Exhibit 99.8(b)
EXECUTION COPY
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FIRST AMENDED AND RESTATED MORTGAGE LOAN SALE AND SERVICING
AGREEMENT
between
THE HEMISPHERE NATIONAL BANK,
as Seller and as Servicer
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.,
as Purchaser
Dated as of December 1, 2005
Conventional,
Fixed and Adjustable Rate,
Residential Mortgage Loans
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS............................................................................1
SECTION 2. PURCHASE AND CONVEYANCE...............................................................17
SECTION 3. MORTGAGE LOAN SCHEDULE................................................................17
SECTION 4. PURCHASE PRICE........................................................................18
SECTION 5. EXAMINATION OF MORTGAGE FILES.........................................................18
SECTION 6. DELIVERY OF MORTGAGE LOAN DOCUMENTS...................................................19
Subsection 6.01 Possession of Mortgage Files..........................................................19
Subsection 6.02 Books and Records.....................................................................19
Subsection 6.03 Delivery of Mortgage Loan Documents...................................................20
Subsection 6.04 MERS Designated Loans.................................................................21
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS; REMEDIES FOR BREACH........................21
Subsection 7.01 Representations and Warranties Regarding Individual Mortgage Loans....................21
Subsection 7.02 Seller Representations................................................................32
Subsection 7.03 Remedies for Breach of Representations and Warranties.................................36
Subsection 7.04 Repurchase of Mortgage Loans with Early Payment Defaults..............................38
Subsection 7.05 Premium Recapture.....................................................................39
SECTION 8. CLOSING...............................................................................39
SECTION 9. CLOSING DOCUMENTS.....................................................................39
SECTION 10. COSTS.................................................................................41
SECTION 11. ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS....................................41
Subsection 11.01 Servicer to Act as Servicer...........................................................41
Subsection 11.02 Liquidation of Mortgage Loans.........................................................42
Subsection 11.03 Collection of Mortgage Loan Payments..................................................42
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Subsection 11.04 Establishment of Custodial Account; Deposits in Custodial.............................42
Subsection 11.05 Withdrawals From the Custodial Account................................................44
Subsection 11.06 Establishment of Escrow Account; Deposits in Escrow Account...........................45
Subsection 11.07 Withdrawals From Escrow Account.......................................................45
Subsection 11.08 Payment of Taxes, Insurance and Other Charges; Collections Thereunder.................46
Subsection 11.09 Transfer of Accounts..................................................................46
Subsection 11.10 Maintenance of Hazard Insurance.......................................................46
Subsection 11.11 Fidelity Bond; Errors and Omissions Insurance.........................................47
Subsection 11.12 Title, Management and Disposition of REO Property.....................................47
Subsection 11.13 Servicing Compensation................................................................49
Subsection 11.14 Distributions.........................................................................49
Subsection 11.15 Statements to the Purchaser...........................................................50
Subsection 11.16 Advances by the Servicer..............................................................51
Subsection 11.17 Assumption Agreements.................................................................51
Subsection 11.18 Satisfaction of Mortgages and Release of Mortgage Files...............................52
Subsection 11.19 Annual Statement as to Compliance.....................................................52
Subsection 11.20 Annual Independent Public Accountants' Servicing Report or Attestation................52
Subsection 11.21 Servicer Shall Provide Access and Information as Reasonably Required..................52
Subsection 11.22 Transfer of Servicing.................................................................53
Subsection 11.23 Notification of Maturity Date.........................................................55
Subsection 11.24 Notification of Adjustments...........................................................55
Subsection 11.25 Availability of Information...........................................................56
SECTION 12. THE SERVICER..........................................................................56
Subsection 12.01 Indemnification; Third Party Claims...................................................56
Subsection 12.02 Merger or Consolidation of the Servicer...............................................57
Subsection 12.03 Limitation on Liability of the Servicer and Others....................................58
Subsection 12.04 Seller and Servicer Not to Resign.....................................................58
Subsection 12.05 Inspection and Audit Rights...........................................................58
SECTION 13. DEFAULT...............................................................................59
Subsection 13.01 Events of Default.....................................................................59
Subsection 13.02 Waiver of Defaults....................................................................60
SECTION 14. TERMINATION...........................................................................60
Subsection 14.01 Termination...........................................................................60
Subsection 14.02 Termination of the Servicer Without Cause.............................................61
Subsection 14.03 Successors to the Servicer............................................................61
SECTION 15. COOPERATION OF SELLER WITH A RECONSTITUTION...........................................62
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SECTION 16. NOTICES...............................................................................64
SECTION 17. SEVERABILITY CLAUSE...................................................................65
SECTION 18. NO PARTNERSHIP........................................................................66
SECTION 19. COUNTERPARTS..........................................................................66
SECTION 20. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS.............................66
SECTION 21. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST........................................66
SECTION 22. INTENTION OF THE PARTIES..............................................................67
SECTION 23. SUCCESSORS AND ASSIGNS................................................................67
SECTION 24. WAIVERS...............................................................................67
SECTION 25. EXHIBITS..............................................................................67
SECTION 26. GENERAL INTERPRETIVE PRINCIPLES.......................................................67
SECTION 27. REPRODUCTION OF DOCUMENTS.............................................................68
SECTION 28. AMENDMENT.............................................................................68
SECTION 29. CONFIDENTIALITY.......................................................................68
SECTION 30. ENTIRE AGREEMENT......................................................................69
SECTION 31. FURTHER AGREEMENTS....................................................................69
SECTION 32. NO SOLICITATION.......................................................................69
SECTION 33. WAIVER OF JURY TRIAL..................................................................69
SECTION 34. COMPLIANCE WITH REGULATION AB.........................................................70
Subsection 34.01 Intent of the Parties; Reasonableness.................................................70
Subsection 34.02 Additional Representations and Warranties of the Seller...............................70
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Subsection 34.03 Information to Be Provided by the Seller..............................................71
Subsection 34.04 Servicer Compliance Statement.........................................................75
Subsection 34.05 Report on Assessment of Compliance and Attestation....................................76
Subsection 34.06 Use of Subservicers and Subcontractors................................................77
Subsection 34.07 Indemnification; Remedies.............................................................78
EXHIBITS
EXHIBIT 1 MORTGAGE LOAN DOCUMENTS
EXHIBIT 2 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 3 FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT 4 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 6 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 7 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 8 SELLER'S UNDERWRITING GUIDELINES
EXHIBIT 9 FORM OF MONTHLY REMITTANCE REPORT
EXHIBIT 10 FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 11 FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT 12 FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT 13 FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT 14 FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT 15 FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
EXHIBIT 16 FORM OF ANNUAL CERTIFICATION
EXHIBIT 17 MONTHLY REO PROPERTY REPORT DATA FIELDS
EXHIBIT 18 SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
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FIRST AMENDED AND RESTATED MORTGAGE LOAN SALE AND SERVICING
AGREEMENT
THIS FIRST AMENDED AND RESTATED MORTGAGE LOAN SALE AND SERVICING
AGREEMENT (the "Agreement"), dated as of December 1, 2005, is hereby executed
by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC., a New York corporation
(the "Purchaser"), and THE HEMISPHERE NATIONAL BANK, a national banking
association, in its capacity as seller (the "Seller") and in its capacity as
servicer (the "Servicer").
W I T N E S S E T H:
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WHEREAS, the Purchaser and the Seller are parties to that certain
Mortgage Loan Sale and Servicing Agreement, dated as of May 1, 2005 (the
"Original Purchase Agreement"), and 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, on a servicing-retained basis, certain conventional
fixed and adjustable rate residential first lien mortgage loans (the "Mortgage
Loans") on a servicing retained basis as described herein, and which shall be
delivered in pools of whole loans (each, a "Mortgage Loan Package") on various
dates as provided herein (each, a "Closing Date");
WHEREAS, at the present time, the Purchaser and the Seller desire to
amend the Original Purchase Agreement to make certain modifications.
NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Purchaser, the Seller
and the Servicer agree as follows:
Section 1. Definitions. For purposes of this Agreement, the following
capitalized terms shall have the respective meanings set forth below.
Accepted Servicing Procedures: Procedures (including collection
procedures) that the Servicer customarily employs and exercises in servicing
and administering mortgage loans for its own account that are similar to the
Mortgage Loans and which are in accordance with accepted mortgage servicing
practices of prudent mortgage lending institutions which service mortgage
loans of the same type as the Mortgage Loans in the jurisdictions where the
related Mortgaged Properties are located.
Adjustable Rate Mortgage Loan: A Mortgage Loan purchased pursuant to this
Agreement, the Mortgage Interest Rate of which is adjusted from time to time
in accordance with the terms of the related Mortgage Note.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Agency Transfer: A ▇▇▇▇▇▇ Mae Transfer or a ▇▇▇▇▇▇▇ Mac Transfer.
Agreement: This First Amended and Restated Mortgage Loan Sale and
Servicing Agreement including all exhibits, schedules, amendments and
supplements hereto.
ALTA: The American Land Title Association.
Applicable Law: A law applicable to the Seller or the Servicer, as the
case may be, and specifically excluding any state or local laws that are
preempted on the basis that any such Person is a national banking association.
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 a
Qualified Appraiser and (ii) the purchase price paid for the related Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan; provided,
however, that in the case of a Refinanced Mortgage Loan, such value of the
Mortgaged Property is based solely upon the value determined by an appraisal
made for the originator of such Refinanced Mortgage Loan at the time of
origination of such Refinanced Mortgage Loan by a Qualified Appraiser.
Assignment and Conveyance Agreement: As defined in Section 2.
Assignment of Mortgage: An individual assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form and in blank,
sufficient under the laws of the jurisdiction in which the related Mortgaged
Property is located to give record notice of the sale of the Mortgage to the
Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan (a) that requires only payments
of interest until the stated maturity date of the Mortgage Loan or (b) for
which Monthly Payments of principal (not including the payment due on its
stated maturity date) are based on an amortization schedule that would be
insufficient to fully amortize the principal thereof by the stated maturity
date of the Mortgage Loan.
Business Day: Any day other than a Saturday or Sunday, or a day on which
banking and savings and loan institutions in the state in which (i) the
Servicer is located or (ii) the Custodial Account is maintained, are
authorized or obligated by law or executive order to be closed.
Cash-Out Refinance: A Refinanced Mortgage Loan in which the proceeds
received were in excess of the amount of funds required to repay the principal
balance of any existing first mortgage on the related Mortgaged Property, pay
related closing costs and satisfy any outstanding subordinate mortgages on the
related Mortgaged Property and which provided incidental cash to the related
Mortgagor of more than 1% of the original principal balance of such Mortgage
Loan.
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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, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
Closing Documents: The documents required to be delivered on each Closing
Date pursuant to Section 9.
CLTA: The California Land Title Association.
Code: The Internal Revenue Code of 1986, as amended, or any successor
statute thereto.
Commission: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards, compensation and settlements in
respect of a taking of all or part of a Mortgaged Property, whether permanent
or temporary, partial or entire, by exercise of the power of condemnation or
the right of eminent domain, to the extent not required to be released to a
Mortgagor in accordance with the terms of the related Mortgage Loan Documents.
Co-op: A private, cooperative housing corporation, having only one class
of stock outstanding, which owns or leases land and all or part of a building
or buildings, including apartments, spaces used for commercial purposes and
common areas therein and whose board of directors authorizes the sale of stock
and the issuance of a Co-op Lease.
Co-op Lease: With respect to a Co-op Loan, the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated to a
dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to Appendix
E of Standard & Poor's Glossary.
Custodial Account: As defined in Subsection 11.04.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively
be referred to as the "Custodial Agreement."
Custodian: ▇.▇. ▇▇▇▇▇▇ Trust Company, National Association, a national
banking association, and its successors in interest, or any successor to the
Custodian under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
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Cut-off Date Principal Balance: The aggregate Stated Principal Balance of
the Mortgage Loans as of the applicable Cut-off Date which is determined after
the application, to the reduction of principal, of payments of principal due
on or before such Cut-off Date, whether or not collected, and of partial
principal prepayments received before such Cut-off Date.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or to be
repurchased or replaced or to be replaced with a Qualified Substitute Mortgage
Loan by the Seller in accordance with the terms of this Agreement.
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Determination Date: With respect to each Remittance Date, the 15th day
(or, if such 15th day is not a Business Day, the following Business Day) of
the month in which such Remittance Date occurs.
Due Date: With respect to each Remittance Date, the first day of the
calendar month in which such Remittance Date occurs, which is the day on which
the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date and any Mortgage Loan,
the period beginning on the second day of the month preceding such Remittance
Date through and including the first day of the month in which such Remittance
Date occurs.
Eligible Account: Either (i) an account 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 a subsidiary of a holding company, the
short-term unsecured debt obligations of such holding company) are rated
"A-1+" by Standard & Poor's, "F-1" by Fitch and "P-1" by Moody's (or a
comparable rating if another rating agency is specified by the 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 FDIC, (iii) a trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity or (iv) any other account acceptable to Standard & Poor's, Fitch and
▇▇▇▇▇'▇.
Eligible Investments: Any one or more of the following obligations or
securities acquired at a purchase price of not greater than par, regardless of
whether issued by the Purchaser, the Seller or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as a
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed
by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days)
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denominated in United States dollars and issued by, and Depository
Institution and rated "P-1" by Moody's, "F1+" by Fitch and "A-1+" by
Standard & Poor's;
(iii) repurchase obligations with respect to any security described
in clause (i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United
States of America or any State thereof and that are rated by each rating
agency that rates such securities in its highest long-term unsecured
rating categories at the time of such investment or contractual
commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each rating agency that rates such securities
in its highest short-term unsecured debt rating available at the time of
such investment;
(vi) units of money market funds, including money market funds
advised by the Purchaser or an Affiliate thereof, that have been rated
"Aaa" by Moody's, "AAA" by Standard & Poor's and at least "AAA" by Fitch;
and
(vii) if previously confirmed in writing to the Purchaser, any other
demand, money market or time deposit, or any other obligation, security
or investment, as may be acceptable to the rating agencies as a permitted
investment of funds backing "Aaa" or "AAA rated securities;
provided, however, that no instrument described hereunder shall evidence
either the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying
obligations.
Escrow Account: As defined in Subsection 11.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the Mortgagee pursuant to the Mortgage or any other
document.
Event of Default: Any one of the conditions or circumstances enumerated
in Subsection 13.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association or any successor
thereto.
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▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ Mae
Servicers' Guide, as amended or restated from time to time.
▇▇▇▇▇▇ ▇▇▇ Transfer: As defined in Section 15.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto
and including the Federal Housing Commissioner and the Secretary of Housing
and Urban Development where appropriate under the FHA Regulations.
Fidelity Bond: The fidelity bond required to be obtained by the Servicer
pursuant to Subsection 11.11.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act
of 1989, as amended and in effect from time to time.
Fitch: Fitch Ratings Inc., and any successor thereto.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased pursuant
to this Agreement.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
▇▇▇▇▇▇▇ Mac Transfer: As defined in Section 15.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note which amount is
added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership and
Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that
term was defined in clause (1) of the definition of that term in the New
Jersey Home Ownership Security Act of 2002 that were originated between
November 26, 2003 and July 7, 2004), "high risk home," "predatory" or similar
loan under any other applicable state, federal or local law (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage
loans having high interest rates, points and/or fees) or (c) a Mortgage Loan
categorized as High Cost pursuant to Appendix E of Standard & Poor's Glossary.
For avoidance of doubt, the parties agree that this definition shall apply to
any law regardless of whether such law is presently, or in the future becomes,
the subject of judicial review or litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to Appendix
E of Standard & Poor's Glossary.
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HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the
functions thereof with regard to Mortgage Insurance issued by the FHA. The
term "HUD," for purposes of this Agreement, is also deemed to include
subdivisions thereof such as the FHA and Government National Mortgage
Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the
related Mortgage Loan Schedule, on which the Mortgage Interest Rate is
adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the interim funder pursuant to the MERS
Procedures Manual.
Investor: With respect to each MERS Designated Mortgage Loan, the Person
named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the term of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage
Interest Rate at the time of origination of such Adjustable Rate Mortgage Loan
by more than the amount per annum set forth on the related Mortgage Loan
Schedule.
Liquidation Proceeds: The proceeds received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan, other than amounts
received following the acquisition of REO Property, Insurance Proceeds and
Condemnation Proceeds.
Loan-to-Value Ratio: With respect to any Mortgage Loan, as of any date of
determination, the ratio (expressed as a percentage) the numerator of which is
the outstanding principal balance of the Mortgage Loan as of the related
Cut-off Date (unless otherwise indicated), and the denominator of which is the
lesser of (a) the Appraised Value of the Mortgaged Property at origination and
(b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
LTV: Loan-to-Value Ratio.
Manufactured Home: A single family residential unit that is constructed
in a factory in sections in accordance with the Federal Manufactured Home
Construction and Safety
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Standards adopted on June 15, 1976, by the Department of Housing and Urban
Development ("HUD Code"), as amended in 2000, which preempts state and local
building codes. Each unit is identified by the presence of a HUD
Plate/Compliance Certificate label. The sections are then transported to the
site and joined together and affixed to a pre-built permanent foundation
(which satisfies the manufacturer's requirements and all state, county, and
local building codes and regulations). The manufactured home is built on a
non-removable, permanent frame chassis that supports the complete unit of
walls, floors, and roof. The underneath part of the home may have running gear
(wheels, axles, and brakes) that enable it to be transported to the permanent
site. The wheels and hitch are removed prior to anchoring the unit to the
permanent foundation. The manufactured home must be classified as real estate
and taxed accordingly. The permanent foundation may be on land owned by the
mortgager or may be on leased land.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the Seller
has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as
nominee for the Seller, in accordance with MERS Procedures Manual and (b) the
Seller has designated or will designate the Purchaser as the Investor on the
MERS(R) System.
MERS Procedures Manual: The MERS Procedures Manual, as it may be amended,
supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: With respect to any Mortgage Loan, the scheduled payment
of principal and interest payable by a Mortgagor under the related Mortgage
Note on each Due Date.
Moody's: ▇▇▇▇▇'▇ Investors Service Inc., and any successor thereto.
Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan, the
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a first lien on the Mortgaged Property. With respect to a Co-op Loan,
the Security Agreement.
Mortgage File: With respect to any Mortgage Loan, the Mortgage Loan
Documents and the items listed in Exhibit 2 hereto and any additional
documents required to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Interest Rate: With respect to each Mortgage Loan, the annual
rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note.
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Mortgage Loan: Each mortgage loan sold, assigned and transferred pursuant
to this Agreement and identified on the applicable Mortgage Loan Schedule,
which Mortgage Loan includes, without limitation, the Mortgage File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, REO Disposition Proceeds, and all other rights,
benefits, proceeds and obligations arising from or in connection with such
Mortgage Loan, excluding replaced or repurchased mortgage loans.
Mortgage Loan Documents: With respect to any Mortgage Loan, the documents
listed in Exhibit 1 hereto.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest payable to the Purchaser, which shall be equal to the
related Mortgage Interest Rate minus the related Servicing Fee Rate.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth the
following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the social security number of the Mortgagor; (4) a
code indicating whether the Mortgagor's race and/or ethnicity is (i) native
American or Alaskan native, (ii) Asian/Pacific islander, (iii) African
American, (iv) white, (v) Hispanic or Latino, (vi) other minority, (vii) not
provided by the Mortgagor, (viii) not applicable (if the Mortgagor is an
entity) and (ix) unknown or missing; (5) the street address of the Mortgaged
Property including the city, state and zip code; (6) a code indicating whether
the Mortgagor is self-employed; (7) a code indicating whether the Mortgaged
Property is owner-occupied, investment property or a second home; (8) a code
indicating the number and type of residential units constituting the Mortgaged
Property (e.g. single family residence, two-family residence, three-family
residence, four-family residence, multifamily residence, condominium,
manufactured housing, mixed-use property, raw land and other non-residential
properties, planned unit development or cooperative stock in a cooperative
housing corporation); (9) the original months to maturity or the remaining
months to maturity from the related Cut-off Date, in any case based on the
original amortization schedule and, if different, the maturity expressed in
the same manner but based on the actual amortization schedule; (10) the
Loan-to-Value Ratio at origination; (11) the Mortgage Interest Rate as of the
related Cut-off Date; (12) 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, the Due Date; (13) the stated maturity date; (14) the
amount of the Monthly Payment as of the related Cut-off Date; (15) the last
payment date on which a payment was actually applied to the outstanding
principal balance; (16) the schedule of the payment delinquencies in the prior
12 months; (17) the original principal amount of the Mortgage Loan; (18) the
principal balance of the Mortgage Loan as of the close of business on the
related Cut-off Date, after deduction of payments of principal due and
collected on or before the related Cut-off Date; (19) whether the Mortgage
Loan has Monthly Payments that are interest-only for a period of time; (20)
with respect to each Mortgage Loan with a second lien behind it, the combined
principal balance of the Mortgage Loan and the applicable second lien loan, as
of the close of business on the related Cut-off Date, after deduction of
payments of principal due and collected on or before the related
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Cut-off Date; (21) a code indicating whether there is a simultaneous second;
(22) with respect to Adjustable Rate Mortgage Loans, the Interest Rate
Adjustment Date; (23) with respect to Adjustable Rate Mortgage Loans, the
Gross Margin; (24) with respect to Adjustable Rate Mortgage Loans, the
Lifetime Rate Cap under the terms of the Mortgage Note; (25) with respect to
Adjustable Rate Mortgage Loans, a code indicating the type of Index, including
the methodology for rounding (e.g. rounded upward, if necessary, to the
nearest ten thousandth (.0001)) and the applicable time frame for determining
the Index; (26) the type of Mortgage Loan (i.e., Fixed Rate, Adjustable Rate);
(27) a code indicating the purpose of the loan (i.e., purchase, Rate/Term
Refinance or Cash-Out Refinance); (28) a code indicating the documentation
style (i.e. no documents, full, alternative, reduced, no income/no asset,
stated income, no ration, reduced or NIV); (29) asset verification (Y/N); (30)
the loan credit classification (as described in the Underwriting Guidelines);
(31) whether such Mortgage Loan provides for a Prepayment Penalty; (32) the
Prepayment Penalty period of such Mortgage Loan, if applicable; (33) a
description of the Prepayment Penalty, if applicable; (34) the Mortgage
Interest Rate as of origination; (35) the credit risk score (FICO score); (36)
the date of origination; (37) with respect to Adjustable Rate Mortgage Loans,
the Mortgage Interest Rate adjustment period; (38) with respect to Adjustable
Rate Mortgage Loans, the Mortgage Interest Rate adjustment percentage; (39)
with respect to Adjustable Rate Mortgage Loans, the Mortgage Interest Rate
floor; (40) the Mortgage Interest Rate calculation method (i.e., 30/360,
simple interest, other); (41) with respect to Adjustable Rate Mortgage Loans,
the Periodic Rate Cap as of the first Interest Rate Adjustment Date; (42) with
respect to each Adjustable Rate Mortgage Loan, a code indicating whether the
Mortgage Loan provides for negative amortization; (43) a code indicating
whether the Mortgage Loan has negative amortization and the maximum of such
negative amortization; (44) a code indicating whether the Mortgage Loan is a
Balloon Mortgage Loan; (45) a code indicating whether the Mortgage Loan by its
original terms or any modifications thereof provides for amortization beyond
its scheduled maturity date; (46) the original Monthly Payment due; (47) the
Appraised Value; (48) appraisal type; (49) appraisal date (50) a code
indicating whether the Mortgage Loan is covered by a PMI Policy and, if so,
identifying the PMI Policy provider; (51) the certificate number of the PMI
Policy, if applicable; (52) the amount of coverage of the PMI Policy, if
applicable; (53) in connection with a condominium unit, a code indicating
whether the condominium project where such unit is located is low-rise or
high-rise; (54) a code indicating whether the Mortgaged Property is a
leasehold estate; (55) with respect to the related Mortgagor, the
debt-to-income ratio; (56) sales price; (57) automated valuation model (AVM);
(58) a code indicating whether the Mortgage Loan is a MERS Designated Mortgage
Loan and the MERS Identification Number, if applicable; (59) a field
indicating whether such Mortgage Loan is a Home Loan; and (60) the DU or LP
number, if applicable. With respect to the Mortgage Loans in the aggregate,
the related 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 aggregate outstanding principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Interest Rate of the Mortgage Loans; (4) the
weighted average maturity of the Mortgage Loans; (5) the average principal
balance of the Mortgage Loans; (6) the applicable Cut-off Date; and (7) the
applicable Closing Date.
Mortgage Note: The original executed note or other evidence of the
Mortgage Loan indebtedness of a Mortgagor, including any riders or addenda
thereto.
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Mortgaged Property: With respect to a Mortgage Loan that is not a Co-op
Loan, the Mortgagor's real property securing repayment of a related Mortgage
Note, consisting of an unsubordinated estate in fee simple or, with respect to
real property located in jurisdictions in which the use of leasehold estates
for residential properties is a widely-accepted practice, a leasehold estate,
in a single parcel or multiple parcels of real property improved by a
Residential Dwelling. With respect to a Co-op Loan, the stock allocated to a
dwelling unit in the residential cooperative housing corporation that was
pledged to secure such Co-op Loan and the related Co-op Lease.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and the
successors and assigns of such mortgagee or beneficiary.
Mortgagor: The obligor on a Mortgage Note, who is an owner of the
Mortgaged Property and the grantor or mortgagor named in the Mortgage and such
grantor's or mortgagor's successors in title to the Mortgaged Property.
NAIC: The National Association of Insurance Commissioners or any
successor thereto.
OCC: Office of the Comptroller of the Currency, or any successor thereto.
Officer's Certificate: A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, a President or a Vice President and by the
Treasurer, the Secretary, or one of the Assistant Treasurers or the 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 counsel for
the Seller or the Servicer, reasonably acceptable to the Purchaser, provided
that any Opinion of Counsel relating to (a) the qualification of any account
required to be maintained pursuant to this Agreement as an eligible account,
(b) qualification of the Mortgage Loans in a REMIC or (c) compliance with the
REMIC Provisions, must be (unless otherwise stated in such Opinion of Counsel)
an opinion of counsel who (i) is in fact independent of the Seller and any
servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Seller or Servicer or in an Affiliate of
either and (iii) is not connected with the Seller or Servicer as an officer,
employee, director or person performing similar functions.
OTS: The Office of Thrift Supervision or any successor thereto.
Owner: As defined in Subsection 11.12.
P&I Advance: As defined in Subsection 11.16.
Payment Adjustment Date: As to each Adjustable Rate Mortgage Loan, the
date on which an adjustment to the Monthly Payment on a Mortgage Note becomes
effective.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan,
the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase or decrease on
an Interest Rate Adjustment Date
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above or below the Mortgage Interest Rate previously in effect. The Periodic
Rate Cap for each Adjustable Rate Mortgage Loan is the rate set forth as such
on the related Mortgage Loan Schedule.
Periodic Rate Floor: With respect to each Adjustable Rate Mortgage Loan,
the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may decrease on an Interest
Rate Adjustment Date below the Mortgage Interest Rate previously in effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued by an
insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the amount of any
premium or penalty required to be paid by the Mortgagor if the Mortgagor
prepays such Mortgage Loan as provided in the related Mortgage Note or
Mortgage.
Prime Rate: The prime rate announced to be in effect from time to time,
as published as the average rate in The Wall Street Journal (Northeast
edition).
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 Penalty thereon, and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: That certain agreement setting forth
the general terms and conditions of the purchase and sale of the Mortgage
Loans to be purchased hereunder, between the Seller and the Purchaser.
Purchase Price Percentage: The percentage of par (expressed as decimal)
set forth in the related Purchase Price and Terms Agreement.
Purchaser: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., a New York corporation,
and its successors in interest and assigns, or any successor to the Purchaser
under this Agreement as herein provided.
Qualified Appraiser: An 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,
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and whose compensation was not affected by the approval or disapproval of the
Mortgage Loan, and such appraiser and the appraisal made by such appraiser
both satisfied the requirements of Title XI of FIRREA and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified Correspondent: Any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Seller and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Seller, in accordance with underwriting
guidelines designated by the Seller ("Designated Guidelines") or guidelines
that do not vary materially from such Designated Guidelines; (ii) such
Mortgage Loans were in fact underwritten as described in clause (i) above and
were acquired by the Seller within 180 days after origination; (iii) either
(x) the Designated Guidelines were, at the time such Mortgage Loans were
originated, used by the Seller in origination of mortgage loans of the same
type as the Mortgage Loans for the Seller's own account or (y) the Designated
Guidelines were, at the time such Mortgage Loans were underwritten, designated
by the Seller on a consistent basis for use by lenders in originating mortgage
loans to be purchased by the Seller; and (iv) the Seller employed, at the time
such Mortgage Loans were acquired by the Seller, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review of
a sample of mortgage loans purchased during a particular time period or
through particular channels) designed to ensure that Persons from which it
purchased mortgage loans properly applied the underwriting criteria designated
by the Seller.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date
of such substitution, be approved by the Purchaser and (i) have an unpaid
principal balance, after deduction of all scheduled payments due in the month
of substitution (or in the case of a substitution of more than one mortgage
loan for a Deleted Mortgage Loan, an aggregate principal balance), not in
excess of the unpaid principal balance of the Deleted Mortgage Loan (the
amount of any shortfall will be deposited in the Custodial Account by the
Seller in the month of substitution); (ii) have a Mortgage Interest Rate not
less than and not more than one percent (1%) greater than the Mortgage
Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term to
maturity not greater than and not more than one (1) year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Cap and
Index); (v) comply as of the date of substitution with each representation and
warranty set forth in Subsection 7.01 of this Agreement; (vi) be current in
the payment of principal and interest; (vii) be secured by a Mortgaged
Property of the same type and occupancy status as secured the Deleted Mortgage
Loan; and (viii) have payment terms that do not vary in any material respect
from those of the Deleted Mortgage Loan.
Rate/Term Refinance: A Refinanced Mortgage Loan, in which the proceeds
received were not in excess of the amount of funds required to repay the
principal balance of any existing first mortgage loan on the related Mortgaged
Property, pay related closing costs and satisfy any outstanding subordinate
mortgages on the related Mortgaged Property and did not provide incidental
cash to the related Mortgagor of more than one percent (1%) of the original
principal balance of such Mortgage Loan.
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Reconstitution: Any Securitization Transaction or Whole Loan Transfer.
Reconstitution Agreement: As defined in Section 15.
Record Date: The close of business of the last Business Day of the month
preceding the month of the related Remittance Date.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Remittance Date: No later than 1:00 p.m. New York time on the 18th day of
any month (or, if such 18th day is not a Business Day, the following Business
Day).
REO Disposition: The final sale by the Servicer of an REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Subsection 11.12.
REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed in lieu of foreclosure, as described in Subsection 11.12.
Repurchase Price: With respect to any Mortgage Loan, a price equal to the
unpaid principal balance of the Mortgage Loan to be repurchased, plus accrued
interest thereon at the Mortgage Interest Rate and including the last Due Date
through which interest had last been paid through the date of such repurchase,
plus the amount of any outstanding advances owed to any servicer if the Seller
is not the Servicer, plus all costs and expenses incurred by the Purchaser or
any servicer arising out of or based upon such breach, including without
limitation costs and expenses incurred in the enforcement of the Seller's
repurchase obligation hereunder.
Residential Dwelling: Any one of the following: (i) a detached one-family
dwelling, (ii) a detached two- to four-family dwelling, (iii) a one-family
dwelling unit in a condominium project, or (iv) a one-family dwelling in a
planned unit development, none of which is a co-operative, mobile or
Manufactured Home.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a sale
or other transfer of some or all of the Mortgage Loans directly or indirectly
to an issuing entity in connection with an issuance of publicly offered or
privately placed, rated or unrated mortgage-backed securities or (2) an
issuance of publicly offered or privately placed, rated or unrated securities,
the payments on which are determined primarily by reference to one or more
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portfolios of residential mortgage loans consisting, in whole or in part, of
some or all of the Mortgage Loans.
Security Agreement: The agreement creating a security interest in the
stock allocated to a dwelling unit in the residential cooperative housing
corporation that was pledged to secure such Co-op Loan and the related Co-op
Lease.
Seller: As defined in the initial paragraph of this Agreement, together
with its successors in interest.
Seller Information: As defined in Section 34.07(a).
Servicer: As defined in the initial paragraph of this Agreement, together
with its successors and assigns as permitted under the terms of this
Agreement, or with respect to Subsection 34.03(c), as defined therein.
Servicing Advances: All customary, reasonable and necessary out-of-pocket
costs and expenses incurred in the performance by the Servicer of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the Mortgaged Property if the Mortgaged Property
is acquired in satisfaction of the Mortgage, and (iv) payments made by the
Servicer with respect to a Mortgaged Property pursuant to Subsection 11.08.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Servicer, which shall, for each
month, be equal to one-twelfth of (i) the product of the Servicing Fee Rate
and (ii) the Stated Principal Balance of such Mortgage Loan. Such fee shall be
payable monthly, computed on the basis of the same principal amount and period
respecting which any related interest payment on a Mortgage Loan is computed,
and shall be pro rated (based upon the number of days of the related month the
Servicer so acted as Servicer relative to the number of days in that month)
for each part thereof. The obligation of the Purchaser to pay the Servicing
Fee is limited to, and payable solely from, the interest portion (including
recoveries with respect to interest from Liquidation Proceeds and other
proceeds, to the extent permitted by Subsection 11.05) of related Monthly
Payments collected by the Servicer, or as otherwise provided under Subsection
11.05.
Servicing Fee Rate: With respect to each Mortgage Loan, the per annum
rate set forth in the applicable Purchase Price and Terms Agreement.
Servicing File: With respect to each Mortgage Loan, the portion of the
Mortgage File, excluding the Mortgage Loan Documents, retained by the Servicer
pursuant to the terms of this Agreement.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing
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officers furnished to the Purchaser by the Servicer, as such list may be
amended from time to time.
Servicing Rights: Any and all of the following: (a) any and all rights to
service the Mortgage Loans; (b) any payments to or monies received by the
Seller for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage
Loans.
Standard & Poor's: Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R) Glossary, as
may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan as to any date of
determination, (i) the principal balance of the Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before
such date, whether or not received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal, or advances in lieu thereof
on such Mortgage Loan.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood
by participants in the mortgage-backed securities market) of Mortgage Loans
but performs one or more discrete functions identified in Item 1122(d) of
Regulation AB with respect to Mortgage Loans under the direction or authority
of the Servicer or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion
of the material servicing functions required to be performed by the Seller
under this Agreement or any Reconstitution Agreement that are identified in
Item 1122(d) of Regulation AB.
Successor Servicer: Any servicer of one or more Mortgage Loans designated
by the Purchaser as being entitled to the benefits of the indemnifications set
forth in Subsections 7.03 and 12.01.
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Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Seller.
Transfer Date: In the event the Servicer is terminated as servicer of a
Mortgage Loan pursuant to Subsections 11.01, 12.04, 13.01, 14.01(c) or 14.02,
the date on which the Purchaser, or its designee, shall receive the transfer
of servicing responsibilities and begin to perform the servicing of such
Mortgage Loans, and the Seller, as Servicer, shall cease all servicing
responsibilities.
Underwriting Guidelines: The underwriting guidelines of the Seller, a
copy of which is attached hereto as Exhibit 8 and a then-current copy of which
shall be attached as an exhibit to the related Assignment and Conveyance.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans, other than a Securitization Transaction.
Section 2. Purchase and Conveyance. The Seller agrees to sell from time
to time, 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 Purchase Price and Terms Agreement, or in
such other amount as agreed by the Purchaser and the Seller as evidenced by
the actual aggregate principal balance of the Mortgage Loans accepted by the
Purchaser on each Closing Date, together with the related Mortgage Files and
all rights and obligations arising under the documents contained therein. The
Seller, simultaneously with the delivery of the Mortgage Loan Schedule with
respect to the related Mortgage Loan Package to be purchased on each Closing
Date, shall execute and deliver an Assignment and Conveyance Agreement in the
form attached hereto as Exhibit 14 (the "Assignment and Conveyance
Agreement").
With respect to each Mortgage Loan purchased, the Purchaser shall own and
be entitled to receive: (a) all scheduled principal due after the related
Cut-off Date, (b) all other payments and/or 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
Servicer after the related Cut-off Date shall belong to the Seller), and (c)
all payments of interest on the Mortgage Loans, net of the Servicing Fee
(minus that portion of any such interest payment that is allocable to the
period prior to the related Cut-off Date).
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 reduce the Stated 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 remit to the Servicer for deposit
any such prepaid amounts into the Custodial Account, which account is
established for the benefit of the Purchaser, for remittance by the Servicer
to the Purchaser on the appropriate Remittance 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.
Section 3. Mortgage Loan Schedule. The Seller from time to time shall
provide the Purchaser with certain information constituting a preliminary
listing of the Mortgage
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Loans to be purchased on each Closing Date in accordance with the related
Purchase Price and Terms Agreement and this Agreement (each, a "Preliminary
Mortgage Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date to the Purchaser
at least five (5) Business Days prior to the related Closing Date. The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage Schedule with
those Mortgage Loans which have not been funded prior to the related Closing
Date deleted.
Section 4. Purchase Price. The Purchase Price for each Mortgage Loan
shall be the percentage of par as stated in the related Purchase Price and
Terms Agreement (subject to adjustment as provided therein), multiplied by the
aggregate principal balance, as of the related Cut-off Date, of the Mortgage
Loans listed on the related Mortgage Loan Schedule, after application of
scheduled payments of principal due on or before the related Cut-off Date, but
only to the extent such payments were actually received. The initial principal
amount of the related Mortgage Loans shall be the aggregate principal balance
of the Mortgage Loans, so computed as of the related Cut-off Date. If so
provided in the related Purchase Price and Terms Agreement, portions of the
Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser shall
pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Seller by wire transfer of immediately available funds to an
account designated by the Seller in writing.
Section 5. Examination of Mortgage Files. At least ten (10) Business Days
prior to the related Closing Date, the Seller shall either (a) deliver to the
Purchaser or its designee in escrow, for examination with respect to each
Mortgage Loan to be purchased, the related Mortgage File, including a copy of
the Assignment of Mortgage, pertaining to each Mortgage Loan, or (b) make the
related Mortgage File available to the Purchaser for examination at such other
location as shall otherwise be acceptable to the Purchaser. Such examination
of the Mortgage Files may be made by the Purchaser or its designee at any
reasonable time before or after the related Closing Date. If the Purchaser
makes such examination prior to the related Closing Date and determines, in
its sole discretion, that any Mortgage Loans do not conform to any of the
requirements set forth in the related Purchase Price and Terms Agreement, or
as an Exhibit annexed thereto, the Purchaser may delete such Mortgage Loans
from the related Mortgage Loan Schedule, and such Deleted Mortgage Loan (or
Loans) may be replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the Purchaser. The Purchaser may, at its option and without
notice to the Seller, purchase some or all of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Purchaser or
its designee has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not impair in any way the Purchaser's
(or any of its successor's) rights to demand repurchase, substitution or other
relief as provided in this Agreement. In the event that the Seller fails to
deliver the Mortgage File with respect to any Mortgage Loan, the Seller shall,
upon the
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request of the Purchaser, repurchase such Mortgage Loan as the price and in
the manner specified in Subsection 7.03.
Section 6. Delivery of Mortgage Loan Documents.
Subsection 6.01 Possession of Mortgage Files. The contents of each
Mortgage File required to be retained by or delivered to the Servicer to
service the Mortgage Loans pursuant to this Agreement and thus not delivered
to the Purchaser, or its designee, are and shall be held in trust by the
Servicer for the benefit of the Purchaser as the owner thereof. The Servicer's
possession of any portion of each such Mortgage File is at the will of the
Purchaser for the sole purpose of facilitating servicing of the Mortgage Loans
pursuant to this Agreement, and such retention and possession by the Servicer
shall be in a custodial capacity only. The ownership of each Mortgage Note,
each Mortgage and the contents of each Mortgage File is vested in the
Purchaser and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Servicer shall immediately vest in the Purchaser and shall be retained and
maintained, in trust, by the Servicer at the will of the Purchaser in such
custodial capacity only. The Mortgage File retained by the Servicer with
respect to each Mortgage Loan pursuant to this Agreement shall be
appropriately identified in the Servicer's computer system and/or books and
records to reflect clearly the sale of such related Mortgage Loan to the
Purchaser. The Servicer shall release from its custody the contents of any
Mortgage File retained by it only in accordance with this Agreement, except
when such release is required in connection with a repurchase of any such
Mortgage Loan pursuant to Subsection 7.03 or if required under Applicable Law
or court order.
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; provided, however, that if a Mortgage has been recorded in the
name of MERS or its designee, the Seller is shown as the owner of the related
Mortgage Loan on the records of MERS for purposes of the system of recording
transfers of beneficial ownership of mortgages maintained by MERS.
Notwithstanding the foregoing, 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
Servicer after the related Cut-off Date on or in connection with a Mortgage
Loan as provided in Section 2 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 2 shall be
received and held by the Servicer in trust for the benefit of the Purchaser or
the appropriate designee 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 related
Mortgage Loans by the Seller and not a pledge of such Mortgage Loans by the
Seller to the Purchaser to secure a debt or other obligation of the Seller.
Consequently, the sale of each Mortgage Loan shall be reflected as a purchase
on the Purchaser's business records, tax returns and financial statements, and
as a sale of assets on the Seller's business records, tax returns and
financial statements.
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Subsection 6.03 Delivery of Mortgage Loan Documents. The Seller shall, at
least two (2) Business Days prior to the related Closing Date (or such later
date as the Purchaser may reasonably request), deliver and release to the
Purchaser, or its designee, the Mortgage Loan Documents with respect to each
Mortgage Loan pursuant to a bailee letter agreement. In connection with the
foregoing, the Seller shall indemnify the Purchaser and its present and former
directors, officers, employees and agents and any Successor Servicer and its
present and former directors, officers, employees and agents, and hold such
parties harmless against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and other costs and
expenses based on or grounded upon, or resulting from, the fact that any
Mortgage Loan is not covered by an ALTA or CLTA lender's title insurance
policy. For purposes of the previous sentence, "Purchaser" shall mean the
Person then acting as the Purchaser under this Agreement and any and all
Persons who previously were "Purchasers" under this Agreement and "Successor
Servicer" shall mean any Person designated as the Successor Servicer pursuant
to this Agreement and any and all Persons who previously were "Successor
Servicers" pursuant to this Agreement.
To the extent received by it, the Servicer 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 (2) weeks after their execution;
provided, however, that the Servicer shall provide the Purchaser, or its
designee, with a copy, certified by the Servicer as a true copy, of any such
document submitted for recordation within two (2) weeks after its execution,
and shall promptly 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 two (2)
weeks following receipt of the original document by the Servicer; provided,
however, that such original recorded document or certified copy thereof shall
be delivered to the Purchaser no later than 180 days following the related
Closing Date, unless there has been a delay at the applicable recording
office.
If the original or copy of any document submitted for recordation to the
appropriate public recording office is not delivered to the Purchaser or its
designee within 180 days following the related Closing Date, the related
Mortgage Loan shall, upon the request of the Purchaser, be repurchased by the
Seller at the price and in the manner specified in Subsection 7.03. The
foregoing repurchase obligation shall not apply if the Seller cannot cause the
Servicer to deliver such original or copy of any document submitted for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided that (i) the Servicer shall instead deliver a recording
receipt of such recording office or, if such recording receipt is not
available, an officer's certificate of a servicing officer of the Servicer,
confirming that such document has been accepted for recording, and (ii) such
document is delivered within twelve (12) months of the related Closing Date.
The Seller shall pay all initial recording fees, if any, for the
Assignments of Mortgage and any other fees or costs in transferring all
original documents to the Custodian or, upon written request of the Purchaser,
to the Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's
designee shall be responsible for recording the Assignments of
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Mortgage and shall be reimbursed by the Seller for the costs associated
therewith pursuant to the preceding sentence.
Subsection 6.04 MERS Designated Loans With respect to each MERS
Designated Mortgage Loan, the Seller shall, on or prior to the related Closing
Date, designate the Purchaser as the Investor and the Custodian as custodian,
and no Person shall be listed as Interim Funder on the MERS System. In
addition, on or prior to the related Closing Date, Seller shall provide the
Custodian and the Purchaser with a MERS Report listing the Purchaser as the
Investor, the Custodian as custodian and no Person listed as Interim Funder
with respect to each MERS Designated Mortgage Loan.
Section 7. Representations, Warranties and Covenants; Remedies for
Breach.
Subsection 7.01 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:
(a) Mortgage Loans as Described. The information set forth in the related
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the related
Closing Date for the Mortgage Loan under the terms of the Mortgage Note have
been made and credited. No payment required under the Mortgage Loan is 30 days
or more delinquent nor has any payment under the Mortgage Loan been 30 days or
more delinquent at any time since the origination of the Mortgage Loan;
(c) No Outstanding Charges. There are no defaults in complying with the
terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground
rents which previously became due and owing have been paid, or an escrow of
funds has been established in an amount sufficient to pay for every such item
which remains unpaid and which has been assessed but is not yet due and
payable. The Seller has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required under the Mortgage Loan,
except for interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage Loan proceeds, whichever is earlier, to the day
which precedes by one month the related Due Date of the first installment of
principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which
has been delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing, and the terms of which are reflected in the
related Mortgage Loan Schedule. The substance of any such waiver, alteration
or modification has been approved by the issuer of any related PMI Policy and
the title insurer, if any, to the extent required by the policy, and its terms
are reflected on the related Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
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assumption agreement, approved by the issuer of any related PMI Policy and the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either
the Mortgage Note or the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, and no such right of
rescission, set-off, counterclaim or defense has been asserted with respect
thereto;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are provided for in the Underwriting
Guidelines. If required by the National Flood Insurance Act of 1968, as
amended, each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms with the Underwriting Guidelines. All
individual insurance policies contain a standard mortgagee clause naming the
Seller and its successors and assigns as mortgagee, and all premiums thereon
have been paid. The Mortgage obligates the Mortgagor thereunder to maintain
the hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at such Mortgagor's cost and expense, and to seek
reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier
of the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the
insurer, is in full force and effect, and will be in full force and effect and
inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in,
and has no knowledge of the Mortgagor's having engaged in, any act or omission
which would impair the coverage of any such policy, the benefits of the
endorsement provided for herein, or the validity and binding effect of either
including, without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of
Applicable Law, including, without limitation, usury, truth-in-lending, real
estate settlement procedures, consumer credit protection, predatory and
abusive lending, equal credit opportunity and disclosure laws applicable to
the Mortgage Loan, including, without limitation, any provisions relating to a
Prepayment Penalty, have been complied with, the consummation of the
transactions contemplated hereby will not involve the violation of any such
laws or regulations, and the Seller shall maintain in its possession,
available for the Purchaser's inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements;
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(h) No Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, 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 release,
cancellation, subordination or rescission. The Seller has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has
the Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Type of Mortgaged Property. With respect to a Mortgage Loan that is
not a Co-op Loan and is not secured by an interest in a leasehold estate, the
Mortgaged Property is a fee simple estate that consists of a single parcel of
real property with a detached single family residence erected thereon, or a
two- to four-family dwelling, or an individual residential condominium unit in
a condominium project, or an individual unit in a planned unit development
(or, with respect to each Co-op Loan an individual unit in a residential
cooperative housing corporation); provided, however, that any condominium
unit, planned unit development or residential cooperative housing corporation
shall conform with the Underwriting Guidelines. No portion of the Mortgaged
Property (or underlying Mortgaged Property, in the case of a Co-op Loan) is
used for commercial purposes, and since the date of origination, no portion of
the Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. None of the Mortgaged Properties are Manufactured
Homes, log homes, mobile homes, geodesic domes or other unique property types;
(j) Valid First Lien. The Mortgage is a valid, subsisting, enforceable
and perfected, first lien on the Mortgaged Property, including all buildings
and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(i) the lien of current real property taxes and assessments not yet
due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions generally
and specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and (a) specifically
referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan or (b) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such appraisal;
and
(iii) 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.
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Any security agreement, chattel mortgage or equivalent document related
to and delivered in connection with the Mortgage Loan establishes and creates
a valid, subsisting, enforceable and perfected first lien and first priority
security interest on the property described therein and the Seller has full
right to sell and assign the same to the Purchaser.
With respect to any Co-op Loan, the related Mortgage is a valid,
subsisting and enforceable first priority security interest on the related
cooperative shares securing the Mortgage Note, subject only to (a) liens of
the related residential cooperative housing corporation for unpaid assessments
representing the Mortgagor's pro rata share of the related residential
cooperative housing corporation's payments for its blanket mortgage, current
and future real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly subject and (b) other matters
to which like collateral is commonly subject which do not materially interfere
with the benefits of the security interest intended to be provided by the
related Security Agreement;
(k) Validity of Mortgage Documents. The Mortgage Note and the Mortgage
and any other agreement executed and delivered by a Mortgagor in connection
with a Mortgage Loan are genuine, and each is the legal, valid and binding
obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to Prepayment
Penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement,
and the Mortgage Note, the Mortgage and any other such related agreement have
been duly and properly executed by other such related parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place on the part of the Seller in
connection with the origination of the Mortgage Loan or in the application of
any insurance in relation to such Mortgage Loan. The documents, instruments
and agreements submitted for loan underwriting were not falsified and contain
no untrue statement of material fact or omit to state a material fact required
to be stated therein or necessary to make the information and statements
therein not misleading. No fraud, error, omission, misrepresentation,
negligence 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 or any other party involved in the origination of the Mortgage
Loan, or to the best of Seller's knowledge, on the part of any builder or
developer or any other Person involved in the application for any insurance in
relation to such Mortgage Loan. In making the representations set forth in
this clause (k), the Seller has reviewed all of the documents constituting the
Servicing File and has made such inquiries as it deems necessary to make and
confirm the accuracy of the representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed and
the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances 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 were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
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(m) Ownership. The Seller is the sole owner of record and holder of the
Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good,
indefeasible and marketable title thereto, and has full right to transfer and
sell the Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each
Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan, except as may be required of the Seller
in its capacity as Servicer of such Mortgage Loan. After the related Closing
Date, the Seller will have no right to modify or alter the terms of the sale
of the Mortgage Loan and the Seller will have no obligation or right to
repurchase the Mortgage Loan or substitute another Mortgage Loan, except as
provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1)
in compliance with any and all applicable licensing requirements of the laws
of the state wherein the Mortgaged Property is located, and (2) either (i)
organized under the laws of such state, or (ii) qualified to do business in
such state, or (iii) a federal savings and loan association, a savings bank or
a national bank having a principal office in such state, or (3) not doing
business in such state;
(o) LTV, PMI Policy. No Mortgage Loan has an LTV greater than 100%. Any
Mortgage Loan that had at the time of origination an LTV in excess of 80% is
insured as to payment defaults by a PMI Policy. Any PMI Policy in effect
covers the related Mortgage Loan for the life of such Mortgage Loan. All
provisions of such PMI Policy have been and are being complied with, such
policy is in full force and effect, and all premiums due thereunder have been
paid. No action, inaction, or event has occurred and no state of facts exists
that has, or will result in the exclusion from, denial of, or defense to
coverage. Any Mortgage Loan subject to a PMI Policy obligates the Mortgagor
thereunder to maintain the PMI Policy and to pay all premiums and charges in
connection therewith. The Mortgage Interest Rate for the Mortgage Loan as set
forth on the related Mortgage Loan Schedule is net of any such insurance
premium;
(p) Title Insurance. With respect to a Mortgage Loan which is not a Co-op
Loan, the Mortgage Loan is covered by an ALTA lender's title insurance policy
or other generally acceptable form of policy or insurance acceptable under the
Underwriting Guidelines and each such title insurance policy is issued by a
title insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
the Seller, its successors and assigns, as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan (or to the
extent a Mortgage Note provides for negative amortization, the maximum amount
of negative amortization in accordance with the Mortgage), subject only to the
exceptions contained in clauses (i) and (ii) of clause (j) of this Subsection
7.02, and in the case of Adjustable Rate Mortgage Loans, against any loss by
reason
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of the invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and
such lender's title insurance policy is valid and remains in full force and
effect and will be in 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, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
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 which
would permit acceleration, and neither the Seller nor any of its affiliates
nor any of their respective predecessors, have waived any default, breach,
violation or event which would permit acceleration;
(r) No Mechanics' Liens. 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 liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements which
were considered in determining the Appraised Value of the 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. No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by a
mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance
company or other similar institution which is supervised and examined by a
federal or state authority. Principal payments on the Mortgage Loan commenced
no more than seventy days after funds were disbursed in connection with the
Mortgage Loan. The Mortgage Interest Rate as well as, in the case of an
Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and the Periodic Rate Cap
and the Periodic Rate Floor are as set forth on the related Mortgage Loan
Schedule. The Mortgage Interest Rate is adjusted, with respect to Adjustable
Rate Mortgage Loans, on each Interest Rate Adjustment Date to equal the Index
plus the Gross Margin (rounded up or down to the nearest 0.125%), subject to
the Periodic
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Rate Cap. The Mortgage Note is payable in equal monthly installments of
principal and interest, which installments of interest, with respect to
Adjustable Rate Mortgage Loans, are subject to change due to the adjustments
to the Mortgage Interest Rate on each Interest Rate Adjustment Date, with
interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty (30) years from commencement of amortization. Unless
otherwise specified on the related Mortgage Loan Schedule, the Mortgage Loan
is payable on the first day of each month. The Mortgage Loan does not require
a balloon payment on its stated maturity date; and by its original terms or
any modification thereof, does not provide for amortization beyond its
scheduled maturity date;
(u) Customary Provisions. The Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver
good and merchantable title to the Mortgaged Property. There is no homestead
or other exemption available to a Mortgagor which would interfere with the
right to sell the Mortgaged Property at a trustee's sale or the right to
foreclose the Mortgage, subject to applicable federal and state laws and
judicial precedent with respect to bankruptcy and right of redemption or
similar law;
(v) Conformance with Agency and Underwriting Guidelines. The Mortgage
Loan was underwritten in accordance with the Underwriting Guidelines (a copy
of which is attached to the related Assignment and Conveyance as Exhibit C).
The Mortgage Note and Mortgage are on forms acceptable to ▇▇▇▇▇▇▇ Mac or
▇▇▇▇▇▇ Mae and no representations have been made to a Mortgagor that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. 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. Unless otherwise specified on the related Mortgage Loan Schedule,
the Mortgagor represented at the time of origination of the Mortgage Loan that
the Mortgagor would occupy the Mortgaged Property as the Mortgagor's primary
residence;
(x) No Additional Collateral. The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and 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;
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(z) Acceptable Investment. The Seller has no knowledge of any
circumstances or conditions with respect to the related Mortgage, the
Mortgaged Property, the Mortgagor, the Mortgage File or the related
Mortgagor's credit standing that can reasonably be expected to cause private
institutional investors that invest in prime mortgage loans similar to the
Mortgage Loan to regard the Mortgage Loan as an unacceptable investment. No
Mortgaged Property is located in a state, city, county or other local
jurisdiction which the Purchaser has determined in its sole good faith
discretion would cause the related Mortgage Loan to be ineligible for whole
loan sale or securitization in a transaction consistent with the prevailing
sale and securitization industry (including, without limitation, the practice
of the rating agencies) with respect to substantially similar mortgage loans;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered under
this Agreement for each Mortgage Loan have been delivered to the Custodian.
The Seller is in possession of a complete, true and accurate Mortgage File in
compliance with Exhibit 2 attached hereto, except for such documents the
originals of which have been delivered to the Custodian;
(bb) Transfer of Mortgage Loans. The Assignment of Mortgage (except with
respect to any Mortgage that has been recorded in the name of MERS or its
designee) with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(cc) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the Mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(dd) Assumability. With respect to each Adjustable Rate Mortgage Loan,
the Mortgage Loan Documents provide that after the related first Interest Rate
Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ee) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on behalf
of the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;
(ff) Consolidation of Future Advances. Any future advances made to the
Mortgagor prior to the applicable Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first lien priority by a title insurance
policy, an endorsement to the policy insuring the Mortgagee's consolidated
interest or by other
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title evidence acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(gg) Mortgaged Property Undamaged; No Condemnation Proceedings. There is
no proceeding pending or, to the Seller's knowledge, threatened for the total
or partial condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to materially and adversely affect the value
of the Mortgaged Property as security for the Mortgage Loan or the use for
which the premises were intended and each Mortgaged Property is in good
repair. There have not been any condemnation proceedings with respect to the
Mortgaged Property and the Seller has no knowledge of any such proceedings in
the future;
(hh) Collection Practices; Escrow Deposits; Interest Rate Adjustments.
The origination, servicing and collection practices used by the Seller with
respect to the Mortgage Loan have been in all respects in compliance with
Accepted Servicing Practices and Applicable Laws, and have been in all
respects legal and proper. With respect to escrow deposits and Escrow
Payments, 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. All Escrow
Payments have been collected in full compliance with state and federal law and
the provisions of the related Mortgage Note and Mortgage. An escrow of funds
is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect
to each Mortgage Note which required a new index to be selected, and such
selection did not conflict with the terms of the related Mortgage Note. The
Seller executed and delivered any and all notices required under Applicable
Law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(ii) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from an adjustable rate to a fixed rate;
(jj) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on
or prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability
of the timely payment of the full amount of the loss otherwise due thereunder
to the insured), irrespective of the cause of such failure of coverage. The
Seller has caused or will cause to be performed any and all acts required to
preserve the rights and remedies of the Purchaser in any insurance policies
applicable to the Mortgage Loans including, without limitation, any necessary
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notifications of insurers, assignments of policies or interests therein, and
establishments of coinsured, joint loss payee and mortgagee rights in favor of
the Purchaser. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received by the
Seller or by any officer, director, or employee of the Seller or any designee
of the Seller or any corporation in which the Seller or any officer, director,
or employee had a financial interest at the time of placement of such
insurance;
(kk) No Violation of Environmental Laws. To the best of the Seller's
knowledge, there is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule
or regulation with respect to the Mortgage Property; and nothing further
remains to be done to satisfy in full all requirements of each such law, rule
or regulation constituting a prerequisite to use and enjoyment of said
property;
(ll) Servicemembers Civil Relief Act. 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 or other similar state
statute;
(mm) Appraisal. The Mortgage File contains an appraisal of the related
Mortgaged Property 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, and whose compensation is not affected by the approval
or disapproval of the Mortgage Loan, and the appraisal and appraiser both
satisfy the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and Title XI of FIRREA
and the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(nn) Disclosure Materials. The Mortgagor has executed a statement to the
effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all Applicable Law with respect to the
making of the Mortgage Loans. The Seller shall maintain such statement in the
Mortgage File;
(oo) Construction or Rehabilitation of Mortgaged Property. No Mortgage
Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(pp) Escrow Analysis. If applicable, with respect to each Mortgage Loan,
the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
Applicable Law;
(qq) Credit Information. As to each consumer report (as defined in the
Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from
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furnishing such information to the Purchaser and the Purchaser is not
precluded from furnishing the same to any subsequent or prospective purchaser
of such Mortgage. The Seller has and shall in its capacity as servicer, for
each Mortgage Loan, 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;
(rr) Leaseholds. If the Mortgage Loan is secured by a leasehold estate,
(1) the ground lease is assignable or transferable; (2) the ground lease will
not terminate earlier than five years after the maturity date of the Mortgage
Loan; (3) the ground lease does not provide for termination of the lease in
the event of lessee's default without the Mortgagee being entitled to receive
written notice of, and a reasonable opportunity to cure the default; (4) the
ground lease permits the mortgaging of the related Mortgaged Property; (5) the
ground lease protects the Mortgagee's interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments that
have become due have been paid; and (7) the use of leasehold estates for
residential properties is a widely accepted practice in the jurisdiction in
which the Mortgaged Property is located;
(ss) Prepayment Penalty. Each Mortgage Loan that is subject to a
Prepayment Penalty as provided in the related Mortgage Note is identified on
the related Mortgage Loan Schedule. With respect to Mortgage Loans originated
prior to October 1, 2002, no such Prepayment Penalty may be imposed for a term
in excess of five (5) years following origination. With respect to Mortgage
Loans originated on or after October 1, 2002, no such Prepayment Penalty may
be imposed for a term in excess of three (3) years following origination;
(tt) Predatory Lending Regulations. No Mortgage Loan is a High Cost Loan
or Covered Loan, as applicable. No Mortgage Loan is covered by the Home
Ownership and Equity Protection Act of 1994 and no Mortgage Loan is in
violation of any comparable state or local law. The Mortgaged Property is not
located in a jurisdiction where a breach of this representation with respect
to the related Mortgage Loan may result in additional assignee liability to
the Purchaser, as determined by Purchaser in its reasonable discretion;
(uu) Single-premium credit life insurance policy. No Mortgagor was
required to purchase any single premium credit insurance policy (e.g., life,
disability, property, accident, unemployment 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 insurance policy
(e.g., life, disability, property, accident, unemployment, mortgage or health
insurance) in connection with the origination of the Mortgage Loan. No
proceeds from any Mortgage Loan were used to purchase single premium credit
insurance policies as part of the origination of, or as a condition to
closing, such Mortgage Loan;
(vv) Qualified Mortgage. The Mortgage Loan is a qualified mortgage under
Section 860G(a)(3) of the Code;
(ww) Tax Service Contract. Each Mortgage Loan is covered by a paid in
full, life of loan, tax service contract issued by First American Real Estate
Tax Service, and such contract is transferable;
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(xx) Origination. No predatory or deceptive lending practices, including,
without limitation, the extension of credit without regard to the ability of
the Mortgagor to repay and the extension of credit which has no apparent
benefit to the Mortgagor, were employed in the origination of the Mortgage
Loan;
(yy) Recordation. Each original Mortgage was recorded and all subsequent
assignments of the original Mortgage (other than the assignment to the
Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of
the Seller, or is in the process of being recorded;
(zz) Co-op Loans. With respect to a Mortgage Loan that is a Co-op Loan,
the stock that is pledged as security for the Mortgage Loan is held by a
person as a tenant-stockholder (as defined in Section 216 of the Code) in a
cooperative housing corporation (as defined in Section 216 of the Code);
(aaa) Mortgagor Bankruptcy. On or prior to the date 60 days after the
related Closing Date, the Mortgagor has not filed and will not file a
bankruptcy petition or has not become the subject and will not become the
subject of involuntary bankruptcy proceedings or has not consented to or will
not consent to the filing of a bankruptcy proceeding against it or to a
receiver being appointed in respect of the related Mortgaged Property;
(bbb) No Prior Offer. If the Mortgage Loan has previously been offered
for sale, such Mortgage Loan was not rejected from being purchased by such
offeree as a result of the offeree's due diligence, unless such deficiency has
since been cured;
(ccc) Georgia Fair Lending Act. There is no Mortgage Loan that was
originated (or modified) on or after October 1, 2002 and before March 7, 2003
which is secured by property located in the State of Georgia. There is no
Mortgage Loan that was originated on or after March 7, 2003 that is a "high
cost home loan" as defined under the Georgia Fair Lending Act;
(ddd) No Arbitration. No Mortgagor with respect to any Mortgage Loan
originated on or after August 1, 2004 agreed to submit to arbitration to
resolve any dispute arising out of or relating in any way to the mortgage loan
transaction; and
(eee) Flood Service Contract. Each Mortgage Loan is covered by a paid in
full, life of loan, flood service contract issued by First American Real
Estate Tax Service or Fidelity, and such contract is transferable.
Subsection 7.02 Seller Representations. The Seller hereby represents and
warrants to the Purchaser that, as of the related Closing Date:
(a) Due Organization and Authority. The Seller is a national banking
association, validly existing, and in good standing under the laws of its
jurisdiction of incorporation or formation and has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified and in
good standing in the states where the Mortgaged Property is located if the
laws of such state require licensing or qualification in order to conduct
business of the type conducted by the Seller. The Seller has corporate power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder; the execution,
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delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and
validly authorized; this Agreement has been duly executed and delivered and
constitutes the valid, legal, binding and enforceable obligation of the
Seller, except as enforceability may be limited by (i) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other similar laws
affecting the enforcement of the rights of creditors and (ii) general
principles of equity, whether enforcement is sought in a proceeding in equity
or at law. All requisite corporate action has been taken by the Seller to make
this Agreement valid and binding upon the Seller in accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or order is
required for the transactions contemplated by this Agreement from any court,
governmental agency or body, or federal or state regulatory authority having
jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related
Closing Date, be obtained;
(c) Ordinary Course of Business. 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 in effect in any applicable
jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this Agreement,
the acquisition or origination of the Mortgage Loans by the Seller, the sale
of the Mortgage Loans to the Purchaser, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement, will conflict with or result in a breach of any
of the terms, conditions or provisions of the Seller's charter or by-laws or
any legal restriction or any agreement or instrument to which the Seller is
now a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Seller or its
property is subject, or result in the creation or imposition of any lien,
charge or encumbrance that would have an adverse effect upon any of its
properties pursuant to the terms of any mortgage, contract, deed of trust or
other instrument, or impair the ability of the Purchaser to realize on the
Mortgage Loans, impair the value of the Mortgage Loans, or impair the ability
of the Purchaser to realize the full amount of any insurance benefits accruing
pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform
under the terms of this Agreement;
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(f) Ability to Perform; Solvency. 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. The Seller is solvent and the sale of
the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or
defraud any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any mortgage
loan or to deny any mortgage loan application is an independent decision based
upon the Underwriting Guidelines, and is in no way made as a result of
Purchaser's decision to purchase, or not to purchase, or the price Purchaser
may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. 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;
(i) Financial Statements; Other Information. The Seller has delivered to
the Purchaser financial statements as to its last three complete fiscal years
and any later quarter ended more than 60 days prior to the execution of this
Agreement. All such financial statements fairly present the pertinent results
of operations and changes in financial position for each of such periods and
the financial position at the end of each such period of the Seller and its
subsidiaries and have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as set forth in the notes thereto. In addition, the Seller has
delivered information as to its loan gain and loss experience in respect of
foreclosures and its loan delinquency experience for the immediately preceding
three year period, in each case with respect to mortgage loans owned by it and
such mortgage loans serviced for others during such period, and all such
information so delivered shall be true and correct in all material respects.
There has been no change in the business, operations, financial condition,
properties or assets of the Seller since the date of the Seller's financial
Statements that would have a material adverse effect on its ability to perform
its obligations under this Agreement. The Seller has completed any forms and
provided any other information reasonably requested by the Purchaser in a
timely manner and in accordance with the provided instructions;
(j) Ability to Service. Seller has the facilities, procedures, and
experienced personnel necessary for the sound servicing of mortgage loans of
the same type as the Mortgage Loans. The Seller is duly qualified, licensed,
registered and otherwise authorized under all applicable federal, state and
local laws, and regulations, if applicable, meets the minimum capital
requirements set forth by HUD, the OTS, the OCC or the FDIC, if applicable,
and is in good standing to enforce, originate, sell mortgage loans to, and
service mortgage loans in the jurisdiction wherein the Mortgaged Properties
are located. No event has occurred, including but not limited to, a change in
insurance coverage, which would make the Seller unable to comply
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with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility requirements or which would require
notification to ▇▇▇▇▇▇ Mae/▇▇▇▇▇▇▇ Mac. 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;
(k) Reasonable Servicing Fee. The Seller acknowledges and agrees that the
Servicing Fee represents reasonable compensation for performing such services
and that the entire Servicing Fee shall be treated by the Seller, for
accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement;
(l) Selection Process. The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 7.01 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(m) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will
be in possession of a complete Mortgage File in compliance with Exhibit 2
hereto, except for such documents as will be delivered to the Custodian;
(n) Mortgage Loan Characteristics. The characteristics of the related
Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 9 on the related Closing Date in the form attached as Exhibit B to
each related Assignment and Conveyance Agreement;
(o) No Untrue Information. Neither this Agreement nor any information,
statement, tape, diskette, report, form, or other document furnished or to be
furnished pursuant to this Agreement or any Reconstitution Agreement or in
connection with the transactions contemplated hereby (including any
Securitization Transaction or Whole Loan Transfer) contains or will contain
any untrue statement of fact or omits or will omit to state a fact necessary
to make the statements contained herein or therein not misleading;
(p) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans for which any
Person other than Seller will be liable;
(q) Sale Treatment. The Seller expects to be advised by its independent
certified public accountants that under generally accepted accounting
principles the transfer of the Mortgage Loans will be treated as a sale on the
books and records of the Seller and the Seller has determined that the
disposition of the Mortgage Loans pursuant to this Agreement will be afforded
sale treatment for tax and accounting purposes;
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(r) Reasonable Purchase Price. The consideration received by the Seller
upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans; and
(s) Insured Depository Institution Representations. Seller is an "insured
depository institution" as that term is defined in Section 1813(c)(2) of Title
12 of the United States Code, as amended, and accordingly, Seller makes the
following additional representations and warranties:
(i) This Agreement between Purchaser and Seller conforms to all
applicable statutory and regulatory requirements; and
(ii) This Agreement is (1) executed contemporaneously with the
agreement reached by Purchaser and Seller, (2) approved by a
specific corporate or banking association resolution by the
Seller's board of directors, which approval shall be reflected
in the minutes of said board, and (3) an official record of the
Seller. A copy of such resolution, certified by a vice
president or higher officer of Seller has been provided to
Purchaser.
Subsection 7.03 Remedies for Breach of Representations and Warranties.
It is understood and agreed that the representations and warranties set forth
in Subsections 7.01 and 7.02 shall survive the sale of the Mortgage Loans to
the Purchaser and shall inure to the benefit of the Purchaser, notwithstanding
any restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination or failure to examine any Mortgage File. With
respect to any representation or warranty contained in Subsections 7.01 or
7.02 hereof that is made to the Seller's knowledge, if it is discovered by the
Purchaser that the substance of such representation and warranty was
inaccurate as of the related Closing Date and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, then notwithstanding
the Seller's lack of knowledge with respect to the inaccuracy at the time the
representation or warranty was made, such inaccuracy shall be deemed a breach
of the applicable representation or warranty. Upon discovery by either the
Seller, the Servicer or the Purchaser of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other relevant parties.
Within sixty (60) days after 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 the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case
of a representation and warranty relating to a particular Mortgage Loan), 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 or Mortgage Loans at the
Repurchase Price. Notwithstanding the above sentence, within sixty (60) days
after the earlier of either discovery by, or notice to, the Seller of any
breach of the representations or warranties set forth in clause (qq), (ss),
(tt), (uu), (vv), (ccc) or (ddd) of Subsection 7.01, the Seller shall
repurchase such Mortgage Loan at the Repurchase Price. In the event that a
breach shall involve any representation or warranty set forth in Subsection
7.02, and
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such breach cannot be cured within (sixty) 60 days of the earlier of either
discovery by or notice to the Seller of such breach, all of the Mortgage Loans
affected by such breach shall, at the Purchaser's option, be repurchased by
the Seller at the Repurchase Price. However, if the breach, shall involve a
representation or warranty set forth in Subsection 7.01 (except as provided in
the second sentence of this paragraph with respect to certain breaches for
which no substitution is permitted) and the Seller discovers or receives
notice of any such breach within 120 days of the related Closing Date, the
Seller shall, at the Purchaser's option and provided that the 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 Qualified Substitute Mortgage Loans;
provided, however, that any such substitution shall be effected within such
one hundred twenty (120) days after the related Closing Date. If the Seller
has no Qualified Substitute Mortgage Loan, it shall repurchase the deficient
Mortgage Loan at the Repurchase Price. Any repurchase of a Mortgage Loan
pursuant to the foregoing provisions of this Subsection 7.03 shall occur on a
date designated by the Purchaser, and acceptable to the Seller, and shall be
accomplished by the Seller remitting to the Servicer for deposit the amount of
the Repurchase Price in the Custodial Account for distribution to the
Purchaser on the next scheduled Remittance Date.
At the time of repurchase of any deficient Mortgage Loan (or removal of
any Deleted Mortgage Loan), the Purchaser and the Seller shall arrange for the
assignment of the repurchased Mortgage Loan (or Deleted Mortgage Loan) to the
Seller or its designee and the delivery to the Seller of any documents held by
the Purchaser relating to the repurchased Mortgage Loan in the manner required
by this Agreement with respect to the purchase and sale of such Mortgage Loan
on the related Closing Date. In the event the Repurchase Price is deposited in
the Custodial Account, the Seller shall, simultaneously with its remittance to
the Servicer of such Repurchase Price for deposit, give written notice to the
Purchaser that such deposit has taken place. Upon such repurchase, the Seller
shall amend the related Mortgage Loan Schedule to reflect the withdrawal of
the repurchased Mortgage Loan from this Agreement.
As to any Deleted Mortgage Loan for which the Seller substitutes one or
more Qualified Substitute Mortgage Loans, the Seller shall be deemed to have
made the representations and warranties set forth in this Agreement except
that all such representations and warranties set forth in this Agreement shall
be deemed made as of the date of such substitution. No substitution will be
made in any calendar month after the Determination Date for such month. The
Seller shall effect such substitution by delivering to the Purchaser for each
Qualified Substitute Mortgage Loan the Mortgage Note, the Mortgage, the
Assignment of Mortgage and such other documents and agreements as are required
by Subsection 6.03. The Seller shall remit to the Servicer for deposit in the
Custodial Account the Monthly Payment less the Servicing Fee due on each
Qualified Substitute Mortgage Loan in the month following the date of such
substitution. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution shall be retained by the Seller.
For the month of substitution, distributions to the Purchaser shall include
the Monthly Payment due on any 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 related 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
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such substitution, each Qualified Substitute Mortgage Loan shall be subject to
the terms of this Agreement in all respects, and the Seller shall be deemed to
have made with respect to such Qualified Substitute Mortgage Loan, as of the
date of substitution, the covenants, representations and warranties set forth
in Subsections 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
shall 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). The amount of such shortfall shall be remitted to the
Servicer by the Seller for distribution by the Servicer in the month of
substitution pursuant to Subsection 11.04. Accordingly, on the date of such
substitution, the Seller will remit to the Servicer from its own funds for
deposit into the Custodial Account an amount equal to the amount of such
shortfall plus one month's interest thereon at the Mortgage Loan Remittance
Rate.
In addition to such repurchase or substitution obligation, the Seller
shall indemnify the Purchaser and its present and former directors, officers,
employees and agents and any Successor Servicer and its present and former
directors, officers, employees and agents and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses 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 representations and warranties
contained in this Agreement or any Reconstitution Agreement. For purposes of
this paragraph, "Purchaser" shall mean the Person then acting as the Purchaser
under this Agreement and any and all Persons who previously were "Purchasers"
under this Agreement and "Successor Servicer" shall mean any Person designated
as the Successor Servicer pursuant to this Agreement and any and all Persons
who previously were "Successor Servicers" pursuant to this Agreement. It is
understood and agreed that the obligations of the Seller set forth in this
Subsection 7.03 to cure, repurchase or substitute for a defective Mortgage
Loan, and to indemnify the Purchaser and Successor Servicer under Subsection
12.01 constitute the sole remedies of the Purchaser and Successor Servicer
respecting a breach of the representations and warranties set forth in
Subsections 7.01 and 7.02.
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 and 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, substitute a Qualified Substitute Mortgage
Loan, or repurchase such Mortgage Loan as specified above and (iii) demand
upon the Seller by the Purchaser for compliance with this Agreement.
Subsection 7.04 Repurchase of Mortgage Loans with Early Payment Defaults.
If the related Mortgagor is delinquent with respect to any of the Mortgage
Loan's first three (3) Monthly Payments at any time either (i) after
origination of such Mortgage Loan, or (ii) after the related Closing Date, the
Seller, at the Purchaser's option, shall repurchase such Mortgage Loan from
the Purchaser at a price equal to the Repurchase Price. The Seller shall
repurchase such delinquent Mortgage Loan within thirty (30) days of such
request.
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Subsection 7.05 Premium Recapture. With respect to any Mortgage Loan
without Prepayment Penalties that prepays in full during the first four months
following the related Closing Date, and with respect to any Mortgage Loan that
is repurchased pursuant to Subsection 7.04, the Seller shall pay the
Purchaser, within ten (10) Business Days after such prepayment in full or
repurchase, an amount equal to the excess of the Purchase Price Percentage for
such Mortgage Loan over par, multiplied by the outstanding principal balance
of such Mortgage Loan as of the related Cut-off Date.
Section 8. Closing. The closing for the purchase and sale of each Mortgage
Loan Package shall take place on the related Closing Date. At the Purchaser's
option, each 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. Each closing shall be subject to each of the following
conditions:
(a) at least two Business Days prior to the related Closing Date, the
Seller shall deliver to the Purchaser a magnetic diskette, or transmit by
modem, a listing on a loan-level basis of the necessary information to compute
the Purchase Price of the Mortgage Loans delivered on such Closing Date
(including accrued interest), and prepare a Mortgage Loan Schedule;
(b) all of the representations and warranties of the Seller in 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 an Event of Default under this Agreement;
(c) the 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 as required
pursuant to the terms hereof; and
(d) all other terms and conditions of this Agreement shall have been
complied with.
Section 9. Closing Documents. On the related Closing Date, the Seller
shall deliver to the Purchaser's attorneys in escrow fully executed originals
of:
(a) this Agreement (to be executed and delivered only for the initial
Closing Date);
(b) the related Purchase Price and Terms Agreement, executed in four (4)
counterparts;
(c) with respect to the initial Closing Date, the Custodial Agreement,
dated as of the initial Cut-off Date;
(d) with respect to the initial Closing Date, a Custodial Account
Certification in the form attached as Exhibit 4 hereto or a Custodial Account
Letter Agreement in the form attached as Exhibit 5 hereto;
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(e) with respect to the initial Closing Date, an Escrow Account
Certification in the form attached as Exhibit 6 hereto or an Escrow Account
Letter Agreement in the form attached as Exhibit 7 hereto;
(f) the related Mortgage Loan Schedule, segregated by Mortgage Loan
Package, one copy to be attached hereto, one copy to be attached to the
Custodian's counterpart of the Custodial Agreement, and one copy to be
attached to the related Assignment and Conveyance as the Mortgage Loan
Schedule thereto;
(g) with respect to the initial Closing Date, an Officer's Certificate,
in the form of Exhibit 10 hereto with respect to the Seller, including all
attachments thereto and with respect to subsequent Closing Dates, an Officer's
Certificate upon request of the Purchaser; and
(h) with respect to the initial Closing Date, an Opinion of Counsel of
the Seller (who may be an employee of the Seller), in the form of Exhibit 11
hereto and with respect to subsequent Closing Dates, an Opinion of Counsel of
the Seller upon request of the Purchaser;
(i) with respect to the initial Closing Date, an Opinion of Counsel of
the Custodian (who may be an employee of the Custodian), in the form of an
exhibit to the Custodial Agreement, if required;
(j) a Security Release Certification, in the form of Exhibit 12 or
Exhibit 13, as applicable, hereto executed by any person, as requested by the
Purchaser, if any of the Mortgage Loans have at any time been subject to any
security interest, pledge or hypothecation for the benefit of such person;
(k) 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;
(l) with respect to the initial Closing Date, the Underwriting Guidelines
to be attached hereto as Exhibit 8 and with respect to each subsequent Closing
Date, the Underwriting Guidelines to be attached to the related Assignment and
Conveyance;
(m) Assignment and Conveyance Agreement in the form of Exhibit 14 hereto,
including all exhibits thereto;
(n) a Custodian's Certification, as required under the Custodial
Agreement, in the form attached to the Custodial Agreement; and
(o) a MERS Report reflecting the Purchaser as Investor, the Custodian as
custodian and no Person as Interim Funder for each MERS Designated Mortgage
Loan.
The Seller shall bear the risk of loss of the closing documents until
such time as they are received by the Purchaser or its attorneys.
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Section 10. Costs. The Purchaser shall pay any commissions due its
salesmen and the legal fees and expenses of its attorneys and custodial fees.
All other costs and expenses incurred in connection with the transfer and
delivery of the Mortgage including 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.
Section 11. Administration and Servicing of the Mortgage Loans.
Subsection 11.01 Servicer to Act as Servicer. The Servicer shall service
and administer the Mortgage Loans in accordance with this Agreement and
Accepted Servicing Procedures and the terms of the Mortgage Notes and
Mortgages, and shall have full power and authority, acting alone or through
sub-servicers or agents, to do or cause to be done any and all things in
connection with such servicing and administration which the Servicer may deem
necessary or desirable and consistent with the terms of this Agreement. The
Servicer may perform its servicing responsibilities through agents or
independent contractors, but shall not thereby be released from any of its
responsibilities hereunder.
Consistent with the terms of this Agreement, the Servicer may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor; provided, however, that (unless the Mortgagor is in default with
respect to the Mortgage Loan, or such default is, in the judgment of the
Servicer, imminent, and the Servicer has the consent of the Purchaser) the
Servicer shall not permit any modification with respect to any Mortgage Loan
which materially and adversely affects the Mortgage Loan, including without
limitation, any modification that would defer or forgive the payment of any
principal or interest, change the outstanding principal amount (except for
actual payments of principal), make any future advances, extend the final
maturity date or change the Mortgage Interest Rate, as the case may be, with
respect to such Mortgage Loan. Without limiting the generality of the
foregoing, the Servicer in its own name or acting through sub-servicers or
agents is hereby authorized and empowered by the Purchaser when the Servicer
believes it appropriate and reasonable in its best judgment, to execute and
deliver, on behalf of itself and the Purchaser, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Mortgage Loans and the
Mortgaged Properties and to institute foreclosure proceedings or obtain a
deed-in-lieu of foreclosure so as to convert the ownership of such properties,
and to hold or cause to be held title to such properties, on behalf of the
Purchaser pursuant to the provisions of Subsection 11.12. The Servicer shall
make all required Servicing Advances and shall service and administer the
Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Purchaser shall furnish to the Servicer any powers of attorney and other
documents reasonably necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties under this Agreement.
Notwithstanding anything to the contrary in this Agreement, the Purchaser
may at any time and from time to time, in its sole discretion, upon written
notice to the Seller, with respect to (1) any REO Property or (2) all Mortgage
Loans that are 90 or more days delinquent as of the date of such notice and
any Mortgage Loans that subsequently become 90 or more days delinquent
following the date of such notice (for the purposes of this paragraph such
Mortgage
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Loans, "Delinquent Mortgage Loans"), either (i) terminate the Seller's
servicing obligations hereunder with respect to such REO Properties and
Delinquent Mortgage Loans, upon reimbursement of any unremibursed advances
owed to the Servicer and payment of the termination fee referred to in
Subsection 14.02, or (ii) assume the absolute right to direct the Seller to
take such actions with respect to such REO Property and Delinquent Mortgage
Loans as the Seller would otherwise be able to undertake pursuant to
Subsection 11.12. Upon the effectiveness of any such termination of the
Seller's servicing obligations with respect to any such REO Property or
Delinquent Mortgage Loan, the Seller shall deliver all agreements, documents,
and instruments related thereto to the Purchaser, in accordance with Accepted
Servicing Procedures and applicable law and shall transfer servicing to the
Purchaser's designee in accordance with Acceptable Servicing Procedures.
Subsection 11.02 Liquidation of Mortgage Loans. If any payment due under
any Mortgage Loan is not paid when the same becomes due and payable, or in the
event the Mortgagor fails to perform any other covenant or obligation under
the Mortgage Loan and such failure continues beyond any applicable grace
period, the Servicer shall take such action as it reasonably believes to be in
the best interest of the Purchaser. If any payment due under any Mortgage Loan
remains delinquent for a period of ninety (90) days or more, the Servicer
shall commence foreclosure proceedings in accordance with the guidelines set
forth by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac. In such event, the Servicer shall from its
own funds make all necessary and proper Servicing Advances.
Subsection 11.03 Collection of Mortgage Loan Payments. Continuously from
the date hereof until the principal and interest on all Mortgage Loans are
paid in full, the Servicer will proceed diligently, in accordance with this
Agreement, to collect all payments due under each of the Mortgage Loans when
the same shall become due and payable. Further, the Servicer will in
accordance with Accepted Servicing Procedures ascertain and estimate taxes,
assessments, fire and hazard insurance premiums, and all other charges that,
as provided in any Mortgage, will become due and payable to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges
as and when they become due and payable.
Subsection 11.04 Establishment of Custodial Account; Deposits in
CustodialAccount. The Servicer shall segregate and hold all funds collected
and received pursuant to each Mortgage Loan separate and apart from any of its
own funds and general assets and shall establish and maintain one or more
Custodial Accounts (collectively, the "Custodial Account"), titled "The
Hemisphere National Bank, in trust for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. as
Purchaser of Mortgage Loans and various Mortgagors." Such Custodial Account
shall be an Eligible Account established with a commercial bank, a savings
bank or a savings and loan association (which may be a depository affiliate of
the Servicer) which meets the guidelines set forth by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac as an eligible depository institution for custodial accounts. In any case,
the Custodial Account shall be insured by the FDIC in a manner which shall
provide maximum available insurance thereunder and which may be drawn on by
the Servicer. The creation of any Custodial Account shall be evidenced by (i)
a certification in the form of Exhibit 4 hereto, in the case of an account
established with a depository affiliate of the Servicer, or (ii) a letter
agreement in the form of Exhibit 5 hereto, in the case of an account held by a
depository other than an affiliate of the Servicer. In either case, a copy of
such certification or letter agreement shall be furnished to the Purchaser
upon request.
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The Servicer shall deposit in the Custodial Account on a daily basis on
the Business Day following receipt thereof, and retain therein the following
payments and collections received or made by it subsequent to the related
Cut-off Date (other than in respect of principal and interest on the Mortgage
Loans due on or before the related Cut-off Date):
(a) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(b) all payments on account of interest on the Mortgage Loans adjusted to
the Mortgage Loan Remittance Rate;
(c) all Liquidation Proceeds;
(d) all proceeds received by the Servicer under any title insurance
policy, hazard insurance policy, or other insurance policy other than proceeds
to be held in the Escrow Account and applied to the restoration or repair of
the Mortgaged Property or released to the Mortgagor in accordance with
Accepted Servicing Procedures;
(e) all awards or settlements in respect of condemnation proceedings or
eminent domain affecting any Mortgaged Property which are not released to the
Mortgagor in accordance with Accepted Servicing Procedures;
(f) any amount required to be deposited in the Custodial Account pursuant
to Subsections 11.14, 11.16 and 11.18;
(g) any amount required to be deposited by the Servicer in connection
with any REO Property pursuant to Subsection 11.12;
(h) any amounts payable in connection with the repurchase of any Mortgage
Loan pursuant to Subsection 7.03, and all amounts required to be deposited by
the Servicer in connection with shortfalls in principal amount of Qualified
Substitute Mortgage Loans pursuant to Subsection 7.03; and
(i) with respect to each Principal Prepayment, an amount (to be paid by
the Servicer out of its own funds) which, when added to all amounts allocable
to interest received in connection with the Principal Prepayment, equals one
month's interest on the amount of principal so prepaid for the month of
prepayment at the applicable Mortgage Loan Remittance Rate; provided, however,
that the Servicer's aggregate obligations under this paragraph for any month
shall be limited to the total amount of Servicing Fees actually received with
respect to the Mortgage Loans by the Servicer during such month.
The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
assumption fees and other ancillary fees need not be deposited by the Servicer
in the Custodial Account.
The Servicer may invest the funds in the Custodial Account in Eligible
Investments designated in the name of the Servicer for the benefit of the
Purchaser, which shall
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mature not later than the Business Day next preceding the Remittance Date next
following the date of such investment (except that (A) any investment in the
institution with which the Custodial Account is maintained may mature on such
Remittance Date and (B) any other investment may mature on such Remittance
Date if the Servicer shall advance funds on such Remittance Date, pending
receipt thereof to the extent necessary to make distributions to the Owner)
and shall not be sold or disposed of prior to maturity. Notwithstanding
anything to the contrary herein and above, all income and gain realized from
any such investment shall be for the benefit of the Servicer and shall be
subject to withdrawal by the Servicer. The amount of any losses incurred in
respect of any such investments shall be deposited in the Custodial Account by
the Servicer out of its own funds immediately as realized.
Subsection 11.05 Withdrawals From the Custodial Account. The Servicer
shall, from time to time, withdraw funds from the Custodial Account for the
following purposes:
(a) to make payments to the Purchaser in the amounts and in the manner
provided for in Subsection 11.14;
(b) to reimburse itself for P&I Advances, the Servicer's right to
reimburse itself pursuant to this subclause (b) with respect to any Mortgage
Loan being limited to related Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, REO Disposition Proceeds and such other amounts as may be
collected by the Servicer from the Mortgagor or otherwise relating to the
Mortgage Loan, it being understood that, in the case of any such
reimbursement, the Servicer's right thereto shall be prior to the rights of
the Purchaser, except that, where the Seller is required to repurchase a
Mortgage Loan, pursuant to Subsection 7.03, the Servicer's right to such
reimbursement shall be subsequent to the payment to the Purchaser of the
Repurchase Price pursuant to Subsection 7.03, and all other amounts required
to be paid to the Purchaser with respect to such Mortgage Loan;
(c) to reimburse itself for any unpaid Servicing Fees and for
unreimbursed Servicing Advances, the Servicer's right to reimburse itself
pursuant to this subclause (c) with respect to any Mortgage Loan being limited
to related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds and such other amounts as may be collected by the
Servicer from the Mortgagor or otherwise relating to the Mortgage Loan, it
being understood that, in the case of any such reimbursement, the Servicer's
right thereto shall be prior to the rights of the Purchaser unless the Seller
is required to repurchase a Mortgage Loan pursuant to Subsection 7.03, in
which case the Servicer's right to such reimbursement shall be subsequent to
the payment to the Purchaser of the Repurchase Price pursuant to Subsection
7.03 and all other amounts required to be paid to the Purchaser with respect
to such Mortgage Loan;
(d) to reimburse itself for unreimbursed Servicing Advances and for
▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, in accordance with Subsection 11.16, to the extent
that such amounts are nonrecoverable by the Servicer pursuant to subclause (b)
or (c) above, provided that the Mortgage Loan for which such advances were
made is not required to be repurchased by the Seller pursuant to Subsection
7.03;
(e) to reimburse itself for expenses incurred by and reimbursable to it
pursuant to Subsection 12.01;
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(f) to withdraw amounts to make P&I Advances in accordance with
Subsection 11.16;
(g) to pay to itself any interest earned or any investment earnings on
funds deposited in the Custodial Account;
(h) to withdraw any amounts inadvertently deposited in the Custodial
Account; and
(i) to clear and terminate the Custodial Account upon the termination of
this Agreement.
Subsection 11.06 Establishment of Escrow Account; Deposits in Escrow
Account. The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts (collectively, the "Escrow
Account"), titled "The Hemisphere National Bank, in trust for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc. as Purchaser of Mortgage Loans and various Mortgagors."
The Escrow Account shall be an Eligible Account established with a commercial
bank, a savings bank or a savings and loan association (which may be a
depository affiliate of Servicer), which meets the guidelines set forth by
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac as an eligible institution for escrow accounts. In
any case, the Escrow Account shall be insured by the FDIC in a manner which
shall provide maximum available insurance thereunder and which may be drawn on
by the Servicer. The creation of any Escrow Account shall be evidenced by a
certification in the form of Exhibit 6 hereto, in the case of an account
established with a depository affiliate of the Servicer, or by a letter
agreement in the form of Exhibit 7 hereto, in the case of an account held by a
depository. In either case, a copy of such certification or letter agreement
shall be furnished to the Purchaser upon request.
The Servicer shall deposit in the Escrow Account on a daily basis, and
retain therein: (a) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement, and (b) all amounts representing
proceeds of any hazard insurance policy which are to be applied to the
restoration or repair of any Mortgaged Property. The Servicer shall make
withdrawals therefrom only in accordance with Subsection 11.07. As part of its
servicing duties, the Servicer shall pay to the Mortgagors interest on funds
in the Escrow Account, to the extent required by law.
Subsection 11.07 Withdrawals From Escrow Account. Withdrawals from the
Escrow Account shall be made by the Servicer only (a) to effect timely
payments of ground rents, taxes, assessments, fire and hazard insurance
premiums or other items constituting Escrow Payments for the related Mortgage,
(b) to reimburse the Servicer for any Servicing Advance made by Servicer
pursuant to Subsection 11.08 with respect to a related Mortgage Loan, (c) to
refund to any Mortgagor any funds found to be in excess of the amounts
required under the terms of the related Mortgage Loan, (d) for transfer to the
Custodial Account upon default of a Mortgagor or in accordance with the terms
of the related Mortgage Loan and if permitted by Applicable Law, (e) for
application to restore or repair of the Mortgaged Property, (f) to pay to
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the Mortgagor, to the extent required by law, any interest paid on the funds
deposited in the Escrow Account, (g) to pay to itself any interest earned on
funds deposited in the Escrow Account (and not required to be paid to the
Mortgagor), (h) to the extent permitted under the terms of the related
Mortgage Note and Applicable Law, to pay late fees with respect to any Monthly
Payment which is received after the applicable grace period, (i) to withdraw
suspense payments that are deposited into the Escrow Account, (j) to withdraw
any amounts inadvertently deposited in the Escrow Account or (k) to clear and
terminate the Escrow Account upon the termination of this Agreement.
Subsection 11.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder. With respect to each Mortgage Loan, the Servicer shall
maintain accurate records reflecting the status of ground rents, taxes,
assessments and other charges which are or may become a lien upon the
Mortgaged Property and the status of fire and hazard insurance coverage and
shall obtain, from time to time, all bills for the payment of such charges
(including renewal premiums) and shall effect payment thereof prior to the
applicable penalty or termination date and at a time appropriate for securing
maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and
accumulated by the Servicer in amounts sufficient for such purposes, as
allowed under the terms of the Mortgage. If a Mortgage does not provide for
Escrow Payments, the Servicer shall determine that any such payments are made
by the Mortgagor. The Servicer assumes full responsibility for the timely
payment of all such bills and shall effect timely payments of all such bills
irrespective of each Mortgagor's faithful performance in the payment of same
or the making of the Escrow Payments and shall make Servicing Advances to
effect such payments, subject to its ability to recover such Servicing
Advances pursuant to Subsection 11.07(b). With respect to each Mortgage Loan,
on or before January 31st of each year during the term of this Agreement,
beginning January 31, 2006, the Servicer shall ensure that all taxes due
during the prior calendar year have been paid on the related Mortgaged
Property.
Subsection 11.09 Transfer of Accounts. The Servicer may transfer the
Custodial Account or the Escrow Account to a different depository institution.
Such transfer shall be made only upon obtaining the prior written consent of
the Purchaser; such consent not to be unreasonably withheld.
Subsection 11.10 Maintenance of Hazard Insurance. The Servicer shall
cause to be maintained for each Mortgage Loan fire and hazard insurance with
extended coverage customary in the area where the Mortgaged Property is
located that conforms to the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac. The Servicer shall maintain on each REO Property fire and hazard
insurance with extended coverage, in an amount with respect to such hazards
which is at least equal to the full replacement cost of the improvements which
are a part of such REO Property and shall indemnify and hold harmless the
Owner with respect to liabilities in connection therewith in an amount of at
least $1 million per occurrence and $2 million in the aggregate. Any amounts
collected by the Servicer under any such policies (other than amounts to be
deposited in the
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Escrow Account and applied to the restoration or repair of the property
subject to the related Mortgage or property acquired in liquidation of the
Mortgage Loan, or to be released to the Mortgagor in accordance with Accepted
Servicing Procedures) shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Subsection 11.05. It is understood and agreed that no
earthquake or other additional insurance need be required by the Servicer of
any Mortgagor or maintained on REO Property other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. All policies required hereunder shall be
endorsed with standard mortgagee clauses with loss payable to Servicer, and
shall provide for at least thirty (30) days prior written notice of any
cancellation, reduction in amount or material change in coverage to the
Servicer. The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either its insurance carrier or agent; provided, however,
that the Servicer shall not accept any such insurance policies that do not
conform to the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Subsection 11.11 Fidelity Bond; Errors and Omissions Insurance. The
Servicer shall maintain, at its own expense, a blanket Fidelity Bond and an
errors and omissions insurance policy, with broad coverage on all officers,
employees or other persons acting in any capacity requiring such persons to
handle funds, money, documents or papers relating to the Mortgage Loans. These
policies shall insure the Servicer against losses resulting from dishonest or
fraudulent acts committed by the Servicer's personnel, any employees of
outside firms that provide data processing services for the Servicer, and
temporary contract employees or student interns. The Fidelity Bond shall also
protect and insure the Servicer against losses in connection with the release
or satisfaction of a Mortgage Loan without having obtained payment in full of
the indebtedness secured thereby. No provision of this Subsection 11.11
requiring such Fidelity Bond and errors and omissions insurance shall diminish
or relieve the Servicer of its duties and obligations as set forth in this
Agreement. The minimum coverage under any such Fidelity Bond and insurance
policy shall be at least equal to the corresponding amounts required by ▇▇▇▇▇▇
Mae in the ▇▇▇▇▇▇ ▇▇▇ Servicing Guide or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇' & Servicers' Guide, as amended or restated from time to time, or in
an amount as may be permitted to the Servicer by express waiver of ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac.
Subsection 11.12 Title, Management and Disposition of REO Property. (a)
If title to the Mortgaged Property is acquired in foreclosure or by deed in
lieu of foreclosure, the deed or certificate of sale shall, with the prior
consent of the Owner, be taken in the name of the Servicer or its nominee, in
either case as nominee, for the benefit of the Purchaser of record on the date
of acquisition of title (the "Owner"). If the Servicer is not authorized or
permitted to hold title to real property in the state where the REO Property
is located, or would be adversely affected under the "doing business" or tax
laws of such state by so holding title, the deed or certificate of sale shall
be taken in the name of such Person or Persons as shall be consistent with an
opinion of counsel obtained by the Servicer, at the expense of the Purchaser,
from an attorney duly licensed to practice law in the state where the REO
Property is located. The Person or Persons holding such title other than the
Owner shall acknowledge in writing that such title is being held as nominee
for the Owner.
The Servicer shall cause to be deposited on a daily basis in the
Custodial Account all revenues received with respect to the conservation and
disposition of the related REO Property and shall, with the prior consent of
the Owner, withdraw therefrom funds necessary for
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the proper operation, management and maintenance of the REO Property,
including the cost of maintaining any hazard insurance pursuant to Subsection
11.10 and the fees of any managing agent acting on behalf of the Servicer. Any
disbursement in excess of $1,000 shall be made only with the written approval
of the Purchaser. The Servicer shall make distributions as required on each
Remittance Date to the Purchaser of the net cash flow from the REO Property
(which shall equal the revenues from such REO Property net of the expenses
described above and of any reserves reasonably required from time to time to
be maintained to satisfy anticipated liabilities for such expenses).
The Servicer shall use its best efforts to dispose of the REO Property as
soon as possible, but only with the prior consent of the Owner, and shall sell
such REO Property in any event within one year after title has been taken to
such REO Property, unless the Servicer determines, and gives an appropriate
notice to the Owner to such effect, that a longer period is necessary for the
orderly liquidation of such REO Property and the Owner consents to such
extension. If a period longer than one year is permitted under the foregoing
sentence and is necessary to sell any REO Property, the Servicer shall report
monthly to the Owner as to the progress being made in selling such REO
Property.
The disposition of REO Property shall be carried out by the Servicer at
such price, and upon such terms and conditions, as the Servicer reasonably
believes to be in the best interests of the Owner. No REO Disposition shall be
effected without the prior consent of the Owner and in accordance with
Accepted Servicing Practices. The proceeds of sale of the REO Property shall
be promptly deposited in the Custodial Account. As soon as practical
thereafter, the Servicer shall prepare for the Owner's approval an itemized
▇▇▇▇ for the expenses of such sale and upon the Owner's approval of the items
on such itemized ▇▇▇▇, the Servicer shall reimburse itself for any related
unreimbursed Servicing Advances and unpaid Servicing Fees made pursuant to
this Section and so approved by the Owner, and on the Remittance Date
immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Owner.
With respect to each REO Property, the Servicer shall hold all funds
collected and received in connection with the operation of the REO Property in
the Custodial Account. The Servicer shall cause to be deposited on a daily
basis upon the receipt thereof in each Custodial Account all revenues received
with respect to the conservation and disposition of the related REO Property.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Owner solely for the purpose of its prompt disposition and
sale. The Servicer shall either itself or through an agent selected by the
Servicer, with the prior consent of the Owner, manage, conserve, protect and
operate the REO Property in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in
the same manner that similar property in the same locality as the REO Property
is managed. The Servicer, at Owner's expense, shall reasonably cooperate with
the Owner's request to transfer the management of any REO Property to a third
party vendor. The Servicer shall attempt to sell the same on such terms and
conditions as the Servicer reasonably believes to be in the best interest of
the Owner. No termination fees will be payable to the Servicer in connection
with any such sale.
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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 Servicer
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.
Upon request, with respect to any REO Property, the Servicer shall
furnish to the Owner a statement covering the Servicer's efforts in connection
with the sale of that REO Property and any rental of the REO Property
incidental to the sale thereof for the previous month (together with an
operating statement).
(b) Together with the statement furnished pursuant to Subsection
11.12(a), the Servicer shall furnish to the Owner on or before the 5th
Business Day of each month a statement with respect to any REO Property
covering the operation of such REO Property for the previous month and the
Servicer'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. That statement shall be accompanied by such other information as the
Owner shall reasonably request, including all of the information fields set
forth on Exhibit 17.
(c) Following the foreclosure sale or abandonment of any Mortgaged
Property, the Servicer shall report such foreclosure or abandonment as
required pursuant to Section 6050J of the Code.
Subsection 11.13 Servicing Compensation. As compensation for its services
hereunder, the Servicer shall be entitled to retain the Servicing Fee from
interest payments on the Mortgage Loans. Additional servicing compensation in
the form of assumption fees, late payment charges and other ancillary income
shall be retained by the Servicer to the extent not required to be deposited
in the Custodial Account. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder and shall
not be entitled to reimbursement therefor except as specifically provided for
herein.
Subsection 11.14 Distributions. On each Remittance Date the Servicer
shall remit by wire transfer of immediately available funds to the account
designated in writing by the Purchaser of record on the preceding Record Date
(a) all Monthly Payments due in the Due Period relating to such Remittance
Date and received by the Servicer prior to the related Determination Date,
plus (b) all amounts, if any, which the Servicer is obligated to distribute
pursuant to Subsection 11.16, plus (c) any amounts attributable to Principal
Prepayments received in the calendar month preceding the month in which the
Remittance Date occurs, together with any additional interest required to be
deposited in the Custodial Account in connection with such Principal
Prepayments in accordance with Subsection 11.04(i), minus (d) all amounts that
may be withdrawn from the Custodial Account pursuant to Subsections 11.05(b)
through (e).
With respect to any remittance received by the Purchaser after the
Business Day on which such payment was due, the Servicer shall pay to the
Purchaser interest on any such late
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payment at an annual rate equal to the Prime Rate, adjusted as of the date of
each change, plus three percent (3.0%), but in no event greater than the
maximum amount permitted by applicable law. Such interest shall be paid by the
Servicer to the Purchaser on the date such late payment is made and shall
cover the period commencing with the Business Day on which such payment was
due and ending with the Business Day immediately preceding the Business Day on
which such payment is made, both inclusive. The payment by the Servicer of any
such interest shall not be deemed an extension of time for payment or a waiver
of any Event of Default by the Servicer.
Subsection 11.15 Statements to the Purchaser. Not later than the 10th
calendar day of each month (or, if such 10th day is not a Business Day, the
following Business Day), the Servicer shall forward to the Purchaser in hard
copy and electronic format mutually acceptable to the Purchaser and the
Seller, a statement, substantially in the form of, and containing the
information fields set forth on, Exhibit 9 and certified by a Servicing
Officer. Such statement shall also include information regarding delinquencies
on Mortgage Loans, indicating the number and aggregate principal amount of
Mortgage Loans which are either one (1), two (2) or three (3) or more months
delinquent and the book value of any REO Property. The Servicer shall submit
to the Purchaser monthly a liquidation report with respect to each Mortgaged
Property sold in a foreclosure sale as of the related Record Date and not
previously reported. Such liquidation report shall be incorporated into the
remittance report delivered to Purchaser in the form of Exhibit 9 hereto.
The Servicer shall furnish to the Purchaser an individual loan accounting
report in hard copy and electronic format mutually acceptable to the Purchaser
and the Seller, as of the last Business Day of each month, in the Purchaser's
assigned loan number order (provided that such loan numbers previously have
been provided in writing by the Purchaser to the Servicer) to document
Mortgage Loan payment activity on an individual Mortgage Loan basis. With
respect to each month, the corresponding individual loan accounting report
shall be received by the Purchaser no later than the fifth Business Day of the
following month, which report shall contain the following:
(i) with respect to each Monthly Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, along with a
detailed report of interest on principal prepayment amounts remitted in
accordance with Subsection 11.14);
(ii) with respect to each Monthly Payment, the amount of such
remittance allocable to interest; and
(iii) the next actual due date for each Mortgage Loan.
In addition, within a reasonable period of time after the end of each
calendar year, the Servicer will furnish a report to each Person that was a
Purchaser at any time during such calendar year. Such report shall state the
aggregate of amounts distributed to the Purchaser for such calendar year. Such
obligation of the Servicer shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Servicer pursuant to any requirements of the Code.
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The Servicer shall prepare and file any and all tax returns, information
statements or other filings required to be delivered to any governmental
taxing authority or to the Purchaser pursuant to any Applicable Law with
respect to the Mortgage Loans and the transactions contemplated hereby. In
addition, the Servicer shall provide the Purchaser with such information
concerning the Mortgage Loans as is necessary for such Purchaser to prepare
federal income tax returns as the Purchaser may reasonably request from time
to time.
Subsection 11.16 Advances by the Servicer. On the Business Day
immediately preceding each Remittance Date, the Servicer shall either (a)
deposit in the Custodial Account from its own funds an amount equal to the
aggregate amount of all Monthly Payments (with interest adjusted to the
Mortgage Loan Remittance Rate) which were due on the Mortgage Loans during the
applicable Due Period and which were delinquent at the close of business on
the immediately preceding Determination Date (each such advance, a "P&I
Advance"), (b) cause to be made an appropriate entry in the records of the
Custodial Account that amounts held for future distribution have been, as
permitted by this Subsection 11.16, used by the Servicer in discharge of any
such P&I Advance or (c) make P&I Advances in the form of any combination of
(a) or (b) aggregating the total amount of P&I Advances to be made. Any
amounts held for future distribution and so used shall be replaced by the
Servicer by deposit in the Custodial Account on or before any future
Remittance Date if funds in the Custodial Account on such Remittance Date
shall be less than payments to the Purchaser required to be made on such
Remittance Date. The Servicer's obligation to make P&I Advances as to any
Mortgage Loan will continue through the last Monthly Payment due prior to the
payment in full of a Mortgage Loan, or through the last Remittance Date prior
to the Remittance Date for the distribution of all other payments or
recoveries (including proceeds under any title, hazard or other insurance
policy, or condemnation awards) with respect to a Mortgage Loan; provided,
however, that such obligation shall cease (i) for any Mortgage Loan and on any
Remittance Date that the distribution of all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds and Condemnation
Proceeds) occurs with respect to such Mortgage Loan or (ii) if the Servicer,
in its good faith judgment, determines that P&I Advances would not be
recoverable pursuant to Subsection 11.05(d). The determination by the Servicer
that a P&I Advance, if made, would be nonrecoverable, shall be evidenced by an
Officer's Certificate of the Servicer, delivered to the Purchaser, which
details the reasons for such determination.
Subsection 11.17 Assumption Agreements. The Servicer will use its best
efforts to enforce any "due-on-sale" provision contained in any Mortgage or
Mortgage Note, provided that the Servicer shall permit such assumption if so
required in accordance with the terms of the Mortgage or the Mortgage Note.
When the Mortgaged Property has been conveyed by the Mortgagor, the Servicer
will, to the extent it has knowledge of such conveyance, exercise its rights
to accelerate the maturity of such Mortgage Loan under the "due-on-sale"
clause applicable thereto; provided, however, the Servicer will not exercise
such rights if prohibited by law from doing so. In connection with any such
assumption, the outstanding principal amount, the Monthly Payment or the
Mortgage Interest Rate of the related Mortgage Note shall not be changed, and
the term of the Mortgage Loan will not be increased or decreased. If an
assumption is allowed pursuant to this Subsection 11.17, the Servicer is
authorized to enter into a substitution of liability agreement with the
purchaser of the Mortgaged Property pursuant to which the original Mortgagor
is released from liability and the purchaser of the Mortgaged Property is
substituted as Mortgagor and becomes liable under the Mortgage Note.
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Subsection 11.18 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the Servicer
of a notification that payment in full will be escrowed in a manner customary
for such purposes, the Servicer will obtain the portion of the Mortgage File
that is in the possession of the Purchaser or its designee, prepare and
process any required satisfaction or release of the Mortgage and notify the
Purchaser in accordance with the provisions of this Agreement. The Purchaser
agrees to deliver to the Servicer the original Mortgage Note for any Mortgage
Loan not later than three (3) Business Days following its receipt of a notice
from the Servicer that such a payment in full has been received or that a
notification has been received that such a payment in full shall be made. Such
Mortgage Note shall be held by the Servicer, in trust, for the purpose of
canceling such Mortgage Note and delivering the cancelled Mortgage Note to the
Mortgagor in a timely manner as and to the extent provided under applicable
state law. If the Mortgage has been recorded in the name of MERS or its
designee, the Servicer shall take all necessary action to effect the release
of the Mortgage Loan on the records of MERS.
If the Servicer grants a satisfaction or release of a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage or
should the Servicer otherwise prejudice any right the Purchaser may have under
the mortgage instruments, the Servicer, upon written demand of the Purchaser,
shall remit to the Purchaser the Stated Principal Balance of the related
Mortgage Loan by deposit thereof in the Custodial Account. The Fidelity Bond
shall insure the Servicer against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth
herein.
Subsection 11.19 Annual Statement as to Compliance. The Servicer shall
deliver to the Purchaser on or before March 10th of each year beginning March
10, 2006, an Officer's Certificate stating that (i) a review of the activities
of the Servicer during the preceding calendar year and if performance under
this Agreement has been made under such officer's supervision, and (ii) to the
best of such officer's knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and the action being taken by the Servicer to cure such default.
Subsection 11.20 Annual Independent Public Accountants' Servicing Report
or Attestation. On or before March 10th of each year beginning March 10, 2006,
the Servicer, at its expense, shall cause a firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Purchaser to the effect that such
firm has, with respect to the Servicer's overall servicing operations,
examined such operations in accordance with the requirements of the Uniform
Single Attestation Program for Mortgage Bankers, stating such firm's
conclusions relating thereto.
Subsection 11.21 Servicer Shall Provide Access and Information as
Reasonably Required. The Servicer shall provide to the Purchaser, and for any
Purchaser insured by FDIC or NAIC, the supervisory agents and examiners of
FDIC and OTS or NAIC, access to any documentation regarding the Mortgage Loans
which may be required by applicable regulations. Such access shall be afforded
without charge, but only upon reasonable request, during normal business hours
and at the offices of the Servicer.
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In addition, the Servicer shall furnish upon request by the Purchaser,
during the term of this Agreement, such periodic, special or other reports or
information, whether or not provided for herein, as shall be necessary,
reasonable and appropriate with respect to the purposes of this Agreement and
applicable regulations. All such reports or information shall be provided by
and in accordance with all reasonable instructions and directions the
Purchaser may require. The Servicer agrees to execute and deliver all such
instruments and take all such action as the Purchaser, from time to time, may
reasonably request in order to effectuate the purposes and to carry out the
terms of this Agreement.
Subsection 11.22 Transfer of Servicing. On the related Transfer Date, if
any, the Purchaser, or its designee, shall assume all servicing
responsibilities related to, and the Seller cease all servicing
responsibilities related to, the related Mortgage Loans subject to such
Transfer Date. On or prior to the related Transfer Date, the Seller shall, at
its sole cost and expense, take such steps as may be necessary or appropriate
to effectuate and evidence the transfer of the servicing of the related
Mortgage Loans to the Purchaser, or its designee, including but not limited to
the following:
(a) Notice to Mortgagors. The Seller shall mail to the Mortgagor of each
related Mortgage Loan a letter advising such Mortgagor of the transfer of the
servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ National Affordable Housing Act of 1990,
as amended; provided, however, the content and format of the letter shall have
the prior approval of the Purchaser. The Seller shall provide the Purchaser
with copies of all such related notices no later than the related Transfer
Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall transmit to the applicable taxing authorities and insurance companies
(including primary mortgage insurance policy insurers, if applicable) and/or
agents, notification of the transfer of the servicing to the Purchaser, or its
designee, and instructions to deliver all notices, tax bills and insurance
statements, as the case may be, to the Purchaser from and after the related
Transfer Date. The Seller shall provide the Purchaser with copies of all such
notices no later than the related Transfer Date.
(c) Delivery of Servicing Records. The Seller shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in
the Seller's possession relating to each related Mortgage Loan.
(d) Escrow Payments. The Seller shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of
the net Escrow Payments and suspense balances and all loss draft balances
associated with the related Mortgage Loans. The Seller shall provide the
Purchaser with an accounting statement, in electronic format acceptable to the
Purchaser in its sole discretion, of Escrow Payments and suspense balances and
loss draft balances sufficient to enable the Purchaser to reconcile the amount
of such payment with the accounts of the Mortgage Loans. Additionally, the
Seller shall wire transfer to the Purchaser the amount of any agency, trustee
or prepaid Mortgage Loan payments and all other similar amounts held by the
Seller.
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(e) Payoffs and Assumptions. The Seller shall provide to the Purchaser,
or its designee, copies of all assumption and payoff statements generated by
the Seller on the related Mortgage Loans from the related Cut-off Date to the
related Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
related Transfer Date all payments received by the Seller on each related
Mortgage Loan shall be properly applied by the Seller to the account of the
particular Mortgagor.
(g) Mortgage Payments Received after Transfer Date. The amount of any
related Monthly Payments received by the Seller after the related Transfer
Date shall be forwarded to the Purchaser by overnight mail on the date of
receipt or by wire transfer on the next succeeding Business Day. The Seller
shall notify the Purchaser of the particulars of the payment, which
notification requirement shall be satisfied if the Seller forwards with its
payment sufficient information to permit appropriate processing of the payment
by the Purchaser. The Seller shall assume full responsibility for the
necessary and appropriate legal application of such Monthly Payments received
by the Seller after the related Transfer Date with respect to related Mortgage
Loans then in foreclosure or bankruptcy; provided, for purposes of this
Agreement, necessary and appropriate legal application of such Monthly
Payments shall include, but not be limited to, endorsement of a Monthly
Payment to the Purchaser with the particulars of the payment such as the
account number, dollar amount, date received and any special Mortgagor
application instructions and the Seller shall comply with the foregoing
requirements with respect to all Monthly Payments received by the Seller after
the related Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication errors;
(ii) The party receiving notice of a misapplied payment occurring
prior to the related Transfer Date and discovered after such Transfer
Date shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the related
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage in a Custodial Account or Escrow Account, the
Seller shall be liable for the amount of such shortage. The Seller shall
reimburse the Purchaser for the amount of such shortage within thirty
(30) days after receipt of written demand therefor from the Purchaser;
(iv) If a misapplied payment which occurred prior to the related
Transfer Date has created an improper Purchase Price as the result of an
inaccurate outstanding principal balance, a check shall be issued to the
party shorted by the improper payment application within five (5)
Business Days after notice thereof by the other party; and
(v) Any check issued under the provisions of this Section 11.22(h)
shall be accompanied by a statement indicating the corresponding Seller
and/or the Purchaser Mortgage Loan identification number and an
explanation of the allocation of any such payments.
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(i) Books and Records. On the related Transfer Date, the books, records
and accounts of the Seller with respect to the related Mortgage Loans shall be
in accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall, on or before the related Transfer
Date, reconcile principal balances and make any monetary adjustments required
by the Purchaser. Any such monetary adjustments will be transferred between
the Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall file or shall cause to be filed all IRS
forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be filed on or
before the related Transfer Date in relation to the servicing and ownership of
the related Mortgage Loans. The Seller shall provide copies of such forms to
the Purchaser upon request and shall reimburse the Purchaser for any costs or
penalties incurred by the Purchaser due to the Seller's failure to comply with
this paragraph.
(l) Mortgage Loans in Foreclosure. The servicing with respect to Mortgage
Loans in foreclosure on or before the related Transfer Date shall not be
transferred from the Servicer to the Purchaser or its designee, as the case
may be, and such Mortgage Loans shall continue to be serviced by the Servicer
pursuant to the terms of this Agreement. However, if the Purchaser so elects,
the Purchaser may waive the provisions of this paragraph and accept transfer
of servicing of such Mortgage Loans and all amounts received by the Servicer
thereunder.
(m) Servicing Advances. Notwithstanding the fact that the related
Transfer Date has occurred, the Servicer shall not be reimbursed for any
Servicing Advances in relation to any Mortgage Loan until the Servicer or the
successor servicer receives a Monthly Payment or Liquidation Proceeds in
relation to such Mortgage Loan. At such time, the Servicer shall be entitled
to be reimbursed for all unreimbursed Servicing Advances with respect to such
Mortgage Loan on a first priority basis from the Monthly Payment or
Liquidation Proceeds received with respect to such Mortgage Loan. This clause
shall survive each Transfer Date.
Subsection 11.23 Notification of Maturity Date. With respect to each
Mortgage Loan, the Seller shall execute and deliver to the Mortgagor any and
all necessary notices required under Applicable Law and the terms of the
related Mortgage Note and Mortgage regarding the maturity date if required
under Applicable Law.
Subsection 11.24 Notification of Adjustments. With respect to each ARM
Mortgage Loan, Seller shall adjust the Mortgage Interest Rate on the related
Interest Rate Adjustment Date and shall adjust the Monthly Payment on the
related Payment Adjustment Date in compliance with the requirements of
Applicable Law and the related Mortgage and Mortgage Note. If, pursuant to the
terms of the Mortgage Note, another index is selected for determining the
Mortgage Interest Rate because the original index is no longer available, the
same index will be used with respect to each Mortgage Note which requires a
new index to be selected, provided that such selection does not conflict with
the terms of the related Mortgage Note. Seller shall execute and deliver any
and all necessary notices required under Applicable Law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and
the Monthly Payment adjustments. Seller shall promptly, upon written request
therefor, deliver to
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the Purchaser such notifications and any additional applicable data regarding
such adjustments and the methods used to calculate and implement such
adjustments. Upon the discovery by Seller or the Purchaser that Seller has
failed to adjust a Mortgage Interest Rate or a Monthly Payment pursuant to the
terms of the related Mortgage Note and Mortgage, Seller shall immediately
deposit in the Custodial Account, from its own funds, the amount of any
interest loss caused the Purchaser thereby without reimbursement therefor.
Subsection 11.25 Availability of Information. So long as the Servicer is
acting as servicer for any Mortgage Loans under this Agreement, the Servicer
shall provide the Purchaser with such information with respect to the
Servicer's servicing portfolio as the Servicer and the Purchaser shall agree
upon. Such information shall be sent to the Purchaser each month in an
extractable electronic format, in a form convenient to the Purchaser and the
Servicer.
Section 12. The Servicer.
Subsection 12.01 Indemnification; Third Party Claims. The Servicer agrees
to indemnify and hold the Purchaser and any Successor Servicer and their
respective present and former directors, officers, employees and agents
harmless from any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and expenses (including, without limitation, any legal
fees and expenses, judgments or expenses relating to such liability, claim,
loss or damage) and related costs, judgments, and any other costs, fees and
expenses that such parties may sustain in any way related to the Servicer's
failure (as a result of any act or omission of the Servicer):
(a) to observe and perform any or all of Servicer's duties, obligations,
covenants, agreements, warranties or representations contained in this
Agreement or in the related Purchase Price and Terms Agreement; or
(b) to comply with all applicable requirements contained in this
Agreement or the related Purchase Price and Terms Agreement with respect to
the servicing of the Mortgage Loan or the transfer of Servicing Rights (but
only if such claim for indemnification is in any way the result of any act or
omission of the Servicer which occurred prior to the related Transfer Date or
in conjunction with the transfer of Servicing Rights).
The Servicer immediately shall notify the Purchaser if a claim is made by
a third party with respect to this Agreement.
For purposes of this Section, "Purchaser" shall mean the Person then
acting as the Purchaser under this Agreement and any and all Persons who
previously were "Purchasers" under this Agreement and "Successor Servicer"
shall mean any Person designated as the Successor Servicer pursuant to this
Agreement and any and all Persons who previously were "Successor Servicers"
pursuant to this Agreement.
If any action is commenced for which indemnification may be available
under this Subsection 12.01 of which an indemnified party has notice, promptly
after receipt by such indemnified party under this Subsection 12.01 of notice
of the commencement of such action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Subsection 12.01, notify the indemnifying party in writing of the
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commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have
to any indemnified party under this Subsection 12.01, except to the extent
that it has been prejudiced in any material respect, or from any liability
which it may have, otherwise than under this Subsection 12.01. In case any
such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent that it may elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party; provided that
if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party or parties shall have
reasonably concluded that there may be legal defenses available to it or them
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of
such action and approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party for expenses incurred by
the indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel
(together with one local counsel, if applicable)), (ii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice
of commencement of the action or (iii) the indemnifying party has authorized
in writing the employment of counsel for the indemnified party at the expense
of the indemnifying party; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel referred to
in such clause (i) or (iii).
Notwithstanding anything to the contrary contained herein, in no event
shall a termination of this Agreement or the Servicer hereunder terminate any
indemnification obligations of the Servicer under this Agreement, which
obligations shall survive any such termination.
Subsection 12.02 Merger or Consolidation of the Servicer. The Seller will
keep in full effect its existence, rights and franchises under the laws of its
jurisdiction of incorporation or organization, and will obtain and preserve
its qualification to do business in each other jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the 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
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company whose business is the origination and servicing of mortgage loans,
unless otherwise consented to by the Purchaser, which consent shall not be
unreasonably withheld, and shall be qualified to service mortgage loans on
behalf of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Subsection 12.03 Limitation on Liability of the Servicer and Others. The
duties and obligations of the Servicer shall be determined solely by the
express provisions of this Agreement, the Servicer shall not be liable except
for the performance of such duties and obligations as are specifically set
forth in this Agreement and no implied covenants or obligations shall be read
into this Agreement against the Servicer. Neither the Servicer nor any of the
directors, officers, employees or agents of the Servicer shall be under any
liability to the Purchaser for any action taken or for refraining from the
taking of any action in accordance with Accepted Servicing Procedures and
otherwise in good faith pursuant to this Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Servicer against
any liability resulting from any breach of any representation or warranty made
herein, or from any liability specifically imposed on the Servicer herein;
and, provided, further, that this provision shall not protect the Servicer
against any liability that would otherwise be imposed by reason of the willful
misfeasance, bad faith or negligence in the performance of duties or by reason
of reckless disregard of the obligations or duties hereunder. The Servicer and
any director, officer, employee or agent of the Servicer may rely on any
document of any kind which it in good faith reasonably believes to be genuine
and to have been adopted or signed by the proper authorities respecting any
matters arising hereunder. Subject to the terms of Subsection 12.01, the
Servicer shall have no obligation to appear with respect to, prosecute or
defend any legal action which is not incidental to the Servicer's duty to
service the Mortgage Loans in accordance with this Agreement.
Subsection 12.04 Seller and Servicer Not to Resign. With respect to the
retention of the Seller to service the Mortgage Loans hereunder, 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, neither Seller nor Servicer shall 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 shall be granted or withheld in the Purchaser's sole discretion or
upon the determination that the Servicer's duties hereunder are no longer
permissible under Applicable Law and such incapacity cannot be cured by the
Servicer. Any such determination permitting the unilateral resignation of the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered
to the Purchaser, which Opinion of Counsel shall be in form and substance
acceptable to the Purchaser. No such resignation or assignment shall become
effective until a successor has assumed the Servicer's responsibilities and
obligations hereunder in accordance with Subsection 14.03.
Subsection 12.05 Inspection and Audit Rights. The Servicer agrees that it
will permit any representative of the Purchaser, at any time during the
Servicer's normal business hours, to examine all the books of account,
records, reports and other papers of the Servicer relating to the Mortgage
Loans, to make copies and extracts therefrom, to cause such books to be
audited by independent certified public accountants selected by the Purchaser
and to discuss its affairs, finances and accounts relating to such Mortgage
Loans with the officers,
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employees and independent public accountants of the Servicer (and by this
provision the Servicer hereby authorizes said accountants to discuss with such
representative such affairs, finances and accounts). Any reasonable
out-of-pocket expense of a Servicer incident to the exercise by the Purchaser
of any right under this Section 12.05 shall be borne by the Servicer.
Nothing in this Section 12.05 shall limit the obligation of the Servicer
to observe any Applicable Law prohibiting disclosure of information regarding
the Mortgagors and the failure of the Servicer to provide access as provided
in this Section as a result of such obligation shall not constitute a breach
of this Section. Nothing in this Section 12.05 shall require the Servicer to
collect, create, collate or otherwise generate any information that it does
not generate in its usual course of business. The Servicer shall not be
required to make copies of or to ship documents to any Person who is not a
party to this Agreement, and then only if provisions have been made for the
reimbursement of the costs thereof.
Section 13. Default.
Subsection 13.01 Events of Default. In case one or more of the following
Events of Default by the Servicer shall occur and be continuing:
(a) any failure by the Servicer to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues
unremedied for a period of one (1) Business Day after the date upon which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Purchaser;
(b) failure by the Servicer to duly observe or perform, in any material
respect, any other covenants, obligations or agreements of the Servicer as set
forth in this Agreement which failure continues unremedied for a period of
sixty (60) days (or, in the case of (i) the annual statement of compliance
required under Subsection 11.19, (ii) the annual independent public
accountants' servicing report or attestation required under Subsection 11.20,
or (iii) the certification required under Section 15 in the form of Exhibit
16, five (5) days) after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer by
the Purchaser;
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force, undischarged or unstayed
for a period of sixty (60) days;
(d) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or relating to all or substantially all of the Servicer's
property;
(e) the Servicer shall admit in writing its inability to pay its debts as
they become due, file a petition to take advantage of any applicable
insolvency or reorganization
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statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations; or
(f) the Servicer ceases to meet the qualifications of either a ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac servicer, or of HUD, or fails any OTS examination in connection
with its servicing activities, which status continues uncured for a period of
thirty (30) days.
then, and in each and every such case, so long as an Event of Default shall
not have been remedied, the Purchaser, by notice in writing to the Servicer,
may, in addition to whatever rights the Purchaser may have at law or equity to
damages, including injunctive relief and specific performance, commence
termination of all the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof. Upon
receipt by the Servicer of such written notice from the Purchaser stating that
it intends to terminate the Servicer as a result of such Event of Default, all
authority and power of the Servicer under this Agreement, whether with respect
to the Mortgage Loans or otherwise, shall pass to and be vested in the
successor appointed pursuant to Subsection 14.03. Upon written request from
the Purchaser, the Servicer shall, in accordance with Subsection 11.22
prepare, execute and deliver to a successor any and all documents and other
instruments, place in such successor's possession all Mortgage Files and do or
cause to be done all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, including, but not limited to, the
transfer and endorsement or assignment of the Mortgage Loans and related
documents to the successor at the Servicer's sole expense. The Servicer agrees
to cooperate with the Purchaser and such successor in effecting the
termination of the Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to such successor for
administration by it of all amounts which shall at the time be credited by the
Servicer to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
Subsection 13.02 Waiver of Defaults. The Purchaser may waive any default
by the Servicer in the performance of its obligations hereunder and its
consequences. Upon any waiver of a past default, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right consequent thereto except
to the extent expressly so waived.
Section 14. Termination.
Subsection 14.01 Termination. The respective obligations and
responsibilities of the Servicer, as servicer, shall terminate upon (a) the
distribution to the Purchaser of the final payment or liquidation with respect
to the last Mortgage Loan (or advances of same by the Servicer); (b) the
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 or (c) by mutual consent of the Servicer and the Purchaser
in writing. Upon written request from the Purchaser in connection with any
such termination, the Servicer shall prepare, execute and deliver, any and all
documents and other instruments, place in the Purchaser's possession all
Mortgage Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at
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the Purchaser's sole expense. The Servicer agrees to cooperate with the
Purchaser and such successor in effecting the termination of the Servicer's
responsibilities and rights hereunder as servicer, including, without
limitation, the transfer to such successor for administration by it of all
cash amounts which shall at the time be credited by the Servicer to the
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans.
Subsection 14.02 Termination of the Servicer Without Cause.
Notwithstanding anything herein to the contrary, upon 45 days prior written
notice from Purchaser to Servicer, the Purchaser may terminate the obligations
and responsibilities of the Servicer in its capacity as Servicer, without
cause, upon payment to the Servicer of a termination fee equal to two percent
(2.0%) of the aggregate outstanding principal balance of the Mortgage Loans as
of the date of such termination. No such termination fee shall be payable in
connection with any termination pursuant to Subsections 11.01 or 11.12(a). The
termination fee provided for in this Subsection 14.02 shall be paid by the
Purchaser on the applicable Transfer Date.
Subsection 14.03 Successors to the Servicer. Prior to the termination of
the Servicer's responsibilities and duties under this Agreement pursuant to
Subsections 12.04, 13.01, 14.01 or 14.02, the Purchaser shall, (a) succeed to
and assume all of the Servicer's responsibilities, rights, duties and
obligations under this Agreement or (b) appoint a successor which shall
succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement upon such termination. In
connection with such appointment and assumption, the Purchaser may make such
arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree. If the Servicer's duties,
responsibilities and liabilities under this Agreement shall be terminated
pursuant to the aforementioned Subsections, the Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned Subsections shall not become
effective until a successor shall be appointed pursuant to this Subsection
14.03 and shall in no event relieve the Seller of the representations and
warranties made pursuant to Subsections 7.01 and 7.02 and the remedies
available to the Purchaser under Subsection 7.03, it being understood and
agreed that the provisions of such Subsections 7.01 and 7.02 shall be
applicable to the Seller notwithstanding any such resignation or termination
of the Servicer, or the termination of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Servicer and to the Purchaser an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this
Agreement. Any termination or resignation of the Servicer or this Agreement
pursuant to Subsections 12.04, 13.01, 14.01 or 14.02 shall not affect any
claims that the Purchaser may have against the Servicer arising prior to any
such termination or resignation.
Upon a successor's acceptance of appointment as such, the Servicer shall
notify by mail the Purchaser of such appointment.
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Section 15. Cooperation of Seller with a Reconstitution. The Seller and
the Purchaser agree that with respect to some or all of the Mortgage Loans,
after the related Closing Date, on one or more dates (each, a "Reconstitution
Date") at the Purchaser's sole option, the Purchaser may effect a sale (each,
a "Reconstitution") of some or all of the Mortgage Loans then subject to this
Agreement, without recourse, to:
(a) ▇▇▇▇▇▇ ▇▇▇ under its Cash Purchase Program or MBS Program (Special
Servicing Option) (each, a "▇▇▇▇▇▇ Mae Transfer"); or
(b) ▇▇▇▇▇▇▇ Mac (the "▇▇▇▇▇▇▇ Mac Transfer"); or
(c) one or more third party purchasers in one or more Whole Loan
Transfers; or
(d) one or more trusts or other entities to be formed as part of one or
more Securitization Transactions.
The Seller agrees to execute in connection with any Agency Transfer, any
and all reasonably acceptable pool purchase contracts, and/or agreements among
the Purchaser, the Seller, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac (as the case may be) and
any servicer in connection with a Whole Loan Transfer, a seller's warranties
and servicing agreement or a participation and servicing agreement in form and
substance reasonably acceptable to the parties, and in connection with a
Securitization Transaction, a pooling and servicing agreement in form and
substance reasonably acceptable to the parties or an Assignment and
Recognition Agreement substantially in the form attached hereto as Exhibit 15
(collectively, the agreements referred to herein are designated, the
"Reconstitution Agreements"), together with an opinion of counsel with respect
to such Reconstitution Agreements.
With respect to each Whole Loan Transfer and each Securitization
Transaction entered into by the 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; (2) to execute, deliver and
perform all Reconstitution Agreements required by the Purchaser; and (3) to
restate the representations and warranties set forth in this Agreement as of
the settlement or closing date in connection with such Reconstitution or make
the representations and warranties set forth in the related selling/servicing
guide of the servicer or issuer, as the case may be, or such representations
or warranties as may be required by any rating agency or prospective purchaser
of the related securities or such Mortgage Loans, in connection with such
Reconstitution. The Seller shall provide to such servicer or issuer, as the
case may be, and any other participants or purchasers in such Reconstitution:
(i) any and all information and appropriate verification of information which
may be reasonably available to the Seller or its affiliates, whether through
letters of its auditors and counsel or otherwise, as the Purchaser or any such
other participant shall request; (ii) such additional representations,
warranties, covenants, opinions of counsel, letters from auditors, and
certificates of public officials or officers of the Seller or the Servicer as
are reasonably believed necessary by the Purchaser or any such other
participant (including, without limitation, such revisions to this Agreement
relating to the servicing of REO Property and the provision of remittance
reports as the Purchaser may reasonably believe to be necessary to enable such
servicer to fulfill its master servicing
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obligations) and (iii) to execute, deliver and satisfy all conditions set
forth in any indemnity agreement required by the Purchaser or any such
participant, including, without limitation, an Indemnification and
Contribution Agreement in substantially the form attached hereto as Exhibit 3.
Moreover, the Seller agrees to cooperate with all reasonable requests made by
the Purchaser to effect such Reconstitution Agreements. The Seller shall
indemnify the Purchaser, each Affiliate of the Purchaser participating in the
Reconstitution, each Person who controls the Purchaser or such Affiliate and
each underwriter and initial purchaser participating in the Reconstitution,
and their respective present and former directors, officers, employees and
agents, and hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that each of them may
sustain in any way related to any information provided by or on behalf of the
Seller regarding the Seller or the Servicer, the Seller's or the Servicer's
servicing practices or the performance of the Mortgage Loans or the
Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. For purposes of the previous sentence,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement.
With respect to any Mortgage Loans sold in a Securitization Transaction
in which the Servicer is the servicer, the Servicer agrees that on or before
March 1st of each year beginning March 1, 2006, the Servicer shall deliver to
the depositor, the master servicer (if any) and the trustee for the
securitization trust in the Securitization Transaction, and their officers,
directors and affiliates, a certification in the form attached as Exhibit 16
hereto, executed by the senior officer in charge of servicing at the Servicer
for use in connection with any Form 10-K to be filed with the Securities and
Exchange Commission with respect to the securitization trust. The Servicer
shall indemnify and hold harmless the depositor, the master servicer (if any)
and the trustee, and their respective officers, directors and Affiliates, from
and against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments and other costs and expenses arising out
of or based upon any breach of the Servicer's obligations under this paragraph
or any material misstatement or omission, negligence, bad faith or willful
misconduct of the Servicer in connection therewith. If the indemnification
provided for in the preceding sentence is unavailable or insufficient to hold
harmless any indemnified party, then the Servicer agrees that it shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities of such indemnified party in
such proportion as is appropriate to reflect the relative fault of such
indemnified party, on the one hand, and the Servicer, on the other, in
connection with a breach of the Servicer's obligations under this paragraph or
any material misstatement or omission, negligence, bad faith or willful
misconduct of the Servicer in connection therewith.
All Mortgage Loans not sold or transferred pursuant to a Reconstitution
shall remain subject to this Agreement and shall continue to be serviced in
accordance with the terms of this Agreement, and with respect thereto this
Agreement shall remain in full force and effect.
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Section 16. Notices. All demands, notices and communications hereunder
shall be in writing and shall be given via email, facsimile transmission or
registered or certified mail to the person at the address set forth below:
(a) if to the Purchaser:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
1221 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Whole Loan Operations Manager
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with copies to:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - Servicing Oversight
▇▇▇▇ ▇-▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - RFPG
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
(b) if to the Servicer:
The Hemisphere National Bank
▇▇▇▇ ▇. ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
with copies to:
The Hemisphere National Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
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The Hemisphere National Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇.▇▇▇
(c) if to the Seller:
The Hemisphere National Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
with a copy to:
The Hemisphere National Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇.▇▇▇
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 17. Severability Clause. Any part, provision representation or
warranty of this Agreement which is prohibited or unenforceable or is held to
be void or unenforceable in any jurisdiction shall be ineffective, as to such
jurisdiction, to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction as to any Mortgage Loan shall not
invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by applicable law, the parties hereto waive any
provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
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Section 18. No Partnership. Nothing herein contained shall be deemed or
construed to create a co-partnership or joint venture between the parties
hereto and the services of the Servicer shall be rendered as an independent
contractor and not as agent for the Purchaser.
Section 19. 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 20. Governing Law Jurisdiction; Consent to Service of Process.
THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED COUNTERPART
THEREOF IS RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND SHALL BE
DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ITS CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER AND THE
SELLER IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR
PROCEEDING IN ANY SUCH COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION
OR PROCEEDING IN ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY
OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW; AND (IV) CONSENTS TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF
BY CERTIFIED MAIL ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER.
Section 21. Mandatory Delivery; Grant of Security Interest. The sale and
delivery on the related Closing Date of the Mortgage Loans described on the
related Mortgage Loan Schedule is mandatory from and after the date of the
execution of the related Purchase Price and Terms Agreement, 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 Purchaser for the losses and damages incurred
by the Purchaser (including damages to prospective purchasers of the Mortgage
Loans) in the event of the Seller's failure to deliver (i) each of the related
Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans or
(iii) one or more Mortgage Loans otherwise acceptable to the Purchaser on or
before the related Closing Date. The Seller hereby grants to the 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 obligations under the related Purchase Price
and Terms Agreement, and the Seller agrees that it shall hold such Mortgage
Loans in custody for the Purchaser subject to the Purchaser's (i) right to
reject any Mortgage Loan (or Qualified Substitute Mortgage Loan) under the
terms of this Agreement and to require another Mortgage Loan (or Qualified
Substitute Mortgage Loan) to be substituted therefor, and (ii) obligation to
pay the Purchase Price for the Mortgage Loans. All rights and remedies of the
Purchaser under this Agreement are distinct from, and cumulative with, any
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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 22. Intention of the Parties. It is the intention of the parties
that the Purchaser is purchasing, and the Seller is selling the Mortgage Loans
and not a debt instrument of the Seller or another security. Accordingly, the
parties hereto each intend to treat the transaction for federal income tax
purposes as a sale by the Seller, and a purchase by the Purchaser, of the
Mortgage Loans. Moreover, the arrangement under which the Mortgage Loans are
held shall be consistent with classification of such arrangement as a grantor
trust in the event it is not found to represent direct ownership of the
Mortgage Loans. The 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 Purchaser in the course of such review.
Section 23. 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 permitted successors and assigns of the Seller and the successors
and assigns of the Purchaser. This Agreement shall not be assigned, pledged or
hypothecated by the Seller to a third party without the prior written consent
of the Purchaser, which consent may be withheld by the Purchaser in its sole
discretion. This Agreement may be assigned, pledged or hypothecated by the
Purchaser in whole or in part, and with respect to one or more of the Mortgage
Loans, without the consent of the Seller. There shall be no limitation on the
number of assignments or transfers allowable by the Purchaser with respect to
the Mortgage Loans and this Agreement. In the event the Purchaser assigns this
Agreement, and the assignee assumes any of the Purchaser's obligations
hereunder, the Seller acknowledges and agrees to look solely to such assignee,
and not to the Purchaser, for performance of the obligations so assumed and
the Purchaser shall be relieved from any liability to the Seller with respect
thereto.
Section 24. 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 25. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this
Agreement.
Section 26. 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;
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(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 terms "include" and "including" shall mean without limitation by
reason of enumeration.
Section 27. Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, (b) documents received by any
party at the closing, and (c) financial statements, certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties hereto agree that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding, whether or not the original is in existence and
whether or not such reproduction was made by a party hereto in the regular
course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
Section 28. Amendment. This Agreement may be amended from time to time by
the Purchaser, the Seller and the Servicer by written agreement signed by the
parties hereto.
Section 29. Confidentiality. Each of the Purchaser, the Seller and the
Servicer shall employ proper procedures and standards designed to maintain the
confidential nature of the terms of this Agreement, except to the extent: (a)
the disclosure of which is reasonably believed by such party to be required in
connection with regulatory requirements or other legal requirements relating
to its affairs; (b) disclosed to any one or more of such party's employees,
officers, directors, agents, attorneys or accountants who would have access to
the contents of this Agreement and such data and information in the normal
course of the performance of such Person's duties for such party, to the
extent such party has procedures in effect to inform such Person of the
confidential nature thereof; (c) that is disclosed in a prospectus, prospectus
supplement or private placement memorandum relating to a securitization of the
Mortgage Loans by the Purchaser (or an affiliate assignee thereof) or to any
Person in connection with the resale or proposed resale of all or a portion of
the Mortgage Loans by such party in accordance with the terms of this
Agreement; and (d) that is reasonably believed by such party to be necessary
for the enforcement of such party's rights under this Agreement.
Notwithstanding any other express or implied agreement to the contrary,
each of the Purchaser, the Seller and the Servicer agree and acknowledge that
each of them and each of their employees, representatives, and other agents
may disclose to any and all persons, without
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limitation of any kind, the tax treatment and tax structure of the transaction
and all materials of any kind (including opinions or other tax analyses) that
are provided to any of them relating to such tax treatment and tax structure,
except to the extent that confidentiality is reasonably necessary to comply
with U.S. federal or state securities laws. For purposes of this paragraph,
the terms "tax treatment" and "tax structure" have the meanings specified in
Treasury Regulation section 1.6011-4(c).
Section 30. Entire Agreement. This Agreement constitutes the entire
agreement and understanding relating to the subject matter hereof between the
parties hereto and any prior oral or written agreements between them shall be
deemed to have merged herewith.
Section 31. Further Agreements. The Seller, the Servicer and the
Purchaser each agree to execute and deliver to the other such reasonable and
appropriate additional documents, instruments or agreements as may be
necessary or appropriate to effectuate the purposes of this Agreement.
Section 32. No Solicitation. From and after the related Closing Date, the
Seller agrees that it will not take any action or permit or cause any action
to be taken by any of its agents or affiliates, or by any independent
contractors on the Seller's behalf, to personally, by telephone or mail,
solicit a Mortgagor under any Mortgage Loan for the purpose of refinancing a
Mortgage Loan, in whole or in part, without the prior written consent of the
Purchaser. Notwithstanding the foregoing, it is understood and agreed that the
Seller, the Servicer or any of their respective affiliates:
(a) may advertise its availability for handling refinancings of mortgages
in its portfolio, including the promotion of terms it has available for such
refinancings, through the sending of letters or promotional material, so long
as it does not specifically target Mortgagors and so long as such promotional
material either is sent to the mortgagors for all of the mortgages in the
servicing portfolio of the Seller, the Servicer and any of their affiliates
(those it owns as well as those serviced for others);
(b) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact it about prepaying their mortgages by
advising them of refinancing terms and streamlined origination arrangements
that are available; and
(c) may offer to refinance a Mortgage Loan made within thirty (30) days
following receipt by it of a pay-off request from the related Mortgagor.
Promotions undertaken by the Seller or the Servicer or by any affiliate
of the Seller or the Servicer 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 32.
Section 33. Waiver of Jury Trial. THE SELLER AND THE PURCHASER EACH
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO
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A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 34. Compliance With Regulation AB
Subsection 34.01 Intent of the Parties; Reasonableness.
The Purchaser and the Seller acknowledge and agree that the purpose of
Section 34 of this Agreement is to facilitate compliance by the Purchaser and
any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable by its
terms only to offerings of asset-backed securities that are registered under
the Securities Act, the Company acknowledges that investors in privately
offered securities may require that the Purchaser or any Depositor provide
comparable disclosure in unregistered offerings. References in this Agreement
to compliance with Regulation AB include provision of comparable disclosure in
private offerings.
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder (or the provision in a private offering of disclosure
comparable to that required under the Securities Act). The Seller acknowledges
that interpretations of the requirements of Regulation AB may change over
time, whether due to interpretive guidance provided by the Commission or its
staff, consensus among participants in the asset-backed securities markets,
advice of counsel, or otherwise, and agrees to comply with requests made by
the Purchaser or any Depositor in good faith for delivery of information under
these provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Seller shall cooperate
fully with the Purchaser to deliver to the Purchaser (including any of its
assignees or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Purchaser or any Depositor to permit the Purchaser or
such Depositor to comply with the provisions of Regulation AB, together with
such disclosures relating to the Seller, any Subservicer, any Third-Party
Originator and the Mortgage Loans, or the servicing of the Mortgage Loans,
reasonably believed by the Purchaser or any Depositor to be necessary in order
to effect such compliance.
The Purchaser shall cooperate with the Seller by providing notice as
required under this Section 34 for requests for information and by limiting
such requests to information necessary, in the Purchaser's good faith
judgment, to comply with Regulation AB.
Subsection 34.02 Additional Representations and Warranties of the Seller.
(a) The Seller shall be deemed to represent to the Purchaser and to any
Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Subsection 34.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date: (i) the Seller
is not aware and has not received notice that any default, early amortization
or other performance triggering event has occurred as to any other
securitization due to any act or failure to act of the Seller; (ii) the Seller
has not been terminated as servicer in a
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residential mortgage loan securitization, either due to a servicing default or
to application of a servicing performance test or trigger; (iii) no material
noncompliance with the applicable servicing criteria with respect to other
securitizations of residential mortgage loans involving the Seller as servicer
has been disclosed or reported by the Seller; (iv) no material changes to the
Seller's policies or procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution Agreement for mortgage
loans of a type similar to the Mortgage Loans have occurred during the
three-year period immediately preceding the related Securitization
Transaction; (v) there are no aspects of the Seller's financial condition that
could have a material adverse effect on the performance by the Seller of its
servicing obligations under this Agreement or any Reconstitution Agreement;
(vi) there are no material legal or governmental proceedings pending (or known
to be contemplated) against the Seller, any Subservicer or any Third-Party
Originator; and (vii) there are no affiliations, relationships or transactions
relating to the Seller, any Subservicer or any Third-Party Originator with
respect to any Securitization Transaction and any party thereto identified by
the related Depositor of a type described in Item 1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Subsection 34.03, the Seller shall, within five Business
Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section or,
if any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
Subsection 34.03 Information to Be Provided by the Seller.
In connection with any Securitization Transaction the Seller shall (i)
within five Business Days following request by the Purchaser or any Depositor,
provide to the Purchaser and such Depositor (or, as applicable, cause each
Third-Party Originator and each Subservicer to provide), in writing and in
form and substance reasonably satisfactory to the Purchaser and such
Depositor, the information and materials specified in paragraphs (a), (b), (c)
and (f) of this Section, and (ii) as promptly as practicable following notice
to or discovery by the Seller, provide to the Purchaser and any Depositor (in
writing and in form and substance reasonably satisfactory to the Purchaser and
such Depositor) the information specified in paragraph (d) of this Section.
(a) If so requested by the Purchaser or any Depositor, the Seller shall
provide such information regarding (i) the Seller, as originator of the
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) each Third-Party Originator, and (iii) as applicable,
each Subservicer, as is requested for the purpose of compliance with Items
1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation AB. Such information shall
include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and how
long the originator has been engaged in originating residential mortgage
loans, which description shall include a discussion of the originator's
experience in originating mortgage loans of
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a similar type as the Mortgage Loans; information regarding the size and
composition of the originator's origination portfolio; and information
that may be material, in the good faith judgment of the Purchaser or any
Depositor, to an analysis of the performance of the Mortgage Loans,
including the originators' credit-granting or underwriting criteria for
mortgage loans of similar type(s) as the Mortgage Loans and such other
information as the Purchaser or any Depositor may reasonably request for
the purpose of compliance with Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental proceedings
pending (or known to be contemplated) against the Seller, each
Third-Party Originator and each Subservicer; and
(D) a description of any affiliation or relationship between the
Seller, each Third-Party Originator, each Subservicer and any of the
following parties to a Securitization Transaction, as such parties are
identified to the Seller by the Purchaser or any Depositor in writing in
advance of such Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) If so requested by the Purchaser or any Depositor, the Seller shall
provide (or, as applicable, cause each Third-Party Originator to provide)
Static Pool Information with respect to the mortgage loans (of a similar type
as the Mortgage Loans, as reasonably identified by the Purchaser as provided
below) originated by (i) the Seller, if the Seller is an originator of
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), and/or (ii) each Third-Party Originator. Such Static Pool
Information shall be prepared by the Seller (or Third-Party Originator) on the
basis of its reasonable, good faith interpretation of the requirements of Item
1105(a)(1)-(3) of Regulation AB. To the extent that there is reasonably
available to the Seller (or Third-Party Originator) Static Pool Information
with respect to more than one mortgage loan type, the Purchaser or any
Depositor shall be entitled to specify whether some or all of such information
shall be provided pursuant to this paragraph. The content of such Static Pool
Information may be in the form customarily provided by the Seller, and need
not be customized for the Purchaser or any Depositor. Such Static Pool
Information for each vintage origination year or prior securitized pool, as
applicable, shall be presented in increments no less frequently than quarterly
over the life of the mortgage loans included in the vintage origination year
or prior securitized pool. The most recent periodic increment must be as of a
date no later than 135 days prior to the date of the prospectus or other
offering document in which the Static Pool Information is to be included or
incorporated by reference. The Static Pool Information shall be provided in an
electronic format that provides a permanent record of the
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information provided, such as a portable document format (pdf) file, or other
such electronic format reasonably required by the Purchaser or the Depositor,
as applicable.
Promptly following notice or discovery of a material error in Static Pool
Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Seller shall provide corrected Static Pool
Information to the Purchaser or any Depositor, as applicable, in the same
format in which Static Pool Information was previously provided to such party
by the Seller.
If so requested by the Purchaser or any Depositor, the Seller shall
provide (or, as applicable, cause each Third-Party Originator to provide), at
the expense of the requesting party (to the extent of any additional
incremental expense associated with delivery pursuant to this Agreement), such
agreed-upon procedures, letters of certified public accountants reasonably
acceptable to the Purchaser or Depositor, as applicable, pertaining to Static
Pool Information relating to prior securitized pools for securitizations
closed on or after January 1, 2006 or, in the case of Static Pool Information
with respect to the Seller's or Third-Party Originator's originations or
purchases, to calendar months commencing January 1, 2006, as the Purchaser or
such Depositor shall reasonably request. Such letters shall be addressed to
and be for the benefit of such parties as the Purchaser or such Depositor
shall designate, which may include, by way of example, any Sponsor, any
Depositor and any broker dealer acting as underwriter, placement agent or
initial purchaser with respect to a Securitization Transaction. Any such
statement or letter may take the form of a standard, generally applicable
document accompanied by a reliance letter authorizing reliance by the
addressees designated by the Purchaser or such Depositor.
(c) If so requested by the Purchaser or any Depositor, the Seller shall
provide such information regarding the Seller, as servicer of the Mortgage
Loans, and each Subservicer (each of the Seller and each Subservicer, for
purposes of this paragraph, a "Servicer"), as is requested for the purpose of
compliance with Item 1108 of Regulation AB. Such information shall include, at
a minimum:
(A) the Servicer's form of organization;
(B) a description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the Servicer's
experience in servicing assets of any type as well as a more detailed
discussion of the Servicer's experience in, and procedures for, the
servicing function it will perform under this Agreement and any
Reconstitution Agreements; information regarding the size, composition
and growth of the Servicer's portfolio of residential mortgage loans of a
type similar to the Mortgage Loans and information on factors related to
the Servicer that may be material, in the good faith judgment of the
Purchaser or any Depositor, to any analysis of the servicing of the
Mortgage Loans or the related asset-backed securities, as applicable,
including, without limitation:
(1) whether any prior securitizations of mortgage loans of a
type similar to the Mortgage Loans involving the Servicer have
defaulted or experienced an early amortization or other performance
triggering event because
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of servicing during the three-year period immediately preceding the
related Securitization Transaction;
(2) the extent of outsourcing the Servicer utilizes;
(3) whether there has been previous disclosure of material
noncompliance with the applicable servicing criteria with respect to
other securitizations of residential mortgage loans involving the
Servicer as a servicer during the three-year period immediately
preceding the related Securitization Transaction;
(4) whether the Servicer has been terminated as servicer in a
residential mortgage loan securitization, either due to a servicing
default or to application of a servicing performance test or
trigger; and
(5) such other information as the Purchaser or any Depositor
may reasonably request for the purpose of compliance with Item
1108(b)(2) of Regulation AB;
(C) a description of any material changes during the three-year
period immediately preceding the related Securitization Transaction to
the Servicer's policies or procedures with respect to the servicing
function it will perform under this Agreement and any Reconstitution
Agreements for mortgage loans of a type similar to the Mortgage Loans;
(D) information regarding the Servicer's financial condition, to the
extent that there is a material risk that an adverse financial event or
circumstance involving the Servicer could have a material adverse effect
on the performance by the Seller of its servicing obligations under this
Agreement or any Reconstitution Agreement;
(E) information regarding advances made by the Servicer on the
Mortgage Loans and the Servicer's overall servicing portfolio of
residential mortgage loans for the three-year period immediately
preceding the related Securitization Transaction, which may be limited to
a statement by an authorized officer of the Servicer to the effect that
the Servicer has made all advances required to be made on residential
mortgage loans serviced by it during such period, or, if such statement
would not be accurate, information regarding the percentage and type of
advances not made as required, and the reasons for such failure to
advance;
(F) a description of the Servicer's processes and procedures
designed to address any special or unique factors involved in servicing
loans of a similar type as the Mortgage Loans;
(G) a description of the Servicer's processes for handling
delinquencies, losses, bankruptcies and recoveries, such as through
liquidation of mortgaged properties, sale of defaulted mortgage loans or
workouts; and
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(H) information as to how the Servicer defines or determines
delinquencies and charge-offs, including the effect of any grace period,
re-aging, restructuring, partial payments considered current or other
practices with respect to delinquency and loss experience.
(d) If so requested by the Purchaser or any Depositor for the purpose of
satisfying its reporting obligation under the Exchange Act with respect to any
class of asset-backed securities, the Seller shall (or shall cause each
Subservicer and Third-Party Originator to) (i) notify the Purchaser and any
Depositor in writing of (A) any material litigation or governmental
proceedings pending against the Seller, any Subservicer or any Third-Party
Originator and (B) any affiliations or relationships that develop following
the closing date of a Securitization Transaction between the Seller, any
Subservicer or any Third-Party Originator and any of the parties specified in
clause (D) of paragraph (a) of this Section (and any other parties identified
in writing by the requesting party) with respect to such Securitization
Transaction, and (ii) provide to the Purchaser and any Depositor a description
of such proceedings, affiliations or relationships.
(e) As a condition to the succession to the Seller or any Subservicer as
servicer or subservicer under this Agreement or any Reconstitution Agreement
by any Person (i) into which the Seller or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Seller or
any Subservicer, the Seller shall provide to the Purchaser and any Depositor,
at least 15 calendar days prior to the effective date of such succession or
appointment, (x) written notice to the Purchaser and any Depositor of such
succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, all information
reasonably requested by the Purchaser or any Depositor in order to comply with
its reporting obligation under Item 6.02 of Form 8-K with respect to any class
of asset-backed securities.
(f) In addition to such information as the Seller, as servicer, is
obligated to provide pursuant to other provisions of this Agreement, if so
requested by the Purchaser or any Depositor, the Seller shall provide such
information regarding the performance or servicing of the Mortgage Loans as is
reasonably required by the Purchaser or any Depositor to facilitate
preparation of distribution reports in accordance with Item 1121 of Regulation
AB and to permit the Purchaser or such Depositor to comply with the provisions
of Regulation AB relating to Static Pool Information regarding the performance
of the Mortgage Loans on the basis of the Purchaser's or such Depositor's
reasonable, good faith interpretation of the requirements of Item
1105(a)(1)-(3) of Regulation AB (including without limitation as to the format
and content of such Static Pool Information). Such information shall be
provided concurrently with the monthly reports otherwise required to be
delivered by the Servicer under this Agreement commencing with the first such
report due in connection with the applicable Securitization Transaction.
Subsection 34.04 Servicer Compliance Statement.
On or before March 10th of each calendar year, commencing in 2007, the
Seller shall deliver to the Purchaser and any Depositor a statement of
compliance addressed to the Purchaser and such Depositor and signed by an
authorized officer of the Seller, to the effect that
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(i) a review of the Seller's activities during the immediately preceding
calendar year (or applicable portion thereof) and of its performance under
this Agreement and any applicable Reconstitution Agreement during such period
has been made under such officer's 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 and any applicable Reconstitution Agreement
in all material respects throughout such calendar year (or applicable portion
thereof) or, if there has been a failure to fulfill any such obligation in any
material respect, specifically identifying each such failure known to such
officer and the nature and the status thereof.
Subsection 34.05 Report on Assessment of Compliance and Attestation.
(a) On or before March 10th of each calendar year, commencing in 2007,
the Seller shall:
(i) deliver to the Purchaser and any Depositor a report (in form and
substance reasonably satisfactory to the Purchaser and such Depositor)
regarding the Seller's assessment of compliance with the Servicing
Criteria during the immediately preceding calendar year, as required
under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. Such report shall be addressed to the Purchaser and such
Depositor and signed by an authorized officer of the Seller, and shall
address each of the Servicing Criteria specified on a certification
substantially in the form of Exhibit 18 hereto delivered to the Purchaser
concurrently with the execution of this Agreement;
(ii) deliver to the Purchaser and any Depositor a report of a
registered public accounting firm reasonably acceptable to the Purchaser
and such Depositor that attests to, and reports on, the assessment of
compliance made by the Seller and delivered pursuant to the preceding
paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3)
and 2-02(g) of Regulation S-X under the Securities Act and the Exchange
Act;
(iii) cause each Subservicer, and each Subcontractor determined by
the Seller pursuant to Subsection 34.06(b) to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, to
deliver to the Purchaser and any Depositor an assessment of compliance
and accountants' attestation as and when provided in paragraphs (a) and
(b) of this Section; and
(iv) deliver to the Purchaser, any Depositor and any other Person
that will be responsible for signing the certification (a "Sarbanes
Certification") required by Rules 13a-14(d) and 15d-14(d) under the
Exchange Act (pursuant to Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002)
on behalf of an asset-backed issuer with respect to a Securitization
Transaction a certification in the form attached hereto as Exhibit 16.
The Seller acknowledges that the parties identified in clause (a)(iv)
above may rely on the certification provided by the Seller pursuant to such
clause in signing a Sarbanes Certification and filing such with the
Commission. Neither the Purchaser nor any Depositor will request delivery of a
certification under clause (a)(iv) above, unless a Depositor is required under
the Exchange Act to file an annual report on Form 10-K with respect to an
issuing entity whose asset pool includes Mortgage Loans.
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(b) Each assessment of compliance provided by a Subservicer pursuant to
Subsection 34.05(a)(i) shall address each of the Servicing Criteria specified
on a certification substantially in the form of Exhibit 18 hereto delivered to
the Purchaser concurrently with the execution of this Agreement or, in the
case of a Subservicer subsequently appointed as such, on or prior to the date
of such appointment. An assessment of compliance provided by a Subcontractor
pursuant to Subsection 34.05(a)(iii) need not address any elements of the
Servicing Criteria other than those specified by the Seller pursuant to
Subsection 34.06.
Subsection 34.06 Use of Subservicers and Subcontractors.
The Seller shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Seller as servicer under
this Agreement or any Reconstitution Agreement unless the Seller complies with
the provisions of paragraph (a) of this Section. The Seller shall not hire or
otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to
fulfill any of the obligations of the Seller as servicer under this Agreement
or any Reconstitution Agreement unless the Seller complies with the provisions
of paragraph (b) of this Section.
(a) The Seller shall not hire or otherwise utilize the services of any
Subservicer with respect to the Mortgage Loans without giving the Purchaser or
its designee fifteen (15) Business Days' advance written notice of the
effective date of such hiring or utilization of a Subservicer, followed by
written confirmation of such hiring or utilization of a Subservicer on the
effective date of such engagement and indicating the circumstances surrounding
such hiring or utilization. Any notices required by this Subsection 34.06(a)
shall be sent via telecopier or certified or registered mail to the addresses
set forth below: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Servicer Oversight Group, ▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Telecopy: ▇▇▇-▇▇▇-▇▇▇▇, and
emailed to: ▇▇▇▇▇_▇▇▇▇▇▇▇▇_▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, with a copy to ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Telecopy: ▇▇▇-▇▇▇-▇▇▇▇, Email: ▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇.▇▇▇
(or such other address as such Person may otherwise specify to Seller). The
Seller shall cause any Subservicer used by the Seller (or by any Subservicer)
for the benefit of the Purchaser and any Depositor to comply with the
provisions of this Section and with Subsections 34.02, 34.03(c) and (e),
34.04, 34.05 and 34.07 of this Agreement to the same extent as if such
Subservicer were the Seller, and to provide the information required with
respect to such Subservicer under Subsection 34.03(d) of this Agreement. The
Seller shall be responsible for obtaining from each Subservicer and delivering
to the Purchaser and any Depositor any servicer compliance statement required
to be delivered by such Subservicer under Subsection 34.04, any assessment of
compliance and attestation required to be delivered by such Subservicer under
Subsection 34.05 and any certification required to be delivered to the Person
that will be responsible for signing the Sarbanes Certification under
Subsection 34.05 as and when required to be delivered.
(b) It shall not be necessary for the Seller to seek the consent of the
Purchaser or any Depositor to the utilization of any Subcontractor. The Seller
shall promptly upon request provide to the Purchaser and any Depositor (or any
designee of the Depositor, such as a master servicer or administrator) a
written description (in form and substance satisfactory to the Purchaser and
such Depositor) of the role and function of each Subcontractor utilized by the
Seller or any Subservicer, specifying (i) the identity of each such
Subcontractor, (ii) which (if
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any) of such Subcontractors are "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB, and (iii) which elements of
the Servicing Criteria will be addressed in assessments of compliance provided
by each Subcontractor identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Seller shall cause any such Subcontractor used by the
Seller (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Subsections 34.05 and 34.07 of this
Agreement to the same extent as if such Subcontractor were the Seller. The
Seller shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation required to be delivered by such Subcontractor under Subsection
34.05, in each case as and when required to be delivered.
Subsection 34.07 Indemnification; Remedies.
(a) The Seller shall indemnify the Purchaser, each affiliate of the
Purchaser, and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible for the
preparation, execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or for execution
of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with respect to such Securitization Transaction; each broker
dealer acting as underwriter, placement agent or initial purchaser, each
Person who controls any of such parties or the Depositor (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act); and
the respective present and former directors, officers, employees and agents of
each of the foregoing and of the Depositor, and shall hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs,
fees and expenses that any of them may sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact contained or alleged
to be contained in any information, report, certification, accountants'
letter or other material provided in written or electronic form under
this Section 34 by or on behalf of the Seller, or provided under this
Section 34 by or on behalf of any Subservicer, Subcontractor or
Third-Party Originator (collectively, the "Seller Information"), or (B)
the omission or alleged omission to state in the Seller Information a
material fact required to be stated in the Seller Information or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, by
way of clarification, that clause (B) of this paragraph shall be
construed solely by reference to the Seller Information and not to any
other information communicated in connection with a sale or purchase of
securities, without regard to whether the Seller Information or any
portion thereof is presented together with or separately from such other
information;
(ii) any failure by the Seller, any Subservicer, any Subcontractor or
any Third-Party Originator to deliver any information, report,
certification, accountants' letter or other material when and as required
under this Section 34, including any failure by the Seller to identify
pursuant to Subsection 34.06(b) any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB; or
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(iii) any breach by the Seller of a representation or warranty set
forth in Subsection 34.02(a) or in a writing furnished pursuant to
Subsection 34.02(b) and made as of a date prior to the closing date of
the related Securitization Transaction, to the extent that such breach is
not cured by such closing date, or any breach by the Seller of a
representation or warranty in a writing furnished pursuant to Subsection
34.02(b) to the extent made as of a date subsequent to such closing date.
In the case of any failure of performance described in clause (a)(ii) of
this Section, the Seller shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission
with respect to such Securitization Transaction, or for execution of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to such Securitization Transaction, for all costs reasonably
incurred by each such party in order to obtain the information, report,
certification, accountants' letter or other material not delivered as required
by the Seller, any Subservicer, any Subcontractor or any Third-Party
Originator.
(b) (i) Any failure by the Seller, any Subservicer, any Subcontractor or
any Third-Party Originator to deliver any information, report, certification,
accountants' letter or other material when and as required under this Section
34, or any breach by the Seller of a representation or warranty set forth in
Subsection 34.02(a) or in a writing furnished pursuant to Subsection 34.02(b)
and made as of a date prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by such closing date,
or any breach by the Seller of a representation or warranty in a writing
furnished pursuant to Subsection 34.02(b) to the extent made as of a date
subsequent to such closing date, shall, except as provided in clause (ii) of
this paragraph, immediately and automatically, without notice or grace period,
constitute an Event of Default with respect to the Seller under this Agreement
and any applicable Reconstitution Agreement, and shall entitle the Purchaser
or Depositor, as applicable, in its sole discretion to terminate the rights
and obligations of the Seller as servicer under this Agreement and/or any
applicable Reconstitution Agreement without payment (notwithstanding anything
in this Agreement or any applicable Reconstitution Agreement to the contrary)
of any compensation to the Seller; provided that to the extent that any
provision of this Agreement and/or any applicable Reconstitution Agreement
expressly provides for the survival of certain rights or obligations following
termination of the Seller as servicer, such provision shall be given effect.
(ii) Any failure by the Seller, any Subservicer or any Subcontractor
to deliver any information, report, certification or accountants' letter
when and as required under Subsection 34.04 or 34.05, including (except
as provided below) any failure by the Seller to identify pursuant to
Subsection 34.06(b) any Subcontractor "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB, which
continues unremedied for ten calendar days after the date on which such
information, report, certification or accountants' letter was required to
be delivered shall constitute an Event of Default with respect to the
Seller under this Agreement and any applicable Reconstitution Agreement,
and shall entitle the Purchaser or Depositor, as applicable, in its sole
discretion to terminate the rights and obligations of the Seller as
servicer under this Agreement and/or any applicable Reconstitution
Agreement without payment (notwithstanding anything in this Agreement to
the contrary) of any compensation to the
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Seller; provided that to the extent that any provision of this Agreement
and/or any applicable Reconstitution Agreement expressly provides for the
survival of certain rights or obligations following termination of the
Seller as servicer, such provision shall be given effect.
Neither the Purchaser nor any Depositor shall be entitled to
terminate the rights and obligations of the Seller pursuant to this
subparagraph (b)(ii) if a failure of the Seller to identify a
Subcontractor "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB was attributable solely to the role
or functions of such Subcontractor with respect to mortgage loans other
than the Mortgage Loans.
(iii) The Seller shall promptly reimburse the Purchaser (or any
designee of the Purchaser, such as a master servicer) and any Depositor,
as applicable, for all reasonable expenses incurred by the Purchaser (or
such designee) or such Depositor, as such are incurred, in connection
with the termination of the Seller as servicer and the transfer of
servicing of the Mortgage Loans to a successor servicer. The provisions
of this paragraph shall not limit whatever rights the Purchaser or any
Depositor may have under other provisions of this Agreement and/or any
applicable Reconstitution Agreement or otherwise, whether in equity or at
law, such as an action for damages, specific performance or injunctive
relief.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Purchaser, the Seller and the Servicer have
caused their names to be signed hereto by their respective officers thereunto
duly authorized on the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:
-------------------------------------
Name:
Title:
THE HEMISPHERE NATIONAL BANK
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
-81-
EXHIBIT 1
MORTGAGE LOAN DOCUMENTS
With respect to each Mortgage Loan, the Mortgage Loan Documents shall
consist of the following:
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To
the extent that there is no room on the face of the Mortgage Notes for
endorsements, the endorsement may be contained on an allonge, if state law so
allows and the Custodian is so advised by the Seller that state law so allows.
If the Mortgage Loan was acquired by the Seller in a merger, the endorsement
must be by "[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 "[Last Endorsee],
formerly known as [previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) with respect to Mortgage Loans that are not Co-op Loans, the original
Mortgage with evidence of recording thereon. With respect to any Co-op Loan,
an original or copy of the Security Agreement. If in connection with any
Mortgage Loan, the Seller cannot deliver or cause to be delivered the original
Mortgage with evidence of recording thereon on or prior to the 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 Custodian, a
photocopy of such Mortgage, together with (i) in the case of a delay caused by
the public recording office, an Officer's Certificate of the Seller (or
certified by the title company, escrow agent, or closing attorney) stating
that such Mortgage has been dispatched to the appropriate public recording
office for recordation and that the original recorded Mortgage or a copy of
such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage 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;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) with respect to Mortgage Loans that are not Co-op Loans, the original
Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording (except with respect to MERS Designated Loans). The
Assignment of Mortgage must be duly recorded only if recordation is either
necessary under applicable law or commonly required by private institutional
mortgage investors in the area where the Mortgaged Property is located or on
direction of the Purchaser as provided in this Agreement. If the Assignment of
Mortgage is to be recorded, the Mortgage shall be assigned to the Purchaser.
If the Assignment of
EXH. 1-1
Mortgage is not to be recorded, the Assignment of Mortgage shall be delivered
in blank. If the Mortgage Loan was acquired by the Seller in a merger, the
Assignment of Mortgage must be made by "[Seller], successor by merger to [name
of predecessor]". If the Mortgage Loan was acquired or originated by the
Seller while doing business under another name, the Assignment of Mortgage
must be by "[Seller], formerly known as [previous name]";
(f) with respect to Mortgage Loans that are not Co-op Loans, the
originals of all intervening assignments of mortgage (if any) evidencing a
complete chain of assignment from the Seller to the Last Endorsee (or, in the
case of a MERS Designated Loan, MERS) with evidence of recording thereon, or
if any such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office retains
the original recorded assignments of mortgage, the Seller shall deliver or
cause to be delivered to the Custodian, a photocopy of such intervening
assignment, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the Seller (or certified by the
title company, escrow agent, or closing attorney) stating that such
intervening assignment of mortgage has been dispatched 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 Custodian upon receipt thereof by the Seller; or
(ii) in the case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording office,
a copy of such intervening assignment certified by such public recording
office to be a true and complete copy of the original recorded intervening
assignment;
(g) with respect to Mortgage Loans that are not Co-op Loans, the original
mortgagee policy of title insurance or, in the event such original title
policy is unavailable, a certified true copy of the related policy binder or
commitment for title certified to be true and complete by the title insurance
company;
(h) the original or, if unavailable, a copy of any security agreement,
chattel mortgage or equivalent document executed in connection with the
Mortgage;
(i) with respect to any Co-op Loan: (i) a copy of the Co-op Lease and the
assignment of such Co-op Lease, with all intervening assignments showing a
complete chain of title and an assignment thereof by Seller; (ii) the stock
certificate together with an undated stock power relating to such stock
certificate executed in blank; (iii) the recognition agreement of the
interests of the Mortgagee with respect to the Co-op Loan by the residential
cooperative housing corporation, the stock of which was pledged by the related
Mortgagor to the originator of such Co-op Loan; and (iv) copies of the
financial statement filed by the originator as secured party and, if
applicable, a filed UCC-3 assignment of the subject security interest showing
a complete chain of title, together with an executed UCC-3 assignment of such
security interest by the Seller in a form sufficient for filing; and
EXH. 1-2
(j) if any of the above documents has been executed by a person holding a
power of attorney, an original or photocopy of such power certified by the
Seller to be a true and correct copy of the original.
In the event an Officer's Certificate of the Seller is delivered to the
Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the related Closing Date, an Officer's Certificate which
shall (i) identify the recorded document, (ii) state that the recorded
document has not been delivered to the Custodian due solely to a delay caused
by the public recording office, (iii) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, and (iv) specify the date the applicable recorded
document will be delivered to the Custodian; provided, however, that any
recorded document shall in no event be delivered later than one year following
the related Closing Date. An extension of the date specified in clause (iv)
above may be requested from the Purchaser, which consent shall not be
unreasonably withheld.
EXH. 1-3
EXHIBIT 2
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include each
of the following items, unless otherwise disclosed to the Purchaser on the
data tape, which shall be available for inspection by the Purchaser and which
shall be retained by the Servicer or delivered to the Purchaser:
(a) Copies of the Mortgage Loan Documents.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income, if required.
(e) Verification of acceptable evidence of source and amount of
downpayment.
(f) Credit report on Mortgagor, in a form acceptable to either ▇▇▇▇▇▇ ▇▇▇
or ▇▇▇▇▇▇▇ Mac.
(g) Residential appraisal report.
(h) Photograph of the Mortgaged Property and photographs of comparable
properties.
(i) Survey of the Mortgaged Property, unless a survey is not required by
the title insurer.
(j) Copy of each instrument necessary to complete identification of any
exception set forth in the exception schedule in the title policy, i.e., map
or plat, restrictions, easements, home owner association declarations, etc.
(k) Copies of all required disclosure statements.
(l) If applicable, termite report, structural engineer's report, water
potability and septic certification.
(m) Sales Contract, if applicable.
(n) Copy of the owner's title insurance policy or attorney's opinion of
title and abstract of title, as applicable.
(o) Evidence of electronic notation of the hazard insurance policy, and,
if required by law, evidence of the flood insurance policy.
EXH. 2-1
EXHIBIT 3
FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
This INDEMNIFICATION AND CONTRIBUTION AGREEMENT ("Agreement"), dated as
of [_______], 200_, among [________________] (the "Depositor"), a
[______________] corporation (the "Depositor"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc., a New York corporation ("▇▇▇▇▇▇") and [_____________], a
[_______________] (the "Seller").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Depositor is acting as depositor and registrant with respect
to the Prospectus, dated [________________], and the Prospectus Supplement to
the Prospectus, [________________] (the "Prospectus Supplement"), relating to
[________________] Certificates (the "Certificates") to be issued pursuant to
a Pooling and Servicing Agreement, dated as of [________________] (the "P&S"),
among the Depositor, as depositor, [________________], as servicer (the
"Servicer"), and [________________], as trustee (the "Trustee");
WHEREAS, as an inducement to the Depositor to enter into the P&S, and
[____________________] (the "Underwriter[s]") to enter into the Underwriting
Agreement, dated [____________________] (the "Underwriting Agreement"),
between the Depositor and the Underwriter[s], and [_______________] (the
"Initial Purchaser[s]") to enter into the Certificate Purchase Agreement,
dated [____________] (the "Certificate Purchase Agreement"), between the
Depositor and the Initial Purchaser[s], Seller has agreed to provide for
indemnification and contribution on the terms and conditions hereinafter set
forth;
WHEREAS, ▇▇▇▇▇▇ purchased from Seller certain of the Mortgage Loans
underlying the Certificates (the "Mortgage Loans") pursuant to a First Amended
and Restated Mortgage Loan Sale and Servicing Agreement, dated as of [DATE]
(the "Sale and Servicing Agreement"), by and between ▇▇▇▇▇▇ and Seller; and
WHEREAS, pursuant to Section 15 of the Sale and Servicing Agreement, the
Seller has agreed to indemnify the Depositor, ▇▇▇▇▇▇, the Underwriter[s], the
Initial Purchaser[s] and their respective affiliates, present and former
directors, officers, employees and agents.
NOW THEREFORE, in consideration of the agreements contained herein, and
other valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the Depositor, ▇▇▇▇▇▇ and the Seller agree as follows:
1. Indemnification and Contribution.
EXH. 3-1
(a) The Seller agrees to indemnify and hold harmless the Depositor,
▇▇▇▇▇▇, the Underwriter[s], the Initial Purchaser[s] and their respective
affiliates and their respective present and former directors, officers,
employees and agents and each person, if any, who controls the Depositor,
▇▇▇▇▇▇, the Underwriter[s], the Initial Purchaser[s] or such affiliate within
the meaning of either Section 15 of the Securities Act of 1933, as amended
(the "1933 Act"), or Section 20 of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the 1933 Act, the 1934 Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based in whole or in part upon any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus Supplement, the
Offering Circular, the ABS Informational and Computational Materials or in the
Free Writing Prospectus or any omission or alleged omission to state in the
Prospectus Supplement, the Offering Circular, the ABS Informational and
Computational Materials or in the Free Writing Prospectus a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, or any
such untrue statement or omission or alleged untrue statement or alleged
omission made in any amendment of or supplement to the Prospectus Supplement,
the Offering Circular, the ABS Informational and Computational Materials or
the Free Writing Prospectus and agrees to reimburse the Depositor, ▇▇▇▇▇▇, the
Underwriter[s], the Initial Purchaser[s] or such affiliates and each such
officer, director, employee, agent and controlling person promptly upon demand
for any legal or other expenses reasonably incurred by any of them in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that Seller shall be liable in any such case only to the
extent that any such loss, claim, damage, liability or action arises out of,
or is based upon, any untrue statement or alleged untrue statement or omission
or alleged omission made in reliance upon and in conformity with the Seller
Information. The foregoing indemnity agreement is in addition to any liability
which Seller may otherwise have to the Depositor, ▇▇▇▇▇▇, the Underwriter[s],
the Initial Purchaser[s] their affiliates or any such director, officer,
employee, agent or controlling person of the Depositor, ▇▇▇▇▇▇, the
Underwriter[s], the Initial Purchaser[s] or their respective affiliates.
As used herein:
"Seller Information" means any information relating to Seller, the
Mortgage Loans and/or the underwriting guidelines relating to the Mortgage
Loans set forth in the Prospectus Supplement, the Offering Circular, the ABS
Informational and Computational Materials or the Free Writing Prospectus and
static pool information regarding mortgage loans originated or acquired by the
Seller and [included in the Prospectus Supplement, the Offering Circular, the
ABS Informational and Computational Materials or the Free Writing Prospectus]
[incorporated by reference from the Seller's website located at
______________].
"ABS Informational and Computational Material" means any written
communication as defined in Item 1101(a) of Regulation AB under the 1933 Act
and the 1934 Act, as amended from time to time.
"Free Writing Prospectus" means any written communication that
constitutes a "free writing prospectus," as defined in Rule 405 under the 1933
Act.
EXH. 3-2
"Offering Circular" means the offering circular, dated [__________]
relating to the private offering of the [_______________] Certificates.
(b)_______Promptly after receipt by any indemnified party under this
Section 1 of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
any indemnifying party under this Section 1, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 1 except to the extent it has
been materially prejudiced by such failure; and provided, further, however,
that the failure to notify any indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 1.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, except as
provided in the following paragraph, the indemnifying party shall not be
liable to the indemnified party under this Section 1 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
necessary or appropriate for such indemnified party to employ separate
counsel; or (iii) the indemnifying party has failed to assume the defense of
such action and employ counsel reasonably satisfactory to the indemnified
party, in which case, if such indemnified party notifies the indemnifying
party in writing that it elects to employ separate counsel at the expense of
the indemnifying party, the indemnifying party shall not have the right to
assume the defense of such action on behalf of such indemnified party, it
being understood, however, the indemnifying party shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys (in addition to local counsel) at any time for
all such indemnified parties.
Each indemnified party, as a condition of the indemnity agreements
contained in this Section 1, shall cooperate with the indemnifying party in
the defense of any such action or claim. No indemnifying party shall be liable
for any settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with its
written consent or if there be a final judgment for the plaintiff in any such
action, the
EXH. 3-3
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or
judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for reasonable fees and expenses of counsel, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than
30 days after receipt by such indemnifying party of the aforesaid request and
(ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement.
(c) If the indemnification provided for in this Section 1 is unavailable
to an indemnified party, then the indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities,
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party, respectively, in connection with
the statements or omissions that result in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the indemnified party and indemnifying party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by such parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission and any other equitable considerations.
(d) The indemnity and contribution agreements contained in this Section 1
and the representations and warranties set forth in Section 2 shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by the Depositor, ▇▇▇▇▇▇, the
Underwriter[s], the Initial Purchaser[s], their respective affiliates,
directors, officers, employees or agents or any person controlling the
Depositor, ▇▇▇▇▇▇, the Underwriter[s], the Initial Purchaser[s] or any such
affiliate, and (iii) acceptance of and payment for any of the Offered
Certificates or Private Certificates.
2. Representations and Warranties. Seller represents and warrants that:
(i) Seller is validly existing and in good standing under the laws
of its jurisdiction of formation or incorporation, as applicable, and has
full power and authority to own its assets and to transact the business
in which it is currently engaged. Seller is duly qualified to do business
and is in good standing in each jurisdiction in which the character of
the business transacted by it or any properties owned or leased by it
requires such qualification and in which the failure so to qualify would
have a material adverse effect on the business, properties, assets or
condition (financial or otherwise) of Seller;
(ii) Seller is not required to obtain the consent of any other
person or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity
or enforceability of this Agreement;
EXH. 3-4
(iii) the execution, delivery and performance of this Agreement by
Seller will not violate any provision of any existing law or regulation
or any order decree of any court applicable to Seller or any provision of
the charter or bylaws of Seller, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which Seller is a
party or by which it may be bound;
(iv) (a) no proceeding of or before any court, tribunal or
governmental body is currently pending or, (b) to the knowledge of
Seller, threatened against Seller or any of its properties or with
respect to this Agreement or the Offered Certificates, in either case,
which would have a material adverse effect on the business, properties,
assets or condition (financial or otherwise) of Seller;
(v) Seller has full power and authority to make, execute, deliver
and perform this Agreement and all of the transactions contemplated
hereunder, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the legal, valid and binding
obligation of each of Seller enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally, by the availability of
equitable remedies, and by limitations of public policy under applicable
securities law as to rights of indemnity and contribution thereunder; and
(vi) this Agreement has been duly executed and delivered by Seller.
3. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to Seller, will be mailed, delivered or faxed or
emailed and confirmed by mail [______________________]; if sent to ▇▇▇▇▇▇,
▇▇▇▇ be mailed, delivered or faxed or emailed and confirmed by mail to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Capital Inc., 1221 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Whole Loans Operations
Manager, Fax: [_______], Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, with
copies to (i) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - Legal Counsel, Securities,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Fax
[_____], Email: ▇▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - SPG Finance, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Fax [_____],Email: ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇; if
to the Depositor, will be mailed, delivered or telegraphed and confirmed to
[____________________]; or if to the Underwriter[s], will be mailed, delivered
or telegraphed and confirmed to [_____________________]; or if to the Initial
Purchaser[s], will be mailed, delivered or telegraphed and confirmed to
[_____________________].
4. Miscellaneous. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without giving effect to
the conflict of laws provisions thereof. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their successors and
assigns and the controlling persons referred to herein, and no other person
shall have any right or obligation hereunder. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or
EXH. 3-5
termination is sought. This Agreement may be executed in counterparts, each of
which when so executed and delivered shall be considered an original, and all
such counterparts shall constitute one and the same instrument. Capitalized
terms used but not defined herein shall have the meanings provided in the P&S.
[SIGNATURE PAGE FOLLOWS]
EXH. 3-6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers hereunto duly authorized, this __th
day of [_____________].
[DEPOSITOR]
By: _________________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By: __________________________________
Name:
Title:
[SELLER]
By: __________________________________
Name:
Title:
EXH. 3-7
EXHIBIT 4
CUSTODIAL ACCOUNT CERTIFICATION
_________ __, 2005
[____] hereby certifies that it has established the account described
below as a Custodial Account pursuant to Subsection 11.04 of the First Amended
and Restated Mortgage Loan Sale and Servicing Agreement, dated as of December
1, 2005, Fixed and Adjustable Rate Mortgage Loans.
Title of Account: "[_____________________], in trust for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc. as Purchaser of Mortgage Loans and various
Mortgagors."
Account Number: __________________________
Address of office or
branch of [_____________________]
at which the Custodial
Account is maintained: ______________________
______________________
______________________
[SELLER]
By: ____________________________
Name:
Title:
EXH. 4-1
EXHIBIT 5
CUSTODIAL ACCOUNT LETTER AGREEMENT
_________ __, 2005
To:
(the "Depository")
As Servicer under the First Amended and Restated Mortgage Loan Sale and
Servicing Agreement, dated as of December 1, 2005, we hereby authorize and
request you to establish an account, as a Custodial Account, to be designated
as "[______], in trust for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. as Purchaser
of Mortgage Loans and various Mortgagors." All deposits in the account shall
be subject to withdrawal therefrom by order signed by the Servicer. You may
refuse any deposit which would result in violation of the requirement that the
account be fully insured as described below. This letter is submitted to you
in duplicate. Please execute and return one original to us.
[SELLER]
By: _______________________________
Name:
Title:
EXH. 5-1
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 account will be insured by the Federal
Deposit Insurance Corporation through the Bank Insurance Fund ("BIF") or the
Savings Association Insurance Fund ("SAIF").
[___________________________],
as Depository
By: _________________________________
Name:
Title:
Date:
EXH. 5-2
EXHIBIT 6
ESCROW ACCOUNT CERTIFICATION
_________ __, 200__
[______] hereby certifies that it has established the account described
below as an Escrow Account pursuant to Subsection 11.06 of the First Amended
and Restated Mortgage Loan Sale and Servicing Agreement, dated as of December
1, 2005 Fixed and Adjustable Rate Mortgage Loans.
Title of Account: "[______], in trust for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc. as Purchaser of Mortgage Loans and various Mortgagors."
Account Number: __________________________
Address of office or
branch of [_____________________]
at which the Escrow
Account is maintained: ______________________
______________________
______________________
[SELLER]
By: ______________________________
Name:
Title:
EXH. 6-1
EXHIBIT 7
ESCROW ACCOUNT LETTER AGREEMENT
_________ __, 200__
To:
(the "Depository")
As Servicer under the First Amended and Restated Mortgage Loan Sale and
Servicing Agreement, dated as of December 1, 2005, we hereby authorize and
request you to establish an account, as an Escrow Account, to be designated as
"[_____________________], in trust for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. as
Purchaser of Mortgage Loans and various Mortgagors." All deposits in the
account shall be subject to withdrawal therefrom by order signed by the
Servicer. You may refuse any deposit which would result in violation of the
requirement that the account be fully insured as described below. This letter
is submitted to you in duplicate. Please execute and return one original to
us.
[SELLER]
By: _______________________________
Name:
Title:
EXH. 7-1
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 account will be insured by the Federal
Deposit Insurance Corporation through the Bank Insurance Fund ("BIF") or the
Savings Association Insurance Fund ("SAIF").
[_______________________],
as Depository
By: ______________________________
Name:
Title:
Date:
EXH. 7-2
EXHIBIT 8
UNDERWRITING GUIDELINES
[SELLER TO PROVIDE]
EXH. 8-1
EXHIBIT 9
FORM OF MONTHLY REMITTANCE REPORT
[SELLER TO PROVIDE]
EXH. 9-1
EXHIBIT 10
FORM OF SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected [Vice]
President of The Hemisphere National Bank, a nationally chartered bank
organized under the National Bank Act (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since _________________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver each of the First Amended
and Restated Mortgage Loan Sale and Servicing Agreement, dated as of
December 1, 2005 by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. (the
"Purchaser") and the Company (the "Sale and Servicing Agreement") and the
Custodial Agreement, dated as of _____ __, 200_, by and among the
Company, the Purchaser and ______________[CUSTODIAN] (the "Custodial
Agreement") [and to endorse the Mortgage Notes and execute the
Assignments of Mortgages by original [or facsimile] signature], and such
resolutions are in effect on the date hereof and have been in effect
without amendment, waiver, rescission or modification since March 30,
2005.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Sale and Servicing Agreement, the Custodial Agreement, the sale
of the mortgage loans or the consummation of the transactions
contemplated by the agreements; or (ii) any required consent, approval,
authorization or order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Sale and Servicing Agreement and the
Custodial Agreement conflicts or will conflict with or results or will
result in a breach of or constitutes or will constitute a default under
the charter or by-laws of the Company, the terms of any indenture or
other agreement or instrument to which the Company is a party or by which
it is bound or to which it is subject, or any statute or order, rule,
regulations,
EXH. 10-1
writ, injunction or decree of any court, governmental authority or
regulatory body to which the Company is subject or by which it is bound.
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its
business substantially as now conducted or in any material liability on
the part of the Company or which would draw into question the validity of
the Sale and Servicing Agreement and the Custodial Agreement, or the
mortgage loans or of any action taken or to be taken in connection with
the transactions contemplated hereby, or which would be likely to impair
materially the ability of the Company to perform under the terms of the
Sale and Servicing Agreement and the Custodial Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Sale and
Servicing Agreement, (b) the Custodial Agreement and (c) any other
document delivered or on the date hereof in connection with any purchase
described in the agreements set forth above was, at the respective times
of such signing and delivery, and is now, a duly elected or appointed,
qualified and acting officer or representative of the Company, who holds
the office set forth opposite his or her name on Exhibit 5, and the
signatures of such persons appearing on such documents are their genuine
signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Sale and Servicing Agreement and the
Custodial Agreement.
EXH. 10-2
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal
of the Company.
Dated: ____________________________
By: ____________________________
Name: ____________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: ____________________________
By: ____________________________
Name: ____________________________
Title: ____________________________
[Assistant] Secretary
EXH. 10-3
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
----------------------- ----------------------------- -------------------------
_______________________ _____________________________ _________________________
_______________________ _____________________________ _________________________
_______________________ _____________________________ _________________________
_______________________ _____________________________ _________________________
_______________________ _____________________________ _________________________
_______________________ _____________________________ _________________________
_______________________ _____________________________ _________________________
_______________________ _____________________________ _________________________
EXH. 10-4
EXHIBIT 11
FORM OF OPINION OF COUNSEL TO SELLER
(date)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General Counsel to
___________________ (the "Company"), with respect to certain matters in
connection with the sale by the Company of the Mortgage Loans pursuant to that
certain First Amended and Restated Mortgage Loan Sale and Servicing Agreement,
by and between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. (the
"Purchaser"), dated as of December 1, 2005 (the "Sale and Servicing
Agreement") which sale is in the form of whole loans, delivered pursuant to a
Custodial Agreement dated as of _____ __, 200_ among the Purchaser, the
Company, and ______________________[CUSTODIAN] (the "Custodial Agreement" and,
collectively with the Sale and Servicing Agreement, the "Agreements").
Capitalized terms not otherwise defined herein have the meanings set forth in
the Sale and Servicing Agreement.
[We] [I] have examined the following documents:
1. the Sale and Servicing Agreement;
2. the Custodial Agreement;
3. the form of Assignment of Mortgage;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I] have
relied upon the representations and warranties of the Company contained in the
Sale and Servicing Agreement. [We] [I] have assumed the authenticity of all
documents submitted to [us] [me] as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all documents.
EXH. 11-1
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a [type of entity] duly organized, validly existing and
in good standing under the laws of the [United States] and is qualified to
transact business in, and is in good standing under, the laws of [the state of
incorporation/formation].
2. The Company has the power to engage in the transactions contemplated
by the Agreements and all requisite power, authority and legal right to
execute and deliver the Agreements and to perform and observe the terms and
conditions of the Agreements.
3. Each of the Agreements has been duly authorized, executed and
delivered by the Company, and is a legal, valid and binding agreement
enforceable in accordance with its respective terms against the Company,
subject to bankruptcy laws and other similar laws of general application
affecting rights of creditors and subject to the application of the rules of
equity, including those respecting the availability of specific performance,
none of which will materially interfere with the realization of the benefits
provided thereunder or with the Purchaser's ownership of the Mortgage Loans.
4. The Company has been duly authorized to allow any of its officers to
execute any and all documents by original signature in order to complete the
transactions contemplated by the Agreements.
5. The Company has been duly authorized to allow any of its officers to
execute by original [or facsimile] signature the endorsements to the Mortgage
Notes and the Assignments of Mortgages, and the original [or facsimile]
signature of the officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the legal and valid
signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the Agreements
and the sale of the Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
7. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of, the Agreements conflicts or will conflict with or
results or will result in a breach of or constitutes or will constitute a
default under the charter or by-laws of the Company, the terms of any
indenture or other agreement or instrument to which the Company is a party or
by which it is bound or to which it is subject, or violates any statute or
order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is subject or
by which it is bound.
8. There is no action, suit, proceeding or investigation pending or, to
the best of [our] [my] knowledge, threatened against the Company which, in
[our] [my] judgment, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material impairment
of the right or ability of the Company to carry on its business substantially
as now
▇▇▇. ▇▇-▇
conducted or in any material liability on the part of the Company or which
would draw into question the validity of the Agreements or the Mortgage Loans
or of any action taken or to be taken in connection with the transactions
contemplated thereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the Agreements.
9. The sale of each Mortgage Note and Mortgage as and in the manner
contemplated by the Agreements is sufficient to fully transfer to the
Purchaser all right, title and interest of the Company thereto as noteholder
and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes have
been duly endorsed as provided in the Custodial Agreement. The Assignments of
Mortgage are in recordable form, except for the insertion of the name of the
assignee, and upon the name of the assignee being inserted, are acceptable for
recording under the laws of the state where each related Mortgaged Property is
located. The endorsement of the Mortgage Notes, the delivery to the Purchaser,
or its designee, of the Assignments of Mortgage, and the delivery of the
original endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all protection available
under applicable law against the claims of any present or future creditors of
the Company, and are sufficient to prevent any other sale, transfer,
assignment, pledge or hypothecation of the Mortgages and the Mortgage Notes by
the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other person
or entity is entitled to rely hereon except that the purchaser or purchasers
to which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of the date of this opinion.
Very truly yours,
_______________________________
_______________________________
[Name]
_______________________________
[Assistant] General Counsel
EXH. 11-3
Exhibit E
EXHIBIT 12
FORM OF SECURITY RELEASE CERTIFICATION
__________________, ______
________________________
________________________
________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
----------------------------------------
Dear Sirs:
This letter serves as notice that [COMPANY] a corporation organized
pursuant to the laws of the state of [___________] (the "Company") has
committed to sell to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. under a First
Amended and Restated Mortgage Loan Sale and Servicing Agreement, dated as of
December 1, 2005, certain mortgage loans originated by the Company. The
Company warrants that the mortgage loans to be sold to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc. are in addition to and beyond any collateral required to secure
advances made by you to the Company.
The Company acknowledges that the mortgage loans to be sold to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Capital Inc. shall not be used as additional or substitute
collateral for advances made by [____________]. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc. understands that the balance of the Company's mortgage loan
portfolio may be used as collateral or additional collateral for advances made
by [___________], and confirms that it has no interest therein.
EXH. 12-1
Exhibit E
Execution of this letter by [___________] shall constitute a full and
complete release of any security interest, claim, or lien which [___________]
may have against the mortgage loans to be sold to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc.
Very truly yours,
__________________________________
By:_______________________________
Name:_____________________________
Title:____________________________
Date:_____________________________
Acknowledged and approved:
______________________________
By:_____________________________
Name:___________________________
Title:__________________________
Date:___________________________
EXH. 12-2
EXHIBIT 13
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
----------------------------
The financial institution named below hereby relinquishes any and all
right, title, interest, lien or claim of any kind it may have in all mortgage
loans described on the attached Schedule A (the "Mortgage Loans") to be
purchased by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. from the company named on
the next page pursuant to that certain First Amended and Restated Mortgage
Loan Sale and Servicing Agreement, dated as of __________, 20__ 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
Company or its designees, as of the date and time of the sale of such Mortgage
Loans to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. Such release shall be effective
automatically without any further action by any party upon payment in one or
more installments, in immediately available funds, of $_____________, in
accordance with the wire instructions set forth below.
Name, Address and Wire Instructions of Financial Institution
________________________________
(Name)
________________________________
(Address)
________________________________
________________________________
________________________________
By:_____________________________
EXH. 13-1
II. Certification of Release
------------------------
The Company named below hereby certifies to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. the security interests
in the Mortgage Loans released by the above-named financial institution
comprise all security interests relating to or affecting any and all such
Mortgage Loans. The Company warrants that, as of such time, there are and will
be no other security interests affecting any or all of such Mortgage Loans.
___________________________
By:___________________________
Title:________________________
Date:_________________________
EXH. 13-2
EXHIBIT 14
FORM OF ASSIGNMENT AND CONVEYANCE
On this ___ day of __________, ____, ___________________ ("Seller"), as
(i) the Seller and Servicer under that certain Purchase Price and Terms
Agreement, dated as of ___________, _____ (the "PPTA"), (ii) the Seller and
Servicer under that certain First Amended and Restated Mortgage Loan Sale and
Servicing Agreement, dated as of ________, 20__ (the "Sale and Servicing
Agreement") and, together with the PPTA, the "Agreements") does hereby sell,
transfer, assign, set over and convey to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
("Purchaser") as the Purchaser under the Agreements, without recourse, but
subject to the terms of the Agreements, all right, title and interest of, in
and to the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto
as Exhibit A (the "Mortgage Loans"), together with the Mortgage Files and all
rights and obligations arising under the documents contained therein. Each
Mortgage Loan subject to the Agreements was underwritten in accordance with,
and conforms to, the Underwriting Guidelines attached hereto as Exhibit C.
Pursuant to Section 6 of the Sale and Servicing Agreement, the Seller has
delivered to the Custodian the documents for each Mortgage Loan to be
purchased as set forth in the Custodial Agreement. The contents of each
Servicing File required to be retained by the Servicer to service the Mortgage
Loans pursuant to the Sale and Servicing Agreement and thus not delivered to
the Purchaser are and shall be held in trust by the Servicer in its capacity
as Servicer for the benefit of the Purchaser as the owner thereof. The
Servicer's possession of any portion of the Servicing File is at the will of
the Purchaser for the sole purpose of facilitating servicing of the related
Mortgage Loan pursuant to the Sale and Servicing Agreement, and such retention
and possession by the Servicer 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 or the Servicer shall immediately
vest in the Purchaser and shall be retained and maintained, in trust, by the
Servicer at the will of the Purchaser in such custodial capacity only.
The Mortgage Loan Package characteristics of the Mortgage Loans subject
hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Sale and Servicing Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Sale and Servicing Agreement.
[Signature Page Follows]
▇▇▇. ▇▇-▇
[SELLER]
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
Accepted and Agreed:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:__________________________________
Name:
Title:
EXH. 14-2
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
▇▇▇. ▇▇-▇
▇▇▇▇▇▇▇ ▇
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on the
related Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than
$_________; (2) an origination date earlier than _ months prior to the related
Cut-off Date; (3) an LTV of greater than _____%; (4) a FICO Score of less than
___; or (5) a debt-to-income ratio of more than __%. Each Mortgage Loan has a
Mortgage Interest Rate of at least ___% per annum and an outstanding principal
balance of less than $_________. Each Adjustable Rate Mortgage Loan has an
Index of [_______].
EXH. 14-4
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXH. 14-5
EXHIBIT 15
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __, 20__]
("Agreement"), among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and other
valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
-------------------------
1. The Assignor hereby conveys, sells, grants, transfers and assigns to
the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain First
Amended and Restated Mortgage Loan Sale and Servicing Agreement (the "Sale and
Servicing Agreement"), dated as of December 1, 2005, between the Assignor, as
purchaser (the "Purchaser"), and the Company, as seller, solely insofar as the
Sale and Servicing Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the Assignee
hereunder any and all right, title and interest in, to and under and any
obligations of the Assignor with respect to (a) Subsection 7.05 of the Sale
and Servicing Agreement or (b) any mortgage loans subject to the Sale and
Servicing Agreement which are not the Mortgage Loans set forth on the Mortgage
Loan Schedule and are not the subject of this Agreement.
Recognition of the Company
--------------------------
2. From and after the date hereof (the "Securitization Closing Date"),
the Company shall and does hereby recognize that the Assignee will transfer
the Mortgage Loans and assign its rights under the Sale and Servicing
Agreement (solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [__________, 200_] (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors
in interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after
the date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii)
the Company shall look solely to the Trust for performance of any obligations
of the Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall
have all the rights and remedies available to the Assignor, insofar as they
relate to the Mortgage Loans, under the Sale and Servicing Agreement,
including, without limitation, the enforcement of the document delivery
requirements set forth in Section 6 of the Sale and Servicing Agreement, and
shall be entitled to enforce all of the
EXH. 15-1
obligations of the Company thereunder insofar as they relate to the Mortgage
Loans, and (iv) all references to the Purchaser, the Custodian or the Bailee
under the Sale and Servicing Agreement insofar as they relate to the Mortgage
Loans, shall be deemed to refer to the Trust (including the Trustee and the
Servicer acting on the Trust's behalf). Neither the Company nor the Assignor
shall amend or agree to amend, modify, waiver, or otherwise alter any of the
terms or provisions of the Sale and Servicing Agreement which amendment,
modification, waiver or other alteration would in any way affect the Mortgage
Loans or the Company's performance under the Sale and Servicing Agreement with
respect to the Mortgage Loans without the prior written consent of the
Trustee.
Representations and Warranties of the Company
---------------------------------------------
3. The Company warrants and represents to the Assignor, the Assignee and
the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Sale and Servicing
Agreement. The execution by the Company of this Agreement is in the
ordinary course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of the
Company's charter or bylaws or any legal restriction, or any material
agreement or instrument to which the Company is now a party or by which
it is bound, or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Company or its property is
subject. The execution, delivery and performance by the Company of this
Agreement have been duly authorized by all necessary corporate action on
part of the Company. This Agreement has been duly executed and delivered
by the Company, and, upon the due authorization, execution and delivery
by the Assignor and the Assignee, will constitute the valid and legally
binding obligation of the Company, enforceable against the Company in
accordance with its terms except as enforceability may be limited by
bankruptcy, reorganization, insolvency, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, and
by general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to be
obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative agency
or other tribunal, which would draw into question the validity of this
Agreement or the Sale and Servicing Agreement, or which, either in any
one instance or in the aggregate, would result in any material adverse
change in the ability of the Company to perform its obligations under
this Agreement or the Sale and Servicing Agreement, and the Company is
solvent.
▇▇▇. ▇▇-▇
▇. ▇▇▇▇▇▇▇▇ to Section 15 of the Sale and Servicing Agreement, the
Company hereby represents and warrants, for the benefit of the Assignor, the
Assignee and the Trust, that the representations and warranties set forth in
Section 7.01 and Section 7.02 of the Sale and Servicing Agreement are true and
correct as of the date hereof as if such representations and warranties were
made on the date hereof unless otherwise specifically stated in such
representations and warranties.
Remedies for Breach of Representations and Warranties
-----------------------------------------------------
5. The Company hereby acknowledges and agrees that the remedies available
to the Assignor, the Assignee and the Trust (including the Trustee and the
Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and
4 hereof shall be as set forth in Subsection 7.03 of the Sale and Servicing
Agreement as if they were set forth herein (including without limitation the
repurchase and indemnity obligations set forth therein).
Miscellaneous
-------------
6. This Agreement shall be construed in accordance with the laws of the
State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
7. 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, with the
prior written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors and
assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the
requirement for any further writing, be deemed Assignor, Assignee or Company,
respectively, hereunder.
9. Each of this Agreement and the Sale and Servicing Agreement shall
survive the conveyance of the Mortgage Loans and the assignment of the Sale
and Servicing Agreement (to the extent assigned hereunder) by Assignor to
Assignee and by Assignee to the Trust and nothing contained herein shall
supersede or amend the terms of the Sale and Servicing Agreement.
10. 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.
11. In the event that any provision of this Agreement conflicts with any
provision of the Sale and Servicing Agreement with respect to the Mortgage
Loans, the terms of this Agreement shall control.
▇▇▇. ▇▇-▇
▇▇. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to
such terms in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the date first above written.
[SELLER]
By:
Name:________________________
Its:_________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:
Name:_________________________
Its:__________________________
[ASSIGNEE]
By:
Name:_________________________
Its:__________________________
EXH. 15-4
EXHIBIT 16
FORM OF ANNUAL CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"),
among [IDENTIFY PARTIES]
I, ________________________________, the _______________________ of [NAME
OF COMPANY], certify to [the Purchaser], [the Depositor], and the [Master
Servicer] [Securities Administrator] [Trustee], and their officers, with the
knowledge and intent that they will rely upon this certification, that:
1. I have reviewed the servicer compliance statement of the Company
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Company's compliance with
the servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and
15d-18 under Securities Exchange Act of 1934, as amended (the "Exchange
Act") and Item 1122 of Regulation AB (the "Servicing Assessment"), the
registered public accounting firm's attestation report provided in
accordance with Rules 13a-18 and 15d-18 under the Exchange Act and
Section 1122(b) of Regulation AB (the "Attestation Report"), and all
servicing reports, officer's certificates and other information relating
to the servicing of the Mortgage Loans by the Company during 200[ ] that
were delivered by the Company to the [Depositor] [Master Servicer]
[Securities Administrator] [Trustee] pursuant to the Agreement
(collectively, the "Company Servicing Information");
2. Based on my knowledge, the Company Servicing Information, 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
the light of the circumstances under which such statements were made, not
misleading with respect to the period of time covered by the Company
Servicing Information;
3. Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee];
4. I am responsible for reviewing the activities performed by the
Company as servicer under the Agreement, and based on my knowledge and
the compliance review conducted in preparing the Compliance Statement and
except as disclosed in the Compliance Statement, the Servicing Assessment
or the Attestation Report, the Company has fulfilled its obligations
under the Agreement in all material respects; and
5. The Compliance Statement required to be delivered by the Company
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Company and by any Subservicer or
Subcontractor pursuant to the Agreement, have been provided to the
[Depositor] [Master Servicer]. Any material instances of noncompliance
described in such reports have been disclosed to the
▇▇▇. ▇▇-▇
[▇▇▇▇▇▇▇▇▇] [Master Servicer]. Any material instance of noncompliance
with the Servicing Criteria has been disclosed in such reports.
Date:_______________________________
By: _______________________________
Name:
Title:
▇▇▇. ▇▇-▇
EXHIBIT 17
MONTHLY REO PROPERTY REPORT DATA FIELDS
MS Field Name MS Field Description Data Type
--------------------------------------------------- ------------------------------------------------------ -----------------------
Servicer ID ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ servicer identifier nvarchar(4)
As Of Date Effective date of the file datetime
Loan Number ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Loan identifier of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ nvarchar(30)
Loan Number Prior Servicer Loan identifier of the prior servicer nvarchar(30)
Loan Number Seller Loan identifier of the seller nvarchar(30)
Loan Number Servicer Loan identifier of the current servicer nvarchar(30)
Accrued Interest Amount of delinquent interest money
ARM Flag Indicates if the loan is an adjustable rate mortgage integer
(-1 = Yes / 0 = No)
ARM Index Index used to determine the adjustment to the nvarchar(50)
interest rate
ARM Initial Interest Rate Change Date Date of the first interest rate adjustment datetime
ARM Initial Interest Rate Change Increment Number of months until the first interest rate integer
change date
ARM Initial Max Interest Rate Decrease Maximum initial interest rate decrease from the integer
original interest rate
ARM Initial Max Interest Rate Increase Maximum initial interest rate increase from the integer
original interest rate
ARM Initial Payment Change Date Date of the first payment adjustment datetime
ARM Initial Payment Change Increment Number of months from the first payment until the integer
first payment change date
ARM Life Max Interest Rate Lifetime maximum interest rate or orig rate plus float
life cap
ARM Life Max Interest Rate Decrease Lifetime maximum interest rate decrease from the float
original interest rate
ARM Life Max Interest Rate Increase Lifetime maximum interest rate increase from the float
original interest rate. (maximum interest rate -
original interest rate)
EXH. 17-1
MS Field Name MS Field Description Data Type
--------------------------------------------------- ------------------------------------------------------ -----------------------
ARM Life Min Interest Rate Lifetime minimum interest rate. In most cases the float
min rate or margin
ARM Lookback Days Number of days before the next nvarchar(30)
interest change date on which the index value is
determined
ARM Margin Margin (increase) over the index percentage float
ARM Negative Amortization First Recast Date Date of the first adjustment to minimum monthly datetime
payment to fully amortize the loan over the
remaining term
ARM Negative Amortization Flag Indicates if the loan is negative amortizing (-1 = integer
Yes / 0 = No)
ARM Negative Amortization Limit Maximum percentage increase to the original float
principal balance allowable through negative
amortization
ARM Negative Amortization Next Recast Date Date of the next adjustment to minimum monthly datetime
payment to fully amortize the loan over the
remaining term
ARM Negative Amortization Payment Cap Percentage that the minimum monthly payment can float
change at each adjustment
ARM Negative Amortization Recast Frequency Number of months between adjustments to minimum integer
monthly payment to fully amortize the loan over the
remaining term
ARM Next Interest Rate Change Date Date of the next interest rate adjustment datetime
ARM Next Payment Change Date Date of the next payment adjustment datetime
ARM Periodic Interest Rate Change Frequency Number of months between interest rate adjustments integer
(after the first adjustment)
ARM Periodic Max Interest Rate Decrease Maximum interest rate decrease from one adjustment float
to the next
ARM Periodic Max Interest Rate Increase Maximum subsequent interest rate increase from one float
adjustment to the next
ARM Periodic Max Payment Increase Maximum subsequent payment increase from one float
adjustment to the next
ARM Periodic Payment Change Frequency Number of months between payment adjustments (after integer
the first adjustment)
ARM Rounding Code Direction of rounding used nvarchar(10)
EXH. 17-2
MS Field Name MS Field Description Data Type
--------------------------------------------------- ------------------------------------------------------ -----------------------
ARM Rounding Factor Factor of rounding used float
Balloon Current Flag Indicates if the loan is a balloon mortgage (-1 = integer
Yes / 0 = No)
BK Affirmation Date Date of bankruptcy affirmation date datetime
BK Autostay Lift Flag Indicates if the automatic stay integer
on a bankruptcy loan has been
lifted (-1 = Yes / 0 = No)
BK Case Number Bankruptcy case number nvarchar(20)
BK Chapter Bankruptcy chapter integer
BK Confirmation Hearing Date Date of the bankruptcy confirmation hearing datetime
BK Consent Order Granted Date Date bankruptcy consent order granted datetime
▇▇ ▇▇▇▇ Down Flag Indicates if a cramdown has occurred
on a bankruptcy loan (-1 = Yes / 0 = No) integer
BK Discharge Date Date bankruptcy is discharged datetime
BK Dismissal Date Date bankruptcy is dismissed datetime
BK End Date Date bankruptcy ends datetime
BK Filing Date Date bankruptcy is filed datetime
BK Flag Indicates if a loan is currently in bankruptcy (-1 = integer
Yes / 0 = No)
BK Motion For Relief Filed Date Date motion for relief of stay is filed datetime
BK Motion For Relief Granted Date Date motion for relief of stay is granted datetime
BK Motion For Relief Hearing Date Date of the hearing for the motion for relief of stay datetime
BK Motion For Relief Referred Date Date motion for relief of stay is referred datetime
BK Motion For Relief Release Date Date motion for relief of stay is released datetime
BK Number Of Filings Number of Bankruptcy Filings integer
BK Paid By Indicates whether the borrower of trustee paid for nvarchar(30)
the bankruptcy
BK Payment Required Under Plan Flag Indicates if a bankruptcy plan requires payment (-1 integer
= Yes / 0 = No)
EXH. 17-3
MS Field Name MS Field Description Data Type
--------------------------------------------------- ------------------------------------------------------ -----------------------
BK Plan Confirmed Date Date bankruptcy plan is confirmed datetime
BK Plan Confirmed Flag Indicates if a bankruptcy plan has been confirmed integer
(-1 = Yes / 0 = No)
BK Post Petition Payment Amount Amount of the post petition payment amount money
BK Post Petition Payment First Due Date First due date following the petition of bankruptcy datetime
BK Post Petition Payment Next Due Date Next post-petition due date datetime
BK Pre Petition Payment Due Date Due date prior to the bankruptcy petition filing date datetime
BK Proof Of Claim Filed Date Date proof of claim filed datetime
BK Sub Status Detailed status of the bankruptcy nvarchar(30)
BK Sub Status Date Date of the detailed status of the bankruptcy datetime
Boarded At Servicer Date Date loan boarded at the current servicer datetime
Borrower Co First Name First Name of the co-borrower nvarchar(25)
Borrower Co Last Name Last Name of the co-borrower nvarchar(50)
Borrower Current Credit Score Latest credit score integer
Borrower Current Credit Score Date Date of the latest credit score datetime
Borrower Debt To Income Back Total monthly debt payments (including car payments, float
credit cards, student loans, etc.) divided by total
▇▇▇▇▇ income
Borrower First Name First name of the borrower nvarchar(25)
Borrower Last Name Last name of the borrower nvarchar(50)
Borrower Original Credit Score Original credit score of the borrower integer
Borrower Original Credit Score Date Date of the original credit score of the borrower datetime
Borrower Self Employment Flag Indicates if the borrower is self-employed (-1 = Yes integer
/ 0 = No)
Borrower Social Security Number Social Security Number of the borrower nvarchar(11)
CashFlow From Borrower Current Month Amount received from the borrower in the most recent money
month
EXH. 17-4
MS Field Name MS Field Description Data Type
--------------------------------------------------- ------------------------------------------------------ -----------------------
Current Corporate Advance Balance Current corporate advance balance money
Delinquency Days Delinquent MBA Number of days delinquent using the MBA delinquency integer
method
Delinquency Days Delinquent OTS Number of days delinquent using the OTS delinquency integer
method
Delinquency Times 30 12 Months Number of times loan between 30 and 59 days integer
delinquent (OTS) in the last 12 months
Delinquency Times 60 12 Months Number of times loan between 60 and 89 days integer
delinquent (OTS) in the last 12 months
Delinquency Times 90 12 Months Number of times loan between 60+ days delinquent integer
(OTS) in the last 12 months
Documentation Type Documentation level nvarchar(30)
Escrow Current Balance Current escrow balance (negative amount = advance money
balance)
FB Stip End Date Date the forbearance/stip plan ends datetime
FB Stip First Payment Due Date Date of the first payment due for a datetime
forbearance/stipulation plan
FB Stip Flag Indicates if a loan is currently on a integer
forbearance/stipulation plan (-1 = Yes / 0 = No)
FB Stip Last Payment Due Date Date of the last payment due for a datetime
forbearance/stipulation plan
FB Stip Next Payment Due Date Date of the next payment due for a datetime
forbearance/stipulation plan
FB Stip Payment Amount Payment amount for a forbearance/stipulation plan money
FB Stip Payment Frequency Payment frequency of a forbearance/stipulation plan integer
FB Stip Plan Agreement Type Type of forbearance/stipulation plan nvarchar(50)
FB Stip Plan Demand Expires Date Date a forbearance/stipulation demand expires datetime
FB Stip Plan Demand Sent Date Date a forbearance/stipulation demand is sent datetime
FB Stip Start Date Date the forbearance/stip plan starts datetime
EXH. 17-5
MS Field Name MS Field Description Data Type
--------------------------------------------------- ------------------------------------------------------ -----------------------
FB Stip Total Plan Amount Total amount of a forbearance/stipulation plan money
FC Contested Flag Indicates if a foreclosure has been contested integer
by the borrower (-1 = Yes / 0 = No)
FC Current Activity Current activity of the foreclosure nvarchar(70)
FC Delay Code Foreclosure delay code nvarchar(15)
FC End Date Date the foreclosure completed datetime
FC Estimated Sale Date Estimated date of the foreclosure sale datetime
FC First Legal Date First legal date of the foreclosure datetime
FC Flag Indicates if the loan is currently in foreclosure integer
(-1 = Yes / 0 = No)
FC Sale Date Date of the foreclosure sale datetime
FC Start Date Date foreclosure is filed datetime
FC Sub Status Detailed status of the foreclosure nvarchar(50)
FC Sub Status Date Date of the detailed status of the foreclosure datetime
Hazard Insurance Claim Flag Indicates if a loan has a hazard insurance claim integer
pending (-1 = Yes / 0 = No)
Interest Collection Type Identifies interest collection method nvarchar(15)
Interest Only Flag Indicates if the loan has a specified period when integer
then borrower pays only the interest portion due
(-1 = Yes / 0 = No)
Interest Only Term Number of months where borrower pays only the integer
interest portion due
Interest Paid Thru Date Date the through which the interest is paid datetime
Interest Rate Current Current interest rate float
Interest Rate Original Original interest rate float
Investor Code Investor code nvarchar(10)
Lien Position Lien position of the loan integer
Loan Purpose Purpose of the loan nvarchar(50)
Loan Status Servicer Status of the loan per ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ code nvarchar(50)
EXH. 17-6
MS Field Name MS Field Description Data Type
--------------------------------------------------- ------------------------------------------------------ -----------------------
Loan to Value Combined Current Current combined loan-to-value ratio (includes float
senior liens)
Loan to Value Combined Original Original combined loan-to-value ratio (includes float
senior liens)
Loan to Value Current Current loan-to-value ratio float
Loan to Value Original Original loan-to-value ratio float
Loss Mitigation Flag Indicates if a loan is in loss mitigation (-1 = Yes integer
/ 0 = No)
Loss Mitigation Sub Status Detailed status of the loss mitigation nvarchar(50)
Loss Mitigation Sub Status Date Date of the detailed status of the loss mitigation datetime
Maturity Date Current Current maturity date datetime
MERS MIN Mortgage Electronic Registration System Mortgage nvarchar(20)
Identification Number
MI Certificate Number Mortgage insurance certificate number nvarchar(25)
MI Claim Filed Date Date mortgage insurance claim filed datetime
MI Company Mortgage insurance company nvarchar(50)
MI Coverage Percentage Mortgage insurance coverage percentage float
MI Flag Indicates if a loan has mortgage insurance (-1 = Yes integer
/ 0 = No)
MI Lender Paid Fee Amount of lender paid mortgage insurance fee money
MI Proceeds Received Amount Amount of proceeds received from the mortgage money
insurance claim
MI Proceeds Received Date Date mortgage insurance proceeds received datetime
Modification Flag Indicates if the loan has been modified (-1 = Yes / integer
0 = No)
Modification Initial Principal Balance Initial principal balance following the latest money
modification
Modification Last Date Date of the latest modification datetime
Modification New Interest Rate New interest rate following the latest modification float
EXH. 17-7
MS Field Name MS Field Description Data Type
--------------------------------------------------- ------------------------------------------------------ -----------------------
Modification New Maturity Date New maturity date following the latest modification datetime
Modification New PI Payment Amount New principal and interest payment amount following money
the latest modification
Modification Payment First Due Date Date of the first payment following the latest datetime
modification of the loan
Number Of Units Number of units integer
Occupancy Type Current Current occupancy type nvarchar(50)
Occupancy Type Original Original occupancy type nvarchar(50)
Origination Date Origination date of the loan datetime
Originator Originator of the loan nvarchar(30)
Payment Actual Received Actual payment amount received in the most recent money
month
Payment First Due Date First payment due date of the loan datetime
Payment Frequency Number of times a payment is due within a year integer
Payment History Counter Alltel Counter. Leftmost spot represents January nvarchar(12)
right represents December.
Payment Last Received Date Date the last payment was received datetime
Payment Next Due Date Next payment due date of the loan datetime
Payment PI Current Current principal and interest payment money
Payment PI Original Original principal and interest payment money
Payment TI Current Current taxes and insurance payment money
Payment Total Current Current total payment (PITI) money
PI Arrearage Principal and interest in arrears money
Pool Number Identifies the pool to which the loan belongs nvarchar(15)
Prepayment Penalty Calculation Prepayment penalty calculation nvarchar(30)
Prepayment Penalty Collected Amount Amount of prepayment penalty collected money
Prepayment Penalty Current Flag Indicates if a loan has an active prepayment penalty integer
(-1 = Yes / 0 = No)
EXH. 17-8
MS Field Name MS Field Description Data Type
--------------------------------------------------- ------------------------------------------------------ -----------------------
Prepayment Penalty Original Flag Indicates if a loan had a prepayment penalty at integer
origination (-1 = Yes / 0 = No)
Prepayment Penalty Original Term Original term of the prepayment penalty in months integer
Prepayment Penalty Remaining Term Remaining term of the prepayment penalty in months integer
Prepayment Penalty Waived Amount Amount of prepayment penalty collected money
Principal Balance Current Actual Actual current principal balance money
Principal Balance Current Scheduled Scheduled current principal balance money
Principal Balance Junior Principal balance of all loans junior to this lien money
position
Principal Balance Original Original principal balance money
Principal Balance Senior Principal balance of all loans senior to this lien money
position
Property Address Property address nvarchar(50)
Property City Property city nvarchar(70)
Property Condition Code Property condition code nvarchar(15)
Property State Property state nvarchar(4)
Property Type Property type nvarchar(15)
Property Zip Property zip code nvarchar(10)
Purchase Price Purchase price of the property money
REO Anticipated Sale Date Date of the anticipated REO sale datetime
REO Anticipated Sale Price Anticipated sale price of the REO asset money
REO As Is Value As is value of the REO asset money
REO Closing Date Actual closing date of the REO asset datetime
REO Contract Price Contract price of the REO asset money
REO Current List Date Date of the most recent listing of the REO asset datetime
REO Current List Price Current listing price of the REO asset money
EXH. 17-9
MS Field Name MS Field Description Data Type
--------------------------------------------------- ------------------------------------------------------ -----------------------
REO Estimated Closing Date Estimated closing date of the REO asset datetime
REO Estimated Eviction Date Estimated eviction completion date of the REO asset datetime
REO Estimated Net Proceeds Estimated net proceeds of the REO asset money
REO Eviction End Date Actual eviction completion date of the REO asset datetime
REO Eviction Flag Indicates if an REO asset is currently in eviction integer
(-1 = Yes / 0 = No)
REO Eviction Start Date Beginning date of the eviction of the REO asset datetime
REO Flag Indicates if a loan is an REO asset (-1 = Yes / 0 = integer
No)
REO Net Proceeds Net proceeds from the sale of the REO asset money
REO Offer Amount Offer amount for the REO asset money
REO Offer Date Date the offer amount was made for the REO asset datetime
REO Offer Status Status of the offer for the REO asset nvarchar(30)
REO Original List Date Date of the original listing of the REO asset datetime
REO Original List Price Original listing price of the REO asset money
REO Repaired Value Repaired value of the REO asset money
REO Sale Date Sale date of the REO asset datetime
REO Sales Price Sales price of the REO asset money
REO Start Date Date the loan became an REO asset datetime
REO Sub Status Detailed status of the REO asset nvarchar(50)
REO Sub Status Date Date of the detailed status of the REO asset datetime
Resolution Accrued Interest Accrued interest at resolution money
Resolution Date Date of the resolution datetime
Resolution Escrow Advances Escrow advances at resolution money
Resolution Eviction Costs Eviction costs at resolution money
EXH. 17-10
MS Field Name MS Field Description Data Type
--------------------------------------------------- ------------------------------------------------------ -----------------------
Resolution Hazard Insurance Proceeds Hazard insurance proceeds money
Resolution Legal Fees Balance Legal fees balance at resolution money
Resolution Miscellaneous Costs Miscellaneous costs at resolution money
Resolution Miscellaneous Proceeds Miscellaneous proceeds from resolution money
Resolution Principal Balance at Resolution Principal balance at resolution money
Resolution Property Preservation Costs Property preservation costs at resolution money
Resolution Property Valuations Costs Property valuation costs at resolution money
Resolution Realized Loss Gain Realized gain/(loss) money
Resolution Sales Proceeds Amount of sales proceeds money
Resolution Type Resolution Type nvarchar(50)
Seasoning Number of months since the first payment due date of integer
the loan up to cutoff
Section 32 Flag Indicates if a loan is a Section 32 mortgage (-1 = integer
Yes / 0 = No)
Seller Name Seller name nvarchar(30)
Service Fee Rate Rate charged by the servicer to service the loan float
Servicer Transfer Date Date of service transfer datetime
Silent Second Flag Indicates if the loan has a second mortgage integer
originated at the same time as the first
mortgage to avoid PMI (-1 = Yes / 0 = No)
SP Appraisal Type Appraisal type per S&P guidelines nvarchar(4)
SP Documentation Type Documentation type per S&P guidelines nvarchar(4)
SP Down Payment Verification Flag Indicates if the verification of the down payment integer
was used to secure the loan for S&P (-1 = Yes / 0 =
No)
Suspense Current Balance Current suspense balance money
Taxes Delinquent Amount of delinquent taxes money
Taxes Search Date Date of tax search datetime
EXH. 17-11
MS Field Name MS Field Description Data Type
--------------------------------------------------- ------------------------------------------------------ -----------------------
Term Original Original term of the loan in months integer
Term Original Amortization Original amortization term of the loan in months integer
Term Remaining Number of months remaining in the loan from cutoff integer
Valuation Acquisition Reconciled Date Date of acquisition reconciled valuation datetime
Valuation Acquisition Reconciled Value Value of acquisition reconciled valuation money
Valuation Appraisal Original Date Date of the original appraisal datetime
Valuation Appraisal Original Value Value of the original appraisal money
Valuation Current Reconciled Value Value of latest reconciled valuation money
Valuation Current Reconciled Value Date Date of latest reconciled valuation datetime
Valuation Order Type Type of valuation performed nvarchar(50)
▇▇▇. ▇▇-▇▇
EXHIBIT 18
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the SELLER] [Name
of Subservicer] shall address, at a minimum, the criteria identified as
below as "Applicable Servicing Criteria":
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Applicable
Servicing Criteria Servicing Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
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General Servicing Considerations
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1122(d)(1)(i) Policies and procedures are instituted to monitor any performance or other
triggers and events of default in accordance with the transaction agreements.
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1122(d)(1)(ii) If any material servicing activities are
outsourced to third parties, policies and
procedures are instituted to monitor the third
party's performance and compliance with such
servicing activities.
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1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a back-up servicer
for the mortgage loans are maintained.
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1122(d)(1)(iv) A fidelity bond and errors and omissions policy
is in effect on the party participating in the
servicing function throughout the reporting
period in the amount of coverage required by and
otherwise in accordance with the terms of the
transaction agreements.
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Cash Collection and Administration
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1122(d)(2)(i) Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related
bank clearing accounts no more than two business
days following receipt, or such other number of
days specified in the transaction agreements.
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1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to an
investor are made only by authorized personnel.
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1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such advances, are
made, reviewed and approved as specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Applicable
Servicing Criteria Servicing Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(2)(iv) The related accounts for the transaction, such as
cash reserve accounts or accounts established as
a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of
cash) as set forth in the transaction agreements.
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1122(d)(2)(v) Each custodial account is maintained at a
federally insured depository institution as set
forth in the transaction agreements. For purposes
of this criterion, "federally insured depository
institution" with respect to a foreign financial
institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1)
of the Securities Exchange Act.
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1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access.
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1122(d)(2)(vii) Reconciliations are prepared on a monthly basis
for all asset-backed securities related bank
accounts, including custodial accounts and
related bank clearing accounts. These
reconciliations are (A) mathematically accurate;
(B) prepared within 30 calendar days after the
bank statement cutoff date, or such other number
of days specified in the transaction agreements;
(C) reviewed and approved by someone other than
the person who prepared the reconciliation; and
(D) contain explanations for reconciling items.
These reconciling items are resolved within 90
calendar days of their original identification,
or such other number of days specified in the
transaction agreements.
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Investor Remittances and Reporting
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including those to be filed
with the Commission, are maintained in accordance
with the transaction agreements and applicable
Commission requirements. Specifically, such
reports (A) are prepared in accordance with
timeframes and other terms set forth in the
transaction agreements; (B) provide information
calculated in accordance with the terms specified
in the transaction agreements; (C) are filed with
the Commission as required by its rules and
regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid
principal balance and number of mortgage loans
serviced by the Servicer.
-----------------------------------------------------------------------------------------------------------------------------------
Exh. 18-2
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Applicable
Servicing Criteria Servicing Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance with
timeframes, distribution priority and other terms set forth in the
transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(3)(iii) Disbursements made to an investor are posted
within two business days to the Servicer's
investor records, or such other number of days
specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
-----------------------------------------------------------------------------------------------------------------------------------
Pool Asset Administration
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on mortgage loans is
maintained as required by the transaction
agreements or related mortgage loan documents.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as required by the
transaction agreements
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made, reviewed
and approved in accordance with any conditions or requirements in the
transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(iv) Payments on mortgage loans, including any
payoffs, made in accordance with the related
mortgage loan documents are posted to the
Servicer's obligor records maintained no more
than two business days after receipt, or such
other number of days specified in the transaction
agreements, and allocated to principal, interest
or other items (e.g., escrow) in accordance with
the related mortgage loan documents.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage
loans agree with the Servicer's records with
respect to an obligor's unpaid principal balance.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's mortgage loans
(e.g., loan modifications or re-agings) are made, reviewed and approved by
authorized personnel in accordance with the transaction agreements and
related pool asset documents.
-----------------------------------------------------------------------------------------------------------------------------------
Exh. 18-3
-----------------------------------------------------------------------------------------------------------------------------------
Applicable
Servicing Criteria Servicing Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g.,
forbearance plans, modifications and deeds in
lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated,
conducted and concluded in accordance with the
timeframes or other requirements established by
the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(viii) Records documenting collection efforts are
maintained during the period a mortgage loan is
delinquent in accordance with the transaction
agreements. Such records are maintained on at
least a monthly basis, or such other period
specified in the transaction agreements, and
describe the entity's activities in monitoring
delinquent mortgage loans including, for example,
phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed
temporary (e.g., illness or unemployment).
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return
for mortgage loans with variable rates are
computed based on the related mortgage loan
documents.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor
(such as escrow accounts): (A) such funds are
analyzed, in accordance with the obligor's
mortgage loan documents, on at least an annual
basis, or such other period specified in the
transaction agreements; (B) interest on such
funds is paid, or credited, to obligors in
accordance with applicable mortgage loan
documents and state laws; and (C) such funds are
returned to the obligor within 30 calendar days
of full repayment of the related mortgage loans,
or such other number of days specified in the
transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as
tax or insurance payments) are made on or before
the related penalty or expiration dates, as
indicated on the appropriate bills or notices for
such payments, provided that such support has
been received by the servicer at least 30
calendar days prior to these dates, or such other
number of days specified in the transaction
agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment to be made on
behalf of an obligor are paid from the servicer's funds and not charged to
the obligor, unless the late payment was due to the obligor's error or
omission.
-----------------------------------------------------------------------------------------------------------------------------------
Exh. 18-4
-----------------------------------------------------------------------------------------------------------------------------------
Applicable
Servicing Criteria Servicing Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within two business
days to the obligor's records maintained by the servicer, or such other
number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible
accounts are recognized and recorded in
accordance with the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xv) Any external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth in the
transaction agreements.
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[NAME OF SELLER] [NAME OF SUBSERVICER]
Date:____________________________________
By: _____________________________________
Name:
Title:
▇▇▇. ▇▇-▇