Exhibit 99.13
EXECUTION COPY
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ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
among
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY,
as Assignor
GS MORTGAGE SECURITIES CORP.,
as Assignee
and
AVELO MORTGAGE, L.L.C.
as Servicer
Dated as of
February 24, 2006
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ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated
February 24, 2006 (this "Agreement"), among ▇▇▇▇▇▇▇ Sachs Mortgage Company
("Assignor"), GS Mortgage Securities Corp. ("Assignee") and Avelo Mortgage,
L.L.C. ( the "Company").
For and in consideration of the mutual promises contained
herein and other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. Assignment, Assumption and Conveyance.
The Assignor hereby conveys, sells, grants, transfers and
assigns to the Assignee all of the right, title and interest (other than those
rights specifically retained by the Assignor pursuant to this Agreement) of the
Assignor, as purchaser, in, to and under (a) those certain Mortgage Loans listed
on the schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans"), and (b) solely insofar as it relates to the Mortgage Loans,
that certain Flow Servicing Agreement, dated as of January 1, 2006 (the
"Servicing Agreement"), by and between the Assignor, as owner (the "Owner") and
the Company. The Assignor hereby agrees that it will (i) deliver possession of
notes evidencing the Mortgage Loans to, or at the direction of, the Assignee or
its designee and (ii) take in a timely manner all necessary steps under all
applicable laws to convey and to perfect the conveyance of the Mortgage Loans as
required under the Trust Agreement (as defined below).
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Servicing Agreement that are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement, (ii) any
rights and obligations of the Assignor pursuant to the Servicing Agreement
arising prior to the date hereof or (iii) the rights and obligations of the
Owner under the following sections of the Servicing Agreement: Section 6.02
(relating to the Owner's right to terminate the Company) and Section 5.01
(relating to the Owner's right to receive information from the Servicer).
The Assignee hereby assumes all of the Assignor's obligations
under the Mortgage Loans and the Servicing Agreement solely insofar as such
obligations relate to the Mortgage Loans, other than the obligations set forth
in clauses (ii) and (iii) of the preceding paragraph.
The parties hereto agree that with respect to the Mortgage
Loans being serviced under the Servicing Agreement the Servicing Fee Rate for
the Mortgage Loans shall be the rate set forth on the Mortgage Loan Schedule.
2. Recognition of the Company.
From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Servicing Agreement
(solely to the extent set forth herein) and this Agreement to U.S. Bank National
Association, as trustee (including its successors in interest and any successor
trustees under the Trust Agreement, the "Trustee"), of the GSAA Home Equity
Trust 2006-3 (the "Trust") created pursuant to a Master Servicing and Trust
Agreement, dated as of February 1, 2006 (the "Trust Agreement"), among the
Assignee, the Trustee, JPMorgan Chase Bank, National Association, as a
custodian, Deutsche Bank National Trust Company, as a custodian, U.S. Bank
National Association, as a custodian and JPMorgan Chase Bank, National
Association, as master servicer (including its successors in interest and any
successor servicer under the Trust Agreement, the "Master Servicer") and as
securities administrator. The Company hereby acknowledges and agrees that from
and after the date hereof (i) the Trust will be the owner of the Mortgage Loans
and the Company will be the servicer of the Mortgage Loans on or after the
applicable Transfer Date pursuant to the terms set forth in the Trust Agreement,
(ii) the Company shall look solely to the Trust (including the Trustee and the
Master Servicer acting on the Trust's behalf) for performance of any obligations
of the Assignor under the Mortgage Loans and the Servicing Agreement (solely
insofar as it relates to the Mortgage Loans) (except for such obligations of the
Assignor retained by the Assignor hereunder), (iii) the Trust (including the
Trustee and the Master Servicer acting on the Trust's behalf) shall have all the
rights and remedies available to the Assignor, insofar as they relate to the
Mortgage Loans, under the applicable purchase agreement pursuant to which the
Owner purchased the related Mortgage Loans from the related Seller and the
Servicing Agreement, including, without limitation, the enforcement of the
document delivery requirements set forth in Section 6.03 of the related purchase
agreement, and shall be entitled to enforce all of the obligations of the
Company thereunder insofar as they relate to the Mortgage Loans, including
without limitation, the remedies for breaches of representations and warranties
set forth in Article IX of the Servicing Agreement (except for the rights and
remedies retained by the Assignor hereunder), (iv) all references to the Owner
under the Servicing Agreement insofar as they relate to the Mortgage Loans shall
be deemed to refer to the Trust (except to the extent of the rights and
obligations retained by the Assignor hereunder) (including the Trustee and the
Servicer acting on the Trust's behalf) and (v) the Mortgage Loans will be part
of a REMIC, and the Company shall service the Mortgage Loans and any real
property acquired upon default thereof (including, without limitation, making or
permitting any modification, waiver or amendment of any term of any Mortgage
Loan) prior to the applicable Transfer Date in accordance with the Servicing
Agreement but in no event in a manner that would (A) cause the REMIC to fail to
qualify as a REMIC or (B) result in the imposition of a tax upon the REMIC
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code, the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code, and the tax on "net income from foreclosure
property" as set forth in Section 860G(c) of the Code). Neither the Company nor
the Assignor shall amend or agree to amend, modify, waiver, or otherwise alter
any of the terms or provisions of the Servicing Agreement which amendment,
modification, waiver or other alteration would in any way affect the Mortgage
Loans or the Company's performance under the Servicing Agreement with respect to
the Mortgage Loans without the prior written consent of the Trustee.
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3. Modification of the Servicing Agreement. Only in so far
as it relates to the Mortgage Loans, the Servicer and the Assignor hereby amend
the Servicing Agreement as follows:
(a) Section 2.05 shall be amended as follows:
(i) "and" shall be deleted from the end of subsection
(vii);
(ii) subsection (viii) shall be amended by deleting the
"." at the end of subsection (viii) and replacing it
with "; and'
(iii) a new subsection (ix) shall be added to Section 2.05
immediately following subsection (viii) which shall
read as follows:
"(ix) to reimburse itself for Monthly Advances of the
Servicer's funds made pursuant to Section 3.04, the Servicer's right to
reimburse itself pursuant to this subclause (viii) being limited to related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and such other
amounts as may be collected by the Servicer from the Mortgagor or otherwise
relating to the Mortgage Loan, including amounts received on the related
Mortgage Loan which represent late payments of principal and/or interest
respecting which any such advance was made, it being understood that, in the
case of any such reimbursement, the Servicer's right thereto shall be prior to
the rights of Purchaser."
(b) the third paragraph of Section 2.18 shall be
deleted and replaced as follows:
"The Servicer shall use its best efforts to dispose of the REO
Property as soon as possible and shall sell such REO Property in any event
within one year after title has been taken to such REO Property, unless (i) a
REMIC election has not been made with respect to the arrangement under which the
Mortgage Loans and the REO Property are held, and (ii) the Servicer determines,
and gives an appropriate notice to the Purchaser to such effect, that a longer
period is necessary for the orderly liquidation of such REO Property; provided
however, that the Servicer agrees not to sell or dispose of any such Mortgage
Loan to a person who acquires such Mortgage Loan using a purchase money
mortgage. If a period longer than one year is permitted under the foregoing
sentence and is necessary to sell any REO Property, the Servicer shall report
monthly to the Purchaser as to the progress being made in selling such REO
Property, and provided further, that if the Servicer is unable to sell such REO
Property within three years of acquisition, the Servicer shall obtain an
extension from the Internal Revenue Service."
(c) Section 3.04 will be amended by adding a new
paragraph as follows:
"In the event that the Servicer determines that any
such advances are non-recoverable, the Servicer shall provide the Owner with a
certificate signed by two officers of the Servicer evidencing such
determination. Notwithstanding the foregoing, the Servicer shall not be
permitted to make any advances from amounts held for future distribution, and
instead shall be required to make all advances from its own funds, unless the
Servicer, its parent, or their respective successors hereunder shall have a
long term credit rating of at least "A" by Fitch, Inc., or the equivalent
rating of another Rating Agency."
(d) a new section, Section 11.17, will be added
immediately following Section 11.16 which shall read as follows:
"Section 11.17 Third-Party Beneficiary. JPMorgan Chase
Bank, National Association, as master servicer, securities administrator and a
custodian under the Master Servicing and Trust Agreement, dated as of February
1, 2006, among GS Mortgage Securities
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Corp., U.S. Bank National Association, as trustee and Deutsche Bank National
Trust Company, as custodian, shall be considered a third-party beneficiary to
this Agreement entitled to all of the rights and benefits accruing to it as if
it were a direct party to this Agreement."
4. Representations and Warranties of the Company.
The Company warrants and represents to and covenants with, the
Assignor, the Assignee and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its formation;
(b) The Company has full power and authority to
execute, deliver and perform its obligations under this Agreement and has full
power and authority to perform its obligations under the Servicing
Agreement. The execution by the Company of this Agreement is in the ordinary
course of the Company's business and will not conflict with, or result in a
breach of, any of the terms, conditions or provisions of the Company's
charter or bylaws or any legal restriction, or any material agreement or
instrument to which the Company is now a party or by which it is bound, or
result in the violation of any law, rule, regulation, order, judgment or
decree to which the Company or its property is subject. The execution,
delivery and performance by the Company of this Agreement have been duly
authorized by all necessary corporate action on part of the Company. This
Agreement has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the Assignee, will
constitute the valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms except as enforceability may
be limited by bankruptcy, reorganization, insolvency, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, and by general principles of equity regardless of whether
enforceability is considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required
to be obtained or made by the Company in connection with the execution, delivery
or performance by the Company of this Agreement or the consummation by it of the
transaction contemplated hereby;
(d) The Company shall establish a Custodial Account and an
Escrow Account under the Servicing Agreement in favor of the Trust with respect
to the Mortgage Loans separate from the Custodial Account and Escrow Account
previously established under the Servicing Agreement in favor of the Assignor;
(e) There is no action, suit, proceeding or investigation
pending or threatened against the Company, before any court, administrative
agency or other tribunal, which would draw into question the validity of this
Agreement or the Servicing Agreement, or which, either in any one instance or
in the aggregate, is likely to result in any material adverse change in the
ability of the Company to perform its obligations under this Agreement or the
Servicing Agreement, and the Company is solvent;
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(f) The Company has serviced the Mortgage Loans in
accordance with the Servicing Agreement and has provided accurate "paid through"
data (assuming the correctness of all "paid through" data provided by the
Assignor to the Company at the time the Company began servicing the Mortgage
Loans) with respect to the Mortgage Loans to the Assignor;
(g) Except as reflected in the "paid through" data
delivered to the Assignor (assuming the correctness of all "paid through" data
provided by the Assignor to the Company at the time the Company began servicing
the Mortgage Loans), there is no payment default existing under any Mortgage or
any Mortgage Note as of the Securitization Closing Date; and
(h) To the Company's knowledge, there is no non-payment
default existing under any Mortgage or Mortgage Note, or any event which, with
the passage of time or with notice and the termination of any grace or cure
period, would constitute a non-payment default, breach, violation or event
which would permit acceleration as of the Securitization Closing Date.
Pursuant to Section 9.01 of the Servicing Agreement, the
Company hereby represents and warrants, for the benefit of the Assignor, the
Assignee and the Trust, that the representations and warranties set forth in
Article IX of the Servicing Agreement are true and correct as of the date hereof
as if such representations and warranties were made on the date hereof.
5. Representations and Warranties of the Assignor.
The Assignor warrants and represents to the Assignee and the
Trust as of date hereof that:
(a) Prior Assignments; Pledges. Except for the sale to the
Assignee, the Assignor has not assigned or pledged any Mortgage Note or the
related Mortgage or any interest or participation therein;
(b) Releases. The Assignor has not satisfied, canceled or
subordinated in whole or in part, or rescinded any Mortgage, and the Assignor
has not released the related Mortgaged Property from the lien of any Mortgage,
in whole or in part, nor has the Assignor executed an instrument that would
effect any such release, cancellation, subordination, or rescission. The
Assignor has not released any Mortgagor, in whole or in part, except in
connection with an assumption agreement or other agreement approved by the
related federal insurer, to the extent such approval was required;
(c) No Waiver. The Assignor has not waived the performance
by any Mortgagor of any action, if such Mortgagor's failure to perform such
action would cause the Mortgage Loan to be in default, nor has the Company
waived any default resulting from any action or inaction by such Mortgagor;
(d) Compliance with Applicable Laws. With respect to each
Mortgage Loan, any and all requirements of any federal, state or local law
including, without limitation,
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usury, truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, predatory and abusive lending or
disclosure laws applicable to such Mortgage Loan, including without limitation,
any provisions relating to prepayment charges, have been complied with;
(e) High Cost. With respect to the Mortgage Loans, no
Mortgage Loan is categorized as "High Cost" pursuant to the then-current
Standard & Poor's Glossary for File Format for LEVELS(R) Version 5.6(c),
Appendix E, as revised from time to time and in effect as of the Original
Purchase Date. Furthermore, none of the Mortgage Loans sold by the Seller are
classified as (a) a "high cost mortgage" loan under the Home Ownership and
Equity Protection Act of 1994 or (b) a "high cost home," "covered," "high-cost,"
"high-risk home," or "predatory" loan under any other applicable state, federal
or local law;
(f) Georgia Fair Lending Act. No Mortgage Loan is secured
by a property in the state of Georgia and originated between October 1, 2002 '
and March 7, 2003;
(g) Qualified Mortgage Loan. Each Mortgage Loan is a
"qualified mortgage" under Section 860G(a)(3) of the Internal Revenue Code of
1986, as amended; and
(h) Credit Reporting. The Assignor will cause to be fully
furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on Mortgagor credit files to Equifax, Experian
and Trans Union Credit Information Company (three of the credit
repositories), on a monthly basis; and
(i) Prepayment Premiums. To the Assignor's knowledge, no
Mortgage Loan originated on or after October 1, 2002 will impose a
prepayment premium for a term in excess of three years. Any loans
originated prior to such date, and any non-subprime loans, will not impose
prepayment penalties in excess of five years.
6. Remedies for Breach of Representations and Warranties
of the Assignor.
The Assignor hereby acknowledges and agrees that in the event
of any breach of the representations and warranties made by the Assignor set
forth in Section 4 hereof or in Section 1 of the Representations and Warranties
Agreement, dated as of February 24, 2006, between the Assignor and Assignee (the
"Representations and Warranties Agreement") that materially and adversely
affects the value of the Mortgage Loans or the interest of the Assignee or the
Trust therein, within sixty (60) days of the earlier of either discovery by or
notice to the Assignor of such breach of a representation or warranty, it shall
cure, purchase, cause the purchase of, or substitute for the applicable Mortgage
Loan in the same manner and subject to the conditions set forth in Section 2 of
the Representations and Warranties Agreement.
7. Miscellaneous.
(a) This Agreement shall be construed in accordance with
the laws of the State of New York, without regard to conflicts of law
principles, and the obligations,
7
rights and remedies of the parties hereunder shall be determined in accordance
with such laws.
(b) No term or provision of this Agreement may be waived
or modified unless such waiver or modification is in writing and signed by the
party against whom such waiver or modification is sought to be enforced, with
the prior written consent of the Trustee.
(c) This Agreement shall inure to the benefit of (i) the
successors and assigns of the parties hereto and (ii) the Trust (including the
Trustee and the Master Servicer acting on the Trust's behalf). Any entity into
which the Assignor, Assignee or the Company may be merged or consolidated shall,
without the requirement for any further writing, be deemed Assignor, Assignee or
the Company, respectively, hereunder.
(d) Each of this Agreement and the Servicing Agreement
shall survive the conveyance of the Mortgage Loans to the Trust and the
assignment of the purchase agreements and the Servicing Agreement (to the extent
assigned hereunder) by the Assignor to the Assignee and by Assignee to the Trust
and nothing contained herein shall supersede or amend the terms of the purchase
agreements and the Servicing Agreement.
(e) This Agreement may be executed simultaneously in any
number of counterparts. Each counterpart shall be deemed to be an original and
all such counterparts shall constitute one and the same instrument.
(f) In the event that any provision of this Agreement
conflicts with any provision of the purchase agreements or the Servicing
Agreement with respect to the Mortgage Loans, the terms of this Agreement shall
control.
(g) Capitalized terms used in this Agreement (including
the exhibits hereto) but not defined in this Agreement shall have the meanings
given to such terms in the purchase agreements or the Servicing Agreement, as
applicable.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized officers as of the date first above
written.
GS MORTGAGE SECURITIES CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY, a New York
limited partnership
By: ▇▇▇▇▇▇▇ SACHS REAL ESTATE FUNDING
CORP., a New York corporation, as
General Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
AVELO MORTGAGE, L.L.C., a Delaware limited
liability company
(Servicer)
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
Conduit/Avelo Step 1 AAR
EXHIBIT A
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Mortgage Loan Schedule
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[On File with the Securities Administrator as provided by the Depositor]
A-1
EXHIBIT 1
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Servicing Agreement
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[See Attached]
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FLOW SERVICING AGREEMENT
between
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY,
Owner
and
AVELO MORTGAGE, L.L.C.,
Servicer
Dated as of January 1, 2006
CONVENTIONAL FIXED AND ADJUSTABLE
RATE RESIDENTIAL MORTGAGE LOANS
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definitions...................................................1
ARTICLE II
SERVICING
Section 2.01 Servicer to Act as Servicer..................................14
Section 2.02 Liquidation of Mortgage Loans................................15
Section 2.03 Collection of Mortgage Loan Payments.........................15
Section 2.04 Establishment of and Deposits to Custodial Account...........15
Section 2.05 Permitted Withdrawals From Custodial Account.................17
Section 2.06 Establishment of and Deposits to Escrow Account..............18
Section 2.07 Permitted Withdrawals From Escrow Account....................18
Section 2.08 Payment of Taxes, Insurance and Other Charges With
Respect to First Lien Loans.................................19
Section 2.09 Protection of Accounts.......................................19
Section 2.10 Maintenance of Hazard Insurance..............................20
Section 2.11 Maintenance of Fidelity Bond and Errors and
Omissions Insurance........................................22
Section 2.12 Inspections..................................................22
Section 2.13 Restoration of Mortgaged Property............................22
Section 2.14 Liquidation Reports..........................................23
Section 2.15 Notification of Adjustments..................................23
Section 2.16 Reports of Foreclosures and Abandonments of
Mortgaged Property.........................................23
Section 2.17 Credit Reporting.............................................23
Section 2.18 Title, Management and Disposition of REO Property............23
Section 2.19 Permitted Withdrawals with Respect to REO Property...........24
Section 2.20 Real Estate Owned Reports....................................25
Section 2.21 Reports of Foreclosures and Abandonments of
Mortgaged Property.........................................25
Section 2.22 Recordation of Assignments of Mortgage.......................25
Section 2.23 Additional Servicing Requirements............................25
Section 2.24 Tax and Flood Service Contracts..............................26
ARTICLE III
PAYMENTS TO OWNER
Section 3.01 Remittances..................................................26
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Section 3.02 Statements to Owner..........................................26
Section 3.03 Advances by Servicer.........................................27
Section 3.04 Principal and Interest Advances by Servicer..................27
ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property..............................28
Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files......28
Section 4.03 Servicing Compensation.......................................29
Section 4.04 Right to Examine Servicer Records............................29
Section 4.05 Compliance with ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999...............29
ARTICLE V
SERVICER TO COOPERATE
Section 5.01 Provision of Information.....................................30
Section 5.02 Financial Statements; Servicing Facilities...................30
Section 5.03 Covenant.....................................................30
ARTICLE VI
TERMINATION
Section 6.01 Liability of the Owner and the Servicer......................30
Section 6.02 Termination..................................................31
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the
Subsequent Transfer Date...................................32
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification..............................................33
Section 8.02 Limitation on Liability of Servicer and Others...............33
Section 8.03 Limitation on Resignation and Assignment by Servicer.........34
Section 8.04 Assignment by Owner..........................................35
Section 8.05 Merger or Consolidation of the Servicer......................35
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ARTICLE IX
REPRESENTATIONS AND WARRANTIES
Section 9.01 Representations and Warranties Regarding the Servicer........36
Section 9.02 Representations and Warranties of the Owner..................37
ARTICLE X
DEFAULT
Section 10.01 Events of Default............................................38
Section 10.02 Waiver of Defaults...........................................39
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Notices......................................................40
Section 11.02 Waivers......................................................40
Section 11.03 [Reserved]...................................................41
Section 11.04 Entire Agreement; Amendment..................................41
Section 11.05 Execution; Binding Effect....................................41
Section 11.06 Headings.....................................................41
Section 11.07 Applicable Law...............................................41
Section 11.08 Relationship of Parties......................................41
Section 11.09 Severability of Provisions...................................41
Section 11.10 General Interpretive Principles..............................41
Section 11.11 Reproduction of Documents....................................42
Section 11.12 Further Agreements...........................................42
Section 11.13 No Solicitation..............................................42
Section 11.14 Waiver of Trial by Jury......................................43
Section 11.15 Submission To Jurisdiction; Waivers..........................43
Section 11.16 Confidential Information.....................................43
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01 Intent of the Parties; Reasonableness........................44
Section 12.02 Additional Representations and Warranties of the Servicer....45
Section 12.03 Information to Be Provided by the Servicer...................45
Section 12.04 Servicer Compliance Statement................................49
Section 12.05 Report on Assessment of Compliance and Attestation...........49
Section 12.06 Use of Subservicers and Subcontractors.......................50
Section 12.07 Indemnification; Remedies....................................51
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EXHIBITS
SCHEDULE 1 REQUIRED FIELDS FOR MONTHLY REMITTANCE REPORT
SCHEDULE 2 CONTENTS OF EACH MORTGAGE LOAN DOCUMENTS
SCHEDULE 3 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 1 FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT 2 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 3 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 4 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 6 FORM OF ANNUAL CERTIFICATION
EXHIBIT 7 SERVICING CRITERIA TO BE ADDRESSED IN
ASSESSMENT OF COMPLIANCE
EXHIBIT 8 SUBPRIME DEFAULT AND REO SERVICING STANDARDS
EXHIBIT 9 REO SERVICING STANDARDS
EXHIBIT 10 FORM OF NOTICE LETTER
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FLOW SERVICING AGREEMENT
This Flow Servicing Agreement (the "Agreement") is entered into
as of the 1st day of January 2006, by and between AVELO MORTGAGE, L.L.C. (the
"Servicer"), a Delaware limited liability company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE
COMPANY, a New York limited partnership (the "Owner").
WHEREAS, the Owner has purchased certain conventional,
residential, fixed and adjustable rate, first and second lien mortgage loans
(the "Mortgage Loans") from various originators which were delivered as whole
loans on a servicing released basis pursuant to the related Purchase Agreement
(as defined below) by and between the Owner and Seller (as defined below);
WHEREAS, the Servicer regularly services residential mortgage
loans and is or will be servicing the Mortgage Loans pursuant to this
Agreement; and
WHEREAS, the Servicer has agreed to service and administer the
Mortgage Loans that become subject to this Agreement on an "at-will" basis,
and the parties desire to provide the terms and conditions of such servicing
by the Servicer.
NOW, THEREFORE, in consideration of the mutual covenants made
herein and for other good and valuable consideration the sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. The following terms are defined as
follows (except as otherwise agreed by the parties).
Accepted Servicing Practices: With respect to any Mortgage Loan
or REO Property, each of (a) those mortgage servicing practices (including
collection procedures) of prudent mortgage lending institutions which service
mortgage loans of the same type as such Mortgage Loan in the jurisdiction
where the related Mortgaged Property is located and in compliance with all
applicable federal, state and local laws which (i) servicing practices are in
compliance with all federal, state and local laws and regulations, (ii) shall
be in accordance with the Servicer's policies and procedures as amended from
time to time for mortgage loans of the same type, (iii) are in accordance with
the terms of the Mortgage and the Mortgage Note and (iv) at a minimum based on
the requirements set forth from time to time by ▇▇▇▇▇▇ Mae.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan.
Advance Facility: As defined in Section 8.03.
Affiliate: With respect to any specified Person, any other
Person controlling or controlled by or under common control with such
specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
Agreement: This agreement between the Owner and the Servicer
for the servicing and administration of the Mortgage Loans.
Ancillary Income: All income derived from the Mortgage Loans
(other than payments or other collections in respect of principal, interest,
Escrow Payments, Servicing Fees and prepayment penalties attributable to the
Mortgage Loans), including but not limited to interest received on funds
deposited in the Custodial Account or any Escrow Account (subject to
applicable law), all late charges, assumption fees, reconveyance fees,
subordination fees, demand statement fees, modification fees, if any, escrow
account benefits, reinstatement fees, fees received with respect to checks on
bank drafts returned by the related bank for insufficient funds, assumption
fees and other similar types of fees arising from or in connection with any
Mortgage Loan to the extent not otherwise payable to the Mortgagor under
applicable law or pursuant to the terms of the related Mortgage Note.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of
the Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Owner.
BPO: A broker price opinion.
Business Day: Any day other than (i) a Saturday or Sunday, (ii)
a day on which banking and savings and loan institutions in (a) the State of
New York, (b) the state in which the Servicer's servicing operations are
located or (c) or (iii) the State in which the Custodian's operations are
located, are authorized or obligated by law or executive order to be closed.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of (a) the sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance of
as of such date of any mortgage loan or mortgage loans that are senior or
equal in priority to the Second Lien Loan and which are secured by the same
Mortgaged Property to (b) the Appraised Value as determined pursuant to the
Underwriting Guidelines of the related Mortgaged Property as of the
origination of the Second Lien Loan.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange
Commission.
Condemnation Proceeds: All awards or settlements in respect of
a Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
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Custodial Account: The separate account or accounts created and
maintained pursuant to Section 2.04.
Custodial Agreement: With respect to each Mortgage Loan, the
agreement between the Owner and the custodian of the Mortgage Loan
Documents for such Mortgage Loan, governing the retention of the originals of
each Mortgage Note, Mortgage, Assignment of Mortgage and other documents
constituting the related Mortgage Loan Documents.
Custodian: With respect to each Mortgage Loan, the custodian of
the Mortgage Loan Documents under the related Custodial Agreement, or its
successor in interest or permitted assigns, or any successor to the Custodian
under the related Custodial Agreement as therein provided.
Cut-off Date: The date set forth as such in the related
Purchase Agreement.
Depositor: The depositor, as such term is defined in Regulation
AB, with respect to any Securitization Transaction.
Determination Date: The last day of the month preceding the
related Remittance Date.
Due Date: The day of the month on which the Monthly Payment is
due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to amounts collected by the Servicer
and required to be remitted to the Owner on each Remittance Date, the period
commencing on the first day of the month and ending on the last day of the
month preceding the month of the Remittance Date.
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than one day prior to the Remittance Date in each month (or such other
date as permitted under this Agreement):
(i) direct obligations of, and obligations fully guaranteed as
to timely payment of principal and interest by, the United States of
America or any agency or instrumentality of the United States of
America the obligations of which are backed by the full faith and
credit of the United States of America ("Direct Obligations");
(ii) federal funds, demand and time deposits in, certificates
of deposits of, or bankers' acceptances issued by, any depository
institution or trust company (including U.S. subsidiaries of foreign
depositories) incorporated or organized under the laws of the United
States of America or any state thereof and subject to supervision
and examination by federal or state banking authorities, so long as
at the time of such investment or the contractual commitment
providing for such investment the commercial paper or other
short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the
commercial paper or other short-term debt or deposit obligations of
such holding company or deposit institution, as the case may be)
have been rated by each
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Rating Agency in its highest short-term rating category or one
of its two highest long-term rating categories;
(iii) repurchase agreements collateralized by Direct
Obligations or securities guaranteed by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac
with any registered broker/dealer subject to Securities Investors'
Protection Corporation jurisdiction or any commercial bank insured
by the FDIC, if such broker/dealer or bank has an uninsured,
unsecured and unguaranteed obligation rated by each Rating Agency in
its highest short-term rating category;
(iv) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States
of America or any state thereof which have a credit rating from each
Rating Agency, at the time of investment or the contractual
commitment providing for such investment, at least equal to one of
the two highest long-term credit rating categories of each Rating
Agency; provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that
investment therein will cause the then outstanding principal amount
of securities issued by such corporation to exceed 20% of the
aggregate principal amount of all Eligible Investments in the
Custodial Accounts and the Escrow Accounts; provided, further, that
such securities will not be Eligible Investments if they are
published as being under review with negative implications from
either Rating Agency;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 180 days after the date
of issuance thereof) rated by each Rating Agency in its highest
short-term rating category;
(vi) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of
the United States of America or its agencies or instrumentalities
(which obligations are backed by the full faith and credit of the
United States of America) held by a custodian in safekeeping on
behalf of the holders of such receipts; and
(vii) any other demand, money market, common trust fund or time
deposit or obligation, or interest-bearing or other security or
investment rated in the highest rating category by each Rating
Agency;
provided, however, that (a) any such instrument shall be acceptable to the
Rating Agencies, and (b) no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Errors and Omissions Insurance Policy: An errors and omissions
insurance policy to be maintained by the Servicer pursuant to Section 2.12.
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Escrow Account: The separate account or accounts created and
maintained pursuant to Section 2.06.
Escrow Payment: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the mortgagee pursuant to the Mortgage or any other
document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 10.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇ Mae: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇
▇▇▇ Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FHA: The Federal Housing Administration, an agency within the
United States Department of Housing and Urban Development, or any successor
thereto and including the Federal Housing Commissioner and the Secretary of
Housing and Urban Development where appropriate under the FHA Regulations.
Fidelity Bond: A fidelity bond to be maintained by the Servicer
pursuant to Section 2.11.
First Lien Loan: A Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest. ---
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Flood Zone Service Contract: A transferable contract maintained
for a Mortgaged Property with a nationally recognized flood zone service
provider for the purpose of obtaining the current flood zone status relating
to such Mortgaged Property.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note which
amount is added to the Index in
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accordance with the terms of the related Mortgage Note to determine on each
Interest Rate Adjustment Date the Mortgage Interest Rate for such Mortgage
Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home
Ownership and Equity Protection Act of 1994, as amended, or (b) classified as
a "high cost," "threshold," "covered," "predatory" or similar loan under any
other applicable state, federal or local law (or a similarly classified loan
using different terminology under a law imposing heightened regulatory
scrutiny or additional legal liability for residential mortgage loans having
high interest rates, points and/or fees).
HOEPA: The federal Home Ownership and Equity Protection Act of
1994, as amended.
HOEPA Loan: A Mortgage Loan which (a) the Owner has identified
to the Servicer in the Mortgage Loan Schedule as being subject to HOEPA, or
(b) which the Servicer discovers is subject to HOEPA.
HUD: The Department of Housing and Urban Development, or any
federal agency or official thereof which may from time to time succeed to
the functions thereof with regard to FHA Mortgage Insurance. The term "HUD,"
for purposes of this Agreement, is also deemed to include subdivisions thereof
such as the FHA and Government National Mortgage Association.
Index: With respect to each Adjustable Rate Mortgage Loan, the
index set forth in the related Mortgage Note.
Insurance Proceeds: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable
Rate Mortgage Loan, the date, specified in the related Mortgage Note and the
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related
to an Adjustable Rate Mortgage Loan which provides for an absolute maximum
Mortgage Interest Rate thereunder. The Mortgage Interest Rate during the terms
of each Adjustable Rate Mortgage Loan shall not at any time exceed the
Mortgage Interest Rate at the time of origination of such Adjustable Rate
Mortgage Loan by more than the amount per annum set forth on the Mortgage Loan
Schedule.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise, or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan,
the ratio (expressed as a percentage) of the outstanding principal amount of
the Mortgage Loan, to the lesser of (a) the Appraised Value of the Mortgaged
Property at origination or (b) if the Mortgage
-6-
Loan was made to finance the acquisition of the related Mortgaged Property,
the purchase price of the Mortgaged Property.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of
Delaware, or any successor thereto.
MERS Mortgage Loan: Any Mortgage Loan as to which the related
mortgage or assignment of Mortgage has been recorded in the name of MERS, as
agent for the holder from time to time of the Mortgage Note and which is
identified as a MERS Mortgage Loan on the related Mortgage Loan Schedule.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number of Mortgage Loans
registered with MERS on the MERS(R) System.
MOM Loan: Any Mortgage Loan where MERS acts as the mortgagee of
record of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Advance: The portion of Monthly Payment delinquent with
respect to each Mortgage Loan at the close of business on the Business Day
immediately preceding the Remittance Date required to be advanced by the
Servicer pursuant to Section 3.04.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan, or the scheduled monthly payment of interest, if
no principal is due.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., and any successor
thereto.
Mortgage: The mortgage, deed of trust or other instrument
securing a Mortgage Note, which creates a first lien, in the case of a
First Lien Loan, or a second lien, in the case of a Second Lien Loan, on an
unsubordinated estate in fee simple in real property securing the Mortgage
Note; except that with respect to real property located in jurisdictions in
which the use of leasehold estates for residential properties is a
widely-accepted practice, the mortgage, deed of trust or other instrument
securing the Mortgage Note may secure and create a first lien, in the case of
a First Lien Loan, or a second lien, in the case of a Second Lien Loan, upon a
leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage
Loan referred to in Schedule 3 hereto, and any additional documents
required to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan Documents: The documents listed on Schedule 2
hereto pertaining to any Mortgage Loan.
-7-
Mortgage Loan Package: A pool of Mortgage Loans to be serviced
by the Servicer hereunder and identified in the related Notice Letter.
Mortgage Loan Remittance Rate: With respect to each Mortgage
Loan, the annual rate of interest remitted to the Owner, which shall be
equal to the Mortgage Interest Rate minus the Servicing Fee.
Mortgage Loan Schedule: The schedule of Mortgage Loans with
respect to a Mortgage Loan Package, in a form mutually agreed upon by the
Owner and the Servicer, to be delivered by the Owner to the Servicer, which
schedule shall include, but not be limited to, the following information with
respect to each Mortgage Loan: (1) the name of the Seller and the Seller's
Mortgage Loan identifying number; (2) the Mortgagor's name; (3) the street
address of the Mortgaged Property including the city, state and zip code; (4)
a code indicating whether the Mortgaged Property is owner-occupied, a second
home or investment property; (5) the number and type of residential units
constituting the Mortgaged Property (i.e. a single family residence, a 2-4
family residence, a unit in a condominium project or a unit in a planned unit
development, manufactured housing); (6) the original months to maturity or the
remaining months to maturity from the related Cut-off Date, in any case based
on the original amortization schedule and, if different, the maturity
expressed in the same manner but based on the actual amortization schedule;
(7) the Loan-to-Value Ratio at origination; (8) with respect to First Lien
Loans, the LTV and with respect to Second Lien Loans, the CLTV; (9) the
Mortgage Interest Rate as of the related Cut-off Date; (10) the date on which
the Monthly Payment was due on the Mortgage Loan and, if such date is not
consistent with the Due Date currently in effect, such Due Date; (11) the
stated maturity date; (12) the amount of the Monthly Payment as of the related
Cut-off Date; (13) the last payment date on which a Monthly Payment was
actually applied to pay interest and the outstanding principal balance; (14)
the original principal amount of the Mortgage Loan; (15) the principal balance
of the Mortgage Loan as of the close of business on the related Cut-off Date,
after deduction of payments of principal due and collected on or before the
related Cut-off Date; (16) with respect to Adjustable Rate Mortgage Loans, the
Interest Rate Adjustment Date; (17) with respect to Adjustable Rate Mortgage
Loans, the Gross Margin; (18) with respect to Adjustable Rate Mortgage Loans,
the Lifetime Rate Cap under the terms of the Mortgage Note; (19) with respect
to Adjustable Rate Mortgage Loans, a code indicating the type of Index; (20)
with respect to Adjustable Rate Mortgage Loans, the Periodic Rate Cap under
the terms of the Mortgage Note; (21) with respect to Adjustable Rate Mortgage
Loans, the Periodic Rate Floor under the terms of the Mortgage Note; (22) the
type of Mortgage Loan (i.e., Fixed Rate Mortgage Loan, Adjustable Rate
Mortgage Loan, First Lien Mortgage Loan, Second Lien Mortgage Loan); (23) a
code indicating the purpose of the loan (i.e., purchase, rate and term
refinance, equity take-out refinance); (24) a code indicating the
documentation style (i.e. full, alternative or reduced); (25) the loan credit
classification (as described in the applicable Underwriting Guidelines); (26)
whether such Mortgage Loan provides for a prepayment penalty or premium; (27)
the prepayment penalty or premium period of such Mortgage Loan, if applicable;
(28) a description of the prepayment penalty or premium, if applicable; (29)
the Mortgage Interest Rate as of origination; (30) the credit risk score (FICO
score) at origination; (31) the date of origination; (32) the Mortgage
Interest Rate adjustment period; (33) the Mortgage Interest Rate adjustment
percentage; (34) the Mortgage Interest Rate floor; (35) the Mortgage Interest
Rate calculation method (i.e., 30/360, simple interest, other); (36) a code
indicating whether the Mortgage Loan is a Section 32 Mortgage Loan; (37) a
code indicating
-8-
whether the Mortgage Loan is assumable; (38) a code indicating whether the
Mortgage Loan has been modified; (39) the one year payment history; (40) the
Due Date for the first Monthly Payment; (41) the original Monthly Payment due;
(42) with respect to the related Mortgagor, the debt-to-income ratio; (43) the
Appraised Value of the Mortgaged Property; (44) the sales price of the
Mortgaged Property if the Mortgage Loan was originated in connection with the
purchase of the Mortgaged Property; (45) the MERS identification number, (46)
if the Mortgage Loan has borrower paid, lender paid or deep primary mortgage
insurance coverage and, if so, (i) the insurer's name, (ii) the policy or
certification number, (iii) the premium rate and (iv) the coverage percentage,
(47) with respect to Second Lien Loans, the outstanding principal balance of
the superior lien, (48) a code indicating whether the Mortgage Loan is a HOEPA
Loan, (49) a code indicating whether the Mortgage Loan is a High Cost Loan,
(50) a code indicating whether the Mortgage Loan is a subject to a buydown and
(51) flood zone and flood insurance coverage information with respect to each
Mortgage Loan (to the extent known by the Owner). With respect to the Mortgage
Loans in the aggregate, the Mortgage Loan Schedule shall set forth the
following information, as of the related Cut-off Date: (1) the number of
Mortgage Loans; (2) the current aggregate outstanding principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the
Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness
of a Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note. ---
Nonrecoverable Advance: Any Servicing Advance or Monthly
Advance previously made or proposed to be made in respect of a Mortgage
Loan or REO Property which, in the good faith judgment of the Servicer, will
not or, in the case of a proposed advance, would not, be ultimately
recoverable from related Insurance Proceeds, Liquidation Proceeds or otherwise
from such Mortgage Loan or REO Property. The determination by the Servicer
that it has made a Nonrecoverable Advance or that any proposed Servicing
Advance or Monthly Advance, if made, would constitute a Nonrecoverable Advance
shall be evidenced by an Officer's Certificate delivered to the Owner.
Notice Date: As defined in Section 10.01(b). ---
Notice Letter: With respect to each Mortgage Loan Package
subject to this Agreement, that certain letter in the form of Exhibit 10
attached hereto, from the Owner to the Servicer identifying the Mortgage Loans
to be subject to this Agreement and the related Transfer Date.
Officer's Certificate: A certificate signed by the Chairman of
the Board or the Vice Chairman of the Board or a President or a Vice
President and by the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Servicer, and delivered to the
Owner as required by this Agreement.
-9-
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Servicer, reasonably acceptable to the Owner, provided
that any Opinion of Counsel relating to (a) the qualification of any account
required to be maintained pursuant to this Agreement as an Eligible Account,
(b) qualification of the Mortgage Loans in a REMIC or (c) compliance with the
REMIC provisions must be (unless otherwise stated in such Opinion of Counsel)
an opinion of counsel who (i) is in fact independent of the related Servicer
and any master servicer of the Mortgage Loans, (ii) does not have any material
direct or indirect financial interest in the related Servicer or any master
servicer of the related Mortgage Loans or in an Affiliate of either and (iii)
is not connected with the related Servicer or any master servicer of the
Mortgage Loans as an officer, employee, director or person performing similar
functions.
Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage Loan, the provision of each Mortgage Note which provides for an
absolute maximum amount by which the Mortgage Interest Rate therein may
increase on an Interest Rate Adjustment Date above the Mortgage Interest Rate
previously in effect.
Periodic Rate Floor: With respect to each Adjustable Rate
Mortgage Loan, the provision of each Mortgage Note which provides for an
absolute maximum amount by which the Mortgage Interest Rate therein may
decrease on an Interest Rate Adjustment Date below the Mortgage Interest Rate
previously in effect.
Person: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
Prepayment Interest Shortfall Amount: With respect to any
Mortgage Loan that was subject to a Principal Prepayment in full or in
part during the Principal Prepayment Period, the amount if any, by which one
month's interest at the related Mortgage Loan Remittance Rate on such
Principal Prepayment exceeds the amount of interest paid in connection with
such Principal Prepayment.
Prime Rate: The prime rate announced to be in effect from time
to time, as published as the average rate in The Wall Street Journal
(Northeast edition).
Principal Prepayment: Any payment or other recovery of
principal on a Mortgage Loan which is received in advance of its scheduled
Due Date, including any prepayment penalty or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of
prepayment.
Principal Prepayment Period: The month preceding the month in
which the related Remittance Date occurs.
Purchase Agreement: The agreement pursuant to which the Owner
purchased the related Mortgage Loans from the related Seller.
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Qualified Depository: A depository the accounts of which are
insured by the FDIC or is otherwise acceptable to the Rating Agencies.
Qualified Insurer: A mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
Rating Agency: Any of Fitch, ▇▇▇▇▇'▇ or Standard & Poor's, or
their respective successors designated by the Owner.
Reconstitution: Any Securitization Transaction or Whole Loan
Transfer.
Reconstitution Agreement: Any (i) pool purchase contracts,
and/or agreements among the Owner, the Servicer, ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac
(as the case may be) and any servicer, (ii) in connection with a Whole Loan
Transfer, a Servicer's warranties and servicing agreement or a participation
and servicing agreement, and (iii) in connection with a Securitization
Transaction, a pooling and servicing agreement or similar agreement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating to a REMIC, which appear at Section 860A through 860G of Subchapter M
of Chapter 1, Subtitle A of the Code, and related provisions and regulations,
rulings or pronouncements promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Date: With respect to each Mortgage Loan, the 18th
day of any month, or if such 18th day is not a Business Day, the following
Business Day.
REO Disposition: The final sale by the Servicer of any REO
Property.
REO Management Fee: With respect to each REO Property being
managed by the Servicer, that fee set forth in the applicable Notice
Letter.
REO Property: A Mortgaged Property acquired by the Servicer on
behalf of the Owner through foreclosure or by deed in lieu of foreclosure.
RESPA: The Real Estate Settlement Procedures Act, as amended
from time to time.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
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Second Lien Loan: A Mortgage Loan secured by a second lien
Mortgaged on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended. ---
Securitization Transaction: Any transaction involving either
(1) a sale or other transfer of some or all of the Mortgage Loans directly
or indirectly to an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed securities or
(2) an issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by reference to one
or more portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
Seller: With respect to each Mortgage Loan, the Seller set
forth in the related Purchase Agreement
Servicer Information: As defined in Section 12.07(a).
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred (regardless if any such advance is not, in the
reasonable determination of the Servicer, a Nonrecoverable Servicing Advance
when made but, thereafter, becomes a Nonrecoverable Servicing Advance) in the
performance by the Servicer of its servicing obligations (other than Monthly
Advances), including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property or REO Property, (b) any
fees relating to any enforcement or judicial proceedings, excluding
foreclosures, (c) any appraisals, valuations, broker price opinions,
inspections, or environmental assessments, (d) foreclosure actions per ▇▇▇▇▇▇▇
Mac attorney fees and costs guidelines, (e) the management and liquidation of
the Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage, (f) taxes, assessments, water rates, sewer rents and other
charges which are or may become a lien upon the Mortgaged Property, and (g)
executing and recording instruments of satisfaction, deeds of reconveyance.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount
of the annual fee the Owner shall pay to the Servicer on each Remittance Date,
which shall, for a period of one full month, be equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal
balance of such Mortgage Loan as of the first day of such month. Such fee
shall be payable monthly, computed on the basis of the same principal amount
and period respecting which any related interest payment on a Mortgage Loan is
computed. The Servicing Fee with respect to any Mortgage Loan serviced by the
Servicer pursuant to this Agreement for a portion of a calendar month shall be
prorated by multiplying the servicing fee that would otherwise be payable with
respect to such Mortgage Loan by a fraction equal to the number of days from
the first calendar day of such month to the applicable Subsequent Transfer
Date divided by thirty (30). The obligation of the Owner to pay the Servicing
Fee is limited to, and the Servicing Fee is payable solely from, the interest
portion (including recoveries with respect
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to interest from Liquidation Proceeds, to the extent permitted by Section
2.05) of such Monthly Payment collected by the Servicer, or as otherwise
provided under Section 2.05.
Servicing Fee Rate: With respect to each Mortgage Loan, the
rate per annum specified in the related Notice Letter.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of copies of the Mortgage Loan
Documents listed on Schedule 2 hereto and originals of all documents in
the Mortgage File as listed on Schedule 3 hereto which are not delivered
to the Owner, its designee or the Custodian.
Servicing Officer: Any officer of the Servicer involved in or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Servicer to the
Owner upon request, as such list may from time to time be amended.
Special Deposit Account: Any demand deposit account established
by the Servicer pursuant to an agreement with the related Qualified
Depository that monies deposited in the account remain the property of the
depositor thereof and are to be used specifically for the purposes set forth
in this Agreement.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and any successor thereto.
Static Pool Information: Static pool information as described
in Item 1105(a)(1)-(3) and 1105(c) of Regulation AB
Static Pool Party: As defined in Section 12.03(g).
Subcontractor: Any vendor, subcontractor or other Person that
is not responsible for the overall servicing (as "servicing" is commonly
understood by participants in the mortgage-backed securities market) of
Mortgage Loans but performs one or more discrete functions identified in Item
1122(d) of Regulation AB with respect to Mortgage Loans under the direction or
authority of the Company or a Subservicer.
Subsequent Transfer Date: The date on which servicing shall be
transferred to a successor servicer, which shall be such date as mutually
agreed in writing by the Servicer and the Owner.
Subservicer: Any Person that services Mortgage Loans on behalf
of the Servicer or any Subservicer and is responsible for the performance
(whether directly or through Subservicers or Subcontractors) of a substantial
portion of the material servicing functions required to be performed by the
Servicer under this Agreement or any Reconstitution Agreement that are
identified in Item 1122(d) of Regulation AB.
Tax Service Contract: A life-of-loan tax service contract
maintained for the Mortgaged Property with a tax service provider for the
purpose of obtaining current information from local taxing authorities
relating to such Mortgaged Property.
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Transfer Date: The date or dates set forth on the related
Notice Letter on which the Servicer from time to time shall commence
servicing the Mortgage Loans listed on the related Notice Letter.
Transaction Servicer: As defined in Section 12.03(c). ---
Underwriting Guidelines: The underwriting guidelines of the
related originator, as identified or specified in the related Purchase
Agreement.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
ARTICLE II
SERVICING
Section 2.01 Servicer to Act as Servicer. With respect to each
Mortgage Loan in each Mortgage Loan Package, from and after the related
Transfer Date, the Servicer, as an independent contractor, shall service and
administer the Mortgage Loans pursuant to the terms of this Agreement, under
the Servicer's name on a scheduled/scheduled basis, and shall have full power
and authority to do any and all things in connection with such servicing and
administration which the Servicer may deem necessary or desirable, consistent
with the terms of this Agreement and with Accepted Servicing Practices. The
Servicer shall acknowledge by email to the Owner its receipt of each Mortgage
Loan Schedule and the Servicer's assumption of the servicing responsibilities
with respect to the related Mortgage Loan Package.
The Servicer may not waive, modify or vary any term of any
Mortgage Loan or consent to the postponement of strict compliance with any
such term or in any manner grant indulgence to any Mortgagor without the prior
written consent of the Owner. Without limiting the generality of the
foregoing, the Servicer shall continue, and is hereby authorized and
empowered, to execute and deliver on behalf of itself and the Owner, all
instruments of satisfaction or cancellation, or of partial or full release,
discharge and all other comparable instruments, with respect to the Mortgage
Loans and with respect to the Mortgaged Properties. If reasonably required by
the Servicer, the Owner shall furnish the Servicer with any powers of attorney
and other documents necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Servicer
shall employ procedures (including collection procedures) and exercise the
same care that it customarily employs and exercises in servicing and
administering mortgage loans for its own account, giving due consideration to
Accepted Servicing Practices where such practices do not conflict with the
requirements of this Agreement, the Mortgage Loan Documents or applicable law,
and the Owner's reliance on the Servicer.
The Servicer shall keep at its servicing office books and
records in which, subject to such reasonable regulations as it may prescribe,
the Servicer shall note transfers of Mortgage Loans. No transfer of a Mortgage
Loan may be made unless such transfer is in compliance with
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the terms hereof. For the purposes of this Agreement, Servicer shall be under
no obligation to deal with any Person with respect to this Agreement or the
Mortgage Loans unless the Servicer has been notified of such transfers as
provided in this Section 2.01. The Owner may sell and transfer, in whole or in
part, the Mortgage Loans. Upon notice thereof, Servicer shall ▇▇▇▇ its books
and records to reflect the ownership of the Mortgage Loans by such assignee,
and the previous Owner shall be released from its obligations hereunder. This
Agreement shall be binding upon and inure to the benefit of the Owner and
Servicer and their permitted successors, assignees and designees.
The Servicer shall notify MERS of the ownership interest of
Owner in each MOM Loan through the MORNET system or MIDANET system, as
applicable, or any other comparable system acceptable to MERS. At any time
during the term of this Agreement, Owner may direct Servicer to cause any MOM
Loan to be deactivated from the MERS System.
The Servicer shall be responsible for the actions of any
vendors which the Servicer utilizes to carry out its obligations hereunder and
any fees paid to such vendors shall be paid by the Servicer from its own
funds.
Section 2.02 Liquidation of Mortgage Loans. In the event that
any payment due under any Mortgage Loan and not postponed pursuant to Section
2.01 is not paid when the same becomes due and payable, or in the event the
Mortgagor fails to perform any other covenant or obligation under the Mortgage
Loan and such failure continues beyond any applicable grace period, the
Servicer shall take such action as (1) the Servicer would take under similar
circumstances with respect to a similar mortgage loan held for its own account
for investment, (2) shall be consistent with Accepted Servicing Practices, (3)
the Servicer shall determine prudently to be in the best interest of Owner.
Section 2.03 Collection of Mortgage Loan Payments. Continuously
from the related Transfer Date until the related Subsequent Transfer Date, the
Servicer shall proceed diligently to collect all payments due under each of
the Mortgage Loans when the same shall become due and payable and shall take
special care in ascertaining and estimating Escrow Payments and all other
charges that will become due and payable with respect to the Mortgage Loans
and each related Mortgaged Property, to the end that the installments payable
by the Mortgagors will be sufficient to pay such charges as and when they
become due and payable.
Section 2.04 Establishment of and Deposits to Custodial
Account. The Servicer shall segregate and hold all funds collected and
received pursuant to the Mortgage Loans separate and apart from any of its own
funds and general assets and shall establish and maintain one or more
Custodial Accounts, in the form of time deposit or demand accounts, titled
"Avelo Mortgage, L.L.C., in trust for ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company,
Residential Fixed and Adjustable Rate Mortgage Loans, and various Mortgagors."
The Custodial Account shall be established with a Qualified Depository
acceptable to the Owner. The Servicer and the Owner intend that the Custodial
Account be a Special Deposit Account. Any funds deposited in the Custodial
Account shall at all times be fully insured to the full extent permitted by
the FDIC and as otherwise acceptable to the Rating Agencies. Funds deposited
in the Custodial Account may be drawn on by the Servicer in accordance with
Section 2.05. The creation of any Custodial Account shall be evidenced by a
certification in the form of Exhibit 2 hereto, in the case of an
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account established with the Servicer, or by a letter agreement in the form of
Exhibit 3 hereto, in the case of an account held by a depository other than
the Servicer. A copy of such certification or letter agreement shall be
furnished to the Owner and, upon request, to any subsequent Owner.
The Servicer shall deposit in the Custodial Account within two
(2) Business Days of receipt thereof, and retain therein, the following
collections received by the Servicer and payments made by the Servicer after
the related Transfer Date, other than payments of principal and interest due
on or before the related Subsequent Transfer Date, or received by the Servicer
prior to the related Subsequent Transfer Date but allocable to a period
subsequent thereto:
(i) all payments on account of principal on the Mortgage Loans
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds and any amounts received with
respect to REO Property;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 2.10 (other than proceeds to be held
in the Escrow Account and applied to the restoration or repair of
the Mortgaged Property or released to the Mortgagor in accordance
with Section
2.13);
(v) all Condemnation Proceeds which are not applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 2.15;
(vi) any amount required to be deposited in the Custodial
Account pursuant to Section 2.01, 2.09, 3.01, 4.01 or 4.02;
(vii) any amounts payable to the Owner in connection with the
repurchase of any Mortgage Loan pursuant to the related Purchase
Agreement;
(viii) with respect to each Principal Prepayment in full or in
part, the Prepayment Interest Shortfall Amount, if any, for the
month of distribution. Such deposit shall be made from the
Servicer's own funds, without reimbursement therefore up to a
maximum amount per month of the Servicing Fee actually received for
such month for the Mortgage Loans;
(ix) any prepayment penalties received with respect to any
Mortgage Loan; and
(x) any amounts required to be deposited by the Servicer
pursuant to Section 2.11 in connection with the deductible clause in
any blanket hazard insurance policy.
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The foregoing requirements for deposit into the Custodial
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, unless otherwise provided herein,
payments in the nature of Ancillary Income, need not be deposited by the
Servicer into the Custodial Account. Any interest paid on funds deposited in
the Custodial Account by the depository institution shall accrue to the
benefit of the Servicer and the Servicer shall be entitled to retain and
withdraw such interest from the Custodial Account pursuant to Section 2.05.
With respect to each Securitization Transaction, the Servicer
shall establish a separate custodial account for the related securitization
and deposit all amounts that have been or are subsequently received with
respect to the Mortgage Loans included in such Securitization Transaction into
the custodial account created for the securitization on the date of the
Securitization Transfer, or as soon as possible thereafter (but not to exceed
48 hours after such date).
Section 2.05 Permitted Withdrawals From Custodial Account. The
Servicer shall, from time to time, withdraw funds from the Custodial Account
for the following purposes:
(i) to make payments to the Owner in the amounts and in the
manner provided for in Section 3.01;
(ii) to reimburse itself for Monthly Advances of the Servicer's
funds made pursuant to Section 3.04, the Servicer's right to
reimburse itself pursuant to this subclause (ii) being limited to
amounts received on the related Mortgage Loan (including without
limitation, late recoveries of payments from the Mortgagor,
Liquidation Proceeds and Insurance Proceeds with respect to such
Mortgage Loan to the extent collected) which represent late payments
of principal and/or interest respecting which any such advance was
made; it being understood that, in the case of any such
reimbursement, the Servicer's right thereto shall be prior to the
rights of the Owner;
(iii) to reimburse itself for unreimbursed Servicing Advances,
and any unpaid Servicing Fees, the Interim Servicer's right to
reimburse itself pursuant to this subclause (iii) with respect to
any Mortgage Loan being limited to related Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds and such other amounts as
may be collected by the Servicer from the Mortgagor or otherwise
relating to the Mortgage Loan, it being understood that, in the case
of any such reimbursement, the Servicer's right thereto shall be
prior to the rights of the Owner;
(iv) to pay itself pursuant to Section 4.03, as servicing
compensation, interest on funds deposited in the Custodial Account;
(v) to reimburse itself for expenses incurred and reimbursable
to it pursuant to Section 4.03;
(vi) to clear and terminate the Custodial Account upon the
termination of this Agreement;
(vii) to withdraw funds deposited in error; and
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(viii) to withdraw amounts collected under a blanket hazard
insurance policy with respect to a Second Lien Loan as provided for
in Section 2.10, for application to restoration or repair of the
Mortgaged Property in accordance with the procedures outlined in
Section 2.13.
Section 2.06 Establishment of and Deposits to Escrow Account.
The Servicer shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart
from any of its own funds and general assets and shall establish and maintain
one or more Escrow Accounts, in the form of time deposit or demand accounts,
titled, Avelo Mortgage, L.L.C., in trust for ▇▇▇▇▇▇▇ Sachs Mortgage Company
Residential Fixed and Adjustable Rate Mortgage Loans, and various Mortgagors."
The Escrow Accounts shall be established with a Qualified Depository, in a
manner which shall provide maximum available insurance by the FDIC and as
otherwise acceptable to the Rating Agencies. The Servicer and the Owner intend
that the Escrow Accounts be Special Deposit Accounts. Funds deposited in the
Escrow Account may be drawn on by the Servicer in accordance with Section
2.07. The creation of any Escrow Account shall be evidenced by a certification
in the form of Exhibit 4 hereto, in the case of an account established with
the Servicer, or by a letter agreement in the form of Exhibit 5 hereto, in the
case of an account held by a depository other than the Servicer. A copy of
such certification shall be furnished to the Owner and, upon request, to any
subsequent Owner.
The Servicer shall deposit in the Escrow Account or Accounts
within two (2) Business Days of receipt thereof, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items
as required under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or
Condemnation Proceeds which are to be applied to the restoration or
repair of any Mortgaged Property.
The Servicer shall make withdrawals from the Escrow Account
only to effect such payments as are required under this Agreement, as set
forth in Section 2.07. The Servicer shall be entitled to retain any interest
paid on funds deposited in the Escrow Account by the depository institution,
other than interest on escrowed funds required by law to be paid to the
Mortgagor. To the extent required by law, the Servicer shall pay interest on
escrowed funds to the Mortgagor notwithstanding that the Escrow Account may be
non-interest bearing or that interest paid thereon is insufficient for such
purposes.
Section 2.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the Servicer
only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, mortgage insurance premiums, condominium
charges, fire and hazard insurance premiums or other items
constituting Escrow Payments for the related Mortgage;
(ii) to reimburse the Servicer for any Servicing Advance made
by the Servicer pursuant to Section 2.08 with respect to a related
Mortgage Loan, but only from amounts
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received on the related Mortgage Loan which represent late
collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in
excess of the amounts required under the terms of the related
Mortgage Loan or applicable federal or state law or judicial or
administrative ruling;
(iv) for transfer to the Custodial Account and application to
reduce the principal balance of the Mortgage Loan in accordance with
the terms of the related Mortgage and Mortgage Note;
(v) for application to restoration or repair of the Mortgaged
Property in accordance with the procedures outlined in Section 2.13;
(vi) to pay to the Servicer, or any Mortgagor to the extent
required by law, any interest paid on the funds deposited in the
Escrow Account;
(vii) to clear and terminate the Escrow Account on the
termination of this Agreement; and (viii) to withdraw funds
deposited in error.
Section 2.08 Payment of Taxes, Insurance and Other Charges With
Respect to First Lien Loans. With respect to each First Lien Loan, the
Servicer shall maintain accurate records reflecting the status of ground
rents, taxes, assessments, water rates, sewer rents, and other charges which
are or may become a lien upon the Mortgaged Property and the status of fire
and hazard insurance coverage and shall obtain, from time to time, all bills
for the payment of such charges (including renewal premiums) and shall effect
payment thereof prior to the applicable penalty or termination date, employing
for such purpose deposits of the Mortgagor in the Escrow Account which shall
have been estimated and accumulated by the Servicer in amounts sufficient for
such purposes, as allowed under the terms of the Mortgage. To the extent that
a Mortgage does not provide for Escrow Payments, the Servicer shall determine
that any such payments are made by the Mortgagor at the time they first become
due. The Servicer shall monitor the Mortgagor's payment of such bills and
shall promptly notify any Mortgagor in breach of timely payments of such bills
to remedy such breach. If after such notification, such Mortgagor continues to
fail to remedy the breach, the Servicer shall arrange for the purchase of
insurance coverage which satisfied the requirements of Section 2.10 of this
Agreement on behalf of such Mortgagor. The Servicer shall advance property
taxes to protect each Mortgaged Property as may be provided for in the related
Mortgage Loan Documents.
Section 2.09 Protection of Accounts. The Servicer may transfer
the Custodial Account or the Escrow Account to a different Qualified
Depository from time to time. Such transfer shall be made only upon obtaining
the consent of the Owner.
The Servicer shall bear any expenses, losses or damages
sustained by the Owner because the Custodial Account and/or the Escrow Account
are not demand deposit accounts.
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Amounts on deposit in the Custodial Account and the Escrow
Account may at the option of the Servicer be invested in Eligible Investments;
provided that in the event that amounts on deposit in the Custodial Account or
the Escrow Account exceed the amount fully insured by the FDIC (the "Insured
Amount") the Servicer shall be obligated to invest the excess amount over the
Insured Amount in Eligible Investments on the same Business Day as such excess
amount becomes present in the Custodial Account or the Escrow Account. Any
such Eligible Investment shall mature no later than the Determination Date
next following the date of such Eligible Investment, provided, however, that
if such Eligible Investment is an obligation of a Qualified Depository (other
than the Servicer) that maintains the Custodial Account or the Escrow Account,
then such Eligible Investment may mature on such Remittance Date. Any such
Eligible Investment shall be made in the name of the Servicer in trust for the
benefit of the Owner. All income on or gain realized from any such Eligible
Investment shall be for the benefit of the Servicer and may be withdrawn at
any time by the Servicer. Any losses incurred in respect of any such
investment shall be deposited in the Custodial Account or the Escrow Account,
by the Servicer out of its own funds immediately as realized.
Section 2.10 Maintenance of Hazard Insurance. The Servicer
shall cause to be maintained for each First Lien Loan, hazard insurance such
that all buildings upon the Mortgaged Property are insured by a generally
acceptable insurer which satisfies the hazard insurer ratings requirements of
each of the Rating Agencies, against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the
Mortgaged Property is located, in an amount which is at least equal to the
lesser of (i) the maximum insurable value of the improvements securing such
First Lien Loan and (ii) the greater of (a) the outstanding principal balance
of the First Lien Loan and (b) an amount such that the proceeds thereof shall
be sufficient to prevent the Mortgagor or the loss payee from becoming a
co-insurer.
If upon origination of the First Lien Loan, the related
Mortgaged Property was located in an area identified in the Federal Register
by the Flood Emergency Management Agency as having special flood hazards (and
such flood insurance has been made available) a flood insurance policy meeting
the requirements of the current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance carrier
which satisfies the flood insurer ratings requirements of each of the Rating
Agencies, in an amount representing coverage equal to the lesser of (i) the
minimum amount required, under the terms of coverage, to compensate for any
damage or loss on a replacement cost basis (or the unpaid balance of the
mortgage if replacement cost coverage is not available for the type of
building insured) and (ii) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended. If at any time
during the term of the First Lien Loan, the Servicer determines in accordance
with applicable law and pursuant to the ▇▇▇▇▇▇ ▇▇▇ Guides that a Mortgaged
Property is located in a special flood hazard area and is not covered by flood
insurance or is covered in an amount less than the amount required by the
Flood Disaster Protection Act of 1973, as amended, the Servicer shall notify
the related Mortgagor that the Mortgagor must obtain such flood insurance
coverage, and if said Mortgagor fails to obtain the required flood insurance
coverage within forty-five (45) days after such notification, the Servicer
shall immediately force place the required flood insurance on the Mortgagor's
behalf.
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If a Mortgage is secured by a unit in a condominium project,
the Servicer shall verify that the coverage required of the owner's
association, including hazard, flood, liability, and fidelity coverage, is
being maintained in accordance with then current ▇▇▇▇▇▇ Mae requirements, and
secure from the owner's association its agreement to notify the Servicer
promptly of any change in the insurance coverage or of any condemnation or
casualty loss that may have a material effect on the value of the Mortgaged
Property as security.
The Servicer shall cause to be maintained on each Mortgaged
Property earthquake or such other or additional insurance as may be required
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance, or pursuant to the
requirements of any private mortgage guaranty insurer, or as may be required
to conform with Accepted Servicing Practices, in any instance, only to the
extent permitted by applicable laws or regulations and subject to the
availability of such additional insurance in the marketplace.
In the event that the Owner or the Servicer shall determine
that the Mortgaged Property should be insured against loss or damage by
hazards and risks not covered by the insurance required to be maintained by
the Mortgagor pursuant to the terms of the Mortgage, the Servicer shall
communicate and consult with the Mortgagor with respect to the need for such
insurance and bring to the Mortgagor's attention the desirability of
protection of the Mortgaged Property.
All policies required hereunder shall name the Servicer as loss
payee and shall be endorsed with standard or New York mortgagee clauses,
without contribution, which shall provide for at least 30 days prior written
notice of any cancellation, reduction in amount or material change in
coverage.
The Servicer shall not interfere with the Mortgagor's freedom
of choice in selecting either his insurance carrier or agent, provided,
however, that the Servicer shall not accept any such insurance policies from
insurance companies unless such companies satisfy the insurer ratings
requirements of each of the Rating Agencies and are licensed to do business in
the jurisdiction in which the Mortgaged Property is located. The Servicer
shall determine that such policies provide sufficient risk coverage and
amounts, that they insure the property owner, and that they properly describe
the property address. The Servicer shall ensure that appropriate insurance
policies are in place in the required coverages.
Pursuant to Section 2.04, any amounts collected by the Servicer
under any such policies (other than amounts to be deposited in the Escrow
Account and applied to the restoration or repair of the related Mortgaged
Property, or property acquired in liquidation of the First Lien Loan, or to be
released to the Mortgagor, in accordance with the Servicer's normal servicing
procedures as specified in Section 2.13) shall be deposited in the Custodial
Account subject to withdrawal pursuant to Section 2.05.
With respect to each Second Lien Loan, the Servicer shall
obtain and maintain the blanket hazard insurance policy in an amount equal to
the unpaid principal balance of such Second Lien Loan. Any amounts collected
by the Servicer under any such policy relating to a Second Lien Loan shall be
deposited in the Custodial Account subject to withdrawal pursuant to
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Section 2.05. Such policy may contain a standard deductible clause. Upon
request of the Owner, the Servicer shall cause to be delivered to the Owner a
certified true copy of such policy and a statement from the insurer thereunder
that such policy shall in no event be terminated or materially modified
without 30 days' prior written notice to the Owner.
Section 2.11 Maintenance of Fidelity Bond and Errors and
Omissions Insurance. The Servicer shall maintain with responsible companies,
at its own expense, a blanket Fidelity Bond and an Errors and Omissions
Insurance Policy, with broad coverage on all officers, employees or other
persons acting in any capacity requiring such persons to handle funds, money,
documents or papers relating to the Mortgage Loans ("Servicer Employees"). Any
such Fidelity Bond and Errors and Omissions Insurance Policy shall be in the
form of the Mortgage Banker's Blanket Bond and shall protect and insure the
Servicer against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of such Servicer Employees. Such Fidelity
Bond and Errors and Omissions Insurance Policy also shall protect and insure
the Servicer against losses in connection with the release or satisfaction of
a Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 2.11 requiring such Fidelity
Bond and Errors and Omissions Insurance Policy shall diminish or relieve the
Servicer from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by ▇▇▇▇▇▇ ▇▇▇ in the ▇▇▇▇▇▇ Mae
Guides or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ Mac Servicers' & Servicers' Guide.
Upon the request of the Owner, the Servicer shall cause to be delivered to the
Owner a certified true copy of such fidelity bond and insurance policy and a
statement from the surety and the insurer that such fidelity bond and
insurance policy shall in no event be terminated or materially modified
without 30 days' prior written notice to the Owner.
Section 2.12 Inspections. The Servicer shall inspect the
Mortgaged Property as often as deemed necessary by the Servicer to assure
itself that the value of the Mortgaged Property is being preserved. In
addition, if any Mortgage Loan is more than 60 days delinquent, the Servicer
immediately shall inspect the Mortgaged Property (provided that if the
Servicer is in communication with the Mortgagor with respect to bringing the
Mortgage Loan current the Servicer shall conduct inspections in accordance
with Accepted Servicing Practices) and shall conduct subsequent inspections in
accordance with Accepted Servicing Practices or as may be required by the
primary mortgage guaranty insurer. The Servicer shall keep a written report of
each such inspection.
Section 2.13 Restoration of Mortgaged Property. The Servicer
need not obtain the approval of the Owner prior to releasing any Insurance
Proceeds or Condemnation Proceeds to the Mortgagor to be applied to the
restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. At a minimum, the Servicer shall
comply with the following conditions in connection with any such release of
Insurance Proceeds or Condemnation Proceeds:
(i) the Servicer shall receive satisfactory independent
verification of completion of repairs and issuance of any required
approvals with respect thereto;
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(ii) the Servicer shall take all steps necessary to preserve
the priority of the lien of the Mortgage, including, but not limited
to requiring waivers with respect to mechanics' and materialmen's
liens;
(iii) the Servicer shall verify that the Mortgage Loan is not
in default; and (iv) pending repairs or restoration, the Servicer
shall place the Insurance Proceeds or Condemnation Proceeds in the
Escrow Account.
If the Owner is named as an additional loss payee, the Servicer
is hereby empowered to endorse any loss draft issued in respect of such a
claim in the name of the Owner.
Section 2.14 Liquidation Reports. Upon the foreclosure sale of
any Mortgaged Property or the acquisition thereof by the Owner pursuant to a
deed in lieu of foreclosure, the Servicer shall submit to the Owner a
liquidation report with respect to such Mortgaged Property.
Section 2.15 Notification of Adjustments. With respect to each
Mortgage Loan, the Servicer shall adjust the Mortgage Interest Rate on the
related Interest Rate Adjustment Date in compliance with the requirements of
applicable law and the related Mortgage and Mortgage Note. The Servicer shall
execute and deliver any and all necessary notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest Rate adjustments. The Servicer shall promptly, upon written
request therefor, deliver to the Owner such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate
and implement such adjustments. Upon the discovery by the Servicer or the
receipt of notice from the Owner that the Servicer has failed to adjust a
Mortgage Interest Rate in accordance with the terms of the related Mortgage
Note, the Servicer shall immediately deposit in the Custodial Account from its
own funds the amount of any interest loss or deferral caused the Owner
thereby.
Section 2.16 Reports of Foreclosures and Abandonments of Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged Property, the
Servicer shall report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code. Section 2.17 Credit Reporting. The Servicer shall
report the Mortgagor credit files to each of the three major credit reporting
agencies on a monthly basis consistent with Accepted Servicing Practices.
Section 2.18 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired
in foreclosure or by deed in lieu of foreclosure, the deed or certificate of
sale shall be taken in the name of the Servicer on behalf of the Owner and
without reference to the Owner except as otherwise required by law. The Person
or Persons holding such title other than the Owner shall acknowledge in
writing that such title is being held as nominee for the Owner.
The Servicer shall manage, conserve, protect and operate each
REO Property for the Owner solely for the purpose of its prompt disposition
and sale. In consideration therefor,
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the Owner shall pay the Servicer the REO Management Fee. The Servicer, either
itself or through an agent selected by the Servicer, shall manage, conserve,
protect and operate the REO Property in the same manner that it manages,
conserves, protects and operates other foreclosed property for its own
account, and in the same manner that similar property in the same locality as
the REO Property is managed. The Servicer shall attempt to sell the same (and
may temporarily rent the same for a period not greater than one year, except
as otherwise provided below) on such terms and conditions as the Servicer
deems to be in the best interest of the Owner in accordance with Accepted
Servicing Practices. The Servicer shall provide the Owner on a monthly basis a
report on the status of each REO Property.
The Servicer shall use commercially reasonable efforts to
dispose of the REO Property as soon as possible and shall sell such REO
Property in any event within one year after title has been taken to such REO
Property, unless the Servicer determines, and gives an appropriate notice to
the Owner to such effect, that a longer period is necessary for the orderly
liquidation of such REO Property. If a period longer than one year is
permitted under the foregoing sentence and is necessary to sell any REO
Property, the Servicer shall report monthly to the Owner as to the progress
being made in selling such REO Property.
The Servicer shall also maintain on each REO Property fire and
hazard insurance with extended coverage in an amount which is at least equal
to the maximum insurable value of the improvements which are a part of such
property, liability insurance and, to the extent required and available under
the National Flood Insurance Act of 1968, as amended, flood insurance in the
amount required in Section 2.10 hereof.
The disposition of REO Property shall be carried out by the
Servicer at such price, and upon such terms and conditions, as the Servicer
deems to be in the best interests of the Owner in accordance with Accepted
Servicing Practices. The proceeds of sale of the REO Property shall be
promptly deposited in the Custodial Account pursuant to the terms of this
Agreement but not later than the second Business Day following receipt
thereof. As soon as practical thereafter, the expenses of such sale shall be
paid and the Servicer shall reimburse itself for any related unreimbursed
Servicing Advances and unpaid Servicing Fees made pursuant to this Section
2.18.
With respect to each REO Property, the Servicer shall hold all
funds collected and received in connection with the operation of the REO
Property in the Custodial Account. The Servicer shall cause to be deposited on
or prior to the second Business Day following the receipt thereof in each
Custodial Account all revenues received with respect to the conservation and
disposition of the related REO Property.
Section 2.19 Permitted Withdrawals with Respect to REO Property.
The Servicer shall withdraw funds on deposit in the Custodial
Account with respect to each related REO Property necessary for the proper
operation, management and maintenance of the REO Property, including the cost
of maintaining any hazard insurance pursuant to Section 2.10 and the fees of
any managing agent acting on behalf of the Servicer. The Servicer shall make
monthly distributions on each Remittance Date to the Owner of the net cash
flow from the REO Property (which shall equal the revenues from such REO
Property net
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of the expenses described in Section 2.18 and of any reserves reasonably
required from time to time to be maintained to satisfy anticipated liabilities
for such expenses).
Section 2.20 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 2.21,
the Servicer shall furnish to the Owner on or before the 5th Business Day of
each month a report with respect to any REO Property covering the operation of
such REO Property for the previous month and the Servicer's efforts in
connection with the sale of such REO Property and any rental of such REO
Property incidental to the sale thereof for the previous month. That statement
shall be accompanied by such other information available to the Servicer as
the Owner shall reasonably request.
Section 2.21 Reports of Foreclosures and Abandonments of
Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged
Property, the Servicer shall report such foreclosure or abandonment as
required pursuant to Section 6050J of the Code.
Section 2.22 Recordation of Assignments of Mortgage.
Except in connection with Accepted Servicing Practices for
defaulted Mortgage Loans, the Servicer shall not be responsible for the
preparation or recording of the Assignments of Mortgage relating to the
Mortgage Loans to the Owner, the securitization trustee or any other party;
provided, however, that in the event the Servicer agrees to record any
mortgage assignment, any expense, including the fees of third party service
providers, incurred by the Servicer in connection with the preparation and
recordation of Assignments of Mortgage shall be reimbursable by the Owner, or
if not reimbursed by the Owner, as a Servicing Advance. The Servicer shall not
be liable for, and shall be indemnified by the Owner, against any losses,
costs, penalties and damages incurred as a result of incorrect or incomplete,
or untimely submission of, Assignments of Mortgage and applicable recording
information.
Section 2.23 Additional Servicing Requirements.
In addition to its other obligations, under this Agreement, the
Servicer shall:
(a) Obtain updated FICO scores quarterly for the entire
portfolio at the Owner's expense.
(b) apply all payments received from Mortgagors to principal
and interest prior to any application of advances or fees.
(c) make staff available to participate in weekly calls to
discuss loans in default including foreclosures, bankruptcy and REO
Properties; and
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(d) adhere to the additional requirements relating to REO
Property set forth in Exhibit 8 (in the case of Mortgage Loans identified by
the Owner in the related Notice Letter as subprime mortgage loans) and Exhibit
9.
Section 2.24 Tax and Flood Service Contracts.
The Servicer, at Owner's expense, shall cause each Mortgage
Loan which is transferred to the Servicer for servicing to be covered by (a) a
Tax Service Contract and (b) Flood Zone Service Contract. Servicer shall place
such Tax Service Contracts and Flood Service Contracts in place, and shall
▇▇▇▇ the Owner the fee associated with acquiring such contracts.
ARTICLE III
PAYMENTS TO OWNER
Section 3.01 Remittances. On each Remittance Date the Servicer
shall remit by wire transfer of immediately available funds to the Owner (a)
all amounts deposited in the Custodial Account for the related Due Period (net
of charges against or withdrawals from the Custodial Account pursuant to
Section 2.05), plus (b) all amounts, if any, which the Servicer is obligated
to remit pursuant to Section 3.04, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Principal Prepayment
Period which amounts shall be remitted on the following Remittance Date,
together with any additional interest required to be deposited in the
Custodial Account in connection with such Principal Prepayment in accordance
with Section 2.04(viii), and minus (d) any amounts attributable to Monthly
Payments collected but due on a Due Date or Dates subsequent to the first day
of the month of the Remittance Date, which amounts shall be remitted on the
applicable Remittance Date.
For all purposes of this Agreement, delinquency status shall be
determined in accordance with standard ABS or RMBS methodology, as is
appropriate, as determined by the Owner for the applicable Mortgage Loan type
as set forth in the related Notice Letter.
With respect to any remittance received by the Owner after the
second Business Day following the Business Day on which such payment was due,
the Servicer shall pay to the Owner interest on any such late payment at an
annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus three percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the Custodial
Account by the Servicer on the date such late payment is made and shall cover
the period commencing with the day the payment was due and ending with the
Business Day on which such payment is made, both inclusive. Such interest
shall be remitted along with the distribution payable on the next succeeding
Remittance Date. The payment by the Servicer of any such interest shall not be
deemed an extension of time for payment or a waiver of any Event of Default by
the Servicer.
Section 3.02 Statements to Owner. Not later than the date which
is two Business Days prior to the Remittance Date, the Servicer shall furnish
to the Owner a monthly remittance advice with all of the information required
by Schedule 1 hereto, with a trial balance report attached thereto in the form
of Exhibit 1 hereto in hard copy and electronic medium
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mutually acceptable to the parties as to the preceding remittance and the
period ending on the preceding Determination Date. At a minimum, the trial
balance report must contain the fields attached as Schedule 1 to Exhibit 1
hereto and Static Pool Information regarding the Mortgage Loans.
In addition, not more than 60 days after the end of each
calendar year, the Servicer shall furnish to each Person who was a Owner at
any time during such calendar year an annual statement in accordance with the
requirements of applicable federal income tax law as to the aggregate of
remittances for the applicable portion of such year.
Such obligation of the Servicer shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Servicer pursuant to any requirements of the Code as from time
to time are in force.
The Servicer shall prepare and file any and all tax returns,
information statements or other filings required to be delivered to any
governmental taxing authority or to the Owner pursuant to any applicable law
with respect to the Mortgage Loans and the transactions contemplated hereby.
In addition, the Servicer shall provide the Owner with such information
concerning the Mortgage Loans as is necessary for the Owner to prepare its
federal income tax return as the Owner may reasonably request from time to
time. Section 3.03 Advances by Servicer. Except as otherwise provided herein,
the Servicer shall be entitled to first priority reimbursement pursuant to
Section 2.07 hereof for Servicing Advances from recoveries from the related
Mortgagor or from all Liquidation Proceeds and other payments or recoveries
(including Insurance Proceeds and Condemnation Proceeds) with respect to the
related Mortgage Loan.
Section 3.04 Principal and Interest Advances by Servicer. ---
On the Business Day immediately preceding each Remittance Date,
the Servicer shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution, or both, an amount equal to all Monthly
Payments (with interest adjusted to the Mortgage Loan Rate minus the
applicable Servicing Fee Rate) which were due on the Mortgage Loans during the
applicable Due Period and which were delinquent on the Business Day
immediately preceding such Remittance Date or which were deferred pursuant to
Section 4.01. Any amounts held for future distribution and so used shall be
replaced by the Servicer by deposit in the Custodial Account on or before any
future Remittance Date if funds in the Custodial Account on such Remittance
Date shall be less than remittances to the Owner required to be made on such
Remittance Date. The Servicer shall keep appropriate records of such amounts.
The Servicer's obligation to make such Monthly Advances as to any Mortgage
Loan will continue through the last Monthly Payment due prior to the payment
in full of the Mortgage Loan, or through the last Remittance Date prior to the
Remittance Date for the distribution of all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds and Condemnation
Proceeds) with respect to the Mortgage Loan; provided, that the Servicer shall
not be obligated to make Monthly Advances which the Servicer determines to be
Nonrecoverable Advances. The Servicer shall not be obligated to advance
shortfalls of interest resulting from the application of the Servicemembers'
Civil Relief Act or any similar state laws.
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ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property. The Servicer
shall use its best efforts to enforce any "due-on-sale" provision contained in
any Mortgage or Mortgage Note and to deny assumption by the person to whom the
Mortgaged Property has been or is about to be sold whether by absolute
conveyance or by contract of sale, and whether or not the Mortgagor remains
liable on the Mortgage and the Mortgage Note. When the Mortgaged Property has
been conveyed by the Mortgagor, the Servicer shall, to the extent it has
knowledge of such conveyance, exercise its rights to accelerate the maturity
of such Mortgage Loan under the "due-on-sale" clause applicable thereto.
If the Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Servicer shall enter
into (i) an assumption and modification agreement with the person to whom such
property has been conveyed, pursuant to which such person becomes liable under
the Mortgage Note and the original Mortgagor remains liable thereon or (ii) in
the event the Servicer is unable under applicable law to require that the
original Mortgagor remain liable under the Mortgage Note and the Servicer has
the prior consent of the primary mortgage guaranty insurer, a substitution of
liability agreement with the purchaser of the Mortgaged Property pursuant to
which the original Mortgagor is released from liability and the purchaser of
the Mortgaged Property is substituted as Mortgagor and becomes liable under
the Mortgage Note. The Servicer shall be entitled to retain as additional
servicing compensation any assumption fees collected by the Servicer in
connection with a Mortgagor entering into an assumption agreement. In
connection with any such assumption, neither the Mortgage Interest Rate borne
by the related Mortgage Note, the term of the Mortgage Loan nor the
outstanding principal amount of the Mortgage Loan shall be changed.
To the extent that any Mortgage Loan is assumable, the Servicer
shall inquire diligently into the creditworthiness of the proposed transferee,
and shall use the underwriting criteria for approving the credit of the
proposed transferee which are used by the Servicers and their affiliates with
respect to underwriting mortgage loans of the same type as the Mortgage Loans.
If the credit of the proposed transferee does not meet such underwriting
criteria, the Servicer diligently shall, to the extent permitted by the
Mortgage or the Mortgage Note and by applicable law, accelerate the maturity
of the Mortgage Loan.
Section 4.02 Satisfaction of Mortgages and Release of Mortgage
Files. Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer shall notify the Owner in the
monthly remittance advice as provided in Section 3.02, and may request the
release of any Mortgage Loan Documents from the Owner in accordance with this
Section 4.02 hereof.
If the Servicer satisfies or releases a Mortgage without first
having obtained payment in full of the indebtedness secured by the Mortgage
(or such lesser amount in connection with a discounted payoff accepted by the
Servicer with respect to a defaulted Mortgage Loan) or should the Servicer
otherwise prejudice any rights the Owner may have under
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the mortgage instruments, if Servicer is unable to reasonably demonstrate that
it will be able to cause the amount of the unpaid indebtedness to be
reinstated and secured under the related Mortgage, or if the Mortgagor becomes
thirty (30) or more days delinquent following such erroneous release,
regardless of Servicer's ability to obtain reinstatement, upon the Servicer's
receiving knowledge of such an event or upon written demand of the Owner,
whichever is earlier, the Servicer shall deposit the amount of any shortfall
thereof in the Custodial Account within 2 Business Days of receipt of such
demand by the Owner; provided, however, that with respect to any such Mortgage
Loan subject to judicial action, the Servicer's obligations under this
sentence shall be limited to giving the Owner notice of such judicial action
and using good faith efforts to reinstate and secure the amount of the unpaid
indebtedness under the related Mortgage. The Servicer shall maintain the
Fidelity Bond and Errors and Omissions Insurance Policy as provided for in
Section 2.11 insuring the Servicer against any loss it may sustain with
respect to any Mortgage Loan not satisfied in accordance with the procedures
set forth herein.
Section 4.03 Servicing Compensation. As consideration for
servicing the Mortgage Loans pursuant to this Agreement, the Servicer shall be
entitled to retain the applicable Servicing Fee from payments on the Mortgage
Loans or to withdraw the applicable Servicing Fee with respect to each
Mortgage Loan from the Custodial Account pursuant to Section 2.05 hereof. The
obligation of the Owner to pay, and the Servicer's right to withdraw, the
Servicing Fee is limited to, and the Servicing Fee is payable solely from, the
interest portion (including recoveries with respect to interest from
Liquidation Proceeds, to the extent permitted by Section 2.05) of such Monthly
Payment collected by the Servicer, or as otherwise provided under Section
2.05. The Servicer shall be entitled to all accrued and unpaid Servicing Fees
upon the termination of its servicing of the related Mortgage Loans.
Additional servicing compensation in the form of Ancillary
Income shall be retained by the Servicer to the extent not required to be
deposited in the Custodial Account. The Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement thereof except as specifically
provided for herein.
Section 4.04 Right to Examine Servicer Records. So long as any
Mortgage Loan are being serviced hereunder and for a reasonable period after
servicing has been transferred, the Owner shall have the right to examine and
audit any and all of the books, records, or other material information of the
Servicer, whether held by the Servicer or by another on its behalf, with
respect to or concerning this Agreement or the Mortgage Loans, during business
hours or at such other times as may be reasonable under applicable
circumstances, upon reasonable advance notice.
Section 4.05 Compliance with ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999.
With respect to each Mortgage Loan and the related Mortgagor, the Servicer
shall comply with Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999, as amended,
and all applicable regulations and guidelines promulgated thereunder, and
shall provide all notices required thereunder using the notice language
supplied by the Owner.
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ARTICLE V
SERVICER TO COOPERATE
Section 5.01 Provision of Information. During the term of this
Agreement, the Servicer shall furnish to the Owner such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
necessary, reasonable, or appropriate with respect to the Owner or the
purposes of this Agreement. All such reports or information shall be provided
by and in accordance with all reasonable instructions and directions which the
Owner may give.
The Servicer shall execute and deliver all such instruments and
take all such action as the Owner may reasonably request from time to time, in
order to effectuate the purposes and to carry out the terms of this Agreement.
Section 5.02 Financial Statements; Servicing Facilities. So
long as any Mortgage Loan are being serviced hereunder and for a reasonable
period after servicing has been transferred, in connection with marketing the
Mortgage Loans, the Owner may make available to a prospective Owner a
Consolidated Statement of Operations of the Servicer for the most recently
completed three fiscal years for which such a statement is available, as well
as a Consolidated Statement of Condition at the end of the last two fiscal
years covered by such Consolidated Statement of Operations. The Servicer also
shall make available any comparable interim statements to the extent any such
statements have been prepared by or on behalf of the Servicer (and are
available upon request to members or stockholders of the Servicer or to the
public at large). If it has not already done so, the Servicer shall furnish
promptly to the Owner copies of the statement specified above.
So long as any Mortgage Loan are being serviced hereunder and
for a reasonable period after servicing has been transferred, the Servicer
shall make available to the Owner or any prospective Owner a knowledgeable
financial or accounting officer for the purpose of answering questions
respecting recent developments affecting the Servicer or the financial
statements of the Servicer, and to permit any prospective Owner to inspect the
Servicer's servicing facilities for the purpose of satisfying such prospective
Owner that the Servicer has the ability to service the Mortgage Loans as
provided in this Agreement.
Section 5.03 Covenant. The Servicer shall use its best efforts
to (i) obtain servicer ratings of at least "Average" from Standard & Poor's
and "RPS2-" from Fitch and (ii) become a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved
servicer, in either case, as soon as practicable.
ARTICLE VI
TERMINATION
Section 6.01 Liability of the Owner and the Servicer. The Owner
and the Servicer shall each be liable in accordance with the terms of this
Agreement only to the extent of
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the obligations specifically and respectively imposed upon and undertaken by
the Owner and Servicer in this Agreement.
Section 6.02 Termination. (a) This Agreement shall terminate
with respect to the Mortgage Loans or portion thereof transferred on the
related Subsequent Transfer Date or on such other date as mutually agreed upon
by the Owner and the Servicer. The Owner may elect to terminate this Agreement
and transfer the servicing from the Servicer prior to the related Subsequent
Transfer Date with respect to all or any portion of the Mortgage Loans by
providing written notice to the Servicer at least 30 days prior to the date on
which it intends to transfer the servicing of its intent to transfer the
servicing from the Servicer.
In the event the Servicer is terminated pursuant to the terms
of this Agreement, the Servicer agrees to cooperate with the Owner and with
any party designated as the successor servicer or subservicer in transferring
the servicing to such successor servicer. In addition, the Servicer shall be
responsible for notifying the related mortgagors of any transfer of servicing
in accordance with the requirements of the RESPA and the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
National Affordable Housing Act of 1990, as amended.
On or before the related Subsequent Transfer Date or such other
date specified by the Owner in accordance with this Section 6.02(a) for the
transfer of servicing from the Servicer, the Servicer shall prepare, execute
and deliver to the successor entity designated by the Owner any and all
documents and other instruments, place in such successor's possession all
Mortgage Loan Documents necessary or appropriate to effect the purposes of
such notice of termination, including but not limited to the transfer and
endorsement or assignment of the Mortgage Loans and related documents. The
Servicer shall cooperate with the Owner and such successor in effecting the
termination of the Servicer's responsibilities and rights hereunder.
On the related Subsequent Transfer Date for each Mortgage Loan,
this Agreement, except for Articles VI, VIII, IX and X which shall survive the
related Subsequent Transfer Date, shall terminate.
(b) Servicing Advances. On or before the date which is five (5)
days after the related Subsequent Transfer Date, the Owner or its designee
shall reimburse the Servicer for any Servicing Advances and Monthly Advances
with respect to any Mortgage Loan. This Section 6.02(b) shall survive the
related Subsequent Transfer Date; provided that neither the Owner nor its
designee shall be obligated to reimburse the Servicer for any Servicing
Advances or Monthly Advances which are reasonably deemed to be nonrecoverable
by the Owner or its designee as of the related Subsequent Transfer Date in its
sole reasonable discretion.
(c) Additional Termination Provisions. Notwithstanding and in
addition to the foregoing, in the event that (i) a Mortgage Loan becomes
delinquent for a period of 90 days or more (a "Delinquent Mortgage Loan") or
(ii) a Mortgage Loan becomes an REO Property, the Owner may at its election
terminate this Agreement with respect to such Delinquent Mortgage Loan or REO
Property, upon 15 days' written notice to the Servicer, and have servicing
transferred to a successor servicer.
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ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the
Subsequent Transfer Date. Prior to the related Subsequent Transfer Date, the
contents of each Servicing File are and shall be held in trust by the Servicer
for the benefit of the Owner as the owner thereof. The Servicer shall maintain
in the Servicing File a copy of the contents of each Mortgage File and the
originals of the documents in each Mortgage File not delivered to the Owner.
The possession of the Servicing File by the Servicer is at the will of the
Owner for the sole purpose of servicing the related Mortgage Loan, pursuant to
this Agreement, and such retention and possession by the Servicer is in its
capacity as Servicer only and at the election of the Owner. The Servicer shall
release its custody of the contents of any Servicing File only in accordance
with written instructions from the Owner, unless such release is required as
incidental to the Servicer's servicing of the Mortgage Loans pursuant to this
Agreement, or is in connection with a repurchase of any Mortgage Loan from the
Owner.
The Servicer shall be responsible for maintaining, and shall
maintain, a complete set of books and records for each Mortgage Loan which
shall be marked clearly to reflect the ownership of each Mortgage Loan by the
Owner. In particular, the Servicer shall maintain in its possession, available
for inspection by the Owner or its designee, and shall deliver to the Owner or
its designee upon demand, evidence of compliance with all federal, state and
local laws, rules and regulations, and requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac, including but not limited to documentation as to the method used in
determining the applicability of the provisions of the Flood Disaster
Protection Act of 1973, as amended, to the Mortgaged Property, documentation
evidencing insurance coverage and eligibility of any condominium project for
approval by ▇▇▇▇▇▇ Mae and periodic inspection reports as required by Section
2.12.
The Servicer shall keep at its servicing office books and
records in which, subject to such reasonable regulations as it may prescribe,
the Servicer shall note transfers of Mortgage Loans. No transfer of a Mortgage
Loan may be made unless such transfer is in compliance with the terms hereof.
For the purposes of this Agreement, the Servicer shall be under no obligation
to deal with any person with respect to this Agreement or the Mortgage Loans
unless the books and records show such person as the owner of the Mortgage
Loan. The Owner may, subject to the terms of this Agreement, sell or transfer
one or more of the Mortgage Loans. The Owner also shall advise the Servicer of
the transfer. Upon receipt of notice of the transfer, the Servicer shall ▇▇▇▇
its books and records to reflect the ownership of the Mortgage Loans of such
assignee, and shall release the previous Owner from its obligations hereunder
with respect to the Mortgage Loans sold or transferred.
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ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification.
(a) The Servicer agrees to indemnify and hold the Owner and any
successor servicer harmless from any liability, claim, loss or damage
(including, without limitation, any reasonable legal fees, judgments or
expenses relating to such liability, claim, loss or damage) to the Owner
directly or indirectly resulting from the Servicer's failure:
(i) to observe and perform any or all of Servicer's duties,
obligations, covenants, agreements, warranties or representations
contained in this Agreement including, without limitation, Sections
4.04, 4.05, 4.12 and 4.13; or
(ii) to comply with all applicable requirements with respect to
the servicing of the Mortgage Loans as set forth herein.
The Servicer immediately shall notify the Owner if a claim is
made by a third party with respect to this Agreement. For purposes of this
Section 8.01(a), "Owner" shall mean the Person then acting as the Owner under
this Agreement and any and all Persons who previously were "Owners" under this
Agreement.
(b) The Owner agrees to indemnify and hold the Servicer
harmless from any liability, claim, loss or damage (including without
limitation, any reasonable legal fees, judgments or expenses relating to such
liability, claim, loss or damage) to the Servicer (i) directly or indirectly
resulting from the Owner's failure to observe and perform any or all of the
Owner's duties, obligations, covenants, agreements, warranties or
representations contained in this Agreement or (ii) directly resulting from
the Servicer taking any legal actions with respect to any Mortgage Loans
and/or REO Properties in the name of the Servicer and without reference to the
Owner, or (iii) any act or omission on the part of the Owner, any prior
servicer or any other third party which occurred in connection with the prior
servicing of a Mortgage Loan, but, in each case, only to the extent such loss
does not result from the failure of the Servicer (x) to observe and perform
any or all of Servicer's duties, obligations, covenants, agreements,
warranties or representations contained in this Agreement or in any other
agreement pursuant to which the Servicer services or has serviced any such
Mortgage Loan; or (y) to comply with all applicable requirements with respect
to the servicing of the Mortgage Loans as set forth in this Agreement or in
any other agreement pursuant to which the Servicer services or has serviced
any such Mortgage Loan.
Section 8.02 Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers,
employees or agents of the Servicer shall be under any liability to the Owner
for any action taken or for refraining from the taking of any action in good
faith pursuant to this Agreement, or for errors in judgment, provided,
however, that this provision shall not protect the Servicer or any such person
against any breach of warranties or representations made herein, its own
negligent actions, or failure to perform its obligations in compliance with
any standard of care set forth in this Agreement, or
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any liability which would otherwise be imposed by reason of any breach of the
terms and conditions of this Agreement. The Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Servicer 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
Agreement and which in its opinion may involve it in any expense or liability,
provided, however, that the Servicer may undertake any such action which it
may deem necessary or desirable in respect to this Agreement and the rights
and duties of the parties hereto. In such event, the Servicer shall be
entitled to reimbursement from the Owner of the reasonable legal expenses and
costs of such action.
Section 8.03 Limitation on Resignation and Assignment by
Servicer.
The Owner has entered into this Agreement with the Servicer and
subsequent purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Servicer, and the representations as to the adequacy
of its servicing facilities, plant, personnel, records and procedures, its
integrity, reputation and financial standing, and the continuance thereof.
Therefore, the Servicer shall not assign this Agreement or the servicing
hereunder or delegate its rights or duties hereunder or any portion hereof or
sell or otherwise dispose of all or substantially all of its property or
assets without the prior written consent of the Owner, which consent shall be
granted or withheld in the reasonable discretion of the Owner.
The Servicer may, without the consent of the Owner, retain
third party contractors to perform certain servicing and loan administration
functions, including without limitation, hazard insurance administration, tax
payment and administration, flood certification and administration, collection
services and similar functions; provided, that the retention of such
contractors by Servicer shall not limit the obligation of the Servicer to
service the Mortgage Loans pursuant to the terms and conditions of this
Agreement.
The Servicer shall not resign from the obligations and duties
hereby imposed on it except by mutual consent of the Servicer and the Owner or
upon the determination that its duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Servicer. Any
such determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Owner which
Opinion of Counsel shall be in form and substance acceptable to the Owner. No
such resignation shall become effective until a successor shall have assumed
the Servicer's responsibilities and obligations hereunder in the manner
provided in Section 6.02.
Without in any way limiting the generality of this Section
8.03, in the event that the Servicer either shall assign this Agreement or the
servicing responsibilities hereunder or delegate its duties hereunder or any
portion thereof or sell or otherwise dispose of all or substantially all of
its property or assets to without the prior written consent of the Owner, then
the Owner shall have the right to terminate this Agreement upon notice given
as set forth in Section 6.02(a), without any payment of any penalty or damages
and without any liability whatsoever to the Servicer or any third party.
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Notwithstanding any provision in this Agreement to the
contrary, the Servicer may at any time upon notice to the Owner, or trustee in
the case of a Reconstitution, and without the consent of any party, solely in
connection with a financing or other facility (any such arrangement, an
"Advance Facility"), assign as collateral security or pledge to another Person
all its rights, title and interest under this Agreement to its rights to
reimbursement of Servicing Advances.
Section 8.04 Assignment by Owner.
Subject to the limitations and requirements set forth in this
Agreement, the Owner shall have the right, to assign, in whole or in part, its
interest under this Agreement with respect to some or all of the Mortgage
Loans, and designate any person to exercise any rights of the Owner hereunder.
Section 8.05 Merger or Consolidation of the Servicer.
The Servicer will keep in full effect its existence, rights and
franchises as a limited partnership under the laws of the state of its filing
except as permitted herein, and will obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement. Any Person into which the Servicer may be
merged or consolidated, or any corporation resulting from any merger,
conversion or consolidation (including by means of the sale of all or
substantially all of the Servicer's assets to such Person) to which the
Servicer shall be a party, or any Person succeeding to the business of the
Servicer (whether or not related to loan servicing), shall be the successor of
the Servicer hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that the Servicer shall not,
without the prior written approval of the Owner, be a party to any such
merger, conversion or consolidation, or sell or otherwise dispose of all or
substantially all of its business or assets if, (i) as a result of such
merger, conversion or consolidation, sale or other disposition, an Event of
Default under Section 11.01 hereof would exist with respect to such successor
Servicer or (ii) such successor has (a) a residential primary servicer rating
for servicing of mortgage loans issued by Standard & Poor's Rating Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., Fitch, Inc. or ▇▇▇▇▇'▇ Investors
Service, Inc. below "average" or its equivalent or (b) a net worth of less
than $25,000,000.
The Servicer shall give 90 days' prior written notice to the
Owner to the extent permitted by applicable law of any such merger,
conversion, consolidation, sale or other disposition to which the Servicer
proposes to be a party. In the event that any successor entity to the Servicer
fails to meet the requirements set forth in this Section 8.04 and the Owner
does not consent to such successor becoming the servicer hereunder, then the
Servicer shall have the right to terminate this Agreement with respect to the
Servicer and any such successor upon notice given as set forth in Section
6.01, without any payment of any termination penalty or termination damages
and without any additional liability whatsoever to the Servicer or any third
party, except for liabilities accrued under this Agreement prior to the date
of termination and for liabilities resulting from Owner's obligations
hereunder, including the payment of the Servicing Fee pursuant to Section
4.03.
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ARTICLE IX
REPRESENTATIONS AND WARRANTIES
Section 9.01 Representations and Warranties Regarding the Servicer. As of the
date hereof and on each date on which a Mortgage Loan Package becomes subject
to the terms of this Agreement, the Servicer warrants and represents to, and
covenants and agrees with, the Owner as follows:
(a) Due Organization and Authority. The Servicer is a Delaware
limited liability company duly organized, validly existing and in good
standing under the laws of Delaware and has all licenses necessary to carry on
its business as now being conducted and is licensed, qualified and in good
standing in each state where a Mortgaged Property is located if the laws of
such state require licensing or qualification in order to conduct business of
the type conducted by the Servicer, and in any event the Servicer is in
compliance with the laws of any such state to the extent necessary to ensure
the enforceability of the related Mortgage Loan in accordance with the terms
of this Agreement; the Servicer has the full power and authority to execute
and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all
instruments or transfer to be delivered pursuant to this Agreement) by the
Servicer and the consummation of the transactions contemplated hereby have
been duly and validly authorized; this Agreement evidences the valid, binding
and enforceable obligation of the Servicer; and all requisite action has been
taken by the Servicer to make this Agreement valid and binding upon the
Servicer in accordance with its terms;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Servicer.
(d) No Conflicts. Neither the execution and delivery of this
Agreement, nor the fulfillment of or compliance with the terms and conditions
of this Agreement, will conflict with or result in a breach of any of the
terms, conditions or provisions of the Servicer's certificate of formation or
limited liability company agreement or any legal restriction or any agreement
or instrument to which the Servicer is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing,
or result in the violation of any law, rule, regulation, order, judgment or
decree to which the Servicer or its property is subject, or impair the ability
of the Owner to realize on the Mortgage Loans, or impair the value of the
Mortgage Loans.
(e) Ability to Service. The Servicer has the facilities,
procedures, and experienced personnel necessary for the sound servicing of
mortgage loans of the same type as the Mortgage Loans. The Servicer is in good
standing to enforce and service mortgage loans in the jurisdiction wherein the
Mortgaged Properties are located.
(f) Ability to Perform. The Servicer does not believe, nor does
it have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement.
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(g) No Litigation Pending. There is no action, suit, proceeding
or investigation pending or to the best of Servicer's knowledge threatened
against the Servicer, before any court, administrative agency or other
tribunal asserting the invalidity of this Agreement, seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or
which, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets of the Servicer, or in any material impairment of the
right or ability of the Servicer to carry on its business substantially as now
conducted, or in any material liability on the part of the Servicer, or which
would draw into question the validity of this Agreement, or the Mortgage Loans
or of any action taken or to be taken in connection with the obligations of
the Servicer contemplated herein, or which would be likely to impair
materially the ability of the Servicer to perform under the terms of this
Agreement.
(h) No Consent Required. No consent, approval, authorization or
order of any court or governmental agency or body is required for the
execution, delivery and performance by the Servicer of or compliance by the
Servicer with this Agreement, or the servicing of the Mortgage Loans as
evidenced by the consummation of the transactions contemplated by this
Agreement, or if required, such approval has been obtained prior to the date
hereof.
(i) No Untrue Information. No statement, report or other
document relating to the Servicer furnished or to be furnished by the Servicer
pursuant to this Agreement or in connection with the transactions contemplated
hereby contains any untrue statement of material fact or omits to state a
material fact necessary to make the statements contained therein not
misleading. Section 9.02 Representations and Warranties of the Owner. As of
the date hereof and on each date on which a Mortgage Loan Package becomes
subject to the terms of this Agreement, the Owner warrants and represents to,
and covenants and agrees with, the Servicer as follows:
(a) Organization and Good Standing; Licensing. The Owner is a
New York limited partnership duly organized, validly existing and has the
power and authority to own its assets and to transact the business in which it
is currently engaged.
(b) Authorization; Binding Obligations. The Owner has the power
and authority to make, execute, deliver and perform this Agreement, and
perform all of the transactions contemplated to be performed by it under this
Agreement, and has taken all necessary action to authorize the execution,
delivery and performance of this Agreement. When executed and delivered, this
Agreement will constitute the legal, valid and binding obligation of the Owner
enforceable in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable remedies.
(c) No Consent Required. The Owner is not required to obtain
the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement, except such as have
been
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obtained or made or as to which the failure to obtain or make will not
materially adversely affect the ability of the Owner to perform all
obligations hereunder.
(d) No Violations. The execution, delivery and performance of
this Agreement by the Owner will not violate any provision of any existing law
or regulation or any order or decree of any court applicable to the Owner,
except for violations that will not adversely affect the Owner's ability to
perform its obligations under this Agreement or the certificate of
incorporation of the Owner, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Owner is a party or by
which the Owner may be bound.
(e) Litigation. No litigation or administrative proceeding of
or before any court, tribunal or governmental body is currently pending or to
the knowledge of the Owner threatened, against the Owner or with respect to
this Agreement, which if adversely determined would have a material adverse
effect on the transactions contemplated by this Agreement.
ARTICLE X
DEFAULT
Section 10.01 Events of Default. The following shall constitute
an Event of Default under this Agreement on the part of the Servicer:
(a) any failure by the Servicer to remit to the Owner any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of two (2) Business Days after the date upon which
notice of such failure is given to the Servicer, requiring the same to be
remedied, shall have been given to the Servicer by the Owner; or
(b) the failure by the Servicer duly to observe or perform in
any material respect any other of the covenants or agreements on the part of
the Servicer set forth in this Agreement or in the Custodial Agreement which
continues unremedied for a period of 30 days after the date on which notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Owner (the date of delivery of such notice, the "Notice
Date"); provided, however, that in the case of a failure that cannot be cured
within thirty (30) days after the Notice Date, the cure period may be extended
if the Servicer can demonstrate to the reasonable satisfaction of the Owner
that the failure can be cured and the Servicer is diligently pursuing remedial
action; or
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for
a period of 60 days; or
(d) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and
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liabilities or similar proceedings of or relating to the Servicer or of or
relating to all or substantially all of its property; or
(e) the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(f) the Servicer fails to maintain its license to do business
or service residential mortgage loans in any jurisdiction where the Mortgaged
Properties are located for more than thirty (30) days after receiving notice
from any Person thereof; or
(g) Any reduction, withdrawal or qualification of the servicing
credit of the Servicer by any Rating Agency which results in the inability of
the Servicer to act as a primary or special servicer for any mortgage-backed
or asset-backed transaction rated or to be rated by any such Rating Agency; or
(h) the Servicer attempts to assign its right to servicing
compensation hereunder or the Servicer attempts, without the consent of the
Owner, to sell or otherwise dispose of all or substantially all of its
property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any portion
thereof in a manner not permitted under this Agreement.
In each and every such case, so long as an Event of Default shall not have
been remedied, in addition to whatsoever rights the Owner may have at law or
equity to damages, including injunctive relief and specific performance, the
Owner, by notice in writing to the Servicer, may terminate without
compensation all the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof.
Upon receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Mortgage Loans or otherwise, shall pass to and be vested in the
successor appointed pursuant to Section 6.02. Upon written request from the
Owner, the Servicer shall prepare, execute and deliver any and all documents
and other instruments, place in such successor's possession all Mortgage Files
to the extent initially provided to the Servicer, and do or accomplish all
other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise, at the
Servicer's sole expense or as otherwise provided under Accepted Servicing
Practices. The Servicer agrees to cooperate with the Owner and such successor
in effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by the Servicer to the Custodial Account or Escrow Account or thereafter
received with respect to the Mortgage Loans.
Section 10.02 Waiver of Defaults. By a written notice, the
Owner may waive any default by the Servicer in the performance of its
obligations hereunder and its consequences. Upon any waiver of a past default,
such default shall cease to exist, and any Event of Default
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arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so
waived.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Notices. All notices, requests, demands and other
communications which are required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given upon
the delivery or mailing thereof, as the case may be, sent by registered or
certified mail, return receipt requested:
(a) If to Owner to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Servicer to:
Avelo Mortgage, L.L.C.
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President and General Counsel
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇ / (▇▇▇) ▇▇▇-▇▇▇▇
(c) With a copy to:
Archon Group, L.P.
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Section 11.02 Waivers. Either the Servicer or Owner may upon
consent of all parties, by written notice to the others:
(a) Waive compliance with any of the terms, conditions or
covenants required to be complied with by the others hereunder; and
(b) Waive or modify performance of any of the obligations of
the others hereunder.
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The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other
subsequent breach.
Section 11.03 [Reserved].
Section 11.04 Entire Agreement; Amendment. This Agreement,
including all documents and exhibits incorporated by reference herein,
constitutes the entire agreement between the parties with respect to servicing
of the Mortgage Loans. This Agreement may be amended and any provision hereof
waived, but, only in writing signed by the party against whom such enforcement
is sought.
Section 11.05 Execution; Binding Effect. This Agreement may be
executed in one or more counterparts and by the different parties hereto on
separate counterparts, each of which, when so executed, shall be deemed to be
an original; such counterparts, together, shall constitute one and the same
agreement. Subject to Section 8.03, this Agreement shall inure to the benefit
of and be binding upon the Servicer and the Owner and their respective
successors and assigns.
Section 11.06 Headings. Headings of the Articles and Sections
in this Agreement are for reference purposes only and shall not be deemed to
have any substantive effect.
Section 11.07 Applicable Law. This Agreement shall be construed
in accordance with the laws of the State of New York.
Section 11.08 Relationship of Parties. Nothing herein contained
shall be deemed or construed to create a partnership or joint venture between
the parties. The duties and responsibilities of the Servicer shall be rendered
by them as independent contractors and not as an agent of Owner. The Servicer
shall have full control of all of its acts, doings, proceedings, relating to
or requisite in connection with the discharge of its duties and
responsibilities under this Agreement.
Section 11.09 Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
Section 11.10 General Interpretive Principles. For purposes of
this Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the
other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
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(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(d) reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 11.11 Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation,
(a) consents, waivers and modifications which may hereafter be
executed,
(b) documents received by any party at the closing, and
(c) financial statements, certificates and other information
previously or hereafter furnished, may be reproduced by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process. The parties agree that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding,
whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
Section 11.12 Further Agreements. The Servicer and the Owner
each agree to execute and deliver to the other such reasonable and appropriate
additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement. Section
11.13 No Solicitation. From and after the related Transfer
Date, the Servicer agrees that it will not take any action or permit or cause
any action to be taken by any of its agents or affiliates, or by any
independent contractors on the Servicer's behalf, to personally, by telephone
or mail, solicit the Mortgagor under any Mortgage Loan for any purpose
whatsoever, including to refinance a Mortgage Loan, in whole or in part,
without the prior written consent of the Owner. It is understood and agreed
that all rights and benefits relating to the solicitation of any Mortgagors
and the attendant rights, title and interest in and to the list of such
Mortgagors and data relating to their Mortgages (including insurance renewal
dates) shall be transferred to the Owner pursuant hereto on the related
Transfer Date and the Servicer shall take no action to undermine these rights
and benefits. Notwithstanding the foregoing, it is understood and agreed that
promotions undertaken by the Servicer or any affiliate of the Servicer which
are directed to the general public at large, including, without limitation,
mass mailing, internet and e-mail solicitations, based in all instances, on
commercially acquired mailing lists (which may not be targeted at the
Mortgagors) and newspaper, radio and television advertisements shall not
constitute solicitation under this Section 29.
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Section 11.14 Waiver of Trial by Jury. THE SERVICER AND THE OWNER EACH
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY
DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 11.15 Submission To Jurisdiction; Waivers. The Servicer
hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF,
TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE
COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING
MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY
LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR
THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH
ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF
BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR
FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH HEREIN
OR AT SUCH OTHER ADDRESS OF WHICH THE OWNER SHALL HAVE BEEN
NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE
RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO ▇▇▇ IN ANY OTHER
JURISDICTION.
Section 11.16 Confidential Information. The Servicer and Owner
understand and agree that this Agreement, any other agreements executed in
connection with the sale contemplated hereunder, any agreements executed in
connection with any Reconstitution, and any offering circulars or other
disclosure documents produced in connection with any Reconstitution are
confidential and proprietary to the Owner or Servicer, and the Servicer and
Owner agree to hold such documents confidential and not to divulge such
documents to anyone except (a) to the extent required by law or judicial order
or to enforce its rights or remedies under this Agreement, (b) to the extent
such information enters into the public domain other than through the wrongful
act of the Servicer or the Owner, as the case may be, (c) as is necessary in
working with legal counsel, rating agencies, auditors, agents, taxing
authorities or other
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governmental agencies or (d) the federal income tax treatment of the
transactions hereunder, any fact relevant to understanding the federal tax
treatment of the transactions hereunder, and all materials of any kind
(including opinions or other tax analyses) relating to such federal income tax
treatment; provided that the Servicer may not disclose the name of or
identifying information with respect to Owner or any pricing terms or other
nonpublic business or financial information that is unrelated to the purported
or claimed federal income tax treatment of the transactions hereunder and is
not relevant to understanding the purported or claimed federal income tax
treatment of the transactions hereunder. Moreover, the Servicer understands
and agrees that this Agreement, any other agreements executed in connection
with the sale contemplated hereunder, any agreements executed in connection
with the securitization of the Mortgage Loans, and any offering circulars or
other disclosure documents produced in connection with such securitization are
confidential and proprietary to the Owner, and the Servicer agrees to hold
such documents confidential and not to divulge such documents to anyone except
(a) to the extent required by law or judicial order or to enforce its rights
or remedies under this letter agreement or the Agreements, (b) to the extent
such information enters into the public domain other than through the wrongful
act of the Servicer, or (c) as is necessary in working with legal counsel,
auditors, agents, rating agencies, taxing authorities or other governmental
agencies. The rights and obligations set forth in this paragraph shall survive
the related Transfer Date and shall not merge into the closing documents but
shall be independently enforceable by the parties hereto.
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01 Intent of the Parties; Reasonableness. The Owner
and the Servicer acknowledge and agree that the purpose of Article XII of this
Agreement is to facilitate compliance by the Owner and any Depositor with the
provisions of Regulation AB and related rules and regulations of the
Commission. Although Regulation AB is applicable by its terms only to
offerings of asset-backed securities that are registered under the Securities
Act, the Servicer acknowledges that investors in privately offered securities
may require that the Owner or any Depositor provide comparable disclosure in
unregistered offerings. References in this Agreement to compliance with
Regulation AB include provision of comparable disclosure in private offerings.
Neither the Owner nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder (or the provision in a private offering of disclosure
comparable to that required under the Securities Act). The Servicer
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Owner or any Depositor in good faith for delivery of
information under these provisions on the basis of evolving interpretations of
Regulation AB. In connection with any Securitization Transaction, the Servicer
shall cooperate fully with the Owner to deliver to the Owner (including any of
its assignees or designees) and any Depositor, any and all statements,
reports,
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certifications, records and any other information necessary in the
good faith determination of the Owner or any Depositor to permit the Owner or
such Depositor to comply with the provisions of Regulation AB, together with
such disclosures relating to the Servicer, any Subservicer and the Mortgage
Loans, or the servicing of the Mortgage Loans, reasonably believed by the
Owner or any Depositor to be necessary in order to effect such compliance.
The Owner (including any of its assignees or designees) shall
cooperate with the Servicer by providing timely notice of requests for
information under these provisions and by reasonably limiting such requests to
information required, in the Owner's reasonable judgment, to comply with
Regulation AB.
Section 12.02 Additional Representations and Warranties of the
Servicer.
(a) The Servicer shall be deemed to represent to the Owner and
to any Depositor, as of the date on which information is first provided to the
Owner or any Depositor under Section 12.03 that, except as disclosed in
writing to the Owner or such Depositor prior to such date: (i) the Servicer is
not aware and has not received notice that any default, early amortization or
other performance triggering event has occurred as to any other securitization
due to any act or failure to act of the Servicer; (ii) the Servicer has not
been terminated as servicer in a residential mortgage loan securitization,
either due to a servicing default or to application of a servicing performance
test or trigger; (iii) no material noncompliance with the applicable servicing
criteria with respect to other securitizations of residential mortgage loans
involving the Servicer as servicer has been disclosed or reported by the
Servicer; (iv) no material changes to the Servicer's policies or procedures
with respect to the servicing function it will perform under this Agreement
and any Reconstitution Agreement for mortgage loans of a type similar to the
Mortgage Loans have occurred during the three-year period immediately
preceding the related Securitization Transaction; (v) there are no aspects of
the Servicer's financial condition that could have a material adverse effect
on the performance by the Servicer of its servicing obligations under this
Agreement or any Reconstitution Agreement; (vi) there are no material legal or
governmental proceedings pending (or known to be contemplated) against the
Servicer or any Subservicer; and (vii) there are no affiliations,
relationships or transactions relating to the Servicer or any Subservicer with
respect to any Securitization Transaction and any party thereto identified by
the related Depositor of a type described in Item 1119 of Regulation AB.
(b) If so requested by the Owner or any Depositor on any date
following the date on which information is first provided to the Owner or any
Depositor under Section 12.03, the Servicer shall, within five Business Days
following such request, confirm in writing the accuracy of the representations
and warranties set forth in paragraph (a) of this Section or, if any such
representation and warranty is not accurate as of the date of such request,
provide reasonably adequate disclosure of the pertinent facts, in writing, to
the requesting party.
Section 12.03 Information to Be Provided by the Servicer. In
connection with any Securitization Transaction the Servicer shall (i) within
five Business Days following request by the Owner or any Depositor, provide to
the Owner and such Depositor (or cause each Subservicer to provide), in
writing and in form and substance reasonably satisfactory to the Owner and
such Depositor, the information and materials specified in paragraphs (a), (c)
and (f)
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of this Section, and (ii) as promptly as practicable following notice to or
discovery by the Servicer, provide to the Owner and any Depositor (in writing
and in form and substance reasonably satisfactory to the Owner and such
Depositor) the information specified in paragraph (d) of this Section.
(a) If so requested by the Owner or any Depositor, the Servicer
shall provide such information regarding each Subservicer, as is requested for
the purpose of compliance with Items 1103(a)(1), 1117 and 1119 of Regulation
AB. Such information shall include, at a minimum:
(A) [Reserved];
(B) [Reserved];
(C) a description of any material legal or
governmental proceedings pending (or known to be contemplated)
against the Servicer and each Subservicer; and
(D) a description of any affiliation or
relationship between the Servicer, each Subservicer and any of
the following parties to a Securitization Transaction, as such
parties are identified to the Servicer by the Owner or any
Depositor in writing in advance of such Securitization
Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) [Reserved].
(c) If so requested by the Owner or any
Depositor, the Servicer shall provide such information
regarding the Servicer, as servicer of the Mortgage Loans, and
each Subservicer (each of the Servicer and each Subservicer,
for purposes of this paragraph, a "Transaction Servicer"), as
is requested for the purpose of compliance with Item 1108 of
Regulation AB. Such information shall include, at a minimum:
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(A) the Transaction Servicer's form of
organization;
(B) a description of how long the Transaction
Servicer has been servicing residential mortgage loans; a
general discussion of the Transaction Servicer's experience in
servicing assets of any type as well as a more detailed
discussion of the Transaction Servicer's experience in, and
procedures for, the servicing function it will perform under
this Agreement and any Reconstitution Agreements; information
regarding the size, composition and growth of the Transaction
Servicer's portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on factors
related to the Transaction Servicer that may be material, in
the good faith judgment of the Owner or any Depositor, to any
analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable, including, without
limitation:
(1) whether any prior securitizations of
mortgage loans of a type similar to
the Mortgage Loans involving the
Transaction Servicer have defaulted or
experienced an early amortization or
other performance triggering event
because of servicing during the
three-year period immediately
preceding the related Securitization
Transaction;
(2) the extent of outsourcing the
Transaction Servicer utilizes;
(3) whether there has been previous
disclosure of material noncompliance
with the applicable servicing criteria
with respect to other securitizations
of residential mortgage loans
involving the Transaction Servicer as
a servicer during the three-year
period immediately preceding the
related Securitization Transaction;
(4) whether the Transaction Servicer has
been terminated as servicer in a
residential mortgage loan
securitization, either due to a
servicing default or to application of
a servicing performance test or
trigger; and
(5) such other information as the Owner or
any Depositor may reasonably request
for the purpose of compliance with
Item 1108(b)(2) of Regulation AB;
(C) a description of any material changes during
the three-year period immediately preceding the related
Securitization Transaction to the Transaction Servicer's
policies or procedures with respect to the servicing function
it will perform under this Agreement for mortgage loans of a
type similar to the Mortgage Loans;
(D) information regarding the Transaction
Servicer's financial condition, to the extent that there is a
material risk that an adverse financial event or circumstance
involving the Transaction Servicer could have a material
adverse
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effect on the performance by the Transaction Servicer of
its servicing obligations under this Agreement or any
Reconstitution Agreement;
(E) information regarding advances made by the
Transaction Servicer on the Mortgage Loans and the Transaction
Servicer's overall servicing portfolio of residential mortgage
loans for the three-year period immediately preceding the
related Securitization Transaction, which may be limited to a
statement by an authorized officer of the Transaction Servicer
to the effect that the Transaction Servicer has made all
advances required to be made on residential mortgage loans
serviced by it during such period, or, if such statement would
not be accurate, information regarding the percentage and type
of advances not made as required, and the reasons for such
failure to advance;
(F) a description of the Transaction Servicer's
processes and procedures designed to address any special or
unique factors involved in servicing loans of a similar type as
the Mortgage Loans;
(G) a description of the Transaction Servicer's
processes for handling delinquencies, losses, bankruptcies and
recoveries, such as through liquidation of mortgaged
properties, sale of defaulted mortgage loans or workouts; and
(H) information as to how the Transaction
Servicer defines or determines delinquencies and charge-offs,
including the effect of any grace period, re-aging,
restructuring, partial payments considered current or other
practices with respect to delinquency and loss experience.
(d) If so requested by the Owner or any Depositor for the
purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Servicer shall (or shall
cause each Subservicer to) (i) notify the Owner and any Depositor in writing
of (A) any material litigation or governmental proceedings pending against the
Servicer or any Subservicer and (B) any affiliations or relationships that
develop following the closing date of a Securitization Transaction between the
Servicer or any Subservicer and any of the parties specified in clause (D) of
paragraph (a) of this Section (and any other parties identified in writing by
the requesting party) with respect to such Securitization Transaction, and
(ii) provide to the Owner and any Depositor a description of such proceedings,
affiliations or relationships.
(e) As a condition to the succession to the Servicer or any
Subservicer as servicer or subservicer under this Agreement or any
Reconstitution Agreement by any Person (i) into which the Servicer or such
Subservicer may be merged or consolidated, or (ii) which may be appointed as a
successor to the Servicer or any Subservicer, the Servicer shall provide to
the Owner and any Depositor, at least 15 calendar days prior to the effective
date of such succession or appointment, (x) written notice to the Owner and
any Depositor of such succession or appointment and (y) in writing and in form
and substance reasonably satisfactory to the Owner and such Depositor, all
information reasonably requested by the Owner or any Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to any class of asset-backed securities.
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(f) In addition to such information as the Servicer, as
servicer, is obligated to provide pursuant to other provisions of this
Agreement, if so requested by the Owner or any Depositor, the Servicer shall
provide such information regarding the performance or servicing of the
Mortgage Loans as is reasonably required by the Owner or any Depositor to
facilitate preparation of distribution reports in accordance with Item 1121 of
Regulation AB and to permit the Owner or such Depositor to comply with the
provisions of Regulation AB relating to Static Pool Information regarding the
performance of the Mortgage Loans on the basis of the Owner's or such
Depositor's reasonable, good faith interpretation of the requirements of Item
1105(a)(1)-(3) of Regulation AB (including without limitation as to the format
and content of such Static Pool Information). Such information shall be
provided concurrently with the monthly reports otherwise required to be
delivered by the Servicer under this Agreement, commencing with the first such
report due in connection with the applicable Securitization Transaction.
(g) The Servicer shall provide to each originator of a Mortgage
Loan (or if such Mortgage Loan was not sold to Owner by the originator, the
seller of such Mortgage Loan) (the "Static Pool Party") information with
respect to each Mortgage Loan from and after the date Servicer commences
servicing such Mortgage Loan necessary for such Static Pool Party to comply
with its obligations under Regulation AB, including, without limitation,
providing to the Static Pool Party static pool information, as set forth in
Item 1105(a)(2) and (3) of Regulation AB.
(h) Promptly following notice or discovery of a material error
in the information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Servicer shall provide corrected static pool
information to the Owner in the same format in which static pool information
was previously provided to such party by the Servicer.
Section 12.04 Servicer Compliance Statement. On or before March
1 of each calendar year, commencing in 2007, the Servicer shall deliver to the
Owner and any Depositor a statement of compliance addressed to the Owner and
such Depositor and signed by an authorized officer of the Servicer, to the
effect that (i) a review of the Servicer's activities during the immediately
preceding calendar year (or applicable portion thereof) and of its performance
under this Agreement and any applicable Reconstitution Agreement during such
period has been made under such officer's supervision, and (ii) to the best of
such officers' knowledge, based on such review, the Servicer has fulfilled all
of its obligations under this Agreement and any applicable Reconstitution
Agreement in all material respects throughout such calendar year (or
applicable portion thereof) or, if there has been a failure to fulfill any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status thereof.
Section 12.05 Report on Assessment of Compliance and
Attestation.
(a) On or before March 1 of each calendar year, commencing in
2007, the Servicer shall:
(i) deliver to the Owner and any Depositor a report (in form
and substance reasonably satisfactory to the Owner and such
Depositor) regarding the Servicer's
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assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18
and 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such
report shall be addressed to the Owner and such Depositor and signed
by an authorized officer of the Servicer, and shall address each of
the Servicing Criteria specified on a certification substantially in
the form of Exhibit 7 hereto delivered to the Owner concurrently
with the execution of this Agreement;
(ii) deliver to the Owner and any Depositor a report of a
registered public accounting firm reasonably acceptable to the Owner
and such Depositor that attests to, and reports on, the assessment
of compliance made by the Servicer and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance with
Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities
Act and the Exchange Act;
(iii) cause each Subservicer, and each Subcontractor determined
by the Company pursuant to Section 12.06(b) to be "participating in
the servicing function" within the meaning of Item 1122 of
Regulation AB, to deliver to the Owner and any Depositor an
assessment of compliance and accountants' attestation as and when
provided in paragraphs (a) and (b) of this Section; and
(iv) if requested by the Owner or any Depositor not later than
February 1 of the calendar year in which such certification is to be
delivered, deliver to the Owner, any Depositor and any other Person
that will be responsible for signing the certification (a "Sarbanes
Certification") required by Rules 13a-14(d) and 15d-14(d) under the
Exchange Act (pursuant to Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002) on behalf of an asset-backed issuer with respect to a
Securitization Transaction a certification in the form attached
hereto as Exhibit 6.
The Servicer acknowledges that the parties identified in clause
(a)(iv) above may rely on the certification provided by the Servicer pursuant
to such clause in signing a Sarbanes Certification and filing such with the
Commission. Neither the Owner nor any Depositor will request delivery of a
certification under clause (a)(iv) above, unless a Depositor is required under
the Exchange Act to file an annual report on Form 10-K with respect to an
issuing entity whose asset pool includes Mortgage Loans.
(b) Each assessment of compliance provided by a Subservicer
pursuant to Section 12.05(a)(i) shall address each of the Servicing Criteria
specified on a certification substantially in the form of Exhibit 7 hereto
delivered to the Owner concurrently with the execution of this Agreement or,
in the case of a Subservicer subsequently appointed as such, on or prior to
the date of such appointment. An assessment of compliance provided by a
Subcontractor pursuant to Section 12.05(a)(iii) need not address any elements
of the Servicing Criteria other than those specified by the Servicer pursuant
to Section 12.06.
Section 12.06 Use of Subservicers and Subcontractors. The
Servicer shall not hire or otherwise utilize the services of any Subservicer
to fulfill any of the obligations of the Servicer as servicer under this
Agreement or any Reconstitution Agreement unless the Servicer complies with
the provisions of paragraph (a) of this Section. The Servicer shall not hire
or otherwise utilize the services of any Subcontractor, and shall not permit
any Subservicer to hire
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or otherwise utilize the services of any Subcontractor, to fulfill any of the
obligations of the Servicer as servicer under this Agreement or any
Reconstitution Agreement unless the Servicer complies with the provisions of
paragraph (b) of this Section.
(a) It shall not be necessary for the Servicer to seek the
consent of the Owner or any Depositor to the utilization of any Subservicer.
The Servicer shall cause any Subservicer used by the Servicer (or by any
Subservicer) for the benefit of the Owner and any Depositor to comply with the
provisions of this Section and with Sections 12.02, 12.03(c) and (e), 12.04,
12.05 and 12.07 of this Agreement to the same extent as if such Subservicer
were the Servicer, and to provide the information required with respect to
such Subservicer under Section 12.03(d) of this Agreement. The Servicer shall
be responsible for obtaining from each Subservicer and delivering to the Owner
and any Depositor any servicer compliance statement required to be delivered
by such Subservicer under Section 12.04, any assessment of compliance and
attestation required to be delivered by such Subservicer under Section 12.05
and any certification required to be delivered to the Person that will be
responsible for signing the Sarbanes Certification under Section 12.05 as and
when required to be delivered.
(b) It shall not be necessary for the Servicer to seek the
consent of the Owner or any Depositor to the utilization of any Subcontractor.
The Servicer shall promptly upon request provide to the Owner and any
Depositor (or any designee of the Depositor, such as a master servicer or
administrator) a written description (in form and substance satisfactory to
the Owner and such Depositor) of the role and function of each Subcontractor
utilized by the Servicer or any Subservicer, specifying (i) the identity of
each such Subcontractor, (ii) which (if any) of such Subcontractors are
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor
identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor
determined to be "participating in the servicing function" within the meaning
of Item 1122 of Regulation AB, the Servicer shall cause any such Subcontractor
used by the Servicer (or by any Subservicer) for the benefit of the Owner and
any Depositor to comply with the provisions of Sections 12.05 and 12.07 of
this Agreement to the same extent as if such Subcontractor were the Servicer.
The Servicer shall be responsible for obtaining from each Subcontractor and
delivering to the Owner and any Depositor any assessment of compliance and
attestation required to be delivered by such Subcontractor under Section
12.05, in each case as and when required to be delivered.
Section 12.07 Indemnification; Remedies.
(a) The Servicer shall indemnify the Owner, each affiliate of
the Owner, the Depositor and each of the following parties participating in a
Securitization Transaction: each sponsor and issuing entity; each Person
responsible for the preparation, execution or filing of any report required to
be filed with the Commission with respect to such Securitization Transaction,
or for execution of a certification pursuant to Rule 13a-14(d) or Rule
15d-14(d) under the Exchange Act with respect to such Securitization
Transaction; each broker dealer acting as underwriter, placement agent or
initial purchaser, each Person who controls any of such parties or the
Depositor (within the meaning of Section 15 of the Securities Act and Section
20 of the
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Exchange Act); each Static Pool Party and the respective present and
former directors, officers, employees and agents of each of the foregoing and
of the Depositor, and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report,
certification, accountants' letter or other material provided under
this Article XII by or on behalf of the Servicer, or provided in
written or electronic form under this Article XII by or on behalf of
any Subservicer or Subcontractor (collectively, the "Servicer
Information"), or (B) the omission or alleged omission to state in
the Servicer Information a material fact required to be stated in
the Servicer Information or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not
misleading; provided, by way of clarification, that clause (B) of
this paragraph shall be construed solely by reference to the
Servicer Information and not to any other information communicated
in connection with a sale or purchase of securities, without regard
to whether the Servicer Information or any portion thereof is
presented together with or separately from such other information;
(ii) any failure by the Servicer, any Subservicer or any
Subcontractor to deliver any information, report, certification,
accountants' letter or other material when and as required under
this Article XII, including any failure by the Servicer to identify
pursuant to Section 12.06(b) any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation
AB; or
(iii) any breach by the Servicer of a representation or
warranty set forth in Section 12.02(a) or in a writing furnished
pursuant to Section 12.02(b) and made as of a date prior to the
closing date of the related Securitization Transaction, to the
extent that such breach is not cured by such closing date, or any
breach by the Servicer of a representation or warranty in a writing
furnished pursuant to Section 12.02(b) to the extent made as of a
date subsequent to such closing date.
In the case of any failure of performance described in clause
(a)(ii) of this Section, the Servicer shall promptly reimburse the Owner, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission
with respect to such Securitization Transaction, or for execution of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to such Securitization Transaction, for all costs reasonably
incurred by each such party in order to obtain the information, report,
certification, accountants' letter or other material not delivered as required
by the Servicer, any Subservicer or any Subcontractor.
(b) (i) Any failure by the Servicer, any Subservicer or any
Subcontractor to deliver any information, report, certification, Static Pool
Party static pool information, accountants' letter or other material when and
as required under this Article XII, or any breach by the Servicer of a
representation or warranty set forth in Section 12.02(a) or in a writing
furnished pursuant to Section 12.02(g) and made as of a date prior to the
closing date of the
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related Securitization Transaction, to the extent that such breach is not
cured by such closing date, or any breach by the Servicer of a representation
or warranty in a writing furnished pursuant to Section 12.02(b) to the extent
made as of a date subsequent to such closing date, shall, except as provided
in clause (ii) of this paragraph, immediately and automatically, without
notice or grace period, constitute an Event of Default with respect to the
Servicer under this Agreement and any applicable Reconstitution Agreement, and
shall entitle the Owner or Depositor, as applicable, in its sole discretion to
terminate the rights and obligations of the Servicer as servicer under this
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement or any applicable Reconstitution
Agreement to the contrary) of any compensation to the Servicer; provided that
to the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Servicer as servicer, such
provision shall be given effect.
(ii) Any failure by the Servicer, any Subservicer or any
Subcontractor to deliver any information, report, certification or
accountants' letter when and as required under Section 12.04 or
12.05, including (except as provided below) any failure by the
Servicer to identify pursuant to Section 12.06(b) any Subcontractor
"participating in the servicing function" within the meaning of Item
1122 of Regulation AB, which continues unremedied for ten calendar
days after the date on which such information, report, certification
or accountants' letter was required to be delivered shall constitute
an Event of Default with respect to the Servicer under this
Agreement and any applicable Reconstitution Agreement, and shall
entitle the Owner or Depositor, as applicable, in its sole
discretion to terminate the rights and obligations of the Servicer
as servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything
in this Agreement to the contrary) of any compensation to the
Servicer; provided that to the extent that any provision of this
Agreement and/or any applicable Reconstitution Agreement expressly
provides for the survival of certain rights or obligations following
termination of the Servicer as servicer, such provision shall be
given effect.
Neither the Owner nor any Depositor shall be entitled to
terminate the rights and obligations of the Servicer pursuant to
this subparagraph (b)(ii) if a failure of the Servicer to identify a
Subcontractor "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB was attributable solely to the
role or functions of such Subcontractor with respect to mortgage
loans other than the Mortgage Loans.
(iii) The Servicer shall promptly reimburse the Owner (or any
designee of the Owner, such as a master servicer) and any Depositor,
as applicable, for all reasonable expenses incurred by the Owner (or
such designee) or such Depositor, as such are incurred, in
connection with the termination of the Servicer as servicer and the
transfer of servicing of the Mortgage Loans to a successor servicer.
The provisions of this paragraph shall not limit whatever rights the
Owner or any Depositor may have under other provisions of this
Agreement and/or any applicable Reconstitution Agreement or
otherwise, whether in equity or at law, such as an action for
damages, specific performance or injunctive relief.
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IN WITNESS WHEREOF, the parties have executed this Agreement
under seal as of the date and year first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY
(the Owner)
By: ▇▇▇▇▇▇▇ SACHS REAL ESTATE FUNDING CORP.
By:
----------------------------------
Name:
Title:
AVELO MORTGAGE, L.L.C.
(the Servicer)
By:
---------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
SCHEDULE 1
Minimum fields required for the Monthly Remittance Report:
(a) investor;
(b) pool;
(c) loan number;
(d) inventory loan number;
(e) contractual due date;
(f) interest rate;
(g) servicing fee rate;
(h) servicing payment;
(i) principal and interest payment;
(j) beginning principal balance;
(k) ending principal balance;
(l) noncash principal adjustments;
(m) noncash interest adjustments;
(n) prepayment penalties;
(o) remittance amount;
(p) actual principal payments (actual principal payments that
the borrower made in the reporting period);
(q) actual interest payments (actual interest payments that the
borrower made in the reporting period);
(r) principal curtailments (principal curtailments applied to
the loan in the reporting period);
(s) payoff date;
(t) borrower's name;
(u) escrow balance;
(v) corporate balance;
(w) suspense balance;
Sch. 1-1
SCHEDULE 2
MORTGAGE LOAN DOCUMENTS
With respect to each Mortgage Loan, the Mortgage Loan Documents
shall include each of the following items:
(a) the original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _________, without recourse" and
signed in the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage Notes
for endorsements, the endorsement may be contained on an allonge, if state law
so allows Custodian is so advised by the loan seller. If the Mortgage Loan was
acquired loan seller in a merger, the endorsement must be by "[Last Endorsee],
successor by merger to [name of predecessor]." If the Mortgage Loan was
acquired or originated by the Last Endorsee while doing business under another
name, the endorsement must be by "[Last Endorsee], formerly known as [previous
name]";
(b) the original of any guarantee executed
in connection with the Mortgage Note;
(c) the original Mortgage with evidence of recording thereon.
If in connection with any Mortgage Loan, the loan seller cannot deliver or
cause to be delivered the original Mortgage with evidence of recording thereon
on or prior to the related Transfer Date because of a delay caused by the
public recording office where such Mortgage has been delivered for recordation
or because such Mortgage has been lost or because such public recording office
retains the original recorded Mortgage, the loan seller shall deliver or cause
to be delivered to the Custodian, a photocopy of such Mortgage, together with
(i) in the case of a delay caused by the public recording office, an officer's
certificate of the loan seller (or certified by the title company, escrow
agent, or closing attorney) stating that such Mortgage has been dispatched to
the appropriate public recording office for recordation and that the original
recorded Mortgage or a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage will be promptly delivered to the Custodian upon receipt thereof by
the loan seller; or (ii) in the case of a Mortgage where a public recording
office retains the original recorded Mortgage or in the case where a Mortgage
is lost after recordation in a public recording office, a copy of such
Mortgage certified by such public recording office to be a true and complete
copy of the original recorded Mortgage;
(d) the originals of all assumption, modification,
consolidation or extension agreements, if any, with evidence of recording
thereon;
(e) except with respect to each MERS Designated Mortgage Loan,
the original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording. The Assignment of Mortgage must be duly
recorded only if recordation is either necessary under applicable law or
commonly required by private institutional mortgage investors in the area
where the Mortgaged Property is located or on direction of the Owner as
provided in this Agreement. If the Assignment of Mortgage is to be recorded,
the Mortgage shall be
SCH. 2-1
assigned to the Owner. If the Assignment of Mortgage is not to be recorded,
the Assignment of Mortgage shall be delivered in blank. If the Mortgage Loan
was acquired by the loan seller in a merger, the Assignment of Mortgage must
be made by "[Servicer], successor by merger to [name of predecessor]." If the
Mortgage Loan was acquired or originated by the loan seller while doing
business under another name, the Assignment of Mortgage must be by
"[Servicer], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage
(if any) evidencing a complete chain of assignment from the originator to the
Last Endorsee (or to MERS with respect to each MERS Designated Mortgage Loan)
with evidence of recording thereon, or if any such intervening assignment has
not been returned from the applicable recording office or has been lost or if
such public recording office retains the original recorded assignments of
mortgage, the loan seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such intervening assignment, together with (i) in
the case of a delay caused by the public recording office, an officers
certificate of the loan seller (or certified by the title company, escrow
agent, or closing attorney) stating that such intervening assignment of
mortgage has been dispatched to the appropriate public recording office for
recordation and that such original recorded intervening assignment of mortgage
or a copy of such intervening assignment of mortgage certified by the
appropriate public recording office to be a true and complete copy of the
original recorded intervening assignment of mortgage will be promptly
delivered to the Custodian upon receipt thereof by the loan seller; or (ii) in
the case of an intervening assignment where a public recording office retains
the original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording office,
a copy of such intervening assignment certified by such public recording
office to be a true and complete copy of the original recorded intervening
assignment;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and
complete by the title insurance company; and
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
In the event an officer's certificate of the loan seller is
delivered to the Owner because of a delay caused by the public recording
office in returning any recorded document, the loan seller shall deliver to
the Owner, within 90 days of the related Transfer Date, an officer's
certificate which shall (i) identify the recorded document, (ii) state that
the recorded document has not been delivered to the Custodian due solely to a
delay caused by the public recording office, (iii) state the amount of time
generally required by the applicable recording office to record and return a
document submitted for recordation, and (iv) specify the date the applicable
recorded document will be delivered to the Custodian. An extension of the date
specified in (iv) above may be requested from the Owner, which consent shall
not be unreasonably withheld.
SCH. 2-2
SCHEDULE 3
CONTENTS OF EACH MORTGAGE FILE
(a) Copies of each Mortgage Loan Document.
(b) The original hazard insurance policy and, if required by
law, flood insurance policy. (
c) Residential loan application.
(d) Mortgage Loan closing statement.
(e) Verification of employment and income (except for Mortgage
Loans originated under a Limited Documentation Program).
(f) Verification of acceptable evidence of source and amount of
downpayment.
(g) Credit report on the Mortgagor.
(h) Residential appraisal report, if available.
(i) Photograph of the Mortgaged Property.
(j) Survey of the Mortgaged Property, if any.
(k) Copy of each instrument necessary to complete
identification of any exception set forth in the exception schedule in the
title policy, i.e., map or plat, restrictions, easements, sewer agreements,
home association declarations, etc.
(l) All required disclosure statements.
(m) If available, termite report, structural engineer's report,
water potability and septic certification.
(n) Sales contract, if applicable.
(o) Tax receipts, insurance premium receipts, ledger sheets,
payment history from date of origination, insurance claim files,
correspondence, current and historical computerized data files, and all other
processing, underwriting and closing papers and records which are customarily
contained in a mortgage loan file and which are required to document the
Mortgage Loan or to service the Mortgage Loan.
(p) Amortization schedule, if applicable.
Sch. 3-1
EXHIBIT 1
FORM OF MONTHLY REMITTANCE ADVICE
Exh. 1-1
SCHEDULE 1 TO EXHIBIT 1
REPORTING REQUIREMENTS
DATA FILE LAYOUT
Static
Information
Loan Number Loan Number currently being used to 123456789
service this loan.
Prior Loan Number Prior Loan Number (if any). If 987654321
servicing has transferred this
should contain the Loan Number used
by the previous servicer.
Custodian File Number Custodian ID used to file 1de457
documents. This can be the
custodian's only id or a category
used to arrange documents into
proper pools.
Custodian Loan Number Custodian secondary ID used to file 365wer5
documents. Often this is used in
conjunction with Custodian File
Number to uniquely identify loans.
GS Loan Number The Loan number that ▇▇▇▇▇▇▇ Sachs Leave Blank
assigns to the loan
Origination Date Origination Date shown on loan 12/25/2004
documents.
Originator The name of the company that ▇▇▇▇▇ Fargo
originated the loan
Origination Source Broker, etc. Broker
Loan Purchase Date The date that Goldman purchased the 11/25/2004
loan
HOEPA Status Y\N
Type of Ownership like fee simple, lease-hold Lease-Hold
Documentation Type Full, Alt, No Ration, None, Full
▇▇▇▇,▇▇▇▇
Income Verification Flag Was the Borrower's income verified Y
or stated
Asset Verification Were the Borrower's Assets verified Y
Employment Verification Was the Borrower's employment Y
verified
Flood Insurance Indicator Does the property have flood Y
insurance
Min Mers # Mers Certificate Number Y
Product Type Generic category code used 6MO
internally to describe loan type
Product Description Generic category description 6 month arm - IO
Interest Calculation Method The basis on which interest is 30/360
calculated. ( arrears, 360, 365,
advance, etc)
Draw Term The term that the borrower can draw 120
from the line of credit stated in
months
▇▇▇. ▇-▇
▇▇▇ ▇▇▇▇▇▇▇ of the Act FHA Section, if applicable
Balloon Term Number of months to Balloon Date 180
IO Term Indicates the term in months of the 24
interest only period
IO Flag Indicates if the loan is an Y
interest only loan for a period of
the loan
Section 32 Flag Indicates if the loan may violate Y
predatory lending laws (Y/N)
Convertible Flag Indicates that the borrower is Y
allowed to convert an ARM mortgage
to a Fixed Rate mortgage
Assumable Flag Indicates if loan is assumable Y
Balloon Flag Code/literal to identify balloon Y
loans. Example: Y, N.
Buydown Flag Indicates if the loan has a buydown Y
option (Y/N)
Daily Simple Interest Flag Flag to identify loans where Y
interest is due is calculated based
on the date that each payment is
actually received.
Loan Type Code/literal to identify the loan Conventional - PMI
type. (Conventional [w/] PMI ,
Jumbo, FHA, VA, etc)
Property Type Code/literal that identifies the PUD
type of property securing the loan.
( 2 Family, PUD)
Property Address Property address, not billing ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
address.
Property City Property city. Toronto
Property State Property state. NY
Property Zip Property zip. 10004
Condo/PUD Project Name Name of the development. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Number of Units The number of units for the 2
property (1,2,3,4) ( should
correspond to the property type)
Year-Built Date property was built 1978
Lien Position Number used to identify the lien 1
position in effect at the time of
application. Example: 1, 2, 3, O
(other)
Occupancy Type Occupancy status at time of OO
application. (2nd home, owner
occupied, vacant, etc)
Convertible Term The specified period at which a 24
borrower can choose to exercise
convertible rights
Expiration date of conversion
Conversion Expiration Date provisions 12/25/2006
Conversion Fee Fee for converting loan from ARM to
Fixed
Exh. 1-3
Conversion Formula
Convert Lookback The period designated for lookback 45
calculation stated in days.
Convert Index Index used for the conversion
Convert Lifetime Cap Down
Convert Lifetime Cap Up
Convert Margin
Convert Cap Down
Convert Cap Up
Convert Max PI CAP (Up)
Convert Max PI CAP (Down)
PMI Provider Name or code for company providing Radian
private mortgage insurance.
PMI Coverage Percentage Percentage of insurance provided by 12
PMI agreement.
PMI Certificate ID Unique ID to identify PMI insurance 5829471
certificate.
Lender Paid Insurance Flag Indicates if Lender pays PMI Y
Insurance
Lender Paid Insurance Fee stated in percent 0.25
Original Balance Original amount of loan granted to 250000.00
borrower. In the case of
construction loans this should be
the full amount extended on which
the monthly payments are based.
Original Senior Lien Amount Amount of senior lien outstanding 0.00
when loan was originated.
Original Junior Lien Amount Amount of junior liens outstanding 32000.00
when loan was originated
Payment Frequency Monthly, bi-weekly, etc. monthly
Original Scheduled P&I Original Scheduled Principal and 564.12
Interest payment
Original PITI Original Scheduled Principal, 725.12
Interest, Tax and Insurance payment
First Payment Date This is the contractual date when 2/1/2005
the first payment was to be made.
Original Maturity Date This is the contractual date when 1/1/2020
the last payment on the loan is
scheduled to be made. For balloons
it should be the balloon date.
▇▇▇. ▇-▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ The number of months from First 180
Payment Date to Original Maturity
Date inclusive.
Original Amortization Term Original Amortization Term of the 360
loan in number of months. For
fully amortizing loans would be the
same as Original Term. For balloon
loans this would exceed Original
Term. For IO loans this would have
no value.
Original Interest Rate Original contractual interest rate 8.515
for loan. ( provide all decimal
places)
Original Loan To Value Ratio Ratio representing the Original 75.69
Loan Balance to the Original
Appraised Value
Original Combined Loan To For Junior liens, Ratio 85.23
Value Ratio representing the sum of the
Original Loan Balance plus Original
Senior Lien Amount to the Original
Appraised Value
Original Appraised Value Appraised value at time of 550562
application.
Original Appraisal Date Date of the original Appraisal 12/1/2004
Original Appraisal Firm Name of the Appraisal firm Union Appraisals
Appraisal Form Type Form 1040 U, 2005
Appraisal Review Type Desk Top, Drive By
Original Purchase Price Price paid for home. 360000
Purchase BPO BPO at the time of Purchase by GS. 580000
Purchase BPO Date Date of the Purchase BPO 12/1/2004
Purpose of Loan Code/literal used to identify the Purchase
original purpose of the loan. (
case-out refi, refi, purchase,
construction, etc)
Cash-out Amount The Amount that the borrower 10000
removed from the loan
Prepayment Flag Code/Flag to determine if loan was Y
originated with a prepayment
penalty. (Y / N)
Prepayment Penalty Type Code/literal to identify 6 Months Interest
characteristics of penalty. on 80%
Example: 6 MO INT ON 80% ▇▇▇▇,
5/4/3/2/1, 3%.
Prepayment Term Original number of months that 24
penalty was imposed.
Arm Index Description Code/literal used to identify the 6ML
specific underlying index that
adjustable rate loans will reset
from. (6 Months Libor, 1 Yr CMT,
etc)
Margin The spread above the index value 3.65
that a new rate on adjustable rate
loans will be set to; subject to
caps and rounding. (stated in
percent)
ARM Rounding Feature Code/literal used to identify the 0.125
method to be used when computing
new rate on adjustable rate loans.
(stated in percent)
Exh. 1-5
Lookback Days The actual number of days prior to 45
the Next Rate Reset Date that the
underlying index will be referenced
for determining new rate on
adjustable rate loans. Examples:
45, 30, 0.
First Payment Reset Date The first date that any payment 3/1/2007
reset was/is scheduled to occur.
Typically is one month after First
Rate Reset Date.
First Rate Reset Date The first date that any rate reset 2/1/2007
was/is scheduled to occur.
Typically is one month prior to
First Payment Reset Date.
Initial Rate Reset Period Number of payments to be made prior 60
to the first rate reset. For a
typical 5/1 ARM, this would contain
the value 60.
Rate Reset Period Number of payments to be made 12
between rate changes following the
initial rate reset period. For a
typical 5/1 ARM this would contain
the value 12.
Initial Payment Reset Period Number of payments to be made prior 60
to the first payment reset. For a
typical 5/1 ARM, this would contain
the value 60. For non hybrid loans
this would equal the Payment Reset
Period.
Payment Reset Period Number of payments to be made 12
between payment changes following
the Initial Payment Reset Period.
For a typical 5/1 ARM this would
contain the value 12.
Initial Rate Adjustment Cap Maximum rate change allowed on 3
First Rate Reset Date.
First Cap Adjustment Down 0
Rate Adjustment Cap Maximum rate increase allowed 1
subsequent to First Rate Reset Date.
Periodic Floor Maximum rate decrease allowed 0
subsequent to First Rate Reset Date.
Lifetime Caps The maximum amount the rate is 6
allowed to increase by over the
life of the loan.
Lifetime Floor The minimum amount the rate is 0
allowed to increase by over the
life of the loan.
Max Rate The absolute maximum rate allowed 11.65
for the loan.
Min Rate The absolute minimum rate allowed 3.65
for the loan.
Negative Amortization Flag Code/literal to identify loans Y
where negative amortization is
allowed. Example: Y=neg am
allowed, N=no neg am allowed.
Negam Percent Cap Maximum percentage of original 25
balance that a loan may negatively
amortize by. (25%, etc.)
Exh. 1-6
Payment Cap Periodic Cap for monthly principal 6.5
& interest payment increase.
Example 7.5%.
Original FICO score Credit bureau score obtained at 654
application.
Credit Score Company Experian
Original Credit Grade B+
Front Debt To Income Ratio Front End Ratio at time of 56.23
application. Mortgage debt to
borrower income.
Debt To Income Ratio Back End Ratio at time of 68.25
application. Total debt to
borrower income.
Scheduled Due Date Scheduled payment date sold to 2/1/2005
security
Borrower Name Last Name Borrower's Last Name Doe
Borrower Name First Name Borrower's First Name ▇▇▇
CoBorrower Name Last Name Co-Borrower's Last Name Doe
CoBorrower Name First Name Co-Borrower's First Name ▇▇▇▇
Borrower Social Security Eleven character ID. Example: ▇▇▇-▇▇-▇▇▇▇
Number/TIN ▇▇▇-▇▇-▇▇▇▇.
CoBorrower Social Security Eleven character ID. Example: ▇▇▇-▇▇-▇▇▇▇
Number/TIN ▇▇▇-▇▇-▇▇▇▇.
Self Employment Flag Y
Borrower Age 52
Co-Age 56
Borrower Race
Co-Race
Borrower Gender Male
Co-Gender Female
Income 182564
Co-Income 256453
Co_credit Score 841
Borrower Ethnicity
Co-Ethnicity
First Time Borrower Flag N
Monthly Updated
Information
Exh. 1-7
Information
Investor Number This is the servicer assigned 691
number for reporting purposes.
Investor Category This is the servicer assigned 2
category for reporting purposes.
Servicing Type Indicates whether the loan is (sched/sched)
serviced on an actual or scheduled
basis.
(act/act,act/sched,sched/act,sched/sched)
Senior Lien Amount Most recently recorded senior lien 0
amount.
Current Maturity Date This is the actual date when the 1/1/2020
last payment on the loan is
scheduled to be made. For balloons
it should be the balloon date. For
modified loans it should be the
modified maturity date.
Current Principal & Interest Principal & Interest in effect for 562.41
Payment currently outstanding payment.
Current Interest Rate Interest Rate in effect for 8.55
currently outstanding payment.
Current Net Interest Rate The current rate exclusive of LPMI, 7.55
servicing and other fees.
Current Rate Expenses Current Rate Expenses ( LPMI and 0
Servicing Fee Excluded)
Remaining Term The Remaining Term of the loan 179
Next Due Date Date next payment is due. 2/1/2005
Interest Paid To Date Date interest is paid to. 1/1/2005
Typically for 30/360 loans it is
one month prior to Next Due Date.
Last Payment Date Date last payment was made. 1/1/2005
Days Past Due Number of days loan is past due. 0
Delinquency Convention Indicates if ABS or MBS method for MBS
reporting delinquencies is used.
Status of Loan Code/literal used to identify loan Foreclosure
status. See Enumerations worksheet.
12 Month Pay String 12 character string representing
the timing of payments received on
a rolling 12 month basis. String
should begin with January and end
with December.
As of Date As of Date of data being provided
Next Payment Reset Date The next date that any payment
reset is scheduled to occur.
Typically is one month after Next
Rate Reset Date.
Next Rate Reset Date The next date that any rate reset
is scheduled to occur. Typically
is one month prior to Next Payment
Reset Date.
Last Modification Date Date that loan was last modified.
Last Extension Date Date loan term was last extended.
Times Extended
Total Extension Months Number of months loan has been
extended in total.
▇▇▇. ▇-▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - T60 1
Delinquency Status - T90 0
Delinquency Status - T120 0
Restructured Interest Total amount of restructured
interest (modified loans)
Recent Property Valuation Most recent appraised value or BPO
value.
Recent Property Valuation Date of most recent valuation.
Date
Valuation Method Identify method used to obtain new
valuation. See Enumerations
worksheet.
Valuation Firm Name of the Firm who appraised the
property
Current FICO Current FICO score.
FICO Date FICO Date.
ARM Flag Y
Servicing
Information
Amortization Term The remaining amortization term, in
months
Forbearance Payment Amount of payment under Forbearance
plan
Servicing Fee The fee rate to service the loan
Servicing Fee Payment The actual service fee for the loan
for the given month
Interest Adjustment Adjustments made to a previous
month's interest
Principal Adjustment Adjustments made to a previous
month's principal
Total Monthly Payment Cash applied to principal.
Principal
Total Monthly Payment Cash applied to interest.
Interest
Total Monthly Payment Cash applied to fees.
Penalties / Fees
Total Monthly Escrow Payment Cash applied to escrow account.
Total Monthly Prepayment Total amount borrower prepaid
Amount
Total Prepayment Penalties Prepayment Penalty collected this
month
Total Monthly Payment Total cash received from borrower.
Exh. 1-9
Total Remit Amount Total amount remitted for the
individual loan
Current PITI Current scheduled Principal,
Interest, Tax and Insurance payment
Monthly Escrow Advances Net escrow advances made or
recovered by servicer. Positive
value denotes payments made by
servicer.
Monthly Corporate Advances Net corporate advances made or
recovered by servicer. Positive
value denotes payments made by
servicer.
Principal Advance Balance Total outstanding principal
advances made by servicer.
Interest Advance Balance Total outstanding interest advances
made by servicer.
Monthly Principal Advances Amount of principal advanced in
current month
Monthly Interest Advances Amount of interest advanced in
current month
Beginning Actual Balance Actual balance at the beginning of
the period. The is most likely
last periods ending balance carried
forward
Current Principal Balance Ending actual principal balance
outstanding
Current Balance Net Present The net present value of the
Value current balance
Beginning Scheduled Balance Beginning scheduled loan balance.
If the loan is serviced on a
scheduled balance basis
Ending Scheduled Balance Ending scheduled loan balance. If
the loan is serviced on a scheduled
balance basis
Escrow Balance Current balance of escrow account
(borrower's positive funds).
Escrow Advance Balance Total outstanding escrow advance
balance.
Recoverable Corporate Corporate advance balance where a +
Advance Balance denotes a payment made by the
servicer
Non Recoverable Corporate Balance of Corporate Advances made
Advance Balance that are not recoverable from the
borrower
Total Corporate Advance Total outstanding Corporate Advance
Balance Balance
Suspense Account Balance Total suspense account balance
Accrued Interest Total Accrued Interest on loan.
Stop Advance Flag Code indicating loan has been
placed in a stop advance status.
Example: Y=Stop Advance.
Exh. 1-10
Stop Advance Recovered Amount of principal and interest
advances recovered at stop date.
Stop Advance Start Date Date loan was initially placed on a
stop advance status.
Stop Advance Reversal Date Date stop advance status was
reversed.
Stop Advance Reversal Amount Amount of advances reversed.
Rent Collection
PI Constant The Constant Principal and Interest
rate the borrower would pay based
on their schedule
Combined Loan to Value Ratio
Current Loan to Value Ratio
Forced Placed Insurance Flag Code indicating loan is on forced
placed insurance.
Annual Forced Placed Amount of forced placed policy.
Insurance
Last Contact Date Date of Servicer's last contact
with the borrower.
Last Attempt Date Date of the Servicer's last attempt
to contact the borrower.
Bankruptcy Flag Flag indicating loan is in
bankruptcy.
Bankruptcy Chapter Chapter of bankruptcy (7, 11, 12,
13, OTH).
Bankruptcy Start Date Bankruptcy filing date.
Bankruptcy End Date Dismissal/Discharge date.
Bankruptcy Post Petition Due Payment due date of Bankruptcy
Date payment plan. In essence the new
due date.
Motion for Relief Request Motion for Relief Request Date.
Date
Motion for Relief Filing Date 0
Motion for Relief Hearing Motion for Relief Hearing Date.
Date
Motion for Relief Granted Motion for Relief Granted Date.
Date
Motion for Relief Denied Date Date the motion was Denied (if
applicable)
In Demand Flag Code indicating demand letter has
been sent.
In Demand Start Date Date demand letter was sent.
Exh. 1-11
In Demand End Date Expiration of demand letter.
Foreclosure Estimated End On loans that are in Foreclosure
Date the Servicers estimate of when the
FCL will be completed.
Foreclosure Sale Date Date of actual foreclosure sale.
Foreclosure Start Date Date of Referral to FC Attorney
Foreclosure end date Date of recording of foreclosure
deed.
First Legal Date Date of first legal action taken on
foreclosure.
Foreclosure Resolution Flag Indicates if the loan has moved out
of foreclosure (i.e. Did not go to
REO).
Foreclosure Resolution Type Method used by the servicer to
prevent the foreclosed loan from
moving into REO. See Enumerations
worksheet.
Foreclosure On Hold Flag indicating that the loan is in
foreclosure but on hold.
Foreclosure Hold Start Date Date indicating when the loan's
foreclosure proceedings were put on
hold.
Bankruptcy Cash Delays Number of days an active
foreclosure has been in BK
subsequent to its initial
foreclosure start date.
Forbearance Cash Delays Number of days an active
foreclosure has been in forbearance
subsequent to its initial
foreclosure start date.
Forbearance Flag Y/N
Non - Cash Delays Number of allowable days that a
loan's foreclosure proceedings have
been on hold due to a non cash
delay (i.e. Title problem...) [again
as per Fannie or ▇▇▇▇▇▇▇ time line]
Forbearance Start Date Date forbearance plan was initiated.
Forbearance End Date Date forbearance plan scheduled to
be complete.
Eviction Start Date Date eviction flag placed on loan.
Eviction End Date Date property is vacated.
REO Start Date Date REO flag placed on loan
(including any redemption periods).
REO End Date Date property is sold.
REO Sub Status Status while within REO. See
Enumerations worksheet.
Not Acquired Date Date that the REO enters "Not
Acquired" sub status
Eviction Date Date that the REO enters "Eviction"
sub status
Listed Date Date that the REO enters "Listed"
sub status
Under Contract Date Date that the REO enters "Under
Contract" sub status
Estimated Closing Date Servicer estimated closing date on
loan
Days In REO Number of Days from the REO becomes
marketable to the As of Date
Exh. 1-12
Estimated Sales Price Servicer estimated REO Sales Price
Possession Date Date when the servicer takes
possession of the property. Date we
have full access to the property,
eviction completed
Redemption End Date Legal time period, determined by
State, when borrower can redeem
their property. Property not
available for sale until redemption
completed (no beginning date, just
an end date)
Initial Listing Price First listing price of property.
Initial Listing Date Date of the first listing price of
property
Current List Price Most recent listing price of
property.
Current List Date Date of the most recent listing
price of property.
Reason For Default Servicer Code representing the
Reason for Default. See
Enumerations worksheet.
Foreclosure Indicator Flag
Termination
Information
Net Interest at termination Ending accrued net interest
outstanding before the loan was
liquidated/terminated
Gross Interest at termination Ending accrued gross interest
outstanding before the loan was
liquidated/terminated
Balance at Termination Actual Principal balance at time of
termination.
Gross Total Proceeds Gross Total Proceeds.
Net Total Proceeds Gross total proceeds less expenses.
Principal Advanced Total of principal advanced at time
of liquidation.
Interest Advanced Total of interest advanced at time
of liquidation.
Deferred Interest Amount of deferred interest on the
loan @ liquidation
Accrued Servicing Fee Servicing fee recovered at time of
Recovered liquidation.
Corporate Advances Recovered The amount of the Total Corporate
at Termination Advance balance recovered at
termination
Escrow Advances Recovered at The amount of the Total Escrow
Termination Advance balance recovered at
termination
Commission The broker commission amount on
liquidation
Seller Concession The dollar amt of seller
concessions upon liquidation.
Taxes Taxes paid on liquidation
Repairs Cost of Repairs to property
Exh. 1-13
Water and Sewer Water & Sewer costs
Expenses Recovered at The amount of the Total Expenses
Termination recovered at termination
Corporate Advances at Corporate advance balance at time
Termination of liquidation.
Escrow Advances at Escrow advance balance at time of
Termination liquidation.
Charge-off amount Loss amount.
Severity Severity percentage.
Severity Formula Formula for calculating Severity
percentage.
Potential Deficiency Flag indicating loan is referred
Judgment Flag for deficiency collections.
Potential Deficiency Amount Deficiency balance reported to
borrower/IRS.
Deficiency Proceeds (this Deficiency proceeds collected in
period) current month.
Deficiency Proceeds Total Deficiency proceeds collected to
(to date) date.
Deficiency Vendor Expense Deficiency vendor out of pocket
expenses.
Deficiency Servicer Expense Deficiency vendor collection fee
Servicer Hold Back Amount Amount servicer withholds for
future trailing expenses.
Days from Acquisition to Days from Acquisition to Close
Close
Days from Possession to Close Days from Possession to Close
Property Sale Date Date property sold.
Termination Type Type of liquidation. See
Enumerations worksheet.
Scheduled Sale Date Dates of planned sales for
properties in Foreclosure
Property Sales Price Sales price if liquidation was
short sale or REO sale.
Liquidation Date Date property liquidated.
Hazard Insurance Claim Date Date hazard claim filed.
Hazard Insurance Claim Due Date hazard claim due.
Date
Hazard Insurance Claim Amount Amount of hazard claim.
Exh. 1-14
Hazard Insurance Claim Paid Amount of hazard claim paid to
Amount investor.
MI Insurance Claim Date Date MI claim filed.
MI Insurance Claim Due Date Date MI claim is due to be paid.
MI Insurance Claim Amount Expected MI proceeds.
MI Insurance Claim Paid Actual MI proceeds received.
Amount
306
Amortization Type
-----------------
BN10 Balloon, 10 Year
BN5 Balloon, 5 Year
BN7 Balloon, 7 Year
FIX Fixed
FX10 Fixed - 10 Year
FX15 Fixed, 15 Year
FX5 Fixed - 5 Year
FXST Fixed - Short Term
H101 Hybrid, 10/1
H106 Hybrid, 10/6 month
H21 Hybrid, 2 Year
H228 Hybrid 2/28
H31 Hybrid, 3/1
H327 Hybrid 3/27
H51 Hybrid, 5/1
H71 Hybrid, 7/1
OTH Other
STEP Step Coupon
Exh. 1-15
ARM Index Description
---------------------
10YC 10 Year CMT
1ML 1 Month Libor
1YC 1 Year CMT
1YL 1 Year Libor
2ML 2 Month Libor
2YC 2 Year CMT
3ML 3 Month Libor
3MT 3 Month TBill
3YC 3 Year CMT
5YC 5 Year CMT
6MCD 6 Month CD
6ML 6 Month Libor
6MT 6 Month TBill
COFI COFI
FHLM FHLMC Commitment Rate
FNMA FNMA Commitment Rate
OTH Other Rate
PRI PRIME
ARM Rounding Feature
--------------------
DEC3 Nearest 1000th
H8 Higher ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇. 1-16
Interest Calculation Method
---------------------------
3360 30/360
A360 Actual/360
A365 Actual/365
AA Actual/Actual
Loan Type
---------
COMI Conventional, with mi. Collecting a premium
from the borrower for mortgage insurance and
is FHA and is VA
CONV Conventional, no mi
FHA FHA Mortgage
HEL Home Equity Line of credit
CC Credit Card
A Auto
B Boats
RV RV's
MFG Manufactured Housing
ATV ATV
VA VA Mortgage
OTH Other
Occupancy Type
--------------
2ND 2nd Home
NOO Non Owner Occupied
OO Owner Occupied
VA Vacant
Property Type
-------------
2F 2 Family
3F 3 Family
Exh. 1-17
4F 4 Family
2-4F 2-4 Family
AUTO Automobile
BOAT Boat
COND Condominium
COOP Cooperative
HR-CONDO High Rise Condo
HVAC HVAC
MF Multi Family
MH Manufactured Housing
MX Mixed Use
OF Office
OTH Other
PUDA PUD - Attached
PUDD PUD - Detached
PWR PowerSports
RT Retail
RV Recreational Vehicle
SF Single Family
TH TownHouse
Purpose of Loan
---------------
PUR Purchase
RELO Relocation
REFI Rate/Term Refinance
CASH Cash Out Refinance
DEBT Cash Out Debt Consolidation
IMPR Cash Out Home Improvement
EDUC Cash Out Medical or Educational Expense
TIT1 Title One Home Improvement
CONST New Construction
Exh. 1-18
REO Facilitate REO
Status of Loan
--------------
BU Bankrupt - Unknown Status
C Current
DISP Dispute
F Foreclosure
NE Non Equity (NPV of current balance < $7,500)
FB Forbearance
ID In Demand
LIT Litigation
NLS No Longer Serviced
PO Paid Off- Borrower paid down entire balance
REO Real Estate Owned - MUST Include a REO sub
status
RSLD Resolved
LIQ Liquidated - MUST include a Termination Type
U Unknown
Termination Type
----------------
CO Charge Off
COC Charge Off with cash possible
NLPO Negotiated Loan Payoff
NS Negotiated Sale
PO Paid Off
PPOC PPO with More Cash Possible
REOS REO Sale
TPPO Third Party Paid Off
Exh. 1-19
Valuation Method
----------------
DB Drive By
WT Walk Through
OTH Other
APPR Appraisal
DD Due Diligence
PRFC Pre Foreclosure
SUPP Supplemental
RR Re-review
REO Sub Status
--------------
AC Acquired
PS Possession
EV Eviction
LS Listed
UC Under Contract
Reason For Default
------------------
ABP Abandonment of Property
BF Business Failure
CI Curtailment Of Income
D Death
EO Excessive Obligations
ILL Illness
ITR Inability To Rent
MD Marital Difficulties
MS Military Service
MI Mortgagor Incarcerated
N No Reason
PD Payment Dispute
PP Property Problem
SP Servicing Problems
Exh. 1-20
TOP Transfer Of Ownership Pen
UC Unable To Contact
UEMP Unemployment
Exh. 1-21
EXHIBIT 2
FORM OF CUSTODIAL ACCOUNT CERTIFICATION
_______ __, 200[_]
[___________] hereby certifies that it has established the account
described below as a Custodial Account pursuant to Section 2.04 of the Flow
Servicing Agreement, dated as of January 1, 2006.
Title of Account: "Avelo Mortgage, L.L.C., in trust for ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company, Residential Fixed and Adjustable Rate Mortgage Loans, and
various Mortgagors."
Account Number:
-----------------------------------
Address of office or branch
of the Servicer at
which Account is maintained:
Avelo Mortgage, L.L.C.,
Servicer
By:
---------------------------------------
Name:
Title:
Exh. 2-1
EXHIBIT 3
FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 200[_]
To:
----------------------
----------------------
----------------------
(the "Depository")
As Servicer under the Flow Servicing Agreement, dated as of January
1, 2006 (the "Agreement"), we hereby authorize and request you to establish an
account, as a Custodial Account pursuant to Section 2.04 of the Agreement, to
be designated as "Avelo Mortgage, L.L.C., in trust for ▇▇▇▇▇▇▇ Sachs Mortgage
Company, Residential Fixed and Adjustable Rate Mortgage Loans, and various
Mortgagors." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Servicer. You may refuse any deposit which
would result in violation of the requirement that the account be fully insured
as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
Avelo Mortgage, L.L.C.,
Servicer
By:
---------------------------------------
Name:
Title:
Date:
Exh. 3-1
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through
the Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund
("SAIF"). The parties hereto intend that the Custodial Account established
hereby shall be a Special Deposit Account. This letter shall be construed in
accordance with the laws of the State of New York.
---------------------------------------------
Depository
By:
---------------------------------------
Name:
Title:
Date:
Exh. 3-2
EXHIBIT 4
FORM OF ESCROW ACCOUNT CERTIFICATION
_________ ___, 200[_]
[_____________] hereby certifies that it has established the account
described below as an Escrow Account pursuant to Section 2.06 of the Flow
Servicing Agreement, dated as of January 1, 2006.
Title of Account: "Avelo Mortgage, L.L.C., in trust for ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company Residential Fixed and Adjustable Rate Mortgage Loans, and
various Mortgagors."
Account Number:
-----------------------------
Address of office or branch of the Servicer at which Account is maintained:
Avelo Mortgage, L.L.C.,
Servicer
By:
--------------------------------------
Name:
Title:
Date:
Exh. 4-1
EXHIBIT 5
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
_______ __, 200[_]
To:
-------------------------
-------------------------
-------------------------
(the "Depository")
As Servicer under the Flow Servicing Agreement, dated as of January
1, 2006 (the "Agreement"), we hereby authorize and request you to establish an
account, as an Escrow Account pursuant to Section 2.06 of the Agreement, to be
designated as "Avelo Mortgage, L.L.C., in trust for ▇▇▇▇▇▇▇ Sachs Mortgage
Company Residential Fixed and Adjustable Rate Mortgage Loans, and various
Mortgagors." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Servicer. You may refuse any deposit which
would result in violation of the requirement that the account be fully insured
as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
Avelo Mortgage, L.L.C.,
Servicer
By:
---------------------------------------
Name:
Title:
Date:
Exh. 5-1
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number [______], at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through
the Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund
("SAIF"). The parties hereto intend that the Escrow Account established hereby
shall be a Special Deposit Account. This letter shall be construed in
accordance with the laws of the State of New York.
---------------------------------------------
Depository
By:
---------------------------------------
Name:
Title:
Date:
Exh. 5-2
EXHIBIT 6
FORM OF ANNUAL CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"),
among [IDENTIFY PARTIES] ---------
I, ________________________________, the _______________________ of
[NAME OF COMPANY] (the "Company"), certify to [the Owner], [the Depositor],
and the [Master Servicer] [Securities Administrator] [Trustee], and their
officers, with the knowledge and intent that they will rely upon this
certification, that:
(1) I have reviewed the servicer compliance statement of the
Company provided in accordance with Item 1123 of Regulation AB (the
"Compliance ------------ Statement"), the report on assessment of the
Company's compliance with the servicing criteria set forth in Item
1122(d) of Regulation AB (the "Servicing Criteria"), provided in
accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act
of 1934, as amended (the "Exchange Act") and Item 1122 of Regulation
AB (the "Servicing Assessment"), the registered public accounting
firm's attestation report provided in accordance with Rules 13a-18
and 15d-18 under the Exchange Act and Section 1122(b) of Regulation
AB (the "Attestation Report"), and all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans by the Company during 200[ ] that were delivered by
the Company to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the
"Company Servicing Information");
(2) Based on my knowledge, the Company Servicing
Information, taken as a whole, does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make
the statements made, in the light of the circumstances under which
such statements were made, not misleading with respect to the period
of time covered by the Company Servicing Information;
(3) Based on my knowledge, all of the Company Servicing
Information required to be provided by the Company under the
Agreement has been provided to the [Depositor] [Master Servicer]
[Securities Administrator] [Trustee];
(4) I am responsible for reviewing the activities performed
by the Company as servicer under the Agreement, and based on my
knowledge and the compliance review conducted in preparing the
Compliance Statement and except as disclosed in the Compliance
Statement, the Servicing Assessment or the Attestation Report, the
Company has fulfilled its obligations under the Agreement in all
material respects; and
(5) The Compliance Statement required to be delivered by the
Company pursuant to the Agreement, and the Servicing Assessment and
▇▇▇. ▇-▇
▇▇▇▇▇▇▇▇▇▇▇ Report required to be provided by the Company and by any
Subservicer or Subcontractor pursuant to the Agreement, have been
provided to the [Depositor] [Master Servicer]. Any material instances
of noncompliance described in such reports have been disclosed to the
[Depositor] [Master Servicer]. Any material instance of noncompliance
with the Servicing Criteria has been disclosed in such reports.
Date:
By: _______________________________________
Name:
Title:
EXHIBIT 7
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Servicer]
[Subservicer] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":
Applicable
Servicing Criteria Servicing Criteria
------------------ ------------------
Reference Criteria
General Servicing Considerations
1122(d)(1)(i) Policies and procedures are instituted to X
monitor any performance or other triggers and
events of default in accordance with the
transaction agreements.
1122(d)(1)(ii) If any material servicing activities are X
outsourced to third parties, policies and
procedures are instituted to monitor the third
party's performance and compliance with such
servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loans
are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy X
is in effect on the party participating in the
servicing function throughout the reporting
period in the amount of coverage required by and
otherwise in accordance with the terms of the
transaction agreements.
Cash Collection and Administration
1122(d)(2)(i) Payments on mortgage loans are deposited into X
the appropriate custodial bank accounts and
related bank clearing accounts no more than two
business days following receipt, or such other
number of days specified in the transaction
agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf X
of an obligor or to an investor are made only by
authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding X
collections, cash flows or distributions, and
any interest or other fees charged for such
advances, are made, reviewed and approved as
specified in the transaction agreements.
Exh. 7-1
1122(d)(2)(iv) The related accounts for the transaction, such X
as cash reserve accounts or accounts established
as a form of overcollateralization, are
separately maintained (e.g., with respect to
commingling of cash) as set forth in the
transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a X
federally insured depository institution as set
forth in the transaction agreements. For
purposes of this criterion, "federally insured
depository institution" with respect to a
foreign financial institution means a foreign
financial institution that meets the
requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to X
prevent unauthorized access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis X
for all asset-backed securities related bank
accounts, including custodial accounts and
related bank clearing accounts. These
reconciliations are (A) mathematically accurate;
(B) prepared within 30 calendar days after the
bank statement cutoff date, or such other number
of days specified in the transaction agreements;
(C) reviewed and approved by someone other than
the person who prepared the reconciliation; and
(D) contain explanations for reconciling items.
These reconciling items are resolved within 90
calendar days of their original identification,
or such other number of days specified in the
transaction agreements.
Investor Remittances and Reporting
1122(d)(3)(i) Reports to investors, including those to be X
filed with the Commission, are maintained in
accordance with the transaction agreements and
applicable Commission requirements.
Specifically, such reports (A) are prepared in
accordance with timeframes and other terms set forth
in the transaction agreements; (B) provide
information calculated in accordance with the terms
specified in the transaction agreements; (C) are
filed with the Commission as required by its rules
and regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and X
remitted in accordance with timeframes,
distribution priority and other terms set forth
in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted X
within two business days to the Servicer's
investor records, or such other number of days
specified in the transaction agreements.
Exh. 7-2
1122(d)(3)(iv) Amounts remitted to investors per the investor X
reports agree with cancelled checks, or other
form of payment, or custodial bank statements.
Pool Asset Administration
1122(d)(4)(i) Collateral or security on mortgage loans is X
maintained as required by the transaction
agreements or related mortgage loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are X
safeguarded as required by the transaction
agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the X
asset pool are made, reviewed and approved in
accordance with any conditions or requirements
in the transaction agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any X
payoffs, made in accordance with the related
mortgage loan documents are posted to the
Servicer's obligor records maintained no more
than two business days after receipt, or such
other number of days specified in the
transaction agreements, and allocated to
principal, interest or other items (e.g.,
escrow) in accordance with the related mortgage
loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage X
loans agree with the Servicer's records with
respect to an obligor's unpaid principal balance.
1122(d)(4)(vi) Changes with respect to the terms or status of X
an obligor's mortgage loans (e.g., loan
modifications or re-agings) are made, reviewed
and approved by authorized personnel in
accordance with the transaction agreements and
related pool asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., X
forbearance plans, modifications and deeds in
lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated,
conducted and concluded in accordance with the
timeframes or other requirements established by
the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are X
maintained during the period a mortgage loan is
delinquent in accordance with the transaction
agreements. Such records are maintained on at
least a monthly basis, or such other period
specified in the transaction agreements, and
describe the entity's activities in monitoring
delinquent mortgage loans including, for
example, phone calls, letters and payment
rescheduling plans in cases where delinquency is
deemed temporary (e.g., illness or unemployment).
Exh. 7-3
1122(d)(4)(ix) Adjustments to interest rates or rates of X
return for mortgage loans with variable rates
are computed based on the related mortgage loan
documents.
1122(d)(4)(x) Regarding any funds held in trust for an X
obligor (such as escrow accounts): (A) such
funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least
an annual basis, or such other period specified
in the transaction agreements; (B) interest on
such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan
documents and state laws; and (C) such funds are
returned to the obligor within 30 calendar days
of full repayment of the related mortgage loans,
or such other number of days specified in the
transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as X
tax or insurance payments) are made on or before
the related penalty or expiration dates, as
indicated on the appropriate bills or notices
for such payments, provided that such support
has been received by the servicer at least 30
calendar days prior to these dates, or such
other number of days specified in the
transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with X
any payment to be made on behalf of an obligor
are paid from the servicer's funds and not
charged to the obligor, unless the late payment
was due to the obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are X
posted within two business days to the obligor's
records maintained by the servicer, or such
other number of days specified in the
transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible X
accounts are recognized and recorded in
accordance with the transaction agreements.
1122(d)(4)(xv) Any external enhancement or other support,
identified in Item 1114(a)(1) through (3) or
Item 1115 of Regulation AB, is maintained as set
forth in the transaction agreements.
[NAME OF SERVICER] [SUBSERVICER]
Date:
Exh. 7-4
By: _______________________________________
Name:
Title:
Exh. 7-5
EXHIBIT 8
Subprime Default and REO Servicing Standards
o Right Party Contact Rate of twenty-seven and a half percent (27.50%)
per month. Termination standard is twenty-two and a half percent
(22.50%), after Servicer has failed to respond to the notice
provisions contained in the Flow Servicing Agreement o Servicer
shall meet the foreclosure timeline requirements as set forth in the
FNMA guidelines
Time Zones
All accounts should be called until 9:00 p.m. in each time zone Monday through
Thursday.
Collection Call Statistics
With respect to only loans owned by GS ("GS Loans"), Servicer shall report
monthly to GS to the extent permitted by applicable law the following dialer
statistical information broken out by delinquency bucket and on a loan level
basis:
o Number of attempts made; ACD, predictive and non-predictive ;
o Number of right party contacts ;
o Number of commitments obtained; and o Number of performing
commitments.
The reports provided by Servicer to Owner will stratify the collection work
efforts and/or results in such a manner as to reasonably assure Owner that
Servicer is in material compliance with the agreed upon service levels.
Skip Tracing Statistics
A minimum of 50% of the accounts referred to skip tracing should result in a
good phone number for the borrower.
Broken Repayment Plans or Broken Promise to Pay
Follow-up with the Mortgagor within seventy-two (72) hours of the repayment
plan being broken.
FICO's
Updated FICO scores must be ordered, at GS's sole cost and expense, on all GS
Loans on a quarterly basis and reported to GS on the following month end tape.
VALUATIONS
BPO should be ordered on the day in which a loan becomes sixty-five (65) days
delinquent if such loan is not cash flowing through a forbearance plan or
bankruptcy plan. Servicer should receive the requested BPO within twenty-one
(21) days of such BPO order with the
Exh. 8-1
understanding that such BPOs may be received at any time depending on the
totality of the circumstances; provided, however, the Servicer shall provide
GS with notice and weekly updates of any developments with respect to any BPO
which is not received by the Servicer within twenty-one (21) days of such BPO
order. Reconciliation should be performed on a BPO within five (5) business
days of receipt thereof. Servicer system should reflect reconciled value upon
receipt of the BPO. The reconciled value should then be reported to GS with
the next month end data tape.
BANKRUPTCY
All bankruptcy actions will be managed according to FNMA guidelines including,
without limitation, bankruptcy set-up, filing proofs of claims, monitoring
plans, referring loans to an attorney, filing motions for relief, and/or
releasing bankruptcies back to foreclosure/normal servicing.
All loans owned by GS should be run though ▇▇▇▇▇ or a similar system once
every thirty (30) days.
FORECLOSURE
Servicer shall follow FNMA timelines for all GS loans in foreclosure.
Allowable delays shall include bankruptcy filings, litigation, loss mitigation
which results in cash being applied to the loan. Assignment delays should be
no longer than thirty (30) days. Title issues should be no longer than sixty
(60) days. Any delays that shall exceed these estimated timelines should be
reported to GS on a monthly basis. GS loans will not be referred to
foreclosure until the reconciled value has been received and evaluated.
Servicer shall maintain a foreclosure resolution rate of fifty percent (50%).
Exh. 8-2
EXHIBIT 9
REO Servicing Standards
Purpose: The purpose of these standards is to serve as a guideline for
valuations, reporting and overall management of Goldman REO Assets.
Property Valuations:
o BPO - As soon as the REO property in possession, by our attached
definition an interior BPO should be ordered by the servicer. The
BPO should state a Value as-is and a Repaired Value. It should
include interior photos, photos of outbuildings, and deferred
maintenance. Upon completion an original copy of the BPO is to be
forwarded to the REO Department of ▇▇▇▇▇▇▇ ▇▇▇▇▇ either in PDF
format or overnight hard copy. Sale and listing information on the
BPO should be in a grid format acceptable to ▇▇▇▇▇▇▇ Sachs.
o APPRAISAL - (Only on new REO acquisitions) As soon as the property
is re-keyed and trashed out the servicer will at Goldman request,
order a full interior appraisal on form 1004 from an Appraiser
acceptable to ▇▇▇▇▇▇▇ Sachs. The appraiser should be given the
access instructions by the servicer. The full appraisal will include
interior photos, photos of all outbuildings and deferred
maintenance. Required is "The Supplemental REO Addendum Form" giving
3 listing comps, itemization of needed repairs, and as-is and
as-repaired value. Upon completion an original copy of the Appraisal
is to be forwarded or made available to the REO Department of
▇▇▇▇▇▇▇ ▇▇▇▇▇ either in PDF format or overnight hard copy.
o OTHER - Any and all subsequent BPO's, CMA's Appraisals, AVM's or
other evaluations ordered during the course of the REO term are to
be made available in the same manner.
Vendors:
o From time to time, ▇▇▇▇▇▇▇ Sachs will provide the Servicer with a
published list of Appraisers, Appraisal Vendors, Realtors, Brokers
and other service providers with whom they prefer not to do
business. The Servicer will make commercially reasonable efforts to
refrain from using anyone named on such a list and ▇▇▇▇▇▇▇ ▇▇▇▇▇
reserves the right to refuse any product or service and payment for
that product or service provided by such listed Appraisers,
Appraisal Vendors, Realtors, Brokers and other service providers -
if, and only if, such product or service does not comply with
reasonable standards as determined by generally accepted mortgage
servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such mortgage loan in the
jurisdiction where the related mortgaged property is located.
Exh. 9-1
Possession:
o RE-KEYING - The property should be Re-keyed as soon as it is in our
possession both to keep prior occupants out and allow access to new
service providers and ▇▇▇▇▇▇▇ Sachs personnel. ▇▇▇▇▇▇▇ ▇▇▇▇▇
suggests that the door be re-keyed to a master key code (key code to
be furnished to REO personnel at ▇▇▇▇▇▇▇ Sachs) and the new keys be
placed in a combo lock box. The servicer will keep REO personnel at
▇▇▇▇▇▇▇ ▇▇▇▇▇ informed with proper access information.
o TRASH OUT - Defined as but not limited to; grass cut, shrubs and
trees trimmed, all debris cleared from interior and exterior,
appliances emptied, cleaned and secured, all trash removed from
premises, windows and doors secured, any fire or safety hazard
removed. The property should be trashed out before the full
appraisal is ordered and the "For Sale" sign is placed on the
property.
o CASH FOR KEYS - The maximum allowable payment to either an owner or
tenant to vacate the property without ▇▇▇▇▇▇▇ Sachs' prior consent
should be one thousand five hundred dollars ($1,500). If the
servicer intends to pay either an owner or tenant to vacate the
property an amount in excess of one thousand five hundred dollars
($1,500), the servicer should make commercially reasonable efforts
to obtain ▇▇▇▇▇▇▇ ▇▇▇▇▇' prior consent. Every advance should be cost
justified and that data available to ▇▇▇▇▇▇▇ Sachs upon request. The
exact amount of the advance should be proportional to the benefit
and made to avoid a lengthily eviction process. Payments should be
made only after the property is actually vacated and inspected by
designated agents of the servicer. The servicer will report each
month on all cash for keys transactions.
o INSURANCE CLAIMS- The servicer will report on a monthly basis all
Insurance claims filed, claims denied and claims aged over ninety
(90) days during the reporting period.
On the Market:
o LISTING -
All properties are expected to be listed within thirty (30)
days of possession.
Properties not listed within thirty (30) days will require an
exceptions report at month end.
All listings should be in the local MLS.
Listing Agreements should not be for more than six (6) months.
All listing agreements are subject to cancellation at any time
without penalty of liability to ▇▇▇▇▇▇▇ ▇▇▇▇▇
Exh. 9-2
o SIGNAGE -
All listed properties are to have a sign that is conspicuous
and readable from the street which clearly indicates the
property is available for sale and contact information for
prospective buyers.
From the date of acquisition through the date of listing , the
broker/agent/servicer is to reasonably inspect the property
until a sale sign is posted.
Exh. 9-3
EXHIBIT 10
FORM OF NOTICE LETTER
[LETTERHEAD OF OWNER]
[DATE]
Avelo Mortgage, L.L.C.
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Re: Flow Servicing Agreement dated January 1, 2006 (the
"Servicing Agreement"), between ▇▇▇▇▇▇▇ Sachs Mortgage
Company ("Owner") and Avelo Mortgage, L.L.C., as servicer
("Countrywide").
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Gentlemen and Ladies:
This letter (this "Notice Letter") and the Mortgage Loan Schedule
attached hereto as Exhibit A, identifies certain mortgage loans (the "Added
Mortgage Loans") which Owner requests to make subject to the Servicing
Agreement effective as of [________] (the "Transfer Date"). --
As of the Transfer Date, the Added Mortgage Loans shall be deemed to
have been made subject to the terms and conditions of the Servicing Agreement.
The Mortgage Loans are [prime] subprime] [Atl-A] Mortgage Loans and all
delinquency calculation with respect to the Mortgage Loans shall be determined
in accordance with [ABS] [RMBS] methodology. The REO Management Fee with
respect to the Mortgage Loans shall be [________].
All exhibits hereto are incorporated herein in their entirety. All
capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Servicing Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Agreement has been executed as of the
____day of ______________.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY, as Owner
By: _______________________________________
Name:
Title:
AVELO MORTGAGE, L.L.C., as Servicer
By: _______________________________________
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President