Exhibit 99.5
EXECUTION
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING INC.
Purchaser
and
WACHOVIA MORTGAGE CORPORATION
Seller
SELLER'S PURCHASE, WARRANTIES AND SERVICING AGREEMENT
Dated as of December 1, 2006
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS.................................................... 4
Section 1.01. Defined Terms........................................... 4
ARTICLE II SERVICING OF MORTGAGE LOANS; RECORD TITLE AND POSSESSION OF
MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF
MORTGAGE LOAN DOCUMENTS............................................... 22
Section 2.01. Agreement to Purchase................................... 22
Section 2.02. Purchase Price.......................................... 22
Section 2.03. Servicing of Mortgage Loans............................. 23
Section 2.04. Record Title and Possession of Mortgage Files;
Maintenance of Servicing Files.......................... 23
Section 2.05. Books and Records....................................... 24
Section 2.06. Transfer of Mortgage Loans.............................. 25
Section 2.07. Delivery of Mortgage Loan Documents..................... 25
Section 2.08. Quality Control Procedures.............................. 26
Section 2.09. Closing................................................. 26
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER; REPURCHASE;
REVIEW OF MORTGAGE LOANS.............................................. 27
Section 3.01. Representations and Warranties of the Seller............ 27
Section 3.02. Representations and Warranties as to Individual Mortgage
Loans................................................... 31
Section 3.03. Repurchase; Substitution................................ 47
Section 3.04. Purchase Price Protection............................... 49
Section 3.05. Repurchase of Mortgage Loans With First Payment
Defaults................................................ 50
ARTICLE IV ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS............ 50
Section 4.01. The Seller to Act as Servicer........................... 50
Section 4.02. Collection of Mortgage Loan Payments.................... 53
Section 4.03. Realization Upon Defaulted Mortgage Loans............... 53
Section 4.04. Establishment of Custodial Accounts; Deposits in
Custodial Accounts...................................... 54
Section 4.05. Permitted Withdrawals From the Custodial Account........ 55
Section 4.06. Establishment of Escrow Accounts; Deposits in Accounts.. 57
Section 4.07. Permitted Withdrawals From the Escrow Account........... 58
Section 4.08. Payment of Taxes, Insurance and Charges; Maintenance of
Primary Mortgage Insurance; Collections Thereunder...... 58
Section 4.09. Transfer of Accounts.................................... 59
Section 4.10. Maintenance of Hazard Insurance......................... 60
Section 4.11. Maintenance of Mortgage Impairment Insurance Policy..... 61
Section 4.12. Maintenance of Fidelity Bond and Errors and Omissions
Insurance............................................... 61
Section 4.13. Title, Management and Disposition of REO Property....... 62
Section 4.14. Notification of Maturity Date........................... 64
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ARTICLE V PAYMENTS TO THE PURCHASER...................................... 64
Section 5.01. Distributions........................................... 64
Section 5.02. Statements to the Purchaser............................. 65
Section 5.03. Monthly Advances by the Seller.......................... 66
Section 5.04. Liquidation Reports..................................... 66
ARTICLE VI GENERAL SERVICING PROCEDURES.................................. 66
Section 6.01. Assumption Agreements................................... 66
Section 6.02. Satisfaction of Mortgages and Release of Mortgage Files. 67
Section 6.03. Servicing Compensation.................................. 68
Section 6.04. Annual Statement as to Compliance....................... 68
Section 6.05. Annual Independent Certified Public Accountants'
Servicing Report........................................ 69
Section 6.06. Purchaser's Right to Examine Seller Records............. 69
Section 6.07. Seller Shall Provide Information as Reasonably
Required................................................ 69
ARTICLE VII THE SELLER................................................... 70
Section 7.01. Indemnification; Third Party Claims..................... 70
Section 7.02. Merger or Consolidation of the Seller................... 71
Section 7.03. Limitation on Liability of the Seller and Others........ 71
Section 7.04. Seller Not to Resign.................................... 72
Section 7.05. No Transfer of Servicing................................ 72
ARTICLE VIII DEFAULT..................................................... 72
Section 8.01. Events of Default....................................... 72
Section 8.02. Waiver of Defaults...................................... 74
ARTICLE IX TERMINATION................................................... 74
Section 9.01. Termination............................................. 74
ARTICLE X RECONSTITUTION OF MORTGAGE LOANS............................... 75
Section 10.01. Reconstitution of Mortgage Loans....................... 75
ARTICLE XI MISCELLANEOUS PROVISIONS...................................... 77
Section 11.01. Successor to the Seller................................ 77
Section 11.02. Amendment.............................................. 78
Section 11.03. [Reserved.]............................................ 78
Section 11.04. Governing Law.......................................... 78
Section 11.05. Notices................................................ 79
Section 11.06. Severability of Provisions............................. 79
Section 11.07. Exhibits............................................... 80
Section 11.08. General Interpretive Principles........................ 80
Section 11.09. Reproduction of Documents.............................. 81
Section 11.10. Confidentiality of Information......................... 81
Section 11.11. Recordation of Assignments of Mortgage................. 81
Section 11.12. Assignment by Purchaser................................ 81
Section 11.13. No Partnership......................................... 82
Section 11.14. Execution; Successors and Assigns...................... 82
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Section 11.15. Entire Agreement....................................... 82
Section 11.16. No Solicitation........................................ 82
Section 11.17. Costs.................................................. 83
Section 11.18. Protection of Mortgagor Personal Information........... 83
Section 11.19. Financial Statements................................... 83
Section 11.20. Purchase Price and Terms Letter........................ 83
EXHIBITS
A-1 Contents of Mortgage File
A-2 Contents of Servicing File
B Form of Custodial Account Letter Agreement
C Form of Escrow Account Letter Agreement
D Form of Assignment, Assumption and Recognition Agreement
E Form of Assignment and Conveyance
F Regulation AB Compliance Addendum
G Form of Remittance Report
H Form of Officer's Certificate
I Form of Security Release
J Form of Joinder Agreement
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This is a Seller's Purchase, Warranties and Servicing Agreement, dated
as of December 1, 2006, and is executed by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Lending Inc., as purchaser (the "Purchaser"), and Wachovia Mortgage Corporation,
as seller and servicer (in such capacity, the "Seller").
WITNESSETH:
WHEREAS, the Purchaser has heretofore agreed to purchase from the
Seller and the Seller has heretofore agreed to sell to the Purchaser certain
Mortgage Loans, servicing rights retained, from time to time, pursuant to the
terms of a letter agreement by and between the Seller and the Purchaser (the
"Purchase Price and Terms Letter");
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of
trust or other security instrument creating a first or second lien on a
residential dwelling located in the jurisdiction indicated on the related
Mortgage Loan Schedule, which is annexed to the related Assignment and
Conveyance. The Mortgage Loans as described herein shall be delivered in groups
of whole loans (each, a "Mortgage Loan Package") on various dates as provided
herein (each, a "Closing Date"); and
WHEREAS, the Purchaser and the Seller wish to prescribe the
representations and warranties of the Seller with respect to itself, the
Mortgage Loans and the management, servicing and control of the Mortgage Loans
by the Seller; and
WHEREAS, following its purchase of the Mortgage Loans from the Seller,
the Purchaser desires to sell some or all of the Mortgage Loans to one or more
purchasers as a Whole Loan Transfer in a whole loan or participation format or a
public or private mortgage-backed securities transaction.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Purchaser and the Seller agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meaning
specified in this Article:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices (including collection procedures) of prudent
mortgage banking institutions which service mortgage loans of the same type as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property is
located, and which are in accordance with ▇▇▇▇▇▇ Mae servicing practices and
procedures, for MBS pool mortgages, as defined in the ▇▇▇▇▇▇ ▇▇▇ Guides,
including future updates.
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Adjustable Rate Mortgage Loan: A Mortgage Loan as to which the related
Mortgage Note provides that the Mortgage Interest Rate may be adjusted
periodically.
Adjustment Date: With respect to each Adjustable Rate Mortgage Loan,
the date set forth in the related Mortgage Note on which the Mortgage Interest
Rate on the Mortgage Loan is adjusted in accordance with the terms of the
related Mortgage Note.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: The sale or transfer by the Purchaser of some or all
of the Mortgage Loans to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Agreement: This Seller's Purchase, Warranties and Servicing Agreement
including all exhibits hereto, amendments hereof and supplements hereto.
Alt-A Mortgage Loan: Any Mortgage Loan made to a borrower of "A"
credit quality that includes features that enable the Seller to charge an
interest rate above the rate for standard loans to A quality Mortgage Loans.
Appraised Value: With respect to any Mortgaged Property, the lesser of
(i) the value thereof as determined by an appraisal made for the originator of
the Mortgage Loan at the time of origination of the Mortgage Loan by a Qualified
Appraiser, and (ii) the purchase price paid for the related Mortgaged Property
by the Mortgagor with the proceeds of the Mortgage Loan, provided, however, in
the case of a Refinanced Mortgage Loan, such value of the Mortgaged Property is
based solely upon the value determined by an appraisal made for the originator
of such Refinanced Mortgage Loan at the time of origination of such Refinanced
Mortgage Loan by an appraiser who met the minimum requirements of ▇▇▇▇▇▇ Mae and
▇▇▇▇▇▇▇ Mac.
Assignment and Conveyance: As defined in Section 2.03.
Assignment of Mortgage: An individual assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form and in blank,
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect the transfer of the Mortgage.
Assignment of Proprietary Lease: With respect to a Co-op Loan, an
assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Co-op Unit is located to reflect the assignment
of such Proprietary Lease.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date and identified on the Mortgage Loan Schedule as a balloon mortgage
loan.
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BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
legal holiday in the States of New York or North Carolina, or (iii) a day on
which banks in the States of New York or North Carolina are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates set forth in the related Purchase
Price and Terms Letter on which the Purchaser from time to time shall purchase
and the Seller from time to time shall sell to the Purchaser, the Mortgage Loans
listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
Code: The Internal Revenue Code of 1986, as the same may be amended
from time to time (or any successor statute thereto).
Combined Loan-to-Value Ratio or CLTV: As of any date and as to any
Second Lien Loan, the ratio, expressed as a percentage, of the (a) sum of (i)
the outstanding principal balance of the Second Lien Loan and (ii) the
outstanding principal balance as of such date of any mortgage loan or mortgage
loans that are senior or equal in priority to the Second Lien Loan and which are
secured by the same Mortgaged Property to (b) the Appraised Value of the related
Mortgaged Property.
Commission: The United States Securities and Exchange Commission.
Compensating Interest: For any Remittance Date, the lesser of (i) the
aggregate Servicing Fee payable to the Seller for such Remittance Date and (ii)
the aggregate Prepayment Interest Shortfall for such Remittance Date.
Condemnation Proceeds: All awards, compensation and settlements in
respect of a Mortgaged Property, whether permanent or temporary, partial or
entire, by exercise of the power of eminent domain or condemnation, to the
extent not required to be released to a Mortgagor in accordance with the terms
of the related Mortgage Loan Documents.
Convertible Mortgage Loan: Any Adjustable Rate Mortgage Loan purchased
pursuant to this Agreement as to which the related Mortgage Note permits the
Mortgagor to convert the Mortgage Interest Rate on such Mortgage Loan to a fixed
Mortgage Interest Rate.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated
to a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Co-op Project: With respect to any Co-op Loan, all real property and
improvements thereto and rights therein and thereto owned by a cooperative
corporation including without limitation the land, separate dwelling units and
all common elements.
Co-op Stock: With respect to a Co-op Loan, the single outstanding
class of stock, partnership interest or other ownership instrument in the
related residential cooperative housing corporation.
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Co-op Unit: With respect to any Co-op Loan, a specific unit in a Co-op
Project.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Credit Score: The credit score for each Mortgage Loan shall be the
minimum of two (2) credit bureau scores obtained at origination or such other
time by the Seller. If two (2) credit bureau scores are obtained, the Credit
Score will be the lower score. If three (3) credit bureau scores are obtained,
the Credit Score will be the middle of the three. When there is more than one
(1) applicant, the lowest of the applicants' Credit Scores will be used. There
is only one (1) score for any loan regardless of the number of borrowers and/or
applicants.
Custodial Account: Each separate demand account or accounts created
and maintained pursuant to Section 4.04 which shall be entitled "Wachovia
Mortgage Corporation, in trust for the Purchaser, owner of various whole loan
series" and shall be established as an Eligible Account, in the name of the
Person that is the "Purchaser" with respect to the related Mortgage Loans.
Cut-off Date: With respect to each Mortgage Loan Package, the first
Business Day of the month of the related Closing Date, or as otherwise set forth
in the related Purchase Price and Terms Letter.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Qualified Substitute Mortgage Loan.
Determination Date: With respect to each Remittance Date, the 15th day
(or if such 15th day is not a Business Day, the Business Day immediately
preceding such 15th day) of the month in which such Remittance Date occurs.
Due Date: With respect to any Mortgage Loan, the day of the month on
which the Monthly Payment is due on such Mortgage Loan, exclusive of any days of
grace.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of such Remittance
Date and ending on, and including the first day of the month of the Remittance
Date.
Eligible Account: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company that (a) is
incorporated under the laws of the United States of America or any state
thereof, (b) is subject to supervision and examination by federal or state
banking authorities and (c) has or is a subsidiary of a holding company that has
an outstanding unsecured commercial paper or other short-term unsecured debt
obligations that are rated A-1 by S&P or Primare-1 by Moody's (or a comparable
rating is another rating agency is specified by the Initial Purchaser by written
notice to the Seller) at the time any amounts are held on deposit therein, (ii)
an account or accounts the deposits in which are fully insured by the FDIC or
(iii) a trust account or accounts maintained with a federal or state chartered
depository institution or trust company acting in its fiduciary capacity.
Eligible Accounts may bear interest.
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Eligible Investments: Any one or more of the following obligations or
securities which investment provides for a date of maturity not later than the
Determination Date in each month:
(a) direct obligations of, and obligations fully guaranteed as to the
timely payment of principal and interest by the United States of America or any
agency or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of America;
(b) (i) demand or time deposits, federal funds or bankers' acceptances
issued by any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof and subject to
supervision and examination by federal and/or state banking authorities,
provided that the commercial paper and/or the short-term deposit rating and/or
the long-term unsecured debt obligations or deposits of such depository
institution or trust company (or, in the case of a depository institution or
trust company which is the principal subsidiary of a holding company, the
commercial paper or other short-term debt obligations of such holding company)
at the time of such investment or contractual commitment providing for such
investment are rated in one of the two highest rating categories by each Rating
Agency and (ii) any other demand or time deposit or certificate of deposit that
is fully insured by the FDIC; "P-1" by ▇▇▇▇▇'▇ Investors Service, Inc. and the
long-term debt obligations of such depository institution or trust company (or,
in the case of a depository institution or trust company which is the principal
subsidiary of a holding company, the long-term debt obligations of such holding
company) are rated at least "Aa" by ▇▇▇▇▇'▇ Investors Service, Inc.
(c) repurchase obligations with a term not to exceed thirty (30) days
and with respect to (i) any security described in clause (a) above and entered
into with a depository institution or trust company (acting as principal)
described in clause (b) (ii) above;
(d) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
state thereof that are rated in one of the two highest rating categories by each
Rating Agency at the time of such investment or contractual commitment providing
for such investment; provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that investments
therein will cause the then outstanding principal amount of securities issued by
such corporation and held as Eligible Investments to exceed 10% of the aggregate
outstanding principal balances of all of the Mortgage Loans and Eligible
Investments;
(e) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one (1) year after the date of issuance thereof) which are
rated in one of the two highest rating categories by each Rating Agency at the
time of such investment;
(f) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to each Rating Agency as evidenced
in writing by each Rating Agency; and
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(g) any money market funds the collateral of which consists of
obligations fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America (which may
include repurchase obligations secured by collateral described in clause (a))
and other securities and which money market funds are rated in one of the two
highest rating categories by each Rating Agency.
provided, however, that no instrument or security shall be an Eligible
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
investment or security is purchased at a price greater than par and, provided,
further, that no instrument or security shall be an Eligible Investment if such
instrument or security is not acceptable to the applicable Rating Agencies in a
Securitization Transaction.
Equity: With respect to any Second Lien Loan, the Appraised Value,
less the unpaid principal balance of the related First Lien Loan.
Equity Loan-to-Value: With respect to any Second Lien Loan, the
original principal balance of such Mortgage Loan, divided by the Equity.
Escrow Account: Each separate trust account or accounts created and
maintained pursuant to Section 4.06 which shall be entitled "Wachovia Mortgage
Corporation, in trust for the Purchaser, as owner of various whole loan series
and various Mortgagors" and shall be established as an Eligible Account, in the
name of the Person that is the "Purchaser" with respect to the related Mortgage
Loans.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, flood insurance premiums, fire
and hazard insurance premiums, condominium charges, and any other payments
required to be escrowed by the Mortgagor with the mortgagee pursuant to the
Mortgage, applicable law or any other related document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 8.01.
▇▇▇▇▇▇ Mae: The entity formerly known as the Federal National Mortgage
Association, or any successor thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ ▇▇▇
Servicers' Guide and all amendments or additions thereto, including, but not
limited to, future updates thereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fidelity Bond: A fidelity bond to be maintained by the Seller pursuant
to Section 4.12.
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FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, as amended and in effect from time to time.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
First Remittance Date: The eighteenth (18th) day of the month
following each respective Closing Date, or if such day is not a Business Day,
the first Business Day immediately thereafter.
Fixed Rate Mortgage Loan: A Mortgage Loan purchased pursuant to this
Agreement which bears a fixed Mortgage Interest Rate during the life of the
loan.
Flood Zone Service Contract: A transferable contract maintained for
the Mortgaged Property with a nationally recognized flood zone service provider
for the purpose of obtaining the current flood zone status relating to such
Mortgaged Property.
Foreign National: Any person who is not a United States citizen or a
permanent or nonpermanent resident alien of the United States.
▇▇▇▇▇▇▇ Mac: The entity formerly known as the Federal Home Loan
Mortgage Corporation, or any successor thereto.
▇▇▇▇▇▇▇ Mac Guides: The ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇▇ Mac
Servicers' Guide and all amendments or additions thereto, including, but not
limited to, any future updates thereof.
GAAP: Generally accepted accounting principles, consistently applied.
Gross Margin: With respect to any Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note and the related
Mortgage Loan Schedule that is added to the Index on each Adjustment Date in
accordance with the terms of the related Mortgage Note to determine the new
Mortgage Interest Rate for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership and
Equity Protection Act of 1994, (b) classified as a "high cost home," "covered,"
"high risk home" or "predatory" loan under any applicable state, federal or
local law (or a similarly classified loan using different terminology under a
law imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees) or
(c) categorized as High Cost pursuant to Appendix E of Standard & Poor's
Glossary. For avoidance of doubt, the parties agree that this definition shall
apply to any law regardless of whether such law is presently, or in the future
becomes, the subject of judicial review or litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
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HUD: The United States Department of Housing and Urban Development or
any successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the Mortgage Loan Schedule and set forth in the related Mortgage
Note for the purpose of calculating the Mortgage Interest Rate thereon.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Only Mortgage Loan: A Mortgage Loan that only requires
payments of interest for a period of time specified in the related Mortgage
Note.
Interest Rate Adjustment Date: With respect to each adjustable rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lender Paid Mortgage Insurance Policy or LPMI Policy: A policy of
primary mortgage guaranty insurance issued by a Qualified Insurer pursuant to
which the related premium is to be paid by the Servicer of the related Mortgage
Loan from payments of interest made by the Mortgagor (or by the Purchaser) in an
amount as is set forth in the related Purchase Price and Terms Letter and the
related Mortgage Loan Schedule.
Liquidation Proceeds: Amounts, other than Insurance Proceeds and
Condemnation Proceeds, received in connection with the partial or complete
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or in
connection with the sale of the Mortgaged Property if the Mortgaged Property is
acquired in satisfaction of the Mortgage.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the original outstanding principal amount
of the Mortgage Loan and, with respect to any Second Lien Loan, the outstanding
principal amount of any related First Lien Loan as of the date of origination of
such mortgage loan, to the lesser of (a) the Appraised Value of the Mortgaged
Property at origination and (b) if the Mortgage Loan was made to finance the
acquisition of the related Mortgaged Property, the purchase price of the
Mortgaged Property.
Master Servicer: With respect to any Securitization Transaction, the
"master servicer," if any, identified in the related transaction documents.
Maximum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the maximum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be increased on any Adjustment
Date.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
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MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
Minimum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the minimum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be decreased on any Adjustment
Date.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Advance: The payment required to be made by the Seller with
respect to any Remittance Date pursuant to Section 5.03.
Monthly Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan
payable by the related Mortgagor pursuant to the terms of the related Mortgage
Note.
Mortgage: The mortgage, deed of trust or other instrument which
creates a first or second lien on (i) with respect to a Mortgage Loan other than
a Co-op Loan, an unsubordinated estate in fee simple in real property securing
the Mortgage Note; except that with respect to real property located in
jurisdictions in which the use of leasehold estates for residential properties
is a widely-accepted practice, the mortgage, deed of trust or other instrument
securing the Mortgage Note may secure and create a first or second lien upon a
leasehold estate of the Mortgagor, or (ii) with respect to a Co-op Loan, the
related Security Agreement which in either case secures the Mortgage Note.
Mortgage File: With respect to each Mortgage Loan, the documents
pertaining thereto specified in Exhibit A-1 and any additional documents
required to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: As to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan in accordance with the provisions
of the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan or Co-op Loan which is the
subject of this Agreement, each Mortgage Loan originally sold and subject to
this Agreement being identified on the related Mortgage Loan Schedule, which
Mortgage Loan includes without limitation the Mortgage File, the Monthly
Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, REO Disposition Proceeds, any escrow accounts related to the
Mortgage Loan, and all other rights, benefits, proceeds and obligations arising
from or in connection with such Mortgage Loan, excluding replaced or repurchased
mortgage loans.
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Mortgage Loan Documents: The documents contained in a Mortgage File.
Mortgage Loan Package: As defined in the Recitals to this Agreement.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
Mortgage Interest Rate less the related Servicing Fee Rate.
Mortgage Loan Schedule: The schedule of Mortgage Loans annexed to the
related Assignment and Conveyance, each such schedule setting forth the
following information with respect to each Mortgage Loan in the related Mortgage
Loan Package:
(1) the Seller's Mortgage Loan identifying number;
(1) the Mortgagor's name;
(2) the street address of the Mortgaged Property including the
city, state and zip code;
(3) a code indicating whether the Mortgaged Property is
owner-occupied, a second home or investment property;
(4) the number of units and type of residential property
constituting the Mortgaged Property (e.g., single family, two- to
four-family, condominium, etc);
(5) the original months to maturity and the remaining months to
maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule;
(6) the date of the Mortgage Note;
(7) the Loan-to-Value Ratio at origination and as of the related
Cut-off Date;
(8) with respect to any Second Lien Loan, the Equity
Loan-to-Value-Ratio at origination and as of the related Cut-off Date;
(9) the Combined Loan-to-Value Ratio at origination and as of the
related Cut-off Date;
(10) the Mortgage Interest Rate at origination and as of the
related Cut-off Date;
(11) the Mortgage Loan origination date;
(12) the last payment date on which a Monthly Payment was
actually applied to pay interest and the outstanding principal balance;
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(13) the stated maturity date of the Mortgage Loan and of the
First Lien Loan, if applicable;
(14) the amount of the Monthly Payment (PITI or ITI, as
applicable) as of the related Cut-off Date;
(15) the original principal amount of the Mortgage Loan and the
principal balance of the related First Lien Loan, if applicable, as of the
date of origination;
(16) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase, rate and term refinance, equity take-out refinance);
(17) a code indicating the documentation style;
(18) the date on which the first Monthly Payment is due;
(19) a code indicating whether or not the Mortgage Loan is
insured as to payment defaults by a Primary Mortgage Insurance Policy; and,
in the case of any Mortgage Loan which is insured as to payment defaults by
a Primary Mortgage Insurance Policy, the name of the provider of such
Primary Mortgage Insurance Policy, the Primary Mortgage Insurance Policy
certificate number and the Primary Mortgage Insurance Policy coverage
percentage;
(20) a code indicating whether or not the Mortgage Loan is the
subject of a Prepayment Penalty, and if so, a description of and the terms
of such Prepayment Penalty;
(21) a code indicating the Credit Score of the Mortgagor at the
time of origination of the Mortgage Loan;
(22) the loan type (i.e. fixed, adjustable; 2/28, 3/27, 5/25,
etc.);
(23) with respect to each Adjustable Rate Mortgage Loan, the
first Adjustment Date and the Adjustment Date frequency;
(24) with respect to each Adjustable Rate Mortgage Loan, the
Gross Margin;
(25) with respect to each Adjustable Rate Mortgage Loan, the
Maximum Mortgage Interest Rate under the terms of the Mortgage Note;
(26) with respect to each Adjustable Rate Mortgage Loan, the
Minimum Mortgage Interest Rate under the terms of the Mortgage Note;
(27) with respect to each Adjustable Rate Mortgage Loan, the
Periodic Rate Cap;
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(28) with respect to each Adjustable Rate Mortgage Loan, the
Index;
(29) with respect to each Adjustable Rate Mortgage Loan, the
lookback (# of days) under the terms of the Mortgage Note;
(30) a code indicating whether the Mortgage Loan is a Second Lien
Loan;
(31) MIN, if applicable;
(32) a code indicating whether the Mortgage Loan is an Interest
Only Mortgage Loan and the term of the interest-only period;
(33) the Due Date for the first Monthly Payment;
(34) with respect to the related Mortgagor, the debt-to-income
ratio;
(35) the Appraised Value of the Mortgaged Property;
(36) the sales price of the Mortgaged Property if the Mortgage
Loan was originated in connection with the purchase of the Mortgaged
Property;
(37) with respect to each Mortgage Loan that was originated six
(6) or more months prior to the related Closing Date, the amount of the
Monthly Payment at origination;
(38) a code indicating if the Mortgage Loan is a Balloon Mortgage
Loan and the term of the Balloon Loan;
(39) the total monthly income for all Mortgagors;
(40) a code indicating whether the Mortgagor is a first time home
buyer;
(41) the race/ethnicity and gender of each Mortgagor and
Co-Mortgagor;
(42) the date of birth of each Mortgagor and co-Mortgagor;
(43) a code indicating if the Mortgage Loan is a Negative
Amortization Mortgage Loan;
(44) the number of times during the twelve (12) month period
preceding the related Closing Date that any Monthly Payment has been
received thirty (30) or more days after its Due Date;
(45) a code indicating the specific loan/underwriting program of
each Mortgage Loan as assigned by the Seller pursuant to the Underwriting
Standards; and
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(46) the monthly tax and insurance payment.
With respect to the Mortgage Loans in the aggregate in each Mortgage
Loan Package, the Mortgage Loan Schedule shall set forth the following
information, as of the related Cut-off Date unless otherwise specified:
(1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the
Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage
Loans;
(4) the weighted average original months to maturity of the
Mortgage Loans and the weighted average remaining months to maturity of the
Mortgage Loans.
Mortgage Note: The original executed note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to any Mortgage Loan that is not a
Co-op Loan, the underlying real property securing repayment of the related
Mortgage Note, consisting of a fee simple parcel of real estate or a leasehold
estate, the term of which is equal to or longer than the term of such Mortgage
Note. With respect to a Co-op Loan, the related Co-op Stock and Proprietary
Lease securing the indebtedness of the Mortgagor under the related Mortgage
Loan.
Mortgagor: The obligor on a Mortgage Note.
Mortgagor Personal Information: Any information, including, but not
limited to, all personal information about a Mortgagor that is disclosed to the
Seller or the Purchaser by or on behalf of the Mortgagor.
Nonrecoverable Advance: Any Servicing Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Seller, will not be ultimately recoverable
from late collections, Insurance Proceeds or Liquidation Proceeds on such
Mortgage Loan or REO Property as provided herein.
OCC: Office of the Comptroller of the Currency, its successors and
assigns.
Officers' Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Senior Vice President or
a Vice President and by the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Seller, and delivered to the
Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the party on behalf of whom the opinion is being given, reasonably
acceptable to the Purchaser,
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provided that any Opinion of Counsel relating to (a) the qualification of any
account required to be maintained pursuant to this Agreement as an eligible
account, (b) qualification of the Mortgage Loans in a REMIC or (c) compliance
with the REMIC Provisions, must be (unless otherwise stated in such Opinion of
Counsel) an opinion of counsel who (i) is in fact independent of the Seller and
any servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Seller or any servicer or in an Affiliate of
either and (iii) is not connected with the Seller or any servicer as an officer,
employee, director or person performing similar functions.
OTS: Office of Thrift Supervision or any successor thereto.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan
and any Adjustment Date therefor, a number of percentage points per annum that
is set forth in the related Mortgage Loan Schedule and in the related Mortgage
Note, which is the maximum amount by which the Mortgage Interest Rate for such
Mortgage Loan may increase (without regard to the Maximum Mortgage Interest
Rate) or decrease (without regard to the Minimum Mortgage Interest Rate) on such
Adjustment Date from the Mortgage Interest Rate in effect immediately prior to
such Adjustment Date, which may be a different amount with respect to the first
Adjustment Date.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pledge Agreement: The specific agreement creating a first or second
lien on and pledge of the Co-op Stock and the appurtenant Proprietary Lease
securing a Co-op Loan.
Premium Percentage: With respect to any Mortgage Loan, a percentage
equal to the excess of the Purchase Price Percentage over 100%.
Prepayment Interest Shortfall: As to any Remittance Date and Principal
Prepayment in full, the difference between (i) one (1) full month's interest at
the applicable Mortgage Interest Rate (after giving effect to any applicable
relief act reduction, debt service reduction and deficient valuation), as
reduced by the Servicing Fee Rate, on the outstanding principal balance of the
related Mortgage Loan immediately prior to such Principal Prepayment and (ii)
the amount of interest actually received with respect to such Mortgage Loan in
connection with such Principal Prepayment.
Prepayment Penalty: With respect to each Mortgage Loan, the amount of
any premium or penalty required to be paid by the Mortgagor if the Mortgagor
prepays such Mortgage Loan as provided in the related Mortgage Note or Mortgage.
Primary Mortgage Insurance Policy or PMI Policy: Each policy of
primary mortgage insurance issued by a Qualified Insurer and represented to be
in effect pursuant to Section 3.02(bb), or any replacement policy therefor
obtained by the Seller pursuant to Section 4.08.
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Prime Rate: The prime rate announced to be in effect from time to time
as published as the average rate in The Wall Street Journal (Northeast Edition).
Principal Prepayment: Any full or partial payment or other recovery of
principal on a Mortgage Loan which is received in advance of its scheduled Due
Date, including any Prepayment Penalty or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Proprietary Lease: The lease on a Co-op Unit evidencing the possessory
interest of the owner of the Co-op Stock in such Co-op Unit.
Purchase Price: As defined in Section 2.02.
Purchase Price and Terms Letter: As defined in the Recitals to this
Agreement which may also be a form of trade execution notice.
Purchase Price Percentage: The purchase price percentage used in
calculating the Purchase Price, as set forth in the related Purchase Price and
Terms Letter.
Purchaser: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending Inc., its successors in
interest and assigns.
Qualified Appraiser: With respect to each Mortgage Loan, an appraiser,
duly appointed by the Seller, who had no interest, direct or indirect in the
Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan, and such appraiser and the appraisal made by such appraiser both satisfy
the requirements of ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac and Title XI of FIRREA and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided by the insurance policy issued by
it, approved as an insurer by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Qualified Substitute Mortgage Loan: As defined in Section 3.03.
Rating Agencies: Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇- ▇▇▇▇ Companies, Inc., ▇▇▇▇▇'▇ Investors Service, Inc. or, in the event
that some or all ownership of the Mortgage Loans is evidenced by mortgage-backed
securities, the nationally recognized rating agencies issuing ratings with
respect to such securities, if any.
Reconstitution: Any Agency Transfer, Securitization Transaction or
Whole Loan Transfer.
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Recognition Agreement: An agreement whereby a Co-op and a lender with
respect to a Co-op Loan (i) acknowledges that such lender may make, or intends
to make such Co-op Loan, and (ii) make certain agreements with respect to such
Co-op Loan.
Refinanced Mortgage Loan: A Mortgage Loan which was made to a
Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan and the proceeds of which were used in whole or part to satisfy an
existing mortgage.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to
REMICs, which appear in Sections 860A through 860G of the Code, and related
provisions, and proposed, temporary and final regulations and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Date: The 18th day of each month, beginning with the First
Remittance Date, or if such day is not a Business Day, the first Business Day
thereafter.
REO Account: The separate account or accounts created and maintained
pursuant to Section 4.13 that constitutes an Eligible Account.
REO Disposition: The final sale by the Seller of any REO Property.
REO Disposition Proceeds: Amounts received by the Seller in connection
with an REO Disposition.
REO Property: A Mortgaged Property acquired by or on behalf of the
Purchaser in full or partial satisfaction of the related Mortgage as described
in Section 4.13.
Repurchase Price: With respect to any Mortgage Loan for which a breach
of a representation or warranty from the Agreement is found, a price equal to
the then outstanding principal balance of the Mortgage Loan to be repurchased,
plus accrued interest thereon at the Mortgage Interest Rate from the date to
which interest had last been paid through the date of such repurchase, plus the
amount of any outstanding advances owed to any servicer, and plus all costs and
expenses incurred by the Purchaser or any servicer arising out of or based upon
such breach, including without limitation costs and expenses incurred in the
enforcement of the Seller's repurchase obligation hereunder, and plus, in the
event a Mortgage Loan is repurchased during the first twelve (12) months
following the related Closing Date, an amount equal to the Premium Percentage
multiplied by the outstanding principal balance of such Mortgage Loan as of the
date of such repurchase.
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Residential Dwelling: Any one of the following: (i) a one-family
dwelling, (ii) a two- to four-family dwelling, (iii) a one-family dwelling unit
in a ▇▇▇▇▇▇ Mae eligible condominium project, or (iv) a one-family dwelling in a
planned unit development, none of which is manufactured housing, a co-operative,
a commercial property, an agricultural property or a mixed use property.
RESPA: Real Estate Settlement Procedures Act, as amended from time to
time.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Scheduled Principal Balance: As to each Mortgage Loan and any date of
determination, (i) the principal balance of such Mortgage Loan as of the related
Cut-off Date after giving effect to payments of principal due on or before such
date, whether or not received, minus (ii) all amounts previously distributed to
the Purchaser with respect to the Mortgage Loan representing payments or
recoveries of principal (or advances in lieu thereof).
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage on
the related Mortgaged Property.
Securitization Transaction: As defined in Section 10.01(a)(iii).
Security Agreement: With respect to a Co-op Loan, the agreement or
mortgage creating a security interest in favor of the originator of the Co-op
Loan in the related Co-op Stock.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred by the Seller in the performance by the
Seller of its servicing obligations, including, but not limited to, the cost of
(a) the preservation, restoration and protection of a Mortgaged Property, (b)
any enforcement, administrative or judicial proceedings, or any legal work or
advice specifically related to servicing the Mortgage Loans, including but not
limited to, foreclosures, bankruptcies, condemnations, drug seizures, elections,
foreclosures by subordinate or superior lienholders, and other legal actions
incidental to the servicing of the Mortgage Loans (provided that such expenses
are reasonable and that the Seller specifies the Mortgage Loan(s) to which such
expenses relate, and provided further that any such enforcement, administrative
or judicial proceeding does not arise out of a breach of any representation,
warranty or covenant of the Seller hereunder), (c) the management and
liquidation of any REO Property, (d) taxes, assessments, water rates, sewer
rates and other charges which are or may become a lien upon the Mortgaged
Property, and Primary Mortgage Insurance Policy or LPMI Policy premiums and fire
and hazard insurance coverage, (e) any expenses reasonably sustained by the
Seller with respect to the liquidation of the Mortgaged Property in accordance
with the terms of this Agreement and (f) compliance with the obligations under
Section 4.08.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual servicing fee the Purchaser shall pay to the Seller for servicing the
Mortgage Loans in accordance with the terms of this Agreement, which shall, for
each month, be equal to one-twelfth of the product of (i) the Servicing Fee Rate
and (ii) the unpaid principal balance of such Mortgage Loan. Such fee shall be
payable monthly, computed on the basis of the same principal
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amount and period respecting which any related interest payment on a Mortgage
Loan is computed, and shall be pro rated at a per diem rate based upon a 30-day
month. The obligation of the Purchaser to pay the Servicing Fee is limited to,
and payable solely from, the interest portion (including recoveries with respect
to interest from Liquidation Proceeds and other proceeds, to the extent
permitted by Section 4.05) of related Monthly Payments collected by the Seller,
or as otherwise provided under Section 4.05.
Servicing Fee Rate: The per annum rate at which the Servicing Fee
accrues, which rate with respect to each Mortgage Loan shall be as set forth in
the related Purchase Price and Terms Letter.
Servicing File: With respect to each Mortgage Loan, the documents
pertaining thereto specified in Exhibit A-2 and copies of all documents for such
Mortgage Loan specified in Exhibit A-1.
Servicing Officer: Any officer of the Seller involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Seller to the
Purchaser upon request, as such list may from time to time be amended.
Servicing Transfer Costs: All reasonable costs and expenses incurred
by the Purchaser in connection with the transfer of servicing from Seller,
including, without limitation, any reasonable costs or expenses associated with
the complete transfer of all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the Purchaser (or any
successor to Seller appointed pursuant to Section 11.01) to correct any errors
or insufficiencies in the servicing data or otherwise to enable the Purchaser
(or any successor to Seller appointed pursuant to Section 11.01) to service the
Mortgage Loans properly and effectively.
Standard & Poor's: Standard & Poor's Rating Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and its successors in interest.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R) Glossary,
as may be in effect from time to time.
Stock Certificate: With respect to a Co-op Loan, the certificates
evidencing ownership of the Co-op Stock issued by the cooperative corporation.
Stock Power: With respect to a Co-op Loan, an assignment of the Stock
Certificate or an assignment of the Co-op Stock issued by the cooperative
corporation.
Tax Service Contract: A transferable contract maintained for the
Mortgaged Property with a tax service provider for the purpose of obtaining
current information from local taxing authorities relating to such Mortgaged
Property.
Underwriting Standards: As to each Mortgage Loan, the Seller's
underwriting guidelines in effect as of the date of origination of such Mortgage
Loan.
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Whole Loan Transfer: As defined in Section 10.01(a)(i).
ARTICLE II
SERVICING OF MORTGAGE LOANS; RECORD TITLE AND POSSESSION OF
MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL AGREEMENT;
DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01. Agreement to Purchase.
The Seller agrees to sell and the Purchaser agrees to purchase on each
Closing Date, pursuant to this Agreement and the related Purchase Price and
Terms Letter, the Mortgage Loans being sold by the Seller and listed on the
related Mortgage Loan Schedule, servicing rights retained, having an aggregate
Scheduled Principal Balance in an amount as set forth in the related Purchase
Price and Terms Letter, or in such other amount as agreed by the Purchaser and
the Seller as evidenced by the actual aggregate principal balance of the
Mortgage Loans accepted by the Purchaser on such Closing Date. The Seller shall
deliver in an electronic format the Mortgage Loan Schedule for the Mortgage
Loans to be purchased on such Closing Date to the Purchaser at least five (5)
Business Days prior to such Closing Date or as otherwise set forth in the
related Purchase Price and Terms Letter.
Section 2.02. Purchase Price.
The Purchase Price for the Mortgage Loans in a Mortgage Loan Package
shall be equal to the sum of (a) the percentage of par as stated in the related
Purchase Price and Terms Letter (subject to adjustment as provided therein),
multiplied by the aggregate Scheduled Principal Balance of Mortgage Loans as of
the related Cut-off Date listed on the related Mortgage Loan Schedule plus (b)
accrued interest on the aggregate Scheduled Principal Balance as of the related
Cut-off Date of the related Mortgage Loans at the weighted average Mortgage Loan
Remittance Rate of such Mortgage Loans from the related Cut-off Date to but not
including such Closing Date (the "Purchase Price"). If so provided in the
related Purchase Price and Terms Letter, portions of each Mortgage Loan Package
shall be priced separately.
The Purchase Price as set forth in the preceding paragraph for the
Mortgage Loans in a Mortgage Loan Package shall be paid on the related Closing
Date by wire transfer of immediately available funds.
With respect to each Mortgage Loan, the Purchaser shall be entitled to
(1) all scheduled payments of principal due after the related Cut-off Date, (2)
all other recoveries of principal collected on or after the related Cut-off Date
(provided, however, that all scheduled payments of principal due on or before
the related Cut-off Date and collected by the Seller or any successor servicer
after the related Cut-off Date shall belong to the Seller), and (3) all payments
of interest on the Mortgage Loans at the related Mortgage Loan Remittance Rate
(minus that portion of any such interest payment which is allocable to the
period prior to the related Cut-off Date). The Scheduled Principal Balance of
each Mortgage Loan as of the related Cut-off Date is determined after
application to the reduction of principal of payments of principal due on or
before the related Cut-off Date whether or not collected. Therefore, for the
purposes of this Agreement, payments of scheduled principal and interest prepaid
for a Due Date beyond the
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related Cut-off Date shall not be applied to the principal balance as of the
related Cut-off Date. Such Monthly Payments shall be the property of the
Purchaser. The Seller shall deposit any such prepaid amounts into the Custodial
Account, which account is established for the benefit of the Purchaser, for
remittance by the Seller to the Purchaser on the first related Remittance Date.
All payments of principal and interest, less the applicable Servicing Fee, due
on a Due Date following the related Cut-off Date shall belong to the Purchaser.
Section 2.03. Servicing of Mortgage Loans.
On each Closing Date, the Mortgage Loans in the related Mortgage Loan
Package will be sold by the Seller to the Purchaser on a servicing retained
basis upon the execution and delivery of an Assignment and Conveyance in the
form attached hereto as Exhibit E (the "Assignment and Conveyance").
Simultaneously with the execution and delivery of the related
Assignment and Conveyance, for each Mortgage Loan Package, the Seller hereby
agrees to service the Mortgage Loans listed on the Mortgage Loan Schedule in
accordance with Accepted Servicing Practices and this Agreement. The rights of
the Purchaser to receive payments with respect to the related Mortgage Loans
shall be as set forth in this Agreement.
Section 2.04. Record Title and Possession of Mortgage Files;
Maintenance of Servicing Files.
As of each Closing Date, the Seller will have sold, transferred,
assigned, set over and conveyed to the Purchaser, without recourse (except as
otherwise set forth in this Agreement and the related Purchase Price and Terms
Letter), and the Seller hereby acknowledges that the Purchaser will have, all
the right, title and interest of the Seller in and to the Mortgage Loans. Record
title to each Mortgage and the related Mortgage Note as of the related Closing
Date shall be in the name of the Seller, the Purchaser, the Custodian or one or
more designees of the Purchaser, as the Purchaser shall designate.
Notwithstanding the foregoing, beneficial ownership of each Mortgage and the
related Mortgage Note shall be vested solely in the Purchaser or the appropriate
designee of the Purchaser, as the case may be. All rights arising out of the
Mortgage Loans including, but not limited to, all funds received by the Seller
after the related Cut-off Date on or in connection with a Mortgage Loan as
provided in Section 2.02 shall be vested in the Purchaser or one or more
designees of the Purchaser; provided, however, that all such funds received on
or in connection with a Mortgage Loan as provided in Section 2.02 shall be
received and held by the Seller in trust for the benefit of the Purchaser or the
assignee of the Purchaser, as the case may be, as the owner of the Mortgage
Loans pursuant to the terms of this Agreement.
In accordance with Section 2.07, the Seller shall deliver at its own
expense, the Mortgage Files for the related Mortgage Loans to Purchaser or its
designee. The possession of each Servicing File by the Seller is for the sole
purpose of servicing the related Mortgage Loan. From each Closing Date, the
ownership of each related Mortgage Loan, including the Mortgage Note, the
Mortgage, the contents of the related Mortgage File and all rights, benefits,
proceeds and obligations arising therefrom or in connection therewith, has been
vested in the Purchaser. All rights arising out of the Mortgage Loans including,
but not limited to, all funds received on or in connection with the Mortgage
Loans and all records or documents with respect to the
23
Mortgage Loans prepared by or which come into the possession of the Seller shall
be received and held by the Seller in trust for the benefit of the Purchaser as
the owner of the Mortgage Loans. Any portion of the Mortgage Files retained by
the Seller shall be appropriately identified in the Seller's computer system to
clearly reflect the ownership of the Mortgage Loans by the Purchaser.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at its own expense, the MERS(R)
System to indicate that such Mortgage Loans have been assigned by the Seller to
the Purchaser in accordance with this Agreement by including (or deleting, in
the case of Mortgage Loans which are repurchased in accordance with this
Agreement) in such computer files the information required by the MERS(R) System
to identify the Purchaser of such Mortgage Loans. The Seller further agrees that
it will not alter the information referenced in this paragraph with respect to
any Mortgage Loan during the term of this Agreement unless and until such
Mortgage Loan is repurchased in accordance with the terms of this Agreement.
It is the express intention of the parties that the transactions
contemplated by this Agreement be, and be construed as, a sale of the Mortgage
Loans by the Seller and not a pledge of the Mortgage Loans by the Seller to the
Purchaser to secure a debt or other obligation of the Seller. Consequently, the
sale of each Mortgage Loan shall be reflected as a sale on the Seller's business
records, tax returns and financial statements. In the event, for any reason, any
transaction contemplated herein is construed by any court or regulatory
authority as a borrowing rather than as a sale, the Seller and the Purchaser
intend that the Purchaser or its assignee, as the case may be, shall have a
perfected first priority security interest in the Mortgage Loans, the Custodial
Account and the proceeds of any and all of the foregoing (collectively, the
"Collateral"), free and clear of adverse claims. In such case, the Seller shall
be deemed to have hereby granted to the Purchaser or its assignee, as the case
may be, a first priority security interest in and lien upon the Collateral, free
and clear of adverse claims. In such event, the related Purchase Price and Terms
Letter and this Agreement shall constitute a security agreement, the Custodian
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Purchaser or its assignee, as the case may be,
and the Purchaser or its assignee, as the case may be, shall have all of the
rights of a secured party under applicable law.
Section 2.05. Books and Records.
The sale of each Mortgage Loan will be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller
and will be reflected on the Purchaser's balance sheet and other financial
statements as a purchase by the Purchaser. The Seller shall maintain, a complete
set of books and records for the Mortgage Loans sold by it which shall be
appropriately identified in the Seller's computer system to clearly reflect the
ownership of the Mortgage Loans by the Purchaser. In particular, the Seller
shall maintain in its possession, available for inspection by the Purchaser, or
its designee and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, as applicable, including but not
limited to documentation as to the method used in determining the applicability
of the provisions of the Flood Disaster Protection Act of 1973, as amended, to
the Mortgaged Property,
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documentation evidencing insurance coverage and eligibility of any condominium
project for approval by Seller and periodic inspection reports as required by
Section 4.13. To the extent that original documents are not required for
purposes of realization of Liquidation Proceeds or Insurance Proceeds, documents
maintained by the Seller may be in the form of microfilm or microfiche or such
other reliable means of recreating original documents, including but not limited
to, optical imagery techniques so long as the Seller complies with the
requirements of the ▇▇▇▇▇▇ Mae Guides.
Section 2.06. Transfer of Mortgage Loans.
The Seller shall keep at its office books and records in which,
subject to such reasonable regulations as it may prescribe, the Seller shall
note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made
unless such transfer is in compliance with the terms of Section 11.12. For the
purposes of this Agreement, the Seller shall be under no obligation to deal with
any person with respect to this Agreement or any Mortgage Loan unless a properly
executed Assignment, Assumption and Recognition Agreement in the form of Exhibit
D with respect to such Mortgage Loan has been delivered to the Seller; provided,
that, unless otherwise provided in the related Purchase Price and Terms Letter,
in no event shall there be more than four (4) "Purchasers" with respect to any
Mortgage Loan Package. Upon receipt of notice of the transfer, the Seller shall
▇▇▇▇ its books and records to reflect the ownership of the Mortgage Loans by
such assignee, and, except as otherwise provided herein, the previous Purchaser
shall be released from its obligations hereunder with respect to the Mortgage
Loans sold or transferred. Upon any such assignment, the Person to whom such
assignment is made shall succeed to all rights and obligations of the Purchaser
under this Agreement to the extent of the related Mortgage Loan or Mortgage
Loans and this Agreement, to the extent of the related Mortgage Loan or Loans,
shall be deemed to be a separate and distinct Agreement between the Seller and
such Purchaser, and a separate and distinct Agreement between the Seller and
each other Purchaser to the extent of the other related Mortgage Loan or Loans.
In the event that this Agreement is assigned to any Person to whom the servicing
or master servicing of any Mortgage Loan is sold or transferred, the rights and
benefits under this agreement which inure to the Purchaser shall inure to the
benefit of both the Person to whom such Mortgage Loan is transferred and the
Person to whom the servicing or master servicing of the Mortgage Loan has been
transferred; provided that, the right to require a Mortgage Loan to be
repurchased by the Seller pursuant to SubSection 3.03, 3.04 or 3.05 shall be
retained solely by the Purchaser. This Agreement shall not be assigned, pledged
or hypothecated by the Seller to a third party without the consent of the
Purchaser, which consent shall not be unreasonably withheld.
Section 2.07. Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Purchaser or its designee
the Mortgage Loan Documents no later than five (5) Business Days prior to the
related Closing Date pursuant to a bailee letter agreement. If the Seller cannot
deliver the original recorded Mortgage Loan Documents on the related Closing
Date, the Seller shall, promptly upon receipt thereof and in any case not later
than 270 days from the related Closing Date, deliver such original recorded
documents to the Purchaser or its designee (unless the Seller is delayed in
making such delivery by reason of the fact that such documents shall not have
been returned by the appropriate recording office). If delivery is not completed
within 270 days of the related Closing Date solely
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because such documents shall not have been returned by the appropriate recording
office, the Seller shall deliver a recording receipt of such recording office,
or, if such recording receipt is not available, an officer's certificate of a
servicing officer of the Seller, confirming that such document has been accepted
for recording and shall in any event deliver such document within twelve (12)
months of the related Closing Date. If the Seller cannot deliver such original
recorded documents within twelve (12) months of the related Closing Date for any
reason, within fifteen (15) days after written receipt of notification of such
failure from the Purchaser, the Seller shall repurchase the related Mortgage
Loan at the price and in the manner specified in Section 3.03.
No later than five (5) days prior to the related Closing Date, the
Seller shall provide a copy of the commitment for title insurance to the
Purchaser or its designee.
Any review by the Purchaser or its designee of the Mortgage Files
shall in no way alter or reduce the Seller's obligations hereunder.
To the extent received by it, the Seller shall forward to the
Purchaser, or its designee, original documents evidencing an assumption,
modification, consolidation or extension of any Mortgage Loan entered into in
accordance with this Agreement within two (2) weeks after their execution;
provided, however, that the Seller shall provide the Purchaser, or its designee,
with a copy, certified by the Seller as a true copy, of any such document
submitted for recordation within two (2) weeks after its execution, and shall
promptly provide the original of any document submitted for recordation or a
copy of such document certified by the appropriate public recording office to be
a true and complete copy of the original within two (2) weeks of its return from
the appropriate public recording office.
Section 2.08. Quality Control Procedures.
The Seller shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the legal documents,
credit documents, property appraisals, and underwriting decisions. The program
must be capable of evaluating and monitoring the overall quality of its loan
production and servicing activities. The program is to ensure that the Mortgage
Loans are originated and serviced in accordance with prudent mortgage banking
practices and accounting principles; guard against dishonest, fraudulent, or
negligent acts; and guard against errors and omissions by officers, employees,
or other authorized persons.
Section 2.09. Closing.
The closing for the purchase and sale of the Mortgage Loans shall take
place on the related Closing Date. The closing shall be either: by telephone,
confirmed by letter or wire as the parties shall agree, or conducted in person,
at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the related
Closing Date shall be subject to each of the following conditions:
(a) at least two (2) Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser a magnetic diskette, or transmit by
modem or e-mail, a listing on a loan-level basis of the information contained in
the Mortgage Loan Schedule;
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(b) all of the representations and warranties of the Seller under this
Agreement shall be true and correct as of the related Closing Date or, with
respect to representations and warranties made as of a date other than the
related Closing Date, as of such date, and no event shall have occurred which,
with notice or the passage of time, would constitute a default under this
Agreement;
(c) the Purchaser shall have received, or the Purchaser's attorneys
shall have received in escrow, all closing documents, in such forms as are
agreed upon and acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the terms hereof, including,
but not limited to the following: (i) an Officer's Certificate, in the form of
Exhibit H hereto, including all attachments thereto; (ii) solely with respect to
the initial Closing Date, an Opinion of Counsel to the Seller, form and
substance satisfactory to the Purchaser; (iii) a Custodial Account Letter
Agreement in the form attached as Exhibit B hereto; (iv) an Escrow Account
Letter Agreement in the form attached as Exhibit C hereto; (v) the related
Purchase Price and Terms Letter; (vi) a Security Release Certification, in the
form of Exhibit J hereto executed by any Person, as requested by the Purchaser,
if any of the Mortgage Loans has at any time been subject to any security
interest, pledge or hypothecation for the benefit of such Person and (vii) an
Assignment and Conveyance in the form of Exhibit E hereto;
(d) the Seller shall have received, or the Seller's attorneys shall
have received in escrow, all closing documents, in such forms as are agreed upon
and acceptable to the Seller, duly executed by all signatories other than the
Seller as required pursuant to the terms hereof;
(e) the Seller shall have delivered and released to the Purchaser (or
its designee) on or prior to the related Closing Date all documents required to
be delivered and released pursuant to the terms of this Agreement; and
(f) all other terms and conditions of this Agreement, the related
Purchase Price and Terms Letter and the related Assignment and Conveyance shall
have been materially complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price pursuant to Section 2.02
of this Agreement, by wire transfer of immediately available funds to the
account designated by the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER; REPURCHASE;
REVIEW OF MORTGAGE LOANS
Section 3.01. Representations and Warranties of the Seller.
The Seller represents, warrants and covenants to the Purchaser that as
of each Closing Date or as of such date specifically provided herein or in the
applicable Assignment and Conveyance:
(a) The Seller is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and has
all licenses necessary to carry out its business as now being conducted, and is
licensed and qualified to transact business
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in and is in good standing under the laws of each state in which any Mortgaged
Property is located or is otherwise exempt under applicable law from such
licensing or qualification or is otherwise not required under applicable law to
effect such licensing or qualification and no demand for such licensing or
qualification has been made upon the Seller by any such state, and in any event
the Seller is in compliance with the laws of any such state to the extent
necessary to ensure the enforceability of each Mortgage Loan and the servicing
of the Mortgage Loans in accordance with the terms of this Agreement. No
licenses or approvals obtained by the Seller are currently suspended or revoked
by any court, administrative agency, arbitrator or governmental body and no
proceedings are pending which might result in such suspension or revocation;
(b) The Seller has the full power and authority and legal right to
hold, transfer and convey each Mortgage Loan, to sell each Mortgage Loan and to
execute, deliver and perform, and to enter into and consummate all transactions
contemplated by this Agreement, the related Purchase Price and Terms Letter and
the related Assignment and Conveyance and to conduct its business as presently
conducted; the Seller has duly authorized the execution, delivery and
performance of this Agreement and any agreements contemplated hereby, has duly
executed and delivered this Agreement, the related Purchase Price and Terms
Letter and the related Assignment and Conveyance, and any agreements
contemplated hereby, and this Agreement, the related Purchase Price and Terms
Letter, the related Assignment and Conveyance and each Assignment of Mortgage to
the Purchaser and any agreements contemplated hereby, constitute the legal,
valid and binding obligations of the Seller, enforceable against it in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization and similar laws,
and by equitable principles affecting the enforceability of the rights of
creditors; and all requisite corporate action has been taken by the Seller to
make this Agreement, the related Purchase Price and Terms Letter, the related
Assignment and Conveyance and all agreements contemplated hereby valid and
binding upon the Seller in accordance with their respective terms;
(c) None of the execution and delivery of this Agreement, the related
Purchase Price and Terms Letter, the related Assignment and Conveyance, the sale
of the Mortgage Loans to the Purchaser, the consummation of the transactions
contemplated hereby, or the fulfillment of or compliance with the terms and
conditions of this Agreement, the related Purchase Price and Terms Letter or the
related Assignment and Conveyance will conflict with any of the terms,
conditions or provisions of the Seller's charter or by-laws or materially
conflict with or result in a material breach of any of the terms, conditions or
provisions of any legal restriction or any material agreement or instrument to
which the Seller is now a party or by which it is bound, or constitute a default
or result in an acceleration under any of the foregoing, or result in the
material violation of any law, rule, regulation, order, judgment or decree to
which the Seller or its property is subject;
(d) There is no litigation, suit, proceeding or investigation pending
or, to the Seller's knowledge, threatened, or any order or decree outstanding,
which is reasonably likely to have a material adverse effect on the sale of the
Mortgage Loans, the execution, delivery, performance or enforceability of this
Agreement, the related Purchase Price and Terms Letter or the related Assignment
and Conveyance, or which is reasonably likely to have a material adverse effect
on the financial condition of the Seller;
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(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this Agreement or
the consummation of the transactions contemplated by this Agreement, the related
Purchase Price and Terms Letter and the related Assignment and Conveyance,
except for consents, approvals, authorizations and orders which have been
obtained prior to the related Closing Date;
(f) The consummation of the transactions contemplated by this
Agreement, the related Purchase Price and Terms Letter and the related
Assignment and Conveyance are in the ordinary course of business of the Seller,
and the transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller pursuant to this Agreement, the related Purchase Price
and Terms Letter and the related Assignment and Conveyance are not subject to
bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;
(g) The Seller has not used selection procedures that identified the
Mortgage Loans as being less desirable or valuable than other comparable
mortgage loans in the Seller's portfolio at the Cut-off Date and the selection
of the Mortgage Loans was not made in a manner so as to affect adversely the
interests of the Purchaser;
(h) The Seller will treat the sale of the Mortgage Loans to the
Purchaser as a sale for reporting and accounting purposes and, to the extent
appropriate, for federal income tax purposes;
(i) The Seller is an approved seller/servicer of residential mortgage
loans for ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac and HUD, with such facilities, procedures and
personnel necessary for the sound servicing of such mortgage loans. The Seller
is duly qualified, licensed, registered and otherwise authorized under all
applicable federal, state and local laws and regulations, meets the minimum
capital requirements, if applicable, set forth by the OCC, and is in good
standing to sell mortgage loans to and service mortgage loans for either ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac and no event has occurred which would make the Seller unable
to comply with eligibility requirements or which would require notification to
either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(j) The Seller does not believe, nor does it have any cause or reason
to believe, that it cannot perform each and every covenant contained in this
Agreement and the related Purchase Price and Terms Letter. The Seller is solvent
and the sale of the Mortgage Loans will not cause the Seller to become
insolvent. The sale of the Mortgage Loans is not undertaken with the intent to
hinder, delay or defraud any of the Seller's creditors;
(k) Neither this Agreement nor any information, statement, tape,
diskette, form, report, or other document furnished or to be furnished by or on
behalf of the Seller pursuant to this Agreement or in connection with the
transactions contemplated hereby (including any Securitization Transaction or
Whole Loan Transfer) contains or will contain any untrue statement of material
fact or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading;
(l) The Seller acknowledges and agrees that the Servicing Fee
represents reasonable compensation for performing such services and that the
entire Servicing Fee shall be
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treated by the Seller, for accounting and tax purposes, as compensation for the
servicing and administration of the Mortgage Loans pursuant to this Agreement;
(m) The Seller has delivered to the Purchaser financial statements as
to its last two (2) complete fiscal years for which financial statements are
available. All such financial statements fairly present the pertinent results of
operations and changes in financial position for each of such periods and the
financial position at the end of each such period of the Seller and its
subsidiaries and have been prepared in accordance with GAAP consistently applied
throughout the periods involved, except as set forth in the notes thereto. There
has been no change in the business, operations, financial condition, properties
or assets of the Seller since the date of the Seller's financial statements that
would have a material adverse effect on its ability to perform its obligations
under this Agreement, the related Purchase Price and Terms Letter or the related
Assignment and Conveyance;
(n) The Seller has not dealt with any broker, investment banker, agent
or other person that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans; and
(o) The Seller is a member of MERS in good standing, and will comply
in all material respects with the rules and procedures of MERS in connection
with the servicing of the MERS Mortgage Loans for as long as such Mortgage Loans
are registered with MERS.
(p) The Seller's decision to originate any mortgage loan or to deny
any mortgage loan application is an independent decision based upon Seller's
Underwriting Guidelines, and is in no way made as a result of Purchaser's
decision to purchase, or not to purchase, or the price Purchaser may offer to
pay for, any such mortgage loan, if originated;
(q) With respect to each Mortgage Loan Package, the Mortgage Loan
characteristics set forth on the related Mortgage Loan Schedule attached to the
related Assignment and Conveyance are true and complete in all material
respects;
(r) Immediately prior to the payment of the Purchase Price for each
Mortgage Loan, the Seller was the owner of record of the related Mortgage and
the indebtedness evidenced by the related Mortgage Note;
(s) The consideration received by the Seller upon the sale of the
Mortgage Loans constitutes fair consideration and reasonably equivalent value
for such Mortgage Loans;
(t) The information delivered by the Seller to the Purchaser with
respect to the Seller's loan loss, foreclosure and delinquency experience for
the twelve (12) months immediately preceding the initial Closing Date on
mortgage loans underwritten to the same standards as the Mortgage Loans and
covering mortgaged properties similar to the Mortgaged Properties, is true and
correct in all material respects;
(u) Neither this Agreement nor any written statement, report or other
document prepared and furnished or to be prepared and furnished by the Seller
pursuant to this Agreement or in connection with the transactions contemplated
hereby contains any untrue
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statement of material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading.
Section 3.02. Representations and Warranties as to Individual Mortgage
Loans.
The Seller hereby represents and warrants to the Purchaser, as to each
Mortgage Loan, as of the related Closing Date as follows:
(a) The information set forth in the Mortgage Loan Schedule, including
any diskette or other related data tapes or electronic media delivered to the
Purchaser, is complete, true and correct in all material respects;
(b) With respect to a First Lien Loan that is not a Co-op Loan, the
Mortgage creates a first lien or a first priority ownership interest in an
estate in fee simple in real property securing the related Mortgage Note. With
respect to a First Lien Loan that is a Co-op Loan, the Mortgage creates a first
lien or a first priority ownership interest in the stock ownership and leasehold
rights associated with the Co-op Unit securing the related Mortgage Note;
(c) With respect to a Second Lien Loan that is not a Co-op Loan, the
Mortgage creates a second lien or a second priority ownership interest in an
estate in fee simple in real property securing the related Mortgage Note. With
respect to a Second Lien Loan that is a Co-op Loan, the Mortgage creates a
second lien or a second priority ownership interest in the stock ownership and
leasehold rights associated with the Co-op Unit securing the related Mortgage
Note;
(d) All payments due on or prior to the related Cut-off Date for such
Mortgage Loan have been made as of the related Closing Date, the Mortgage Loan
is not delinquent thirty (30) days or more in payment and has not been
dishonored; there are no material defaults under the terms of the Mortgage Loan;
the Seller has not advanced funds, or induced, solicited or knowingly received
any advance of funds from a party other than the owner of the Mortgaged Property
subject to the Mortgage, directly or indirectly, for the payment of any amount
required by the Mortgage Loan; as to each Mortgage Loan, no payment under the
Mortgage Loan has been delinquent at any time since origination;
(e) All taxes, ground rents governmental assessments, insurance
premiums, water charges, sewer rents, municipal charges, leasehold payments or
ground rents which previously became due and owing have been paid, or escrow
funds have been established in an amount sufficient to pay for every such
escrowed item which remains unpaid and which has been assessed but is not yet
due and payable;
(f) The terms of the Mortgage Note and the Mortgage (and the
Proprietary Lease and the Security Agreement with respect to each Co-op Loan)
have not been impaired, waived, altered or modified in any respect, except by
written instruments which have been recorded to the extent any such recordation
is required by law, or, necessary to protect the interest of the Purchaser, and
which have been delivered to the Custodian; the substance of any such waiver,
alteration or modification has been approved by the insurer under the Primary
Mortgage Insurance Policy or LPMI Policy, if any, and the title insurer, to the
extent required by the related policy, and is reflected on the related Mortgage
Loan Schedule. No instrument of
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waiver, alteration or modification has been executed in connection with such
Mortgage Loan, and no Mortgagor has been released, in whole or in part, from the
terms thereof except in connection with an assumption agreement and which
assumption agreement is part of the Mortgage File and been delivered to the
Custodian and the terms of which are reflected in the Mortgage Loan Schedule;
the substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy or LPMI Policy
and title insurance policy, to the extent required by the related policies;
(g) The Mortgage Note and the Mortgage (and the Pledge Agreement
related to each Co-op Loan) are not subject to any right of rescission, set-off,
counterclaim or defense, including, without limitation, the defense of usury,
nor will the operation of any of the terms of the Mortgage Note or the Mortgage,
or the exercise of any right thereunder, render the Mortgage Note or Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(h) All buildings or other customarily insured improvements upon the
Mortgaged Property are insured by an insurer acceptable under the ▇▇▇▇▇▇ Mae
Guides, against loss by fire, hazards of extended coverage and such other
hazards as are provided for in the ▇▇▇▇▇▇ Mae Guides or by ▇▇▇▇▇▇▇ Mac, as well
as all additional requirements set forth in Section 4.10 of this Agreement. All
such standard hazard policies are in full force and effect and on the date of
origination contained a standard mortgagee clause naming the Seller and its
successors in interest and assigns as loss payee and such clause is still in
effect and all premiums due thereon have been paid. If the Mortgaged Property is
in an area identified on a Flood Hazard Map or Flood Insurance Rate Map issued
by the Federal Emergency Management Agency as having special flood hazards (and
such flood insurance has been made available), the Mortgage Loan is covered by a
flood insurance policy in an amount and meeting the requirements of the current
guidelines of the Federal Insurance Administration which policy conforms to
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac requirements, as well as all additional requirements
set forth in Section 4.10 of this Agreement. Such policy was issued by an
insurer acceptable under ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac guidelines. The Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at the
Mortgagor's cost and expense, and upon the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering the common facilities of a planned unit development. The hazard
insurance policy is the valid and binding obligation of the insurer, is in full
force and effect, and will be in full force and effect and inure to the benefit
of the Purchaser upon the consummation of the transactions contemplated by this
Agreement. The Seller has not engaged in, and has no knowledge of the Mortgagor,
any Subservicer or any prior originator or subservicer having engaged in, any
act or omission which would impair the coverage of any such policy, the benefits
of the endorsement provided for herein, or the validity and binding effect of
either, including without limitation, no unlawful fee, unlawful commission,
unlawful kickback or other unlawful compensation or value of any kind has been
or will be received, retained or realized by any attorney, firm or other person
or entity, and no such unlawful items have been received, retained or realized
by the Seller
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(i) Each Mortgage Loan and, if any, the related Prepayment Penalty
complied with any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, fair housing
or disclosure laws and all predatory, fair and abusive lending laws applicable
to origination and servicing of mortgage loans of a type similar to the Mortgage
Loan, have been complied with and the consummation of the transactions
contemplated hereby will not involve the violation of any such laws, and the
Seller shall deliver to the Purchaser, upon request, evidence of compliance with
all such requirements;
(j) The Mortgage has not been satisfied, canceled or subordinated, in
whole or in part, or rescinded, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part nor has any instrument been
executed that would effect any such release, cancellation, subordination,
release or rescission. The Seller has not waived the performance by the
Mortgagor of any action, if the Mortgagor's failure to perform such action would
cause the Mortgage Loan to be in default, nor has the Seller waived any default
resulting from any action or inaction by the Mortgagor;
(k) With respect to any First Lien Loan, the related Mortgage is
properly recorded and is a valid, subsisting, enforceable and perfected first
lien on the Mortgaged Property and, with respect to any Second Lien Loan, the
related Mortgage is properly recorded and is a valid, subsisting, enforceable
and perfected second lien on the Mortgaged Property, including for Mortgage
Loans that are not Co-op Loans, all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems affixed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing securing the
Mortgage Note's original principal balance. The Mortgage and the Mortgage Note
do not contain any evidence of any security interest or other interest or right
thereto. Such lien is free and clear of all adverse claims, liens and
encumbrances having priority over the first or second lien, as applicable, of
the Mortgage subject only to (1) with respect to any Second Lien Loan, the
related First Lien Loan, (2) the lien of non-delinquent current real property
taxes and assessments not yet due and payable, (3) covenants, conditions and
restrictions, rights of way, easements and other matters of the public record as
of the date of recording which are acceptable to mortgage lending institutions
generally and are (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan, and (b) do not adversely
affect the Appraised Value of the Mortgaged Property as set forth in such
appraisal, and (4) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security intended to
be provided by the Mortgage or the use, enjoyment, value or marketability of the
related Mortgaged Property. Any security agreement, chattel mortgage or
equivalent document related to and delivered in connection with the Mortgage
Loan establishes and creates (1) with respect to any First Lien Loan, a valid,
subsisting, enforceable and perfected first lien and first priority security
interest and (2) with respect to any Second Lien Loan, a valid, subsisting,
enforceable and perfected second lien and second priority security interest, in
each case, on the property described therein, and the Seller has the full right
to sell and assign the same to the Purchaser;
(l) The Mortgage Note and the related Mortgage and, in the case of a
Co-op Loan, the related Pledge Agreement are original and genuine and each is
the legal, valid and binding obligation of the maker thereof, enforceable in all
respects in accordance with its terms,
33
except as such enforcement may be limited by bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors generally and the equitable remedy of specific performance and by
general equitable principles. All parties to the Mortgage Note and the related
Mortgage had the legal capacity to enter into the Mortgage Loan and to execute
and deliver the Mortgage Note and the related Mortgage. The Mortgage Note and
the related Mortgage have been duly and properly executed by such parties. With
respect to each Co-op loan, all parties to the Mortgage Note and Mortgage Loan
had legal capacity to execute and deliver the Mortgage Note, the Pledge
Agreement, the Proprietary Lease, the Stock Power, the Recognition Agreement,
the Financing Statement and the Assignment of Proprietary Lease and such
documents have been duly executed by such parties. Each Stock Power (i) has all
signatures guaranteed or (ii) if all signatures are not guaranteed, then such
Co-op Stock will be transferred by the stock transfer agent of the co-op if the
Seller undertakes to convert the ownership of the collateral securing the
related Co-op Loan. No fraud, error, omission, misrepresentation, negligence or
similar occurrence with respect to a Mortgage Loan has taken place on the part
of any person, including, without limitation, the Seller, the Mortgagor, any
appraiser, or any other party involved in the origination of the Mortgage Loan
or in the application of any insurance in relation to such Mortgage Loan. The
proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvements and as to disbursements of
any escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or related Mortgage;
(m) The Seller or its Affiliate, or MERS as a nominee for the Seller,
is the sole owner of record and holder of the Mortgage Loan (and with respect to
any Co-op Loan the sole owner of the related Pledge Agreement) and the
indebtedness evidenced by the Mortgage Note, and upon recordation the Purchaser
or its designee will be the owner of record of the Mortgage and the indebtedness
evidenced by the Mortgage Note, and upon the sale of the Mortgage Loan to the
Purchaser, the Seller will retain the Servicing File in trust for the Purchaser
only for the purpose of servicing and supervising the servicing of the Mortgage
Loan. Immediately prior to the transfer and assignment to the Purchaser on the
related Closing Date, the Mortgage Loan, including the Mortgage Note and the
Mortgage, were not subject to an assignment or pledge, and the Seller had good
and marketable title to and was the sole legal, beneficial and equitable owner
thereof and had full right and authority under all governmental and regulatory
bodies having jurisdiction over such Seller, to transfer and sell the Mortgage
Loan to the Purchaser free and clear of any encumbrance, equity, lien, pledge,
charge, claim or security interest and has the full right and authority subject
to no interest or participation of, or agreement with, any other party, to sell
and assign the Mortgage Loan pursuant to this Agreement and following the sale
of the Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear
of any encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan, except for the purposes of servicing the
Mortgage Loan as set forth in this Agreement. After the related Closing Date,
the Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided in this
Agreement or the Purchase Price and Terms Letter;
34
(n) Each Mortgage Loan that is not a Co-op Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy or
insurance acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac (which, in the case of an
Adjustable Rate Mortgage Loan has an adjustable rate mortgage endorsement in the
form of ALTA 6.0 or 6.1), issued by a title insurer acceptable to ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring (subject to the exceptions contained above in (k)
(2) and (3) and, with respect to each Mortgage Loan which is indicated by the
Seller to be a Second Lien Mortgage Loan (as reflected on the Mortgage Loan
Schedule) clause (1)))the Seller, its successors and assigns, as to the first or
second priority lien, as applicable, of the Mortgage in the original principal
amount of the Mortgage Loan. Where required by applicable state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. The Seller, its successors and
assigns, are the sole insureds of such lender's title insurance policy, such
title insurance policy has been duly and validly endorsed to the Purchaser or
the assignment to the Purchaser of the Seller's interest therein does not
require the consent of or notification to the insurer and affirmatively insures
ingress and egress to and from the Mortgaged Property, and against encroachments
by or upon the Mortgaged Property or any interest therein. The Seller is the
sole insured of such lender's title insurance policy, such lender's title
insurance policy is in full force and effect and will be in full force and
effect upon the consummation of the transactions contemplated by this Agreement
and the related Purchase Price and Terms Letter. No claims have been made under
such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(o) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event permitting
acceleration; and neither the Seller nor, to the Seller's knowledge, any prior
mortgagee has waived any default, breach, violation or event permitting
acceleration. With respect to each Second Lien Loan(as reflected on the Mortgage
Loan Schedule), (i) the First Lien Loan is in full force and effect, (ii) there
is no default, breach, violation or event of acceleration existing under such
First Lien mortgage or the related mortgage note, and (iii) no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration
thereunder, and either (a) the First Lien mortgage contains a provision which
allows or (b) applicable law requires, the mortgagee under the Second Lien Loan
to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the First Lien mortgage;
(p) There are no mechanics' or similar liens or claims which have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such liens) affecting the related Mortgaged Property which
are or may be liens prior to or equal to the lien of the related Mortgage;
35
(q) All improvements which were considered in determining the
Appraised Value of the Mortgaged Property lie wholly within the boundaries and
building restriction lines of the Mortgaged Property (and wholly within the
project with respect to a condominium unit) and no improvements on adjoining
properties encroach upon the Mortgaged Property except those which are insured
against by the title insurance policy referred to in clause (n) above and all
improvements on the property comply with all applicable zoning and subdivision
laws and ordinances;
(r) The Mortgage Loan was originated by or for the Seller. The
Mortgage Loan complies with the terms, conditions and requirements of the
Underwriting Standards in all material respects. The Mortgage Notes and
Mortgages are on forms acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac. The Mortgage
Loan bears interest at the Mortgage Interest Rate set forth in the related
Mortgage Loan Schedule, and Monthly Payments under the Mortgage Note are due and
payable on the first day of each month. The Mortgage contains customary and
enforceable provisions for the acceleration of the payment of the unpaid
principal amount of the Mortgage Loan in the event the related Mortgaged
Property is sold without the prior consent of the mortgagee thereunder;
(s) The Mortgaged Property (and with respect to a Co-op Loan, the
related Co-op Project and the Co-op Unit) is free of damage and waste and there
is no proceeding pending or threatened for the total or partial condemnation
thereof nor is such a proceeding currently occurring.
(t) The related Mortgage and the related Mortgage Note contain
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby including, (a) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and (b)
otherwise by judicial foreclosure. The Mortgaged Property has not been subject
to any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no homestead or
other exemption available to the Mortgagor which would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage;
(u) If the Mortgage constitutes a deed of trust, a trustee, duly
authorized and duly qualified under applicable law to act as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses, except as may be required by local law, are or will become
payable by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale or attempted sale after default by the
Mortgagor;
(v) The Mortgage File contains an appraisal of the related Mortgaged
Property, in a form acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, and such appraisal
was made and signed prior to the final approval of the mortgage loan application
by a Qualified Appraiser;
(w) All parties which have had any interest in the Mortgage, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (a) in compliance with any
and all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (b) (1)
36
organized under the laws of such state, or (2) qualified to do business in such
state, or (3) federal savings and loan associations or national banks or a
Federal Home Loan Bank or savings bank having principal offices in such state,
or (4) not doing business in such state or (5) not otherwise required to be
licensed in such state. All parties which have had any interest in the Mortgage
Loan were in compliance with any and all applicable "doing business" and
licensing requirements of the laws of the state wherein the Mortgaged Property
is located or were not required to be licensed in such state;
(x) The related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in clause (k) above and such collateral does not
serve as security for any other obligation;
(y) No Mortgage Loan contains provisions pursuant to which Monthly
Payments are (a) paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, (b) paid by any source other than the Mortgagor or (c) contains any
other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan does not contain "graduated payment" features and the Mortgage
Loan does not have a shared appreciation or other contingent interest feature;
(z) The Mortgagor was not in bankruptcy or insolvent as of the date of
origination of the Mortgage Loan and is not in bankruptcy or insolvent as of the
related Closing Date;
(aa) Each Fixed Rate Mortgage Loan has an original term to maturity of
not more than thirty (30) years, with interest calculated and payable in arrears
on the first day of each month in equal monthly installments of principal and
interest. Except with respect to Interest Only Mortgage Loans, each Mortgage
Note requires a monthly payment which is sufficient to fully amortize the
original principal balance of the Mortgage Loan fully by the stated maturity
date, over an original term of not more than thirty (30) years and to pay
interest at the related Mortgage Interest Rate; provided, however, in the case
of a balloon Mortgage Loan, the Mortgage Loan matures at least seven (7) years
after the first payment date thereby requiring a final payment of the
outstanding principal balance prior to the full amortization of the Mortgage
Loan. No Mortgage Loan contains terms or provisions which would result in
negative amortization. With respect to each Mortgage Loan identified on the
Mortgage Loan Schedule as an interest-only Mortgage Loan, the interest-only
period shall not exceed the period specified on the Mortgage Loan Schedule and
following the expiration of such interest-only period, the remaining Monthly
Payments shall be sufficient to fully amortize the original principal balance
over the remaining term of the Mortgage Loan.;
(bb) If a Mortgage Loan has an LTV greater than 80%, the portion of
the principal balance of such Mortgage Loan in excess of the portion of the
Appraisal Value of the Mortgaged Property required by ▇▇▇▇▇▇ Mae, is and will be
insured as to payment defaults by a Primary Mortgage Insurance Policy or LPMI
Policy issued by a Qualified Insurer. All provisions of such Primary Mortgage
Insurance Policy or LPMI Policy have been and are being complied with, such
policy is in full force and effect, and all premiums due thereunder have been
paid. No action, inaction, or event has occurred and no state of facts exists
that has, or will result
37
in the exclusion from, denial of, or defense to coverage. Any Mortgage Loan
subject to a Primary Mortgage Insurance Policy or LPMI Policy obligates the
Mortgagor thereunder to maintain the Primary Mortgage Insurance Policy or LPMI
Policy and to pay all premiums and charges in connection therewith. The mortgage
interest rate for the Mortgage Loan as set forth on the related Mortgage Loan
Schedule does not include any such insurance premium;
(cc) As to any Mortgage Loan which is not a MERS Mortgage Loan, the
Assignment of Mortgage is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is located;
(dd) The Mortgaged Property is located in the state identified in the
related Mortgage Loan Schedule and is improved by a Residential Dwelling or in
the case of a Mortgage Loan secured by Co-op Stock leases or occupancy
agreements. No portion of the Mortgaged Property was used for commercial
purposes, and, since the date of origination no portion of the Mortgaged
Property has been used for commercial purposes, except as permitted under the
Underwriting Standards;
(ee) Payments on the Mortgage Loan commenced no more than sixty (60)
days after the funds were disbursed in connection with such Mortgage Loan;
(ff) Each Mortgage Loan that is subject to a Prepayment Penalty as
provided in the related Mortgage Note is identified on the related Mortgage Loan
Schedule. With respect to Mortgage Loans originated prior to October 1, 2002, no
such Prepayment Penalty may be imposed for a term in excess of five (5) years
following origination;
(gg) The Mortgaged Property (or with respect to a Co-op Loan, the
related Co-op Unit) was lawfully occupied under applicable law, and all
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property (or Co-op Unit, as
the case may be) and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate authorities. No
improvement located on or being part of any Mortgaged Property is in violation
of any applicable zoning law or regulation. To the best of the Seller's
knowledge and with respect to each Mortgage Loan that is covered by a Primary
Mortgage Insurance Policy or LPMI Policy, the improvement(s) located on or being
part of the related Mortgaged Property were constructed in accordance with the
specifications set forth in the original construction plans;
(hh) If the Residential Dwelling Mortgaged Property is a condominium
unit or a planned unit development (other than a de minimis planned unit
development), or stock in a Co-op housing corporation, such condominium, Co-op
or planned unit development project meets the Seller's eligibility requirements
of ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac;
(ii) There is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgaged Property; and the Mortgage Property is
in material compliance with all applicable environmental laws pertaining to
environmental hazards including, without limitation, asbestos;
38
(jj) The related Mortgagor has not notified the Seller, and the Seller
has no knowledge of any relief requested or allowed to the Mortgagor under the
Servicemembers Civil Relief Act;
(kk) No action has been taken or failed to be taken by the Seller on
or prior to the related Closing Date which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any Primary Mortgage
Insurance Policy or LPMI Policy (including, without limitation, any exclusions,
denials or defenses which would limit or reduce the availability of the timely
payment of the full amount of the loss otherwise due thereunder to the insured)
whether arising out of actions, representations, errors, omissions, negligence,
or fraud of the Seller, or for any other reason under such coverage;
(ll) Each Mortgage Loan has been serviced in compliance with Accepted
Servicing Practices;
(mm) With respect to each Co-op Loan, the related Mortgage is a valid,
enforceable and subsisting first security interest on the related Co-op Stock
securing the related Mortgage Note, subject only to (a) liens of the cooperative
for unpaid assessments representing the Mortgagor's pro rata share of the
cooperative's payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments to
which like collateral is commonly subject and (b) other matters to which like
collateral is commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Security Agreement.
There are no liens against or security interest in the Co-op Stock relating to
each Co-op Loan (except for unpaid maintenance, assessments and other amounts
owed to the related cooperative which individually or in the aggregate will not
have a material adverse effect on such Co-op Loan), which have priority over the
Seller's security interest in such Co-op Stock;
(nn) With respect to each Co-op Loan, a search for filings of
financing statements has been made by a company competent to make the same,
which company is acceptable to ▇▇▇▇▇▇ ▇▇▇ and qualified to do business in the
jurisdiction where the Co-op Unit is located, and such search has not found
anything which would materially and adversely affect the Co-op Loan;
(oo) With respect to each Co-op Loan, the related cooperative
corporation that owns title to the related cooperative apartment building is a
"cooperative housing corporation" within the meaning of Section 216 of the Code,
is held by a person as a tenant-stockholder (as defined in Section 216 of the
Code) and is in material compliance with applicable federal, state and local
laws which, if not complied with, could have a material adverse effect on the
Mortgaged Property;
(pp) With respect to each Co-op Loan, there is no prohibition against
pledging the shares of the cooperative corporation or assigning the Proprietary
Lease;
(qq) With respect to each Co-op Loan, (i) the terms of the related
Proprietary Lease is longer than the terms of the Co-op Loan and (ii) there is
no provision in any Proprietary
39
Lease which requires the borrower to offer for sale the Co-op Stock owned by
such borrower first to the cooperative;
(rr) With respect to each Co-op Loan, there is no default in complying
with the terms of the Mortgage Note, the Pledge Agreement and the Proprietary
Lease and all maintenance charges and assessments (including assessments payable
in the future installments, which previously became due and owing) have been
paid. The Seller has the right under the terms of the Mortgage Note, Pledge
Agreement and Recognition Agreement to pay any maintenance charges or
assessments owed by the Mortgagor;
(ss) With respect to each Co-op Loan, each Pledge Agreement contains
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization of the benefits of the security provided
thereby. The Pledge Agreement contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Note
in the event the Co-op Unit is transferred or sold without the consent of the
holder thereof;
(tt) The Mortgage Loan was originated by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of
the National Housing Act, a savings and loan association, a savings bank, a
commercial bank, credit union, insurance company or similar institution which is
supervised and examined by a federal or state authority;
(uu) With respect to any ground lease to which a Mortgaged Property
may be subject: (i) a true, correct and complete copy of the ground lease and
all amendments, modifications and supplements thereto is included in the
Servicing File, and the Mortgagor is the owner of a valid and subsisting
leasehold interest under such ground lease; (ii) such ground lease is in full
force and effect, unmodified and not supplemented by any writing or otherwise
except as contained in the Mortgage File; (iii) all ground lease rents,
additional rent, assessments and other charges reserved therein that have become
due have been fully paid to the extent payable as of the related Closing Date;
(iv) the Mortgagor enjoys the quiet and peaceful possession of the leasehold
estate, subject to any sublease; (v) the Mortgagor is not in default under any
of the terms of such ground lease, and there are no circumstances which, with
the passage of time or the giving of notice, or both, would result in a default
under such ground lease; (vi) the lessor under such ground lease is not in
default under any of the terms or provisions of such ground lease on the part of
the lessor to be observed or performed; (vii) the lessor under such ground lease
has satisfied any repair or construction obligations due as of the related
Closing Date pursuant to the terms of such ground lease; (viii) the execution,
delivery and performance of the Mortgage do not require the consent (other than
those consents which have been obtained and are in full force and effect) under,
and will not contravene any provision of or cause a default under, such ground
lease; (ix) the ground lease will not terminate earlier than five (5) years
after the maturity date of the related Mortgage Loan; (x) the Purchaser has the
right to cure defaults on the ground lease; (xi) the use of leasehold estates
for residential properties is a widely accepted practice in the jurisdiction in
which the Mortgage Property is located; (xii) the ground lease protects the
mortgagee's interests in the event of a property condemnation; (xiii) the ground
lease permits the mortgaging of the related Mortgage Property; (xiv) the ground
lease is assignable or transferable; and (xv) the ground lease does not provide
for termination of the lease in the event
40
of lessee's default without the mortgagee being entitled to receive written
notice of, and a reasonable opportunity to cure, the default;
(vv) With respect to any broker fees collected and paid on any of the
Mortgage Loans, all broker fees have been properly assessed to the borrower and
no claims will arise as to broker fees that are double charged and for which the
borrower would be entitled to reimbursement;
(ww) Each Mortgage Loan constitutes a "qualified mortgage" under
Section 860G(a)(3)(a) of the Code and Treasury Regulations Section
1.860G-2(a)(1);
(xx) Except as provided in Section 2.07, the Mortgage Note, the
Mortgage, the Assignment of Mortgage and the other documents set forth in
Exhibit A-1 and required to be delivered on the related Closing Date have been
delivered to the Purchaser or its designee;
(yy) All information supplied by, on behalf of, or concerning the
Mortgagor is true, accurate and complete and does not contain any statement that
is or will be inaccurate or misleading in any material respect;
(zz) The Mortgagor has executed a statement to the effect that the
Mortgagor has received all disclosure materials required by applicable law with
respect to the making of adjustable rate mortgage loans. The Seller shall
maintain such statement in the Servicing File;
(aaa) No Mortgage Loan had a Loan-to-Value Ratio at the time of
origination of more than 100%. No Second Lien Loan has an Equity LTV in excess
of 100%;
(bbb) Either (a) no consent for the Second Lien Loan is required by
the holder of the related First Lien Loan or (b) such consent has been obtained
and is contained in the Mortgage File;
(ccc) With respect to any Second Lien Loan, the Seller has not
received notice of: (1) any proceeding for the total or partial condemnation of
any Mortgaged Property, (2) any subsequent, intervening mortgage, lien,
attachment, lis pendens or other encumbrance affecting any Mortgaged Property or
(3) any default under any mortgage, lien or other encumbrance senior to each
Mortgage;
(ddd) No Mortgage Loan is a "home equity line of credit";
(eee) As of the Closing Date, the Seller has not received a notice of
default of a First Lien Loan;
(fff) No Mortgage Loan provides for negative amortization;
(ggg) No Mortgage Loan is a High Cost Loan or Covered Loan. No
Mortgage Loan is (a) covered by the Home Ownership and Equity Protection Act of
1994, as amended or has an "annual percentage rate" or "total points and fees"
payable by the borrower (as each such term is defined under HOEPA) that equal or
exceed the applicable thresholds defined under HOEPA (Section 32 of Regulation
Z, 12 C.F.R. Section 226.32(a)(1)(i) and (ii)), (b) a "high
41
cost", "covered", "abusive", "predatory", "home loan", "Oklahoma Section 10" or
"high risk" mortgage loan (or a similarly designated loan using different
terminology) under any federal, state or local law, including without
limitation, the provisions of the Georgia Fair Lending Act, New York Banking
Law, Section 6-1, the Arkansas Home Loan Protection Act, effective as of June
14, 2003, Kentucky State Statute KRS 360.100, effective as of June 25, 2003, the
New Jersey Home Ownership Security Act of ▇▇▇▇ (▇▇▇ "▇▇ ▇▇▇"), ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Home Loan Protection Act (N.M. Stat. ▇▇▇. Sections 58-21A-1 et seq.), the
Illinois High-Risk Home Loan Act (815 Ill. Comp. Stat. 137/1 et seq.), the
Oklahoma Home Ownership and Equity Protection Act, Nevada Assembly ▇▇▇▇ No. 284,
effective as of Oct. 1, 2003, the Minnesota Residential Mortgage Originator and
Servicer Licensing Act (MN Stat. Section 58.137), the South Carolina High-Cost
and Consumer Home Loans Act, effective January 1, 2004, the Massachusetts
Predatory Home Loan Practices Act, effective November 7, 2004 (Mass. ▇▇▇. Laws
Ch. 183C) or any other statute or regulation providing assignee liability to
holders of such mortgage loans, or (c) subject to or in violation of any such or
comparable federal, state or local statutes or regulations. The Mortgaged
Property is not located in a jurisdiction where a breach of this representation
with respect to the related Mortgage Loan may result in additional assignee
liability to the Purchaser, as determined by Purchaser in its reasonable
discretion. No predatory or deceptive lending practices were employed in the
origination of the Mortgage Loan. Each Mortgage Loan is in compliance with the
anti-predatory lending eligibility for purchase requirements of ▇▇▇▇▇▇ Mae's
Selling Guide;
(hhh) Each Mortgage Loan originated in the state of Texas pursuant to
Article XVI, Section 50(a)(6) of the Texas Constitution (a "Texas Refinance
Loan") has been originated in compliance with the provisions of Article XVI,
Section 50(a)(6) of the Texas Constitution, Texas Civil Statutes and the Texas
Finance Code. With respect to each Texas Refinance Loan that is a Cash-Out
Refinancing, the related Mortgage Loan Documents state that the Mortgagor may
prepay such Texas Refinance Loan in whole or in part without incurring a
Prepayment Penalty. The Seller does not collect any such Prepayment Penalties in
connection with any such Texas Refinance Loan;
(iii) The origination and servicing practices with respect to each
Mortgage Note and Mortgage have been legal, customary, in accordance with
applicable laws and regulations, and proper and prudent in the mortgage
origination and servicing business. The Mortgage Loan has been serviced by the
Seller and any predecessor servicer in accordance with all applicable laws,
rules and regulations, the terms of the Mortgage Note and Mortgage, and the
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac servicing guides. With respect to escrow deposits and
payments that the Seller is entitled to collect, all such payments are in the
possession of, or under the control of, the Seller, and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All escrow payments have been collected
and are being maintained in full compliance with applicable state and federal
law and the provisions of the related Mortgage Note and Mortgage. As to any
Mortgage Loan that is the subject of an escrow, escrow of funds is not
prohibited by applicable law and has been established in an amount sufficient to
pay for every escrowed item that remains unpaid and has been assessed but is not
yet due and payable. No escrow deposits or other charges or payments due under
the Mortgage Note have been capitalized under any Mortgage or the related
Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict
compliance with state
42
and federal law and the terms of the related Mortgage Note. Any interest
required to be paid pursuant to state and local law has been properly paid and
credited;
(jjj) No Mortgage Loan is a Convertible Mortgage Loan;
(kkk) With respect to each Adjustable Rate Mortgage Loan, the Mortgage
Loan Documents provide that after the related first Interest Rate Adjustment
Date, a related Mortgage Loan may only be assumed if the party assuming such
Mortgage Loan meets certain credit requirements stated in the Mortgage Loan
Documents;
(lll) Any future advances made to the Mortgagor prior to the
applicable Cut-off Date have been consolidated with the outstanding principal
amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term reflected
on the Mortgage Loan Schedule. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having (a) first lien
priority with respect to each Mortgage Loan which is indicated by the Seller to
be a First Lien (as reflected on the Mortgage Loan Schedule), or (b) second lien
priority with respect to each Mortgage Loan which is indicated by the Seller to
be a Second Lien Mortgage Loan (as reflected on the Mortgage Loan Schedule), in
either case, by a title insurance policy, an endorsement to the policy insuring
the Mortgagee's consolidated interest or by other title evidence acceptable to
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac. The consolidated principal amount does not exceed
the original principal amount of the Mortgage Loan;
(mmm) No Mortgage Loan was made in connection with the construction
(other than a "construct-to-perm" loan which has converted to a closed end,
fully amortizing Mortgage Loan for which a certificate of occupancy has been
issued and construction has been completed) or rehabilitation of a Mortgaged
Property or facilitating the trade-in or exchange of a Mortgaged Property;
(nnn) If applicable, with respect to each Mortgage, the Seller has
within the last twelve (12) months (unless such Mortgage was originated within
such twelve (12) month period) analyzed the required Escrow Payments for each
Mortgage and adjusted the amount of such payments so that, assuming all required
payments are timely made, any deficiency will be eliminated on or before the
first anniversary of such analysis, or any overage will be refunded to the
Mortgagor, in accordance with RESPA and any other applicable law;
(ooo) As to each consumer report (as defined in the Fair Credit
Reporting Act, Public Law 91-508) or other credit information furnished by the
Seller to the Purchaser, that Seller has full right and authority and is not
precluded by law or contract from furnishing such information to the Purchaser
and the Purchaser is not precluded from furnishing the same to any subsequent or
prospective purchaser of such Mortgage;
(ppp) Each Mortgage Loan is covered by a paid in full, life of loan,
Tax Service Contract issued by First American Real Estate Tax Service, and such
contract is transferable to the Purchaser or its designee at no cost to the
Purchase or its designee;
(qqq) Each original Mortgage was recorded and all subsequent
assignments of the original Mortgage (other than the assignment to the
Purchaser) have been recorded in the
43
appropriate jurisdictions wherein such recordation is necessary to perfect the
lien thereof as against creditors of the Seller, or is in the process of being
recorded;
(rrr) No Mortgagor with respect to any Mortgage Loan originated on or
after August 1, 2004 agreed to submit to arbitration to resolve any dispute
arising out of or relating in any way to the mortgage loan transaction;
(sss) As of the required compliance dates, Seller has (i) complied
with all applicable anti-money laundering laws and regulations, including
without limitation the USA Patriot Act of 2001 and the Bank Secrecy Act
(collectively, the "Anti-Money Laundering Laws"); (ii) established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws;
(iii) conducted the requisite due diligence in connection with the origination
of each Mortgage Loan for purposes of the Anti-Money Laundering Laws, including
with respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Mortgagor to purchase the property in question; and (iv)
maintained, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws. No Mortgage Loan is
subject to nullification pursuant to Executive Order 13224 (the "Executive
Order") or the regulations promulgated by the Office of Foreign Assets Control
of the United States Department of the Treasury (the "OFAC Regulations") or in
violation of the Executive Order or the OFAC Regulations, and no Mortgagor is
subject to the provisions of such Executive Order or the OFAC Regulations nor
listed as a "blocked person" for purposes of the OFAC Regulations;
(ttt) The Seller is the owner of record of each Mortgage and the
indebtedness evidenced by each Mortgage Note, and upon the sale of the Mortgage
Loans to the Purchaser, the Seller will retain the Mortgage Files with respect
thereto in trust only for the purpose of servicing and supervising the servicing
of each Mortgage Loan;
(uuu) Interest on each Mortgage Loan is calculated on the basis of a
360-day year consisting of twelve 30-day months;
(vvv) No Mortgage Loan provides for interest payable on a simple
interest basis;
(www) Each Mortgage Loan at the time it was made complied in all
material respects with applicable local, state and federal laws, including, but
not limited to, all applicable predatory, abusive and fair lending laws;
(xxx) There is no Mortgage Loan that was originated on or after
October 1, 2002 and before March 7, 2003, which is secured by a Mortgaged
Property located in the State of Georgia. There is no Mortgage Loan that was
originated on or after March 7, 2003, which is a "high cost home loan" as
defined under the Georgia Fair Lending Act;
(yyy) No Mortgage Loan is a "high cost home," "covered," "high risk
home" or "predatory" loan under any applicable state, federal or local law (or a
similarly classified loan using different terminology under a law imposing
heightened regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees);
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(zzz) No Mortgagor was required to purchase any single premium credit
insurance policy (e.g., life, disability, accident, unemployment, property or
health insurance product) or debt cancellation agreement in connection with the
origination of the Mortgage Loan. No Mortgagor obtained a prepaid single premium
credit insurance policy (e.g., life, mortgage, disability, accident,
unemployment, property or health insurance product) or debt cancellation
agreement in connection with the origination of the Mortgage Loan. No proceeds
from any Mortgage Loan were used to purchase single premium credit insurance
policies (e.g., life, mortgage, disability, accident, unemployment, property or
health insurance product) or debt cancellation agreements as part of the
origination of, or as a condition to closing, such Mortgage Loan;
(aaaa) With respect to any Mortgage Loan that contains a provision
permitting imposition of a Prepayment Penalty: (i) the Mortgage Loan provides
some benefit to the Mortgagor (e.g., such as rate or fee reduction) in exchange
for accepting such Prepayment Penalty; (ii) the Mortgage Loan's originator had a
written policy of offering the Mortgagor, or requiring third-party brokers to
offer the Mortgagor, the option of obtaining a mortgage loan that did not
require payment of such a Prepayment Penalty; (iii) the Prepayment Penalty was
adequately disclosed to the Mortgagor pursuant to applicable state and federal
law; (iv) no Mortgage Loan originated on or after October 1, 2002 will impose a
prepayment premium for a term in excess of three (3) years and any Mortgage
Loans originated prior to such date will not impose prepayment penalties in
excess of five (5) years; in each case unless the Mortgage Loan was modified to
reduce the prepayment period to no more than three (3) years from the date of
the note and the borrower was notified in writing of such reduction in
prepayment period; and (v) notwithstanding any state or federal law to the
contrary, the Servicer shall not impose such prepayment premium in any instance
when the Mortgage Loan is accelerated or paid off in connection with the workout
of a delinquent mortgage or due to the borrower's default, notwithstanding that
the terms of the Mortgage Loan or state or federal law might permit the Servicer
to impose such premium;
(bbbb) The Seller has and shall in its capacity as servicer, for each
Mortgage Loan, fully furnished, in accordance with the Fair Credit Reporting Act
and its implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian and
Trans Union Credit Information Company (three (3) of the credit repositories),
on a monthly basis unless such reporting is suspended due to the Servicemembers
Civil Relief Act or an eligible disaster declaration;
(cccc) With respect to the Mortgage Loans, the borrower was not
encouraged or required to select a mortgage loan product offered by the mortgage
loan's originator which is a higher cost product designed for less creditworthy
borrowers, taking into account such facts as, without limitation, the mortgage
loan's requirements and the borrower's credit history, income, assets and
liabilities;
(dddd) The methodology used in underwriting the extension of credit
for each Mortgage Loan employed objective criteria which relate such facts as,
without limitation, the Mortgagor's credit history income, assets and
liabilities (except in the case of loan programs which do not require the
Mortgagor to report the Mortgagor's income or assets, such as "no income, no
assets" lending programs or which rely on the Mortgagor's representation of the
45
Mortgagor's income, such as "stated income" lending programs) to the proposed
payment and such underwriting methodology does not rely on the extent of the
Mortgagor's equity in the collateral as the principal determining factor in
approving such credit extension. Such underwriting methodology determined that
at the time of origination (application/approval) the Mortgagor had the
reasonable ability to make timely payments on the Mortgage Loan;
(eeee) All points, fees and charges, including finance charges
(whether or not financed, assessed, collected or to be collected), in connection
with the origination and servicing of any Mortgage Loan were disclosed in
writing to the related Mortgagor in accordance with applicable state and federal
law and regulation and no related Mortgagor was charged "points and fees"
(whether or not financed) in an amount that exceeds the greater of (1) 5% of the
principal amount of such loan or (2) $1,000. For the purposes of this
representation, "points and fees" (a) include origination, underwriting, broker
and finder's fees and charges that the lender imposed as a condition of making
the Mortgage Loan, whether they are paid to the lender or a third party; and (b)
exclude bona fide discount points, fees paid for actual services rendered in
connection with the origination of the Mortgage Loan (such as attorneys' fees,
notaries fees and fees paid for property appraisals, credit reports, surveys,
title examinations and extracts, flood and tax certifications, and home
inspections) and the cost of mortgage insurance or credit-risk price
adjustments; the costs of title, hazard, and flood insurance policies; state and
local transfer taxes or fees; escrow deposits for the future payment of taxes
and insurance premiums; and other miscellaneous fees and charges that, in total,
do not exceed 0.25 percent of the loan amount);
(ffff) With respect to any Mortgage Loan originated on or after August
1, 2004, neither the related Mortgage nor the related Mortgage Note requires the
borrower to submit to arbitration to resolve any dispute arising out of or
relating in any way to the Mortgage Loan transaction;
(gggg) The Mortgage Loan is in compliance with all requirements set
forth in the related Purchase Price and Terms Letter, and the characteristics of
the related Mortgage Loan Package as set forth in the related Purchase Price and
Terms Letter are true and correct;
(hhhh) The Seller has no knowledge of any circumstances or condition
with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can reasonably be expected to cause the
Mortgage Loan to be an unacceptable investment, cause the Mortgage Loan to
become delinquent, or adversely affect the value of the Mortgage Loan;
(iiii) The source of the down payment with respect to each Mortgage
Loan has been fully verified by the Seller in accordance with the Underwriting
Guidelines;
(jjjj) Each Mortgage Loan is covered by a "life of loan" Flood Zone
Service Contract which is assignable to the Purchaser or its designee at no cost
to the Purchaser or its designee or, for each Mortgage Loan not covered by such
Flood Zone Service Contract, the Seller agrees to purchase such Flood Zone
Service Contract;
(kkkk) Each Mortgage Loan has a valid and original Credit Score, with
a minimum Credit Score as set forth in the related Purchase Price and Terms
Letter;
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(llll) The Seller will transmit full-file credit reporting data for
each Mortgage Loan pursuant to ▇▇▇▇▇▇ Mae Guide Announcement 95-19 and for each
Mortgage Loan, Seller agrees it shall report one of the following statuses each
month as follows: new origination, current, delinquent (30-, 60-, 90-days,
etc.), foreclosed, or charged-off;
(mmmm) No Mortgage Loan is a "manufactured housing loan" pursuant to
the NJ Act, and one hundred percent of the amount financed of any purchase money
Second Lien Mortgage Loan subject to the NJ Act was used for the purchase of the
related Mortgaged Property;
(nnnn) With respect to each MERS Mortgage Loan, a MIN has been
assigned by MERS and such MIN is accurately provided on the related Mortgage
Loan Schedule. The related assignment of Mortgage to MERS has been duly and
properly recorded;
(oooo) No Mortgage Loan is secured by manufactured housing; and
(pppp) With respect to each MERS Mortgage Loan, the Seller has not
received any notice of liens or legal actions with respect to such Mortgage Loan
and no such notices have been electronically posted by MERS;
(qqqq) No Mortgagor is a Foreign National.
Section 3.03. Repurchase; Substitution.
It is understood and agreed that the representations and warranties
set forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans
and delivery of the Mortgage File to the Purchaser, or its designee, and shall
inure to the benefit of the Purchaser, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination, or lack of examination, of any Mortgage Loan Document. Upon
discovery by the Seller or the Purchaser of a breach of any of the foregoing
representations and warranties which materially and adversely affects the value
of the Mortgage Loans or the interest of the Purchaser in any Mortgage Loan, the
party discovering such breach shall give prompt written notice to the others.
The Seller shall have a period of sixty (60) days from the earlier of its
discovery or its receipt of notice of any such breach within which to correct or
cure such breach. Notwithstanding the above sentences, any breach of the
representations or warranties set forth in clause (ggg), (xxx), (www), (zzz),
(aaaa), (bbbb), (cccc), (dddd), (eeee), (ffff) or (oooo) of Section 3.02 shall
automatically be deemed to materially and adversely affect the value of the
Mortgage Loan and the interest of the Purchaser therein and the Seller shall
repurchase such Mortgage Loan at the Repurchase Price. The Seller hereby
covenants and agrees that (except as provided in the previous sentence with
respect to certain breaches for which no substitution is permitted) if any such
breach is not corrected or cured within such sixty (60) day period, the Seller
shall, at the Purchaser's option, either repurchase such Mortgage Loan at the
Repurchase Price within fifteen (15) days following the expiration of the
related cure period or substitute a mortgage loan for the Deleted Mortgage Loan
as provided below. In the event that any such breach shall involve any
representation or warranty set forth in Section 3.01, and such breach is not
cured within sixty (60) of the earlier of either discovery by or notice to the
Seller of such breach, all affected Mortgage Loans shall, at the option of the
Purchaser, be
47
repurchased by the Seller at the Repurchase Price within fifteen (15) days
following the expiration of the related cure period. Any such repurchase shall
be accomplished by deposit in the Custodial Account of the amount of the
Repurchase Price. With respect to any representations and warranties made by the
Seller, in the event that it is discovered that the circumstances with respect
to the Mortgage Loan are not accurately reflected in such representation and
warranty notwithstanding the actual knowledge or lack of knowledge of Seller,
then, notwithstanding that such representation and warranty is made "to the best
of the Seller's knowledge," or in reliance on or based on other information,
there shall be a breach of such representation and Seller shall cure such breach
or repurchase the affected Mortgage Loan as provided in this SubSection 3.03.
If pursuant to the foregoing provisions the Seller repurchases a
Mortgage Loan that is a MERS Mortgage Loan, the Seller shall either (i) cause
MERS to execute and deliver an assignment of the Mortgage in recordable form to
transfer the Mortgage from MERS to the Seller and shall cause such Mortgage to
be removed from registration on the MERS(R) System in accordance with MERS'
rules and regulations or (ii) cause MERS to designate on the MERS(R) System the
Seller as the beneficial holder of such Mortgage Loan.
If the Seller is required to repurchase any Mortgage Loan pursuant to
this Section 3.03 as a result of a breach of any of the representations and
warranties set forth in Section 3.02, the Seller may, with the Purchaser's prior
consent, which consent shall be in the sole discretion of the Purchaser, remove
such defective Mortgage Loan from the terms of this Agreement and substitute
another mortgage loan acceptable to the Purchaser in its sole discretion (each,
a "Qualified Substitute Mortgage Loan") for such defective Mortgage Loan, in
lieu of repurchasing such defective Mortgage Loan.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Seller
will determine the amount (if any) by which the aggregate principal balance of
all such Qualified Substitute Mortgage Loans as of the date of substitution is
less than the aggregate Scheduled Principal Balance of all such Deleted Mortgage
Loans (after application of scheduled principal payments due in the month of
substitution). An amount equal to the sum of (x) the product of (i) the amount
of such shortfall and (ii) the purchase price percentage used to calculate the
Purchase Price, as stated in the related Purchase Price and Terms Letters and
(y) accrued interest on the amount of such shortfall to the last day of the
month such substitution occurs, shall be distributed by the Seller in the month
of substitution pursuant to the Agreement. Accordingly, on the date of such
substitution, the Seller, as applicable, will deposit from its own funds into
the Custodial Account an amount equal to such amount.
As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, the Seller shall effect such
substitution by delivering to the Purchaser for such Qualified Substitute
Mortgage Loan or Loans the Mortgage Note, the Mortgage, the Assignment of
Mortgage and such other documents and agreements as are required by this
Agreement, with the Mortgage Note endorsed as required therein. The Seller shall
deposit in the Custodial Account the Monthly Payment less the Servicing Fee due
on such Qualified Substitute Mortgage Loan or Loans in the month following the
date of such substitution. The Seller shall amend the related Mortgage Loan
Schedule to reflect the
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withdrawal of the removed Mortgage Loan from this Agreement and the substitution
of such substitute Mortgage Loan therefor. Upon such amendment, the Purchaser
shall review the Mortgage File delivered to it relating to the substitute
Mortgage Loan. The Monthly Payment on a substitute Mortgage Loan due on the Due
Date in the month of substitution shall be the property of the Seller and the
Monthly Payment on the Deleted Mortgage Loan for which the substitution is made
due on the such date shall be the property of the Purchaser and the Seller shall
thereafter be entitled to retain all amounts subsequently received by the Seller
in respect of such Deleted Mortgage Loan. Upon such substitution, such Qualified
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Seller shall be deemed to have made with
respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of
substitution, the covenants, representations and warranties set forth in
SubSections 3.01 and 3.02.
It is understood and agreed that the obligation of the Seller set
forth in this Section 3.03 to cure, repurchase or substitute for a defective
Mortgage Loan, and to indemnify Purchaser pursuant to Section 7.01, constitutes
the sole remedies of the Purchaser respecting a breach of the foregoing
representations and warranties. If the Seller fails to repurchase or substitute
for a defective Mortgage Loan in accordance with this Section 3.03, or fails to
cure a defective Mortgage Loan to Purchaser's reasonable satisfaction in
accordance with this Section 3.03, or to indemnify Purchaser pursuant to Section
7.01, that failure shall, upon compliance by the Purchaser with the next to the
last paragraph of this Section 3.03, be an Event of Default and the Purchaser
shall be entitled to pursue all available remedies. No provision of this
paragraph shall affect the rights of the Purchaser to terminate this Agreement
for cause, as set forth in Sections 8.01 and 9.01.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Sections 3.01 and 3.02
shall accrue as to any Mortgage Loan upon (i) the earlier of discovery of such
breach by the Seller or notice thereof by the Purchaser to the Seller, (ii)
failure by the Seller to cure such breach or repurchase such Mortgage Loan as
specified above, and (iii) demand upon the Seller by the Purchaser for
compliance with this Agreement.
In the event that any Mortgage Loan is held by a REMIC,
notwithstanding any contrary provision of this Agreement, with respect to any
Mortgage Loan that is not in default or as to which no default is imminent,
Purchaser may, in connection with any repurchase or substitution of a Deleted
Mortgage Loan pursuant to this Section 3.03, require that the Seller deliver, at
the Seller's expense, an Opinion of Counsel to the effect that such repurchase
or substitution will not (i) result in the imposition of taxes on "prohibited
transactions" of such REMIC (as defined in Section 860F of the Code) or
otherwise subject the REMIC to tax, or (ii) cause the REMIC to fail to qualify
as a REMIC at any time.
Section 3.04. Purchase Price Protection.
With respect to (i) any Mortgage Loan other than Alt-A Mortgage Loans
that prepays in full during the first month following the related Closing Date
and (ii) any Alt-A Mortgage Loan that prepays in full during the first two (2)
months following the related Closing Date, the Seller shall reimburse the
Purchaser the amount (if any) by which the Purchase Price
49
paid by the Purchaser to the Seller exceeded 100% of the outstanding scheduled
principal balance of the Mortgage Loan as of the related Cut-off Date, within
thirty (30) days of such payoff. Upon any assignment of a Mortgage Loan and/or
this Agreement, the Purchaser may at its option retain its rights under this
Section 3.04 notwithstanding such assignment.
Section 3.05. Repurchase of Mortgage Loans With First Payment
Defaults.
With respect to (i) any Mortgage Loan other than Alt-A Mortgage Loans,
with respect to which a Mortgagor fails to make the first Monthly Payment due to
the Purchaser immediately following the related Closing Date, and (ii) any Alt-A
Mortgage Loan with respect to which a Mortgagor fails to make either of the
first two (2) Monthly Payments due to the Purchaser immediately following the
related Closing Date, in each case, within the calendar month such payment is
due on the related Mortgage Loan, or (a) a Mortgagor shall voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal or state bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (b) an involuntary proceeding shall be
commenced or an involuntary petition shall be filed seeking liquidation,
reorganization or other relief in respect of a Mortgagor under any Federal or
state bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, the Seller shall promptly repurchase such Mortgage Loan from the
Purchaser within fifteen (15) calendar days' of receipt of written notice from
the Purchaser. Any repurchase pursuant to this Section 3.05 shall be effected in
accordance with the procedures set forth in Section 3.03 hereof, however, any
such repurchase shall be made at the Repurchase Price.
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 4.01. The Seller to Act as Servicer.
The Seller, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement, the Mortgage,
Mortgage Note and with Accepted Servicing Practices, and shall have full power
and authority, acting alone or through subservicers or agents, to do or cause to
be done any and all things in connection with such servicing and administration
which the Seller may deem necessary or desirable and consistent with the terms
of this Agreement, the Mortgage, Mortgage Note and with Accepted Servicing
Practices. The Seller shall service and administer the Mortgage Loans through
the exercise of the same care that it customarily employs for its own account.
The Seller may perform its servicing responsibilities through agents or
independent contractors, but shall not thereby be released from any of its
responsibilities hereunder. Notwithstanding anything to the contrary, the Seller
may delegate any of its duties under this Agreement to one or more of its
Affiliates without regard to any of the requirements of this Section; provided,
however, that the Seller shall not be released from any of its responsibilities
hereunder by virtue of such delegation.
Except as set forth in this Agreement, the Seller shall service the
Mortgage Loans in compliance with the servicing provisions of the ▇▇▇▇▇▇ ▇▇▇
Guides, which include, but are not limited to, provisions regarding the
liquidation of Mortgage Loans, the collection of Mortgage Loan payments, the
payment of taxes, insurance and other charges, the maintenance of hazard
insurance with a Qualified Insurer, the maintenance of mortgage impairment
insurance,
50
the maintenance of fidelity bond and errors and omissions insurance,
inspections, the restoration of Mortgaged Property, the maintenance of Primary
Mortgage Insurance Policies, insurance claims, the title, management of REO
Property, permitted withdrawals with respect to REO Property, liquidation
reports, and reports of foreclosures and abandonments of Mortgaged Property, the
transfer of Mortgaged Property, the release of Mortgage Files, annual
statements, and examination of records and facilities. In the event of any
conflict, inconsistency or discrepancy between any of the servicing provisions
of this Agreement and any of the servicing provisions of the ▇▇▇▇▇▇ Mae Guides,
the provisions of this Agreement shall control and be binding upon the Purchaser
and the Seller.
Consistent with the terms of this Agreement, the Seller may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
any such term or in any manner grant indulgence to any Mortgagor if in the
Seller's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Purchaser, provided,
however, that unless the Mortgagor is in default with respect to the Mortgage
Loan, or such default is, in the judgment of the Seller, reasonably foreseeable,
and the Seller has obtained the prior written consent of the Purchaser, the
Seller shall not permit any modification with respect to any Mortgage Loan that
would change the Mortgage Interest Rate, forgive the payment of any principal or
interest, reduce or increase the outstanding principal balance (except for
actual payments of principal), make any additional advances of additional
principal or extend the final maturity date, as the case may be, with respect to
such Mortgage Loan. In the event of any such modification that permits the
deferral of interest or principal payments on any Mortgage Loan, the Seller
shall, on the Business Day immediately preceding the Remittance Date in any
month in which any such principal or interest payment has been deferred, deposit
in the Custodial Account from its own funds, in accordance with Section 4.04,
the difference between (a) the otherwise scheduled Monthly Payment and (b) the
amount paid by the Mortgagor. The Seller shall be entitled to reimbursement for
such advances to the same extent as for all other advances pursuant to Section
4.05. Without limiting the generality of the foregoing, the Seller shall
continue, and is hereby authorized and empowered by the Purchaser when the
Seller believes it appropriate and reasonable in its best judgment, to prepare,
execute and deliver, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Properties and
to institute foreclosure proceedings or obtain a deed-in-lieu of foreclosure so
as to convert the ownership of such properties, and to hold or cause to be held
title to such properties, on behalf of the Purchaser pursuant to the provisions
of Section 4.13. Notwithstanding anything herein to the contrary, the Seller may
not enter into a forbearance agreement or similar arrangement with respect to
any Mortgage Loan which runs more than 180 days after the first delinquent Due
Date without the prior consent of the Purchaser. Any such agreement shall be
approved by any applicable holder of a Primary Mortgage Insurance Policy or LPMI
Policy, if required.
Notwithstanding anything in this Agreement to the contrary, in the
event of a Principal Prepayment in full or in part of a Mortgage Loan, the
Seller may not waive any Prepayment Penalty or portion thereof required by the
terms of the related Mortgage Note unless (i) the Seller determines that such
waiver would maximize recovery of Liquidation Proceeds for such Mortgage Loan,
taking into account the value of such Prepayment Penalty and the Mortgage Loan,
and the waiver of such Prepayment Penalty is standard and customary in
51
servicing similar Mortgage Loans (including the waiver of a Prepayment Penalty
in connection with a refinancing of the Mortgage Loan related to a default or a
reasonably foreseeable default) or (ii) (a) the enforceability thereof is
limited (1) by bankruptcy, insolvency, moratorium, receivership, or other
similar law relating to creditors' rights or (2) due to acceleration in
connection with a foreclosure or other involuntary payment, or (b) the
enforceability is otherwise limited or prohibited by subsequent changes in
applicable law. In no event shall the Seller waive a Prepayment Penalty in
connection with a refinancing of a Mortgage Loan that is not related to a
default or a reasonably foreseeable default. If the Seller waives or does not
collect all or a portion of a Prepayment Penalty relating to a Principal
Prepayment in full or in part due to any action or omission of the Seller, other
than as provided above, the Seller shall deposit the amount of such Prepayment
Penalty (or such portion thereof as had been waived for deposit) into the
Custodial Account at the time of such prepayment for distribution in accordance
with the terms of this Agreement.
The Seller is authorized and empowered by the Purchaser, in its own
name, when the Seller believes it appropriate in its reasonable judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Purchaser, any and all instruments of assignment and other
comparable instruments with respect to such assignment or re-recording of a
Mortgage in the name of MERS, solely as nominee for the Purchaser and its
successors and assigns.
In servicing and administering the Mortgage Loans, the Seller shall
employ procedures including collection procedures and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted mortgage
servicing practices of prudent lending institutions and the Purchaser's reliance
on the Seller.
Unless a different time period is stated in this Agreement, the
Purchaser shall be deemed to have given consent in connection with a particular
matter if the Purchaser does not affirmatively grant or deny consent within
fifteen (15) Business Days from the date the Purchaser receives a written
request for consent for such matter from the Seller.
The Seller shall accurately and fully report its borrower credit files
related to the Mortgage Loans to Equifax, Transunion and Experian in a timely
manner.
Notwithstanding anything herein to the contrary, no Servicing Advance
shall be required to be made hereunder by the Seller if such Servicing Advance
would, if made, constitute a Nonrecoverable Advance. The determination by the
Seller that it has made a Nonrecoverable Advance or that any proposed Servicing
Advance, if made, would constitute a Nonrecoverable Advance, shall be evidenced
by an Officers' Certificate of the Seller delivered to the Purchaser.
With respect to each Mortgagor, the Seller will monitor applicable
sanction lists pursuant to, and in accordance with, the Anti-Money Laundering
Laws, including to determine whether any Mortgagor becomes listed as a "blocked
person" for purposes of the OFAC
52
Regulations. In the event a Mortgagor is listed as a "blocked person", the
Seller shall immediately notify the Purchaser.
Section 4.02. Collection of Mortgage Loan Payments.
Continuously from the date hereof until the date each Mortgage Loan
ceases to be serviced subject to this Agreement or until the principal and
interest on all Mortgage Loans are paid in full, the Seller will proceed
diligently to collect all payments due under each Mortgage Loan when the same
shall become due and payable and shall, to the extent such procedures shall be
consistent with this Agreement, Accepted Servicing Practices, and the terms and
provisions of related Primary Mortgage Insurance Policy or LPMI Policy, follow
such collection procedures as it follows with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Further, the
Seller will take special care in ascertaining and estimating Escrow Payments and
all other charges that, as provided in the Mortgage, will become due and
payable, so that the installments payable by the Mortgagors will be sufficient
to pay such charges as and when they become due and payable.
Section 4.03. Realization Upon Defaulted Mortgage Loans.
The Seller shall use its best efforts, consistent with the procedures
that the Seller would use in servicing loans for its own account, Accepted
Servicing Practices, any Primary Mortgage Insurance and the best interest of
Purchaser, to foreclose upon or otherwise comparably convert the ownership of
properties securing such of the Mortgage Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments pursuant to Section 4.01. Foreclosure or comparable
proceedings shall be initiated pursuant to ▇▇▇▇▇▇ ▇▇▇ guidelines and applicable
state law with respect to Mortgaged Properties for which no satisfactory
arrangements can be made for collection of delinquent payments. The Seller shall
use its best efforts to realize upon defaulted Mortgage Loans in such manner as
will maximize the receipt of principal and interest by the Purchaser, taking
into account, among other things, the timing of foreclosure proceedings. The
foregoing is subject to the provisions that, in any case in which the Mortgaged
Property shall have suffered damage, the Seller shall not be required to expend
its own funds toward the restoration of such property in excess of $2,000 unless
it shall determine in its discretion (i) that such restoration will increase the
proceeds of liquidation of the related Mortgage Loan to the Purchaser after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by the Seller through Insurance Proceeds or Liquidation Proceeds
from the related Mortgaged Property, as contemplated in Section 4.05. In the
event that any payment due under any Mortgage Loan is not paid when the same
becomes due and payable, or in the event the Mortgagor fails to perform any
other covenant or obligation under the Mortgage Loan and such failure continues
beyond any applicable grace period, the Seller shall take such action as it
shall deem to be in the best interest of the Purchaser. Except as otherwise
required by applicable law, in the event that any payment due under any Mortgage
Loan remains delinquent for a period of 90 days or more, the Seller shall
commence foreclosure proceedings, provided that prior to commencing foreclosure
proceedings, the Seller shall notify the Purchaser in writing (which may be by
electronic mail) of the Seller's intention to do so, and the Seller shall not
commence foreclosure proceedings if the Purchaser objects to such action within
ten (10) Business Days of receiving such notice. The Seller shall be responsible
for all costs and expenses incurred by it in
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any such proceedings or functions; provided, however, that it shall be entitled
to reimbursement thereof from the related property, as contemplated in Section
4.05. Notwithstanding anything to the contrary contained herein, in connection
with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event
the Seller has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector at the Purchaser's expense. Upon completion of the inspection, the
Seller shall promptly provide the Purchaser with a written report of the
environmental inspection. After reviewing the environmental inspection report,
the Purchaser shall determine how the Seller shall proceed with respect to the
Mortgaged Property.
In the event that a Mortgage Loan becomes part of a REMIC, and becomes
REO Property, such property shall be disposed of by the Seller in accordance
with Section 4.13.
Section 4.04. Establishment of Custodial Accounts; Deposits in
Custodial Accounts.
The Seller shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts
with a commercial bank, a savings bank or a savings and loan association (which
may be a depository Affiliate of the Seller) which meets the guidelines set
forth by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac as an eligible depository institution for
custodial accounts. Each Custodial Account shall be an Eligible Account. Funds
deposited in a Custodial Account may be drawn on in accordance with Section
4.05. The creation of any Custodial Account shall be evidenced by a letter
agreement in the form shown in Exhibit B hereto. The original of such letter
agreement shall be furnished to the Purchaser on or before the initial Closing
Date, and upon the request of any subsequent purchaser.
The Seller shall deposit in the Custodial Account on a daily basis,
within one (1) Business Day of receipt thereof, and retain therein the following
payments and collections received or made by it subsequent to the Cut-off Date,
or received by it prior to the Cut-off Date but allocable to a period subsequent
thereto, other than in respect of principal and interest on the Mortgage Loans
due on or before the Cut-off Date:
(i) all payments on account of principal, including Principal
Prepayments and Prepayment Penalties, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) any amounts required to be deposited by the Seller in
connection with any REO Property pursuant to Section 4.13;
(v) all Insurance Proceeds including amounts required to be
deposited pursuant to Sections 4.08, 4.10 and 4.11, other than
proceeds to be held in the Escrow Account and applied to the
restoration or repair of the Mortgaged
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Property or released to the Mortgagor in accordance with Accepted
Servicing Practices, the loan documents or applicable law;
(vi) all Condemnation Proceeds affecting any Mortgaged Property
which are not released to the Mortgagor in accordance with the
Seller's normal servicing procedures, the loan documents or applicable
law;
(vii) any Monthly Advances;
(viii) Compensating Interest, if any, for the month of
distribution. Such deposit shall be made from the Seller's own funds,
without reimbursement therefor;
(ix) all proceeds of any Mortgage Loan repurchased in accordance
with Sections 3.03;
(x) any amounts required to be deposited by the Seller pursuant
to Section 4.11 in connection with the deductible clause in any
blanket hazard insurance policy, such deposit shall be made from the
Seller's own funds, without reimbursement therefor;
(xi) any amounts required to be deposited in the Custodial
Account pursuant to Section 4.01 or Section 6.02; and
The foregoing requirements for deposit in the Custodial Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
assumption fees and other ancillary fees, to the extent permitted by Section
6.01, need not be deposited by the Seller in the Custodial Account.
The Seller may invest the funds in the Custodial Account in Eligible
Investments designated in the name of the Seller for the benefit of the Seller,
which shall mature not later than the Business Day next preceding the Remittance
Date next following the date of such investment (except that any investment in
the Eligible Institution with which the Custodial Account is maintained may
mature on such Remittance Date) and shall not be sold or disposed of prior to
maturity. Notwithstanding anything to the contrary herein and above, all income
and gain realized from any such investment shall be for the benefit of the
Seller and shall be subject to withdrawal by the Seller from the Custodial
Account pursuant to Section 4.05(iv). The amount of any losses incurred in
respect of any such investments shall be deposited in the Custodial Account by
the Seller out of its own funds immediately as realized.
If the balance on deposit in the Custodial Account exceeds $75,000 as
of the commencement of business on any Business Day and the Custodial Account
constitutes an Eligible Account solely pursuant to clause (a) of the definition
of Eligible Account, the Seller shall, on or before twelve o'clock noon Eastern
time on such Business Day, withdraw from the related Custodial Account any and
all amounts payable to the Purchaser and remit such amounts to the Purchaser by
wire transfer of immediately available funds.
Section 4.05. Permitted Withdrawals From the Custodial Account.
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The Seller may, from time to time, withdraw from the Custodial Account
for the following purposes:
(i) to make distributions (including Prepayment Penalties) to the
Purchaser in the amounts and in the manner provided for in Section
5.01;
(ii) to reimburse itself for Monthly Advances, the Seller's right
to reimburse itself pursuant to this subclause (ii) being limited to
amounts received on the related Mortgage Loan which represent late
collections (net of the related Servicing Fee) of principal and/or
interest respecting which any such advance was made, it being
understood that, in the case of such reimbursement, the Seller's right
thereto shall be prior to the rights of the Purchaser, except that,
where the Seller is required to repurchase a Mortgage Loan, pursuant
to Section 3.03, the Seller's right to such reimbursement shall be
subsequent to the payment to the Purchaser of the Repurchase Price
pursuant to such Section and all other amounts required to be paid to
the Purchaser with respect to such Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances and
any unpaid Servicing Fees, the Seller's right to reimburse itself
pursuant to this subclause (iii) with respect to any Mortgage Loan
being limited to related proceeds from Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds and REO Disposition
Proceeds;
(iv) to pay to itself as part of its servicing compensation: (a)
any interest earned on funds or any investment earnings in the
Custodial Account net of any losses on such investments (all such
amounts to be withdrawn monthly not later than each Remittance Date),
and (b) to the extent not otherwise retained, the Servicing Fee from
that portion of any payment or recovery as to interest with respect to
a particular Mortgage Loan;
(v) to pay to itself with respect to each Mortgage Loan that has
been repurchased pursuant to Section 3.03 all amounts received thereon
and not distributed as of the date on which the related Repurchase
Price is determined;
(vi) to reimburse the Seller for any unreimbursed Servicing
Advances made with respect to a Mortgage Loan that, upon a final
recovery determination with respect to such Mortgage Loan are
Nonrecoverable Advances, but only to the extent that late collections,
Liquidation Proceeds and Insurance Proceeds received with respect to
such Mortgage Loan are insufficient to reimburse the Seller for such
unreimbursed Servicing Advances; provided, that the Seller shall
provide an Officer's Certificate specifying the amount of any
Nonrecoverable Advances and detailing the calculation of such amount;
(vii) to transfer funds to another Eligible Account in accordance
with Section 4.09 hereof;
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(viii) to remove funds inadvertently placed in the Custodial
Account by the Seller or for which amounts previously deposited are
returned unpaid by the related Mortgagor's banking institution; and
(ix) to clear and terminate the Custodial Account upon the
termination of this Agreement.
Section 4.06. Establishment of Escrow Accounts; Deposits in Accounts.
The Seller shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts. Each Escrow Account shall be an Eligible
Account. Funds deposited in the Escrow Account may be drawn on by the Seller in
accordance with Section 4.07. The creation of any Escrow Account shall be
evidenced by a letter agreement in the form shown in Exhibit C. The original of
such letter agreement shall be furnished to the Purchaser on or before the
initial Closing Date, and upon request to any subsequent purchaser.
The Seller shall deposit in the Escrow Account or Accounts on a daily
basis, within one (1) Business Day of receipt thereof, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of ground rents,
taxes, assessments, water rates, hazard insurance premiums, Primary
Mortgage Insurance Policy or LPMI Policy premiums, if applicable or
any other items as required under the terms of this Agreement;
(ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property; and
(iii) all Servicing Advances for Mortgagors whose Escrow Payments
are insufficient to cover escrow disbursements.
The Seller shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, and for such other
purposes as shall be as set forth or in accordance with Section 4.07. The Seller
shall be entitled to retain any interest paid on funds deposited in an Escrow
Account by the depository institution other than interest on escrowed funds
required by law to be paid to the Mortgagor and, to the extent required by law,
the Seller shall pay interest on escrowed funds to the Mortgagor notwithstanding
that such Escrow Account is non-interest bearing or that interest paid thereon
is insufficient for such purposes.
If the balance on deposit in the Escrow Account exceeds $75,000 as of
the commencement of business on any Business Day and the Escrow Account
constitutes an Eligible Account solely pursuant to clause (a) of the definition
of Eligible Account, the Seller shall, on or before twelve o'clock noon Eastern
time on such Business Day, withdraw from the related Escrow Account any and all
amounts payable to the Purchaser and remit such amounts to the Purchaser by wire
transfer of immediately available funds.
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Section 4.07. Permitted Withdrawals From the Escrow Account.
Withdrawals from the Escrow Account may be made by the Seller only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, Primary Mortgage Insurance Policy or LPMI
Policy premiums, if applicable, flood insurance premiums, fire and
hazard insurance premiums, condominium assessments and comparable
items for the related Mortgage Note or other related Mortgage Loan
Documents;
(ii) to reimburse the Seller for any Servicing Advance made by
the Seller with respect to a related Mortgage Loan but only from
amounts received on the related Mortgage Loan which represent late
payments or collections of Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds as may be determined
to be overages;
(iv) for transfer to the Custodial Account in accordance with the
terms of this Agreement;
(v) for application to restoration or repair of the Mortgaged
Property;
(vi) to pay to the Seller, or to the Mortgagor to the extent
required by law, any interest paid on the funds deposited in the
Escrow Account;
(vii) to clear and terminate the Escrow Account on the
termination of this Agreement;
(viii) to pay to the Mortgagors or other parties Insurance
Proceeds deposited in accordance with Section 4.06;
(ix) to remove funds inadvertently placed in the Escrow Account
by the Seller or for which amounts previously deposited are returned
unpaid by the related Mortgagor's banking institution;
(x) to clear and terminate the Escrow Account upon the
termination of this Agreement; and
Section 4.08. Payment of Taxes, Insurance and Charges; Maintenance of
Primary Mortgage Insurance; Collections Thereunder.
With respect to each Mortgage Loan, the Seller shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates
and other charges which are or may become a lien upon the Mortgaged Property and
the status of primary mortgage insurance premiums (if any) and flood, fire and
hazard insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges, including renewal premiums and shall effect payment
thereof prior to the applicable penalty or termination date and at a time
appropriate for
58
securing maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and accumulated
by the Seller in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage or applicable law. To the extent that the Mortgage does
not provide for Escrow Payments, the Seller shall determine that any such
payments are made by the Mortgagor at the time they first become due. The Seller
assumes full responsibility for the timely payment of all such bills and shall
effect timely payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments subject to
its ability to recover such Servicing Advances pursuant to Sections 4.05 (iii)
[and (vi]). Notwithstanding the foregoing, if the Seller reasonably determines
that any such Servicing Advance would not be recoverable from amounts collected
on the related Mortgage Loan, the Seller shall have no obligation to make such
Servicing Advance. Any such determination shall be evidenced by an Officer's
Certificate delivered to the Purchaser indicating the reasons therefor.
The Seller shall maintain in full force and effect Primary Mortgage
Insurance Policies or LPMI Policy issued by a Qualified Insurer with respect to
each Mortgage Loan for which such coverage is herein required. Such coverage
will be maintained until the Loan-to-Value ratio of the related Mortgage Loan is
reduced to the amount for which ▇▇▇▇▇▇ ▇▇▇ no longer requires such insurance to
be maintained. The Seller will not cancel or refuse to renew any Primary
Mortgage Insurance Policy or LPMI Policy in effect on the related Closing Date
that is required to be kept in force under this Agreement unless a replacement
Primary Mortgage Insurance Policy or LPMI Policy for such canceled or
non-renewed policy is obtained from and maintained with a Qualified Insurer. The
Seller shall not take any action which would result in non-coverage under any
applicable Primary Mortgage Insurance Policy or LPMI Policy of any loss which,
but for the actions of the Seller would have been covered thereunder. In
connection with any assumption or substitution agreement entered into or to be
entered into pursuant to Section 6.01, the Seller shall promptly notify the
insurer under the related Primary Mortgage Insurance Policy or LPMI Policy, if
any, of such assumption or substitution of liability in accordance with the
terms of such policy and shall take all actions which may be required by such
insurer as a condition to the continuation of coverage under the Primary
Mortgage Insurance Policy or LPMI Policy. If such Primary Mortgage Insurance
Policy or LPMI Policy is terminated as a result of such assumption or
substitution of liability, the Seller shall obtain a replacement Primary
Mortgage Insurance Policy or LPMI Policy as provided above.
In connection with its activities as servicer, the Seller agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any Primary Mortgage Insurance Policy or LPMI Policy in a timely
fashion in accordance with the terms of such Primary Mortgage Insurance Policy
or LPMI Policy and, in this regard, to take such action as shall be necessary to
permit recovery under any Primary Mortgage Insurance Policy or LPMI Policy
respecting a defaulted First Lien Loan. Pursuant to Section 4.04, any amounts
collected by the Seller under any Primary Mortgage Insurance Policy or LPMI
Policy shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 4.05.
Section 4.09. Transfer of Accounts.
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The Seller may transfer a Custodial Account or an Escrow Account to a
different Eligible Account from time to time. Such transfer shall be made only
upon obtaining the consent of the Purchaser, which consent shall not be
unreasonably withheld. In any case, the Custodial Account and Escrow Account
shall be Eligible Accounts.
Section 4.10. Maintenance of Hazard Insurance.
The Seller shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is acceptable to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac and customary in the area where the Mortgaged Property is located in
an amount which is equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan, and (b) an amount such that
the proceeds thereof shall be sufficient to prevent the Mortgagor and/or the
mortgagee from becoming a co-insurer. If required by the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan shall be covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
in effect with an insurance carrier acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, in
an amount representing coverage not less than the least of (i) the outstanding
principal balance of the Mortgage Loan, (ii) the maximum insurable value of the
improvements securing such Mortgage Loan and (iii) the maximum amount of
insurance which is available under the Flood Disaster Protection Act of 1973 or
the National Flood Insurance Act of 1968, as amended. If at any time during the
term of the Mortgage Loan, the Seller determines in accordance with applicable
law and pursuant to the ▇▇▇▇▇▇ Mae Guides that a Mortgaged Property is located
in a special flood hazard area and is not covered by flood insurance or is
covered in an amount less than the amount required by the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Act of 1968, as amended,
the Seller shall notify the related Mortgagor that the Mortgagor must obtain
such flood insurance coverage, and if the related Mortgagor fails to obtain the
required flood insurance coverage within forty-five (45) days after such
notification, the Seller shall immediately force place the required flood
insurance on the Mortgagor's behalf. The Seller shall also maintain on each REO
Property, fire and hazard insurance with extended coverage in an amount which is
at least equal to the maximum insurable value of the improvements which are a
part of such property, and, to the extent required and available under the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Act of 1968, as
amended, flood insurance in an amount as provided above. Any amounts collected
by the Seller under any such policies other than amounts to be deposited in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or REO Property, or released to the Mortgagor in accordance with
Accepted Servicing Practices, shall be deposited in the Custodial Account,
subject to withdrawal pursuant to Section 4.05. It is understood and agreed that
no other additional insurance need be required by the Seller or maintained on
property acquired in respect of the Mortgage Loan, other than pursuant to this
Agreement, the ▇▇▇▇▇▇ ▇▇▇ Guides or such applicable state or federal laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All such policies shall be endorsed with standard
mortgagee clauses with loss payable to the Seller and its successors and/or
assigns and shall provide for at least thirty (30) days prior written notice of
any cancellation, reduction in the amount or material change in coverage to the
Seller. The Seller shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent, provided, however, that the
Seller shall
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not accept any such insurance policies from insurance companies unless such
companies are Qualified Insurers.
Section 4.11. Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Seller (or an Affiliate of the Seller) shall
obtain and maintain a mortgage impairment or blanket policy issued by an issuer
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac insuring against flood, fire and hazard
losses on all of the Mortgage Loans, then, to the extent such policy provides
coverage in an amount equal to the amount required pursuant to Section 4.10 and
otherwise complies with all other requirements of Section 4.10, it shall
conclusively be deemed to have satisfied its obligations as set forth in Section
4.10, it being understood and agreed that such policy may contain a deductible
clause, in which case the Seller shall, in the event that there shall not have
been maintained on the related Mortgaged Property or REO Property a policy
complying with Section 4.10, 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. In
connection with its activities as servicer of the Mortgage Loans, the Seller
agrees to prepare and present, on behalf of the Purchaser, claims under any such
blanket policy in a timely fashion in accordance with the terms of such policy.
Upon request of the Purchaser, the Seller shall cause to be delivered to the
Purchaser a certified true copy of such policy and shall use commercially
reasonable efforts to obtain a statement from the insurer thereunder that such
policy shall in no event be terminated or materially modified without thirty
(30) days' prior written notice to the Purchaser.
Section 4.12. Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
The Seller shall maintain, at its own expense, a blanket Fidelity Bond
and an errors and omissions insurance policy, with broad coverage with
responsible companies that would meet the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac on all officers, employees or other persons acting in any capacity with
regard to the Mortgage Loans to handle funds, money, documents and papers
relating to the Mortgage Loans. The Fidelity Bond shall be in the form of a
mortgage banker's blanket bond and shall protect and insure the Seller against
losses, including forgery, theft, embezzlement and fraud of such persons. The
errors and omissions insurance shall protect and insure the Seller against
losses arising out of errors and omissions and negligent acts of such persons.
Such errors and omissions insurance shall also protect and insure the Seller
against losses in connection with the failure to maintain any insurance policies
required pursuant to this Agreement and the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 4.12 requiring the Fidelity Bond
or errors and omissions insurance shall diminish or relieve the Seller from its
duties and obligations as set forth in this Agreement. The minimum coverage
under any such bond and insurance policy shall be at least equal to the
corresponding amounts required by ▇▇▇▇▇▇ Mae in the ▇▇▇▇▇▇ ▇▇▇ Guides or by
▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ Mac Guides. The Seller shall deliver to the Purchaser
a certificate from the surety and the insurer as to the existence of the
Fidelity Bond and errors and omissions insurance policy and shall obtain a
statement from the surety and the insurer that such Fidelity Bond or insurance
policy shall in no event be terminated or materially modified without thirty
(30) days' prior written notice to the Purchaser.
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Upon request by the Purchaser, the Seller shall provide the Purchaser with an
insurance certificate certifying coverage under this Section 4.12, and will
provide an update to such certificate upon request, or upon renewal or material
modification of coverage.
Section 4.13. Title, Management and Disposition of REO Property.
In the event that title to the Mortgaged Property is acquired in
foreclosure, by deed in lieu of foreclosure or other method resulting in full or
partial satisfaction of the related Mortgage, the deed or certificate of sale
shall be taken in the name of the Purchaser or its designee, or in the event the
Purchaser or its designee is not authorized or permitted to hold title to real
property in the state where the REO Property is located, or would be adversely
affected under the "doing business" or tax laws of such state by so holding
title, the deed or certificate of sale shall be taken in the name of such Person
or Persons as shall be consistent with an Opinion of Counsel obtained by the
Seller, at the expense of the Purchaser, from an attorney duly licensed to
practice law in the state where the REO Property is located. Any Person or
Persons holding such title other than the Purchaser shall acknowledge in writing
that such title is being held as nominee for the benefit of the Purchaser. The
Purchaser hereby appoints the Seller its designee for the purpose of taking and
holding title to Mortgaged Property acquired in foreclosure pursuant to this
Section 4.13.
The Seller shall notify the Purchaser in accordance with the ▇▇▇▇▇▇
Mae Guides of each acquisition of REO Property upon such acquisition, and
thereafter assume the responsibility for marketing such REO Property in
accordance with Accepted Servicing Practices. Thereafter, the Seller shall
continue to provide certain administrative services to the Purchaser relating to
such REO Property as set forth in this Section 4.13.
The Seller shall, either itself or through an agent selected by the
Seller, and in accordance with the ▇▇▇▇▇▇ ▇▇▇ Guides manage, conserve, protect
and operate each REO Property (and may temporarily rent the same) in the same
manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. If a REMIC election is or is
to be made with respect to the arrangement under which the Mortgage Loans and
any REO Property are held, the Seller shall manage, conserve, protect and
operate each REO Property in a manner which does not cause such REO Property to
fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of the Code or result in the receipt by such REMIC of any "income
from non permitted assets" within the meaning of Section 860F(a)(2)(b) of the
Code or any "net income from foreclosure property" within the meaning of Section
860G(c)(2) of the Code. The Seller shall cause each REO Property to be inspected
promptly upon the acquisition of title thereto and shall cause each REO Property
to be inspected at least monthly thereafter or more frequently as required by
the circumstances. The Seller shall make or cause to be made a written report of
each such inspection. Such reports shall be retained in the Servicing File and
copies thereof shall be forwarded upon request by the Seller to the Purchaser.
The Seller shall use its best efforts to dispose of the REO Property
as soon as possible and shall sell such REO Property in any event within two (2)
years after title has been taken to such REO Property, unless the Seller
determines, and gives an appropriate notice to the Purchaser to such effect,
that a longer period is necessary for the orderly liquidation of such REO
62
Property. If a longer period than two (2) years is necessary to sell any REO
Property, (i) the Seller shall report monthly to the Purchaser as to the
progress being made in selling such REO Property and (ii) if, with the written
consent of the Purchaser, a purchase money mortgage is taken in connection with
such sale, such purchase money mortgage shall name the Seller as mortgagee, and
a separate servicing agreement between the Seller and the Purchaser shall be
entered into with respect to such purchase money mortgage. Notwithstanding the
foregoing, if a REMIC election is made with respect to the arrangement under
which the Mortgage Loans and the REO Property are held, such REO Property shall
be disposed of within three (3) years or such other period as may be permitted
under Section 860G(a)(8) of the Code. If as of the date title to any REO
Property was acquired by the Seller there were outstanding unreimbursed
Servicing Advances with respect to the REO Property, the Seller shall be
entitled to immediate reimbursement from the Purchaser for any related
unreimbursed Servicing Advances. The disposition of REO Property shall be
carried out by the Seller at such price, and upon such terms and conditions, as
the Seller deems to be in the best interests of the Purchaser. The Seller shall
update the Purchaser from time-to-time as to the status of each REO Property.
With respect to each REO Property, the Seller shall segregate and hold
all funds collected and received in connection with the operation of the REO
Property separate and apart from its own funds or general assets and shall
establish and maintain a separate REO Account for each Purchaser in the form of
a non interest bearing demand account. Each REO Account shall be established
with the Seller or, with the prior consent of the Purchaser, with a commercial
bank, a mutual savings bank or a savings association. The creation of any REO
Account shall be evidenced by a letter agreement substantially in the form of
the Custodial Account Letter Agreement attached as Exhibit B hereto, as
applicable. An original of such letter agreement shall be furnished to any
Purchaser upon request.
The Seller shall deposit or cause to be deposited, on a daily basis in
each REO Account all revenues received with respect to the related REO Property
and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property, including the cost of
maintaining any hazard insurance pursuant to Section 2.10 hereof and the fees of
any managing agent acting on behalf of the Seller. The Seller shall not be
entitled to retain interest paid or other earnings, if any, on funds deposited
in such REO Account. On or before each Determination Date, the Seller shall
withdraw from each REO Account and deposit into the Custodial Account the net
income from the REO Property on deposit in the REO Account.
The Seller shall furnish to the Purchaser on each Remittance Date, an
operating statement for each REO Property covering the operation of each REO
Property for the previous month. Such operating statement shall be accompanied
by such other information as the Purchaser shall reasonably request.
Each REO Disposition shall be carried out by the Seller at such price
and upon such terms and conditions as the Seller deems to be in the best
interest of the Purchaser only with the prior written consent of the Purchaser.
If as of the date title to any REO Property was acquired by the Seller there
were outstanding unreimbursed Servicing Advances with respect to the REO
Property, the Seller, upon an REO Disposition of such REO Property, shall be
entitled to reimbursement for any related unreimbursed Servicing Advances from
proceeds received in
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connection with such REO Disposition. The proceeds from the REO Disposition, net
of any payment to the Seller as provided above, shall be deposited in the REO
Account and shall be transferred to the Custodial Account on the Determination
Date in the month following receipt thereof for distribution on the succeeding
Remittance Date in accordance with Section 5.01.
Section 4.14. Notification of Maturity Date.
With respect to each Mortgage Loan, the Seller shall execute and
deliver to the Mortgagor any and all necessary notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
maturity date if required under applicable law.
ARTICLE V
PAYMENTS TO THE PURCHASER
Section 5.01. Distributions.
On each Remittance Date, the Seller shall distribute by wire transfer
to the Purchaser (i) all amounts credited to the Custodial Account as of the
close of business on the preceding Determination Date, net of charges against or
withdrawals from the Custodial Account pursuant to Section 4.05, plus (ii) all
Monthly Advances, if any, which the Seller is obligated to distribute pursuant
to Section 5.03, plus (iii) all payments in respect of Compensating Interest for
such Remittance Date required to be deposited in the Custodial Account pursuant
to Section 4.04(viii), minus (iv) any amounts attributable to Monthly Payments
collected but due on a Due Date or Dates subsequent to the preceding
Determination Date, which amounts shall be remitted on the Remittance Date next
succeeding the Due Period for such amounts.
All distributions made to the Purchaser on each Remittance Date will
be made to the Purchaser of record on the preceding Record Date, and shall be
based on the Mortgage Loans owned and held by the Purchaser, and shall be made
by wire transfer of immediately available funds in accordance with the following
wire transfer instructions:
Deutsche Bank NY NY
Acc#00854209
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending
Ref 032-32129
Attn Prime Whole Loans
ABA#▇▇▇▇▇▇▇▇▇
With respect to any remittance received by the Purchaser after the
first Business Day following the Business Day on which such payment was due, the
Seller shall pay to the Purchaser interest on any such late payment at an annual
rate equal to the Prime Rate, adjusted as of the date of each change, plus two
(2) percentage points, but in no event greater than the maximum amount permitted
by applicable law. Such interest shall be deposited in the Custodial Account by
the Seller on the date such late payment is made and shall cover the period
commencing with the day following the first Business Day on which such payment
was due and ending with the Business Day on which such payment is made, both
inclusive. Such interest
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shall be remitted along with such late payment. The payment by the Seller of any
such interest shall not be deemed an extension of time for payment or a waiver
of any Event of Default by the Seller.
Section 5.02. Statements to the Purchaser.
The Seller shall furnish to the Purchaser an individual loan
accounting report, as of the last Business Day of each month, in the Seller's
assigned loan number order to document Mortgage Loan payment activity on an
individual Mortgage Loan basis. With respect to each month, the corresponding
individual loan accounting report shall be received by the Purchaser no later
than the fifth (5th) Business Day of the following month in a format mutually
agreed upon by both the Purchaser and the Seller and in hard copy, which report
shall contain the following (or such other information as is mutually agreed
upon by the Seller and the Purchaser):
(i) with respect to each Monthly Payment, the amount of such
remittance allocable to principal (including a separate breakdown of
any Principal Prepayment, including the date of such prepayment, and
any Prepayment Penalties or premiums, along with a detailed report of
interest on principal prepayment amounts remitted in accordance with
Section 4.04);
(ii) with respect to each Monthly Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by the Seller
during the prior collection period;
(iv) the aggregate Scheduled Principal Balance of the Mortgage
Loans;
(v) the aggregate of any expenses reimbursed to the Seller during
the prior distribution period pursuant to Section 4.05;
(vi) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89 days,
and (3) 90 days or more; (b) as to which foreclosure has commenced;
and (c) as to which REO Property has been acquired; and
(vii) the amount of any Monthly Advances.
The Seller shall also provide a monthly servicing report, sorted in
the Purchaser's assigned loan number order, in the form of Alltel reports P139,
S214, S215 and S50Y and Fidelity report P-4DL (or in such other forms as the
Purchaser and the Seller may agree), with each such report.
The Seller shall prepare and file any and all information statements
or other filings required to be delivered to any governmental taxing authority
or to the Purchaser pursuant to any applicable law with respect to the Mortgage
Loans and the transactions contemplated hereby. In addition, the Seller shall
provide the Purchaser with such information concerning the
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Mortgage Loans as is necessary for the Purchaser to prepare its federal income
tax return as the Purchaser may reasonably request from time to time.
In addition, not more than sixty (60) days after the end of each
calendar year, the Seller shall furnish to each Person who was a Purchaser at
any time during such calendar year an annual statement in accordance with the
requirements of applicable federal income tax law as to the aggregate of
remittances for the applicable portion of such year.
Section 5.03. Monthly Advances by the Seller.
Not later than the close of business on the Business Day preceding
each Remittance Date, the Seller shall deposit in the Custodial Account an
amount equal to all Monthly Payments, whether or not deferred pursuant to
Section 4.01, which were due on a Mortgage Loan on the immediately preceding Due
Date and delinquent at the close of business on the related Determination Date.
The Seller's obligation to make such Monthly Advances as to any
Mortgage Loan is mandatory, notwithstanding any other provision of this
Servicing Agreement and will continue through the earlier of: (i) the date of
the termination or resignation, as applicable, of the Seller pursuant to Section
7.04, 8.01 or 9.01 or (ii) the date of final disposition and liquidation of the
related Mortgage Loan or any Mortgaged Property acquired through foreclosure or
a conveyance in lieu of foreclosure, unless the Seller reasonably believes such
advance to be non-recoverable from proceeds of the related Mortgage Loan. In
such event, the Seller shall deliver to the Purchaser an Officer's Certificate
of the Seller to the effect that an officer of the Seller has reviewed the
related Servicing File and has made the reasonable determination that any
additional advances are non-recoverable from proceeds of the related Mortgage
Loan.
Section 5.04. Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Purchaser pursuant to a deed in lieu of foreclosure, the Seller
shall submit to the Purchaser a liquidation report with respect to such
Mortgaged Property. The Seller shall also provide reports on the status of REO
Property containing such information as the Purchaser may reasonably require.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01. Assumption Agreements.
The Seller shall, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of the Mortgaged Property (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause to the extent permitted by law; provided, however, that the
Seller shall not exercise any such rights if prohibited by law or the terms of
the Mortgage Note from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related Primary Mortgage Insurance
Policy or LPMI Policy, if any. If the
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Seller reasonably believes it is unable under applicable law to enforce such
"due-on-sale" clause, the Seller will enter into an assumption agreement with
the person to whom the Mortgaged Property has been conveyed or is proposed to be
conveyed pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. If the Seller is prohibited under applicable law from (a)
entering into an assumption agreement with the Person to whom the Mortgaged
Property has been conveyed or is proposed to be conveyed or (b) requiring the
original Mortgagor to remain liable under the Mortgage Note, the Seller, with
the prior consent of the primary mortgage insurer, if any, is authorized to
enter into a substitution of liability agreement with the person to whom the
Mortgaged Property has been conveyed or is proposed to be conveyed pursuant to
which the original Mortgagor is released from liability and such Person is
substituted as mortgagor and becomes liable under the related Mortgage Note. Any
such substitution of liability agreement shall be in lieu of an assumption
agreement.
In connection with any such assumption or substitution of liability,
the Seller shall follow the underwriting practices and procedures of the ▇▇▇▇▇▇
Mae Guides. With respect to an assumption or substitution of liability, the
Mortgage Interest Rate borne by the related Mortgage Note the amount of the
Monthly Payment and the final maturity date of such Mortgage Note may not be
changed. If the credit of the proposed transferee does not meet such
underwriting criteria, the Seller diligently shall, to the extent permitted by
the Mortgage or the Mortgage Note and by applicable law, accelerate the maturity
of the Mortgage Loan. The Seller shall notify the Purchaser that any such
substitution of liability or assumption agreement has been completed by
forwarding to the Purchaser the original of any such substitution of liability
or assumption agreement, which document shall be added to the related Mortgage
File and shall, for all purposes, be considered a part of such Mortgage File to
the same extent as all other documents and instruments constituting a part
thereof. All fees collected by the Seller for entering into an assumption or
substitution of liability agreement shall belong to the Seller as additional
servicing compensation.
Notwithstanding the foregoing paragraphs of this Section or any other
provision of this Agreement, the Seller shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any assumption which the
Seller may be restricted by law from preventing, for any reason whatsoever. For
purposes of this Section 6.01, the term "assumption" is deemed to also include a
sale of the Mortgaged Property subject to the Mortgage that is not accompanied
by an assumption or substitution of liability agreement.
Section 6.02. Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Seller of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Seller will immediately notify the Purchaser by
a certification of a Servicing Officer, which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the Custodial
Account pursuant to Section 4.04 have been or will be so deposited, of a
Servicing Officer and shall request delivery to it of the portion of the
Mortgage File held by the Purchaser or its designee. Upon receipt of such
certification and request, the Purchaser, shall promptly release the related
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mortgage documents to the Seller and the Seller shall prepare and process any
satisfaction or release. No expense incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account or the Purchaser. If such Mortgage Loan is a MERS Mortgage Loan, the
Seller is authorized to cause the removal from the registration on the MERS
System of such Mortgage and to execute and deliver, on behalf of the Purchaser,
any and all instruments of satisfaction or cancellation or of partial or full
release.
In the event the Seller satisfies or releases a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage or
should it otherwise prejudice any right the Purchaser may have under the
Mortgage Loan Documents, the Seller shall remit within five (5) Business Days of
such satisfaction or release to the Purchaser the then outstanding principal
balance of the related Mortgage Loan by deposit thereof in the Custodial
Account.
From time to time and as appropriate for the servicing or foreclosure
of the Mortgage Loans, including for the purpose of collection under any Primary
Mortgage Insurance Policy or LPMI Policy, the Purchaser or its designee shall,
upon request of the Seller and delivery to the Purchaser or its designee of a
servicing receipt signed by a Servicing Officer, release the portion of the
Mortgage File held by the Purchaser or its designee to the Seller. Such
servicing receipt shall obligate the Seller to return such Mortgage Loan
Documents to the Purchaser or its designee when the need therefor by the Seller
no longer exists, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Custodial Account or the Mortgage File has been delivered to an attorney, or to
a public trustee or other public official as required by law, for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgaged Property either judicially or non-judicially, and the Seller has
delivered to the Purchaser or its designee a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
was delivered and the purpose or purposes of such delivery. Upon receipt of a
certificate of a Servicing Officer stating that such Mortgage Loan was
liquidated, the servicing receipt shall be released by the Purchaser or its
designee to the Seller.
Section 6.03. Servicing Compensation.
As compensation for its services hereunder, the Seller shall be
entitled to withdraw from the Custodial Account or to retain from interest
payments on the Mortgage Loans the amounts provided for as the Servicing Fee.
Additional servicing compensation in the form of assumption fees, as provided in
Section 6.01, late payment charges, interest and investment earning on funds on
deposit in the Custodial Account and Escrow Account (to the extent provided for
herein) and other ancillary income shall be retained by the Seller to the extent
not required to be deposited in the Custodial Account. The Seller shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement therefor except
as specifically provided for herein. Notwithstanding the foregoing, in no event
shall the Seller retain the Prepayment Penalties
Section 6.04. Annual Statement as to Compliance.
The Seller will deliver to the Purchaser, not later than March 15th of
each year, an Officers' Certificate stating, as to each signatory thereof, that
(i) a review of the activities of the
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Seller during the preceding calendar year and of performance under this
Agreement has been made under such officers' supervision, and (ii) to the best
of such officers' knowledge, based on such review, the Seller has fulfilled all
of its obligations under this Agreement throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officers and the nature and status thereof. The first
Officer's Certificate delivered by the Seller to the Purchaser pursuant to this
Section shall be delivered on or before March 15, 2007. Copies of such statement
shall be provided by the Seller to the Purchaser upon request.
Section 6.05. Annual Independent Certified Public Accountants'
Servicing Report.
Not later than March 15th of each calendar year, the Seller at its
expense shall cause a firm of independent public accountants which is a member
of the American Institute of Certified Public Accountants to furnish a statement
to the Purchaser to the effect that such firm has examined certain documents and
records relating to the Seller's servicing of residential mortgage loans, and
that, on the basis of such an examination, conducted substantially in compliance
with the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Guide for HUD Approved Title II Approved Mortgagees and Loan Correspondent
Programs, such firm is of the opinion that the Seller's servicing has been
conducted in compliance with such programs, except for (i) such exceptions as
such firm shall believe to be immaterial, and (ii) such other exceptions as
shall be set forth in such statement. The first statement delivered by the
Seller to the Purchaser pursuant to this Section shall be delivered on or before
March 15, 2007. Copies of such statement shall be provided by the Seller to the
Purchaser.
Section 6.06. Purchaser's Right to Examine Seller Records.
At its expense, the Purchaser shall have the right to examine and
audit upon reasonable notice to the Seller, during business hours or at such
other times as might be reasonable under applicable circumstances, any and all
of the books, records, documentation or other information of the Seller, or held
by another for the Seller or on its behalf or otherwise, which relates to the
performance or observance by the Seller of the terms, covenants or conditions of
this Agreement.
The Seller shall provide to the Purchaser and any supervisory agents
or examiners representing a state or federal governmental agency having
jurisdiction over the Purchaser, including but not limited to, OCC, OTS, FDIC
and other similar entities, access to any documentation regarding the Mortgage
Loans in the possession of the Seller which may be required by any applicable
regulations. Such access shall be afforded without charge, upon reasonable
request, during normal business hours and at the offices of the Seller, and in
accordance with the federal government, OCC, FDIC, OTS, or any other similar
regulations.
Section 6.07. Seller Shall Provide Information as Reasonably Required.
The Seller shall furnish to the Purchaser during the term of this
Agreement such periodic, special or other reports, information or documentation
as the Purchaser may reasonably request, as shall be necessary, reasonable or
appropriate in respect to the Mortgage Loans and the
69
performance of the Seller under this Agreement, including any reports,
information or documentation reasonably required to comply with any regulations
regarding any supervisory agents or examiners of the Purchaser; provided, that,
the Seller shall not be liable for any reasonable out-of-pocket costs with
respect to the provision of such reports, information or documentation. All such
reports or information shall be provided by and in accordance with such
applicable instructions and directions as the Purchaser may reasonably request
in relation to this Agreement or the performance of the Seller under this
Agreement. The Seller agrees to execute and deliver all such instruments and
take all such action as the Purchaser, from time to time, may reasonably request
in order to effectuate the purpose and to carry out the terms of this Agreement.
The Seller, upon reasonable advance notice, shall make reasonably
available to the Purchaser or any prospective purchaser a knowledgeable
financial or accounting officer for the purpose of answering questions and to
permit any prospective purchaser to inspect the Seller's servicing facilities
for the purpose of satisfying such prospective purchaser that the Seller has the
ability to service the Mortgage Loans as provided in this Agreement.
The Seller shall maintain with respect to each Mortgage Loan and shall
make available for inspection by the Purchaser or its designee the related
Servicing File during the time the Purchaser retains ownership of a Mortgage
Loan and thereafter in accordance with applicable laws and regulations.
ARTICLE VII
THE SELLER
Section 7.01. Indemnification; Third Party Claims.
The Seller agrees to indemnify and hold the Purchaser, any successor
servicer and their respective present and former directors, officers, employees
and agents harmless from any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses (including, without limitation, any legal fees and expenses,
judgments or expenses relating to such liability, claim, loss or damage) that
such parties may sustain in any way related to the failure of the Seller to
observe and perform its duties, obligations, covenants, and agreements and to
service the Mortgage Loans in compliance with the terms of this Agreement or as
a result of the breach of a representation or warranty set forth in Sections
3.01 or 3.02 of this Agreement. The Purchaser agrees to indemnify and hold the
Seller and the Seller's present and former directors, officers, employees and
agents harmless from any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses (including, without limitation, any legal fees and expenses,
judgments or expenses relating to such liability, claim, loss or damage) that
the Seller may sustain in any way related to the failure of the Purchaser to
perform any of its obligations hereunder.
Promptly after receipt by an indemnified party under this Section 7.01
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 7.01, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party will
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not relieve the indemnifying party from any liability which it may have to any
indemnified party under this Section 7.01, except to the extent that it has been
prejudiced in any material respect, or from any liability which it may have,
otherwise than under this Section 7.01. The indemnifying party shall assume
(with the consent of the indemnified party) the defense of any such claim and
pay all expenses in connection therewith, including attorney's fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the indemnified party in respect of such claim. The indemnifying
party shall follow any written instructions received from the indemnified party
in connection with such claim. The provisions of this Section 7.01 shall survive
termination of this Agreement.
Section 7.02. Merger or Consolidation of the Seller.
The Seller shall keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and shall obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated
(including by means of sale or disposal of all or substantially all of the
Seller's assets), or any corporation resulting from any merger, conversion or
consolidation to which the Seller shall be a party, or any Person succeeding to
the business of the Seller, shall be the successor of the Seller hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or surviving Person shall be an
institution whose deposits are insured by FDIC or a company whose business is
the origination and servicing of mortgage loans, shall satisfy any requirements
of Section 11.01 with respect to the qualifications of a successor to the
Seller, and shall be qualified and in good standing to service mortgage loans on
behalf of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
Section 7.03. Limitation on Liability of the Seller and Others.
The duties and obligations of the Seller shall be determined solely by
the express provisions of this Agreement, the Seller shall not be liable except
for the performance of such duties and obligations as are specifically set forth
in this Agreement and no implied covenants or obligations shall be read into
this Agreement against the Seller. Neither the Seller nor any of the officers,
employees or agents of the Seller shall be under any liability to the Purchaser
for any action taken or for refraining from the taking of any action in good
faith pursuant to this Agreement, or for errors in judgment made in good faith;
provided, however, that this provision shall not protect the Seller or any such
person against any breach of warranties or representations made herein, or
failure to perform its obligations in compliance with any standard of care set
forth in this Agreement, or any liability which would otherwise be imposed by
reason of negligence, bad faith or willful misconduct, or any breach of the
terms and conditions of this Agreement. The Seller and any officer, employee or
agent of the Seller may rely in good faith on any document of any kind prima
facie properly executed and submitted by the Purchaser respecting any matters
arising hereunder. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the
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Mortgage Loans in accordance with this Agreement and which in its reasonable
opinion may involve it in any expenses or liability; provided, however, that the
Seller may undertake any such action which it may deem necessary or desirable in
respect to this Agreement and the rights and duties of the parties hereto as is
consistent with Accepted Servicing Practices. In such event, the reasonable
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities for which the Purchaser shall be
liable, and the Seller shall be entitled to be reimbursed therefor from the
Purchaser upon written demand.
Section 7.04. Seller Not to Resign.
The Seller shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Seller and the Purchaser or upon
the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Seller. Any such
determination permitting the resignation of the Seller shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Seller's responsibilities and obligations hereunder in the manner provided in
Section 11.01.
Section 7.05. No Transfer of Servicing.
With respect to the retention of the Seller to service the Mortgage
Loans hereunder, the Seller acknowledges that the Purchaser has acted in
reliance upon the Seller's independent status, the adequacy of its servicing
facilities, plan, personnel, records and procedures, its integrity, reputation
and financial standing and the continuance thereof. Without in any way limiting
the generality of this Section 7.05 and except as pursuant to Section 7.02, the
Seller shall not either assign this Agreement or the servicing hereunder or
delegate its rights or duties hereunder or any portion thereof without the prior
written approval of the Purchaser. Notwithstanding the foregoing, the Seller
may, without the consent of the Purchaser, retain reasonable and necessary third
party contractors to perform certain servicing and loan administration
functions, including and limited to, hazard insurance administration, tax
payment and administration, flood certification and administration and
foreclosure activities; provided, that such contractors shall perform such
servicing and loan administrative functions in a manner consistent with this
Agreement; provided, further, that the retention of such contractors by Seller
shall not limit the obligation of the Seller to service the Mortgage Loans
pursuant to the terms and conditions of this Agreement or release it from any of
its obligations hereunder.
ARTICLE VIII
DEFAULT
Section 8.01. Events of Default.
In case one or more of the following Events of Default by the Seller
shall occur and be continuing, that is to say:
(i) any failure by the Seller to remit to the Purchaser any
payment required to be made under the terms of this Agreement which
continues unremedied for a period of one (1) Business Day after the
date upon which
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written notice of such failure, requiring the same to be remedied,
shall have been given to the Seller by the Purchaser; or
(ii) failure on the part of the Seller duly to observe or perform
in any material respect any other of the covenants or agreements on
the part of the Seller set forth in this Agreement, or which failure
continues unremedied for a period of thirty (30) days after the date
on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller by the Purchaser; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or
for the winding-up or liquidation of its affairs, shall have been
entered against the Seller and such decree or order shall have
remained in force undischarged or unstayed for a period of sixty (60)
days; or
(iv) the Seller shall voluntarily go into liquidation, consent to
the appointment of a conservator or receiver or liquidator in any
insolvency, bankruptcy, readjustment of debt, marshalling of assets
and liabilities or similar proceedings of or relating to the Seller or
of or relating to all or substantially all of its property; or
(v) the Seller shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations; or
(vi) the Seller ceases to be approved by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac as a mortgage loan seller and servicer for more than thirty (30)
days; or
(vii) the Seller attempts to assign its right to servicing
compensation hereunder or the Seller attempts, without the consent of
the Purchaser, to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any
portion thereof in a manner not permitted under this Agreement;
(viii) the Seller ceases to be (a) licensed to service
residential mortgage loans in each jurisdiction in which a Mortgaged
Property is located and such licensing is required, and (b) qualified
to transact business in any jurisdiction where it is currently so
qualified, but only to the extent such non-qualification materially
and adversely affects the Seller's ability to perform its obligations
hereunder; or
(ix) the Seller's servicer rating is reduced to "average" or the
equivalent or lower rating by two (2) or more nationally recognized
statistical rating organizations;
then, and in each and every such case, so long as an Event of Default
shall not have been remedied, the Purchaser, by notice in writing to the Seller
may, in addition to
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whatever rights the Purchaser may have under Sections 3.03 and 7.01 and at law
or equity or to damages, including injunctive relief and specific performance,
terminate all the rights and obligations of the Seller under this Agreement and
in and to the Mortgage Loans and the proceeds thereof without compensating the
Seller for the same. On or after the receipt by the Seller of such written
notice of termination, all authority and power of the Seller under this
Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the successor appointed pursuant to Section 12.01. Upon
written request from the Purchaser, the Seller shall prepare, execute and
deliver, any and all documents and other instruments, place in such successor's
possession all Servicing Files, and do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise, at the Seller's sole expense. The
Seller agrees to cooperate with the Purchaser and such successor in effecting
the termination of the Seller's responsibilities and rights hereunder,
including, without limitation, the transfer to such successor for administration
by it of all cash amounts which shall at the time be credited by the Seller to
the Custodial Account or Escrow Account or thereafter received with respect to
the Mortgage Loans or any REO Property.
If any of the Mortgage Loans are MERS Mortgage Loans, in connection
with the termination or resignation (as described in Section 8.04) of the Seller
hereunder, either (i) the successor servicer shall represent and warrant that it
is a member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS, or (ii) the Seller shall
cooperate with the successor servicer either (x) in causing MERS to execute and
deliver an assignment of Mortgage in recordable form to transfer the Mortgage
from MERS to the Purchaser and to execute and deliver such other notices,
documents and other instruments as may be necessary or desirable to effect a
transfer of such Mortgage Loan or servicing of such Mortgage Loan on the MERS(R)
System to the successor servicer or (y) in causing MERS to designate on the
MERS(R) System the successor servicer as the servicer of such Mortgage Loan.
All Servicing Transfer Costs shall be paid by the Seller upon
presentation of reasonable documentation of such costs.
Section 8.02. Waiver of Defaults.
The Purchaser may waive only by written notice any default by the
Seller in the performance of its obligations hereunder and its consequences.
Upon any such waiver of a past default, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived in writing.
ARTICLE IX
TERMINATION
Section 9.01. Termination.
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The respective obligations and responsibilities of the Seller, as
servicer, shall terminate upon (a) the distribution to the Purchaser of the
final payment or liquidation with respect to the last Mortgage Loan (or advances
of same by the Seller); (b) the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure with respect to the last Mortgage
Loan and the remittance of all funds due hereunder; (c) by mutual consent of the
Seller and the Purchaser in writing; or (d) the termination of the Seller by the
Purchaser with cause under the terms of this Agreement.
ARTICLE X
RECONSTITUTION OF MORTGAGE LOANS
Section 10.01. Reconstitution of Mortgage Loans.
(a) The Seller acknowledges and the Purchaser agrees that with respect
to some or all of the Mortgage Loans, the Purchaser may effect, upon (or as
otherwise agreed) prior written notice to the Seller, either:
(i) one or more sales of the Mortgage Loans as whole loan
transfers (each, a "Whole Loan Transfer");
(ii) one or more Agency Transfers; and/or
(iii) one or more sales of the Mortgage Loans directly or
indirectly to an issuing entity in connection with an issuance of
publicly offered or privately placed, rated or unrated mortgage-backed
securities or an issuance of publicly offered or privately placed,
rated or unrated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential
mortgage loans consisting, in whole or in part, of some or all of the
Mortgage Loans (each, a "Securitization Transaction").
(b) With respect to each Whole Loan Transfer, Agency Transfer or
Securitization Transaction, as the case may be, the Seller agrees:
(i) to cooperate fully with the Purchaser and any prospective
purchaser with respect to all reasonable requests, and with respect to
servicing requirements reasonably requested by the rating agencies and
credit enhancers;
(ii) to execute all agreements, (including but not limited to
credit risk management agreements) required to be executed by the
Seller in connection with such Whole Loan Transfer, Agency Transfer or
Securitization Transaction, including without limitation any
Indemnification Agreement, provided that any such agreements be
consistent with the terms hereof and impose no greater duties,
liabilities or obligations upon the Seller than those set forth herein
and provided that the Seller is given an opportunity to review and
reasonably negotiate in good faith the content of such documents not
specifically referenced or provided for herein;
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(iii) to make all the representations and warranties set forth in
Section 3.01 as of the date of the Whole Loan Transfer, Agency
Transfer or Securitization Transaction;
(iv) to deliver to the Purchaser (a) for inclusion in any
prospectus or other offering material such publicly available
information regarding the Seller, its underwriting guidelines, its
financial condition and its mortgage loan delinquency, foreclosure and
loss experience and any additional information reasonably requested by
the Purchaser, (b) any similar nonpublic, unaudited financial
information (which the Purchaser may, at its option and its cost, have
audited by certified public accountants) and such other information as
is reasonably requested by the Purchaser and which the Seller is
capable of providing without unreasonable effort or expense, and to
indemnify the Purchaser and its Affiliates for any losses, costs or
damages incurred by any of them directly related to any material
misstatements contained in such information or for any omissions of
material fact required to be stated therein to the extent such
information is provided by the Seller specifically for use in a
prospectus or other offering material; provided, that, the Purchaser
shall indemnify the Seller and its Affiliates for any losses, costs or
damages related to any material misstatements contained in any
prospectus or other offering material other than in such information
provided by the Seller specifically for use therein or for any
omissions of material fact required to be stated therein and (c) such
statements and audit letters of reputable, certified public
accountants pertaining to information provided by the Seller pursuant
to clause (a) above as shall be reasonably requested by the Purchaser;
(v) to deliver to the Purchaser, and to any Person designated by
the Purchaser, such legal documents and in-house opinions of counsel
in a form reasonably acceptable to the Purchaser if required as a
condition of (a) a Rating Agency to rate such Securitization
Transaction, (b) a party to a Whole Loan Transfer, Agency Transfer or
Securitization Transaction (other than the Purchaser or depositor), as
the case may be, to enter into a reconstitution agreement in form and
substance reasonably acceptable to the parties hereto or an
Assignment, Assumption and Recognition Agreement substantially in the
form attached hereto as Exhibit D, (c) a co-underwriter to the closing
of a Securitization Transaction, or (d) an investor to purchase a
class of securities, it being understood that the cost of any opinions
of counsel (other than in-house counsel opinions which cost shall be
deemed to be $0) that may be required for a Whole Loan Transfer,
Agency Transfer or Securitization Transaction, as the case may be,
shall be the responsibility of the Purchaser;
(vi) to negotiate and execute one or more subservicing agreements
between the Seller and any master servicer which is generally
considered to be a prudent master servicer in the secondary mortgage
market, designated by the Purchaser in its sole discretion after
consultation with the Seller and/or one or more custodial and
servicing agreements among the Purchaser, the Seller and a third party
custodian/trustee which is generally considered to be a prudent
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custodian/trustee in the secondary mortgage market designated by the
Purchaser in its sole discretion after consultation with the Seller,
in either case for the purpose of pooling the Mortgage Loans with
other mortgage loans for resale or securitization; and
(vii) if requested by Purchaser to execute a pooling and
servicing agreement, which pooling and servicing agreement may, at the
Purchaser's direction, contain contractual provisions including, but
not limited to, a 24-day certificate payment delay (54-day total
payment delay), servicer advances of delinquent scheduled payments of
principal and interest through liquidation (unless deemed
non-recoverable) and prepayment interest shortfalls (to the extent of
the monthly servicing fee payable thereto), servicing and mortgage
loan representations and warranties which conform to the
representations and warranties in this Agreement and to secondary
market standards for securities backed by mortgage loans similar to
the Mortgage Loans and such provisions with regard to servicing
responsibilities, investor reporting, segregation and deposit of
principal and interest payments, custody of the Mortgage Loans, and
other covenants as are required by the Purchaser and one or more
nationally recognized rating agencies for mortgage pass-through
transactions.
(c) In order to facilitate compliance with Regulation AB, the Seller
and the Purchaser agree to comply with the provisions of the Regulation AB
Compliance Addendum attached hereto as Exhibit F.
The Purchaser shall reimburse the Seller for any and all out-of-pocket
expenses, costs and fees, including reasonable attorney's fees incurred by the
Seller in response to requests for information or assistance under this Section,
provided, however, that the attorney's fees for each Securitization Transaction
shall equal a fixed-fee of $3,000 with respect to the first two (2)
Securitization Transactions and $1,000 thereafter to the extent such attorney
review is necessary. All Mortgage Loans not sold or transferred pursuant to a
Whole Loan Transfer, Agency Transfer or Securitization Transaction shall be
subject to this Agreement and shall continue to be serviced in accordance with
the terms of this Agreement and with respect thereto this Agreement shall remain
in full force and effect.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Successor to the Seller.
Prior to termination of Seller's responsibilities and duties under
this Agreement pursuant to Section 7.04, 8.01 or 9.01, the Purchaser shall (i)
succeed to and assume all of the Seller's responsibilities, rights, duties and
obligations under this Agreement, or (ii) appoint a successor having the
characteristics set forth in Section 7.02 hereof and which shall succeed to all
rights and assume all of the responsibilities, duties and liabilities of the
Seller under this Agreement. In connection with such appointment and assumption,
the Purchaser may make such arrangements for the compensation of such successor
out of payments on Mortgage Loans as the Purchaser and such successor shall
agree. In the event that the Seller's duties, responsibilities
77
and liabilities under this Agreement should be terminated pursuant to the
aforementioned Sections, the Seller shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or financial
condition of its successor. The resignation or removal of the Seller pursuant to
the aforementioned Sections shall not become effective until a successor shall
be appointed pursuant to this Section and shall in no event relieve the Seller
of the representations and warranties made pursuant to Sections 3.01, 3.02, the
remedies available under Section 3.03 and the indemnification obligations of the
Seller pursuant to Section 7.01.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Seller and to the Purchaser an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Seller, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Seller or this Agreement pursuant to
Section 7.04, 7.05, 8.01 or 9.01 shall not affect any claims that the Purchaser
may have against the Seller arising prior to any such termination or
resignation.
The Seller shall promptly deliver to the successor the funds in the
Custodial Account, REO Account and the Escrow Account and the Mortgage Files and
related documents and statements held by it hereunder and the Seller shall
account for all funds. The Seller shall execute and deliver such instruments and
do such other things all as may reasonably be required to more fully and
definitely vest and confirm in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Seller. Upon appointment of
successor servicer to the Seller, subject to recoverable reconciliation, the
Seller shall be reimbursed for unrecovered Servicing Advances, Monthly Advances
and unpaid Servicing Fees which would otherwise have been recovered by the
Seller pursuant to this Agreement but for the appointment such successor
servicer.
Upon a successor's acceptance of appointment as such, the Seller shall
notify by mail the Purchaser of such appointment.
Section 11.02. Amendment.
This Agreement may be amended or supplemented from time to time by
written agreement executed by the Purchaser and the Seller.
Section 11.03. [Reserved.]
Section 11.04. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to its conflict of law
provisions (except Section 5-1401 of the New York General Obligations Law),
except to the extent preempted by Federal law. The
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obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 11.05. Notices.
Any demands, notices or other communications permitted or required
hereunder shall be in writing and shall be deemed conclusively to have been
given if personally delivered at or mailed by registered mail, postage prepaid,
and return receipt requested or certified mail, return receipt requested, or
transmitted by telex, telegraph or telecopier and confirmed by a similar mailed
writing, as follows:
(i) if to the Seller:
Wachovia Mortgage Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 28202-1088
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Wachovia Mortgage Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Purchaser:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Mortgage Accounting Group
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
Section 11.06. Severability of Provisions.
Any part, provision, representation or warranty of this Agreement
which is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or
79
is held to be void or unenforceable in any jurisdiction shall be ineffective, as
to such jurisdiction, to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction as to any Mortgage Loan shall not
invalidate or render unenforceable such provision in any other jurisdiction. To
the extent permitted by applicable law, the parties hereto waive any provision
of law which prohibits or renders void or unenforceable any provision hereof. If
the invalidity of any part, provision, representation or warranty of this
Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate, in good faith, to
develop a structure the economic effect of which is nearly as possible the same
as the economic effect of this Agreement without regard to such invalidity.
Section 11.07. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 11.08. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(i) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as
the singular, and the use of any gender herein shall be deemed to
include the other gender;
(ii) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(iii) references herein to "Articles," "Sections," Subsections,"
"Paragraphs," and other subdivisions without reference to a document
are to designated Articles, Sections, Subsections, Paragraphs and
other subdivisions of this Agreement;
(iv) a reference to a SubSection without further reference to a
Section is a reference to such SubSection as contained in the same
Section in which the reference appears, and this rule shall also apply
to Paragraphs and other subdivisions;
(v) the words "herein," "hereof," "hereunder," and other words of
similar import refer to this Agreement as a whole and not to any
particular provision;
(vi) the term "include" or "including" shall mean without
limitation by reason of enumeration; and
(vii) headings of the Articles and Sections in this Agreement are
for reference purposes only and shall not be deemed to have any
substantive effect.
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Section 11.09. Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and (iii)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
Section 11.10. Confidentiality of Information.
The Seller and the Purchaser understand and agree that this Agreement,
any other agreements executed in connection with the sale contemplated
hereunder, any agreements executed in connection with any Reconstitution, (other
than any offering circulars or other disclosure documents produced in connection
with any Reconstitution) are confidential and proprietary to the Purchaser or
Seller, and the Seller and Purchaser agree to hold such documents confidential
and not to divulge such documents to anyone except (a) to the extent required by
law or judicial order or to enforce its rights or remedies under this Agreement,
(b) to the extent such information enters into the public domain other than
through the wrongful act of the Seller or the Purchaser, as the case may be or
(c) as is necessary in working with legal counsel, rating agencies, auditors,
agents, taxing authorities or other governmental agencies.
Section 11.11. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected (i) with respect to MERS Mortgage Loans and (ii) with respect to
Mortgage Loans that are not MERS Mortgage Loans, at the Seller's expense, in
each case, in the event recordation is either necessary under applicable law or
requested by the Purchaser at its sole option.
Section 11.12. Assignment by Purchaser.
(a) The Purchaser shall have the right, upon notice to the Seller, to
assign, in whole or in part, its interest under this Agreement with respect to
some or all of the Mortgage Loans, and designate any person to exercise any
rights of the Purchaser hereunder, by executing an Assignment, Assumption and
Recognition Agreement substantially in the form of Exhibit D hereto, and the
assignee or designee shall accede to the rights and obligations hereunder of the
Purchaser with respect to such Mortgage Loans; provided, however, that, in no
event shall there be any more than four (4) "Purchasers" with respect to any
Mortgage Loan Package. In no event shall the Purchaser sell a partial interest
in any Mortgage Loan without the prior written consent of the Seller, which
consent may be granted or withheld in the Seller's sole discretion. All
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references to the Purchaser in this Agreement shall be deemed to include its
assignee or designee.
(b) Joinder of Affiliates. By execution and delivery of a Joinder
Agreement in the form of Exhibit J, any affiliate of the Purchaser may become a
party to this Agreement, with all of the rights and obligations as if a party
originally hereto. Such Joinder Agreement shall be in form and substance
satisfactory to the Seller, the Purchaser and each such additional Purchaser.
Section 11.13. No Partnership.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Seller shall be rendered as an independent contractor and not as agent for
Purchaser.
Section 11.14. Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 7.02, this Agreement
shall inure to the benefit of and be binding upon the Seller and the Purchaser
and their respective successors and assigns.
Section 11.15. Entire Agreement.
Each of the parties to this Agreement acknowledges that no
representations, agreements or promises were made to any of the other parties to
this Agreement or any of its employees other than those representations,
agreements or promises specifically contained herein. This Agreement and the
related Purchase Price and Terms Letter set forth the entire understanding
between the parties hereto and shall be binding upon all successors of all of
the parties. In the event of any inconsistency between a Purchase Price and
Terms Letter and this Agreement, this Agreement shall control.
Section 11.16. No Solicitation.
From and after the related Cut-off Date, except as provided below, the
Seller agrees that it will not take any action or permit or cause any action to
be taken by any of its agents or Affiliates, or by any independent contractors
on the Seller's behalf, in any manner to solicit the borrower or obligor under
any Mortgage Loan to refinance the Mortgage Loan, in whole or in part. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors to refinance any Mortgage Loans and the attendant rights,
title and interest in and to the list of such Mortgagors and data relating to
their Mortgages (including insurance renewal dates) shall be transferred to the
Purchaser pursuant hereto on the related Closing Date and the Seller shall take
no action to undermine these rights and benefits. Notwithstanding the foregoing,
it is understood and agreed that the following promotions or solicitations
undertaken by the Seller or any Affiliate of the Seller shall not be prohibited
under this Section 11.16: (i) promotions or solicitations that are directed to
the general public at large or segments thereof, provided that no segment shall
consist primarily of the borrowers or
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obligors under the Mortgage Loans, including, without limitation, mass mailing
based on commercially acquired mailing lists, newspaper, radio and television
advertisements; (ii) responding to Mortgagor requests for pay-off information
and regarding other bank or financial products or services; and (iii) promotions
or solicitations to any Mortgagor for any other bank or financial products or
services, unless such promotions or solicitations are for a prepayment of a
Mortgage Loan.
Section 11.17. Costs.
The Purchaser shall pay any commissions due its salesmen, the expenses
of its accountants and attorneys and the expenses and fees of any broker
retained by the Purchaser with respect to the transactions covered by this
Agreement. To the extent not otherwise provided herein, all other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans, including, without limitation, fees for recording intervening assignments
of mortgage and Assignments of Mortgage, the cost of obtaining tax service
contracts and the legal fees and expenses of its attorneys shall be paid by the
Seller. The Seller shall be responsible for causing the recordation of all
Assignments of Mortgage and all intervening assignments of mortgage, as
applicable.
Section 11.18. Protection of Mortgagor Personal Information.
Each of the Purchaser and the Seller agree that it (i) shall comply
with any applicable laws and regulations regarding the privacy and security of
Mortgagor Personal Information, (ii) shall not use Mortgagor Personal
Information in any manner inconsistent with any applicable laws and regulations
regarding the privacy and security of Mortgagor Personal Information, (iii)
shall not disclose Mortgagor Personal Information to third parties except at the
specific written direction of the other; provided, however, that the Purchaser
and the Seller may disclose Mortgagor Personal Information to third parties in
connection with secondary market transactions to the extent not prohibited by
applicable law or to the extent required by a valid and effective subpoena
issued by a court of competent jurisdiction or other governmental body, (iv)
shall maintain adequate physical, technical and administrative safeguards to
protect Mortgagor Personal Information from unauthorized access and (v) shall
immediately notify the other of any actual or suspected breach of the
confidentiality of Mortgagor Personal Information.
Section 11.19. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers the Seller's financial statements for the most recently
completed three (3) fiscal years respecting which such statements are available.
The Seller, if it has not already done so, agrees to furnish promptly to the
Purchaser copies of the statements specified above.
Section 11.20. Purchase Price and Terms Letter.
The terms and conditions set forth in the Purchase Price and Terms
Letter with respect to each Closing Date shall be incorporated herein. In the
event of any conflict between the terms of this Agreement and the related
Purchase Price and Terms Letter, the Purchase Price and Terms Letter shall
control.
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[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING INC.,
as Purchaser
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WACHOVIA MORTGAGE CORPORATION,
as Seller
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[Signature Page to Seller's Purchase, Warranties and Servicing Agreement,
dated as of December 1, 2006]
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EXHIBIT A-1
CONTENTS OF MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser, and which shall be retained by the Seller in the Servicing File or
delivered to the Purchaser or its designee pursuant to Sections 2.04 and 2.05 of
the Seller's Purchase, Warranties and Servicing Agreement.
1. The original Mortgage Note, with all applicable riders, endorsed
"Pay to the order of ___________________ without recourse," and signed in the
name of the Seller by an authorized officer, with all intervening endorsements
showing a complete chain of title from the originator to the Seller. If the
Mortgage Loan was acquired by the Seller in a merger, the endorsement must be by
"[Seller], successor by merger to the [name of predecessor]". If the Mortgage
Loan was acquired or originated by the Seller while doing business under another
name, the endorsement must be by "[Seller] formerly known as [previous name]".
2. Except as provided below and for each Mortgage Loan that is not a
MERS Mortgage Loan, the original Mortgage, with all applicable riders with
evidence of recording thereon, or a copy thereof certified by the public
recording office in which such mortgage has been recorded or, if the original
Mortgage has not been returned from the applicable public recording office, a
true certified copy, certified by the title insurer, of the original Mortgage
together with a certificate of the title insurer certifying that the original
Mortgage has been delivered for recording in the appropriate public recording
office of the jurisdiction in which the Mortgaged Property is located and in the
case of each MERS Mortgage Loan, the original Mortgage, noting the presence of
the MIN of the Mortgage Loans and either language indicating that the Mortgage
Loan is a MOM Loan or if the Mortgage Loan was not a MOM Loan at origination,
the original Mortgage and the assignment thereof to MERS, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded.
3. The original or certified to be a true copy or if in electronic
form identified on the Mortgage Loan Schedule, the certificate number, certified
by the Seller, of the related Primary Mortgage Insurance Policy or LPMI Policy,
if required.
4. In the case of each Mortgage Loan that is not a MERS Mortgage Loan,
the original Assignment of Mortgage, from the Seller with the assignee's name in
blank, which assignment shall be in form and substance acceptable for recording.
5. With respect to Mortgage Loans that are not Co-op Loans, the
original policy of title insurance, including riders and endorsements thereto,
or if the policy has not yet been issued, a written commitment or interim binder
or preliminary report of title issued by the title insurance or escrow company.
6. Originals of all recorded intervening Assignments of Mortgage, or
copies thereof, certified by the public recording office in which such
Assignments of Mortgage have been recorded showing a complete chain of title
from the originator to the Seller, with evidence of recording thereon, or a copy
thereof certified by the public recording office in which such
A-1-1
Assignment has been recorded or, if the original Assignment of Mortgage has not
been returned from the applicable public recording office, a true certified
copy, certified by the title insurer of the original Assignment of Mortgage
together with a certificate of the title insurer certifying that the original
Assignment of Mortgage has been delivered for recording in the appropriate
public recording office of the jurisdiction in which the Mortgaged Property is
located.
7. Originals, or copies thereof certified by the public recording
office in which such documents have been recorded, of each assumption,
extension, modification, written assurance or substitution agreements, if
applicable, or if the original of such document has not been returned from the
applicable public recording office, a true certified copy, certified by the
title insurer, of such original document together with certificate of Seller
certifying the original of such document has been delivered for recording in the
appropriate recording office of the jurisdiction in which the Mortgaged Property
is located.
8. If the Mortgage Note or Mortgage or any other material document or
instrument relating to the Mortgage Loan has been signed by a person on behalf
of the Mortgagor, the original power of attorney or other instrument that
authorized and empowered such person to sign bearing evidence that such
instrument has been recorded, if so required in the appropriate jurisdiction
where the Mortgaged Property is located (or, in lieu thereof, a duplicate or
conformed copy of such instrument, together with a certificate of receipt from
the recording office, certifying that such copy represents a true and complete
copy of the original and that such original has been or is currently submitted
to be recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located), or if the original power
of attorney or other such instrument has been delivered for recording in the
appropriate public recording office of the jurisdiction in which the Mortgaged
Property is located.
9. With respect to a Co-op Loan: (i) a copy of the Proprietary Lease
and the Assignment of such Proprietary Lease to the originator of the Mortgage
Loan, with all intervening assignments showing a complete chain of title and an
assignment thereof by Seller; (ii) the Stock Certificate together with an
undated Stock Power relating to such Stock Certificate executed in blank; (iii)
the Recognition Agreement in substantially the same form as standard a "AZTECH"
form; (iv) the Pledge Agreement, the original Assignment of the Pledge Agreement
to [blank] in form and substance acceptable for recording and signed in the name
of the endorsee an authorized officer and originals of all intervening
assignments of Pledge Agreement, if any; (v) the original or acknowledgment copy
of UCC-1 and any continuation statements with evidence of filing thereon; (vii)
the original assignment of the Co-Op Lease, and the assignment of the Assignment
of the Co-Op Lease and (vi) copies of the financial statement filed by the
originator as secured party and any continuation statement with evidence of
filing therein and, if applicable, a filed UCC-3 Assignment of the subject
security interest showing a complete chain of title, together with an executed
UCC-3 Assignment of such security interest by the Seller in a form sufficient
for filing.
11. The original of any guarantee executed in connection with the
Mortgage Note.
A-1-2
Notwithstanding anything to the contrary herein, the Seller may
provide one (1) certificate for all of the Mortgage Loans indicating that the
documents were delivered for recording.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
CONTENTS OF SERVICING FILE
With respect to each Mortgage Loan, the Servicing File shall include
each of the following items, which shall be available for inspection by the
Purchaser:
1. Mortgage Loan closing statement (Form HUD-1) and any other
truth-in-lending or real estate settlement procedure forms required by law.
2. Residential loan application.
3. Uniform underwriter and transmittal summary (▇▇▇▇▇▇ Mae Form 1008)
or reasonable equivalent.
4. Credit report on the mortgagor.
5. Business credit report, if applicable.
6. Residential appraisal report and attachments thereto.
7. Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program, all in accordance with
Seller's Underwriting Standards.
8. Verification of acceptable evidence of source and amount of down
payment, in accordance with the Underwriting Standards.
9. Photograph of the Mortgaged Property (may be part of appraisal).
10. Survey of the Mortgaged Property, if any.
11. Sales contract, if applicable.
12. If available, termite report, structural engineer's report, water
portability and septic certification.
13. Any original security agreement, chattel mortgage or equivalent
executed in connection with the Mortgage.
14. Any ground lease, including all amendments, modifications and
supplements thereto.
15. Any other document required to service the Mortgage Loans.
A-2-1
EXHIBIT B
FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
[__________], 200[_]
To:
As "Seller" under the Seller's Purchase, Warranties and Servicing
Agreement, dated as of December 1, 2006 (the "Agreement"), we hereby authorize
and request you to establish an account, as a Custodial Account pursuant to
Section 4.04 of the Agreement, to be designated as "Wachovia Mortgage
Corporation, in trust for the Purchaser, owner of various whole loan series -
principal and interest". All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Seller. This letter is submitted to
you in duplicate. Please execute and return one (1) original to us.
WACHOVIA MORTGAGE CORPORATION,
as SELLER
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
The undersigned, as "Depository," hereby certifies that the above
described account has been established under Account Number [__________], at the
office of the depository indicated above, and agrees to honor withdrawals on
such account as provided above.
----------------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
B-1
EXHIBIT C
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
[__________], 200[_]
To:
As "Seller" under the Seller's Purchase, Warranties and Servicing
Agreement, dated as of December 1, 2006 (the "Agreement"), we hereby authorize
and request you to establish an account, as an Escrow Account pursuant to
Section 4.06 of the Agreement, to be designated as "Wachovia Mortgage
Corporation, in trust for the Purchaser, owner of various whole loan series, and
various Mortgagors." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Seller. This letter is submitted to you in
duplicate. Please execute and return one (1) original to us.
WACHOVIA MORTGAGE CORPORATION,
as SELLER
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
The undersigned, as "Depository," hereby certifies that the above
described account has been established under Account Number [__________], at the
office of the depository indicated above, and agrees to honor withdrawals on
such account as provided above.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
C-1
EXHIBIT D
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This Assignment, Assumption and Recognition Agreement (this
"Assignment Agreement"), dated as of [_____], 200[_], between [Purchaser], a
[__________] (the "Assignor"), [__________], a [__________] (the "Assignee"),
and Wachovia Mortgage Corporation, a North Carolina corporation (the "Seller"):
For good and valuable consideration the receipt and sufficiency of
which hereby are acknowledged, and of the premises and mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee all
of the right, title and interest of Assignor, as Purchaser, in, to and under (a)
those certain mortgage loans listed on Exhibit A attached hereto (the "Mortgage
Loans"); and (b) the Seller's Purchase, Warranties and Servicing Agreement dated
as of December 1, 2006, but only to the extent of the Mortgage Loans (the
"Purchase Agreement"). For purposes of this Assignment Agreement, the term
"Purchase Agreement" includes any separate Assignment and Conveyance pursuant to
which Seller and Assignor effectuated the purchase and sale of any Mortgage Loan
following the execution and delivery of the Purchase Agreement.
The Assignor specifically reserves and does not assign to the Assignee
hereunder any and all right, title and interest in, to and under any all
obligations of the Assignor with respect to any mortgage loans subject to the
Purchase Agreement which are not the Mortgage Loans set forth on Exhibit A
attached hereto and are not the subject of this Assignment Agreement.
2. Each of the Seller and the Assignor represent and warrant to the
Assignee that (a) the copy of the Purchase Agreement, attached hereto as Exhibit
B, provided to the Assignee, is a true, complete and accurate copy of the
Purchase Agreement, (b) the Purchase Agreement is in full force and effect as of
the date hereof, (c) the provisions thereof have not been waived, amended or
modified in any respect, nor have any notices of termination been given
thereunder, (d) the Purchase Agreement contains all of the terms and conditions
governing the sale of the Mortgage Loans by Seller to Assignor and the purchase
of the Mortgage Loans by Assignor from Seller;, and (e) Seller sold, conveyed
and transferred each Mortgage Loan to Assignor pursuant to the Purchase
Agreement.
3. The Assignor warrants and represents to, and covenants with, the
Assignee and the Seller that:
(a) As of the date hereof, the Assignor is not in default under the
Purchase Agreement;
(b) The Assignor is the lawful owner of the Mortgage Loans with the
full right to transfer the Mortgage Loans and any and all of its interests,
rights and obligations under the Purchase Agreement, free from any and all
claims and encumbrances arising out of the Assignor's ownership thereof, and the
Mortgage Loans, as well as the Purchase Agreement, upon
D-1
the transfer thereof to the Assignee as contemplated herein, shall be free and
clear of all such liens, claims and encumbrances or any lien claim or
encumbrance arising out of the ownership of the Mortgage Loans by any person at
any time after Assignor first acquired any Mortgage Loan from the Seller;
(c) The Assignor has not received notice of, and has no knowledge of,
any offsets, counterclaims or other defenses available to the Seller with
respect to the Purchase Agreement or the Mortgage Loans;
(d) The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Purchase Agreement or the
Mortgage Loans. The Assignor has no knowledge of, and has not received notice
of, any waivers under or amendments or other modifications of, or assignments of
rights or obligations under or defaults under, the Purchase Agreement, or the
Mortgage Loans;
(e) The Assignor is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, and
has all requisite corporate power and authority to sell, transfer and assign the
Mortgage Loans;
(f) The Assignor has full corporate power and authority to execute,
deliver and perform under this Assignment Agreement, and to consummate the
transactions set forth herein. The consummation of the transactions contemplated
by this Assignment Agreement is in the ordinary course of the Assignor's
business and will not conflict with, or result in a breach of, any of the terms,
conditions or provisions of the Assignor's charter or by-laws, or any legal
restriction, or any material agreement or instrument to which the Assignor is
now a party or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Assignor or its
property is subject. The execution, delivery and performance by the Assignor of
this Assignment Agreement, and the consummation by it of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
of the Assignor. This Assignment Agreement has been duly executed and delivered
by the Assignor and constitutes the valid and legally binding obligation of the
Assignor enforceable against the Assignor in accordance with its respective
terms except as enforceability thereof may be limited by bankruptcy, insolvency,
or reorganization or other similar laws now or hereinafter in effect relating to
creditor's rights generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or in law;
and
(g) No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required to
be obtained or made by the Assignor in connection with the execution, delivery
or performance by the Assignor of this Assignment Agreement, or the consummation
by it of the transactions contemplated hereby.
4. The Assignee warrants and represents to, and covenants with, the
Assignor and the Seller that:
(a) The Assignee is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, and
has all requisite corporate power and authority to acquire, own and purchase the
Mortgage Loans;
D-2
(b) The Assignee has full corporate power and authority to execute,
deliver and perform under this Assignment Agreement, and to consummate the
transactions set forth herein. The consummation of the transactions contemplated
by this Assignment Agreement is in the ordinary course of the Assignee's
business and will not conflict with, or result in a breach of, any of the terms,
conditions or provisions of the Assignee's charter or by-laws, or any legal
restriction, or any material agreement or instrument to which the Assignee is
now a party or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Assignee or its
property is subject. The execution, delivery and performance by the Assignee of
this Assignment Agreement, and the consummation by it of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
of the Assignee. This Assignment Agreement has been duly executed and delivered
by the Assignee and constitutes the valid and legally binding obligation of the
Assignee enforceable against the Assignee in accordance with its respective
terms except as enforceability thereof may be limited by bankruptcy, insolvency,
or reorganization or other similar laws now or hereinafter in effect relating to
creditor's rights generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or in law;
(c) No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required to
be obtained or made by the Assignee in connection with the execution, delivery
or performance by the Assignee of this Assignment Agreement, or the consummation
by it of the transactions contemplated hereby; and
(d) The Assignee agrees to be bound, as Purchaser, by all of the
terms, covenants and conditions of the Purchase Agreement and the Mortgage
Loans, and from and after the date hereof, the Assignee assumes for the benefit
of the Assignor all of the Assignor's obligations as "Purchaser" thereunder,
solely with respect to the Mortgage Loans.
(e) The Assignee considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
5. The Seller warrants and represents to, and covenants with, the
Assignor and the Assignee that:
(a) The Seller is not a natural person or a general partnership and is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its formation, and has all requisite power and authority to
service the Mortgage Loans. The Assignor is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation;
(b) The Seller has full power and authority to execute, deliver and
perform under this Assignment Agreement, and to consummate the transactions set
forth herein. The consummation of the transactions contemplated by this
Assignment Agreement is in the ordinary course of the Seller's business and will
not conflict with, or result in a breach of, any of the terms, conditions or
provisions of the Seller's charter or by-laws, or any legal restriction, or any
material agreement or instrument to which the Seller is now a party or by which
it is bound, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Seller
D-3
or its property is subject. The execution, delivery and performance by the
Seller of this Assignment Agreement, and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action of the Seller. This Assignment Agreement has been duly executed
and delivered by the Seller and constitutes the valid and legally binding
obligation of the Seller enforceable against the Seller in accordance with its
respective terms except as enforceability thereof may be limited by bankruptcy,
insolvency, or reorganization or other similar laws now or hereinafter in effect
relating to creditors' rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or in law;
(d) No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required to
be obtained or made by the Seller in connection with the execution, delivery or
performance by the Seller of this Assignment Agreement, or the consummation by
it of the transactions contemplated hereby;
(e) As of the date hereof, the Seller is not in default under the
Purchase Agreement; and
(f) The Seller hereby makes the representations and warranties set
forth in SubSections 3.01 of the Purchase Agreement to the Assignee as of the
date hereof. The remedies set forth in SubSection 3.03 shall apply in the event
of a breach of any such representations and warranties. No event has occurred or
has failed to occur, during the period commencing on date on which Assignor
acquired the Mortgage Loans and ending on the date hereof, inclusive, which
would make the representations and warranties set forth in Section 3.01 of the
Purchase Agreement untrue if such representations and warranties were made with
respect to the Mortgage Loans effective as of the date hereof.
(g) The Seller hereby acknowledges and agrees that the remedies
available to the Assignee in connection with any breach of the representations
and warranties made by the Seller set forth in Section 5(f) hereof shall be as
set forth in SubSection 3.03 of the Purchase Agreement as if they were set forth
herein (including without limitation the repurchase and indemnity obligations
set forth therein).
6. From and after the date hereof, the Seller shall recognize the
Assignee as the owner of the Mortgage Loans, and shall look solely to the
Assignee for performance from and after the date hereof of the Assignor's
obligations with respect to the Mortgage Loans.
7. Notice Addresses.
(a) The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and this Assignment Agreement is:
[_____________________]
[_____________________]
[_____________________]
Attention: [__________]
D-4
(b) The Assignor's address for purposes for all notices and
correspondence related to the Mortgage Loans and this Assignment Agreement is:
[_____________________]
[_____________________]
[_____________________]
Attention: [__________]
(c) The Seller's address for purposes of all notices and
correspondence related to the Mortgage Loans and this Assignment Agreement is:
Wachovia Mortgage Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
8. This Assignment Agreement shall be construed in accordance with the
substantive laws of the State of New York (without regard to conflict of laws
principles) and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws, except to the extent preempted
by federal law.
9. This Assignment Agreement shall inure to the benefit of the
successors and assigns of the parties hereto. Any entity into which the Seller,
the Assignor or the Assignee may be merged or consolidated shall, without the
requirement for any further writing, be deemed the Seller, the Assignor or the
Assignee, respectively, hereunder.
10. No term or provision of this Assignment Agreement may be waived or
modified unless such waiver or modification is in writing and signed by the
party against whom such waiver or modification is sought to be enforced.
11. This Assignment Agreement shall survive the conveyance of the
Mortgage Loans and the assignment of the Purchase Agreement by the Assignor.
12. Notwithstanding the assignment of the Purchase Agreement by either
the Assignor or Assignee, this Assignment Agreement shall not be deemed assigned
by the Seller or the Assignor unless assigned by separate written instrument.
13. For the purpose for facilitating the execution of this Assignment
Agreement as herein provided and for other purposes, this Assignment Agreement
may be executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute and be one and the same instrument.
[signatures on following page]
D-5
IN WITNESS WHEREOF, the parties have caused this Assignment Agreement
to be executed by their duly authorized officers as of the date first above
written.
[ ]
--------------------------------------
Assignor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[ ]
--------------------------------------
Assignee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Wachovia Mortgage Corporation Seller
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
D-6
EXHIBIT E
FORM OF ASSIGNMENT AND CONVEYANCE
On this [__] day of [_____] 200[_], Wachovia Mortgage Corporation ("Wachovia")
as the Seller under that certain Seller's Purchase, Warranties and Servicing
Agreement, dated as of December 1, 2006 (the "Agreement"), and that certain
Purchase Price and Terms Letter, dated as of [_____], 200[_] (the "PPTL"), each
by and between Wachovia and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending Inc. (the
"Purchaser") does hereby sell, transfer, assign, set over and convey to the
Purchaser under the Agreement, without recourse, but subject to the terms of the
Agreement and the PPTL, all rights, title and interest of Wachovia (excluding
the right to service the Mortgage Loans) in and to the Mortgage Loans listed on
the Mortgage Loan Schedule attached hereto as Exhibit A, together with the
Mortgage Files and all rights and obligations arising under the documents
contained therein. Pursuant to Section 2.07 of the Agreement, Wachovia has
delivered to the Purchaser the documents for each Mortgage Loan to be purchased
as set forth therein. The contents of each Servicing File required to be
retained by Wachovia to service the Mortgage Loans pursuant to the Agreement and
thus not delivered to the Purchaser are and shall be held in trust by Wachovia,
for the benefit of the Purchaser as the owner thereof. Wachovia's possession of
any portion of the Servicing File is at the will of the Purchaser for the sole
purpose of facilitating servicing of the related Mortgage Loan pursuant to the
Agreement, and such retention and possession by Wachovia shall be in a custodial
capacity only. The ownership of each Mortgage Note, Mortgage, and the contents
of the Mortgage File and Servicing File is vested in the Purchaser and the
ownership of all records and documents with respect to the related Mortgage Loan
prepared by or which come into the possession of Wachovia shall immediately vest
in the Purchaser and shall be retained and maintained, in trust, by Wachovia at
the will of the Purchaser in such custodial capacity only.
[SIGNATURE PAGES FOLLOWS]
E-1
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
WACHOVIA MORTGAGE CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
E-2
EXHIBIT A
E-3
EXHIBIT F
REGULATION AB COMPLIANCE ADDENDUM
[to be provided]
F-1
EXHIBIT G
FORM OF REMITTANCE REPORT
G-1
EXHIBIT H
FORM OF SELLER'S OFFICER'S CERTIFICATE
I, ________________________, hereby certify that I am the duly elected
______________ of Wachovia Mortgage Corporation, a _________ (the "Seller"), and
further certify, on behalf of the Seller as follows:
1. Attached hereto as Attachment I are a true and correct copy of the
Certificate of Incorporation and by-laws of the Seller as are in full force and
effect on the date hereof.
2. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of the Seller are pending or contemplated.
3. Each person who, as an officer or attorney-in-fact of the Seller,
signed (a) the Seller's Purchase, Warranties and Servicing Agreement (the
"Purchase Agreement"), dated as of December 1, 2006 by and between the Seller
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending Inc. (the "Purchaser"); (b) the Purchase
Price and Terms Letter, dated _______ __, 200_, between the Seller and the
Purchaser (the "Purchase Price and Terms Letter"); and (c) any other document
delivered prior hereto or on the date hereof in connection with the sale and
servicing of the Mortgage Loans in accordance with the Purchase Agreement and
the Purchase Price and Terms Letter was, at the respective times of such signing
and delivery, and is as of the date hereof, duly elected or appointed, qualified
and acting as such officer or attorney-in-fact, and the signatures of such
persons appearing on such documents are their genuine signatures.
4. Attached hereto as Attachment II is a true and correct copy of the
resolutions duly adopted by the board of directors of the Seller on
____________, 200_ (the "Resolutions") with respect to the authorization and
approval of the sale and servicing of the Mortgage Loans; said Resolutions have
not been amended, modified, annulled or revoked and are in full force and effect
on the date hereof.
5. Attached hereto as Attachment III is a Certificate of Good Standing
of the Seller dated ____________, 200_. No event has occurred since ______, 200_
which has affected the good standing of the Seller under the laws of the State
of ___________.
6. Attached hereto as Attachment IV is a copy of each license of the
Seller to originate and sell the Mortgage Loans. No such licenses have been
suspended or revoked by any court, administrative agency, arbitrator or
governmental body and no proceedings are pending which might result in such
suspension or revocation.
7. All of the representations and warranties of the Seller contained
in SubSections 3.01 and 3.02 of the Purchase Agreement were true and correct in
all material respects as of the date of the Purchase Agreement and are true and
correct in all material respects as of the date hereof.
H-1
8. The Seller has performed all of its duties and has satisfied all
the material conditions on its part to be performed or satisfied prior to the
related Closing Date pursuant to the Purchase Agreement and the related Purchase
Price and Terms Letter.
9. Each person whose name, title and signature appears on Attachment V
hereto is duly authorized to execute on behalf of the Seller any and all
documents in connection with the sale and servicing of the Mortgage Loans in
accordance with the Purchase Agreement.
All capitalized terms used herein and not otherwise defined shall have
the meaning assigned to them in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Seller.
Dated: __________
[Seal]
WACHOVIA MORTGAGE CORPORATION
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title: Vice President
I, _______________________, Secretary of the Seller, hereby certify
that _________________________ is the duly elected, qualified and acting Vice
President of the Seller and that the signature appearing above is genuine.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: __________
[Seal]
WACHOVIA MORTGAGE CORPORATION
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title: [Assistant] Secretary
H-2
ATTACHMENT V
AUTHORIZED SIGNATORIES
NAME TITLE SIGNATURE
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H-3
EXHIBIT I
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
___________________________, hereby relinquishes any and all right,
title and interest it may have in and to the Mortgage Loans described in Exhibit
A attached hereto upon purchase thereof by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending Inc.
from the Seller named below pursuant to that certain Seller's Purchase,
Warranties and Servicing Agreement, dated as of December 1, 2006, as of the date
and time of receipt by ______________________________ of $__________ for such
Mortgage Loans (the "Date and Time of Sale"), and certifies that all notes,
mortgages, assignments and other documents in its possession relating to such
Mortgage Loans have been delivered and released to the Seller named below or its
designees as of the Date and Time of Sale.
Name and Address of Financial Institution
-------------------------------------
(Name)
-------------------------------------
(Address)
By:
---------------------------------
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II. Certification of Release
The Seller named below hereby certifies to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Lending Inc. that, as of the Date and Time of Sale of the above mentioned
Mortgage Loans to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending Inc., the security interests in
the Mortgage Loans released by the above named corporation comprise all security
interests relating to or affecting any and all such Mortgage Loans. The Seller
warrants that, as of such time, there are and will be no other security
interests affecting any or all of such Mortgage Loans.
WACHOVIA MORTGAGE CORPORATION
Seller
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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EXHIBIT J
FORM OF JOINDER AGREEMENT
This JOINDER TO SELLER'S PURCHASER, WARRANTIES AND SERVICING AGREEMENT
(this "Joinder"), dated as of [__], 200__, is made by [NAME OF ENTITY JOINING
AGREEMENT] (the "Joining Purchaser"), for the benefit of WACHOVIA MORTGAGE
CORPORATION (the "Seller") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING INC. (the
"Original Purchaser").
RECITALS
WHEREAS, the Original Purchaser and the Seller are parties to that certain
Seller's Purchase, Warranties and Servicing Agreement, dated as of December __,
2006 (the "Agreement"). Unless otherwise defined herein, capitalized terms used
in this Joinder shall have the meaning set forth in the Agreement.
WHEREAS, the Joining Purchaser desires to join in the Agreement and the
Original Purchaser and the Seller desire to permit the Joining Purchaser to join
in the Agreement;
NOW, THEREFORE, in consideration of the foregoing and for other valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
Joining Purchaser, intending to be legally bound, hereto agrees as follows:
SECTION 1. Joinder. The Joining Purchaser hereby joins in the Agreement as
a party thereto and (i) makes all covenants and agreements of the Original
Purchaser therein, with respect to the Joining Purchaser, (ii) is entitled to
the benefit of and to enforce all rights, representations, warranties,
covenants, agreements and obligations owed to the Original Purchaser under the
Agreement with respect to those Mortgage Loans purchased by the Joining Party
pursuant to a Trade Confirmation and (iii) agrees to be bound by the Agreement
as if it was a party thereto on the date the same was executed with respect to
those Mortgage Loans purchased by the Joining Purchaser pursuant to a Trade
Confirmation. The obligations of the Original Purchaser and the Joining
Purchaser under the Agreement are not joint, but are several with respect to
those Mortgage Loans purchased by the Original Purchaser or the Joining
Purchaser, as applicable.
SECTION 2. Notices. All notices to the Joining Purchaser required to be
given pursuant to Section 11.05 of the Agreement shall be sent to [Address].
SECTION 3. Severability. In case any provision of this Joinder shall be
invalid, illegal, or unenforceable, such provision shall be deemed to have been
modified to the extent necessary to make it valid, legal, and enforceable. The
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 4. No Modification Except in Writing. None of the terms of this
Joinder may be modified, waived, altered, amended, supplemented, extended,
consolidated, replaced, exchanged or otherwise changed except by an instrument
in writing duly executed by all of the parties hereto.
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SECTION 5. MISCELLANEOUS.
Subsection 5.01. This Joinder shall inure to the benefit of and be binding
upon the Joining Purchaser and its successors and assigns.
Subsection 5.02. The Joining Purchaser confirms and ratifies the terms and
provisions of the Agreement and agrees that the Agreement remains in full force
and effect as of the date hereof.
Subsection 5.03. This Joinder shall be construed in accordance with the
laws of the State of New York, without regard to conflicts of law principles,
and the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
Subsection 5.04. Any reference to the Agreement in any other documents
shall hereafter mean the Seller's Purchase, Warranties and Servicing Agreement,
collectively, as modified by this Joinder as the same may be subsequently
amended, modified, altered, supplemented, extended, consolidated, replaced,
exchanged or otherwise changed.
[signature pages follow]
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IN WITNESS WHEREOF, the undersigned has caused this JOINDER TO SELLER'S
PURCHASE, WARRANTIES AND SERVICING AGREEMENT to be duly executed by its duly
authorized representative, all as of the day and year first above written.
[JOINING PURCHASER]
(Joining Purchaser)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WACHOVIA MORTGAGE CORPORATION
(Seller)
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING INC.
(Original Purchaser)
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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