser Dated as of April 1, 2005 Fixed and Adjustable Rate First and Second Lien Mortgage Loans
GREENPOINT
MORTGAGE FUNDING, INC.
Seller
and Servicer
CITIGROUP
GLOBAL MARKETS REALTY CORP.
Initial
Purchaser
Dated
as
of April 1, 2005
Fixed
and
Adjustable Rate
First
and
Second Lien Mortgage Loans
TABLE
OF
CONTENTS
|
SECTION
1.
|
Definitions
|
|
SECTION
2.
|
Agreement
to Purchase
|
|
SECTION
3.
|
Mortgage
Loan Schedules
|
|
SECTION
4.
|
Purchase
Price
|
|
SECTION
5.
|
Examination
of Mortgage Files
|
|
SECTION
6.
|
Conveyance
from Seller to Initial Purchaser.
|
|
Subsection
6.01.
|
Conveyance
of Mortgage Loans; Possession of Servicing Files.
|
|
Subsection
6.02.
|
Books
and Records.
|
|
Subsection
6.03.
|
Delivery
of Mortgage Loan Documents.
|
|
SECTION
7.
|
Representations,
Warranties and Covenants of the Seller; Remedies for
Breach.
|
|
Subsection
7.01.
|
Representations
and Warranties Respecting the Seller.
|
|
Subsection
7.02.
|
Representations
and Warranties Regarding Individual Mortgage Loans.
|
|
Subsection
7.03.
|
Remedies
for Breach of Representations and Warranties.
|
|
Subsection
7.04.
|
Repurchase
of Certain Mortgage Loans.
|
|
SECTION
8.
|
Closing
|
|
SECTION
9.
|
Closing
Documents.
|
|
SECTION
10.
|
Costs
|
|
SECTION
11.
|
Seller’s
Servicing Obligations
|
|
SECTION
12.
|
Removal
of Mortgage Loans from Inclusion under This Agreement Upon a Whole
Loan
Transfer or a Pass-Through Transfer on One or More Reconstitution
Dates.
|
|
SECTION
13.
|
The
Seller.
|
|
Subsection
13.01.
|
Additional
Indemnification by the Seller.
|
|
Subsection
13.02.
|
Merger
or Consolidation of the Seller.
|
|
Subsection
13.03.
|
Limitation
on Liability of the Seller and Others.
|
|
Subsection
13.04.
|
Seller
Not to Resign.
|
|
Subsection
13.05.
|
No
Transfer of Servicing.
|
|
SECTION
14.
|
DEFAULT.
|
|
Subsection
14.01.
|
Events
of Default.
|
|
Subsection
14.02.
|
Waiver
of Defaults.
|
|
SECTION
15.
|
Termination
|
|
SECTION
16.
|
Successor
to the Seller
|
|
SECTION
17.
|
Financial
Statements
|
|
SECTION
18.
|
Mandatory
Delivery: Grant of Security Interest
|
|
SECTION
19.
|
Notices
|
|
SECTION
20.
|
Severability
Clause
|
|
SECTION
21.
|
Counterparts
|
|
SECTION
22.
|
Governing
Law
|
|
SECTION
23.
|
Intention
of the Parties
|
|
SECTION
24.
|
Successors
and Assigns
|
|
SECTION
25.
|
Waivers
|
|
SECTION
26.
|
Exhibits
|
|
SECTION
27.
|
General
Interpretive Principles
|
|
SECTION
28.
|
Nonsolicitation
|
|
SECTION
29.
|
Reproduction
of Documents
|
|
SECTION
30.
|
Further
Agreements
|
|
SECTION
31.
|
Privacy.
|
EXHIBITS
|
EXHIBIT
1
|
SELLER’S
OFFICER’S CERTIFICATE
|
|
EXHIBIT
2
|
FORM
OF OPINION OF COUNSEL TO THE SELLER
|
|
EXHIBIT
3
|
SECURITY
RELEASE CERTIFICATION
|
|
EXHIBIT
4
|
ASSIGNMENT
AND CONVEYANCE
|
|
EXHIBIT
5
|
CONTENTS
OF EACH MORTGAGE FILE
|
|
EXHIBIT
6
|
FORM
OF CUSTODIAL ACCOUNT LETTER AGREEMENT
|
|
EXHIBIT
7
|
FORM
OF ESCROW ACCOUNT LETTER AGREEMENT
|
|
EXHIBIT
8
|
SERVICING
ADDENDUM FOR SERVICING RETAINED MORTGAGE LOANS
|
|
EXHIBIT
9
|
SERVICING
ADDENDUM FOR SERVICING RELEASED MORTGAGE LOANS
|
|
EXHIBIT
10
|
SELLER’S
UNDERWRITING GUIDELINES
|
|
SCHEDULE
I
|
DATA
FILE
|
This
is a
MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT (the “Agreement”), dated
as of April 1, 2005, by and between Citigroup Global Markets Realty Corp.,
having an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the “Initial Purchaser”, and the Initial Purchaser or
the Person, if any, to which the Initial Purchaser has assigned its rights
and
obligations hereunder as Purchaser with respect to a Mortgage Loan, and each
of
their respective successors and assigns, the “Purchaser”) and GreenPoint
Mortgage Funding, Inc., having an office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “Seller”).
W I T N E
;S S E T H
:
WHEREAS,
the Seller desires to sell, from time to time, to the Purchaser, and the
Purchaser desires to purchase, from time to time, from the Seller, certain
conventional fixed and adjustable rate residential first and second lien
mortgage loans (the “Mortgage Loans”), and, with respect to the Servicing
Released Mortgage Loans (as defined herein), the servicing rights appurtenant
thereto, as described herein on a servicing-retained or servicing-released
basis, and which shall be delivered in groups of whole loans on various dates
as
provided in the related Confirmation (each, a “Closing Date”);
WHEREAS,
each Mortgage Loan is secured by a mortgage, deed of trust or other security
instrument creating a first or second lien on a residential dwelling located
in
the jurisdiction indicated on the Mortgage Loan Schedule for the related
Mortgage Loan Package, which is to be annexed to the related Assignment and
Conveyance on each Closing Date as Schedule One;
WHEREAS,
the Purchaser and the Seller wish to prescribe the manner of the conveyance,
servicing and control of the Mortgage Loans; and
WHEREAS,
following its purchase of the Mortgage Loans from the Seller, the Purchaser
desires to sell some or all of the Mortgage Loans to one or more purchasers
as a
whole loan transfer in a whole loan or participation format or a public or
private mortgage-backed securities transaction;
NOW,
THEREFORE, in consideration of the premises and mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Seller
agree
as follows:
SECTION
1. Definitions.
For
purposes of this Agreement the following capitalized terms shall have the
respective meanings set forth below.
Adjustable
Rate Mortgage Loan:
A
Mortgage Loan which provides for the adjustment of the Mortgage Interest Rate
payable in respect thereto.
Adjustment
Date:
With
respect to each Adjustable Rate Mortgage Loan, the date set forth in the related
Mortgage Note on which the Mortgage Interest Rate on such Adjustable Rate
Mortgage Loan is adjusted in accordance with the terms of the related Mortgage
Note.
Agreement:
This
Master Mortgage Loan Purchase and Servicing Agreement including all exhibits,
schedules, amendments and supplements hereto.
Appraised
Value:
With
respect to any Mortgaged Property, the lesser of (i) the value thereof as
determined by an appraisal made for the originator of the Mortgage Loan at
the
time of origination of the Mortgage Loan by an appraiser who met the minimum
requirements of FNMA and FHLMC, and (ii) the purchase price paid for the related
Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan,
provided, however, in the case of a Refinanced Mortgage Loan, such value of
the
Mortgaged Property is based solely upon the value determined by an appraisal
made for the originator of such Refinanced Mortgage Loan at the time of
origination of such Refinanced Mortgage Loan by an appraiser who met the minimum
requirements of FNMA and FHLMC.
Assignment
and Conveyance:
An
assignment and conveyance of the Mortgage Loans purchased on a Closing Date
in
the form annexed hereto as Exhibit
4.
Assignment
of Mortgage:
With
respect to each Mortgage Loan which is not a MOM Loan, an individual assignment
of the Mortgage, notice of transfer or equivalent instrument in recordable
form,
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to give record notice of the sale of the Mortgage to the
Purchaser.
Business
Day:
Any day
other than a Saturday or Sunday, or a day on which banking and savings and
loan
institutions in the State of California or the State of New York are authorized
or obligated by law or executive order to be closed.
Buydown
Agreement:
An
agreement between the Seller and a Mortgagor, or an agreement among the Seller,
a Mortgagor and a seller of a Mortgaged Property or a third party with respect
to a Mortgage Loan which provides for the application of Buydown
Funds.
Buydown
Funds:
In
respect of any Buydown Mortgage Loan, any amount contributed by the seller
of a
Mortgaged Property subject to a Buydown Mortgage Loan, the buyer of such
property, the Seller or any other source, plus interest earned thereon, in
order
to enable the Mortgagor to reduce the payments required to be made from the
Mortgagor’s funds in the early years of a Mortgage Loan.
Buydown
Mortgage Loan:
Any
Mortgage Loan in respect of which, pursuant to a Buydown Agreement, (i) the
Mortgagor pays less than the full monthly payments specified in the Mortgage
Note for a specified period and (ii) the difference between the payments
required under such Buydown Agreement and the Mortgage Note is provided from
Buydown Funds.
Buydown
Period:
The
period of time when a Buydown Agreement is in effect with respect to a related
Buydown Mortgage Loan.
Cash-Out
Refinancing:
A
Refinanced Mortgage Loan the proceeds of which were in excess of the principal
balance of any existing first and second mortgage on the related Mortgaged
Property and related closing costs, and were used to pay any such existing
first
and second mortgage, related closing costs and subordinate mortgages on the
related Mortgaged Property.
Closing
Date:
The
date or dates on which the Purchaser, from time to time, shall purchase and
the
Seller, from time to time, shall sell to the Purchaser, the Mortgage Loans
listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
Closing
Documents:
With
respect to any Closing Date, the documents required pursuant to Section
9.
Code:
The
Internal Revenue Code of 1986, or any successor statute thereto.
Combined
Loan-to-Value Ratio
or
CLTV:
With
respect to any Mortgage Loan, the fraction, expressed as a percentage, the
numerator of which is the sum of (a) the original principal balance of the
Mortgage Loan, plus (b) the unpaid principal balance of any related subordinate
mortgage loan or loans secured by the Mortgaged Property, and the denominator
of
which is the Appraised Value of the related Mortgaged Property.
Condemnation
Proceeds:
All
awards, compensation and settlements in respect of a taking of all or part
of a
Mortgaged Property by exercise of the power of condemnation or the right of
eminent domain.
Confirmation:
With
respect to any Mortgage Loan Package purchased and sold on any Closing Date,
the
purchase price and terms letter agreement between the Purchaser and the Seller
(including any exhibits, schedules and attachments thereto), setting forth
the
terms and conditions of such transaction and describing the Mortgage Loans
to be
purchased by the Purchaser on such Closing Date. A Confirmation may relate
to
more than one Mortgage Loan Package to be purchased on one or more Closing
Dates
hereunder.
Convertible
Mortgage Loan:
A
Mortgage Loan that by its terms and subject to certain conditions contained
in
the related Mortgage or Mortgage Note allows the Mortgagor to convert the
adjustable Mortgage Interest Rate on such Mortgage Loan to a fixed Mortgage
Interest Rate.
Credit
Score:
The
credit score of the Mortgagor provided by Fair, ▇▇▇▇▇ & Company, Inc. or
such other organization providing credit scores at the time of the origination
of a Mortgage Loan. If two credit scores are obtained, the Credit Score shall
be
the lower of the two credit scores. If three credit scores are obtained, the
Credit Score shall be the middle of the three credit scores.
Custodial
Account:
The
separate account or accounts, each of which shall be an Eligible Account,
created and maintained pursuant to this Agreement, which shall be entitled
“GreenPoint Mortgage Funding, Inc., as servicer, in trust for the Purchaser
and
various Mortgagors, Fixed and Adjustable Rate Mortgage Loans”, established at a
financial institution acceptable to the Purchaser.
Cut-off
Date:
The
first day of the month in which the related Closing Date occurs, or as otherwise
set forth in the related Confirmation.
Data
File:
The
electronic data file containing the fields set forth on Schedule I hereto and
attached to the related Assignment and Conveyance.
Deleted
Mortgage Loan:
A
Mortgage Loan replaced or to be replaced by a Qualified Substitute Mortgage
Loan.
Determination
Date:
With
respect to each Distribution Date, the fifteenth (15th) day of the calendar
month in which such Distribution Date occurs or, if such fifteenth (15th) day
is
not a Business Day, the Business Day immediately preceding such fifteenth (15th)
day.
Distribution
Date:
The
eighteenth (18th) day of each month, commencing on the tenth day of the month
next following the month in which the related Cut-off Date occurs, or if such
eighteenth (18th) day is not a Business Day, the first Business Day immediately
preceding such eighteenth (18th) day.
Due
Date:
With
respect to each Distribution Date, the first day of the calendar month in which
such Distribution Date occurs, which is the day on which the Monthly Payment
is
due on a Mortgage Loan, exclusive of any days of grace.
Due
Period:
With
respect to each Distribution Date, the period commencing on the second day
of
the month preceding the month of the Distribution Date and ending on the first
day of the month of the Distribution Date.
Eligible
Account:
Either
(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 short-term
unsecured debt obligations of such holding company of which) are rated A-1
by
S&P or Prime-1 by Moody’s (or a comparable rating if another rating agency
is specified by the Initial Purchaser by written notice to the Seller) at the
time any amounts are held on deposit therein, (ii) an account or accounts the
deposits in which are fully insured by the FDIC or (iii) a trust account or
accounts maintained with a federal or state chartered depository institution
or
trust company acting in its fiduciary capacity. Eligible Accounts may bear
interest.
Escrow
Account:
The
separate trust account or accounts created and maintained pursuant to this
Agreement which shall be entitled “GreenPoint Mortgage Funding, Inc., as
servicer, in trust for the Purchaser and various Mortgagors, Fixed and
Adjustable Rate Mortgage Loans”, established at a financial institution
acceptable to the Purchaser.
Escrow
Payments:
The
amounts constituting ground rents, taxes, assessments, water charges, sewer
rents, Primary Insurance Policy premiums, fire and hazard insurance premiums
and
other payments required to be escrowed by the Mortgagor with the Mortgagee
pursuant to the terms of any Mortgage Note or Mortgage.
Event
of Default:
Any
one
of the events enumerated in Section 14.01.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
FHLMC:
▇▇▇▇▇▇▇
Mac or any successor thereto.
Final
Recovery Determination:
With
respect to any defaulted Mortgage Loan or any REO Property (other than a
Mortgage Loan or REO Property repurchased by the Seller pursuant to this
Agreement), a determination made by the Seller that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Seller, in
its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. The Seller shall maintain records, prepared
by a
servicing officer of the Seller, of each Final Recovery
Determination.
First
Lien:
With
respect to each Mortgaged Property, the lien of the mortgage, deed of trust
or
other instrument securing a Mortgage Note which creates a first lien on the
Mortgaged Property.
Fixed
Rate Mortgage Loan:
A
Mortgage Loan with respect to which the Mortgage Interest Rate set forth in
the
Mortgage Note is fixed for the term of such Mortgage Loan.
Flood
Zone Service Contract:
A
transferable contract maintained for the Mortgaged Property with a nationally
recognized flood zone service provider for the purpose of obtaining the current
flood zone status relating to such Mortgaged Property
FNMA:
▇▇▇▇▇▇
▇▇▇ or any successor thereto.
Gross
Margin:
With
respect to any Adjustable Rate Mortgage Loan, the fixed percentage amount set
forth in the related Mortgage Note and the related Mortgage Loan Schedule that
is added to the Index on each Adjustment Date in accordance with the terms
of
the related Mortgage Note to determine the new Mortgage Interest Rate for such
Mortgage Loan.
HUD:
The
United States Department of Housing and Urban Development or any successor
thereto.
Index:
With
respect to any Adjustable Rate Mortgage Loan, the index identified on the
Mortgage Loan Schedule and set forth in the related Mortgage Note for the
purpose of calculating the interest rate thereon.
Initial
Closing Date:
The
Closing Date on which the Initial Purchaser purchases and the Seller sells
the
first Mortgage Loan Package hereunder.
Initial
Purchaser:
Citigroup Global Markets Realty Corp., or any successor.
Initial
Rate Cap:
With
respect to each Adjustable Rate Mortgage Loan and the initial Adjustment Date
therefor, a number of percentage points per annum that is set forth in the
related Final Mortgage Loan Schedule and in the related Mortgage Note, which
is
the amount by which the Mortgage Interest Rate for such Adjustable Rate Mortgage
Loan may increase or decrease on the initial Adjustment Date.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
Interim
Servicing Period:
With
respect to any Servicing Released Mortgage Loan, the period commencing on the
related Closing Date and ending on the related Servicing Transfer Date;
provided, however that the Interim Servicing Period may be extended for an
additional period by written notice by the Purchaser.
Lender
Paid Mortgage Insurance Policy
or
LPMI
Policy:
A
policy of mortgage guaranty insurance issued by a Qualified Insurer in which
the
owner or servicer of the Mortgage Loan is responsible for the premiums
associated with such mortgage insurance policy.
Liquidation
Proceeds:
Amounts, other than Insurance Proceeds and Condemnation Proceeds, received
in
connection with the liquidation of a defaulted Mortgage Loan through trustee’s
sale, foreclosure sale or otherwise, other than amounts received following
the
acquisition of REO Property and prior to an REO Disposition.
Loan-to-Value
Ratio
or
LTV:
With
respect to any Mortgage Loan as of any date of determination, the ratio on
such
date of the outstanding principal amount of the Mortgage Loan, to the Appraised
Value of the Mortgaged Property.
Maximum
Mortgage Interest Rate:
With
respect to each Adjustable Rate Mortgage Loan, a rate that is set forth on
the
related Mortgage Loan Schedule and in the related Mortgage Note and is the
maximum interest rate to which the Mortgage Interest Rate on such Mortgage
Loan
may be increased on any Adjustment Date.
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
MERS
Mortgage Loan:
Any
Mortgage Loan registered with MERS on the MERS System.
MERS
System:
The
system of recording transfers of mortgages electronically maintained by
MERS.
MIN:
The
Mortgage Identification Number for any MERS Mortgage Loan.
Minimum
Mortgage Interest Rate:
With
respect to each Adjustable Rate Mortgage Loan, a rate that is set forth on
the
related Mortgage Loan Schedule and in the related Mortgage Note and is the
minimum interest rate to which the Mortgage Interest Rate on such Mortgage
Loan
may be decreased on any Adjustment Date.
MOM
Loan:
Any
Mortgage Loan as to which MERS is acting as the mortgagee of record of such
Mortgage Loan, solely as nominee for the originator of such Mortgage Loan and
its successors and assigns, at the origination thereof.
Monthly
Advance:
The
aggregate of the advances made by the Seller on any Distribution Date pursuant
to Section 11.21 of Exhibit
8.
Monthly
Payment:
With
respect to any Mortgage Loan, the scheduled combined payment of principal and
interest payable by a Mortgagor under the related Mortgage Note on each Due
Date.
Moody’s:
▇▇▇▇▇’▇
Investors Service, Inc. or its successor in interest.
Mortgage:
The
mortgage, deed of trust or other instrument creating a first or second lien
on
Mortgaged Property securing the Mortgage Note.
Mortgagee:
The
mortgagee or beneficiary named in the Mortgage and the successors and assigns
of
such mortgagee or beneficiary.
Mortgage
File:
The
items pertaining to a particular Mortgage Loan referred to in Exhibit
5
annexed
hereto, and any additional documents required to be added to the Mortgage File
pursuant to this Agreement or the related Confirmation.
Mortgage
Interest Rate:
With
respect to each Fixed Rate Mortgage Loan, the fixed annual rate of interest
provided for in the related Mortgage Note and, with respect to each Adjustable
Rate Mortgage Loan, the annual rate that interest accrues on such Adjustable
Rate Mortgage Loan from time to time in accordance with the provisions of the
related Mortgage Note.
Mortgage
Loan:
Each
first or second lien residential Servicing Retained Mortgage Loan and Servicing
Released Mortgage Loan, sold, assigned and transferred to the Purchaser pursuant
to this Agreement and the related Confirmation and identified on the Mortgage
Loan Schedule annexed to this Agreement on the related Closing Date, which
Mortgage Loan includes without limitation the Mortgage File, the Monthly
Payments, Principal Prepayments, Prepayment Charges, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition proceeds, and all
other rights, benefits, proceeds and obligations arising from or in connection
with such Mortgage Loan.
Mortgage
Loan Documents:
The
documents described as the “Mortgage Loan Documents” in Exhibit
5
annexed
hereto pertaining to any Mortgage Loan.
Mortgage
Loan Package:
The
Mortgage Loans listed on a Mortgage Loan Schedule, delivered to the Purchaser
or
its designee at least five (5) Business Days prior to the related Closing Date
and attached to the Assignment and Conveyance as Schedule One on the related
Closing Date.
Mortgage
Loan Schedule:
With
respect to each Mortgage Loan Package, the schedule of Mortgage Loans to be
annexed to an Assignment and Conveyance as Schedule One on each Closing Date
for
the Mortgage Loan Package delivered on such Closing Date in both hard copy
and
electronic form, such schedule setting forth the following information with
respect to each Mortgage Loan in the Mortgage Loan Package: (1) the Seller’s
Mortgage Loan identifying number; (2) the Mortgagor’s first and last name; (3)
the street address of the Mortgaged Property including the state and zip code;
(4) a code indicating whether the Mortgaged Property is owner-occupied; (5)
the
type of Residential Dwelling constituting the Mortgaged Property; (6) the
original months to maturity; (7) the original date of the Mortgage Loan and
the
remaining months to maturity from the Cut-off Date, based on the original
amortization schedule; (8) the Loan-to-Value Ratio at origination and the
Combined Loan-to-Value Ratio at origination; (9) the Mortgage Interest Rate
in
effect immediately following the related Cut-off Date; (10) the date on which
the first Monthly Payment was due on the Mortgage Loan; (11) the stated maturity
date; (12) the amount of the Monthly Payment at origination; (13) the amount
of
the Monthly Payment as of the Cut-off Date; (14) the last Due Date on which
a
Monthly Payment was actually applied to the unpaid Stated Principal Balance;
(15) the original principal amount of the Mortgage Loan; (16) the Stated
Principal Balance of the Mortgage Loan as of the close of business on the
Cut-off Date; (17) with respect to each Adjustable Rate Mortgage Loan, the
first
Adjustment Date; (18) with respect to each Adjustable Rate Mortgage Loan, the
Gross Margin; (19) a code indicating the purpose of the loan (i.e., purchase
financing, Rate/Term Refinancing, Cash-Out Refinancing); (20) with respect
to
each Adjustable Rate Mortgage Loan, the Maximum Mortgage Interest Rate under
the
terms of the Mortgage Note; (21) with respect to each Adjustable Rate Mortgage
Loan, the Minimum Mortgage Interest Rate under the terms of the Mortgage Note;
(22) the Mortgage Interest Rate at origination; (23) with respect to each
Adjustable Rate Mortgage Loan, the Periodic Rate Cap; (24) with respect to
each
Adjustable Rate Mortgage Loan, the first Adjustment Date immediately following
the Cut-off Date; (25) with respect to each Adjustable Rate Mortgage Loan,
the
Index; (26) the date on which the first Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in effect,
such Due Date; (27) a code indicating whether the Mortgage Loan is an Adjustable
Rate Mortgage Loan or a Fixed Rate Mortgage Loan; (28) a code indicating the
documentation style (i.e., full, alternative or reduced); 29) a code indicating
if the Mortgage Loan is subject to a Primary Insurance Policy or LPMI Policy;
and if so, the provider of such insurance, the coverage percentage of such
insurance and the fee payable to the provider in respect of such insurance;
(30)
the Appraised Value of the Mortgaged Property; (31) the sale price of the
Mortgaged Property, if applicable; (32) a code indicating whether the Mortgage
Loan is subject to a Prepayment Charge, the term of such Prepayment Charge
and
the amount of such Prepayment Charge; (33) the product type (e.g., 2/28, 15
year
fixed, 30 year fixed, 15/30, etc.); (34) the Mortgagor’s debt to income ratio;
(35) a code indicating whether the Mortgaged Property is subject to a First
Lien
or a Second Lien; (36) a code indicating the Credit Score of the Mortgagor
at
the time of origination of the Mortgage Loan; (37) a code indicating the form
of
appraisal (i.e. form 1004, 2055, etc.); (38) a code indicating whether the
Mortgage Loan is a MERS Mortgage Loan and, if so, the corresponding MIN; (39)
a
code indicating if the Mortgage Loan is an interest-only Mortgage Loan and,
if
so, the term of the interest-only period of such Mortgage Loan; (40) the amount
of any fees payable by the Mortgagor in connection with the origination of
such
Mortgage Loan; (41) the Mortgagor’s income at origination; (42) the amortized
original term to maturity as of the Cut-off Date; (43) with respect to each
Adjustable Rate Mortgage Loan, a code indicating the frequency of adjustment
of
the related Mortgage Interest Rate; (44) the number of units in the related
Mortgaged Property; (45) a code indicating whether the related Mortgagor is
self-employed; (46) a code indicating the credit grade; (47) Tax Service
Contract provider; and (48) Tax Service Contract number. With respect to the
Mortgage Loan Package in the aggregate, the Mortgage Loan Schedule shall set
forth the following information, as of the related Cut-off Date: (1) the number
of Mortgage Loans; (2) the current principal balance of the Mortgage Loans;
(3)
the weighted average Mortgage Interest Rate of the Mortgage Loans; and (4)
the
weighted average maturity of the Mortgage Loans.
Mortgage
Note:
The
original executed note or other evidence of the Mortgage Loan indebtedness
of a
Mortgagor.
Mortgaged
Property:
The
Mortgagor’s real property securing repayment of a related Mortgage Note,
consisting of a fee simple interest in a single parcel of real property improved
by a Residential Dwelling.
Mortgagor:
The
obligor on a Mortgage Note, the owner of the Mortgaged Property and the grantor
or mortgagor named in the related Mortgage and such grantor’s or mortgagor’s
successors in title to the Mortgaged Property.
Net
Mortgage Rate:
With
respect to any Servicing Retained Mortgage Loan (or the related REO Property),
as of any date of determination, a per annum rate of interest equal to the
then
applicable Mortgage Interest Rate for such Servicing Retained Mortgage Loan
minus the Servicing Fee Rate.
Nonrecoverable
Monthly Advance:
Any
Monthly Advance previously made or proposed to be made in respect of a Servicing
Retained Mortgage Loan or REO Property that, in the good faith business judgment
of the Seller, will not, or, in the case of a proposed Monthly Advance, would
not be, ultimately recoverable from related late payments, Insurance Proceeds
or
Liquidation Proceeds on such Servicing Retained Mortgage Loan or REO Property
as
provided herein.
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board or the Vice Chairman of the
Board or a President or a Vice President and by the Treasurer or the Secretary
or one of the Assistant Treasurers or Assistant Secretaries of the Person on
behalf of whom such certificate is being delivered.
Opinion
of Counsel:
A
written opinion of counsel, who may be salaried counsel for the Person on behalf
of whom the opinion is being given, reasonably acceptable to each Person to
whom
such opinion is addressed.
Pass-Through
Transfer:
The
sale or transfer of some or all of the Mortgage Loans by the Purchaser to a
trust to be formed as part of a publicly issued or privately placed
mortgage-backed securities transaction.
Periodic
Rate Cap:
With
respect to each Adjustable Rate Mortgage Loan and any Adjustment Date therefor,
a number of percentage points per annum that is set forth in the related
Mortgage Loan Schedule and in the related Mortgage Note, which is the maximum
amount by which the Mortgage Interest Rate for such Adjustable Rate Mortgage
Loan may increase (without regard to the Maximum Mortgage Interest Rate) or
decrease (without regard to the Minimum Mortgage Interest Rate) on such
Adjustment Date from the Mortgage Interest Rate in effect immediately prior
to
such Adjustment Date.
Person:
An
individual, corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Preliminary
Servicing Period:
With
respect to any Servicing Retained Mortgage Loans, the period commencing on
the
related Closing Date and ending on the date the Seller enters into
Reconstitution Agreements which amend or restate the servicing provisions of
this Agreement.
Prepayment
Charge:
With
respect to any Mortgage Loan, any prepayment penalty or premium thereon payable
in connection with a principal prepayment on such Mortgage Loan pursuant to
the
terms of the related Mortgage Note.
Primary
Insurance Policy:
A
policy of primary mortgage guaranty insurance issued by a Qualified
Insurer.
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date, including any Prepayment Charge or penalty
thereon, which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent
to
the month of prepayment.
Purchase
Price:
The
price paid on the related Closing Date by the Purchaser to the Seller pursuant
to the related Confirmation in exchange for the Mortgage Loans purchased on
such
Closing Date as provided in Section 4.
Qualified
Insurer:
Any
insurer which meets the requirements of FNMA and FHLMC.
Qualified
Substitute Mortgage Loan:
A
mortgage loan substituted for a Deleted Mortgage Loan pursuant to the terms
of
this Agreement which must, on the date of such substitution, (i) have an
outstanding principal balance, after application of all scheduled payments
of
principal and interest due during or prior to the month of substitution, not
in
excess of the Stated Principal Balance of the Deleted Mortgage Loan as of the
Due Date in the calendar month during which the substitution occurs, (ii) have
a
Mortgage Interest Rate not less than (and not more than one percentage point
in
excess of) the Mortgage Interest Rate of the Deleted Mortgage Loan, (iii) have
a
Net Mortgage Rate not less than (and not more than one percentage point in
excess of) the Net Mortgage Rate of the Deleted Mortgage Loan, (iv) have a
remaining term to maturity not greater than (and not less than) that of the
Deleted Mortgage Loan, (v) have the same Due Date as the Due Date on the Deleted
Mortgage Loan, (vi) have a Loan-to-Value Ratio as of the date of substitution
equal to or lower than the Loan-to-Value Ratio of the Deleted Mortgage Loan
as
of such date, (vii) be covered under a Primary Insurance Policy if such
Qualified Substitute Mortgage Loan has a Loan-to-Value Ratio in excess of 80%
and the Deleted Mortgage Loan was covered under a Primary Insurance Policy,
(viii) conform to each representation and warranty set forth in Subsection
7.02
of this Agreement and (ix) be the same type of mortgage loan (i.e. first or
second, fixed or adjustable rate with the same Gross Margin and Index as the
Deleted Mortgage Loan). In the event that one or more mortgage loans are
substituted for one or more Deleted Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate principal
balances, the Mortgage Interest Rates described in clause (ii) hereof shall
be
determined on the basis of weighted average Mortgage Interest Rates and shall
be
satisfied as to each such mortgage loan, the terms described in clause (iv)
shall be determined on the basis of weighted average remaining terms to
maturity, the Loan-to-Value Ratios described in clause (vi) hereof shall be
satisfied as to each such mortgage loan and, except to the extent otherwise
provided in this sentence, the representations and warranties described in
clause (viii) hereof must be satisfied as to each Qualified Substitute Mortgage
Loan or in the aggregate, as the case may be. In addition, the substitution
of
more than one Mortgage Loan pursuant to the previous sentence shall be subject
to the Purchaser’s approval in its sole discretion..
Rate/Term
Refinancing:
A
Refinanced Mortgage Loan, the proceeds of which are not in excess of the
existing first and second mortgage loan on the related Mortgaged Property and
related closing costs, and were used exclusively to satisfy the then existing
first and second mortgage loan of the Mortgagor on the related Mortgaged
Property and to pay related closing costs.
Reconstitution
Agreements:
The
agreement or agreements entered into by the Seller and the Purchaser and/or
certain third parties on the Reconstitution Date or Dates with respect to any
or
all of the Mortgage Loans serviced hereunder, in connection with a Whole Loan
Transfer or a Pass-Through Transfer as provided in Section 12.
Reconstitution
Date:
The
date or dates on which any or all of the Mortgage Loans serviced under this
Agreement shall be removed from this Agreement and reconstituted as part of
a
Whole Loan Transfer or Pass-Through Transfer pursuant to Section 12
hereof.
Record
Date:
With
respect to each Distribution Date, the last Business Day of the month
immediately preceding the month in which such Distribution Date
occurs.
Refinanced
Mortgage Loan:
A
Mortgage Loan the proceeds of which were not used to purchase the related
Mortgaged Property.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of the
Code.
REMIC
Provisions:
Provisions of the federal income tax law relating to REMICs, which appear in
Sections 860A through 860G of the Code, and related provisions, and proposed,
temporary and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to
time.
REO
Disposition:
The
final sale by the Seller of any REO Property.
REO
Property:
A
Mortgaged Property acquired as a result of the liquidation of a Mortgage
Loan.
Repurchase
Price:
With
respect to any Mortgage Loan, a price equal to (a) the Purchase Price percentage
used to calculate the Purchase Price, as stated in the related Confirmation,
times the Stated Principal Balance of the Mortgage Loan so repurchased plus
(b)
accrued interest thereon at the Mortgage Interest Rate from the interest paid
to
date, to but not including, the last day of the month that such repurchase
occurs, less amounts received in respect of such repurchased Mortgage Loan
which
are being held in the Custodial Account for distribution in connection with
such
Mortgage Loan, plus (c) any unreimbursed servicing advances and monthly advances
(including nonrecoverable monthly advances) and any unpaid servicing fees
allocable to such Mortgage Loan paid by any party other than the Seller, plus
(d) any costs and expenses incurred by the Purchaser, the servicer, master
servicer or any trustee in respect of the breach or defect giving rise to the
repurchase obligation including, without limitation, any costs and damages
incurred by any such party in connection with any violation by any such Mortgage
Loan of any predatory or abusive lending law.
Residential
Dwelling:
Any one
of the following: (i) a detached one-family dwelling, (ii) a detached two-
to
four-family dwelling, (iii) a one-family dwelling unit in a FNMA eligible
condominium project, or (iv) a detached one-family dwelling in a planned unit
development, none of which is manufactured housing, a co-operative, a commercial
property, an agricultural property, a mixed use property or a mobile
home.
Second
Lien:
With
respect to each Mortgaged Property, the lien of the mortgage, deed of trust
or
other instrument securing a Mortgage Note which creates a second lien on the
Mortgaged Property.
Servicing
Addendum:
The
terms and conditions attached hereto as Exhibit
8
which
will govern the servicing of the Servicing Retained Mortgage Loans by Seller
during the Preliminary Servicing Period, and the terms and conditions attached
hereto as Exhibit
9
which
will govern the interim servicing of the Servicing Released Mortgage Loans
by
the Seller during the Interim Servicing Period.
Servicing
Advances:
All
customary, reasonable and necessary “out-of-pocket” costs and expenses incurred
by the Seller in the performance of its servicing obligations, including, but
not limited to, the cost of (i) preservation, restoration and repair of a
Mortgaged Property, (ii) any enforcement or judicial proceedings with respect
to
a Mortgage Loan, including foreclosure actions and (iii) the management and
liquidation of REO Property.
Servicing
Fee:
With
respect to each Servicing Retained Mortgage Loan, the amount of the annual
servicing fee the Purchaser shall pay to the Seller, which shall, for each
month, be equal to one-twelfth of the product of (a) the Servicing Fee Rate
and
(b) the unpaid principal balance of the Mortgage Loan. Such fee shall be payable
monthly, computed on the basis of the same principal amount and period
respectively which any related interest payment on a Mortgage Loan is computed.
The obligation of the Purchaser to pay the Servicing Fee is limited to, and
payable solely from, the interest portion (including recoveries with respect
to
interest from Liquidation Proceeds and other proceeds, to the extent permitted
by Section 11.05) of related Monthly Payment collected by the Seller, or as
otherwise proved under Section 11.05. If the Preliminary Servicing Period
includes any partial month, the Servicing Fee for such month shall be pro rated
at a per diem rate based upon a 30-day month. With respect to each Servicing
Released Mortgage Loan, the Servicing Fee shall be an amount equal to the dollar
amount per Mortgage Loan set forth in the related Confirmation. If the Interim
Servicing Period includes any partial month, the Servicing Fee for such month
shall be pro rated at a per diem rate based upon a 30 day month.
Servicing
Fee Rate:
With
respect to each Servicing Retained Mortgage Loan, the per annum rate set forth
in the related Confirmation at which the Servicing Fee accrues.
Servicing
File:
With
respect to each Mortgage Loan, the file retained by the Seller consisting of
originals of all documents in the Mortgage File which are not delivered to
the
Purchaser or its designee and copies of the Mortgage Loan
Documents.
Servicing
Released Mortgage Loan:
The
Mortgage Loans sold by the Seller on a servicing released basis, which Servicing
Released Mortgage Loans are serviced pursuant to the Servicing Addendum attached
hereto as Exhibit
9.
Servicing
Retained Mortgage Loan:
The
Mortgage Loans sold by the Seller on a servicing retained basis, which Servicing
Retained Mortgage Loans are serviced pursuant to the Servicing Addendum attached
hereto as Exhibit
8.
Servicing
Transfer Costs:
All
reasonable costs and expenses incurred by the Purchaser in connection with
the
transfer of servicing of the Servicing Retained Mortgage Loans from Seller,
including, without limitation, any reasonable costs or expenses associated
with
the complete transfer of all servicing data and the completion, correction
or
manipulation of such servicing data as may be required by the Purchaser (or
any
successor to Seller appointed pursuant to Section 16) to correct any errors
or
insufficiencies in the servicing data or otherwise to enable the Purchaser
(or
any successor to Seller appointed pursuant to Section 16) to service the
Mortgage Loans properly and effectively.
Servicing
Transfer Date:
With
respect to each Servicing Released Mortgage Loan, the date or dates set forth
in
the related Confirmation upon which the actual transfer of servicing
responsibilities for any Servicing Released Mortgage Loan being herein is
transferred from the Seller to the Purchaser or its designee.
S&P:
Standard & Poor’s, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or its
successor in interest.
Stated
Principal Balance:
As to
each Servicing Retained Mortgage Loan as of any date of determination, (i)
the
scheduled principal balance of the Mortgage Loan as of the Cut-off Date after
giving effect to payments of principal due on or before such date, whether
or
not collected from the Mortgagor on or before such date, minus (ii) all amounts
previously distributed to the Purchaser with respect to the related Mortgage
Loan representing payments or recoveries of principal. With respect to each
Servicing Released Mortgage Loan as of any date of determination, (i) the
principal balance of the Mortgage Loan as of the Cut-off Date after giving
effect to payments of principal received on or before such date, minus (ii)
all
amounts previously distributed to the Purchaser with respect to the related
Mortgage Loan representing payments or recoveries of principal.
Tax
Service Contract:
A
transferable contract maintained for the Mortgaged Property with a tax service
provider for the purpose of obtaining current information from local taxing
authorities relating to such Mortgaged Property.
Underwriting
Guidelines:
The
Seller’s written underwriting guidelines attached hereto as Exhibit
10
in
effect with respect to the Mortgage Loans purchased by the Purchaser on the
Initial Closing Date, which may be amended, supplemented or modified from time
to time thereafter.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans by the Purchaser to a
third party, which sale or transfer is not a Pass-Through Transfer.
SECTION
2. Agreement
to Purchase.
The
Seller agrees to sell, and the Purchaser agrees to purchase, from time-to-time,
Mortgage Loans having an aggregate principal balance on the related Cut-off
Date
in an amount as set forth in the related Confirmation, or in such other amount
as agreed by the Purchaser and the Seller as evidenced by the actual aggregate
principal balance of the Mortgage Loans accepted by the Purchaser on the related
Closing Date.
SECTION
3. Mortgage
Loan Schedules.
The
Seller shall deliver the Mortgage Loan Schedule for a Mortgage Loan Package
to
be purchased on a particular Closing Date to the Purchaser at least five (5)
Business Days prior to the related Closing Date.
SECTION
4. Purchase
Price.
(a) The
Purchase Price for each Servicing Retained Mortgage Loan listed on the related
Mortgage Loan Schedule shall be the percentage of par as stated in the related
Confirmation (subject to adjustment as provided therein), multiplied by its
Stated Principal Balance as of the related Cut-off Date. If so provided in
the
related Confirmation, portions of the Mortgage Loans shall be priced
separately.
In
addition to the Purchase Price as described above, the Initial Purchaser shall
pay to the Seller, at closing, accrued interest on the Stated Principal Balance
of each Servicing Retained Mortgage Loan as of the related Cut-off Date at
its
Net Mortgage Rate from the related Cut-off Date through the day prior to the
related Closing Date, both inclusive.
The
Purchaser shall own and be entitled to receive with respect to each Servicing
Retained Mortgage Loan purchased, (1) all scheduled principal due after the
related Cut-off Date, (2) all other recoveries of principal collected after
the
related Cut-off Date (provided, however, that all scheduled payments of
principal due on or before the related Cut-off Date and collected by the Seller
after the related Cut-off Date shall belong to the Seller), and (3) all payments
of interest on the Servicing Retained Mortgage Loans net of the Servicing Fee
(minus that portion of any such interest payment that is allocable to the period
prior to the related Cut-off Date). The Stated Principal Balance of each
Servicing Retained Mortgage Loan as of the related Cut-off Date is determined
after application to the reduction of principal of payments of principal due
on
or before the related Cut-off Date whether or not collected. Therefore, for
the
purposes of this Agreement, payments of scheduled principal and interest prepaid
for a Due Date beyond the related Cut-off Date shall not be applied to the
principal balance as of the related Cut-off Date. Such prepaid amounts (minus
the applicable Servicing Fee) shall be the property of the Purchaser. The Seller
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser, for remittance by the Seller
to
the Purchaser on the first related Distribution Date. All payments of principal
and interest, less the applicable Servicing Fee, due on a Due Date following
the
related Cut-off Date shall belong to the Purchaser.
(b) The
Purchase Price for each Servicing Released Mortgage Loan listed on the related
Mortgage Loan Schedule shall be the percentage of par as stated in the related
Confirmation (subject to adjustment as provided therein), multiplied by its
Stated Principal Balance as of the related Cut-off Date. If so provided in
the
related Confirmation, portions of the Mortgage Loans shall be priced
separately.
In
addition to the Purchase Price as described above, the Initial Purchaser shall
pay to the Seller, at closing, accrued interest on the Stated Principal Balance
of each Servicing Released Mortgage Loan as of the related Cut-off Date at
its
Mortgage Interest Rate, net of the Servicing Fee, from the related Cut-off
Date
through the day prior to the related Closing Date, both inclusive.
The
Purchaser shall own and be entitled to receive with respect to each Servicing
Released Mortgage Loan purchased, (1) all recoveries of principal collected
after the related Cut-off Date and (2) all payments of interest on the Mortgage
Loans net of the Servicing Fee during the Interim Servicing Period.
SECTION
5. Examination
of Mortgage Files.
In
addition to the rights granted to the Initial Purchaser under the related
Confirmation to underwrite the Mortgage Loans and review the Mortgage Files
prior to the Closing Date, prior to the related Closing Date, the Seller shall
(a) deliver to the Purchaser or its designee in escrow, for examination with
respect to each Mortgage Loan to be purchased on such Closing Date, the related
Mortgage File on diskette or compact disk, including the Assignment of Mortgage,
pertaining to each Mortgage Loan, or (b) make the related Mortgage File
available to the Initial Purchaser for examination at the Seller’s offices or
such other location as shall otherwise be reasonably agreed upon by the Initial
Purchaser and the Seller. Such examination may be made by the Initial Purchaser
or its designee at any reasonable time before or after the related Closing
Date.
If the Initial Purchaser makes such examination prior to the related Closing
Date and identifies any Mortgage Loans that do not conform to the terms of
the
related Confirmation or the Seller’s Underwriting Guidelines, such Mortgage
Loans may, at the Initial Purchaser’s option, be rejected for purchase by the
Initial Purchaser. If not purchased by the Initial Purchaser, such Mortgage
Loans shall be deleted from the related Mortgage Loan Schedule. The Initial
Purchaser may, at its option and without notice to the Seller, purchase all
or
part of any Mortgage Loan Package without conducting any partial or complete
examination. The fact that the Initial Purchaser has conducted or has determined
not to conduct any partial or complete examination of the Mortgage Files shall
not affect the Initial Purchaser’s (or any of its successors’) rights to demand
repurchase or other relief or remedy provided for in this
Agreement.
The
Initial Purchaser shall have the opportunity to conduct a corporate due
diligence of the Seller, including but not limited to, on site review of the
Seller's facilities and discussions with the Seller's management. The Initial
Purchaser may conduct such review prior to or following the Initial Closing
Date. In addition, the Initial Purchaser may perform additional reviews as
the
Initial Purchaser, as mutually agreed between the parties.
SECTION
6. Conveyance
from Seller to Initial Purchaser.
| Subsection 6.01. |
Conveyance
of Mortgage Loans; Possession of Servicing
Files.
|
The
Seller, simultaneously with the payment of the Purchase Price, shall execute
and
deliver to the Initial Purchaser an Assignment and Conveyance with respect
to
the related Mortgage Loan Package in the form attached hereto as Exhibit
4.
The
Servicing File retained by the Seller with respect to each Mortgage Loan
pursuant to this Agreement shall be appropriately identified in the Seller’s
computer system to reflect clearly the sale of such related Mortgage Loan to
the
Purchaser. The Seller shall release from its custody the contents of any
Servicing File retained by it only in accordance with this Agreement, except
when such release is required in connection with a repurchase of any such
Mortgage Loan pursuant to Subsection 7.03 or 7.04.
| Subsection 6.02. |
Books
and Records.
|
Record
title to each Mortgage and the related Mortgage Note as of the related Closing
Date shall be in the name of the Seller, the Purchaser or one or more designees
of the Purchaser, as the Purchaser shall designate. Record title to each
Mortgage and the related Mortgage Note shall be transferred by Seller to
Purchaser. Seller shall, with respect to any Mortgage Loan not registered with
the MERS System, at the option of Purchaser, either (i) prepare and cause to
be
recorded the Assignment of Mortgage for each Mortgage Loan and shall, promptly
upon its receipt of each original recorded Assignment of Mortgage from the
applicable recording office, deliver the same to Purchaser, or (ii) prepare
and
deliver to Purchaser an original Assignment of Mortgage from Seller to Purchaser
or in blank. Seller shall bear the cost and expense related to (i) providing
all
Assignments of Mortgages and endorsements of Mortgage Notes for any transfer
of
record title required hereunder with respect to the obligations of the Mortgage
Notes and the underlying security interest related to each Mortgage Loan and
(ii) recording fees and fees for title policy endorsements. In connection with
the assignment of any MERS Mortgage Loan, the Seller agrees that it will cause,
at the Seller’s expense, the MERS System to indicate that such Mortgage Loans
have been assigned by the Seller to the Purchaser (or deleting, in the case
of
Mortgage Loans which are repurchased in accordance with this Agreement) by
including in such computer files the information required by the MERS System
to
identify the Purchaser and the series in which such Mortgage Loans were sold.
The Seller further agrees that it will not alter the codes referenced in this
paragraph with respect to any Mortgage Loan during the term of this Agreement
unless and until such Mortgage Loan is repurchased in accordance with the terms
of this Agreement.
Notwithstanding
the foregoing, beneficial ownership of each Mortgage and the related Mortgage
Note shall be vested solely in the Purchaser or the appropriate designee of
the
Purchaser, as the case may be. All rights arising out of the Mortgage Loans
including, but not limited to, all funds received by the Seller after the
related Cut-off Date on or in connection with a Mortgage Loan as provided in
Section 4 shall be vested in the Purchaser or one or more designees of the
Purchaser; provided, however, that all such funds received on or in connection
with a Mortgage Loan as provided in Section 4 shall be received and held by
the
Seller in trust for the benefit of the Purchaser or the assignee of the
Purchaser, as the case may be, as the owner of the Mortgage Loans pursuant
to
the terms of this Agreement.
It
is the
express intention of the parties that the transactions contemplated by this
Agreement be, and be construed as, a sale of the Mortgage Loans by the Seller
and not a pledge of the Mortgage Loans by the Seller to the Purchaser to secure
a debt or other obligation of the Seller. Consequently, the sale of each
Mortgage Loan shall be reflected as a sale on the Seller’s business records, tax
returns and financial statements. In the event, for any reason, any transaction
contemplated herein is construed by any court or regulatory authority as a
borrowing rather than as a sale, the Seller and the Purchaser intend that the
Purchaser or its assignee, as the case may be, shall have a perfected first
priority security interest in the Mortgage Loans, the Custodial Account and
the
proceeds of any and all of the foregoing (collectively, the “Collateral”), free
and clear of adverse claims. In such case, the Seller shall be deemed to have
hereby granted to the Purchaser or its assignee, as the case may be, a first
priority security interest in and lien upon the Collateral, free and clear
of
adverse claims. In such event, the related Confirmation and this Agreement
shall
constitute a security agreement, the Custodian shall be deemed to be an
independent custodian for purposes of perfection of the security interest
granted to the Purchaser or its assignee, as the case may be, and the Purchaser
or its assignee, as the case may be, shall have all of the rights of a secured
party under applicable law.
| Subsection 6.03. |
Delivery
of Mortgage Loan Documents.
|
The
Seller shall, at least five (5) Business Days prior to the related Closing
Date,
deliver and release to the Purchaser or its designee the Mortgage Loan Documents
with respect to each Mortgage Loan to be purchased and sold on such Closing
Date
and set forth on the related Mortgage Loan Schedule delivered with such Mortgage
Loan Documents.
The
Seller shall forward to the Purchaser or its designee original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks
of
their execution, provided, however, that the Seller shall provide the Purchaser
or its designee with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide the original
of
any document submitted for recordation or a copy of such document certified
by
the appropriate public recording office to be a true and complete copy of the
original within ninety days of its submission for recordation.
In
the
event that the Seller does not comply with the delivery requirements set forth
in this Section 6.03 with respect to any Mortgage Loan, the related Mortgage
Loan shall, upon request of the Purchaser, be repurchased by the Seller at
the
Repurchase Price in accordance with Section 7.03.
| SECTION 7. |
Representations,
Warranties and Covenants of the Seller; Remedies for
Breach.
|
| Subsection 7.01. |
Representations
and Warranties Respecting the Seller.
|
The
Seller represents, warrants and covenants to the Purchaser as of the Initial
Closing Date and each subsequent Closing Date or as of such date specifically
provided herein or in the applicable Assignment and Conveyance:
(i) The
Seller is duly organized, validly existing and in good standing under the laws
of the state of its formation and has all licenses necessary to carry on its
business as now being conducted. It is licensed in, qualified to transact
business in and is in good standing under the laws of the state in which any
Mortgaged Property is located and is and will remain in compliance with the
laws
of each state in which any Mortgaged Property is located to the extent necessary
to ensure the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loan in accordance with the terms of this Agreement. No licenses or
approvals obtained by Seller have been suspended or revoked by any court,
administrative agency, arbitrator or governmental body for any material
violation of such license or approval and no proceedings are pending which
might
result in such suspension or revocation;
(ii) The
Seller has the full power and authority to hold each Mortgage Loan, to sell
each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate, all transactions contemplated by this Agreement. The Seller has
duly
authorized the execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the Purchaser, constitutes a legal,
valid and binding obligation of the Seller, enforceable against it in accordance
with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization or other similar laws affecting the
enforcement of the rights of creditors and general principals of equity, whether
enforcement is sought in a proceeding in equity or at law;
(iii) The
execution and delivery of this Agreement by the Seller and the performance
of
and compliance with the terms of this Agreement will not violate the Seller’s
articles of incorporation or by-laws or constitute a default under or result
in
a breach or acceleration of, any material contract, agreement or other
instrument to which the Seller is a party or which may be applicable to the
Seller or its assets;
(iv) The
Seller is not in violation of, and the execution and delivery of this Agreement
by the Seller and its performance and compliance with the terms of this
Agreement will not constitute a violation with respect to, any order or decree
of any court or any order or regulation of any federal, state, municipal or
governmental agency having jurisdiction over the Seller or its assets, which
violation might have consequences that would materially and adversely affect
the
condition (financial or otherwise) or the operation of the Seller or its assets
or might have consequences that would materially and adversely affect the
performance of its obligations and duties hereunder;
(v) The
Seller is an approved seller/servicer for FNMA and FHLMC in good standing and
is
a HUD approved mortgagee pursuant to Section 203 of the National Housing Act.
No
event has occurred, including but not limited to a change in insurance coverage,
which would make the Seller unable to comply with FNMA, FHLMC or HUD eligibility
requirements or which would require notification to FNMA, FHLMC or
HUD;
(vi) The
Seller does not believe, nor does it have any reason or cause to believe, that
it cannot perform each and every covenant contained in this
Agreement;
(vii) Immediately
prior to the payment of the Purchase Price for each Mortgage Loan, the Seller
was the owner of record of the related Mortgage and the indebtedness evidenced
by the related Mortgage Note and upon the payment of the Purchase Price by
the
Purchaser, in the event that the Seller retains record title, the Seller shall
retain such record title to each Mortgage, each related Mortgage Note and the
related Mortgage Files with respect thereto in trust for the Purchaser as the
owner thereof and only for the purpose of servicing and supervising the
servicing of each Mortgage Loan;
(viii) There
are
no actions or proceedings against, or investigations of, the Seller before
any
court, administrative agency or other tribunal (A) that might prohibit its
entering into this Agreement, (B) seeking to prevent the sale of the Mortgage
Loans or the consummation of the transactions contemplated by this Agreement
or
(C) that might prohibit or materially and adversely affect the performance
by
the Seller of its obligations under, or the validity or enforceability of,
this
Agreement;
(ix) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Seller
of,
or compliance by the Seller with, this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained prior
to
the related Closing Date;
(x) The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Seller, and the transfer, assignment and
conveyance of the Mortgage Notes and the Mortgages by the Seller pursuant to
this Agreement are not subject to the bulk transfer or any similar statutory
provisions;
(xi) Neither
this Agreement nor any written statement, report or other document prepared
and
furnished or to be prepared and furnished by the Seller pursuant to this
Agreement or in connection with the transactions contemplated hereby contains
any material untrue statement of material fact or omits to state a material
fact
necessary to make the statements contained herein or therein not
misleading;
(xii) The
transfer of the Mortgage Loans shall be treated as a sale on the books and
records of Seller, and Seller has determined that, and will treat, the
disposition of the Mortgage Loans pursuant to this Agreement for tax and
accounting purposes as a sale. Seller shall maintain a complete set of books
and
records for each Mortgage Loan which shall be clearly marked to reflect the
ownership of each Mortgage Loan by Purchaser;
(xiii) The
consideration received by the Seller upon the sale of the Mortgage loans
constitutes fair consideration and reasonably equivalent value for such Mortgage
Loans;
(xiv) Seller
is
solvent and will not be rendered insolvent by the consummation of the
transactions contemplated hereby. The Seller is not transferring any Mortgage
loan with any intent to hinder, delay or defraud any of its creditors;
and
(xv) The
Seller is a member of MERS in good standing, and will comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the MERS Mortgage Loans for as long as such Mortgage Loans are registered
with MERS.
| Subsection 7.02. |
Representations
and Warranties Regarding Individual Mortgage
Loans.
|
The
Seller hereby represents and warrants to the Purchaser that, as to each Mortgage
Loan, as of the related Closing Date for such Mortgage Loan:
(i) The
information set forth in the related Mortgage Loan Schedule and the Mortgage
Loan data delivered to the Purchaser on the Data Tape is complete, true and
correct in all material respects;
(ii) The
Mortgage Loan is in compliance with all requirements set forth in the related
Confirmation, and the characteristics of the related Mortgage Loan Package
as
set forth in the related Confirmation are true and correct;
(iii) All
payments required to be made up to the close of business on the Closing Date
for
such Mortgage Loan under the terms of the Mortgage Note have been made; the
Seller has not advanced funds, or induced, solicited or knowingly received
any
advance of funds from a party other than the owner of the related Mortgaged
Property, directly or indirectly, for the payment of any amount required by
the
Mortgage Note or Mortgage. No payment under the Mortgage Loan has been
delinquent at any time since the origination of the Mortgage Loan;
(iv) There
are
no delinquent taxes, ground rents, water charges, sewer rents, assessments,
insurance premiums, leasehold payments, including assessments payable in future
installments or other outstanding charges affecting the related Mortgaged
Property;
(v) The
Mortgaged Property is located in the state identified in the related Mortgage
Loan Schedule and is improved by a Residential Dwelling;
(vi) The
terms
of the Mortgage Note and the Mortgage have not been impaired, waived, altered
or
modified in any respect, except by written instruments, recorded in the
applicable public recording office or registered with the MERS System if
necessary to maintain the lien priority of the Mortgage, and which have been
delivered to the Purchaser; the substance of any such waiver, alteration or
modification has been approved by the insurer under the Primary Insurance Policy
or LPMI Policy, if any, and the title insurer, to the extent required by the
related policy, and is reflected on the related Mortgage Loan Schedule. No
instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, except in connection with
an
assumption agreement approved by the insurer under the Primary Insurance Policy
or LPMI Policy, if any, the title insurer, to the extent required by the policy,
and which assumption agreement has been delivered to the Purchaser and the
terms
of which are reflected in the related Mortgage Loan Schedule;
(vii) The
Mortgage Note and the Mortgage are not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will
the
operation of any of the terms of the Mortgage Note and/or the Mortgage, or
the
exercise of any right thereunder, render the Mortgage unenforceable, in whole
or
in part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect
thereto;
(viii) All
buildings upon the Mortgaged Property are insured by an insurer acceptable
to
FNMA and FHLMC against loss by fire, hazards of extended coverage and such
other
hazards as are customary in the area where the Mortgaged Property is located,
pursuant to insurance policies conforming to the requirements of the Servicing
Addendum. All such insurance policies contain a standard mortgagee clause naming
the Seller, its successors and assigns as mortgagee and all premiums thereon
have been paid. If the Mortgaged Property is in an area identified on a Flood
Hazard Map or Flood Insurance Rate Map issued by the Federal Emergency
Management Agency as having special flood hazards (and such flood insurance
has
been made available) a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect which
policy conforms to the requirements of FNMA and FHLMC. The Mortgage obligates
the Mortgagor thereunder to maintain all such insurance at the Mortgagor’s cost
and expense, and on the Mortgagor’s failure to do so, authorizes the holder of
the Mortgage to maintain such insurance at Mortgagor’s cost and expense and to
seek reimbursement therefor from the Mortgagor;
(ix) Any
and
all requirements of any federal, state or local law including, without
limitation, usury, truth in lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity, fair housing, disclosure laws
or
all predatory and abusive lending laws applicable to the origination and
servicing of mortgage loans of a type similar to the Mortgage Loans have been
complied with and the consummation of the transactions contemplated hereby
will
not involve the violation of any such laws, and the Seller shall maintain in
its
possession, available for the inspection of the Purchaser or its designee,
and
shall upon two Business Days’ request, evidence of compliance with such
requirements;
(x) The
Mortgage has not been satisfied, cancelled, subordinated or rescinded, in whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such satisfaction, cancellation, subordination, rescission
or
release;
(xi) The
related Mortgage is properly recorded and is a valid, existing and enforceable
(A) first lien and first priority security interest with respect to each
Mortgage Loan which is indicated by the Seller to be a First Lien (as reflected
on the Mortgage Loan Schedule), or (B) second lien and second priority security
interest with respect to each Mortgage Loan which is indicated by the Seller
to
be a Second Lien (as reflected on the Mortgage Loan Schedule), in either case,
on the Mortgaged Property, including all improvements on the Mortgaged Property
subject only to (a) the lien of current real property taxes and assessments
not
yet due and payable, (b) covenants, conditions and restrictions, rights of
way,
easements and other matters of the public record as of the date of recording
being acceptable to mortgage lending institutions generally and specifically
referred to in the lender’s title insurance policy delivered to the originator
of the Mortgage Loan and which do not adversely affect the Appraised Value
of
the Mortgaged Property, (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 the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property and (d) with respect to each
Mortgage Loan which is indicated by the Seller to be a Second Lien Mortgage
Loan
(as reflected on the Mortgage Loan Schedule) a First Lien on the Mortgaged
Property. Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, existing and enforceable (A) first lien and first priority
security interest with respect to each Mortgage Loan which is indicated by
the
Seller to be a First Lien (as reflected on the Mortgage Loan Schedule) or (B)
second lien and second priority security interest with respect to each Mortgage
Loan which is indicated by the Seller to be a Second Lien Mortgage Loan (as
reflected on the Mortgage Loan Schedule), in either case, on the property
described therein and the Seller has full right to sell and assign the same
to
the Purchaser. The Mortgaged Property was not, as of the date of origination
of
the Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt
or
other security instrument creating a lien subordinate to the lien of the
Mortgage;
(xii) 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 except as enforceability is limited by bankruptcy, insolvency or
reorganization or other similar laws affecting the enforcement of the rights
of
creditors and general principals of equity, whether enforcement is sought in
a
proceeding in equity or at law;
(xiii) All
parties to the Mortgage Note and the Mortgage had legal capacity to enter into
the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage,
and the Mortgage Note and the Mortgage have been duly and properly executed
by
such parties. The Mortgagor is a natural person;
(xiv) The
proceeds of the Mortgage Loan have been fully disbursed to or for the account
of
the Mortgagor and there is no obligation for the Mortgagee to advance additional
funds thereunder and any and all requirements as to completion of any on-site
or
off-site improvement and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making or closing
the Mortgage Loan and the recording of the Mortgage have been paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due to the
Mortgagee pursuant to the Mortgage Note or Mortgage;
(xv) The
Seller is the sole legal, beneficial and equitable owner of the Mortgage Note
and the Mortgage. The Seller has full right and authority under all governmental
and regulatory bodies having jurisdiction over such Seller, subject to no
interest or participation of, or agreement with, any party, to transfer and
sell
the Mortgage Loan to the Purchaser pursuant to this Agreement free and clear
of
any encumbrance or right of others, equity, lien, pledge, charge, mortgage,
claim, participation interest or security interest of any nature (collectively,
a “Lien”); and immediately upon the transfers and assignments herein
contemplated, the Seller shall have transferred and sold all of its right,
title
and interest in and to each Mortgage Loan and the Purchaser will hold good,
marketable and indefeasible title to, and be the owner of, each Mortgage Loan
subject to no Lien;
(xvi) All
parties which have had any interest in the Mortgage Loan, whether as originator,
mortgagee, assignee, pledgee or otherwise, are (or, during the period in which
they held and disposed of such interest, were): (A) organized under the laws
of
such state, or (B) qualified to do business in such state, or (C) federal
savings and loan associations or national banks having principal offices in
such
state, or (D) not doing business in such state so as to require qualification
or
licensing, or (E) not otherwise required to be licensed in such state. All
parties which have had any interest in the Mortgage Loan were in compliance
with
any and all applicable “doing business” and licensing requirements of the laws
of the state wherein the Mortgaged Property is located or were not required
to
be licensed in such state;
(xvii) The
Mortgage Loan is covered by an American Land Title Association (“ALTA”) ALTA
lender’s title insurance policy (which, in the case of an Adjustable Rate
Mortgage Loan has an adjustable rate mortgage endorsement in the form of ALTA
6.0 or 6.1), issued by a title insurer acceptable to FNMA and FHLMC and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring (subject to the exceptions contained above in (xi)(a) and
(b)
and, with respect to each Mortgage Loan which is indicated by the Seller to
be a
Second Lien Mortgage Loan (as reflected on the Mortgage Loan Schedule) clause
(d)) the Seller, its successors and assigns as to the first priority lien of
the
Mortgage in the original principal amount of the Mortgage Loan and, with respect
to any Adjustable Rate Mortgage Loan, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of
the
Mortgage providing for adjustment in the Mortgage Interest Rate and Monthly
Payment. Additionally, such lender’s title insurance policy affirmatively
insures ingress and egress to and from the Mortgaged Property, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender’s title insurance policy, and such
lender’s title insurance policy is in full force and effect and will be in full
force and effect upon the consummation of the transactions contemplated by
this
Agreement. No claims have been made under such lender’s title insurance policy,
and no prior holder of the related Mortgage, including the Seller, has done,
by
act or omission, anything which would impair the coverage of such lender’s title
insurance policy;
(xviii) There
is
no default, breach, violation or event of acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time
or
with notice and the expiration of any grace or cure period, would constitute
a
default, breach, violation or event of acceleration, and the Seller has not
waived any default, breach, violation or event of acceleration. With respect
to
each Mortgage Loan which is indicated by the Seller to be a Second Lien Mortgage
Loan (as reflected on the Mortgage Loan Schedule) (i) the First Lien is in
full
force and effect, (ii) there is no default, breach, violation or event of
acceleration existing under such First Lien mortgage or the related mortgage
note, (iii) no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration thereunder, and either (A) the First Lien
mortgage contains a provision which allows or (B) applicable law requires,
the
mortgagee under the Second Lien Mortgage Loan to receive notice of, and affords
such mortgagee an opportunity to cure any default by payment in full or
otherwise under the First Lien mortgage;
(xix) There
are
no mechanics’ or similar liens or claims which have been filed for work, labor
or material (and no rights are outstanding that under law could give rise to
such lien) affecting the related Mortgaged Property which are or may be liens
prior to, or equal or coordinate with, the lien of the related
Mortgage;
(xx) All
improvements which were considered in determining the Appraised Value of the
related Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on adjoining
properties encroach upon the Mortgaged Property;
(xxi) The
Mortgage Loan was originated by the Seller or by a savings and loan association,
a savings bank, a commercial bank or similar banking institution which is
supervised and examined by a federal or state authority, or by a mortgagee
approved as such by the Secretary of HUD;
(xxii) Payments
on the Mortgage Loan shall commence (with respect to any newly originated
Mortgage Loans) or commenced no more than sixty days after the proceeds of
the
Mortgage Loan were disbursed. The Mortgage Loan bears interest at the Mortgage
Interest Rate. With respect to each Mortgage Loan, the Mortgage Note is payable
on the first day of each month in Monthly Payments, which, (A) in the case
of a
Fixed Rate Mortgage Loan, are sufficient to fully amortize the original
principal balance over the original term thereof and to pay interest at the
related Mortgage Interest Rate, and (B) in the case of an Adjustable Rate
Mortgage Loan, are changed on each Adjustment Date, and in any case, are
sufficient to fully amortize the original principal balance over the original
term thereof and to pay interest at the related Mortgage Interest Rate. The
Index for each Adjustable Rate Mortgage Loan is as defined in the related
Mortgage Loan Schedule. With respect to each Mortgage Loan identified on the
Mortgage Loan Schedule as an interest-only Mortgage Loan, the interest-only
period shall not exceed the period specified on the Mortgage Loan Schedule
and
following the expiration of such interest-only period, the remaining Monthly
Payments shall be sufficient to fully amortize the original principal balance
over the remaining term of the Mortgage Loan. The Mortgage Note does not permit
negative amortization. No Mortgage Loan is a Convertible Mortgage
Loan;
(xxiii) The
origination and collection practices used by the Seller with respect to each
Mortgage Note and Mortgage have been in all respects legal, proper, prudent
and
customary in the mortgage origination and servicing industry. The Mortgage
Loan
has been serviced by the Seller and any predecessor servicer in accordance
with
all applicable laws, rules and regulations, the terms of the Mortgage Note
and
Mortgage, and the FNMA and FHLMC servicing guides. With respect to escrow
deposits and Escrow Payments (other than with respect to each Mortgage Loan
which is indicated by the Seller to be a Second Lien Mortgage Loan and for
which
the mortgagee under the First Lien is collecting Escrow Payments (as reflected
on the Mortgage Loan Schedule)), if any, all such payments are in the possession
of, or under the control of, the Seller and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof
have
not been made. No escrow deposits or Escrow Payments or other charges or
payments due the Seller have been capitalized under any Mortgage or the related
Mortgage Note and no such escrow deposits or Escrow Payments are being held
by
the Seller for any work on a Mortgaged Property which has not been
completed;
(xxiv) The
Mortgaged Property is free of damage and waste and is in good repair, and there
is no proceeding pending or, to the best of the Seller’s knowledge, threatened
for the total or partial condemnation thereof nor is such a proceeding currently
occurring;
(xxv) The
Mortgage and related Mortgage Note contain customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate for
the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (a) in the case of a Mortgage designated as a
deed
of trust, by trustee’s sale, and (b) otherwise by judicial foreclosure. The
Mortgaged Property has not been subject to any bankruptcy proceeding or
foreclosure proceeding and the Mortgagor has not filed for protection under
applicable bankruptcy laws. There is no homestead or other exemption available
to the Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee’s sale or the right to foreclose the Mortgage;
(xxvi) The
Mortgagor has not notified the Seller and the Seller has no knowledge of any
relief requested or allowed to the Mortgagor under the Servicemembers Civil
Relief Act;
(xxvii) The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines
of
the Seller in effect at the time the Mortgage Loan was originated; and the
Mortgage Note and Mortgage are on forms acceptable to FNMA and
FHLMC;
(xxviii) The
Mortgage Note is not and has not been secured by any collateral except the
lien
of the corresponding Mortgage on the Mortgaged Property and the security
interest of any applicable security agreement or chattel mortgage referred
to in
(xi) above;
(xxix) The
Mortgage File contains an appraisal of the related Mortgaged Property which,
(a)
with respect to First Lien Mortgage Loans, was on appraisal form 1004 or form
2055 with an interior inspection, or (b) with respect to Second Lien Mortgage
Loans, was on appraisal form 704, 2065 or 2055 with an exterior only inspection,
and (c) with respect to (a) or (b) above, was made and signed, prior to the
approval of the Mortgage Loan application, by a qualified appraiser, duly
appointed by the Seller, who had no interest, direct or indirect in the
Mortgaged Property or in any loan made on the security thereof, whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan
and who met the minimum qualifications of FNMA and FHLMC. Each appraisal of
the
Mortgage Loan was made in accordance with the relevant provisions of the
Financial Institutions Reform, Recovery, and Enforcement Act of
1989;
(xxx) In
the
event the Mortgage constitutes a deed of trust, a trustee, duly qualified under
applicable law to serve as such, has been properly designated and currently
so
serves and is named in the Mortgage, and no fees or expenses are or will become
payable by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee’s sale after default by the Mortgagor;
(xxxi) With
respect to each Buydown Mortgage Loan:
(a) On
or
before the date of origination of such Mortgage Loan, the Seller and the
Mortgagor, or the Seller, the Mortgagor and the seller of the Mortgaged Property
or a third party entered into a Buydown Agreement. The Buydown Agreement
provides that the seller of the Mortgaged Property (or third party) shall
deliver to the Seller temporary Buydown Funds in an amount equal to the
aggregate undiscounted amount of payments that, when added to the amount the
Mortgagor on such Mortgage Loan is obligated to pay on each Due Date in
accordance with the terms of the Buydown Agreement, is equal to the full
scheduled Monthly Payment due on such Mortgage Loan. The temporary Buydown
Funds
enable the Mortgagor to qualify for the Buydown Mortgage Loan for the first
six
months of the term of such Mortgage Loan at an interest rate of not more than
1.0% less per annum than the Mortgage Interest Rate. The effective interest
rate
will increase in the seventh month of the Buydown Mortgage Loan so that the
effective interest rate will be equal to the interest rate as set forth in
the
related Mortgage Note.
(b) The
Mortgage and Mortgage Note reflect the permanent payment terms rather than
the
payment terms of the Buydown Agreement. The Buydown Agreement provides for
the
payment by the Mortgagor of the full amount of the Monthly Payment on any Due
Date that the Buydown Funds are not available. The Buydown Funds were not used
to reduce the original principal balance of the Mortgage Loan or to increase
the
Appraised Value of the Mortgaged Property when calculating the Loan-to-Value
Ratios for purposes of this Agreement and, if the Buydown Funds were provided
by
the Seller and if required under Agency Guidelines, the terms of the Buydown
Agreement were disclosed to the appraiser of the Mortgaged
Property;
(c) The
Buydown Funds may not be refunded to the Mortgagor unless the Mortgagor makes
a
principal payment for the outstanding balance of the Mortgage Loan;
(d) No
more
than ___% of the Mortgage Loans, measured by unpaid principal balance as of
the
Cut-off Date, are Buydown Mortgage Loans;
(e) As
of the
Cut-off Date, the Buydown Funds are 5% or less of the aggregate Stated Principal
Balance of the Mortgage Loans. Each of the Buydown Mortgage Loans provide that
the amount of the Buydown Funds is determined through a discounting process
using a discount rate of __% and at origination the aggregate Buydown Funds
were
20% or less of the aggregate original principal balances of the Mortgage
Loans;
(f) As
of the
date of origination of the Mortgage Loan, the provisions of the related Buydown
Agreement complied with the requirements of FNMA and FHLMC regarding buydown
agreements;]
(xxxii) The
Mortgage Loan is not a graduated payment mortgage loan or a balloon Mortgage
Loan, and the Mortgage Loan does not have a shared appreciation or other
contingent interest feature;
(xxxiii) The
Mortgagor has executed a statement to the effect that the Mortgagor has received
all disclosure materials required by applicable law with respect to the making
of fixed rate mortgage loans in the case of Fixed Rate Mortgage Loans, and
adjustable rate mortgage loans in the case of Adjustable Rate Mortgage Loans
and
rescission materials with respect to Refinanced Mortgage Loans, and such
statement is and will remain in the Mortgage File;
(xxxiv) No
Mortgage Loan was made in connection with (a) the construction or rehabilitation
of a Mortgaged Property or (b) facilitating the trade-in or exchange of a
Mortgaged Property;
(xxxv) The
Seller has no knowledge of any circumstances or condition with respect to the
Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor’s credit
standing that can reasonably be expected to cause the Mortgage Loan to be an
unacceptable investment, cause the Mortgage Loan to become delinquent, cause
the
Mortgage Loan to not be paid in full when due, or adversely affect the value
of
the Mortgage Loan;
(xxxvi) With
respect to any Mortgage Loan with an original Loan-to-Value Ratio greater than
80%, the Mortgage Loan will be insured by a Primary Insurance Policy, issued
by
a Qualified Insurer, which insures that portion of the Mortgage Loan in excess
of the portion of the Appraised Value of the Mortgaged Property required by
FNMA. All provisions of such Primary Insurance Policy have been and are being
complied with, such policy is in full force and effect, and all premiums due
there under have been paid. Any Mortgage subject to any such Primary Insurance
Policy obligates the Mortgagor there under to maintain such insurance and to
pay
all premiums and charges in connection therewith. The Mortgage Interest Rate
for
the Mortgage Loan does not include any such insurance premium. If a Mortgage
Loan is identified on the Mortgage Loan Schedule as subject to a Lender Paid
Mortgage Insurance Policy, such policy insures that portion of the Mortgage
Loan
set forth in the LPMI Policy. All provisions of any such LPMI Policy have been
and are being complied with, such policy is in full force and effect, and all
premiums due there under have been paid. The Mortgage Interest Rate for the
Mortgage Loan does not include the insurance premium for any LPMI
Policy;
(xxxvii) The
Mortgaged Property is lawfully occupied under applicable law; 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. No improvement located on or being part of any
Mortgaged Property is in violation of any applicable zoning and subdivision
law,
ordinance or regulation;
(xxxviii) No
error,
omission, misrepresentation, negligence, fraud or similar occurrence with
respect to a Mortgage Loan has taken place on the part of any person, including
without limitation the Mortgagor, any appraiser, any builder or developer,
or
any other party involved in the origination of the Mortgage Loan or in the
application of any insurance in relation to such Mortgage Loan;
(xxxix) Each
original Mortgage was recorded and all subsequent assignments of the original
Mortgage (other than the assignment to the Purchaser) have been recorded, or
are
in the process of being recorded, in the appropriate jurisdictions wherein
such
recordation is necessary to perfect the lien thereof as against creditors of
the
Seller. As to any Mortgage Loan which is not a MERS Mortgage Loan, the
Assignment of Mortgage is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is
located;
(xl) Any
principal advances made to the Mortgagor 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 Mortgage Loan Schedule. The lien of
the
Mortgage securing the consolidated principal amount is expressly insured as
having (A) first lien priority with respect to each Mortgage Loan which is
indicated by the Seller to be a First Lien (as reflected on the Mortgage Loan
Schedule), or (B) second lien priority with respect to each Mortgage Loan which
is indicated by the Seller to be a Second Lien Mortgage Loan (as reflected
on
the Mortgage Loan Schedule), in either case, by a title insurance policy, an
endorsement to the policy insuring the mortgagee’s consolidated interest or by
other title evidence acceptable to FNMA and FHLMC. The consolidated principal
amount does not exceed the original principal amount of the Mortgage
Loan;
(xli) If
the
Residential Dwelling on the Mortgaged Property is a condominium unit or a unit
in a planned unit development (other than a de minimis planned unit development)
such condominium or planned unit development project meets the eligibility
requirements of FNMA and FHLMC;
(xlii) Each
Mortgage Loan originated in the state of Texas pursuant to Article XVI, Section
50(a)(6) of the Texas Constitution (a “Texas Refinance Loan”) has been
originated in compliance with the provisions of Article XVI, Section 50(a)(6)
of
the Texas Constitution, Texas Civil Statutes and the Texas Finance Code. With
respect to each Texas Refinance Loan that is a Cash Out Refinancing, the related
Mortgage Loan Documents state that the Mortgagor may prepay such Texas Refinance
Loan in whole or in part without incurring a Prepayment Charge. The Seller
does
not collect any such Prepayment Charges in connection with any such Texas
Refinance Loan;
(xliii) Interest
on each Mortgage Loan is calculated on the basis of a 360-day year consisting
of
twelve 30-day months;
(xliv) The
Mortgaged Property is in material compliance with all applicable environmental
laws pertaining to environmental hazards including, without limitation,
asbestos, and neither the Seller nor, to the Seller’s knowledge, the related
Mortgagor, has received any notice of any violation or potential violation
of
such law;
(xlv) The
Seller shall, at its own expense, cause each Mortgage Loan to be covered by
a
“life of loan” Tax Service Contract which is assignable to the Purchaser or its
designee at no cost to the Purchaser or its designee; provided however, that
if
the Seller fails to purchase such Tax Service Contract, the Seller shall be
required to reimburse the Purchaser for all costs and expenses incurred by
the
Purchaser in connection with the purchase of any such Tax Service
Contract;
(xlvi) Each
Mortgage Loan is covered by a “life of loan” Flood Zone Service Contract which
is assignable to the Purchaser or its designee at no cost to the Purchaser
or
its designee or, for each Mortgage Loan not covered by such Flood Zone Service
Contract, the Seller agrees to purchase such Flood Zone Service
Contract;
(xlvii) None
of
the Adjustable Rate Mortgage Loans include an option to convert to a Fixed
Rate
Mortgage Loan;
(xlviii) No
selection procedures were used by the Seller that identified the Mortgage Loans
as being less desirable or valuable than other comparable mortgage loans in
the
Seller’s portfolio;
(xlix) The
Loan-to-Value Ratio of any Mortgage Loan at origination was not more than 95%
and the CLTV of any Mortgage Loan at origination was not more than
100%;
(l) Each
Mortgage Loan constitutes a “qualified mortgage” under Section 860G(a)(3)(A) of
the Code and Treasury Regulation Section 1.860G-2(a)(1);
(li) No
Mortgage Loan is (a) subject to, covered by or in violation of the provisions
of
the Homeownership and Equity Protection Act of 1994, as amended (“HOEPA”), (b) a
“high cost”, “covered”, “abusive”, “predatory”, “home loan”, “Section 10” or
“high risk” mortgage loan (or a similarly designated loan using different
terminology) under any federal, state or local law, or any other statute or
regulation providing assignee liability to holders of such mortgage loans,
or
(c) subject to or in violation of any such or comparable federal, state or
local
statutes or regulations, (d) no Mortgage Loan is a high cost loan or a covered
loan, as applicable (as such terms are defined in Standard & Poor’s LEVELS
Version 5.6 Glossary Revised, Appendix E as of the related Closing
Date).
(lii) Each
Mortgage Loan has a valid and original Credit Score, with a minimum Credit
Score
as set forth in the related Commitment Letter;
(liii) No
Mortgage Loan had an original term to maturity of more than thirty (30)
years;
(liv) No
Mortgagor is the obligor on more than two Mortgage Notes;
(lv) Each
Mortgage contains a provision for the acceleration of the payment of the unpaid
principal balance of the related Mortgage Loan in the event the related
Mortgaged Property is sold without the prior consent of the mortgagee
thereunder;
(lvi) With
respect to each Mortgage Loan which is a Second Lien, (i) the related first
lien
does not provide for negative amortization, and (ii) either no consent for
the
Mortgage Loan is required by the holder of the first lien or such consent has
been obtained and is contained in the Mortgage File;
(lvii) No
Mortgage Loan originated prior to October 1, 2002 has a Prepayment Charge longer
than five years after its origination;
(lviii) The
Mortgage Loan Documents with respect to each Mortgage Loan subject to Prepayment
Charges specifically authorizes such Prepayment Charges to be collected, such
Prepayment Charges are permissible and enforceable in accordance with the terms
of the related Mortgage Loan Documents and all applicable federal, state and
local laws (except to the extent that the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors’ rights generally or the collectability thereof may be
limited due to acceleration in connection with a foreclosure) and each
Prepayment Charge was originated in compliance with all applicable federal,
state and local laws;
(lix) With
respect to any Mortgage Loan that contains a provision permitting imposition
of
a Prepayment Charge upon a Principal Prepayment prior to maturity: (i) prior
to
the Mortgage Loan’s origination, the Mortgagor agreed to such Prepayment Charge
in exchange for a monetary benefit, including but not limited to a Mortgage
Interest Rate or fee reduction, (ii) prior to the Mortgage Loan’s origination,
the Mortgagor was offered the option of obtaining a Mortgage Loan that did
not
require payment of a Prepayment Charge, (iii) the Prepayment Charge is disclosed
to the Mortgagor in the Mortgage Loan Documents pursuant to applicable state
and
federal law, (iv) for Mortgage Loans originated on or after September 1, 2004,
the duration of the prepayment period shall not exceed three (3) years from
the
date of the Mortgage Note, unless the Mortgage Loan was modified to reduce
the
prepayment period to no more than five years from the date of the Mortgage
Note
and the Mortgagor was notified in writing of such reduction in the prepayment
period, and (v) notwithstanding any state or federal law to the contrary, the
Seller shall not impose such Prepayment Charge in any instance when the Mortgage
debt is accelerated as the result of the Mortgagor’s default in making the
Monthly Payments;
(lx) No
Mortgagor was required to purchase any credit life, disability, accident or
health insurance product or debt cancellation agreement as a condition of
obtaining the extension of credit. No Mortgagor obtained a prepaid single
premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan, and no proceeds from
any
Mortgage Loan were used to finance single-premium credit insurance policies
or
debt cancellation agreements as part of the origination of, or as a condition
to
closing, such Mortgage Loan;
(lxi) No
Mortgage Loan originated or modified on or after October 1, 2002 and prior
to
March 7, 2003 is secured by a Mortgaged Property located in the State of
Georgia;
(lxii) The
Seller and any predecessor servicer has fully furnished, in accordance with
the
Fair Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Company (three
of
the credit repositories) on a monthly basis; and the Seller will fully furnish,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Credit Information
Company (three of the credit repositories), on a monthly basis;
(lxiii) No
predatory, abusive or deceptive lending practices, including but not limited
to,
the extension of credit to a Mortgagor without regard for the Mortgagor’s
ability to repay the Mortgage Loan and the extension of credit to a Mortgagor
which has no tangible net benefit to the Mortgagor, were employed in connection
with the origination of the Mortgage Loan. Each Mortgage Loan is in compliance
with the anti-predatory lending eligibility for purchase requirements of FNMA’s
Selling Guide;
(lxiv) The
Seller has complied with all applicable anti-money laundering laws and
regulations, including without limitation the USA Patriot Act of 2001
(collectively, the “Anti-Money Laundering Laws”). The Seller has established an
anti-money laundering compliance program as required by the Anti-Money
Laundering Laws, has conducted the requisite due diligence in connection with
the origination of each Mortgage Loan for purposes of the Anti-Money Laundering
Laws, including with respect to the legitimacy of the applicable Mortgagor
and
the origin of the assets used by the said Mortgagor to purchase the property
in
question, and maintains, and will maintain, sufficient information to identify
the applicable Mortgagor for purposes of the Anti-Money Laundering Laws; no
Mortgage Loan is subject to nullification pursuant to Executive Order 13224
(the
“Executive Order”) or the regulations promulgated by the Office of Foreign
Assets Control of the United States Department of the Treasury (the “OFAC
Regulations”) or in violation of the Executive Order or the OFAC Regulations,
and no Mortgagor is subject to the provisions of such Executive Order or the
OFAC Regulations nor listed as a “blocked person” for purposes of the OFAC
Regulations;
(lxv) No
Mortgagor was encouraged or required to select a Mortgage Loan product offered
by the Seller which is a higher cost product designed for less creditworthy
borrowers, unless at the time of the related Mortgage Loan’s origination, such
Mortgagor did not qualify taking into account credit history and debt to income
ratios for a lower cost credit product then offered by the Seller or any
affiliate of the Seller. If, at the time of the related loan application, the
Mortgagor may have qualified for a lower cost credit product then offered by
any
mortgage lending affiliate of the Seller, the Seller referred the Mortgagor’s
application to such affiliate for underwriting consideration;
(lxvi) The
methodology used in underwriting the extension of credit for each Mortgage
Loan
employs objective mathematical principles which relate the Mortgagor’s income,
assets and liabilities to the proposed payment and such underwriting methodology
does not rely on the extent of the Mortgagor’s equity in the collateral as the
principal determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of origination
(application/approval) the Mortgagor had a reasonable ability to make timely
payments on the Mortgage Loan;
(lxvii) All
points, fees and charges, including finance charges (whether or not financed,
assessed, collected or to be collected), in connection with the origination
and
servicing of each Mortgage Loan were disclosed in writing to the related
Mortgagor in accordance with applicable state and federal law and regulation.
Except in the case of a Mortgage Loan in an original principal amount of less
than $60,000 which would have resulted in an unprofitable origination, no
related Mortgagor was charged “points and fees” (whether or not financed) in an
amount greater than 5% of the principal amount of such loan, such 5% limitation
is calculated in accordance with FNMA’s anti-predatory lending requirements as
set forth in the FNMA Selling Guide;
(lxviii) The
Seller will transmit full-file credit reporting data for each Mortgage Loan
pursuant to ▇▇▇▇▇▇ ▇▇▇ Guide Announcement 95-19 and for each Mortgage Loan,
Company agrees it shall report one of the following statuses each month as
follows: new origination, current, delinquent (30-, 60-, 90-days, etc.),
foreclosed, or charged-off;
(lxix) No
Mortgage Loan is a “manufactured housing loan” pursuant to the NJ Act, and one
hundred percent of the amount financed of any purchase money Second Lien
Mortgage Loan subject to the NJ Act was used for the purchase of the related
Mortgaged Property;
(lxx) With
respect to each MERS Mortgage Loan, a MIN has been assigned by MERS and such
MIN
is accurately provided on the related Mortgage Loan Schedule. The related
assignment of Mortgage to MERS has been duly and properly recorded;
(lxxi) With
respect to each MERS Mortgage Loan, the Seller has not received any notice
of
liens or legal actions with respect to such Mortgage Loan and no such notices
have been electronically posted by MERS;
(lxxii) With
respect to each Mortgage Loan, neither the related Mortgage nor the related
Mortgage Note requires the Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan
transaction;
(lxxiii) With
respect to any Mortgage Loan for which a mortgage loan application was submitted
by the Mortgagor after April 1, 2004, no such Mortgage Loan secured by a
Mortgage Property located in the State of Illinois is in violation of the
provisions of the Illinois Interest Act, including Section 4.1a which provides
that no such Mortgage Loan with a Mortgage Interest Rate in excess of 8.0%
per
annum has lender-imposed fees (or other charges) in excess of 3.0% of the
original principal balance of the Mortgage Loan;
(lxxiv) No
Mortgage Loan is secured in whole or in part by the interest of the Mortgagor
as
a lessee under a ground lease of the related Mortgaged Property;
(lxxv) No
Mortgage Loan originated on or after November 7, 2004 secured by a Mortgaged
Property located in the State of Massachusetts is a Refinanced Mortgage Loan,
or
such Mortgage Loan is in the "borrower's interest," as documented by a
"borrower's interest worksheet" for the particular Mortgage Loan, which
worksheet incorporates the factors set forth in Massachusetts House ▇▇▇▇ 4880
(2004) and the regulations promulgated thereunder for determining "borrower's
interest," and otherwise complies in all material respects with the laws of
the
Commonwealth of Massachusetts.
(lxxvi) The
Mortgage Loan Documents and any other documents required to be delivered with
respect to each Mortgage Loan have been delivered to the Purchaser all in
compliance with the specific requirements of this Agreement;
| Subsection 7.03. |
No
Mortgage Loan originated on or after November 7, 2004 secured by a
Mortgaged Property located in the State of Massachusetts is a Refinanced
Mortgage Loan.Remedies
for Breach of Representations and
Warranties.
|
It
is
understood and agreed that the representations and warranties set forth in
Subsections 7.01 and 7.02 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser, notwithstanding
any
restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination or lack of examination of any Mortgage File. Upon
discovery by the Seller or the Purchaser of a breach of any of the foregoing
representations and warranties (notwithstanding any representation and warranty
given to the best of Seller’s knowledge) which materially and adversely affects
the value of the Mortgage Loans or the interest of the Purchaser (or which
materially and adversely affects the interests of the Purchaser in the related
Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan), the party discovering such breach shall give prompt
written notice to the other.
Within
60
days (or with respect to a breach of Section 7.02(lxx), within ten (10) days)
of
the earlier of either discovery by or notice to the Seller of any breach of
a
representation or warranty which materially and adversely affects the value
of a
Mortgage Loan or the Mortgage Loans, the Seller shall use its best efforts
promptly to cure such breach in all material respects and, if such breach cannot
be cured, the Seller shall, at the Purchaser’s option, repurchase such Mortgage
Loan at the Repurchase Price within two (2) Business Days following the
expiration of the related cure period. In the event that a breach shall involve
any representation or warranty set forth in Subsection 7.01 and such breach
cannot be cured within 60 days of the earlier of either discovery by or notice
to the Seller of such breach, all of the Mortgage Loans shall, at the
Purchaser’s option, be repurchased by the Seller at the Repurchase Price. With
respect to any representations and warranties made by the Seller, in the event
that it is discovered that the circumstances with respect to the Mortgage Loan
are not accurately reflected in such representation and warranty notwithstanding
the actual knowledge or lack of knowledge of Seller, then, notwithstanding
that
such representation and warranty is made “to the best of the Seller’s
knowledge,” or in reliance on or based on other information, there shall be a
breach of such representation and Seller shall cure such breach or repurchase
the affected Mortgage Loan as provided in this Subsection 7.03. The Seller
shall, at the request of the Purchaser and assuming that Seller has a Qualified
Substitute Mortgage Loan, rather than repurchase the Mortgage Loan as provided
above, remove such Mortgage Loan and substitute in its place a Qualified
Substitute Mortgage Loan or Loans; provided that such substitution shall be
effected not later than 120 days after the related Closing Date. If the Seller
has no Qualified Substitute Mortgage Loan, it shall repurchase the deficient
Mortgage Loan. Notwithstanding anything to the contrary contained herein, it
is
understood by the parties hereto that a breach of the representations and
warranties made in Subsections 7.02(li), (lvii), (lx), (lxi) (lxii) or (lxxii)
will be deemed to materially and adversely affect the value of the related
Mortgage Loan or the interest of the Purchaser therein.
Any
repurchase of a Servicing Retained Mortgage Loan(s) pursuant to the foregoing
provisions of this Subsection 7.03 shall occur on a date designated by the
Purchaser and shall be accomplished by deposit in the Custodial Account of
the
amount of the Repurchase Price for distribution to the Purchaser on the next
scheduled Distribution Date. Any repurchase of a Servicing Released Mortgage
Loan(s) pursuant to the foregoing provisions of this Subsection 7.03 shall
occur
on a date designated by the Purchaser and shall be accomplished (i) during
the
Interim Servicing Period by deposit in the Custodial Account of the amount
of
the Repurchase Price for distribution to the Purchaser on the next scheduled
Distribution Date and (ii) following the Interim Servicing Period by wire
transfer of immediately available funds on the repurchase date to an account
designated by the Purchaser.
At
the
time of repurchase of any deficient Mortgage Loan, the Purchaser and the Seller
shall arrange for the reassignment of the repurchased Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Purchaser
relating to the repurchased Mortgage Loan. In the event the Repurchase Price
is
deposited in the Custodial Account, the Seller shall, simultaneously with such
deposit, give written notice to the Purchaser that such deposit has taken place.
Upon such repurchase the related Mortgage Loan Schedule shall be amended to
reflect the withdrawal of the repurchased Mortgage Loan from this
Agreement.
If
the
Seller repurchases a Mortgage Loan that is a MERS Mortgage Loan, the Seller
shall either (i) cause MERS to execute and deliver an Assignment of Mortgage
in
recordable form to transfer the Mortgage from MERS to the Company and shall
cause such Mortgage to be removed from registration on the MERS System in
accordance with MERS’ rules and regulations or (ii) cause MERS to designate on
the MERS System the Seller or its designee as the beneficial holder of such
Mortgage Loan.
As
to any
Deleted Mortgage Loan for which the Seller substitutes a Qualified Substitute
Mortgage Loan or Loans, the Seller shall effect such substitution by delivering
to the Purchaser for such Qualified Substitute Mortgage Loan or Loans the
Mortgage Note, the Mortgage, the Assignment of Mortgage and such other documents
and agreements as are required by this Agreement, with the Mortgage Note
endorsed as required therein. The Seller shall deposit in the Custodial Account
the Monthly Payment less the Servicing Fee due on such Qualified Substitute
Mortgage Loan or Loans in the month following the date of such substitution.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in
the
month of substitution will be retained by the Seller. For the month of
substitution, distributions to the Purchaser will include the Monthly Payment
due on such Deleted Mortgage Loan in the month of substitution, and the Seller
shall thereafter be entitled to retain all amounts subsequently received by
the
Seller in respect of such Deleted Mortgage Loan. The Seller shall give written
notice to the Purchaser that such substitution has taken place and shall amend
the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage
Loan
from the terms of this Agreement and the substitution of the Qualified
Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall be subject to the terms of this Agreement in all
respects, and the Seller shall be deemed to have made with respect to such
Qualified Substitute Mortgage Loan or Loans, as of the date of substitution,
the
covenants, representations and warranties set forth in Sections 7.01 and
7.02.
For
any
month in which the Seller substitutes one or more Qualified Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the Seller will determine the
amount (if any) by which the aggregate principal balance of all such Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all such Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
An amount equal to the product of the amount of such shortfall multiplied by
the
Repurchase Price shall be distributed by the Seller in the month of substitution
pursuant to the Servicing Addendum. Accordingly, on the date of such
substitution, the Seller will deposit from its own funds into the Custodial
Account an amount equal to such amount.
In
addition to such cure, repurchase and substitution obligation, the Seller shall
indemnify the Purchaser and hold it harmless against any out of pocket losses,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach
of
the Seller’s representations and warranties contained in this Section 7. It is
understood and agreed that the obligations of the Seller set forth in this
Subsection 7.03 to cure, substitute for or repurchase a defective Mortgage
Loan
and to indemnify the Purchaser as provided in this Subsection 7.03 constitute
the sole remedies of the Purchaser respecting a breach of the foregoing
representations and warranties. The indemnification obligation of the Seller
set
forth herein shall survive the termination of this Agreement.
Any
cause
of action against the Seller relating to or arising out of the breach of any
representations and warranties made in Subsections 7.01 or 7.02 shall accrue
as
to any Mortgage Loan upon (i) discovery of such breach by the Purchaser or
notice thereof by the Seller to the Purchaser, (ii) failure by the Seller to
cure such breach or repurchase such Mortgage Loan as specified above, and (iii)
demand upon the Seller by the Purchaser for compliance with the relevant
provisions of this Agreement.
In
addition to the foregoing, within 60 days of the earlier of discovery by Sellers
or receipt of notice by Sellers of a breach of any representation of any Seller
which materially and adversely affects the interests of any Prepayment
Charge, the Sellers shall pay the amount of the scheduled Prepayment Charge
to
the Purchaser.
| Subsection 7.04. |
Prepayment-in-Full
Premium Recapture.
|
In
the
event that any Mortgage Loans prepay-in-full within three (3) months of the
related Closing Date, the Seller shall remit to the Purchaser within thirty
(30)
days following receipt of notice from the Purchaser of a prepayment-in-full,
the
greater of (i) an amount equal to the product of (A) the excess of the related
purchase price percentage over 100% and (B) the Stated Principal Balance of
such
prepaid Mortgage Loan as of the related Closing Date or (ii) the amount of
any
prepayment penalty fees paid with respect to such Mortgage Loan.
| Subsection 7.05. |
Early
Payment Default.
|
In
the
event that any Mortgagor fails to make the first or second scheduled Monthly
Payment due on a Mortgage Loan or due to Purchaser within the calendar month
such payment is due, Seller shall repurchase such Mortgage Loan at the
Repurchase Price within thirty (30) days following receipt of notice from the
Purchaser of such payment default.
SECTION
8. Closing.
The
closing for each Mortgage Loan Package shall take place on the related Closing
Date. At the Purchaser’s option, the closing shall be either: by telephone,
confirmed by letter or wire as the parties shall agree, or conducted in person,
at such place as the parties shall agree.
The
closing for the Mortgage Loans to be purchased on each Closing Date shall be
subject to each of the following conditions:
| (a) |
all
of the representations and warranties of the Seller under this Agreement
shall be true and correct as of the related Closing Date and no event
shall have occurred which, with notice or the passage of time, would
constitute a default under this
Agreement;
|
| (b) |
the
Initial Purchaser shall have received, or the Initial Purchaser’s
attorneys shall have received in escrow, all Closing Documents as
specified in Section 9, in such forms as are agreed upon and acceptable
to
the Purchaser, duly executed by all signatories other than the Purchaser
as required pursuant to the terms hereof;
|
| (c) |
the
Seller shall have delivered and released to the Purchaser all documents
required pursuant to this Agreement; and
|
| (d) |
all
other terms and conditions of this Agreement shall have been complied
with.
|
Subject
to the foregoing conditions, the Initial Purchaser shall pay to the Seller
on
the related Closing Date the Purchase Price, plus accrued interest pursuant
to
Section 4, by wire transfer of immediately available funds to the account
designated by the Seller. The Purchaser will use its best efforts to wire funds
by 4:00 p.m. Eastern Time on the related Closing Date.
SECTION
9. Closing
Documents.
(a) On
or
before the Initial Closing Date, the Seller shall submit to the Initial
Purchaser fully executed originals of the following documents:
| 1. |
this
Agreement, in four counterparts;
|
| 2. |
a
Custodial Account Letter Agreement in the form attached as Exhibit
6
hereto;
|
| 3. |
as
Escrow Account Letter Agreement in the form attached as Exhibit
7
hereto;
|
| 4. |
an
Officer’s Certificate, in the form of Exhibit
1
hereto, including all attachments
thereto;
|
| 5. |
an
Opinion of Counsel to the Seller, in the form of Exhibit
2
hereto; and
|
| 6. |
the
Seller’s Underwriting Guidelines.
|
(b) The
Closing Documents for the Mortgage Loans to be purchased on each Closing Date
shall consist of fully executed originals of the following
documents:
| 1. |
the
related Confirmation;
|
| 2. |
the
related Mortgage Loan Schedule;
|
| 3. |
an
Officer’s Certificate, in the form of Exhibit
1
hereto, including all attachments
thereto;
|
| 4. |
if
requested by the Initial Purchaser, an Opinion of Counsel to the Seller,
in the form of Exhibit
2
hereto;
|
| 5. |
a
Security Release Certification, in the form of Exhibit
3
hereto executed by any Person, as requested by the Initial Purchaser,
if
any of the Mortgage Loans has at any time been subject to any security
interest, pledge or hypothecation for the benefit of such
Person;
|
| 6. |
a
certificate or other evidence of merger or change of name, signed or
stamped by the applicable regulatory authority, if any of the Mortgage
Loans were acquired by the Seller by merger or acquired or originated
by
the Seller while conducting business under a name other than its present
name, if applicable; and
|
| 7. |
an
Assignment and Conveyance in the form of Exhibit
4
hereto.
|
(c) In
addition, to the extent that the Underwriting Guidelines are modified, amended
or supplemented at any time following the Initial Closing Date, the Seller
shall
notify the Purchaser of such change and provide the Purchaser a copy in both
electronic and hard copy of such modification, amendment or supplement no later
than five (5) Business Days following the effective date of such modification,
amendment or supplement.
SECTION
10. Costs.
The
Purchaser shall pay any commissions due its salesmen and the legal fees and
expenses of its attorneys. All other costs and expenses incurred in connection
with the transfer and delivery of the Mortgage Loans, including without
limitation recording fees, fees for title policy endorsements and continuations,
fees for recording Assignments of Mortgage and the Seller’s attorney’s fees,
shall be paid by the Seller.
The
Seller shall also pay certain expenses of the Purchaser’s custodian, including
but not limited to, the custodian’s preparation of trust receipts and
certifications.
SECTION
11. Seller’s
Servicing Obligations.
The
Seller, as independent contract servicer, shall service and administer the
Mortgage Loans during the Preliminary Servicing Period and the Interim Servicing
Period, as applicable, in accordance with the terms and provisions set forth
in
the Servicing Addendum attached as Exhibit
8,
or the
Servicing Addendum attached as Exhibit
9,
as
applicable, which Servicing Addendums are incorporated herein by
reference.
The
Seller agrees to act reasonably, in good faith and in accordance with all
applicable laws and regulations and to do all things necessary to effect the
transfer of the servicing of the Servicing Released Mortgage Loans to
Purchaser.
SECTION
12. Removal
of Mortgage Loans from Inclusion under This Agreement Upon
a
Whole Loan Transfer or a Pass-Through Transfer on One or
More Reconstitution Dates.
The
Seller and the Initial Purchaser agree that with respect to some or all of
the
Mortgage Loans, the Initial Purchaser may effect either:
| (1) |
one
or more Whole Loan Transfers; and/or
|
| (2) |
one
or more Pass-Through Transfers.
|
With
respect to each Whole Loan Transfer or Pass-Through Transfer, as the case may
be, entered into by the Initial Purchaser, the Seller agrees:
| (1) |
to
cooperate fully with the Purchaser and any prospective purchaser with
respect to all reasonable requests and due diligence procedures and
with
respect to the preparation (including, but not limited to, the
endorsement, delivery, assignment, and execution) of the Mortgage Loan
Documents and other related documents, and with respect to servicing
requirements reasonably requested by the rating agencies and credit
enhancers;
|
| (2) |
to
execute all Reconstitution Agreements provided that each of the Seller
and
the Purchaser is given an opportunity to review and reasonably negotiate
in good faith the content of such documents not specifically referenced
or
provided for herein;
|
| (3) |
with
respect to any Whole Loan Transfer or Pass-Through Transfer, the Seller
shall make the representations and warranties regarding the Seller
and the
Mortgage Loans as of the date of the Whole Loan Transfer or Pass-Through
Transfer (except to the extent any such representation or warranty
is not
accurate on such date), modified to the extent necessary to accurately
reflect the passage of time and pool statistics of the Mortgage Loans
as
of the date of such Whole Loan Transfer or Pass-Through Transfer and
supplemented by additional representations and warranties that are
not
unreasonable under the circumstances as of the date of such Whole Loan
Transfer or Pass-Through Transfer;
|
| (4) |
to
deliver to the Purchaser for inclusion in any prospectus or other offering
material such publicly available information regarding the Seller,
its
financial condition and its mortgage loan delinquency, foreclosure
and
loss experience and any additional information reasonably requested
by the
Purchaser, and to deliver to the Purchaser any similar non public,
unaudited financial information, in which case the Purchaser shall
bear
the cost of having such information audited by certified public
accountants if the Purchaser desires such an audit, or as is otherwise
reasonably requested by the Purchaser and which the Seller is capable
of
providing without unreasonable effort or expense, and to indemnify
the
Purchaser and its affiliates for any material misstatements or omissions
or any alleged misstatements or omissions contained (i) in such
information and (ii) on the Mortgage Loan
Schedule;
|
| (5) |
to
deliver to the Purchaser and to any Person designated by the Purchaser,
at
the Purchaser’s expense, such statements and audit letters of reputable,
certified public accountants pertaining to information provided by
the
Seller pursuant to clause 4 above as shall be reasonably requested
by the
Purchaser;
|
| (6) |
to
deliver to the Purchaser, and to any Person designated by the Purchaser,
such legal documents and in-house Opinions of Counsel as are customarily
delivered by originators or servicers, as the case may be, and reasonably
determined by the Purchaser to be necessary in connection with Whole
Loan
Transfers or Pass-Through Transfers, as the case may be, such in-house
Opinions of Counsel for a Pass-Through Transfer to be in the form
reasonably acceptable to the Purchaser, it being understood that the
cost
of any opinions of outside special counsel that may be required for
a
Whole Loan Transfer or Pass-Through Transfer, as the case may be, shall
be
the responsibility of the Purchaser;
|
| (7) |
in
connection with any securitization of any Servicing Retained Mortgage
Loans, to negotiate and execute one or more subservicing agreements
between the Seller and any master servicer which is generally considered
to be a prudent master servicer in the secondary mortgage market,
designated by the Purchaser in its sole discretion after consultation
with
the Seller and/or one or more custodial and servicing agreements among
the
Purchaser, the Seller and a third party custodian/trustee which is
generally considered to be a prudent custodian/trustee in the secondary
mortgage market designated by the Purchaser in its sole discretion
after
consultation with the Seller, in either case for the purpose of pooling
the Mortgage Loans with other Mortgage Loans for resale or
securitization;
|
| (8) |
in
connection with any securitization of any Servicing Retained Mortgage
Loans, to reasonably negotiate and execute a pooling and servicing
agreement, which pooling and servicing agreement may, at the Purchaser’s
direction, contain contractual provisions including, but not limited
to, a
24-day certificate payment delay (54-day total payment delay), servicer
advances of delinquent scheduled payments of principal and interest
through liquidation (unless deemed non-recoverable) and prepayment
interest shortfalls (to the extent of the monthly servicing fee payable
thereto), servicing and mortgage loan representations and warranties
which
in form and substance conform to the representations and warranties
in
this Agreement and to secondary market standards for securities backed
by
mortgage loans similar to the Mortgage Loans and such provisions with
regard to servicing responsibilities, investor reporting, segregation
and
deposit of principal and interest payments, custody of the Mortgage
Loans,
and other covenants as are reasonably required by the Purchaser and
one or
more nationally recognized rating agencies for mortgage pass-through
transactions which are “mortgage related securities” for the purposes of
the Secondary Mortgage Market Enhancement Act of 1984, unless otherwise
mutually agreed. At the option of the Purchaser, the facilities of
the
Depository Trust Company (“DTC”) may be used in connection with any class
of security issued pursuant to any pooling agreement, subject only
to the
consent of the DTC. If the Purchaser deems it advisable at any time
to
pool the Mortgage Loans with other mortgage loans for the purpose of
resale or securitization, the Seller agrees to execute one or more
subservicing agreements between itself (as servicer) and a master servicer
designated by the Purchaser at its sole discretion, and/or one or more
servicing agreements among the Seller (as servicer), the Purchaser
and a
trustee designated by the Purchaser at its sole discretion, such
agreements in each case incorporating terms and provisions substantially
identical to those described in the immediately preceding
paragraph;
|
| (9) |
With
respect to each Whole Loan Transfer and Pass-Through Transfer, the
Seller
shall establish and maintain one or more Custodial Accounts and Escrow
Accounts with respect to the Mortgage Loans sold pursuant to such Whole
Loan Transfer or Pass-Through Transfer, which accounts shall be
established and maintained in addition to, and separate and apart from,
any other Custodial Account or Custodial Accounts and Escrow Account
or
Escrow Accounts established and maintained pursuant to this Agreement.
The
sale or transfer of the Mortgage Loans pursuant to a Whole Loan Transfer
or Pass-Through Transfer shall be deemed to create a separate and distinct
servicing agreement by the Seller with respect to such Mortgage Loan
or
Loans. In connection therewith, the obligation of the Seller in respect
of
compensating interest payments for Prepayment Interest Shortfalls with
respect to the Mortgage Loans sold pursuant to a Whole Loan Transfer
or
Pass-Through Transfer, or sold pursuant to one Whole Loan Transfer
or
Pass-Through Transfer and separated by loan group (each, a “Loan Group”),
shall accrue with respect to the related Mortgage Loans or Loan Group,
and
shall not be made on an aggregate basis with all of the Mortgage Loans
purchased pursuant to or in connection with this Agreement or with
the
Mortgage Loans of a different Loan Group. In addition, any reimbursement
of the Seller in respect of Monthly Advances, Servicing Advances and
unreimbursed Servicing Fees shall be reimbursed first on a loan by
loan
basis and, if reimbursed out of general collections on the related
Mortgage Loans, shall be reimbursed from collections on the Mortgage
Loans
sold pursuant to the related Whole Loan Transfer or Pass-Through Transfer
or, with respect to Mortgage Loans sold pursuant to one Whole Loan
Transfer or Pass-Through Transfer and separated by Loan Group, out
of
collections of the Mortgage Loans in the related Loan Group. The sale
or
transfer of the Mortgage Loans pursuant to a Whole Loan Transfer or
Pass-Through Transfer shall be deemed to create a separate and distinct
servicing agreement by the Seller with respect to such Mortgage Loan
or
Loans.
|
| (10) |
in
connection with any securitization of any Servicing Retained Mortgage
Loans, to transfer the servicing rights to the Purchaser or its designee
as described in Section 15 upon the direction of the
Purchaser.
|
All
Mortgage Loans not sold or transferred pursuant to a Whole Loan Transfer or
Pass-Through Transfer shall be subject to this Agreement and shall continue
to
be serviced for the remainder of the Preliminary Servicing Period in accordance
with the terms of this Agreement and with respect thereto this Agreement shall
remain in full force and effect.
SECTION
13. The
Seller.
| Subsection 13.01. |
Additional
Indemnification by the Seller.
|
In
addition to the indemnification provided in Subsection 7.03, the Seller shall
indemnify the Purchaser and hold the Purchaser harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Purchaser may sustain in any way related to the failure of the Seller
to perform its obligations under this Agreement including but not limited to
its
obligation to service and administer the Mortgage Loans in strict compliance
with the terms of this Agreement or any Reconstitution Agreement entered into
pursuant to Section 12. The indemnification obligation of the Seller set forth
herein shall survive the termination of this Agreement.
| Subsection 13.02. |
Merger
or Consolidation of the Seller.
|
The
Seller shall keep in full force and effect its existence, rights and franchises
as a corporation under the laws of the state of its incorporation except as
permitted herein, and shall obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is
or
shall be necessary to protect the validity and enforceability of this Agreement
or any of the Mortgage Loans, and to enable the Seller to perform its duties
under this Agreement.
Any
Person into which the Seller may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Seller
shall
be a party, or any Person succeeding to the business of the Seller, shall be
the
successor of the Seller hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein
to
the contrary notwithstanding; provided, however, that the successor or surviving
Person shall be an institution whose deposits are insured by FDIC or a company
whose business is the origination and servicing of mortgage loans, shall be
a
FNMA or FHLMC approved seller/servicer and shall satisfy any requirements of
Section 16 with respect to the qualifications of a successor to the
Seller.
| Subsection 13.03. |
Limitation
on Liability of the Seller and
Others.
|
Neither
the Seller nor any of the officers, employees or agents of the Seller shall be
under any liability to the Purchaser for any action taken or for refraining
from
the taking of any action in good faith in connection with the servicing of
the
Mortgage Loans pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Seller or any such person
against any breach of warranties or representations made herein, or failure
to
perform its obligations in strict compliance with any standard of care set
forth
in this Agreement, or any liability which would otherwise be imposed by reason
of any breach of the terms and conditions of this Agreement. The Seller and
any
officer, employee or agent of the Seller 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 Seller shall not be under any obligation
to
appear in, prosecute or defend any legal action which is not incidental to
its
obligation to sell or duty to service the Mortgage Loans in accordance with
this
Agreement and which in its opinion may result in its incurring any expenses
or
liability; provided, however, that the Seller may, with the consent of the
Purchaser, undertake any such action which it may deem necessary or desirable
in
respect to this Agreement and the rights and duties of the parties hereto.
In
such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities for which the
Purchaser shall be liable, the Seller shall be entitled to reimbursement
therefor from the Purchaser upon written demand except when such expenses,
costs
and liabilities are subject to the Seller’s indemnification under Subsections
7.03 or 13.01.
| Subsection 13.04. |
Seller
Not to Resign.
|
The
Seller shall not assign this Agreement or resign from the obligations and duties
hereby imposed on it except by mutual consent of the Seller and the Purchaser
or
upon the determination that its servicing duties hereunder are no longer
permissible under applicable law and such incapacity cannot be cured by the
Seller in which event the Seller may resign as servicer. Any such determination
permitting the resignation of the Seller as servicer shall be evidenced by
an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion
of
Counsel shall be in form and substance acceptable to the Purchaser and which
shall be provided at the cost of the Seller. No such resignation shall become
effective until a successor shall have assumed the Seller’s responsibilities and
obligations hereunder in the manner provided in Section 16.
| Subsection 13.05. |
No
Transfer of Servicing.
|
The
Seller acknowledges that the Purchaser has acted in reliance upon the Seller’s
independent status, the adequacy of its servicing facilities, plan, personnel,
records and procedures, its integrity, reputation and financial standing and
the
continuance thereof. Without in any way limiting the generality of this Section,
the Seller shall not either assign this Agreement or the servicing hereunder
or
delegate its rights or duties hereunder or any portion thereof, or sell or
otherwise dispose of all or substantially all of its property or assets, without
the prior written approval of the Purchaser, which consent will not be
unreasonably withheld.
SECTION
14. DEFAULT.
| Subsection 14.01. |
Events
of Default.
|
In
case
one or more of the following Events of Default by the Seller shall occur and
be
continuing, that is to say:
(i) any
failure by the Seller to remit to the Purchaser any payment required to be
made
under the terms of this Agreement which continues unremedied for a period of
two
Business Days after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to the Seller by the
Purchaser; or
(ii) failure
on the part of the Seller duly to observe or perform in any material respect
any
other of the covenants or agreements on the part of the Seller set forth in
this
Agreement which continues unremedied for a period of thirty days (except that
such number of days shall be fifteen in the case of a failure to pay any premium
for any insurance policy required to be maintained under this Agreement) after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller by the Purchaser; or
(iii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
for
the appointment of a conservator or receiver or liquidator in any insolvency,
bankruptcy, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Seller and such decree or order shall have
remained in force undischarged or unstayed for a period of sixty days;
or
(iv) the
Seller shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of
assets and liabilities or similar proceedings of or relating to the Seller
or of
or relating to all or substantially all of its property; or
(v) the
Seller shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors,
or
voluntarily suspend payment of its obligations; or
(vi) failure
by the Seller to be in compliance with the “doing business” or licensing laws of
any jurisdiction where a Mortgaged Property is located but only to the extent
such qualification is necessary to ensure the enforceability of each Mortgage
Loan and to perform the Servicer’s obligation under this Agreement;
or
(vii) the
Seller has its right to service temporarily or permanently suspended by FNMA
or
FHLMC or otherwise ceases to meet the qualifications of either a FNMA or FHLMC
seller/servicer; or
(viii) the
Seller attempts to assign its right to servicing compensation hereunder or
the
Seller attempts, without the consent of the Purchaser, to sell or otherwise
dispose of all or substantially all of its property or assets or to assign
this
Agreement or the servicing responsibilities hereunder or to delegate its duties
hereunder or any portion thereof; or
(ix) to
the
extent any Mortgage Loan is a MERS Mortgage Loan, the Seller’s membership in
MERS is terminated for any reason; or
(x) failure
by the Seller to duly perform, within the required time period, its obligations
under Sections 11.24, 11.25 or 11.26 of the Servicing Addendum, which failure
continues unremedied for a period of fifteen (15) days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Seller by any party to this Agreement or by any master
servicer responsible for master servicing the Mortgage Loans pursuant to a
securitization of such Mortgage Loans; or
(xi) a
Rating
Agency lowers the Seller’s servicer rating at any time below a rating of
“Average” following the date of this Agreement;
then,
and
in each and every such case, so long as an Event of Default shall not have
been
remedied, the Purchaser, by notice in writing to the Seller may, in addition
to
whatever rights the Purchaser may have at law or equity to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Seller as servicer under this Agreement. On or after the
receipt by the Seller of such written notice, all authority and power of the
Seller to service the Mortgage Loans under this Agreement shall on the date
set
forth in such notice pass to and be vested in the successor appointed pursuant
to Section 16.
All
Servicing Transfer Costs shall be paid by the Seller upon presentation of
reasonable documentation of such costs.
If
any of
the Mortgage Loans are MERS Mortgage Loans, in connection with the termination
or resignation (as described in Section 13.04) of the Seller hereunder, either
(i) the successor Seller shall represent and warrant that it is a member of
MERS
in good standing and shall agree to comply in all material respects with the
rules and procedures of MERS in connection with the servicing of the Mortgage
Loans that are registered with MERS, or (ii) the Seller shall cooperate with
the
successor company either (x) in causing MERS to execute and deliver an
assignment of Mortgage in recordable form to transfer the Mortgage from MERS
to
the Purchaser and to execute and deliver such other notices, documents and
other
instruments as may be necessary or desirable to effect a transfer of such
Mortgage Loan or servicing of such Mortgage Loan on the MERS System to the
successor company or (y) in causing MERS to designate on the MERS System the
successor company as the servicer of such Mortgage Loan.
| Subsection 14.02. |
Waiver
of Defaults.
|
The
Purchaser may waive any default by the Seller in the performance of its
obligations hereunder and its consequences. Upon any such waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so
waived.
SECTION
15. Termination.
The
respective obligations and responsibilities of the Seller, as servicer, shall
terminate (i) with respect to the Servicing Released Mortgage Loans, at the
expiration of the Interim Servicing Period unless terminated on an earlier
date
at the opinion of the Purchaser pursuant to this Section 15 or pursuant to
Section 14 or (ii) with respect to the Servicing Retained Mortgage Loans, upon
the distribution to the Purchaser of the final payment or liquidation with
respect to the last Mortgage Loan (or advances of same by the Seller) or the
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure with respect to the last Mortgage Loan and the remittance of all
funds due hereunder unless terminated with respect to all or a portion of the
Mortgage Loans on an earlier date at the option of the Purchaser pursuant to
this Section 15 or pursuant to Section 14. In connection with the Servicing
Retained Mortgage Loans, the Purchaser may terminate the Seller as servicer
pursuant to this Section 15 without cause if the Purchaser pays to the Seller
a
termination fee based on the fair market value of the related servicing rights
as mutually agreed to between the Seller and the Purchaser. Upon written request
from the Purchaser in connection with any such termination, the Seller shall
prepare, execute and deliver, any and all documents and other instruments,
place
in the Purchaser’s possession all Mortgage Files, and do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice
of
termination, whether to complete the transfer and endorsement or assignment
of
the Mortgage Loans and related documents, or otherwise, at the Seller’s sole
expense. The Seller agrees to cooperate with the Purchaser and such successor
in
effecting the termination of the Seller’s responsibilities and rights hereunder
as servicer, including, without limitation, the transfer to such successor
for
administration by it of all cash amounts which shall at the time be credited
by
the Seller to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
SECTION
16. Successor
to the Seller.
Prior
to termination of Seller’s responsibilities and duties under this Agreement
pursuant to Section 12, 14 or 15, the Purchaser shall (i) succeed to and assume
all of the Seller’s responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor which shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of the Seller as
servicer under this Agreement. In connection with such appointment and
assumption, the Purchaser may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor shall
agree. In the event that the Seller’s duties, responsibilities and liabilities
as servicer under this Agreement should be terminated pursuant to the
aforementioned Sections, the Seller shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or financial
condition of the Purchaser or such successor. The termination of the Seller
as
servicer pursuant to the aforementioned Sections shall not become effective
until a successor shall be appointed pursuant to this Section 16 and shall
in no
event relieve the Seller of the representations and warranties made pursuant
to
Subsections 7.01 and 7.02 and the remedies available to the Purchaser under
Subsection 7.03, 7.04 or 7.05, it being understood and agreed that the
provisions of such Subsections 7.01, 7.02, 7.03, 7.04 and 7.05 shall be
applicable to the Seller notwithstanding any such resignation or termination
of
the Seller, or the termination of this Agreement.
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Seller and to the Purchaser an instrument accepting such appointment,
whereupon such successor shall become fully vested with all the rights, powers,
duties, responsibilities, obligations and liabilities of the Seller, with like
effect as if originally named as a party to this Agreement provided, however,
that such successor shall not assume, and Seller shall indemnify such successor
for, any and all liabilities arising out of the Seller’s acts as servicer. Any
termination of the Seller as servicer pursuant to Section 12, 14 or 15 shall
not
affect any claims that the Purchaser may have against the Seller arising prior
to any such termination or resignation or remedies with respect to such
claims.
The
Seller shall timely deliver to the successor the funds in the Custodial Account
and the Escrow Account and the Mortgage Files and related documents and
statements held by it hereunder and the Seller shall account for all funds.
The
Seller shall execute and deliver such instruments and do such other things
all
as may reasonably be required to more fully and definitely vest and confirm
in
the successor all such rights, powers, duties, responsibilities, obligations
and
liabilities of the Seller as servicer. The successor shall make arrangements
as
it may deem appropriate to reimburse the Seller for amounts the Seller actually
expended as servicer pursuant to this Agreement which the successor is entitled
to retain hereunder and which would otherwise have been recovered by the Seller
pursuant to this Agreement but for the appointment of the successor
servicer.
SECTION
17. Financial
Statements.
The
Seller understands that in connection with the Purchaser’s marketing of the
Mortgage Loans, the Purchaser shall make available to prospective purchasers
the
Seller’s financial statements for the most recently completed three fiscal years
respecting which such statements are available. The Seller also shall make
available any comparable interim statements to the extent any such statements
have been prepared by the Seller (and are available upon request to members
or
stockholders of the Seller or the public at large). The Seller, if it has not
already done so, agrees to furnish promptly to the Purchaser copies of the
statements specified above.
The
Seller also agrees to allow access to knowledgeable financial, accounting,
origination and servicing officers of the Seller for the purpose of answering
questions asked by any prospective purchaser regarding recent developments
affecting the Seller, its loan origination or servicing practices or the
financial statements of the Seller.
SECTION
18. Mandatory
Delivery: Grant of Security Interest.
The
sale and delivery of each Mortgage Loan on or before the related Closing Date
is
mandatory from and after the date of the execution of the related Confirmation,
it being specifically understood and agreed that each Mortgage Loan is unique
and identifiable on the date hereof and that an award of money damages would
be
insufficient to compensate the Initial Purchaser for the losses and damages
incurred by the Initial Purchaser (including damages to prospective purchasers
of the Mortgage Loans) in the event of the Seller’s failure to deliver each of
the related Mortgage Loans or one or more Mortgage Loans otherwise acceptable
to
the Initial Purchaser on or before the related Closing Date. The Seller hereby
grants to the Initial Purchaser a lien on and a continuing security interest
in
each Mortgage Loan and each document and instrument evidencing each such
Mortgage Loan to secure the performance by the Seller of its obligation
hereunder, and the Seller agrees that it holds such Mortgage Loans in custody
for the Initial Purchaser subject to the Initial Purchaser’s (i) right to reject
any Mortgage Loan under the terms of this Agreement and the related
Confirmation, and (ii) obligation to pay the related Purchase Price for the
Mortgage Loans. The Purchaser shall relinquish its security interest with
respect to any Mortgage Loan which is not purchased by the related Closing
Date
or is repurchased pursuant to this agreement, in the later case following
receipt of the Repurchase Price. All rights and remedies of the Purchaser under
this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or
successively.
SECTION
19. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed, by registered or certified mail,
return receipt requested, or, if by other means, when received by the other
party at the address as follows:
(i)
if
to the
Purchaser:
Citigroup
Global Markets Realty Corp.
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(ii)
if
to the
Seller:
GreenPoint
Mortgage Funding, Inc.
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention
▇▇▇▇▇ ▇▇▇▇▇, Secondary Marketing
Telephone:
▇▇▇-▇▇▇-▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
With
a
copy to:
GreenPoint
Mortgage Funding, Inc
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention
General Counsel
or
such
other address as may hereafter be furnished to the other party by like notice.
Any such demand, notice or communication hereunder shall be deemed to have
been
received on the date delivered to or received at the premises of the addressee
(as evidenced, in the case of registered or certified mail, by the date noted
on
the return receipt).
SECTION
20. Severability
Clause.
Any
part, provision, representation or warranty of this Agreement which is
prohibited or which is held to be void or unenforceable shall be ineffective
to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty
of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability in
any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of
any
part, provision, representation or warranty of this Agreement shall deprive
any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION
21. Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts shall
constitute one and the same instrument.
SECTION
22. Governing
Law.
The
Agreement shall be construed in accordance with the laws of the State of New
York without regard to any conflicts of law provisions and the obligations,
rights and remedies of the parties hereunder shall be determined in accordance
with the laws of the State of New York, except to the extent preempted by
Federal law.
SECTION
23. Intention
of the Parties.
It is
the intention of the parties that the Initial Purchaser is purchasing, and
the
Seller is selling, the Mortgage Loans and not a debt instrument of the Seller
or
another security. Accordingly, the parties hereto each intend to treat the
transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. The Initial Purchaser shall
have the right to review the Mortgage Loans and the related Mortgage Loan Files
to determine the characteristics of the Mortgage Loans which shall affect the
federal income tax consequences of owning the Mortgage Loans and the Seller
shall cooperate with all reasonable requests made by the Initial Purchaser
in
the course of such review.
In the
event, for any reason, any transaction contemplated herein is construed by
any
court or regulatory authority as a borrowing rather than as a sale, the Seller
and the Purchaser intend that the Purchaser or its assignee, as the case may
be,
shall have a perfected first priority security interest in the Mortgage Loans,
the Custodial Account and the proceeds of any and all of the foregoing
(collectively, the “Collateral”), free and clear of adverse claims. In such
case, the Seller shall be deemed to have hereby granted to the Purchaser or
its
assignee, as the case may be, a first priority security interest in and lien
upon the Collateral, free and clear of adverse claims. In such event, the
related Confirmation and this Agreement shall constitute a security agreement,
the Purchaser’s custodian shall be deemed to be an independent custodian for
purposes of perfection of the security interest granted to the Purchaser or
its
assignee, as the case may be, and the Purchaser or its assignee, as the case
may
be, shall have all of the rights of a secured party under applicable
law.
SECTION
24. Successors
and Assigns.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective successors and assigns of the Seller
and the Purchaser. The Purchaser may assign this Agreement to any Person to
whom
any Mortgage Loan is transferred whether pursuant to a sale or financing and
to
any Person to whom the servicing or master servicing of any Mortgage Loan is
sold or transferred. Upon any such assignment, the Person to whom such
assignment is made shall succeed to all rights and obligations of the Purchaser
under this Agreement to the extent of the related Mortgage Loan or Mortgage
Loans and this Agreement, to the extent of the related Mortgage Loan or Loans,
shall be deemed to be a separate and distinct Agreement between the Seller
and
such Purchaser, and a separate and distinct Agreement between the Seller and
each other Purchaser to the extent of the other related Mortgage Loan or Loans.
In the event that this Agreement is assigned to any Person to whom the servicing
or master servicing of any Mortgage Loan is sold or transferred, the rights
and
benefits under this agreement which inure to the Purchaser shall inure to the
benefit of both the Person to whom such Mortgage Loan is transferred and the
Person to whom the servicing or master servicing of the Mortgage Loan has been
transferred; provided that, the right to require a Mortgage Loan to be
repurchased by the Seller pursuant to Subsection 7.03 or 7.04 shall be retained
solely by the Purchaser. This Agreement shall not be assigned, pledged or
hypothecated by the Seller to a third party without the consent of the
Purchaser.
SECTION
25. Waivers.
No term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced.
SECTION
26. Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
SECTION
27. General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(a) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender herein
shall be deemed to include the other gender;
(b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(c) references
herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other
Subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
(d) reference
to a Subsection without further reference to a Section is a reference to such
Subsection as contained in the same Section in which the reference appears,
and
this rule shall also apply to Paragraphs and other subdivisions;
(e) the
words
“herein,” “hereof,” “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(f) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
SECTION
28. Nonsolicitation.
The
Seller covenants and agrees that it shall not take any action to solicit the
refinancing of any Mortgage Loan following the date hereof or provide
information to any other entity to solicit the refinancing of any Mortgage
Loan.
Notwithstanding the foregoing, it is understood and agreed that the Seller,
the
Servicer or any of their respective affiliates:
(a) may
provide pay-off information and otherwise cooperate with individual mortgagors
who contact it about prepaying their mortgages by advising them of refinancing
terms and streamlined origination arrangements that are available;
and
(b) may
offer
to refinance a Mortgage Loan made within 30 days following receipt by it of
a pay-off request from the related Mortgagor.
Promotions
undertaken by the Seller or by any affiliate of the Seller which are directed
to
the general public at large (including, without limitation, mass mailing based
on commercially acquired mailing lists, newspaper, radio and television
advertisements), shall not constitute solicitation under this
Section.
SECTION
29. Reproduction
of Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(a)
consents, waivers and modifications which may hereafter be executed, (b)
documents received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
SECTION
30. Further
Agreements.
The
Seller and the Purchaser each agree to execute and deliver to the other such
reasonable and appropriate additional documents, instruments or agreements
as
may be necessary or appropriate to effectuate the purposes of this
Agreement.
Without
limiting the generality of the foregoing, the Seller shall cooperate with the
Purchaser in connection with any Whole Loan Transfer or Pass-Through Transfer
contemplated by the Initial Purchaser pursuant to Section 12 hereof. In such
connection, the Seller shall (a) execute any agreement in accordance with the
provisions of Section 12, and (b) provide to the Initial Purchaser or any
prospective purchaser: (i) any and all information and appropriate verification
of information, whether through letters of its auditors and counsel or
otherwise, as the Initial Purchaser shall reasonably request; and (ii) such
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Seller as
are
reasonably believed necessary by the Initial Purchaser in connection with such
transactions. The requirement of the Seller pursuant to (ii) above shall
terminate on the final Reconstitution Date. Prior to incurring any out-of-pocket
expenses pursuant to this paragraph, the Seller shall notify the Initial
Purchaser in writing of the estimated amount of such expense. The Initial
Purchaser shall reimburse the Seller for any such expense following its receipt
of appropriate details thereof.
SECTION
31. Entire
Agreement.
This
Agreement constitutes the entire agreement and understanding of the parties
with
respect to the matters and transactions contemplated by this Agreement and,
except to the extent otherwise set forth in writing, supersedes any prior
agreement and understandings with respect to those matters and
transactions.
SECTION
32. Third
Party Beneficiary.
For
purposes of this Agreement any master servicer shall be considered a third
party
beneficiary to this Agreement entitled to all the rights and benefits accruing
to any master servicer herein as if it were a direct party to this
Agreement.
SECTION
33. Confidentiality.
Each
of
the Purchaser and the Seller shall employ proper procedures and standards
designed to maintain the confidential nature of the terms of this Agreement,
except to the extent (a) the disclosure of which is reasonably believed by
such party to be required in connection with regulatory requirements or other
legal requirements relating to its affairs; (b) disclosed to any one or
more of such party’s employees, officers, directors, agents, attorneys or
accountants who would have access to the contents of this Agreement and such
data and information in the normal course of the performance of such person’s
duties for such party, to the extent such party has procedures in effect to
inform such person of the confidential nature thereof; (c) that is
disclosed in a prospectus, prospectus supplement or private placement memorandum
relating to a securitization of the Mortgage Loans by the Purchaser (or an
affiliate assignee thereof) or to any Ratings Agency or other person in
connection with the resale or proposed resale of all or a portion of the
Mortgage Loans by such party in accordance with the terms of this Agreement;
and
(d) that is reasonably believed by such party to be necessary for the
enforcement of such party’s rights under this Agreement.
IN
WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
date first above written.
GREENPOINT
MORTGAGE FUNDING, INC.
(Seller)
By:
/s/
[Authorized
Signatory]
Name:
______________________________
Title:
_______________________________
CITIGROUP
GLOBAL MARKETS REALTY CORP.
(Initial
Purchaser)
By:
/s/
[Authorized
Signatory]
Name:
______________________________
Title:
_______________________________
SCHEDULE
I
DATA
FILE
(TO
BE
PROVIDED BY SELLER)
EXHIBIT
1
SELLER’S
OFFICER’S CERTIFICATE
I,
________________________, hereby certify that I am the duly elected
______________ of [SELLER], a ______________ (the “Seller”), and further
certify, on behalf of the Seller as follows:
1. Attached
hereto as Attachment I are a true and correct copy of the [Certificate of
Incorporation and by-laws][Certificate of limited partnership and limited
partnership agreement] of the Seller as are in full force and effect on the
date
hereof.
2. No
proceedings looking toward merger, liquidation, dissolution or bankruptcy of
the
Seller are pending or contemplated.
3. Each
person who, as an officer or attorney-in-fact of the Seller, signed (a) the
Master Mortgage Loan Purchase and Servicing Agreement (the “Purchase
Agreement”), dated as of ____ 1, 200_, by and between the Seller and Citigroup
Global Markets Realty Corp. (the “Purchaser”); (b) the Confirmation, dated
_____________ 200_, between the Seller and the Purchaser (the “Confirmation”);
and (c) any other document delivered prior hereto or on the date hereof in
connection with the sale and servicing of the Mortgage Loans in accordance
with
the Purchase Agreement and the Confirmation was, at the respective times of
such
signing and delivery, and is as of the date hereof, duly elected or appointed,
qualified and acting as such officer or attorney-in-fact, and the signatures
of
such persons appearing on such documents are their genuine
signatures.
4. Attached
hereto as Attachment II is a true and correct copy of the resolutions duly
adopted by the board of directors of the Seller on ________________, 200_ (the
“Resolutions”) with respect to the authorization and approval of the sale and
servicing of the Mortgage Loans; said Resolutions have not been amended,
modified, annulled or revoked and are in full force and effect on the date
hereof.
5. Attached
hereto as Attachment III is a Certificate of Good Standing of the Seller dated
______________, 200_. No event has occurred since ___________________, 200_
which has affected the good standing of the Seller under the laws of the State
of ___________.
6. All
of
the representations and warranties of the Seller contained in Subsections 7.01
and 7.02 of the Purchase Agreement were true and correct in all material
respects as of the date of the Purchase Agreement and are true and correct
in
all material respects as of the date hereof.
7. The
Seller has performed all of its duties and has satisfied all the material
conditions on its part to be performed or satisfied prior to the related Closing
Date pursuant to the Purchase Agreement and the related
Confirmation.
All
capitalized terms used herein and not otherwise defined shall have the meaning
assigned to them in the Purchase Agreement.
IN
WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Seller.
Dated:
__________________________
[Seal]
[SELLER]
(Seller)
By:
_________________________________
Name:
_______________________________
Title:
Vice President
I,
_______________________, Secretary of the Seller, hereby certify that
_________________________ is the duly elected, qualified and acting Vice
President of the Seller and that the signature appearing above is his genuine
signature.
IN
WITNESS WHEREOF, I have hereunto signed my name.
Dated:
__________________________
[Seal]
[SELLER]
(Seller)
By:
_________________________________
Name:
_______________________________
Title:
[Assistant] Secretary
EXHIBIT
2
[FORM
OF
OPINION OF COUNSEL TO THE SELLER]
Ladies
and Gentlemen:
I
have
acted as counsel to the Company in connection with certain matters described
in
the Agreements. This opinion is given to you pursuant to Section 9 of the
Master Mortgage Loan Purchase and Servicing Agreement, dated as of ____________,
2005 (the “Servicing Agreement”) between Citigroup Global Markets Realty Corp.
and GreenPoint Mortgage Funding, Inc. (the “Company”). Capitalized terms not
otherwise defined herein have the meanings set forth in the Servicing
Agreement.
In
connection with rendering this opinion letter, I, or attorneys working under
my
direction have examined, among other things, originals, certified copies or
copies otherwise identified to my satisfaction as being true copies of the
following:
1. Signed
copies of the Agreements;
2. The
Company’s Certificate of Incorporation
3. The
Company’s By-Laws; and
4. Resolutions
adopted by the Board of Directors of the Company.
For
the
purpose of rendering this opinion, I have made such documentary, factual and
legal examinations, as I deemed necessary under the circumstances. As to factual
matters, I have relied upon statements, certificates and other assurances of
public officials and of officers and other representatives of the Company,
and
upon such other certificates as I deemed appropriate, which factual matters
have
not been independently established or verified by me. I have also assumed,
among
other things, the genuineness of all signatures, the legal capacity of all
natural persons, the authenticity of all documents submitted to me as originals,
and the conformity to original documents of all documents submitted to me as
copies and the authenticity of the originals of such copied
documents.
On
the
basis of and subject to the foregoing examination, and in reliance thereon,
and
subject to the assumptions, qualifications, exceptions and limitations expressed
herein, I am of the opinion that:
(a) The
Company has been duly incorporated and is validly existing and in good standing
under the laws of the State of New York with corporate power and authority
to
own its properties and conduct its business as presently conducted by it. The
Company has the corporate power and authority to execute, deliver, and perform
its obligations under the Agreements.
(b) The
Agreements have been duly and validly authorized, executed and delivered by
the
Company.
(c) The
Agreements constitute valid, legal and binding obligations of the Company,
enforceable against the Company in accordance with their respective
terms.
(d) No
consent, approval, authorization or order of any court or United States federal
or California government authority on the part of the Company is required for
the execution, delivery and performance by the Company of the Agreements, except
for those consents, approvals, authorizations or orders which previously have
been obtained.
(e) The
execution, delivery and performance of the Agreements will not, as of the date
hereof, result in a violation of the Certificate of Incorporation or By-Laws
of
the Company, or, to the best of my knowledge, result in a violation of, or
constitute a default under, (i) the terms of any indenture or other
agreement or instrument to which the Company is a party or by which it is bound,
(ii) any California or United States federal statute or regulation
applicable to the Company, or (iii) any order of any State of California or
United States federal court, regulatory body, administrative agency or
governmental body having jurisdiction over the Company, except in any such
case
where the violation would not have a material adverse effect on the company
or
its ability to perform its obligations under the Agreement.
(f) There
is
no action, suit, proceeding or investigation pending or, to the best of my
knowledge, threatened against the Company which, in my judgment, would draw
into
question the validity of the Agreements or which would be likely to impair
materially the ability of the Company to perform under the terms of the
Agreements.
The
opinions above are subject to the following additional assumptions, exceptions,
qualifications and limitations:
1. I
have
assumed that all parties to the Agreements other than the Company have all
requisite power and authority to execute, deliver and perform their respective
obligations under the Agreements, and that the Agreements have been duly
authorized by all necessary corporate action on the part of such parties, has
been executed and delivered by such parties and constitutes the legal, valid
and
binding obligation of such parties.
2. My
opinion expressed in paragraph c above is subject to the qualifications
that (i) the enforceability of the Agreements may be limited by the effect
of laws relating to (1) bankruptcy, reorganization, insolvency, moratorium
or other similar laws now or hereafter in effect relating to creditors’ rights
generally, including, without limitation, the effect of statutory or other
laws
regarding fraudulent conveyances or preferential transfers, and (2) general
principles of equity upon the specific enforceability of any of the remedies,
covenants or other provisions of the Agreements and upon the availability of
injunctive relief or other equitable remedies and the application of principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) as such principles relate to, limit or affect
the enforcement of creditors’ rights generally and the discretion of the court
before which any proceeding for such enforcement may be brought; and (ii) I
express no opinion herein with respect to the validity, legality, binding effect
or enforceability of provisions for indemnification in the Agreements to the
extent such provisions may be held to be unenforceable as contrary to public
policy.
3. My
opinion expressed in paragraph e above relating to violations of United
States federal and California statutes, regulations or orders applicable to
the
Company is limited to such statutes, regulations or orders that in my experience
are typically applicable to a transaction of the nature contemplated by the
Agreements.
4. I
have
assumed, without independent check or certification, that there are no
agreements or understandings among the Company and any other party, which would
expand, modify or otherwise affect the terms of the Agreements or the respective
rights or obligations of the parties there under.
I
am
admitted to practice in the State of California, and I render no opinion herein
as to matters involving or governed by the laws of any jurisdiction other than
the State of California and the federal laws of the United States of America.
I
also express no opinion as to whether the laws of any particular jurisdiction
apply, and no opinion to the extent that the laws of any jurisdiction other
than
those identified above are applicable to the Agreements.
This
opinion letter has been prepared and should be understood in accordance with
the
Legal
Opinion Principles,
53 Bus. Law. 831 (1998), and Guidelines
for the Preparation of Closing Opinions,
57 Bus. Law. 345 (2001), of the Committee on Legal Opinions, ABA
Section of Business Law.
Very
truly yours,
▇▇▇▇▇
▇.
▇▇▇▇▇▇▇
General
Counsel
GreenPoint
Mortgage Funding, Inc.
EXHIBIT
3
SECURITY
RELEASE CERTIFICATION
I. Release
of Security Interest
___________________________,
hereby relinquishes any and all right, title and interest it may have in and
to
the Mortgage Loans described in Exhibit
A
attached
hereto upon purchase thereof by Citigroup Global Markets Realty Corp. from
the
Seller named below pursuant to that certain Master Mortgage Loan Purchase and
Servicing Agreement, dated as of _____ 1, 200_, as of the date and time of
receipt by ______________________________ of $__________ for such Mortgage
Loans
(the “Date and Time of Sale”), and certifies that all notes, mortgages,
assignments and other documents in its possession relating to such Mortgage
Loans have been delivered and released to the Seller named below or its
designees as of the Date and Time of Sale.
Name
and
Address of Financial Institution
(Name)
(Address)
By:
______________________________
II. Certification
of Release
The
Seller named below hereby certifies to Citigroup Global Markets Realty Corp.
that, as of the Date and Time of Sale of the above mentioned Mortgage Loans
to
Citigroup Global Markets Realty Corp., the security interests in the Mortgage
Loans released by the above named corporation comprise all security interests
relating to or affecting any and all such Mortgage Loans. The Seller warrants
that, as of such time, there are and will be no other security interests
affecting any or all of such Mortgage Loans.
______________________________________
Seller
By:
__________________________________
Name: ________________________________
Title:
_________________________________
EXHIBIT
4
ASSIGNMENT
AND CONVEYANCE
On
this
_______ day of ________, 200_, [SELLER] (“Seller”) as the Seller under that
certain Master Mortgage Loan Purchase and Servicing Agreement, dated as of
____
1, 200_ (the “Agreement”) does hereby sell, transfer, assign, set over and
convey to Citigroup Global Markets Realty Corp. as Purchaser under the
Agreement, without recourse, but subject to the terms of the Agreement, all
rights, title and interest of the Seller in and to the Mortgage Loans listed
on
the Mortgage Loan Schedule attached hereto, together with the related Mortgage
Files and all rights and obligations arising under the documents contained
therein. Pursuant to Section 6.03 of the Agreement, the Seller has delivered
to
the Purchaser the documents for each Mortgage Loan to be purchased as set forth
in the Agreement. The contents of each related Servicing File required to be
retained by the Seller to service the Mortgage Loans pursuant to the Agreement
and thus not delivered to the Purchaser are and shall be held in trust by the
Seller for the benefit of the Purchaser as the owner thereof. The Seller’s
possession of any portion of each such Servicing File is at the will of the
Purchaser for the sole purpose of facilitating servicing of the related Mortgage
Loan pursuant to the Agreement, and such retention and possession by the Seller
shall be in a custodial capacity only. The ownership of each Mortgage Note,
Mortgage, and the contents of the Mortgage File and Servicing File is vested
in
the Purchaser and the ownership of all records and documents with respect to
the
related Mortgage Loan prepared by or which come into the possession of the
Seller shall immediately vest in the Purchaser and shall be retained and
maintained, in trust, by the Seller at the will of the Purchaser in such
custodial capacity only.
The
Seller confirms to the Purchaser that the representation and warranties set
forth in Sections 7.01 and 7.02 of the Agreement and in the Confirmation, dated
_______________, 200__, are true and correct as of the date hereof, and that
all
statements made in the Seller’s Officer’s Certificate and all Attachments
thereto remain complete, true and correct in all respects as of the date
hereof:
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Agreement.
[SELLER]
(Seller)
By:
__________________________________
Name: ________________________________
Title:
_________________________________
EXHIBIT
5
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Purchaser and
which shall be retained by the Seller or delivered to the
Purchaser:
| 1. |
The
following documents (collectively, the “Mortgage Loan
Documents”)
|
| (a) |
the
original Mortgage Note bearing all intervening endorsements necessary
to
show a complete chain of endorsements from the original payee to the
applicable Seller, endorsed in blank, “Pay to the order of _____________,
without recourse”, and, if previously endorsed, signed in the name of the
last endorsee by a duly qualified officer of the last endorsee. If
the
Mortgage Loan was acquired by the last endorsee in a merger, the
endorsement must be by “[name of last endorsee], successor by merger to
[name of predecessor]”. If the Mortgage Loan was acquired or originated by
the last endorsee while doing business under another name, the endorsement
must be by “[name of last endorsee], formerly known as [previous
name]”;
|
| (b) |
with
respect to each Mortgage Loan which is not a MERS Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording. The Mortgage shall be assigned,
with
assignee’s name left blank. If the Mortgage Loan was acquired by the last
assignee in a merger, the Assignment of Mortgage must be made by “[name of
last assignee], successor by merger to [name of predecessor]”. If the
Mortgage Loan was acquired or originated by the last assignee while
doing
business under another name, the Assignment of Mortgage must be by
“[name
of last assignee], formerly known as [previous
name];
|
| (c) |
the
original of each guarantee executed in connection with the Mortgage
Note,
if any;
|
| (d) |
for
each Mortgage Loan which is not a MERS Mortgage Loan, the original
recorded Mortgage with evidence of recording thereon, and in the case
of
each MERS Mortgage Loan, the original Mortgage, noting the presence
of the
MIN for that Mortgage Loan and either language indicating that the
Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, or
if such
Mortgage Loan was not a MOM Loan at origination, the original Mortgage
and
the assignment to MERS, with evidence of recording thereon.. If in
connection with any Mortgage Loan, the applicable Seller has not delivered
or caused to be delivered the original Mortgage with evidence of recording
thereon on or prior to the related Closing Date because of a delay
caused
by the public recording office where such Mortgage has been delivered
for
recordation or because such Mortgage has been lost or because such
public
recording office retains the original recorded Mortgage, the Seller
shall
deliver or cause to be delivered to the Purchaser, (i) in the case
of a
delay caused by the public recording office, a copy of such Mortgage
certified by the applicable Seller, escrow agent, title insurer or
closing
attorney to be a true and complete copy of the original recorded Mortgage
and (ii) 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, a copy of such Mortgage
certified by such public recording office to be a true and complete
copy
of the original recorded Mortgage;
|
| (e) |
originals
of each assumption, modification, consolidation or extension agreement,
if
any;
|
| (f) |
except
in the event that the original Mortgage is made to MERS, the originals
of
all intervening assignments of mortgage with evidence of recording
thereon
evidencing a complete chain of ownership from the originator of the
Mortgage Loan to the last assignee (or to MERS, if the Mortgage Loan
is
registered on the MERS System), or if any such intervening assignment
of
mortgage has not been returned from the applicable public recording
office
or has been lost or if such public recording office retains the original
recorded intervening assignments of mortgage, a photocopy of such
intervening assignment of mortgage, together with (i) in the case of
a
delay caused by the public recording office, an Officer’s Certificate of
the applicable Seller, escrow agent, closing attorney or the title
insurer
insuring the Mortgage stating that such intervening assignment of mortgage
has been delivered to the appropriate public recording office for
recordation and that such original recorded intervening assignment
of
mortgage or a copy of such intervening assignment of mortgage certified
by
the appropriate public recording office to be a true and complete copy
of
the original recorded intervening assignment of mortgage will be promptly
delivered to the Purchaser upon receipt thereof by the party delivering
the Officer’s Certificate or by the applicable Seller; or (ii) in the case
of an intervening assignment of mortgage where a public recording office
retains the original recorded intervening assignment of mortgage or
in the
case where an intervening assignment of mortgage is lost after recordation
in a public recording office, a copy of such intervening assignment
of
mortgage with recording information thereon certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment of mortgage;
|
| (g) |
if
the Mortgage Note, the Mortgage, any Assignment of Mortgage or any
other
related document has been signed by a Person on behalf of the Mortgagor,
the original power of attorney or other instrument that authorized
and
empowered such Person to sign;
|
| (h) |
original
of any security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage, if any;
and
|
| (i) |
the
original Primary Insurance Policy, if the Loan-to-Value Ratio is greater
than 80.00%.
|
| 2. |
Residential
loan application.
|
| 3. |
Mortgage
Loan closing statement.
|
| 4. |
Verification
of employment and income.
|
| 5. |
Verification
of acceptable evidence of source and amount of
downpayment.
|
| 6. |
Credit
report on Mortgagor.
|
| 7. |
Residential
appraisal report.
|
| 8. |
Photograph
of the Mortgaged Property.
|
| 9. |
Survey
of the Mortgaged Property.
|
| 10. |
Copy
of each instrument necessary to complete identification of any exception
set forth in the exception schedule in the title policy, i.e., map
or
plat, restrictions, easements, sewer agreements, home association
declarations, etc.
|
| 11. |
All
required disclosure statements and statement of Mortgagor confirming
receipt thereof.
|
| 12. |
If
available, termite report, structural engineer’s report, water potability
and septic certification.
|
| 13. |
Sales
Contract, if applicable.
|
| 14. |
Hazard
insurance policy.
|
| 15. |
Tax
receipts, insurance premium receipts, ledger sheets, payment history
from
date of origination, insurance claim files, correspondence, current
and
historical computerized data files, and all other processing, underwriting
and closing papers and records which are customarily contained in a
mortgage loan file and which are required to document the Mortgage
Loan or
to service the Mortgage Loan.
|
The
original lender’s title insurance policy (or a marked title insurance
commitment, in the event that an original lender’s title insurance policy has
not yet been issued) in the form of an ALTA mortgage title insurance policy,
containing each of the endorsements required by FNMA and insuring the Purchaser
and its successors and assigns as to the first priority lien of the Mortgage
in
the original principal amount of the Mortgage Loan shall be delivered within
180
days of the related Closing Date
EXHIBIT
6
CUSTODIAL
ACCOUNT LETTER AGREEMENT
____________
__, 200_
To:
__________________________________
(the
“Depository”)
As
Seller
under the Master Mortgage Loan Purchase and Servicing Agreement, dated as of
____ 1, 200_, we hereby authorize and request you to establish an account,
as a
Custodial Account, to be designated as “[SELLER] in trust for the Purchaser and
various Mortgagors, Fixed and Adjustable Rate Mortgage Loans.” All deposits in
the account shall be subject to withdrawal therefrom by order signed by the
Seller. You may refuse any deposit which would result in violation of the
requirement that the account be fully insured as described below. This letter
is
submitted to you in duplicate. Please execute and return one original to
us.
[SELLER]
(Seller)
By:_________________________________
Name:_______________________________
Title:________________________________
Date:________________________________
The
undersigned, as Depository, hereby certifies that the above-described account
has been established under Account Number ___________ at the office of the
Depository indicated above, and agrees to honor withdrawals on such account
as
provided above. The full amount deposited at any time in the account will be
insured by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund (“BIF”) or the Savings Association Insurance Fund (“SAIF”).
______________________________________
Depository
By:_________________________________
Name:_______________________________
Title:________________________________
Date:________________________________
EXHIBIT
7
ESCROW
ACCOUNT LETTER AGREEMENT
,
200_
To: __________________________________
(the
“Depository”)
As
Seller
under the Master Mortgage Loan Purchase and Servicing Agreement, dated as of
____ 1, 200_, we hereby authorize and request you to establish an account,
as an
Escrow Account, to be designated as “[SELLER] in trust for the Purchaser and
various Mortgagors, Fixed and Adjustable Rate Mortgage Loans.” All deposits in
the account shall be subject to withdrawal therefrom by order signed by the
Seller. You may refuse any deposit which would result in violation of the
requirement that the account be fully insured as described below. This letter
is
submitted to you in duplicate. Please execute and return one original to
us.
[SELLER]
(Seller)
By:_________________________________
Name:_______________________________
Title:________________________________
Date:________________________________
The
undersigned, as Depository, hereby certifies that the above-described account
has been established under Account Number ___________ at the office of the
Depository indicated above, and agrees to honor withdrawals on such account
as
provided above. The full amount deposited at any time in the account will be
insured by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund (“BIF”) or the Savings Association Insurance Fund (“SAIF”).
_____________________________________
Depository
By:_________________________________
Name:_______________________________
Title:________________________________
Date:________________________________
EXHIBIT
8
SERVICING
ADDENDUM FOR SERVICING RETAINED MORTGAGE LOANS
| Section 11.01 |
Seller
to Act as Servicer.
|
The
Seller, as independent contract servicer, shall service and administer the
Servicing Retained Mortgage Loans in accordance with this Agreement, all
applicable laws, rules and regulations, the terms of the Mortgage Loan Documents
and the FNMA and FHLMC servicing guides, and shall have full power and
authority, acting alone, to do or cause to be done any and all things in
connection with such servicing and administration which the Seller may deem
necessary or desirable and consistent with the terms of this
Agreement.
Consistent
with the terms of this Agreement, the Seller may waive, modify or vary any
term
of any Mortgage Loan or consent to the postponement of strict compliance with
any such term or in any manner grant indulgence to any Mortgagor if in the
Seller’s reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Purchaser; provided,
however, that the Seller shall not permit any modification with respect to
any
Mortgage Loan that would change the Mortgage Interest Rate, defer or forgive
the
payment thereof or of any principal or interest payments, reduce the outstanding
principal amount (except for actual payments of principal), make additional
advances of additional principal or extend the final maturity date on such
Mortgage Loan. Without limiting the generality of the foregoing, the Seller
shall continue, and is hereby authorized and empowered, to execute and deliver
on behalf of itself, and the Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Property. If reasonably required by the Seller, the Purchaser shall
furnish the Seller with any powers of attorney and other documents necessary
or
appropriate to enable the Seller to carry out its servicing and administrative
duties under this Agreement.
Notwithstanding
anything in this Agreement to the contrary, in the event of a Principal
Prepayment in full or in part of a Mortgage Loan, the Seller may not waive
any
Prepayment Charge or portion thereof required by the terms of the related
Mortgage Note unless (i) the Seller determines that such waiver would maximize
recovery of Liquidation Proceeds for such Mortgage Loan, taking into account
the
value of such Prepayment Charge, or (ii) (A) the enforceability thereof is
limited (1) by bankruptcy, insolvency, moratorium, receivership, or other
similar law relating to creditors’ rights generally or (2) due to acceleration
in connection with a foreclosure or other involuntary payment, or (B) the
enforceability is otherwise limited or prohibited by applicable law. If the
Seller waives or does not collect all or a portion of a Prepayment Charge
relating to a Principal Prepayment in full due to any action or omission of
the
Seller, other than as provided above, the Seller shall deposit the amount of
such Prepayment Charge (or such portion thereof as had been waived for deposit)
into the Custodial Account for distribution in accordance with the terms of
this
Agreement.
The
Servicer shall notify MERS of the ownership interest of Purchaser in each MOM
Loan through the MORNET system or MIDANET system, as applicable, or any other
comparable system acceptable to MERS. At any time during the term of this
Agreement, Purchaser may direct Servicer to cause any MOM Loan to be deactivated
from the MERS System.
In
servicing and administering the Mortgage Loans, the Seller shall employ
procedures including collection procedures and exercise the same care that
it
customarily employs and exercises in servicing and administering mortgage loans
for its own account giving due consideration to accepted mortgage servicing
practices of prudent lending institutions and the Purchaser’s reliance on the
Seller.
| Section 11.02 |
Collection
of Mortgage Loan Payments.
|
Continuously
from the date hereof until the principal and interest on all Servicing Retained
Mortgage Loans are paid in full, the Seller shall proceed diligently to collect
all payments due under each Servicing Retained Mortgage Loan when the same
shall
become due and payable and shall, to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Primary Insurance Policy or LPMI Policy, follow such collection procedures
as it
follows with respect to mortgage loans comparable to the Mortgage Loans and
held
for its own account. Further, the Seller shall take special care in ascertaining
and estimating annual ground rents, taxes, assessments, water rates, fire and
hazard insurance premiums, mortgage insurance premiums, and all other charges
that, as provided in the Mortgage, will become due and payable to the end that
the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.
| Section 11.03 |
Realization
Upon Defaulted Mortgage Loans.
|
(a) The
Seller shall use its best efforts, consistent with the procedures that the
Seller would use in servicing loans for its own account, to foreclose upon
or
otherwise comparably convert the ownership of such Mortgaged Properties as
come
into and continue in default and as to which no satisfactory arrangements can
be
made for collection of delinquent payments pursuant to Section 11.01. The Seller
shall use its best efforts to realize upon defaulted Mortgage Loans in such
a
manner as will maximize the receipt of principal and interest by the Purchaser,
taking into account, among other things, the timing of foreclosure proceedings.
The foregoing is subject to the provisions that, in any case in which Mortgaged
Property shall have suffered damage, the Seller shall not be required to expend
its own funds toward the restoration of such property in excess of $2,000 unless
it shall determine in its discretion (i) that such restoration will increase
the
proceeds of liquidation of the related Mortgage Loan to Purchaser after
reimbursement to itself for such expenses, and (ii) that such expenses will
be
recoverable by the Seller through Insurance Proceeds or Liquidation Proceeds
from the related Mortgaged Property, as contemplated in Section 11.05. In the
event that any payment due under any Mortgage Loan is not paid when the same
becomes due and payable, or in the event the Mortgagor fails to perform any
other covenant or obligation under the Mortgage Loan and such failure continues
beyond any applicable grace period, the Seller shall take such action as it
shall deem to be in the best interest of the Purchaser. In the event that any
payment due under any Servicing Retained Mortgage Loan remains delinquent for
a
period of 90 days or more, the Seller shall commence foreclosure proceedings,
provided that prior to commencing foreclosure proceedings, the Seller shall
notify the Purchaser in writing of the Seller’s intention to do so, and the
Seller shall not commence foreclosure proceedings if the Purchaser objects
to
such action within ten (10) Business Days of receiving such notice. In such
connection, the Seller shall be responsible for all costs and expenses incurred
by it in any such proceedings; provided, however, that it shall be entitled
to
reimbursement thereof from the related Mortgaged Property, as contemplated
in
Section 11.05.
(b) Notwithstanding
the foregoing provisions of this Section 11.03, with respect to any Mortgage
Loan as to which the Seller has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property the Seller shall not either (i) obtain title to such
Mortgaged Property as a result of or in lieu of foreclosure or otherwise, or
(ii) otherwise acquire possession of, or take any other action, with respect
to,
such Mortgaged Property if, as a result of any such action, the Purchaser would
be considered to hold title to, to be a mortgagee-in-possession of, or to be
an
owner or operator of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as
amended from time to time, or any comparable law, unless the Seller has also
previously determined, based on its reasonable judgment and a prudent report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:
(1) such
Mortgaged Property is in compliance with applicable environmental laws or,
if
not, that it would be in the best economic interest of the Purchaser to take
such actions as are necessary to bring the Mortgaged Property into compliance
therewith; and
(2) there
are
no circumstances present at such Mortgaged Property relating to the use,
management or disposal of any hazardous substances, hazardous materials,
hazardous wastes, or petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under any
federal, state or local law or regulation, or that if any such materials are
present for which such action could be required, that it would be in the best
economic interest of the Purchaser to take such actions with respect to the
affected Mortgaged Property.
The
cost
of the environmental audit report contemplated by this Section 11.03 shall
be
advanced by the Seller, subject to the Seller’s right to be reimbursed therefor
from the Custodial Account as provided in Section 11.05(vii).
If
the
Seller determines, as described above, that it is in the best economic interest
of the Purchaser to take such actions as are necessary to bring any such
Mortgaged Property into compliance with applicable environmental laws, or to
take such action with respect to the containment, clean-up or remediation of
hazardous substances, hazardous materials, hazardous wastes, or petroleum-based
materials affecting any such Mortgaged Property, then the Seller shall take
such
action as it deems to be in the best economic interest of the Purchaser. The
cost of any such compliance, containment, cleanup or remediation shall be
advanced by the Seller, subject to the Seller’s right to be reimbursed therefor
from the Custodial Account as provided in Section 11.05(vii).
(c) Proceeds
received in connection with any Final Recovery Determination, as well as any
recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds in respect of any Mortgage Loan, will be applied in the
following order of priority: first,
to
reimburse the Seller for any related unreimbursed Servicing Advances pursuant
to
Section 11.05(iii); second,
to pay
accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or if not in connection with a Final Recovery
Determination, to the Due Date prior to the Distribution Date on which such
amounts are to be distributed; and third,
as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than the full amount of accrued and unpaid
interest due on such Mortgage Loan, the amount of such recovery will be
allocated by the Seller as follows: first,
to
unpaid Servicing Fees; and second,
to the
balance of the interest then due and owing.
| Section 11.04 |
Establishment
of Custodial Accounts; Deposits in Custodial
Accounts.
|
The
Seller shall segregate and hold all funds collected and received pursuant to
each Mortgage Loan separate and apart from any of its own funds and general
assets and shall establish and maintain one or more Custodial Accounts, in
the
form of time deposit or demand accounts. The creation of any Custodial Account
shall be evidenced by a Custodial Account Letter Agreement in the form of
Exhibit
6.
The
Seller shall deposit in the Custodial Account on a daily basis, and retain
therein the following payments and collections received by it subsequent to
the
Cut-off Date, or received by it prior to the Cut-off Date but allocable to
a
period subsequent thereto, other than in respect of principal and interest
on
the Servicing Retained Mortgage Loans due on or before the Cut-off
Date:
(i) all
payments on account of principal on the Mortgage Loans;
(ii) all
payments on account of interest on the Mortgage Loans, including all Prepayment
Charges;
(iii) all
Liquidation Proceeds;
(iv) all
Insurance Proceeds including amounts required to be deposited pursuant to
Sections 11.10 and 11.11, other than proceeds to be held in the Escrow Account
and applied to the restoration or repair of the Mortgaged Property or released
to the Mortgagor in accordance with the loan documents or applicable
law;
(v) all
Condemnation Proceeds affecting any Mortgaged Property which are not released
to
the Mortgagor in accordance with the Seller’s normal servicing procedures, the
loan documents or applicable law;
(vi) all
Monthly Advances;
(vii) all
proceeds of any Servicing Retained Mortgage Loan repurchased in accordance
with
Sections 7.03 and 7.04 and all amounts required to be deposited by the Seller
in
connection with shortfalls in principal amount of Qualified Substitute Mortgage
Loans pursuant to Section 7.03;
(viii) any
amounts required to be deposited by the Seller pursuant to Section 11.11 in
connection with the deductible clause in any blanket hazard insurance policy.
Such deposit shall be made from the Seller’s own funds, without reimbursement
therefor;
(ix) any
amounts required to be deposited by the Seller in connection with any REO
Property pursuant to Section 11.13;
(x) any
amounts required to be deposited in the Custodial Account pursuant to Sections
11.19 or 11.20; and
(xi) with
respect to each Principal Prepayment in full or in part, an amount (to be paid
by the Seller out of its own funds without reimbursement therefor) which, when
added to all amounts allocable to interest received in connection with such
Principal Prepayment, equals one month’s interest on the amount of principal so
prepaid at the Mortgage Interest Rate; provided, however, that in no event
shall
the aggregate of deposits made by the Seller pursuant to this clause (xi) exceed
the aggregate amount of the Seller’s servicing compensation in the calendar
month in which such deposits are required.
The
foregoing requirements for deposit in the Custodial Account shall be exclusive,
it being understood and agreed that, without limiting the generality of the
foregoing, payments in the nature of late payment charges and assumption fees,
to the extent permitted by Section 11.01, need not be deposited by the Seller
in
the Custodial Account. Such Custodial Account shall be an Eligible Account.
Any
interest or earnings on funds deposited in the Custodial Account by the
depository institution shall accrue to the benefit of the Seller and the Seller
shall be entitled to retain and withdraw such interest from the Custodial
Account pursuant to Section 11.05(iii). The Seller shall give notice to the
Purchaser of the location of the Custodial Account when established and prior
to
any change thereof.
If
the
balance on deposit in the Custodial Account exceeds $75,000 as of the
commencement of business on any Business Day and the Custodial Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of Eligible Account, the Seller shall, on or before twelve o’clock noon Eastern
time on such Business Day, withdraw from the Custodial Account any and all
amounts payable to the Purchaser and remit such amounts to the Purchaser by
wire
transfer of immediately available funds.
| Section 11.05 |
Permitted
Withdrawals From the Custodial
Account.
|
The
Seller may, from time to time, withdraw from the Custodial Account for the
following purposes:
(i) to
make
distributions to the Purchaser in the amounts and in the manner provided for
in
Section 11.14;
(ii) to
reimburse itself for Monthly Advances, the Seller’s right to reimburse itself
pursuant to this subclause (ii) being limited to amounts received on the related
Mortgage Loan which represent late collections (net of the related Servicing
Fees) respecting which any such advance was made it being understood that,
in
the case of such reimbursement, the Seller’s right thereto shall be prior to the
rights of Purchaser, except that, where the Seller is required to repurchase
a
Servicing Retained Mortgage Loan pursuant to Section 7.03, 7.04 or 7.05, the
Seller’s right to such reimbursement shall be subsequent to the payment to the
Purchaser of the Repurchase Price pursuant to Section 7.03, 7.04 or 7.05, and
all other amounts required to be paid to the Purchaser with respect to such
Servicing Retained Mortgage Loans;
(iii) to
reimburse itself for unreimbursed Servicing Advances, the Seller’s right to
reimburse itself pursuant to this subclause (iii) with respect to any Mortgage
Loan being limited to related Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds and such other amounts as may be collected by the Seller
from
the Mortgagor or otherwise relating to the Mortgage Loan, it being understood
that, in the case of such reimbursement, the Seller’s right thereto shall be
prior to the rights of the Purchaser, except that, where the Seller is required
to repurchase a Servicing Retained Mortgage Loan pursuant to Section 7.03,
7.04
or 7.05, the Seller’s right to such reimbursement shall be subsequent to the
payment to the Purchaser of the Repurchase Price pursuant to Section 7.03,
7.04
or 7.05 and all other amounts required to be paid to the Purchaser with respect
to such Servicing Retained Mortgage Loans;
(iv) to
pay to
itself pursuant to Section 11.22 as servicing compensation (a) any interest
earned on funds in the Custodial Account (all such interest to be withdrawn
monthly not later than each Distribution Date), and (b) the Servicing Fee from
that portion of any payment or recovery as to interest on a particular Mortgage
Loan;
(v) to
pay to
itself with respect to each Servicing Retained Mortgage Loan that has been
repurchased pursuant to Section 7.03, 7.04 or 7.05 all amounts received thereon
and not distributed as of the date on which the related Repurchase Price is
determined;
(vi) to
reimburse itself for any Monthly Advance previously made which the Seller has
determined to be a Nonrecoverable Monthly Advance;
(vii) to
pay,
or to reimburse itself for advances in respect of, expenses incurred in
connection with any Mortgage Loan pursuant to Section 11.03(b), but only to
the
extent of amounts received in respect of the Mortgage Loans to which such
expense is attributable;
(viii) to
clear
and terminate the Custodial Account on the termination of this
Agreement.
The
Seller shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Custodial Account pursuant to such subclauses (ii) - (vii) above. The Seller
shall provide written notification in the form of an Officers’ Certificate to
the Purchaser, on or prior to the next succeeding Distribution Date, upon making
any withdrawals from the Custodial Account pursuant to subclause (vi)
above.
| Section 11.06 |
Establishment
of Escrow Accounts; Deposits in Escrow
Accounts.
|
The
Seller shall segregate and hold all funds collected and received pursuant to
each Mortgage Loan which constitute Escrow Payments separate and apart from
any
of its own funds and general assets and shall establish and maintain one or
more
Escrow Accounts, in the form of time deposit or demand accounts. The creation
of
any Escrow Account shall be evidenced by Escrow Account Letter Agreement in
the
form of Exhibit
7.
The
Seller shall deposit in the Escrow Account or Accounts on a daily basis, and
retain therein, (i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement, and (ii) all Insurance Proceeds which are
to
be applied to the restoration or repair of any Mortgaged Property. The Seller
shall make withdrawals therefrom only to effect such payments as are required
under this Agreement, and for such other purposes as shall be as set forth
or in
accordance with Section 11.08. The Seller shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid
to
the Mortgagor and, to the extent required by law, the Seller shall pay interest
on escrowed funds to the Mortgagor notwithstanding that the Escrow Account
is
non-interest bearing or that interest paid thereon is insufficient for such
purposes.
| Section 11.07 |
Permitted
Withdrawals From Escrow Account.
|
Withdrawals
from the Escrow Account may be made by the Seller (i) to effect timely payments
of ground rents, taxes, assessments, water rates, hazard insurance premiums,
Primary Insurance Policy premiums, if applicable, and comparable items, (ii)
to
reimburse the Seller for any Servicing Advance made by the Seller with respect
to a related Mortgage Loan but only from amounts received on the related
Mortgage Loan which represent late payments or collections of Escrow Payments
thereunder, (iii) to refund to the Mortgagor any funds as may be determined
to
be overages, (iv) for transfer to the Custodial Account in accordance with
the
terms of this Agreement, (v) for application to restoration or repair of the
Mortgaged Property, (vi) to pay to the Seller, or to the Mortgagor to the extent
required by law, any interest paid on the funds deposited in the Escrow Account,
or (vii) to clear and terminate the Escrow Account on the termination of this
Agreement.
| Section 11.08 |
Payment
of Taxes, Insurance and Other Charges; Maintenance of Primary Insurance
Policies and LPMI Policies; Collections
Thereunder.
|
With
respect to each Mortgage Loan, the Seller shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates and
other
charges which are or may become a lien upon the Mortgaged Property and the
status of Primary Insurance Policy and LPMI Policy premiums and fire and hazard
insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges, including insurance renewal premiums and shall effect
payment thereof prior to the applicable penalty or termination date and at
a
time appropriate for securing maximum discounts allowable, employing for such
purpose deposits of the Mortgagor in the Escrow Account which shall have been
estimated and accumulated by the Seller in amounts sufficient for such purposes,
as allowed under the terms of the Mortgage and applicable law. To the extent
that the Mortgage does not provide for Escrow Payments, the Seller shall
determine that any such payments are made by the Mortgagor at the time they
first become due. The Seller assumes full responsibility for the timely payment
of all such bills and shall effect timely payments of all such bills
irrespective of the Mortgagor’s faithful performance in the payment of same or
the making of the Escrow Payments and shall make advances from its own funds
to
effect such payments.
The
Seller shall maintain in full force and effect, a Primary Insurance Policy,
issued by a Qualified Insurer, with respect to each Mortgage Loan for which
such
coverage is required. Such coverage shall be maintained until the Loan-to-Value
Ratio of the related Mortgage Loan is reduced to that amount for which FNMA
no
longer requires such insurance to be maintained. The Seller will not cancel
or
refuse to renew any Primary Insurance Policy in effect on the related Closing
Date that is required to be kept in force under this Agreement unless a
replacement Primary Insurance Policy for such cancelled or non- renewed policy
is obtained from and maintained with a Qualified Insurer. The Seller shall
not
take any action which would result in non-coverage under any applicable Primary
Insurance Policy or LPMI Policy of any loss which, but for the actions of the
Seller, would have been covered thereunder. In connection with any assumption
or
substitution agreement entered into or to be entered into pursuant to Section
11.19, the Seller shall promptly notify the insurer under the related Primary
Insurance Policy or LPMI Policy, if any, of such assumption or substitution
of
liability in accordance with the terms of such policy and shall take all actions
which may be required by such insurer as a condition to the continuation of
coverage under the Primary Insurance Policy or LPMI Policy. If such Primary
Insurance Policy is terminated as a result of such assumption or substitution
of
liability, the Seller shall obtain a replacement Primary Insurance Policy as
provided above.
In
connection with its activities as servicer, the Seller agrees to prepare and
present, on behalf of itself, and the Purchaser, claims to the insurer under
any
Primary Insurance Policy or LPMI Policy in a timely fashion in accordance with
the terms of such policies and, in this regard, to take such action as shall
be
necessary to permit recovery under any Primary Insurance Policy or LPMI Policy
respecting a defaulted Mortgage Loan. Pursuant to Section 11.04, any amounts
collected by the Seller under any Primary Insurance Policy or LPMI Policy shall
be deposited in the Custodial Account, subject to withdrawal pursuant to Section
11.05.
| Section 11.09 |
Transfer
of Accounts.
|
The
Seller may transfer the Custodial Account or the Escrow Account to a different
depository institution from time to time. Such transfer shall be made only
upon
obtaining the consent of the Purchaser, which consent shall not be unreasonably
withheld. In any case, the Custodial Account and Escrow Account shall be
Eligible Accounts.
| Section 11.10 |
Maintenance
of Hazard Insurance.
|
In
connection with its activities as servicer, the Seller agrees to prepare and
present, on behalf of itself and the Purchaser, claims to the insurer under
any
hazard insurance policy in a timely fashion in accordance with the terms of
such
policies and, in this regard, to take such action as shall be necessary to
permit recovery under any hazard insurance policy. The Seller shall cause to
be
maintained for each Mortgage Loan fire and hazard insurance with extended
coverage as is customary in the area where the Mortgaged Property is located
in
an amount which is at least equal to the lesser of (i) the amount necessary
to
fully compensate for any damage or loss to the improvements which are a part
of
such property on a replacement cost basis or (ii) the outstanding principal
balance of the Mortgage Loan, in each case in an amount not less than such
amount as is necessary to prevent the Mortgagor and/or the Mortgagee from
becoming a co-insurer. If the Mortgaged Property is in an area identified on
a
Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Flood
Emergency Management Agency as having special flood hazards and such flood
insurance has been made available, the Seller will cause to be maintained a
flood insurance policy meeting the requirements of the current guidelines of
the
Federal Insurance Administration with a generally acceptable insurance carrier,
in an amount representing coverage not less than the lesser of (i) the
outstanding principal balance of the Mortgage Loan or (ii) the maximum amount
of
insurance which is available under the National Flood Insurance Act of 1968
or
the Flood Disaster Protection Act of 1973, as amended. The Seller also shall
maintain on any REO Property, fire and hazard insurance with extended coverage
in an amount which is at least equal to the lesser of (i) the maximum insurable
value of the improvements which are a part of such property and (ii) the
outstanding principal balance of the related Mortgage Loan at the time it became
an REO Property plus accrued interest at the Mortgage Interest Rate and related
Servicing Advances, liability insurance and, to the extent required and
available under the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended, flood insurance in an amount as provided
above. Pursuant to Section 11.04, any amounts collected by the Seller under
any
such policies other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the Mortgaged Property or REO Property,
or released to the Mortgagor in accordance with the Seller’s normal servicing
procedures, shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 11.05. Any cost incurred by the Seller in maintaining any
such insurance shall not, for the purpose of calculating distributions to the
Purchaser, be added to the unpaid principal balance of the related Mortgage
Loan, notwithstanding that the terms of such Mortgage Loan so permit. It is
understood and agreed that no earthquake or other additional insurance need
be
required by the Seller or the Mortgagor or maintained on property acquired
in
respect of the Mortgage Loan, other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All such policies shall be endorsed with standard
mortgagee clauses with loss payable to the Seller, or upon request to the
Purchaser, and shall provide for at least thirty days prior written notice
of
any cancellation, reduction in the amount of, or material change in, coverage
to
the Seller. The Seller shall not interfere with the Mortgagor’s freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Seller shall not accept any such insurance policies from insurance
companies unless such companies currently reflect a General Policy Rating of
A:VI or better in Best’s Key Rating Guide and are licensed to do business in the
state wherein the property subject to the policy is located.
| Section 11.11 |
Maintenance
of Mortgage Impairment Insurance
Policy.
|
In
the
event that the Seller shall obtain and maintain a mortgage impairment or blanket
policy issued by an issuer that has a Best rating of A:VI insuring against
hazard losses on all Mortgaged Properties securing the Mortgage Loans, then,
to
the extent such policy provides coverage in an amount equal to the amount
required pursuant to Section 11.10 and otherwise complies with all other
requirements of Section 11.10, the Seller shall conclusively be deemed to have
satisfied its obligations as set forth in Section 11.10, it being understood
and
agreed that such policy may contain a deductible clause, in which case the
Seller shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with Section
11.10, and there shall have been one or more losses which would have been
covered by such policy, deposit in the Custodial Account the amount not
otherwise payable under the blanket policy because of such deductible clause.
In
connection with its activities as servicer of the Mortgage Loans, the Seller
agrees to prepare and present, on behalf of the Purchaser, claims under any
such
blanket policy in a timely fashion in accordance with the terms of such policy.
The Seller shall deliver to the Purchaser a certified true copy of such policy
and a statement from the insurer thereunder that such policy shall in no event
be terminated or materially modified without thirty days prior written notice
to
the Purchaser.
| Section 11.12 |
Fidelity
Bond, Errors and Omissions Insurance.
|
The
Seller shall maintain, at its own expense, a blanket fidelity bond and an errors
and omissions insurance policy, with broad coverage with responsible companies
that would meet the requirements of FNMA and FHLMC on all officers, employees
or
other persons acting in any capacity with regard to the Mortgage Loans to handle
funds, money, documents and papers relating to the Mortgage Loans. The fidelity
bond and errors and omissions insurance shall be in the form of the Mortgage
Banker’s Blanket Bond and shall protect and insure the Seller against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons. Such fidelity bond shall also protect and insure
the Seller against losses in connection with the failure to maintain any
insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of
the
indebtedness secured thereby. No provision of this Section 11.12 requiring
the
fidelity bond and errors and omissions insurance shall diminish or relieve
the
Seller from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by FNMA in the FNMA Servicing Guide
or by FHLMC in the FHLMC Sellers’ and Servicers’ Guide. Upon request of the
Purchaser, the Seller shall cause to be delivered to the Purchaser a certified
true copy of the fidelity bond and insurance policy and a statement from the
surety and the insurer that such fidelity bond or insurance policy shall in
no
event be terminated or materially modified without thirty days’ prior written
notice to the Purchaser.
| Section 11.13 |
Title,
Management and Disposition of REO
Property.
|
In
the
event that title to the Mortgaged Property is acquired in foreclosure or by
deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in the
name of the person designated by the Purchaser, or in the event such person
is
not authorized or permitted to hold title to real property in the state where
the REO Property is located, or would be adversely affected under the “doing
business” or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an opinion of counsel obtained by the Seller from an attorney
duly licensed to practice law in the state where the REO Property is located.
Any Person or Persons holding such title other than the Purchaser shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Purchaser.
The
Seller shall either itself or through an agent selected by the Seller, manage,
conserve, protect and operate each REO Property (and may temporarily rent the
same) in the same manner that it manages, conserves, protects and operates
other
foreclosed property for its own account, and in the same manner that similar
property in the same locality as the REO Property is managed. If a REMIC
election is or is to be made with respect to the arrangement under which the
Mortgage Loans and any REO Property are held, the Seller shall manage, conserve,
protect and operate each REO Property in a manner which does not cause such
REO
Property to fail to qualify as “foreclosure property” within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by such REMIC of any
“income from non-permitted assets” within the meaning of Section 860F(a)(2)(B)
of the Code or any “net income from foreclosure property” within the meaning of
Section 860G(c)(2) of the Code. The Seller shall cause each REO Property to
be
inspected promptly upon the acquisition of title thereto and shall cause each
REO Property to be inspected at least annually thereafter. The Seller shall
make
or cause to be made a written report of each such inspection. Such reports
shall
be retained in the Mortgage File and copies thereof shall be forwarded by the
Seller to the Purchaser. The Seller shall use its best efforts to dispose of
the
REO Property as soon as possible and shall sell such REO Property in any event
within one year after title has been taken to such REO Property, unless the
Seller determines, and gives appropriate notice to the Purchaser, that a longer
period is necessary for the orderly liquidation of such REO Property. If a
period longer than one year is necessary to sell any REO property, (i) the
Seller shall report monthly to the Purchaser as to the progress being made
in
selling such REO Property and (ii) if, with the written consent of the
Purchaser, a purchase money mortgage is taken in connection with such sale,
such
purchase money mortgage shall name the Seller as mortgagee, and a separate
servicing agreement between the Seller and the Purchaser shall be entered into
with respect to such purchase money mortgage. Notwithstanding the foregoing,
if
a REMIC election is made with respect to the arrangement under which the
Mortgage Loans and the REO Property are held, such REO Property shall be
disposed of within three years or such other period as may be permitted under
Section 860G(a)(8) of the Code.
With
respect to each REO Property, the Seller shall hold all funds collected and
received in connection with the operation of the REO Property in the Custodial
Account. The Seller shall account for each REO Property on a property by
property basis.
The
Seller shall deposit or cause to be deposited, on a daily basis into the
Custodial Account all revenues received with respect to the related REO Property
and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property, including the cost of
maintaining any hazard insurance pursuant to Section 11.10 hereof and the fees
of any managing agent acting on behalf of the Seller.
The
Seller shall furnish to the Purchaser on each Distribution Date, an operating
statement for each REO Property covering the operation of each REO Property
for
the previous month. Such operating statement shall be accompanied by such other
information as the Purchaser shall reasonably request.
Each
REO
Disposition shall be carried out by the Seller at such price and upon such
terms
and conditions as the Seller deems to be in the best interest of the Purchaser
only with the prior written consent of the Purchaser. If as of the date title
to
any REO Property was acquired by the Seller there were outstanding unreimbursed
Servicing Advances with respect to the REO Property, the Seller, upon an REO
Disposition of such REO Property, shall be entitled to reimbursement for any
related unreimbursed Servicing Advances from proceeds received in connection
with such REO Disposition. The proceeds from the REO Disposition, net of any
payment to the Seller as provided above, shall be deposited in the Custodial
Account for distribution on the succeeding Distribution Date in accordance
with
Section 5.01.
| Section 11.14 |
Distributions.
|
On
each
Distribution Date, the Seller shall distribute to the Purchaser all amounts
credited to the Custodial Account as of the close of business on the preceding
Determination Date, net of charges against or withdrawals from the Custodial
Account pursuant to Section 11.05; plus (ii) all Monthly Advances, if any,
which
the Seller is obligated to distribute pursuant to Section 11.21, minus (iii)
any
amounts attributable to Principal Prepayments received after the last day of
the
calendar month immediately preceding the related Distribution Date and (iv)
any
amounts attributable to Monthly Payments collected but due on a Due Date or
Dates subsequent to the preceding Determination Date.
All
distributions made to the Purchaser on each Distribution Date will be made
to
the Purchaser of record on the preceding Record Date, and shall be based on
the
Mortgage Loans owned and held by the Purchaser, and shall be made by wire
transfer of immediately available funds to the account of the Purchaser at
a
bank or other entity having appropriate facilities therefor, if the Purchaser
shall have so notified the Seller or by check mailed to the address of the
Purchaser.
With
respect to any remittance received by the Purchaser on or after the first
Business Day following the Business Day on which such payment was due, the
Seller shall pay to the Purchaser interest on any such late payment at an annual
rate equal to the rate of interest as is publicly announced from time to time
at
its principal office by JPMorgan Chase Bank, New York, New York, as its prime
lending rate, adjusted as of the date of each change, plus three percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be paid by the Seller to the Purchaser on the date
such
late payment is made and shall cover the period commencing with the day
following such first Business Day and ending with the Business Day on which
such
payment is made, both inclusive. Such interest shall be remitted along with
such
late payment. The payment by the Seller of any such interest shall not be deemed
an extension of time for payment or a waiver of any Event of Default by the
Seller.
| Section 11.15 |
Remittance
Reports.
|
No
later
than the fifth Business Day of each month, the Seller shall furnish to the
Purchaser or its designee a computer tape containing, and a hard copy of, the
monthly data. On the Business Day following each Determination Date, the Seller
shall deliver to the Purchaser or its designee by telecopy (or by such other
means as the Seller and the Purchaser may agree from time to time) a computer
tape containing, and a hard copy of, the determination data with respect to
the
related Distribution Date, together with such other information with respect
to
the Mortgage Loans as the Purchaser may reasonably require to allocate
distributions made pursuant to this Agreement and provide appropriate statements
with respect to such distributions. On the same date, the Seller shall forward
to the Purchaser by overnight mail a computer readable magnetic tape containing
the information set forth in the Remittance Report with respect to the related
Distribution Date.
| Section 11.16 |
Statements
to the Purchaser.
|
Not
later
than fifteen days after each Distribution Date, the Seller shall forward to
the
Purchaser or its designee a statement prepared by the Seller setting forth
the
status of the Custodial Account as of the close of business on such Distribution
Date and showing, for the period covered by such statement, the aggregate amount
of deposits into and withdrawals from the Custodial Account of each category
of
deposit specified in Section 11.04 and each category of withdrawal specified
in
Section 11.05.
In
addition, not more than sixty days after the end of each calendar year, the
Seller shall furnish to each Person who was the Purchaser at any time during
such calendar year, (i) as to the aggregate of remittances for the applicable
portion of such year, an annual statement in accordance with the requirements
of
applicable federal income tax law, and (ii) a listing of the principal balances
of the Mortgage Loans outstanding at the end of such calendar year.
The
Seller shall prepare and file any and all tax returns, information statements
or
other filings required to be delivered to any governmental taxing authority
or
to any Purchaser pursuant to any applicable law with respect to the Mortgage
Loans and the transactions contemplated hereby. In addition, the Seller shall
provide the Purchaser with such information concerning the Mortgage Loans as
is
necessary for the Purchaser to prepare its federal income tax return as any
Purchaser may reasonably request from time to time.
| Section 11.17 |
Real
Estate Owned Reports.
|
Together
with the statement furnished pursuant to Section 11.13, with respect to any
REO
Property, the Seller shall furnish to the Purchaser a statement covering the
Seller’s efforts in connection with the sale of such REO Property and any rental
of such REO Property incidental to the sale thereof for the previous month,
together with the operating statement. Such statement shall be accompanied
by
such other information as the Purchaser shall reasonably request.
| Section 11.18 |
Liquidation
Reports.
|
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by the
Purchaser pursuant to a deed-in-lieu of foreclosure, the Seller shall submit
to
the Purchaser a liquidation report with respect to such Mortgaged
Property.
| Section 11.19 |
Assumption
Agreements.
|
The
Seller shall, to the extent it has knowledge of any conveyance or prospective
conveyance by any Mortgagor of the Mortgaged Property (whether by absolute
conveyance or by contract of sale, and whether or not the Mortgagor remains
or
is to remain liable under the Mortgage Note and/or the Mortgage), exercise
its
rights to accelerate the maturity of such Mortgage Loan under any “due-on-sale”
clause applicable thereto; provided, however, that the Seller shall not exercise
any such rights if prohibited by law from doing so or if the exercise of such
rights would impair or threaten to impair any recovery under the related Primary
Insurance Policy or LPMI Policy, if any. If the Seller reasonably believes
it is
unable under applicable law to enforce such “due-on-sale” clause, the Seller
shall enter into an assumption agreement with the person to whom the Mortgaged
Property has been conveyed or is proposed to be conveyed, pursuant to which
such
person becomes liable under the Mortgage Note and, to the extent permitted
by
applicable state law, the Mortgagor remains liable thereon. Where an assumption
is not allowed pursuant to this Section 11.19, the Seller, with the prior
written consent of the insurer under the Primary Insurance Policy or LPMI
Policy, if any, is authorized to enter into a substitution of liability
agreement with the person to whom the Mortgaged Property has been conveyed
or is
proposed to be conveyed pursuant to which the original Mortgagor is released
from liability and such Person is substituted as Mortgagor and becomes liable
under the related Mortgage Note. Any such substitution of liability agreement
shall be in lieu of an assumption agreement.
In
connection with any such assumption or substitution of liability, the Seller
shall follow the underwriting practices and procedures of prudent mortgage
lenders in the state in which the related Mortgaged Property is located. With
respect to an assumption or substitution of liability, Mortgage Interest Rate,
the amount of the Monthly Payment, and the final maturity date of such Mortgage
Note may not be changed. The Seller shall notify the Purchaser that any such
substitution of liability or assumption agreement has been completed by
forwarding to the Purchaser the original of any such substitution of liability
or assumption agreement, which document shall be added to the related Mortgage
File and shall, for all purposes, be considered a part of such Mortgage File
to
the same extent as all other documents and instruments constituting a part
thereof. Any fee collected by the Seller for entering into an assumption or
substitution of liability agreement in excess of 1% of the outstanding principal
balance of the Mortgage Loan shall be deposited in the Custodial Account
pursuant to Section 11.04.
Notwithstanding
the foregoing paragraphs of this Section or any other provision of this
Agreement, the Seller shall not be deemed to be in default, breach or any other
violation of its obligations hereunder by reason of any assumption of a Mortgage
Loan by operation of law or any assumption which the Seller may be restricted
by
law from preventing, for any reason whatsoever. For purposes of this Section
11.19, the term “assumption” is deemed to also include a sale of the Mortgaged
Property subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.
| Section 11.20 |
Satisfaction
of Mortgages and Release of Mortgage
Files.
|
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Seller of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Seller will immediately notify the Purchaser by a
certification of a servicing officer of the Seller (a “Servicing Officer”),
which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required
to
be deposited in the Custodial Account pursuant to Section 11.04 have been or
will be so deposited, and shall request execution of any document necessary
to
satisfy the Mortgage Loan and delivery to it of the portion of the Mortgage
File
held by the Purchaser or the Purchaser’s designee. Upon receipt of such
certification and request, the Purchaser, shall promptly release the related
mortgage documents to the Seller and the Seller shall prepare and process any
satisfaction or release. No expense incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account or the Purchaser.
In
the
event the Seller satisfies or releases a Mortgage without having obtained
payment in full of the indebtedness secured by the Mortgage or should it
otherwise prejudice any right the Purchaser may have under the mortgage
instruments, the Seller, upon written demand, shall remit to the Purchaser
the
then outstanding principal balance of the related Mortgage Loan by deposit
thereof in the Custodial Account. The Seller shall maintain the fidelity bond
insuring the Seller against any loss it may sustain with respect to any Mortgage
Loan not satisfied in accordance with the procedures set forth
herein.
From
time
to time and as appropriate for the servicing or foreclosure of the Mortgage
Loan, including for this purpose collection under any Primary Insurance Policy
or LPMI Policy, the Purchaser shall, upon request of the Seller and delivery
to
the Purchaser of a servicing receipt signed by a Servicing Officer, release
the
requested portion of the Mortgage File held by the Purchaser to the Seller.
Such
servicing receipt shall obligate the Seller to return the related Mortgage
documents to the Purchaser when the need therefor by the Seller no longer
exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the Custodial
Account or the Mortgage File or such document has been delivered to an attorney,
or to a public trustee or other public official as required by law, for purposes
of initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and the Seller
has delivered to the Purchaser a certificate of a Servicing Officer certifying
as to the name and address of the Person to which such Mortgage File or such
document was delivered and the purpose or purposes of such delivery. Upon
receipt of a certificate of a Servicing Officer stating that such Mortgage
Loan
was liquidated, the servicing receipt shall be released by the Purchaser to
the
Seller.
| Section 11.21 |
Monthly
Advances by the Seller.
|
(a) Not
later
than the close of business on the Business Day preceding each Distribution
Date,
the Seller shall deposit in the Custodial Account an amount equal to all
payments not previously advanced by the Seller, whether or not deferred pursuant
to Section 11.01, of principal (due after the Cut-off Date) and interest not
allocable to the period prior to the Cut-off Date, at the Mortgage Interest
Rate
net of the Servicing Fee, which were due on a Mortgage Loan and delinquent
at
the close of business on the related Determination Date.
(b) The
obligation of the Seller to make such Monthly Advances is mandatory,
notwithstanding any other provision of this Agreement, and, with respect to
any
Mortgage Loan or REO Property, shall continue until a Final Recovery
Determination in connection therewith; provided that, notwithstanding anything
herein to the contrary, no Monthly Advance shall be required to be made
hereunder by the Seller if such Monthly Advance would, if made, constitute
a
Nonrecoverable Monthly Advance. The determination by the Seller that it has
made
a Nonrecoverable Monthly Advance or that any proposed Monthly Advance, if made,
would constitute a Nonrecoverable Monthly Advance, shall be evidenced by an
Officers’ Certificate delivered to the Purchaser.
| Section 11.22 |
Servicing
Compensation.
|
As
compensation for its services hereunder, the Seller shall, subject to Section
11.04(xi), be entitled to withdraw from the Custodial Account or to retain
from
interest payments on the Mortgage Loans the amounts provided for as the Seller’s
Servicing Fee. Additional servicing compensation in the form of assumption
fees,
as provided in Section 11.19, and late payment charges or otherwise shall be
retained by the Seller to the extent not required to be deposited in the
Custodial Account. The Seller shall be required to pay all expenses incurred
by
it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement therefor except as specifically provided
for.
| Section 11.23 |
Special
Remittance Provisions for Principal Prepayments.
|
The
Purchaser shall have the right to direct the Servicer to modify the remittance
cycle applicable to Principal Payments in full received on any Mortgage Loan
by
remitting to the Purchaser on any Distribution Date all Principal Prepayments
in
full received by the Servicer prior to the related Determination Date, plus
any
interest collected on such Principal Prepayments, to the extent not previously
remitted to the Purchaser. In connection with the foregoing, the Servicer shall
not be required to pay the amount set forth in Section 11.04 (xi) with respect
to the related Mortgage Loans and the report by the Servicer shall reflect
such
revised remittance cycle.
| Section 11.24 |
Statement
as to Compliance.
|
(a) The
Seller will deliver to the Purchaser not later than March 15th
of each
year, an Officers’ Certificate (each, an “Annual Statement of Compliance”)
stating, as to each signatory thereof, that (i) a review of the activities
of
the Seller during the preceding year and of performance under this Agreement
has
been made under such officers’ supervision and (ii) to the best of such
officers’ knowledge, based on such review, the Seller has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been
a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof. Copies of such
statement shall be provided by the Purchaser to any Person identified as a
prospective purchaser of the Mortgage Loans.
(b) For
so
long as the Mortgage Loans are being master serviced by a master servicer in
a
securitization transaction (the “Master Servicer”), by March 15th
of each
year (or if not a Business Day, the immediately preceding Business Day), or
at
any other time upon thirty (30) days written request, an officer of the Seller
shall execute and deliver an Officer’s Certificate to the Master Servicer for
the benefit of such Master Servicer and its officers, directors and affiliates,
certifying as to the following matters:
(i) Based
on
my knowledge, the information in the Annual Statement of Compliance, the Annual
Independent Public Accountant’s Servicing Report delivered pursuant to Section
11.25 of the Servicing Addendum (the “Annual Independent Public Accountant’s
Servicing Report”) and all servicing reports, officer’s certificates and other
information relating to the servicing of the Mortgage Loans submitted to the
Master Servicer taken as a whole, does not contain any untrue statement of
a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made,
not
misleading as of the date of this certification;
(ii) The
servicing information required to be provided to the Master Servicer by the
Seller under this Agreement has been provided to the Master
Servicer;
(iii) I
am
responsible for reviewing the activities performed by the Seller under the
Agreement and based upon the review required by this Agreement, and except
as
disclosed in the Annual Statement of Compliance or the Annual Independent Public
Accountant’s Servicing Report submitted to the Master Servicer, the Seller has,
as of the date of this certification fulfilled its obligations under this
Agreement; and
(iv) I
have
disclosed to the Master Servicer all significant deficiencies relating to the
Seller’s compliance with the minimum servicing standards in accordance with a
review conducted in compliance with the Uniform Single Attestation Program
for
Mortgage Bankers or similar standard as set forth in the Agreement.
(c) The
Seller shall indemnify and hold harmless the Master Servicer and its officers,
directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach
by
the Seller or any of its officers, directors, agents or affiliates of its
obligations under this Section 11.24 or the negligence, bad faith or willful
misconduct of the Seller in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the Master
Servicer, then the Seller agrees that it shall contribute to the amount paid
or
payable by the Master Servicer as a result of the losses, claims, damages or
liabilities of the Master Servicer in such proportion as is appropriate to
reflect the relative fault of the Master Servicer on the one hand and the Seller
on the other in connection with a breach of the Seller’s obligations under this
Section 11.24 or the Seller’s negligence, bad faith or willful misconduct in
connection therewith.
| Section 11.25 |
Independent
Public Accountants’ Servicing Report.
|
Not
later
than March 15th of each year, the Seller at its expense shall cause a firm
of
independent public accountants (which may also render other services to the
Seller) which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Purchaser or its designee 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
pooling and servicing agreements (including the Mortgage Loans and this
Agreement) substantially similar one to another (such statement to have attached
thereto a schedule setting forth the pooling and 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,
such firm confirms that such servicing has been conducted in compliance with
such pooling and 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 requires it to report. Copies of such
statement shall be provided by the Purchaser to any Person identified as a
prospective purchaser of the Mortgage Loans.
| Section 11.26 |
Notification
of Adjustments.
|
On
each
Adjustment Date, the Seller shall make interest rate adjustments for each
Adjustable Rate Mortgage Loan in compliance with the requirements of the related
Mortgage and Mortgage Note. The Seller shall execute and deliver the notices
required by each Mortgage and Mortgage Note regarding interest rate adjustments.
The Seller also shall provide timely notification to the Purchaser of all
applicable data and information regarding such interest rate adjustments and
the
Seller’s methods of implementing such interest rate adjustments. Upon the
discovery by the Seller or the Purchaser that the Seller has failed to adjust
a
Mortgage Interest Rate or a Monthly Payment pursuant to the terms of the related
Mortgage Note and Mortgage, the Seller shall immediately deposit in the
Custodial Account from its own funds the amount of any interest loss caused
thereby without reimbursement therefor.
| Section 11.27 |
Access
to Certain Documentation.
|
The
Seller shall provide to the Office of Thrift Supervision, the FDIC and any
other
federal or state banking or insurance regulatory authority that may exercise
authority over the Purchaser access to the documentation regarding the Mortgage
Loans serviced by the Seller required by applicable laws and regulations. Such
access shall be afforded without charge, but only upon reasonable request and
during normal business hours at the offices of the Seller. In addition, access
to the documentation will be provided to the Purchaser and any Person identified
to the Seller by the Purchaser without charge, upon reasonable request during
normal business hours at the offices of the Seller.
| Section 11.28 |
Reports
and Returns to be Filed by the
Seller.
|
The
Seller shall file information reports with respect to the receipt of mortgage
interest received in a trade or business, reports of foreclosures and
abandonments of any Mortgaged Property and information returns relating to
cancellation of indebtedness income with respect to any Mortgaged Property
as
required by Sections 6050H, 6050J and 6050P of the Code. Such reports shall
be
in form and substance sufficient to meet the reporting requirements imposed
by
such Sections 6050H, 6050J and 6050P of the Code.
| Section 11.29 |
Compliance
with REMIC Provisions.
|
If
a
REMIC election has been made with respect to the arrangement under which the
Mortgage Loans and REO Property are held, the Seller shall not take any action,
cause the REMIC to take any action or fail to take (or fail to cause to be
taken) any action that, under the REMIC Provisions, if taken or not taken,
as
the case may be, could (i) endanger the status of the REMIC as a REMIC or (ii)
result in the imposition of a tax upon the REMIC (including but not limited
to
the tax on “prohibited transactions” as defined in Section 860F(a)(2) of the
Code and the tax on “contributions” to a REMIC set forth in Section 860G(d) of
the Code) unless the Seller has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
| Section 11.30 |
Application
of Buydown Funds.
|
With
respect to each Buydown Mortgage Loan, the Seller shall segregate and hold
all
Buydown Funds in the Custodial Account separate and apart from the Seller’s
funds and general assets.
With
respect to each Buydown Mortgage Loan, the Seller shall have deposited into
the
Custodial Account, no later than the Closing Date, Buydown Funds in an amount
equal to the aggregate undiscounted amount of payments that, when added to
the
amount the Mortgagor on such Mortgage Loan is obligated to pay on all Due Dates
in accordance with the terms of the Buydown Agreement, is equal to the full
scheduled Monthly Payments which are required to be paid by the Mortgagor under
the terms of the related Mortgage Note (without regard to the related Buydown
Agreement as if the Mortgage Loan were not subject to the terms of the Buydown
Agreement). With respect to each Buydown Mortgage Loan, the Seller will
distribute to the Purchaser on each Distribution Date an amount of Buydown
Funds
equal to the amount that, when added to the amount required to be paid on such
date by the related Mortgagor, pursuant to and in accordance with the related
Buydown Agreement, equals the full Monthly Payment that would otherwise be
required to be paid on such Mortgage Loan by the related Mortgagor under the
terms of the related Mortgage Note (as if the Mortgage Loan were not a Buydown
Mortgage Loan and without regard to the related Buydown Agreement).
If
the
Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan during
the
Buydown period and the Mortgaged Property securing such Buydown Mortgage Loan
is
sold in the liquidation thereof (either by the Seller or the insurer under
any
related Primary Insurance Policy) the Seller shall, on the Distribution Date
following the date upon which Liquidation Proceeds or REO Disposition Proceeds
are received with respect to any such Buydown Mortgage Loan, distribute to
the
Purchaser all remaining Buydown Funds for such Mortgage Loan then remaining
in
the Custodial Account. Pursuant to the terms of each Buydown Agreement, any
amounts distributed to the Purchaser in accordance with the preceding sentence
will be applied to reduce the outstanding principal balance of the related
Buydown Mortgage Loan. If a Mortgagor on a Buydown Mortgage Loan prepays such
Mortgage Loan in its entirety during the related Buydown Period, the Seller
shall be required to withdraw from the Custodial Account any Buydown Funds
remaining in the Custodial Account with respect to such Buydown Mortgage Loan
in
accordance with the related Buydown Agreement. If a Principal Prepayment by
a
Mortgagor on a Buydown Mortgage Loan during the related Buydown Period, together
with any Buydown Funds then remaining in the Custodial Account related to such
Buydown Mortgage Loan, would result in a Principal Prepayment in full, the
Seller shall distribute to the Purchaser on the Distribution Date occurring
in
the month immediately succeeding the month in which such Principal Prepayment
is
received, all Buydown Funds related to such Mortgage Loan so remaining in the
Custodial Account.
| Section 11.31 |
Superior
Liens.
|
With
respect to each Second Lien Mortgage Loan, the Seller shall, for the protection
of the Purchaser’s interest, file (or cause to be filed) of record a request for
notice of any action by a superior lienholder where permitted by local law
and
whenever applicable state law does not require that a junior lienholder be
named
as a party defendant in foreclosure proceedings in order to foreclose such
junior lienholder’s equity of redemption. The Seller shall also notify any
superior lienholder in writing of the existence of the Mortgage Loan and request
notification of any action (as described below) to be taken against the
Mortgagor or the Mortgaged Property by the superior lienholder.
If
the
Seller is notified that any superior lienholder has accelerated or intends
to
accelerate the obligations secured by the superior lien, or has declared or
intends to declare a default under the superior mortgage or the promissory
note
secured thereby, or has filed or intends to file an election to have the
Mortgaged Property sold or foreclosed, the Seller shall take whatever actions
are necessary to protect the interests of the Purchaser, and/or to preserve
the
security of the related Mortgage Loan, subject to any requirements applicable
to
real estate mortgage investment conduits pursuant to the Code. The Seller shall
make a Servicing Advance of the funds necessary to cure the default or reinstate
the superior lien if the Seller determines that such Servicing Advance is in
the
best interests of the Purchaser. The Seller shall not make such a Servicing
Advance except to the extent that it determines in its reasonable good faith
judgment that such advance will be recoverable from Liquidation Proceeds on
the
related Mortgage Loan. The Seller shall thereafter take such action as is
necessary to recover the amount so advanced.
EXHIBIT
9
SERVICING
ADDENDUM FOR SERVICING RELEASED MORTGAGE LOANS
| Section 11.01 |
Seller
to Act as Servicer.
|
The
Seller, as independent contract servicer, shall service and administer the
Servicing Released Mortgage Loans in accordance with this Agreement, all
applicable laws, rules and regulations, the terms of the Mortgage Loan Documents
and the FNMA and FHLMC servicing guidelines and shall have full power and
authority, acting alone, to do or cause to be done any and all things in
connection with such servicing and administration which the Seller may deem
necessary or desirable and consistent with the terms of this
Agreement.
Consistent
with the terms of this Agreement, the Seller may waive, modify or vary any
term
of any Mortgage Loan or consent to the postponement of strict compliance with
any such term or in any manner grant indulgence to any Mortgagor if in the
Seller’s reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Purchaser; provided,
however, that the Seller shall not permit any modification with respect to
any
Mortgage Loan that would change the Mortgage Interest Rate, defer or forgive
the
payment thereof or of any principal or interest payments, reduce the outstanding
principal amount (except for actual payments of principal), make additional
advances of additional principal or extend the final maturity date on such
Mortgage Loan. Without limiting the generality of the foregoing, the Seller
shall continue, and is hereby authorized and empowered, to execute and deliver
on behalf of itself, and the Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Property. If reasonably required by the Seller, the Purchaser shall
furnish the Seller with any powers of attorney and other documents necessary
or
appropriate to enable the Seller to carry out its servicing and administrative
duties under this Agreement.
The
Servicer shall notify MERS of the ownership interest of Purchaser in each MOM
Loan through the MORNET system or MIDANET system, as applicable, or any other
comparable system acceptable to MERS. At any time during the term of this
Agreement, Purchaser may direct Servicer to cause any MOM Loan to be deactivated
from the MERS System.
In
servicing and administering the Mortgage Loans, the Seller shall employ
procedures including collection procedures and exercise the same care that
it
customarily employs and exercises in servicing and administering Mortgage Loans
for its own account giving due consideration to accepted mortgage servicing
practices of prudent lending institutions and the Purchaser’s reliance on the
Seller.
| Section 11.02 |
Collection
of Mortgage Loan Payments.
|
Continuously
from the date hereof until the principal and interest on all Servicing Released
Mortgage Loans are paid in full, the Seller shall proceed diligently to collect
all payments due under each Servicing Released Mortgage Loan when the same
shall
become due and payable and shall, to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Primary Insurance Policy, follow such collection procedures as it follows with
respect to Mortgage Loans comparable to the Mortgage Loans and held for its
own
account. Further, the Seller shall take special care in ascertaining and
estimating annual ground rents, taxes, assessments, water rates, fire and hazard
insurance premiums, mortgage insurance premiums, and all other charges that,
as
provided in the Mortgage, will become due and payable to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges
as
and when they become due and payable.
| Section 11.03 |
Realization
Upon Defaulted Mortgage Loans.
|
(a) The
Seller shall use its best efforts, consistent with the procedures that the
Seller would use in servicing loans for its own account, to foreclose upon
or
otherwise comparably convert the ownership of such Mortgaged Properties as
come
into and continue in default and as to which no satisfactory arrangements can
be
made for collection of delinquent payments pursuant to Section 11.01. The Seller
shall use its best efforts to realize upon defaulted Mortgage Loans in such
a
manner as will maximize the receipt of principal and interest by the Purchaser,
taking into account, among other things, the timing of foreclosure proceedings.
The foregoing is subject to the provisions that, in any case in which Mortgaged
Property shall have suffered damage, the Seller shall not be required to expend
its own funds toward the restoration of such property in excess of $2,000 unless
it shall determine in its discretion (i) that such restoration will increase
the
proceeds of liquidation of the related Mortgage Loan to Purchaser after
reimbursement to itself for such expenses, and (ii) that such expenses will
be
recoverable by the Seller through Insurance Proceeds or Liquidation Proceeds
from the related Mortgaged Property, as contemplated in Section 11.05. In the
event that any payment due under any Mortgage Loan is not paid when the same
becomes due and payable, or in the event the Mortgagor fails to perform any
other covenant or obligation under the Mortgage Loan and such failure continues
beyond any applicable grace period, the Seller shall take such action as it
shall deem to be in the best interest of the Purchaser. In the event that any
payment due under any Servicing Released Mortgage Loan remains delinquent for
a
period of 90 days or more, the Seller shall commence foreclosure proceedings,
provided that prior to commencing foreclosure proceedings, the Seller shall
notify the Purchaser in writing of the Seller’s intention to do so, and the
Seller shall not commence foreclosure proceedings if the Purchaser objects
to
such action within ten (10) Business Days of receiving such notice. In such
connection, the Seller shall be responsible for all costs and expenses incurred
by it in any such proceedings; provided, however, that it shall be entitled
to
reimbursement thereof from the related Mortgaged Property, as contemplated
in
Section 11.05.
(b) Notwithstanding
the foregoing provisions of this Section 11.03, with respect to any Mortgage
Loan as to which the Seller has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property the Seller shall not either (i) obtain title to such
Mortgaged Property as a result of or in lieu of foreclosure or otherwise, or
(ii) otherwise acquire possession of, or take any other action, with respect
to,
such Mortgaged Property if, as a result of any such action, the Purchaser would
be considered to hold title to, to be a mortgagee-in-possession of, or to be
an
owner or operator of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as
amended from time to time, or any comparable law, unless the Seller has also
previously determined, based on its reasonable judgment and a prudent report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:
(1) such
Mortgaged Property is in compliance with applicable environmental laws or,
if
not, that it would be in the best economic interest of the Purchaser to take
such actions as are necessary to bring the Mortgaged Property into compliance
therewith; and
(2) there
are
no circumstances present at such Mortgaged Property relating to the use,
management or disposal of any hazardous substances, hazardous materials,
hazardous wastes, or petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under any
federal, state or local law or regulation, or that if any such materials are
present for which such action could be required, that it would be in the best
economic interest of the Purchaser to take such actions with respect to the
affected Mortgaged Property.
The
cost
of the environmental audit report contemplated by this Section 11.03 shall
be
advanced by the Seller, subject to the Seller’s right to be reimbursed therefor
from the Custodial Account as provided in Section 11.05(v).
If
the
Seller determines, as described above, that it is in the best economic interest
of the Purchaser to take such actions as are necessary to bring any such
Mortgaged Property into compliance with applicable environmental laws, or to
take such action with respect to the containment, clean-up or remediation of
hazardous substances, hazardous materials, hazardous wastes, or petroleum-based
materials affecting any such Mortgaged Property, then the Seller shall take
such
action as it deems to be in the best economic interest of the Purchaser. The
cost of any such compliance, containment, cleanup or remediation shall be
advanced by the Seller, subject to the Seller’s right to be reimbursed therefor
from the Custodial Account as provided in Section 11.05(v).
(c) Proceeds
received in connection with any Final Recovery Determination, as well as any
recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds in respect of any Mortgage Loan, will be applied in the
following order of priority: first,
to
reimburse the Seller for any related unreimbursed Servicing Advances pursuant
to
Section 11.05(ii); second,
to pay
accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or if not in connection with a Final Recovery
Determination, to the Due Date prior to the Distribution Date on which such
amounts are to be distributed; and third,
as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than the full amount of accrued and unpaid
interest due on such Mortgage Loan, the amount of such recovery will be
allocated by the Seller as follows: first,
to
unpaid Servicing Fees; and second,
to the
balance of the interest then due and owing. The portion of the recovery so
allocated to unpaid Servicing Fees shall be reimbursed to the Seller pursuant
to
Section 11.05(ii).
| Section 11.04 |
Establishment
of Custodial Accounts; Deposits in Custodial
Accounts.
|
The
Seller shall segregate and hold all funds collected and received pursuant to
each Mortgage Loan separate and apart from any of its own funds and general
assets and shall establish and maintain one or more Custodial Accounts, in
the
form of time deposit or demand accounts. The creation of any Custodial Account
shall be evidenced by a Custodial Account Letter Agreement in the form of
Exhibit
6.
The
Seller shall deposit in the Custodial Account on a daily basis, and retain
therein the following payments and collections received by it subsequent to
the
Cut-off Date, or received by it prior to the Cut-off Date but allocable to
a
period subsequent thereto, other than in respect of principal and interest
on
the Servicing Released Mortgage Loans due on or before the Cut-off
Date:
(i) all
payments on account of principal on the Mortgage Loans;
(ii) all
payments on account of interest on the Mortgage Loans, including all Prepayment
Charges;
(iii) all
Liquidation Proceeds;
(iv) all
Insurance Proceeds including amounts required to be deposited pursuant to
Sections 11.10 and 11.11, other than proceeds to be held in the Escrow Account
and applied to the restoration or repair of the Mortgaged Property or released
to the Mortgagor in accordance with the loan documents or applicable
law;
(v) all
Condemnation Proceeds affecting any Mortgaged Property which are not released
to
the Mortgagor in accordance with the Seller’s normal servicing procedures, the
loan documents or applicable law;
(vi) all
proceeds of any Servicing Released Mortgage Loan repurchased in accordance
with
Sections 7.03, 7.04 and 7.05 and all amounts required to be deposited by the
Seller in connection with shortfalls in principal amount of Qualified Substitute
Mortgage Loans pursuant to Section 7.03;
(vii) any
amounts required to be deposited by the Seller pursuant to Section 11.11 in
connection with the deductible clause in any blanket hazard insurance policy.
Such deposit shall be made from the Seller’s own funds, without reimbursement
therefor;
(viii) any
amounts required to be deposited by the Seller in connection with any REO
Property pursuant to Section 11.13; and
(ix) any
amounts required to be deposited in the Custodial Account pursuant to Sections
11.19 or 11.20; and
The
foregoing requirements for deposit in the Custodial Account shall be exclusive,
it being understood and agreed that, without limiting the generality of the
foregoing, payments in the nature of late payment charges and assumption fees,
to the extent permitted by Section 11.01, need not be deposited by the Seller
in
the Custodial Account. Such Custodial Account shall be an Eligible Account.
Any
interest or earnings on funds deposited in the Custodial Account by the
depository institution shall accrue to the benefit of the Seller and the Seller
shall be entitled to retain and withdraw such interest from the Custodial
Account pursuant to Section 11.05(iii). The Seller shall give notice to the
Purchaser of the location of the Custodial Account when established and prior
to
any change thereof.
If
the
balance on deposit in the Custodial Account exceeds $75,000 as of the
commencement of business on any Business Day and the Custodial Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of Eligible Account, the Seller shall, on or before twelve o’clock noon Eastern
time on such Business Day, withdraw from the Custodial Account any and all
amounts payable to the Purchaser and remit such amounts to the Purchaser by
wire
transfer of immediately available funds.
| Section 11.05 |
Permitted
Withdrawals From the Custodial
Account.
|
The
Seller may, from time to time, withdraw from the Custodial Account for the
following purposes:
(i) to
make
distributions to the Purchaser in the amounts and in the manner provided for
in
Section 11.14;
(ii) to
reimburse itself for unreimbursed Servicing Advances, the Seller’s right to
reimburse itself pursuant to this subclause (ii) with respect to any Mortgage
Loan being limited to related Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds and such other amounts as may be collected by the Seller
from
the Mortgagor or otherwise relating to the Mortgage Loan, it being understood
that, in the case of such reimbursement, the Seller’s right thereto shall be
prior to the rights of the Purchaser, except that, where the Seller is required
to repurchase a Servicing Released Mortgage Loan, pursuant to Section 7.03
7.04
or 7.05, the Seller’s right to such reimbursement shall be subsequent to the
payment to the Purchaser of the Repurchase Price pursuant to Section 7.03,
7.04
or 7.05 and all other amounts required to be paid to the Purchaser with respect
to such Servicing Released Mortgage Loans;
(iii) to
pay to
itself pursuant to Section 11.22 as servicing compensation (a) any interest
earned on funds in the Custodial Account (all such interest to be withdrawn
monthly not later than each Distribution Date), and (b) the Servicing Fee from
that portion of any payment or recovery as to interest on a particular Mortgage
Loan;
(iv) to
pay to
itself with respect to each Servicing Released Mortgage Loan that has been
repurchased pursuant to Section 7.03, 7.04 or 7.05 all amounts received thereon
and not distributed as of the date on which the related Repurchase Price is
determined;
(v) to
pay,
or to reimburse itself for advances in respect of, expenses incurred in
connection with any Mortgage Loan pursuant to Section 11.03(b), but only to
the
extent of amounts received in respect of the Mortgage Loans to which such
expense is attributable;
(vi) to
clear
and terminate the Custodial Account on the termination of this
Agreement.
The
Seller shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Custodial Account pursuant to such subclauses (ii) - (v) above.
| Section 11.06 |
Establishment
of Escrow Accounts; Deposits in Escrow
Accounts.
|
The
Seller shall segregate and hold all funds collected and received pursuant to
each Mortgage Loan which constitute Escrow Payments separate and apart from
any
of its own funds and general assets and shall establish and maintain one or
more
Escrow Accounts, in the form of time deposit or demand accounts. The creation
of
any Escrow Account shall be evidenced by Escrow Account Letter Agreement in
the
form of Exhibit
7.
The
Seller shall deposit in the Escrow Account or Accounts on a daily basis, and
retain therein, (i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement, and (ii) all Insurance Proceeds which are
to
be applied to the restoration or repair of any Mortgaged Property. The Seller
shall make withdrawals therefrom only to effect such payments as are required
under this Agreement, and for such other purposes as shall be as set forth
or in
accordance with Section 11.08. The Seller shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid
to
the Mortgagor and, to the extent required by law, the Seller shall pay interest
on escrowed funds to the Mortgagor notwithstanding that the Escrow Account
is
non-interest bearing or that interest paid thereon is insufficient for such
purposes.
| Section 11.07 |
Permitted
Withdrawals From Escrow Account.
|
Withdrawals
from the Escrow Account may be made by the Seller (i) to effect timely payments
of ground rents, taxes, assessments, water rates, hazard insurance premiums,
Primary Insurance Policy premiums, if applicable, and comparable items, (ii)
to
reimburse the Seller for any Servicing Advance made by the Seller with respect
to a related Mortgage Loan but only from amounts received on the related
Mortgage Loan which represent late payments or collections of Escrow Payments
thereunder, (iii) to refund to the Mortgagor any funds as may be determined
to
be overages, (iv) for transfer to the Custodial Account in accordance with
the
terms of this Agreement, (v) for application to restoration or repair of the
Mortgaged Property, (vi) to pay to the Seller, or to the Mortgagor to the extent
required by law, any interest paid on the funds deposited in the Escrow Account,
or (vii) to clear and terminate the Escrow Account on the termination of this
Agreement.
| Section 11.08 |
Payment
of Taxes, Insurance and Other Charges; Maintenance of Primary Insurance
Policies and LPMI Policies; Collections
Thereunder.
|
With
respect to each Mortgage Loan, the Seller shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates and
other
charges which are or may become a lien upon the Mortgaged Property and the
status of Primary Insurance Policy and LPMI Policy premiums and fire and hazard
insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges, including insurance renewal premiums and shall effect
payment thereof prior to the applicable penalty or termination date and at
a
time appropriate for securing maximum discounts allowable, employing for such
purpose deposits of the Mortgagor in the Escrow Account which shall have been
estimated and accumulated by the Seller in amounts sufficient for such purposes,
as allowed under the terms of the Mortgage and applicable law. To the extent
that the Mortgage does not provide for Escrow Payments, the Seller shall
determine that any such payments are made by the Mortgagor at the time they
first become due. The Seller assumes full responsibility for the timely payment
of all such bills and shall effect timely payments of all such bills
irrespective of the Mortgagor’s faithful performance in the payment of same or
the making of the Escrow Payments and shall make advances from its own funds
to
effect such payments.
The
Seller shall maintain in full force and effect, a Primary Insurance Policy,
issued by a Qualified Insurer, with respect to each Mortgage Loan for which
such
coverage is required. Such coverage shall be maintained until the Loan-to-Value
Ratio of the related Mortgage Loan is reduced to that amount for which FNMA
no
longer requires such insurance to be maintained. The Seller will not cancel
or
refuse to renew any Primary Insurance Policy in effect on the Closing Date
that
is required to be kept in force under this Agreement unless a replacement
Primary Insurance Policy or LPMI Policy for such cancelled or non- renewed
policy is obtained from and maintained with a Qualified Insurer. The Seller
shall not take any action which would result in non-coverage under any
applicable Primary Insurance Policy or LPMI Policy of any loss which, but for
the actions of the Seller, would have been covered thereunder. In connection
with any assumption or substitution agreement entered into or to be entered
into
pursuant to Section 11.19, the Seller shall promptly notify the insurer under
the related Primary Insurance Policy or LPMI Policy, if any, of such assumption
or substitution of liability in accordance with the terms of such policy and
shall take all actions which may be required by such insurer as a condition
to
the continuation of coverage under the Primary Insurance Policy or LPMI Policy.
If such Primary Insurance Policy is terminated as a result of such assumption
or
substitution of liability, the Seller shall obtain a replacement Primary
Insurance Policy as provided above.
In
connection with its activities as servicer, the Seller agrees to prepare and
present, on behalf of itself, and the Purchaser, claims to the insurer under
any
Primary Insurance Policy in a timely fashion in accordance with the terms of
such policies and, in this regard, to take such action as shall be necessary
to
permit recovery under any Primary Insurance Policy respecting a defaulted
Mortgage Loan. Pursuant to Section 11.04, any amounts collected by the Seller
under any Primary Insurance Policy shall be deposited in the Custodial Account,
subject to withdrawal pursuant to Section 11.05.
| Section 11.09 |
Transfer
of Accounts.
|
The
Seller may transfer the Custodial Account or the Escrow Account to a different
depository institution from time to time. Such transfer shall be made only
upon
obtaining the consent of the Purchaser, which consent shall not be unreasonably
withheld. In any case, the Custodial Account and Escrow Account shall be
Eligible Accounts.
| Section 11.10 |
Maintenance
of Hazard Insurance.
|
In
connection with its activities as servicer, the Seller agrees to prepare and
present, on behalf of itself and the Purchaser, claims to the insurer under
any
hazard insurance policy in a timely fashion in accordance with the terms of
such
policies and, in this regard, to take such action as shall be necessary to
permit recovery under any hazard insurance policy. The Seller shall cause to
be
maintained for each Mortgage Loan fire and hazard insurance with extended
coverage as is customary in the area where the Mortgaged Property is located
in
an amount which is at least equal to the lesser of (i) the amount necessary
to
fully compensate for any damage or loss to the improvements which are a part
of
such property on a replacement cost basis or (ii) the outstanding principal
balance of the Mortgage Loan, in each case in an amount not less than such
amount as is necessary to prevent the Mortgagor and/or the Mortgagee from
becoming a co-insurer. If the Mortgaged Property is in an area identified on
a
Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Flood
Emergency Management Agency as having special flood hazards and such flood
insurance has been made available, the Seller will cause to be maintained a
flood insurance policy meeting the requirements of the current guidelines of
the
Federal Insurance Administration with a generally acceptable insurance carrier,
in an amount representing coverage not less than the lesser of (i) the
outstanding principal balance of the Mortgage Loan or (ii) the maximum amount
of
insurance which is available under the National Flood Insurance Act of 1968
or
the Flood Disaster Protection Act of 1973, as amended. The Seller also shall
maintain on any REO Property, fire and hazard insurance with extended coverage
in an amount which is at least equal to the lesser of (i) the maximum insurable
value of the improvements which are a part of such property and (ii) the
outstanding principal balance of the related Mortgage Loan at the time it became
an REO Property plus accrued interest at the Mortgage Interest Rate and related
Servicing Advances, liability insurance and, to the extent required and
available under the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended, flood insurance in an amount as provided
above. Pursuant to Section 11.04, any amounts collected by the Seller under
any
such policies other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the Mortgaged Property or REO Property,
or released to the Mortgagor in accordance with the Seller’s normal servicing
procedures, shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 11.05. Any cost incurred by the Seller in maintaining any
such insurance shall not, for the purpose of calculating distributions to the
Purchaser, be added to the unpaid principal balance of the related Mortgage
Loan, notwithstanding that the terms of such Mortgage Loan so permit. It is
understood and agreed that no earthquake or other additional insurance need
be
required by the Seller or the Mortgagor or maintained on property acquired
in
respect of the Mortgage Loan, other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All such policies shall be endorsed with standard
mortgagee clauses with loss payable to the Seller, or upon request to the
Purchaser, and shall provide for at least thirty days prior written notice
of
any cancellation, reduction in the amount of, or material change in, coverage
to
the Seller. The Seller shall not interfere with the Mortgagor’s freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Seller shall not accept any such insurance policies from insurance
companies unless such companies currently reflect a General Policy Rating of
A:VI or better in Best’s Key Rating Guide and are licensed to do business in the
state wherein the property subject to the policy is located.
| Section 11.11 |
Maintenance
of Mortgage Impairment Insurance
Policy.
|
In
the
event that the Seller shall obtain and maintain a mortgage impairment or blanket
policy issued by an issuer that has a Best rating of A:VI insuring against
hazard losses on all Mortgaged Properties securing the Mortgage Loans, then,
to
the extent such policy provides coverage in an amount equal to the amount
required pursuant to Section 11.10 and otherwise complies with all other
requirements of Section 11.10, the Seller shall conclusively be deemed to have
satisfied its obligations as set forth in Section 11.10, it being understood
and
agreed that such policy may contain a deductible clause, in which case the
Seller shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with Section
11.10, and there shall have been one or more losses which would have been
covered by such policy, deposit in the Custodial Account the amount not
otherwise payable under the blanket policy because of such deductible clause.
In
connection with its activities as servicer of the Mortgage Loans, the Seller
agrees to prepare and present, on behalf of the Purchaser, claims under any
such
blanket policy in a timely fashion in accordance with the terms of such policy.
Upon request of the Purchaser, the Seller shall cause to be delivered to the
Purchaser a certified true copy of such policy and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without thirty days prior written notice to the Purchaser.
| Section 11.12 |
Fidelity
Bond, Errors and Omissions Insurance.
|
The
Seller shall maintain, at its own expense, a blanket fidelity bond and an errors
and omissions insurance policy, with broad coverage with responsible companies
that would meet the requirements of FNMA and FHLMC on all officers, employees
or
other persons acting in any capacity with regard to the Mortgage Loans to handle
funds, money, documents and papers relating to the Mortgage Loans. The fidelity
bond and errors and omissions insurance shall be in the form of the Mortgage
Banker’s Blanket Bond and shall protect and insure the Seller against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons. Such fidelity bond shall also protect and insure
the Seller against losses in connection with the failure to maintain any
insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of
the
indebtedness secured thereby. No provision of this Section 11.12 requiring
the
fidelity bond and errors and omissions insurance shall diminish or relieve
the
Seller from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by FNMA in the FNMA Servicing Guide
or by FHLMC in the FHLMC Sellers’ and Servicers’ Guide. The Seller shall deliver
to the Purchaser a certified true copy of the fidelity bond and insurance policy
and a statement from the surety and the insurer that such fidelity bond or
insurance policy shall in no event be terminated or materially modified without
thirty days’ prior written notice to the Purchaser.
| Section 11.13 |
Title,
Management and Disposition of REO
Property.
|
In
the
event that title to the Mortgaged Property is acquired in foreclosure or by
deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in the
name of the person designated by the Purchaser, or in the event such person
is
not authorized or permitted to hold title to real property in the state where
the REO Property is located, or would be adversely affected under the “doing
business” or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an opinion of counsel obtained by the Seller from an attorney
duly licensed to practice law in the state where the REO Property is located.
Any Person or Persons holding such title other than the Purchaser shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Purchaser.
The
Seller shall either itself or through an agent selected by the Seller, manage,
conserve, protect and operate each REO Property (and may temporarily rent the
same) in the same manner that it manages, conserves, protects and operates
other
foreclosed property for its own account, and in the same manner that similar
property in the same locality as the REO Property is managed. If a REMIC
election is or is to be made with respect to the arrangement under which the
Mortgage Loans and any REO Property are held, the Seller shall manage, conserve,
protect and operate each REO Property in a manner which does not cause such
REO
Property to fail to qualify as “foreclosure property” within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by such REMIC of any
“income from non-permitted assets” within the meaning of Section 860F(a)(2)(B)
of the Code or any “net income from foreclosure property” within the meaning of
Section 860G(c)(2) of the Code. The Seller shall cause each REO Property to
be
inspected promptly upon the acquisition of title thereto and shall cause each
REO Property to be inspected at least annually thereafter. The Seller shall
make
or cause to be made a written report of each such inspection. Such reports
shall
be retained in the Mortgage File and copies thereof shall be forwarded by the
Seller to the Purchaser. The Seller shall use its best efforts to dispose of
the
REO Property as soon as possible and shall sell such REO Property in any event
within one year after title has been taken to such REO Property, unless the
Seller determines, and gives appropriate notice to the Purchaser, that a longer
period is necessary for the orderly liquidation of such REO Property. If a
period longer than one year is necessary to sell any REO property, (i) the
Seller shall report monthly to the Purchaser as to the progress being made
in
selling such REO Property and (ii) if, with the written consent of the
Purchaser, a purchase money mortgage is taken in connection with such sale,
such
purchase money mortgage shall name the Seller as mortgagee, and a separate
servicing agreement between the Seller and the Purchaser shall be entered into
with respect to such purchase money mortgage. Notwithstanding the foregoing,
if
a REMIC election is made with respect to the arrangement under which the
Mortgage Loans and the REO Property are held, such REO Property shall be
disposed of within three years or such other period as may be permitted under
Section 860G(a)(8) of the Code.
With
respect to each REO Property, the Seller shall hold all funds collected and
received in connection with the operation of the REO Property in the Custodial
Account. The Seller shall account for each REO Property on a property by
property basis.
The
Seller shall deposit or cause to be deposited, on a daily basis into the
Custodial Account all revenues received with respect to the related REO Property
and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property, including the cost of
maintaining any hazard insurance pursuant to Section 11.10 hereof and the fees
of any managing agent acting on behalf of the Seller.
The
Seller shall furnish to the Purchaser on each Distribution Date, an operating
statement for each REO Property covering the operation of each REO Property
for
the previous month. Such operating statement shall be accompanied by such other
information as the Purchaser shall reasonably request.
Each
REO
Disposition shall be carried out by the Seller at such price and upon such
terms
and conditions as the Seller deems to be in the best interest of the Purchaser
only with the prior written consent of the Purchaser. If as of the date title
to
any REO Property was acquired by the Seller there were outstanding unreimbursed
Servicing Advances with respect to the REO Property, the Seller, upon an REO
Disposition of such REO Property, shall be entitled to reimbursement for any
related unreimbursed Servicing Advances from proceeds received in connection
with such REO Disposition. The proceeds from the REO Disposition, net of any
payment to the Seller as provided above, shall be deposited in the Custodial
Account for distribution on the succeeding Distribution Date in accordance
with
Section 5.01.
| Section 11.14 |
Distributions.
|
On
each
Distribution Date, the Seller shall distribute to the Purchaser all amounts
credited to the Custodial Account as of the close of business on the preceding
Determination Date, net of charges against or withdrawals from the Custodial
Account pursuant to Section 11.05; minus (ii) any amounts attributable to
Principal Prepayments received after the last day of the calendar month
immediately preceding the related Distribution Date and (iii) any amounts
attributable to Monthly Payments collected but due on a Due Date or Dates
subsequent to the preceding Determination Date.
All
distributions made to the Purchaser on each Distribution Date will be made
to
the Purchaser of record on the preceding Record Date, and shall be based on
the
Mortgage Loans owned and held by the Purchaser, and shall be made by wire
transfer of immediately available funds to the account of the Purchaser at
a
bank or other entity having appropriate facilities therefor, if the Purchaser
shall have so notified the Seller or by check mailed to the address of the
Purchaser.
With
respect to any remittance received by the Purchaser on or after the second
Business Day following the Business Day on which such payment was due, the
Seller shall pay to the Purchaser interest on any such late payment at an annual
rate equal to the rate of interest as is publicly announced from time to time
at
its principal office by JPMorgan Chase Bank, New York, New York, as its prime
lending rate, adjusted as of the date of each change, plus three percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be paid by the Seller to the Purchaser on the date
such
late payment is made and shall cover the period commencing with the day
following such second Business Day and ending with the Business Day on which
such payment is made, both inclusive. Such interest shall be remitted along
with
such late payment. The payment by the Seller of any such interest shall not
be
deemed an extension of time for payment or a waiver of any Event of Default
by
the Seller.
| Section 11.15 |
Remittance
Reports.
|
No
later
than the fifth Business Day of each month, the Seller shall furnish to the
Purchaser or its designee a computer tape containing, and a hard copy of, the
monthly data. On the Business Day following each Determination Date, the Seller
shall deliver to the Purchaser or its designee by telecopy (or by such other
means as the Seller and the Purchaser may agree from time to time) a computer
tape containing, and a hard copy of, the determination data with respect to
the
related Distribution Date, together with such other information with respect
to
the Mortgage Loans as the Purchaser may reasonably require to allocate
distributions made pursuant to this Agreement and provide appropriate statements
with respect to such distributions. On the same date, the Seller shall forward
to the Purchaser by overnight mail a computer readable magnetic tape containing
the information set forth in the Remittance Report with respect to the related
Distribution Date.
| Section 11.16 |
Statements
to the Purchaser.
|
Not
later
than fifteen days after each Distribution Date, the Seller shall forward to
the
Purchaser or its designee a statement prepared by the Seller setting forth
the
status of the Custodial Account as of the close of business on such Distribution
Date and showing, for the period covered by such statement, the aggregate amount
of deposits into and withdrawals from the Custodial Account of each category
of
deposit specified in Section 11.04 and each category of withdrawal specified
in
Section 11.05.
In
addition, not more than sixty days after the end of each calendar year, the
Seller shall furnish to each Person who was the Purchaser at any time during
such calendar year, (i) as to the aggregate of remittances for the applicable
portion of such year, an annual statement in accordance with the requirements
of
applicable federal income tax law, and (ii) a listing of the principal balances
of the Mortgage Loans outstanding at the end of such calendar year.
The
Seller shall prepare and file any and all tax returns, information statements
or
other filings required to be delivered to any governmental taxing authority
or
to any Purchaser pursuant to any applicable law with respect to the Mortgage
Loans and the transactions contemplated hereby. In addition, the Seller shall
provide the Purchaser with such information concerning the Mortgage Loans as
is
necessary for the Purchaser to prepare its federal income tax return as any
Purchaser may reasonably request from time to time.
| Section 11.17 |
Real
Estate Owned Reports.
|
Together
with the statement furnished pursuant to Section 11.13, with respect to any
REO
Property, the Seller shall furnish to the Purchaser a statement covering the
Seller’s efforts in connection with the sale of such REO Property and any rental
of such REO Property incidental to the sale thereof for the previous month,
together with the operating statement. Such statement shall be accompanied
by
such other information as the Purchaser shall reasonably request.
| Section 11.18 |
Liquidation
Reports.
|
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by the
Purchaser pursuant to a deed-in-lieu of foreclosure, the Seller shall submit
to
the Purchaser a liquidation report with respect to such Mortgaged
Property.
| Section 11.19 |
Assumption
Agreements.
|
The
Seller shall, to the extent it has knowledge of any conveyance or prospective
conveyance by any Mortgagor of the Mortgaged Property (whether by absolute
conveyance or by contract of sale, and whether or not the Mortgagor remains
or
is to remain liable under the Mortgage Note and/or the Mortgage), exercise
its
rights to accelerate the maturity of such Mortgage Loan under any “due-on-sale”
clause applicable thereto; provided, however, that the Seller shall not exercise
any such rights if prohibited by law from doing so or if the exercise of such
rights would impair or threaten to impair any recovery under the related Primary
Insurance Policy, if any. If the Seller reasonably believes it is unable under
applicable law to enforce such “due-on-sale” clause, the Seller shall enter into
an assumption agreement with the person to whom the Mortgaged Property has
been
conveyed or is proposed to be conveyed, pursuant to which such person becomes
liable under the Mortgage Note and, to the extent permitted by applicable state
law, the Mortgagor remains liable thereon. Where an assumption is not allowed
pursuant to this Section 11.19, the Seller, with the prior written consent
of
the insurer under the Primary Insurance Policy, if any, is authorized to enter
into a substitution of liability agreement with the person to whom the Mortgaged
Property has been conveyed or is proposed to be conveyed pursuant to which
the
original Mortgagor is released from liability and such Person is substituted
as
Mortgagor and becomes liable under the related Mortgage Note. Any such
substitution of liability agreement shall be in lieu of an assumption
agreement.
In
connection with any such assumption or substitution of liability, the Seller
shall follow the underwriting practices and procedures of prudent mortgage
lenders in the state in which the related Mortgaged Property is located. With
respect to an assumption or substitution of liability, Mortgage Interest Rate,
the amount of the Monthly Payment, and the final maturity date of such Mortgage
Note may not be changed. The Seller shall notify the Purchaser that any such
substitution of liability or assumption agreement has been completed by
forwarding to the Purchaser the original of any such substitution of liability
or assumption agreement, which document shall be added to the related Mortgage
File and shall, for all purposes, be considered a part of such Mortgage File
to
the same extent as all other documents and instruments constituting a part
thereof. Any fee collected by the Seller for entering into an assumption or
substitution of liability agreement in excess of 1% of the outstanding principal
balance of the Mortgage Loan shall be deposited in the Custodial Account
pursuant to Section 11.04.
Notwithstanding
the foregoing paragraphs of this Section or any other provision of this
Agreement, the Seller shall not be deemed to be in default, breach or any other
violation of its obligations hereunder by reason of any assumption of a Mortgage
Loan by operation of law or any assumption which the Seller may be restricted
by
law from preventing, for any reason whatsoever. For purposes of this Section
11.19, the term “assumption” is deemed to also include a sale of the Mortgaged
Property subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.
| Section 11.20 |
Satisfaction
of Mortgages and Release of Mortgage
Files.
|
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Seller of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Seller will immediately notify the Purchaser by a
certification of a servicing officer of the Seller (a “Servicing Officer”),
which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required
to
be deposited in the Custodial Account pursuant to Section 11.04 have been or
will be so deposited, and shall request execution of any document necessary
to
satisfy the Mortgage Loan and delivery to it of the portion of the Mortgage
File
held by the Purchaser or the Purchaser’s designee. Upon receipt of such
certification and request, the Purchaser, shall promptly release the related
mortgage documents to the Seller and the Seller shall prepare and process any
satisfaction or release. No expense incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account or the Purchaser.
In
the
event the Seller satisfies or releases a Mortgage without having obtained
payment in full of the indebtedness secured by the Mortgage or should it
otherwise prejudice any right the Purchaser may have under the mortgage
instruments, the Seller, upon written demand, shall remit to the Purchaser
the
then outstanding principal balance of the related Mortgage Loan by deposit
thereof in the Custodial Account. The Seller shall maintain the fidelity bond
insuring the Seller against any loss it may sustain with respect to any Mortgage
Loan not satisfied in accordance with the procedures set forth
herein.
From
time
to time and as appropriate for the servicing or foreclosure of the Mortgage
Loan, including for this purpose collection under any Primary Insurance Policy,
the Purchaser shall, upon request of the Seller and delivery to the Purchaser
of
a servicing receipt signed by a Servicing Officer, release the requested portion
of the Mortgage File held by the Purchaser to the Seller. Such servicing receipt
shall obligate the Seller to return the related Mortgage documents to the
Purchaser when the need therefor by the Seller no longer exists, unless the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to
the
Mortgage Loan have been deposited in the Custodial Account or the Mortgage
File
or such document has been delivered to an attorney, or to a public trustee
or
other public official as required by law, for purposes of initiating or pursuing
legal action or other proceedings for the foreclosure of the Mortgaged Property
either judicially or non-judicially, and the Seller has delivered to the
Purchaser a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. Upon receipt of a certificate
of a
Servicing Officer stating that such Mortgage Loan was liquidated, the servicing
receipt shall be released by the Purchaser to the Seller.
| Section 11.21 |
Reserved.
|
| Section 11.22 |
Servicing
Compensation.
|
As
compensation for its services hereunder, the Seller shall be entitled to
withdraw from the Custodial Account or to retain from interest payments on
the
Mortgage Loans the amounts provided for as the Seller’s Servicing Fee.
Additional servicing compensation in the form of assumption fees, as provided
in
Section 11.19, and late payment charges or otherwise shall be retained by the
Seller to the extent not required to be deposited in the Custodial Account.
The
Seller shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided for.
| Section 11.23 |
Independent
Public Accountants’ Servicing Report.
|
Not
later
than March 15th of each year, the Seller at its expense shall cause a firm
of
independent public accountants (which may also render other services to the
Seller) which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Purchaser or its designee 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
pooling and servicing agreements (including the Mortgage Loans and this
Agreement) substantially similar one to another (such statement to have attached
thereto a schedule setting forth the pooling and 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,
such firm confirms that such servicing has been conducted in compliance with
such pooling and 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 requires it to report. Copies of such
statement shall be provided by the Purchaser to any Person identified as a
prospective purchaser of the Mortgage Loans.
| Section 11.24 |
Statement
as to Compliance.
|
(a) The
Seller will deliver to the Purchaser not later than March 15th
of each
year, an Officers’ Certificate (each, an “Annual Statement of Compliance”)
stating, as to each signatory thereof, that (i) a review of the activities
of
the Seller during the preceding year and of performance under this Agreement
has
been made under such officers’ supervision and (ii) to the best of such
officers’ knowledge, based on such review, the Seller has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been
a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof. Copies of such
statement shall be provided by the Purchaser to any Person identified as a
prospective purchaser of the Mortgage Loans.
(b) For
so
long as the Mortgage Loans are being master serviced by a master servicer in
a
securitization transaction (the “Master Servicer”), by March 15th
of each
year (or if not a Business Day, the immediately preceding Business Day), or
at
any other time upon thirty (30) days written request, an officer of the Seller
shall execute and deliver an Officer’s Certificate to the Master Servicer for
the benefit of such Master Servicer and its officers, directors and affiliates,
certifying as to the following matters:
(i) Based
on
my knowledge, the information in the Annual Statement of Compliance, the Annual
Independent Public Accountant’s Servicing Report delivered pursuant to Section
11.23 of the Servicing Addendum (the “Annual Independent Public Accountant’s
Servicing Report”) and all servicing reports, officer’s certificates and other
information relating to the servicing of the Mortgage Loans submitted to the
Master Servicer taken as a whole, does not contain any untrue statement of
a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made,
not
misleading as of the date of this certification;
(ii) The
servicing information required to be provided to the Master Servicer by the
Seller under this Agreement has been provided to the Master
Servicer;
(iii) I
am
responsible for reviewing the activities performed by the Seller under the
Agreement and based upon the review required by this Agreement, and except
as
disclosed in the Annual Statement of Compliance or the Annual Independent Public
Accountant’s Servicing Report submitted to the Master Servicer, the Seller has,
as of the date of this certification fulfilled its obligations under this
Agreement; and
(iv) I
have
disclosed to the Master Servicer all significant deficiencies relating to the
Seller’s compliance with the minimum servicing standards in accordance with a
review conducted in compliance with the Uniform Single Attestation Program
for
Mortgage Bankers or similar standard as set forth in the
Agreement.
(c) The
Seller shall indemnify and hold harmless the Master Servicer and its officers,
directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach
by
the Seller or any of its officers, directors, agents or affiliates of its
obligations under this Section 11.24 or the negligence, bad faith or willful
misconduct of the Seller in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the Master
Servicer, then the Seller agrees that it shall contribute to the amount paid
or
payable by the Master Servicer as a result of the losses, claims, damages or
liabilities of the Master Servicer in such proportion as is appropriate to
reflect the relative fault of the Master Servicer on the one hand and the Seller
on the other in connection with a breach of the Seller’s obligations under this
Section 11.24 or the Seller’s negligence, bad faith or willful misconduct in
connection therewith.
| Section 11.25 |
Notification
of Adjustments.
|
On
each
Adjustment Date, the Seller shall make interest rate adjustments for each
Adjustable Rate Mortgage Loan in compliance with the requirements of the related
Mortgage and Mortgage Note. The Seller shall execute and deliver the notices
required by each Mortgage and Mortgage Note regarding interest rate adjustments.
The Seller also shall provide timely notification to the Purchaser of all
applicable data and information regarding such interest rate adjustments and
the
Seller’s methods of implementing such interest rate adjustments. Upon the
discovery by the Seller or the Purchaser that the Seller has failed to adjust
a
Mortgage Interest Rate or a Monthly Payment pursuant to the terms of the related
Mortgage Note and Mortgage, the Seller shall immediately deposit in the
Custodial Account from its own funds the amount of any interest loss caused
thereby without reimbursement therefor.
| Section 11.26 |
Access
to Certain Documentation.
|
The
Seller shall provide to the Office of Thrift Supervision, the FDIC and any
other
federal or state banking or insurance regulatory authority that may exercise
authority over the Purchaser access to the documentation regarding the Mortgage
Loans serviced by the Seller required by applicable laws and regulations. Such
access shall be afforded without charge, but only upon reasonable request and
during normal business hours at the offices of the Seller. In addition, access
to the documentation will be provided to the Purchaser and any Person identified
to the Seller by the Purchaser without charge, upon reasonable request during
normal business hours at the offices of the Seller.
| Section 11.27 |
Reports
and Returns to be Filed by the
Seller.
|
The
Seller shall file information reports with respect to the receipt of mortgage
interest received in a trade or business, reports of foreclosures and
abandonments of any Mortgaged Property and information returns relating to
cancellation of indebtedness income with respect to any Mortgaged Property
as
required by Sections 6050H, 6050J and 6050P of the Code. Such reports shall
be
in form and substance sufficient to meet the reporting requirements imposed
by
such Sections 6050H, 6050J and 6050P of the Code.
| Section 11.28 |
Compliance
with REMIC Provisions.
|
If
a
REMIC election has been made with respect to the arrangement under which the
Mortgage Loans and REO Property are held, the Seller shall not take any action,
cause the REMIC to take any action or fail to take (or fail to cause to be
taken) any action that, under the REMIC Provisions, if taken or not taken,
as
the case may be, could (i) endanger the status of the REMIC as a REMIC or (ii)
result in the imposition of a tax upon the REMIC (including but not limited
to
the tax on “prohibited transactions” as defined in Section 860F(a)(2) of the
Code and the tax on “contributions” to a REMIC set forth in Section 860G(d) of
the Code) unless the Seller has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
| Section 11.29 |
Application
of Buydown Funds.
|
With
respect to each Buydown Mortgage Loan, the Seller shall segregate and hold
all
Buydown Funds in the Custodial Account separate and apart from the Seller’s
funds and general assets.
With
respect to each Buydown Mortgage Loan, the Seller shall have deposited into
the
Custodial Account, no later than the Closing Date, Buydown Funds in an amount
equal to the aggregate undiscounted amount of payments that, when added to
the
amount the Mortgagor on such Mortgage Loan is obligated to pay on all Due Dates
in accordance with the terms of the Buydown Agreement, is equal to the full
scheduled Monthly Payments which are required to be paid by the Mortgagor under
the terms of the related Mortgage Note (without regard to the related Buydown
Agreement as if the Mortgage Loan were not subject to the terms of the Buydown
Agreement). With respect to each Buydown Mortgage Loan, the Seller will
distribute to the Purchaser on each Distribution Date an amount of Buydown
Funds
equal to the amount that, when added to the amount required to be paid on such
date by the related Mortgagor, pursuant to and in accordance with the related
Buydown Agreement, equals the full Monthly Payment that would otherwise be
required to be paid on such Mortgage Loan by the related Mortgagor under the
terms of the related Mortgage Note (as if the Mortgage Loan were not a Buydown
Mortgage Loan and without regard to the related Buydown Agreement).
If
the
Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan during
the
Buydown period and the Mortgaged Property securing such Buydown Mortgage Loan
is
sold in the liquidation thereof (either by the Seller or the insurer under
any
related Primary Insurance Policy) the Seller shall, on the Distribution Date
following the date upon which Liquidation Proceeds or REO Disposition Proceeds
are received with respect to any such Buydown Mortgage Loan, distribute to
the
Purchaser all remaining Buydown Funds for such Mortgage Loan then remaining
in
the Custodial Account. Pursuant to the terms of each Buydown Agreement, any
amounts distributed to the Purchaser in accordance with the preceding sentence
will be applied to reduce the outstanding principal balance of the related
Buydown Mortgage Loan. If a Mortgagor on a Buydown Mortgage Loan prepays such
Mortgage Loan in its entirety during the related Buydown Period, the Seller
shall be required to withdraw from the Custodial Account any Buydown Funds
remaining in the Custodial Account with respect to such Buydown Mortgage Loan
in
accordance with the related Buydown Agreement. If a Principal Prepayment by
a
Mortgagor on a Buydown Mortgage Loan during the related Buydown Period, together
with any Buydown Funds then remaining in the Custodial Account related to such
Buydown Mortgage Loan, would result in a Principal Prepayment in full, the
Seller shall distribute to the Purchaser on the Distribution Date occurring
in
the month immediately succeeding the month in which such Principal Prepayment
is
received, all Buydown Funds related to such Mortgage Loan so remaining in the
Custodial Account.
| Section 11.30 |
Superior
Liens.
|
With
respect to each Second Lien Mortgage Loan, the Seller shall, for the protection
of the Purchaser’s interest, file (or cause to be filed) of record a request for
notice of any action by a superior lienholder where permitted by local law
and
whenever applicable state law does not require that a junior lienholder be
named
as a party defendant in foreclosure proceedings in order to foreclose such
junior lienholder’s equity of redemption. The Seller shall also notify any
superior lienholder in writing of the existence of the Mortgage Loan and request
notification of any action (as described below) to be taken against the
Mortgagor or the Mortgaged Property by the superior lienholder.
If
the
Seller is notified that any superior lienholder has accelerated or intends
to
accelerate the obligations secured by the superior lien, or has declared or
intends to declare a default under the superior mortgage or the promissory
note
secured thereby, or has filed or intends to file an election to have the
Mortgaged Property sold or foreclosed, the Seller shall take whatever actions
are necessary to protect the interests of the Purchaser, and/or to preserve
the
security of the related Mortgage Loan, subject to any requirements applicable
to
real estate mortgage investment conduits pursuant to the Code. The Seller shall
make a Servicing Advance of the funds necessary to cure the default or reinstate
the superior lien if the Seller determines that such Servicing Advance is in
the
best interests of the Purchaser. The Seller shall not make such a Servicing
Advance except to the extent that it determines in its reasonable good faith
judgment that such advance will be recoverable from Liquidation Proceeds on
the
related Mortgage Loan. The Seller shall thereafter take such action as is
necessary to recover the amount so advanced.
EXHIBIT
10
Seller’s
Underwriting Guidelines