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IMPAC FUNDING CORPORATION,
as Master Servicer,
and
IMPAC CMB TRUST SERIES 1998-2,
as Issuer
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SERVICING AGREEMENT
Dated as of March 1, 1998
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Fixed-Rate Mortgage Loans
Impac CMB Trust Series 1998-2
TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
Section 1.01. Definitions..........................................................................-1-
Section 1.02. Other Definitional Provisions........................................................-2-
Section 1.03. Interest Calculations................................................................-2-
ARTICLE II
Representations and Warranties
Section 2.01. Representations and Warranties Regarding the Master Servicer.........................-3-
Section 2.02. Existence............................................................................-4-
Section 2.03. Enforcement of Representations and Warranties........................................-4-
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. Master Servicer to Assure Servicing..................................................-6-
Section 3.02. Subservicing Agreements Between Master Servicer and Subservicers.....................-7-
Section 3.03. Successor Subservicers...............................................................-7-
Section 3.04. Liability of the Master Servicer.....................................................-8-
Section 3.05. Assumption or Termination of Subservicing Agreements by Indenture Trustee............-8-
Section 3.06. Collection of Mortgage Loan Payments.................................................-9-
Section 3.07. Withdrawals from the Collection Account.............................................-11-
Section 3.09. Access to Certain Documentation and Information Regarding the Mortgage Loans........-14-
Section 3.10. Maintenance of Primary Insurance Policies; Collection Thereunder....................-14-
Section 3.11. Maintenance of Hazard Insurance and Fidelity Coverage...............................-15-
Section 3.12. Due-on-Sale Clauses; Assumption Agreements.........................................-16-
Section 3.13. Realization Upon Defaulted Mortgage Loans...........................................-17-
Section 3.14. Indenture Trustee to Cooperate; Release of Mortgage Files...........................-18-
Section 3.15. Master Servicing Compensation.......................................................-20-
Section 3.16. Annual Statements of Compliance.....................................................-20-
Section 3.18. Optional Purchase of Defaulted Mortgage Loans.......................................-21-
Section 3.19. Information Required by the Internal Revenue Service Generally and Reports
of Foreclosures and Abandonments of Mortgaged Property...........................-21-
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ARTICLE IV
Servicing Certificate
Section 4.01. Remittance Reports..................................................................-22-
Section 4.02. Reserved............................................................................-22-
Section 4.03. Payment Account.....................................................................-22-
Section 4.04. Advances............................................................................-23-
Section 4.05. Compensating Interest Payments......................................................-23-
ARTICLE V
The Master Servicer
Section 5.01. Liability of the Master Servicer....................................................-24-
Section 5.02. Merger or Consolidation of, or Assumption of the Obligations of, the
Master Servicer..................................................................-24-
Section 5.03. Limitation on Liability of the Master Servicer and Others...........................-24-
Section 5.04. Master Servicer Not to Resign.......................................................-25-
Section 5.05. Delegation of Duties................................................................-25-
Section 5.06. Master Servicer to Pay Indenture Trustee's and Owner Trustee's Fees and
Expenses; Indemnification..........................................................-26-
ARTICLE VI
Default
Section 6.01. Servicing Default...................................................................-28-
Section 6.02. Indenture Trustee to Act; Appointment of Successor..................................-30-
Section 6.03. Notification to Bondholders.........................................................-31-
Section 6.04. Waiver of Defaults..................................................................-31-
ARTICLE VII
Miscellaneous Provisions
Section 7.01. Amendment...........................................................................-32-
Section 7.02. GOVERNING LAW.......................................................................-32-
Section 7.03. Notices.............................................................................-32-
Section 7.04. Severability of Provisions..........................................................-33-
Section 7.05. Third-Party Beneficiaries...........................................................-33-
Section 7.06. Counterparts........................................................................-33-
Section 7.07. Effect of Headings and Table of Contents............................................-33-
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Section 7.08. Termination.........................................................................-34-
Section 7.09. No Petition.........................................................................-34-
Section 7.10. No Recourse.........................................................................-34-
ARTICLE VIII
Duties of the Master Servicer
Section 8.01. Administrative Duties...............................................................-35-
Section 8.02. Records.............................................................................-36-
Section 8.03. Additional Information to be Furnished..............................................-36-
EXHIBIT A - MORTGAGE LOAN SCHEDULE..............................................................................A-1
EXHIBIT B - FORM OF REQUEST FOR RELEASE.........................................................................B-1
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This Servicing Agreement, dated as of March 1, 1998, between
Impac Funding Corporation, as Master Servicer (the "Master Servicer") and Impac
CMB Trust Series 1998-2, as Issuer (the "Issuer").
W I T N E S S E T H T H A T:
WHEREAS, pursuant to the terms of the Mortgage Loan Sale and
Contribution Agreement, IMH Assets Corp. (the "Company" or the "Depositor") will
acquire the Mortgage Loans;
WHEREAS, the Company will create Impac CMB Trust Series
1998-2, a Delaware business trust, and will transfer the Mortgage Loans and all
of its rights under the Mortgage Loan Sale and Contribution Agreement to the
Issuer;
WHEREAS, pursuant to the terms of a Trust Agreement dated as
of March 27, 1998 (the "Trust Agreement") between the Company, as depositor, and
Wilmington Trust Company, as owner trustee (the "Owner Trustee"), the Company
will convey the Mortgage Loans to the Issuer in exchange for the Certificates
(as defined below);
WHEREAS, pursuant to the terms of the Trust Agreement between
the Depositor and the Owner Trustee, the Issuer will issue and transfer to or at
the direction of the Depositor, the Trust Certificates, Series 1998-2 (the
"Certificates");
WHEREAS, pursuant to the terms of an Indenture dated as of
March 27, 1998 (the "Indenture") between the Issuer and Bankers Trust Company of
California, N.A. (the "Indenture Trustee"), the Issuer will pledge the Mortgage
Loans and issue and transfer to or at the direction of the Purchaser the
Collateralized Asset-Backed Bonds, Series ▇▇▇▇-▇ (▇▇▇ "▇▇▇▇▇"); and
WHEREAS, pursuant to the terms of this Servicing Agreement,
the Master Servicer will service the Mortgage Loans set forth on the Mortgage
Loan Schedule attached hereto as Exhibit A directly or through one or more
Subservicers;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. DEFINITIONS. For all purposes of this Servicing
Agreement, except as otherwise expressly provided herein or unless the context
otherwise requires, capitalized terms not otherwise defined herein shall have
the meanings assigned to such terms in the Definitions contained in Appendix A
to the Indenture which is incorporated by reference herein. All other
capitalized terms used herein shall have the meanings specified herein.
Section 1.02. OTHER DEFINITIONAL PROVISIONS. (a) All terms defined in
this Servicing Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein.
(b) As used in this Servicing Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Servicing Agreement or in any such certificate or other
document, and accounting terms partly defined in this Servicing Agreement or in
any such certificate or other document, to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Servicing Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Servicing Agreement or in any such
certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Servicing Agreement shall refer to this Servicing
Agreement as a whole and not to any particular provision of this Servicing
Agreement; Section and Exhibit references contained in this Servicing Agreement
are references to Sections and Exhibits in or to this Servicing Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(d) The definitions contained in this Servicing Agreement are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
Section 1.03. INTEREST CALCULATIONS. All calculations of interest
hereunder that are made in respect of the Principal Balance of a Mortgage Loan
shall be made in accordance with the terms of the related Mortgage Note and
Mortgage. The calculation of the Servicing Fee shall be made on the basis of a
360-day year consisting of twelve 30-day months.
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ARTICLE II
Representations and Warranties
Section 2.01. REPRESENTATIONS AND WARRANTIES REGARDING THE MASTER
SERVICER. The Master Servicer represents and warrants to the Issuer and for the
benefit of the Indenture Trustee, as pledgee of the Mortgage Loans and the
Bondholders, as of the Cut-Off Date and the Closing Date, that:
(i) The Master Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of California and has the corporate power to own its assets and
to transact the business in which it is currently engaged. The Master
Servicer is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires
such qualification and in which the failure to so qualify would have a
material adverse effect on the business, properties, assets, or
condition (financial or other) of the Master Servicer or the validity
or enforceability of the Mortgage Loans;
(ii) The Master Servicer has the power and authority to
make, execute, deliver and perform this Servicing Agreement and all of
the transactions contemplated under this Servicing Agreement, and has
taken all necessary corporate action to authorize the execution,
delivery and performance of this Servicing Agreement. When executed and
delivered, this Servicing Agreement will constitute the legal, valid
and binding obligation of the Master Servicer enforceable in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies;
(iii) The Master Servicer is not required to obtain the
consent of any other Person or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Servicing Agreement, except for such consent, license, approval or
authorization, or registration or declaration, as shall have been
obtained or filed, as the case may be;
(iv) The execution and delivery of this Servicing
Agreement and the performance of the transactions contemplated hereby
by the Master Servicer will not violate any provision of any existing
law or regulation or any order or decree of any court applicable to the
Master Servicer or any provision of the certificate of incorporation or
bylaws of the Master Servicer, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Master
Servicer is a party or by which the Master Servicer may be bound; and
(v) No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending,
or to the knowledge of the Master
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Servicer threatened, against the Master Servicer or any of its
properties or with respect to this Servicing Agreement or the Bonds or
the Certificates which, to the knowledge of the Master Servicer, has a
reasonable likelihood of resulting in a material adverse effect on the
transactions contemplated by this Servicing Agreement.
The foregoing representations and warranties shall survive any
termination of the Master Servicer hereunder.
Section 2.02. EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Servicing Agreement.
Section 2.03. ENFORCEMENT OF REPRESENTATIONS AND WARRANTIES. The Master
Servicer, on behalf of and subject to the direction of the Indenture Trustee, as
pledgee of the Mortgage Loans, shall enforce the representations and warranties
and related obligations for breaches thereof of the Seller pursuant to the
Mortgage Loan Sale and Contribution Agreement. Upon the discovery by the Seller,
the Master Servicer, the Indenture Trustee or the Company of a breach of any of
the representations and warranties made in the Mortgage Loan Sale and
Contribution Agreement, in respect of any Mortgage Loan which materially and
adversely affects the interests of the Bondholders or the Certificateholders,
the party discovering such breach shall give prompt written notice to the other
parties. The Master Servicer shall promptly notify the Seller of such breach and
request that, pursuant to the terms of the Mortgage Loan Sale and Contribution
Agreement, the Seller either (i) cure such breach in all material respects or
(ii) purchase such Mortgage Loan, in each instance in accordance with the
Mortgage Loan Sale and Contribution Agreement; PROVIDED that the Seller shall,
subject to the conditions set forth in the Mortgage Loan Sale and Contribution
Agreement, have the option to substitute an Eligible Substitute Mortgage Loan or
Eligible Substitute Mortgage Loans for such Mortgage Loan. Monthly Payments due
with respect to Eligible Substitute Mortgage Loans in the month of substitution
shall not be part of the Trust Estate and will be retained by the Master
Servicer and remitted by the Master Servicer to the Seller on the next
succeeding Payment Date. For the month of substitution, distributions to the
Payment Account pursuant to the Servicing Agreement will include the Monthly
Payment due on a Deleted Mortgage Loan for such month and thereafter the Seller
shall be entitled to retain all amounts received in respect of such Deleted
Mortgage Loan. The Master Servicer shall amend or cause to be amended the
Mortgage Loan Schedule to reflect the removal of such Mortgage Loan and the
substitution of the Eligible Substitute Mortgage Loans and the Master Servicer
shall promptly deliver the amended Mortgage Loan Schedule to the related
Subservicer, Owner Trustee and Indenture Trustee.
In connection with the substitution of one or more Eligible Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (such amount, a "Substitution Adjustment Amount"), if any,
by which the aggregate principal balance
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of all such Eligible Substitute Mortgage Loans as of the date of substitution is
less than the aggregate principal balance of all such Deleted Mortgage Loans
(after application of the principal portion of the Monthly Payments due in the
month of substitution that are to be distributed to the Payment Account in the
month of substitution). The Seller shall pay the Substitution Adjustment Amount
to the Master Servicer and the Master Servicer shall deposit such Substitution
Adjustment Amount into the Collection Account upon receipt.
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ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. MASTER SERVICER TO ASSURE SERVICING. (a) The Master
Servicer shall supervise, or take such actions as are necessary to ensure, the
servicing and administration of the Mortgage Loans and any REO Property in
accordance with this Servicing Agreement and its normal servicing practices,
which generally shall conform to the standards of an institution prudently
servicing mortgage loans for its own account and shall have full authority to do
anything it reasonably deems appropriate or desirable in connection with such
servicing and administration. The Master Servicer may perform its
responsibilities relating to servicing through other agents or independent
contractors, but shall not thereby be released from any of its responsibilities
as hereinafter set forth. The authority of the Master Servicer, in its capacity
as master servicer, and any Subservicer acting on its behalf, shall include,
without limitation, the power to (i) consult with and advise any Subservicer
regarding administration of a related Mortgage Loan, (ii) approve any
recommendation by a Subservicer to foreclose on a related Mortgage Loan, (iii)
supervise the filing and collection of insurance claims and take or cause to be
taken such actions on behalf of the insured Person thereunder as shall be
reasonably necessary to prevent the denial of coverage thereunder, and (iv)
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing a related Mortgage Loan, including the employment of
attorneys, the institution of legal proceedings, the collection of deficiency
judgments, the acceptance of compromise proposals, the filing of claims under
any Primary Insurance Policy and any other matter pertaining to a delinquent
Mortgage Loan. The authority of the Master Servicer shall include, in addition,
the power on behalf of the Bondholders, the Indenture Trustee, or any of them to
(i) execute and deliver customary consents or waivers and other instruments and
documents, (ii) consent to transfer of any related Mortgaged Property and
assumptions of the related Mortgage Notes and Security Instruments (in the
manner provided in this Servicing Agreement) and (iii) collect any Insurance
Proceeds and Liquidation Proceeds. Without limiting the generality of the
foregoing, the Master Servicer and any Subservicer acting on its behalf may, and
is hereby authorized, and empowered by the Indenture Trustee to, execute and
deliver, on behalf of itself, the Bondholders, the Indenture Trustee or any of
them, any instruments of satisfaction, cancellation, partial or full release,
discharge and all other comparable instruments, with respect to the related
Mortgage Loans, the Insurance Policies and the accounts related thereto, and the
Mortgaged Properties. The Master Servicer may exercise this power in its own
name or in the name of a Subservicer.
(b) Notwithstanding the provisions of Subsection 3.01(a), the Master
Servicer shall not take any action inconsistent with the interests of the
Indenture Trustee or the Bondholders or with the rights and interests of the
Indenture Trustee or the Bondholders under this Servicing Agreement.
(c) The Indenture Trustee shall furnish the Master Servicer with any
powers of attorney and other documents in form as provided to it necessary or
appropriate to enable the Master Servicer to service and administer the related
Mortgage Loans and REO Property.
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Section 3.02. SUBSERVICING AGREEMENTS BETWEEN MASTER SERVICER AND
SUBSERVICERS. (a) The Master Servicer may enter into Subservicing Agreements
with Subservicers for the servicing and administration of the Mortgage Loans and
for the performance of any and all other activities of the Master Servicer
hereunder. Each Subservicer shall be either (i) an institution the accounts of
which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans comparable to the Mortgage
Loans, and in either case shall be authorized to transact business in the state
or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, and in either case shall be a FHLMC or FNMA approved mortgage
servicer. Any Subservicing Agreement entered into by the Master Servicer shall
include the provision that such Agreement may be immediately terminated (x) with
cause and without any termination fee by any Master Servicer hereunder or (y)
without cause in which case the Master Servicer shall be responsible for any
termination fee or penalty resulting therefrom. In addition, each Subservicing
Agreement shall provide for servicing of the Mortgage Loans consistent with the
terms of this Servicing Agreement. With the consent of the Indenture Trustee,
the Master Servicer and the Subservicers may enter into Subservicing Agreements
and make amendments to the Subservicing Agreements or enter into different forms
of Subservicing Agreements providing for, among other things, the delegation by
the Master Servicer to a Subservicer of additional duties regarding the
administration of the Mortgage Loans; provided, however, that any such
amendments or different forms shall be consistent with and not violate the
provisions of this Servicing Agreement, and that no such amendment or different
form shall be made or entered into which could be reasonably expected to be
materially adverse to the interests of the Bondholders, without the consent of
at least 51% of the aggregate Bond Principal Balance of the Outstanding Bonds.
The Master Servicer has entered into Subservicing Agreements with the
Initial Subservicer for the servicing and administration of the Mortgage Loans
and may enter into additional Subservicing Agreements with Subservicers
acceptable to the Indenture Trustee for the servicing and administration of
certain of the Mortgage Loans.
(b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Indenture Trustee and the Bondholders, shall enforce the
obligations of each Subservicer under the related Subservicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Subservicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, but shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement only
to the extent, if any, that such recovery exceeds all amounts due in respect of
the related Mortgage Loan or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Section 3.03. SUCCESSOR SUBSERVICERS. The Master Servicer shall be
entitled to terminate any Subservicing Agreement that may exist in accordance
with the terms and conditions of such Subservicing Agreement and without any
limitation by virtue of this Servicing Agreement;
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PROVIDED, HOWEVER, that upon termination, the Master Servicer shall either act
as servicer of the related Mortgage Loan or enter into an appropriate contract
with a successor Subservicer acceptable to the Indenture Trustee pursuant to
which such successor Subservicer will be bound by all relevant terms of the
related Subservicing Agreement pertaining to the servicing of such Mortgage
Loan.
Section 3.04. LIABILITY OF THE MASTER SERVICER. (a) Notwithstanding any
Subservicing Agreement, any of the provisions of this Servicing Agreement
relating to agreements or arrangements between the Master Servicer and a
Subservicer or reference to actions taken through a Subservicer or otherwise,
the Master Servicer shall under all circumstances remain obligated and primarily
liable to the Indenture Trustee and the Bondholders for the servicing and
administering of the Mortgage Loans and any REO Property in accordance with this
Servicing Agreement. The obligations and liability of the Master Servicer shall
not be diminished by virtue of Subservicing Agreements or by virtue of
indemnification of the Master Servicer by any Subservicer, or any other Person.
The obligations and liability of the Master Servicer shall remain of the same
nature and under the same terms and conditions as if the Master Servicer alone
were servicing and administering the related Mortgage Loans. The Master Servicer
shall, however, be entitled to enter into indemnification agreements with any
Subservicer or other Person and nothing in this Servicing Agreement shall be
deemed to limit or modify such indemnification. For the purposes of this
Servicing Agreement, the Master Servicer shall be deemed to have received any
payment on a Mortgage Loan on the date the Subservicer received such payment;
PROVIDED, HOWEVER, that this sentence shall not apply to the Indenture Trustee
acting as the Master Servicer; PROVIDED, FURTHER, however, that the foregoing
provision shall not affect the obligation of the Master Servicer if it is also
the Indenture Trustee to advance amounts which are not Nonrecoverable Advances.
(b) Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as an originator shall be deemed to be between
the Subservicer and the Master Servicer alone, and the Indenture Trustee and the
Bondholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Subservicer
except as set forth in Section 3.05.
Section 3.05. ASSUMPTION OR TERMINATION OF SUBSERVICING AGREEMENTS BY
INDENTURE TRUSTEE. (a) If the Indenture Trustee or its designee shall assume the
master servicing obligations of the Master Servicer in accordance with Section
6.02 below, the Indenture Trustee, to the extent necessary to permit the
Indenture Trustee to carry out the provisions of Section 6.02 with respect to
the Mortgage Loans, shall succeed to all of the rights and obligations of the
Master Servicer under each of the Subservicing Agreements. In such event, the
Indenture Trustee or its designee as the successor master servicer shall be
deemed to have assumed all of the Master Servicer's rights and obligations
therein and to have replaced the Master Servicer as a party to such Subservicing
Agreements to the same extent as if such Subservicing Agreements had been
assigned to the Indenture Trustee or its designee as a successor master
servicer, except that the Indenture Trustee or its designee as a successor
master servicer shall not be deemed to have assumed any obligations or
liabilities of the Master Servicer arising prior to such assumption (other than
the obligation to make any Advances) and the Master Servicer shall not thereby
be relieved of any
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liability or obligations under such Subservicing Agreements arising prior to
such assumption. Nothing in the foregoing shall be deemed to entitle the
Indenture Trustee or its designee as a successor master servicer at any time to
receive any portion of the servicing compensation provided under Section 3.17
except for such portion as the Master Servicer would be entitled to receive.
(b) In the event that the Indenture Trustee or its designee as
successor master servicer for the Indenture Trustee assumes the servicing
obligations of the Master Servicer under Section 6.02, upon the reasonable
request of the Indenture Trustee or such designee as successor master servicer
the Master Servicer shall at its own expense deliver to the Indenture Trustee,
or at its written request to such designee, photocopies of all documents, files
and records, electronic or otherwise, relating to the Subservicing Agreements
and the related Mortgage Loans or REO Property then being serviced and an
accounting of amounts collected and held by it, if any, and will otherwise
cooperate and use its reasonable efforts to effect the orderly and efficient
transfer of the Subservicing Agreements, or responsibilities hereunder to the
Indenture Trustee, or at its written request to such designee as successor
master servicer.
Section 3.06. COLLECTION OF MORTGAGE LOAN PAYMENTS. (a) The Master
Servicer will coordinate and monitor remittances by Subservicers to it with
respect to the Mortgage Loans in accordance with this Servicing Agreement.
(b) The Master Servicer shall make its best reasonable efforts to
collect or cause to be collected all payments required under the terms and
provisions of the Mortgage Loans and shall follow, and use its best reasonable
efforts to cause Subservicers to follow, collection procedures comparable to the
collection procedures of prudent mortgage lenders servicing mortgage loans for
their own account to the extent such procedures shall be consistent with this
Servicing Agreement. Consistent with the foregoing, the Master Servicer or the
related Subservicer may in its discretion (i) waive or permit to be waived any
late payment charge, prepayment charge, assumption fee, or any penalty interest
in connection with the prepayment of a Mortgage Loan and (ii) suspend or reduce
or permit to be suspended or reduced regular monthly payments for a period of up
to six months, or arrange or permit an arrangement with a Mortgagor for a
scheduled liquidation of delinquencies; provided, however, that the Master
Servicer or the related Subservicer may permit the foregoing only if it
believes, in good faith, that recoveries of Monthly Payments will be maximized;
provided further, however, that Monthly Payments may not be suspended during the
twelve months prior to the final maturity of the Bonds. In the event the Master
Servicer or related Subservicer shall consent to the deferment of the due dates
for payments due on a Mortgage Note, the Master Servicer shall nonetheless make
an Advance or shall cause the related Subservicer to make an advance to the same
extent as if such installment were due, owing and delinquent and had not been
deferred through liquidation of the Mortgaged Property; PROVIDED, HOWEVER, that
the obligation of the Master Servicer or the related Subservicer to make an
Advance shall apply only to the extent that the Master Servicer believes, in
good faith, that such advances are not Nonrecoverable Advances.
(c) Within five Business Days after the Master Servicer has determined
that all amounts which it expects to recover from or on account of a Mortgage
Loan have been recovered and that
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no further Liquidation Proceeds will be received in connection therewith, the
Master Servicer shall provide to the Indenture Trustee a certificate of a
Servicing Officer that such Mortgage Loan became a Liquidated Mortgage Loan as
of the date of such determination.
(d) The Master Servicer shall establish a segregated account in the
name of the Indenture Trustee (the "Collection Account"), which shall be an
Eligible Account, in which the Master Servicer shall deposit or cause to be
deposited any amounts representing payments on and any collections in respect of
the Mortgage Loans due subsequent to the Cut-Off Date (other than in respect of
the payments referred to in the following paragraph) within one Business Day
following receipt thereof (or otherwise on or prior to the Closing Date),
including the following payments and collections received or made by it (without
duplication):
(i) all payments of principal of or interest on the
Mortgage Loans received by the Master Servicer directly from Mortgagors
or from the respective Subservicer, net of any portion of the interest
thereof retained by the Subservicer as subservicing fees;
(ii) the aggregate Repurchase Price of the Mortgage
Loans purchased by the Master Servicer pursuant to Section 3.18;
(iii) Net Liquidation Proceeds;
(iv) all proceeds of any Mortgage Loans repurchased by
the Seller pursuant to the Mortgage Loan Sale and Contribution
Agreement, and all Substitution Adjustment Amounts required to be
deposited in connection with the substitution of an Eligible Substitute
Mortgage Loan pursuant to the Mortgage Loan Sale and Contribution
Agreement;
(v) Insurance Proceeds, other than Net Liquidation
Proceeds, resulting from any insurance policy (including, without
limitation, the CMAC PMI Policy) maintained on a Mortgaged Property;
(vi) amounts required to be paid by the Master Servicer
pursuant to Section 7.08;
(vii) any Advance and any Compensating Interest payments;
and
(viii) any other amounts received by the Master Servicer,
including any fees or penalties not retained by a Subservicer, or the
Indenture Trustee required to be deposited in the Collection Account
pursuant to this Servicing Agreement.
PROVIDED, HOWEVER, that with respect to each Due Period, the Master Servicer
shall be permitted to retain from payments in respect of interest on the
Mortgage Loans, the Servicing Fee and the CMAC PMI Policy Fee for such Due
Period. The foregoing requirements respecting deposits to the Collection Account
are exclusive, it being understood that, without limiting the generality of
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the foregoing, the Master Servicer need not deposit in the Collection Account
fees (including annual fees or assumption fees) or late charge and prepayment
penalties, payable by Mortgagors, each as further described in Section 3.15, or
amounts received by the Subservicer for the accounts of Mortgagors for
application towards the payment of taxes, insurance premiums, assessments and
similar items. In the event any amount not required to be deposited in the
Collection Account is so deposited, the Master Servicer may at any time (prior
to being terminated under this Agreement) withdraw such amount from the
Collection Account, any provision herein to the contrary notwithstanding. The
Master Servicer shall keep records that accurately reflect the funds on deposit
in the Collection Account that have been identified by it as being attributable
to the Mortgage Loans and shall hold all collections in the Collection Account
for the benefit of the Owner Trustee, the Indenture Trustee, the Bondholders, as
their interests may appear. The Master Servicer shall remit all Foreclosure
Profits to the Collection Account.
Funds in the Collection Account may not be invested and shall not be
commingled with the Master Servicer's own funds or general assets or with funds
respecting payments on mortgage loans or with any other funds not related to the
Bonds.
(e) The Master Servicer will require each Subservicer to hold all funds
constituting collections on the Mortgage Loans, pending remittance thereof to
the Master Servicer, in one or more accounts meeting the requirements of an
Eligible Account, and invested in Eligible Investments. The Subservicer 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 any
other funds. Each Subservicer shall make remittances to the Master Servicer no
later than the eighteenth (18th) day of each month, commencing on the eighteenth
(18th) day of the month next following the Cut-off Date, or if such eighteenth
(18th) day is not a Business Day, the first Business Day immediately succeeding
such eighteenth (18th) day.
Section 3.07. WITHDRAWALS FROM THE COLLECTION ACCOUNT. (a) The Master
Servicer shall, from time to time as provided herein, make withdrawals from the
Collection Account of amounts on deposit therein pursuant to Section 3.06 that
are attributable to the Mortgage Loans for the following purposes (without
duplication):
(i) to deposit in the Payment Account, by the third
Business Day prior to each Payment Date, all collections on the
Mortgage Loans required to be distributed on a Payment Date;
(ii) to the extent deposited to the Collection Account,
to reimburse itself or the related Subservicer for previously
unreimbursed expenses incurred in maintaining individual insurance
policies pursuant to Sections 3.10 or 3.11, or Liquidation Expenses,
paid pursuant to Section 3.13 or otherwise reimbursable pursuant to the
terms of this Servi cing Agreement, such withdrawal right being limited
to amounts received on particular Mortgage Loans (other than any
Repurchase Price in respect thereof) which represent late recoveries of
the payments for which such advances were made, or from related
Liquidation Proceeds;
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(iii) to pay to itself out of each payment received on
account of interest on a Mortgage Loan as contemplated by Section 3.15,
an amount equal to the related Servicing Fee (to the extent not
retained pursuant to Section 3.06), to pay to any Subservicer any
subservicing fees not previously withheld by the Subservicer and to pay
CMAC any amounts owed under the CMAC PMI Policy;
(iv) to pay to itself or the Seller, with respect to any
Mortgage Loan or property acquired in respect thereof that has been
purchased or otherwise transferred to the Seller, the Master Servicer
or other entity, all amounts received thereon and not required to be
distributed to Bondholders as of the date on which the related Purchase
Price or Repurchase Price is determined;
(v) to reimburse the Master Servicer or any Subservicer
for any Advance of its own funds or any advance of such Subservicer's
own funds, the right of the Master Servicer or a Subservicer to
reimbursement pursuant to this subclause (v) being limited to amounts
received on a particular Mortgage Loan (including, for this purpose,
the Repurchase Price therefor, Insurance Proceeds and Liquidation
Proceeds) which represent late payments or recoveries of the principal
of or interest on such Mortgage Loan respecting which such Advance or
advance was made;
(vi) to reimburse the Master Servicer or any Subservicer
from Insurance Proceeds or Liquidation Proceeds relating to a
particular Mortgage Loan for amounts expended by the Master Servicer or
such Subservicer pursuant to Section 3.13 in good faith in connection
with the restoration of the related Mortgage Property which was damaged
by the uninsured cause or in connection with the liquidation of such
Mortgage Loan;
(vii) to pay the Master Servicer or any Subservicer
(payment to any Subservicer to be subject to prior payment to the
Master Servicer of an amount equal to the Servicing Fee), as
appropriate, from Liquidation Proceeds or Insurance Proceeds received
in connection with the liquidation of any Mortgage Loan, the amount
which it or such Subservicer would have been entitled to receive under
subclause (x) of this Subsection 3.07(a) as servicing compensation on
account of each defaulted scheduled payment on such Mortgage Loan if
paid in a timely manner by the related Mortgagor, but only to the
extent that the aggregate of Liquidation Proceeds and Insurance
Proceeds with respect to such Mortgage Loan, after any reimbursement to
the Master Servicer or any Subservicer, pursuant to other subclauses of
this Subsection 3.07(a), exceeds the outstanding Principal Balance of
such Mortgage Loan plus accrued and unpaid interest thereon at the
related Mortgage Rate less the Servicing Fee to but not including the
date of payment (in any event, the amount of servicing compensation
received by a Subservicer and the Master Servicer with respect to any
defaulted scheduled payment shall not exceed the applicable Servicing
Fee);
(viii) to reimburse the Master Servicer or any Subservicer
for advances of funds pursuant to Article III, the right to
reimbursement pursuant to this subclause being
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limited to amounts received on the related Mortgage Loan (including,
for this purpose, the Repurchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late recoveries of the payments
for which such advances were made;
(ix) to reimburse the Master Servicer or any Subservicer
for any Nonrecoverable Advance previously made, and not reimbursed
pursuant to this Subsection 3.07(a);
(x) to deposit in the Payment Account, by the third
Business Day prior to each Payment Date, the Owner Trustee Fee and the
Indenture Trustee Fee;
(xi) to withdraw any other amount deposited in the
Collection Account that was not required to be deposited therein
pursuant to Section 3.06;
(xii) to reimburse the Master Servicer for costs
associated with the environmental report specified in Section 3.13(c);
and
(xiii) clear and terminate the Collection Account
pursuant to Section 7.08.
In connection with withdrawals pursuant to clauses (ii), (iii), (iv), (v), (vi),
(vii) and (viii), the Master Servicer's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, and the Master
Servicer shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Collection Account pursuant to such clauses. Notwithstanding any other provision
of this Servi cing Agreement, the Master Servicer shall be entitled to reimburse
itself for any previously unreimbursed expenses incurred pursuant to Section
3.13 or otherwise reimbursable expenses incurred pursuant to the terms of this
Servicing Agreement, but only to the extent of collections or other recoveries
on the related Mortgage Loan.
(b) Notwithstanding the provisions of this Section 3.07, the Master
Servicer may, but is not required to, allow the Subservicers to deduct from
amounts received by them or from the related account maintained by a
Subservicer, prior to deposit in the Collection Account, any portion to which
such Subservicers are entitled as servicing compensation (including income on
Eligible Investments) or reimbursement of any reimbursable Advances made by such
Subservicers.
Section 3.08. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
SERVICING ACCOUNTS.
(a) The Master Servicer shall establish and maintain or cause the
related Subservicer to establish and maintain, one or more Servicing Accounts.
The Master Servicer or a Subservicer will deposit and retain therein all
collections from the Mortgagors for the payment of taxes, assessments, insurance
premiums, or comparable items as agent of the Mortgagors.
(b) The deposits in the Servicing Accounts shall be held in trust by
the Master Servicer or a Subservicer (and its successors and assigns) in the
name of the Indenture Trustee. Such Servicing Accounts shall be Eligible
Accounts and if permitted by applicable law, invested in
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Eligible Investments held in trust by the Master Servicer or a Subservicer as
described above and maturing, or be subject to redemption or withdrawal, no
later than the date on which such funds are required to be withdrawn, and in no
event later than 45 days after the date of investment; withdrawals of amounts
from the Servicing Accounts may be made only to effect timely payment of taxes,
assessments, insurance premiums, or comparable items, to reimburse the Master
Servicer or a Subservicer for any advances made with respect to such items, to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required, to Mortgagors on balances in the Servicing Accounts or to
clear and terminate the Servicing Accounts at or any time after the termination
of this Servicing Agreement.
Section 3.09. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE MORTGAGE LOANS. The Master Servicer shall provide, and shall cause any
Subservicer to provide, to the Indenture Trustee and the Owner Trustee access to
the documentation regarding the related Mortgage Loans and REO Property and to
the Bondholders, the FDIC, and the supervisory agents and examiners of the FDIC
(to which the Indenture Trustee shall also provide) access to the documentation
regarding the related Mortgage Loans required by applicable regulations, such
access being afforded without charge but only upon reasonable request and during
normal business hours at the offices of the Master Servicer or the Subservicers
that are designated by these entities; PROVIDED, HOWEVER, that, unless otherwise
required by law, the Indenture Trustee, the Master Servicer or the Subservicer
shall not be required to provide access to such documentation if the provision
thereof would violate the legal right to privacy of any Mortgagor; PROVIDED,
FURTHER, HOWEVER, that the Indenture Trustee and the Owner Trustee shall
coordinate their requests for such access so as not to impose an unreasonable
burden on, or cause an unreasonable interruption of, the business of the Master
Servicer or any Subservicer. The Master Servicer, the Subservicers and the
Indenture Trustee shall allow representatives of the above entities to photocopy
any of the documentation and shall provide equipment for that purpose at a
charge that covers their own actual out-of-pocket costs.
Section 3.10. MAINTENANCE OF PRIMARY INSURANCE POLICIES; COLLECTION
THEREUNDER. (a) The Master Servicer shall, or shall cause the related
Subservicer to, exercise its best reasonable efforts to maintain and keep in
full force and effect each Primary Insurance Policy by a Qualified Insurer, or
other insurer satisfactory to the Rating Agencies, with respect to each first
lien Mortgage Loan as to which as of the Cut-Off Date such a Primary Insurance
Policy was in effect (or, in the case of a Substitute Mortgage Loan, the date of
substitution) and the original principal amount of the related Mortgage Note
exceeded 80% of the Original Value in an amount at least equal to the excess of
such original principal amount over 75% of such Original Value until the
principal amount of any such first lien Mortgage Loan is reduced below 80% of
the Original Value or, based upon a new appraisal, the principal amount of such
first lien Mortgage Loan represents less than 80% of the new appraised value.
The Master Servicer shall, or shall cause the related Subservicer to, effect the
timely payment of the premium on each Primary Insurance Policy. The Master
Servicer and the related Subservicer shall have the power to substitute for any
Primary Insurance Policy another substantially equivalent policy issued by
another Qualified Insurer, PROVIDED, THAT, such substitution shall be subject to
the condition that it will not cause the ratings on the Bonds to be downgraded
or withdrawn, as evidenced by a writing from each Rating Agency.
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(b) In connection with its activities as administrator and master
servicer of the Mortgage Loans, the Master Servicer agrees to file, on behalf of
itself, the Indenture Trustee, the Depositor and the Certificateholders claims
to CMAC with respect to the CMAC PMI Policy in a timely fashion in accordance
with the terms of such policy and, in this regard, to take such action as shall
be necessary to permit recovery under such policy respecting a related defaulted
Mortgage Loan which is covered by such policy. Pursuant to Section 3.06, any
amounts collected by the Master Servicer under the CMAC PMI Policy (other than
any amount to be applied to the restoration or repair of the property encumbered
by the related Mortgage Loan with respect to which such amount was collected)
shall be deposited in the Collection Account pursuant to Section 3.06.
Section 3.11. MAINTENANCE OF HAZARD INSURANCE AND FIDELITY COVERAGE.
(a) The Master Servicer shall maintain and keep, or cause each Subservicer to
maintain and keep, with respect to each Mortgage Loan and each REO Property, in
full force and effect hazard insurance (fire insurance with extended coverage)
equal to at least the lesser of the Principal Balance of the Mortgage Loan or
the current replacement cost of the Mortgaged Property, and containing a
standard mortgagee clause, PROVIDED, HOWEVER, that the amount of hazard
insurance may not be less than the amount necessary to prevent loss due to the
application of any co-insurance provision of the related policy. Unless
applicable state law requires a higher deductible, the deductible on such hazard
insurance policy may be no more than $1,000 or 1% of the applicable amount of
coverage, whichever is less. In the case of a condominium unit or a unit in a
planned unit development, the required hazard insurance shall take the form of a
multi-peril policy covering the entire condominium project or planned unit
development, in an amount equal to at least 100% of the insurable value based on
replacement cost.
(b) Any amounts collected by the Master Servicer or a Subservicer under
any such hazard insurance policy (other than amounts to be applied to the
restoration or repair of the Mortgaged Property or amounts released to the
Mortgagor in accordance with the Master Servicer's or a Subservicer's normal
servicing procedures, the Mortgage Note, the Security Instrument or applicable
law) shall be deposited initially in a Collection Account, for transmittal to
the Payment Account, subject to withdrawal pursuant to Section 3.07.
(c) Any cost incurred by a Master Servicer or a Subservicer in
maintaining any such hazard insurance policy shall not be added to the amount
owing under the Mortgage Loan for the purpose of calculating monthly
distributions to Bondholders, notwithstanding that the terms of the Mortgage
Loan so permit. Such costs shall be recoverable by the Master Servicer or a
Subservicer out of related late payments by the Mortgagor or out of Insurance
Proceeds or Liquidation Proceeds or by the Master Servicer from the Repurchase
Price, to the extent permitted by Section 3.07.
(d) No earthquake or other additional insurance is to be required of
any Mortgagor or maintained on property acquired with respect to a Security
Instrument other than pursuant to such applicable laws and regulations as shall
at any time be in force and shall require such additional insurance. When, at
the time of origination of the Mortgage Loan or at any subsequent time, the
Mortgaged Property is located in a federally designated special flood hazard
area, the Master
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Servicer shall use its best reasonable efforts to cause with respect to the
Mortgage Loans and each REO Property flood insurance (to the extent available
and in accordance with mortgage servicing industry practice) to be maintained.
Such flood insurance shall cover the Mortgaged Property, including all items
taken into account in arriving at the Appraised Value on which the Mortgage Loan
was based, and shall be in an amount equal to the lesser of (i) the Principal
Balance of the related Mortgage Loan and (ii) the minimum amount required under
the terms of coverage to compensate for any damage or loss on a replacement cost
basis, but not more than the maximum amount of such insurance available for the
related Mortgaged Property under either the regular or emergency programs of the
National Flood Insurance Program (assuming that the area in which such Mortgaged
Property is located is participating in such program). Unless applicable state
law requires a higher deductible, the deductible on such flood insurance may not
exceed $1,000 or 1% of the applicable amount of coverage, whichever is less.
(e) If insurance has not been maintained complying with Subsections
3.11 (a) and (d) and there shall have been a loss which would have been covered
by such insurance had it been maintained, the Master Servicer shall pay, or
cause the related Subservicer to pay, for any
necessary repairs.
(f) The Master Servicer shall present, or cause the related Subservicer
to present, claims under any applicable Primary Insurance Policy or the related
hazard insurance or flood insurance policy.
(g) The Master Servicer shall obtain and maintain at its own expense
and for the duration of this Servicing Agreement a blanket fidelity bond and
shall cause each Subservicer to obtain and maintain an errors and omissions
insurance policy covering such Subservicer's officers, employees and other
persons acting on its behalf in connection with its activities under this
Servicing Agreement. The amount of coverage shall be at least equal to the
coverage maintained by the Master Servicer acceptable to FNMA or FHLMC to
service loans for it or otherwise in an amount as is commercially available at a
cost that is generally not regarded as excessive by industry standards. The
Master Servicer shall promptly notify the Indenture Trustee of any material
change in the terms of such bond or policy. The Master Servicer shall provide
annually to the Indenture Trustee a certificate of insurance that such bond and
policy are in effect. If any such bond or policy ceases to be in effect, the
Master Servicer shall, to the extent possible, give the Indenture Trustee ten
days' notice prior to any such cessation and shall use its reasonable best
efforts to obtain a comparable replacement bond or policy, as the case may be.
Any amounts relating to the Mortgage Loans collected under such bond or policy
shall be deposited initially in a Collection Account for transmittal to the
Payment Account, subject to withdrawal pursuant to Section 3.07.
Section 3.12. DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. (a) In any
case in which the Master Servicer is notified by any Mortgagor or Subservicer
that a Mortgaged Property relating to a Mortgage Loan has been or is about to be
conveyed by the Mortgagor, the Master Servicer shall enforce, or shall instruct
such Subservicer to enforce, any due-on-sale clause contained in the related
Security Instrument to the extent permitted under the terms of the related
Mortgage Note and by applicable law. The Master Servicer or the related
Subservicer may
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repurchase a Mortgage Loan at the Repurchase Price when the Master Servicer
requires acceleration of the Mortgage Loan, but only if the Master Servicer is
satisfied, as evidenced by an Officer's Certificate delivered to the Indenture
Trustee, that either (i) such Mortgage Loan is in default or default is
reasonably foreseeable or (ii) if such Mortgage Loan is not in default or
default is not reasonably foreseeable, such repurchase will have no adverse tax
consequences for the Trust Estate or any Securityholder. If the Master Servicer
reasonably believes that such due-on-sale clause cannot be enforced under
applicable law or if the Mortgage Loan does not contain a due-on-sale clause,
the Master Servicer is authorized, and may authorize any Subservicer, to consent
to a conveyance subject to the lien of the Mortgage, and to take or enter into
an assumption agreement from or with the Person to whom such property has been
or is about to be conveyed, pursuant to which such Person becomes liable under
the related Mortgage Note and unless prohibited by applicable state law, such
Mortgagor remains liable thereon, on condition, however, that the related
Mortgage Loan shall continue to be covered by a hazard policy and (if so covered
before the Master Servicer or the related Subservicer enters into such
agreement) by any Primary Insurance Policy. In connection with any such
assumption, no material term of the related Mortgage Note may be changed. The
Master Servicer shall notify the Indenture Trustee, whenever possible, before
the completion of such assumption agreement, and shall forward to the Indenture
Trustee the original copy of such assumption agreement, which copy shall be
added by the Indenture Trustee to the related Mortgage File and which 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. A portion,
equal to up to 2% of the Principal Balance of the related Mortgage Loan, of any
fee or additional interest collected by the related Subservicer for consenting
in any such conveyance or entering into any such assumption agreement may be
retained by the related Subservicer as additional servicing compensation.
(b) Notwithstanding the foregoing paragraph or any other provision of
this Servicing Agreement, the Master Servicer 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 conveyance by the
Mortgagor of the related Mortgaged Property or assumption of a Mortgage Loan
which the Master Servicer reasonably believes it may be restricted by law from
preventing, for any reason whatsoever or if the exercise of such right would
impair or threaten to impair any recovery under any applicable insurance policy.
Section 3.13. REALIZATION UPON DEFAULTED MORTGAGE LOANS. (a) The Master
Servicer shall, or shall direct the related Subservicer to, foreclose upon or
otherwise comparably convert the ownership of properties securing any Mortgage
Loans that come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.06, except that the Master Servicer shall not, and shall not direct
the related Subservicer to, foreclose upon or otherwise comparably convert a
Mortgaged Property if there is evidence of toxic waste or other environmental
hazards thereon unless the Master Servicer follows the procedures in Subsection
(c) below. In connection with such foreclosure or other conversion, the Master
Servicer in conjunction with the related Subservicer, if any, shall use its best
reasonable efforts to preserve REO Property and to realize upon defaulted
Mortgage Loans in such manner as to maximize the receipt of principal and
interest by the Bondholders, taking into account, among other things, the timing
of foreclosure and the considerations set forth in
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Subsection 3.13(b). The foregoing is subject to the proviso that the Master
Servicer shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration of any property unless it determines in
good faith (i) that such restoration or foreclosure will increase the proceeds
of liquidation of the Mortgage Loan to Bondholders after reimbursement to itself
for such expenses and (ii) that such expenses will be recoverable to it either
through Liquidation Proceeds (respecting which it shall have priority for
purposes of reimbursements from the Collection Account pursuant to Section 3.07)
or through Insurance Proceeds (respecting which it shall have similar priority).
The Master Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; PROVIDED, HOWEVER, that it shall be
entitled to reimbursement thereof (as well as its normal servicing
compensation), and in respect of any Subservicer only, to receive Foreclosure
Profits as additional servicing compensation to the extent that transfers or
withdrawals from the Collection Account with respect thereto are permitted under
Section 3.07. Any income from or other funds (net of any income taxes) generated
by REO Property shall be deemed for purposes of this Servicing Agreement to be
Insurance Proceeds.
(b) The Trust Estate shall not acquire any real property (or any
personal property incident to such real property) except in connection with a
default or reasonably foreseeable default of a Mortgage Loan. In the event that
the Trust Estate acquires any real property (or personal property incident to
such real property) in connection with a default or imminent default of a
Mortgage Loan, such property shall be disposed of by the Indenture Trustee on
behalf of the Trust Estate within two years after its acquisition by the Trust
Estate.
(c) With respect to any Mortgage Loan as to which the Master Servicer
or a Subservicer has received notice of, or has actual knowledge of, the
presence of any toxic or hazardous substance on the Mortgaged Property, the
Master Servicer shall promptly notify the Indenture Trustee and the Owner
Trustee. The Master Servicer may, in its sole discretion, obtain an
environmental audit report prepared by a Person who regularly conducts
environmental audits using customary industry standards, a copy of which shall
be delivered to the Issuer and the Indenture Trustee. The Master Servicer shall
be entitled to reimbursement for such report pursuant to Section 3.07. The
Master Servicer shall take such action as it deems to be in the best economic
interest of the Trust Estate (other than proceeding against the Mortgaged
Property) and is hereby authorized at such time as it deems appropriate to
release such Mortgaged Property from the lien of the related Mortgage. The
parties hereto acknowledge that the Master Servicer shall not obtain on behalf
of the Issuer a deed as a result or in lieu of foreclosure, and shall not
otherwise acquire possession of or title to, or commence any proceedings to
acquire possession of or title to, or take any other action with respect to, any
Mortgage Property, if the Owner Trustee could reasonably be considered to be a
responsible party for any liability arising from the presence of any toxic or
hazardous substance on the Mortgaged Property, unless the Owner Trustee has been
indemnified to its reasonable satisfaction against such liability.
Section 3.14. INDENTURE TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE
FILES. (a) Upon payment in full of any Mortgage Loan or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
the Indenture Trustee by a certification signed by a Servicing Officer in the
form of the Request for Release attached hereto as Exhibit B (which
certification shall include
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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 Payment
Account have been or will be so deposited) and shall request delivery to the
Master Servicer or Subservicer, as the case may be, of the Mortgage File. Upon
receipt of such certification and request, the Indenture Trustee shall promptly
release the related Mortgage File to the Master Servicer or Subservicer and
execute and deliver to the Master Servicer, without recourse, the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Security Instrument (furnished by the
Master Servicer), together with the Mortgage Note with written evidence of
cancellation thereon.
(b) From time to time as is appropriate, for the servicing or
foreclosure of any Mortgage Loan or collection under an insurance policy, the
Master Servicer may deliver to the Indenture Trustee a Request for Release
signed by a Servicing Officer on behalf of the Master Servicer in substantially
the form attached as Exhibit B hereto. Upon receipt of the Request for Release,
the Indenture Trustee shall deliver the Mortgage File or any document therein to
the Master Servicer or Subservicer, as the case may be, as bailee for the
Indenture Trustee.
(c) The Master Servicer shall cause each Mortgage File or any document
therein released pursuant to Subsection 3.14(b) to be returned to the Indenture
Trustee when the need therefor no longer exists, and in any event within 21 days
of the Master Servicer's receipt thereof, unless the Mortgage Loan has become a
Liquidated Mortgage Loan and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Collection Account or such Mortgage File is
being used to pursue foreclosure or other legal proceedings. Prior to return of
a Mortgage File or any document to the Indenture Trustee, the Master Servicer,
the related insurer or Subservicer to whom such file or document was delivered
shall retain such file or document in its respective control as bailee for the
Indenture Trustee unless the Mortgage File or such document has been delivered
to an attorney, or to a public trustee or other public official as required by
law, to initiate or pursue legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and the Master
Servicer has delivered to the Indenture Trustee a certificate of a Servicing
Officer certifying as to the name and address of the Person to which such
Mortgage File or such document was delivered and the purpose or purposes of such
delivery. If a Mortgage Loan becomes a Liquidated Mortgage Loan, the Indenture
Trustee shall deliver the Request for Release with respect thereto to the Master
Servicer upon deposit of the related Liquidation Proceeds in the Collection
Account.
(d) The Indenture Trustee shall execute and deliver to the Master
Servicer any court pleadings, requests for trustee's sale or other documents
necessary to (i) the foreclosure or trustee's sale with respect to a Mortgaged
Property; (ii) any legal action brought to obtain judgment against any Mortgagor
on the Mortgage Note or Security Instrument; (iii) obtain a deficiency judgment
against the Mortgagor; or (iv) enforce any other rights or remedies provided by
the Mortgage Note or Security Instrument or otherwise available at law or
equity. Together with such documents or pleadings the Master Servicer shall
deliver to the Indenture Trustee a certificate of a Servicing Officer in which
it requests the Indenture Trustee to execute the pleadings or documents. The
certificate shall certify and explain the reasons for which the pleadings or
documents are required. It shall further certify that the Indenture Trustee's
execution and delivery
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of the pleadings or documents will not invalidate any insurance coverage under
the insurance policies or invalidate or otherwise affect the lien of the
Security Instrument, except for the termination of such a lien upon completion
of the foreclosure or trustee's sale.
Section 3.15. MASTER SERVICING COMPENSATION. (a) As compensation for
its activities hereunder, the Master Servicer shall be entitled to receive the
Servicing Fee from full payments of accrued interest on each Mortgage Loan. The
Master Servicer shall be solely responsible for paying any and all fees with
respect to a Subservicer and the Trust Estate shall not bear any fees, expenses
or other costs directly associated with any Subservicer.
(b) The related Subservicer may retain additional servicing
compensation in the form of conversion fees, if any, with respect to a
prepayment charges, if any, a portion of the assumption fees up to 2% of the
Principal Balance of the related Mortgage Loan, tax service fees, fees for
statement of account or payoff, late payment charges, or otherwise, to the
extent such fees are collected from the related Mortgagors or, with respect to a
Liquidated Mortgage Loan, to the extent such fees have accrued. The Master
Servicer shall not be entitled to servicing compensation other than its
Servicing Fee. The Master Servicer shall be required to pay all expenses it
incurs in connection with servicing activities under this Servicing Agreement
and shall not be entitled in connection with servicing activities under this
Servicing Agreement to reimbursement except as provided in this Servicing
Agreement. Expenses to be paid by the Master Servicer under this Subsection
3.15(b) shall include payment of the expenses of the accountants retained
pursuant to Section 3.17.
Section 3.16. ANNUAL STATEMENTS OF COMPLIANCE. Within 120 days after
December 31 of each year, commencing December 1998, the Master Servicer at its
own expense shall deliver to the Indenture Trustee, with a copy to the Rating
Agencies, an Officer's Certificate stating, as to the signer thereof, that (i) a
review of the activities of the Master Servicer during the preceding calendar
year and of performance under this Servicing Agreement has been made under such
officer's supervision, (ii) to the best of such officer's knowledge, based on
such review, the Master Servicer has fulfilled all its obligations under this
Servicing Agreement for such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof including the steps being taken by the
Master Servicer to remedy such default; (iii) a review of the activities of each
Subservicer during the Subservicer's most recently ended calendar year on or
prior to such December 31 and its performance under its Subservicing Agreement
has been made under such officer's supervision; and (iv) to the best of the
Servicing Officer's knowledge, based on his review and the certification of an
officer of the Subservicer (unless the Servicing Officer has reason to believe
that reliance on such certification is not justified), either each Subservicer
has performed and fulfilled its duties, responsibilities and obligations under
this Servicing Agreement and its Subservicing Agreement in all material respects
throughout the year, or, if there has been a default in performance or
fulfillment of any such duties, responsibilities or obligations, specifying the
nature and status of each such default known to the Servicing Officer. Copies of
such statements shall be provided by the Master Servicer to the Bondholders upon
request or by the Indenture Trustee at the expense of the Master Servicer should
the Master Servicer fail to provide such copies.
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Section 3.17. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
(a) Within 120 days after December 31 of each year, commencing December, 1998,
the Master Servicer, at its expense, shall cause a firm of Independent public
accountants who are members of the American Institute of Certified Public
Accountants to furnish a statement to the Master Servicer, which will be
provided to the Indenture Trustee and the Rating Agencies, to the effect that,
in connection with the firm's examination of the Master Servicer's financial
statements as of the end of such calendar year, nothing came to their attention
that indicated that the Master Servicer was not in compliance with Sections
3.06, 3.07 and 3.08 except for (i) such exceptions as such firm believes to be
immaterial and (ii) such other exceptions as are set forth in such statement.
(b) Within 120 days after December 31 of each year, commencing
December 1998, the Master Servicer, at its expense, shall or shall cause each
Subservicer to cause a nationally recognized firm of independent certified
public accountants to furnish to the Master Servicer or such Subservicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer or such Subservicer
which includes an assertion that the Master Servicer or such Subservicer has
complied with certain minimum mortgage loan servicing standards (to the extent
applicable to residential mortgage loans) identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America with respect to the servicing of first and second lien
conventional single family mortgage loans during the most recently completed
calendar year and (ii) on the basis of an examination conducted by such firm in
accordance with standards established by the American Institute of Certified
Public Accountants, such representation is fairly stated in all material
respects, subject to such exceptions and other qualifications that may be
appropriate. Immediately upon receipt of such report, the Master Servicer shall
or shall cause each Subservicer to furnish a copy of such report to the
Indenture Trustee, the Rating Agencies.
Section 3.18. OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS. The Master
Servicer may repurchase any Mortgage Loan delinquent in payment for a period of
90 days or longer for a price equal to the Repurchase Price. Any such purchase
shall be accomplished as provided in Subsection 2.03 hereof.
Section 3.19. INFORMATION REQUIRED BY THE INTERNAL REVENUE SERVICE
GENERALLY AND REPORTS OF FORECLOSURES AND ABANDONMENTS OF MORTGAGED PROPERTY.
The Master Servicer shall prepare and deliver all federal and state information
reports when and as required by all applicable state and federal income tax
laws. In particular, with respect to the requirement under Section 6050J of the
Code to the effect that the Master Servicer or Subservicer shall make reports of
foreclosures and abandonments of any mortgaged property for each year beginning
in 1998, the Master Servicer or Subservicer shall file reports relating to each
instance occurring during the previous calendar year in which the Master
Servicer (i) acquires an interest in any Mortgaged Property through foreclosure
or other comparable conversion in full or partial satisfaction of a Mortgage
Loan, or (ii) knows or has reason to know that any Mortgaged Property has been
abandoned. The reports from the Master Servicer or Subservicer shall be in form
and substance sufficient to meet the reporting requirements imposed by Section
6050J, Section 6050H (reports relating to mortgage interest received) and
Section 6050P of the Code (reports relating to cancellation of indebtedness).
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ARTICLE IV
Servicing Certificate
Section 4.01. REMITTANCE REPORTS. On the second Business Day following
each Determination Date, the Master Servicer shall deliver to the Indenture
Trustee a report, prepared as of the close of business on the Determination Date
(the "Determination Date Report"), in the form of a magnetic tape or disk or
such other method as to which the Master Servicer and Indenture Trustee shall
agree. The Determination Date Report and any written information supplemental
thereto shall include such information with respect to the Mortgage Loans that
is reasonably available to the Master Servicer and that is required by the
Indenture Trustee for purposes of making the calculations and providing the
reports referred to in the Indenture, as set forth in written specifications or
guidelines issued by the Indenture Trustee from time to time. Such information
shall include the aggregate amounts required to be withdrawn from the Collection
Account and deposited into the Payment Account pursuant to 3.07.
In addition, prior to each Payment Date, the Master Servicer shall
determine the total amount of Realized Losses, if any, that resulted from any
Cash Liquidation, Debt Service Reduction, Deficient Valuation or REO Disposition
that occurred during the related Collection Period. The amount of each Realized
Loss shall be evidenced by an Officer's Certificate delivered to the Indenture
Trustee with the related Determination Date Report.
The determination by the Master Servicer of such amounts shall, in the
absence of obvious error, be presumptively deemed to be correct for all purposes
hereunder and the Owner Trustee and Indenture Trustee shall be protected in
relying upon the same without any independent check or verification.
Section 4.02. RESERVED.
Section 4.03. PAYMENT ACCOUNT. The Indenture Trustee shall establish
and maintain a separate account (the "Payment Account") in accordance with the
Indenture. The Payment Account shall be an Eligible Account. On each Payment
Date, amounts on deposit in the Payment Account will be distributed by the
Indenture Trustee in accordance with Section 3.05 of the Indenture. The
Indenture Trustee shall, upon written request from the Master Servicer, invest
or cause the institution maintaining the Payment Account to invest the funds in
the Payment Account in Eligible Investments designated in the name of the
Indenture Trustee, which shall mature not later than the Business Day next
preceding the Payment Date next following the date of such investment (except
that (i) any investment in the institution with which the Payment Account is
maintained may mature on such Payment Date and (ii) any other investment may
mature on such Payment Date if the Indenture Trustee shall advance funds on such
Payment Date to the Payment Account in the amount payable on such investment on
such Payment Date, pending receipt thereof to the extent necessary to make
distributions on the Bonds) and shall not be sold or disposed of prior to
maturity. All income and gain realized from any such investment shall be for the
benefit of the Bondholders. The amount of any losses incurred with respect to
any such investments shall be deposited in the Payment Account by the Master
Servicer.
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Section 4.04. ADVANCES. If any Monthly Payment (together with any
advances from the Subservicers) on a Mortgage Loan that was due on the
immediately preceding Due Date and delinquent on the Determination Date is
delinquent other than as a result of application of the Relief Act, the Master
Servicer will deposit in the Collection Account not later than the third
Business Day immediately preceding the related Payment Date an amount equal to
such deficiency net of the related Servicing Fee for such Mortgage Loan, except
to the extent the Master Servicer determines any such advance to be
nonrecoverable from Liquidation Proceeds, Insurance Proceeds or future payments
on any Mortgage Loan. Subject to the foregoing and in the absence of such a
determination, the Master Servicer shall continue to make such advances through
the date that the related Mortgaged Property has, in the judgment of the Master
Servicer, been completely liquidated. If applicable, on the fourth Business Day
preceding each Payment Date, the Master Servicer shall present an Officer's
Certificate to the Indenture Trustee (i) stating that the Master Servicer elects
not to make an Advance in a stated amount and (ii) detailing the reason it deems
the advance to be nonrecoverable.
Section 4.05. COMPENSATING INTEREST PAYMENTS. The Master Servicer shall
deposit in the Collection Account not later than the third Business Day
preceding the Payment Date an amount equal to the Compensating Interest related
to the related Determination Date. The Master Servicer shall not be entitled to
any reimbursement of any Compensating Interest payment.
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ARTICLE V
The Master Servicer
Section 5.01. LIABILITY OF THE MASTER SERVICER. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Master Servicer herein.
Section 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE MASTER SERVICER. Any corporation into which the Master
Servicer may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Master Servicer shall be a party, or any corporation succeeding to the business
of the Master Servicer, shall be the successor of the Master Servicer,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
The Master Servicer may assign its rights and delegate its duties and
obligations under this Servicing Agreement; PROVIDED, that the Person accepting
such assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of FNMA or FHLMC, is reasonably satisfactory to the
Indenture Trustee (as pledgee of the Mortgage Loans) and the Company (in its
sole discretion), is willing to service the Mortgage Loans and executes and
delivers to the Indenture Trustee and the Company an agreement, in form and
substance reason ably satisfactory to the Indenture Trustee and the Company,
which contains an assumption by such Person of the due and punctual performance
and observance of each covenant and condition to be performed or observed by the
Master Servicer under this Servicing Agreement; PROVIDED, FURTHER, that each
Rating Agency's rating of the Bonds in effect immediately prior to such
assignment and delegation will not be qualified, reduced, or withdrawn as a
result of such assignment and delegation (as evidenced by a letter to such
effect from each Rating Agency) or considered to be below investment grade.
Section 5.03. LIMITATION ON LIABILITY OF THE MASTER SERVICER AND
OTHERS. Neither the Master Servicer nor any of the directors or officers or
employees or agents of the Master Servicer shall be under any liability to the
Company, the Issuer, the Owner Trustee, the Indenture Trustee or the Bondholders
for any action taken or for refraining from the taking of any action in good
faith pursuant to this Servicing Agreement, PROVIDED, HOWEVER, that this
provision shall not protect the Master Servicer or any such Person against any
liability which would otherwise be imposed by reason of its willful misfeasance,
bad faith or gross negligence in the performance of its duties hereunder or by
reason of its reckless disregard of its obligations and duties hereunder. The
Master Servicer and any director or officer or employee or agent of the Master
Servicer may rely in good faith on any document of any kind PRIMA FACIE properly
executed and submitted by any Person respecting any matters arising hereunder.
The Master Servicer and any director or officer or employee or agent of the
Master Servicer shall be indemnified by the Company and held harmless against
any loss, liability or expense incurred in connection with any legal action
relating to this Servicing Agreement or the Bonds, including any amount paid to
the Owner Trustee or the Indenture Trustee pursuant to Section 5.06(b), other
than any loss, liability or expense related to
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any specific Mortgage Loan or Mortgage Loans (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Servicing Agreement)
and any loss, liability or expense incurred by reason of its willful
misfeasance, bad faith or gross negligence in the performance of its duties
hereunder or by reason of its reckless disregard of its obligations and duties
hereunder. The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Mortgage Loans in accordance with this Servicing Agreement, and
which in its opinion may involve it in any expense or liability; PROVIDED,
HOWEVER, that the Master Servicer may in its sole discretion undertake any such
action which it may deem necessary or desirable in respect of this Servicing
Agreement, and the rights and duties of the parties hereto and the interests of
the Bondholders hereunder. In such event, the reasonable legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Company, and the Master Servicer shall be entitled
to be reimbursed therefor. The Master Servicer's right to indemnity or
reimbursement pursuant to this Section 5.03 shall survive any resignation or
termination of the Master Servicer pursuant to Section 5.04 or 6.01 with respect
to any losses, expenses, costs or liabilities arising prior to such resignation
or termination (or arising from events that occurred prior to such resignation
or termination).
Section 5.04. MASTER SERVICER NOT TO RESIGN. Subject to the provisions
of Section 5.02, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that the performance
of its obligations or duties hereunder are no longer permissible under
applicable law or (ii) upon satisfaction of the following conditions: (a) the
Master Servicer has proposed a successor servicer to the Company and the
Indenture Trustee in writing and such proposed successor servicer is reasonably
acceptable to the Company and the Indenture Trustee; and (b) each Rating Agency
shall have delivered a letter to the Company and the Indenture Trustee prior to
the appointment of the successor servicer stating that the proposed appointment
of such successor servicer as Master Servicer hereunder will not result in the
reduc tion or withdrawal of the then current rating of the Bonds; PROVIDED,
HOWEVER, that no such resig nation by the Master Servicer shall become effective
until such successor servicer or, in the case of (i) above, the Indenture
Trustee, as pledgee of the Mortgage Loans, shall have assumed the Master
Servicer's responsibilities and obligations hereunder or the Indenture Trustee,
as pledgee of the Mortgage Loans, shall have designated a successor servicer in
accordance with Section 6.02. Any such resignation shall not relieve the Master
Servicer of responsibility for any of the obligations specified in Sections 6.01
and 6.02 as obligations that survive the resignation or termination of the
Master Servicer. The Master Servicer shall have no claim (whether by subroga
tion or otherwise) or other action against any Bondholder for any amounts paid
by the Master Servicer pursuant to any provision of this Servicing Agreement.
Any such determination permitting the resignation of the Master Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Indenture
Trustee.
Section 5.05. DELEGATION OF DUTIES. In the ordinary course of business,
the Master Servicer at any time may delegate any of its duties hereunder to any
Person, including any of its Affiliates, who agrees to conduct such duties in
accordance with standards comparable to those with which the Master Servicer
complies pursuant to Section 3.01. Such delegation shall not
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relieve the Master Servicer of its liabilities and responsibilities with respect
to such duties and shall not constitute a resignation within the meaning of
Section 5.04.
Section 5.06. MASTER SERVICER TO PAY INDENTURE TRUSTEE'S AND OWNER
TRUSTEE'S FEES AND EXPENSES; INDEMNIFICATION. (a) The Master Servicer covenants
and agrees to pay to the Owner Trustee, the Indenture Trustee and any co-trustee
of the Indenture Trustee from time to time, and the Owner Trustee, the Indenture
Trustee and any such co-trustee shall be entitled to, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by each
of them in the execution of the trusts created under the Trust Agreement and the
Indenture and in the exercise and performance of any of the powers and duties
under the Trust Agreement or the Indenture, as the case may be, of the Owner
Trustee, the Indenture Trustee and any co-trustee of the Indenture Trustee, and
the Master Servicer will pay or reimburse (i) the Indenture Trustee and any
co-trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Indenture Trustee or any co-trustee of the Indenture
Trustee in accordance with any of the provisions of this Servicing Agreement
except any such expense, disbursement or advance as may arise from its
negligence or bad faith and (ii) the Owner Trustee upon request for all
reasonable expenses, disbursements and advances incurred or made by the Owner
Trustee in accordance with any of the provisions of this Servicing Agreement
except any such expense, disbursement or advance as may arise from its willful
misconduct, gross negligence or bad faith or grossly negligent failure to act.
(b) The Master Servicer agrees to indemnify the Indenture Trustee and
the Owner Trustee for, and to hold the Indenture Trustee and the Owner Trustee,
as the case may be, harmless against, any claim, tax, penalty, loss, liability
or expense of any kind whatsoever, incurred without negligence (gross negligence
in the case of the Owner Trustee) or willful misconduct on its part, arising out
of, or in connection with, the failure by the Master Servicer to perform its
duties in compliance with this Servicing Agreement, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against any claim in connection with the exercise or performance of any of its
powers or duties under any Basic Document, provided that:
(i) with respect to any such claim, the Indenture
Trustee or Owner Trustee, as the case may be, shall have given the
Master Servicer written notice thereof promptly after the Indenture
Trustee or Owner Trustee, as the case may be, shall have actual
knowledge thereof;
(ii) while maintaining control over its own defense, the
Company, the Indenture Trustee or Owner Trustee, as the case may be,
shall cooperate and consult fully
with the Master Servicer in preparing such defense; and
(iii) notwithstanding anything in this Servicing
Agreement to the contrary, the Master Servicer shall not be liable for
settlement of any claim by the Indenture Trustee or the Owner Trustee,
as the case may be, entered into without the prior consent of the
Master Servicer, which consent shall not be unreasonably withheld.
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No termination of this Servicing Agreement shall affect the obligations created
by this Section 5.06 of the Master Servicer to indemnify the Indenture Trustee
and the Owner Trustee under the condi tions and to the extent set forth herein.
This section shall survive the termination of this Servicing Agreement and the
resignation or removal of the Master Servicer. Any amounts to be paid by the
Master Servicer pursuant to this Subsection may not be paid from the Trust
Estate.
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ARTICLE VI
Default
Section 6.01. SERVICING DEFAULT. If any one of the following events
("Servicing Default") shall occur and be continuing:
(i) Any failure by the Master Servicer to deposit in
the Collection Account or Payment Account any deposit required to be
made under the terms of this Servicing Agreement, including any
Advances and Compensating Interest, which continues unremedied for a
period of five Business Days after the date upon which written notice
of such failure shall have been given to the Master Servicer by the
Company, the Issuer or the Indenture Trustee; or
(ii) Failure on the part of the Master Servicer duly to
observe or perform in any material respect any other covenants or
agreements of the Master Servicer set forth in the Bonds or in this
Servicing Agreement, which failure, in each case, materially and
adversely affects the interests of Bondholders and which continues
unremedied for a period of 30 days after the date on which written
notice of such failure, requiring the same to be remedied, and stating
that such notice is a "Notice of Default" hereunder, shall have been
given to the Master Servicer by the Company, the Issuer or the
Indenture Trustee; or
(iii) The entry against the Master Servicer of a decree
or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a trustee,
conservator, receiver or liquidator in any insolvency, conservatorship,
receivership, readjustment of debt, marshalling of assets and
liabilities or similar proceed ings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
(iv) The Master Servicer shall voluntarily go into
liquidation, consent to the appointment of a conservator, receiver,
liquidator or similar person in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or of or relating to all or
substantially all of its property, or a decree or order of a court,
agency or supervisory authority having jurisdiction in the premises for
the appointment of a conservator, receiver, liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceed ings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force
undischarged, unbonded or unstayed for a period of 60 days; or the
Master Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations;
then, and in every such case, so long as a Servicing Default shall not have been
remedied by the Master Servicer, either the Issuer, subject to the direction of
the Indenture Trustee as pledgee of
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the Mortgage Loans, with the consent of the holders of at least 51% of the
aggregate Bond Principal Balance of the Bonds, by notice then given in writing
to the Master Servicer (and to the Indenture Trustee), terminate all of the
rights and obligations of the Master Servicer as servicer under this Servicing
Agreement other than its right to receive servicing compensation and expenses
for servicing the Mortgage Loans hereunder during any period prior to the date
of such termina tion and the Company, subject to the direction of the Indenture
Trustee as pledgee of the Mortgage Loans, may exercise any and all other
remedies available at law or equity. Any such notice to the Master Servicer
shall also be given to each Rating Agency, the Company and the Issuer. On or
after the receipt by the Master Servicer of such written notice, all authority
and power of the Master Servicer under this Servicing Agreement, whether with
respect to the Bonds or the Mortgage Loans or otherwise, shall pass to and be
vested in the Indenture Trustee, pursuant to and under this Section 6.01; and,
without limitation, the Indenture Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement of each
Mortgage Loan and related documents, or other wise. The Master Servicer agrees
to cooperate with the Indenture Trustee in effecting the termination of the
responsibilities and rights of the Master Servicer hereunder, including, without
limitation, the transfer to the Indenture Trustee for the administration by it
of all cash amounts relating to the Mortgage Loans that shall at the time be
held by the Master Servicer and to be deposited by it in the Collection Account,
or that have been deposited by the Master Servicer in the Collection Account or
thereafter received by the Master Servicer with respect to the Mortgage Loans.
All reasonable costs and expenses (including, but not limited to, attorneys'
fees) incurred in connection with amending this Servicing Agreement to reflect
such succession as Master Servicer pursuant to this Section 6.01 shall be paid
by the predecessor Master Servicer (or if the predecessor Master Servicer is the
Indenture Trustee, the initial Master Servicer) upon presen tation of reasonable
documentation of such costs and expenses.
Notwithstanding any termination of the activities of the Master
Servicer hereunder, the Master Servicer shall be entitled to receive, out of any
late collection of a payment on a Mortgage Loan which was due prior to the
notice terminating the Master Servicer's rights and obligations hereunder and
received after such notice, that portion to which the Master Servicer would have
been entitled pursuant to Sections 3.07 and 3.15 as well as its Servicing Fee in
respect thereof, and any other amounts payable to the Master Servicer hereunder
the entitlement to which arose prior to the termination of its activities
hereunder.
Notwithstanding the foregoing, a delay in or failure of performance
under Section 6.01(i) or under Section 6.01(ii) after the applicable grace
periods specified in such Sections, shall not constitute a Servicing Default if
such delay or failure could not be prevented by the exercise of reasonable
diligence by the Master Servicer and such delay or failure was caused by an act
of God or the public enemy, acts of declared or undeclared war, public disorder,
rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes,
earthquakes, floods or similar causes. The pre ceding sentence shall not relieve
the Master Servicer from using reasonable efforts to perform its respective
obligations in a timely manner in accordance with the terms of this Servicing
Agreement and the Master Servicer shall provide the Indenture Trustee and the
Bondholders with notice of
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such failure or delay by it, together with a description of its efforts to so
perform its obligations. The Master Servicer shall immediately notify the
Indenture Trustee and the Owner Trustee in writing of any Servicing Default.
Section 6.02. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a)
On and after the time the Master Servicer receives a notice of termination
pursuant to Section 6.01 or sends a notice pursuant to Section 5.04, the
Indenture Trustee on behalf of the Bondholders shall be the successor in all
respects to the Master Servicer in its capacity as servicer under this Servicing
Agreement and the transactions set forth or provided for herein and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Master Servicer by the terms and provisions hereof, including but
not limited to the provisions of Article VIII. Nothing in this Servicing
Agreement shall be construed to permit or require the Indenture Trustee to (i)
succeed to the responsibilities, duties and liabilities of the initial Master
Servicer in its capacity as the Seller under the Mortgage Loan Sale and
Contribution Agreement, (ii) be responsible or accountable for any act or
omission of the Master Servicer prior to the issuance of a notice of termination
hereunder, (iii) require or obligate the Indenture Trustee, in its capacity as
successor Master Servicer, to purchase, repurchase or substitute any Mortgage
Loan, (iv) fund any losses on any Eligible Investment directed by any other
Master Servicer, or (v) be responsible for the representa tions and warranties
of the Master Servicer; PROVIDED, HOWEVER, that the Indenture Trustee, as
successor Master Servicer, shall be required to make any Advances to the extent
that the Master Servicer failed to make such Advances. As compensation therefor,
the Indenture Trustee shall be entitled to such compensation as the Master
Servicer would have been entitled to hereunder if no such notice of termination
had been given. Notwithstanding the above, (i) if the Indenture Trustee is
unwilling to act as successor Master Servicer, or (ii) if the Indenture Trustee
is legally unable so to act, the Indenture Trustee on behalf of the Bondholders
may (in the situation described in clause (i)) or shall (in the situation
described in clause (ii)) appoint or petition a court of competent jurisdiction
to appoint any established housing and home finance institution, bank or other
mortgage loan servicer having a net worth of not less than $10,000,000 as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder;
PROVIDED, that any such successor Master Servicer will not result in the
qualification, reduction or withdrawal of the ratings assigned to the Bonds by
the Rating Agencies or the ratings assigned to the Bonds. Pending appointment of
a successor to the Master Servicer hereunder, unless the Indenture Trustee is
prohibited by law from so acting, the Indenture Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation which the
Master Servicer would otherwise have received pursuant to Section 3.15 (or such
lesser compensation as the Indenture Trustee and such successor shall agree).
The appointment of a successor Master Servicer shall not affect any liability of
the predecessor Master Servicer which may have arisen under this Servicing
Agreement prior to its termination as Master Servicer (including, without
limitation, the obligation to purchase Mortgage Loans pursuant to Section 2.05,
to pay any deduc tible under an insurance policy pursuant to Section 3.11 or to
indemnify the Indenture Trustee pursuant to Section 5.06), nor shall any
successor Master Servicer be liable for any acts or omissions of the predecessor
Master Servicer or for any breach by such Master Servicer of any of its
representations or warranties contained herein or in any related document or
agreement. The
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Indenture Trustee and such successor shall take such action, consistent with
this Servicing Agreement, as shall be necessary to effectuate any such
succession.
(b) Any successor, including the Indenture Trustee on behalf of the
Bondholders, to the Master Servicer as servicer shall during the term of its
service as servicer (i) continue to service and administer the Mortgage Loans
for the benefit of the Bondholders, (ii) maintain in force a policy or policies
of insurance covering errors and omissions in the performance of its obligations
as Master Servicer hereunder and a fidelity bond in respect of its officers,
employees and agents to the same extent as the Master Servicer is so required
pursuant to Section 3.11.
(c) Any successor Master Servicer, including the Indenture Trustee on
behalf of the Bondholders, shall not be deemed to be in default or to have
breached its duties hereunder if the predecessor Master Servicer shall fail to
deliver any required deposit to the Collection Account or otherwise cooperate
with any required servicing transfer or succession hereunder.
Section 6.03. NOTIFICATION TO BONDHOLDERS. Upon any termination or
appointment of a successor to the Master Servicer pursuant to this Article VI or
Section 5.04, the Indenture Trustee shall give prompt written notice thereof to
the Bondholders, the Owner Trustee, the Company, the Issuer and each Rating
Agency.
Section 6.04. WAIVER OF DEFAULTS. The Indenture Trustee shall transmit
by mail to all Bondholders, within 10 days after the occurrence of any Servicing
Default known to the Indenture Trustee, unless such Servicing Default shall have
been cured, notice of each such Servicing Default hereunder known to the
Indenture Trustee. The holders of at least 51% of the aggregate Bond Principal
Balance of the Bonds may waive any default by the Master Servicer in the
performance of its obligations hereunder and the consequences thereof, except a
default in the making of or the causing to be made any required distribution on
the Bonds. Upon any such waiver of a past default, such default shall be deemed
to cease to exist, and any Servicing Default arising therefrom shall be deemed
to have been timely remedied for every purpose of this Servicing 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. The Master Servicer
shall give notice of any such waiver to the Rating Agencies.
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ARTICLE VII
Miscellaneous Provisions
Section 7.01. AMENDMENT. This Servicing Agreement may be amended from
time to time by the parties hereto, provided that any amendment be accompanied
by a letter from the Rating Agencies that the amendment will not result in the
downgrading or withdrawal of the rating then assigned to the Bonds.
Section 7.02. GOVERNING LAW. THIS SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 7.03. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
when delivered to:
(a) in the case of the Master Servicer: Impac Funding Corporation
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇
(b) in the case of Rating Agencies: ▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Residential Mortgage
Monitoring Unit
Duff & ▇▇▇▇▇▇ Credit Rating Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Impac CMB Trust Series
1998-2
Fitch IBCA, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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(c) in the case of the Owner Trustee,
the Corporate Trust Office: Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Administration
(d) in the case of the Issuer,
to Impac CMB Trust Series 1998-2: c/o IMH Assets Corp.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party. Any notice required or permitted to be
mailed to a Bondholder shall be given by first class mail, postage prepaid, at
the address of such Bondholder as shown in the Bond Register. Any notice so
mailed within the time prescribed in this Servicing Agreement shall be
conclusively presumed to have been duly given, whether or not the Bondholder
receives such notice. Any notice or other document required to be delivered or
mailed by the Indenture Trustee to any Rating Agency shall be given on a
reasonable efforts basis and only as a matter of courtesy and accommodation and
the Indenture Trustee shall have no liability for failure to deliver such notice
or document to any Rating Agency.
Section 7.04. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Servicing Agreement shall be
for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Servicing Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Servicing
Agreement or of the Bonds or the rights of the Bondholders thereof.
Section 7.05. THIRD-PARTY BENEFICIARIES. This Servicing Agreement will
inure to the benefit of and be binding upon the parties hereto, the Bondholders,
the Owner Trustee, the Indenture Trustee and their respective successors and
permitted assigns. Except as otherwise provided in this Servicing Agreement, no
other Person will have any right or obligation hereunder. The Indenture Trustee
shall have the right to exercise all rights of the Issuer under this Agreement.
Section 7.06. COUNTERPARTS. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 7.07. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
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Section 7.08. TERMINATION. The respective obligations and
responsibilities of the Master Servicer and the Issuer created hereby shall
terminate upon the satisfaction and discharge of the Indenture pursuant to
Section 4.10 thereof.
Section 7.09. NO PETITION. The Master Servicer, by entering into this
Servicing Agreement, hereby covenants and agrees that it will not at any time
institute against the Issuer, or join in any institution against the Issuer, any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations of the Issuer. This section shall
survive the termination of this Servicing Agreement by one year.
Section 7.10. NO RECOURSE. The Master Servicer acknowledges that no
recourse may be had against the Issuer, except as may be expressly set forth in
this Servicing Agreement.
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ARTICLE VIII
DUTIES OF THE MASTER SERVICER
Section 8.01. ADMINISTRATIVE DUTIES. (a) DUTIES WITH RESPECT TO THE
INDENTURE. The Master Servicer shall perform all its duties and the duties of
the Issuer under the Indenture. In addition, the Master Servicer shall consult
with the Owner Trustee as the Master Servicer deems appropriate regarding the
duties of the Issuer under the Indenture. The Master Servicer shall monitor the
performance of the Issuer and shall advise the Owner Trustee when action is
necessary to comply with the Issuer's duties under the Indenture. The Master
Servicer shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Indenture. In furtherance of
the foregoing, the Master Servicer shall take all necessary action that is the
duty of the Issuer to take pursuant to the Indenture.
(b) DUTIES WITH RESPECT TO THE ISSUER.
(i) In addition to the duties of the Master Servicer
set forth in this Servicing Agreement or any of the Basic Documents, the Master
Servicer shall perform such calculations and shall prepare for execution by the
Issuer or the Owner Trustee or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Issuer or the Owner Trustee to prepare,
file or deliver pursuant to this Servicing Agreement or any of the Basic
Documents or under state and federal tax and securities laws, and at the request
of the Owner Trustee shall take all appropriate action that it is the duty of
the Issuer to take pursuant to this Servicing Agreement or any of the Basic
Documents. In accordance with the directions of the Issuer or the Owner Trustee,
the Master Servicer shall administer, perform or supervise the performance of
such other activities in connection with the Bonds (including the Basic
Documents) as are not covered by any of the foregoing provisions and as are
expressly requested by the Issuer or the Owner Trustee and are reasonably within
the capability of the Master Servicer.
(ii) Notwithstanding anything in this Servicing
Agreement or any of the Basic Documents to the contrary, the Master Servicer
shall be responsible for promptly notifying the Owner Trustee in the event that
any withholding tax is imposed on the Issuer's payments (or allocations of
income) to an Owner (as defined in the Trust Agreement) as contemplated in
Section 5.03 of the Trust Agreement. Any such notice shall be in writing and
specify the amount of any withholding tax required to be withheld by the Owner
Trustee pursuant to such provision.
(iii) In carrying out the foregoing duties or any of
its other obligations under this Servicing Agreement, the Master Servicer may
enter into transactions with or otherwise deal with any of its Affiliates;
PROVIDED, HOWEVER, that the terms of any such transactions or dealings shall be
in accordance with any directions received from the Issuer and shall be, in the
Master Servicer's opinion, no less favorable to the Issuer in any material
respect than with terms made available to unrelated third-parties.
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(c) TAX MATTERS. The Master Servicer shall prepare and file
(or cause to be prepared and filed), on behalf of the Owner Trustee, all tax
returns and information reports, tax elections, financial statements and such
annual or other reports of the Issuer as are necessary for preparation of tax
returns and information reports as provided in Section 5.03 of the Trust
Agreement, including without limitation Form 1099. All tax returns and
information reports shall be signed by the Owner Trustee as provided in Section
5.03 of the Trust Agreement.
(d) NON-MINISTERIAL MATTERS. With respect to matters that in
the reasonable judgment of the Master Servicer are non-ministerial, the Master
Servicer shall not take any action pursuant to this Article VIII unless within a
reasonable time before the taking of such action, the Master Servicer shall have
notified the Owner Trustee and the Indenture Trustee of the proposed action and
the Owner Trustee and, with respect to items (A), (B), (C) and (D) below, the
Indenture Trustee shall not have withheld consent or provided an alternative
direction. For the purpose of the preceding sentence, "non-ministerial matters"
shall include:
(A) the amendment of or any supplement to the
Indenture;
(B) the initiation of any claim or lawsuit by the
Issuer and the compromise of any action, claim or lawsuit
brought by or against the Issuer (other than in connection
with the collection of the Mortgage Loans);
(C) the amendment, change or modification of this
Agreement or any of the Basic Documents;
(D) the appointment of successor Certificate Paying
Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of successor Servicers or the
consent to the assignment by the Certificate Registrar, Paying
Agent or Trustee of its obligations under the Indenture; and
(E) the removal of the Indenture Trustee.
Section 8.02. RECORDS. The Master Servicer shall maintain
appropriate books of account and records relating to services performed under
this Servicing Agreement, which books of account and records shall be accessible
for inspection by the Issuer at any time during normal business hours.
Section 8.03. ADDITIONAL INFORMATION TO BE FURNISHED. The
Master Servicer shall furnish to the Issuer from time to time such additional
information regarding the Bonds as the Issuer shall reasonably request.
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IN WITNESS WHEREOF, the Master Servicer and the Issuer have caused this
Servicing Agreement to be duly executed by their respective officers or
representatives all as of the day and year first above written.
IMPAC FUNDING CORPORATION,
as Master Servicer
By: /s/ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
IMPAC CMB TRUST SERIES 1998-2,
as Issuer
Wilmington Trust Company, not in its
capacity but solely as Owner Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Financial Services Officer
EXHIBIT A
MORTGAGE LOAN SCHEDULE
(provided upon request)
EXHIBIT B
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with your administration of the Mortgage Loans, we request the
release of the Mortgage File described below.
Servicing Agreement Dated:
Series #:
Account #:
Pool #:
Loan #:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan Prepaid in Full
Other
Mortgage Loan Repurchased
Please deliver the Mortgage File to:____________________________________________
________________________________________________________________________________
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Servicing Agreement."
_________________________
[Name of Master Servicer]
Authorized Signature
******************************************************************
TO CUSTODIAN/Indenture Trustee: Please acknowledge this request, and check off
documents being enclosed with a copy of this form. You should retain this form
for your files in accordance with the terms of the Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Primary Insurance Policy
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or
Deed of Trust
[ ] Title Insurance Policy
[ ] Other: ___________________________
_________________________
Name
_________________________
Title
_________________________
Date
B-1