SECOND AMENDED AND RESTATED FLOW SALE AND SERVICING AGREEMENT Dated and effective as of March 1, 2006 GOLDMAN SACHS MORTGAGE COMPANY (Initial Owner) and GMAC MORTGAGE CORPORATION (Company) Residential Adjustable and Fixed Rate Conventional Mortgage Loans
EXECUTION
COPY
SECOND
AMENDED AND RESTATED
Dated
and
effective as of March 1, 2006
▇▇▇▇▇▇▇
▇▇▇▇▇ MORTGAGE COMPANY
(Initial
Owner)
and
GMAC
MORTGAGE CORPORATION
(Company)
Residential
Adjustable and Fixed Rate Conventional Mortgage Loans
This
is a
Second Amended and Restated Flow Sale and Servicing Agreement, dated and
effective as of March 1, 2006, and is executed between ▇▇▇▇▇▇▇ Sachs Mortgage
Company as purchaser and initial Owner (hereinafter, the “Initial Owner”), and
GMAC Mortgage Corporation, a Pennsylvania corporation, as seller and servicer
(the “Company”).
WITNESSETH:
WHEREAS,
the Company and the Initial Owner are parties to that certain Flow Sale and
Servicing Agreement, dated as of March 1, 2005, as amended by the First Amended
and Restated Flow Sale and Servicing Agreement, dated as of January 1, 2006,
as
amended (the “Original Purchase Agreement”), pursuant to which, from time to
time, the Company desires to sell to the Initial Owner, and, from time to
time,
the Initial Owner desires to purchase from the Company, certain conventional
adjustable and fixed-rate residential mortgage loans (the “Mortgage Loans”),
retaining the Company to service such Mortgage Loans;
WHEREAS,
at the present time, the Initial Owner and the Company desire to amend the
Original Purchase Agreement to make certain modifications as set forth herein
with respect to all Mortgage Loans acquired to this Agreement or the Original
Purchase Agreement.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the Initial Owner and the Company agree as
follows:
ARTICLE
I
DEFINITIONS
Whenever
used herein, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
“Acknowledgment
and Conveyance Agreement”:
The
agreement, substantially in the form of Exhibit A-2
hereto,
to be executed by the Company and the Initial Owner on each Closing
Date.
“Additional
Mortgage Loan Documents”:
Has
the meaning set forth in Section 2.03.
“Agency
Transfer”:
Any
sale or transfer of some or all of the Mortgage Loans by the initial Owner
to
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
“Agreement”:
This
Second Amended and Restated Flow Sale and Servicing Agreement, including
all
exhibits hereto, and all amendments hereof and supplements hereto.
“ALTA”:
The
American Land Title Association or any successor organization.
“Appraised
Value”:
The
amount set forth in an Appraisal in connection with the origination of each
Mortgage Loan as the value of the Mortgaged Property, or, if the Mortgage
Loan
is a refinanced Mortgage Loan processed and originated under the Company’s
“express refinance,” “streamline refinance,” “GM family” or “select processing”
program (as described in the Company’s underwriting guidelines attached hereto
as Exhibit F)
the
Appraised Value shall equal the amount indicated on the Company’s servicing
system as the appraised value of the Mortgaged Property; or if the Mortgage
Loan
is a purchase Mortgage Loan originated under the Company’s “select processing”
or “GM family” programs (as described in the Company’s underwriting guidelines
attached hereto as Exhibit F)
the
Appraised Value shall equal the amount of the purchase price of the Mortgaged
Property.
“ARM
Loan”:
An
“adjustable rate” Mortgage Loan, the Mortgage Interest Rate of which is subject
to periodic adjustment in accordance with the terms of the Mortgage
Note.
“Assignment
of Mortgage”:
An
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form (but not recorded) that, when properly completed and recorded,
is sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect of record the sale of the Mortgage Loan to
the
Owner or, in the case of a MERS Mortgage Loan, an electronic transmission
to
MERS, identifying a transfer of ownership of the related Mortgage to the
Owner
or its designee.
“Assumed
Principal Balance”:
As to
each Mortgage Loan as of any date of determination, (i) the principal
balance of the Mortgage Loan outstanding as of the Cut-off Date after
application of payments due on or before the Cut-off Date, whether or not
received, minus (ii) all amounts previously distributed to the Owner with
respect to the Mortgage Loan pursuant to Section 5.01 and representing
(a) payments or other recoveries of principal or (b) Monthly Advances
made pursuant to Section 5.03.
“BIF”:
The
Bank Insurance Fund, or any successor thereto.
“Business
Day”:
Any
day other than (i) a Saturday or Sunday, or (ii) a day on which
banking or savings and loan institutions in the Commonwealth of Pennsylvania
or
State of New York are authorized or obligated by law or executive order to
be
closed.
“Buydown
Agreement”:
An
agreement between the Company and a Mortgagor, or an agreement among the
Company, a Mortgagor and a seller of a Mortgaged Property or a third party
with
respect to a Mortgage Loan which provides for the application of Buydown
Funds.
“Buydown
Funds”:
In
respect of any Buydown Mortgage Loan, any amount contributed by the seller
of a
Mortgaged Property subject to a Buydown Mortgage Loan, the buyer of such
property, the Company or any other source.
“Buydown
Mortgage Loan”:
Any
Mortgage Loan in respect of which, pursuant to a Buydown Agreement, (i) the
Mortgagor pays less than the full monthly payments specified in the Mortgage
Note for a specified period, and (ii) the difference between the payments
required under such Buydown Agreement and the Mortgage Note is provided from
Buydown Funds.
“Buydown
Period”:
The
period of time when a Buydown Agreement is in effect with respect to a related
Buydown Mortgage Loan.
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“Closing
Date”:
Means
a date on which the Company shall sell and the Initial Owner shall purchase
Mortgage Loans under this Agreement as set forth in the related Purchase
Price
and Terms Letter or Trade Confirmation, as the case may be.
“Code”:
The
Internal Revenue Code of 1986, as it may be amended from time to time or
any
successor statute thereto, and applicable U.S. Treasury Department regulations
issued pursuant thereto.
“Commission”:
The
United States Securities and Exchange Commission.
“Company”:
GMAC
Mortgage Corporation, a Pennsylvania corporation, or its successor in interest
or any successor to the Company under this Agreement appointed as herein
provided.
“Company
Information”:
As
defined in Subsection 13.04(a).
“Condemnation
Proceeds”:
All
awards or settlements in respect of a Mortgaged Property, whether permanent
or
temporary, partial or entire, by exercise of the power of eminent domain
or
condemnation, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Mortgage.
Covered
Loan:
A
Mortgage Loan categorized as Covered pursuant to Appendix E of Standard &
Poor’s Glossary.
“Curtailment”:
Any
Principal Prepayment made by a Mortgagor that is not a Full Principal
Prepayment.
“Custodial
Account”:
The
separate account or accounts created and maintained pursuant to
Section 4.04.
“Custodial
Agreement”:
The
agreement for the retention of each Mortgage Note, Mortgage, Assignment of
Mortgage and other documents, which agreement is in the form annexed hereto
as
Exhibit C,
as the
same may be amended, modified or replaced from time to time.
“Custodian”:
The
Custodian under the Custodial Agreement, or its successor in interest or
assigns
or any successor to the Custodian under the Custodial Agreement as provided
herein.
“Customary
Servicing Procedures”:
Procedures (including collection procedures) using the same care that the
Company customarily employs and exercises in servicing and administering
mortgage loans of the same type for its own account giving due consideration
to
accepted mortgage servicing practices.
“Cut-off
Date”:
With
respect to any Mortgage Loan purchased on a Closing Date, the first day of
the
month in which the related Closing Date occurs, or such other date as may
be set
forth in the related Purchase Price and Terms Letter or Trade Confirmation,
as
the case may be.
“Deleted
Mortgage Loan”:
A
Mortgage Loan replaced or to be replaced with a Qualified Substitute Mortgage
Loan in accordance with this Agreement.
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“Depositor”:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
“Determination
Date”:
The
16th day (or if such 16th day is not a Business Day, the Business Day
immediately preceding such 16th
day) of
the month of the related Remittance Date.
“Due
Date”:
The
day of the month on which each Monthly Payment is due on a Mortgage Loan,
exclusive of any days of grace.
“Due
Period”:
With
respect to each Remittance Date, the period commencing on the second day
of the
month preceding the month of such Remittance Date and ending on the first
day of
the month of such Remittance Date.
“Eligible
Depository Institution”:
Either
a (i) depository the accounts of which are insured by the FDIC through the
BIF or the SAIF and the debt obligations of which are rated A (or Aa3) or
better
by S&P or Moody’s or (ii) the corporate trust department of any bank
the debt obligations of which are rated at least A-1 (or P-1) by S&P or
Moody’s.
“Eligible
Investments”:
Any
one or more of the following obligations or securities:
(i) obligations
of or guaranteed as to principal and interest by the (a) United States,
▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇ or any agency or instrumentality of the United States
when such obligations are backed by the full faith and credit of the United
States; provided,
that
such obligations of ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ ▇▇▇ shall be limited to senior
debt
obligations and mortgage participation certificates except that investments
in
mortgage-backed or mortgage participation securities with yields evidencing
extreme sensitivity to the rate of principal payments on the underlying
mortgages shall not constitute Eligible Investments hereunder;
(ii) repurchase
agreements (which must be fully collateralized) on obligations specified
in
clause (i) maturing not more than one month from the date of acquisition
thereof;
(iii) federal
funds, certificates of deposit, demand deposits, time deposits and bankers’
acceptances (which shall each have an original maturity of not more than
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)
denominated in United States dollars of any U.S. depository institution or
trust
company incorporated under the laws of the United States or any state thereof
or
of any domestic branch of a foreign depository institution or trust
company;
(iv) commercial
paper (having original maturities of not more than 270 days) of any corporation
incorporated under the laws of the United States or any state thereof which
are
rated at least A-1 or P-1 by S & P Corporation (“S & P”) and ▇▇▇▇▇’▇
Investor Services, Inc. (“Moody’s”), respectively;
-4-
(v) obligations
of major foreign commercial banks, limited to Eurodollar deposits, time
deposits, certificate of deposits, bankers acceptances, Yankee Bankers
acceptances and Yankee certificate of deposits;
(vi) obligations
of major foreign corporations limited to commercial paper, auction rate
preferred stock, medium term notes, master notes and loan
participations;
(vii) money
market funds comprised of securities described in the aforementioned clauses
(i-iv) and having a stated policy of maintaining a set net asset value per
share
(a “Money Market Fund”). All Money Market Funds will conform to Rule 2a-7 of the
Investment Company Act of 1940;
provided,
however,
that no
instrument shall be an Eligible Investment if it represents, either (1) the
right to receive only interest payments with respect to the underlying debt
instrument or (2) the right to receive both principal and interest payments
derived from obligations underlying such instrument and the principal and
interest with respect to such instrument provide a yield to maturity greater
than 120% of the yield to maturity at par of such underlying
obligations.
“Escrow
Account”:
The
separate account or accounts created and maintained pursuant to
Section 4.06.
“Escrow
Payments”:
With
respect to any Mortgage Loan, the amounts constituting taxes, assessments,
mortgage insurance premiums, fire and hazard insurance premiums and other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
any Mortgage Loan.
“Essential
Mortgage Loan Documents”:
Has
the meaning set forth in Section 2.03.
“Event
of Default”:
Any
one of the conditions or circumstances enumerated in
Section 9.01.
“Exchange
Act”:
The
Securities Exchange Act of 1934, as amended.
“▇▇▇▇▇▇
Mae”:
The
Federal National Mortgage Association or any successor
organization.
“FDIC”:
The
Federal Deposit Insurance Corporation or any successor
organization.
“Fidelity
Bond”:
A
fidelity bond required to be maintained by the Company pursuant to
Section 4.13.
“▇▇▇▇▇▇▇
Mac”:
The
Federal Home Loan Mortgage Corporation or any successor
organization.
“Full
Principal Prepayment”:
A
Principal Prepayment made by a Mortgagor of the entire principal balance
of a
Mortgage Loan.
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“GMAC”:
General Motors Acceptance Corporation.
“Gross
Margin”:
With
respect to each ARM Loan, the fixed percentage added to the Index on each
Rate
Adjustment Date, as specified in each related Mortgage Note and listed in
the
Mortgage Loan Schedule.
“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,” “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) 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.
“Index”:
With
respect to each ARM Loan, on each Rate Adjustment Date, the applicable rate
index set forth on the Mortgage Loan Schedule.
“Initial
Owner”:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company.
“Insurance
Proceeds”:
Proceeds of any Primary Insurance Policy, title policy, hazard policy or
other
insurance policy covering a Mortgage Loan or the related Mortgaged Property,
if
any, to the extent such proceeds are not to be applied to the restoration
of the
related Mortgaged Property or released to the Mortgagor in accordance with
Customary Servicing Procedures or in accordance with the terms of the related
Mortgage Loan or applicable law.
“Lifetime
Rate Cap”:
With
respect to each ARM Loan, the absolute maximum Mortgage Interest Rate payable,
above which the Mortgage Interest Rate shall not be adjusted, as set forth
in
the related Mortgage Note and Mortgage Loan Schedule.
“Liquidation
Proceeds”:
Cash,
other than Insurance Proceeds, Condemnation Proceeds or REO Disposition
Proceeds, received in connection with the liquidation of a defaulted Mortgage
Loan, whether through the sale or assignment of the Mortgage Loan, trustee’s
sale, foreclosure sale or otherwise.
“Loan-to-Value
Ratio”
or
“LTV”:
With
respect to any Mortgage Loan, the original principal balance of such Mortgage
Loan divided by the Appraised Value of the related Mortgaged
Property.
“Maximum
Rate”:
With
respect to each ARM Loan, the per annum rate set forth in the related Mortgage
Note as the maximum Mortgage Interest Rate thereunder. The Maximum Rate as
to
each ARM Loan is set forth on the Mortgage Loan Schedule.
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“MERS”:
Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or
any
successor in interest thereto.
“MERS
Mortgage Loan”:
Any
Mortgage Loan as to which the related Mortgage, or an Assignment of Mortgage,
has been recorded in the name of MERS, as agent for the holder from time
to time
of the Mortgage Note.
“MIN”:
a MERS
Mortgage Identification Number assigned to a Mortgage Loan in accordance
with
the MERS Procedures Manual.
“MOM
Loan”:
means
a Mortgage Loan where the related Mortgage names MERS as the original mortgagee
thereof, as to which a MIN has been assigned, and which Mortgage has not
been
assigned to any other Person.
“Monthly
Advance”:
With
respect to each Remittance Date and each Mortgage Loan, an amount equal to
the
Monthly Payment (with the interest portion of such Monthly Payment adjusted
to
the Mortgage Loan Remittance Rate) which was due on the Mortgage Loan, and
(i) which was delinquent at the close of business on the immediately
preceding Determination Date or which was deferred, modified or reduced pursuant
to Section 4.01 and (ii) which was not the subject of a previous
Monthly Advance.
“Monthly
Payment”:
The
scheduled monthly payment of principal and interest on a Mortgage Loan which
is
payable by a Mortgagor under the related Mortgage Note.
“Monthly
Remittance Advice”:
The
statement provided by the Company to the Owner or its designees on or prior
to
each Remittance Date pursuant to Section 5.02, containing the data listed
on Exhibit F
attached
hereto.
“Moody’s”:
▇▇▇▇▇’▇ Investors Service, or any successor in interest.
“Mortgage”:
The
mortgage, deed of trust or other instrument creating a first lien on or first
priority ownership interest in an estate in fee simple, or a leasehold estate,
in real property securing a Mortgage Note, including any rider incorporated
by
reference therein.
“Mortgage
File”:
The
documents, records and other items referred to in Exhibit B
annexed
hereto pertaining to a particular Mortgage Loan.
“Mortgage
Interest Rate”:
The
annual rate at which interest accrues on any Mortgage Loan in accordance
with
the provisions of the related Mortgage Note, without regard to any reduction
in
such rate as a result of any modification of the Mortgage Note or application
of
the Servicemembers Civil Relief Act, as amended.
“Mortgage
Loan”:
An
individual Mortgage Loan that is the subject of this Agreement, each such
Mortgage Loan originally sold and subject to this Agreement being identified
on
the 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.
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“Mortgage
Loan Package”:
A
group of Mortgage Loans sold to the Initial Owner by the Company on a Closing
Date and set forth on the Mortgage Loan Schedule annexed to the related
Acknowledgment and Conveyance Agreement.
“Mortgage
Loan Remittance Rate”
or
“Remittance
Rate”:
As to
each Mortgage Loan, the annual rate of interest required to be remitted
hereunder to the Owner, which shall be equal to the related Mortgage Interest
Rate minus the related Servicing Fee Rate.
“Mortgage
Loan Schedule”:
The
schedule of Mortgage attached hereto as Annex 1
to each
Acknowledgment and Conveyance Agreement, each such schedule setting forth
the
following information as to each Mortgage Loan, as applicable: (a) the
Mortgage Loan identifying number, (b) the Mortgagor’s name, (c) the
street address of the Mortgaged Property, including the city, state and zip
code, (d) the Mortgage Interest Rate as of the Cut-off Date, (e) the
original principal balance of the Mortgage Loan, (f) principal balance of
the Mortgage Loan as of the Cut-off Date after deduction of payments of
principal due on or before the Cut-off Date, whether or not collected,
(g) the first payment date, (h) a code indicating whether the
Mortgaged Property is occupied by the owner (and, if so, whether it is occupied
as a primary, secondary or vacation residence), (i) the purpose of the
Mortgage Loan, (j) the stated maturity date, (k) the amount of monthly
principal and interest payment, (l) interest paid to date, (m) note
date, (n) buydown flag, (o) Borrower social security number,
(p) original loan-to-value ratio, (q) original loan term,
(r) original appraised value, (s) original purchase price,
(t) property type, (u) modification date, if applicable,
(v) original combined cltv, (w) remaining term to maturity,
(x) the appraisal type, (y) self employed flag, (z) asset
verification flag, (aa) Primary Insurance Policy provider, if applicable,
(bb) Primary Insurance Policy coverage %, if applicable,
(cc) documentation type, (dd) fico score, (ee) the property
valuation type, and (ff) a code indicating whether the Mortgage Loan is a
temporary buydown (Y or N). With respect to any ARM Loan, in addition to
(a) through (ee) above: (1) the Gross Margin; (2) the Periodic
Rate Cap; (3) the Lifetime Rate Cap; (4) the next Interest Adjustment
Date and the Interest Adjustment Date frequency; (5) the Maximum Rate; and
(6) the Index.
“Mortgage
Note”:
The
note or other evidence of the indebtedness of a Mortgagor secured by the
related
Mortgage.
“Mortgaged
Property”:
The
real property and improvements subject to a Mortgage, constituting security
for
repayment of the debt evidenced by the related Mortgage Note.
“Mortgagor”:
The
obligor on a Mortgage Note.
“Nonrecoverable
Advance”:
Any
Servicing Advance or Monthly Advance which the Company has determined in
its
good faith business judgment will not or, in the case of a proposed Servicing
Advance or Monthly Advance, would not, be ultimately recoverable, by the
Company
from late payments, Insurance Proceeds, Liquidation Proceed, Condemnation
Proceeds, or other amounts received or receivable with respect to the related
Mortgage Loan or REO Property. Upon request of the Owner, the determination
by
the Company that it has made a Nonrecoverable Advance shall be evidenced
by an
Officer’s Certificate delivered to the Owner setting forth such determination
and the procedures and considerations of the Company forming the basis of
such
determination, which shall include a copy of any information or reports obtained
by the Company which may support such determination.
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“Officers’
Certificate”:
A
certificate signed by the President, a Senior Vice President or a Vice President
and by the Treasurer or the Secretary or one of the Assistant Secretaries
of the
Company, or by other duly authorized officers or agents of the Company, and
delivered to the Owner as required by this Agreement.
“Opinion
of Counsel”:
A
written opinion of counsel, who may be salaried counsel employed by the
Company.
“Owner”:
The
Initial Owner and any successor or assign to this Agreement by the Initial
Owner
or an Owner.
“Periodic
Rate Cap”:
With
respect to each ARM Loan, the provision in each Mortgage Note that limits
permissible increases and decreases in the Mortgage Interest Rate on any
Rate
Adjustment Date to not more than one percentage point with respect to each
ARM
Loan that is subject to semi-annual adjustment or two percentage points with
respect to each ARM Loan that is subject to annual adjustment.
“Person”:
Any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
“Prepayment
Interest Shortfall”:
As to
any Remittance Date and any Mortgage Loan, (a) if such Mortgage Loan was
the subject of a Full Principal Prepayment during the related Principal
Prepayment Period, the excess of one month’s interest (adjusted to the Mortgage
Loan Remittance Rate) on the Assumed Principal Balance of such Mortgage Loan
outstanding immediately prior to such prepayment, over the amount of interest
(adjusted to the Mortgage Loan Remittance Rate) actually paid by the Mortgagor
in respect of such Principal Prepayment Period, and (b) if such Mortgage
Loan was the subject of a Curtailment during the related Principal Prepayment
Period, an amount equal to one month’s interest at the Mortgage Loan Remittance
Rate on the amount of such Curtailment.
“Primary
Insurance Policy”:
With
respect to each Mortgage Loan, the primary policy of mortgage insurance in
effect, or any replacement policy therefore obtained by the Company pursuant
to
Section 4.08.
“Principal
Prepayment”:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date, (not including any prepayment penalty
or
premium thereon,) and 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.
“Principal
Prepayment Period”:
As to
any Remittance Date, the calendar month preceding the calendar month in which
such Remittance Date occurs.
“Purchase
Price”:
Has
the meaning set forth in Section 2.01.
-9-
“Purchase
Price and Terms Letter”:
Those
certain letter agreements between the Company and the Initial Owner setting
forth the general terms and conditions of the transactions consummated herein
identifying the Mortgage Loans to be purchased hereunder, as modified by
the
related Trade Confirmation.
“Qualified
Appraiser”:
An
appraiser who (a) satisfies the requirements of Title XI of the Financial
Institutions Reform, and Enforcement Act of 1989, as amended, and the
regulations promulgated thereunder, (b) is acceptable to ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac and (c) approved by the Company.
“Qualified
Correspondent”:
Any
Person from which the Company purchased Mortgage Loans, provided
that the
following conditions are satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement between the Company and such Person that contemplated
that such Person would underwrite mortgage loans from time to time, for sale
to
the Company, in accordance with underwriting guidelines designated by the
Company (“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 Company within 180 days after
origination; (iii) either (x) the Designated Guidelines were, at the
time such Mortgage Loans were originated, used by the Company in origination
of
mortgage loans of the same type as the Mortgage Loans for the Company’s own
account or (y) the Designated Guidelines were, at the time such Mortgage
Loans were underwritten, designated by the Company on a consistent basis
for use
by lenders in originating mortgage loans to be purchased by the Company;
and
(iv) the Company employed, at the time such Mortgage Loans were acquired by
the Company, 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 Company.
“Qualified
Substitute Mortgage Loan”:
A
mortgage loan substituted by the Company for a Deleted Mortgage Loan which
must,
on the date of such substitution, (i) have a principal balance at the time
of substitution not in excess of the principal balance of the Deleted Mortgage
Loan (the amount of any difference being deemed to be a principal payment
to be
credited to or deposited by the Company in the Custodial Account),
(ii) have a Mortgage Interest Rate not less than and not more than 0.50%
greater than that of the Deleted Mortgage Loan, (iii) have a remaining
maturity not later than and not more than one year less than the remaining
maturity of the Deleted Mortgage Loan, and (iv) be, in the reasonable
determination of the Company, of the same type, quality and character as
the
Deleted Mortgage Loan as if the breach had not occurred.
“Rate
Adjustment Date”:
With
respect to each ARM Loan, the date on which the Mortgage Interest Rate
adjusts.
“Reconstitution”:
Any
Securitization Transaction or Whole Loan Transfer.
“Reconstitution
Agreement”:
The
agreement or agreements entered into by the Company and the Initial Owner
and
certain third parties on the Reconstitution Date or Dates with respect to
any or
all of the Mortgage Loans serviced hereunder, in connection with a Whole
Loan
Transfer, a Securitization Transaction or Agency Transfer as provided in
Section 12.01.
-10-
“Reconstitution
Date”:
The
date or dates on which any or all of the Mortgage Loans serviced under this
Agreement shall be removed from this Agreement and reconstituted as part
of a
Whole Loan Transfer, Securitization Transaction or Agency Transfer pursuant
to
Section 12.01 hereof. On such date, the Mortgage Loans transferred shall
cease to be covered by the servicing provisions of this Agreement and the
Company shall cease to service such Mortgage Loans under this
Agreement.
“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 that was made to a Mortgagor who owned the Mortgaged Property
prior to the origination of such Mortgage Loan.
“Regulation
AB”:
Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§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.
“REMIC”:
A
“real estate mortgage investment conduit” within the meaning of
Section 860D of the Code.
“Remittance
Date”:
The
18th day of each month, or if such 18th day is not a Business Day, the first
Business Day immediately preceding such date.
“REO
Disposition”:
The
final sale by the Company of a Mortgaged Property acquired by the Company
in
foreclosure or by deed in lieu of foreclosure.
“REO
Disposition Proceeds”:
All
amounts received with respect to an REO Disposition pursuant to
Section 4.14.
“REO
Property”:
A
Mortgaged Property acquired by the Company through foreclosure or deed in
lieu
of foreclosure, as described in Section 4.14.
“Repurchase
Price”:
With
respect to any Mortgage Loan to be repurchased by the Company pursuant to
Section 3.03, an amount equal to the Assumed Principal Balance of such
Mortgage Loan as of the date of such repurchase, plus interest on such Assumed
Principal Balance at the Mortgage Loan Remittance Rate from the date to which
interest has last been paid up to and including the day prior to repurchase,
plus with regard to any Mortgage Loan subject to a Securitization Transaction,
any costs and damages incurred by a related trust in connection with any
violation by such Mortgage Loan of any predatory or abusive lending
law.
“S&P”:
Standard & Poor’s Rating Services, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., or any successor in interest.
-11-
“Securities
Act”:
The
federal 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 portfolios of residential
mortgage loans consisting, in whole or in part, of some or all of the Mortgage
Loans.
“Servicer”:
As
defined in Section 13.03(c).
“Servicing
Criteria”:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.
“Servicing
Advances”:
All
customary, reasonable and necessary “out of pocket” costs and expenses incurred
in the performance by the Company of its servicing obligations, including,
but
not limited to, the cost of (a) the preservation, restoration and
protection of the Mortgaged Property, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of
REO Property pursuant to Section 4.14 and (d) compliance with the
Company’s obligations described in Section 4.08.
“Servicing
Fee”:
The
amount of the annual fee the Owner shall pay to the Company, as outlined
in the
Purchase Price and Terms Letter. Such fee shall be payable monthly from the
interest portion (including recoveries with respect to interest from the
Liquidation Proceeds of each Monthly Payment collected by the Company (or
as
otherwise provided under Section 4.05)and shall be computed on the basis of
the same principal amount and for the period respecting which any related
interest payment on a Mortgage Loan is computed. The obligation of the Owner
to
pay the Servicing Fee is limited to, and the Servicing Fee is payable solely
from, the interest portion (including recoveries with respect to interest
from
Liquidation Proceeds) of each Monthly Payment collected by the Company, or
as
otherwise provided under Section 4.05.
“Servicing
Officer”:
Any
officer of the Company involved in, or responsible for, the administration
and
servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished by the Company to the Owner upon request, as such list
may
from time to time be amended.
“Sponsor”:
The
sponsor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
“Standard
& Poor’s Glossary”:
The
Standard & Poor’s LEVELS®
Glossary, as may be in effect from time to time.
“Static
Pool Information”:
Static
pool information as described in Item 1105(a) 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 Company or a Subservicer.
A Subcontractor shall not include a lockbox or a tax insurance tracking system.
-12-
“Subservicer”:
Any
Person that services Mortgage Loans on behalf of the Company 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 Company under this Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB.
“Third-Party
Originator”:
Each
Person, other than a Qualified Correspondent, that originated Mortgage Loans
acquired by the Company, and regarding which Initial Owner determines in
good
faith that disclosure is required pursuant to Item 1110 of regulation
AB.
“Trade
Confirmation”:
With
respect to each purchase of a Mortgage Loan Package hereunder (other than
the
initial Mortgage Loan Package purchased hereunder), that certain confirmation
letter in the form of Exhibit A-1
hereto
supplementing the Purchase Price and Terms Letter and setting forth the general
terms, conditions and portfolio characteristics for each Mortgage Loan Package
to be purchased hereunder as of any Closing Date.
“Transfer
Date”:
The
meaning set forth in Section 10.02.
“Underwriting
Guidelines”:
Company’s underwriting guidelines for conventional residential mortgage loans in
effect as of the date of the origination of the related Mortgage Loan(s),
a copy
of which is attached hereto as Exhibit H.
“Whole
Loan Transfer”:
Any
sale or transfer of some or all of the Mortgage Loans, other than a
Securitization Transaction.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS
AND RECORDS; CUSTODIAL AGREEMENT;
DELIVERY
OF MORTGAGE LOAN DOCUMENTS
Section
2.01 Conveyance
of Mortgage Loans; Possession of Mortgage Files.
On
each
Closing Date, the Company, simultaneously with the execution and delivery
of the
related Acknowledgment and Conveyance Agreement, does hereby sell, transfer,
assign, set over and convey to the Owner, without recourse, but subject to
the
terms of this Agreement, all the right, title and interest of the Company
in and
to the Mortgage Loans included in the related Mortgage Loan Package, including
all interest and principal received by the Company on or with respect to
the
Mortgage Loans after the related Cut-off Date (other than payments of principal
and interest due on the Mortgage Loans on or before such Cut-off Date, whether
or not received), together with all of the Company’s right, title and interest
in and to each Custodial Account and all amounts from time to time credited
to
and the proceeds of such Custodial Account, all amounts from time to time
credited to and the proceeds of any Escrow Account, any Liquidation Proceeds
or
Condemnation Proceeds, any REO Property and the proceeds thereof, the Company’s
rights under any insurance policies related to the Mortgage Loans, any Insurance
Proceeds, the Company’s security interest in any collateral pledged to secure
the Mortgage Loans, including the Mortgaged Properties, and any proceeds
of the
foregoing.
-13-
Pursuant
to Section 2.03 hereof, the Company shall deliver a portion of each
Mortgage File to the Custodian. The contents of each Mortgage File not delivered
to the Custodian are and shall be held in trust by the Company for the benefit
of the Owner as the owner thereof and the Company’s possession of the portion of
each Mortgage File so retained is at the will of the Owner for the sole purpose
of servicing the related Mortgage Loan, and such retention and possession
by the
Company is in a custodial capacity only. On the Closing Date, the ownership
of
each Mortgage Note, Mortgage and each related Mortgage File shall vest in
the
Owner and the ownership of all records and documents with respect to each
related Mortgage Loan prepared by or which come into the possession of the
Company shall immediately vest in the Owner and shall be retained and
maintained, in trust, by the Company at the will of the Owner in such custodial
capacity only. The Mortgage File may be retained in microfilm, microfiche,
optical storage or magnetic media in lieu of hard copy. The Company shall
maintain records (i) confirming the sale of the related Mortgage Loan to
the Owner and (ii) confirming the Owner’s ownership interest in the
Mortgage File. The Company shall release from its custody the contents of
any
Mortgage File only in accordance with written instructions from the Owner,
unless such release is required as incidental to the Company’s servicing of the
Mortgage Loans or is in connection with a repurchase of any Mortgage Loan
or the
removal of any Mortgage Loan or related REO Property from the terms of this
Agreement pursuant to Section 3.03 such written instructions shall not be
required.
In
addition, in connection with the assignment of any MERS Mortgage Loan, the
Company agrees that it will cause, at its own expense, the MERS®
System
to indicate that such Mortgage Loans have been assigned by the Company to
the
Owner in accordance with this Agreement by including (or deleting, in the
case
of Mortgage Loans which are repurchased in accordance with this Agreement)
in
such computer files the information required by the MERS®
System
to identify the purchaser of such Mortgage Loans. Prior to the assignment
of any
MERS Mortgage Loan, the Owner will provide the Company with the Owner’s MERS
registration number. The Company further agrees that it will not alter the
information referenced in this paragraph with respect to any Mortgage Loan
during the term of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement.
In
full
consideration for the purchase of each Mortgage Loan Package by the Owner,
on
each Closing Date, the Owner shall pay to the Company the purchase price
calculated in accordance with the provisions of the related Acknowledgment
and
Conveyance Agreement (the “Purchase Price”) by wire transfer in immediately
available funds pursuant to the wiring instructions as provided by the Company
to the Owner. If, subsequent to any Closing Date, the amount on which the
related Purchase Price with respect to a Mortgage Loan was based is found
to be
in error, or if, for any other reason, the Purchase Price or such other amounts
are found to be in error, within ten (10) Business Days of the receipt of
information sufficient to provide notice that payment is due the party
benefiting from the error shall pay an amount sufficient to correct and
reconcile the Purchase Price plus interest thereon at an agreed upon market
rate
or such other amounts and shall provide a reconciliation statement and such
other documentation sufficient reasonably to satisfy the other party concerning
the accuracy of such reconciliation.
-14-
It
is
intended that the conveyance pursuant to this Agreement of the Company’s right,
title and interest in and to the property described in the first paragraph
of
this Section shall constitute, and shall be construed as, a sale of such
property and not a grant of a security interest to secure a loan. However,
if
such conveyance is deemed to be, or to be made as security for, a loan, it
is
intended that: (1) the rights and obligations of the parties shall be
established pursuant to the terms of this Agreement; (2) the Company hereby
grants to the Owner a first priority security interest in all of the Company’s
right, title and interest in, to and under, whether now owned or hereafter
acquired, the property described in the first paragraph of this
Section 2.01; and (3) this Agreement shall constitute a security
agreement under applicable law.
Section
2.02 Books
and Records.
Notwithstanding
the sale of a Mortgage Loan Package to the Owner, record title to each Mortgage
and the related Mortgage Note in such Mortgage Loan Package shall continue
in
the name of the Company and be retained by the Company in trust for the Owner
for the sole purpose of facilitating the servicing and the supervision of
the
servicing of the Mortgage Loans; provided however,
that
the Company agrees to cooperate with the Initial Owner in the event the Initial
Owner requests recordation of the Assignments of Mortgage in connection with
a
reconstitution of this Agreement as contemplated under Article XII. It
being further understood that this Assignment of Mortgage may necessitate
putting the Assignments in the name of the Trust or some other third party.
All
rights arising out of the Mortgage Loans included in each Mortgage Loan Package
including, but not limited to, all funds received on or in connection with
a
Mortgage Loan shall be held by the Company in trust for the benefit of the
Owner
as the owner of the Mortgage Loans, subject to subsequent deduction of amounts
to which the Company is entitled pursuant to the terms of this
Agreement.
The
sale
of each Mortgage Loan shall be reflected on the Company’s balance sheet and
other financial statements as a sale of assets by the Company. After the
Closing
Date, the Company agrees to cooperate with the Owner or any parties to a
reconstitution of the Mortgage Loans on one or more occasions as more fully
set
forth in Article XII, at the Owner’s or such other party’s expense, in
providing such reasonable documentation or confirmation, as may be reasonably
requested by the Owner or such parties to a reconstitution. The Company shall
be
responsible for maintaining, and shall maintain, a complete set of books
and
records for each Mortgage Loan which shall be clearly marked to reflect the
ownership of each Mortgage Loan by the Owner.
Section
2.03 Custodial
Agreement; Delivery of Mortgage Loan Documents.
By
no
later than the date set forth in the related Purchase Price and Terms Letter
or
Trade Confirmation, as the case may be, the Company shall have delivered
to the
Custodian each of the following documents for each Mortgage Loan (the “Essential
Mortgage Loan Documents”) and the Custodian shall have certified its receipt of
all such documents to the Initial Owner as of or prior to the related Closing
Date:
(a) The
original Mortgage Note endorsed, “Pay to the order of ____________, without
recourse” and signed in the name of the Company by an authorized officer. Such
signature may be an original signature or a facsimile signature of such officer.
If the Mortgage Loan was acquired by the Company in a merger, the endorsement
must be by “GMAC Mortgage Corporation, successor by merger to [name of
predecessor]”; and if the Mortgage Loan was acquired or originated by the
Company while doing business under another name, the endorsement must be
by
“GMAC Mortgage Corporation, formerly known as [previous name]”. The Mortgage
Note shall include all intervening endorsements showing a complete chain
of
title from the originator to the Company. In lieu of the original Mortgage
Note,
the Owner will accept lost note affidavits in a form acceptable to the Owner
for
up to five percent (5%) of the Mortgage Loans (measured by unpaid principal
balance);
-15-
(b) Originals
or certified true copies from the appropriate recording offices of all
assumption and modification agreements, if any or if the original has not
yet
been returned from the recording office, a copy of such original certified
by
the Company; and
(c) Unless
the Mortgage Loan is registered on the MERS System, the original Assignment
of
Mortgage, assigned to ________________, but otherwise in form and substance
acceptable for recording and sent for recording; provided however,
that
certain recording information will not be available if, as of the related
Closing Date, the Company has not received the related Mortgage from the
appropriate recording office. If the Mortgage Loan was acquired by the Company
in a merger, the assignment must be by “GMAC Mortgage Corporation, successor by
merger to [name of predecessor]”; and if the Mortgage Loan was acquired or
originated by the Company while doing business under another name, the
assignment must be by “GMAC Mortgage Corporation, formerly known as [previous
name]”.
In
addition, the Company is in possession of the following documents for each
Mortgage Loan (the “Additional Loan Documents”), which shall be delivered to the
Owner or a Custodian designated by the Owner if required in connection with
an
Agency Transfer, a Whole Loan Transfer or a Securitization Transaction entered
into pursuant to this Agreement:
(a) The
original Mortgage, or a copy of the Mortgage with evidence of recording thereon
certified by the appropriate recording office to be a true copy of the recorded
Mortgage, or, if the original Mortgage has not yet been returned from the
recording office, a copy of the original Mortgage together with a certificate
of
a duly authorized representative of the Company (which certificate may consist
of stamped text appearing on such copy of the Mortgage), the closing attorney
or
an officer of the title insurer which issued the related title insurance
policy,
certifying that the copy is a true copy of the original of the Mortgage which
has been transmitted for recording in the appropriate recording office of
the
jurisdiction in which the Mortgaged Property is located;
(b) The
original Assignment of Mortgage, executed in blank, but otherwise in form
and
substance acceptable for recording; provided,
however,
that
certain recording information will not be available if, as of the Closing
Date,
the Company has not received the related Mortgage from the appropriate recording
office. If the Mortgage Loan was acquired by the Company in a merger, the
assignment must be by “GMAC Mortgage Corporation, successor by merger to [name
of predecessor]”; and if the Mortgage Loan was acquired or originated by the
Company while doing business under another name, the assignment must be by
“GMAC
Mortgage Corporation, formerly known as [previous name]”; provided,
further,
that if
the Mortgage Loan is a MERS Mortgage Loan (and, except in the case of a MOM
Loan
where no intervening assignment shall be required, the original or certified
true copy of the recorded Assignment of Mortgage to MERS is provided pursuant
to
clause (d)below) no Assignment of Mortgage shall be
required;
-16-
(c) The
original policy of title insurance or, if such insurance is in force but
the
original policy of title insurance has not been delivered to the Company
by the
issuing title insurer, the report of title insurance or other evidence of
title
insurance generally acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac or, if the Mortgage
Loan is the subject of a ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac approved master title
insurance policy, a certified copy of the certificate of title insurance
issued
thereunder; and
(d) Originals,
or certified true copies from the appropriate recording offices, of any
intervening assignments of the Mortgage with evidence of recording thereon,
or,
if the original intervening assignment has not yet been returned from the
recording office, a certified copy of such assignment.
Notwithstanding
any delivery of the Essential Mortgage Loan Documents or the Additional Mortgage
Loan Documents by the Company to the Owner or the Custodian, the Company
shall
retain, in its capacity as servicer of the Mortgage Loans, all other items
included in the Mortgage File, all of which shall be available for inspection
by
the Owner and which may be retained in microfilm, microfiche, optical storage
or
magnetic media in lieu of hard copy.
If,
in
connection with any reconstitution of the Mortgage Loans, ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, as applicable, in the case of an Agency Transfer, the third party purchaser
in the case of a Whole Loan Transfer, or the trustee or master servicer in
the
case of a Securitization Transaction, requires that Assignments of Mortgage
be
delivered and/or recorded with respect to each Mortgage Loan, then within
the
time period required by the applicable Reconstitution Agreement, the Company,
at
the Company’s expense, shall deliver to the Initial Owner or its designee an
Assignment of Mortgage with respect to each Mortgage Loan in the name designated
by the Initial Owner and in form and substance acceptable for recording in
the
jurisdiction in which the related Mortgaged Property is located. It is
understood and agreed that such Assignment of Mortgage shall not be required
if
the Mortgage Loan is a MERS Mortgage Loan, and the Assignment of Mortgage
naming
MERS has been duly recorded and is included in the Mortgage File held by
the
Company or delivered to the Owner or the Custodian to the extent required
by
this Agreement.
The
Custodian has certified or will certify its receipt of each such document
as
evidenced by its Initial Certification in the form annexed to the Custodial
Agreement.
The
Company shall promptly forward to the Custodian original documents evidencing
any assumption, modification, consolidation or extension of any Mortgage
Loan
entered into in accordance with Section 4.01 or Section 6.01 within
thirty (30) days of its execution; provided,
however,
that
the Company shall provide the Custodian with a certified true copy of any
such
document submitted for recordation within thirty (30) days of its execution,
and
shall provide the original of any such 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 promptly upon receiving the same
from
the appropriate public recording office.
Section
2.04 Examination
of Mortgage File.
At
the
Owner’s request upon reasonable advance notice prior to or after the Closing
Date, the Owner or its designee or any other third party may, at such Person’s
cost and expense, conduct a due diligence review of a reasonable sample of
the
Mortgage Files for the purpose of selling, assigning or reconstituting the
Mortgage Loans, ensuring conformity with the Underwriting Guidelines and
to
insure that the Mortgage Loans meet the characteristics set forth in this
Agreement, the Purchase Price and Terms Letter and in the Schedules and Exhibits
hereto and thereto.
-17-
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY;
REPURCHASE
AND SUBSTITUTION;
REVIEW
OF MORTGAGE LOANS
Section
3.01 Representations
and Warranties of the Company.
The
Company represents, warrants and covenants to the Owner, as of each Closing
Date or as of such other date specified below, that:
(i) The
Company is a validly existing corporation in good standing under the laws
of the
Commonwealth of Pennsylvania and is qualified to transact business in, is
in
good standing under the laws of, and possesses all licenses necessary for
the
conduct of its business in, each state in which any Mortgaged Property is
located or is otherwise exempt or not required under applicable law to effect
such qualification or license and no demand for such qualification or license
has been made upon the Company by any such state, and in any event the Company
is in compliance with the laws of each such State to the extent necessary
to
ensure the enforceability of each Mortgage Loan;
(ii) The
Company has full power and authority to hold each Mortgage Loan, to sell
each
Mortgage Loan pursuant to this Agreement and to execute, deliver and perform,
and to enter into and consummate all transactions contemplated by this Agreement
and to conduct its business as presently conducted, has duly authorized the
execution, delivery and performance of this Agreement, has duly executed
and
delivered this Agreement, and this Agreement is enforceable against it in
accordance with its terms subject to bankruptcy laws and other similar laws
of
general application affecting rights of creditors and subject to the application
of the rules of equity, including those respecting the availability of specific
performance;
(iii) None
of
the execution and delivery of this Agreement, the origination of the Mortgage
Loans by the Company, the sale of the Mortgage Loans to the Owner, the
consummation of the transactions contemplated hereby, or the fulfillment
of or
compliance with the terms and conditions of this Agreement will conflict
with
any of the terms, conditions or provisions of the Company’s articles of
incorporation or by-laws or materially conflict with or result in a material
breach of any of the terms, conditions or provisions of any legal restriction
or
any agreement or instrument to which the Company is now a party or by which
it
is bound, or constitute a default or result in an acceleration under any
of the
foregoing, or result in the material violation of any law, rule, regulation,
order, judgment or decree to which the Company or its property is
subject;
(iv) Each
Mortgage Note and any other documents required pursuant to this Agreement
to be
delivered to the Owner or its assignee for each Mortgage Loan have been,
on or
before the Closing Date, delivered to the Owner or its
designee;
-18-
(v) There
is
no litigation pending or to the best of Company’s knowledge threatened with
respect to the Company which is reasonably likely to have a material adverse
effect on the sale of the related Mortgage Loans, the execution, delivery
or
enforceability of this Agreement, or which is reasonably likely to have a
material adverse effect on the financial condition of the Company, or which
would draw into question the validity of this Agreement or the Mortgage Loans
or
if any action taken in connection with the obligations of the Company
contemplated herein, or which would be likely to impair materially the ability
of the Company to perform under the terms of this Agreement;
(vi) 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 this Agreement, the sale of the Mortgage
Loans
or the consummation of the transactions contemplated by this Agreement except
for consents, approvals, authorizations and orders which have been
obtained;
(vii) The
consummation of the transactions contemplated by this Agreement is in the
ordinary course of business of the Company, and the transfer, assignment
and
conveyance of the Mortgage Notes and the Mortgages by the Company pursuant
to
this Agreement are not subject to bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction;
(viii) The
Mortgage Loans were selected on a random basis from among the outstanding
residential mortgage loans contained in the Company’s nonconforming adjustable
or fixed rate loan portfolios immediately prior to the Closing Date as to
which
the representations and warranties set forth in this Section 3.01 and
Section 3.02 could be made;
(ix) There
has
been no change in the business, operations, financial condition, properties
or
assets of the Company since the date of the Company’s financial statements that
would have a material adverse effect on its ability to perform its obligations
under this Agreement;
(x) The
Company 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
Company is solvent and the sale of the Mortgage Loans will not cause the
Company
to become insolvent. The sale of the Mortgage Loans is not undertaken with
the
intent to hinder, delay or defraud any of the Company’s creditors;
(xi) The
Company is an approved seller/servicer of residential mortgage loans for
▇▇▇▇▇▇
Mae and ▇▇▇▇▇▇▇ Mac. No event has occurred, including but not limited to
a
change in insurance coverage, which would make the Company unable to comply
with
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, or which would require notification to ▇▇▇▇▇▇
Mae or
▇▇▇▇▇▇▇ Mac;
(xii) The
execution of this Agreement by the parties hereto and the assignment of the
Mortgage Notes to the Owner shall be effective to transfer and assign to
and
vest in the Owner all right, title and interest in and to each Mortgage Loan
related thereto, including all rights of the related mortgagee thereunder,
excluding therefrom the right to service the Mortgage Loans;
-19-
(xiii) The
Company has not retained any broker, finder, investment banker or financial
advisor in connection with this Agreement or any of the transactions
contemplated hereby that would be entitled to a broker’s, finder’s, investment
banker’s, financial adviser’s or similar fee in connection
therewith;
(xiv) Neither
this Agreement nor any statement, report or other document furnished pursuant
to
this Agreement or in connection with the transactions contemplated hereby
contains any untrue statement of fact or omits to state a fact necessary
to make
the statements contained therein not misleading; and
(xv) The
Company 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 and subject to this Agreement.
Section
3.02 Representations
and Warranties as to Individual Mortgage Loans.
The
Company hereby represents and warrants to the Owner, as to each Mortgage
Loan
included in the related Mortgage Loan Package as of each Closing Date or
such
other date as may be specified below with respect to such Mortgage Loan Package,
that:
(i) The
information set forth in the Mortgage Loan Schedule is true, complete and
correct in all material respects as of the Cut-off Date;
(ii) The
Mortgage creates a first lien or a first priority ownership interest in an
estate in fee simple in real property securing the related Mortgage Note,
free
and clear of all adverse claims, liens and encumbrances having priority over
the
first lien of the Mortgage subject only to (1) the lien of non-delinquent
current real property taxes and assessments not yet due and payable,
(2) covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording which are acceptable
to mortgage lending institutions generally and, with respect to any Mortgage
Loan for which an appraisal was made prior to the Cut-off Date, either (A)
which
are 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 as set forth in such appraisal, and (3) 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. Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes
and
creates a valid, subsisting and enforceable first lien and first priority
security interest on the property described therein. 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 or chattel
mortgage;
-20-
(iii) There
are
no defaults under the terms of the Mortgage Loan; and the Company has not
advanced funds, or induced, solicited or knowingly received any advance of
funds
from a party other than the owner of the Mortgaged Property subject to the
Mortgage, directly or indirectly, for the payment of any amount required
by the
Mortgage Loan;
(iv) There
are
no delinquent taxes which are due and payable, ground rents, assessments
or
other outstanding charges affecting the related Mortgaged Property;
(v) The
terms
of the Mortgage Note of the related Mortgagor and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by applicable law or is necessary to protect the interests of the
Owner, and which have been approved by the title insurer and the primary
mortgage insurer, as applicable, and copies of which written instruments
are
included in the Mortgage File. No other instrument of waiver, alteration
or
modification has been executed, and no Mortgagor has been released, in whole
or
in part, from the terms thereof except in connection with an assumption
agreement, which assumption agreement is part of the Mortgage File and the
terms
of which are reflected on the Mortgage Loan Schedule. To the best of the
Company’s knowledge, no Mortgagor was in debtor in any state or federal
insolvency proceeding at the time the Mortgage Loan was originated;
(vi) The
Mortgage Note and the Mortgage are not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will
the
operation of any of the terms of the Mortgage Note and the Mortgage, or the
exercise of any right thereunder, render the Mortgage Note or Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, and no
such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(vii) All
buildings upon the Mortgaged Property are insured by a generally acceptable
insurer pursuant to standard hazard policies conforming to the requirements
of
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac. All such standard hazard policies are in effect
and
on the date of origination contained a standard mortgagee clause naming the
Company and its successors in interest as loss payee and such clause is still
in
effect and all premiums due thereon have been paid. If the Mortgaged Property
is
located in an area identified by the Federal Emergency Management Agency
as
having special flood hazards under the Flood Disaster Protection Act of 1973,
as
amended, such Mortgaged Property is covered by flood insurance by a generally
acceptable insurer in an amount not less than the requirements of ▇▇▇▇▇▇
Mae and
▇▇▇▇▇▇▇ Mac. The Mortgage obligates the Mortgagor thereunder to maintain
all
such insurance at the Mortgagor’s cost and expense, and on the Mortgagor’s
failure to do so, authorizes the holder of the Mortgage to maintain such
insurance at the Mortgagor’s cost and expense and to seek reimbursement therefor
from the Mortgagor;
(viii) Any
and
all requirements of any federal, state or local law including, without
limitation, usury, truth-in-lending, real estate settlement procedures,
predatory and abusive lending, consumer credit protection, equal credit
opportunity or disclosure laws applicable to the Mortgage Loan have been
complied with, and the Company shall maintain in its possession, available
for
the Owner’s inspection, evidence of compliance with all such
requirements;
-21-
(ix) The
Mortgage has not been satisfied, canceled or subordinated, in whole or in
part,
or rescinded, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part nor has any instrument been executed that
would effect any such satisfaction, release, cancellation, subordination
or
rescission;
(x) The
Mortgage Note and the related Mortgage are original and genuine and each
is the
legal, valid and binding obligation of the maker thereof, enforceable in
all
respects in accordance with its terms, subject to bankruptcy, insolvency
and
other laws of general application affecting the rights of creditors, and
the
Company has taken all action necessary to transfer such rights of enforceability
to the Owner. All parties to the Mortgage Note and the Mortgage had the legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage. The Mortgage Note and the Mortgage have been duly
and
properly executed by such parties. The proceeds of the Mortgage Note 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
improvements and as to disbursements of any escrow funds therefor have been
complied with;
(xi) Immediately
prior to the transfer and assignment to the Owner, the Mortgage Note and
the
Mortgage were not subject to an assignment or pledge, and the Company had
good
and marketable title to and was the sole owner thereof and had full right
to
transfer and sell the Mortgage Loan to the Owner free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security
interest;
(xii) The
Mortgage Loan is covered by an ALTA lender’s title insurance policy or other
generally acceptable form of policy of insurance, with all necessary
endorsements, issued by a title insurer qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to
the
exceptions contained in clause (b) (1), (2) and (3) above) the
Company, its successors and assigns, as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan and in the
case
of ARM Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of such Mortgage providing for
adjustment to the applicable Mortgage Interest Rate and Monthly Payment.
Such
title insurance policy affirmatively insures ingress and egress and against
encroachments by or upon the Mortgaged Property or any interest therein.
The
Company is the sole insured of such lender’s title insurance policy, such title
insurance policy has been duly and validly endorsed to the Owner or the
assignment to the Owner of the Company’s interest therein does not require the
consent of or notification to the insurer and such lender’s title insurance
policy is in full force and effect and will be in full force and effect upon
the
consummation of the transactions contemplated by this Agreement. No claims
have
been made under such lender’s title insurance policy, and no prior holder of the
related Mortgage has done, by act or omission, anything which would impair
the
coverage of such lender’s title insurance policy;
-22-
(xiii) There
is
no default, breach, violation or event of acceleration existing under the
Mortgage or the related Mortgage Note and, to the Company’s knowledge, no event
which, with the passage of time or with notice and the expiration of any
grace
or cure period, would constitute a default, breach, violation or event
permitting acceleration; and neither the Company nor any prior mortgagee
has
waived any default, breach, violation or event permitting
acceleration;
(xiv) To
the
best of the Company’s knowledge, there are no mechanics, or similar liens or
claims which have been filed for work, labor or material affecting the related
Mortgaged Property which are or may be liens prior to or equal to the lien
of
the related Mortgage;
(xv) All
improvements subject to the Mortgage lie wholly within the boundaries and
building restriction lines of the Mortgaged Property (and wholly within the
project with respect to a condominium unit) and no improvements on adjoining
properties encroach upon the Mortgaged Property except those which are insured
against by the title insurance policy referred to in clause (xii) above and
all
improvements on the property comply with all applicable zoning and subdivision
laws and ordinances;
(xvi) The
Mortgage Loan was originated by the Company or by an eligible correspondent
of
the Company. The Mortgage Loan complies in all material respects with the
Underwriting Guidelines attached here as Exhibit H.
The
Mortgage Notes and Mortgages are on forms acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac;
(xvii) The
Mortgage Loan contains the usual and enforceable provisions of the originator
at
the time of origination for the acceleration of the payment of the unpaid
principal amount if the related Mortgaged Property is sold without the prior
consent of the mortgagee thereunder. The Mortgage Note is payable in monthly
installments of principal and interest (provided
that
with respect to any ARM Loan, the installments of interest are subject to
change
due to the adjustments to the Mortgage Interest Rate on each 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 years from commencement of amortization. The mortgage
loan
provides for accrual of interest on the basis of a 360-day year consisting
of
twelve 30-day months. Except as otherwise set forth on the Mortgage Loan
Schedule, the Mortgage Loan does not contain terms or provisions which would
result in negative amortization nor contain “graduated payment”
features;
(xviii) The
Mortgaged Property at origination of the Mortgage Loan was and, to the Company’s
knowledge, currently is free of damage and waste and at origination of the
Mortgage Loan there was, and, to the Company’s knowledge, there currently is, no
proceeding pending for the total or partial condemnation thereof. At the
time of
the origination of the Mortgage Loan, the Mortgaged Property was lawfully
occupied;
-23-
(xix) The
related Mortgage contains 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,
(1) in the case of a Mortgage designated as a deed of trust, by trustee’s
sale, and (2) otherwise by judicial foreclosure. Upon default by a
Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the
related Mortgaged Property pursuant to the Customary Servicing Procedures,
the
holder of such Mortgage Loan will be able to deliver good and merchantable
title
to the related Mortgage Property. To the Company’s knowledge, there is no
homestead or other exemption available to a Mortgagor that would interfere
with
the ultimate sale of the related Mortgaged Property at a trustee’s sale or the
right to foreclose the Mortgage;
(xx) If
the
Mortgage constitutes a deed of trust, a trustee, duly qualified if required
under applicable law to act 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 Owner to the trustee under the deed of trust, except
in
connection with a trustees sale or attempted sale after default by the
Mortgagor;
(xxi) If
required by the applicable processing style, the Mortgage File contains an
appraisal of the related Mortgaged Property made and signed prior to the
final
approval of the mortgage loan application by a Qualified Appraiser. The
appraisal, if applicable, is in a form generally acceptable to ▇▇▇▇▇▇ Mae
or
▇▇▇▇▇▇▇ Mac;
(xxii) All
parties which have had any interest in the Mortgage, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they
held
and disposed of such interest, were) (A) in substantial compliance with any
and
all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (B) (1) organized under the laws of such
state, or (2) qualified to do business in such state, or (3) federal
savings and loan associations, national banks, a Federal Home Loan Bank or
the
Federal Reserve Bank, or (4) not doing business in such state;
(xxiii) To
the
best of the Company’s knowledge, there does not exist any circumstances or
conditions with respect to the Mortgage, the Mortgaged Property, the Mortgagor
or the Mortgagor’s credit standing that could reasonably be expected to cause
private institutional investors to regard the Mortgage Loan as an unacceptable
investment, to cause the Mortgage Loan to become delinquent, or to materially
adversely affect the value or marketability of the Mortgage Loan;
(xxiv) To
the
Company’s knowledge, each of the Mortgaged Properties consists of a single
parcel of real property with a detached single-family residence erected thereon,
or a two- to four-family dwelling, a townhouse, an individual condominium
unit
in a condominium project, an individual unit in a planned unit development
or a
proprietary lease on a cooperatively owned apartment and stock in the related
cooperative corporation. Any condominium unit or planned unit development
either
conforms with applicable ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac requirements regarding
such
dwellings or is covered by a waiver confirming that such condominium unit
or
planned unit development is acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac or is
otherwise “warrantable” with respect thereto. No such residence is a mobile home
or manufactured dwelling;
-24-
(xxv) The
ratio
of the original outstanding principal amount of the Mortgage Loan to the
lesser
of the appraised value (or stated value if an appraisal was not a requirement
of
the applicable processing style) of the Mortgaged Property at origination
or the
purchase price of the Mortgaged Property securing each Mortgage Loan is not
in
excess of 95.00%. The original Loan-to-Value Ratio of each Mortgage Loan
was not
more than 95.00%, and the excess LTV over 80.00% is insured as to payment
defaults by a Primary Insurance Policy issued by a primary mortgage insurer
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. All provisions of such Primary
Insurance Policy have been and are being complied with, such policy is in
full
force and effect, and all premiums due thereunder have been paid. Any Mortgage
Loan subject to a Primary Insurance Policy obligates the Mortgagor thereunder
to
maintain the Primary Insurance Policy and to pay all premiums and charges
in
connection therewith. The Mortgage Interest Rate for the Mortgage Loan Schedule
is net of any such insurance premium;
(xxvi) The
Company is or will be in possession of each of the Additional Mortgage Loan
Documents with respect to each Mortgage Loan;
(xxvii) The
Company is either, and each Mortgage Loan was originated by, a savings and
loan
association, savings bank, commercial bank, credit union, insurance company
or
similar institution which is supervised and examined by a federal or State
authority, or by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Section 203 and 211 of the National Housing
Act;
(xxviii) The
origination, collection and servicing practices with respect to each Mortgage
Note and Mortgage have been in accordance with Customary Servicing Procedures,
and have been in all material respects in compliance with all applicable
laws
and regulations. With respect to escrow deposits and Escrow Payments, if
any,
all such payments are in the possession of, or under the control of, the
Company
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 regulation,
including applicable Regulations. With respect to each Mortgage Loan that
provides for Escrow Payments and where Escrow Payments have been collected,
an
escrow of funds is not prohibited by applicable law and has been established
in
accordance with Customary Servicing Procedures. The amount of all Escrow
Payments have been computed in accordance with applicable law. No escrow
deposits or Escrow Payments or other charges or payments have been capitalized
under the Mortgage or the Mortgage Note;
(xxix) With
respect to any Mortgage Loan originated on or after August 1, 2004, neither
the
related Mortgage nor the related Mortgage Note requires the Mortgagor to
submit
to arbitration to resolve any dispute arising out of or relating in any way
to
the Mortgage Loan transaction;
-25-
(xxx) [reserved]
(xxxi) No
Mortgage Loan contains provisions pursuant to which Monthly Payments will
in the
future be paid or partially paid with funds deposited in any separate account
established by the Company, 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 currently in effect; no Mortgage Loan is secured by a
cooperative property, or by manufactured housing that is not affixed to a
permanent structure;
(xxxii) Each
Mortgage File contains each of the documents and instruments required to
be
maintained by this Agreement and such documents and instruments are duly
executed and genuine, and, to the Company’s knowledge, the information contained
therein is true, accurate and complete; to the Company’s knowledge, 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;
(xxxiii) No
action, inaction, event or circumstance has occurred and no state of facts
exists that has resulted or will result in the exclusion from, denial of,
or
defense to coverage under, or any curtailment or reduction of coverage under,
any applicable insurance policy or Primary Insurance Policy;
(xxxiv) The
Mortgagor with respect to each Mortgage Loan is one or more natural persons
and/or trustees for an Illinois land trust or a trustee under a “living
trust”
and such
“living
trust”
is in
compliance with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac guidelines. All of the terms of
the
related Mortgage Note pertaining to interest rate adjustments, payment
adjustments and adjustments of the outstanding principal balance, if any,
are
enforceable. All such adjustments on such Mortgage Loan have been made properly
and in accordance with the provisions of such Mortgage Loan;
(xxxv) No
Mortgage Loan is a High Cost Loan or Covered Loan, as applicable, and no
Mortgage Loan originated on or after October 1, 2002 through March 6, 2003
is
governed by the Georgia Fair Lending Act. 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;
(xxxvi) The
Mortgage Loan is subject to a prepayment penalty as provided in the related
Mortgage Note except as set forth on the related Mortgage Loan Schedule.
With
respect to each Mortgage Loan that has a prepayment penalty feature, each
such
prepayment penalty is enforceable and will be enforced by the Company for
the
benefit of the Initial Owner, and each prepayment penalty is permitted pursuant
to federal, state and local law. Each such prepayment penalty is in an amount
not more than the maximum amount permitted under applicable law and no such
prepayment penalty may be imposed for a term in excess of five (5) years
with
respect to Mortgage Loans originated prior to October, 1, 2002. With respect
to
Mortgage Loans originated on or after October 1, 2002, the duration of the
prepayment period shall not exceed three (3) years from the date of the Mortgage
Note unless the Mortgage Loan was modified to reduce the prepayment period
to no
more than three (3) years from the date of such Mortgage Loan and the
Mortgagor was notified in writing of such reduction in prepayment period.
With
respect to any Mortgage Loan that contains a provision permitting imposition
of
a premium upon a prepayment prior to maturity: (i) prior to the Mortgage
Loan’s
origination, the Mortgagor agreed to such premium in exchange for a monetary
benefit, including but not limited to a rate or fee reduction, (ii) prior
to the
Mortgage Loan’s origination, the Mortgagor was offered the option of obtaining a
mortgage loan that did not require payment of such a premium and (iii) the
prepayment premium is disclosed to the Mortgagor in the loan documents pursuant
to applicable state, local and federal law. This representation and warranty
is
a Deemed Material Breach Representation;
-26-
(xxxvii) In
connection with the origination of any Mortgage Loan, no proceeds from any
Mortgage Loan were used to finance or acquire a single-premium credit life
insurance policy. No Mortgagor was required to purchase any single-premium
credit insurance policy (e.g., life, mortgage, disability, 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, mortgage, disability,
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 or debt cancellation
agreements as part of the origination of, or as a condition to closing, such
Mortgage Loan. This representation and warranty is a Deemed Material Breach
Representation;
(xxxviii) No
fraud
or misrepresentation of a material fact with respect to the origination of
a
Mortgage Loan has taken place on the part of the Company and to the best
of the
Company’s knowledge, no fraud or misrepresentation of a material fact with
respect to the origination of a Mortgage Loan has taken place on the part
of any
third party, including without limitation the Mortgagor, connected with the
origination of the Mortgage Loan;
(xxxix) As
to
each consumer report (as defined in the Fair Credit Reporting Act, Public
Law
91-508) or other credit information furnished by the Company to the Owner,
that
Company has full right and authority and is not precluded by law or contract
from furnishing such information to the Owner and the Owner is not precluded
by
the terms of the Mortgage Loan Documents from furnishing the same to any
subsequent or prospective purchaser of such Mortgage. The Company shall hold
the
Owner harmless from any and all damages, losses, costs and expenses (including
attorney’s fees) arising from disclosure of credit information in connection
with the Owner’s secondary marketing operations and the purchase and sale of
mortgages. The Company has 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. The Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to ▇▇▇▇▇▇ Mae Guide Announcement 95-19 and that for
each
Mortgage Loan, Servicer agrees it shall report one of the following statuses
each month as follows: new origination, current, delinquent (30-, 60-, 90-days,
etc.), foreclosed, or charged-off. This representation and warranty is a
Deemed
Material Breach Representation;
-27-
(xl) To
the
Company’s knowledge, there exist no violation of any local, state or federal
environmental law, rule or regulation. There is no pending action or proceeding
directly involving any Mortgaged Property of which the Company is aware in
which
compliance with any environmental law, rule or regulation is an
issue;
(xli) There
is
no action, suit, proceeding, investigation or litigation pending or, to the
best
of Company’s knowledge, threatened, with respect to the Mortgage
Loan;
(xlii) No
Mortgage Loan is an “equity loan” within the meaning of Section 50(a)(6),
Article XVI of the constitution of the State of Texas;
(xliii) Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract
and such contract is fully transferable without cost to the Owner;
(xliv) If
any of
the Mortgage Loans are secured by a leasehold interest, with respect to each
leasehold interest: residential property in such area consisting of leasehold
estates is readily marketable; the lease is recorded and is in full force
and
effect and is not subject to any prior lien or encumbrance by which the
leasehold could be terminated or subject to any charge or penalty and the
ground
lease permits the mortgaging of the related Mortgaged Property; and the
remaining term of the lease does not terminate less than ten years after
the
maturity date of such Mortgage Loan;
(xlv) [Reserved];
(xlvi) [Reserved];
(xlvii) [Reserved];
(xlviii) With
respect to each Mortgage Loan that is a Buydown Mortgage Loan:, such Buydown
Mortgage Loan was originated and serviced pursuant to ▇▇▇▇▇▇ ▇▇▇ requirements.
(xlix) The
Mortgage Loan is a “qualified mortgage” under Section 860G(a)(3) of
the Code;
(l) Unless
noted on the Mortgage Loan Schedule, the Mortgagor has not notified the Company,
and the Company has no knowledge of any relief requested or allowed to the
Mortgagor under the Servicemembers Civil Relief Act, as amended, or other
similar state statute; and
(li) No
Mortgage Loan is a second lien Mortgage Loan.
-28-
Section
3.03 Repurchase
and Substitution.
The
representations and warranties set forth in Sections 3.01 and 3.02 shall
survive the sale of the Mortgage Loans and shall inure to the benefit of
the
Owner, notwithstanding any restrictive or qualified endorsement on any Mortgage
Note or Assignment of Mortgage or the examination of any Mortgage File. Upon
discovery by either the Company or an Owner of a breach of any of the
representations and warranties set forth in Sections 3.01 and 3.02 (which
breach shall be determined without regard to language qualifying such
representation or warranty as being made to the Company’s best knowledge), which
breach materially and adversely affects the value of the Mortgage Loans or
the
interest of the Owner (or which materially and adversely affects the interest
of
the Owner in the related Mortgage Loan in the case of a representation and
warranty relating to a particular Mortgage Loan), the party discovering such
breach shall give prompt written notice to the other. Upon the earlier of
either
discovery by or notice to the Company of any such breach, the Company shall
use
its best efforts to promptly cure such breach in all material respects within
60
days, and, if such breach cannot be cured during such time period, the Company
shall, at the Owner’s option, repurchase such Mortgage Loan at the Repurchase
Price. If any such breach shall involve any representation or warranty set
forth
in Section 3.01, and such breach cannot be cured within 60 days of the
earlier of either discovery by or notice to the Company of such breach, all
the
Mortgage Loans shall, at the Owner’s option, be repurchased by the Company at
the Repurchase Price; provided,
however,
that in
the event of a breach of representation and warranty set forth in
Section 3.01 that relates to less than all of the Mortgage Loans in the
related Mortgage Loan Package, the Company shall repurchase only the Mortgage
Loans to which such breach relates. However, the Company may, with the consent
of the Owner, replace a Mortgage Loan as to which a breach of representation
of
warranty has occurred as described in the foregoing sentences of this
Section 3.03 and substitute in its place with a Qualified Substitute
Mortgage Loan or Loans, provided,
however,
that
any such substitution shall be effected not later than 120 days after the
Closing Date and only with respect to those Mortgage Loans that have not
been
transferred to a securitization trust. Any repurchase of a Mortgage Loan
or
Loans pursuant to the foregoing provisions of this Section 3.03 shall be
accomplished by deposit in the Custodial Account of the amount of the Repurchase
Price (after deducting therefrom any amounts received in respect of such
repurchased Mortgage Loan or Loans and being held in the Custodial Account
for
future distribution).
The
Company shall effect any substitution of a Qualified Substitute Mortgage
Loan by
delivering to the Custodian the documents as are required to be delivered
by
Section 2.03, with the Mortgage Note endorsed as required by
Section 2.03. No substitution will be made in any calendar month after the
Determination Date occurring in such month. The Company shall deposit in
the
Custodial Account the Monthly Payment less the Servicing Fee due on such
Qualified Substitute Mortgage Loan or Loans in the month following the date
of
such substitution. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution will be retained by the Company.
For
the month of substitution, distributions to the Owner will include the Monthly
Payment due on such Deleted Mortgage Loan in the month of substitution, and
the
Company shall thereafter be entitled to retain all amounts subsequently received
by the Company in respect of such Deleted Mortgage Loan. The Company shall
give
written notice to the Owner that such substitution has taken place and shall
amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage
Loan from the terms of this Agreement and the substitution of the Qualified
Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall be subject to the terms of this Agreement in
all
respects, and the Company shall be deemed to have made with respect to such
Qualified Substitute Mortgage Loan or Loans, as of the date of substitution,
the
covenants, representations and warranties set forth in Sections 3.01 and
3.02, except to the extent a representation contained in Section 3.02
relates to an expressly specified percentage of the Mortgage
Loans.
-29-
If
pursuant to the foregoing provisions the Company repurchases a Mortgage Loan
that is a MERS Mortgage Loan, the Company shall either (i) cause MERS to
execute and deliver an assignment of the Mortgage in recordable form to transfer
the Mortgage from MERS to the Company on behalf of the Owner, and shall cause
such Mortgage to be removed from registration on the MERS®
System
in accordance with MERS’ rules and regulations or (ii) cause MERS to
designate on the MERS®
System
the Company as the beneficial holder with respect to such Mortgage
Loan.
For
any
month in which the Company substitutes one or more Qualified Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the Company will determine
the
amount (if any) by which the aggregate principal balance of all such Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Assumed 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 distributed by the Company in the month
of
substitution pursuant to Section 5.01. Accordingly, on the date of such
substitution, the Company will deposit from its own funds into the Custodial
Account an amount equal to the amount of such shortfall.
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
4.01 Company
to Act as Servicer.
The
Company, as independent contract servicer, shall service and administer the
Mortgage Loans for the benefit of the Owner in accordance with the terms
of this
Agreement and in conformity with Customary Servicing Procedures. In performing
its obligations hereunder, the Company shall exercise no less than the same
care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, but shall perform such obligations without
regard to the Company’s obligation to make Servicing Advances and Monthly
Advances , or to the Company’s right to receive compensation for its services
hereunder.
Subject
to the above-described servicing standards, the specific requirements and
prohibitions of this Agreement and the respective Mortgage Loans, and the
provisions of any Primary Insurance Policy and applicable law, the Company
shall
have full power and authority, acting alone, to do any and all things in
connection with such servicing and administration which the Company may deem
necessary or desirable. Without limiting the generality of the foregoing,
the
Company shall, and is hereby authorized and empowered to (i) execute and
deliver on behalf of itself and the Owner, any and all instruments of
satisfaction or cancellation, or of partial or full release, discharge and
all
other comparable instruments, with respect to the Mortgage Loan and with
respect
to the Mortgaged Property and (ii) 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 the related Mortgagor if in the
Company’s reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the interests of
the
Owner and is not prohibited by a Primary Insurance Policy; provided,
however,
that
the Company may not, unless it has obtained the consent of the Owner, permit
any
modification with respect to any Mortgage Loan that would vary the Mortgage
Interest Rate, defer or forgive the payment of interest or of any principal,
reduce the outstanding principal amount (other than as a result of its actual
receipt of payment of principal on) or extend the final maturity date of
such
Mortgage Loan. In the event of any such modification which permits the deferral
or reduction of interest or principal payments on any Mortgage Loan, the
Company
shall, on the Business Day immediately preceding the Remittance Date in any
month in which any such principal or interest payment has been deferred or
reduced, make a Monthly Advance in accordance with Section 5.03, in an
amount equal to the difference between (a) such month’s principal and one
month’s interest at the Remittance Rate on the unpaid principal balance of such
Mortgage Loan and (b) the amount paid by the Mortgagor. The Company shall
be entitled to reimbursement for such advances to the same extent as for
all
other Monthly Advances made pursuant to Section 5.03. If reasonably
required by the Company, the Owner shall furnish the Company with any powers
of
attorney and other documents necessary or appropriate to enable the Company
to
carry out its servicing and administrative duties under this
Agreement.
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In
servicing and administering the Mortgage Loans, the Company shall employ
procedures (including collection procedures consistent with Customary Servicing
Procedures and loss mitigation procedures consistent with ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac) and exercise the same care that it customarily employs and exercises
in
servicing and administering mortgage loans for its own account, giving due
consideration to Customary Servicing Procedures where such practices do not
conflict with the requirements of this Agreement. The Company shall at all
times
comply strictly with all applicable state and federal regulations.
The
Company is authorized and empowered by the Owner, in its own name, when the
Company believes it appropriate in its reasonable judgment to register any
Mortgage Loan on the MERS®
System,
or cause the removal from the registration of any Mortgage Loan on the
MERS®
System,
to execute and deliver, on behalf of the Owner, any and all instruments of
assignment and other comparable instruments with respect to such assignment
or
re-recording of a Mortgage in the name of MERS, solely as nominee for the
Owner
and its successors and assigns. The Company will comply in all material respects
with the rules and procedures of MERS in connection with the servicing of
the
MERS Mortgage Loans.
Section
4.02 Liquidation
of Mortgage Loans; Servicing Advances and Foreclosure.
If
any
payment due under any Mortgage Loan and not postponed pursuant to
Section 4.01 is not paid when the same becomes due and payable, or if the
Mortgagor fails to perform any other covenant or obligation under the Mortgage
Loan and such failure continues beyond any applicable grace period, the Company
shall take such action, including action relating to delinquency management,
loss mitigation and foreclosure as it shall deem to be in the best interests
of
the Owner. If any payment due under any Mortgage Loan and not postponed pursuant
to Section 4.01 remains delinquent for a period of 90 days or more, the
Company shall (a) act in the best interests of the Owner and in accordance
with the Regulations, and such action may include the commencement of
foreclosure proceedings, (b) if the Company commences foreclosure
proceedings, notify the Owner thereof on the monthly remittance report delivered
pursuant to Section 5.02 on the first Remittance Date following such
commencement and (c) respond to reasonable inquiries of the Owner with
respect to the Mortgage Loan or related REO Property. The Owner shall be
entitled to compensation for loss mitigation, as permitted by ▇▇▇▇▇▇ ▇▇▇
or
▇▇▇▇▇▇▇ Mac.
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Whether
in connection with the foreclosure of a Mortgage Loan or otherwise, the Company
shall from its own funds make all necessary and proper Servicing Advances;
provided,
however,
that
the Company is not required to make a Servicing Advance unless the Company
determines in the exercise of its good faith reasonable judgment that such
Servicing Advance would ultimately be recoverable from REO Disposition Proceeds,
Insurance Proceeds, or Condemnation Proceeds (with respect to each of which
the
Company shall have the priority described in Section 4.05 for purposes of
withdrawals from the Custodial Account). In the event that any Servicing
Advance
or any commitment to pay Servicing Advances in connection with any Mortgage
Loan
exceeds $5,000 in the aggregate, the Company shall secure the written approval
of the Owner.
In
the
event that the Company believes or has reason to believe that a Mortgaged
Property is contaminated by hazardous or toxic substances or wastes, the
Company
shall not proceed with foreclosure or acceptance of a deed in lieu of
foreclosure, except to the extent required under applicable Regulations in
order
to secure the benefits of the applicable Primary Insurance Policy.
Section
4.03 Collection
of Mortgage Loan Payments.
Continuously
from the date hereof until the principal and interest on all Mortgage Loans
are
paid in full, the Company 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, and will take special care in ascertaining
and estimating annual taxes, assessments, fire and hazard insurance premiums,
mortgage insurance premiums, and all other charges that, as provided in any
Mortgage, will become due and payable in order that the installments payable
by
the Mortgagors will be sufficient to pay such charges as and when they become
due and payable.
Section
4.04 Establishment
of Custodial Account; Deposits in Custodial Account.
The
Company shall segregate and hold all funds collected and received pursuant
to
each Mortgage Loan and REO Property 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”), in the form of non-interest
bearing time deposit or demand accounts. The Custodial Account shall be
established with an Eligible Depository Institution. The creation of any
Custodial Account shall be evidenced by a letter agreement in the form of
Exhibit B
hereto.
A copy of such certification or letter agreement shall be furnished to any
Owner
upon request.
The
Company shall deposit in a mortgage clearing account on a daily basis and
in the
Custodial Account no later than the second Business Day thereafter and retain
therein:
(i) all
scheduled payments due after the Cutoff Date on account of principal, including
Principal Prepayments collected after the Cutoff Date, on the Mortgage
Loans;
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(ii) all
scheduled payments on account of interest on the Mortgage Loans (minus the
portion of any such payment which is allocable to the period prior to the
Cutoff
Date) adjusted to the Mortgage Loan Remittance Rate;
(iii) all
Liquidation Proceeds;
(iv) all
Insurance Proceeds, including amounts required to be deposited pursuant to
Section 4.10 and Section 4.11, other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with Customary Servicing
Procedures, the Mortgage Loan documents or applicable law;
(v) all
Condemnation Proceeds with respect to any Mortgaged Property which are not
released to the Mortgagor in accordance with Customary Servicing Procedures,
the
Mortgage Loan documents or applicable law;
(vi) any
amounts payable in connection with the repurchase of any Mortgage Loan pursuant
to Section 3.03 and all amounts required to be deposited by the Company in
connection with shortfalls in principal amount of Qualified Substitute Mortgage
Loans pursuant to Section 3.03;
(vii) any
amount required to be deposited in the Custodial Account pursuant to
Sections 4.01, 4.11, 4.14, 5.01, 5.03, 5.05 and 6.02, or otherwise under
this Agreement; and
(viii) all
Buydown Funds.
The
foregoing requirements for deposit in the Custodial Account shall be exclusive.
Without limiting the generality of the foregoing, payments in the nature
of late
payment charges, fees for special services provided to a Mortgagor and
assumption fees need not be deposited by the Company in the Custodial
Account.
The
Company may invest the funds in the Custodial Account in Eligible Investments
designated in the name of the Company for the benefit of the Owner, which
shall
mature not later than the Business Day next preceding the Remittance Date
next
following the date of such investment (except that (i) any investment in
the institution with which the Custodial Account is maintained may mature
on
such Remittance Date and (ii) any other investment may mature on such
Remittance Date if the Company 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 Company and shall be subject
to
its withdrawal or order from time to time. The amount of any losses incurred
in
respect of any such investments shall be deposited in the Custodial Account
by
the Company out of its own funds immediately as realized.
Section
4.05 Withdrawals
From the Custodial Account.
The
Company shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
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(i) to
make
payments to the Owner in the amounts and in the manner provided for in
Section 5.01;
(ii) to
reimburse itself for Monthly Advances, the Company’s right to reimburse itself
pursuant to this subclause (ii) being limited as provided in
Section 5.03;
(iii) to
reimburse itself for unreimbursed Servicing Advances, and for any unpaid
Servicing Fees, the Company’s right to reimburse itself pursuant to this
subclause (iii) with respect to any Mortgage Loan being limited as provided
in Section 5.03;
(iv) reserved;
(v) to
pay
itself investment earnings on funds deposited in the Custodial
Account;
(vi) to
withdraw Amounts Held For Future Distribution to the extent permitted under
Section 5.03;
(vii) to
withdraw funds deposited in error in the Custodial Account; and
(viii) to
clear
and terminate the Custodial Account upon the termination of this
Agreement.
On
each
Remittance Date, the Company shall withdraw all funds from the Custodial
Account
except for those amounts which, pursuant to Section 5.01(a)(iv) and (v),
the Company is not obligated to remit on such Remittance Date. The Company
may
use such withdrawn funds only for the purposes described in this
Section 4.05.
Section
4.06 Establishment
of Escrow Account; Deposits in Escrow Account.
The
Company 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”), in the form of
non-interest bearing time deposit or demand accounts. The Escrow Account
shall
be established with an Eligible Depository Institution. The creation of any
Escrow Account shall be evidenced by a letter agreement in the form of
Exhibit C
hereto.
Upon request, the Company shall provide the Owner with a copy of a letter
agreement evidencing the establishment of each Escrow Account.
The
Company shall deposit in a mortgage clearing account on a daily basis and
no
later than the second Business Day thereafter in the Escrow Account and retain
therein: (i) all Escrow Payments held or 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, (ii) all Insurance Proceeds
that are to be applied to the restoration or repair of any Mortgaged Property
and (iii) all revenues received with respect to the management,
conservation, protection and operation of the REO Properties pursuant to
Section 4.14. The Company shall make withdrawals therefrom only to effect
such payments as are required under this Agreement, and for such other purposes
as shall be set forth in or in accordance with Section 4.07. The Company
shall pay to the Mortgagor interest on escrowed funds to the extent required
by
law notwithstanding that the Escrow Account is non-interest
bearing.
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Section
4.07 Withdrawals
From Escrow Account.
Withdrawals
from the Escrow Account may be made by the Company only (a) to effect
timely payments of taxes, assessments, Primary Insurance Policy premiums,
fire
and hazard insurance premiums or other items constituting Escrow Payments
for
the related Mortgage, (b) to reimburse the Company for any Servicing
Advance made by Company pursuant to Section 4.08 hereof with respect to a
related Mortgage Loan, but only from amounts received on the related Mortgage
Loan which represent late payments or collections of Escrow Payments thereunder,
(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) upon
default of a Mortgagor or in accordance with the terms of the related Mortgage
Loan and if permitted by applicable law, for transfer to the Custodial Account
of such amounts as are to be applied to the indebtedness of a Mortgage Loan
in
accordance with the terms thereof, (e) for application to restoration or
repair of the Mortgaged Property, (f) to deposit into the Custodial Account
the funds required to be deposited therein pursuant to Section 4.14,
(g) to pay to itself amounts to which it is entitled pursuant to
Section 4.14, (h) to withdraw any Escrow Payments related to a
Mortgage Loan repurchased by the Company pursuant to Section 3.03,
(i) to clear and terminate the Escrow Account upon the termination of this
Agreement or (j) to remit to Purchaser payments on account of Buydown Funds
as
applicable.
Section
4.08 Payment
of Taxes, Insurance and Other Charges.
With
respect to each Mortgage Loan, the Company shall maintain accurate records
reflecting the status of taxes, assessments, and other charges for which
an
escrow is maintained and the status of Primary Insurance Policy premiums
and
fire and hazard insurance coverage and shall obtain, from time to time, all
bills for the payment of such charges (including renewal premiums) and shall
effect payment thereof employing for such purpose deposits of the Mortgagor
in
the Escrow Account which shall have been estimated and accumulated by the
Company in amounts sufficient for such purposes, as allowed under the terms
of
the Mortgage or applicable law. To the extent that a Mortgage does not provide
for Escrow Payments, or the Company has waived the escrow of Escrow Payments
or
the Company is prohibited by applicable state law from requiring the escrow
of
Escrow Payments, the Company shall determine that any such payments are made
by
the Mortgagor. The Company 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 advances from its own funds to effect
such
payments.
Section
4.09 Transfer
of Accounts.
The
Company may from time to time transfer the Custodial Account and the Escrow
Account to any other Eligible Depository Institution. The Company shall notify
the Owner within 14 days of any such transfer under this
Section 4.09.
Section
4.10 Maintenance
of Hazard Insurance.
The
Company shall cause to be maintained (with an insurance company acceptable
to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac) for each Mortgage Loan, fire and hazard insurance
with extended coverage customary in the area where the Mortgaged Property
is
located, in an amount which is, subject to applicable law, at least equal
to the
lesser of (i) the maximum insurable value of the improvements securing the
related Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) the minimum amount necessary
to prevent the Mortgagor and/or the mortgagee from becoming a co-insurer.
If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and
such
flood insurance has been made available) the Company will cause to be maintained
a flood insurance policy meeting the requirements of the current guidelines
of
the Federal Insurance Administration with a generally acceptable insurance
carrier, in an amount representing coverage not less than the least of
(i) the outstanding principal balance of the Mortgage Loan, (ii) the
full insurable value of the Mortgaged Property, or (iii) the maximum amount
of insurance available under the National Flood Insurance Act of 1968 and
the
Flood Disaster Protection Act of 1973, each as amended. The Company shall
also
maintain on any REO Property, fire and hazard insurance with extended coverage
in an amount which is at least equal to the maximum insurable value of the
improvements which are a part of such property, liability insurance and,
to the
extent required and available under the National Flood Insurance Act of 1968
and
the Flood Disaster Protection Act of 1973, each as amended, flood insurance
in
an amount required above. Any amounts collected by the Company under any
such
policies (other than amounts to be deposited in the Escrow Account and applied
to the restoration or repair of the related Mortgaged Property, REO Property,
or
released to the Mortgagor in accordance with Customary Servicing Procedures
or
in accordance with the terms of the Mortgage Loan or applicable law) shall
be
deposited in the Custodial Account, subject to withdrawal pursuant to
Section 4.05. It is understood and agreed that no earthquake or other
additional insurance need be required by the Company of any Mortgagor or
maintained on property acquired in respect of a Mortgage Loan, other than
pursuant to such applicable laws and regulations as shall at any time be
in
force and as shall require such additional insurance. All policies required
hereunder shall be endorsed with standard mortgagee clauses with loss payable
to
the Company, its successors and its assigns, or, upon request of the Owner,
to
the Owner, and shall provide for at least 30 days prior written notice to
the
Company of any cancellation thereof. The Company shall not accept or obtain
any
such insurance policy from an insurance company that does not at that time
maintain a General Policy Rating of B-III or better in Best’s Key Rating Guide,
or that is not licensed to do business in the State wherein the related
Mortgaged Property is located.
-35-
Section
4.11 Maintenance
of Blanket Insurance Policy.
If
the
Company shall obtain and maintain a blanket insurance policy that is issued
by
an insurer generally acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and that insures
against hazard losses on all of the Mortgage Loans, then, to the extent such
policy provides coverage in an amount equal to the coverage required pursuant
to
Section 4.10 and otherwise complies with all other requirements of
Section 4.10, the Company shall be deemed to have satisfied its obligations
as set forth in Section 4.10. Such policy may contain a clause providing
for a reasonable deductible, in which case the Company shall, if there shall
not
have been maintained on the related Mortgaged Property a policy complying
with
Section 4.10, and if there shall have been a loss that would have been
covered by such policy, deposit in the Custodial Account the amount not
otherwise payable under the blanket policy because of such deductible
clause.
Section
4.12 Maintenance
of Mortgage Impairment Insurance Policy.
The
Company may satisfy its obligations under Section 4.10 and 4.11 pertaining
to physical storage of insurance policies and general policy rating requirements
by maintaining a mortgage impairment or other form of blanket policy that
will
protect the Company and/or investor in the event of uninsured loss, insolvency
of an insurance carrier or any other loss normally to be covered by a mortgage
impairment policy. It is agreed that any expense incurred by the Company
in
maintaining any such insurance shall be borne by the Company. This shall
be
deemed to include any loss or any expense as a result of a deductible clause
in
such a policy.
-36-
Section
4.13 Fidelity
Bond; Errors and Omissions Insurance.
The
Company at its own expense shall maintain with responsible companies throughout
the term of this Agreement a blanket fidelity bond and an errors and omissions
insurance policy, with broad coverage on all officers, employees and other
individuals acting on behalf of the Company in connection with its activities
under this Agreement. The amount of coverage shall be at least equal to the
coverage that would be required of the Company by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac,
if
the Company were servicing the Mortgage Loans for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac,
and
such policy shall be issued by a company that is acceptable to ▇▇▇▇▇▇ Mae
or
▇▇▇▇▇▇▇ Mac. The Fidelity Bond and errors and omissions insurance shall be
in
the form of the Mortgage Banker’s Blanket Bond and shall protect and insure the
Company against losses caused by such individuals, including losses from
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts
of
such individuals. Such Fidelity Bond shall also protect and insure the Company
against losses in connection with the failure to maintain any insurance policies
required pursuant to this Agreement and the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 4.13 requiring such fidelity
bond and errors and omissions insurance shall diminish or relieve the Company
from its duties and obligations as set forth in this Agreement.
Section
4.14 Title,
Management and Disposition of REO Property.
In
the
event that title to any Mortgaged Property is acquired in foreclosure or
by deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in
the
name of the Company, as directed by the Owner, or in the event the Company
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 Company from an attorney
duly licensed to practice law in the state where the REO Property is located.
The Company shall hold such title as nominee for the Owner, and any Person
or
Persons holding such title other than the Owner or the Company shall acknowledge
in writing that such title is being held as nominee for the Owner.
The
Company shall manage, conserve, protect and operate each REO Property for
the
Owner solely for the purpose of its prompt disposition in accordance with
Customary Servicing Procedures. The Company shall dispose of any REO Property
as
soon as possible in accordance with Customary Servicing Procedures.
The
Company shall also maintain on each REO Property fire and hazard insurance
with
extended coverage in an amount that is in accordance with Customary Servicing
Procedures and, to the extent required and available under the Flood Disaster
Protection Act of 1973, as amended, flood insurance in an amount that is
in
accordance with Customary Servicing Procedures.
Subject
to the approval of the Owner as described in this paragraph, the disposition
of
REO Property shall be carried out by the Company at such price, and upon
such
terms and conditions, as the Company deems to be in the best interests of
the
Owner and otherwise in accordance with Customary Servicing Procedures. Prior
to
acceptance by the Company of an offer to sell any REO Property, the Company
shall notify the Owner of such offer in writing which notification shall
set
forth all material terms of said offer (each a “Notice of Sale”). The Owner
shall be deemed to have approved the sale of any REO Property unless the
Owner
notifies the Company in writing, within three (3) Business Days after its
receipt of the related Notice of Sale, that it disapproves of the related
sale.
The REO Disposition Proceeds shall be promptly deposited in the Custodial
Account.
-37-
The
disposition of REO Property shall be carried out by the Company at such price,
and upon such terms and conditions, as the Company reasonably believes to
be in
the best interests of the Owner. The proceeds of sale of the REO Property
shall
be promptly deposited in the Custodial Account. As soon as practical thereafter
the expenses of such sale shall be paid and the Company shall reimburse itself,
to the extent permitted under Section 5.03, for any related unreimbursed
Servicing Advances, unpaid Servicing Fees and unreimbursed Monthly Advances,
and
on the Remittance Date immediately following the 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.
The
Company shall notify the Owner in accordance with Customary Servicing Procedures
of each acquisition of REO Property upon such acquisition, and thereafter
assume
the responsibility for marketing such REO Property in accordance with Customary
Servicing Procedures. Thereafter, the Company shall continue to provide certain
administrative services to the Owner relating to such REO Property as set
forth
in this Section 4.14. The REO Property must be sold within three years
following the end of the calendar year of the date of acquisition, unless
a
REMIC election has been made with respect to the arrangement under which
the
Mortgage Loans and REO Property are held and (i) the Owner shall have been
supplied with an Opinion of Counsel to the effect that the holding by the
related trust of such Mortgaged Property subsequent to such three-year period
(and specifying the period beyond such three-year period for which the Mortgaged
Property may be held) will not result in the imposition of taxes on “prohibited
transactions” of the related trust as defined in Section 860F of the Code,
or cause the related REMIC to fail to qualify as a REMIC, in which case the
related trust may continue to hold such Mortgaged Property (subject to any
conditions contained in such Opinion of Counsel), or (ii) the Owner or the
Company shall have applied for, prior to the expiration of such three-year
period, an extension of such three-year period in the manner contemplated
by
Section 856(e)(3) of the Code, in which case the three-year period
shall be extended by the applicable period. If a period longer than three
years
is permitted under the foregoing sentence and is necessary to sell any REO
Property, (i) the Company shall report monthly to the Owner as to progress
being made in selling such REO Property and (ii) if, with the written
consent of the Owner, a purchase money mortgage is taken in connection with
such
sale, such purchase money mortgage shall name the Company as mortgagee, and
such
purchase money mortgage shall not be held pursuant to this Agreement, but
instead a separate participation agreement between the Company and Owner
shall
be entered into with respect to such purchase money mortgage.
Notwithstanding
any other provision of this Agreement, if a REMIC election has been made,
no
Mortgaged Property held by a REMIC shall be rented (or allowed to continue
to be
rented) or otherwise used for the production of income by or on behalf of
the
related trust or sold in such a manner or pursuant to any terms that would
(i) cause such Mortgaged Property to fail to qualify at any time as
“foreclosure property” within a meaning of Section 860G(a)(8) of the Code,
(ii) subject the related trust to the imposition of any federal or state
income taxes on “net income from foreclosure property” with respect to such
Mortgaged Property within the meaning of Section 860G(c) of the Code,
or (iii) cause the sale of such Mortgaged Property to result in the receipt
by the related trust or any income from non-permitted assets as described
in
Section 860F(a) (2)(B) of the Code, unless the Company has agreed to
indemnify and hold harmless the related trust with respect to the imposition
of
any such taxes.
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Section
4.15 Adjustments
to Mortgage Interest Rate and Monthly Payment.
On
each
applicable Interest Rate Change Date, the Mortgage Interest Rate shall be
adjusted, in compliance with the requirements of the related Mortgage and
Mortgage Note, to equal the sum of the Current Index plus the Gross Margin
(rounded in accordance with the related Mortgage Note) subject to the applicable
Annual Mortgage Interest Rate Cap and Lifetime Mortgage Interest Rate Cap,
as
set forth in the Mortgage Note. The Company shall execute and deliver the
notices required by each Mortgage and Mortgage Note, Customary Servicing
Procedures, applicable laws and regulations regarding interest rate
adjustments.
Section
4.16 Servicing
of Buydown Mortgage Loans.
Each
Buydown Mortgage Loan will be serviced in accordance with ▇▇▇▇▇▇ ▇▇▇
requirements.
Section
4.17 Reports
of Foreclosures and Abandonments of Mortgaged Property.
Following
the foreclosure sale or abandonment of any Mortgaged Property, the Company
shall
report such foreclosure or abandonment to the extent and in the manner required
pursuant to Section 6050J of the Code.
Section
4.18 Force
Placed Insurance.
Each
Mortgage obligates the Mortgagor thereunder to maintain the required hazard
insurance policy at the Mortgagor’s cost and expense, and on the Mortgagor’s
failure to do so, authorizes the Company to obtain and maintain such insurance
at such Mortgagor’s cost and expense, and to seek reimbursement therefor from
the Mortgagor. Upon any failure of the Mortgagor to maintain the required
hazard
insurance, the Company shall obtain and maintain such force placed hazard
insurance at the Mortgagor’s cost and expense.
Section
4.19 Inspections.
The
Company shall inspect the Mortgaged Property as often as deemed necessary
by the
Company and in accordance with Customary Servicing Procedures to assure itself
that the value of the Mortgaged Property is being preserved. In addition,
if any
Mortgage Loan is more than 90 days delinquent, the Company immediately shall
inspect the Mortgaged Property and shall conduct subsequent inspections in
accordance with Customary Servicing Procedures. The Company shall keep an
electronic report of each such inspection.
Section
4.20 Restoration
of Mortgaged Property.
Except
as
otherwise required by Customary Servicing Procedures, the Company need not
obtain the approval of the Owner prior to releasing any Insurance Proceeds
or
Condemnation Proceeds to the Mortgagor to be applied to the restoration or
repair of the Mortgaged Property if such release is in accordance with Customary
Servicing Procedures. At a minimum, with respect to claims greater than $10,000,
the Company shall comply with the following conditions in connection with
any
such release of Insurance Proceeds or Condemnation Proceeds:
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(i) the
Company shall receive satisfactory independent verification of completion
of
repairs and issuance of any required approvals with respect
thereto;
(ii) the
Company shall take all steps necessary to preserve the priority of the lien
of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics’ and materialmen’s liens;
(iii) the
Company shall verify that the Mortgage Loan is not 60 or more days delinquent;
and
(iv) pending
repairs or restoration, the Company shall place the Insurance Proceeds or
Condemnation Proceeds in the Escrow Account.
With
respect to claims of $10,000 or less, the Company shall comply with the
following conditions in connection with any such release of Insurance Proceeds
or Condemnation Proceeds:
(i) the
related Mortgagor shall provide an affidavit verifying the completion of
repairs
and issuance of any required approvals with respect thereto;
(ii) the
Company shall verify the total amount of the claim with the applicable insurance
company; and
(iii) pending
repairs or restoration, the Company shall place the Insurance Proceeds or
Condemnation proceeds in the Escrow Account.
If
the
Owner is named as an additional loss payee, the Company is hereby empowered
to
endorse any loss draft issued in respect of such a claim in the name of the
Owner.
Section
4.21 MERS.
In
the
case of each MERS Mortgage Loan, the Company shall, as soon as practicable
after
the Owner’s request (but in no event more than 30 days thereafter with respect
to each Mortgage Loan that was a MERS Mortgage Loan as of the applicable
Closing
Date, or 90 days thereafter with respect to each Mortgage Loan that was a
MERS
Eligible Mortgage Loan as of the applicable Closing Date and subsequent to
the
applicable Closing Date becomes a MERS Mortgage Loan), the Company shall
take
such actions as are necessary to cause the Owner to be clearly identified
as the
owner of each MERS Mortgage Loan on the records of MERS for purposes of the
system of recording transfers of beneficial ownership of mortgages maintained
by
MERS. With respect to all MERS Mortgage Loans serviced hereunder, the Company
shall promptly notify MERS as to any transfer of beneficial ownership or
release
of any security interest in such Mortgage Loans.
Section
4.22 Application
of Buydown Funds.
With
respect to each Buydown Loan, the Company shall segregate and hold all Buydown
Funds in the Custodial Account separate and apart from the Company's funds
and
general assets.
With
respect to each Buydown Mortgage Loan, the Company shall have deposited into
the
Custodial Account, no later than the related Closing Date, Buydown Funds
in an
amount equal to the aggregate undiscounted amount of payments that, when
added
to the amount the Mortgagor on such Mortgage Loan is obligated to pay on
all Due
Dates in accordance with the terms of the Buydown Agreement, is equal to
the
full scheduled Monthly Payments which are required to be paid by the Mortgagor
under the terms of the related Mortgage Note (without regard to the related
Buydown Agreement as if the Mortgage Loan were not subject to the terms of
the
Buydown Agreement). With respect to each Buydown Mortgage Loan, the Company
will
distribute to the Owner on each Remittance Date an amount of Buydown Funds
equal
to the amount that, when added to the amount required to be paid on such
date by
the related Mortgagor, pursuant to and in accordance with the related Buydown
Agreement, equals the full Monthly Payment that would otherwise be required
to
be paid on such Mortgage Loan by the related Mortgagor under the terms of
the
related Mortgage Note (as if the Mortgage Loan were not a Buydown Mortgage
Loan
and without regard to the related Buydown Agreement).
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If
the
Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan during
the
Buydown period and the Mortgaged Property securing such Buydown Mortgage
Loan is
sold in the liquidation thereof (either by the Company or the insurer under
any
related Primary Insurance Policy) the Company shall, on the Remittance Date
following the date upon which Liquidation Proceeds or REO Disposition Proceeds
are received with respect to any such Buydown Mortgage Loan (if such Liquidation
or REO Disposition Proceeds are received on or before the 23rd day of any
month,
or on the second succeeding Remittance Date if such proceeds are received
after
the 23rd day of any month), distribute to the Owner all remaining Buydown
Funds
for such Mortgage Loan then remaining in the Custodial Account. Pursuant
to the
terms of each Buydown Agreement, any amounts distributed to the Owner in
accordance with the preceding sentence will be applied to reduce the outstanding
principal balance of the related Buydown Mortgage Loan. If a Mortgagor on
a
Buydown Mortgage Loan prepays such Mortgage Loan in its entirety during the
related Buydown Period, the Company shall distribute to the Owner, on the
Remittance Date occurring in the calendar month immediately following the
date
on which such prepayment is received, any Buydown Funds related to such Buydown
Mortgage Loan then remaining in the Custodial Account. If a Principal Prepayment
by a Mortgagor on a Buydown Mortgage Loan during the related Buydown Period,
together with any Buydown Funds then remaining in the Custodial Account related
to such Buydown Mortgage Loan, would result in a Full Principal Prepayment,
the
Company shall distribute to the Owner on the Remittance Date occurring in
the
month immediately succeeding the month in which such Principal Prepayment
is
received, all Buydown Funds related to such Mortgage Loan so remaining in
the
Custodial Account, together with any amounts required to be deposited into
the
Custodial Account pursuant to Section 5.03.
ARTICLE
V
PAYMENTS
TO THE OWNER
Section
5.01 Distributions.
On
each
Remittance Date the Company shall remit by wire transfer of immediately
available funds to the Owner or its designee the sum of (a) all amounts
deposited in the Custodial Account as of the close of business on the
Determination Date (net of charges against or withdrawals from the Custodial
Account pursuant to Section 4.05), plus (b) all amounts, if any, which
the Company is obligated to deposit into the Custodial Account pursuant to
Section 5.03, plus (c) the aggregate amount of any Prepayment Interest
Shortfall existing as of such Remittance Date, minus (i) any amounts
attributable to Principal Prepayments received after the immediately preceding
Prepayment Period and (ii) any Insurance Proceeds, Liquidation Proceeds
received after the immediately preceding Prepayment Period, and (iii) any
Monthly Payment received by the Company during any Due Period in addition
to the
Monthly Payment due on such Due Date, intended by the related Mortgagor to
be
applied on a subsequent Due Date, and (iv) any amounts attributable to Buydown
Funds relating to a future Due Date being held in the Custodial Account,
which
amounts shall be remitted on the Remittance Date next succeeding the Due
Date
for such amounts (the sum of (i), (ii), (iii) and (iv), the “Amount Held for
Future Distribution”), all of which amounts shall be remitted on the next
succeeding applicable Remittance Date.
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Each
remittance pursuant to this Section 5.01 shall be made by wire transfer of
immediately available funds to, or by other means of transmission or transfer
that causes funds to be immediately available in, the account which shall
have
been designated by the Owner.
With
respect to any remittance received by the Owner after the Business Day on
which
such payment was due, the Company shall pay to the Owner interest on any
such
late payment at an annual rate equal to the Prime Rate, adjusted as of the
date
of each change, plus three percentage points, but in no event greater than
the
maximum amount permitted by applicable law. Such interest shall be deposited
in
the Custodial Account by the Company on the date such late payment is made
and
shall cover the period commencing with the day following such Business Day
and
ending with the Business Day on which such payment is made, both inclusive.
Such
interest shall be remitted along with the distribution payable on the next
succeeding related Remittance Date.
The
Company shall ten days prior to the Remittance Date on which the final
distribution of funds to Owner is to be made hereunder, notify each Owner
of the
pendency of such distribution and such distribution shall be made to each
Owner.
Section
5.02 Statements
to the Owner.
Not
later
than the 10th day of each month (or if such day is not a Business Day, the
preceding Business Day), the Company shall furnish to the Owner (and up to
two
designees of the Owner) a Monthly Remittance Advice, with a trial balance
report
attached thereto, and an electronic tape, computer diskette or other electronic
data transmission in a format agreed to by the Company and the Owner, containing
the information set forth in Exhibit F
hereto,
as to the related remittance and the period ending on the last day of the
preceding Due Period. Upon reconstitution of some or all of the Mortgage
Loans
as contemplated by Article XII, the Company shall prepare the reports
required by any related Reconstitution Agreement and shall also submit
appropriate reports to the Owner’s designee in a form and format mutually
satisfactory to the Company and such designee.
In
addition, not more than 60 days after the end of each calendar year, upon
receipt of written request by the Owner, the Company will furnish at any
time
during such calendar year, a listing of the principal balances of the Mortgage
Loans outstanding at the end of such calendar year.
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The
Company shall prepare and file any and all tax returns, information statements
or other filings required to be delivered to any governmental taxing authority
(other than those required to be filed by the Owner) or to the Owner pursuant
to
any applicable law with respect to the Mortgage Loans and the transactions
contemplated hereby.
Section
5.03 P&I
Advances by the Company.
Not
later
than the close of business on the Business Day preceding each Remittance
Date,
the Company shall from its own funds deposit in the Custodial Account an
amount
equal to all Monthly Payments that were due on the related Due Date and that
were delinquent at the close of business on the related Determination Date,
with
the interest adjusted to the respective Mortgage Loan Remittance Rates;
provided,
however,
that to
the extent there are funds on deposit in the Custodial Account that are not
otherwise required to be distributed to the Owner on such Remittance Date,
the
Company may remit such funds in lieu of making advances of its own funds;
and
further provided that any such funds held for future distribution and so
used
shall be appropriately reflected in the Company’s records and replaced by the
Company by deposit into the Custodial Account on or before any future Remittance
Date to the extent that funds on deposit in the Custodial Account for the
related Remittance Date (determined without regard to P&I Advances required
to be made on such Remittance Date) shall be less than the aggregate amount
required to be distributed to the Owner pursuant to Section 5.01 on such
related Remittance Date. For purposes of this Section 5.03, any Monthly
Payment or portion thereof deferred pursuant to Section 4.01 shall be
considered delinquent until paid. The Company’s obligation to make P&I
Advances as to any Mortgage Loan shall continue through the earlier to occur
of
(a) the repurchase of the Mortgage Loan by the Company pursuant to
Section 3.03 and (b) the Remittance Date following acquisition or
disposition of title to the related Mortgaged Property through foreclosure
or by
delivery of a deed in lieu of foreclosure; provided,
however,
that if
requested by a Rating Agency in connection with a securitization as contemplated
under Article XII, the Company shall be obligated to make such advances
through the Remittance Date prior to the date on which cash is received in
connection with the liquidation of REO Property.
Notwithstanding
the provisions of this Section 5.03, the Company shall not be required to
make any advance of principal and interest if, in the good faith judgment
of the
Company, such advance of principal and interest will not ultimately be
recoverable from the related Mortgagor, from Liquidation Proceeds or otherwise.
In the event that the Company determines that any such advances are
non-recoverable, the Company shall provide the Owner with an Officer’s
Certificate, which details the reason for such determination.
Section
5.04 Reserved.
Section
5.05 Prepayment
Interest Shortfalls.
Not
later
than the close of business on the Business Day preceding each Remittance
Date,
the Company shall from its own funds deposit in the Custodial Account an
amount
equal to the aggregate Prepayment Interest Shortfall, if any, existing in
respect of the related Principal Prepayment Period.
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ARTICLE
VI
GENERAL
SERVICING PROCEDURE
Section
6.01 Assumption
Agreements.
The
Company shall use its best efforts to enforce any “due-on-sale” provision
contained in each Mortgage or Mortgage Note to the extent permitted by law
and
provided
that
such enforcement would not impair any recovery under any related Policy.
The
Company shall be entitled to retain as additional servicing compensation
any
assumption fee collected by the Company for entering into an assumption
agreement.
If
the
Company reasonably believes it is unable under applicable law to enforce
such
“due-on-sale” clause, the Company shall enter into (i) an assumption and
modification agreement with the person to whom such property has been conveyed,
pursuant to which such person becomes liable under the Mortgage Note and
the
original Mortgagor remains liable thereon or (ii) in the event the Company
is unable under applicable law to require that the original Mortgagor remain
liable under the Mortgage Note, 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. In
connection with any such assumption, neither the Mortgage Interest Rate borne
by
the related Mortgage Note, the term of the Mortgage Loan nor the outstanding
principal amount of the Mortgage Loan shall be changed.
Section
6.02 Release
of Mortgage Files; Wrongful Satisfaction of Mortgages.
Upon
the
payment in full of any Mortgage Loan, the Company will obtain the portion
of the
Mortgage File that is in the possession of the Custodian, prepare and process
any required satisfaction or release of the Mortgage and notify the Owner
as
provided in Section 5.02.
If
the
Company satisfies or releases the lien of a Mortgage without having obtained
payment in full of the indebtedness secured by the Mortgage, the Company,
upon
written demand, shall remit to the Owner the then Assumed Principal Balance
of
the related Mortgage Loan by deposit thereof in the Custodial Account. The
Company shall maintain the Fidelity Bond as provided for in Section 4.13
insuring the Company against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth
herein.
Section
6.03 Servicing
Compensation.
As
compensation for its services hereunder, the Company shall be entitled to
withdraw from the Custodial Account or to retain from interest payments on
the
Mortgage Loans the amounts provided for as the Company’s Servicing Fee. The
Servicing Fee shall be payable monthly and shall be computed on the basis
of the
same unpaid principal balance and for the period as to which any related
interest payment on a Mortgage Loan is computed. The Servicing Fee shall
be
payable only at the time of and with respect to those Mortgage Loans for
which
payment is in fact made of the entire amount of the Monthly Payment. The
obligation of the Owner to pay the Servicing Fee is limited to, and payable
solely from, the interest portion (including recoveries with respect to interest
from Liquidation Proceeds ) of such Monthly Payments collected by the Company.
Additional servicing compensation in the form of assumption fees, as provided
in
Section 6.01, prepayment penalties or premiums and late payment charges or
otherwise shall be retained by the Company unless otherwise set forth in
the
applicable Purchase Price and Terms Letter.
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Section
6.04 Annual
Statement as to Compliance.
The
Company shall deliver to the Owner, on or before March 15 of each year,
beginning March 15, 2006, an Officers’ Certificate stating that (i) a
review of the activities of the Company during the preceding calendar year
and
of the Company’s 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 Company has fulfilled all of its obligations under
this Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to
such
Servicing Officer and the nature and status thereof and the action being
taken
by the Company to cure such default.
Section
6.05 Annual
Independent Public Accountants’ Servicing Report.
On
or
before March 15 of each year, beginning March 15, 2006, the Company, at its
expense, shall cause a firm of independent public accountants that is a member
of the American Institute of Certified Public Accountants to furnish a statement
to the Owner to the effect that such firm has examined certain documents
and
records relating to the servicing of mortgage loans in the Company’s portfolio.
On the basis of this examination, the CPA firm will disclose any exceptions
or
errors relating to the servicing of mortgage loans, as required by paragraph
four (4) of “The Uniform Single Attestation Program for Mortgage
Bankers.”
Section
6.06 Owner’s
Right to Examine Company Records.
The
Owner
shall have the right, upon reasonable notice to the Company, to examine and
audit any and all of the books, records or other information of the Company
whether held by the Company or by another on behalf of the Company, which
may be
relevant to the performance or observance by the Company of the terms, covenants
or conditions of this Agreement, and to discuss such books, records or other
information with an officer or employee of the Company who is knowledgeable
about the matters contained therein.
Section
6.07 Fair
Credit Reporting Act Compliance.
The
Company shall fully furnish, in accordance with the Fair Credit Reporting
Act
and its implementing regulations, accurate and complete information (i.e.,
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.
Section
6.08 Compliance
with REMIC Provisions.
If
a
REMIC election has been made with respect to the arrangement under which
the
Mortgage Loans and REO Property are held, the Company shall not take any
action,
cause the REMIC to take any action or fail to take (or fail to cause to be
taken) any action that, under the REMIC Provisions, if taken or not taken,
as
the case may be, could (i) endanger the status of the REMIC as a REMIC or
(ii) result in the imposition of a tax upon the REMIC (including but not
limited to the tax on “prohibited transactions” as defined in
Section 860(a)(2) of the Code and the tax on “contributions” to a
REMIC set forth in Section 860(d) of the Code) unless the Company has
received an opinion of counsel (at the expense of the party seeking to take
such
action) to the effect that the contemplated action will not endanger such
REMIC
status or result in the imposition of any such tax.
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ARTICLE
VII
REPORTS
TO BE PREPARED BY COMPANY
Section
7.01 Company
Shall Provide Access and Information as Reasonably Required.
The
Company shall furnish to the Owner upon written request, during the term
of this
Agreement, such periodic, special or other reports or information, whether
or
not provided for herein, as shall be necessary, reasonable or appropriate
with
respect to the purposes of this Agreement. The Company may negotiate with
the
Owner for a reasonable fee for providing such report or information, unless
(i) the Company is required to supply such report or information pursuant
to any other section of this Agreement, or (ii) the report or information
has been requested in connection with Internal Revenue Service requirements.
The
Company agrees to execute and deliver all such instruments as the Owner,
from
time to time, may reasonably request in order to effectuate the purposes
and to
carry out the terms of this Agreement.
Section
7.02 Financial
Statements.
The
Company understands that, in connection with marketing the Mortgage Loans,
the
Owner may make available to a prospective Owner a consolidated statement
of
operations of Company for the most recently completed five fiscal years for
which such a statement is available as well as a consolidated statement of
condition at the end of the last two fiscal years covered by such consolidated
statement of operations. The Company, if it has not already done so, agrees
to
promptly furnish to Owner copies of the statements specified above.
The
Company also agrees to make available upon reasonable notice and during normal
business hours to any prospective Owner a knowledgeable financial or accounting
officer for the purposes of answering questions respecting recent developments
affecting the Company or the financial statements of the Company and to permit
upon reasonable notice and during normal business hours any prospective Owner
to
inspect the Company’s servicing facilities for the purpose of satisfying such
prospective Owner that the Company has the ability to service the Mortgage
Loans
in accordance with this Agreement.
ARTICLE
VIII
THE
COMPANY
Section
8.01 Indemnification;
Third Party Claims.
The
Company agrees to indemnify the Owner and hold them harmless against any
and all
claims, losses, penalties, fines, forfeitures, reasonable legal fees and
related
costs, judgments, and any other costs, fees and expenses that the Owner incurs
directly resulting from the failure of the Company to perform its duties
and
service the Mortgage Loans in material compliance with the terms of this
Agreement. The Company shall immediately notify the Owner if a claim is made
by
a third party with respect to this Agreement or any Mortgage Loans. The Company
shall follow any written instructions received from the Owner in connection
with
such claim.
Section
8.02 Merger
or Consolidation of the Company.
The
Company shall keep in full effect its existence, rights and franchises as
a
corporation, and shall preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall
be
necessary to protect the validity and enforceability of this Agreement, or
the
ability of the Company to perform its duties under this
Agreement.
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Any
Person into which the Company may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Company
shall be a party, or any Person succeeding to the business of the Company
hereunder, shall be the successor of the Company hereunder without the execution
or filing of any paper or any further act on the part of either of the parties
hereto, anything herein to the contrary notwithstanding; provided,
however,
that
the successor or surviving Person shall be an institution (i) that is
qualified to service mortgage loans on behalf of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac
and
(ii) that has a net worth of not less than $25,000,000.
The
Company shall use its best efforts to give 90 days’ prior written notice to the
Owner of any such merger, conversion, consolidation, sale or other disposition
to which the Company proposes to be a party.
Section
8.03 Company
Not to Resign.
The
Owner
has entered into this Agreement with the Company in reliance upon the
independent status of the Company, and the representations as to the adequacy
of
its servicing facilities, plant, personnel, records and procedures, its
integrity, reputation and financial standing, and the continuance thereof.
Therefore, the Company shall neither assign its rights under this Agreement
nor
delegate its duties hereunder or any portion thereof or sell or otherwise
dispose of all or substantially all of its property or assets without, in
each
case, the prior written consent of the Owner, which consent shall be granted
or
withheld in the sole discretion of the Owner. In addition, the ability of
the
Company to assign its rights and delegate its duties under this Agreement
to a
successor servicer shall be subject to the following conditions:
(i) Such
successor servicer must be qualified to service loans for ▇▇▇▇▇▇ Mae and
▇▇▇▇▇▇▇
Mac , in each case in good standing with the applicable agency;
(ii) Such
successor servicer must have a net worth of not less than $25,000,000;
and
(iii) Such
successor servicer must execute and deliver to the Owner an agreement, in
form
and substance reasonably satisfactory to the Owner, that contains an assumption
by such successor servicer of the due and punctual performance and observance
of
each covenant and condition to be performed and observed by the Company under
this Agreement;
The
Company shall not resign from the obligations and duties hereby imposed on
it
except by mutual consent of the Company and the Owner or upon the determination
that its duties hereunder are no longer permissible under applicable law
and
such incapacity cannot be cured by the Company. Any such determination
permitting the resignation of the Company shall be evidenced by an Opinion
of
Counsel to such effect delivered to the Owner which Opinion of Counsel shall
be
in form and substance reasonably acceptable to the Owner. No such resignation
shall become effective until a successor shall have assumed the Company’s
responsibilities and obligations hereunder in the manner provided in
Section 11.01.
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Without
in any way limiting the generality of this Section 8.03, in the event that
the Company either shall assign this Agreement or the servicing responsibilities
hereunder or delegate its 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 consent of the Owner, then the Owner shall have the right
to
terminate this Agreement upon notice given as set forth in Section 9.01,
without any payment of any penalty or damages and without any liability
whatsoever to the Company or any third party.
ARTICLE
IX
DEFAULT
Section
9.01 Events
of Default.
Event
of
Default, whenever used herein, means any one or more of the following
events:
(i) any
failure by the Company to remit to the Owner any payment required to be made
under the terms of this Agreement that continues unremedied for a period
of
three Business Days after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been received by the Company
from
the Owner; or
(ii) any
failure on the part of the Company duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Company
set
forth in this Agreement or in the Custodial Agreement that continues unremedied
for a period of 45 days (30 days in instances where the Company has failed
to
pay insurance premiums) after the date on which written notice of such failure,
requiring the same to be remedied, shall have been received by the Company
from
the Owner; or
(iii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
for
the appointment of a trustee in bankruptcy, conservator, receiver or liquidator
in any bankruptcy, reorganization, insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Company and
such
decree or order shall have remained in force undischarged or unstayed for
a
period of 45 days; or
(iv) the
Company ceases to be qualified to transact business in any jurisdiction where
it
is currently so qualified, but only to the extent such non-qualification
materially and adversely affects the Company’s ability to perform its
obligations hereunder; or
(v) the
Company shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets
and
liabilities or similar proceedings of or relating to the Company or of or
relating to all or substantially all of its property; or
(vi) the
Company shall admit in writing its inability to pay its debts generally as
they
become due, file a petition to take advantage of any applicable insolvency,
bankruptcy or reorganization statute, make an assignment for the benefit
of its
creditors or voluntarily suspend payment of its obligations; or
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(vii) any
failure by the Company, to meet the qualifications of a ▇▇▇▇▇▇ Mae
seller/servicer, which failure continues for a period of time longer than
for
more than 30 (thirty) days; or
(viii) the
Company attempts to assign its right to servicing compensation hereunder
without
satisfying the requirements of Section 8.03 or the Company attempts,
without the consent of the Owner, to sell or otherwise dispose of all or
substantially all of its property or assets (other than in compliance with
Section 8.03) or to assign this Agreement or the servicing responsibilities
hereunder or to delegate its duties hereunder or any portion thereof to other
than the Company in violation of Section 8.03.
If
an
Event of Default shall occur, then so long as such Event of Default shall
not
have been remedied, the Owner may, by notice in writing to the Company, in
addition to whatever rights the Owner may have at law or equity to damages,
including injunctive relief and specific performance, terminate all the rights
and obligations of the Company under this Agreement and in and to the Mortgage
Loans and the proceeds thereof. On or after the receipt by the Company of
such
written notice, all authority and power of the Company under this Agreement,
whether with respect to the Mortgage Loans or otherwise, shall pass to and
be
vested in the successor appointed pursuant to Section 11.03. Upon written
request from the Owner, the Company shall prepare, execute and deliver, any
and
all documents and other instruments, place in such successor’s possession all
Mortgage Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether
to
complete the transfer and endorsement or assignment of the Mortgage Loans
and
related documents, or otherwise, at the Company’s sole expense. The Company
shall cooperate with the Owner and such successor in effecting the termination
of the Company’s responsibilities and rights hereunder, including, without
limitation, the transfer to such successor for administration by it of all
cash
amounts (less any amounts due the Company pursuant to the terms of this
Agreement) which shall at the time be credited by the Company to the Custodial
Account or Escrow Account or thereafter received with respect to the Mortgage
Loans.
If
any of
the Mortgage Loans are MERS Mortgage Loans, in connection with the termination
or resignation of the Company hereunder, the Company shall cooperate with
the
successor servicer either (x) in causing MERS to execute and deliver an
assignment of Mortgage in recordable form to transfer the Mortgage from MERS
to
the Owner and to execute and deliver such other notices, documents and other
instruments as may be necessary to effect a transfer of such Mortgage Loan
or
servicing of such Mortgage Loan on the MERS system to the successor servicer
or
(y) in causing MERS to designate on the MERS system the successor servicer
as the servicer of such Mortgage Loan.
Section
9.02 Waiver
of Defaults.
The
Owner
may in writing waive any past default by the Company in the performance of
its
obligations hereunder and the consequences thereof and any default in remitting
to Owner any required distribution in accordance with this Agreement, including
the Company’s obligation to make Monthly Advances. Subject to the preceding
sentence, upon any waiver of a past default, such default shall be deemed
not to
exist and any Event of Default arising therefrom shall be deemed to have
been
remedied for every purpose of this Agreement, except as otherwise stated
in such
waiver; provided,
however,
that no
such waiver shall extend to any subsequent or other default or impair any
right
consequent thereto, except as otherwise stated in such waiver.
-49-
ARTICLE
X
TERMINATION
Section
10.01 Termination.
i) This
Agreement shall terminate upon either: (i) the later of the distribution to
the Owner of final payment or liquidation with respect to the last Mortgage
Loan
(or advances of same by the Company), or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure with respect to
the
last Mortgage Loan and the remittance of all funds due hereunder or
(ii) mutual consent of the Company and the Owner in writing.
(b) The
Company, at its option but only upon thirty (30) days’ prior written notice to
the Owner, may terminate this Agreement at any time when the aggregate Assumed
Principal Balance of the Mortgage Loans which remain subject to this Agreement
(the “Remaining Mortgage Loans”) has been reduced by application of Monthly
Payments or otherwise to an amount no greater than five (5) percent of the
aggregate Assumed Principal Balance of the Remaining Mortgage Loans as of
the
Cut-off Date. Such termination shall be effected by the deposit by the Company
of an amount equal to the sum of (i) 100% of the aggregate Assumed
Principal Balance of the Remaining Mortgage Loans as of the first calendar
day
of the month in which such repurchase occurs (the “Repurchase Cut-off Date”)
after application of principal due on such date whether or not received,
and the
appraised value of REO Properties, which appraisals shall be performed by
an
appraiser acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac, and (ii) interest on
the aggregate Assumed Principal Balance at the Mortgage Loan Remittance Rate
from the Repurchase Cut-off Date to, but not including, the date of repurchase.
Upon any such purchase of Mortgage Loans and REO Properties under this
Section 10.01(b), the Owner shall, to the extent necessary, transfer or
cause to be transferred to the Company title to the repurchased Mortgage
Loans
and REO Properties by instruments of transfer or assignment, without recourse.
The Company may not purchase fewer than all of such Mortgage Loans and REO
Properties. The Company shall deposit the repurchase price for the remaining
Mortgage Loans as described in (i) and (ii) above in the Custodial Account
no later than one (1) Business Day prior to the first Remittance Date to
occur after the expiration of thirty days following the notice described
in the
first sentence of this Section 10.01(b). Upon presentation and surrender of
the outstanding Mortgage Loans, the Company shall cause to be distributed
to the
Owner on such Remittance Date the repurchase price together with the amounts
(including Monthly Advances) that would be otherwise distributable to the
Owner
in respect of Mortgage Loans and REO Properties on such Remittance Date.
Upon
receipt of such final payment, the Owner shall deliver, or cause the Custodian
to deliver to the Company, the Mortgage Files in connection therewith and
shall
otherwise use its best efforts to effect or cause to be effected the orderly
transfer of assets to the Company.
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ARTICLE
XI
MISCELLANEOUS
PROVISIONS
Section
11.01 Closing.
Each
closing for the purchase and sale of Mortgage Loans hereunder shall take
place
on the related Closing Date. Upon agreement by the Company and the Owner,
the
closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties
shall
agree.
Each
closing for a Mortgage Loan Package shall be subject to each of the following
conditions:
(a) at
least
one (1) Business Day prior to the Closing Date, the Company shall deliver
to the Owner a Mortgage Loan Schedule with respect to the Mortgage Loans
to be
purchased and sold on such date;
(b) all
of
the representations and warranties of the Company under this Agreement shall
be
true and correct as of such Closing Date and no event shall have occurred
which,
with notice or the passage of time, would constitute a default under this
Agreement;
(c) the
Owner
shall have received, or the Owner’s attorneys shall have received in escrow, all
closing documents as specified in 11.02 of this Agreement, in such forms
as are
agreed upon and reasonably acceptable to the Owner, duly executed by all
signatories other than the Owner as required pursuant to the terms
hereof;
(d) the
Company shall have delivered and released to the Custodian on or prior to
the
Closing Date all documents required pursuant to Section 2.03 hereof;
and
(e) all
other
terms and conditions of this Agreement and the related Purchase Price and
Terms
Letter (if any), Trade Confirmation (if any) and Acknowledgment and Conveyance
Agreement shall have been complied with.
Subject
to the foregoing conditions, the Owner shall pay to the Company on each Closing
Date the Purchase Price for the Mortgage Loan Package purchased on such date
by
wire transfer of immediately available funds to the account designated by
the
Company.
Section
11.02 Closing
Documents.
(b) The
closing documents for the Mortgage Loans to be purchased on the initial Closing
Date under this Agreement shall consist of fully executed originals of the
following documents as well as the documents referred to in
Section 12.04(b):
(i) the
Purchase Price and Terms Letter;
(ii) this
Agreement;
(iii) the
Custodial Agreement among the Owner; the Company and the
Custodian;
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(iv) a
Custodial Account Letter Agreement, in the form of Exhibit D
hereto;
and
(v) an
Escrow
Account Letter Agreement, in the form of Exhibit E
hereto.
(vi) Officer’s
Certificate
(b) The
closing documents for the Mortgage Loans to be purchased on each Closing
Date
under this Agreement (including the initial Closing Date) shall consist of
fully
executed originals of the following documents:
(i) the
related Purchase Price and Terms Letter (if applicable);
(ii) the
related Trade Confirmation (if applicable);
(iii) the
related Acknowledgment and Conveyance Agreement; and
(iv) the
Mortgage Loan Schedule.
Section
11.03 Successor
to the Company.
Prior
to
termination of the Company’s responsibilities and duties under this Agreement
pursuant to Section 8.03, 9.01 or 10.01(a)(ii), the Owner shall
(i) succeed to and assume all of the Company’s responsibilities, rights,
duties and obligations under this Agreement, or (ii) appoint a successor
which shall succeed to all rights and assume all of the responsibilities,
duties
and liabilities of the Company under this Agreement prior to the termination
of
Company’s responsibilities, duties and liabilities under this Agreement. In
connection with such appointment and assumption, the Owner may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree. The Company shall discharge its
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 that it is obligated to exercise under this
Agreement. The resignation or removal of the Company pursuant to the
aforementioned Sections shall not become effective until a successor shall
be appointed pursuant to this Section and shall not relieve the Company named
herein of its obligations under Section 3.03 or Section 8.01 (in the
event a third party claim is filed during the period of time in which the
Company is servicing the Mortgage Loans).
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Company and to the Owner an instrument accepting such appointment, whereupon
such successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Company, with like effect
as if originally named as a party to this Agreement. No termination of the
Company or this Agreement shall affect any claims that the Owner may have
against the Company arising prior to any such termination or
resignation.
The
Company shall timely deliver to its successor the funds in the Custodial
Account
and the Escrow Account (less any amounts to which the Company is entitled
pursuant to the terms of this Agreement) and all Mortgage Files and related
documents and statements held by it hereunder and the Company shall account
for
all funds. The Company shall execute and deliver such instruments and do
such
other things all as may reasonably be required to more fully and definitely
vest
and confirm in the successor all such rights, powers, duties, responsibilities,
obligations and liabilities of the Company.
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Upon
a
successor’s acceptance of appointment as such, the Company shall notify by mail
the Owner of such appointment.
Section
11.04 Repurchases
and Related Assurances.
In
the
event the Company repurchases a Mortgage Loan pursuant to Section 3.03, the
Owner shall upon any request of the Company subsequent to the Remittance
Date on
which the Repurchase Price has been remitted to the Owner take actions
reasonably necessary to effect the reconveyance of the Mortgage
Loan.
Section
11.05 Amendment.
This
Agreement may be amended only by written agreement signed by the Company
and
Owner hereunder.
Section
11.06 Recordation
of Assignment of Mortgages.
As
provided in the Custodial Agreement, each Assignment of Mortgage, if applicable,
shall be in a form acceptable for recording in all appropriate public offices
for real property records in the jurisdiction in which the Mortgaged Property
recited in each such Assignment of Mortgage is situated. At the Owner’s request
(and upon written notice to the Company), the Assignments of Mortgage shall
be
recorded in the name of the Owner or in the name of a Person designated by
the
Owner in all appropriate public offices for real property records. All recording
fees related to such initial recordation shall be paid by the
Company.
Section
11.07 Duration
of Agreement.
This
Agreement shall continue in existence and effect until terminated as herein
provided.
Section
11.08 Governing
Law.
This
Agreement shall be construed in accordance with the laws of the State of
New
York, except to the extent preempted by federal law but without regard to
principles of conflicts of laws, and the obligations, rights and remedies
of the
parties hereunder shall be determined in accordance with such laws.
Section
11.09 Notices.
Any
communications provided for or permitted hereunder shall be in writing and,
unless otherwise expressly provided herein, shall be deemed to have been
duly
given if (a) personally delivered, (b) mailed by registered mail,
postage prepaid, return receipt requested, and received by the addressee,
(c) sent by express courier delivery service and received by the addressee,
or (d) transmitted by telex, telecopy or telegraph and confirmed by a
writing delivered by means of (a), (b) or (c), to: (i) in the case of
the Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Senior Vice President, or such other address as may hereafter be furnished
to
the Owner in writing by the Company, with a copy to the Company at the same
address and (ii) in the case of the Owner, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice President.
Section
11.10 Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in
no way
affect the validity or enforceability of the other provisions of this
Agreement.
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Section
11.11 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 Company
shall
be rendered as an independent contractor and not as agent for the
Owner.
Section
11.12 Counterparts.
This
Agreement may be executed in any number of counterparts and by different
parties
hereto on separate counterparts, each of which shall be deemed to be an
original. Such counterparts shall constitute one and the same
agreement.
Section
11.13 Successors
and Assigns.Notwithstanding
anything to the contrary in this agreement, it is understood and agreed that
the
Owner may transfer its interest in this Agreement and the Mortgage Loans
in
whole or in part, in accordance with Article XII of this Agreement. This
Agreement shall inure to the benefit of and be binding upon the Company and
the
Owner and their respective successors and assigns permitted
hereunder.
Section
11.14 General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(a) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender
herein
shall be deemed to include the other gender;
(b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(c) references
herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs, Clauses and other subdivisions of this
Agreement;
(d) a
reference to a Subsection without further reference to a Section is a
reference to such Subsection as contained in the same Section in which
the reference appears, and this rule shall also apply to Paragraphs, Clauses,
and other subdivisions;
(e) the
words
“herein”, “hereof”, “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(f) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
ARTICLE
XII
WHOLE
LOAN TRANSFER; SECURITIZATION TRANSACTION; AGENCY TRANSFER
Section
12.01 Removal
of Mortgage Loans from Inclusion under this Agreement upon a Whole Loan
Transfer, a Securitization Transaction or Agency Transfer on One or more
Reconstitution Dates.
The
Company acknowledges and the Initial Owner agrees that with respect to some
or
all of the Mortgage Loans, the Initial Owner may effect either:
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|
(1)
|
one
or more Whole Loan Transfers;
|
|
(2)
|
one
or more Securitization Transaction;
|
provided,
however,
that
the aggregate number of “investors” in the Mortgage Loans shall not exceed four
(4), per each Mortgage Loan Package; provided,
that
for purposes hereof, the “investor” shall be ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, as
applicable, in the case of an Agency Transfer, the third party purchaser
in the
case of a Whole Loan Transfer, or the trustee or master servicer in the case
of
a Securitization Transaction. In addition, if the Owner enters into more
than
two (2) reconstitution transactions with respect to the Mortgage Loans, for
each reconstitution transaction after the second such transaction, the Company
shall have the right to reimbursement from the Owner for the reasonable expenses
incurred by the Company in connection with effecting such Agency Transfer,
Whole
Loan Transfer or Securitization Transaction, including reimbursement for
the
amount which reasonably reflects time and expenses directly incurred by the
Company in connection with such reconstitution transactions.
The
Company shall cooperate with the Initial Owner in connection with any Whole
Loan
Transfer, Securitization Transaction or Agency Transfer contemplated by the
Initial Owner pursuant to this Section. In connection therewith, the Initial
Owner shall deliver any Reconstitution Agreement or other document related
to
the Whole Loan Transfer, Securitization Transaction or Agency Transfer to
the
Company at least 10 days prior to such transfer and the Company shall execute
any Reconstitution Agreement which contains servicing provisions substantially
similar to those herein or otherwise reasonably acceptable to the Initial
Owner
and the Company and which restates the representations and warranties contained
in Section 3.01 as of the Reconstitution Date (except to the extent any
such representation or warranty is not accurate on such date) and
Section 3.02 herein as of the Closing Date. With respect to any
Reconstitution that involves a sale of Mortgage Loans or Securities to an
Agency, the Company shall additionally make with respect to the applicable
Mortgage Loans as of the date the Mortgage Loans were sold from the Company
to
the Initial Owner each additional representation or warranty required by
such
Agency as the Company has negotiated with such Agency. In addition, with
respect
to any Securitization Transaction, the Company and the Owner shall execute
and
deliver an indemnity agreement substantially in the form of Exhibit
O
hereto.
The Initial Owner hereby agrees to reimburse the Company for reasonable
“out-of-pocket” expenses incurred by the Company that relate to such Whole Loan
Transfer, Securitization Transaction or Agency Transfer, including reimbursement
for the amount which reasonably reflects time and effort expended by the
Company
in connection therewith. It is understood and agreed by Initial Owner and
Company that the right to effectuate such Whole Loan Transfer, Securitization
Transaction or Agency Transfer as contemplated by this Section 12.01 is
limited to the Initial Owner.
With
respect to any Mortgage Loans that are subject to a Securitization Transaction,
unless otherwise provided in the related pooling and servicing agreement
or
similar agreement, the Company shall (1) cause the servicing officer in
charge of servicing for the Company to execute and deliver a certification
(the
“SEC Certification”) in the format attached hereto as Exhibit G
which at
the Owner’s option shall be (A) attached to any Form 10-K’s filed with the
Commission in connection with the related securitization trust (or similar
transaction) or (B) provided to the Owner and such other Persons as are
specified in the pooling and servicing agreement or similar agreement, and
(2) indemnify the Owner and such other Persons as are specified in the
pooling and servicing agreement or similar agreement for losses in connection
with or relating to the inaccuracy of the SEC Certification provided by the
Company.
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All
Mortgage Loans not sold or transferred pursuant to a Whole Loan Transfer,
Securitization Transaction or Agency Transfer shall be subject to this Agreement
and shall continue to be serviced in accordance with the terms of this Agreement
and with respect thereto this Agreement shall remain in full force and
effect.
ARTICLE
XIII
COMPLIANCE
WITH REGULATION AB
Section
13.01 Intent
of the Parties; Reasonableness.
The
Initial Owner and the Company acknowledge and agree that the purpose of this
Article XIII is to facilitate compliance by the Initial Owner 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 Initial Owner 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 Initial Owner 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 Company 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 Initial Owner or any Depositor
in
good faith for delivery of information under these provisions on the basis
of
evolving interpretations of Regulation AB.
The
Initial Owner (including any of its assignees or designees) shall cooperate
with
the Company by providing timely notice of requests for information under
these
provisions and by reasonably limiting such requests to information required,
in
the Initial Owner’s reasonable judgment, to comply with Regulation AB and the
Initial Owner shall not request any information unless it deems it necessary
under Regulation AB.
Section
13.02 Additional
Representations and Warranties of the Company.
(i) The
Company shall be deemed to represent to the Initial Owner and to any Depositor,
as of the date on which information is first provided to the Initial Owner
or
any Depositor under Section 13.03 that, except as disclosed in writing to
the
Initial Owner or such Depositor prior to such date: (i) the Company 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 Company; (ii) the Company has not 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; (iii) no material noncompliance with the applicable servicing criteria
with respect to other securitizations of residential mortgage loans involving
the Company as servicer has been disclosed or reported by the Company; (iv)
no
material changes to the Company’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 Company’s financial
condition that could have a material adverse effect on the performance by
the
Company 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 Company, any Subservicer or any
Third-Party Originator; and (vii) there are no affiliations, relationships
or
transactions relating to the Company, 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.
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(ii) If
so
requested by the Initial Owner or any Depositor on any date following the
date
on which information is first provided to the Initial Owner or any Depositor
under Section 13.03, the Company shall, within ten 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.
Section
13.03 Information
to Be Provided by the Company.
In
connection with any Securitization Transaction the Company shall (1) within
ten
Business Days following request by the Initial Owner or any Depositor, provide
to the Initial Owner 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 Initial Owner and such Depositor,
the information and materials specified in paragraphs (i), (ii), (iii) and
(vi)
of this Section 13.03, and (2) as promptly as practicable following notice
to or
discovery by the Company, provide to the Initial Owner and any Depositor
(in
writing and in form and substance reasonably satisfactory to the Initial
Owner
and such Depositor) the information specified in paragraph (iv) of this
Section.
(i) If
so
requested by the Initial Owner or any Depositor, the Company shall provide
such
information regarding (x) the Company, as originator of the Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
or
(y) each Third-Party Originator, and (z) as applicable, each Subservicer,
as is
required for the purpose of compliance with Items 1103(a)(1), 1105, 1110,
1117
and 1119 of Regulation AB. Such information shall include the
following:
(A) the
originator’s form of organization;
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(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 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 Initial
Owner 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
Initial Owner or any Depositor may reasonably request, consistent with this
Article XIII 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 Company, each Third-Party Originator and
each
Subservicer; and
(D) a
description of any affiliation or relationship between the Company, each
Third-Party Originator, each Subservicer and any of the following parties
to a
Securitization Transaction, as such parties are identified to the Company
by the
Initial Owner 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.
(ii) If
so
requested by the Initial Owner or any Depositor, the Company 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 Initial Owner as provided
below)
originated by (a) the Company, if the Company is an originator of Mortgage
Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (b) each Third-Party Originator. Such Static Pool Information shall
be
prepared by the Company (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
Company (or Third Party Originator) Static Pool Information with respect
to more
than one mortgage loan type similar to the Mortgage Loans, the Initial Owner
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 Company,
and need not be customized for the Initial Owner 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 information provided, such
as a
portable document format (pdf) file, or other such electronic format mutually
agreed between the Initial Owner or the Depositor, as applicable, and the
Company.
-58-
If
so
requested by the Initial Owner or any Depositor, the Company 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
Initial Owner 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
Company’s or Third-Party Originator’s originations or purchases, to calendar
months commencing January 1, 2006, as the Initial Owner or such Depositor
shall
reasonably request. Such statements and letters shall be addressed to and
be for
the benefit of such parties as the Initial Owner 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 Owner
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 Initial Owner
or
such Depositor.
(iii) If
so
requested by the Initial Owner or any Depositor, the Company shall provide
such
information regarding the Company, as servicer of the Mortgage Loans, and
each
Subservicer (each of the Company and each Subservicer, for purposes of this
paragraph, a “Servicer”), as is required for the purpose of compliance with
Items 1108 of Regulation AB. Such information shall include the
following:
(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 reasonable good faith judgment of the Initial
Owner
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 of servicing by the Servicer
during the three-year period immediately preceding the related Securitization
Transaction;
-59-
(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 Initial Owner or any Depositor may reasonably request,
consistent with Article XIII hereof, 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 Company
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
-60-
(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.
(iv) If
so
requested by the Initial Owner 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 Company shall (or shall cause each Subservicer
and
Third-Party Originator to) (i) notify the Initial Owner and any Depositor
in
writing of (A) any material litigation or governmental proceedings pending
against the Company, 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 Company, any Subservicer or any
Third-Party Originator and any of the parties specified in clause (D) of
paragraph (i) of this Section 13.03 (and any other parties identified in
writing
by the requesting party) with respect to such Securitization Transaction,
and
(ii) provide to the Initial Owner and any Depositor a description of such
proceedings, affiliations or relationships.
(v) As
a
condition to the succession to the Company or any Subservicer as servicer
or
subservicer under this Agreement or any Reconstitution Agreement by any Person
(i) into which the Company or such Subservicer may be merged or consolidated,
or
(ii) which may be appointed as a successor to the Company or any Subservicer,
the Company shall provide to the Initial Owner and any Depositor, at least
15
calendar days prior to the effective date of such succession or appointment,
(x)
written notice to the Initial Owner and any Depositor of such succession
or
appointment and (y) in writing and in form and substance reasonably satisfactory
to the Initial Owner and such Depositor, all information reasonably requested
by
the Initial Owner 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.
(vi) In
addition to such information as the Company, as servicer, is obligated to
provide pursuant to other provisions of this Agreement, if so requested by
the
Initial Owner or any Depositor, the Company shall provide such information
reasonably available to the Company regarding the performance or servicing
of
the Mortgage Loans as is reasonably required by the Initial Owner or any
Depositor to facilitate preparation of distribution reports in accordance
with
Item 1121 of Regulation AB and to permit the Initial Owner 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 Initial
Owner'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).
(vii) 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 Company shall provide corrected Static Pool Information to
the
Initial Owner or any Depositor, as applicable, in the same format in which
Static Pool Information was previously provided to such party by the Company.
-61-
Section
13.04 Servicer
Compliance Statement.
On
or
before March 15 of each calendar year, commencing in 2007, the Company shall
deliver to the Initial Owner and any Depositor a statement of compliance
addressed to the Initial Owner and such Depositor and signed by an authorized
officer of the Company, to the effect that (i) a review of the Company’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 Company 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.
Section
13.05 Report
on Assessment of Compliance and Attestation. (i) On
or
before March 15 of each calendar year, commencing in 2007, the Company
shall:
(A) deliver
to the Initial Owner and any Depositor a report (in form and substance
reasonably satisfactory to the Initial Owner and such Depositor) regarding
the
Company’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 Initial Owner and such Depositor and signed by an authorized
officer;
(B) deliver
to the Initial Owner and any Depositor a report of a registered public
accounting firm reasonably acceptable to the Initial Owner and such Depositor
that attests to, and reports on, the assessment of compliance made by the
Company 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;
(C) cause
each Subservicer and each Subcontractor determined by the Company pursuant
to
Section 13.06(ii) to be “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB (each, a “Participating Entity”), to
deliver to the Initial Owner and any Depositor an assessment of compliance
and
accountants’ attestation as and when provided in paragraphs (i) and (ii) of this
Section 13.05; and
(D) if
requested by the Owner or any Depositor not later than February 1 of the
calendar year in which such certification is to be delivered, deliver to
the
Initial Owner, 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 A.
-62-
The
Company acknowledges that the parties identified in clause (i)(D) above may
rely
on the certification provided by the Company pursuant to such clause in signing
a Sarbanes Certification and filing such with the Commission. Neither the
Owner
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. Neither the Owner nor the Depositor shall file any such Sarbanes
Certification with the Commission unless required by law or regulation. In
the
event that the Owner or the Depositor is required by law or regulation to
file
such Sarbanes Certification with the Commission, the party that files such
Sarbanes Certification shall provide to the Company reasonable notice of
such
filing.
(ii) Each
assessment of compliance provided by a Subservicer pursuant to Section
13.05(i)(A) shall address each of the applicable Servicing Criteria specified
in
Item 1122 of Regulation AB. An assessment of compliance provided by a
Subcontractor pursuant to Section 13.05(i)(C) need not address any elements
of
the Servicing Criteria other than those specified by the Company pursuant
to
Section 13.06.
Section
13.06 Use
of
Subservicers and Subcontractors.
The
Company shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Company as servicer under this Agreement
or any Reconstitution Agreement unless the Company complies with the provisions
of paragraph (i) of this Section 13.06. The Company 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 Company as servicer under this Agreement or any
Reconstitution Agreement unless the Company complies with the provisions
of
paragraph (ii) below of this Section 13.06.
(i) It
shall
not be necessary for the Company to seek the consent of the Initial Owner
or any
Depositor to the utilization of any Subservicer. The Company shall cause
any
Subservicer used by the Company (or by any Subservicer) for the benefit of
the
Initial Owner and any Depositor to comply with the provisions of this Section
and with Sections 13.02, 13.03(iii) and (v), 13.04, 13.05 and 13.07 to the
same
extent as if such Subservicer were the Company, and to provide the information
required with respect to such Subservicer under Section 13.03(iv) of this
Agreement. The Company shall be responsible for obtaining from each Subservicer
and delivering to the Initial Owner and any Depositor any servicer compliance
statement required to be delivered by such Subservicer under Section 13.04,
any
assessment of compliance and attestation required to be delivered by such
Subservicer under Section 13.05 and any certification required to be delivered
to the Person that will be responsible for signing the Sarbanes Certification
under Section 13.05 as and when required to be delivered.
(ii) It
shall
not be necessary for the Company to seek the consent of the Initial Owner
or any
Depositor to the utilization of any Subcontractor. The Company shall promptly
upon request provide to the Initial Owner and any Depositor (or any designee
of
the Depositor, such as a master servicer or administrator) a written description
(in form and substance reasonably satisfactory to the Initial Owner and such
Depositor) of the role and function of each Subcontractor utilized by the
Company or any Subservicer, specifying (a) the identity of each such
Subcontractor, (b) which (if any) of such Subcontractors are “participating in
the servicing function” within the meaning of Item 1122 of Regulation AB,
and (c) which elements of the Servicing Criteria will be addressed in
assessments of compliance provided by each Subcontractor identified pursuant
to
clause (b) of this paragraph.
-63-
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 Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Initial Owner and
any
Depositor to comply with the provisions of Section 13.05 and 13.07 to the
same
extent as if such Subcontractor were the Company. The Company shall be
responsible for obtaining from each Subcontractor and delivering to the Initial
Owner and any Depositor any assessment of compliance and attestation required
to
be delivered by such Subcontractor under Section 13.05, in each case as and
when
required to be delivered.
Section
13.07 Remedies.
(i) Any
failure by the Company, 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 Article XIII, or
any
breach by the Company of a representation or warranty set forth in Section
13.02(i) or in a writing furnished pursuant to Section 13.02(ii) 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 Company of a representation or warranty in a writing furnished pursuant
to
Section 13.02(ii) to the extent made as of a date subsequent to such closing
date, shall, except as provided in clause (ii) of this Section, immediately
and
automatically, without notice or grace period, constitute an Event of Default
with respect to the Company under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Initial Owner or Depositor,
as
applicable, in its sole discretion to terminate the rights and obligations
of
the Company 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 Company; 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
Company as servicer, such provision shall be given effect.
The
second occurrence of any failure by the Company, any Subservicer or any
Subcontractor fails to deliver any information, report, certification or
accountants’ letter when and as required under Section 13.04 or 13.05, including
any failure by the Company to identify pursuant to Section 13.06(ii) 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 Company under this Agreement and any applicable Reconstitution
Agreement; and shall entitle the Initial Owner or Depositor, as applicable,
in
its sole discretion to terminate the rights and obligations of the Company
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 Company; 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 Company as servicer, such provision shall be given
effect.
-64-
(ii) The
Company shall promptly reimburse the Initial Owner (or any designee of the
Initial Owner, such as a master servicer) and any Depositor, as applicable,
for
all reasonable expenses incurred by the Initial Owner (or such designee)
or such
Depositor as such are incurred, in connection with the termination of the
Company 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 Initial Owner 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.
Notwithstanding
anything to the contrary herein, the Company shall be under no obligation
to
provide information that the Initial Owner deems required under Regulation
AB if
(i) the Company does not believe that such information is required under
Regulation AB and (ii) the Company is not providing such information for
its own
securitizations unless the Initial Owner pays all reasonable costs incurred
by
the Company in connections with the preparation and delivery of such information
and the Company is given reasonable time to establish the necessary systems
and
procedures to produce such information.
Further,
notwithstanding anything to the contrary here, when determining if information
is required under Regulation AB, all threshold and other requirements shall
be
determined solely by looking at the Company's Mortgage Loans and those of
its
Third Party Originators. The Company shall have no obligation with respect
to
disclosure or Regulation AB in the event that the aggregation of its third-party
originated loans with those the Owner's or Depositor's other sellers require
additional disclosure with respect thereto.
(SIGNATURE
PAGE FOLLOWS)
-65-
IN
WITNESS WHEREOF, the Company and the Initial Owner have caused their names
to be
signed hereto by their respective officers thereunto duly authorized as of
the
day and year first above written.
GMAC
MORTGAGE CORPORATION,
Company
By:
Name:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Vice President
▇▇▇▇▇▇▇
SACHS MORTGAGE COMPANY,
Initial
Owner
By: ▇▇▇▇▇▇▇
▇▇▇▇▇ Real Estate Funding Corp.,
its
General Partner
By:
Name:
Title:
| COMMONWEALTH OF PENNSYLVANIA | ) | |
| ) | SS. | |
| COUNTY OF ▇▇▇▇▇▇▇▇▇▇ | ) |
On
the
___ day of June before me, a Notary Public in and for said Commonwealth,
personally appeared ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ known to me to be Vice President of
GMAC
Mortgage Corporation, that executed the within instrument and also known
to me
to be the person who executed it on behalf of said association, and acknowledged
to me that such association executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my official seal the
day
and year in this certificate first above written.
Notary
Public
My
Commission expires ________
| COMMONWEALTH OF | ) | |
| ) | SS. | |
| COUNTY OF | ) |
On
the
____ day of __________ before me, a Notary Public in and for said state,
personally appeared ________________ known to me to be a _____________ of
__________ ________________, the company that executed the within instrument
and
also known to me to be the person who executed it on behalf of said company,
and
acknowledged to me that such company executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my official seal the
day
and year in this certificate first above written.
Notary
Public
My
Commission expires ________
EXHIBIT
A-1
FORM
OF
TRADE CONFIRMATION
_____________
(the “Owner”) hereby confirms its agreement to purchase and GMAC Mortgage
Corporation (the “Company”) hereby confirms its agreement to sell and service,
certain adjustable and fixed rate first lien one-to-four family residential
mortgage loans pursuant to that certain Flow Sale and Servicing Agreement
(the
“Agreement”), dated as of ____________, 2006, between the Owner and the Company
All capitalized terms used herein without definition shall have the meanings
ascribed thereto in the Agreement.
The
Company shall deliver and the Servicer shall service mortgage loans as
follows:
|
(A)
|
Unpaid
Principal Balance:
$__________ (plus or minus [__]%).
|
|
(B)
|
Cut-off
Date:
[______ __, 200_].
|
|
(C)
|
Closing
Date:
[______ __, 200_].
|
|
(D)
|
Mortgage
Loan Document Delivery Date: On or prior to [______ __,
200_].
|
|
(E)
|
Purchase
Price Percentage: [______]%.
|
|
(F)
|
Gross
WAC
(Mortgage Interest Rate): [___]% (if on the Closing Date the Gross
WAC
does not equal such amount, the Purchase Price shall be adjusted
utilizing
the Gross WAC Buyup/Buydown Ratio set forth
below).
|
|
(G)
|
Index:
With respect to each adjustable rate Mortgage Loan, the index is
the
[________________].
|
|
(H)
|
Gross
WAC Buyup/Buydown Ratio: [____: 1].
|
|
(I)
|
Servicing
Fee Rate: %.
|
|
(J)
|
First
Remittance Date:
[___________ __, 200_]
|
|
(K)
|
[OTHER]:
|
The
mortgage loans that are the subject of this trade shall be delivered to the
Owner in accordance with the Agreement and an Acknowledgment and Conveyance
Agreement to be entered into between the parties on the Closing Date, as
contemplated by the Agreement. Except as otherwise set forth in this
confirmation, all of the terms and conditions of the Agreement and the Purchase
Price and Terms Letter, dated as of ___________2006, between the Owner, the
Company and the Servicer, shall apply to the transaction contemplated
hereby.
A-1-1
This
Trade Confirmation may be executed simultaneously in any number of counterparts.
Each counterpart shall be deemed an original, and all such counterparts shall
constitute one and the same instrument.
Very
truly yours,
_____________,
as Owner
By:
Name:
Title:
Agreed
and accepted on
_________
__, 200_.
GMAC
MORTGAGE CORPORATION
as
Company
By:
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇
▇-▇
FORM
OF
ACKNOWLEDGMENT AND CONVEYANCE AGREEMENT
This
is
an Acknowledgment and Conveyance Agreement delivered pursuant to that certain
Flow Sale and Servicing Agreement (the “Agreement”), dated as of ____________,
2006, between _____________ (the “Owner”), and GMAC Mortgage Corporation (the
“Company”). All capitalized terms used herein without definition shall have the
meanings ascribed thereto in the Agreement.
The
Owner
and the Company hereby confirm that they have reached agreement on the purchase,
sale and servicing of the Mortgage Loans described on the Mortgage Loan Schedule
attached as Annex 1
hereto
on the terms and conditions set forth in the Agreement (which terms and
conditions are incorporated herein by this reference) and [the Purchase Price
and Terms Letter] [Trade Confirmation, dated as of ___________ __, 200_ between
the parties hereto (the “Trade Confirmation”)].
Accordingly,
on this [___ day of _________, 200_], the Company does hereby sell, transfer,
assign, set over and convey to the Owner all right, title and interest of
the
Company in and to the Mortgage Loans listed on the Mortgage Loan Schedule
attached as Annex 1
hereto,
including all interest and principal received by the Company on or with respect
to the Mortgage Loans after the related Cut-off Date (other than payments
of
principal and interest due on the Mortgage Loans on or before the related
Cut-off Date, whether or not received), together with all of the Company’s
right, title and interest in and to each Custodial Account and all amounts
from
time to time credited to and the proceeds of such Custodial Account, all
amounts
from time to time credited to and the proceeds of any Escrow Account, any
Liquidation Proceeds or Condemnation Proceeds, any REO Property and the proceeds
thereof, the Company’s rights under any insurance policies related to the
Mortgage Loans, any Insurance Proceeds, the Company’s security interest in any
collateral pledged to secure the Mortgage Loans, including the Mortgaged
Properties, and any proceeds of the foregoing. Pursuant to Section 2.03 of
the Agreement, the Company has delivered to the Custodian the documents for
each
Mortgage Loan to be purchased as set forth in the Agreement. The ownership
of
each Mortgage Note, Mortgage, and the contents of each Mortgage File is vested
in the Owner 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
Company shall immediately vest in the Owner.
By
its
execution and delivery of this Acknowledgment and Conveyance Agreement, the
Company represent and warrant to the Owner that each of the representations
and
warranties contained in Sections 3.01 and 3.02 of the Agreement is true and
correct as of the date hereof with respect to the Company and each of the
Mortgage Loans listed on the Mortgage Loan Schedule attached as Annex 1
hereto.
Please
indicate your agreement with the terms set forth in this Acknowledgment and
Conveyance Agreement by countersigning a copy of this letter and returning
it to
the undersigned by telecopy.
A-2-1
This
Acknowledgment and Conveyance Agreement may be executed simultaneously in
any
number of counterparts. Each counterpart shall be deemed an original, and
all
such counterparts shall constitute one and the same instrument.
GMAC
MORTGAGE CORPORATION, as
Company
By:
Name:
Title:
_____________________________________,
as
Owner
By:
Name:
Title:
A-2-2
Annex 1
to
Acknowledgment
and Conveyance Agreement
MORTGAGE
LOAN SCHEDULE
[Each
Mortgage Loan Schedule shall provide the information required by the Agreement
and the Purchase Price and Terms Agreement with respect to each Mortgage
Loan as
of the related Cut-off Date]
A-2-3
EXHIBIT
B
CONTENTS
OF MORTGAGE FILES
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items (except the items delivered to the Custodian pursuant to
Section 2.03), all of which shall be available for inspection by the Owner
and which may be retained in microfilm, microfiche, optical storage or magnetic
media in lieu of hard copy:
|
1.
|
The
original Mortgage Note endorsed, “Pay to the order of __________________,
without recourse” and signed in the name of the Company by an authorized
officer. Such signature may be an original signature or a facsimile
signature of such officer. If the Mortgage Loan was acquired by
the
Company in a merger, the endorsement must be by “GMAC Mortgage
Corporation, successor by merger to [name of predecessor]”; and if the
Mortgage Loan was acquired or originated by the Company while doing
business under another name, the endorsement must be by “GMAC Mortgage
Corporation, formerly known as [previous name]”. The Mortgage Note shall
include all intervening endorsements showing a complete chain of
title
from the originator to the Company.
|
|
2.
|
The
original Mortgage, or a copy of the Mortgage with evidence of recording
thereon certified by the appropriate recording office to be a true
copy of
the recorded Mortgage, or, if the original Mortgage has not yet
been
returned from the recording office, a copy of the original Mortgage
together with a certificate of a duly authorized representative
of the
Company (which certificate may consist of stamped text appearing
on such
copy of the Mortgage), the closing attorney or an officer of the
title
insurer which issued the related title insurance policy, certifying
that
the copy is a true copy of the original of the Mortgage which has
been
transmitted for recording in the appropriate recording office of
the
jurisdiction in which the Mortgaged Property is
located.
|
|
3.
|
The
original Assignment of Mortgage, executed in blank, but otherwise
in form
and substance acceptable for recording; provided,
however,
that certain recording information will not be available if, as
of the
Closing Date, the Company has not received the related Mortgage
from the
appropriate recording office. If the Mortgage Loan was acquired
by the
Company in a merger, the assignment must be by “GMAC Mortgage Corporation,
successor by merger to [name of predecessor]”; and if the Mortgage Loan
was acquired or originated by the Company while doing business
under
another name, the assignment must be by “GMAC Mortgage Corporation,
formerly known as [previous name]”.
|
|
4.
|
The
original policy of title insurance or, if such insurance is in
force but
the original policy of title insurance has not been delivered to
the
Company by the issuing title insurer, the report of title insurance
or
other evidence of title insurance generally acceptable to ▇▇▇▇▇▇
▇▇▇ or
▇▇▇▇▇▇▇ Mac or, if the Mortgage Loan is the subject of a ▇▇▇▇▇▇
Mae or
▇▇▇▇▇▇▇ Mac approved master title insurance policy, a certified
copy of
the certificate of title insurance issued
thereunder.
|
B-1
|
5.
|
Originals
or certified true copies from the appropriate recording offices
of all
assumption and modification agreements, if any or if the original
has not
yet been returned from the recording office, a copy of such original
certified by the Company.
|
|
6.
|
Originals,
or certified true copies from the appropriate recording offices,
of any
intervening assignments of the Mortgage with evidence of recording
thereon, or, if the original intervening assignment has not yet
been
returned from the recording office, a certified copy of such
assignment.
|
|
7.
|
Original
hazard insurance policy or a binder evidencing such coverage and,
if
required by law, flood insurance policy, with extended coverage
of the
hazard insurance policy, unless the Mortgage Loan is the subject
of a
blanket mortgage impairment insurance policy meeting the requirements
of
Section 4.11 of the Agreement.
|
|
8.
|
Mortgage
Loan closing statement (Form HUD-1 or
HUD-1A).
|
|
9.
|
Residential
loan application.
|
|
10.
|
Credit
report on the Mortgagor.
|
|
11.
|
Residential
appraisal report, if applicable.
|
|
12.
|
Photograph
of the property, if applicable.
|
|
13.
|
Income
and asset verification, if
applicable.
|
|
14.
|
Other
disclosures required in connection with the origination of the
Mortgage
Loan, as applicable.
|
B-2
EXHIBIT
C
FORM
OF
CUSTODIAL AGREEMENT
C-1
EXHIBIT
D
FORM
OF
ESCROW ACCOUNT LETTER AGREEMENT
D-1
EXHIBIT
E
FORM
OF
CUSTODIAL ACCOUNT LETTER AGREEMENT
E-1
EXHIBIT
F
FORM
OF
MONTHLY REMITTANCE STATEMENT
F-1
EXHIBIT
G
FORM
OF
ANNUAL CERTIFICATION
|
Re:
|
The
Second Amended and Restated Flow Sale and Servicing Agreement dated
as of
March 1, 2006 (the “Agreement”), among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Co. and GMAC
Mortgage Co.
|
I,
________________________________, the _______________________ of GMAC Mortgage
Co., certify to ▇▇▇▇▇▇▇ Sachs Mortgage Co., [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 2006 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; and
5. The
Compliance Statement required to be delivered by the Company pursuant to
this
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Company and by each 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
[Depositor] [Master Servicer]. Any material instance of noncompliance with
the
Servicing Criteria has been disclosed in such reports.
G-1
Date:
By:
Name:
Title:
G-2
EXHIBIT
H
UNDERWRITING
GUIDELINES
H-1
EXHIBIT
I
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by GMAC Mortgage Co. [Name of
Subservicer] shall address, at a minimum, the criteria identified as below
as
“Applicable Servicing Criteria”:
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
General
Servicing Considerations
|
||
|
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.
|
|
|
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.
|
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
|
|
|
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.
|
|
|
Cash
Collection and Administration
|
||
|
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.
|
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
|
|
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.
|
I-1
|
Servicing
Criteria
|
Applicable
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.
|
|
|
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.
|
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized
access.
|
|
|
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.
|
|
|
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.
|
I-2
|
Servicing
Criteria
|
Applicable
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.
|
I-3
|
Servicing
Criteria
|
Applicable
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.
|
I-4
|
Servicing
Criteria
|
Applicable
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.
|
[NAME
OF
COMPANY] [NAME OF SUBSERVICER]
Date:
By:
Name:
Title
I-5
EXHIBIT
J
FORM
OF
INDEMNIFICATION AGREEMENT
[Transaction/Series]
[____________],
2006
Reference
is made to the Prospectus Supplement (the “Prospectus Supplement”), dated
[__________],
2006,
relating to [Transaction / Series] (the “Certificates”) and the Free Writing
Prospectus[es], dated [ ] and [ ], related to the Certificates.
GMAC
Mortgage Corporation (“GMACM”), as a servicer and originator, hereby agrees to
indemnify and hold harmless ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and its affiliates (the
“Company”), their respective officers and directors and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
of
1933, as amended (the “Act”), or Section 20 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), from and against any and all losses,
claims, expenses, damages or liabilities to which the Company, their respective
officers or directors and any such controlling person may become subject
under
the Act or otherwise, as and when such losses, claims, expenses, damages
or
liabilities are incurred, insofar as such losses, claims, expenses, damages
or
liabilities (or actions in respect thereof) arise out of or are based upon
(i)
any untrue statement of material fact regarding any mortgage loan sold by
GMACM
to the Company actually provided by GMACM to the Company or its affiliates,
or
(ii) any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement or the Free Writing Prospectus[es],
or
arise out of, or are based upon, the omission or alleged omission to state
therein any material fact required to be stated therein or necessary to make
the
statements therein, in light of the circumstances under which they were made,
not misleading, and will reimburse the Company, their respective officers
and
directors and any such controlling person for any legal or other expenses
reasonably incurred by it or any of them in connection with defending any
such
loss, claim, expense, damage, liability or action, as and when incurred;
provided,
however,
that,
with respect to this clause (ii), GMACM shall be liable only insofar as such
untrue statement or alleged untrue statement or omission or alleged omission
relates solely to (a) the Prospectus Supplement Information (as defined below)
and (b) information about GMACM that is required to be delivered by GMACM
to the Company or its affiliates pursuant to the Mortgage Loan Purchase
Agreement, dated March 1, 2006, between GMACM and the Company and is information
about GMACM that is required to be in the Prospectus Supplement pursuant
to
Regulation AB (as defined in the Agreement) (collectively, with clauses (a),
the
GMACM Information). For purposes of this Indemnification Agreement, the Company
and GMACM acknowledge and agree that “Prospectus Supplement Information” shall
mean the statements set forth under the heading [“The Servicers—GMAC Mortgage
Corporation”] in the Prospectus Supplement (including any Static Pool
information incorporated therein by reference) actually provided by GMACM
to the
Company or its affiliates. GMACM hereby represents and warrants, as of the
date
of the Prospectus Supplement and the date hereof, that the Prospectus Supplement
Information and the Raw Data is true and correct in all material
respects.
J-1
The
Company agrees to indemnify and hold harmless GMACM, their respective officers
and directors and each person, if any, who controls the GMACM within the
meaning
of Section 15 Ac, or Section 20 of the Exchange Act from and against any
and all
losses, claims, expenses, damages or liabilities to which the GMACM, their
respective officers or directors and any such controlling person may become
subject under the Act or otherwise, as and when such losses, claims, expenses,
damages or liabilities are incurred, insofar as such losses, claims, expenses,
damages or liabilities (or actions in respect thereof) arise out of or are
based
upon any losses, claims, damages, liabilities or expenses (including the
reasonable cost of investigating and defending against any claims therefore
and
reasonable counsel fees incurred in connection therewith, except as otherwise
provided herein), on the ground or alleged ground that the Depositor Information
contained an untrue statement or alleged untrue statement of any material
fact
contained in the Prospectus Supplement, or arise out of, or are based upon,
the
omission or alleged omission to state therein any material fact required
to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and will reimburse
GMACM, their respective officers and directors and any such controlling person
for any legal or other expenses reasonably incurred by it or any of them
in
connection with defending any such loss, claim, expense, damage, liability
or
action, as and when incurred. The information in the Prospectus Supplement,
other than the GMACM Information, is referred to herein as the “Depositor
Information.”
Promptly
after receipt by an indemnified party hereunder of notice of the commencement
of
any action, such indemnified party will, if a claim in respect thereof is
to be
made against the indemnifying party hereunder, notify the indemnifying party
of
the commencement thereof; but the omission so to notify the indemnifying
party
will not relieve it from any liability that such indemnifying party may have
to
any indemnified party under this Agreement except to the extent that such
indemnifying party has been materially prejudiced by such failure; provided,
however, that the failure to so notify the indemnifying party shall not relieve
it from any liability that such indemnifying party may have to any indemnified
party otherwise than under this Agreement. 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 such indemnifying party may wish, to assume
(at
its own expense) the defense thereof, with counsel satisfactory to such
indemnified party (which counsel may be counsel to the indemnifying party),
and,
after notice from the indemnifying party to such indemnified party hereunder,
such indemnifying party shall not be liable for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnifying party shall have agreed in writing to
the
continuing participation of such counsel or (ii) the named parties to any
such
proceeding (including any impleaded parties) include both the indemnifying
party
and the indemnified party and representation of both parties by the same
counsel
would, in the opinion of such counsel, be inappropriate due to the actual
or
potential differing interests between them. If the indemnifying party assumes
the defense of any proceeding, it shall be entitled to settle such proceeding
with the consent of the indemnified party, which will not be unreasonably
withheld or delayed or, if such settlement provides for release of the
indemnified party in connection with all matters relating to the proceeding
which have been asserted against the indemnified party in such proceeding
by the
other parties to such settlement, without the consent of the indemnified
party.
J-2
If
recovery is not available under the foregoing indemnification provisions
for any
reason other than as specified therein, each indemnified party shall be entitled
to contribution to liabilities and expenses, except to the extent that
contribution is not permitted under Section 11(f) of the Act. In determining
the
amount of such contribution, there shall be considered the parties' relative
knowledge and access to information concerning the matter with respect to
which
the claim was asserted, the opportunity to correct and prevent any misstatement
or omission, the relative fault of the parties, and any other equitable
considerations appropriate under the circumstances.
The
agreements, indemnities and representations of the parties thereto contained
herein or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof,
made by
or on behalf of any parties hereto or any of the controlling persons referred
to
herein, and will survive the sale of the Certificates.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New York, without regard to conflict of laws principles applied
in
such state. This Agreement shall inure to the benefit of and be binding upon
the
parties hereto and their successors and assignees 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
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.
J-3
Executed
as of the day and year first above written.
GMAC
MORTGAGE CORPORATION
By:
Name:
Title:
▇▇▇▇▇▇▇,
SACHS & CO.
By:
Name:
Title:
J-4