NAME OF SERVICER], as Servicer _____ TRUST SERIES ____-__, as Issuing Entity and [NAME OF INDENTURE TRUSTEE] as Indenture Trustee SERVICING AGREEMENT Dated as of ________ 1, ___
EXHIBIT
4.3
[NAME
OF
SERVICER],
as
Servicer
_____
TRUST SERIES ____-__,
as
Issuing Entity
and
[NAME
OF
INDENTURE TRUSTEE]
as
Indenture Trustee
__________________________
Dated
as
of ________ 1, ___
__________________________
TABLE
OF
CONTENTS
Page
|
ARTICLE
I
|
||
|
DEFINITIONS
|
||
|
Section
1.01
|
Definitions
|
1
|
|
Section
1.02
|
Other
Definitional Provisions
|
1
|
|
Section
1.03
|
Interest
Calculations
|
2
|
|
ARTICLE
II
|
||
|
REPRESENTATIONS
AND WARRANTIES
|
||
|
Section
2.01
|
Representations
and Warranties Regarding the Servicer
|
2
|
|
Section
2.02
|
Representations
and Warranties of the Issuing Entity
|
3
|
|
Section
2.03
|
Enforcement
of Representations and Warranties
|
4
|
|
ARTICLE
III
|
||
|
ADMINISTRATION
AND SERVICING OF LOANS
|
||
|
Section
3.01
|
The
Servicer
|
5
|
|
Section
3.02
|
Collection
of Certain Loan Payments
|
7
|
|
Section
3.03
|
Withdrawals
From the Custodial Account
|
9
|
|
Section
3.04
|
Maintenance
of Hazard Insurance; Property Protection Expenses
|
10
|
|
Section
3.05
|
Modification
Agreements
|
11
|
|
Section
3.06
|
Trust
Estate; Related Documents
|
11
|
|
Section
3.07
|
Realization
Upon Defaulted Loans; Loss Mitigation
|
12
|
|
Section
3.08
|
Issuing
Entity and Indenture Trustee to Cooperate
|
14
|
|
Section
3.09
|
Servicing
Compensation; Payment of Certain Expenses by Servicer
|
15
|
|
Section
3.10
|
Annual
Statement as to Compliance
|
15
|
|
Section
3.11
|
Annual
Servicing Report
|
16
|
|
Section
3.12
|
Access
to Certain Documentation and Information Regarding the
Loans
|
18
|
|
Section
3.13
|
Maintenance
of Certain Servicing Insurance Policies
|
18
|
|
Section
3.14
|
Information
Required by the Internal Revenue Service and Reports of Foreclosures
and
Abandonments of Mortgaged Property
|
18
|
|
Section
3.15
|
Optional
Purchase of Loans by Servicer
|
18
|
|
ARTICLE
IV
|
||
|
SERVICING
CERTIFICATE
|
||
|
Section
4.01
|
Statements
to Securityholders
|
19
|
|
Section
4.02
|
Tax
Reporting
|
23
|
i
|
ARTICLE
V
|
||
|
PAYMENT
ACCOUNT
|
||
|
Section
5.01
|
Payment
Account
|
23
|
|
ARTICLE
VI
|
||
|
THE
SERVICER
|
||
|
Section
6.01
|
Liability
of the Servicer
|
24
|
|
Section
6.02
|
Merger
or Consolidation of, or Assumption of the Obligations of, the
Servicer
|
24
|
|
Section
6.03
|
Limitation
on Liability of the Servicer and Others
|
24
|
|
Section
6.04
|
Servicer
Not to Resign
|
25
|
|
Section
6.05
|
Delegation
of Duties
|
25
|
|
ARTICLE
VII
|
||
|
DEFAULT
|
||
|
Section
7.01
|
Servicing
Default
|
26
|
|
Section
7.02
|
Indenture
Trustee to Act; Appointment of Successor
|
27
|
|
Section
7.03
|
Notification
to Securityholders
|
29
|
|
ARTICLE
VIII
|
||
|
MISCELLANEOUS
PROVISIONS
|
||
|
Section
8.01
|
Amendment
|
29
|
|
Section
8.02
|
Governing
Law
|
29
|
|
Section
8.03
|
Notices
|
29
|
|
Section
8.04
|
Severability
of Provisions
|
30
|
|
Section
8.05
|
Third-Party
Beneficiaries
|
30
|
|
Section
8.06
|
Counterparts
|
30
|
|
Section
8.07
|
Effect
of Headings and Table of Contents
|
30
|
|
Section
8.08
|
Termination
Upon Purchase by the Servicer or Liquidation of All Loans; Partial
Redemption
|
30
|
|
Section
8.09
|
Certain
Matters Affecting the Indenture Trustee
|
31
|
|
Section
8.10
|
Owner
Trustee Not Liable for Related Documents
|
31
|
|
EXHIBIT
A - LOAN SCHEDULE
|
A-1
|
|
EXHIBIT
B - POWER OF ATTORNEY
|
B-1
|
|
EXHIBIT
C - FORM OF REQUEST FOR RELEASE
|
C-1
|
|
EXHIBIT
D - CERTIFICATE PURSUANT TO SECTION 3.08
|
D-1
|
|
EXHIBIT
E - SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF
COMPLIANCE
|
E-1
|
ii
This
is a
Servicing Agreement, dated as of _________ 1, ____, among [Name of Servicer]
(the “Servicer”), the _____ Trust Series ____-__ (the “Issuing Entity”) and
[Name of Indenture Trustee] (the “Indenture Trustee”).
WITNESSETH
THAT:
WHEREAS,
pursuant to the terms of the Loan Purchase Agreement, [Name of Sponsor] (in
its
capacity as Sponsor) will sell to the Depositor the Loans together with the
Related Documents on the Closing Date;
WHEREAS,
the Depositor will sell the Loans and all of its rights under the Loan Purchase
Agreement to the Issuing Entity, together with the Related Documents on the
Closing Date;
WHEREAS,
pursuant to the terms of the Trust Agreement, the Issuing Entity will issue
and
transfer to or at the direction of the Depositor, the Certificates;
WHEREAS,
pursuant to the terms of the Indenture, the Issuing Entity will issue and
transfer to or at the direction of the Depositor, the Notes; and
WHEREAS,
pursuant to the terms of this Servicing Agreement, the Servicer will service
the
Loans directly or through one or more Subservicers;
NOW,
THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Definitions.
For all
purposes of this Servicing Agreement, except as otherwise expressly provided
herein or unless the context otherwise requires, capitalized terms not otherwise
defined herein shall have the meanings assigned to such terms in the Definitions
contained in Appendix A to the Indenture dated as of _______________ (the
“Indenture”), between ______ Trust Series ____-__, as issuing entity, and [Name
of Indenture Trustee], as indenture trustee, which is incorporated by reference
herein. All other capitalized terms used herein shall have the meanings
specified herein.
Section
1.02 Other
Definitional Provisions.
i)
All
terms defined in this Servicing Agreement shall have the defined meanings
when
used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(b) As
used
in this Servicing Agreement and in any certificate or other document made
or
delivered pursuant hereto or thereto, accounting terms not defined in this
Servicing Agreement or in any such certificate or other document, and accounting
terms partly defined in this Servicing Agreement or in any such certificate
or
other document, to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent
that
the definitions of accounting terms in this Servicing Agreement or in any
such
certificate or other document are inconsistent with the meanings of such
terms
under generally accepted accounting principles, the definitions contained
in
this Servicing Agreement or in any such certificate or other document shall
control.
(c) The
words
“hereof,” “herein,” “hereunder” and words of similar import when used in this
Servicing Agreement shall refer to this Servicing Agreement as a whole and
not
to any particular provision of this Servicing Agreement; Section and Exhibit
references contained in this Servicing Agreement are references to Sections
and
Exhibits in or to this Servicing Agreement unless otherwise specified; and
the
term “including” shall mean “including without limitation”.
(d) The
definitions contained in this Servicing Agreement are applicable to the singular
as well as the plural forms of such terms and to the masculine as well as
the
feminine and neuter genders of such terms.
(e) Any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented
and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a
Person
are also to its permitted successors and assigns.
Section
1.03 Interest
Calculations.
All
calculations of interest hereunder that are made in respect of the Stated
Principal Balance of a Loan shall be made in accordance with the Mortgage
Note.
All calculations of interest on the Securities (other than the Class A, M-2
and
B-1 Notes) shall be made on the basis of a 30-day month and a year assumed
to
consist of 360 days. Calculation of interest on the Class A, M-2 and B-1
Notes
shall be made on the basis of the actual number of days in the Accrual Period
and a year assumed to consist of 360 days. The calculation of the Servicing
Fee
shall be made on the basis of a 30-day month and a year assumed to consist
of
360 days. All dollar amounts calculated hereunder shall be rounded to the
nearest ▇▇▇▇▇ with one-half of one ▇▇▇▇▇ being rounded up.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
Section
2.01 Representations
and Warranties Regarding the Servicer.
The
Servicer represents and warrants to the Issuing Entity and for the benefit
of
the Indenture Trustee, as pledgee of the Loans, as of the Cut-off
Date:
(i)
The
Servicer is a limited partnership duly organized, validly existing and in
good
standing under the laws of the State of _____________ and has the corporate
power to own its assets and to transact the business in which it is currently
engaged. The Servicer is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires such
qualification and in which the failure to so qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or
other) of the Servicer;
2
(ii)
The
Servicer has the power and authority to make, execute, deliver and perform
this
Servicing Agreement and all of the transactions contemplated under this
Servicing Agreement, and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Servicing Agreement. When
executed and delivered, this Servicing Agreement will constitute the legal,
valid and binding obligation of the Servicer enforceable in accordance with
its
terms, except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights
generally and by the availability of equitable remedies;
(iii)
The
Servicer is not required to obtain the consent of any other Person or any
consent, license, approval or authorization from, or registration or declaration
with, any governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this Servicing
Agreement, except for such consent, license, approval or authorization, or
registration or declaration, as shall have been obtained or filed, as the
case
may be;
(iv)
The
execution and delivery of this Servicing Agreement and the performance of
the
transactions contemplated hereby by the Servicer will not violate any provision
of any existing law or regulation or any order or decree of any court applicable
to the Servicer or any provision of the Certificate of Incorporation of the
Servicer, or constitute a material breach of any mortgage, indenture, contract
or other agreement to which the Servicer is a party or by which the Servicer
may
be bound; and
(v)
No
litigation or administrative proceeding of or before any court, tribunal
or
governmental body is currently pending, or to the knowledge of the Servicer
threatened, against the Servicer or any of its properties or with respect
to
this Servicing Agreement or the Securities which in the opinion of the Servicer
has a reasonable likelihood of resulting in a material adverse effect on
the
transactions contemplated by this Servicing Agreement.
The
foregoing representations and warranties shall survive any termination of
the
Servicer hereunder.
Section
2.02 Representations
and Warranties of the Issuing Entity.
The
Issuing Entity hereby represents and warrants to the Servicer and for the
benefit of the Indenture Trustee, as pledgee of the Loans, as of the Cut-off
Date:
(i)
The
Issuing Entity is a business trust duly formed and in good standing under
the
laws of the State of Delaware and has full power, authority and legal right
to
execute and deliver this Servicing Agreement and to perform its obligations
under this Servicing Agreement, and has taken all necessary action to authorize
the execution, delivery and performance by it of this Servicing Agreement;
and
(ii)
The
execution and delivery by the Issuing Entity of this Servicing Agreement
and the
performance by the Issuing Entity of its obligations under this Servicing
Agreement will not violate any provision of any law or regulation governing
the
Issuing Entity or any order, writ, judgment or decree of any court, arbitrator
or governmental authority or agency applicable to the Issuing Entity or any
of
its assets. Such execution, delivery, authentication and performance will
not
conflict with, or result in a breach or violation of, any mortgage, deed
of
trust, lease or other agreement or instrument to which the Issuing Entity
is
bound.
3
Section
2.03 Enforcement
of Representations and Warranties.
The
Servicer, on behalf of and subject to the direction of the Indenture Trustee,
as
pledgee of the Loans, or the Issuing Entity, shall enforce the representations
and warranties of the Sponsor pursuant to the Loan Purchase Agreement. Upon
the
discovery by the Sponsor, the Depositor, the Servicer, the Indenture Trustee,
the Issuing Entity, or any Custodian of a breach of any of the representations
and warranties made in the Loan Purchase Agreement, in respect of any Loan
which
materially and adversely affects the interests of the Securityholders, the
party
discovering such breach or existence shall give prompt written notice to
the
other parties. The Servicer shall promptly notify the Sponsor of such breach
and
request that, pursuant to the terms of the Loan Purchase Agreement, the Sponsor
either (i) cure such breach in all material respects within 90 days from
the
date the Sponsor was notified of such breach or (ii) purchase such Loan from
the
Issuing Entity at the price and in the manner set forth in Section 4 of the
Loan
Purchase Agreement; provided that the Sponsor shall, subject to compliance
with
all the conditions set forth in the Loan Purchase Agreement, have the option
to
substitute an Eligible Substitute Loan or Loans for such Loan. In the event
that
the Sponsor elects to substitute one or more Eligible Substitute Loans pursuant
to Section 4 of the Loan Purchase Agreement, the Sponsor shall deliver to
the
Issuing Entity with respect to such Eligible Substitute Loans, the original
Mortgage Note, the Mortgage, and such other documents and agreements as are
required by the Loan Purchase Agreement. Payments due with respect to Eligible
Substitute Loans in the month of substitution shall not be transferred to
the
Issuing Entity and will be retained by the Servicer and remitted by the Servicer
to the Sponsor on the next succeeding Payment Date provided a payment at
least
equal to the applicable Monthly Payment has been received by the Issuing
Entity
for such month in respect of the Loan to be removed. The Servicer shall amend
or
cause to be amended the Loan Schedule to reflect the removal of such Loan
and
the substitution of the Eligible Substitute Loans and the Servicer shall
promptly deliver the amended Loan Schedule to the Owner Trustee and the
Indenture Trustee.
It
is
understood and agreed that the obligation of the Sponsor to cure such breach
or
purchase or substitute for such Loan as to which such a breach has occurred
and
is continuing shall constitute the sole remedy respecting such breach available
to the Issuing Entity and the Indenture Trustee, as pledgee of the Loans,
against the Sponsor. In connection with the purchase of or substitution for
any
such Loan by the Sponsor, the Issuing Entity shall assign to the Sponsor
all of
its right, title and interest in respect of the Loan Purchase Agreement
applicable to such Loan. Upon receipt of the Repurchase Price, or upon
completion of such substitution, the Servicer shall notify the Custodian
and
then the Custodian shall deliver the Mortgage Files to the Servicer, together
with all relevant endorsements and assignments prepared by the Servicer which
the Indenture Trustee shall execute.
4
ARTICLE
III
ADMINISTRATION
AND SERVICING OF LOANS
Section
3.01 The
Servicer.
(a)
The
Servicer shall service and administer the Loans in accordance with the terms
of
this Servicing Agreement, following such procedures as it would employ in
its
good faith business judgment and which are normal and usual in its general
mortgage servicing activities, and shall have full power and authority, acting
alone or through a subservicer, to do any and all things in connection with
such
servicing and administration which it may deem necessary or desirable, it
being
understood, however, that the Servicer shall at all times remain responsible
to
the Issuing Entity and the Indenture Trustee for the performance of its duties
and obligations hereunder in accordance with the terms hereof. Without limiting
the generality of the foregoing, the Servicer shall continue, and is hereby
authorized and empowered by the Issuing Entity and the Indenture Trustee,
as
pledgee of the Loans, to execute and deliver, on behalf of itself, the Issuing
Entity, the Indenture Trustee or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge,
or of
consent to modification in connection with a proposed conveyance, or of
assignment of any Mortgage and Mortgage Note in connection with the repurchase
of a Loan and all other comparable instruments with respect to the Loans
and
with respect to the Mortgaged Properties, or with respect to the modification
or
re-recording of a Mortgage for the purpose of correcting the Mortgage, the
subordination of the lien of the Mortgage in favor of a public utility company
or government agency or unit with powers of eminent domain, the taking of
a deed
in lieu of foreclosure, the commencement, prosecution or completion of judicial
or non-judicial foreclosure, the acquisition of any property acquired by
foreclosure or deed in lieu of foreclosure, or the management, marketing
and
conveyance of any property acquired by foreclosure or deed in lieu of
foreclosure. The Issuing Entity, the Indenture Trustee and the Custodian,
as
applicable, shall furnish the Servicer with any powers of attorney and other
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. On the Closing Date, the
Indenture Trustee shall deliver to the Servicer a limited power of attorney
substantially in the form of Exhibit B hereto.
If
the
Mortgage relating to a Loan did not have a lien senior to the Loan on the
related Mortgaged Property as of the Cut-off Date, then the Servicer, in
such
capacity, may not consent to the placing of a lien senior to that of the
Mortgage on the related Mortgaged Property. If the Mortgage relating to a
Loan
had a lien senior to the Loan on the related Mortgaged Property as of the
Cut-off Date, then the Servicer, in such capacity, may consent to the
refinancing of the prior senior lien, provided that the following requirements
are met:
(i)
(A)
the
Mortgagor’s debt-to-income ratio resulting from such refinancing is less than
the original debt-to-income ratio as set forth on the Mortgage Loan Schedule;
or
(B) the
resulting Combined Loan-to-Value Ratio of such Loan is no higher than the
Combined Loan-to-Value Ratio prior to such refinancing; provided, however,
if
such refinanced mortgage loan is a “rate and term” mortgage loan (meaning, the
Mortgagor does not receive any cash from the refinancing), the Combined
Loan-to-Value Ratio may increase to the extent of the reasonable closing
costs
of such refinancing;
5
(ii)
the
interest rate, or, in the case of an adjustable rate existing senior lien,
the
maximum interest rate, for the loan evidencing the refinanced senior lien
is no
more than 2.0% higher than the interest rate or the maximum interest rate,
as
the case may be, on the loan evidencing the existing senior lien immediately
prior to the date of such refinancing; provided, however (a) if the loan
evidencing the existing senior lien prior to the date of refinancing has
an
adjustable rate and the loan evidencing the refinanced senior lien has a
fixed
rate, then the current interest rate on the loan evidencing the refinanced
senior lien may be up to 2.0% higher than the then-current loan rate of the
loan
evidencing the existing senior lien and (b) if the loan evidencing the existing
senior lien prior to the date of refinancing has a fixed rate and the loan
evidencing the refinanced senior lien has an adjustable rate, then the maximum
interest rate on the loan evidencing the refinanced senior lien shall be
less
than or equal to (x) the interest rate on the loan evidencing the existing
senior lien prior to the date of refinancing plus (y) 2.0%; and
(iii)
the
loan
evidencing the refinanced senior lien is not subject to negative
amortization.
The
relationship of the Servicer (and of any successor to the Servicer as servicer
under this Servicing Agreement) to the Issuing Entity under this Servicing
Agreement is intended by the parties to be that of an independent contractor
and
not that of a joint venturer, partner or agent.
(b) The
Servicer may continue in effect Subservicing Agreements entered into by the
Sponsor and Subservicers prior to the execution and delivery of this Agreement,
and may enter into Subservicing Agreements with Subservicers for the servicing
and administration of certain of the Loans. Each Subservicer of a Loan shall
be
entitled to receive and retain, as provided in the related Subservicing
Agreement and in Section 3.02, the related Subservicing Fee from payments
of
interest received on such Loan after payment of all amounts required to be
remitted to the Servicer in respect of such Loan. For any Loan not subject
to a
Subservicing Agreement, the Servicer shall be entitled to receive and retain
an
amount equal to the Subservicing Fee from payments of interest. References
in
this Servicing Agreement to actions taken or to be taken by the Servicer
in
servicing the Loans include actions taken or to be taken by a Subservicer
on
behalf of the Servicer. Each Subservicing Agreement will be upon such terms
and
conditions as are not inconsistent with this Servicing Agreement and as the
Servicer and the Subservicer have agreed. With the approval of the Servicer,
a
Subservicer may delegate its servicing obligations to third-party servicers,
but
such Subservicers will remain obligated under the related Subservicing
Agreements. The Servicer and the Subservicer may enter into amendments to
the
related Subservicing Agreements; provided, however, that any such amendments
shall not cause the Loans to be serviced in a manner that would be materially
inconsistent with the standards set forth in this Servicing Agreement. The
Servicer shall be entitled to terminate any Subservicing Agreement in accordance
with the terms and conditions thereof and without any limitation by virtue
of
this Servicing Agreement; provided, however, that in the event of termination
of
any Subservicing Agreement by the Servicer or the Subservicer, the Servicer
shall either act as servicer of the related Loan or enter into a Subservicing
Agreement with a successor Subservicer which will be bound by the terms of
the
related Subservicing Agreement. The Servicer shall be entitled to enter into
any
agreement with a Subservicer for indemnification of the Servicer and nothing
contained in this Servicing Agreement shall be deemed to limit or modify
such
indemnification.
6
In
the
event that the rights, duties and obligations of the Servicer are terminated
hereunder, any successor to the Servicer in its sole discretion may, to the
extent permitted by applicable law, terminate the existing Subservicing
Agreement with any Subservicer in accordance with the terms of the applicable
Subservicing Agreement or assume the terminated Servicer’s rights and
obligations under such subservicing arrangements which termination or assumption
will not violate the terms of such arrangements.
As
part
of its servicing activities hereunder, the Servicer, for the benefit of the
Securityholders, shall use reasonable efforts to enforce the obligations
of each
Subservicer under the related Subservicing Agreement, to the extent that
the
non-performance of any such obligation would have a material adverse effect
on a
Loan. Such enforcement, including, without limitation, the legal prosecution
of
claims, termination of Subservicing Agreements and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Servicer would employ in its good faith business
judgment and which are normal and usual in its general mortgage servicing
activities. The Servicer shall pay the costs of such enforcement at its own
expense, and shall be reimbursed therefor only (i) from a general recovery
resulting from such enforcement to the extent, if any, that such recovery
exceeds all amounts due in respect of the related Loan or (ii) from a specific
recovery of costs, expenses or attorneys fees against the party against whom
such enforcement is directed.
Section
3.02 Collection
of Certain Loan Payments.
(a)
The
Servicer shall make reasonable efforts to collect all payments called for
under
the terms and provisions of the Loans, and shall, to the extent such procedures
shall be consistent with this Servicing Agreement and generally consistent
with
any related insurance policy, follow such collection procedures as it would
employ in its good faith business judgment and which are normal and usual
in its
general mortgage servicing activities. Consistent with the foregoing, and
without limiting the generality of the foregoing, the Servicer may in its
discretion waive any late payment charge, prepayment charge or penalty interest
or other fees which may be collected in the ordinary course of servicing
such
Loan. The Servicer may also extend the Due Date for payment due on a Loan,
provided, however, that the Servicer shall first determine that any such
waiver
or extension will not impair the coverage of any related insurance policy
or
materially adversely affect the lien of the related Mortgage (except as
described below) or the interests of the Securityholders. Consistent with
the
terms of this Servicing Agreement, the Servicer may also:
(i)
waive,
modify or vary any term of any Loan;
(ii)
consent
to the postponement of strict compliance with any such term or in any manner
grant indulgence to any Mortgagor;
(iii)
arrange
with a Mortgagor a schedule for the payment of principal and interest due
and
unpaid;
(iv)
forgive
any portion of the amounts contractually owed under the Loan;
7
(v)
capitalize
past due amounts owed under the Loan by adding any amounts in arrearage to
the
existing principal balance of the Loan (a “Capitalization Workout”) of which
will result in an increased Monthly Payment amount, provided that: (A) the
amount added to the existing principal balance of the Loan (the “Capitalized
Amount”) shall be no greater than five times the Mortgagor’s current Monthly
Payment amount; and (B) the Servicer shall not enter into a Capitalization
Workout unless the Combined Loan-to-Value Ratio of the Loan prior to the
Capitalization Workout equals or exceeds 80% and the Mortgagor has qualified
for
the Capitalization Workout under the Servicer’s servicing
guidelines;
(vi)
reset
the
Due Date for the Loan, or any combination of the foregoing;
if
in the
Servicer’s determination such waiver, modification, postponement or indulgence,
arrangement or other action referred to above is not materially adverse to
the
interests of the Securityholders and is generally consistent with the Servicer’s
policies with respect to mortgage loans similar to the Loans; provided, however,
that the Servicer may not modify or permit any Subservicer to modify any
Loan
(including without limitation any modification that would change the Loan
Rate,
forgive the payment of any principal or interest (unless in connection with
the
liquidation of the related Loan) or extend the final maturity date of such
Loan)
unless such Loan is in default or, in the judgment of the Servicer, such
default
is reasonably foreseeable. The general terms of any waiver, modification,
postponement or indulgence with respect to any of the Loans will be included
in
the Servicing Certificate, and such Loans will not be considered “delinquent”
for the purposes of the Basic Documents so long as the Mortgagor complies
with
the terms of such waiver, modification, postponement or indulgence.
(b) The
Servicer shall establish a Custodial Account, which shall be an Eligible
Account
in which the Servicer shall deposit or cause to be deposited any amounts
representing payments and collections in respect of the Loans received by
it
subsequent to the Cut-off Date (other than in respect of the payments referred
to in the following paragraph) within one Business Day following receipt
thereof
(or otherwise on or prior to the Closing Date), including the following payments
and collections received or made by it (without duplication):
(i)
all
payments of principal or interest on the Loans received by the Servicer from
the
respective Subservicer, net of any portion of the interest thereof retained
by
the Subservicer as Subservicing Fees;
(ii)
the
aggregate Repurchase Price of the Loans purchased by the Servicer pursuant
to
Section 3.15;
(iii)
Net
Liquidation Proceeds net of any related Foreclosure Profit;
(iv)
all
proceeds of any Loans repurchased by the Sponsor pursuant to the Loan Purchase
Agreement, and all Substitution Amounts required to be deposited in connection
with the substitution of an Eligible Substitute Loan pursuant to the Loan
Purchase Agreement;
(v)
insurance
proceeds, other than Net Liquidation Proceeds, resulting from any insurance
policy maintained on a Mortgaged Property; and
8
(vi)
amounts
required to be paid by the Servicer pursuant to Sections 3.04 and
8.08.
provided,
however,
that
with respect to each Collection Period, the Servicer shall be permitted to
retain from payments in respect of interest on the Loans, the Servicing Fee
for
such Collection Period. The foregoing requirements respecting deposits to
the
Custodial Account are exclusive, it being understood that, without limiting
the
generality of the foregoing, the Servicer need not deposit in the Custodial
Account amounts representing Foreclosure Profits, prepayment penalties, fees
(including annual fees) or late charge penalties payable by Mortgagors (such
amounts to be retained as additional servicing compensation in accordance
with
Section 3.09 hereof), or amounts received by the Servicer for the accounts
of
Mortgagors for application towards the payment of taxes, insurance premiums,
assessments and similar items. In the event any amount not required to be
deposited in the Custodial Account is so deposited, the Servicer may at any
time
withdraw such amount from the Custodial Account, any provision herein to
the
contrary notwithstanding.
The
Servicer may cause the institution maintaining the Custodial Account to invest
any funds in the Custodial Account in Permitted Investments, which shall
mature
not later than the Business Day preceding the next Payment Date and which
shall
not be sold or disposed of prior to its maturity. Except as provided above,
all
income and gain realized from any such investment shall inure to the benefit
of
the Servicer and shall be subject to its withdrawal or order from time to
time.
The amount of any losses incurred in respect of the principal amount of any
such
investments shall be deposited in the Custodial Account by the Servicer out
of
its own funds immediately as realized.
(c) The
Servicer will require each Subservicer to hold all funds constituting
collections on the Loans, pending remittance thereof to the Servicer, in
one or
more accounts meeting the requirements of an Eligible Account, and invested
in
Permitted Investments.
Section
3.03 Withdrawals
From the Custodial Account.
The
Servicer shall, from time to time as provided herein, make withdrawals from
the
Custodial Account of amounts on deposit therein pursuant to Section 3.02
that
are attributable to the Loans for the following purposes:
(i)
to
deposit in the Payment Account, seven days prior to each Payment Date (or
if
such day is not a Business Day, the immediately preceding Business Day),
an
amount equal to the Interest Remittance Amount (excluding any payments under
the
Yield Maintenance Agreement that were received by the Indenture Trustee)
and
Principal Remittance Amount required to be distributed on such Payment
Date;
(ii)
to
the
extent deposited to the Custodial Account, to reimburse itself or the related
Subservicer for previously unreimbursed expenses incurred in maintaining
individual insurance policies pursuant to Section 3.04, or Liquidation Expenses,
paid pursuant to Section 3.07 or otherwise reimbursable pursuant to the terms
of
this Servicing Agreement (to the extent not payable pursuant to Section 3.09),
such withdrawal right being limited to amounts received on particular Loans
(other than any Repurchase Price in respect thereof) which represent late
recoveries of the payments for which such advances were made, or from related
Liquidation Proceeds or the proceeds of the purchase of such Loan;
9
(iii)
to
pay to
itself out of each payment received on account of interest on a Loan as
contemplated by Section 3.09, an amount equal to the related Servicing Fee
(to
the extent not retained pursuant to Section 3.02), and to pay to any Subservicer
any Subservicing Fees not previously withheld by the Subservicer;
(iv)
to
the
extent deposited in the Custodial Account to pay to itself as additional
servicing compensation any interest or investment income earned on funds
deposited in the Custodial Account and Payment Account that it is entitled
to
withdraw pursuant to Sections 3.02(b) and 5.01;
(v)
to
pay to
itself or the Sponsor, with respect to any Loan or property acquired in respect
thereof that has been purchased or otherwise transferred to the Sponsor,
the
Servicer or other entity, all amounts received thereon and not required to
be
distributed to Securityholders as of the date on which the related Purchase
Price or Repurchase Price is determined; and
(vi)
to
withdraw any other amount deposited in the Custodial Account that was not
required to be deposited therein pursuant to Section 3.02.
Since,
in
connection with withdrawals pursuant to clauses (ii), (iii), (iv) and (v),
the
Servicer’s entitlement thereto is limited to collections or other recoveries on
the related Loan, the Servicer shall keep and maintain separate accounting,
on a
Loan by Loan basis, for the purpose of justifying any withdrawal from the
Custodial Account pursuant to such clauses. Notwithstanding any other provision
of this Servicing Agreement, the Servicer shall be entitled to reimburse
itself
for any previously unreimbursed expenses incurred pursuant to Section 3.07
or
otherwise reimbursable pursuant to the terms of this Servicing Agreement
that
the Servicer determines to be otherwise nonrecoverable (except with respect
to
any Loan as to which the Repurchase Price has been paid), by withdrawal from
the
Custodial Account of amounts on deposit therein attributable to the Loans
on any
Business Day prior to the Payment Date succeeding the date of such
determination.
Section
3.04 Maintenance
of Hazard Insurance; Property Protection Expenses.
The
Servicershall cause to be maintained for each Loan hazard insurance naming
the
Servicer or related Subservicer as loss payee thereunder providing extended
coverage in an amount which is equal to at least 100% of the insurable value
of
the improvements (guaranteed replacement) or the sum of the unpaid principal
balance of the first mortgage loan and the Loan amount. The Servicer shall
also
cause to be maintained on property acquired upon foreclosure, or deed in
lieu of
foreclosure, of any Loan, fire insurance with extended coverage in an amount
which is at least equal to the amount necessary to avoid the application
of any
coinsurance clause contained in the related hazard insurance policy. Amounts
collected by the Servicer under any such policies (other than amounts to
be
applied to the restoration or repair of the related Mortgaged Property or
property thus acquired or amounts released to the Mortgagor in accordance
with
the Servicer’s normal servicing procedures) shall be deposited in the Custodial
Account to the extent called for by Section 3.02. In cases in which any
Mortgaged Property is located at any time during the life of a Loan in a
federally designated flood area, the hazard insurance to be maintained for
the
related Loan shall include flood insurance (to the extent available). All
such
flood insurance shall be in amounts equal to the lesser of (i) the amount
required to compensate for any loss or damage to the Mortgaged Property on
a
replacement cost basis and (ii) the maximum amount of such insurance available
for the related Mortgaged Property under the national flood insurance program
(assuming that the area in which such Mortgaged Property is located is
participating in such program). The Servicer shall be under no obligation
to
require that any Mortgagor maintain earthquake or other additional insurance
and
shall be under no obligation itself to maintain any such additional insurance
on
property acquired in respect of a 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. If the Servicer shall obtain and maintain a blanket
policy
consistent with its general mortgage servicing activities insuring against
hazard losses on all of the Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first sentence of this Section
3.04, it being understood and agreed that such blanket policy may contain
a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.04 and there shall have
been
a loss which would have been covered by such policy, deposit in the Custodial
Account the amount not otherwise payable under the blanket policy because
of
such deductible clause. Any such deposit by the Servicer shall be made on
the
last Business Day of the Collection Period in the month in which payments
under
any such policy would have been deposited in the Custodial Account. In
connection with its activities as servicer of the Loans, the Servicer agrees
to
present, on behalf of itself, the Issuing Entity and the Indenture Trustee,
claims under any such blanket policy.
10
Section
3.05 Modification
Agreements.
The
Servicer or the related Subservicer, as the case may be, shall be entitled
to
(A) execute assumption agreements, modification agreements, substitution
agreements, and instruments of satisfaction or cancellation or of partial
or
full release or discharge, or any other document contemplated by this Servicing
Agreement and other comparable instruments with respect to the Loans and
with
respect to the Mortgaged Properties subject to the Mortgages (and the Issuing
Entity and the Indenture Trustee each shall promptly execute any such documents
on request of the Servicer) and (B) approve the granting of an easement thereon
in favor of another Person, any alteration or demolition of the related
Mortgaged Property or other similar matters, in each case if it has determined,
exercising its good faith business judgment in the same manner as it would
if it
were the owner of the related Loan, that the security for, and the timely
and
full collectability of, such Loan would not be adversely affected thereby.
A
partial release pursuant to this Section 3.05 shall be permitted only if
the
Combined Loan-to-Value Ratio for such Loan after such partial release does
not
exceed the Combined Loan-to-Value Ratio for such Loan as of the Cut-off Date.
Any fee collected by the Servicer or the related Subservicer for processing
such
request will be retained by the Servicer or such Subservicer as additional
servicing compensation.
Section
3.06 Trust
Estate; Related Documents.
iv)
When
required by the provisions of this Servicing Agreement, the Issuing Entity
or
the Indenture Trustee shall execute instruments to release property from
the
terms of the Trust Agreement, Indenture or Custodial Agreement, as applicable,
or convey the Issuing Entity’s or the Indenture Trustee’s interest in the same,
in a manner and under circumstances which are not inconsistent with the
provisions of this Servicing Agreement. No party relying upon an instrument
executed by the Issuing Entity or the Indenture Trustee as provided in this
Section 3.06 shall be bound to ascertain the Issuing Entity’s or the Indenture
Trustee’s authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
11
(b) If
from
time to time the Servicer shall deliver to the Custodian copies of any written
assurance, assumption agreement or substitution agreement or other similar
agreement pursuant to Section 3.05, the Custodian shall check that each of
such
documents purports to be an original executed copy (or a copy of the original
executed document if the original executed copy has been submitted for recording
and has not yet been returned) and, if so, shall file such documents, and
upon
receipt of the original executed copy from the applicable recording office
or
receipt of a copy thereof certified by the applicable recording office shall
file such originals or certified copies with the Related Documents. If any
such
documents submitted by the Servicer do not meet the above qualifications,
such
documents shall promptly be returned by the Custodian to the Servicer pursuant
to the related Custodial Agreement, with a direction to the Servicer to forward
the correct documentation.
(c) Upon
receipt of a “Request for Release”, in the form attached hereto as Exhibit C,
from the Servicer (a “Request for Release”), to the effect that a Loan has been
the subject of a final payment or a prepayment in full and the related Loan
has
been terminated or that substantially all Liquidation Proceeds which have
been
determined by the Servicer in its reasonable judgment to be finally recoverable
have been recovered, and upon deposit to the Custodial Account of such final
monthly payment, prepayment in full together with accrued and unpaid interest
to
the date of such payment with respect to such Loan or, if applicable,
Liquidation Proceeds, the Custodian shall promptly release the Related Documents
to the Servicer pursuant to the related Custodial Agreement, which the Indenture
Trustee shall execute, along with such documents as the Servicer or the
Mortgagor may request to evidence satisfaction and discharge of such Loan,
upon
request of the Servicer. If from time to time and as appropriate for the
servicing or foreclosure of any Loan, the Servicer requests the Custodian
to
release the Related Documents and delivers to the Custodian a Request for
Release to the Custodian signed by a Responsible Officer of the Servicer,
the
Custodian shall release the Related Documents to the Servicer pursuant to
the
related Custodial Agreement. The Servicer shall return promptly to the Custodian
the Related Documents when the Servicer’s need therefor no longer exists, unless
the related Loan has been liquidated. If such Loans shall be liquidated and
the
Custodian receives a Request for Release from the Servicer as provided above,
then, upon request of the Servicer, the Custodian shall release the Request
for
Release to the Servicer pursuant to the related Custodial
Agreement.
Section
3.07 Realization
Upon Defaulted Loans; Loss Mitigation.
With
respect to such of the Loans as come into and continue in default, the Servicer
will decide whether to (i) foreclose upon the Mortgaged Properties securing
such
Loans, (ii) write off the unpaid principal balance of the Loans as bad debt,
(iii) take a deed in lieu of foreclosure, (iv) accept a short sale (a payoff
of
the Loan for an amount less than the total amount contractually owed in order
to
facilitate a sale of the Mortgaged Property by the Mortgagor) or permit a
short
refinancing (a payoff of the Loan for an amount less than the total amount
contractually owed in order to facilitate refinancing transactions by the
Mortgagor not involving a sale of the Mortgaged Property), (v) arrange for
a
repayment plan, (vi) agree to a modification in accordance with this Servicing
Agreement, or (vii) take an unsecured note, in connection with a negotiated
release of the lien of the Mortgage in order to facilitate a settlement with
the
Mortgagor; in each case subject to the rights of any related first lien holder;
provided that in connection with the foregoing if the Servicer has actual
knowledge that any Mortgaged Property is affected by hazardous or toxic wastes
or substances and that the acquisition of such Mortgaged Property would not
be
commercially reasonable, then the Servicer will not cause the Issuing Entity
or
the Indenture Trustee to acquire title to such Mortgaged Property in a
foreclosure or similar proceeding. In connection with such decision, the
Servicer shall follow such practices (including, in the case of any default
on a
related senior mortgage loan, the advancing of funds to correct such default
if
deemed to be appropriate by the Servicer) and procedures as it shall deem
necessary or advisable and as shall be normal and usual in its general mortgage
servicing activities; provided that the Servicer shall not be liable in any
respect hereunder if the Servicer is acting in connection with any such
foreclosure or attempted foreclosure which is not completed or other conversion
in a manner that is consistent with the provisions of this Servicing Agreement.
The foregoing is subject to the proviso that the Servicer shall not be required
to expend its own funds in connection with any foreclosure or attempted
foreclosure which is not completed or towards the correction of any default
on a
related senior mortgage loan or restoration of any property unless it shall
determine that such expenditure will increase Net Liquidation Proceeds. In
the
event of a determination by the Servicer that any such expenditure previously
made pursuant to this Section 3.07 will not be reimbursable from Net Liquidation
Proceeds, the Servicer shall be entitled to reimbursement of its funds so
expended pursuant to Section 3.03.
12
Notwithstanding
any provision of this Servicing Agreement, a Loan may be deemed to be finally
liquidated if substantially all amounts expected by the Servicer to be received
in connection with the related defaulted Loan have been received; provided,
however, the Servicer shall treat any Loan that is 180 days or more delinquent
as having been finally liquidated. The Servicer may retain a Subservicer
to sell
or perform collection activities with respect to a Loan that is 180 days
or more
delinquent, and any subsequent collections (less the applicable subservicing
fee) with respect to any such Loan shall be deposited to the Custodial Account.
For purposes of determining the amount of any Liquidation Proceeds or Insurance
Proceeds, or other unscheduled collections, the Servicer may take into account
minimal amounts of additional receipts expected to be received or any estimated
additional Liquidation Expenses expected to be incurred in connection with
the
related defaulted Loan.
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 issued to
the
Indenture Trustee, who shall hold the same on behalf of the Issuing Entity
in
accordance with Section 3.13 of the Indenture. Notwithstanding any such
acquisition of title and cancellation of the related Loan, such Mortgaged
Property shall (except as otherwise expressly provided herein) be considered
to
be an outstanding Loan held as an asset of the Issuing Entity until such
time as
such property shall be sold.
Any
proceeds from the purchase or repurchase of any Loan pursuant to the terms
of
this Servicing Agreement (including without limitation Sections 2.03 and
3.15)
will be applied in the following order of priority: first, to the Servicer
or
the related Subservicer, all Servicing Fees payable therefrom to the Payment
Date on which such amounts are to be deposited in the Payment Account; second,
as part of the Interest Remittance Amount, accrued and unpaid interest on
the
related Loan, at the Net Loan Rate to the Payment Date on which such amounts
are
to be deposited in the Payment Account; and third, as part of the Principal
Remittance Amount, as a recovery of principal on the Loan.
13
Liquidation
Proceeds with respect to a Liquidated Loan will be applied in the following
order of priority: first, to reimburse the Servicer or the related Subservicer
in accordance with this Section 3.07 for any Liquidation Expenses; second,
to
the Servicer or the related Subservicer, all unpaid Servicing Fees through
the
date of receipt of the final Liquidation Proceeds; third as part of the Interest
Remittance Amount, accrued and unpaid interest on the related Loan at the
Net
Loan Rate through the date of receipt of the final Liquidation Proceeds;
fourth
as part of the Principal Remittance Amount, as a recovery of principal on
the
Loan, up to an amount equal to the Loan Balance of the related Loan immediately
prior to the date it became a Liquidated Loan; and fifth, to Foreclosure
Profits.
Proceeds
and other recoveries from a Loan after it becomes a Liquidated Loan will
be
applied in the following order of priority: first, to reimburse the Servicer
or
the related Subservicer in accordance with this Section 3.07 for any expenses
previously unreimbursed from Liquidation Proceeds or otherwise; second, to
the
Servicer or the related Subservicer, all unpaid Servicing Fees payable thereto
through the date of receipt of the proceeds previously unreimbursed from
Liquidation Proceeds or otherwise; third, as part of the Interest Remittance
Amount, up to an amount equal to the sum of (a) the Stated Principal Balance
of
the related Loan immediately prior to the date it became a Liquidated Loan,
less
any Net Liquidation Proceeds previously received with respect to such Loan
and
applied as a recovery of principal, and (b) accrued and unpaid interest on
the
related Loan at the Net Loan Rate through the date of receipt of the proceeds;
and fourth, to Foreclosure Profits.
Section
3.08 Issuing
Entity and Indenture Trustee to Cooperate.
On or
before each Payment Date, the Servicer will notify the Indenture Trustee
or the
Custodian, with a copy to the Issuing Entity, of the termination of or the
payment in full and the termination of any Loan during the preceding Collection
Period. Upon receipt of payment in full, the Servicer is authorized to execute,
pursuant to the authorization contained in Section 3.01, if the assignments
of
Mortgage have been recorded if required under the Loan Purchase Agreement,
an
instrument of satisfaction regarding the related Mortgage, which instrument
of
satisfaction shall be recorded by the Servicer if required by applicable
law and
be delivered to the Person entitled thereto. It is understood and agreed
that
any expenses incurred in connection with such instrument of satisfaction
or
transfer shall be reimbursed from amounts deposited in the Custodial Account.
From time to time and as appropriate for the servicing or foreclosure of
any
Loan, the Indenture Trustee or the Custodian shall, upon request of the Servicer
and delivery to the Indenture Trustee or Custodian, with a copy to the Issuing
Entity, of a Request for Release, signed by a Servicing Officer, release
or
cause to be released the related Mortgage File to the Servicer and the Issuing
Entity or Indenture Trustee shall promptly execute such documents, in the
forms
provided by the Servicer, as shall be necessary for the prosecution of any
such
proceedings or the taking of other servicing actions. Such trust receipt
shall
obligate the Servicer to return the Mortgage File to the Indenture Trustee
or
the Custodian (as specified in such receipt) when the need therefor by the
Servicer no longer exists unless the Loan shall be liquidated, in which case,
upon receipt of a certificate of a Servicing Officer similar to that hereinabove
specified, the trust receipt shall be released to the Servicer.
14
In
order
to facilitate the foreclosure of the Mortgage securing any Loan that is in
default following recordation of the assignments of Mortgage in accordance
with
the provisions of the Loan Purchase Agreement, the Indenture Trustee or the
Issuing Entity shall, if so requested in writing by the Servicer, promptly
execute an appropriate assignment in the form provided by the Servicer to
assign
such Loan for the purpose of collection to the Servicer (any such assignment
shall unambiguously indicate that the assignment is for the purpose of
collection only), and, upon such assignment, such assignee for collection
will
thereupon bring all required actions in its own name and otherwise enforce
the
terms of the Loan and deposit or credit the Net Liquidation Proceeds, exclusive
of Foreclosure Profits, received with respect thereto in the Custodial Account.
In the event that all delinquent payments due under any such Loan are paid
by
the Mortgagor and any other defaults are cured, then the assignee for collection
shall promptly reassign such Loan to the Indenture Trustee and return all
Related Documents to the place where the related Mortgage File was being
maintained.
In
connection with the Issuing Entity’s obligation to cooperate as provided in this
Section 3.08 and all other provisions of this Servicing Agreement requiring
the
Issuing Entity to authorize or permit any actions to be taken with respect
to
the Loans, the Indenture Trustee, as pledgee of the Loans and as assignee
of
record of the Loans on behalf of the Issuing Entity pursuant to Section 3.13
of
the Indenture, expressly agrees, on behalf of the Issuing Entity, to take
all
such actions on behalf of the Issuing Entity and to promptly execute and
return
all instruments reasonably required by the Servicer in connection therewith;
provided that if the Servicer shall request a signature of the Indenture
Trustee, on behalf of the Issuing Entity, the Servicer will deliver to the
Indenture Trustee an Officer’s Certificate stating that such signature is
necessary or appropriate to enable the Servicer to carry out its servicing
and
administrative duties under this Servicing Agreement.
Section
3.09 Servicing
Compensation; Payment of Certain Expenses by Servicer.
The
Servicer shall be entitled to receive the Servicing Fee in accordance with
Sections 3.02 and 3.03 as compensation for its services in connection with
servicing the Loans. Moreover, additional servicing compensation in the form
of
late payment charges, prepayment charges, investment income on amounts in
the
Custodial Account or the Payment Account and other receipts not required
to be
deposited in the Custodial Account as specified in Section 3.02 shall be
retained by the Servicer. The Servicer shall be required to pay all expenses
incurred by it in connection with its activities hereunder and shall not
be
entitled to reimbursement therefor.
Section
3.10 Annual
Statement as to Compliance.
v)
The
Servicer will deliver to the Issuing Entity, the Underwriters and the Indenture
Trustee on or before February 28 of each year, beginning February 28, ____,
an
Officer’s Certificate (an “Annual Statement of Compliance”) stating, as to each
signatory thereof, that (i) a review of the activities of the Servicer during
the preceding calendar year and of performance under this Servicing Agreement
and other applicable servicing agreements has been made under such officer’s
supervision and (ii) to the best of such officers’ knowledge, based on such
review, the Servicer has complied in all respects with its obligations under
this Agreement or other applicable servicing agreements in all material respects
throughout such year, or, if there has been failure to fulfill such obligation
in any material respect, such statement shall include a description of such
noncompliance or specify each such default, as the case may be, known to
such
officer and the nature and status or cure provisions thereof.
Such
Annual Statement of Compliance shall contain no restrictions or limitations
on
its use. In the event that the Servicer has delegated any servicing
responsibilities with respect to the Mortgage Loans to a subservicer, the
Servicer shall deliver a similar Annual Statement of Compliance by that
subservicer to the Indenture Trustee as described above as and when required
with respect to the Servicer.
15
If
the
Servicer cannot deliver the related Annual Statement of Compliance by February
28th of such year, the Indenture Trustee, at its sole option, may permit
a cure
period for the Servicer to deliver such Annual Statement of Compliance, but
in
no event later than March 10th of such year.
Failure
of the Servicer to timely comply with this Section 3.10 shall be deemed a
Servicing Default, and the Indenture Trustee may, in addition to whatever
rights
the Indenture Trustee may have under this Servicing Agreement and at law
or
equity or to damages, including injunctive relief and specific performance,
upon
notice immediately terminate all the rights and obligations of the Servicer
under this Servicing Agreement and in and to the Mortgage Loans and the proceeds
thereof without compensating the Servicer for the same. This paragraph shall
supercede any other provision in this Servicing Agreement or any other agreement
to the contrary.
(b) The
Servicer shall deliver to the Issuing Entity and the Indenture Trustee, promptly
after having obtained knowledge thereof, but in no event later than five
Business Days thereafter, written notice by means of an Officer’s Certificate of
any event which with the giving of notice or the lapse of time or both, would
become a Servicing Default.
Section
3.11 Assessments
of Compliance and Attestation Reports.
On and
after January 1, 2006, the Servicer shall service and administer the Loans
in
accordance with all applicable requirements of the Servicing Criteria. Pursuant
to Rules 13a-18 and 15d-18 of the Exchange Act and Item 1123 of Regulation
AB,
the Servicer shall deliver to the Depositor, the Issuing Entity, the Indenture
Trustee, the Depositor, the credit enhancer and each Rating Agency on or
before
February 28 of each calendar year beginning in 2007, a report regarding the
Servicer’s assessment of compliance (an “Assessment of Compliance”) with the
Servicing Criteria during the preceding calendar year. The Assessment of
Compliance must be reasonably satisfactory to the Indenture Trustee, and
as set
forth in Regulation AB, the Assessment of Compliance must contain the
following:
(a) A
statement by such officer of its responsibility for assessing compliance
with
the Servicing Criteria applicable to the Servicer;
(b) A
statement by such officer that such officer used the Servicing Criteria attached
as Exhibit A hereto, and which will also be attached to the Assement of
Compliance, to assess compliance with the Servicing Criteria applicable to
the
Servicer;
(c) An
assessment by such officer of the Servicer’s compliance with the applicable
Servicing Criteria for the period consisting of the preceding calendar year,
including disclosure of any material instance of noncompliance with respect
thereto during such period, which assessment shall be based on the activities
it
performs with respect to asset-backed securities transactions taken as a
whole
involving the Servicer, that are backed by the same asset type as the
Loans;
16
(d) A
statement that a registered public accounting firm has issued an attestation
report on the Servicer’s Assessment of Compliance for the period consisting of
the preceding calendar year; and
(e) A
statement as to which of the Servicing Criteria, if any, are not applicable
to
the Servicer, which statement shall be based on the activities it performs
with
respect to asset-backed securities transactions taken as a whole involving
the
Servicer, that are backed by the same asset type as the Mortgage
Loans.
Such
report at a minimum shall address each of the Servicing Criteria specified
on
Exhibit A hereto which are indicated as applicable to the Servicer.
On
or
before February 28 of each calendar year beginning in 2007, the Servicer
shall
furnish to the Depositor, the Issuing Entity, the Indenture Trustee, the
Depositor, the credit enhancer and each Rating Agency a report (an “Attestation
Report”) by a registered public accounting firm that attests to, and reports on,
the Assessment of Compliance made by the Depositor, as required by Rules
13a-18
and 15d-18 of the Exchange Act and Item 1122(b) of Regulation AB, which
Attestation Report must be made in accordance with standards for attestation
reports issued or adopted by the Public Company Accounting Oversight Board.
The
Servicer shall cause any subservicer, and each subcontractor determined by
the
Servicer to be “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB, to deliver to the Depositor, the Issuing Entity,
the
Indenture Trustee, the Depositor, the credit enhancer and each Rating Agency
an
Assessment of Compliance and Attestation Report as and when provided
above.
Such
Assessment of Compliance, as to any subservicer, shall at a minimum address
each
of the Servicing Criteria specified on Exhibit A hereto which are indicated
as
applicable to any “primary servicer.” Notwithstanding the foregoing, as to any
subcontractor, an Assessment of Compliance is not required to be delivered
unless it is required as part of a Form 10-K with respect to the trust
fund.
If
the
Servicer cannot deliver any Assessment of Compliance or Attestation Report
by
February 28th of such year, the Indenture Trustee, at its sole option, may
permit a cure period for the Servicer to deliver such Assessment of Compliance
or Attestation Report, but in no event later than March 10th of such
year.
Failure
of the Master Servicer to timely comply with this Section 3.11 shall be deemed
a
Servicing Default, and the Indenture Trustee may, in addition to whatever
rights
the Indenture Trustee may have under this Agreement and at law or equity
or to
damages, including injunctive relief and specific performance, upon notice
immediately terminate all the rights and obligations of the Servicer under
this
Agreement and in and to the Mortgage Loans and the proceeds thereof without
compensating the Servicer for the same. This paragraph shall supercede any
other
provision in this Agreement or any other agreement to the contrary.
17
The
Indenture Trustee shall also provide an Assessment of Compliance and Attestation
Report, as and when provided above, which shall at a minimum address each
of the
Servicing Criteria specified on Exhibit A hereto which are indicated as
applicable to the “indenture trustee” or “securities administrator.” In
addition, the Indenture Trustee shall cause the Custodian to deliver to the
Indenture Trustee and the Depositor an Assessment of Compliance and Attestation
Report, as and when provided above, which shall at a minimum address each
of the
Servicing Criteria specified on Exhibit A hereto which are indicated as
applicable to a “custodian.” Notwithstanding the foregoing, as to any Custodian,
an Assessment of Compliance is not required to be delivered unless it is
required as part of a Form 10-K with respect to the trust fund.
Section
3.12 Access
to Certain Documentation and Information Regarding the Loans.
Whenever required by statute or regulation, the Servicer shall provide to
any
Securityholder upon reasonable request (or a regulator for a Securityholder)
or
the Indenture Trustee, reasonable access to the documentation regarding the
Loans such access being afforded without charge but only upon reasonable
request
and during normal business hours at the offices of the Servicer. Nothing
in this
Section 3.12 shall derogate from the obligation of the Servicer to observe
any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of the Servicer to provide access as provided in this Section
3.12 as a result of such obligation shall not constitute a breach of this
Section 3.12.
Section
3.13 Maintenance
of Certain Servicing Insurance Policies.
The
Servicer shall during the term of its service as servicer maintain in force
(i)
a policy or policies of insurance covering errors and omissions in the
performance of its obligations as Servicer hereunder and (ii) a fidelity
bond in
respect of its officers, employees or agents. Each such policy or policies
and
bond shall be at least equal to the coverage that would be required by FNMA
or
FHLMC, whichever is greater, for Persons performing servicing for loans similar
to the Loans purchased by such entity.
Section
3.14 Information
Required by the Internal Revenue Service and Reports of Foreclosures and
Abandonments of Mortgaged Property.
The
Servicer shall prepare and deliver all federal and state information reports
when and as required by all applicable state and federal income tax laws.
In
particular, with respect to the requirement under Section 6050J of the Code
to
the effect that the Servicer or Subservicer shall make reports of foreclosures
and abandonments of any mortgaged property for each year beginning in ____,
the
Servicer or Subservicer shall file reports relating to each instance occurring
during the previous calendar year in which the Servicer (i) on behalf of
the
Issuing Entity, acquires an interest in any Mortgaged Property through
foreclosure or other comparable conversion in full or partial satisfaction
of a
Loan, or (ii) knows or has reason to know that any Mortgaged Property has
been
abandoned. The reports from the Servicer or Subservicer shall be in form
and
substance sufficient to meet the reporting requirements imposed by Section
6050J
and Section 6050H (reports relating to mortgage interest received) of the
Code.
Section
3.15 Optional
Purchase of Loans by Servicer.
The
Servicer may, at its option, repurchase a Loan which becomes 60 or more days
delinquent. The Servicer shall not use any procedure in selecting Loans to
be
repurchased which is materially adverse to the interests of the Securityholders.
The Servicer shall purchase such delinquent Loan at a price equal to the
Repurchase Price. Any such repurchase of a Loan pursuant to this Section
3.15
shall be accomplished by delivery to the Indenture Trustee for deposit in
the
Payment Account of the amount of the Repurchase Price. The Indenture Trustee
shall immediately effectuate the conveyance of such delinquent Loan to the
Servicer to the extent necessary, including the prompt delivery of all
documentation to the Servicer.
18
Section
3.16 Intention
of the Parties and Interpretation.
Each of
the parties acknowledges and agrees that the purpose of Sections 3.10 and
3.11
of this Servicing Agreement is to facilitate compliance with the provisions
of
Regulation AB promulgated by the SEC under the 1934 Act (17 C.F.R. §§ 229.1100 -
229.1123), as such may be amended from time to time and subject to clarification
and interpretive advice as may be issued by the staff of the SEC from time
to
time. Therefore, each of the parties agrees that (a) the obligations of the
parties hereunder shall be interpreted in such a manner as to accomplish
that
purpose, (b) the parties’ obligations hereunder will be supplemented and
modified as necessary to be consistent with any such amendments, interpretive
advice or guidance, convention or consensus among active participants in
the
asset-backed securities markets, advice of counsel, or otherwise in respect
of
the requirements of Regulation AB, (c) the parties shall comply with requests
made by the Indenture Trustee or the Depositor for delivery of additional
or
different information as the Indenture Trustee or the Depositor may determine
in
good faith is necessary to comply with the provisions of Regulation AB, and
(d)
no amendment of this Servicing Agreement shall be required to effect any
such
changes in the parties’ obligations as are necessary to accommodate evolving
interpretations of the provisions of Regulation AB.
ARTICLE
IV
SERVICING
CERTIFICATE
Section
4.01 Statements
to Securityholders.
vi)
With
respect to each Payment Date, on the Business Day following the related
Determination Date, the Servicer shall forward to the Indenture Trustee the
Loan
information reasonably available to the Servicer with respect to the Loans
as
the Indenture Trustee may reasonably request in order for the Indenture Trustee
to perform the calculations necessary to prepare the statements contemplated
by
this Section 4.01 (the “Servicing Certificate”). The Indenture Trustee pursuant
to Section 3.23 of the Indenture shall forward or cause to be forwarded by
mail
to each Certificateholder, the Depositor, the Owner Trustee, the Certificate
Paying Agent and each Rating Agency, a statement setting forth the following
information as to the Notes and Certificates, to the extent
applicable:
(i)
the
aggregate amount of (a) Interest Remittance Amount, (b) Principal Remittance
Amount and (c) Substitution Amounts;
(ii)
the
amount of such distribution as principal to the Noteholders;
(iii)
the
amount of such distribution as interest to the Noteholders, separately stating
the portion thereof in respect of overdue accrued interest;
(iv)
the
number and Aggregate Loan Balance of the Loans as of the end of the related
Collection Period;
19
(v)
the
weighted average Net Loan Rate for the related Collection Period and the
weighted average Net Loan Rate for the aggregate of the stated Principal
Balance
of (A) all of the Loans and (B) the adjustable rate Loans, for the following
Collection Period;
(vi)
the
weighted average Loan Rate for the related Collection Period;
(vii)
the
Class
Principal Balance after giving effect to the distribution of principal on
such
Payment Date;
(viii)
the
Certificate Distribution Amount immediately following such Payment
Date;
(ix)
the
aggregate Servicing Fees for the related Collection Period;
(x)
the
Overcollateralization Amount and the Targeted Overcollateralization Amount
immediately following such Payment Date;
(xi)
the
number and principal amount of Capitalization Workouts pursuant to Section
3.02(a)(v) entered into since the Closing Date;
(xii)
the
aggregate amount recovered during the related Collection Period consisting
of
all subsequent recoveries on any Loan that was 180 days or more delinquent;
(xiii)
the
related Basis Risk Shortfall for the Class A, Class M-1 and Class B-1 Notes
and
the Available Funds Shortfall for the Class B-2 Notes on each Payment Date;
(xiv)
the
applicable record dates, accrual periods, determination dates for calculating
distributions and general distribution dates;
(xv)
the
total
cash flows received and the general sources thereof;
(xvi)
the
related amount of the Servicing Fees paid to or retained by the Servicer
for the
related Due Period;
(xvii)
the
amount of any net swap payment payable to the derivative administrator, any
net
swap payment payable to the Swap Provider, any swap termination payment payable
to the derivative administrator and any swap termination payment payable
to the
Swap Provider;
(xviii)
the
interest carry forward amount and any Basis Risk Shortfall Carry Forward
Amount
for each Class of Notes;
(xix)
the
Note
Principal Balance or Note Notional Amount, as applicable, of each Class after
giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Applied Loss Amounts for
such
Distribution Date;
20
(xx)
the
number and Stated Principal Balance of the Loans in each loan group in respect
of which (A) one Scheduled Payment is Delinquent, (B) two Scheduled Payments
are
delinquent, (C) three or more Scheduled Payments are delinquent and (D)
foreclosure proceedings have been commenced, in each case as of the close
of
business on the last day of the calendar month preceding such Distribution
Date
and separately identifying such information for the (1) first lien Mortgage
Loans, (2) second lien Mortgage Loans, and (3) adjustable rate Loans, in
each
such loan group;
provided,
however,
that
such information will not be provided on the statements relating to the first
Payment Date;
(xxi)
the
amount of advances included in the distribution on such Distribution Date
(including the general purpose of such advances), the aggregate amount of
unreimbursed advances at the close of business on the Distribution Date,
and the
general source of funds for reimbursements;
(xxii)
the
cumulative amount of Applied Loss Amounts to date;
(xxiii)
if
applicable, material modifications, extensions or waivers to Loan terms,
fees,
penalties or payments during the preceding calendar month or that have become
material over time;
(xxiv)
with
respect to any Loan that was liquidated during the preceding calendar month,
the
loan number and Stated Principal Balance of, and Realized Loss on, such Loan
as
of the close of business on the Determination Date preceding such Distribution
Date;
(xxv)
the
total
number and principal balance of any real estate owned or REO properties as
of
the close of business on the Determination Date preceding such Distribution
Date;
(xxvi)
the
three
month rolling average of the percent equivalent of a fraction, the numerator
of
which is the aggregate Stated Principal Balance of the Mortgage Loans that
are
60 days or more delinquent or are in bankruptcy or foreclosure or are REO
properties, and the denominator of which is the aggregate Stated Principal
Balance of all of the Loans in each case as of the close of business on the
last
day of the calendar month preceding such Distribution Date and separately
identifying such information for the (1) first lien Loans, and (2) adjustable
rate Loans;
(xxvii)
the
Realized Losses during the related Prepayment Period and the cumulative Realized
Losses through the end of the preceding month;
(xxviii)
whether
a
trigger event exists;
(xxix)
updated
pool composition data including the following with respect to each loan group:
average loan balance, weighted average mortgage rate, weighted average
loan-to-value ratio at origination, weighted average FICO at origination
weighted average remaining term; [NOTE - Item 1121(a)(8) requires updated
pool
composition information, the foregoing is a suggestion of what to
provide]
21
(xxx)
information
about any additions of, substitutions for or removal of any Loans from the
trust
fund, and any changes in the underwriting, acquisition or selection criteria
as
to any Mortgage Loans added to the trust fund;
(xxxi)
the
amount, if any of fees or expenses accrued and paid, with an identification
of
the payee and the general purpose of such fees;
(xxxii)
the
amount of, if any, of excess cash flow or excess spread and the application
of
such excess cash flow;
(xxxiii)
interest
rates, as applicable, to the pool assets and securities;
(xxxiv)
the
beginning and ending balance of the reserve fund or similar account, if any
together with any material activity;
(xxxv)
if
applicable, material modifications, extensions or waivers to pool asset terms,
fees penalties or payments during the distribution period or that have become
material overtime;
(xxxvi)
material
breaches of pool asset representation or warranties or transaction
covenants;
(xxxvii)
Information
regarding any new issuance of securities backed by the same asset pool, any
pool
asset changes, such as additions or removals in connection with a prefunding
and
pool asset substitutions and repurchases, and cash flows available for future
purchases, such as the balances of any prefunding, if applicable;
(xxxviii)
The
Special Hazard Amount, Fraud Loss Amount and Bankruptcy Amount, if applicable,
as of the close of business on the applicable distribution date and a
description of any change in the calculation of these amount; and
(xxxix)
With
respect to any series of securities as to which the trust fund includes mortgage
securities, additional information as required under this Agreement and
specified in the related prospectus supplement.
In
the
case of information furnished pursuant to clauses (ii) and (iii) above, the
amounts shall be expressed as an aggregate dollar amount per Note or
Certificate, as applicable, with a $1,000 denomination.
(b) In
addition, with respect to each Payment Date, on the Business Day following
the
related Determination Date, the Servicer shall forward to the Rating Agencies
the following information for each Capitalization Workout entered into during
the related Collection Period:
(i)
the
original Loan amount;
(ii)
the
Loan
amount after the Capitalization Workout;
(iii)
the
original Monthly Payment amount;
22
(iv)
the
Monthly Payment amount after the Capitalization Workout;
(v)
the
Capitalized Amount as defined in Section 3.02(a)(v) herein;
(vi)
the
Combined Loan-to-Value Ratio prior to the Capitalization Workout;
(vii)
the
Combined Loan-to-Value Ratio after the Capitalization Workout; and
(viii)
if
an
appraisal was used in determining the Combined Loan-to-Value Ratio referred
to
in (vii) above, the type and date of appraisal.
The
Servicer shall also forward to the Indenture Trustee any other information
reasonably requested by the Indenture Trustee necessary to make distributions
pursuant to Section 3.05 of the Indenture. Prior to the close of business
on the
Business Day next succeeding each Determination Date, the Servicer shall
furnish
a written statement to the Certificate Paying Agent and the Indenture Trustee
setting forth the aggregate amounts required to be withdrawn from the Custodial
Account and deposited into the Payment Account on the Business Day preceding
the
related Payment Date pursuant to Section 3.03. The determination by the Servicer
of such amounts shall, in the absence of obvious error, be presumptively
deemed
to be correct for all purposes hereunder and the Owner Trustee and Indenture
Trustee shall be protected in relying upon the same without any independent
check or verification. In addition, upon the Issuing Entity’s written request,
the Servicer shall promptly furnish information reasonably requested by the
Issuing Entity that is reasonably available to the Servicer to enable the
Issuing Entity to perform its federal and state income tax reporting
obligations.
Section
4.02 Tax
Reporting.
So long
as 100% of the Certificates are owned by the same person, then no separate
federal and state income tax returns and information returns or reports will
be
filed with respect to the Issuing Entity, and the Issuing Entity will be
treated
as an entity disregarded from the 100% Certificateholder.
ARTICLE
V
PAYMENT
ACCOUNT
Section
5.01 Payment
Account.
The
Indenture Trustee shall establish and maintain a Payment Account titled “[Name
of Indenture Trustee], as Indenture Trustee, for the benefit of the
Securityholders and the Certificate Paying Agent pursuant to the Indenture,
dated as of __________________, between _____ Trust Series ____-__ and [Name
of
Indenture Trustee]”. The Payment Account shall be an Eligible Account. On each
Payment Date, amounts on deposit in the Payment Account will be distributed
by
the Indenture Trustee in accordance with Section 3.05 of the Indenture. The
Indenture Trustee may invest or cause the institution maintaining the Payment
Account to invest the funds in the Payment Account in Permitted Investments
designated in the name of the Indenture Trustee, which shall mature not later
than the Business Day next preceding the Payment Date next following the
date of
such investment. All income and gain realized from any such investment shall
be
for the benefit of the Indenture Trustee 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 Payment Account by the Indenture
Trustee out of its own funds immediately as realized.
23
ARTICLE
VI
THE
SERVICER
Section
6.01 Liability
of the Servicer.
The
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Servicer
herein.
Section
6.02 Merger
or Consolidation of, or Assumption of the Obligations of, the
Servicer.
Any
corporation into which the Servicer may be merged or converted or with which
it
may be consolidated, or any corporation resulting from any merger, conversion
or
consolidation to which the Servicer shall be a party, or any corporation
succeeding to the business of the Servicer, shall be the successor of the
Servicer, hereunder, without the execution or filing of any paper or any
further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
The
Servicer may assign its rights and delegate its duties and obligations under
this Servicing Agreement; provided that the Person accepting such assignment
or
delegation shall be a Person which is qualified to service mortgage loans
similar to those in the Trust Estate, is reasonably satisfactory to the
Indenture Trustee (as pledgee of the Loans) and the Issuing Entity, is willing
to service the Loans and executes and delivers to the Indenture Trustee and
the
Issuing Entity an agreement, in form and substance reasonably satisfactory
to
the Indenture Trustee and the Issuing Entity, which contains an assumption
by
such Person of the due and punctual performance and observance of each covenant
and condition to be performed or observed by the Servicer under this Servicing
Agreement; provided further that each Rating Agency’s rating of the Securities
in effect immediately prior to such assignment and delegation will not be
qualified, reduced, or withdrawn as a result of such assignment and delegation
(as evidenced by a letter to such effect from each Rating Agency); and provided
further that the Owner Trustee receives an Opinion of Counsel to the effect
that
such assignment or delegation shall not cause the Owner Trust to be treated
as a
corporation for federal or state income tax purposes.
Section
6.03 Limitation
on Liability of the Servicer and Others.
Neither
the Servicer nor any of the directors or officers or employees or agents
of the
Servicer shall be under any liability to the Issuing Entity, the Owner Trustee,
the Indenture Trustee or the Securityholders for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Servicing Agreement, provided, however, that this provision shall not protect
the Servicer or any such Person against any liability which would otherwise
be
imposed by reason of its willful misfeasance, bad faith or gross negligence
in
the performance of its duties hereunder or by reason of its reckless disregard
of its obligations and duties hereunder. The Servicer and any director or
officer or employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Servicer and any director or
officer or employee or agent of the Servicer shall be indemnified by the
Issuing
Entity and held harmless against any loss, liability or expense incurred
in
connection with any legal action relating to this Servicing Agreement or
the
Securities, other than any loss, liability or expense incurred by reason
of its
willful misfeasance, bad faith or gross negligence in the performance of
its
duties hereunder or by reason of its reckless disregard of its obligations
and
duties hereunder. The Servicer shall not be under any obligation to appear
in,
prosecute or defend any legal action which is not incidental to its duties
to
service the Loans in accordance with this Servicing Agreement, and which
in its
opinion may involve it in any expense or liability; provided, however, that
the
Servicer may in its sole discretion undertake any such action which it may
deem
necessary or desirable in respect of this Servicing Agreement, and the rights
and duties of the parties hereto and the interests of the Securityholders.
In
such event, the reasonable legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of
the
Issuing Entity, and the Servicer shall be entitled to be reimbursed therefor.
The Servicer’s right to indemnity or reimbursement pursuant to this Section 6.03
shall survive any resignation or termination of the Servicer pursuant to
Section
6.04 or 7.01 with respect to any losses, expenses, costs or liabilities arising
prior to such resignation or termination (or arising from events that occurred
prior to such resignation or termination).
24
Section
6.04 Servicer
Not to Resign.
Subject
to the provisions of Section 6.02, the Servicer shall not resign from the
obligations and duties hereby imposed on it except (i) upon determination
that
the performance of its obligations or duties hereunder are no longer permissible
under applicable law or are in material conflict by reason of applicable
law
with any other activities carried on by it or its subsidiaries or Affiliates,
the other activities of the Servicer so causing such a conflict being of
a type
and nature carried on by the Servicer or its subsidiaries or Affiliates at
the
date of this Servicing Agreement or (ii) upon satisfaction of the following
conditions: (a) the Servicer has proposed a successor servicer to the Issuing
Entity and the Indenture Trustee in writing and such proposed successor servicer
is reasonably acceptable to the Issuing Entity and the Indenture Trustee;
and
(b) each Rating Agency shall have delivered a letter to the Issuing Entity
and
the Indenture Trustee prior to the appointment of the successor servicer
stating
that the proposed appointment of such successor servicer as Servicer hereunder
will not result in the reduction or withdrawal of the then current rating
of the
Securities; provided, however, that no such resignation by the Servicer shall
become effective until such successor servicer or, in the case of (i) above,
the
Indenture Trustee, as pledgee of the Loans, shall have assumed the Servicer’s
responsibilities and obligations hereunder or the Indenture Trustee, as pledgee
of the Loans, shall have designated a successor servicer in accordance with
Section 7.02. Any such resignation shall not relieve the Servicer of
responsibility for any of the obligations specified in Sections 7.01 and
7.02 as
obligations that survive the resignation or termination of the Servicer.
Any
such determination permitting the resignation of the Servicer shall be evidenced
by an Opinion of Counsel to such effect delivered to the Indenture
Trustee.
Section
6.05 Delegation
of Duties.
In the
ordinary course of business, the Servicer at any time may delegate any of
its
duties hereunder to any Person, including any of its Affiliates, who agrees
to
conduct such duties in accordance with standards comparable to those with
which
the Servicer complies pursuant to Section 3.01. Such delegation shall not
relieve the Servicer of its liabilities and responsibilities with respect
to
such duties and shall not constitute a resignation within the meaning of
Section
6.04.
25
ARTICLE
VII
DEFAULT
Section
7.01 Servicing
Default.
If any
one of the following events (“Servicing Default”) shall occur and be
continuing:
(i)
Any
failure by the Servicer to deposit in the Custodial Account or Payment Account
any deposit required to be made under the terms of this Servicing Agreement
which continues unremedied for a period of three Business Days after the
date
upon which written notice of such failure shall have been given to the Servicer
by the Issuing Entity or the Indenture Trustee; or
(ii)
Failure
on the part of the Servicer duly to observe or perform in any material respect
any other covenants or agreements of the Servicer set forth in the Securities
or
in this Servicing Agreement, which failure, in each case, materially and
adversely affects the interests of Securityholders and which continues
unremedied for a period of 45 days after the date on which written notice
of
such failure, requiring the same to be remedied, and stating that such notice
is
a “Notice of Default” hereunder, shall have been given to the Servicer by the
Issuing Entity or the Indenture Trustee; or
(iii)
The
entry
against the Servicer of a decree or order by a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a trustee,
conservator, receiver or liquidator in any insolvency, conservatorship,
receivership, readjustment of debt, marshalling of assets and liabilities
or
similar proceedings, or for the winding up or liquidation of its affairs,
and
the continuance of any such decree or order undischarged or unstayed and
in
effect for a period of 60 consecutive days; or
(iv)
The
Servicer shall voluntarily go into liquidation, consent to the appointment
of a
conservator, receiver, liquidator or similar person in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer or of or relating to all or
substantially all of its property, or a decree or order of a court, agency
or
supervisory authority having jurisdiction in the premises for the appointment
of
a conservator, receiver, liquidator or similar person in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Servicer and such decree or order shall have remained
in force undischarged, unbonded or unstayed for a period of 60 days; or the
Servicer shall admit in writing its inability to pay its debts generally
as they
become due, file a petition to take advantage of any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors
or
voluntarily suspend payment of its obligations.
Then,
and
in every such case, so long as a Servicing Default shall not have been remedied
by the Servicer, either the Issuing Entity or the Indenture Trustee, by notice
then given in writing to the Servicer shall terminate all of the rights and
obligations of the Servicer as servicer under this Servicing Agreement other
than its right to receive servicing compensation and expenses for servicing
the
Loans hereunder during any period prior to the date of such termination and
the
Issuing Entity or the Indenture Trustee, may exercise any and all other remedies
available at law or equity. Any such notice to the Servicer shall also be
given
to each Rating Agency and the Issuing Entity. On or after the receipt by
the
Servicer of such written notice, all authority and power of the Servicer
under
this Servicing Agreement, whether with respect to the Securities or the Loans
or
otherwise, shall, subject to Section 7.02 of this Agreement, pass to and
be
vested in the Indenture Trustee, pursuant to and under this Section 7.01;
and,
without limitation, the Indenture Trustee is hereby authorized and empowered
to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes
of such
notice of termination, whether to complete the transfer and endorsement of
each
Loan and related documents, or otherwise. The Servicer agrees to cooperate
with
the Indenture Trustee in effecting the termination of the responsibilities
and
rights of the Servicer hereunder, including, without limitation, the transfer
to
the Indenture Trustee for the administration by it of all cash amounts relating
to the Loans that shall at the time be held by the Servicer and to be deposited
by it in the Custodial Account, or that have been deposited by the Servicer
in
the Custodial Account or thereafter received by the Servicer with respect
to the
Loans. All reasonable costs and expenses (including, but not limited to,
attorneys’ fees) incurred in connection with amending this Servicing Agreement
to reflect such succession as Servicer pursuant to this Section 7.01 shall
be
paid by the predecessor Servicer (or if the predecessor Servicer is the
Indenture Trustee, the initial Servicer) upon presentation of reasonable
documentation of such costs and expenses.
26
Notwithstanding
any termination of the activities of the Servicer hereunder, the Servicer
shall
be entitled to receive, out of any late collection of a payment on a Loan
which
was due prior to the notice terminating the Servicer’s rights and obligations
hereunder and received after such notice, that portion to which the Servicer
would have been entitled pursuant to Sections 3.03 and 3.09 as well as its
Servicing Fee in respect thereof, and any other amounts payable to the Servicer
hereunder the entitlement to which arose prior to the termination of its
activities hereunder.
Notwithstanding
the foregoing, a delay in or failure of performance under Section 7.01(i)
or
under Section 7.01(ii) after the applicable grace periods specified in such
Sections, shall not constitute a Servicing Default if such delay or failure
could not be prevented by the exercise of reasonable diligence by the Servicer
and such delay or failure was caused by an act of God or the public enemy,
acts
of declared or undeclared war, public disorder, rebellion or sabotage,
epidemics, landslides, lightning, fire, hurricanes, earthquakes, floods or
similar causes. The preceding sentence shall not relieve the Servicer from
using
reasonable efforts to perform its respective obligations in a timely manner
in
accordance with the terms of this Servicing Agreement and the Servicer shall
provide the Indenture Trustee and the Securityholders with notice of such
failure or delay by it, together with a description of its efforts to so
perform
its obligations. The Servicer shall immediately notify the Indenture Trustee
and
the Owner Trustee in writing of any Servicing Default.
Section
7.02 Indenture
Trustee to Act; Appointment of Successor.
vii)
On and
after the time the Servicer receives a notice of termination pursuant to
Section
7.01 or sends a notice pursuant to Section 6.04, the Indenture Trustee shall
be
the successor in all respects to the Servicer in its capacity as servicer
under
this Servicing Agreement and the transactions set forth or provided for herein
and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof.
Nothing in this Servicing Agreement or in the Trust Agreement shall be construed
to permit or require the Indenture Trustee to (i) succeed to the
responsibilities, duties and liabilities of the initial Servicer in its capacity
as Sponsor under the Loan Purchase Agreement, (ii) be responsible or accountable
for any act or omission of the Servicer prior to the issuance of a notice
of
termination hereunder, (iii) require or obligate the Indenture Trustee, in
its
capacity as successor Servicer, to purchase, repurchase or substitute any
Loan,
(iv) fund any losses on any Permitted Investment directed by any other Servicer
or (v) be responsible for the representations and warranties of the Servicer.
As
compensation therefor, the Indenture Trustee shall be entitled to such
compensation as the Servicer would have been entitled to hereunder if no
such
notice of termination had been given. Notwithstanding the above, (i) if the
Indenture Trustee is unwilling to act as successor Servicer, or (ii) if the
Indenture Trustee is legally unable so to act, the Indenture Trustee may
(in the
situation described in clause (i)) or shall (in the situation described in
clause (ii)) appoint or petition a court of competent jurisdiction to appoint
any established housing and home finance institution, bank or other mortgage
loan or home equity loan servicer having a net worth of not less than
$10,000,000 as the successor to the Servicer hereunder in the assumption
of all
or any part of the responsibilities, duties or liabilities of the Servicer
hereunder; provided that the appointment of any such successor Servicer will
not
result in the qualification, reduction or withdrawal of the ratings assigned
to
the Securities by the Rating Agencies. Pending appointment of a successor
to the
Servicer hereunder, unless the Indenture Trustee is prohibited by law from
so
acting, the Indenture Trustee shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the successor
shall be entitled to receive compensation out of payments on Loans in an
amount
equal to the compensation which the Servicer would otherwise have received
pursuant to Section 3.09 (or such lesser compensation as the Indenture Trustee
and such successor shall agree). The appointment of a successor Servicer
shall
not affect any liability of the predecessor Servicer which may have arisen
under
this Servicing Agreement prior to its termination as Servicer (including,
without limitation, the obligation to purchase Loans pursuant to Section
3.01 or
to pay any deductible under an insurance policy pursuant to Section 3.04),
nor
shall any successor Servicer be liable for any acts or omissions of the
predecessor Servicer or for any breach by such Servicer of any of its
representations or warranties contained herein or in any related document
or
agreement. The Indenture Trustee and such successor shall take such action,
consistent with this Servicing Agreement, as shall be necessary to effectuate
any such succession.
27
(b) Any
successor, including the Indenture Trustee, to the Servicer as servicer shall
during the term of its service as servicer (i) continue to service and
administer the Loans for the benefit of the Securityholders and (ii) maintain
in
force a policy or policies of insurance covering errors and omissions in
the
performance of its obligations as Servicer hereunder and a fidelity bond
in
respect of its officers, employees and agents to the same extent as the Servicer
is so required pursuant to Section 3.13.
(c) Any
successor Servicer, including the Indenture Trustee, shall not be deemed
in
default or to have breached its duties hereunder if the predecessor Servicer
shall fail to deliver any required deposit to the Custodial Account or otherwise
cooperate with any required servicing transfer or succession
hereunder.
28
Section
7.03 Notification
to Securityholders.
Upon
any termination of or appointment of a successor to the Servicer pursuant
to
this Article VII or Section 6.04, the Indenture Trustee shall give prompt
written notice thereof to the Securityholders, the Issuing Entity and each
Rating Agency.
ARTICLE
VIII
MISCELLANEOUS
PROVISIONS
Section
8.01 Amendment.
This
Servicing Agreement may be amended from time to time by the parties hereto,
provided that any amendment be accompanied by a letter from the Rating Agencies
that the amendment will not result in the downgrading or withdrawal of the
rating then assigned to the Securities, and the consent of the Indenture
Trustee. Promptly after the execution by the Servicer, the Issuing Entity
and
the Indenture Trustee of any amendment of this Servicing Agreement pursuant
to
this Section 8.01, the Indenture Trustee shall provide the Custodian with
written copies thereof. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amendment.
Section
8.02 Governing
Law.
THIS
SERVICING AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE
OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section
8.03 Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered at or mailed by certified
mail, return receipt requested, to (a) in the case of the Servicer, [Name
of
Servicer], __________________________________, Attention: ___________, (b)
in
the case of ▇▇▇▇▇’▇, Home Mortgage Loan Monitoring Group, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (c) in the case of Standard & Poor’s, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ st 10041, Attention: Residential
Mortgage Surveillance Group, (d) in the case of the Owner Trustee, [Name
of
Owner Trustee], ____________________________________, Attention: _______
Trust
Series ____-__, (e) in the case of the Issuing Entity, to ______ Trust Series
____-__, c/o Owner Trustee, [Name of Owner Trustee],
______________________________________, Attention: ______ Trust Series ____-
__,
(f) in the case of the Indenture Trustee, [Name of Indenture Trustee],
___________________________, Attention: _______________ and (g) in the case
of
the Underwriter, at [Name of Underwriter], _____________________________,
Attention: ________________; or, as to each party, at such other address
as
shall be designated by such party in a written notice to each other party.
Any
notice required or permitted to be mailed to a Securityholder shall be given
by
first class mail, postage prepaid, at the address of such Securityholder
as
shown in the Register. Any notice so mailed within the time prescribed in
this
Servicing Agreement shall be conclusively presumed to have been duly given,
whether or not the Securityholder receives such notice. Any notice or other
document required to be delivered or mailed by the Indenture Trustee to any
Rating Agency shall be given on a reasonable efforts basis and only as a
matter
of courtesy and accommodation and the Indenture Trustee shall have no liability
for failure to delivery such notice or document to any Rating
Agency.
29
Section
8.04 Severability
of Provisions.
If any
one or more of the covenants, agreements, provisions or terms of this Servicing
Agreement shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Servicing Agreement and
shall
in no way affect the validity or enforceability of the other provisions of
this
Servicing Agreement or of the Securities or the rights of the Securityholders
thereof.
Section
8.05 Third-Party
Beneficiaries.
This
Servicing Agreement will inure to the benefit of and be binding upon the
parties
hereto, the Securityholders, the Owner Trustee and their respective successors
and permitted assigns. Except as otherwise provided in this Servicing Agreement,
no other Person will have any right or obligation hereunder.
Section
8.06 Counterparts.
This
instrument may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section
8.07 Effect
of Headings and Table of Contents.
The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section
8.08 Termination
Upon Purchase by the Servicer or Liquidation of All Loans; Partial
Redemption.
(a) The
respective obligations and responsibilities of the Servicer, the Issuing
Entity
and the Indenture Trustee created hereby shall terminate upon the last action
required to be taken by the Issuing Entity pursuant to the Trust Agreement
and
by the Indenture Trustee pursuant to the Indenture following the earlier
of:
(i)
the
date
on or before which the Indenture or Trust Agreement is terminated,
or
(ii)
the
purchase by the Servicer from the Issuing Entity of all Loans and all property
acquired in respect of any Loan at a price equal to the Termination
Price.
The
right
of the Servicer to purchase the assets of the Issuing Entity pursuant to
clause
(ii) above on any Payment Date is conditioned upon the Aggregate Loan Balance
(after applying payments received in the related Collection Period) as of
such
Payment Date being less than ten percent of the Aggregate Loan Balance as
of the
Cut-off Date. If such right is exercised by the Servicer, the Servicer shall
deposit the Termination Price calculated pursuant to clause (ii) above with
the
Indenture Trustee pursuant to Section 4.10 of the Indenture and, upon the
receipt of such deposit, the Indenture Trustee or Custodian shall release
to the
Servicer, the files pertaining to the Loans being purchased.
(b) The
Servicer, at its expense, shall prepare and deliver to the Indenture Trustee
for
execution, at the time the Loans are to be released to the Servicer, appropriate
documents assigning each such Loan from the Indenture Trustee or the Issuing
Entity to the Servicer or the appropriate party.
(c) The
Servicer shall give the Indenture Trustee not less than seven Business Days’
prior written notice of the Payment Date on which the Servicer anticipates
that
the final distribution will be made to Noteholders. Notice of any termination,
specifying the anticipated Final Scheduled Payment Date or other Payment
Date
(which shall be a date that would otherwise be a Payment Date) upon which
the
Noteholders may surrender their Notes to the Indenture Trustee (if so required
by the terms hereof) for payment of the final distribution and cancellation,
shall be given promptly by the Servicer to the Indenture Trustee
specifying:
30
(i)
the
anticipated Final Scheduled Payment Date or other Payment Date upon which
final
payment of the Notes is anticipated to be made upon presentation and surrender
of Notes at the office or agency of the Indenture Trustee therein designated;
and
(ii)
the
amount of any such final payment, if known.
Section
8.09 Certain
Matters Affecting the Indenture Trustee.
For all
purposes of this Servicing Agreement, in the performance of any of its duties
or
in the exercise of any of its powers hereunder, the Indenture Trustee shall
be
subject to and entitled to the benefits of Article VI of the
Indenture.
Section
8.10 Owner
Trustee Not Liable for Related Documents.
The
recitals contained herein shall be taken as the statements of the Depositor,
and
the Owner Trustee assumes no responsibility for the correctness thereof.
The
Owner Trustee makes no representations as to the validity or sufficiency
of this
Servicing Agreement, of any Basic Document or of the Certificates (other
than
the signatures of the Owner Trustee on the Certificates) or the Notes, or
of any
Related Documents. The Owner Trustee shall at no time have any responsibility
or
liability with respect to the sufficiency of the Owner Trust Estate or its
ability to generate the payments to be distributed to Certificateholders
under
the Trust Agreement or the Noteholders under the Indenture, including, the
compliance by the Depositor or the Sponsor with any warranty or representation
made under any Basic Document or in any related document or the accuracy
of any
such warranty or representation, or any action of the Certificate Paying
Agent,
the Certificate Registrar or the Indenture Trustee taken in the name of the
Owner Trustee.
It
is
expressly understood and agreed by the parties hereto that with respect to
the
execution of this Agreement by [Name of Owner Trustee] (the “Trust Company”) for
the Issuing Entity (a) this Agreement is executed and delivered by the Trust
Company, not individually or personally, but solely as Owner Trustee, in
the
exercise of the powers and authority conferred and vested in it, pursuant
to the
Owner Trust Agreement, (b) each of the representations, undertakings and
agreements herein made on the part of the Issuing Entity is made and intended
not as personal representations, undertakings and agreements by the Trust
Company but is made and intended for the purpose for binding only the Issuing
Entity, (c) nothing herein contained shall be construed as creating any
liability on the Trust Company, individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability,
if
any, being expressly waived by the parties hereto and by any person claiming
by,
through or under the parties hereto, and (d) under no circumstances shall
the
Trust Company be personally liable for the payment of any indebtedness or
expenses of the Issuing Entity or be liable for the breach or failure of
any
obligation, representation, warranty or covenant made or undertaken by the
Issuing Entity under this Agreement or any other related documents.
31
IN
WITNESS WHEREOF, the Servicer, the Indenture Trustee and the Issuing Entity
have
caused this Servicing Agreement to be duly executed by their respective officers
or representatives all as of the day and year first above written.
[NAME
OF
SERVICER],
as
Servicer
By:________________________________
Name:
Title:
______
TRUST SERIES ____-__
By:
[NAME
OF OWNER TRUSTEE], not in its individual capacity but solely as Owner
Trustee
By:________________________________
Name:
Title:
[NAME
OF
INDENTURE TRUSTEE],
as
Indenture Trustee
By:________________________________
Name:
Title:
32
EXHIBIT
A
LOAN
SCHEDULE
(TO
BE
PROVIDED UPON REQUEST)
A-1
EXHIBIT
B
LIMITED
POWER OF ATTORNEY
KNOW
ALL
MEN BY THESE PREMISES:
That
[Name of Indenture Trustee], as Indenture Trustee (the “Trustee”), under the
Indenture (the “Indenture”) among ________________________________________ and
the Indenture Trustee, a national banking association organized and existing
under the laws of the State of ________, and having its principal office
located
at_____________________________________________, hath made, constituted and
appointed, and does by these presents make, constitute and appoint
________________________, a corporation organized and existing under the
laws of
the State of ______________, its true and lawful Attorney-in-Fact, with full
power and authority to sign, execute, acknowledge, deliver, file for record,
and
record any instrument on its behalf and to perform such other act or acts
as may
be customarily and reasonably necessary and appropriate to effectuate the
following enumerated transactions in respect of any of the mortgages or deeds
of
trust (the “Mortgages” and the “Deeds of Trust”, respectively) creating a trust,
second lien, third lien or an estate in fee simple interest in real property
securing a Loan and promissory notes secured thereby (the “Mortgage Notes”) for
which the undersigned is acting as Indenture Trustee for various Securityholders
(whether the undersigned is named therein as mortgagee or beneficiary or
has
become mortgagee by virtue of Endorsement of the Mortgage Note secured by
any
such Mortgage or Deed of Trust) and for which [Name of Servicer] is acting
as
Servicer pursuant to a Servicing Agreement, dated as of ____________ 1, ____
(the “Servicing Agreement”).
This
appointment shall apply only to transactions which the Trustee is authorized
to
enter into under the Indenture, but in no event shall apply to any transactions
other than the following enumerated transactions only:
(1) The
modification or re-recording of a Mortgage or Deed of Trust, where said
modification or rerecording is for the purpose of correcting the Mortgage
or
Deed of Trust to conform same to the original intent of the parties thereto
or
to correct title errors discovered after such title insurance was issued
and
said modification or re-recording, in either instance, does not adversely
affect
the lien of the Mortgage or Deed of Trust as insured.
(2) The
subordination of the lien of a Mortgage or Deed of Trust to an easement in
favor
of a public utility company or a government agency or unit with powers of
eminent domain; this section shall include, without limitation, the execution
of
partial satisfactions/releases, partial reconveyances or the execution of
requests to trustees to accomplish same.
(3) With
respect to a Mortgage or Deed of Trust, the foreclosure, the taking of a
deed in
lieu of foreclosure, or the completion of judicial or non-judicial foreclosure
or termination, cancellation or rescission of any such foreclosure, including,
without limitation, any and all of the following acts:
B-1
|
a)
|
The
substitution of trustee(s) serving under a Deed of Trust, in accordance
with state law and the Deed of
Trust;
|
|
b)
|
Statements
of breach or non-performance;
|
|
c)
|
Notices
of default;
|
|
d)
|
Cancellations/rescissions
of notices of default and/or notices of
sale;
|
|
e)
|
The
taking of a deed in lieu of foreclosure;
and
|
|
f)
|
Such
other documents and actions as may be necessary under the terms
of the
Mortgage, Deed of Trust or state law to expeditiously complete
said
transactions.
|
(4) The
conveyance of the properties to the mortgage insurer, or the closing of the
title to the property to be acquired as real estate owned, or conveyance
of
title to real estate owned.
(5) The
completion of loan assumption agreements.
(6) The
full
satisfaction/release of a Mortgage or Deed of Trust or full reconveyance
upon
payment and discharge of all sums secured thereby, including, without
limitation, cancellation of the related Mortgage Note.
(7) The
assignment of any Mortgage or Deed of Trust and the related Mortgage Note,
in
connection with the repurchase of the Loan secured and evidenced
thereby.
(8) The
full
assignment of a Mortgage or Deed of Trust upon payment and discharge of all
sums
secured thereby in conjunction with the refinancing thereof, including, without
limitation, the endorsement of the related Mortgage Note.
(9) The
modification or re-recording of a Mortgage or Deed of Trust, where said
modification or rerecording is for the purpose of any modification pursuant
to
Section 3.01 of the Servicing Agreement.
(10) The
subordination of the lien of a Mortgage or Deed of Trust, where said
subordination is in connection with any modification pursuant to Section
3.01 of
the Servicing Agreement, and the execution of partial satisfactions/releases
in
connection with such same Section 3.01.
The
undersigned gives said Attorney-in-Fact full power and authority to execute
such
instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this
Limited
Power of Attorney as fully as the undersigned might or could do, and hereby
does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or
cause
to be done by authority hereof.
Third
parties without actual notice may rely upon the exercise of the power granted
under this Limited Power of Attorney; and may be satisfied that this Limited
Power of Attorney shall continue in full force and effect has not been revoked
unless an instrument of revocation has been made in writing by the
undersigned.
B-2
|
[NAME
OF INDENTURE TRUSTEE], not in its individual capacity, but solely
as
Indenture Trustee under the Agreements and the
Indentures.
|
||||
|
Name:
|
Name:
|
|||
|
Title:
|
Title:
|
|||
B-3
|
STATE
OF
|
)
|
|
S.
|
|
|
COUNTY
OF
|
)
|
On
this
__ day of ____________, ____, before me the undersigned, Notary Public of
said
State, personally appeared ___________________ and _____________________
personally known to me to be duly authorized officers of [Name of Indenture
Trustee] that executed the within instrument and personally known to me to
be
the persons who executed the within instrument on behalf of [Name of Indenture
Trustee] therein named, and acknowledged to me such [Name of Indenture Trustee]
executed the within instrument pursuant to its by-laws.
|
WITNESS
my hand and official seal.
|
|||
|
Notary
Public in and for the
|
|||
|
State
of
|
|||
|
After
recording, please mail to:
|
|||
|
Attn:
|
|||
B-4
EXHIBIT
C
FORM
OF
REQUEST FOR RELEASE
To: [Custodian]
|
Re:
|
Servicing
Agreement, dated as of ____________ 1, ____, among [Name of Indenture
Trustee], as Indenture Trustee, ______ Trust Series ____-__, as
Issuing
Entity, and [Name of Servicer], as Servicer
|
|
In
connection with the administration of the Loans held by you as the Custodian
on
behalf of the Indenture Trustee under the Custodial Agreement, dated as of
_________ 1, ____, among the Indenture Trustee, and [Name of Custodian],
we
request the release, and acknowledge receipt, of the (Custodial File/[specify
documents]) for the Loan described below, for the reason indicated.
Mortgagor’s
Name Address & ZIP Code:
Loan
Number:
Reason
For Requesting Documents
(check
one)
|
___
|
1.
|
Loan
Paid in Full (The undersigned hereby certifies that all amounts
received
in connection therewith have been credited to the account of the
Indenture
Trustee.)
|
|
___
|
2.
|
Loan
Liquidated by ____________________ (The undersigned hereby certifies
that
all proceeds of foreclosure, insurance, condemnation or other liquidation
have been finally received and credited to the Custodial
Account.)
|
|
___
|
3.
|
Loan
in Foreclosure
|
|
___
|
4.
|
Other
(explain)
|
If
box 1
or 2 above is checked, and if all or part of the Custodial File was previously
released to us, please release to us our previous request and receipt on
file
with you, as well as any additional documents in your possession relating
to the
specified Loan.
C-1
If
box 3
or 4 above is checked, upon our return of all of the above documents to you
as
the Custodian, please acknowledge your receipt by signing in the space indicated
below, and returning this form.
|
[NAME
OF SERVICER], as Servicer
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
Date:
|
||
Acknowledgment
of Documents returned to the Custodian:
|
[NAME
OF CUSTODIAN], as Custodian
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
Date:
|
||
C-2
EXHIBIT
D
CERTIFICATE
PURSUANT TO SECTION 3.08
(Provided
Upon Request)
D-1
EXHIBIT
E
SERVICING
CRITERIA TO BE ADDRESSED
IN
ASSESSMENT OF COMPLIANCE
Definitions
Primary
Servicer - transaction party having borrower contact
Master
Servicer - aggregator of pool assets
Securities
Administrator - waterfall calculator (may be the Trustee, or may be the Master
Servicer)
Back-up
Servicer - named in the transaction (in the event a Back up Servicer becomes
the
Primary Servicer, follow Primary Servicer obligations)
Custodian
- safe keeper of pool assets
Paying
Agent - distributor of funds to ultimate investor
Trustee
-
fiduciary of the transaction
Note:
The
definitions above describe the essential function that the party performs,
rather than the party’s title. So, for example, in a particular transaction, the
trustee may perform the “paying agent” and “securities administrator” functions,
while in another transaction, the securities administrator may perform these
functions.
Where
there are multiple checks for criteria the attesting party will identify
in
their management assertion that they are attesting only to the portion of
the
distribution chain they are responsible for in the related transaction
agreements.
Key: X
- obligation
[X]
- under consideration for obligation
|
Reg
AB Reference
|
Servicing
Criteria
|
Primary
Servicer
|
Master
Servicer
|
Securities
Admin
|
Custodian
|
Paying
Agent
|
Trustee
|
|
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.
|
X
|
X
|
X
|
X
(Sec.
9.01)
|
||
|
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.
|
X
|
X
|
X
|
|||
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the Pool Assets 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.
|
X
|
X
|
E-1
|
Reg
AB
Reference
|
Servicing
Criteria
|
Primary
Servicer
|
Master
Servicer
|
Securities
Admin
|
Custodian
|
Paying
Agent
|
Trustee
|
|
Cash
Collection and Administration
|
|||||||
|
1122(d)(2)(i)
|
Payments
on pool assets 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.
|
X
|
X
|
X
|
X
|
||
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
X
|
X
|
X
|
X
|
X
|
|
|
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.
|
X
|
X
|
X
|
X
|
X
(Sec.
8.01)
|
|
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of over collateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
[X]
|
X
|
||||
|
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.
|
X
|
X
|
X
|
X
|
||
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
|
X
|
|||||
|
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.
|
X
|
X
|
X
|
X
|
X
|
|
|
Investor
Remittances and Reporting
|
E-2
|
Reg
AB
Reference
|
Servicing
Criteria
|
Primary
Servicer
|
Master
Servicer
|
Securities
Admin
|
Custodian
|
Paying
Agent
|
Trustee
|
|
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 Pool Assets serviced by the Servicer.
|
X
|
X
|
X
|
X
|
||
|
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.
|
X
|
X
|
X
|
X
|
X
|
|
|
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.
|
X
|
X
|
X
|
X
|
X
|
|
|
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.
|
X
|
X
|
X
|
X
|
X
|
|
|
Pool
Asset Administration
|
|||||||
|
1122(d)(4)(i)
|
Collateral
or security on pool assets is maintained as required by the transaction
agreements or related pool asset documents.
|
X
|
X
|
||||
|
1122(d)(4)(ii)
|
Pool
assets and related documents are safeguarded as required by the
transaction agreements
|
X
|
X
|
||||
|
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.
|
X
|
X
|
X
|
|||
|
1122(d)(4)(iv)
|
Payments
on pool assets, including any payoffs, made in accordance with
the related
pool asset 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 pool asset documents.
|
X
|
|||||
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the pool assets agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
|
X
|
|||||
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor's pool assets
(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.
|
X
|
X
|
||||
|
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.
|
X
|
X
|
E-3
|
Reg
AB
Reference
|
Servicing
Criteria
|
Primary
Servicer
|
Master
Servicer
|
Securities
Admin
|
Custodian
|
Paying
Agent
|
Trustee
|
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period
a pool
asset 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 pool assets including, for
example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).
|
X
|
|||||
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for pool assets with variable
rates
are computed based on the related pool asset documents.
|
X
|
X
|
||||
|
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 pool asset 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 pool asset documents
and state
laws; and (C) such funds are returned to the obligor within 30
calendar
days of full repayment of the related pool assets, or such other
number of
days specified in the transaction agreements.
|
X
|
|||||
|
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.
|
X
|
|||||
|
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.
|
X
|
|||||
|
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.
|
X
|
|||||
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
X
|
X
|
X
|
|||
|
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.
|
X
|
X
|
E-4