MORTGAGE LOAN SERVICING AGREEMENT
WILSHIRE CREDIT CORPORATION,
as a Servicer
▇▇▇▇▇▇ LOAN SERVICING LP,
as a Servicer
LASALLE BANK NATIONAL ASSOCIATION,
as Master Servicer and Securities Administrator
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS TRUST, SERIES 2007-SL1,
as Issuing Entity
CITIBANK, N.A.,
as Indenture Trustee
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.
as Depositor
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC.
as Sponsor
Dated as of May 1, 2007
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS ......................................... 1
Section 1.01 Definitions .................................. 1
Section 1.02 Other Definitional Provisions ................ 2
ARTICLE II REPRESENTATIONS AND WARRANTIES ..................... 2
Section 2.01 Representations and Warranties Regarding
Wilshire, ▇▇▇▇▇▇ and the Master Servicer ..... 2
Section 2.02 Representations and Warranties of the Issuing
Entity ....................................... 3
Section 2.03 Breaches of Representations and Warranties;
Notice ....................................... 3
ARTICLE III ADMINISTRATION AND SERVICING OF LOANS ............. 6
Section 3.01 Servicers to Service Mortgage Loans .......... 6
Section 3.02 Servicing and Subservicing; Enforcement of the
Obligations of the Servicers ................. 8
Section 3.03 Rights of the Depositor and the Indenture
Trustee in Respect of the Servicers .......... 9
Section 3.04 Master Servicer to Act as Servicer ........... 9
Section 3.05 Collection of Mortgage Loan Payments;
Collection Account; Master Servicer Collection
Account; Payment Account ..................... 10
Section 3.06 Collection of Taxes, Assessments and Similar
Items; Escrow Accounts ....................... 15
Section 3.07 Access to Certain Documentation and
Information Regarding the Mortgage Loans ..... 16
Section 3.08 Permitted Withdrawals from the Collection
Account, the Master Servicer Collection
Account and Payment Account .................. 16
Section 3.09 [Reserved] ................................... 20
Section 3.10 [Reserved] ................................... 20
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption
Agreements ................................... 20
Section 3.12 Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds; Special Loss
Mitigation ................................... 21
Section 3.13 Custodian to Cooperate; Release of Mortgage
Files ........................................ 26
Section 3.14 Documents, Records and Funds in Possession of
Servicer to be Held for the Indenture
Trustee ...................................... 28
Section 3.15 Servicing Compensation ....................... 28
Section 3.16 Access to Certain Documentation .............. 28
Section 3.17 Annual Statement as to Compliance ............ 29
Section 3.18 Annual Independent Public Accountants'
Servicing Statement; Financial Statements .... 29
Section 3.19 Rights of the NIMs Insurer ................... 33
Section 3.20 Periodic Filings ............................. 33
Section 3.21 Indemnification by Securities Administrator .. 37
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TABLE OF CONTENTS
(continued)
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Section 3.22 Regulation AB; Indemnification by Servicer ... 38
Section 3.23 Prepayment Charge Reporting Requirements ..... 39
Section 3.24 Information to the Master Servicer ........... 39
Section 3.25 Indemnification .............................. 39
Section 3.26 Nonsolicitation .............................. 40
Section 3.27 High Cost Mortgage Loans ..................... 40
Section 3.28 Special Servicing Agreements ................. 40
Section 3.29 Servicing Rights Owner ....................... 41
ARTICLE IIIA THE MASTER SERVICER .............................. 41
Section 3A.01 Master Servicer .............................. 41
Section 3A.02 Monitoring of Servicers ...................... 42
Section 3A.03 Power to Act; Procedures ..................... 43
Section 3A.04 Liabilities of the Master Servicer ........... 44
Section 3A.05 Merger or Consolidation of the Master
Servicer ..................................... 44
Section 3A.06 Regulation AB; Indemnification from the Master
Servicer ..................................... 45
Section 3A.07 Limitations on Liability of the Master
Servicer and Others .......................... 45
Section 3A.08 Master Servicer Not to Resign ................ 46
Section 3A.09 Sale and Assignment of Master Servicing ...... 47
Section 3A.10 Compensation for the Master Servicer ......... 47
ARTICLE IV SERVICING NOTES .................................... 47
Section 4.01 Advances ..................................... 47
Section 4.02 Reduction of Servicing Compensation in
Connection with Prepayment Interest
Shortfalls ................................... 49
ARTICLE V PAYMENT ACCOUNT ..................................... 49
Section 5.01 Payment Account .............................. 49
ARTICLE VI THE SERVICERS, THE MASTER SERVICER AND THE
DEPOSITOR .................................................. 49
Section 6.01 Respective Liabilities of the Master Servicer,
the Servicers and the Depositor .............. 49
Section 6.02 Merger or Consolidation of the Master
Servicer, the Servicers or the Depositor ..... 50
Section 6.03 Limitation on Liability of the Master
Servicer, the Servicers, the Depositor and
Others ....................................... 50
Section 6.04 Limitation on Resignation of Servicers ....... 51
Section 6.05 Errors and Omissions Insurance; Fidelity
Bonds ........................................ 52
ARTICLE VII DEFAULT ........................................... 52
Section 7.01 Events of Default ............................ 52
Section 7.02 Master Servicer or Indenture Trustee to Act;
Appointment of Successor ..................... 56
Section 7.03 Notification to Securityholders .............. 58
ARTICLE VIII MISCELLANEOUS PROVISIONS ......................... 58
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TABLE OF CONTENTS
(continued)
PAGE
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Section 8.01 Amendment .................................... 58
Section 8.02 Governing Law ................................ 59
Section 8.03 Notices ...................................... 59
Section 8.04 Severability of Provisions ................... 59
Section 8.05 Third-Party Beneficiaries .................... 60
Section 8.06 Counterparts ................................. 60
Section 8.07 Effect of Headings and Table of Contents ..... 60
Section 8.08 Termination .................................. 60
Section 8.09 Certain Matters Affecting the Indenture
Trustee and the Securities Administrator ..... 60
Section 8.10 Owner Trustee Not Liable for Mortgage Files .. 60
Section 8.11 Additional Termination Requirements .......... 61
Section 8.12 Entire Agreement ............................. 62
Section 8.13 Additional Rights of the NIMs Insurer ........ 62
EXHIBIT A-1 MORTGAGE LOAN SCHEDULE ........................... ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ MORTGAGE LOAN SCHEDULE .... A-2-1
EXHIBIT B LIMITED POWER OF ATTORNEY ........................ B-1
EXHIBIT C FORM OF REQUEST FOR RELEASE ...................... ▇-▇
▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇ CERTIFICATION OF SERVICER ...... D-1
EXHIBIT E FORM OF ASSESSMENT OF COMPLIANCE ................. E-1
EXHIBIT F SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT
OF COMPLIANCE .................................... F-1
EXHIBIT G ▇▇▇▇▇▇▇▇-▇▇▇▇▇ CERTIFICATES ...................... G-1
EXHIBIT H FORM OF BACK-UP CERTIFICATION OF SECURITIES
ADMINISTRATOR .................................... H-1
EXHIBIT I FORM OF BACKUP CERTIFICATION OF SERVICER ......... I-1
SCHEDULE I REPRESENTATIONS AND WARRANTIES OF WILSHIRE ....... Schedule I-1
SCHEDULE II REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇ ......... Schedule II-1
SCHEDULE III REPRESENTATIONS AND WARRANTIES OF THE MASTER
SERVICER ......................................... Schedule III-1
SCHEDULE IV item on form 8-k ................................. Schedule IV-1
SCHEDULE V item on form 10-d ................................ Schedule V-1
SCHEDULE VI item on form 10-k ................................ Schedule VI-1
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This is a Mortgage Loan Servicing Agreement, dated as of May 1, 2007 (this
"Servicing Agreement"), by and among Wilshire Credit Corporation, as a servicer
("Wilshire" and a "Servicer"), ▇▇▇▇▇▇ Loan Servicing LP, as a servicer ("▇▇▇▇▇▇"
and a "Servicer"), LaSalle Bank National Association, as master servicer (the
"Master Servicer") and as securities administrator (the "Securities
Administrator"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Series ▇▇▇▇-▇▇▇ (▇▇▇
"▇▇▇▇▇▇▇ ▇▇▇▇▇▇"), ▇▇▇▇▇▇▇▇, N.A., as indenture trustee (in such capacity, the
"Indenture Trustee"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as depositor (the
"Depositor"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., as sponsor (the
"Sponsor").
WITNESSETH THAT:
WHEREAS, pursuant to the terms of the Mortgage Loan Purchase Agreement
("MLPA"), dated as of April 1, 2007, by and between the Sponsor, as seller, and
the Depositor, as purchaser, the Sponsor has sold to the Depositor the Mortgage
Loans together with the Mortgage Files on the Closing Date and thereafter all
Additional Balances created on or after the Cut-off Date;
WHEREAS, pursuant to the Trust Agreement, dated as of May 11, 2007, by and
between the Depositor and Wilmington Trust Company, as owner trustee (the "Owner
Trustee"), the Depositor will sell the Mortgage Loans and all of its rights
under the MLPA to the Issuing Entity, together with the Mortgage Files on the
Closing Date and thereafter all Additional Balances relating thereto created on
or after the Cut-off Date;
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuing Entity
will issue and transfer the Certificates to the Depositor;
WHEREAS, pursuant to the terms of the Indenture, the Issuing Entity will
issue and transfer the Notes to the Depositor; and
WHEREAS, pursuant to the terms of this Servicing Agreement, Wilshire and
▇▇▇▇▇▇ will service the related Mortgage Loans directly or through one or more
Subservicers and the Master Servicer will master servicer the Mortgage Loans
serviced by Wilshire and ▇▇▇▇▇▇ hereunder and by Countrywide Home Loans
Servicing LP ("Countrywide" and, together with Wilshire and ▇▇▇▇▇▇, the
"Servicers") under the Assignment, Assumption and Recognition Agreement, dated
as of May 11, 2007, among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation, the Sponsor,
Countrywide, the Indenture Trustee and the Master Servicer (the "Countrywide
AAR") and the Flow Servicing Agreement, dated as of August 8, 2006, by and
between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation, as owner, the Sponsor, as owner,
Countrywide, as servicer (together with the Countrywide AAR, the "Countrywide
Servicing Agreement");
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
1
For all purposes of this Servicing Agreement, except as otherwise expressly
provided herein or unless the context otherwise requires, capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in the
Definitions contained in Appendix A to the Indenture, dated as of May 11, 2007
(the "Indenture"), among the Issuing Entity, the Indenture Trustee and the
Securities Administrator, which is incorporated by reference herein. All other
capitalized terms used herein shall have the meanings specified herein.
Section 1.02 Other Definitional Provisions.
(a) All terms defined in this Servicing Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Servicing Agreement and in any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Servicing Agreement or in any such certificate or other
document, and accounting terms partly defined in this Servicing Agreement or in
any such certificate or other document, to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Servicing Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Servicing Agreement or in any such
certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Servicing Agreement shall refer to this Servicing
Agreement as a whole and not to any particular provision of this Servicing
Agreement; section and exhibit references contained in this Servicing Agreement
are references to sections and exhibits in or to this Servicing Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation;" "or" shall include "and/or;" and the term "proceeds" shall have the
meaning ascribed thereto in the UCC.
(d) The definitions contained in this Servicing Agreement are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01 Representations and Warranties Regarding Wilshire, ▇▇▇▇▇▇ and
the Master Servicer.
2
Each of Wilshire and ▇▇▇▇▇▇ makes the representations and warranties set
forth in Schedule I and II, respectively, to the Master Servicer, the Securities
Administrator, the Issuing Entity, the Indenture Trustee, the Depositor and the
Sponsor as of the Closing Date. The Master Servicer makes the representations
and warranties set forth in Schedule III to the Issuing Entity, the Indenture
Trustee, the Depositor, the Sponsor and the Servicers.
Section 2.02 Representations and Warranties of the Issuing Entity.
The Issuing Entity hereby represents and warrants to the other parties
hereto, as of the Closing Date that:
(a) The Issuing Entity is a statutory trust duly formed and in good
standing under the laws of the State of Delaware and has full power, authority
and legal right to execute and deliver this Servicing Agreement and to perform
its obligations under this Servicing Agreement, and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Servicing Agreement; and
(b) The execution and delivery by the Issuing Entity of this Servicing
Agreement and the performance by the Issuing Entity of its obligations under
this Servicing Agreement will not violate any provision of any law or regulation
governing the Issuing Entity or any order, writ, judgment or decree of any
court, arbitrator or governmental authority or agency applicable to the Issuing
Entity or any of its assets. Such execution, delivery, authentication and
performance will not conflict with, or result in a breach or violation of, any
mortgage, deed of trust, lease or other agreement or instrument to which the
Issuing Entity is bound.
Section 2.03 Breaches of Representations and Warranties; Notice.
(a) The representations and warranties of the Sponsor with respect to
the Mortgage Loans contained in the MLPA were made as of the Closing Date. To
the extent that any fact, condition or event with respect to a Mortgage Loan
constitutes a breach of a representation or warranty of the Sponsor under the
MLPA, the obligations of the Sponsor under the MLPA shall be enforced against
the Sponsor as set forth in the MLPA.
(b) Upon discovery by any of the Depositor, any Servicer, the NIMs
Insurer, the Master Servicer, the Securities Administrator or the Indenture
Trustee of a breach of any of such representations and warranties that adversely
and materially affects the value of the related Mortgage Loan, Prepayment
Charges or the interests of the Securityholders, the party discovering such
breach shall give prompt written notice to the other parties. Within ninety (90)
days of the discovery of such breach of any representation or warranty, the
Sponsor shall either (a) cure such breach in all material respects, (b)
repurchase such Mortgage Loan or any property acquired in respect thereof from
the Issuing Entity at the Purchase Price or (c) within the two (2) year period
following the Closing Date, substitute a Replacement Mortgage Loan for the
affected Mortgage Loan. In the event of discovery of a breach of any
representation and warranty of the Sponsor, the Indenture Trustee's rights shall
be enforced under the MLPA for the benefit of the NIMs Insurer and the
Securityholders. If a breach of the representations and warranties set forth in
a MLPA exists solely due to the unenforceability of a Prepayment Charge, the
Indenture
3
Trustee (if it has had actual notice thereof), the Sponsor, the Depositor or the
other party having notice thereof shall notify the Master Servicer and the
related Servicer thereof and not seek to enforce the repurchase remedy provided
for herein unless such Mortgage Loan is not current. In the event that such
breach relates solely to the unenforceability of a Prepayment Charge, amounts
received in respect of such indemnity up to the amount of such Prepayment Charge
shall be distributed pursuant to Section 3.06 of the Indenture. As provided in
the MLPA, if the Sponsor substitutes for a Mortgage Loan for which there is a
breach of any representations and warranties in the MLPA which adversely and
materially affects the value of such Mortgage Loan and such substitute mortgage
loan is not a Replacement Mortgage Loan, under the terms of the MLPA, the
Sponsor will, in exchange for such substitute Mortgage Loan, (i) provide the
applicable Purchase Price for the affected Mortgage Loan or (ii) within two
years of the Closing Date, substitute such affected Mortgage Loan with a
Replacement Mortgage Loan. Any such substitution shall not be effected prior to
the additional delivery to the Custodian of a Request for Release substantially
in the form of Exhibit C and shall not be effected unless it is within two years
of the Startup Day. The Sponsor indemnifies and holds the Issuing Entity, the
Indenture Trustee, the Depositor, the Master Servicer, the Servicers, the NIMs
Insurer, the Custodian and each Securityholder harmless against any and all
taxes, claims, losses, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments, and any other costs, fees and expenses that the
Issuing Entity, the Indenture Trustee, the Depositor, the Master Servicer, the
Servicers, the NIMs Insurer, the Custodian and each Securityholder may sustain
in connection with any actions of the Sponsor relating to a repurchase of a
Mortgage Loan other than in compliance with the terms of this Section 2.03 and
the MLPA, to the extent that any such action causes (i) any federal or state tax
to be imposed on the Issuing Entity or any REMIC provided for in the Indenture,
including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup day" under Section 860G(d)(1) of the Code, or (ii) any REMIC created
pursuant to the Indenture to fail to qualify as a REMIC at any time that any
Certificate is outstanding. In furtherance of the foregoing, if the Sponsor is
not a member of MERS and repurchases a Mortgage Loan which is registered on the
MERS System, the Sponsor, at its own expense and without any right of
reimbursement, shall cause MERS to execute and deliver an assignment of the
Mortgage in recordable form to transfer the Mortgage from MERS to the Sponsor
and shall cause such Mortgage to be removed from registration on the MERS System
in accordance with MERS' rules and regulations.
With respect to any Mortgage Loan repurchased by the Sponsor pursuant to
the MLPA, the principal portion of the funds received in respect of such
repurchase of a Mortgage Loan by the related Servicer or the Sponsor will be
considered a Principal Prepayment and shall be deposited in the Collection
Account pursuant to Section 3.05 of this Servicing Agreement or the MLPA, as
applicable. Upon receipt by the Indenture Trustee of notice from the related
Servicer, of receipt by such Servicer of the full amount of the Purchase Price
for a Deleted Mortgage Loan, and upon receipt by the Custodian of the Mortgage
File for a Replacement Mortgage Loan substituted for a Deleted Mortgage Loan and
a Request for Release, the Custodian shall release to the Sponsor the related
Mortgage File for the Deleted Mortgage Loan and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be necessary to vest in such party or its
designee or assignee title to any Deleted Mortgage Loan released pursuant
hereto, free and clear of all security interests, liens and other encumbrances
created by this Servicing Agreement, which instruments shall be prepared
4
by the Depositor or the Sponsor and the Indenture Trustee shall have no further
responsibility with respect to the Mortgage File relating to such Deleted
Mortgage Loan.
With respect to each Replacement Mortgage Loan to be delivered to the
Custodian pursuant to the terms of this Article II in exchange for a Deleted
Mortgage Loan: (i) the Sponsor must deliver to such Custodian the Mortgage File
for the Replacement Mortgage Loan containing the documents set forth in Section
3.01 of the Trust Agreement along with a written certification certifying as to
the Mortgage Loan satisfying all requirements under the definition of
Replacement Mortgage Loan and the delivery of such Mortgage File; and (ii) the
Depositor will be deemed to have made, with respect to such Replacement Mortgage
Loan, each of the representations and warranties made by it with respect to the
related Deleted Mortgage Loan. The Custodian shall review the Mortgage File with
respect to each Replacement Mortgage Loan and certify to the Depositor that all
documents required by Section 3.01 of the Trust Agreement have been executed and
received.
For any month in which the Sponsor substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Sponsor will
determine the amount (if any) by which the aggregate principal balance of all
such Replacement Mortgage Loans as of the date of substitution and the aggregate
Prepayment Charges with respect to such Replacement Mortgage Loans is less than
the aggregate Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) and aggregate
Prepayment Charges of all such Deleted Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in the preceding sentence (such amount,
the "Substitution Adjustment Amount") plus an amount equal to any unreimbursed
costs, penalties and/or damages incurred by the Issuing Entity in connection
with any violation relating to such Deleted Mortgage Loan of any predatory or
abusive lending law shall be remitted by the Sponsor to the Securities
Administrator for deposit into the Payment Account on the Determination Date for
the Payment Date relating to the Prepayment Period during which the related
Mortgage Loan became required to be purchased or replaced hereunder.
Notwithstanding any other provision of this Servicing Agreement, the right
to repurchase or substitute Mortgage Loans pursuant to this Article II shall be
subject to the additional limitations that no substitution of a Replacement
Mortgage Loan for a Deleted Mortgage Loan or repurchase of a Mortgage Loan shall
be made unless the Indenture Trustee, the NIMs Insurer and the Master Servicer
shall have received an Opinion of Counsel (at the expense of the party seeking
to make the substitution or the repurchase) that, under current law, such
substitution will not (A) affect adversely the status of any REMIC established
pursuant to the Indenture as a REMIC, or of the related "regular interests" as
"regular interests" in any such REMIC, or (B) cause any such REMIC to engage in
a "prohibited transaction" or prohibited contribution pursuant to the REMIC
Provisions.
The Master Servicer shall amend the Mortgage Loan Schedule to reflect the
removal of such Deleted Mortgage Loan from the terms of this Servicing Agreement
and the substitution of the Replacement Mortgage Loan or Replacement Mortgage
Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the
NIMs Insurer. Upon such substitution by the Sponsor, such Replacement Mortgage
Loan or Replacement Mortgage Loans shall constitute part of the Mortgage Pool
and shall be subject in all respects to the terms of this Servicing Agreement
5
and the applicable MLPA, including all applicable representations and warranties
thereof included in the applicable MLPA as of the date of substitution.
(c) It is understood and agreed that the representations, warranties
and indemnification (i) set forth in this Section 2.03 and (ii) of the Sponsor
and the Depositor set forth in the MLPA and assigned to the Indenture Trustee by
the Depositor hereunder shall each survive delivery of the Mortgage Files and
the Assignment of Mortgage of each Mortgage Loan to the Custodian and shall
continue throughout the term of this Servicing Agreement.
(d) The Depositor shall deliver a copy of the Mortgage Loan Schedule
to the Master Servicer on the Closing Date.
(e) Upon discovery by the Depositor, the NIMs Insurer, any Servicer,
the Master Servicer, the Securities Administrator or the Indenture Trustee that
any Mortgage Loan does not constitute a "qualified mortgage" within the meaning
of section 860G(a)(3) of the Code, the party discovering such fact shall
promptly (and in any event within five Business Days of discovery) give written
notice thereof to the other parties. In connection therewith, the Depositor
shall, at the Depositor's option, either (i) substitute, if the conditions in
Section 2.03(b) with respect to substitutions are satisfied, a Replacement
Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase the affected
Mortgage Loan within ninety (90) days of such discovery in the same manner as it
would a Mortgage Loan for a breach of representation or warranty contained in
this Section 2.03. The Indenture Trustee, upon the written direction of the
Depositor, shall reconvey to the Depositor the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as it
would a Mortgage Loan repurchased for breach of a representation or warranty
contained in this Section 2.03.
(f) The Depositor shall notify the Servicers, the Master Servicer, the
Securities Administrator and the Trustee when any NIM Notes are issued and when
such NIM Notes are no longer outstanding and whether such NIM Notes are insured
by a NIMs Insurer and the contact information of the NIMs Insurer.
ARTICLE III
ADMINISTRATION AND SERVICING OF LOANS
Section 3.01 Servicers to Service Mortgage Loans.
For and on behalf of the Securityholders, the Servicers shall service and
administer the Mortgage Loans in accordance with the Accepted Servicing
Practices. In connection with such servicing and administration, the Servicers
shall have full power and authority, acting alone and/or through Subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the Securityholders
and the Indenture Trustee, customary consents or waivers and other instruments
and documents, (ii) to consent to transfers of any Mortgaged Property and
assumptions of the Mortgage Notes and related Mortgages (but only in the manner
provided in this Servicing Agreement), (iii) to collect any Insurance Proceeds
and
6
other Liquidation Proceeds and (iv) subject to Section 3.12(a), to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan; provided that, subject to Section 6.03, neither
Servicer shall take any action that is inconsistent with or prejudices the
interests of the Issuing Entity or the Securityholders in any Mortgage Loan
serviced by it under this Servicing Agreement or the rights and interests of the
other parties to this Servicing Agreement except as otherwise required by this
Servicing Agreement or by law. Notwithstanding anything in this Servicing
Agreement to the contrary, neither Servicer shall make or permit any
modification, waiver or amendment of any term of any Mortgage Loan which would
cause any of the REMICs provided for in the Indenture to fail to qualify as a
REMIC or result in the imposition of any tax under Section 860G(a) or 860G(d) of
the Code. The Servicers shall represent and protect the interest of the Trust
Estate in the same manner as it currently protects its own interest in mortgage
loans in its own portfolio in any claim, proceeding or litigation regarding a
Mortgage Loan, but in any case not in any manner that is a lesser standard than
that provided in the first sentence of this Section 3.01. Without limiting the
generality of the foregoing, each Servicer, in its own name or in the name of
the Depositor and the Indenture Trustee, is hereby authorized and empowered by
the Depositor and the Indenture Trustee, when such Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of the
Indenture Trustee, the Depositor, the Securityholders or any of them, any and
all instruments of satisfaction or cancellation, or of partial or full release
or discharge, subordinations and all other comparable instruments, with respect
to the Mortgage Loans, and with respect to the Mortgaged Properties held for the
benefit of the Securityholders. Each Servicer shall prepare and deliver to the
Depositor, the Securities Administrator and/or the Indenture Trustee such
documents requiring execution and delivery by any or all of them as are
necessary or appropriate to enable such Servicer to service and administer the
Mortgage Loans, to the extent that such Servicer is not permitted to execute and
deliver such documents pursuant to the preceding sentence. Upon receipt of such
documents, the Depositor, the Securities Administrator and/or the Indenture
Trustee shall execute such documents and deliver them to such Servicer. For
purposes of this Section 3.01, the Indenture Trustee hereby grants to each
Servicer a limited power of attorney (in the form of Exhibit B) to execute and
file any and all documents necessary to fulfill the obligations of each Servicer
under this Section 3.01.
The Mortgage Loans identified in Exhibit B-2 shall be subject to the
foreclosure restrictions described in this paragraph. In the event that any
Mortgage Loan that is subject to foreclosure restriction goes into foreclosure,
▇▇▇▇▇▇ will not be permitted to acquire title to the Mortgaged Property
underlying such loan on behalf of the related REMIC. In the event that any
Mortgage Loan that is subject to foreclosure restriction goes into foreclosure,
Wilshire will not be permitted to acquire title to the Mortgaged Property
underlying such loan on behalf of the related REMIC if acquiring title to such
Mortgaged Property would cause the aggregate adjusted basis (for federal income
tax purposes) of all Mortgaged Properties that are currently owned by the
related REMIC which were acquired in respect of loans subject to foreclosure
restriction (along with any other assets owned by that REMIC other than
"qualified mortgages" and "permitted investments" within the meaning of Section
860G of the Internal Revenue Code) to exceed 0.75% of the aggregate adjusted
basis of all of the assets in the related REMIC. Instead, Wilshire will be
required to dispose of such Mortgage Loan for cash in the foreclosure sale. In
addition, if Wilshire determines that, following the distributions on
any Payment Date, the aggregate adjusted basis of Mortgaged Properties acquired
in respect of loans subject to foreclosure restriction (along with any other
assets owned by the related REMIC other than "qualified mortgages" and
"permitted investments" within the meaning of Section 860G of the Internal
Revenue Code) would exceed 1.0% of the aggregate adjusted basis of all of the
assets of the related REMIC immediately after giving effect to such
distributions, then, prior to such Payment Date, Wilshire will dispose of a
sufficient amount of such Mortgaged Properties for cash such that the aggregate
adjusted basis of such Mortgaged Properties (along with any other assets owned
by the related REMIC other than
7
"qualified mortgages" and "permitted investments" within the meaning of Section
860G of the Internal Revenue Code) will be less than 1.0% of the aggregate
adjusted basis of all of the assets of the related REMIC. In either event, a
Servicer will be permitted to acquire (for its own account and not on behalf of
the Trust) any Mortgaged Property in foreclosure at the foreclosure sale for an
amount not less than the greater of: (i) the highest amount bid by any other
person at the foreclosure sale, or (ii) the estimated fair value of the
Mortgaged Property, as determined by such Servicer in good faith. These
foreclosure restrictions will be lifted with respect to a Mortgage Loan if the
Mortgage Loan becomes current for three consecutive regular scheduled monthly
payments.
Upon request of a Servicer, the Indenture Trustee shall furnish such
Servicer with any powers of attorney and other documents in form as provided to
it necessary or appropriate to enable such Servicer to service and administer
the Mortgage Loans. The Indenture Trustee shall not be responsible for and the
Servicer shall indemnify the Indenture Trustee for any misuse of any power of
attorney to the extent indemnification by such Servicer is required by Section
3.25 and provided that such Servicer shall have no obligation to indemnify the
Indenture Trustee for such action to the extent such action was taken pursuant
to and in accordance with specific written instructions from the Indenture
Trustee, which instructions are not based on such Servicer's recommendations or
proposals. Notwithstanding anything contained herein to the contrary, no
Servicer shall without the Indenture Trustee's written consent, hire or procure
counsel to represent the Indenture Trustee without indicating its representative
capacity.
The Servicers shall not be required to make any Servicing Advance with
respect to a Mortgage Loan that is 150 days or more delinquent.
The Servicers, the Master Servicer and the Securities Administrator shall
have at least thirty (30) days' notice of the appointment of a NIMs Insurer
prior to being required to deliver any notices pursuant to this Agreement to
such NIMs Insurer.
The Servicers and the Securities Administrator shall receive notice at
least ten (10) days prior to the issuance of any NIM Notes.
The Servicers shall deliver a list of Servicing Officers to the Master
Servicer and the Indenture Trustee by the Closing Date.
Each Servicer further is authorized and empowered by the Issuing Entity and
the Indenture Trustee, on behalf of the Securityholders and the Indenture
Trustee, in its own name or in the name of the Sub-Servicer, when such Servicer
or the Sub-Servicer, as the case may be, believes it is appropriate in its best
judgment to register any Mortgage Loan on the MERS System, or cause the removal
from the registration of any Mortgage Loan on the MERS System, to execute and
deliver, on behalf of the Issuing Entity and the Indenture Trustee and the
8
Securityholders or any of them, any and all instruments of assignment and other
comparable instruments with respect to such assignment or re-recording of a
Mortgage in the name of MERS, solely as nominee for the Indenture Trustee and
its successors and assigns. Any reasonable expenses incurred in connection with
the actions described in the preceding sentence or as a result of MERS
discontinuing or becoming unable to continue operations in connection with the
MERS System, shall be subject to withdrawal by the related Servicer from the
related Collection Account (provided that such expenses constitute
"unanticipated expenses" within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii)).
With respect to any Mortgage Loan, the related Servicer may consent to the
refinancing of the prior senior lien relating to such Mortgage Loan, provided
that the following requirements are met:
(a) the resulting Combined Loan-to-Value Ratio of such Mortgage Loan
is no higher than the Combined Loan-to-Value Ratio prior to such refinancing;
(b) the interest rate for the loan evidencing the refinanced senior
lien is no more than 2.0% higher than the interest rate on the loan evidencing
the existing senior lien immediately prior to the date of such refinancing; and
(c) the loan evidencing the refinanced senior lien is not subject to
negative amortization.
Notwithstanding the foregoing, the restriction in clauses (a) - (c) shall
not be applicable if the Mortgage Loan is in default or, in the judgment of the
related Servicer, such default is reasonably foreseeable.
In connection with any modification pursuant to this Section and to the
extent there are any unreimbursed Advances or Servicing Advances with respect to
the related Mortgage Loan, the related Servicer shall reimburse itself for such
amounts from the Collection Account.
Section 3.02 Servicing and Subservicing; Enforcement of the Obligations of
the Servicers.
(a) Each Servicer may arrange for the subservicing of any Mortgage
Loan by a subservicer, which may be an affiliate, pursuant to a subservicing
agreement (each, a "Subservicing Agreement"); provided, however, that (i) such
subservicing arrangement and the terms of the related Subservicing Agreement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder, (ii) that such agreement
would not result in a withdrawal or downgrading by any Rating Agency of the
ratings of any Securities or any of the NIM Notes and (iii) the NIMs Insurer
shall have consented to such Subservicing Agreement, which consent shall not be
unreasonably withheld. Notwithstanding the provisions of any Subservicing
Agreement, any of the provisions of this Servicing Agreement relating to
agreements or arrangements between a Servicer and a Subservicer or reference to
actions taken through a Subservicer or otherwise, such Servicer shall remain
obligated and liable to the Depositor, the Master Servicer, the Indenture
Trustee and the Securityholders for the servicing and administration of the
Mortgage Loans in accordance with the provisions of this Servicing Agreement
without diminution of such obligation or liability by
9
virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if such Servicer alone were servicing and administering
the Mortgage Loans. Every Subservicing Agreement entered into by any Servicer
shall contain a provision giving any successor servicer the option to terminate
such agreement, with the consent of the NIMs Insurer (which consent shall not be
unreasonably withheld), in the event a successor servicer is appointed. All
actions of each Subservicer performed pursuant to the related Subservicing
Agreement shall be performed as an agent of the related Servicer with the same
force and effect as if performed directly by such Servicer. Each Servicer shall
deliver to the NIMs Insurer and the Master Servicer copies of such Servicer's
Subservicing Agreements. The Indenture Trustee, the Master Servicer and the
Securities Administrator shall have no obligations, duties or liabilities with
respect to a Subservicer, including, without limitation, any obligation, duty or
liability to monitor such Subservicer or to pay a Subservicer's fees and
expenses.
(b) For purposes of this Servicing Agreement, the Servicers shall be
deemed to have received any collections, recoveries or payments with respect to
the related Mortgage Loan that are received by a Subservicer regardless of
whether such payments are remitted by the Subservicer to such Servicer.
(c) Each Servicer shall not permit a Subservicer to perform any
servicing responsibilities hereunder with respect to the Mortgage Loans unless
that Subservicer, if required by Section 3.17, first agrees in writing with such
Servicer to deliver an Assessment of Compliance and an Accountant's Attestation
in such manner and at such times that permits such Servicer to comply with
Section 3.17 of this Servicing Agreement.
Section 3.03 Rights of the Depositor and the Indenture Trustee in Respect
of the Servicers.
None of the Securities Administrator, the Master Servicer, the Indenture
Trustee or the Depositor shall have any responsibility or liability for any
action or failure to act by the Servicers, and none of them is obligated to
supervise the performance of the Servicers hereunder or otherwise except, with
respect to the Master Servicer, as expressly provided herein.
Section 3.04 Master Servicer to Act as Servicer.
Subject to Sections 6.04 and 7.02, in the event that any Servicer shall for
any reason no longer be a servicer hereunder or Countrywide shall for any reason
no longer be the servicer under the Countrywide Servicing Agreement (in both
cases, including by reason of an Event of Default), the Master Servicer or its
designee shall, within a period of time not to exceed ninety (90) days from the
date of notice of termination or resignation, thereupon assume all of the rights
and obligations of such Servicer hereunder arising thereafter (except that the
Master Servicer shall not be (i) liable for losses arising out of any acts or
omissions of the predecessor servicer hereunder, (ii) obligated to make Advances
or Servicing Advances if it is prohibited from doing so by applicable law, (iii)
obligated to effectuate repurchases or substitutions of Mortgage Loans
hereunder, including pursuant to Section 2.03 hereof, (iv) responsible for any
expenses of such Servicer pursuant to Section 2.03 or (v) deemed to have made
any representations and warranties hereunder or under the Countrywide Servicing
Agreement, including pursuant to Section 2.01 or
10
the first paragraph of Section 6.02 hereof; provided, however that the Master
Servicer (subject to clause (ii) above) or its designee, in its capacity as the
successor servicer, shall, if such servicer is a Servicer hereunder, immediately
assume the terminated or resigning Servicer's obligation to make Advances and
Servicing Advances). No such termination or resignation shall affect any
obligation of the related Servicer to pay amounts owed under this Servicing
Agreement and to perform its duties under this Servicing Agreement until its
successor assumes all of its rights and obligations hereunder. If a Servicer
hereunder shall for any reason no longer be a servicer (including by reason of
any Event of Default), the Master Servicer (or any other successor servicer)
may, at its option, succeed to any rights and obligations of the related
Servicer under any subservicing agreement in accordance with the terms thereof;
provided, however, that the Master Servicer (or any other successor servicer)
shall not incur any liability or have any obligations in its capacity as
servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of such Servicer thereunder; and such Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising prior to
the date of such succession. To the extent any costs or expenses, including
without limitation, Servicing Transfer Costs incurred by the Master Servicer in
connection with this Section 3.04 or Section 7.02, are not paid by the related
Servicer pursuant to this Servicing Agreement within thirty (30) days of the
date of the Master Servicer's invoice thereof, such amounts shall be payable out
of the Payment Account; provided that if such Servicer has been terminated by
reason of an Event of Default, the terminated servicer shall reimburse the
Issuing Entity for any such expense incurred by the Issuing Entity upon receipt
of a reasonably detailed invoice evidencing such expenses. If the Master
Servicer is unwilling or unable to act as servicer, the Master Servicer shall
seek to appoint a successor servicer that is eligible in accordance with the
criteria specified in this Servicing Agreement and reasonably acceptable to the
NIMs Insurer.
The Servicers shall, upon request of the Master Servicer, but at the
expense of the related Servicer if such Servicer has been terminated by reason
of an Event of Default, deliver to the assuming party all documents and records
relating to each subservicing agreement and the Mortgage Loans then being
serviced and otherwise use its best efforts to effect the orderly and efficient
transfer of the subservicing agreement to the assuming party.
Section 3.05 Collection of Mortgage Loan Payments; Collection Account;
Master Servicer Collection Account; Payment Account.
(a) The Servicers shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Servicing Agreement and the terms and provisions of any
related Required Insurance Policy. Consistent with the foregoing, each Servicer
may in its discretion (i) waive any late payment charge or, if applicable, any
default interest charge, or (ii) subject to Section 3.01, extend the due dates
for payments due on a Mortgage Note for a period not greater than 180 days;
provided, however, that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below; provided, further, that the
NIMs Insurer's prior written consent shall be required for any modification,
waiver or amendment after the Cut-off Date if the aggregate number of
outstanding Mortgage Loans which have been modified, waived or amended exceeds
5% of the number of Mortgage
11
Loans as of the Cut-Off Date. In the event of any such arrangement pursuant to
clause (ii) above, subject to Article IV herein, the related Servicer shall make
any Advances on the related Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. Notwithstanding the
foregoing (and without being subject to the 5% limitation of the second prior
sentence), in the event that any Mortgage Loan is in default or, in the judgment
of such Servicer, such default is reasonably foreseeable, such Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
(any and all such waivers, modifications, variances, forgiveness of principal or
interest, postponements, or indulgences collectively referred to herein as
"forbearance"), provided, however, that in determining which course of action
permitted by this sentence it shall pursue, such Servicer shall adhere to the
standards of Section 3.01. The relevant Servicer's analysis supporting any
forbearance and the conclusion that any forbearance meets the standards of
Section 3.01 shall be reflected in writing in the Mortgage File.
With respect to Mortgage Loans affected by a hurricane or other natural
disaster, if the Mortgaged Property is located in public and individual
assistance counties, as designated by Federal Emergency Management Agency (as
set forth on its website ▇▇▇.▇▇▇▇.▇▇▇), the related Servicer (or the related
Subservicer, if such Servicer is no longer servicing Mortgage Loans), may, at
its sole option, cease collection activities, charging late fees and credit
reporting activity for all Mortgagors in such counties for a period of time and,
if reasonably prudent, may extend such period as long as it deems necessary. In
addition, the related Servicer (or the related Subservicer, if applicable) may
suspend all foreclosure and bankruptcy activity relating to such Mortgage Loans
for a period of time and, if reasonably prudent, may extend such period as long
as it deems necessary.
(b) The Servicers will not waive any Prepayment Charge or portion
thereof unless, (i) the enforceability thereof shall have been limited by
bankruptcy, insolvency, moratorium, receivership or other similar laws relating
to creditors' rights generally or is otherwise prohibited by law, or (ii) the
collectability thereof shall have been limited due to acceleration in connection
with a foreclosure or other involuntary payment, or (iii) the related Servicer
has not been provided with information sufficient to enable it to collect the
Prepayment Charge, or (iv) in the related Servicer's reasonable judgment as
described in Section 3.01 hereof, (x) such waiver relates to a default or a
reasonably foreseeable default, (y) such waiver would maximize recovery of total
proceeds taking into account the value of such Prepayment Charge and related
Mortgage Loan and (z) doing so is standard and customary in servicing similar
Mortgage Loans (including any waiver of a Prepayment Charge in connection with a
refinancing of a Mortgage Loan that is related to a default or a reasonably
foreseeable default), (v) the collection of the Prepayment Charge or of a
similar type of prepayment premium would be considered "predatory" or "illegal"
pursuant to written guidance published by any applicable federal, state or local
regulatory authority having jurisdiction over such matters or has been
challenged by any such authority; or (vi) unless the Depositor has notified the
related Servicer
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that NIM Notes have been issued, there is a certified class action in which a
similar type of prepayment premium is being challenged. Except as provided in
the preceding sentence, in no event will the related Servicer waive a Prepayment
Charge in connection with a refinancing of a Mortgage Loan that is not related
to a default or a reasonably foreseeable default. If a Servicer waives or does
not collect all or a portion of a Prepayment Charge relating to a Principal
Prepayment in full or in part due to any action or omission of such Servicer,
other than as provided above, such Servicer shall deposit the amount of such
Prepayment Charge (or such portion thereof as had been waived for deposit) into
the related Collection Account for distribution in accordance with the terms of
this Servicing Agreement.
(c) The Servicers shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with
respect to a taking or condemnation) if it reasonably believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.
(d) Each Servicer shall establish and initially maintain so long as it
is acting as a servicer hereunder, on behalf of the Securityholders, a
Collection Account, in the name of the Indenture Trustee for the benefit of the
Securityholders. Each Servicer shall deposit into such Collection Account,
within two (2) Business Days after proper cash application of such funds
thereof, in immediately available funds, the following payments and collections
received or made by it on and after the Cut-off Date with respect to the
Mortgage Loans:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans, other than principal due on the Mortgage
Loans on or prior to the Cut-off Date;
(ii) all payments on account of interest on the Mortgage Loans
net of the Servicing Fee permitted under Section 3.15, other than (x) interest
due on the Mortgage Loans on or prior to the Cut-off Date and (y) Prepayment
Interest Excess;
(iii) all Liquidation Proceeds, other than proceeds to be applied
to the restoration or repair of the Mortgaged Property or released to either the
Mortgagor or the holder of a senior lien on the Mortgaged Property in accordance
with the related Servicer's normal servicing procedures;
(iv) all Subsequent Recoveries;
(v) all Compensating Interest;
(vi) any amount required to be deposited by the Servicer pursuant
to Section 3.05(g) in connection with any losses on Permitted Investments;
(vii) any amounts required to be deposited by the Servicer
pursuant to Section 3.10 hereof;
(viii) all Advances made by the Servicer pursuant to Section 4.01
hereof;
13
(ix) all Prepayment Charges; and
(x) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by each Servicer into its
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, all servicing related fees,
including all late payment charges, insufficient funds charges and payments in
the nature of assumption fees (i.e. fees related to the assumption of a Mortgage
Loan upon the purchase of the related Mortgaged Property, modification fees,
extension fees and other similar ancillary fees and charges (other than
Prepayment Charges) if collected, and any Prepayment Interest Excess) need not
be remitted by such Servicer. Rather, such fees and charges may be retained by
the related Servicer as additional servicing compensation. In the event that a
Servicer hereunder shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time withdraw or direct the Securities Administrator, or such other institution
maintaining its Collection Account, to withdraw such amount from its Collection
Account, any provision herein to the contrary notwithstanding. Each Servicer
shall maintain adequate records with respect to all withdrawals made pursuant to
this Section. All funds deposited by each Servicer in its Collection Account
shall be held in trust for the Securityholders until withdrawn in accordance
with Section 3.08. In no event shall the Securities Administrator or the Master
Servicer incur liability for withdrawals from the related Collection Account at
the direction of each Servicer hereunder.
Each Servicer shall give notice to the Securities Administrator, the Master
Servicer and the Indenture Trustee of the location of the Collection Account
maintained by it when established and prior to any change thereof.
(e) The Master Servicer shall establish and maintain, on behalf of the
Securityholders, the Master Servicer Collection Account, in the name of the
Indenture Trustee for the benefit of the Securityholders. The Master Servicer
shall, within two (2) Business Days after proper cash application after receipt
of funds from or on behalf of the related Servicer, deposit or cause to be
deposited in the Master Servicer Collection Account and retain therein the
following:
(i) Any amounts withdrawn from a Protected Account or other
permitted account;
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds, Liquidation Proceeds or Subsequent
Recoveries received by or on behalf of the Master Servicer or which were not
deposited in a Collection Account or other permitted account;
(iv) The repurchase price with respect to any Mortgage Loans
repurchased and all proceeds of any Mortgage Loans or property acquired in
connection with the optional redemption of the Trust Estate;
(v) Any amounts required to be deposited by the Master Servicer
pursuant to Section 3.05(g) with respect to losses on Permitted Investments; and
14
(vi) Any other amounts received by or on behalf of the Master
Servicer and required to be deposited in the Master Servicer Collection Account
pursuant to this Servicing Agreement.
Any amounts received by the Master Servicer which are required to be
deposited in the Master Servicer Collection Account by the Servicers may (but
are not required to be) be invested for the benefit of the Master Servicer in
Permitted Investments on the Business Day on which they were received. The
requirements for remittance by the Servicers in Section 3.08 hereof and deposit
by the Master Servicer into the Master Servicer Collection Account shall be
exclusive. If a Servicer fails to remit any funds due by the time designated
herein, that Servicer shall pay to the Master Servicer, for its own account,
interest accrued on such funds at the prime rate as set forth in The Wall Street
Journal from and including the applicable due date, to but excluding the day
such funds are paid to the Master Servicer. In the event that either Servicer
hereunder shall remit any amount not required to be remitted and not otherwise
subject to withdrawal pursuant to Section 3.08 hereof, it may at any time
withdraw such amount from the Master Servicer Collection Account, any provision
herein to the contrary notwithstanding. All funds deposited in the Master
Servicer Collection Account shall be held by the Master Servicer in trust for
the Securityholders until disbursed in accordance with this Servicing Agreement
or withdrawn in accordance with Section 3.08. In no event shall the Master
Servicer incur liability for withdrawals from the Master Servicer Collection
Account at the direction of a Servicer. The Master Servicer shall give notice to
each Servicer of the location of the Master Servicer Collection Account
maintained by it when established and prior to any change thereof.
The Master Servicer shall give notice to the NIMs Insurer of the location
of the Master Servicer Collection Account maintained by it when established and
prior to any change thereof. Not later than twenty days after each Payment Date,
the Master Servicer shall forward to the NIMs Insurer the most current available
bank statement for the Master Servicer Collection Account.
(f) The Securities Administrator shall establish and maintain, on
behalf of the Securityholders, the Payment Account, in the name of the Indenture
Trustee for the benefit of the Securityholders. The Securities Administrator
shall, promptly upon receipt, deposit or cause to be deposited in the Payment
Account and retain therein the following:
(i) the aggregate amount withdrawn by the Master Servicer from
the Master Servicer Collection Account for deposit in the Payment Account;
(ii) any amount required to be deposited by the Securities
Administrator pursuant to Section 3.05(g) in connection with any losses on
Permitted Investments; and
(iii) any amount received in connection with an Optional
Redemption of the Notes.
Any amounts received by the Securities Administrator which are required to
be deposited in the Payment Account by the Master Servicer may be invested for
the benefit of the Securities Administrator in Permitted Investments on the
Business Day on which they were received. The
15
foregoing requirements for remittance by the Master Servicer and deposit by the
Securities Administrator into the Payment Account shall be exclusive. If the
Master Servicer fails to remit any funds due by the time designated herein, the
Master Servicer shall pay to the Securities Administrator, for its own account,
interest accrued on such funds at the prime rate as set forth in The Wall Street
Journal from and including the applicable due date, to but excluding the day
such funds are paid to the Securities Administrator. In the event that the
Master Servicer shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time withdraw such amount from the Payment Account, any provision herein to the
contrary notwithstanding. All funds deposited in the Payment Account shall be
held by the Securities Administrator in trust for the Securityholders until
disbursed in accordance with this Servicing Agreement or withdrawn in accordance
with Section 3.08. In no event shall the Securities Administrator incur
liability for withdrawals from the Payment Account at the direction of the
Master Servicer. The Securities Administrator shall give notice to the NIMs
Insurer and the Master Servicer of the location of the Payment Account
maintained by it when established and prior to any change thereof.
(g) Each institution that maintains a Collection Account, the Master
Servicer Collection Account and the Payment Account may but shall not be
required to, invest the funds in each such account, as directed by either
Servicer hereunder, the Master Servicer or the Securities Administrator, as
applicable, in writing, in Permitted Investments, which shall mature not later
than (i) in the case of the Collection Account, the Business Day preceding the
related Servicer Remittance Date (except that if such Permitted Investment is an
obligation of the institution that maintains such Collection Account or is
otherwise immediately available, then such Permitted Investment shall mature not
later than the related Servicer Remittance Date), (ii) in the case of the Master
Servicer Collection Account, the Business Day preceding the Deposit Date (except
that if such Permitted Investment is an obligation of the institution that
maintains such Master Servicer Collection Account or is otherwise immediately
available, then such Permitted Investment shall mature not later than the
Deposit Date) and (iii) in the case of the Payment Account, the Business Day
immediately preceding the first Payment Date that follows the date of such
investment (except that if such Permitted Investment is an obligation of the
institution that maintains such Payment Account or is otherwise immediately
available, then such Permitted Investment shall mature not later than such
Payment Date) and, in each case, shall not be sold or disposed of prior to its
maturity. All such Permitted Investments shall be made in the name of the
related Servicer or the Securities Administrator, as applicable, for the benefit
of the Securityholders. All income and gain net of any losses realized from
amounts on deposit in the related Collection Account, and any other benefits
arising from the Collection Account, shall be for the benefit of the related
Servicer as servicing compensation and shall be remitted to it monthly as
provided herein. The amount of any losses incurred in the Collection Account in
respect of any such investments shall be deposited by the related Servicer in
the related Collection Account out of such Servicer's own funds immediately as
realized. All income and gain net of any losses realized from amounts on deposit
in the Master Servicer Collection Account, and any other benefits arising from
the Master Servicer Collection Account, shall be for the benefit of the Master
Servicer and shall be remitted to or withdrawn by it monthly as provided herein.
The amount of any losses incurred in the Master Servicer Collection Account in
respect of any such investments shall be deposited by the Master Servicer in the
Master Servicer Collection Account out of the Master Servicer's own funds
immediately as realized. All income and gain net of any losses realized from
amounts on deposit in the Payment Account
16
shall be for the benefit of the Securities Administrator and shall be remitted
to or withdrawn by it monthly as provided herein. The amount of any losses
incurred in the Payment Account in respect of any such investments shall be
deposited by the Securities Administrator in the Payment Account out of the
Securities Administrator's own funds immediately as realized.
Section 3.06 [Reserved]
Section 3.07 Access to Certain Documentation and Information Regarding the
Mortgage Loans
Upon reasonable advance notice in writing if required by federal
regulation, each Servicer will provide to each Securityholder that is a savings
and loan association, bank or insurance company certain reports and reasonable
access to information and documentation regarding the Mortgage Loans sufficient
to permit such Securityholder to comply with applicable regulations of the OTS
or other regulatory authorities with respect to investment in the Securities;
provided, that such Servicer shall be entitled to be reimbursed by each such
Securityholder for actual expenses incurred by such Servicer in providing such
reports and access.
The Servicers may from time to time provide the Depositor or the Master
Servicer, and any Person designated by the Depositor or Master Servicer, with
reports and information regarding the Mortgage Loans, including without
limitation, information requested by the Depositor or an originator of the
Mortgage Loans for required institutional risk control. In addition, subject to
limitations of applicable privacy laws, the Servicers may make public
information regarding performance of the Mortgage Loans. Upon reasonable
advance notice to the applicable Servicer and during regular business hours,
the Master Servicer shall have the right to inspect and examine the books and
records of a Servicer with respect to the Mortgage Loans.
Section 3.08 Permitted Withdrawals from the Collection Account, the Master
Servicer Collection Account and Payment Account
(a) The Servicers may from time to time, make withdrawals from the
related Collection Account for the following purposes:
(i) to pay to the related Servicer (to the extent not previously
paid to or withheld by such Servicer), as servicing compensation in accordance
with Section 3.15, that portion of any payment of interest that equals the
Servicing Fee for the period with respect to which such interest payment was
made, and, as additional servicing compensation, those other amounts set forth
in Section 3.15;
(ii) to reimburse the related Servicer (or the Master Servicer as
successor servicer) for Advances made by it (or to reimburse the advance
financing person for Advances made by it) with respect to the Mortgage Loans,
such right of reimbursement pursuant to this subclause (ii) being limited to
amounts received on particular Mortgage Loan(s) (including, for this purpose,
Condemnation Proceeds, Insurance Proceeds, Liquidation Proceeds) that represent
late recoveries of payments of principal and/or interest on such particular
Mortgage Loan(s) in respect of which any such Advance was made;
(iii) to reimburse the related Servicer for any Non-Recoverable
Advance previously made and any Non-Recoverable Servicing Advances previously
made to the
17
extent that, in the case of Non-Recoverable Servicing Advances, reimbursement
therefor constitutes "unanticipated expenses" within the meaning of Treasury
Regulation Section 1.860G-1(b)(3)(ii);
(iv) to pay to the related Servicer earnings on or investment
income with respect to funds in or credited to the related Collection Account;
(v) to reimburse the related Servicer from Insurance Proceeds for
Insured Expenses covered by the related Insurance Policy;
(vi) [reserved];
(vii) to pay the related Servicer (or the Master Servicer as
successor servicer) any unpaid Servicing Fees and to reimburse it for any
unreimbursed Servicing Advances (to the extent that reimbursement for Servicing
Advances would constitute an "unanticipated expense" within the meaning of
Treasury Regulation Section 1.860G-1(b)(3)(ii)), the related Servicer's right to
reimbursement of Servicing Advances pursuant to this subclause (vii) with
respect to any Mortgage Loan being limited to amounts received on particular
Mortgage Loan(s) (including, for this purpose, Liquidation Proceeds, purchase
and repurchase proceeds and Subsequent Recoveries related to any Liquidated
Loan) that represent late recoveries of the payments for which such advances
were made pursuant to Section 3.01 or Section 3.06;
(viii) to pay to the Depositor or the related Servicer, as
applicable, with respect to each Mortgage Loan or property acquired in respect
thereof that has been purchased pursuant to Section 2.03 or 3.12, all amounts
received thereon and not taken into account in determining the related Stated
Principal Balance of such repurchased Mortgage Loan;
(ix) to reimburse the related Servicer, the Master Servicer, the
Securities Administrator or the Depositor for expenses incurred by any of them
in connection with the Mortgage Loans or Securities and reimbursable pursuant to
the provisions of this Servicing Agreement, the Countrywide Servicing Agreement
or the Indenture provided that reimbursement therefor would constitute
"unanticipated" expenses within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii);
(x) to reimburse the Indenture Trustee or the Master Servicer for
expenses and indemnities reasonably incurred in respect of a breach or defect
giving rise to the purchase obligation in Section 2.03 that were incurred in the
Purchase Price of the Mortgage Loans including any expenses arising out of the
enforcement of the purchase obligation; provided that any such expenses will be
reimbursable under this subclause (x) only to the extent that such expenses
would constitute "unanticipated expenses" within the meaning of Treasury
Regulation Section 1.860G-1(b)(3)(ii) if paid by one of the REMICs provided for
in the Indenture;
(xi) to pay the related Servicer any unpaid Servicing Fees for
any Mortgage Loan upon such Mortgage Loan being charged off and upon termination
of the obligations of such Servicer;
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(xii) to withdraw pursuant to Section 3.05 any amount deposited
in the Collection Account and not required to be deposited therein or amounts
previously deposited but returned as unpaid due to insufficient funds or other
denial by the related Mortgagor's banking institution;
(xiii) to clear and terminate the Collection Account upon
termination of this Servicing Agreement pursuant to Section 8.08 hereof;
(xiv) to reimburse itself for Advances or Servicing Advances from
amounts in the related Collection Account held for future distributions that
were not included in Available Funds for the preceding Distribution Date. An
amount equal to the amount withdrawn from the related Collection Account
pursuant to this subclause (xiv) shall be deposited in such Collection Account
by the related Servicer on the next succeeding Distribution Date on which funds
are to be distributed to Certificateholders; and
(xv) to reimburse itself from any amounts in the related
Collection Account for any prior Advances or Servicing Advances made by the
related Servicer that have not otherwise been reimbursed to such Servicer at the
time a Mortgage Loan is modified.
In addition, each Servicer will use commercially reasonable efforts to
cause to be withdrawn from the related Collection Account no later than 2:30
p.m. New York City time, but in any case no later than 4:00 p.m. New York City
time on the related Servicer Remittance Date, the Interest Funds and the
Principal Funds (for this purpose only, neither Interest Funds nor Principal
Funds shall include a deduction for any amount reimbursable to the Master
Servicer, Securities Administrator or Indenture Trustee unless such amounts have
actually been reimbursed from such funds at the discretion of the Master
Servicer), to the extent on deposit, and such amount shall be deposited in the
Master Servicer Collection Account; provided, however, if the Master Servicer
does not receive such Interest Funds and Principal Funds by 4:00 p.m. on the
related Servicer Remittance Date, the related Servicer shall pay, out of its own
funds, interest on such amount at a rate equal to the "prime rate" as published
by The Wall Street Journal at such time for each date or part thereof.
Each Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the related Collection Account.
Each Servicer shall provide written notification to the Master Servicer in
the Remittance Report as set forth in Section 3.24 of this Servicing Agreement
upon making any withdrawals from the related Collection Account pursuant to
subclauses (iii) and (vii) above.
Unless otherwise specified, any amounts reimbursable to any Servicer or the
Securities Administrator from amounts on deposit in the Collection Account,
Master Servicer Collection Account or the Payment Account shall be deemed to
come from first, Interest Funds, and thereafter, Principal Funds for the related
Payment Date.
(b) (i) The Master Servicer will, from time to time on demand of a
Servicer hereunder, the Indenture Trustee, the Custodian or the Securities
Administrator, make or cause to be made such withdrawals or transfers from the
Master Servicer Collection Account
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as the Master Servicer has designated for such transfer or withdrawal pursuant
to the Indenture or other Operative Documents. The Master Servicer may clear and
terminate the Master Servicer Collection Account pursuant to Section 3A.04 and
remove amounts from time to time deposited in error.
(ii) On an ongoing basis, the Master Servicer shall withdraw from
the Master Servicer Collection Account (x) any expenses recoverable by the
Indenture Trustee, Custodian, the Master Servicer or the Securities
Administrator pursuant to this Servicing Agreement (or other Operative
Documents), including but not limited to Sections 3A.02 and 3A.07, (y) the
Master Servicing Fee and (z) any amounts payable to the Master Servicer.
(iii) In addition, on or before each Deposit Date, the Master
Servicer shall deposit in the Payment Account (or remit to the Securities
Administrator for deposit therein) any Monthly Advances required to be made by
the Master Servicer with respect to the Mortgage Loans.
(iv) No later than 3:00 p.m. New York time on each Deposit Date,
the Master Servicer will transfer all Available Funds on deposit in the Master
Servicer Collection Account with respect to the related Payment Date to the
Securities Administrator for deposit in the Payment Account.
(v) The Master Servicer will from time to time, upon notification
from Countrywide, remit available principal collections on the Payment Date in
an amount equal to unreimbursed draws, including HELOC Draw Advances, due to
Countrywide as of the end of the prior Due Period, pursuant to Section 3.03 of
the Countrywide Servicing Agreement.
(c) The Securities Administrator shall withdraw funds from the Payment
Account for distribution to the Securityholders in the manner specified in the
Indenture (and shall withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to this Servicing Agreement). In
addition, prior to making such distributions to the Securityholders, the
Securities Administrator may from time to time make withdrawals from the Payment
Account for the following purposes:
(i) to withdraw pursuant to Section 3.05 any amount deposited in
the Payment Account and not required to be deposited therein;
(ii) to clear and terminate the Payment Account upon termination
of the Servicing Agreement pursuant to Section 8.08 hereof (after paying all
amounts necessary to the Indenture Trustee, the Securities Administrator, Master
Servicer or any Servicer in connection with any such termination);
(iii) to reimburse Countrywide for any unreimbursed draws due to
it as of the end of the prior Due Period, to the extent not reimbursed out of
the Master Servicer Collection Account pursuant to Section 3.08(b)(v) herein,
pursuant to Section 3.03 of the Countrywide Servicing Agreement.
(iv) to reimburse the Securities Administrator, the Custodian,
the Master Servicer or the Indenture Trustee for any fees, expenses,
disbursements and indemnification reimbursable pursuant to this Servicing
Agreement, including without limitation Sections 3.04 and 6.03 hereof and
Section 6.07 in the Indenture; and
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indemnification reimbursable pursuant to this Servicing Agreement, including
without limitation Sections 3.04 and 6.03 hereof and Section 6.07 in the
Indenture; and
(v) to pay to the Securities Administrator earnings on or
investment income with respect to funds in or credited to the Payment Account.
Section 3.09 [Reserved]
Section 3.10 [Reserved]
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the related Servicer shall, except as set forth below, to the extent
it has knowledge of such conveyance or prospective conveyance, exercise its
rights to accelerate the maturity of the related Mortgage Loan under any
"due-on-sale" clause contained in the related Mortgage or Mortgage Note;
provided, however, that the related Servicer shall not exercise any such right
if the "due-on-sale" clause, in the reasonable belief of such Servicer, is not
enforceable under applicable law; provided, further, that such Servicer shall
not take any action in relation to the enforcement of any "due-on-sale" clause
that would adversely affect or jeopardize coverage under any Required Insurance
Policy. An opinion of counsel, which shall be reimbursable as a Servicing
Advance (to the extent it is an "unanticipated expense" within the meaning of
Treasury Regulation Section 1.860G-1(b)(3)(ii)), delivered to the Indenture
Trustee, the Master Servicer, the Securities Administrator and the Depositor
shall conclusively establish the reasonableness of the related Servicer's belief
that any "due-on-sale" clause is not enforceable under applicable law.
Notwithstanding the foregoing, no Servicer is required to exercise such rights
with respect to a related Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In such event, the related Servicer shall make reasonable efforts
to enter into an assumption and modification agreement with the Person to whom
such property has been or is about to be conveyed, pursuant to which such Person
becomes liable under the Mortgage Note and, unless prohibited by applicable law
or the Mortgage, the Mortgagor remains liable thereon. If the foregoing is not
permitted under applicable law, the related Servicer is authorized to enter into
a substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Note. In addition to the foregoing, the
related Servicer shall not be required to enforce any "due-on-sale" clause if in
the reasonable judgment of such Servicer, such action would not be in the best
interests of the Securityholders. The Mortgage Loan, as assumed, shall conform
in all respects to the requirements, representations and warranties of this
Servicing Agreement. The related Servicer shall notify the Master Servicer and
the Custodian that any such assumption or substitution agreement has been
completed and shall forward to the Custodian the original copy of such
assumption or substitution agreement (indicating the Mortgage File to which it
relates), which copy shall be added by the Custodian to the related Mortgage
File and which shall, for all purposes, be considered a part of such Mortgage
File to the same extent as all other documents and instruments constituting a
part thereof. The related
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Servicer shall be responsible for recording any such assumption or substitution
agreements. In connection with any such assumption or substitution agreement,
the Monthly Payment on the related Mortgage Loan shall not be changed but shall
remain as in effect immediately prior to the assumption or substitution, the
stated maturity or outstanding principal amount of such Mortgage Loan shall not
be changed nor shall any required monthly payments of principal or interest be
deferred or forgiven. Any fee collected by the related Servicer for consenting
to any such conveyance or entering into an assumption or substitution agreement
shall be retained by or paid to such Servicer as additional servicing
compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Servicing Agreement, no Servicer hereunder shall be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any transfer or assumption
which the related Servicer reasonably believes it is restricted by law from
preventing, for any reason whatsoever.
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination of
Excess Proceeds; Special Loss Mitigation
(a) The Servicers shall use reasonable efforts consistent with the
servicing standard set forth in Section 3.01 to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of Delinquent payments. In connection
with such foreclosure or other conversion, the related Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided,
however, that such Servicer shall not be required to expend its own funds in
connection with the restoration of any property that shall have suffered damage
due to an uninsured cause unless it shall determine (i) that such restoration
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Collection Account pursuant to
Section 3.08 hereof). Each Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the proceeds of liquidation of
the related Mortgaged Property, and, if applicable, as a Non-Recoverable
Servicing Advance, as contemplated in Section 3.08 hereof.
With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Indenture Trustee or its nominee (which nominee shall
not be the Servicer). Pursuant to its efforts to sell such REO Property, each
Servicer shall either itself or through an agent selected by such Servicer
protect and conserve such REO Property in the same manner and to such extent as
is customary in the locality where such REO Property is located and may,
incident to its conservation and protection of the interests of the
Securityholders, rent the same, or any part thereof, as such Servicer deems to
be in the best interest of such Servicer and the Securityholders for the period
prior to the sale of such REO Property. The related Servicer or an Affiliate
thereof may receive usual and customary real estate referral fees for real
estate brokers in connection with the listing and disposition of REO Property.
The related Servicer shall prepare a statement with respect to each REO Property
that has been rented showing the
22
aggregate rental income received and all expenses incurred in connection with
the management and maintenance of such REO Property at such times as is
necessary to enable each Servicer to comply with the reporting requirements of
the REMIC Provisions. The net monthly rental income, if any, from such REO
Property shall be deposited in the Collection Account no later than the close of
business on each Determination Date. The related Servicer shall perform the tax
reporting and withholding related to foreclosures, abandonments and cancellation
of indebtedness income as specified by Sections 1445, 6050J and 6050P of the
Code by preparing and filing such tax and information returns, as may be
required. A copy of such statements and reports will be delivered to the Master
Servicer by the Servicer.
In the event that the Issuing Entity acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the related Servicer shall dispose of such Mortgaged Property
prior to the expiration of three years from the end of the year of its
acquisition by the Issuing Entity or, at the expense of the Issuing Entity,
obtain, in accordance with applicable procedures for obtaining an automatic
extension of the grace period, more than sixty (60) days prior to the day on
which such three-year period would otherwise expire, an extension of the
three-year grace period, in which case such property must be disposed of prior
to the end of such extension, unless the Indenture Trustee and the NIMs Insurer
shall have been supplied with an Opinion of Counsel (such Opinion of Counsel not
to be an expense of the Master Servicer, Securities Administrator, the NIMs
Insurer or the Indenture Trustee), to the effect that the holding by the Issuing
Entity of such Mortgaged Property subsequent to such three-year period or
extension will not result in the imposition of taxes on "prohibited
transactions" of the Issuing Entity or any of the REMICs provided for in the
Indenture as defined in section 860F of the Code or cause any of the REMICs
provided for in the Indenture to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Issuing Entity may continue to
hold such Mortgaged Property (subject to any conditions contained in such
Opinion of Counsel). Notwithstanding any other provision of this Servicing
Agreement, no Mortgaged Property acquired by the Issuing Entity shall be held,
rented (or allowed to continue to be rented) or otherwise used for the
production of income by or on behalf of the Issuing Entity in such a manner or
pursuant to any terms that would (i) cause such Mortgaged Property to fail to
qualify as "foreclosure property" within the meaning of section 860G(a)(8) of
the Code or (ii) subject the Issuing Entity or any REMIC provided for in the
Indenture to the imposition of any federal, state or local income taxes on the
income earned from such Mortgaged Property under section 860G(c) of the Code or
otherwise, unless the related Servicer or the Depositor has agreed to indemnify
and hold harmless the Indenture Trustee and the Trust Estate with respect to the
imposition of any such taxes.
The related Servicer agrees not to knowingly or intentionally take any
action or omit to take any action that would cause the termination of the REMIC
status of any of the REMICs provided for in the Indenture or result in the
imposition of a tax upon any of the REMICs provided for in the Indenture. In the
event that any REMIC provided for in the Indenture fails to qualify as a REMIC,
loses its status as a REMIC or incurs federal, state or local taxes as a result
of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the related Servicer of its
duties and obligations set forth herein, such Servicer shall indemnify the
Indenture Trustee, the Securities Administrator, the Master Servicer, the NIMs
Insurer and the Issuing Entity against any and all losses resulting from such
negligence; provided, however, that such Servicer shall not be liable for any
such losses
23
attributable to the action or inaction of the Indenture Trustee, the Master
Servicer, the Securities Administrator, the Depositor, the NIMs Insurer or the
holder of the residual interest in such REMIC, as applicable, nor for any such
losses resulting from misinformation provided by the holder of the residual
interest in such REMIC on which such Servicer has relied. The foregoing shall
not be deemed to limit or restrict the rights and remedies of the holder of the
residual interest in such REMIC now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event shall the related Servicer
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Servicing Agreement, (2) for any losses other
than those arising out of a negligent performance by such Servicer of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Securityholders (in addition to payment of principal and interest on
the Securities).
The Servicers shall have no liability for any losses resulting from a
foreclosure on a second lien Mortgage Loan in connection with the foreclosure of
the related first lien mortgage loan that is not a Mortgage Loan if the
applicable Servicer does not receive notice of such foreclosure action.
The decision of a Servicer to foreclose on a defaulted Mortgage Loan shall
be subject to a determination by such Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
related Servicer for expenses incurred (including any property or other taxes)
in connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted Mortgage Loans
(with interest accruing as though such Mortgage Loans were still current) and
all such income shall be deemed, for all purposes in this Servicing Agreement,
to be payments on account of principal and interest on the related Mortgage
Notes and shall be deposited into the related Collection Account. To the extent
the income received during a Prepayment Period is in excess of the amount
attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related Mortgage Loan, such excess shall be considered to
be a partial Principal Prepayment for all purposes hereof.
Notwithstanding the foregoing provisions of this Section 3.12 or any other
provision of this Servicing Agreement, with respect to any Mortgage Loan as to
which the assistant vice president for foreclosures or the vice president of
default management or analogous officer of a Servicer (other than ▇▇▇▇▇▇) has
actual knowledge (which shall not be presumed due to any documents received by
such Servicer) of, the presence of any toxic or hazardous substance on the
related Mortgaged Property, such Servicer shall not, on behalf of the Indenture
Trustee, either (i) obtain title to such Mortgaged Property as a result of or in
lieu of foreclosure or otherwise, or (ii) otherwise acquire possession of, or
take any other action with respect to, such Mortgaged Property, if, as a result
of any such action, the Indenture Trustee, the Issuing Entity or the
Securityholders would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless such Servicer believes, based on its reasonable
24
judgment and a report prepared by a Person who regularly conducts environmental
audits using customary industry standards, that:
(1) such Mortgaged Property is in material compliance with applicable
environmental laws or, if not, that it would be in the best economic interest of
the Issuing Entity to take such actions as are necessary to bring the Mortgaged
Property into compliance therewith; and
(2) it is probable that there are no circumstances present at such
Mortgaged Property relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based materials
for which additional investigation, testing, monitoring, containment, clean-up
or remediation could be required under any federal, state or local law or
regulation, or that if any such materials are present for which such action
could be required, that it would be in the best economic interest of the Issuing
Entity to take such actions with respect to the affected Mortgaged Property.
Any such Servicer shall forward a copy of the environmental audit report to
the Depositor, the Master Servicer and the Indenture Trustee. The cost of the
environmental audit report contemplated by this Section 3.12 shall be advanced
by such Servicer, subject to such Servicer's right to be reimbursed therefor
from the Collection Account, such right of reimbursement being prior to the
rights of Securityholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.
If a Servicer (other than ▇▇▇▇▇▇) determines, as described above, that it
is in the best economic interest of the Issuing Entity to take such actions as
are necessary to bring any such Mortgaged Property into compliance with
applicable environmental laws, or to take such action with respect to the
containment, clean-up or remediation of hazardous substances, hazardous
materials, hazardous wastes or petroleum-based materials affecting any such
Mortgaged Property, then such Servicer may take such action as it deems to be in
the best economic interest of the Issuing Entity; provided that any amounts
disbursed by such Servicer pursuant to this Section 3.12 shall constitute
Advances. The cost of any such compliance, containment, clean-up or remediation
shall be advanced by such Servicer, subject to such Servicer's right to be
reimbursed therefor from the Collection Account, such right of reimbursement
being prior to the rights of Securityholders to receive any amount in the
Collection Account received in respect of the affected Mortgage Loan or other
Mortgage Loans. If such Servicer decides not to take such action, it may not
obtain title to such Mortgaged Property.
In the case of the ▇▇▇▇▇▇ Mortgage Loans, if ▇▇▇▇▇▇ has knowledge that a
Mortgaged Property that it is contemplating acquiring in foreclosure or by
deed-in-lieu of foreclosure is located within a one-mile radius of any site with
environmental or hazardous waste risks known to ▇▇▇▇▇▇, ▇▇▇▇▇▇ will, prior to
acquiring the Mortgaged Property, consider such risks and only take action in
accordance with Accepted Servicing Practices.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net of
any payment to the related Servicer as provided above, shall be deposited in the
related Collection Account on the next succeeding Determination Date following
receipt thereof for distribution on the related Payment Date.
25
The proceeds of any Liquidated Loan, as well as any recovery resulting from
a partial collection of Liquidation Proceeds, will be applied as between the
parties in the following order of priority: first, to reimburse such Servicer
for any related unreimbursed Servicing Advances and unpaid Servicing Fees,
pursuant to Section 3.08(a)(vii) or this Section 3.12; second, to reimburse the
related Servicer (or Master Servicer, as applicable) for any unreimbursed
Advances, pursuant to Section 3.08(a)(ii) or this Section 3.12; third, to
accrued and unpaid interest (to the extent no Advance has been made for such
amount) on the Mortgage Loan, at the Net Mortgage Rate to the Due Date occurring
in the month in which such amounts are required to be distributed; and fourth,
as a recovery of principal of the Mortgage Loan; and fifth, to any Prepayment
Charges.
The proceeds of any net income from any REO Property will be applied as
between the parties in the following order of priority: first, to reimburse the
related Servicer (or the Master Servicer, as applicable) for any related
unreimbursed Servicing Advances and unpaid Servicing Fees, pursuant to Section
3.08(a)(vii) or this Section 3.12; second, to reimburse the related Servicer (or
the Master Servicer, as applicable) for any unreimbursed Advances, pursuant to
Section 3.08(a)(ii) or this Section 3.12; third, as a recovery of principal; and
fourth, to accrued and unpaid interest (to the extent no Advance has been made
for such amount) on the related REO property, at the applicable Net Mortgage
Rate to the Due Date occurring in the month in which such amounts are required
to be distributed.
(b) On each Determination Date, the related Servicer shall determine
the respective aggregate amounts of Excess Proceeds, if any, that occurred in
the related Prepayment Period.
(c) [Reserved]
(d) With respect to such of the Mortgage Loans as come into and
continue in default, the related Servicer will decide, in its reasonable
business judgment, whether to (i) foreclose upon the Mortgaged Properties
securing those Mortgage Loans pursuant to Section 3.12(a), (ii) write off the
unpaid principal balance of the Mortgage Loans as bad debt (provided that such
Servicer has determined that no net recovery is possible through foreclosure
proceedings or other liquidation of the related Mortgaged Property), (iii) take
a deed in lieu of foreclosure, (iv) accept a short sale or short refinance; (v)
arrange for a repayment plan or refinancing, or (vi) agree to a modification of
such Mortgage Loan. As to any Mortgage Loan that becomes 120 days delinquent,
the related Servicer (other than ▇▇▇▇▇▇) shall have obtained or shall obtain a
broker's price opinion, the cost of which will be reimbursable as a Servicing
Advance. After obtaining the broker's price opinion, such Servicer will
determine, in its reasonable business judgment, whether a net recovery is
possible through foreclosure proceedings or other liquidation of the related
Mortgage Property. If any Servicer determines that no such recovery is possible,
in the case of Wilshire, it must, and in the case of ▇▇▇▇▇▇, it may charge off
the related Mortgage Loan at the time it becomes 180 days delinquent and will
identify any charged off Mortgage Loan in the Remittance Report delivered
pursuant to Section 3.24. Once a Mortgage Loan has been charged off, the related
Servicer will discontinue making Advances, such Servicer will not be entitled to
future Servicing Fees (except as provided below) with respect to such Mortgage
Loan, and the Mortgage Loan will be treated as a Liquidated Mortgage Loan. If
the related Servicer determines that such net recovery is possible through
foreclosure proceedings or other liquidation of the related Mortgaged Property
on a Mortgage Loan that
26
becomes 180 days delinquent, the related Servicer need not charge off the
Mortgage Loan and may continue making Advances and the related Servicer will
continue to be entitled to Servicing Fees.
(e) Any Mortgage Loan that is charged off, pursuant to (d) above, may
continue to be serviced by the related Servicer for the Securityholders using
specialized collection procedures (including foreclosure, if appropriate). The
related Servicer will be entitled to Servicing Fees and reimbursement of
expenses in connection with such Mortgage Loans after the date of charge off,
only to the extent of funds available from any recoveries on any such Mortgage
Loans.
(f) Any Wilshire serviced Mortgage Loans serviced in accordance with
the specialized collection procedures shall be serviced for approximately six
months. Any net recoveries received on such Wilshire serviced Mortgage Loans
during such six month period will be treated as Subsequent Recoveries. On the
date which is six months after the date on which Wilshire began servicing such
Mortgage Loans using the specialized collection procedures, unless specific
additional net recoveries are anticipated by Wilshire on a particular Mortgage
Loan, such charged off loan will be released to the majority holder of the Class
C Certificates and thereafter, (i) the majority holder of the Class C
Certificates, as identified with contact information in writing to Wilshire by
the Depositor, will be entitled to any amounts subsequently received in respect
of any such released loans, subject to such Wilshire's fees described below,
(ii) the majority holder of the Class C Certificates may designate any servicer
to service any such released loan, (iii) the majority holder of the Class C
Certificates may sell any such released loan to a third party and (iv) to the
extent the servicing of such charged off loan is not transferred from Wilshire,
the servicing of such charged off loan and the fees therefor shall be governed
by the most current servicing agreement between Wilshire and the Sponsor.
(g) Any ▇▇▇▇▇▇ serviced Mortgage Loans serviced in accordance with the
specialized collection procedures shall be serviced for approximately 90 days.
Any net recoveries received on such ▇▇▇▇▇▇ serviced Mortgage Loans during such
90 day period will be treated as Subsequent Recoveries. On the date which is 90
days after the date on which ▇▇▇▇▇▇ began servicing such Mortgage Loans using
the specialized collection procedures, unless specific net recoveries are
anticipated by ▇▇▇▇▇▇ on a particular Mortgage Loan, (i) such charged off loan
may be released to the majority holder of the Class C Certificates as identified
with contact information in writing to ▇▇▇▇▇▇ by the Depositor, and in such case
the servicing of such Mortgage Loan shall be released to the majority holder's
designee within thirty (30) days of the date such Mortgage Loan is released to
such majority holder or (ii) ▇▇▇▇▇▇, in its sole discretion, may continue to
service such charged off loan for the Securityholders as described above.
Section 3.13 Custodian to Cooperate; Release of Mortgage Files
Upon the payment in full of any Mortgage Loan, or the receipt by a
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, such Servicer will promptly notify the related
Custodian by delivering a Request for Release substantially in the form of
Exhibit C. Upon receipt of a copy of such request, the Custodian shall promptly
release the related Mortgage File to the related Servicer, the cost of which may
be paid by such Servicer as a Servicing Advance, and such Servicer is authorized
to cause the
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removal from the registration on the MERS System of any such Mortgage if
applicable, and such Servicer, on behalf of the Indenture Trustee shall execute
and deliver the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
together with the Mortgage Note with written evidence of cancellation thereon.
Expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Mortgagor to the extent permitted by
law, and otherwise to the Trust Estate to the extent such expenses constitute
"unanticipated expenses" within the meaning of Treasury Regulations Section
1.860G-(1)(b)(3)(ii). From time to time and as shall be appropriate for the
servicing or foreclosure of any Mortgage Loan, including for collection under
any policy of flood insurance, any fidelity bond or errors or omissions policy,
or for the purposes of effecting a partial release of any Mortgaged Property
from the lien of the Mortgage or the making of any corrections to the Mortgage
Note or the Mortgage or any of the other documents included in the Mortgage
File, the Custodian shall, upon delivery to the Custodian of a Request for
Release in the form of Exhibit C signed by a Servicing Officer, release the
Mortgage File to the related Servicer, and the cost of delivery of the Mortgage
File may be charged to such Servicer by the Custodian. Subject to the further
limitations set forth below, the related Servicer shall cause the Mortgage File
or documents so released to be returned to the Custodian when the need therefor
by such Servicer no longer exists, unless the Mortgage Loan is liquidated and
the proceeds thereof are deposited in its Collection Account.
Each Request for Release may be delivered to the Custodian (i) via mail or
courier, (ii) via facsimile or (iii) by such other means, including, without
limitation, electronic or computer readable medium, as the related Servicer and
the Custodian shall mutually agree. The Custodian shall release the related
Mortgage File(s) within four (4) Business Days of receipt of a properly
completed Request for Release pursuant to clauses (i), (ii) or (iii) above.
Receipt of a properly completed Request for Release shall be authorization to
the Custodian to release such Mortgage Files, provided the Custodian has
determined that such Request for Release has been executed, with respect to
clauses (i) or (ii) above, or approved, with respect to clause (iii) above, by
an authorized Servicing Officer of the related Servicer, and so long as the
Custodian complies with its duties and obligations under this Servicing
Agreement and the Custodial Agreement. If the Custodian is unable to release the
Mortgage Files within the period previously specified, the Custodian shall
immediately notify the related Servicer indicating the reason for such delay.
The related Servicer shall not pay penalties or damages due to the Custodian's
failure to release the related Mortgage File or the Indenture Trustee's or its
designee's failure to execute and release documents in a timely manner, and such
amounts shall be Servicing Advances.
On each day that the related Servicer remits to the Custodian Requests for
Releases pursuant to clauses (ii) or (iii) above, such Servicer shall also
submit to the Custodian a summary of the total number of such Requests for
Releases requested on such day by the same method as described in such clauses
(ii) and (iii) above.
If a Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Servicing Agreement,
such Servicer may deliver or cause to be delivered to the Indenture Trustee for
signature, or execute any court pleadings, requests for trustee's sale or other
documents necessary to effectuate such foreclosure or any legal action brought
to obtain judgment against the Mortgagor on the Mortgage Note or the Mortgage or
to obtain a deficiency judgment or to enforce any other remedies or rights
provided
28
by the Mortgage Note or the Mortgage or otherwise available at law or in equity.
Notwithstanding the foregoing, the related Servicer shall cause possession of
any Mortgage File or of the documents therein that shall have been released by
the Custodian to be returned to the Custodian promptly after possession thereof
shall have been released by the Custodian unless (i) the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the related Collection Account, and the related Servicer shall have
delivered to the Custodian a Request for Release in the form of Exhibit C or
(ii) the Mortgage File or document shall have been delivered to an attorney or
to a public trustee or other public official as required by law for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgaged Property and the related Servicer shall have delivered to the
Custodian an Officer's Certificate of a Servicing Officer certifying as to the
name and address of the Person to which the Mortgage File or the documents
therein were delivered and the purpose or purposes of such delivery.
The related Servicer shall not have any liability for and shall be
excused from performance of the Agreement to the extent it is unable to perform
due to the Indenture Trustee's or the Custodian's failure to release the related
Mortgage File or the Indenture Trustee's or the Custodian's failure to execute
and release documents in a timely manner, and such amounts shall be Servicing
Advances which shall be reimbursable to the related Servicer as an
"unanticipated expense" as set forth in Section 3.08(iii) of this Agreement.
Section 3.14 Documents, Records and Funds in Possession of Servicer to be
Held for the Indenture Trustee.
All Mortgage Files and funds collected or held by, or under the control of,
the Servicers in respect of any Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds, including but not
limited to, any funds on deposit in its Collection Account shall be held by the
related Servicer for and on behalf of the Indenture Trustee and shall be and
remain the sole and exclusive property of the Trust Estate, subject to the
applicable provisions of this Servicing Agreement. The Servicers also agree that
they shall not create, incur or subject any Mortgage File or any funds that are
deposited in the relevant Collection Account, the Master Servicer Collection
Account or the Payment Account or in any Escrow Account, or any funds that
otherwise are or may become due or payable to the Indenture Trustee or the
Securities Administrator for the benefit of the Securityholders, to any claim,
lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of set
off against any Mortgage File or any funds collected on, or in connection with,
a Mortgage Loan, except, however, that the Servicers shall be entitled to set
off against and deduct from any such funds any amounts that are properly due and
payable to such Servicer under this Servicing Agreement.
Section 3.15 Servicing Compensation
As compensation for its activities hereunder, the related Servicer shall be
entitled to retain or withdraw from its Collection Account out of each payment
or recovery of interest on a Mortgage Loan included in the Trust Estate an
amount equal to interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the related Mortgage Loan as of the immediately preceding
Payment Date.
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Additional servicing compensation in the form of any Excess Proceeds, late
payment fees, assumption fees (i.e. fees related to the assumption of a Mortgage
Loan upon the purchase of the related Mortgaged Property), release fees, bad
check charges, modification or extension fees, customary real estate referral
fees and similar fees payable by the Mortgagor, Prepayment Interest Excess, all
income and gain net of any losses realized from Permitted Investments in the
Collection Account, and any other benefits arising from the Collection Account
and the Escrow Account shall be retained by the related Servicer to the extent
not required to be deposited in the related Collection Account and the Escrow
Account pursuant to Sections 3.05, 3.06 or 3.12(a) hereof. Each 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 therefor except
as specifically provided in this Servicing Agreement. In no event shall the
Indenture Trustee, Master Servicer or the Securities Administrator be liable for
any Servicing Fee or for any differential between the Servicing Fee and the
amount necessary to induce a successor servicer to act as successor servicer
under this Servicing Agreement.
Section 3.16 Access to Certain Documentation
Each Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates and the examiners
and supervisory agents of the OTS, the FDIC and such other authorities, as
applicable, access to the documentation regarding the Mortgage Loans required by
applicable regulations of the OTS and the FDIC. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices of the related Servicer designated by it
provided, that such Servicer shall be entitled to be reimbursed by each such
Securityholder for actual expenses incurred by such Servicer in providing such
reports and access. Nothing in this Section shall limit the obligation of each
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of such Servicer to provide access as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section. Upon reasonable advance notice to the related Servicer,
and during regular business hours, the Indenture Trustee, the Securities
Administrator and the Master Servicer shall have the right to inspect and
examine the books and records of a Servicer with respect to the Mortgage Loans.
Section 3.17 Annual Statement as to Compliance
Not later than (a) March 15 of each calendar year (other than the calendar
year during which the Closing Date occurs) or (b) with respect to any calendar
year during which an annual report on Form 10-K is not required to be filed
pursuant to Section 3.20 on behalf of the Issuing Entity, by April 15 of each
calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), each Servicer shall deliver to the Depositor, Master Servicer and
the Securities Administrator, an Officer's Certificate in the form attached
hereto as Exhibit D stating, as to each signatory thereof, that (i) a review of
the activities of such Servicer during the preceding calendar year and of the
performance of such Servicer under this Servicing Agreement has been made under
such officer's supervision, and (ii) to the best of such officer's knowledge,
based on such review, such Servicer has fulfilled all its obligations under this
Servicing Agreement in all material respects throughout such year or a portion
thereof, or, if there has been a failure to fulfill any such obligation in any
material respect, specifying each such failure known to such officer and the
nature and status thereof. With respect to any Subservicer that meets the
30
criteria of Item 1108(a)(2)(i) through (iii) of Regulation AB, the related
Servicer shall cause each such Subservicer to deliver the Officer's Certificate
set forth in this Section 3.17 as and when required with respect to such
Subservicer. Notwithstanding the forgoing, such Servicer shall provide the
Annual Statements as to Compliance only with respect to the time period in which
it serviced the Mortgage Loans after the Closing Date, and provided further that
such Servicer shall be required to deliver such Annual Statement as to
Compliance to the NIMs Insurer only to the extent such Servicer is provided with
the contact information for such NIMs Insurer.
Section 3.18 Annual Independent Public Accountants' Servicing Statement;
Financial Statements
(a) Not later than (i) March 15 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 3.20 on behalf of the Issuing Entity, by April 15 of
each calendar year (or if such day is not a Business Day, the immediately
succeeding Business Day), each Servicer, at its own expense, shall deliver to
the Securities Administrator, the NIMs Insurer, the Master Servicer and the
Depositor an officer's assessment of its compliance with the Servicing Criteria
applicable to it (as set forth on Exhibit F) during the preceding calendar year
as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB (the "Assessment of Compliance"), which assessment shall be
substantially in the form of Exhibit E hereto. Provided however, that such
Servicer shall provide the Assessment of Compliance only with respect to the
time period in which it serviced the Mortgage Loans after the Closing Date, and
provided further, that such Servicer shall be required to deliver such
Assessment of Compliance to the NIMs Insurer only to the extent such Servicer is
provided with the contact information for such NIMs Insurer.
(b) Not later than (i) March 15 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 3.20 on behalf of the Issuing Entity, April 15 of each
calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), each Servicer, at its own expense, shall cause a nationally or
regionally recognized firm of independent registered public accountants (who may
also render other services to any Servicer, the Sponsor or any Affiliate
thereof) which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Securities Administrator, the NIMs
Insurer, the Master Servicer and the Depositor that attests to and reports on
the Assessment of Compliance provided by such Servicer pursuant to Section
3.18(a) (the "Accountant's Attestation"). Such Accountant's Attestation shall be
in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act.
(c) The related Servicer shall cause any Subservicer and each
Subcontractor (unless, in the case of any Subcontractor, the Depositor has
notified such Servicer, the Master Servicer and the Securities Administrator in
writing that such compliance statement is not required by Regulation AB) to
deliver not later than March 15 of each calendar year (other than the calendar
year during which the Closing Date occurs) with respect to any calendar year
during which the Issuing Entity's annual report on Form 10-K is required to be
filed in accordance with the Exchange Act and the rules and regulations of the
Commission, to the Securities
31
Administrator, the Master Servicer and the Depositor an Assessment of
Compliance, which assessment shall be substantially in the form of Exhibit E
hereto. The related Servicer shall cause any Subservicer (other than the
calendar year during which the Closing Date occurs) with respect to any calendar
year during which the Issuing Entity's annual report on Form 10-K is not
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, by April 15 of each calendar year (or, in each
case, if such day is not a Business Day, the immediately succeeding Business
Day) to deliver to the Securities Administrator, the NIMs Insurer, the Master
Servicer and the Depositor an Assessment of Compliance, which assessment shall
be substantially in the form of Exhibit E hereto.
(d) Not later than March 15 of each calendar year (other than the
calendar year during which the Closing Date occurs) with respect to any calendar
year during which the Issuing Entity's annual report on Form 10-K is required to
be filed in accordance with the Exchange Act and the rules and regulations of
the Commission, each Servicer shall cause each Subservicer and each
Subcontractor (unless, in the case of any Subcontractor, the Depositor has
notified the NIMs Insurer, the Master Servicer, Securities Administrator and
such Servicer in writing that such compliance statement is not required by
Regulation AB) to deliver to the Master Servicer, the Securities Administrator
and the Depositor an Accountant's Attestation by a registered public accounting
firm that attests to, and reports on, the Assessment of Compliance pursuant to
Section 3.18(c) above. Other than the calendar year during which the Closing
Date occurs, with respect to any calendar year during which the Issuing Entity's
annual report on Form 10-K is not required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission, not later than
April 15 of each calendar year (or, in each case, if such day is not a Business
Day, the immediately succeeding Business Day), the related Servicer shall cause
each Subservicer to deliver to the Securities Administrator, Master Servicer and
the Depositor an Accountant's Attestation by a registered public accounting firm
that attests to, and reports on, the Assessment of Compliance pursuant to
Section 3.18(c) above.
(e) Not later than (i) March 15 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 3.20 on behalf of the Issuing Entity, by April 15 of
each calendar year (or if such day is not a Business Day, the immediately
succeeding Business Day), the Master Servicer, at its own expense, shall deliver
to the Securities Administrator and the Depositor an Assessment of Compliance
with the Servicing Criteria applicable to it (as set forth in Exhibit F) during
the preceding calendar year as required by Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB (the "Assessment of Compliance"),
which assessment shall be substantially in the form of Exhibit E hereto.
(f) Not later than (i) March 15 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 3.20 on behalf of the Issuing Entity, April 15 of each
calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), the Master Servicer, at its own expense, shall cause a nationally
or regionally recognized firm of independent registered public accountants (who
may also render other services to any Servicer, the Sponsor or any Affiliate
thereof) which is a member of the American Institute of Certified Public
Accountants to furnish an Accountant's
32
Attestation to the Securities Administrator and the Depositor that attests to
and reports on the Assessment of Compliance provided by the Master Servicer
pursuant to Section 3.18(e). Such Accountant's 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.
(g) The Master Servicer shall cause any Subservicer and each
Subcontractor engaged by it (unless, in the case of any Subcontractor, the
Depositor has notified the Master Servicer and the Securities Administrator in
writing that such compliance statement is not required by Regulation AB) not
later than March 15 of each calendar year (other than the calendar year during
which the Closing Date occurs) with respect to any calendar year during which
the Issuing Entity's annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, to deliver to the Securities Administrator and the Depositor an
Assessment of Compliance, which assessment shall be substantially in the form of
Exhibit E hereto. The Master Servicer shall cause any such engaged Subservicer
(other than the calendar year during which the Closing Date occurs) with respect
to any calendar year during which the Issuing Entity's annual report on Form
10-K is not required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, to deliver by April 15 of each calendar
year (or, in each case, if such day is not a Business Day, the immediately
succeeding Business Day) to the Securities Administrator, the Master Servicer
and the Depositor an Assessment of Compliance, which assessment shall be
substantially in the form of Exhibit E hereto.
(h) Not later than March 15 of each calendar year (other than the
calendar year during which the Closing Date occurs) with respect to any calendar
year during which the Issuing Entity's annual report on Form 10-K is required to
be filed in accordance with the Exchange Act and the rules and regulations of
the Commission, the Master Servicer shall cause each Subservicer and each
Subcontractor (unless, in the case of any Subcontractor, the Depositor has
notified the Securities Administrator and Master Servicer in writing that such
compliance statement is not required by Regulation AB) to deliver to the Master
Servicer, the Securities Administrator and the Depositor an Accountant's
Attestation by a registered public accounting firm that attests to, and reports
on, the Assessment of Compliance pursuant to Section 3.18(g) above. Other than
the calendar year during which the Closing Date occurs, with respect to any
calendar year during which the Issuing Entity's annual report on Form 10-K is
not required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, by April 15 of each calendar year (or, in each
case, if such day is not a Business Day, the immediately succeeding Business
Day), the Master Servicer shall cause each such engaged Subservicer to deliver
to the Master Servicer, the Securities Administrator and the Depositor an
Accountant's Attestation by a registered public accounting firm that attests to,
and reports on, the Assessment of Compliance pursuant to Section 3.18(g) above.
(i) Not later than, with respect to any calendar year during which the
Issuing Entity's annual report on Form 10K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission, 15
calendar days before the date on which the Issuing Entity's annual report on
Form 10-K with respect to the transactions contemplated by this Servicing
Agreement is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission (or, in each case, if such day is not a
Business Day, the immediately preceding Business Day), the Securities
Administrator shall deliver to the Depositor
33
and the Master Servicer an Assessment of Compliance with regard to the Servicing
Criteria applicable to the Securities Administrator (as set forth in Exhibit F)
during the preceding calendar year, which assessment shall be substantially in
the form of Exhibit E hereto.
(j) Not later than, with respect to any calendar year during which the
Issuing Entity's annual report on Form 10K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission, 15
calendar days before the date on which the Issuing Entity's annual report on
Form 10-K with respect to the transactions contemplated by this Servicing
Agreement is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission (or, in each case, if such day is not a
Business Day, the immediately preceding Business Day), the Securities
Administrator shall deliver to the Depositor and the Master Servicer an
Accountant's Attestation by a registered public accounting firm that attests to,
and reports on, the Assessment of Compliance pursuant to Section 3.18(i) above
(k) Any statement, report and information, including the Assessments
of Compliance and Accountant's Attestations, delivered to the Securities
Administrator pursuant to Sections 3.17 or 3.18 shall be delivered in
▇▇▇▇▇-compatible form (which may be Word or Excel documents easily convertible
to ▇▇▇▇▇ format) or in such other form as agreed upon by the Securities
Administrator and the party delivering such statement, report or other
information. Copies of such Assessments of Compliance and Accountant's
Attestations filed by the Securities Administrator shall be available on the
Securities Administrator's website (▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇) to any Securityholder,
provided such statement is delivered to the Securities Administrator. The
initial Assessments of Compliance and Accountant's Attestations required
pursuant to this Section 3.18 shall be delivered to the Securities
Administrator, the Master Servicer and the Depositor, as applicable, by each
party no later than March 15, 2008, or as otherwise expressly provided herein.
(l) Each of the parties hereto acknowledges and agrees that the
purpose of this Section 3.18 is to facilitate compliance by the Sponsor and the
Depositor with the provisions of Regulation AB, as such may be amended or
clarified from time to time. Therefore, each of the parties agrees that the
parties' obligations hereunder will be supplemented and modified as necessary to
be consistent with any such amendments, interpretive advice or guidance,
convention or consensus among active participants in the asset-backed securities
markets, advice of counsel, or otherwise in respect of the requirements of
Regulation AB and the parties shall comply with requests made by the Sponsor or
the Depositor for delivery of additional or different information as the Sponsor
or the Depositor may determine in good faith is necessary to comply with the
provisions of Regulation AB, provided that such information is available to such
party without unreasonable effort or expense and within such timeframe as may be
reasonably requested. Any such supplementation or modification shall be made in
accordance with Section 8.01 without the consent of the Securityholders, and may
result in a change in the reports filed by the Securities Administrator on
behalf of the Issuing Entity under the Exchange Act.
Section 3.19 Rights of the NIMs Insurer
Each of the rights of the NIMs Insurer set forth in this agreement shall
exist so long as the NIM Notes issued pursuant to the NIM Indenture remain
outstanding or the NIMs Insurer is owed amount in respect of its guarantee or
payments on such NIM Notes.
Section 3.20 Periodic Filings
34
As set forth on Schedule III hereto, for so long as the Issuing Entity is
subject to the Exchange Act reporting requirements, no later than the end of
business on the second Business Day after the occurrence of an event requiring
disclosure on Form 8K (a "reportable event"), (i) the Depositor, the Indenture
Trustee, the Sponsor, the Servicers (and in the case of Countrywide, the
Depositor shall cause such Servicer) or the Master Servicer shall have timely
notified the Securities Administrator of an item reportable on a Form 8-K
(unless such item is specific to the Securities Administrator, in which case the
Securities Administrator will be deemed to have notice), (ii) the Depositor,
each Servicer, the Master Servicer and the Indenture Trustee shall have
delivered to the Securities Administrator, all information, data, and exhibits
required to be provided or filed with such Form 8-K in a word format (or other
▇▇▇▇▇ compatible form) agreed upon by the Indenture Trustee, the Securities
Administrator and Depositor, Sponsor or Master Servicer, as applicable, and
(iii) the Depositor, the Servicers or the Securities Administrator, to the
extent the reportable item pertains to such party, shall notify the Master
Servicer thereof by telephone or in writing. The Securities Administrator shall
not be responsible for determining what information is required to be filed on a
Form 8-K in connection with the transactions contemplated by this Servicing
Agreement (unless such information is specific to the Securities Administrator,
in which case the Securities Administrator will be responsible for consulting
with the Depositor or Master Servicer in making such a determination) or what
events shall cause a Form 8-K to be required to be filed (unless such event is
specific to the Securities Administrator, in which case the Securities
Administrator will be responsible for consulting with the Depositor, Master
Servicer or related Servicer before causing such Form 8-K to be filed) and shall
not be liable for any late filing of a Form 8-K in the event that it does not
receive all information, data and exhibits required to be provided or filed on
or prior to the second Business Day prior to the applicable filing deadline and
with respect to signatures, by noon, New York City time, on the fourth Business
Day after the reportable event. After preparing the Form 8-K on behalf of the
Depositor, the Securities Administrator shall, if required, forward
electronically a draft copy of the Form 8-K to the Depositor and Master Servicer
for review. No later than one and one-half Business Days after receiving a final
copy of the Form 8-K from the Securities Administrator, a duly authorized
representative of the Master Servicer shall sign the Form 8-K and return an
electronic or fax copy of such signed Form 8-K (with an original executed hard
copy to follow by overnight mail) to the Securities Administrator and the
Securities Administrator shall file such Form 8-K; provided that the Depositor
has notified the Securities Administrator and Master Servicer that it approves
of the form and substance of such Form 8-K. If a Form 8-K cannot be filed on
time or if a previously filed Form 8-K needs to be amended, the Securities
Administrator will follow the procedures set forth in this Servicing Agreement.
After filing with the Commission, the Securities Administrator will, pursuant to
this Servicing Agreement, make available on its internet website a final
executed copy of each Form 8-K. The Securities Administrator will have no
obligation to prepare, execute or file such Form 8-K or any liability with
respect to any failure to properly prepare, execute or file such Form 8-K
resulting from the Securities Administrator's inability or failure to obtain or
receive any information needed to prepare, arrange for execution or file such
Form 8-K within the time frames required by this paragraph, not resulting from
its own negligence, bad faith or willful misconduct.
Within fifteen (15) days after each Payment Date, the Securities
Administrator shall, on behalf of the Issuing Entity and in accordance with
industry standards, file with the Commission via the Electronic Data Gathering
and Retrieval System (▇▇▇▇▇), a Form 10-D with (1) a copy of the report to the
Securityholders for such Payment Date as an exhibit thereto. Any other
35
information provided to the Securities Administrator by the Servicers, the
Master Servicer or Depositor to be included in Form 10-D shall be determined and
prepared by and at the direction of the Depositor pursuant to the following
paragraph and the Securities Administrator will have no duty or liability for
any failure hereunder to determine or prepare or receive any additional
information on Form 10-D ("Additional Form 10-D Disclosure") as set forth in the
next paragraph.
As set forth in Schedule IV hereto, within five (5) calendar days after the
related Payment Date (i) the parties hereto, as applicable, will be required
(and, in the case of Countrywide, the Depositor will require Countrywide) to
provide to the Depositor and the Master Servicer, to the extent known to such
party, any Additional Form 10-D Disclosure (including any breaches of pool asset
representations and warranties or transaction covenants of which the party has
written notice and which has not been included on the monthly distribution
report for the period), if applicable, and (ii) the Depositor, to the extent it
deems necessary, shall forward to the Securities Administrator in
▇▇▇▇▇-compatible form (with a copy to the Master Servicer), or in such other
form as otherwise agreed upon by the Securities Administrator and the Depositor,
the form and substance of the Additional Form 10-D Disclosure by the eighth
calendar day after the Payment Date. The Depositor will be responsible for any
reasonable fees and expenses incurred by the Securities Administrator in
connection with including any Additional Form 10-D Disclosure on Form 10-D
pursuant to this paragraph.
After preparing the Form 10-D at the direction of the Depositor, the
Securities Administrator will forward electronically a draft copy of the Form
10-D to the Depositor (with a copy to the Master Servicer) for review by the
ninth calendar day after the Payment Date. No later than two (2) Business Days
after receipt of a final copy after the related Payment Date, unless the Master
Servicer receives a notice from the Securities Administrator as described below
or a notice from the Depositor that it has discovered a material deficiency or
irregularity with respect to such Form 10-D, a duly authorized representative of
the Master Servicer shall sign the Form 10-D and return an electronic or fax
copy of such Form 10-D (with an original executed hard copy to follow by
overnight mail) to the Securities Administrator and the Securities Administrator
shall file such Form 10-D within two (2) Business Days. Unless the Master
Servicer shall have received notice from the Securities Administrator to the
contrary, the Securities Administrator will be deemed to have represented to the
Master Servicer that the Monthly Statement has been properly prepared by the
Securities Administrator and the Master Servicer may rely upon the accuracy
thereof in it execution of the Form 10-D. If a Form 10-D cannot be filed on time
(because of notice from the Securities Administrator per the previous sentence
or otherwise) or if a previously filed Form 10-D needs to be amended, the
Securities Administrator will follow the procedures set forth in this Servicing
Agreement. After filing with the Commission, the Securities Administrator will
make available on its internet website a final executed copy of each Form 10-D.
The Securities Administrator and Master Servicer will have no liability with
respect to any failure to properly prepare, execute or file such Form 10-D
resulting from the Securities Administrator's inability or failure to obtain or
receive any information needed to prepare, arrange for execution or file such
Form 10-D on a timely basis.
Prior to ▇▇▇▇▇ ▇▇, ▇▇▇▇ (▇▇▇, if applicable, prior to the 90th calendar day
after the end of the fiscal year for the Issuing Entity), the Securities
Administrator shall, on behalf of the Issuing Entity and in accordance with
industry standards, prepare and file with the Commission via ▇▇▇▇▇ a Form 10 -K
with respect to the Issuing Entity. Such Form 10-K shall include the
36
following items, in each case to the extent they have been delivered to the
Securities Administrator within the applicable time frames set forth in this
Servicing Agreement, the Countrywide Servicing Agreement and the Custodial
Agreement, (i) an annual compliance statement for each Servicer, the Master
Servicer, Securities Administrator and each Subservicer and Subcontractor, if
and as applicable, pursuant to Section 3.17 of this Servicing Agreement or the
Countrywide Servicing Agreement, (ii)(A) the annual reports on Assessment of
Compliance with Servicing Criteria for the Master Servicer, Securities
Administrator, each Servicer, Subservicer, Subcontractor and the Custodian
(unless the Depositor has determined that such compliance statement is not
required by Regulation AB), as described in Section 3.18 of this Servicing
Agreement or the Countrywide Servicing Agreement or in the Custodial Agreement,
and (B) if any Servicer's report on Assessment of Compliance with Servicing
Criteria described in Section 3.18 identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if any
report on Assessment of Compliance with Servicing Criteria described in Section
3.18 of this Servicing Agreement or the Countrywide Servicing Agreement is not
included as an exhibit to such Form 10-K, disclosure that such report is not
included and an explanation why such report is not included, (iii)(A) the
registered public accounting firm attestation report for the Master Servicer,
Securities Administrator, the Servicers, each Subservicer, Subcontractor, and
the Custodian, as described in Section 3.18 of this Servicing Agreement or the
Countrywide Servicing Agreement or in the Custodial Agreement, and (B) if any
registered public accounting firm attestation report described in the Section
3.18 of the Servicing Agreement identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if any
such registered public accounting firm attestation report is not included as an
exhibit to such Form 10-K, disclosure that such report is not included and an
explanation why such report is not included, and (iv) a ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certificate in the form attached hereto as Exhibit G, executed by the senior
officer in charge of securitizations of the Master Servicer. Any disclosure or
information in addition to (i) through (iv) above that is required to be
included on Form 10-K ("Additional Form 10-K Disclosure") shall be determined
and prepared by and at the direction of the Depositor pursuant to the following
paragraph and neither the Master Servicer nor the Securities Administrator will
have a duty or liability for any failure hereunder to determine or prepare any
Additional Form 10-K Disclosure, except as set forth in the next paragraph.
As set forth in Schedule V hereto, no later than March 12 of each year that
the Issuing Entity is subject to the Exchange Act reporting requirements,
commencing in 2008, (i) certain parties to the transaction shall be required
(and with respect to Countrywide, the Depositor shall cause such Servicer) to
provide to the Depositor, the Securities Administrator and the Master Servicer,
to the extent known, any Additional Form 10-K Disclosure, if applicable, and
(ii) the Depositor shall, to the extent it deems necessary, forward to the
Securities Administrator in ▇▇▇▇▇-compatible form, or in such other form as
otherwise agreed upon by the Securities Administrator and the Depositor, the
form and substance of the Additional Form 10-K Disclosure by March 15. The
Depositor will be responsible for any reasonable fees and expenses incurred by
the Securities Administrator in connection with including any Additional Form
10-K Disclosure on Form 10-K pursuant to this paragraph.
After preparing the Form 10-K, the Securities Administrator shall forward
electronically a draft copy of the Form 10-K to the Depositor for review. Upon
the request of the Master Servicer, the Depositor shall confirm that it has
reviewed the Form 10-K, that it has been
37
properly prepared and that the Master Servicer may rely on the accuracy thereof
(other than with respect to any portion of the Form 10-K or any exhibit thereto
provided by the Master Servicer (other than any portion thereof with respect to
which the Master Servicer has relied on the Securities Administrator)). No later
than 5:00pm EST on the third Business Day following receipt of a final copy of
the Form 10-K and if requested, the above-described confirmation from the
Depositor, a duly authorized representative of the Master Servicer shall sign
the Form 10-K and return an electronic or fax copy of such signed Form 10-K
(with an original executed hard copy to follow by overnight mail) to the
Securities Administrator and the Securities Administrator shall file such Form
10-K by March 30th. If a Form 10-K cannot be filed on time or if a previously
filed Form 10-K needs to be amended, the Securities Administrator will follow
the procedures set forth in the Servicing Agreement. After filing with the
Commission, the Securities Administrator will, pursuant to the Servicing
Agreement, make available on its internet website a final executed copy of each
Form 10-K. the Securities Administrator shall have no liability with respect to
any failure to properly prepare, execute or file such Form 10-K resulting from
the Securities Administrator's inability or failure to obtain or receive any
information needed to prepare, arrange for execution or file such Form 10-K on a
timely basis.
Each Form 10-K shall include a certification (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certificate") which shall be in the form attached hereto as Exhibit G. The
Master Servicer will cause its senior officer in charge of securitization to
execute the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certificate required pursuant to Rule 13a -14 under
the Securities Exchange Act of 1934, as amended, and to deliver the original
executed ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certificate to the Securities Administrator by March 20
of each year in which the Issuing Entity is subject to the reporting
requirements of the Exchange Act. In connection therewith, each of the
Securities Administrator, Countrywide, ▇▇▇▇▇▇, Wilshire and each Subservicer and
Subcontractor shall sign an Officer's Certificate (in the form attached hereto
as Exhibit H and Exhibit I, respectively) for the benefit of the Master Servicer
and its officers, directors and Affiliates regarding certain aspects of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certificate. To the extent any information or exhibits required
to be included in the Form 10-K are not timely received by the Securities
Administrator prior to March 30, the Securities Administrator shall, on behalf
of the Issuing Entity, file a Form 12B-25 and one or more amended Form 10-Ks, to
the extent such amendments are accepted by the Exchange Act, to include such
missing information or exhibits promptly after receipt thereof by the Securities
Administrator.
Promptly following the first date legally permissible under applicable
regulations and interpretations of the Commission, the Securities Administrator
shall, on behalf of the Issuing Entity and in accordance with industry
standards, file with the Commission via ▇▇▇▇▇ a Form 15 Suspension Notification
with respect to the Issuing Entity, if applicable.
The Depositor, Master Servicer, Wilshire and ▇▇▇▇▇▇ (and the Depositor
shall cause Countrywide) each agree to furnish promptly to the Securities
Administrator, from time to time upon request, such further information,
reports, and financial statements (each in ▇▇▇▇▇ compatible form) within its
control related to this Servicing Agreement and the Mortgage Loans as is
reasonably necessary to prepare and file all necessary reports with the
Commission. The Securities Administrator shall have no responsibility to file
any items with the Commission other than those specified in this section and the
Master Servicer shall execute any and all Form 8-Ks and 10-Ks required
hereunder.
The Securities Administrator shall not have any responsibility to file any
items (other than those generated by it) that have not been received in format
suitable (or readily convertible into a format suitable) for electronic filing
via the ▇▇▇▇▇ system and shall not have any responsibility to convert any such
items to such format (other than those items generated by it or that are readily
convertible to such format).
38
If the Commission issues additional interpretative guidance or promulgates
additional rules or regulations with respect to Regulation AB or otherwise, or
if other changes in applicable law occur, that would require the reporting
arrangements, or the allocation of responsibilities with respect thereto,
described in this Section 3.20, to be conducted differently than as described,
the Depositor, the Master Servicer, each Servicer, and the Securities
Administrator will reasonably cooperate to amend the provisions of this Section
3.20 in order to comply with such amended reporting requirements and such
amendment of this Section 3.20. Any such amendment shall be made in accordance
with Section 10.01 without the consent of the Securityholders and may result in
a change in the reports filed by the Securities Administrator on behalf of the
Issuing Entity under the Exchange Act. Notwithstanding the foregoing, the
Depositor, the Master Servicer, each Servicer and the Securities Administrator
shall not be obligated to enter into any amendment pursuant to this Section 3.20
that adversely affects its obligations and immunities under this Servicing
Agreement.
The Depositor, the Servicers, the Master Servicer and the Securities
Administrator agree to use their good faith efforts to cooperate in complying
with the requirements of this Section 3.20.
Section 3.21 Indemnification by Securities Administrator
The Securities Administrator shall indemnify and hold harmless the
Depositor, the Master Servicer, the Issuing Entity, the Servicers and their
respective officers, directors, agents and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Securities Administrator or any of its officers, directors,
agents or Affiliates of its obligations under Sections 3.18 and 3.20, any
material misstatement or omission in any documents prepared thereunder (to the
extent the Securities Administrator is responsible for providing information or
calculating amounts included in such information), the failure of the Securities
Administrator to deliver when required any Assessment of Compliance or
Accountant's Attestation required of it pursuant to Section 3.18, or the
negligence, bad faith or willful misconduct of the Securities Administrator in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the indemnified parties, then the Securities
Administrator agrees that it shall contribute to the amount paid or payable by
the indemnified parties as a result of the losses, claims, damages or
liabilities of the indemnified parties in such proportion as is appropriate to
reflect the relative fault of the Securities Administrator on the one hand and
of the indemnified parties on the other.
Section 3.22 Regulation AB; Indemnification by Servicer
▇▇▇▇▇▇ and Wilshire shall indemnify and hold harmless the Securities
Administrator, the Issuing Entity, the Indenture Trustee, the Master Servicer
and the Depositor and their respective officers, directors and Affiliates from
and against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
directly arising out of Litton's or Wilshire's failure, as applicable, to sign
and deliver any documents required under Sections 3.17, 3.18 and 3.20 within the
time frame provided therein,
39
other than any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of a breach by the Master Servicer, the Securities Administrator,
the Indenture Trustee or the Depositor of its obligations under this Agreement.
If the indemnification provided for herein is unavailable or insufficient to
hold harmless the Securities Administrator, the Issuing Entity, the Indenture
Trustee, the Master Servicer and the Depositor and their respective officers,
directors and Affiliates, then ▇▇▇▇▇▇ or Wilshire, as applicable, shall
contribute to the amount paid or payable by any such party, its officers,
directors or Affiliates as a result of the losses, claims, damages or
liabilities of such party, its officers, directors or Affiliates in such
proportion as is appropriate to reflect the relative fault of such party and its
officers, directors and Affiliate on the one hand and ▇▇▇▇▇▇ or Wilshire, as
applicable, on the other.
Section 3.23 Prepayment Charge Reporting Requirements
Promptly before or after each Payment Date, the related Servicer shall
provide to the Depositor and the Master Servicer the following information with
regard to each Mortgage Loan that has prepaid during the related Prepayment
Period:
(i) loan number;
(ii) current Mortgage Rate;
(iii) current principal balance;
(iv) original principal balance;
(v) Prepayment Charge amount due; and
(vi) Prepayment Charge amount collected.
Section 3.24 Information to the Master Servicer
Each Servicer shall furnish to the Master Servicer each month in electronic
format (i) (i) a report (the "Remittance Report") containing such data and
information as to permit the Securities Administrator to prepare the statement
to Securityholders (the "Monthly Statement") and make the required payments for
the related Payment Date and such other information as shall be mutually agreed
between such Servicer and the Master Servicer, (ii) a delinquency report and
(iii) a prepayment report each in such form or forms as the Master Servicer and
the related Servicer have agreed to or may from time to time agree for the
period ending on the last Business Day of the preceding month (and with respect
to prepayments in full, for the period ending on the last day of the Prepayment
Period, respectively for each Servicer, of the month in which such Remittance
Report is to be furnished). The Remittance Report and related delinquency report
shall be delivered to the Master Servicer, with respect to ▇▇▇▇▇▇, on or before
the 12th day of each month (or if such day is not a Business Day the first
preceding Business Day); also, on or before the 16th day (or if such day is not
a Business Day, the next immediate Business Day), ▇▇▇▇▇▇ shall deliver to the
Master Servicer the prepayment report with respect to prepayments in full for
the period beginning on the 1st day of the month and ending on the 15th day of
the month in which such reports are to be furnished. With respect to Wilshire,
such
40
reports described herein will be delivered to the Master Servicer after the 14th
day of each month, but not later than the 18th day of each month. The Securities
Administrator will prepare the Monthly Statement based solely upon the
information received from the Master Servicer.
Section 3.25 Indemnification
Each Servicer shall indemnify the Sponsor, the Issuing Entity, the
Indenture Trustee (in its individual capacity and in its capacity as trustee),
the Depositor, the Master Servicer, the Securities Administrator and their
officers, directors, employees and agents and hold each of them harmless against
any and all claims, losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and any other costs, fees
and expenses that any of such parties may sustain in any way related to the
failure of such Servicer to perform its duties and service the related Mortgage
Loans in compliance with the terms of this Servicing Agreement by reason of
negligence, willful misfeasance or bad faith in the performance of its duties or
by reason of reckless disregard of obligations and duties hereunder. Each
Servicer immediately shall notify the Sponsor, the Indenture Trustee, the
Depositor, the Master Servicer, the Securities Administrator or any other
relevant party if a claim is made by a third party with respect to such party
and this Servicing Agreement or the related Mortgage Loans and, if subject to
this indemnification obligation, assume (with the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld or delayed)
the defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against it or any of such parties in respect of such
claim. Each Servicer shall provide the Depositor and the Master Servicer with a
written report of all expenses and advances incurred by such Servicer pursuant
to this Section 3.25, and such Servicer shall promptly reimburse itself from the
assets of the Trust Estate in the related Collection Account for all amounts
advanced by it pursuant to the preceding sentence except when the claim in any
way relates to the gross negligence, bad faith or willful misconduct of such
Servicer. The provisions of this paragraph shall survive the termination of this
Servicing Agreement and the payment of the outstanding Certificates.
Section 3.26 Nonsolicitation
▇▇▇▇▇▇ hereby covenants that neither it nor any Affiliate of ▇▇▇▇▇▇ will
directly solicit any Mortgagor hereunder to refinance the related Mortgage Loan.
For the purposes of the foregoing, neither ▇▇▇▇▇▇ nor any Affiliate of ▇▇▇▇▇▇
shall be deemed to directly solicit any Mortgagor (i) if ▇▇▇▇▇▇ received (A) a
request for verification of mortgage, (B) a request for demand for payoff, (C) a
mortgagor initiated written or verbal communication indicating a desire to
prepay or refinance the related Mortgage Loan, (D) information that another
mortgage company has pulled a credit report on the Mortgagor or (E) information
that the Mortgagor initiates a title search, or if ▇▇▇▇▇▇ responds to a request
from a Mortgagor regarding a refinancing or (ii) in connection with a
refinancing of a delinquent Mortgage Loan or if the Mortgage Loan is Delinquent
and ▇▇▇▇▇▇ refers a Mortgagor to a Person for refinancing or provides a
Mortgagor's contact information to such Person. It is understood that the
promotions undertaken by ▇▇▇▇▇▇ or its Affiliates or agents which are directed
to the general public at large, or certain segments thereof, shall not
constitute solicitation as that term is used in this Section 3.26.
41
Notwithstanding the foregoing, with respect to any Mortgage Loan serviced
by Wilshire, Wilshire and its Affiliates may solicit or refer to a mortgage
originator, who may or may not be an Affiliate of the Depositor or Wilshire, any
Mortgagor for refinancing or otherwise take action to encourage refinancing.
Section 3.27 High Cost Mortgage Loans
In the event that any Servicer reasonably determines that a Mortgage Loan
may be a "high cost mortgage loan", "high cost home", "covered", "high cost",
"high risk home", "predatory" or similarly classified loan under any applicable
state, federal or local law, such Servicer may notify the Master Servicer, the
Securities Administrator, the Depositor, the Sponsor and the Indenture Trustee
thereof; such Servicer may terminate its servicing thereof; and such
determination shall be deemed to materially and adversely affect the interests
of the Securityholders in such Mortgage Loan and the Sponsor will repurchase the
Mortgage Loan within a 30-day period from the date of the notice in the manner
described in Section 2.03(e).
Section 3.28 Special Servicing Agreements
Any Servicer may enter into a special servicing advisory agreement with (i)
a holder of (a) the Class R Certificate, (b) the Class C Certificate, (c) one or
more other Class of subordinated securities issued by the Issuing Entity and/or
(d) a NIM Note and/or (ii) an advisor designated by any of the foregoing.
Pursuant to such agreement, the related Servicer may provide such holder or
advisor, in its capacity as special servicing advisor, with loan-level
information with respect to the Mortgage Loans, and such person may advise such
Servicer with respect to efforts to maximize recoveries with regard to the
Mortgage Loans, including, without limitation, the commencement of foreclosure
proceedings or other actions. The Master Servicer shall have no obligation to
monitor or otherwise have any responsibilities with respect to such advisory
agreements.
Section 3.29 Subordination of Liens.
In connection with any governmental program under which a Mortgagor may
obtain a benefit in the event the related Mortgaged Property is subject to a
disaster provided that the Mortgagor files a covenant or other lien against the
Mortgaged Property and is required to obtain the subordination thereto of the
Mortgage, the related Servicer may cause such subordination to be executed and
filed provided that either (i) the related Mortgage Loan is in default or, in
such Servicer's best judgment, default with respect to such Mortgage Loan is
imminent or (ii) such subordination and participation in such governmental
program will not result in a change in payment expectations with respect to such
Mortgage Loan. For purposes of the preceding sentence, a change in payment
expectations occurs if, as a result of such subordination and participation in
such governmental program, (1) there is a substantial enhancement of the
Mortgagor's capacity to meet the payment obligations under the Mortgage Loan and
that capacity was primarily speculative prior to such subordination and
participation in such governmental program and is adequate after such
subordination and participation in such governmental program or (2) there is a
substantial impairment of the Mortgagor's capacity to meet the payment
obligations under the Mortgage Loan and that capacity was adequate prior to such
subordination and participation in such governmental program and is primarily
speculative after such
42
subordination and participation in such governmental program. The preceding
sentence and clause (ii) of the second preceding sentence are intended to comply
with Treasury Regulations Section 1.1001-3(e)(4) and shall be interpreted in
accordance therewith.
Section 3.30 Servicing Rights Owner.
At the Servicing Rights Owner's request, ▇▇▇▇▇▇ shall resign as Servicer
upon the selection and appointment of a successor servicer by the Servicing
Rights Owner; provided that the Servicing Rights Owner delivers to the Master
Servicer, the Indenture Trustee, the NIMs Insurer and the Securities
Administrator a letter indicating that such successor servicer designated by the
Servicing Rights Owner meets the eligibility requirements for a successor
servicer. No appointment of a successor servicer hereunder shall be effective
until the Master Servicer and the NIMs Insurer shall have consented thereto.
Upon such appointment, at the date specified in such letter such successor
servicer will become a servicer pursuant to the terms of this Agreement.
Section 3.31 Assignment
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by any
Servicer without the prior written consent of the Securities Administrator and
Depositor; provided, however, each Servicer is hereby authorized to enter into
an Advance Facility under which (l) the related Servicer sells, assigns or
pledges to an Advancing Person such Servicer's rights under this Agreement to be
reimbursed for any Advances or Servicing Advances and/or (2) an Advancing Person
agrees to fund some or all Advances or Servicing Advances required to be made by
such Servicer pursuant to this Agreement. No consent of the Indenture Trustee,
the Securities Administrator, the Master Servicer, Noteholders or any other
party is required before the related Servicer may enter into an Advance
Facility. Notwithstanding the existence of any Advance Facility under which an
Advancing Person agrees to fund Advances and/or Servicing Advances on the
related Servicer's behalf, the related Servicer shall remain obligated pursuant
to this Agreement to make Advances and Servicing Advances pursuant to and as
required by this Agreement, and shall not be relieved of such obligations by
virtue of such Advance Facility.
Reimbursement amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the related Servicer would be permitted to reimburse itself in accordance
with this Agreement, assuming the related Servicer had made the related
Advance(s) and/or Servicing Advance(s).
The related Servicer shall maintain and provide to any successor Servicer
and Master Servicer a detailed accounting on a loan by loan basis as to amounts
advanced by, pledged or assigned to, and reimbursed to any Advancing Person. The
successor Servicer and Master Servicer shall be entitled to rely on any such
information provided by the predecessor Servicer, and the successor Servicer
shall not be liable for any errors in such information.
An Advancing Person who purchases or receives an assignment or pledge of
the rights to be reimbursed for Advances and/or Servicing Advances, and/or whose
obligations hereunder are
43
limited to the funding of Advances and/or Servicing Advances shall not be
required to meet the criteria for qualification of a Subservicer set forth in
this Agreement.
The documentation establishing any Advance Facility shall require that such
reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first in, first out"
(FIFO) basis. Such documentation shall also require the related Servicer to
provide to the related Advancing Person or its designee loan by loan information
with respect to each such reimbursement amount distributed to such Advancing
Person or Advance Facility trustee on each Distribution Date, to enable the
Advancing Person or Advance Facility trustee to make the FIFO allocation of each
such reimbursement amount with respect to each Mortgage Loan. The related
Servicer shall remain entitled to be reimbursed by the Advancing Person or
Advance Facility trustee for all Advances and Servicing Advances funded by the
related Servicer to the extent the related rights to be reimbursed therefor have
not been sold, assigned or pledged to an Advancing Person.
Any amendment to this Section 3.31 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 3.31, including amendments to
add provisions relating to a successor Servicer, may be entered into by the
Master Servicer and such Servicer, without the consent of any Noteholder
notwithstanding anything to the contrary in this Agreement, upon receipt by the
Master Servicer of an Opinion of Counsel that such amendment has no material
adverse effect on the Noteholders or written confirmation from the Rating
Agencies that such amendment will not adversely affect the ratings on the Notes.
Prior to entering into an Advance Facility, the related Servicer shall notify
the lender under such facility in writing that: (a) the Advances financed by
and/or pledged to the lender are obligations owed to such Servicer on a non
recourse basis payable only from the cash flows and proceeds received under this
Agreement for reimbursement of Advances only to the extent provided herein, and
the Indenture Trustee, the Securities Administrator and the Trust Fund are not
otherwise obligated or liable to repay any Advances financed by the lender; (b)
such Servicer will be responsible for remitting to the lender the applicable
amounts collected by it as reimbursement for Advances funded by the lender,
subject to the restrictions and priorities created in this Agreement; and (c)
the Master Servicer, Indenture Trustee or the Securities Administrator shall not
have any responsibility to track or monitor the administration of the financing
arrangement between such Servicer and the lender.
ARTICLE IIIA
THE MASTER SERVICER
Section 3A.01 Master Servicer.
The Master Servicer shall supervise, monitor and oversee the obligation of
the Servicers to service and administer their respective Mortgage Loans in
accordance with the terms of the Countrywide Servicing Agreement or the
Servicing Agreement, as applicable, and shall have full power and authority to
do any and all things which it may deem necessary or desirable in connection
with such master servicing and administration. In performing its obligations
hereunder, the Master Servicer shall act in a manner consistent with Accepted
Master Servicing
44
Practices. Furthermore, the Master Servicer shall oversee and consult with each
Servicer as necessary from time-to-time to carry out the Master Servicer's
obligations hereunder, shall receive, review and evaluate certain reports,
information and other data provided to the Master Servicer by the Servicers and
shall enforce each Servicer's obligations to perform and observe the covenants,
obligations and conditions to be performed or observed by such servicer under
the Servicing Agreement and the Countrywide Servicing Agreement, as applicable.
The Master Servicer shall independently and separately monitor each Servicer's
servicing activities with respect to each related Mortgage Loan, reconcile the
results of such monitoring with such information provided in the previous
sentence on a monthly basis and coordinate corrective adjustments to the
Servicers' and Master Servicer's records, and based on such reconciled and
corrected information, the Master Servicer shall provide such information to the
Securities Administrator as shall be necessary in order for it to prepare the
statements specified in Section 6.06 of the Indenture, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its monitoring
with the actual remittances of the Servicers to the Master Servicer Collection
Account pursuant to the Countrywide Servicing Agreement and the Servicing
Agreement. Except during any time where the Master Servicer is acting as
servicer hereunder, neither the Master Servicer nor the Securities Administrator
shall have any responsibility for reviewing or reconciling the Collection
Account or for any expenses or other consequences resulting from any failure of
such Collection Account to be so reconciled. The Master Servicer shall be
entitled to conclusively rely on the Mortgage Loan data provided by the
Servicers and the Depositor and shall have no liability for any errors in such
Mortgage Loan data.
If the Master Servicer and the Securities Administrator are the same
entity, then at any time the Master Servicer is terminated as master servicer,
the Securities Administrator shall likewise be removed as securities
administrator.
Section 3A.02 Monitoring of Servicers.
(a) The Master Servicer shall be responsible for reporting to the
Indenture Trustee, the Securities Administrator and the Depositor any material
non-compliance by any Servicer with its duties under the Servicing Agreement or
the Countrywide Servicing Agreement, as applicable. In the review of each
Servicer's activities, the Master Servicer may rely upon an officer's
certificate of such servicer with regard to such servicer's compliance with the
terms of the Servicing Agreement or the Countrywide Servicing Agreement, as
applicable. In the event that the Master Servicer, in its judgment, determines
that any Servicer should be terminated in accordance with this Servicing
Agreement or the Countrywide Servicing Agreement, as applicable, or that a
notice should be sent pursuant to such agreement with respect to the occurrence
of an event that, unless cured, would constitute grounds for such termination,
the Master Servicer shall notify the Depositor, the Securities Administrator and
the Indenture Trustee thereof and the Master Servicer shall issue such notice or
take such other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Indenture Trustee and
the Securityholders, shall enforce the obligations of the Servicers under the
Servicing Agreement and Countrywide Servicing Agreement, as applicable, and
shall, in the event that any Servicer fails to perform its obligations in
accordance with the Servicing Agreement or Countrywide
45
Servicing Agreement, as applicable, subject to the preceding paragraph,
terminate the rights and obligations of such servicer thereunder and act as
servicer of the related Mortgage Loans or, if the Master Servicer is unwilling
or unable to act as a servicer, the Master Servicer shall cause the Indenture
Trustee to enter in to a new servicing agreement with a successor servicer
selected by the Master Servicer (with the consent of the Depositor) that is
eligible in accordance with the criteria specified in this Servicing Agreement;
provided, however, it is understood and acknowledged by the parties hereto that
there will be a period of transition (not to exceed 90 days) before the actual
servicing functions can be fully transferred to such successor servicer. In
either event, such enforcement, including, without limitation, the legal
prosecution of claims, termination of the Countrywide Servicing Agreement or
this Servicing Agreement and the pursuit of other appropriate remedies, shall be
in such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense subject to its right of reimbursement and Section
3A.02(c), provided that the Master Servicer shall not be required to prosecute
or defend any legal action except to the extent that the Master Servicer shall
have received reasonable indemnity for its costs and expenses in pursuing such
action.
(c) To the extent that the reasonable costs and expenses of the Master
Servicer related to any termination of any Servicer, appointment of a successor
servicer or the transfer and assumption of servicing by the Master Servicer with
respect to the Countrywide Servicing Agreement or the Servicing Agreement
(including, without limitation, (i) all legal costs and expenses and all due
diligence costs and expenses associated with an evaluation of the potential
termination of a Servicer as a result of an event of default by such Servicer
and (ii) all costs and expenses associated with the complete transfer of
servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with the related Servicing Agreement) are not fully
and timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Master Servicer
Collection Account pursuant to Section 3.08.
(d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the Servicing
Agreement and Countrywide Servicing Agreement, as applicable.
(e) If the Master Servicer acts as successor to a Servicer, it will
not assume liability for the acts or omissions or the representations and
warranties of such Servicer, if any, that it replaces.
Section 3A.03 Power to Act; Procedures.
The Master Servicer shall master service the Mortgage Loans and shall have
full power and authority, subject to the REMIC Provisions and the provisions of
Article X in the Indenture, to do any and all things that it may deem necessary
or desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Securityholders and the Indenture Trustee,
46
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Servicing Agreement and the
related Servicing Agreement, as applicable; provided, however, that the Master
Servicer shall not (and, consistent with its responsibilities under Section
3A.02, shall not knowingly take any action to permit any Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause any REMIC created pursuant to the
Indenture to fail to qualify as a REMIC or result in the imposition of a tax
upon the Issuing Entity (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) unless the
Master Servicer has received an Opinion of Counsel (but not at the expense of
the Master Servicer) to the effect that the contemplated action will not cause
any REMIC created pursuant to the Indenture to fail to qualify as a REMIC or
result in the imposition of a tax upon any REMIC created pursuant to the
Indenture. The Indenture Trustee shall furnish the Master Servicer, upon written
request from a Servicing Officer, with any limited powers of attorney (in form
acceptable to the Indenture Trustee) empowering the Master Servicer or any
Servicer to execute and deliver instruments of satisfaction or cancellation, or
of partial or full release or discharge, and to foreclose upon or otherwise
liquidate Mortgaged Property, and to appeal, prosecute or defend in any court
action relating to the Mortgage Loans or the Mortgaged Property, in accordance
with the applicable Servicing Agreement and this Servicing Agreement, and the
Indenture Trustee shall execute and deliver such other documents, as the Master
Servicer may request, to enable the Master Servicer to master service and
administer the Mortgage Loans and carry out its duties hereunder, in each case
in accordance with Accepted Master Servicing Practices (and the Indenture
Trustee shall have no liability for misuse of any such powers of attorney by the
Master Servicer or any Servicer). If the Master Servicer or the Indenture
Trustee has been advised that it is likely that the laws of the state in which
action is to be taken prohibit such action if taken in the name of the Indenture
Trustee or that the Indenture Trustee would be adversely affected under the
"doing business" or tax laws of such state if such action is taken in its name,
the Master Servicer shall join with the Indenture Trustee in the appointment of
a co-trustee pursuant to Section 6.10 of the Indenture. In the performance of
its duties hereunder, the Master Servicer shall be an independent contractor and
shall not, except in those instances where it is taking action in the name of
the Indenture Trustee, be deemed to be the agent of the Indenture Trustee.
Section 3A.04 Liabilities of the Master Servicer.
The Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the Master
Servicer, as the case may be, herein.
Section 3A.05 Merger or Consolidation of the Master Servicer.
(a) The Master Servicer will keep in full force and effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and will obtain
47
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 Servicing Agreement, the Notes or any of the
Mortgage Loans and to perform its duties under this Servicing Agreement.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 3A.06 Regulation AB; Indemnification from the Master Servicer.
For certain Sections herein, the Master Servicer shall indemnify and hold
harmless the Depositor, the Securities Administrator, the Issuing Entity and
their respective officers, directors, agents and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Master Servicer or any of its officers, directors, agents
or Affiliates of its obligations under Sections 3.18 and 3.20, any material
misstatement or omission in any documents prepared thereunder (to the extent the
Master Servicer is responsible for providing information or calculating amounts
included in such information), the failure of the Master Servicer or any related
Sub-Servicer or Subcontractor to deliver or cause to be delivered when required
any Assessment of Compliance or Accountant's Attestation required of it pursuant
to Section 3.18, or any material misstatement or omission contained in any
Assessment of Compliance, Accountant's Attestation or Annual Statement as to
Compliance provided on its behalf pursuant to Section 3.18, as applicable, or
the negligence, bad faith or willful misconduct of the Master Servicer in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the indemnified parties, then the Master
Servicer agrees that it shall contribute to the amount paid or payable by the
indemnified parties as a result of the losses, claims, damages or liabilities of
the indemnified parties in such proportion as is appropriate to reflect the
relative fault of the Master Servicer on the one hand and the indemnified
parties on the other.
Section 3A.07 Limitations on Liability of the Master Servicer and Others.
Subject to the obligation of the Master Servicer to indemnify the
Indemnified Persons pursuant to Section 3A.06:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indenture Trustee, the Depositor, Wilshire, Litton, Countrywide, the Securities
Administrator, the Issuing Entity and their respective officers, directors,
agents and Affiliates or the Securityholders for taking any action or for
refraining from taking any action in good faith pursuant to this Servicing
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer or any such Person against any breach of
warranties or representations made herein or any liability which would otherwise
be imposed by reason of such Person's willful
48
misfeasance, bad faith or negligence in the performance of duties or by reason
of reckless disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent
of the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer and any director, officer, employee or agent
of the Master Servicer shall be indemnified by the Issuing Entity and held
harmless thereby against any loss, liability or expense (including reasonable
legal fees and disbursements of counsel) incurred on their part that may be
sustained in connection with, arising out of, or related to, any claim or legal
action (including any pending or threatened claim or legal action) relating to
this Servicing Agreement, any Operative Document or the Securities, other than
(i) any such loss, liability or expense related to the Master Servicer's failure
to perform its duties in compliance with this Servicing Agreement (except as any
such loss, liability or expense shall be otherwise reimbursable pursuant to this
Servicing Agreement), or (ii) any such loss, liability or expense incurred by
reason of the Master Servicer's willful misfeasance, bad faith or negligence in
the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder.
(d) The Master Servicer shall not be under any obligation to appear
in, prosecute or defend any legal action that is not incidental to its duties
under this Servicing Agreement and that in its opinion may involve it in any
expense or liability; provided, however, the Master Servicer may in its
discretion, undertake any such action which it may deem necessary or desirable
with respect to this Servicing Agreement or the Countrywide Servicing Agreement
and the rights and duties of the parties hereto and the interests of the
Securityholders hereunder and thereunder. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Issuing Entity, and the Master Servicer shall be
entitled to be reimbursed therefor out of the Master Servicer Collection Account
as provided by Section 3.08. Nothing in this Subsection 3A.07(d) shall affect
the Master Servicer's obligation to supervise, or to take such actions as are
necessary to ensure, the servicing and administration of the Mortgage Loans
pursuant to Section 3A.01.
(e) In taking or recommending any course of action pursuant to this
Servicing Agreement, unless specifically required to do so pursuant to this
Servicing Agreement, the Master Servicer shall not be required to investigate or
make recommendations concerning potential liabilities which the Issuing Entity
might incur as a result of such course of action by reason of the condition of
the Mortgaged Properties but shall give notice to the Indenture Trustee if it
has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions
of any Servicer.
Section 3A.08 Master Servicer Not to Resign.
Except as provided in Section 3A.09, the Master Servicer shall not resign
from the obligations and duties
49
hereby imposed on it except upon a determination that any such duties hereunder
are no longer permissible under applicable law and such impermissibility cannot
be cured. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Indenture Trustee. No such resignation by the Master Servicer shall become
effective until the Sponsor or the Indenture Trustee or a successor to the
Master Servicer reasonably satisfactory to the Indenture Trustee shall have
assumed the responsibilities, duties, liabilities and obligations of the Master
Servicer in accordance with Article VII hereof. The Indenture Trustee shall
notify the Rating Agencies of the resignation of the Master Servicer.
If the Master Servicer and the Securities Administrator are the same
entity, then at any time the Master Servicer is terminated as master servicer,
the Securities Administrator shall likewise be removed as securities
administrator.
Section 3A.09 Sale and Assignment of Master Servicing.
The Master Servicer may sell and assign its rights and delegate its duties
and obligations in its entirety as Master Servicer under this Servicing
Agreement; provided, however, that: (i) the purchaser or transferee accepting
such assignment and delegation (a) shall be a Person which shall be qualified to
service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; (b) shall have a net worth
of not less than $10,000,000 (unless otherwise approved by each Rating Agency
pursuant to clause (ii) below); (c) shall be reasonably satisfactory to the
Indenture Trustee (as evidenced in a writing signed by the Indenture Trustee);
and (d) shall execute and deliver to the Indenture Trustee an agreement, in form
and substance reasonably satisfactory to the Indenture Trustee, which contains
an assumption by such Person of the due and punctual performance and observance
of each covenant and condition to be performed or observed by it as master
servicer under this Servicing Agreement, any custodial agreement from and after
the effective date of such agreement; (ii) each Rating Agency shall be given
prior written notice of the identity of the proposed successor to the Master
Servicer and each Rating Agency's rating of the Notes in effect immediately
prior to such assignment, sale and delegation will not be downgraded, qualified
or withdrawn as a result of such assignment, sale and delegation, as evidenced
by a letter to such effect delivered to the Master Servicer and the Indenture
Trustee; and (iii) the Master Servicer assigning and selling the master
servicing shall deliver to the Indenture Trustee an Officer's Certificate and an
Opinion of Independent Counsel, each stating that all conditions precedent to
such action under this Servicing Agreement have been completed and such action
is permitted by and complies with the terms of this Servicing Agreement. No such
assignment or delegation shall affect any liability of the Master Servicer
arising prior to the effective date thereof.
Section 3A.10 Compensation for the Master Servicer.
The Master Servicer will be entitled to all income and gain realized from
any investment of funds in the Master Servicer Collection Account, pursuant to
Sections 3.05 and 3.08 herein, for the performance of its activities hereunder.
The Master Servicer will also be entitled to the Master Servicing Fee. The
Master Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Servicing Agreement.
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ARTICLE IV
SERVICING PROCEDURES
Section 4.01 Advances.
(a) Subject to the conditions of this Article IV, each Servicer, as
required below, shall make an Advance and deposit such Advance in its Collection
Account. The Servicers shall use commercially reasonable efforts to remit each
such Advance no later than 2:30 p.m. EST, but in any case no later than 4:00
p.m. EST, on the Servicer Advance Date in immediately available funds. The
Servicers shall be obligated to make any such Advance only to the extent that
such advance would not be a Non-Recoverable Advance. If any of the Servicers
shall have determined that it has made a Non-Recoverable Advance or that a
proposed Advance or a lesser portion of such Advance would constitute a
Non-Recoverable Advance, such Servicer shall deliver (i) to the Master Servicer
for the benefit of the Securityholders, funds constituting the remaining portion
of such Advance, if applicable, and (ii) to the Depositor, each Rating Agency,
the NIMs Insurer, the Master Servicer and the Securities Administrator an
Officer's Certificate setting forth the basis for such determination. Each
Servicer may, in its sole discretion, make an Advance with respect to the
principal portion of the final Scheduled Payment on a Balloon Loan, but no
Servicer is under an obligation to do so; provided, however, that nothing in
this sentence shall affect Wilshire's obligation under this Section 4.01 to
Advance the interest portion of the final Scheduled Payment with respect to a
Balloon Loan as if such Balloon Loan were a fully amortizing Mortgage Loan.
▇▇▇▇▇▇ shall not advance any Balloon Amounts. If a Mortgagor does not pay its
final Scheduled Payment on a Balloon Loan when due, the related Servicer shall
Advance (unless it determines in its good faith judgment that such amounts would
constitute a Non-Recoverable Advance) a full month of interest (net of the
Servicing Fee) on the Stated Principal Balance thereof each month until its
Stated Principal Balance is reduced to zero.
In lieu of making all or a portion of such Advance from its own funds, the
related Servicer may (i) cause to be made an appropriate entry in its records
relating to its Collection Account that any amount held for future distribution
has been used by such Servicer in discharge of its obligation to make any such
Advance and (ii) transfer such funds from the Collection Account to the Master
Servicer Collection Account. In addition, each Servicer shall have the right to
reimburse itself for any such Advance from amounts held from time to time in the
related Collection Account to the extent such amounts are not then required to
be distributed. Any funds so applied and transferred pursuant to the previous
two sentences shall be replaced by the related Servicer by deposit in the
related Collection Account no later than the close of business on the Servicer
Advance Date on which such funds are required to be distributed pursuant to this
Servicing Agreement. Each Servicer shall be entitled to be reimbursed from the
related Collection Account for all Advances of its own funds made pursuant to
this Section as provided in Section 3.08. The obligation to make Advances with
respect to any Mortgage Loan shall continue until the earlier of (i) such
Mortgage Loan is paid in full, (ii) the related Mortgaged Property or related
REO Property has been liquidated or until the purchase or repurchase thereof (or
substitution therefor) from the Issuing Entity pursuant to any applicable
provision of this Servicing Agreement, except as otherwise provided in this
Section 4.01, (iii) the related Servicer determines in its good faith judgment
that such amounts would constitute a Non-Recoverable
51
Advance as provided in the preceding paragraph or (iv) the date on which such
Mortgage Loan becomes 150 days delinquent as set forth below.
(b) Notwithstanding anything in this Servicing Agreement to the
contrary (including, but not limited to, Sections 3.01 and 4.01(a) hereof), no
Advance or Servicing Advance shall be required to be made hereunder by any
Servicer (including for the avoidance of doubt, the Master Servicer as successor
servicer) if such Advance or Servicing Advance would, if made, constitute a
Non-Recoverable Advance or a Non-Recoverable Servicing Advance. The
determination by the related Servicer that it has made a Non-Recoverable Advance
or a Non-Recoverable Servicing Advance or that any proposed Advance or Servicing
Advance, if made, would constitute a Non-Recoverable Advance or a
Non-Recoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of such Servicer delivered to the Depositor, the Master
Servicer and the Securities Administrator. In addition, each Servicer (including
the Master Servicer if acting as successor servicer) shall not be required to
advance any Relief Act Reductions or shortfalls due to bankruptcy proceedings.
▇▇▇▇▇▇ (including the Master Servicer if acting as successor servicer) will not
make any Advances of principal on any Mortgage Loans or REO Properties and will
not make any Advances of Balloon Amounts.
Notwithstanding the foregoing, no Servicer shall be required to make any
Advances for any Mortgage Loan after such Mortgage Loan becomes 150 days
delinquent or for Relief Act shortfalls or Mortgage Loans in bankruptcy. The
related Servicer shall identify such delinquent Mortgage Loans in the Remittance
Report referenced in Section 3.24. In addition, each Servicer shall provide, at
the time of delivery of such Remittance Report, the Master Servicer with an
Officer's Certificate listing such delinquent Mortgage Loans and certifying that
such loans are 150 days or more delinquent.
Section 4.02 Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls
In the event that any Mortgage Loan (other than a HELOC) is the subject of
a Prepayment Interest Shortfall, the related Servicer shall, from amounts in
respect of the Servicing Fee for such Payment Date, deposit into the related
Collection Account, as a reduction of the Servicing Fee for such Payment Date,
no later than the Servicer Advance Date immediately preceding such Payment Date,
an amount up to the Compensating Interest. In case of such deposit, the related
Servicer shall not be entitled to any recovery or reimbursement from the
Depositor, the Indenture Trustee, the Master Servicer, the Securities
Administrator, the Issuing Entity or the Securityholders. With respect to any
Payment Date, to the extent that the Prepayment Interest Shortfall exceeds
Compensating Interest (such excess, a "Non-Supported Interest Shortfall"), such
Non-Supported Interest Shortfall shall reduce the Current Interest with respect
to each Class of Securities, pro rata based upon the amount of interest each
such Class would otherwise be entitled to receive on such Payment Date.
Notwithstanding the foregoing, there shall be no reduction of the Servicing
Fee in connection with Prepayment Interest Shortfalls related to the Relief Act
or bankruptcy proceedings and no Servicer (including the Master Servicer as
successor servicer) shall be obligated to pay Compensating Interest with respect
to Prepayment Interest Shortfalls related to the Relief Act or bankruptcy
proceedings
52
ARTICLE V
PAYMENT ACCOUNT
Section 5.01 Payment Account.
The Securities Administrator shall establish and maintain a Payment Account
titled "Citibank, N.A., as Indenture Trustee, for the benefit of the
Securityholders and the Certificate Paying Agent pursuant to the Indenture,
dated as of the Closing Date, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2007-SL1, LaSalle Bank National Association and Citibank, N.A." The
Payment Account shall be an Eligible Account. On each Payment Date, amounts on
deposit in the Payment Account will be distributed by the Securities
Administrator in accordance with the relevant Section in the Indenture.
ARTICLE VI
THE SERVICERS, THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01 Respective Liabilities of the Master Servicer, the
Servicers and the Depositor.
The Master Servicer, the Servicers and the Depositor shall each be liable
in accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Master Servicer, the
Servicers or the Depositor
Except as provided in the next paragraph, the Master Servicer, the
Servicers and the Depositor will each keep in full effect its existence, rights
and franchises as a corporation or banking association under the laws of the
United States or under the laws of one of the States thereof and will each
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 Servicing Agreement, or any of
the Mortgage Loans and to perform its respective duties under this Servicing
Agreement.
Any Person into which the Master Servicer, any of the Servicers or the
Depositor may be merged or consolidated, or any Person resulting from any merger
or consolidation to which the Master Servicer, any of the Servicers or the
Depositor shall be a party, or any Person succeeding to the business of the
Master Servicer, any of the Servicers or the Depositor, shall be the successor
of the Master Servicer, such Servicer or the Depositor, as the case may be,
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 (except for the execution of an assumption agreement where such
succession is not effected by operation of law); provided, however, that the
successor or surviving Person to such Servicer shall be qualified to sell
mortgage loans to, and to service mortgage loans on behalf of, ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac.
53
Section 6.03 Limitation on Liability of the Master Servicer, the
Servicers, the Depositor and Others
None of the Master Servicer, the Servicers, the Depositor or any of the
directors, officers, employees or agents of the Master Servicer, the Servicers
or the Depositor shall be under any liability to the parties hereto or the
Securityholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Servicing Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Master
Servicer, the Servicer, the Depositor or any such Person against any breach of
representations or warranties made by it herein or protect the Master Servicer,
the Servicers, the Depositor or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Master Servicer, the Servicers or the Depositor and
any director, officer, employee or agent of the Master Servicer, the Servicers
or the Depositor may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Master Servicer, the Servicers or the Depositor and any director,
officer, employee or agent of the Master Servicer, the Servicers or the
Depositor shall be indemnified by the Issuing Entity and held harmless against
any loss, liability or expense, incurred in connection with the performance of
their duties under this Servicing Agreement or incurred in connection with any
audit, controversy or judicial proceeding relating to a governmental taxing
authority or any legal action relating to this Servicing Agreement or the
Securities, other than any loss, liability or expense (i) incurred by reason of
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties hereunder
or (ii) which does not constitute an "unanticipated expense" within the meaning
of Treasury Regulation Section 1.860G-1(b)(3)(ii). None of the Master Servicer,
the Servicers or the Depositor shall be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and that in its opinion may involve it in any expense or
liability; provided, however, that any of the Master Servicer, the Servicers or
the Depositor in its discretion may undertake any such action that it may deem
necessary or desirable in respect of this Servicing Agreement and the rights and
duties of the parties hereto and the interests of the Indenture Trustee and the
Securityholders hereunder. In such event, the legal expenses and costs of such
action and any liability resulting therefrom shall be, expenses, costs and
liabilities of the Issuing Entity, and the Master Servicer, the Servicers and
the Depositor shall be entitled to be reimbursed therefor out of the Collection
Account as provided by Section 3.08 hereof. The provisions of this Section 6.03
shall survive any termination of this Agreement and the resignation or removal
of the Depositor, the Master Servicer, the Securities Administrator or a
Servicer, as applicable, and shall be construed to include, but not be limited
to any loss, liability or expense under any environmental law.
Notwithstanding anything herein to the contrary, in preparing or furnishing
any information, reports or certifications pursuant to this Servicing Agreement,
the Master Servicer and each Servicer shall be entitled to rely conclusively on
the accuracy of the information or data provided to it by any other party to the
Servicing Agreement or Countrywide under the Countrywide Servicing Agreement and
shall have no liability for any errors therein.
Section 6.04 Limitation on Resignation of Servicers.
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Subject to the provisions of Section 7.01, the second paragraph of Section
7.02, the second paragraph of Section 6.02 and the following paragraph of this
Section 6.04, the Servicers shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law and such impermissibility cannot be
cured. Any such determination permitting the resignation of any of the Servicers
shall be evidenced by an Opinion of Counsel to such effect delivered to the NIMs
Insurer and the Master Servicer. No such resignation by a Servicer shall become
effective until the Master Servicer or a successor servicer reasonably
acceptable to the NIMs Insurer and the Master Servicer is appointed and has
assumed the Servicer's responsibilities, duties, liabilities and obligations
hereunder. Any such resignation shall not relieve a Servicer of any of the
obligations specified in Section 7.01 and 7.02 as obligations that survive the
resignation or termination of such Servicer.
Notwithstanding anything to the contrary in the previous paragraph of this
Section 6.04, the Securities Administrator, the NIMs Insurer and the Indenture
Trustee hereby specifically (i) consent to the pledge and assignment by a
Servicer of all the Servicer's right, title and interest in, to and under this
Servicing Agreement to the Servicing Rights Pledgee, if any, for the benefit of
certain lenders, and (ii) agree that upon delivery to the Indenture Trustee by
the Servicing Rights Pledgee of a letter signed by such Servicer whereby such
Servicer shall resign as a Servicer under this Servicing Agreement,
notwithstanding anything to the contrary which may be set forth in Section 3.04
above, the Master Servicer shall appoint the Servicing Rights Pledgee or its
designee as successor servicer, provided that such Servicer's resignation will
not be effective unless, at the time of such appointment, the Servicing Rights
Pledgee or its designee (i) meets the requirements of a successor servicer under
Section 7.03 of this Servicing Agreement (including being acceptable to the
Rating Agencies), provided, that the consent and approval of the Securities
Administrator, the NIMs Insurer and the Indenture Trustee shall be deemed to
have been given to the Servicing Rights Pledgee or its designee, and the
Servicing Rights Pledgee and its designee are hereby agreed to be acceptable to
the Securities Administrator, the NIMs Insurer and the Indenture Trustee and
(ii) agrees to be subject to the terms of this Servicing Agreement. If, pursuant
to any provision hereof, the duties of a Servicer are transferred to a successor
servicer, the entire amount of the Servicing Fee and other compensation payable
to such Servicer pursuant hereto shall thereafter be payable to such successor
servicer.
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds
Each Servicer shall, for so long as it acts as servicer under this
Servicing Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac for
such servicers performing servicing for mortgage loans purchased by ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac. Each Servicer shall provide the NIMs Insurer, the Master
Servicer and the Indenture Trustee, upon request and reasonable notice, with
copies of such policies and fidelity bond or a certification from the insurance
provider evidencing such policies and fidelity bond. Each Servicer may be deemed
to have complied with this provision if an Affiliate of such Servicer has such
errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
such Servicer. In the event that any such policy or
55
bond ceases to be in effect, the related Servicer shall use its reasonable best
efforts to obtain a comparable replacement policy or bond from an insurer or
issuer meeting the requirements set forth above as of the date of such
replacement. With respect to Wilshire only, any such policy or fidelity bond
shall by its terms not be cancelable without thirty days' prior written notice
to the Master Servicer and the Indenture Trustee.
With respect to ▇▇▇▇▇▇ only, each year, together with the Annual Statement
as to Compliance delivered pursuant to Section 3.17, ▇▇▇▇▇▇ shall cause to be
delivered to the Master Servicer proof of coverage of the fidelity bond and
errors and omissions insurance policy and a statement from the surety and the
insurer that the surety and the insurer shall endeavor to notify the Master
Servicer within thirty (30) days prior to such fidelity bond's errors and
omissions insurance policy's termination or material modification.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default.
(a) "Servicing Default," wherever used herein, means any one of the
following events:
(i) any failure by such Servicer to make any Advance, to deposit
in the Collection Account or remit to the Master Servicer any payment (excluding
a payment required to be made under Section 4.01 hereof) required to be made
under the terms of this Servicing Agreement, which failure shall continue
unremedied for three (3) Business Days and, with respect to a payment required
to be made under Section 4.01 hereof, for one (1) Business Day, after the date
on which written notice of such failure shall have been given to the related
Servicer, the Master Servicer the Indenture Trustee and the Depositor by the
Indenture Trustee, the Master Servicer or the Depositor, or to the related
Servicer, the Indenture Trustee, the Depositor and the Master Servicer by the
Holders of Securities evidencing greater than 50% of the Voting Rights evidenced
by the Securities; or
(ii) any failure by such Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of such
Servicer contained in this Servicing Agreement (other than clause (vi) below) or
any representation or warranty shall prove to be untrue, which failure or breach
shall continue unremedied for a period of 60 days after the date on which
written notice of such failure shall have been given to such Servicer, the
Master Servicer, the Indenture Trustee and the Depositor by the Master Servicer,
the Indenture Trustee or the Depositor, or to the Servicer, the Master Servicer,
the Indenture Trustee and the Depositor by the Holders of Securities evidencing
greater than 50% of the Voting Rights evidenced by the Securities; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a receiver or liquidator in
any insolvency, 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 such Servicer and such
56
decree or order shall have remained in force undischarged or unstayed for a
period of 60 consecutive days; or
(iv) consent by such Servicer to the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to such Servicer or all or
substantially all of the property of such Servicer; or
(v) admission by such Servicer in writing of its inability to pay
its debts generally as they become due, file a petition to take advantage of, or
commence a voluntary case under, any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations; or
(vi) any failure by such Servicer to duly perform, within the
required time period, its obligations under Sections 3.17, 3.18 and 3.20 of this
Servicing Agreement, which failure continues unremedied for a period of ten (10)
days after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to such Servicer by the Indenture Trustee
or any other party to this Servicing Agreement.
If a Servicing Default shall occur with respect to Wilshire or ▇▇▇▇▇▇ or a
termination event shall occur under the Countrywide Servicing Agreement with
respect to Countrywide, then, and in each and every such case, so long as such
Servicing Default shall not have been remedied within the applicable grace
period, the Indenture Trustee may, or at the direction of the NIMs Insurer or
the Holders of Securities evidencing greater than 50% of the Voting Rights
evidenced by the Securities shall, by notice in writing to the related Servicer,
(with a copy to each Rating Agency), terminate all of the rights and obligations
of Wilshire or ▇▇▇▇▇▇ under this Servicing Agreement or Countrywide under the
Countrywide Servicing Agreement, as applicable, and in and to the related
Mortgage Loans and the proceeds thereof, other than its rights as a
Securityholder hereunder. On or after the receipt by a Servicer of such written
notice, all authority and power of such Servicer hereunder, whether with respect
to the related Mortgage Loans or otherwise, shall pass to and be vested in the
Master Servicer. To the extent the Servicing Default resulted from the failure
of a Servicer to make a required Advance, the Master Servicer shall thereupon
make any Advance described in Section 4.01 hereof subject to Section 3.04
hereof. The Indenture Trustee is hereby authorized and empowered to execute and
deliver, on behalf of such Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of any Servicer to pay amounts owed pursuant to Article VI. Each Servicer agrees
to cooperate with the Master Servicer in effecting the termination of such
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Master Servicer of all cash amounts which shall at the time
be credited to the related Collection Account, or thereafter be received with
respect to the Mortgage Loans. The related Servicer and the Master Servicer
shall promptly notify the Rating Agencies of the occurrence of a Servicing
Default, such notice to be provided in any event within two Business Days of
such occurrence.
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Notwithstanding any termination of the activities of a Servicer hereunder,
such Servicer shall be entitled to receive, out of any late collection of a
Scheduled Payment on a Mortgage Loan that was due prior to the notice
terminating such Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which such Servicer would
have been entitled pursuant to Sections 3.08(a) (i) through (ix), (xi), (xii),
(xiv) and (xv), and any other amounts payable to such Servicer hereunder the
entitlement to which arose prior to the termination of its activities hereunder.
Notwithstanding anything herein to the contrary, upon termination of a Servicer
hereunder, any liabilities of such Servicer which accrued prior to such
termination shall survive such termination.
(b) "Master Servicer Event of Default," wherever used herein, means
any one of the following events:
(i) any failure by the Master Servicer to make any Advance, to
deposit in the Master Servicer Collection Account or remit to the Securities
Administrator any payment required to be made under the terms of this Servicing
Agreement, which failure shall continue unremedied for three (3) Business Days
after the date on which written notice of such failure shall have been given to
the Master Servicer by the Indenture Trustee or the Depositor, or to the
Indenture Trustee, the Depositor and the Master Servicer by the Holders of
Securities evidencing greater than 50% of the Voting Rights evidenced by the
Securities; or
(ii) any failure by the Master Servicer to observe or perform in
any material respect any other of the covenants or agreements on the part of the
Master Servicer contained in this Servicing Agreement or any representation or
warranty shall prove to be untrue, which failure or breach shall continue
unremedied for a period of sixty (60) days after the date on which written
notice of such failure shall have been given to the Master Servicer by the
Indenture Trustee or the Depositor, or to the Master Servicer, the Indenture
Trustee and the Depositor by the Holders of Securities evidencing greater than
50% of the Voting Rights evidenced by the Securities; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a receiver or liquidator in
any insolvency, 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 Master Servicer and such decree or order shall
have remained in force undischarged or unstayed for a period of sixty (60)
consecutive days; or
(iv) consent by the Master Servicer to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Master
Servicer or all or substantially all of the property of the Master Servicer; or
(v) admission by the Master Servicer in writing of its inability
to pay its debts generally as they become due, file a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations; or
58
(vi) any failure by the Master Servicer to duly perform, within
the required time period, its obligations under Sections 3.17, 3.18 and 3.20 of
this Servicing Agreement, which failure continues unremedied for a period of ten
(10) days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Master Servicer by the
Indenture Trustee or any other party to this Servicing Agreement.
If a Master Servicer Event of Default shall occur with respect to the
Master Servicer, then, and in each and every such case, so long as such Master
Servicer Event of Default shall not have been remedied within the applicable
grace period, the Indenture Trustee may, or at the direction of the Holders of
Securities evidencing greater than 50% of the Voting Rights evidenced by the
Securities shall, by notice in writing to the Master Servicer (with a copy to
each Rating Agency), terminate all of the rights and obligations of the Master
Servicer under this Servicing Agreement and in and to the related Mortgage Loans
and the proceeds thereof, other than its rights as a Securityholder hereunder.
On or after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer hereunder, whether with respect to
the related Mortgage Loans or otherwise, shall pass to and be vested in the
Indenture Trustee. To the extent the Master Servicer Event of Default resulted
from the failure of the Master Servicer to make a required Advance, the
Indenture Trustee (solely in its capacity as successor master servicer) shall
thereupon make any Advance described in Section 4.01 hereof subject to Section
3A.01 hereof. The Indenture Trustee (solely in its capacity as successor master
servicer) is hereby authorized and empowered to execute and deliver, on behalf
of the Master Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise. Unless expressly provided in such
written notice, no such termination shall affect any obligation of the Master
Servicer to pay amounts owed pursuant to Article VIII. The Master Servicer
agrees to cooperate with the Indenture Trustee in effecting the termination of
the Master Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Indenture Trustee of all cash amounts which
shall at the time be credited to the Master Servicer Collection Account, or
thereafter be received with respect to the Mortgage Loans. The Master Servicer
and the Indenture Trustee shall promptly notify the Rating Agencies of the
occurrence of a Master Servicer Event of Default, such notice to be provided in
any event within two Business Days of such occurrence.
Notwithstanding any termination of the activities of the Master
Servicer hereunder, the Master Servicer shall be entitled to receive, out of any
late collection of a Scheduled Payment on a Mortgage Loan that was due prior to
the notice terminating the Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
the Master Servicer would have been entitled pursuant to Sections 3.08(b), and
any other amounts payable to the Master Servicer hereunder the entitlement to
which arose prior to the termination of its activities hereunder.
Notwithstanding anything herein to the contrary, upon termination of the Master
Servicer hereunder, any liabilities of the Master Servicer which accrued prior
to such termination shall survive such termination.
Section 7.02 Master Servicer or Indenture Trustee to Act; Appointment of
Successor.
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(a) On and after the time a Servicer receives a notice of termination
pursuant to Section 7.01 hereof (or with respect to Countrywide, under Section
6.01 of the Countrywide Servicing Agreement), the Master Servicer shall, to the
extent provided in Section 3.04, be the successor to such Servicer in its
capacity as servicer under this Servicing Agreement and the transactions set
forth or provided for herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on such Servicer by the terms and
provisions hereof and applicable law including the obligation to make advances
pursuant to Section 4.01. As compensation therefor, subject to the last
paragraph of Section 7.01, the Master Servicer shall be entitled to all fees,
compensation and reimbursement for costs and expenses that such Servicer would
have been entitled to hereunder if such Servicer had continued to act hereunder.
Notwithstanding the foregoing, if the Master Servicer has become the successor
to such Servicer in accordance with Section 7.01 hereof, the Master Servicer
may, if it shall be unwilling to so act, or shall, if it is prohibited by
applicable law from making Advances pursuant to Section 4.01 hereof or if it is
otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution
provided the appointment of such successor shall be approved by the NIMs Insurer
and does not adversely affect the then current rating of the Securities by each
Rating Agency as the successor to such Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Any successor Servicer shall be an institution that is acceptable to
the NIMs Insurer and is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved seller/servicer in
good standing, that has a net worth of at least $15,000,000, and that is willing
to service the Mortgage Loans and executes and delivers to the Depositor and the
Master Servicer an agreement accepting such delegation and assignment, that
contains an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of the related Servicer (other
than liabilities of the Servicer under Section 6.03 hereof incurred prior to
termination of such Servicer under Section 7.01), with like effect as if
originally named as a party to this Servicing Agreement; and provided further
that each Rating Agency acknowledges that its rating of the Securities in effect
immediately prior to such assignment and delegation will not be qualified or
reduced as a result of such assignment and delegation. No appointment of a
successor to the Servicer hereunder shall be effective until the Master Servicer
shall have consented thereto, prior written consent of the NIMs Insurer has been
obtained and written notice of such proposed appointment shall have been
provided by the Master Servicer to each Securityholder. The Master Servicer
shall not resign as servicer until a successor servicer has been appointed and
has accepted such appointment. Pending appointment of a successor to a Servicer
hereunder, the Master Servicer, unless the Master Servicer is prohibited by law
from so acting, shall, subject to Section 3.04 hereof, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Master Servicer may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of that
permitted such Servicer hereunder. The Master Servicer and such successor shall
take such action, consistent with this Servicing Agreement, as shall be
necessary to effectuate any such succession. Neither the Master Servicer nor any
other successor servicer shall be deemed to be in default hereunder by reason of
any failure to make, or any delay in making, any distribution hereunder or any
portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the related Servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
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Any successor to a Servicer as servicer shall give notice to the Mortgagors
of such change of servicer and shall, during the term of its service as servicer
maintain in force the policy or policies that such Servicer is required to
maintain pursuant to Section 6.05.
(b) On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Indenture Trustee shall, to the
extent provided in Section 3A.01, be the successor to the Master Servicer in its
capacity as master servicer under this Servicing Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof and applicable law including the
obligation to make advances pursuant to Section 4.01. As compensation therefor,
subject to the last paragraph of Section 7.01, the Indenture Trustee shall be
entitled to all fees, compensation and reimbursement for costs and expenses that
the Master Servicer would have been entitled to hereunder if the Master Servicer
had continued to act hereunder. Notwithstanding the foregoing, if the Indenture
Trustee has become the successor to the Master Servicer in accordance with
Section 7.01 hereof, the Indenture Trustee may, if it shall be unwilling to so
act, or shall, if it is prohibited by applicable law from making Advances
pursuant to Section 4.01 hereof or if it is otherwise unable to so act, appoint,
or petition a court of competent jurisdiction to appoint, any established
mortgage loan servicing institution provided the appointment of such successor
does not adversely affect the then current rating of the Securities by each
Rating Agency as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer hereunder. Any successor Master Servicer shall be an
institution that is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved seller/servicer in
good standing, that has a net worth of at least $15,000,000, and that is willing
to service the Mortgage Loans and executes and delivers to the Depositor and the
Indenture Trustee an agreement accepting such delegation and assignment, that
contains an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer (other than
liabilities of the Master Servicer under Sections 6.03 and 3A.07 hereof incurred
prior to termination of the Master Servicer under Section 7.01), with like
effect as if originally named as a party to this Servicing Agreement; and
provided further that each Rating Agency acknowledges that its rating of the
Securities in effect immediately prior to such assignment and delegation will
not be qualified or reduced as a result of such assignment and delegation. No
appointment of a successor to the Master Servicer hereunder shall be effective
until the Indenture Trustee shall have consented thereto and written notice of
such proposed appointment shall have been provided by the Indenture Trustee to
each Securityholder. The Indenture Trustee shall not resign as master servicer
until a successor master servicer has been appointed and has accepted such
appointment. Pending appointment of a successor to the Master Servicer
hereunder, the Indenture Trustee, unless the Indenture Trustee is prohibited by
law from so acting, shall, subject to Section 3A.01 hereof, act in such capacity
as hereinabove provided. In connection with such appointment and assumption, the
Indenture Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of that
permitted the Master Servicer hereunder. The Indenture Trustee and such
successor shall take such action, consistent with this Servicing Agreement, as
shall be necessary to effectuate any such succession. Neither the Indenture
Trustee nor any other successor master servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
61
caused by the failure of the Master Servicer to deliver or provide, or any delay
in delivering or providing, any cash, information, documents or records to it.
Section 7.03 Notification to Securityholders.
Upon any termination of or appointment of a successor to the Master
Servicer, Wilshire, ▇▇▇▇▇▇ or Countrywide pursuant to this Article VII and
Sections 3A.08 or 6.04, respectively, the Securities Administrator shall give
prompt written notice thereof to the Securityholders, the Issuing Entity and
each Rating Agency or, as applicable, the Master Servicer shall give prompt
written notice thereof to the Securities Administrator.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 Amendment.
This Servicing Agreement may be amended from time to time by the parties
hereto, provided that any amendment be accompanied by a tax opinion to the
effect that neither such amendment nor any action permitted by such amendment
and not otherwise permitted by this Servicing Agreement will cause any REMIC
created pursuant to the Indenture to fail to qualify as a REMIC or give rise to
the imposition of a tax on "prohibited transactions" of a REMIC. Promptly after
the execution by each Servicer, the Depositor, the Issuing Entity, the Master
Servicer, the Securities Administrator and the Indenture Trustee of any
amendment of this Servicing Agreement pursuant to this Section 8.01, the
Securities Administrator shall provide the Rating Agencies with written copies
thereof. Any failure of the Securities Administrator to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such amendment.
The Issuing Entity shall not enter into any amendment to this Servicing
Agreement that could have a materially adverse effect on the Swap Counterparty
without first obtaining the consent of the Swap Counterparty, as applicable.
Section 8.02 Governing Law.
THIS SERVICING AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 8.03 Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
certified mail, return receipt requested, to (a) in the case of Wilshire,
Wilshire Credit Corporation, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, (b) in the case of ▇▇▇▇▇'▇ Investors Service,
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (c) in the case of
Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - 41st Floor, New York, New York 10041, (d)
in the case of
62
Fitch Ratings, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (e) in the case
of the Issuing Entity, in care of Wilmington Trust Company, as set forth in the
Trust Agreement, (f) in the case of the Securities Administrator or the Master
Servicer, LaSalle Bank National Association, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: Global Securities and Trust
Services--MLMI 2007-SL1, (g) in the case of the Indenture Trustee, Citibank,
N.A., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention:
Structured Finance Agency and Trust - MLMI 2007-SL1, (h) in the case of the
Depositor, at ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 4 World
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: MLMI
2007-SL1; (i) in the case of the Underwriter, at ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Investors, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 4 World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: MLMI 2007-SL1; (j) in the case of the Sponsor,
at ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 4 World ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: MLMI 2007-SL1; (k) in
the case of ▇▇▇▇▇▇, at ▇▇▇▇▇▇ Loan Servicing LP, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, or, as to each party, at such
other address as shall be designated by such party in a written notice to each
other party. Any notice required or permitted to be mailed to a Securityholder
shall be given by first class mail, postage prepaid, at the address of such
Securityholder as shown in the Register. Any notice so mailed within the time
prescribed in this Servicing Agreement shall be conclusively presumed to have
been duly given, whether or not the Securityholder receives such notice. Any
notice or other document required to be delivered or mailed by the Securities
Administrator to any Rating Agency shall be given on a reasonable efforts basis
and only as a matter of courtesy and accommodation and the Securities
Administrator shall have no liability for failure to delivery such notice or
document to any Rating Agency.
Section 8.04 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Servicing Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Servicing
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Servicing Agreement or of the Securities or the rights of the
Securityholders thereof.
Section 8.05 Third-Party Beneficiaries.
This Servicing Agreement will inure to the benefit of and be binding upon
the parties hereto, the Securityholders, the Owner Trustee, the Swap
Counterparty, the Corridor Counterparty, the NIMs Insurer and their respective
successors and permitted assigns. Except as otherwise provided in this Servicing
Agreement, no other Person will have any right or obligation hereunder.
Section 8.06 Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
63
Section 8.07 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 8.08 Termination.
The respective obligations and responsibilities of the Servicers, the
Master Servicer, the Securities Administrator, the Issuing Entity and the
Indenture Trustee created hereby shall terminate upon the last action required
to be taken by the Issuing Entity pursuant to the Trust Agreement and by the
Securities Administrator pursuant to the Indenture following the later of the
date on or before which the Indenture or Trust Agreement is terminated.
Section 8.09 Certain Matters Affecting the Indenture Trustee and the
Securities Administrator.
For all purposes of this Servicing Agreement, in the performance of any of
its duties or in the exercise of any of its powers hereunder, the Indenture
Trustee and the Securities Administrator shall be subject to and entitled to the
benefits of Article VI of the Indenture.
Section 8.10 Owner Trustee Not Liable for Mortgage Files.
The recitals contained herein shall not be taken as the statements of the
Owner Trustee, and the Owner Trustee assumes no responsibility for the
correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Servicing Agreement, of any Operative Document
or of the Securities (other than the signatures of the Owner Trustee on the
Securities) or the Notes, or of any Mortgage Files. The Owner Trustee shall at
no time have any responsibility or liability with respect to the sufficiency of
the Trust Estate or its ability to generate the payments to be distributed to
Securityholders under the Trust Agreement or the Noteholders under the
Indenture, including, the compliance by the Depositor or the Sponsor with any
warranty or representation made under any Operative Document or in any related
document or the accuracy of any such warranty or representation, or any action
of the Paying Agent, the Certificate Registrar or the Securities Administrator
taken in the name of the Owner Trustee.
It is expressly understood and agreed by the parties hereto that with
respect to the execution of this Servicing Agreement by Wilmington Trust Company
for the Issuing Entity (a) this Servicing Agreement is executed and delivered by
Wilmington Trust Company, not individually or personally, but solely as Owner
Trustee, in the exercise of the powers and authority conferred and vested in it,
pursuant to the Trust Agreement, (b) each of the representations, undertakings
and agreements herein made on the part of the Issuing Entity is made and
intended not as personal representations, undertakings and agreements by
Wilmington Trust Company but is made and intended for the purpose for binding
only the Issuing Entity, (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company, individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
person claiming by, through or under the parties hereto, and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Issuing Entity or be liable for
the breach or failure of any obligation,
64
representation, warranty or covenant made or undertaken by the Issuing Entity
under this Servicing Agreement or any other related documents.
Section 8.11 Additional Termination Requirements.
(a) Notwithstanding any other terms of this Servicing Agreement, prior
to termination of the Trust Estate, each Servicer may prepare a reconciliation
of all Advances and Servicing Advances made by it for which it has not been
reimbursed and a reasonable estimate of all additional Servicing Advances and
other costs for which it would be entitled to be reimbursed if the Trust Estate
were not being terminated, including without limitation, any Servicing Advances
and other costs arising under Section 6.03, and such Servicer may recover these
Advances, Servicing Advances and estimated Servicing Advances and other costs
from the Collection Account (to the extent that such recovery of Servicing
Advances, estimated Servicing Advances and other costs constitutes
"unanticipated expenses" within the meaning of Treasury Regulation Section
1.860G 1(b)(3)(ii)).
(b) Notwithstanding any other terms of this Servicing Agreement,
unless a Servicer previously has notified the Indenture Trustee that it has
entered into a servicing agreement for the servicing after the termination date
of the Trust Estate assets, at least twenty (20) days prior to any termination
of the Trust Estate, the Depositor shall notify such Servicer in writing to
transfer the assets of the Trust Estate as of the termination date to the person
specified in the notice, or if such person is not then known, to continue
servicing the assets until the date that is twenty (20) days after the
termination date and on the termination date, the Depositor shall notify such
Servicer of the person to whom the assets should be transferred on that date. In
the latter event such Servicer shall be entitled to recover its servicing fee
and any advances made for the interim servicing period from the collections on
the assets which have been purchased from the Trust Estate and the new owner of
the assets, and the agreements for the new owner to obtain ownership of the
assets of the Trust Estate shall so provide.
Section 8.12 Entire Agreement.
This Servicing Agreement shall constitute the entire agreement between the
parties with respect to the matters contained herein and shall supersede any
prior written or oral agreements relating thereto.
Section 8.13 Additional Rights of the NIMs Insurer
Provided that a party to this Servicing Agreement has been provided with
the contact information of the NIMs Insurer, such party, any agent thereof and
any successor thereto shall furnish to the NIMs Insurer a copy of any notice,
direction, demand, opinion, schedule, list, certificate, report or filing
required to be provided under this Servicing Agreement and provided by it or on
its behalf to any other Person pursuant to this Servicing Agreement at the same
time, in the same form and in the same manner as such communication is so
provided and shall address or cause such communication to be addressed to the
NIMs Insurer in addition to any other addressee thereof. With respect to the
Security Administrator, such obligation shall be satisfied with the provision of
access to the NIMs Insurer to the Security Administrator's website.
65
Wherever in this Servicing Agreement there shall be a requirement that
there be no downgrade, reduction, withdrawal or qualification of or other effect
on the rating of any Class of Securities by any Rating Agency as of any date,
there also shall be deemed to be a requirement that there be no such effect on
any class of notes issued pursuant to the NIM Indenture and guaranteed by the
NIMs Insurer as of such date. In addition, unless there exists a continuance of
any failure by the NIMs Insurer to make a required payment under the policy
insuring the NIM Notes (such event, a "NIMs Insurer Default"), wherever in this
Servicing Agreement there shall be a requirement that any Person or any
communication, object or other matter be acceptable or satisfactory to or
otherwise receive the consent or other approval of any other Person (whether as
a condition to the eligibility of such Person to act in any capacity, as a
condition to any circumstance or state of affairs related to such matter, or
otherwise), there also shall be deemed to be a requirement that such Person or
matter be approved in writing by the NIMs Insurer, which approval shall not be
unreasonably withheld or delayed.
66
IN WITNESS WHEREOF, Wilshire, the Master Servicer, the Securities
Administrator, the Indenture Trustee, the Depositor, ▇▇▇▇▇▇, the Sponsor and the
Issuing Entity have caused this Servicing Agreement to be duly executed by their
respective officers or representatives all as of the day and year first above
written.
WILSHIRE CREDIT CORPORATION, as Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
--------------------------------
LASALLE BANK NATIONAL ASSOCIATION,
as Master Servicer and as Securities
Administrator
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS TRUST,
SERIES 2007-SL1
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CITIBANK, N.A., not in its individual
capacity, but solely as Indenture
Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.,
as Depositor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
67
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC.,
as Sponsor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
68
▇▇▇▇▇▇ LOAN SERVICING LP
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
69
EXHIBIT A-1
MORTGAGE LOAN SCHEDULE
[TO BE PROVIDED UPON REQUEST]
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
MORTGAGE LOAN SCHEDULE
[TO BE PROVIDED UPON REQUEST]
A-2-1
EXHIBIT B
FORM OF POWER OF ATTORNEY
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
[-----------------]
[-----------------]
[-----------------]
Attn:
---------------------------------
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Citibank, N.A., having its principal place
of business at ___________________, as Indenture Trustee (the "Indenture
Trustee") pursuant to that Mortgage Loan Servicing Agreement (the "Servicing
Agreement"), dated as of May 1, 2007, among Wilshire Credit Corporation, as a
servicer, ▇▇▇▇▇▇ Loan Servicing LP, as a servicer, LaSalle Bank National
Association, as master servicer and securities administrator, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Investors Trust, Series 2007-SL1, as issuing entity, Indenture Trustee,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as depositor, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Lending, Inc., as sponsor, hereby constitutes and appoints [_______], by and
through [______]'s officers, the Indenture Trustee's true and lawful
Attorney-in-Fact, in the Indenture Trustee's name, place and stead and for the
Indenture Trustee's benefit, in connection with all mortgage loans serviced by
[______] pursuant to the Servicing Agreement for the purpose of performing all
acts and executing all documents in the name of the Indenture Trustee as may be
customarily and reasonably necessary and appropriate to effectuate the following
enumerated transactions in respect of any of the mortgages or deeds of trust
(the "Mortgages" and the "Deeds of Trust", respectively) and promissory notes
secured thereby (the "Mortgage Notes") for which the undersigned is acting as
Indenture Trustee for various certificateholders (whether the undersigned is
named therein as mortgagee or beneficiary or has become mortgagee by virtue of
endorsement of the Mortgage Note secured by any such Mortgage or Deed of Trust)
and for which [_______] is acting as servicer, all subject to the terms of the
Servicing Agreement.
This appointment shall apply to the following enumerated transactions only:
1. The modification or re-recording of a Mortgage or Deed of Trust, where
said modification or re-recordings is for the purpose of correcting the Mortgage
or Deed of Trust to conform same to the original intent of the parties thereto
or to correct title errors discovered after such title insurance was issued and
said modification or re-recording, in either instance, does not adversely affect
the lien of the Mortgage or Deed of Trust as insured.
2. The subordination of the lien of a Mortgage or Deed of Trust to an
easement in favor of a public utility company of a government agency or unit
with powers of eminent domain; this section shall include, without limitation,
the execution of partial satisfactions/releases, partial reconveyances or the
execution or requests to trustees to accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the closing
of the title to the property to be acquired as real estate owned, or conveyance
of title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby, including,
without limitation, cancellation of the related Mortgage Note.
6. The assignment of any Mortgage or Deed of Trust and the related Mortgage
Note, in connection with the repurchase of the mortgage loan secured and
evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the refinancing
thereof, including, without limitation, the assignment of the related Mortgage
Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the taking
of a deed in lieu of foreclosure, or the completion of judicial or non-judicial
foreclosure or termination, cancellation or rescission of any such foreclosure,
including, without limitation, any and all of the following acts:
a. the substitution of trustee(s) serving under a Deed of Trust, in
accordance with state law and the Deed of Trust;
b. the preparation and issuance of statements of breach or non-performance;
c. the preparation and filing of notices of default and/or notices of sale;
d. the cancellation/rescission of notices of default and/or notices of
sale;
e. the taking of a deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and performance of
such other actions as may be necessary under the terms of the Mortgage, Deed of
Trust or state law to expeditiously complete said transactions in paragraphs
8.a. through 8.e., above.
The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof.
Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of attorney; and may be satisfied that this
Limited Power of Attorney shall
continue in full force and effect and has not been revoked unless an instrument
of revocation has been made in writing by the undersigned.
This limited power of attorney has been executed and is effective as of this ___
day of _________ and the same and any subsequent limited power of attorney given
to any Subservicer shall terminate on the date that is the earlier of (i) one
year from the date hereof and (ii) until revoked in writing by the undersigned.
IN WITNESS WHEREOF, as Indenture Trustee pursuant to that
Servicing Agreement among Wilshire Credit Corporation, ▇▇▇▇▇▇ Loan Servicing LP,
LaSalle Bank National Association, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2007-SL1, Indenture Trustee, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc. and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., dated as of May 1, 2007, has caused its
corporate seal to be hereto affixed and these presents to be signed and
acknowledged in its name and behalf by its duly elected and authorized Vice
President this day of ___________, 200__.
-----------------------------------
as Indenture Trustee for ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Series 2007-SL1
By
--------------------------------
STATE OF
COUNTY OF
On , _________, 200__, before me, the undersigned, a Notary Public in
and for said state, personally appeared , Vice President of as Indenture Trustee
for ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Series 2007-SL1, personally known to
me to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed that same in his/her authorized
capacity, and that by his/her signature on the instrument the entity upon behalf
of which the person acted and executed the instrument.
WITNESS my hand and official seal.
(SEAL)
------------------------------------
Notary Public
My Commission Expires
-------------------------
EXHIBIT C
FORM OF REQUEST FOR RELEASE
To: [LaSalle Bank National Association,
as Custodian
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇]
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed
Securities, Series 2007-SL1
In connection with the administration of the Mortgage Loans held by you, as
Custodian, pursuant to the Indenture, dated as of May 11, 2007, among Citibank,
N.A., as Indenture Trustee, LaSalle Bank National Association, as Securities
Administrator and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Series 2007-SL1, as
Trust (the "Indenture"), we request the release, and hereby acknowledge receipt,
of the Mortgage File for the Mortgage Loan described below, for the reason
indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
[ ] 1. Mortgage Paid in Full
[ ] 2. Foreclosure
[ ] 3. Substitution
[ ] 4. Other Liquidation (Repurchases, etc.)
[ ] 5. Nonliquidation
Address to which the Custodian should deliver the Mortgage File:
By:
------------------------------------
(authorized signer)
Address:
-------------------------------
Date:
----------------------------------
C-1
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.
If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Custodian, please acknowledge your receipt by signing in the
space indicated below, and returning this form.
Please acknowledge the execution of the above request by your signature and date
below:
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
By:
--------------------------------- ----------------------------------------
Signature Date
Documents returned to Custodian:
By:
--------------------------------- ----------------------------------------
Signature Date
C-2
EXHIBIT D
FORM OF ITEM 1123 CERTIFICATION OF SERVICER
[DATE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
LaSalle Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2007-SL1
Re: Servicing Agreement (the "Servicing Agreement"), dated as of May 1, 2007
among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as depositor, Wilshire Credit
Corporation, as servicer, ▇▇▇▇▇▇ Loan Servicing LP, as servicer, and
LaSalle Bank National Association, as master servicer and securities
administrator, Citibank, N.A., as indenture trustee, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Lending, Inc., as sponsor, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2007-SL1, as issuing entity, relating to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Investors Trust, Mortgage Loan Asset-Backed Securities, Series 2007-SL1
I, [identify name of certifying individual], [title of certifying individual] of
[Wilshire Credit Corporation (the "Servicer")][▇▇▇▇▇▇ Loan Servicing LP (the
"Servicer)], hereby certify that:
(1) A review of the activities of the Servicer during the preceding
calendar year and of the performance of the Servicer under the Servicing
Agreement has been made under my supervision; and
(2) To the best of my knowledge, based on such review, the Servicer has
fulfilled all its obligations under the Servicing Agreement in all material
respects throughout such year or a portion thereof[, or, if there has been a
failure to fulfill any such obligation in any material respect, I have specified
below each such failure known to me and the nature and status thereof].
Date:
-------------------------------
[Wilshire Credit Corporation,][▇▇▇▇▇▇
Loan Servicing LP,]
as Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
D-1
EXHIBIT E
FORM OF ASSESSMENT OF COMPLIANCE
[DATE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, [Countrywide Home Loans Servicing LP
Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇]
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
LaSalle Bank National Association ▇▇▇▇▇'▇ Investors Service, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - Standard & Poor's, a division of The
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
Investors Trust, Series ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇-▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[SERVICERS AS ADDRESSEES BY CUSTODIAN ONLY]
[Wilshire Credit Corporation [▇▇▇▇▇▇ Loan Servicing LP
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇]
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇]
Re: Servicing Agreement (the "Servicing Agreement"), dated as of May 1, 2007
among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as depositor, Wilshire Credit
Corporation, as servicer, ▇▇▇▇▇▇ Loan Servicing LP, as servicer, and
LaSalle Bank National Association, as master servicer and securities
administrator, Citibank, N.A., as indenture trustee, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Lending, Inc., as sponsor, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2007-SL1, as issuing entity, relating to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Investors Trust, Mortgage Loan Asset-Backed Securities, Series 2007-SL1
For the calendar year ending December 31, [2007] or portion thereof,
[LaSalle Bank National Association, as Master Servicer] [Wilshire Credit
Corporation, as Servicer] [▇▇▇▇▇▇ Loan Servicing LP, as Servicer] [LaSalle Bank
National Association, as Securities Administrator] [LaSalle Bank National
Association, as Custodian] for the Issuing Entity, has complied in all material
respects with the relevant Servicing Criteria in Exhibit F of the Servicing
Agreement.
E-1
All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Servicing Agreement.
Date:
-------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
E-2
EXHIBIT F
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
(RMBS unless otherwise noted)
KEY: X - OBLIGATION
WHERE THERE ARE MULTIPLE CHECKS FOR CRITERIA THE ATTESTING PARTY WILL IDENTIFY
IN THEIR MANAGEMENT ASSERTION THAT THEY ARE ATTESTING ONLY TO THE PORTION OF THE
DISTRIBUTION CHAIN THEY ARE RESPONSIBLE FOR IN THE RELATED TRANSACTION
AGREEMENTS.
WILSHIRE
CREDIT
CORPORATION
AND ▇▇▇▇▇▇
LASALLE BANK LOAN LASALLE LASALLE BANK
REGULATION AB (MASTER SERVICING LP BANK (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA SERVICER) (SERVICERS) (CUSTODIAN) ADMINISTRATOR) INFORMATION
---------------- ------------------------------ ------------ ------------ ----------- -------------- ------------------
GENERAL SERVICING
CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are X X X Servicers,
instituted to monitor any Securities
performance or other triggers Administrator and
and events of default in Master Servicer
accordance with the each responsible
transaction agreements. only to the extent
that each party,
as applicable, has
actual knowledge
or written notice
with respect to
parties other
than itself.
1122(d)(1)(ii) If any material servicing IF IF IF IF
activities are outsourced to APPLICABLE APPLICABLE APPLICABLE APPLICABLE
third parties, policies and FOR A FOR A FOR A FOR A
procedures are instituted to TRANSACTION TRANSACTION TRANSACTION TRANSACTION
monitor the third party's PARTICIPANT PARTICIPANT PARTICIPANT PARTICIPANT
performance and compliance
with such servicing
activities.
1122(d)(1)(iii) Any requirements in the N/A N/A N/A N/A
transaction agreements to
maintain a back-up servicer
for the Pool Assets are
maintained.
1122(d)(1)(iv) A fidelity bond and errors and X X X
omissions policy is in effect
on the party participating in
the servicing function
throughout the reporting
period in the amount of
coverage required by and
otherwise in accordance with
the terms of the transaction
agreements.
CASH COLLECTION AND
ADMINISTRATION
1122(d)(2)(i) Payments on pool assets are X X X Servicer,
deposited into the appropriate Securities
custodial bank accounts and Administrator
related bank clearing accounts and Master
no more than two business days Servicer each
following receipt, or such responsible only
other number of days specified for deposits into
in the transaction agreements. the accounts held
by it.
1122(d)(2)(ii) Disbursements made via wire X X X Servicers disburse
transfer on behalf of an funds to Master
obligor or to an investor are Servicer
made only by authorized
F-1
WILSHIRE
CREDIT
CORPORATION
AND ▇▇▇▇▇▇
LASALLE BANK LOAN LASALLE LASALLE BANK
REGULATION AB (MASTER SERVICING LP BANK (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA SERVICER) (SERVICERS) (CUSTODIAN) ADMINISTRATOR) INFORMATION
---------------- ------------------------------ ------------ ------------ ----------- -------------- ------------------
personnel. who disburses to
Securities
Administrator.
Securities
Administrator
disburses funds to
Security-holders.
1122(d)(2)(iii) Advances of funds or X X
guarantees regarding
collections, cash flows or
distributions, and any
interest or other fees charged
for such advances, are made,
reviewed and approved as
specified in the transaction
agreements.
1122(d)(2)(iv) The related accounts for the X X X Servicer needs to
transaction, such as cash provide only if it
reserve accounts or accounts is deemed that
established as a form of over the related
collateralization, are collection
separately maintained (e.g., account is
with respect to commingling of subject to this
cash) as set forth in the criteria.
transaction agreements.
1122(d)(2)(v) Each custodial account is X X
maintained at a federally
insured depository institution
as set forth in the
transaction agreements. For
purposes of this criterion,
"federally insured depository
institution" with respect to a
foreign financial institution
means a foreign financial
institution that meets the
requirements of Rule
13k-1(b)(1) of the Securities
Exchange Act.
1122(d)(2)(vi) Unissued checks are IF
safeguarded so as to prevent APPLICABLE
unauthorized access.
1122(d)(2)(vii) Reconciliations are prepared X X X
on a monthly basis for all
asset-backed securities
related bank accounts,
including custodial accounts
and related bank clearing
accounts. These
reconciliations are (A)
mathematically accurate; (B)
prepared within 30 calendar
days after the bank statement
cutoff date, or such other
number of days specified in
the transaction agreements;
(C) reviewed and approved by
someone other than the person
who prepared the
reconciliation; and (D)
contain explanations for
reconciling items. These
reconciling items are resolved
within 90 calendar days of
their original identification,
or such other number of days
specified in the transaction
agreements.
INVESTOR REMITTANCES AND
REPORTING
1122(d)(3)(i) Reports to investors, X X X For
including those to be filed 1122(d)(3)(i)(C),
with the Commission, are waterfall
maintained in accordance with calculations
the transaction agreements and are a
applicable Commission Securities
requirements. Specifically, Administrator
such reports (A) are prepared responsibility
in accordance with timeframes under the
and other terms set forth in Indenture.
the transaction agreements;
(B) provide information
calculated in accordance
F-2
WILSHIRE
CREDIT
CORPORATION
AND ▇▇▇▇▇▇
LASALLE BANK LOAN LASALLE LASALLE BANK
REGULATION AB (MASTER SERVICING LP BANK (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA SERVICER) (SERVICERS) (CUSTODIAN) ADMINISTRATOR) INFORMATION
---------------- ------------------------------ ------------ ------------ ----------- -------------- ------------------
with the terms specified in
the transaction agreements;
(C) are filed with the
Commission as required by its
rules and regulations; and (D)
agree with investors' or the
trustee's records as to the
total unpaid principal balance
and number of Pool Assets
serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are X X X Each Servicer
allocated and remitted in remits cash and
accordance with timeframes, loan level data to
distribution priority and Master Servicer
other terms set forth in the based on timelines
transaction agreements. established in the
Servicing
Agreement (or any
other applicable
agreement).
Master Servicer
remits cash and
loan level data to
Securities
Administrator
based on timelines
established in the
Servicing
Agreement.
The Securities
Administrator is
responsible for
the allocation of
funds to
Securityholders
using the
appropriate
distribution
priority as
established
by the Indenture.
1122(d)(3)(iii) Disbursements made to an X X X Solely for the
investor are posted within two purpose of Section
business days to the 1122(d)(3)(iii),
Servicer's investor records, the term
or such other number of days "investor"
specified in the transaction shall mean the
agreements. Master Servicer..
Securities
Administrator
disburses funds to
Securityholder.
1122(d)(3)(iv) Amounts remitted to investors X X X Each Servicer
per the investor reports agree remits funds
with cancelled checks, or and provides
other form of payment, or certain
custodial bank statements. investor
reports to the
Master Servicer
within guidelines
and timeframes
established in
Servicing
F-3
WILSHIRE
CREDIT
CORPORATION
AND ▇▇▇▇▇▇
LASALLE BANK LOAN LASALLE LASALLE BANK
REGULATION AB (MASTER SERVICING LP BANK (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA SERVICER) (SERVICERS) (CUSTODIAN) ADMINISTRATOR) INFORMATION
---------------- ------------------------------ ------------ ------------ ----------- -------------- ------------------
Agreement.
Master Servicer
remits funds and
provides certain
investor reports
to Securities
Administrator
within guidelines
and timeframes
established
in Servicing
Agreement.
Securities
Administrator
disburses funds to
Security-holders.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on pool X Servicer shall not
assets is maintained as attest to
required by the transaction performance
agreements or related pool of obligations of
asset documents. the Custodian
under the
transaction
agreements
1122(d)(4)(ii) Pool assets and related X Servicer shall not
documents are safeguarded as attest to
required by the transaction performance of
agreements obligations of the
Custodian under
the transaction
agreements
1122(d)(4)(iii) Any additions, removals or X
substitutions to the asset
pool are made, reviewed and
approved in accordance with
any conditions or requirements
in the transaction agreements.
1122(d)(4)(iv) Payments on pool assets, X
including any payoffs, made in
accordance with the related
pool asset documents are
posted to the Servicer's
obligor records maintained no
more than two business days
after receipt, or such other
number of days specified in
the transaction agreements,
and allocated to principal,
interest or other items (e.g.,
escrow) in accordance with the
related pool asset documents.
1122(d)(4)(v) The Servicer's records X
regarding the pool assets
agree with the Servicer's
records with respect to an
obligor's unpaid principal
balance.
1122(d)(4)(vi) Changes with respect to the X
terms or status of an
obligor's pool assets (e.g.,
loan modifications or
re-agings) are made, reviewed
and approved by authorized
personnel in accordance with
the transaction agreements and
related pool asset documents.
1122(d)(4)(vii) Loss mitigation or recovery X
actions
F-4
WILSHIRE
CREDIT
CORPORATION
AND ▇▇▇▇▇▇
LASALLE BANK LOAN LASALLE LASALLE BANK
REGULATION AB (MASTER SERVICING LP BANK (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA SERVICER) (SERVICERS) (CUSTODIAN) ADMINISTRATOR) INFORMATION
---------------- ------------------------------ ------------ ------------ ----------- -------------- ------------------
(e.g., forbearance plans,
modifications and deeds in
lieu of foreclosure,
foreclosures and
repossessions, as applicable)
are initiated, conducted and
concluded in accordance with
the timeframes or other
requirements established by
the transaction agreements.
1122(d)(4)(viii) Records documenting collection X
efforts are maintained during
the period a pool asset is
delinquent in accordance with
the transaction agreements.
Such records are maintained on
at least a monthly basis, or
such other period specified in
the transaction agreements,
and describe the entity's
activities in monitoring
delinquent pool assets
including, for example, phone
calls, letters and payment
rescheduling plans in cases
where delinquency is deemed
temporary (e.g., illness or
unemployment).
1122(d)(4)(ix) Adjustments to interest rates X
or rates of return for pool
assets with variable rates are
computed based on the related
pool asset documents.
1122(d)(4)(x) Regarding any funds held in X
trust for an obligor (such as
escrow accounts): (A) such
funds are analyzed, in
accordance with the obligor's
pool asset documents, on at
least an annual basis, or such
other period specified in the
transaction agreements; (B)
interest on such funds is
paid, or credited, to obligors
in accordance with applicable
pool asset documents and state
laws; and (C) such funds are
returned to the obligor within
30 calendar days of full
repayment of the related pool
assets, or such other number
of days specified in the
transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an X
obligor (such as tax or
insurance payments) are made
on or before the related
penalty or expiration dates,
as indicated on the
appropriate bills or notices
for such payments, provided
that such support has been
received by the servicer at
least 30 calendar days prior
to these dates, or such other
number of days specified in
the transaction agreements.
1122(d)(4)(xii) Any late payment penalties in X
connection with any payment to
be made on behalf of an
obligor are paid from the
Servicer's funds and not
charged to the obligor, unless
the late payment was due to
the obligor's error or
omission.
1122(d)(4)(xiii) Disbursements made on behalf X
of an obligor are posted
within two business days to
the obligor's records
maintained by the servicer, or
such other number of days
specified in the transaction
agreements.
F-5
WILSHIRE
CREDIT
CORPORATION
AND ▇▇▇▇▇▇
LASALLE BANK LOAN LASALLE LASALLE BANK
REGULATION AB (MASTER SERVICING LP BANK (SECURITIES ADDITIONAL
REFERENCE SERVICING CRITERIA SERVICER) (SERVICERS) (CUSTODIAN) ADMINISTRATOR) INFORMATION
---------------- ------------------------------ ------------ ------------ ----------- -------------- ------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and X X
uncollectible accounts are
recognized and recorded in
accordance with the
transaction agreements.
1122(d)(4)(xv) Any external enhancement or X
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.
F-6
EXHIBIT G
▇▇▇▇▇▇▇▇-▇▇▇▇▇ CERTIFICATES
[DATE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
LaSalle Bank National Association,
as Securities Administrator
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed
Securities, Series 2007-SL1
I, [identify the certifying individual], certify that:
(1) I have reviewed the report on Form 10-K and all reports on Form 10-D
required to be filed in respect of the period covered by this report on Form
10-K of [identify the issuing entity] (the "Exchange Act periodic reports");
(2) Based on my knowledge, the Exchange Act periodic reports, taken as a
whole, do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
(3) Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;
(4) [I am responsible for reviewing the activities performed by the
servicer(s) and based on my knowledge and the compliance review(s) conducted in
preparing the servicer compliance statement(s) required in this report under
Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic
reports, the servicer(s) [has/have] fulfilled [its/their] obligations under the
servicing agreement(s); and]
(5) All of the reports on assessment of compliance with servicing criteria
for ABS and their related attestation reports on assessment of compliance with
servicing criteria for asset-backed securities required to be included in this
report in accordance with Item 1122 of Regulation AB and Exchange Act Rules
13a-18 and 15d-18 have been included as an exhibit to this report, except as
otherwise disclosed in this report. Any material instances of noncompliance
described in such reports have been disclosed in this report on Form 10-K.
G-1
[In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties [name of
servicer, sub-servicer, co-servicer, depositor or securities administrator].]
Date:
-----------------
----------------------------------------
[Signature]
[Title]
--------------------------------
G-2
EXHIBIT H
FORM OF BACK-UP CERTIFICATION OF SECURITIES ADMINISTRATOR
[DATE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Servicing Agreement (the "Servicing Agreement"), dated as of May 1, 2007
among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., as depositor, Wilshire Credit
Corporation, as servicer, ▇▇▇▇▇▇ Loan Servicing LP, as servicer, and
LaSalle Bank National Association, as master servicer and securities
administrator, Citibank, N.A., as indenture trustee, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Lending, Inc., as sponsor, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2007-SL1, as issuing entity, relating to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Investors Trust, Mortgage Loan Asset-Backed Securities, Series 2007-SL1
The Securities Administrator hereby certifies to the Depositor and their
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
(1) I have reviewed the annual report on Form 10-K for the fiscal year
[2007] (the "Annual Report"), and all reports on Form 8-K (if any) and on Form
10-D required to be filed in respect of the period covered by the Annual Report
(collectively with the Annual Report, the "Reports"), of the Issuing Entity;
(2) To the best of my knowledge, and assuming the accuracy of the
statements required to be made or data required to be delivered by Wilshire,
Litton, Countrywide, Master Servicer and Depositor (to the extent that such
statements or data were received by the Securities Administrator and are
relevant to the statements made by the Securities Administrator in this Back-Up
Certification), the information in the Reports relating to the Securities
Administrator, 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 light of the circumstances under which such statements were made, not
misleading with respect to the period covered by the Annual Report;
(3) To the best of my knowledge, and assuming the accuracy of the
statements required to be made or data required to be delivered by Wilshire,
Litton, Countrywide and the Depositor (to the extent that such statements or
data were received by the Securities Administrator and are relevant to the
statements made by the Securities Administrator in this Back-Up Certification),
the distribution and any other information required to be provided by the
Securities Administrator (other than information provided by or on behalf of
Wilshire, Litton, Countrywide, the Master Servicer, the Depositor or other third
party) to the Depositor, Wilshire, ▇▇▇▇▇▇ and Countrywide under the Servicing
Agreement for inclusion in the Reports is included in the Reports; and
(4) The report on assessment of compliance with servicing criteria for
asset-backed securities of the Securities Administrator and its related
attestation report on assessment of
H-1
compliance with servicing criteria required to be included in the Annual Report
in accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and
15d-18 has been included as an exhibit to the Annual Report. Any material
instances of non-compliance are described in such report and have been disclosed
in the Annual Report.
LaSalle Bank National Association,
as Securities Administrator
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
H-2
EXHIBIT I
FORM OF BACKUP CERTIFICATION OF SERVICER
[DATE]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
LaSalle Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services - ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust,
Series 2007-SL1
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust, Mortgage Loan Asset-Backed
Securities, Series 2007-SL1
[_____________] (the "Servicer") certifies to the Depositor and the
Securities Administrator, and their officers, directors and affiliates, and with
the knowledge and intent that they will rely upon this certification, that:
(1) I am responsible for reviewing the activities performed by the Servicer
under the Servicing Agreement and I have reviewed, or persons under my
supervision have reviewed, the servicer compliance statement of the Servicer and
the compliance statements of each Sub-Servicer, if any, engaged by the Servicer
provided to the Depositor, the Master Servicer and the Securities Administrator
for the Trust Estate's fiscal year [___] in accordance with Item 1123 of
Regulation AB (each a "Compliance Statement"), the report on assessment of the
Servicer's compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria") and reports on assessment of compliance
with servicing criteria for asset-backed securities of the Servicer and of each
Sub-Servicer [or Subcontractor], if any, engaged or utilized by the Servicer
provided to the Depositor, the Master Servicer and the Securities Administrator
for the Issuing Entity's fiscal year [___] 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 (each a "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
related to each Servicing Assessment (each a "Attestation Report"), and all
servicing reports, officer's certificates and other information relating to the
servicing of the Mortgage Loans by the Servicer during 200[ ] that were
delivered or caused to be delivered by the Servicer pursuant to the Servicing
Agreement (collectively, the "Servicing Information");
(2) Based on my knowledge, and assuming the accuracy of the information
provided to the Servicer in connection with the transfer of servicing of the
Mortgage Loans to the Servicer and in connection with the performance of the
Servicer's duties under the Servicing Agreement, the Servicing Information,
taken as a whole, does not contain any untrue statement of a material
I-1
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 Servicing
Information;
(3) Based on my knowledge, the servicing information required to be
provided to the Master Servicer and the Securities Administrator by the Servicer
pursuant to the Servicing Agreement has been provided to the Securities
Administrator;
(4) Based on my knowledge and the compliance review conducted in preparing
each Compliance Statement of the Servicer and, if applicable, reviewing each
Compliance Statement of each Sub-Servicer, if any, engaged by the Servicer, and
except as disclosed in such Compliance Statement[(s)], the Servicer [(directly
and through its Sub-Servicers, if any)] has fulfilled its obligations under the
Servicing Agreement in all material respects.
(5) Each Servicing Assessment of the Servicer and of each Sub-Servicer [or
Subcontractor], if any, engaged or utilized by the Servicer and its related
Attestation Report required to be included in the Annual Report in accordance
with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 has
been provided to the Depositor, the Master Servicer and the Securities
Administrator. Any material instances of non-compliance are described in any
such Servicing Assessment or Attestation Report.
Date:
----------------
----------------------------------------
[Servicer]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
I-2
SCHEDULE I
REPRESENTATIONS AND WARRANTIES OF WILSHIRE
(i) Wilshire is duly organized and is validly existing as a corporation in
good standing under the laws of the State of Nevada and is duly authorized and
qualified to transact any and all business contemplated by this Servicing
Agreement to be conducted by Wilshire in any state in which a Mortgaged Property
is located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business laws
of any such state, to the extent necessary to ensure its ability to enforce each
Mortgage Loan, to service the Mortgage Loans in accordance with the terms of
this Servicing Agreement and to perform any of its other obligations under this
Servicing Agreement in accordance with the terms hereof.
(ii) Wilshire has the corporate power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Servicing Agreement and has
duly authorized by all necessary corporate action on the part of Wilshire the
execution, delivery and performance of this Servicing Agreement; and this
Servicing Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and binding
obligation of Wilshire, enforceable against Wilshire in accordance with its
terms, except that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(iii) The execution and delivery of this Servicing Agreement by Wilshire,
the servicing of the Mortgage Loans under this Servicing Agreement, the
consummation of any other of the transactions contemplated by this Servicing
Agreement, and the fulfillment of or compliance with the terms hereof are in the
ordinary course of business of Wilshire and will not (A) result in a material
breach of any term or provision of the charter or by-laws of Wilshire or (B)
materially conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other material
agreement or instrument to which Wilshire is a party or by which it may be
bound, or (C) constitute a material violation of any statute, order or
regulation applicable to Wilshire of any court, regulatory body, administrative
agency or governmental body having jurisdiction over Wilshire; and Wilshire is
not in breach or violation of any material indenture or other material agreement
or instrument, or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair Wilshire's ability to
perform or meet any of its obligations under this Servicing Agreement.
(iv) Wilshire is an approved servicer of mortgage loans for ▇▇▇▇▇▇ ▇▇▇ and
is an approved servicer of mortgage loans for ▇▇▇▇▇▇▇ Mac.
(v) No litigation is pending or, to the best of Wilshire's knowledge,
threatened, against Wilshire that would materially and adversely affect the
execution, delivery or enforceability of this Servicing Agreement or the ability
of Wilshire to service the Mortgage
Schedule I-1
Loans or to perform any of its other obligations under this Servicing Agreement
in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Wilshire of, or compliance by Wilshire with, this Servicing
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, Wilshire has
obtained the same.
(vii) Wilshire will fully furnish (for the period it services the Mortgage
Loans), in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company on a monthly basis except as Wilshire deems appropriate for
prevention or resolution of disputes with the Mortgagors.
Schedule I-2
SCHEDULE II
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇
(i) ▇▇▇▇▇▇ is duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its formation and has all licenses necessary to
carry on its business as now being conducted, except for such licenses,
certificates and permits the absence of which, individually or in the aggregate,
would not have a material adverse effect on the ability of ▇▇▇▇▇▇ to conduct its
business as it is presently conducted, and is licensed, qualified and in good
standing in the states where the Mortgaged Property is located if the laws of
such state require licensing or qualification in order to conduct business of
the type conducted by ▇▇▇▇▇▇ or to ensure the enforceability or validity of each
Mortgage Loan; ▇▇▇▇▇▇ has the 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 of transfer to be
delivered pursuant to this Agreement) by ▇▇▇▇▇▇ and the consummation of the
transactions contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of ▇▇▇▇▇▇,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally; and
all requisite corporate action has been taken by ▇▇▇▇▇▇ to make this Agreement
valid and binding upon ▇▇▇▇▇▇ in accordance with its terms;
(ii) The consummation of the transactions contemplated by this Agreement
are in the ordinary course of business of ▇▇▇▇▇▇ and will not result in the
breach of any term or provision of the certificate of formation or the
partnership agreement of ▇▇▇▇▇▇ or result in the breach of any term or provision
of, or conflict with or constitute a default under or result in the acceleration
of any obligation under, any agreement, indenture or loan or credit agreement or
other instrument to which ▇▇▇▇▇▇ or its property is subject, or result in the
violation of any law, rule, regulation, order, judgment or decree to which
▇▇▇▇▇▇ or its property is subject;
(iii) ▇▇▇▇▇▇ is an approved servicer of mortgage loans for ▇▇▇▇▇▇ ▇▇▇ and
has the facilities, procedures and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. ▇▇▇▇▇▇ is,
and shall remain for as long as it is servicing the Mortgage Loans hereunder, in
good standing to service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, and no
event has occurred, including but not limited to a change in insurance coverage,
which would make ▇▇▇▇▇▇ unable to comply with ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac
eligibility requirements or which would require notification to any of ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac;
(iv) This Agreement, and all documents and instruments contemplated hereby
which are executed and delivered by ▇▇▇▇▇▇, constitute and will constitute
valid, legal and binding obligations of ▇▇▇▇▇▇, enforceable in accordance with
their respective terms, except as the enforcement thereof may be limited by
applicable bankruptcy laws and general principles of equity;
(v) ▇▇▇▇▇▇ 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;
Schedule II-1
(vi) There is no action, suit, proceeding or investigation pending or, to
its knowledge, threatened against ▇▇▇▇▇▇ that, either individually or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of ▇▇▇▇▇▇, or in any
material impairment of the right or ability of ▇▇▇▇▇▇ to carry on its business
substantially as now conducted, or in any material liability on the part of
▇▇▇▇▇▇, or that would draw into question the validity or enforceability of this
Agreement or of any action taken or to be taken in connection with the
obligations of ▇▇▇▇▇▇ contemplated herein, or that would be likely to impair
materially the ability of ▇▇▇▇▇▇ to perform under the terms of this Agreement;
(vii) No consent, approval or order of any court or governmental agency or
body is required for the execution, delivery and performance by ▇▇▇▇▇▇ of or
compliance by ▇▇▇▇▇▇ with this Agreement or the consummation of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations and orders, if any, that have been obtained;
(viii) Neither this Agreement nor any information, certificate of an
officer, statement furnished in writing or report delivered to the Indenture
Trustee by ▇▇▇▇▇▇ in connection with the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading; and
(ix) ▇▇▇▇▇▇ has accurately and fully reported, and will continue to
accurately and fully report, its borrower credit files to each of the credit
repositories in a timely manner.
Schedule II-2
SCHEDULE III
REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER
(i) It is a national banking association duly formed, validly existing and
in good standing under the laws of the United States of America and is duly
authorized and qualified to transact any and all business contemplated by this
Servicing Agreement to be conducted by the Master Servicer and the Securities
Administrator, to the extent necessary to ensure its ability to master service
the Mortgage Loans in accordance with the terms of this Servicing Agreement and
to perform any of its other obligations under this Servicing Agreement in
accordance with the terms hereof.
(ii) It has the full corporate power and authority to execute, deliver and
perform, and to enter into and consummate the transactions contemplated by this
Servicing Agreement and has duly authorized by all necessary corporate action on
its part the execution, delivery and performance of this Servicing Agreement;
and this Servicing Agreement, assuming the due authorization, execution and
delivery hereof by the other parties hereto, constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, except
that (a) the enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors' rights
generally and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(iii) The execution and delivery of this Servicing Agreement by it, the
consummation of any other of the transactions contemplated by this Servicing
Agreement, and the fulfillment of or compliance with the terms hereof are in its
ordinary course of business and will not (A) result in a material breach of any
term or provision of its charter or by laws or (B) materially conflict with,
result in a material breach, violation or acceleration of, or result in a
material default under, the terms of any other material agreement or instrument
to which it is a party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to it of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it; and it is not in breach or violation of any material indenture or other
material agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or governmental
body having jurisdiction over it which breach or violation may materially impair
its ability to perform or meet any of its obligations under this Servicing
Agreement.
(iv) No litigation is pending or, to the best of its knowledge, threatened,
against it that would materially and adversely affect the execution, delivery or
enforceability of this Servicing Agreement or its ability to perform any of its
other obligations under this Servicing Agreement in accordance with the terms
hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery and
performance of, or compliance with, this Servicing Agreement or the consummation
of the transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, it has obtained the same.
Schedule III-1
SCHEDULE IV
ITEM ON FORM 8-K
Item on Form 8-K Party Responsible
--------------------------------------- --------------------------------------
*Item 1.01- Entry into a Material The parties to this Servicing
Definitive Agreement Agreement entering into
the material definitive agreement
(excluding the Indenture Trustee)
*Item 1.02- Termination of a Material The parties to this Servicing
Definitive Agreement Agreement terminating the
material definitive agreement
(excluding the Indenture Trustee)
Item 1.03- Bankruptcy or Receivership Depositor
Item 2.04- Triggering Events that Depositor
Accelerate or Increase a
Direct Financial Obligation or an
Obligation under an
Off-Balance Sheet Arrangement
*Item 3.03- Material Modification to Securities Administrator
Rights of Security Holders
Item 5.03- Amendments of Articles of Depositor
Incorporation or Bylaws; Change of
Fiscal Year
Item 6.01- ABS Informational and Depositor
Computational Material
*Item 6.02- Change of Servicer or Servicer, Master Servicer, Securities
Trustee Administrator
*Item 6.03- Change in Credit Depositor/Securities Administrator
Enhancement or External Support
*Item 6.04- Failure to Make a Required Securities Administrator
Distribution
Item 6.05- Securities Act Updating Depositor
Disclosure
Item 7.01- Reg FD Disclosure Depositor
Item 8.01 Depositor
Item 9.01 Depositor
Schedule IV-1
SCHEDULE V
ITEM ON FORM 10-D
Item on Form 10-D Party Responsible
--------------------------------------- --------------------------------------
Item 1: Distribution and Pool Securities Administrator, Master
Performance Information Servicer and Servicer (with respect to
underlying Mortgage Loan data)
Plus any information required by 1121
which is NOT included on the monthly
statement to Certificateholders
Depositor, Master Servicer and
Securities Administrator (to the
extent required by Regulation AB)
Item 2: Legal Proceedings per Item All parties to the Servicing Agreement
1117 of Regulation AB (as to themselves), the
Depositor/Securities
Administrator/Master Servicer (to the
extent known) as to the Issuing
Entity, the Sponsor, 1106(b)
originator, any 1100(d)(1) party
Item 3: Sale of Securities and Use of Depositor
Proceeds
Item 4: Defaults Upon Senior Securities Securities Administrator
Item 5: Submission of Matters to a Vote Securities Administrator
of Security Holders
Item 6: Significant Obligors of Pool Depositor/Sponsor/Mortgage Loan Seller
Assets
Item 7: Significant Enhancement Depositor/Sponsor
Provider Information
Item 8: Other Information All parties to the Servicing Agreement
(as to themselves) responsible for
disclosure items on Form 8-K (as
indicated on Schedule III)
Item 9: Exhibits Securities Administrator (with respect
to the Monthly Statements) and
Depositor
Schedule V-1
SCHEDULE VI
ITEM ON FORM 10-K
Item on Form 10-K Party Responsible
--------------------------------------- --------------------------------------
Item 1B: Unresolved Staff Comments Depositor
*Item 9B: Other Information Securities Administrator and any other
party responsible for disclosure items
on Form 8-K (as indicated on Schedule
III)
*Item 15: Exhibits, Financial Statement Securities Administrator/Master
Schedules Servicer/Servicer (as to
themselves)/Subservicers/Depositor
*Additional Item: Disclosure per All parties to the Servicing Agreement
Item 1117 of Regulation AB (as to themselves), the
Depositor/Securities
Administrator/Master Servicer (to the
extent known) as to the Issuing
Entity, the Sponsor, 1106(b)
originator, any 1100(d)(1) party
*Additional Item: Disclosure per All parties to the Servicing
Item 1119 of Regulation AB Agreement, the sponsor, originator,
significant obligor, enhancement or
support provider
Additional Item: Disclosure per Depositor/Sponsor/Mortgage Loan
Item 1112(b) of Regulation AB Seller/Master Servicer
Additional Item: Disclosure per Depositor/Sponsor
Items 1114(b) and 115(b) of Regulation
AB
Schedule VI-1