CITIGROUP GLOBAL MARKETS REALTY CORP. Owner and WELLS FARGO BANK, N.A. Servicer AMENDED AND RESTATED FLOW SERVICING AGREEMENT Dated as of March 1, 2006 Fixed and Adjustable Rate First and Second Lien Mortgage Loans
CITIGROUP
GLOBAL MARKETS REALTY CORP.
Owner
and
▇▇▇▇▇
FARGO BANK, N.A.
Servicer
______________________________________________________
AMENDED
AND RESTATED FLOW SERVICING AGREEMENT
Dated
as of March 1, 2006
______________________________________________________
Fixed
and Adjustable Rate
First
and Second Lien Mortgage Loans
TABLE
OF CONTENTS
|
ARTICLE
I
|
|
DEFINITIONS
|
|
ARTICLE
II
|
|
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS;
CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS
|
|
ARTICLE
III
|
|
REPRESENTATIONS
AND WARRANTIES REMEDIES AND BREACH
|
|
ARTICLE
IV
|
|
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
|
|
ARTICLE
V
|
|
PAYMENTS
TO OWNER
|
|
ARTICLE
VI
|
|
GENERAL
SERVICING PROCEDURES
|
|
ARTICLE
VII
|
|
SERVICER
TO COOPERATE
|
|
ARTICLE
VIII
|
|
THE
SERVICER
|
|
ARTICLE
IX
|
|
REMOVAL
OF MORTGAGE LOANS FROM AGREEMENT
|
|
ARTICLE
X
|
|
DEFAULT
|
|
ARTICLE
XI
|
|
TERMINATION
|
|
ARTICLE
XII
|
|
MISCELLANEOUS
PROVISIONS
|
EXHIBITS
|
Exhibit
A
|
Form
of Acknowledgement Agreement
|
|
Exhibit
B
|
Contents
of each Custodial Mortgage File, Retained Mortgage File and Servicing
File
|
|
Exhibit
C
|
Servicing
Criteria
|
|
Exhibit
D
|
Form
of Sarbanes Certification
|
|
Exhibit
E
|
[Reserved]
|
|
Exhibit
F
|
Form
of Assignment, Assumption and Recognition Agreement
|
|
Exhibit
G
|
Form
of Opinion of Counsel
|
This
is
an Amended and Restated Flow Servicing Agreement for fixed rate and adjustable
rate residential first and second lien mortgage loans, dated and effective
as of
March 1, 2006, and is executed between Citigroup Global Markets Realty Corp.,
as
owner (the "Owner"), and ▇▇▇▇▇ Fargo Bank, N.A., as servicer (the
"Servicer").
W I T N E
;S S E T H
WHEREAS,
the Owner owns certain fixed rate and adjustable rate mortgage loans (the
“Mortgage Loans”);
WHEREAS,
the Owner desires to have the Servicer service and administer the Mortgage
Loans
and the Servicer desires to service and administer the Mortgage Loans in
accordance with the terms and conditions of this Agreement;
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and
for other good and valuable consideration, the receipt and adequacy of which
is
hereby acknowledged, the Owner and the Servicer agree as follows:
ARTICLE
I
DEFINITIONS
Whenever
used herein, the following words and phrases, unless the content otherwise
requires, shall have the following meanings:
Accepted
Servicing Practices:
With
respect to any Mortgage Loan serviced in accordance with all applicable federal,
state and local laws and regulations, the terms of the Mortgage Loan Documents,
and those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as the Mortgage Loans in the
jurisdiction where the related Mortgaged Property is located.
Acknowledgment
Agreement:
An
acknowledgment agreement substantially in the form of Exhibit A hereto, that
makes specific reference to this Agreement, and which is to be executed on
or
prior to each Servicing Date with respect to servicing of Mortgage Loans by
the
Servicer.
Adjustment
Date:
As to
each adjustable rate Mortgage Loan, the date on which the Mortgage Interest
Rate
is adjusted in accordance with the terms of the related Mortgage Note and
Mortgage.
Agency:
▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇ Mac or GNMA, or any of them as applicable.
Agency
Sale:
Any
sale or transfer of some or all of the Mortgage Loans by the Owner to an Agency
which sale or transfer is not a Securitization Transaction or Whole Loan
Transfer.
Agreement:
This
Servicing Agreement and all exhibits hereto, amendments hereof and supplements
hereto.
Appraised
Value:
The
value set forth on the related Mortgage Loan Schedule and determined in
accordance with the terms of the agreement pursuant to which the related
Mortgage Loan was purchased.
Assignment
of Mortgage:
An
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the sale of the Mortgage to
the
Owner, or if the related Mortgage has been recorded in the name of MERS or
its
designee, such actions as are necessary to cause the Owner to be shown as the
owner of the related Mortgage on the records of MERS for purposes of the system
of recording transfers of beneficial ownership of mortgages maintained by
MERS.
Assignment
of Mortgage Note and Pledge Agreement:
With
respect to a Cooperative Loan, as assignment of the Mortgage Note and Pledge
Agreement.
Assignment
of Proprietary Lease:
With
respect to a Cooperative Loan, as assignment of the Proprietary Lease sufficient
under the laws of the jurisdiction wherein the related Cooperative Apartment
is
located to effect the assignment of such Proprietary Lease.
Balloon
Loan:
A
Mortgage Loan for which the Monthly Payments will not fully amortize the loan
by
the end of the term, at which time the balance of the principal is due in a
lump
sum.
Business
Day:
Any day
other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings
and loan institutions in the states where the parties are located, are
authorized or obligated by law or executive order to be closed.
Buydown
Agreement:
An
agreement between the originator of a Mortgage Loan and a Mortgagor, or an
agreement among the originator, a Mortgagor and a seller of a Mortgaged Property
or a third party with respect to a Mortgage Loan which provides for the
application of Buydown Funds.
Buydown
Funds:
In
respect of any Buydown Mortgage Loan, any amount contributed by the seller
of a
Mortgaged Property subject to a Buydown Mortgage Loan, the buyer of such
property, or any other source, plus interest earned thereon, in order to enable
the Mortgagor to reduce the payments required to be made from the Mortgagor’s
funds in the early years of a Mortgage Loan.
Buydown
Mortgage Loan:
Any
Mortgage Loan in respect of which, pursuant to a Buydown Agreement, (i) the
Mortgagor pays less than the full monthly payments specified in the Mortgage
Note for a specified period, and (ii) the difference between the payments
required under such Buydown Agreement and the Mortgage Note is provided from
Buydown Funds.
Buydown
Period:
The
period of time when a Buydown Agreement is in effect with respect to a related
Buydown Mortgage Loan.
Code:
The
Internal Revenue Code of 1986, as it may be amended from time to time or any
successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.
Combined
Loan-to-Value Ratio or CLTV:
As to
any Second Lien Mortgage Loan at any date of determination, the ratio on such
date of the principal balance of such Mortgage Loan,
plus the
principal balance of any Superior Lien, to the Appraised Value of the related
Mortgaged Property.
Commission:
The
United States Securities and Exchange Commission.
Commitment
Letter:
The
letter agreement to be executed between (i) the Seller and the Owner relating
to
the Owned Mortgage Loans or (ii) the Servicer and the Owner relating to the
Purchased Mortgage Loans.
Condemnation
Proceeds:
All
awards or settlements in respect of a Mortgaged Property, whether permanent
or
temporary, partial or entire, by exercise of the power of eminent domain or
condemnation, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Mortgage Loan Documents.
Cooperative:
The
entity that holds title (fee or an acceptable leasehold estate) to all of the
real property that the Project comprises, including the land, separate dwelling
units and all common areas.
Cooperative
Apartment:
The
specific dwelling unit relating to a Cooperative Loan.
Cooperative
Lien Search:
A
search for (a) federal tax liens, mechanics’ liens, lis pendens, judgments of
record or otherwise against (i) the Cooperative, (ii) the seller of the
Cooperative Apartment and (iii) the Servicer if the Cooperative Loan is a
refinanced Mortgage Loan, (b) filings of financing statements and (c) the deed
of the Project into the Cooperative.
Cooperative
Loan:
A
Mortgage Loan that is secured by Cooperative Shares and a Proprietary Lease
granting exclusive rights to occupy the related Cooperative
Apartment.
Cooperative
Shares:
The
shares of stock issued by a Cooperative, owned by the Mortgagor, and allocated
to a Cooperative Apartment.
Custodial
Account:
The
separate account or accounts created and maintained pursuant to Section
4.04.
Custodial
Agreement:
The
agreement governing the retention of the originals of each Mortgage Note,
Assignment of Mortgage and other applicable Mortgage Loan
Documents.
Custodial
Mortgage File:
With
respect to each Owned Mortgage Loan, the file consisting of the Mortgage Loan
Documents listed as items 1 through 5 of Exhibit B attached hereto, which have
been delivered to the Custodian as of the related Servicing Date.
Custodian:
The
custodian under the Custodial Agreement, or its successor in interest or
assigns, or any successor to the Custodian under the Custodial Agreement as
provided therein.
Cut-off
Date:
With
respect to each transaction contemplated hereby, the date so specified in the
related Acknowledgment Agreement.
Data
File: The
electronic data file prepared by the Seller and delivered to the Owner pursuant
to the related Master Mortgage Loan Purchase Agreement.
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Determination
Date:
The
Business Day immediately preceding the related Remittance Date.
Due
Date:
The day
of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive
of any days of grace.
Due
Period:
With
respect to each Remittance Date, the period commencing on the second day of
the
month preceding the month of the Remittance Date and ending on the first day
of
the month of the Remittance Date.
Errors
and Omissions Insurance Policy:
An
errors and omissions insurance policy to be maintained by the Servicer pursuant
to Section 4.12.
Escrow
Account:
The
separate account or accounts created and maintained pursuant to Section 4.06.
Escrow
Payments:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and any
other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage or any other related document.
Event
of Default:
Any one
of the conditions or circumstances enumerated in Section 10.01.
Exchange
Act:
The
Securities and Exchange Act of 1934, as amended.
▇▇▇▇▇▇
▇▇▇:
The
Federal National Mortgage Association or ▇▇▇▇▇▇ Mae, or any successor
thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity
Bond:
A
fidelity bond to be maintained by the Servicer pursuant to Section
4.12.
First
Lien:
With
respect to each Mortgaged Property, the lien on the mortgage, deed of trust
or
other instrument securing a mortgage note which creates a first lien on the
Mortgaged Property.
First
Lien Mortgage Loan:
A
Mortgage Loan secured by a First Lien on the Mortgage Property.
First
Remittance Date:
With
respect to each Mortgage Loan, the 18th
day (or
if such day is not a Business Day, the immediately preceding Business Day)
of
the month following the month in which the related Cut-off Date occurs, or
such
other day of the month as may be specified in the related Acknowledgement
Agreement.
Flow
Servicing Rights Purchase and Sale Agreement:
That
certain agreement between the Owner, as seller and the Servicer, as purchaser,
pursuant to which the Servicer purchases the servicing rights related to the
Purchased Mortgage Loans.
▇▇▇▇▇▇▇
Mac:
The
Federal Home Loan Mortgage Corporation or ▇▇▇▇▇▇▇ Mac, or any successor
thereto.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
Interest
Only Mortgage Loan:
A
Mortgage Loan for which an interest-only payment feature is allowed during
the
interest-only period as set forth in the related Mortgage Note.
Letter
of Credit:
With
respect to a Pledged Asset Mortgage Loan, a guaranty issued to the Servicer
by
the Pledge Holder for the Pledged Value Amount.
Liquidation
Proceeds:
Cash
received in connection with the liquidation of a defaulted Mortgage Loan,
whether through the sale or assignment of such Mortgage Loan, trustee's sale,
foreclosure sale or otherwise, or the sale of the related Mortgaged Property
if
the Mortgaged Property is acquired in satisfaction of the Mortgage
Loan.
Loan-to-Value
Ratio or LTV:
With
respect to any First Lien Mortgage Loan, the ratio of the original loan amount
of the Mortgage Loan at its origination (unless otherwise indicated) to the
Appraised Value of the Mortgaged Property.
LPMI
Policy: With
respect to the Serviced-owned Mortgage Loans, a PMI Policy for which the Seller
pays all premiums from its own funds, without reimbursement.
Master
Mortgage Loan Purchase Agreement:
The
agreement, dated as of March 1, 2006, between the Seller and the Owner pursuant
to which the Owner purchased the Owned Mortgage Loans.
MERS:
Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or
any
successor in interest thereto.
MERS
Mortgage Loan:
Any
Mortgage Loan as to which the related Mortgage or Assignment of Mortgage has
been registered with MERS on the MERS System
MERS
System:
The
system of recording transfers of mortgages electronically maintained by
MERS.
MIN:
The
eighteen digit Mortgage Identification Number.
Monthly
Advance:
The
portion of each Monthly Payment that is delinquent with respect to each Mortgage
Loan at the close of business on the Determination Date required to be advanced
by the Servicer pursuant to Section 5.03 on the Business Day immediately
preceding the Remittance Date of the related month.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage Loan, or
in
the case of an Interest Only Mortgage Loan, payments of (i) interest, or (ii)
principal and interest, if applicable, on a Mortgage Loan.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a first or second lien on an unsubordinated estate in fee simple in
real
property securing the Mortgage Note, or the Pledge Agreement securing the
Mortgage Note for a Cooperative Loan.
Mortgage
Impairment Insurance Policy:
A
mortgage impairment or blanket hazard insurance policy as described in Section
4.11.
Mortgage
Interest Rate:
The
annual rate of interest borne on a Mortgage Note in accordance with the
provisions of the Mortgage Note.
Mortgage
Loan:
Certain
fixed rate and adjustable rate mortgage loans, which mortgage loans are serviced
by the Servicer pursuant to this Agreement.
Mortgage
Loan Documents:
With
respect to a Mortgage Loan, the documents listed on Exhibit B attached hereto.
Mortgage
Loan Remittance Rate:
With
respect to each Mortgage Loan, the annual rate of interest remitted to the
Owner, which shall be equal to the related Mortgage Interest Rate minus the
Servicing Fee Rate.
Mortgage
Loan Schedule:
With
respect to each transaction contemplated hereby, a schedule of Mortgage Loans
subject to this Agreement and annexed to the related Acknowledgement
Agreement.
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a
Mortgage.
Mortgaged
Property:
The
real property securing repayment of the debt evidenced by a Mortgage Note,
or
with respect to a Cooperative Loan, the Cooperative Apartment.
Mortgagor:
The
obligor on a Mortgage Note.
Officer's
Certificate:
A
certificate signed by the Chairman of the Board or the Vice Chairman of the
Board or the President or a Vice President or an Assistant Vice President and
certified by the Treasurer or the Secretary or one of the Assistant Treasurers
or Assistant Secretaries of the Servicer, and delivered to the Owner as required
by this Agreement.
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the Servicer, reasonably
acceptable to the Owner.
Owned
Mortgage Loan:
An
individual Mortgage Loan originally sold by the Seller to the Owner, as to
which
the servicing rights are owned by the Servicer.
Owner:
Citigroup Global Markets Realty Corp., or its successor in interest or any
successor to or designee or assignee of the Owner under this Agreement as herein
provided.
Periodic
Interest Rate Cap:
As to
each adjustable rate Mortgage Loan, the maximum increase or decrease in the
Mortgage Interest Rate on any Adjustment Date pursuant to the terms of the
Mortgage Note.
Person:
Any
individual, corporation, partnership, joint venture, limited liability company,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
Pledge
Account:
With
respect to a Pledged Asset Mortgage Loan, an account that is managed by the
Pledge Holder to secure a Letter of Credit.
Pledge
Account Maintenance Value:
With
respect to a Pledged Asset Mortgage Loan, a
minimum percentage of the pledged amount specified in the underwriting
guidelines of the Servicer. If the balance on the Pledge Account falls below
the
maintenance value of the pledge amount,
the Pledge Holder will require that more funds be added to the Pledge Account,
or decide to make a margin call.
Pledge
Account Set-Up Value:
With
respect to a Pledged Asset Mortgage Loan, a minimum percentage of the pledged
amount specified in the underwriting guidelines of the Servicer placed in the
Pledge Account to allow for market fluctuations. The Pledge Holder determines
the Pledge Account Set-Up Value.
Pledge
Agreement:
With
respect to a Cooperative Loan, the specific agreement creating a first lien
on
and pledge of the Cooperative Shares and the appurtenant Proprietary
Lease.
Pledged
Asset Mortgage Loan:
A
Mortgage Loan for which the Mortgagor has pledged financial assets as partial
collateral for the Mortgage Loan, in lieu of a cash down payment.
Pledge
Holder: With
respect to a Pledged Asset Mortgage Loan, the
entity that holds the Pledge Account, manages the Pledge Account and provides
the Letter of Credit.
Pledge
Instruments:
With
respect to a Cooperative Loan, the Stock Power, the Assignment of the
Proprietary Lease and the Assignment of the Mortgage Note and Pledge
Agreement.
Pledged
Value Amount:
With
respect to a Pledged Asset Mortgage Loan, a minimum of 20% of the lower of
the
purchase price or appraised value of a Mortgaged Property.
PMI
Policy:
A
policy of primary mortgage guaranty insurance evidenced by an electronic form
and certificate number issued by a Qualified Insurer, as required by this
Agreement with respect to certain Mortgage Loans. The premiums on a PMI Policy
may be paid (i) by the Mortgagor or (ii) by the Servicer from its own funds,
without reimbursement, in the case of an LPMI Policy.
Prepayment
Charge:
With
respect to any calendar month, any prepayment premium, penalty or charge payable
by a Mortgagor in connection with a Principal Prepayment in full on a
Mortgage Loan pursuant to the terms of the related Mortgage Note (other than
any
Prepayment Charge Payment Amount).
Prepayment
Charge Payment Amount:
An
amount in respect of a Prepayment Charge or portion thereof waived other than
as
permitted in Section 4.27, paid by the Servicer as required by Section 4.27.
Prepayment
Interest Shortfall:
As to
any Remittance Date and each Mortgage Loan subject to a Principal Prepayment
received during the calendar month preceding such Remittance Date, the amount,
if any, by which one month’s interest at the related Mortgage Loan Remittance
Rate on such Principal Prepayment exceeds the amount of interest paid in
connection with such Principal Prepayment.
Prime
Rate:
The
prime rate announced to be in effect from time to time, as published as the
average rate in The
Wall Street Journal.
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date, including any prepayment penalty or premium
thereon and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent
to
the month of prepayment.
Principal
Prepayment Period:
With
respect to the Owned Mortgage Loans, the month preceding the month in which
the
related Remittance Date occurs. With respect to the Purchased Mortgage Loans,
either (A)(i)
with respect to any Principal Prepayment in full, the period that commences
on
and includes the 14th day of the month immediately preceding the month in which
such Remittance Date occurs and ends on and includes the 13th day of the month
in which such Remittance Date occurs, and (ii) with respect to any partial
Principal Prepayment, the calendar month preceding the month in which the
Remittance Date occurs, or (B) the calendar month preceding the month in which
the Remittance Date occurs, as set forth in the related Commitment Letter
.
Project:
With
respect to a Cooperative Loan, all real property owned by the related
Cooperative including the land, separate dwelling units and all common
areas.
Proprietary
Lease:
With
respect to a Cooperative Loan, a lease on a Cooperative Apartment evidencing
the
possessory interest of the Mortgagor in such Cooperative Apartment.
Purchased
Mortgage Loans:
An
individual Mortgage Loan, the servicing rights to which have been purchased
by
the Servicer from the Owner pursuant to the Flow Servicing Rights Purchase
and
Sale Agreement.
Qualified
Correspondent:
Any
Person from which the Seller purchased Mortgage Loans, provided that the
following conditions were satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement between the Seller and such Person that contemplated
that such Person would underwrite and originate mortgage loans from time to
time, for sale to the Seller, in accordance with underwriting guidelines
designated by the Seller (“Designated Guidelines”) or guidelines that do not
vary materially from such Designated Guidelines; (ii) such Mortgage Loans were
in fact underwritten as described in clause (i) above and were acquired by
the
Seller within 180 days of origination; (iii) either (x) the Designated
Guidelines were, at the time such Mortgage Loans were originated, used by the
Seller in origination of mortgage loans of the same type as the Mortgage Loans
for the Seller’s own account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the Seller on a consistent
basis for use by lenders in originating mortgage loans to be purchased by the
Seller; and (iv) the Seller employed, at the time such Mortgage Loans were
acquired by the Seller, pre-purchased or post-purchased quality assurance
procedures (which may involve, among other things, review of a sample of
mortgage loans purchased during a particular time period or through particular
channels) designed to ensure that Persons from which it purchases mortgage
loans
properly applied the underwriting criteria designated by the
Seller.
Qualified
Depository:
A
deposit account or accounts maintained with a federal or state chartered
depository institution the deposits in which are insured by the FDIC to the
applicable limits and the short-term unsecured debt obligations of which (or,
in
the case of a depository institution that is a subsidiary of a holding company,
the short-term unsecured debt obligations of such holding company) are rated
A-1
by Standard & Poor’s Ratings Services or Prime-1 by ▇▇▇▇▇’▇ Investors
Service, Inc. (or a comparable rating if another Rating Agency is specified
by
the Owner by written notice to the Servicer) at the time any deposits are held
on deposit therein.
Qualified
Insurer:
A
mortgage guaranty insurance Servicer duly authorized and licensed where required
by law to transact mortgage guaranty insurance business and approved as an
insurer by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Rating
Agency or Agencies:
Any
nationally recognized statistical Rating Agency, or its successors, including
Standard & Poor’s, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, ▇▇▇▇▇’▇
Investors Service, Inc. and Fitch Ratings.
Recognition
Agreement:
An
agreement whereby a Cooperative and a lender with respect to a Cooperative
Loan
(i) acknowledge that such lender may make, or intends to make, such Cooperative
Loan, and (ii) make certain agreements with respect to such Cooperative
Loan.
Reconstitution:
Any
Securitization Transaction or Whole Loan Transfer.
Reconstitution
Agreement:
The
agreement or agreements entered into by the Servicer and the Owner and/or
certain third parties on the Reconstitution Date or Dates with respect to any
or
all of the Mortgage Loans serviced hereunder, in connection with a Whole Loan
Transfer or a Securitization Transaction.
Reconstitution
Date:
The
date on which any or all of the Mortgage Loans serviced under this Agreement
may
be removed from this Agreement and reconstituted as part of a Securitization
Transaction, Agency Sale or Whole Loan Transfer pursuant to Section 9.01 hereof.
The Reconstitution Date shall be such date which the Owner shall
designate.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
REMIC:
A "real
estate mortgage investment conduit" within the meaning of Section 860D of the
Code.
REMIC
Provisions:
Provisions of the federal income tax law relating to a REMIC, which appear
at
Section 860A through 860G of Subchapter M of Chapter 1, Subtitle A of the Code,
and related provisions, regulations, rulings or pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time.
Remittance
Date:
The
18th day (or if such 18th day is not a Business Day, the first Business Day
immediately preceding) of any month, beginning with the First Remittance
Date.
REO
Disposition:
The
final sale by the Servicer of any REO Property.
REO
Disposition Proceeds:
All
amounts received with respect to an REO Disposition pursuant to Section
4.16.
REO
Property:
A
Mortgaged Property acquired by the Servicer on behalf of the Owner through
foreclosure or by deed in lieu of foreclosure, as described in Section
4.16.
Repurchase
Price:
With
respect to the Mortgage Loans, the price as stated in the Commitment
Letter.
Retained
Mortgage File:
With
respect to each Owned Mortgage Loan, the file consisting of the Mortgage Loan
Documents listed as items 6 through 11 of Exhibit B attached
hereto.
Sarbanes
Certifying Party:
A
Person who files a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ certification directly with the Securities
and
Exchange Commission pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
Second
Lien:
With
respect to a Mortgaged Property, a lien of the mortgage, deed of trust or other
instrument securing a mortgage note which creates a second lien on the Mortgaged
Property.
Second
Lien Mortgage Loan:
A
Mortgage Loan secured by the lien on the Mortgaged Property, subject to one
prior lien on such Mortgaged Property securing financing obtained by the related
Mortgagor.
Securities
Act:
The
Securities Act of 1933, as amended.
Securitization
Transaction:
Any
transaction involving either (a) a sale or other transfer of some or all of
the
Mortgage Loans directly or indirectly to an issuing entity in connection with
an
issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities or (b) an issuance of publicly offered or privately
placed, rated or unrated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage
Loans.
Seller:
▇▇▇▇▇
Fargo Bank, N.A.
Seller/Servicer
Information:
As
defined in Section 9.01(f)(i)(A).
Servicer:
▇▇▇▇▇
Fargo Bank, N.A., or its successor in interest or assigns, or any successor
to
the Servicer under this Agreement appointed as herein provided.
Servicing
Advances:
All
customary, reasonable and necessary "out of pocket" costs and expenses other
than Monthly Advances (including reasonable attorney's fees and disbursements)
incurred in the performance by the Servicer of its servicing obligations,
including, but not limited to, the cost of (a) the preservation, restoration
and
protection of the Mortgaged Property, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of
any
REO Property and (d) compliance with the obligations under Section 4.08
(excluding the Servicer’s obligation to pay the premiums on LPMI Policies on
Serviced-owned Mortgage Loans).
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.
Servicing
Date:
(i)
With respect to each Owned Mortgage Loan, the Closing Date, as defined in the
Master Mortgage Loan Purchase Agreement and (ii) with respect to each Purchased
Mortgage Loan, the Reconstitution Date as defined in the Agreement, dated as
of
September 15, 2005, between the Servicer and the Owner.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee the Owner shall
pay
to the Servicer, which shall, for a period of one full month, be equal to
one-twelfth of the product of (a) the Servicing Fee Rate and (b) the outstanding
principal balance of such Mortgage Loan. Such fee shall be payable monthly,
computed on the basis of the same principal amount and period respecting which
any related interest payment on a Mortgage Loan is received. The obligation
of
the Owner to pay the Servicing Fee is limited to, and the Servicing Fee is
payable solely from, the interest portion (including recoveries with respect
to
interest from Liquidation Proceeds, to the extent permitted by Section 4.05)
of
such Monthly Payment collected by the Servicer, or as otherwise provided under
Section 4.05.
Servicing
Fee Rate:
The
percent per annum with respect to each Mortgage Loan identified on the related
Mortgage Loan Schedule attached to the related Acknowledgment
Agreement.
Servicing
File:
With
respect to each Mortgage Loan, the file consisting of the Mortgage Loan
Documents listed as items 12 through 27 of Exhibit B attached hereto plus copies
of all Mortgage Loan Documents, contained in the Custodial Mortgage File and
the
Retained Mortgage File, which are retained by the Company.
Servicing
Officer:
Any
officer of the Servicer involved in or responsible for the administration and
servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished by the Servicer to the Owner upon request, as such list
may
from time to time be amended.
Stated
Principal Balance:
As to
each Mortgage Loan, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before
such
date, whether or not received, minus (ii) all amounts previously distributed
to
the Owner with respect to the related Mortgage Loan representing payments or
recoveries of principal or advances in lieu thereof.
Static
Pool Information:
Static
pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation
AB.
Stock
Certificate:
With
respect to a Cooperative Loan, a certificate evidencing ownership of the
Cooperative Shares issued by the Cooperative.
Stock
Power:
With
respect to a Cooperative Loan, an assignment of the Stock Certificate or an
assignment of the Cooperative Shares issued by the Cooperative.
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
Mortgage Loans under the direction or authority of the Servicer of a
Subservicer.
Subservicer:
Any
Person that services Mortgage Loans on behalf of the Servicer or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Servicer under this Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB.
Subsidy
Account:
An
account maintained by the Servicer specifically to hold all Subsidy Funds to
be
applied to individual Subsidy Loans.
Subsidy
Funds:
With
respect to any Subsidy Loans, funds contributed by the employer of a Mortgagor
in order to reduce the payments required from the Mortgagor for a specified
period in specified amounts.
Subsidy
Loan:
Any
Mortgage Loan subject to a temporary interest subsidy agreement pursuant to
which the monthly interest payments made by the related Mortgagor will be less
than the scheduled monthly interest payments on such Mortgage Loan, with the
resulting difference in interest payments being provided by the employer of
the
Mortgagor.
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, that originated Mortgage Loans
acquired by the Seller.
Time$aver®
Mortgage Loan:
A
Mortgage Loan which has been refinanced pursuant to a Seller program that allows
a rate/term refinance of an existing Owned Mortgage Loan with minimal
documentation.
Whole
Loan Transfer: Any sale or transfer of some or all of the Mortgage Loans by
the Owner to a third party, which sale or transfer is not a Securitization
Transaction or Agency Sale.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL
AGREEMENT; DELIVERY OF DOCUMENTS
Section
2.01 Possession
of Mortgage Files; Maintenance of Servicing Files.
Pursuant
to Section 2.03 below, the Servicer has delivered the Custodial Mortgage File
to
the Custodian. From and after each Servicing Date, the contents of each Retained
Mortgage File shall be held in trust by the Servicer for the benefit of the
Owner as the owner thereof. The Servicer shall maintain a Servicing File
consisting of a copy of the contents of each of the Custodial Mortgage File
and
the Retained Mortgage File. The possession of each Servicing File and Retained
Mortgage File held by the Servicer is at the will of the Owner for the sole
purpose of servicing the related Mortgage Loan, and such retention and
possession by the Servicer is in a custodial capacity only. The ownership of
each Mortgage Note, the related Mortgage and the related Custodial Mortgage
File, Retained Mortgage File and Servicing File are vested in the Owner, and
the
ownership of all records and documents with respect to the related Mortgage
Loan
prepared by or which come into the possession of the Servicer shall vest
immediately in the Owner and shall be retained and maintained by the Servicer,
in trust, at the will of the Owner and only in such custodial capacity. The
Servicer shall release its custody of the contents of any Servicing File and
Retained Mortgage File only in accordance with written instructions from the
Owner, unless such release is required as incidental to the Servicer's servicing
of the Mortgage Loans, in the case of the Servicing File, or is in connection
with a repurchase of any Mortgage Loan. All such costs associated with the
release, transfer and re-delivery of
any Custodial Mortgage Files, Retained Mortgage Files and Servicing Files
between the parties
shall be
the responsibility of the party
in possession of such file or files.
In
addition, in connection with the assignment of any MERS Mortgage Loan, the
Servicer agrees that it will cause the MERS System to indicate that such
Mortgage Loan has been assigned by the Seller, with respect to an Owner Mortgage
Loan, or assigned by the prior owner, with respect to any Purchased Mortgage
Loan, the Owner in accordance with this Agreement by including (or deleting,
in
the case of a repurchased Mortgage Loan) in such computer files the information
required by the MERS System to identify the Owner as the beneficial owner of
such Mortgage Loan.
Section
2.02 Books
and Records; Transfers of Mortgage Loans.
All
rights arising out of the Mortgage Loans, including, but not limited to, all
funds received on or in connection with the Mortgage Loans, shall be received
and held by the Servicer in trust for the benefit of the Owner as owner of
the
Mortgage Loans, and the Servicer shall retain record title to the related
Mortgages for the sole purpose of facilitating the servicing and the supervision
of the servicing of the Mortgage Loans.
The
Servicer shall maintain with respect to each Mortgage Loan and shall make
available for inspection by any purchaser or its designee the related Retained
Mortgage File and Servicing File during the time the Owner retains ownership
of
a Mortgage Loan and thereafter in accordance with applicable laws and
regulations.
The
Servicer shall keep at its servicing office books and records in which, subject
to such reasonable regulations as it may prescribe, the Servicer shall note
transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made unless
such transfer is in compliance with the terms hereof. For the purposes of this
Agreement, the Servicer shall be under no obligation to deal with any Person
with respect to this Agreement or the Mortgage Loans unless the books and
records show such Person as the owner of the Mortgage Loan. The Owner may,
subject to the terms of this Agreement, sell and transfer one or more of the
Mortgage Loans. The Owner also shall advise the Servicer of the transfer. Upon
receipt of notice of the transfer, the Servicer shall ▇▇▇▇ its books and records
to reflect the ownership of the Mortgage Loans of such assignee, and shall
release the previous Owner from its obligations hereunder with respect to the
Mortgage Loans sold or transferred. Such notification of a transfer shall
include a final loan schedule which shall be received by the Servicer no fewer
than five (5) Business Days before the last Business Day of the month. If such
notification is not received as specified above, the Servicer’s duties to remit
and report as required by Section 5 shall begin with the next Due
Period.
With
respect to the Owned Mortgage Loans, upon request from the Owner, at the Owner’s
expense, the Servicer shall deliver no later than fifteen (15) Business Days
after such request any Retained Mortgage File or document therein, or copies
thereof, to the Owner at the direction of the Owner. The Owner shall return
any
Retained Mortgage File or document therein delivered pursuant to this Section
no
later than ten (10) Business Days after receipt thereof. An extension of this
date may be requested from the Owner, which consent shall not be unreasonably
withheld. In the event that the Servicer fails to make delivery of the requested
Retained Mortgage File or document therein, or copies thereof, as required
under
this Section 2.02, the Servicer shall repurchase, in accordance with the related
Commitment Letter, the related Mortgage Loan within thirty (30) Business Days
after receipt of a request to do so by the Owner.
Section
2.03 Custodial
Agreement; Delivery of Documents.
The
Servicer shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 or 6.01 within one week of their
execution, provided, however, that the Servicer shall provide the Custodian
with
a certified true copy of any such document submitted for recordation within
ten
(10) days of its execution, and shall provide the original of any document
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within sixty days of its submission for recordation.
In
the
event the public recording office is delayed in returning any original document,
which the Servicer is required to deliver at any time to the Custodian in
accordance with the terms of this Agreement or which the Servicer is required
to
maintain in the Retained Mortgage File, the Servicer shall deliver to the
Custodian within 240 days of its submission for recordation, a copy of such
document and an Officer's Certificate, which shall (i) identify the recorded
document; (ii) state that the recorded document has not been delivered to the
Custodian due solely to a delay by the public recording office, (iii) state
the
amount of time generally required by the applicable recording office to record
and return a document submitted for recordation, and (iv) specify the date
the
applicable recorded document will be delivered to the Custodian. The Servicer
will be required to deliver the document to the Custodian by the date specified
in (iv) above. An extension of the date specified in (iv) above may be requested
from the Owner, which consent shall not be unreasonably withheld.
In
the
event that new, replacement, substitute or additional Stock Certificates are
issued with respect to existing Cooperative Shares, the Servicer immediately
shall deliver to the Custodian the new Stock Certificates, together with the
related Stock Powers in blank. Such new Stock Certificates shall be subject
to
the related Pledge Instruments and shall be subject to all of the terms,
covenants and conditions of this Agreement.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES REMEDIES AND BREACH
Section
3.01 Servicer
Representations and Warranties.
The
Servicer hereby represents and warrants to the Owner that, as of each Servicing
Date:
|
(a)
|
Due
Organization and Authority.
|
|
The
Servicer is a national banking association duly organized, validly
existing and in good standing under the laws of the United States
and has
all licenses necessary to carry on its business as now being conducted
and
is licensed, qualified and in good standing in each state where a
Mortgaged Property is located if the laws of such state require licensing
or qualification in order to conduct business of the type conducted
by the
Servicer, and in any event the Servicer is in compliance with the
laws of
any such state to the extent necessary to ensure the enforceability
of the
related Mortgage Loan and the servicing of such Mortgage Loan in
accordance with the terms of this Agreement; the Servicer has the
full
power and authority to execute and deliver this Agreement and to
perform
in accordance herewith; the execution, delivery and performance of
this
Agreement (including all instruments of transfer to be delivered
pursuant
to this Agreement) by the Servicer and the consummation of the
transactions contemplated hereby have been duly and validly authorized;
this Agreement evidences the valid, binding and enforceable obligation
of
the Servicer; and all requisite action has been taken by the Servicer
to
make this Agreement valid and binding upon the Servicer in accordance
with
its terms;
|
|
(b)
|
Ordinary
Course of Business.
|
|
The
consummation of the transactions contemplated by this Agreement are
in the
ordinary course of business of the Servicer, who is in the business
of
selling and servicing loans, and the transfer, assignment and conveyance
of the Mortgage Notes and the Mortgages by the Servicer pursuant
to this
Agreement are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable
jurisdiction;
|
|
(c)
|
No
Conflicts.
|
|
Neither
the execution and delivery of this Agreement, the transactions
contemplated hereby, nor the fulfillment of or compliance with the
terms
and conditions of this Agreement will conflict with or result in
a breach
of any of the terms, articles of incorporation or by-laws or any
legal
restriction or any agreement or instrument to which the Servicer
is now a
party or by which it is bound, or constitute a default or result
in the
violation of any law, rule, regulation, order, judgment or decree
to which
the Servicer or its property is
subject;
|
|
(d)
|
Ability
to Service.
|
|
The
Servicer is an approved seller/servicer of conventional residential
mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, with the facilities,
procedures, and experienced personnel necessary for the sound servicing
of
mortgage loans of the same type as the Mortgage Loans. The Servicer
is a
HUD approved mortgagee and is in good standing to sell mortgage loans
to
and service mortgage loans for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, and no
event has
occurred, including but not limited to a change in insurance coverage,
which would make the Servicer unable to comply with ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇
Mac eligibility requirements or which would require notification
to either
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
|
|
(e)
|
Reasonable
Servicing Fee.
|
|
The
Servicer acknowledges and agrees that the Servicing Fee represents
reasonable compensation for performing such services and that the
entire
Servicing Fee shall be treated by the Servicer, for accounting and
tax
purposes, as compensation for the servicing and administration of
the
Mortgage Loans pursuant to this
Agreement;
|
|
(f)
|
Ability
to Perform.
|
|
The
Servicer does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained
in this
Agreement. The Servicer is solvent;
|
|
(g)
|
No
Litigation Pending.
|
|
There
is no action, suit, proceeding or investigation pending or threatened
against the Servicer which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Servicer,
or
in any material impairment of the right or ability of the Servicer
to
carry on its business substantially as now conducted, or in any material
liability on the part of the Servicer, or which would draw into question
the validity of this Agreement or of any action taken or to be
contemplated herein, or which would be likely to impair materially
the
ability of the Servicer to perform under the terms of this
Agreement;
|
|
(h)
|
No
Consent Required.
|
|
No
consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance
by
the Servicer of or compliance by the Servicer with this Agreement
as
evidenced by the consummation of the transactions contemplated by
this
Agreement, or if required, such approval has been obtained prior
to the
Servicing Date;
|
|
(i)
|
No
Untrue Information.
|
|
Neither
this Agreement nor any statement, report or other document furnished
or to
be furnished pursuant to this Agreement or in connection with the
transactions contemplated hereby contains any untrue statement of
fact or
omits to state a fact necessary to make the statements contained
therein
not misleading;
|
|
(j)
|
No
Material Change.
|
|
There
has been no material adverse change in the business, operations,
financial
condition or assets of the Servicer since the date of the Servicer’s most
recent financial statements; and
|
(k)
MERS.
The
Servicer is a member of MERS in good standing.
Section
3.02 Repurchase
of Purchased Mortgage Loans.
With
respect to Purchased Mortgage Loans, the Servicer shall cooperate with the
Owner
in facilitating the repurchase of any Purchased Mortgage Loan or Loans by a
seller. Upon receipt by the Servicer of notice from the Owner of a breach by
a
seller or a representation or warranty contained in any agreement between the
Owner and seller, or a request by the Owner for a seller to repurchase any
Purchased Mortgage Loan or Loans, the Servicer shall, at the direction of the
Owner, use its best efforts to cure and correct any breach related to such
deficiencies of the related Purchased Mortgage Loan or Loans.
At
the
time of repurchase of the Purchased Mortgage Loan or Loans, the Owner or the
Custodian, as applicable, and the Servicer shall arrange for the reassignment
of
the repurchased Purchased Mortgage Loan or Loans to the seller according to
the
Owner’s instructions and, with respect to any Purchased Mortgage Loan that is a
MERS Mortgage Loan, in accordance with Section 2.01, and the delivery of any
documents held by the Servicer with respect to the repurchased Purchased
Mortgage Loan or Loans. The Servicer will facilitate the remittance of
repurchase funds between the seller and the Owner, but shall not be required
to
advance funds for such repurchase and shall be reimbursed for any expenses
incurred due to such repurchase.
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
4.01 Servicer
to Act as Servicer.
The
Servicer, as an independent contractor, shall service and administer the
Mortgage Loans and shall have full power and authority, acting alone or through
the utilization of a Subservicer or a Subcontractor, to do any and all things
in
connection with such servicing and administration which the Servicer may deem
necessary or desirable, consistent with the terms of this Agreement and with
Accepted Servicing Practices.
The Servicer shall be responsible for any and all acts of a Subservicer or
a
Subcontractor, and the Servicer’s utilization of a Subservicer or a
Subcontractor shall in no way relieve the liability of the Servicer under this
Agreement.
Consistent
with the terms of this Agreement, the Servicer may waive, modify or vary any
term of any Mortgage Loan or consent to the postponement of strict compliance
with any such term or in any manner grant indulgence to any Mortgagor if in
the
Servicer's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Owner, provided,
however, the Servicer shall not make any future advances with respect to a
Mortgage Loan. Unless the Mortgagor is in default with respect to the Mortgage
Loan or such default is, in the judgment of the Servicer, imminent, the Servicer
shall not permit any modification with respect to any Mortgage Loan that would
change the Mortgage Interest Rate, defer or forgive the payment of principal
(except for actual payments of principal) or change the final maturity date
on
such Mortgage Loan. The Servicer shall request written consent from the Owner
to
permit such a modification and the Owner shall provide written consent or notify
the Servicer of its objection to such modification within three (3) Business
Days of its receipt of the Servicer's request. In the event of any such
modification which permits the deferral of interest or principal payments on
any
Mortgage Loan, the Servicer shall, on the Business Day immediately preceding
the
Remittance Date in any month in which any such principal or interest payment
has
been deferred, deposit in the Custodial Account from its own funds, in
accordance with Section 5.03, the difference between (a) such month's principal
and one month's interest at the Mortgage Loan Remittance Rate on the unpaid
principal balance of such Mortgage Loan and (b) the amount paid by the
Mortgagor. The Servicer shall be entitled to reimbursement for such advances
to
the same extent as for all other advances made pursuant to Section 5.03. Without
limiting the generality of the foregoing, the Servicer shall continue, and
is
hereby authorized and empowered, to execute and deliver on behalf of itself
and
the Owner, all instruments of satisfaction or cancellation, or of partial or
full release, discharge and all other comparable instruments, with respect
to
the Mortgage Loans and with respect to the Mortgaged Properties. If reasonably
required by the Servicer, the Owner shall furnish the Servicer with any powers
of attorney and other documents necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties under this
Agreement.
In
servicing and administering the Mortgage Loans, the Servicer shall employ
procedures (including collection procedures) and exercise the same care that
it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
and the Owner's reliance on the Servicer.
The
Servicer shall cause to be maintained for each Cooperative Loan a copy of the
financing statements and shall file and such financing statements and
continuation statements as necessary, in accordance with the Uniform Commercial
Code applicable in the jurisdiction in which the related Cooperative Apartment
is located, to perfect and protect the security interest and lien of the
Owner.
The
Servicer is authorized and empowered by the Owner, pursuant to the instructions
of the Owner, in its own name, when the Servicer believes it appropriate in
its
reasonable 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 Owner, 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 Owner
and its successors and assigns.
Section
4.02 Liquidation
of Mortgage Loans.
In
the
event that any payment due under any Mortgage Loan and not postponed pursuant
to
Section 4.01 is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period,
the
Servicer shall take such action as (1) the Servicer would take under similar
circumstances with respect to a similar mortgage loan held for its own account
for investment, (2) shall be consistent with Accepted Servicing Practices,
(3)
the Servicer shall determine prudently to be in the best interest of Owner,
and
(4) is consistent with any related PMI Policy. In the event that any payment
due
under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains
delinquent for a period of ninety (90) days or any other default continues
for a
period of ninety (90) days beyond the expiration of any grace or cure period,
the Servicer shall commence foreclosure proceedings, the Servicer shall notify
the Owner in writing of the Servicer's intention to do so, and the Servicer
shall not commence foreclosure proceedings if the Owner objects to such action
within three (3) Business Days after receiving such notice. In the event the
Owner objects to such foreclosure action, the Servicer shall not be required
to
make Monthly Advances with respect to such Mortgage Loan, pursuant to Section
5.03, and the Servicer's obligation to make such Monthly Advances shall
terminate on the 90th day referred to above. In such connection, the Servicer
shall from its own funds make all necessary and proper Servicing Advances,
provided, however, that the Servicer shall not be required to expend its own
funds in connection with any foreclosure or towards the restoration or
preservation of any Mortgaged Property, unless it shall determine (a) that
such
preservation, restoration and/or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan to Owner after reimbursement to itself for
such
expenses and (b) that such expenses will be recoverable by it either through
Liquidation Proceeds (respecting which it shall have priority for purposes
of
withdrawals from the Custodial Account pursuant to Section 4.05) or through
Insurance Proceeds (respecting which it shall have similar
priority).
Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure
or
acceptance of a deed in lieu of foreclosure, in the event the Servicer has
reasonable cause to believe that a Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, or if the Owner otherwise requests
an
environmental inspection or review of such Mortgaged Property, such an
inspection or review is to be conducted by a qualified inspector. The cost
for
such inspection or review shall be borne by the Owner in the event of
liquidation, and will be advanced by the Servicer. Upon completion of the
inspection or review, the Servicer shall promptly provide the Owner with a
written report of the environmental inspection.
After
reviewing the environmental inspection report, the Owner shall determine how
the
Servicer shall proceed with respect to the Mortgaged Property. In the event
(a)
the environmental inspection report indicates that the Mortgaged Property is
contaminated by hazardous or toxic substances or wastes and (b) the Owner
directs the Servicer to proceed with foreclosure or acceptance of a deed in
lieu
of foreclosure, the Servicer shall be reimbursed for all reasonable costs
associated with such foreclosure or acceptance of a deed in lieu of foreclosure
and any related environmental clean up costs, as applicable, from the related
Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully
reimburse the Servicer, the Servicer shall be entitled to be reimbursed from
amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event
the Owner directs the Servicer not to proceed with foreclosure or acceptance
of
a deed in lieu of foreclosure, the Servicer shall be reimbursed for all
Servicing Advances made with respect to the related Mortgaged Property from
the
Custodial Account pursuant to Section 4.05 hereof.
Section
4.03 Collection
of Mortgage Loan Payments.
Continuously
from the date hereof until the principal and interest on all Mortgage Loans
are
paid in full, the Servicer shall proceed diligently to collect all payments
due
under each of the Mortgage Loans when the same shall become due and payable
and
shall take special care in ascertaining and estimating Escrow Payments and
all
other charges that will become due and payable with respect to the Mortgage
Loan
and the Mortgaged Property, to the end that the installments payable by the
Mortgagors will be sufficient to pay such charges as and when they become due
and payable.
Section
4.04 Establishment
of and Deposits to Custodial Account.
The
Servicer shall segregate and hold all funds collected and received in
connection with
a
Mortgage Loan separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Custodial Accounts, in the form
of
time deposit or demand accounts, titled "▇▇▇▇▇ Fargo Bank, N.A., in trust for
the Owner and/or subsequent purchasers of Mortgage Loans, - P & I." The
Custodial Account shall be established with a Qualified Depository. The
existence of the Custodial Account shall be evidenced by an account
certification and shall be provided on the respective Servicing Date. The
Custodial Account shall at all times be insured to the fullest extent allowed
by
applicable law. Funds deposited in the Custodial Account may be drawn on by
the
Servicer in accordance with Section 4.05.
The
Servicer shall deposit in the Custodial Account within one (1) Business Day
of
Servicer’s receipt, and retain therein, the following collections received by
the Servicer and payments made by the Servicer after the Cut-off Date, other
than payments of principal and interest due on or before the Cut-off Date,
or
received by the Servicer prior to the Cut-off Date but allocable to a period
subsequent thereto:
|
(i)
|
all
payments on account of principal on the Mortgage Loans, including
all
Principal Prepayments;
|
|
(ii)
|
all
payments on account of interest on the Mortgage Loans adjusted to
the
Mortgage Loan Remittance Rate;
|
|
(iii)
|
all
Liquidation Proceeds;
|
|
(iv)
|
all
Insurance Proceeds including amounts required to be deposited pursuant
to
Section 4.10 (other than proceeds to be held in the Escrow Account
and
applied to the restoration or repair of the Mortgaged Property or
released
to the Mortgagor in accordance with Section 4.14), Section 4.11 and
Section 4.15;
|
|
(v)
|
all
Condemnation Proceeds which are not applied to the restoration or
repair
of the Mortgaged Property or released to the Mortgagor in accordance
with
Section 4.14;
|
|
(vi)
|
any
amount required to be deposited in the Custodial Account pursuant
to
Section 4.01, 5.03, 6.01 or 6.02;
|
|
(vii)
|
any
amounts payable in connection with the repurchase of any Mortgage
Loan
pursuant to Section 3.02 hereof and Section 6 of the Master Mortgage
Loan
Purchase Agreement;
|
|
(viii)
|
with
respect to each Principal Prepayment, the Prepayment Interest Shortfall
(to be paid by the Servicer out of its funds); provided, however,
that in
no event shall the aggregate of deposits made by the Servicer pursuant
to
this sub clause (viii) exceed the aggregate amount of the Servicer’s
Servicing Fee for the related Due
Period;
|
|
(ix)
|
any
amounts required to be deposited by the Servicer pursuant to Section
4.11
in connection with the deductible clause in any blanket hazard insurance
policy;
|
| (x) |
any
amounts received with respect to or related to any REO Property and
all
REO Disposition Proceeds pursuant to Section 4.16;
and
|
|
(xi)
|
an
amount from the Subsidy Account that when added to the Mortgagor’s payment
will equal the full monthly amount due under the related Mortgage
Note.
|
The
foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Servicer into the Custodial Account. Any interest paid on funds deposited in
the
Custodial Account by the depository institution shall accrue to the benefit
of
the Servicer and the Servicer shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.05.
Section
4.05 Permitted
Withdrawals From Custodial Account.
The
Servicer shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
(i)
to
make
payments to the Owner in the amounts and in the manner provided for in Section
5.01;
(ii)
to
reimburse itself for Monthly Advances of the Servicer's funds made pursuant
to
Section 5.03, the Servicer's right to reimburse itself pursuant to this
subclause (ii) being limited to amounts received on the related Mortgage Loan
which represent late Monthly Payments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds and such other amounts as may be collected by
the
Servicer respecting which any such advance was made, it being understood that,
in the case of any such reimbursement, the Servicer's right thereto shall be
prior to the rights of Owner; except that, when the Seller is required to
repurchase an Owned Mortgage Loan pursuant to the Master Mortgage Loan Purchase
Agreement, the Servicer’s right to such reimbursement shall be subsequent to the
payment of the Owner of the Repurchase Price and all other amounts required
to
be paid to the Purchaser with respect to such Owned Mortgage Loan;
(iii)
to
reimburse itself for unreimbursed Servicing Advances, and for any unpaid
Servicing Fees, the Servicer's right to reimburse itself pursuant to this
subclause (iii) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and such other
amounts as may be collected by the Servicer from the Mortgagor or otherwise
relating to the Mortgage Loan, it being understood that, in the case of any
such
reimbursement, the Servicer's right thereto shall be prior to the rights of
Owner; except that, when the Seller is required to repurchase an Owned Mortgage
Loan pursuant to the Master Mortgage Loan Purchase Agreement, the Servicer’s
right to such reimbursement shall be subsequent to the payment of the Owner
of
the Repurchase Price and all other amounts required to be paid to the Purchaser
with respect to such Owned Mortgage Loan;
(iv) to
pay
itself interest on funds deposited in the Custodial Account;
(v)
to
reimburse itself for expenses incurred and reimbursable to it pursuant to
Section 8.01;
(vi)
to
pay
any amount required to be paid pursuant to Section 4.16 related to any REO
Property, it being understood that, in the case of any such expenditure or
withdrawal related to a particular REO Property, the amount of such expenditure
or withdrawal from the Custodial Account shall be limited to amounts on deposit
in the Custodial Account with respect to the related REO Property;
(vii)
to
reimburse itself for any Servicing Advances or REO expenses after liquidation
of
the Mortgaged Property not otherwise reimbursed above;
(viii) to
remove
funds inadvertently placed in the Custodial Account by the Servicer;
and
(ix)
to
clear
and terminate the Custodial Account upon the termination of this
Agreement.
In
the
event that the Custodial Account is interest bearing, on each Remittance Date,
the Servicer shall withdraw all funds from the Custodial Account except for
those amounts which, pursuant to Section 5.01, the Servicer is not obligated
to
remit on such Remittance Date. The Servicer may use such withdrawn funds only
for the purposes described in this Section 4.05.
Section
4.06 Establishment
of and Deposits to Escrow Account.
The
Servicer shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan constituting Escrow Payments separate and apart from any of its
own funds and general assets and shall establish and maintain one or more Escrow
Accounts, in the form of time deposit or demand accounts, titled, "▇▇▇▇▇ Fargo
Bank, N.A., in trust for the Owner and/or subsequent purchasers of residential
Mortgage Loans, and various Mortgagors - T & I." The Escrow Accounts shall
be established with a Qualified Depository, in a manner which shall provide
maximum available insurance thereunder. The existence of an Escrow Account
shall
be evidenced by an account certification and shall be provided on the Servicing
Date. Funds deposited in the Escrow Account may be drawn on by the Servicer
in
accordance with Section 4.07.
The
Servicer shall deposit in the Escrow Account or Accounts within one (1) Business
Day of Servicer’s receipt, and retain therein:
|
(i)
|
all
Escrow Payments collected on account of the Mortgage Loans, for the
purpose of effecting timely payment of any such items as required
under
the terms of this Agreement;
|
|
(ii)
|
all
amounts representing Insurance Proceeds or Condemnation Proceeds
which are
to be applied to the restoration or repair of any Mortgaged Property;
|
| (iii) |
all
payments on account of Buydown Funds; and
|
| (iv) |
all
Servicing Advances for Mortgagors whose Escrow Payment are insufficient
to
cover escrow disbursements.
|
The
Servicer shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in Section 4.07.
The
Servicer shall be entitled to retain any interest paid on funds deposited in
the
Escrow Account by the depository institution, other than interest on escrowed
funds required by law to be paid to the Mortgagor. To the extent required by
law, the Servicer shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes.
Section
4.07 Permitted
Withdrawals From Escrow Account.
Withdrawals
from the Escrow Account or Accounts may be made by the Servicer
only:
|
(i)
|
to
effect timely payments of ground rents, taxes, assessments, water
rates,
mortgage insurance premiums, condominium charges, fire and hazard
insurance premiums or other items constituting Escrow Payments for
the
related Mortgage;
|
|
(ii)
|
to
reimburse the Servicer for any Servicing Advances made by the Servicer
pursuant to Section 4.08 with respect to a related Mortgage Loan,
but only
from amounts received on the related Mortgage Loan which represent
late
collections of Escrow Payments
thereunder;
|
|
(iii)
|
to
refund to any Mortgagor any funds found to be in excess of the amounts
required under the terms of the related Mortgage
Loan;
|
|
(iv)
|
for
transfer to the Custodial Account and application to reduce the principal
balance of the Mortgage Loan in accordance with the terms of the
related
Mortgage and Mortgage Note;
|
|
(v)
|
for
application to the restoration or repair of the Mortgaged Property
in
accordance with the procedures outlined in Section
4.14;
|
|
(vi)
|
to
pay to the Servicer, or any Mortgagor to the extent required by law,
any
interest paid on the funds deposited in the Escrow
Account;
|
|
(vii)
|
to
remove funds inadvertently placed in the Escrow Account by the Servicer;
|
| (viii) |
to
remit to Owner payments on account of Buydown Funds as applicable;
and
|
|
(ix)
|
to
clear and terminate the Escrow Account on the termination of this
Agreement.
|
Section
4.08 Payment
of Taxes, Insurance and Other Charges.
With
respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates, sewer
rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of
such
charges (including renewal premiums) and shall effect payment thereof prior
to
the applicable penalty or termination date, employing for such purpose deposits
of the Mortgagor in the Escrow Account (excluding the payment of LPMI Policy
premiums, which are to be paid from the Servicer’s own funds without
reimbursement) which shall have been estimated and accumulated by the Servicer
in amounts sufficient for such purposes, as allowed under the terms of the
Mortgage. The Servicer assumes full responsibility for the timely payment of
all
such bills and shall effect timely payment of all such charges irrespective
of
each Mortgagor's faithful performance in the payment of same, irrespective
of
whether the Mortgage Loan provides for Escrow Payments or the making of the
Escrow Payments, and the Servicer shall make advances from its own funds to
effect such payments and such amounts shall not be added to the
unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of the
Mortgage Loan so permit. The obligation of the Servicer to make such Servicing
Advances is mandatory, notwithstanding any other provision of this Agreement,
and, with respect
to any Mortgage Loan or REO Property, shall continue through the last Monthly
Payment due prior to the payment in full of the Mortgage Loan, or through the
last Remittance Date prior to the Remittance Date for the distribution of all
Liquidation Proceeds and other payments or recoveries (including REO Disposition
Proceeds, Insurance Proceeds and Condemnation Proceeds) with respect to the
Mortgage Loan; provided that, notwithstanding anything herein to the contrary,
no Servicing Advance shall be required to be made hereunder by the Servicer
if
such Servicing Advance would, if made, constitute a nonrecoverable Servicing
Advance. The determination by the Servicer that it has made a nonrecoverable
Servicing Advance or that any proposed Servicing Advance, if made, would
constitute a nonrecoverable Servicing Advance, shall be evidenced by an
Officers’ Certificate delivered to the Purchaser.
Section
4.09 Protection
of Accounts.
The
Servicer may transfer the Custodial Account, Subsidy Account or the Escrow
Account to a different Qualified Depository from time to time, provided that
the
Servicer shall give notice to the Owner of such transfer.
Section
4.10 Maintenance
of Hazard Insurance.
The
Servicer shall cause to be maintained for each Mortgage Loan hazard insurance
such that all buildings upon the Mortgaged Property are insured by an insurer
acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area where
the
Mortgaged Property is located, in an amount which is at least equal to the
lesser of (i) 100% of the insurable value, on a replacement cost basis, of
the
improvements on the related Mortgaged Property, or (ii) the greater
of (x) the outstanding principal balance of the Mortgage Loan or (y) an amount
such that the proceeds of such insurance shall be sufficient to prevent the
application to the Mortgagor or loss payee of any coinsurance clause under
the
policy.
In the
event a hazard insurance policy shall be in danger of being terminated, or
in
the event the insurer shall cease to be acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac,
the Servicer shall notify the Owner and the related Mortgagor, and shall use
its
best efforts, as permitted by applicable law, to obtain from another qualified
insurer a replacement hazard insurance policy substantially and materially
similar in all respects to the original policy. In no event, however, shall
a
Mortgage Loan be without a hazard insurance policy acceptable to ▇▇▇▇▇▇ Mae
or
▇▇▇▇▇▇▇ Mac at any time, subject only to Section 4.11 hereof.
If
the
related Mortgaged Property is located in an area identified by the Flood
Emergency Management Agency as having special flood hazards (and such flood
insurance has been made available) the Servicer shall cause to be maintained
a
flood insurance policy meeting the requirements of the current guidelines of
the
Federal Insurance Administration is in effect with a generally acceptable
insurance carrier acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac in an amount
representing coverage equal to the lesser of (i) the minimum amount required,
under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. If at any time during the term of the
Mortgage Loan, the Servicer determines in accordance with applicable law that
a
Mortgaged Property is located in a special flood hazard area and is not covered
by flood insurance or is covered in an amount less than the amount required
by
the flood Disaster Protection Act of 1973, as amended, the Servicer shall notify
the related Mortgagor that the Mortgagor must obtain such flood insurance
coverage, and if said Mortgagor fails to obtain the require flood insurance
coverage within forty-five (45) days after such notification, the Servicer
shall
immediately force place the required flood insurance on the Mortgagor’s
behalf.
If
a Mortgage is secured by a unit in a condominium project, the Servicer shall
verify that the coverage required of the owner's association, including hazard,
flood, liability, and fidelity coverage, is being maintained in accordance
with
then current ▇▇▇▇▇▇ Mae requirements, and secure from the owner's association
its agreement to notify the Company promptly of any change in the insurance
coverage or of any condemnation or casualty loss that may have a material effect
on the value of the Mortgaged Property as security.
In
the
event that the Owner or the Servicer shall determine that the Mortgaged Property
should be insured against loss or damage by hazards and risks not covered by
the
insurance required to be maintained by the Mortgagor pursuant to the terms
of
the Mortgage, the Servicer shall communicate and consult with the Mortgagor
with
respect to the need for such insurance and bring to the Mortgagor's attention
the required amount of coverage for the Mortgaged Property and if the Mortgagor
does not obtain such coverage, the Servicer shall immediately force place the
required coverage on the Mortgagor’s behalf.
All
policies required hereunder shall name the Servicer as loss payee and shall
be
endorsed with standard or union mortgagee clauses, without contribution, which
shall provide for at least thirty (30) days prior written notice of any
cancellation, reduction in amount or material change in coverage.
The
Servicer shall not interfere with the Mortgagor's freedom of choice in selecting
either his insurance carrier or agent, provided, however, that the Servicer
shall not accept any such insurance policies from insurance companies unless
such companies are acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac and are licensed
to
do business in the jurisdiction in which the Mortgaged Property is located.
The
Servicer shall determine that such policies provide sufficient risk coverage
and
amounts, that they insure the property owner, and that they properly describe
the property address.
Pursuant
to Section 4.04, any amounts collected by the Servicer under any such policies
(other than amounts to be deposited in the Escrow Account and applied to the
restoration or repair of the related Mortgaged Property, or property acquired
in
liquidation of the Mortgage Loan, or to be released to the Mortgagor, in
accordance with the Servicer's normal servicing procedures as specified in
Section 4.14) shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.05.
Section
4.11 Maintenance
of Mortgage Impairment Insurance.
In
the
event that the Servicer shall obtain and maintain a blanket policy insuring
against losses arising from fire and hazards covered under extended coverage
on
all of the Mortgage Loans, then, to the extent such policy provides coverage
in
an amount equal to the amount required pursuant to Section 4.10 and otherwise
complies with all other requirements of Section 4.10, it shall conclusively
be
deemed to have satisfied its obligations as set forth in Section 4.10. The
Servicer shall prepare and make any claims on the blanket policy as deemed
necessary by the Servicer in accordance with Accepted Servicing Practices.
Any
amounts collected by the Servicer under any such policy relating to a Mortgage
Loan shall be deposited in the Custodial Account subject to withdrawal pursuant
to Section 4.05. Such policy may contain a deductible clause, in which case,
in
the event that there shall not have been maintained on the related Mortgaged
Property a policy complying with Section 4.10, and there shall have been a
loss
which would have been covered by such policy, the Servicer shall deposit in
the
Custodial Account at the time of such loss the amount not otherwise payable
under the blanket policy because of such deductible clause, such amount to
be
deposited from the Servicer's funds, without reimbursement therefor. Upon
request of the Owner, the Servicer shall cause to be delivered to such Owner
a
certificate of insurance and a statement from the insurer thereunder that such
policy shall in no event be terminated or materially modified without 30 days'
prior written notice to such Owner.
Section
4.12 Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
The
Servicer shall maintain with responsible companies that are acceptable to ▇▇▇▇▇▇
Mae and ▇▇▇▇▇▇▇ Mac, at its own expense, a blanket Fidelity Bond and an Errors
and Omissions Insurance Policy, with broad coverage on all officers, employees
or other Persons acting in any capacity requiring such Persons to handle funds,
money, documents or papers relating to the Mortgage Loans ("Servicer
Employees"). Any such Fidelity Bond and Errors and Omissions Insurance Policy
shall be in the form of the Mortgage Banker's Blanket Bond and shall protect
and
insure the Servicer against losses, including forgery, theft, embezzlement,
fraud, errors and omissions and negligent acts of such Servicer Employees.
Such
Fidelity Bond and Errors and Omissions Insurance Policy also shall protect
and
insure the Servicer against losses in connection with the release or
satisfaction of a Mortgage Loan without having obtained payment in full of
the
indebtedness secured thereby. No provision of this Section 4.12 requiring such
Fidelity Bond and Errors and Omissions Insurance Policy shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be at least equal to the amounts acceptable
to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. Upon the request of any Owner, the Servicer shall
cause to be delivered to such Owner a certificate of insurance for such Fidelity
Bond and Errors and Omissions Insurance Policy and a statement from the surety
and the insurer that such Fidelity Bond and Errors and Omissions Insurance
Policy shall in no event be terminated or materially modified without thirty
(30) days' prior written notice to the Owner.
Section
4.13 Inspections.
If
any
Mortgage Loan is more than forty-five (45) days delinquent, the Servicer shall
inspect the Mortgaged Property and shall conduct subsequent inspections in
accordance with Accepted Servicing Practices or as may be required by the
primary mortgage guaranty insurer. The Servicer shall keep a record of each
such
inspection and, upon request, shall provide the Owner with such
information.
Section
4.14 Restoration
of Mortgaged Property.
The
Servicer need not obtain the approval of the Owner prior to releasing any
Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to
the restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. For claims greater than $15,000,
at a minimum the Servicer shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation
Proceeds:
(i)
the
Servicer shall receive satisfactory independent verification of completion
of
repairs and issuance of any required approvals with respect
thereto;
(ii)
the
Servicer shall take all steps necessary to preserve the priority of the lien
of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics' and materialmen's liens;
(iii)
the
Servicer shall verify that the Mortgage Loan is not in default; and
(iv)
pending
repairs or restoration, the Servicer shall place the Insurance Proceeds or
Condemnation Proceeds in the Escrow Account.
If
the
Owner is named as an additional loss payee, the Servicer is hereby empowered
to
endorse any loss draft issued in respect of such a claim in the name of the
Owner.
Section
4.15 Maintenance
of PMI Policy; Claims.
Except
for the Pledged Asset Mortgage Loans, for each Mortgage Loan with an LTV in
excess of 80% at the time of origination, the Servicer shall, without any cost
to the Owner maintain or cause the Mortgagor to maintain in full force and
effect a PMI Policy insuring a portion of the unpaid principal balance of the
Mortgage Loan as to payment defaults. If the Mortgage Loan is insured by a
PMI
Policy for which the Mortgagor pays all premiums, the coverage will remain
in
place until (i) the LTV decreases to 78% or (ii) the PMI Policy is otherwise
terminated pursuant to the Homeowners Protection Act of 1998, 12 USC §4901, et
seq. In the event that such PMI Policy shall be terminated other than as
required by law, the Servicer shall obtain from another Qualified Insurer a
comparable replacement policy, with a total coverage equal to the remaining
coverage of such terminated PMI Policy. If the insurer shall cease to be a
Qualified Insurer, the Servicer shall, in accordance with Accepted Servicing
Practices, determine whether recoveries under the PMI Policy are jeopardized
for
reasons related to the financial condition of such insurer, it being understood
that the Servicer shall in no event have any responsibility or liability for
any
failure to recover under the PMI Policy for such reason. If the Servicer
determines that recoveries are so jeopardized, it shall notify the Owner and
the
Mortgagor, if required, and obtain from another Qualified Insurer a replacement
insurance policy. The Servicer shall not take any action which would result
in
noncoverage under any applicable PMI Policy of any loss which, but for the
actions of the Servicer would have been covered thereunder. In connection with
any assumption or substitution agreement entered into or to be entered into
pursuant to Section 6.01, the Servicer shall promptly notify the insurer under
the related PMI Policy, if any, of such assumption or substitution of liability
in accordance with the terms of such PMI Policy and shall take all actions
which
may be required by such insurer as a condition to the continuation of coverage
under such PMI Policy. If such PMI Policy is terminated as a result of such
assumption or substitution of liability, the Servicer shall obtain a replacement
PMI Policy as provided above.
In
the
event that the Servicer’s rights hereunder are terminated pursuant to Section
10.01 the Servicer shall pay any premiums on each LPMI Policy (which may include
a one-time lump sum to the related LPMI provider to continue the related LPMI
Policy) until the applicable Mortgage Loans have been paid in full or otherwise
liquidated or another entity acceptable to the insurers of such LPMI Policy
undertakes to pay such LPMI premiums.
In
connection with its activities as servicer, the Servicer agrees to prepare
and
present, on behalf of itself and the Owner, claims to the insurer under any
PMI
Policy in a timely fashion in accordance with the terms of such PMI Policy
and,
in this regard, to take such action as shall be necessary to permit recovery
under any PMI Policy respecting a defaulted Mortgage Loan. Pursuant to Section
4.04, any amounts collected by the Servicer under any PMI Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
Any
premiums payable on LPMI Policies will be paid from the Servicer’s own funds
without reimbursement.
Section
4.16 Title,
Management and Disposition of REO Property.
In
the
event that title to any Mortgaged Property is acquired in foreclosure or by
deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in the
name of the Owner or the Owner's designee, or in the event the Owner is not
authorized or permitted to hold title to real property in the state where the
REO Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an Opinion of Counsel obtained by the Servicer from any attorney
duly licensed to practice law in the state where the REO Property is located.
The Person or Persons holding such title other than the Owner shall acknowledge
in writing that such title is being held as nominee for the Owner.
The
Servicer shall manage, conserve, protect and operate each REO Property for
the
Owner solely for the purpose of its prompt disposition and sale. The Servicer,
either itself or through an agent selected by the Servicer, shall manage,
conserve, protect and operate the REO Property in the same manner that it
manages, conserves, protects and operates other foreclosed property for its
own
account, and in the same manner that similar property in the same locality
as
the REO Property is managed. The Servicer shall attempt to sell the same (and
may temporarily rent the same for a period not greater than one year, except
as
otherwise provided below) on such terms and conditions as the Servicer deems
to
be in the best interest of the Owner.
The
Servicer shall use its best efforts to dispose of the REO Property as soon
as
possible and shall sell such REO Property in any event within one year after
title has been taken to such REO Property, unless (i) a REMIC election has
not
been made with respect to the arrangement under which the Mortgage Loans and
the
REO Property are held, and (ii) the Servicer determines that a longer period
is
necessary for the orderly liquidation of such REO Property. If a period longer
than one year is permitted under the foregoing sentence and is necessary to
sell
any REO Property, (i) the Servicer shall report monthly to the Owner as to
the
progress being made in selling such REO Property and (ii) if a purchase money
mortgage is taken in connection with such sale, such purchase money mortgage
shall name the Servicer as mortgagee, and such purchase money mortgage shall
not
be held pursuant to this Agreement.
The
Servicer shall also maintain on each REO Property fire and hazard insurance
with
extended coverage in amount which is at least equal to the maximum insurable
value of the improvements which are a part of such property, liability insurance
and, to the extent required and available under the Flood Disaster Protection
Act of 1973, as amended, flood insurance in the amount required
above.
The
disposition of REO Property shall be carried out by the Servicer at such price,
and upon such terms and conditions, as the Servicer deems to be in the best
interests of the Owner. The proceeds of sale of the REO Property shall be
promptly deposited in the Custodial Account. As soon as practical thereafter
the
expenses of such sale shall be paid and the Servicer shall reimburse itself
for
any related unreimbursed Servicing Advances, unpaid Servicing Fees and
unreimbursed advances made pursuant to Section 5.03. On the Remittance Date
immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Owner.
The
Servicer shall withdraw from the Custodial Account funds necessary for the
proper operation management and maintenance of the REO Property, including
the
cost of maintaining any hazard insurance pursuant to Section 4.10 and the fees
of any managing agent of the Servicer, or the Servicer itself. The Servicer
shall make monthly distributions on each Remittance Date to the Owner of the
net
cash flow from the REO Property (which shall equal the revenues from such REO
Property net of the expenses described in this Section 4.16 and of any reserves
reasonably required from time to time to be maintained to satisfy anticipated
liabilities for such expenses).
Section
4.17 Real
Estate Owned Reports.
Together
with the statement furnished pursuant to Section 5.02, the Servicer shall
furnish to the Owner on or before the Remittance Date each month a statement
with respect to any REO Property covering the operation of such REO Property
for
the previous month and the Servicer's efforts in connection with the sale of
such REO Property and any rental of such REO Property incidental to the sale
thereof for the previous month. That statement shall be accompanied by such
other information as the Owner shall reasonably request.
Section
4.18 Liquidation
Reports.
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by the
Owner pursuant to a deed in lieu of foreclosure, the Servicer shall submit
to
the Owner a liquidation report with respect to such Mortgaged
Property.
Section
4.19 Reports
of Foreclosures and Abandonments of Mortgaged Property.
Following
the foreclosure sale or abandonment of any Mortgaged Property, the Servicer
shall report such foreclosure or abandonment as required pursuant to Section
6050J of the Code. The Servicer shall file information reports with respect
to
the receipt of mortgage interest received in a trade or business and information
returns relating to cancellation of indebtedness income with respect to any
Mortgaged Property as required by the Code. Such reports shall be in form and
substance sufficient to meet the reporting requirements imposed by the
Code.
Section
4.20 Notification
of Adjustments.
With
respect to each adjustable rate Mortgage Loan, the Servicer shall adjust the
Mortgage Interest Rate on the related Adjustment Date in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note.
The
Servicer shall execute and deliver any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate adjustments. Upon the discovery by the Servicer
or
the receipt of notice from the Owner that the Servicer has failed to adjust
a
Mortgage Interest Rate in accordance with the terms of the related Mortgage
Note, the Servicer shall immediately deposit in the Custodial Account from
its
own funds the amount of any interest loss or deferral caused the Owner
thereby.
Section
4.21 Confidentiality/Protection
of Customer Information.
The
Servicer shall keep confidential and shall not divulge to any party, without
the
Owner's prior written consent, the price paid by the Owner for the Mortgage
Loans, except to the extent that it is reasonable and necessary for the Servicer
to do so in working with legal counsel, auditors, taxing authorities or other
governmental agencies. Each party agrees that it shall comply with all
applicable laws and regulations regarding the privacy or security of Customer
Information shall maintain appropriate administrative, technical and physical
safeguards to protect the security, confidentiality and integrity of Customer
Information, including maintaining security measures designed to meet the
objectives of the Interagency Guidelines Establishing Standards for Safeguarding
Customer Information, 66 Fed. Reg. 8616 (the “Interagency Guidelines”). For
purposes of this Section, the term “Customer Information” shall have the meaning
assigned to it in the Interagency Guidelines.
Section
4.22 Credit
Reporting.
For
Each
Mortgage Loan, the Servicer shall furnish on a monthly basis complete
information on the related borrower credit files to Equifax, Experian and Trans
Union Credit Information Servicer, in accordance with the Fair Credit Reporting
Act and its implementing regulations.
Section
4.23 Application
of Buydown Funds.
With
respect to each Buydown Mortgage Loan, the Servicer shall have deposited into
the Escrow Account, no later than the last day of the month, Buydown Funds
in an
amount equal to the aggregate undiscounted amount of payments that, when added
to the amount the Mortgagor on such Mortgage Loan is obligated to pay on all
Due
Dates in accordance with the terms of the Buydown Agreement, is equal to the
full scheduled Monthly Payments which are required to be paid by the Mortgagor
under the terms of the related Mortgage Note (without regard to the related
Buydown Agreement as if the Mortgage Loan were not subject to the terms of
the
Buydown Agreement). With respect to each Buydown Mortgage Loan, the Servicer
will distribute to the Owner on each Remittance Date an amount of Buydown Funds
equal to the amount that, when added to the amount required to be paid on such
date by the related Mortgagor, pursuant to and in accordance with the related
Buydown Agreement, equals the full Monthly Payment that would otherwise be
required to be paid on such Mortgage Loan by the related Mortgagor under the
terms of the related Mortgage Note (as if the Mortgage Loan were not a Buydown
Mortgage Loan and without regard to the related Buydown Agreement).
If
the
Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan during
the
Buydown Period and the Mortgaged Property securing such Buydown Mortgage Loan
is
sold in the liquidation thereof (either by the Servicer or the insurer under
any
related Primary Insurance Policy) the Servicer shall, on the Remittance Date
following the date upon which Liquidation Proceeds or REO Disposition proceeds
are received with respect to any such Buydown Mortgage Loan, distribute to
the
Owner all remaining Buydown Funds for such Mortgage Loan then remaining in
the
Escrow Account. Pursuant to the terms of each Buydown Agreement, any amounts
distributed to the Owner in accordance with the preceding sentence will be
applied to reduce the outstanding principal balance of the related Buydown
Mortgage Loan. If a Mortgagor on a Buydown Mortgage Loan prepays such Mortgage
Loan in its entirety during the related Buydown Period, the Servicer shall
be
required to withdraw from the Escrow Account any Buydown Funds remaining in
the
Escrow Account with respect to such Buydown Mortgage Loan in accordance with
the
related Buydown Agreement. If a principal prepayment by a Mortgagor on a Buydown
Mortgage Loan during the related Buydown Period, together with any Buydown
Funds
then remaining in the Escrow Account related to such Buydown Mortgage Loan,
would result in a principal prepayment of the entire unpaid principal balance
of
the Buydown Mortgage Loan, the Servicer shall distribute to the Owner on the
Remittance Date occurring in the month immediately succeeding the month in
which
such Principal Prepayment is received, all Buydown Funds related to such
Mortgage Loan so remaining in the Escrow Account, together with any amounts
required to be deposited into the Custodial Account.
Section
4.24 Establishment
of and Deposits to Subsidy Account.
The
Servicer shall segregate and hold all Subsidy Funds collected and received
pursuant to the Subsidy Loans separate and apart from any of its own funds
and
general assets and shall establish and maintain one or more Subsidy Accounts,
in
the form of time deposit or demand accounts, titled “▇▇▇▇▇ Fargo Bank, N.A., in
trust for the Owner, its successors or assigns, and/or subsequent purchasers
of
residential Mortgage Loans, and various Mortgagors.” The Subsidy Account shall
be an eligible deposit account established with a Qualified
Depository.
The
Servicer shall, from time to time, withdraw funds from the Subsidy Account
for
the following purposes:
|
(i)
|
to
deposit in the Custodial Account in the amounts and in the manner
provided
for in Section 4.04(xi);
|
|
(ii)
|
to
transfer funds to another eligible institution in accordance with
Section
4.09 hereof;
|
(iii)
to
withdraw funds deposited in error; and
|
(iv)
|
to
clear and terminate the Subsidy Account upon the termination of this
Agreement.
|
Notwithstanding
anything to the contrary elsewhere in this Agreement, the Servicer may employ
the Escrow Account as the Subsidy Account to the extent that the Servicer can
separately identify any Subsidy Funds deposited therein.
Section
4.25 Subordination
of Second Lien Mortgage Loans.
The
Servicer is authorized, without the prior approval of the Owner, to consent
to
the refinancing of any Superior Lien on a Mortgaged Property, provided, that
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.
With
respect to the Owned Mortgage Loans, where permitted by local law and where
the
senior lienholder is required to notify a junior lienholder be named as a party
defendant in foreclosure proceedings in order to foreclose such junior
lienholder’s equity of redemption, the Servicer shall file (or cause to be
filed) a request for notice of any action by a superior lienholder under a
related senior lien for the protection of the Owner’s interest in the related
Second Lien Mortgage Loan. Any costs associated with such filing shall be a
Servicing Advance reimbursable pursuant to Section 4.05(iii).
With
respect to Purchased Mortgage Loans, where permitted by local law and where
the
senior lienholder is required to notify a junior lienholder be named as a party
defendant in foreclosure proceedings in order to foreclose such junior
lienholder’s equity of redemption, the Servicer shall, at the reasonable expense
of the Owner, file (or cause to be filed) a request for notice of any action
by
a superior lienholder under a related senior lien for the protection of the
Owner’s interest in the related Second Lien Mortgage Loan.
If
the
Servicer is notified that any superior lienholder has accelerated or intends
to
accelerate the obligations secured by the superior lien, or has declared or
intends to declare a default under the superior mortgage or the promissory
note
secured thereby, or has filed or intends to file an election to have the
Mortgaged Property sold or foreclosed, the Servicer shall take whatever actions
are necessary to protect the interests of the Owner, and/or to preserve the
security of the related Mortgage Loan, subject to any requirements applicable
to
real estate mortgage investment conduits pursuant to the Code. The Servicer
shall advance the funds necessary to cure the default or reinstate the superior
lien if the Servicer determines that such advance is in the best interests
of
the Owner. The Servicer shall not make such an advance except to the extent
that
it determines in its reasonable good faith judgment that such advance will
be
recoverable from Liquidation Proceeds on the related Mortgage Loan. The Servicer
shall thereafter take such action as is necessary to recover the amount so
advanced.
Section
4.26 Use
of
Subservicers and Subcontractors.
The
Servicer shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Servicer under this Agreement or any
Reconstitution Agreement unless the Servicer complies with the provisions of
paragraph (a) of this Section 4.26. The Servicer shall not hire or otherwise
utilize the services of any Subcontractor, and shall not permit any Subservicer
to hire or otherwise utilize the services of any Subcontractor, to fulfill
any
of the obligations of the Servicer under this Agreement or any Reconstitution
Agreement unless the Servicer complies with the provisions of paragraph (b)
of
this Section 4.26.
(a) It
shall
not be necessary for the Servicer to seek the consent of the Owner or any
Depositor to the utilization of any Subservicer. The Servicer shall cause any
Subservicer used by the Servicer (or by any Subservicer) for the benefit of
the
Owner and any Depositor to comply with the provisions of this Section 4.26
and
with Sections 6.04, 6.06, 9.01(e)(iii), 9.01(e)(v), 9.01(e)(vi) and 9.01(f)
of
this Agreement to the same extent as if such Subservicer were the Servicer,
and
to provide the information required with respect to such Subservicer under
Section 9.01(e)(iv) of this Agreement. The Servicer shall be responsible or
obtaining from each Subservicer and delivering to the Owner and any Depositor
any servicer compliance statement required to be delivered by such Subservicer
under Section 6.04 and any assessment of compliance and attestation required
to
be delivered by such Subservicer under Section 6.06 and any certification
required to be delivered to the Person that will be responsible for signing
the
Sarbanes Certification under Section 6.06 as and when required to be
delivered.
(b) It
shall
not be necessary for the Servicer to seek the consent of the Owner or any
Depositor to the utilization of any Subcontractor. The Servicer shall promptly
upon request provide to the Owner and any Depositor (or any designee of the
Depositor, such as a master servicer or administrator) a written description
(in
form and substance satisfactory to the Owner and such Depositor) of the role
and
function of each Subcontractor utilized by the Servicer or any Subservicer,
specifying (i) the identity of each such Subcontractor, (ii) which (if any)
of
such Subcontractors are “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the Servicing
Criteria will be addressed in assessments of compliance provided by each
Subcontractor identified pursuant to clause (ii) of this paragraph.
As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor used by the
Servicer (or by any Subservicer) for the benefit of the Owner and any Depositor
to comply with the provisions of Sections 6.06 and 9.01(f) of this Agreement
to
the same extent as if such Subcontractor were the Servicer. The Servicer shall
be responsible for obtaining from each Subcontractor and delivering to the
Owner
and any Depositor any assessment of compliance and attestation required to
be
delivered by such Subcontractor under Section 6.06, in each case as and when
required to be delivered.
Section
4.27 Prepayment
Charge Waivers.
With
respect to the Mortgage Loans and to the extent consistent with the terms of
this Agreement, the Servicer may waive (or permit a subservicer to waive) a
Prepayment Charge only under the following circumstances: (i) such waiver is
standard and customary in servicing similar Mortgage Loans and (ii) such waiver
relates to a default or a reasonably foreseeable default and would, in the
reasonable judgment of the Servicer, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related Mortgage Loan.
If a Prepayment Charge or any portion thereof is waived for any reason other
than as permitted by meeting the standards described in clauses (i) and (ii)
above, then the Seller shall pay to the Owner the amount of such waived
Prepayment Charge or portion thereof. Such remedy amount payable by the Seller
shall accompany the Seller’s next scheduled monthly remittance to the Owner
following the calendar month in which the related Principal Prepayment occurred.
ARTICLE
V
PAYMENTS
TO OWNER
Section
5.01 Remittances.
On
each
Remittance Date the Servicer shall remit by wire transfer of immediately
available funds to the Owner (a) all amounts deposited in the Custodial Account
as of the close of business on the Determination Date (net of charges against
or
withdrawals from the Custodial Account pursuant to Section 4.05), plus (b)
all
amounts, if any, which the Servicer is obligated to distribute pursuant to
Section 5.03, minus (c) any amounts attributable to Principal Prepayments
received after the applicable Principal Prepayment Period which amounts shall
be
remitted on the following Remittance Date, together with any additional interest
required to be deposited in the Custodial Account in connection with such
Principal Prepayment in accordance with Section 4.04(viii); minus (d) any
amounts attributable to Monthly Payments collected but due on a Due Date or
Dates subsequent to the first day of the month of the Remittance Date, and
minus
(e) any amounts attributable to Buydown Funds being held in the Custodial
Account, which amounts shall be remitted on the Remittance Date next succeeding
the Due Period for such amounts.
With
respect to any remittance received by the Owner after the second Business Day
following the Business Day on which such payment was due, the Servicer shall
pay
to the Owner interest on any such late payment at an annual rate equal to the
Prime Rate, adjusted as of the date of each change, plus three percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be deposited in the Custodial Account by the Servicer
on the date such late payment is made and shall cover the period commencing
with
the day following such second Business Day and ending with the Business Day
on
which such payment is made, both inclusive. Such interest shall be remitted
along with the distribution payable on the next succeeding Remittance Date.
The
payment by the Servicer of any such interest shall not be deemed an extension
of
time for payment or a waiver of any Event of Default by the
Servicer.
Section
5.02 Statements
to Owner.
With
respect to the Owned Mortgage Loans and the Purchased Mortgage Loans that have
the Principal Prepayment Period set forth in clause (B) of such definition,
not
later than the tenth (10th)
Business Day of each month,
the
Servicer shall furnish to the Owner a monthly remittance advice, with a trial
balance report attached thereto, as to the remittance period ending on the
last
day of the preceding month. With respect to the Purchased Mortgage Loans that
have the Principal Prepayment Period set forth in clause (A) of such definition
not later than the tenth (10th)
Business Day of each month, the Servicer shall furnish to the Owner a a
preliminary monthly remittance advice, with a trial balance report attached
thereto, as to the remittance period ending on the last day of the preceding
month and a final monthly remittance advice, with a trial balance report
attached thereto, as to the remittance period ending on the last day of the
preceding month two (2) Business Days following the 14th
day of
the month.
Section
5.03 Monthly
Advances by Servicer.
On
the
Business Day immediately preceding each Remittance Date, the Servicer shall
deposit in the Custodial Account from its own funds or from amounts held for
future distribution an amount equal to all Monthly Payments (with interest
adjusted to the Mortgage Loan Remittance Rate) which were due on the Mortgage
Loans during the applicable Due Period and which were delinquent at the close
of
business on the immediately preceding Determination Date or which were deferred
pursuant to Section 4.01. Any amounts held for future distribution and so used
shall be replaced by the Servicer by deposit in the Custodial Account on or
before any future Remittance Date if funds in the Custodial Account on such
Remittance Date shall be less than payments to the Owner required to be made
on
such Remittance Date. The Servicer's obligation to make such Monthly Advances
as
to any Mortgage Loan will continue through the last Monthly Payment due prior
to
the payment in full of the Mortgage Loan, or through the last Remittance Date
prior to the Remittance Date for the distribution of all Liquidation Proceeds
and other payments or recoveries (including REO Disposition Proceeds, Insurance
Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan; provided,
however, that such obligation shall cease if the Servicer determines, in its
sole reasonable opinion, that advances with respect to such Mortgage Loan are
non-recoverable by the Servicer from Liquidation Proceeds, REO Disposition
Proceeds, Insurance Proceeds, Condemnation Proceeds, or otherwise with respect
to a particular Mortgage Loan. In the event that the Servicer determines that
any such advances are non-recoverable, the Servicer shall provide the Owner
with
a certificate signed by two officers of the Servicer evidencing such
determination.
ARTICLE
VI
GENERAL
SERVICING PROCEDURES
Section
6.01 Transfers
of Mortgaged Property.
The
Servicer shall use its best efforts to enforce any "due-on-sale" provision
contained in any Mortgage or Mortgage Note and to deny assumption by the Person
to whom the Mortgaged Property has been or is about to be sold whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note. When the Mortgaged
Property has been conveyed by the Mortgagor, the Servicer shall, to the extent
it has knowledge of such conveyance, exercise its rights to accelerate the
maturity of such Mortgage Loan under the "due-on-sale" clause applicable
thereto, provided, however, that the Servicer shall not exercise such rights
if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related PMI Policy, if
any.
If
the
Servicer reasonably believes it is unable under applicable law to enforce such
"due-on-sale" clause, the Servicer shall enter into (i) an assumption and
modification agreement with the Person to whom such property has been conveyed,
pursuant to which such Person becomes liable under the Mortgage Note and the
original Mortgagor remains liable thereon or (ii) in the event the Servicer
is
unable under applicable law to require that the original Mortgagor remain liable
under the Mortgage Note and the Servicer has the prior consent of the primary
mortgage guaranty insurer, a substitution of liability agreement with the
purchaser of the Mortgaged Property pursuant to which the original Mortgagor
is
released from liability and the purchaser of the Mortgaged Property is
substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Servicer for entering into an assumption
agreement the fee will be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage
Loan,
the outstanding principal amount of the Mortgage Loan nor any other material
terms shall be changed without Owner’s consent.
To
the
extent that any Mortgage Loan is assumable, the Servicer shall inquire
diligently into the credit worthiness of the proposed transferee, and shall
use
the underwriting criteria for approving the credit of the proposed transferee
which are used with respect to underwriting mortgage loans of the same type
as
the Mortgage Loan. If the credit worthiness of the proposed transferee does
not
meet such underwriting criteria, the Servicer diligently shall, to the extent
permitted by the Mortgage or the Mortgage Note and by applicable law, accelerate
the maturity of the Mortgage Loan.
Section
6.02 Satisfaction
of Mortgages and Release of Retained Mortgage Files.
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Servicer of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Servicer shall notify the Owner in the monthly remittance
advice as provided in Section 5.02, and may request the release of any Mortgage
Loan Documents.
With
respect to each Owned Mortgage Loan, if
the
Servicer satisfies or releases a Mortgage without first having obtained payment
in full of the indebtedness secured by the Mortgage or should the Servicer
otherwise prejudice any rights the Owner may have under the mortgage
instruments, upon written demand of the Owner, the Servicer shall repurchase
the
related Mortgage Loan at the Repurchase Price by deposit thereof in the
Custodial Account within two (2) Business Days of receipt of such demand by
the
Owner. The Servicer shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 4.12 insuring the Servicer against
any loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
With
respect to each Purchased Mortgage Loan, if the Servicer satisfies or releases
a
Mortgage without first having obtained payment in full of the indebtedness
secured by the Mortgage or should the Servicer otherwise prejudice any rights
the Owner may have under the mortgage instruments, upon written demand of the
Owner, the Servicer shall deposit in the Custodial Account the entire
outstanding principal balance, plus all accrued interest on such Mortgage Loan,
on the day preceding the Remittance Date in the month following the date of
such
release. The Servicer shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 4.12 insuring the Servicer against
any loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
Section
6.03 Servicing
Compensation.
As
compensation for its services hereunder, the Servicer shall be entitled to
withdraw from the Custodial Account the amount of its Servicing Fee. The
Servicing Fee shall be payable monthly and shall be computed on the basis of
the
same unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is received. The obligation of the Owner
to
pay the Servicing Fee is limited to, and payable solely from, the interest
portion (including recoveries with respect to interest from Liquidation
Proceeds, to the extent permitted by Section 4.05) of such Monthly
Payments.
Additional
servicing compensation in the form of assumption fees, to the extent provided
in
Section 6.01, and late payment charges shall be retained by the Servicer to
the
extent not required to be deposited in the Custodial Account. The Servicer
shall
be required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement thereof except
as specifically provided for herein.
Section
6.04 Annual
Statements as to Compliance.
On
or
before March 1 of each calendar year, commencing in 2007, the Servicer shall
deliver to the Owner and any Depositor a statement of compliance addressed
to
the Owner and such Depositor and signed by an authorized officer of the
Servicer, to the effect that (a) a review of the Servicer’s activities during
the immediately preceding calendar year (or applicable portion thereof) and
of
its performance under this Agreement and any applicable Reconstitution Agreement
during such period has been made under such officer’s supervision, and (b) to
the best of such officers’ knowledge, based on such review, the Servicer has
fulfilled all of its obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar
year
(or applicable portion thereof) or, if there has been a failure to fulfill
any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status
thereof.
Section
6.05 Annual
Independent Public Accountants' Servicing Report.
Except
with respect to Securitization Transactions occurring on or after January 1,
2006, on or before February 28, 2006, the Servicer, at its expense, shall cause
a firm of independent public accountants which is a member of the American
Institute of Certified Public Accountants to furnish a statement to each Owner
to the effect that such firm has examined certain documents and records relating
to the servicing of the mortgage loans similar in nature and that such firm
is
of the opinion that the provisions of this or similar Agreements have been
complied with, and that, on the basis of such examination conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers, nothing has come to their attention which would indicate
that
such servicing has not been conducted in compliance therewith, except for (i)
such exceptions as such firm shall believe to be immaterial, and (ii) such
other
exceptions as shall be set forth in such statement. By providing Owner a copy
of
a Uniform Single Attestation Program Report from their independent public
accountant's on an annual basis, Servicer shall be considered to have fulfilled
its obligations under this Section 6.05.
Section
6.06 Report
on Assessment of Compliance and Attestation.
(a) With
respect to any Mortgage Loans that are the subject of a Securitization
Transaction occurring on or after January 1, 2006, on or before March 1 of
each
calendar year, commencing in 2007, the Servicer shall:
|
(i)
|
deliver
to the Owner and any Depositor a report (in form and substance reasonably
satisfactory to the Owner and such Depositor) regarding the Servicer’s
assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18
and
15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report
shall be addressed to the Owner and such Depositor and signed by
an
authorized officer of the Servicer, and shall address each of the
Servicing Criteria set forth in an exhibit delivered by the Servicer
at
the time of a Securitization Transaction, which exhibit shall be
substantially in the form of Exhibit C attached
hereto;
|
|
(ii)
|
deliver
to the Owner and any Depositor a report of a registered public accounting
firm reasonably acceptable to the Owner and such Depositor that attests
to, and reports on, the assessment of compliance made by the Servicer
and
delivered pursuant to the preceding paragraph. Such attestation shall
be
in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X
under
the Securities Act and the Exchange Act;
|
|
(iii)
|
cause
each Subservicer, and each Subcontractor determined by the Servicer
pursuant to Section 4.26(b) to be “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB, to deliver to
the Owner and any Depositor an assessment of compliance and accountants’
attestation as and when provided in paragraphs (i) and (ii) of this
Section 6.06; and
|
|
(iv)
|
deliver
to the Owner, any Depositor and any other Person that will be responsible
for signing the certification (a “Sarbanes Certification”) required by
Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to
Section
302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002) on behalf of an asset-backed
issuer
with respect to a Securitization Transaction a certification in the
form
attached hereto as Exhibit D.
|
The
Servicer acknowledges that the parties identified in clause (a)(iv) above may
rely on the certification provided by the Servicer pursuant to such clause
in
signing a Sarbanes Certification and filing such with the
Commission.
(b) Each
assessment of compliance provided by a Subservicer pursuant to Section 6.06(i)
shall address each of the Servicing Criteria set forth in an exhibit delivered
to the Owner at the time of a Securitization Transaction or, in the case of
a
Subservicer subsequently appointed as such, on or prior to the date of such
appointment, which exhibit shall be substantially in the form of Exhibit C
attached hereto. An assessment of compliance provided by a Subcontractor
pursuant to Section 6.06(iii) need not address any elements of the Servicing
Criteria other than those specified by the Servicer pursuant to Section
4.26.
Section
6.07 Remedies.
(i) Any
failure by the Servicer, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under Article IX, Sections 6.04,
6.05, or Section 6.06, or any breach by the Servicer of a representation or
warranty set forth in Section 9.01(e)(vi)(A), or in a writing furnished pursuant
to Section 9.01(e)(vi)(B) and made as of a date prior to the closing date of
the
related Securitization Transaction, to the extent that such breach is not cured
by such closing date, or any breach by the Servicer of a representation or
warranty in a writing furnished pursuant to Section 9.01(e)(vi)(B) to the extent
made as of a date subsequent to such closing date, shall, except as provided
in
sub-clause (ii) of this Section 6.07, immediately and automatically, without
notice or grace period, constitute an Event of Default with respect to the
Servicer under this Agreement and any applicable Reconstitution Agreement,
and
shall entitle the Owner or Depositor, as applicable, in its sole discretion
to
terminate the rights and obligations of the Servicer under this Agreement and/or
any applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement or any applicable Reconstitution Agreement to the
contrary) of any compensation to the Servicer; provided that to the extent
that
any provision of this Agreement and/or any applicable Reconstitution Agreement
expressly provides for the survival of certain rights or obligations following
termination of the Company as servicer, such provision shall be given
effect.
(ii) Any
failure by the Servicer, any Subservicer or any Subcontractor to deliver any
information, report, certification or accountants’ letter when and as required
under Section 6.04 or Section 6.06, including any failure by the Company to
identify pursuant to Section 9.01(e)(vi)(B) any Subcontract “participating in
the servicing function” within the meaning of Item 1122 of Regulation AB, which
continues unremedied for ten (10) calendar days after the date on which such
information, report, certification or accountants’ letter was required to be
delivered shall constitute an Event of Default with respect to the Servicer
under this Agreement and any applicable Reconstitution Agreement, and shall
entitle the Owner or Depositor, as applicable, in its sole discretion to
terminate the rights and obligations of the Servicer under this Agreement and/or
any applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement to the contrary) of any compensation to the Servicer;
provided that to the extent that any provision of this Agreement and/or any
applicable Reconstitution Agreement expressly provides for the survival of
certain rights or obligations following termination of the Company as servicer,
such provision shall be given effect.
(iii) The
Servicer shall promptly reimburse the Owner (or any designee of the Purchaser,
such as a master servicer) and any Depositor, as applicable, for all reasonable
expenses incurred by the Owner (or such designee) or such Depositor, as such
are
incurred, in connection with the termination of the Servicer as servicer and
the
transfer of servicing of the Mortgage Loans to a successor servicer. The
provisions of this paragraph shall not limit whatever rights the Owner or any
Depositor may have under other provisions of this Agreement and/or any
applicable Reconstitution Agreement or otherwise, whether in equity or at law,
such as an action for damages, specific performance or injunctive
relief.
Section
6.08 Right
to Examine Servicer Records.
The
Owner, or its designee, shall have the right to examine and audit any and all
of
the books, records, or other information of the Servicer, whether held by the
Servicer or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during business hours or at such other times
as
may be reasonable under applicable circumstances, upon reasonable advance
notice. The Owner shall pay its own expenses associated with such
examination.
Section
6.09 Compliance
with REMIC Provisions.
If
a
REMIC election has been made with respect to the arrangement under which the
Mortgage Loans and REO Property are held, the Servicer shall not take any
action, cause the REMIC to take any action or fail to take (or fail to cause
to
be taken) any action that, under the REMIC Provisions, if taken or not taken,
as
the case may be, could (i) endanger the status of the REMIC as a REMIC or (ii)
result in the imposition of a tax upon the REMIC (including but not limited
to
the tax on “prohibited transactions” as defined in Section 860F(a) (2) of the
Code and the tax on “contributions” to a REMIC set forth in Section 860G(d) of
the Code) unless the Servicer has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
ARTICLE
VII
SERVICER
TO COOPERATE
Section
7.01 Provision
of Information.
During
the term of this Agreement, the Servicer shall furnish to the Owner such
periodic, special, or other reports or information, and copies or originals
of
any documents contained in the Servicing File for each Mortgage Loan provided
for herein. All other special reports or information not provided for herein
as
shall be necessary, reasonable, or appropriate with respect to the Owner or
any
regulatory agency will be provided at the Owner’s expense. All such reports,
documents or information shall be provided by and in accordance with all
reasonable instructions and directions which the Owner may give.
The
Servicer shall execute and deliver all such instruments and take all such action
as the Owner may reasonably request from time to time, in order to effectuate
the purposes and to carry out the terms of this Agreement.
Section
7.02 Financial
Statements; Servicing Facility.
In
connection with marketing the Mortgage Loans, the Owner may make available
to a
prospective purchaser a Consolidated Statement of Operations of the Servicer
for
the most recently completed two (2) fiscal years for which such a statement
is
available, as well as a Consolidated Statement of Condition at the end of the
last two (2) fiscal years covered by such Consolidated Statement of Operations.
The Servicer, upon request, also shall make available any comparable interim
statements to the extent any such statements have been prepared by or on behalf
of the Servicer (and are available upon request to members or stockholders
of
the Servicer or to the public at large).
The
Servicer also shall make available to Owner or prospective purchasers a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Servicer or the financial
statements of the Servicer, and to permit any prospective purchaser to inspect
the Servicer's servicing facilities for the purpose of satisfying such
prospective purchaser that the Servicer has the ability to service the Mortgage
Loans as provided in this Agreement.
ARTICLE
VIII
THE
SERVICER
Section
8.01 Indemnification;
Third Party Claims.
The
Servicer shall indemnify the Owner and hold it 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 the Owner may sustain in any way related to the failure of the Servicer
to
perform its duties and service the Mortgage Loans in strict compliance with
the
terms of this Agreement. The Servicer immediately shall notify the Owner if
a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans, assume (with the prior written consent of the Owner) 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 the Owner in respect of such claim. The Servicer shall
follow any written instructions received from the Owner in connection with
such
claim. The Owner promptly shall reimburse the Servicer for all amounts advanced
by it pursuant to the preceding sentence except when the claim is in any way
related to the Servicer's repurchase obligation pursuant to Section 3.02,
indemnification obligation pursuant to this Section 8.01, or the failure of
the
Servicer to service and administer the Mortgage Loans in strict compliance
with
the terms of this Agreement.
Section
8.02 Merger
or Consolidation of the Servicer.
The
Servicer shall keep in full effect its existence, rights and franchises and
shall obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity
and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its
duties under this Agreement.
Any
person into which the Servicer may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any Person succeeding to the business of the Servicer,
shall be the successor of the Servicer hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, provided, however, that the
successor or surviving Person shall be an institution which is a ▇▇▇▇▇▇
▇▇▇/▇▇▇▇▇▇▇ Mac-approved Servicer in good standing. Furthermore, in the event
the Servicer transfers or otherwise disposes of all or substantially all of
its
assets to an affiliate of the Servicer, such affiliate shall satisfy the
condition above, and shall also be fully liable to the Owner for all of the
Servicer's obligations and liabilities hereunder.
Section
8.03 Limitation
on Liability of Servicer and Others.
Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Owner for any action taken or
for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment, provided, however, that this provision
shall not protect the Servicer or any such person against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with any standard of care set forth in this Agreement
or
any other liability which would otherwise be imposed under this Agreement.
The
Servicer and any director, officer, employee or agent of the Servicer may rely
in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans
in
accordance with this Agreement and which in its opinion may involve it in any
expense or liability, provided, however, that the Servicer may, with the consent
of the Owner, undertake any such action which it may deem necessary or desirable
in respect to this Agreement and the rights and duties of the parties hereto.
In
such event, the Servicer shall be entitled to reimbursement from the Owner
of
the reasonable legal expenses and costs of such action.
Section
8.04 Limitation
on Resignation and Assignment by Servicer.
The
Owner
has entered into this Agreement with the Servicer and subsequent purchasers
will
purchase the Mortgage Loans in reliance upon the independent status of the
Servicer, and the representations as to the adequacy of its servicing
facilities, personnel, records and procedures, its integrity, reputation and
financial standing, and the continuance thereof. Therefore, the Servicer shall
neither assign this Agreement or the servicing rights hereunder or delegate
its
rights or duties hereunder (other than pursuant to Section 4.01) or any portion
hereof or sell or otherwise dispose of all of its property or assets without
the
prior written consent of the Owner, which consent shall not be unreasonably
withheld.
The
Servicer shall not resign from the obligations and duties hereby imposed on
it
except by mutual consent of the Servicer and the Owner or upon the determination
that its duties hereunder are no longer permissible under applicable law and
such incapacity cannot be cured by the Servicer. Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion
of
Counsel to such effect delivered to the Owner which Opinion of Counsel shall
be
in form and substance acceptable to the Owner. No such resignation shall become
effective until a successor shall have assumed the Servicer's responsibilities
and obligations hereunder in the manner provided in Section 12.01.
Without
in any way limiting the generality of this Section 8.04, in the event that
the
Servicer either shall assign this Agreement or the servicing responsibilities
hereunder or delegate its duties hereunder (other than pursuant to Section
4.01)
or any portion thereof or sell or otherwise dispose of all or substantially
all
of its property or assets, without the prior written consent of the Owner,
then
the Owner shall have the right to terminate this Agreement upon notice given
as
set forth in Section 10.01, without any payment of any penalty or damages and
without any liability whatsoever to the Servicer or any third
party.
ARTICLE
IX
REMOVAL
OF MORTGAGE LOANS FROM AGREEMENT
Section
9.01 Removal
of Mortgage Loans from Inclusion Under this Agreement
The
Owner
and the Servicer agree that with respect to some or all of the Mortgage Loans,
the Owner, at its sole option, may effect Whole Loan Transfers, Agency Sales
or
Securitization Transactions, retaining the Servicer as the servicer thereof
or
subservicer if a master servicer is employed, or as applicable the
"seller/servicer." On the Reconstitution Date, the Mortgage Loans transferred
may cease to be serviced under this Agreement; provided, however, that, in
the
event that any Mortgage Loan transferred pursuant to this Section 9.01 is
rejected by the transferee, the Servicer shall continue to service such rejected
Mortgage Loan on behalf of the Owner in accordance with the terms and provisions
of this Agreement.
The
Servicer shall cooperate with the Owner in connection with each Whole Loan
Transfer, Agency Sale or Securitization Transaction in accordance with this
Section 9.01. In connection therewith:
|
(a)
|
the
Servicer shall make all representations and warranties with respect
to the
Mortgage Loans in Section 6(b) of the Master Mortgage Loan Purchase
Agreement as of the related Servicing Date and with respect to the
Servicer itself as of the closing date of each Whole Loan Transfer,
Agency
Sale or Securitization Transaction;
|
|
(b)
|
the
Servicer shall negotiate in good faith and execute any seller/servicer
agreements, pooling and servicing agreement or assignment, assumption
and
recognition agreement required to effectuate the foregoing, provided
such
agreements create no greater obligation or cost on the part of the
Servicer than otherwise set forth in this
Agreement;
|
|
(c)
|
[reserved];
|
|
(d)
|
the
Servicer shall:
|
|
(i)
|
provide
such additional representations, warranties, covenants, opinions
of
counsel, and certificates of public officials or officers of the
Servicer
as are reasonably believed necessary by the trustee, any Rating Agency
or
the Owner, as the case may be, in connection with such Whole Loan
Transfers, Agency Sales or Securitization Transactions. The Owner
shall
pay all third party costs associated with the preparation of such
information. The Servicer shall execute any seller/servicer agreements
required within a reasonable period of time after receipt of such
seller/servicer agreements which time shall be sufficient for the
Servicer
and Servicer's counsel to review such seller/servicer agreements.
Under
this Agreement, the Servicer shall retain a Servicing Fee for each
Mortgage Loan at the Servicing Fee Rate; and
|
|
(ii)
|
at
any time as required by any Rating Agency, provide such additional
documents from the related Retained Mortgage File to the Custodian
as may
be required by such Rating Agency within fifteen (15) Business Days
of
receipt of such request.
|
|
(e)
|
in
connection with any Securitization Transaction, the Servicer, in
its
capacity as Seller under the Master Mortgage Loan Purchase Agreement,
shall (1) within five (5) Business Days following request by the
Owner or
any Depositor, provide to the Owner and such Depositor (or, as applicable,
cause each Third-Party Originator and each Subservicer to provide),
in
writing and in form and substance reasonably satisfactory to the
Owner and
such Depositor, the information and materials specified in paragraphs
(i),
(ii), (iii) and (vii) of this subsection (e), and (2) as promptly
as
practicable following notice to or discovery by the Servicer, provide
to
the Owner and any Depositor (in writing and in form and substance
reasonably satisfactory to the Owner and such Depositor) the information
specified in paragraph (iv) of this subsection
(e).
|
|
(i)
|
If
so requested by the Owner or any Depositor, the Servicer, in its
capacity
as Seller under the Master Mortgage Loan Purchase Agreement, shall
provide
such information regarding (1) the Seller, as originator of the Mortgage
Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (2) each Third-Party Originator, and (3) as applicable,
the Servicer, in its capacity as Servicer hereunder, shall provide
such
information regarding each Subservicer, as is requested for the purpose
of
compliance with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation
AB. Such information shall include, at a
minimum:
|
|
(A)
|
the
originator’s form of organization;
|
|
(B)
|
a
description of the originator’s origination program and how long the
originator has been engaged in originating residential mortgage loans,
which description shall include a discussion of the originator’s
experience in originating mortgage loans of a similar type as the
Mortgage
Loans; information regarding the size and composition of the originator’s
origination portfolio; and information that may be material, in the
good
faith judgment of the Owner or any Depositor, to an analysis of the
performance of the Mortgage Loans, including the originators’
credit-granting or underwriting criteria for mortgage loans of similar
type(s) as the Mortgage Loans and such other information as the Owner
or
any Depositor may reasonably request for the purpose of compliance
with
Item 1110(b)(2) of Regulation AB;
|
|
(C)
|
a
description of any material legal or governmental proceedings pending
(or
known to be contemplated) against the Servicer, in its capacity as
Seller
under the Master Mortgage Loan Purchase Agreement or in its capacity
as
Servicer hereunder, each Third-Party Originator and each Subservicer;
and
|
|
(D)
|
a
description of any affiliation or relationship between the Servicer,
in
its capacity as Seller under the Master Mortgage Loan Purchase Agreement
or in its capacity as Servicer hereunder, each Third-Party Originator,
each Subservicer and any of the following parties to a Securitization
Transaction, as such parties are identified to the Servicer by the
Owner
or any Depositor in writing in advance of a Securitization
Transaction:
|
|
(1)
|
the
sponsor;
|
|
(2)
|
the
depositor;
|
|
(3)
|
the
issuing entity;
|
|
(4)
|
any
servicer;
|
|
(5)
|
any
trustee;
|
|
(6)
|
any
originator;
|
|
(7)
|
any
significant obligor;
|
|
(8)
|
any
enhancement or support provider; and
|
|
(9)
|
any
other material transaction party.
|
|
(ii)
|
If
so requested by the Owner or any Depositor, the Servicer, in its
capacity
as Seller under the Master Mortgage Loan Purchase Agreement, shall
provide
(or, as applicable, cause each Third-Party Originator to provide)
Static
Pool Information with respect to the mortgage loans (of a similar
type as
the Mortgage Loans, as reasonably identified by the Owner as provided
below) originated by (1) the Servicer, in its capacity as Seller
under the
Master Mortgage Loan Purchase Agreement, if the Servicer, in its
capacity
as Seller under the Master Mortgage Loan Purchase Agreement, is an
originator of Mortgage Loans (including as an acquirer of Mortgage
Loans
from a Qualified Correspondent), and/or (2) each Third-Party Originator.
Such Static Pool Information shall be prepared by the Servicer (or
Third-Party Originator) on the basis of its reasonable, good faith
interpretation of the requirements of Item 1105(a)(1)-(3) of Regulation
AB. To the extent that there is reasonably available to the Servicer,
in
its capacity as Seller under the Master Mortgage Loan Purchase Agreement,
(or Third-Party Orignator) Static Pool Information with respect to
more
than one mortgage loan type, the Owner or any Depositor shall be
entitled
to specify whether some or all of such information shall be provided
pursuant to this paragraph. The content of such Static Pool Information
may be in the form customarily provided by the Servicer, in its capacity
as Seller under the Master Mortgage Loan Purchase Agreement, and
need not
be customized for the Owner or any Depositor. Such Static Pool Information
for each vintage origination year or prior securitized pool, as
applicable, shall be presented in increments no less frequently than
quarterly over the life of the mortgage loans included in the vintage
origination year or prior securitized pool. The most recent periodic
increment must be as of a date no later than 135 days prior to the
date of
the prospectus or other offering document in which the Static Pool
Information is to be included or incorporated by reference. The Static
Pool Information shall be provided in an electronic format that provides
a
permanent record of the information provided, such as a portable
document
format (pdf) file, or other such electronic format reasonably required
by
the Owner or the Depositor, as
applicable.
|
If
so
requested by the Owner or any Depositor, the Servicer, in its capacity as Seller
under the Master Mortgage Loan Purchase Agreement, shall provide (or, as
applicable, cause each Third-Party Originator to provide), at the expense of
the
requesting party (to the extent of any additional incremental expense associated
with delivery pursuant to this Agreement), such agreed-upon procedures letters
of certified public accountants reasonably acceptable to the Owner or Depositor,
as applicable, pertaining to Static Pool Information relating to prior
securitized pools for securitizations closed on or after January 1, 2006 or,
in
the case of Static Pool Information with respect to the Servicer’s (in its
capacity as Seller under the Master Mortgage Loan Purchase Agreement) or
Third-Party Originator’s originations or purchases, to calendar months
commencing January 1, 2006, as the Owner or such Depositor shall reasonably
request. Such statements and letters shall be addressed to and be for the
benefit of such parties as the Owner or such Depositor shall designate, which
may include, by way of example, any sponsor, any Depositor and any broker dealer
acting as underwriter, placement agent or initial purchaser with respect to
a
Securitization Transaction. Any such statement or letter may take the form
of a
standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Owner or such
Depositor.
|
(iii)
|
If
so requested by the Owner or any Depositor, the Servicer shall provide
such information regarding the Servicer, as servicer of the Mortgage
Loans, and each Subservicer (each of the Servicer and each Subservicer,
for purposes of this paragraph, a “Servicer”), as is requested for the
purpose of compliance with Items 1108 of Regulation AB. Such information
shall include, at a minimum:
|
|
(A)
|
the
Servicer’s form of organization;
|
|
(B)
|
a
description of how long the Servicer has been servicing residential
mortgage loans; a general discussion of the Servicer’s experience in
servicing assets of any type as well as a more detailed discussion
of the
Servicer’s experience in, and procedures for, the servicing function it
will perform under this Agreement and any Reconstitution Agreements;
information regarding the size, composition and growth of the Servicer’s
portfolio of residential mortgage loans of a type similar to the
Mortgage
Loans and information on factors related to the Servicer that may
be
material, in the good faith judgment of the Purchaser or any Depositor,
to
any analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable, including, without limitation:
|
|
(1)
|
whether
any prior securitizations of mortgage loans of a type similar to
the
Mortgage Loans involving the Servicer have defaulted or experienced
an
early amortization or other performance triggering event because
of
servicing during the three-year period immediately preceding the
related
Securitization Transaction;
|
|
(2)
|
the
extent of outsourcing the Servicer utilizes;
|
|
(3)
|
whether
there has been previous disclosure of material noncompliance with
the
applicable servicing criteria with respect to other securitizations
of
residential mortgage loans involving the Servicer as a servicer during
the
three-year period immediately preceding the related Securitization
Transaction;
|
|
(4)
|
whether
the Servicer has been terminated as servicer in a residential mortgage
loan securitization, either due to a servicing default or to application
of a servicing performance test or trigger; and
|
|
(5)
|
such
other information as the Purchaser or any Depositor may reasonably
request
for the purpose of compliance with Item 1108(b)(2) of Regulation
AB;
|
|
(C)
|
a
description of any material changes during the three-year period
immediately preceding the related Securitization Transaction to the
Servicer’s policies or procedures with respect to the servicing function
it will perform under this Agreement and any Reconstitution Agreements
for
mortgage loans of a type similar to the Mortgage
Loans;
|
|
(D)
|
information
regarding the Servicer’s financial condition, to the extent that there is
a material risk that an adverse financial event or circumstance involving
the Servicer could have a material adverse effect on the performance
by
the Company of its servicing obligations under this Agreement or
any
Reconstitution Agreement;
|
|
(E)
|
information
regarding advances made by the Servicer on the Mortgage Loans and
the
Servicer’s overall servicing portfolio of residential mortgage loans for
the three-year period immediately preceding the related Securitization
Transaction, which may be limited to a statement by an authorized
officer
of the Servicer to the effect that the Servicer has made all advances
required to be made on residential mortgage loans serviced by it
during
such period, or, if such statement would not be accurate, information
regarding the percentage and type of advances not made as required,
and
the reasons for such failure to
advance;
|
|
(F)
|
a
description of the Servicer’s processes and procedures designed to address
any special or unique factors involved in servicing loans of a similar
type as the Mortgage Loans;
|
|
(G)
|
a
description of the Servicer’s processes for handling delinquencies,
losses, bankruptcies and recoveries, such as through liquidation
of
mortgaged properties, sale of defaulted mortgage loans or workouts;
and
|
|
(H)
|
information
as to how the Servicer defines or determines delinquencies and
charge-offs, including the effect of any grace period, re-aging,
restructuring, partial payments considered current or other practices
with
respect to delinquency and loss
experience.
|
|
(iv)
|
If
so requested by the Owner or any Depositor for the purpose of satisfying
its reporting obligation under the Exchange Act with respect to any
class
of asset-backed securities, the Servicer shall (or shall cause each
Subservicer and Third-Party Originator to) (a) notify the Owner and
any
Depositor in writing of (1) any material litigation or governmental
proceedings pending against the Servicer, in its capacity as Seller
under
the Master Mortgage Loan Purchase Agreement or in its capacity as
Servicer
hereunder, any Subservicer or any Third-Party Originator and (2)
any
affiliations or relationships that develop following the closing
date of a
Securitization Transaction between the Servicer, in its capacity
as Seller
under the Master Mortgage Loan Purchase Agreement or in its capacity
as
Servicer hereunder, any Subservicer or any Third-Party Originator
and any
of the parties specified in Section 9.01(e)(i)(D) (and any other
parties
identified in writing by the requesting party) with respect to such
Securitization Transaction, and (b) provide to the Owner and any
Depositor
a description of such proceedings, affiliations or
relationships.
|
|
(v)
|
As
a condition to the succession to the Servicer or any Subservicer
as
servicer or subservicer under this Agreement or any Reconstitution
Agreement by any Person (a) into which the Servicer or such Subservicer
may be merged or consolidated, or (b) which may be appointed as a
successor to the Servicer or any Subservicer, the Servicer shall
provide
to the Owner and any Depositor, at least fifteen (15) calendar days
prior
to the effective date of such succession or appointment, (x) written
notice to the Owner and any Depositor of such succession or appointment
and (y) in writing and in form and substance reasonably satisfactory
to
the Owner and such Depositor, all information reasonably requested
by the
Owner or any Depositor in order to comply with is reporting obligation
under Item 6.02 of Form 8-K with respect to any class of asset-backed
securities.
|
(vi)
(A) The
Servicer shall be deemed to represent to the Owner and to any Depositor, as
of
the date on which information is first provided to the Owner under this Section
9.01(e) that, except as disclosed in writing to the Owner or such Depositor
prior to such date: (1) the Servicer is not aware and has not received notice
that any default, early amortization or other performance triggering event
has
occurred as to any other securitization due to any act or failure to act of
the
Servicer; (2) the Servicer has not been terminated as servicer in a residential
mortgage loan securitization, either due to a servicing default or to
application of a servicing performance test or trigger; (3) no material
noncompliance with the applicable servicing criteria with respect to other
securitizations of residential mortgage loans involving the Servicer as servicer
has been disclosed or reported by the Servicer; (4) no material changes to
the
Servicer’s policies or procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution Agreement for mortgage
loans
of a type similar to the Mortgage Loans have occurred during the three-year
period immediately preceding the related Securitization Transaction; (5) there
are no aspects of the Servicer’s financial condition that could have a material
adverse effect on the performance by the Servicer of its servicing obligations
under this Agreement or any Reconstitution Agreement; (6) there are no material
legal or governmental proceedings pending (or known to be contemplated) against
the Servicer (as Seller or Servicer), any Subservicer or any Third-Party
Originator; and (7) there are no affiliations, relationships or transactions
relating to the Servicer (as Seller or Servicer), any Subservicer or any
Third-Party Originator with respect to any Securitization Transaction and any
party thereto identified by the related Depositor of a type described in Item
1119 of Regulation AB.
(B) If
so
requested by the Owner or any Depositor on any date following the date on which
information is first provided to the Owner or any Depositor under this Section
9.01(e), the Servicer shall, within five (5) Business Days following such
request, confirm in writing the accuracy of the representations and warranties
set forth in sub clause (A) above or, if any such representation and warranty
is
not accurate as of the date of such request, provide reasonably adequate
disclosure of the pertinent facts, in writing, to the requesting
party.
|
(vii)
|
In
addition to such information as the Servicer, as servicer, is obligated
to
provide pursuant to other provisions of this Agreement, if so requested
by
the Purchaser or any Depositor, the Servicer shall provide such
information reasonably available to the Servicer regarding the performance
or servicing of the Mortgage Loans as is reasonably required to facilitate
preparation of distribution reports in accordance with Item 1121
of
Regulation AB.
|
|
(f)
|
The
Servicer, in its capacity as Seller under the Master Mortgage Loan
Purchase Agreement and in its capacity as Servicer hereunder, shall
indemnify the Owner, each affiliate of the Owner, and each of the
following parties participating in a Securitization Transaction:
each
sponsor and issuing entity; each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission
with respect to such Securitization Transaction, or for execution
of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under
the
Exchange Act with respect to such Securitization Transaction; each
broker
dealer acting as underwriter, placement agent or initial purchaser,
each
Person who controls any of such parties or the Depositor (within
the
meaning of Section 15 of the Securities Act and Section 20 of the
Exchange
Act); and the respective present and former directors, officers,
employees
and agents of each of the foregoing and of the Depositor, and shall
hold
each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments,
and any other costs, fees and expenses that any of them may sustain
arising out of or based upon:
|
(i) (A) any
untrue statement of a material fact contained or alleged to be contained in
any
information, report, certification, accountants’ letter or other material
provided under Sections 4.26, 6.04(ii), 6.06, 9.01(d) and (e) by or on behalf
of
the Servicer, in its capacity as Seller under the Master Mortgage Loan Purchase
Agreement or in its capacity as Servicer hereunder, or provided under Sections
4.26, 6.04(ii), 6.06, 9.01(d) and (e) by or on behalf of any Subservicer,
Subcontractor or Third-Party Originator (collectively, the “Seller/Servicer
Information”), or (B) the omission or alleged omission to state in the
Seller/Servicer Information a material fact required to be stated in the
Seller/Servicer Information or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided,
by way of clarification, that
clause (B) of this paragraph shall be construed solely by reference to the
Seller/Servicer Information and not to any other information communicated in
connection with a sale or purchase of securities, without regard to whether
the
Seller/Servicer Information or any portion thereof is presented together with
or
separately from such other information;
| (ii) |
any
failure by the Servicer, in its capacity as Seller under the Master
Mortgage Loan Purchase Agreement or in its capacity as Servicer hereunder,
any Subservicer, any Subcontractor or any Third-Party Originator to
deliver any information, report, certification, accountants’ letter or
other material when and as required under Sections 4.26, 6.04(ii),
6.06,
9.01(d) and (e), including any failure by the Servicer to identify
pursuant to Section 4.26(b) any Subcontractor “participating in the
servicing function” within the meaning of Item 1122 of Regulation AB;
or
|
| (iii) |
any
breach by the Servicer of a representation or warranty set forth in
Section 9.01(e)(vi)(A) or in a writing furnished pursuant to Section
9.01(e)(vi)(B) and made as of a date prior to the closing date of the
related Securitization Transaction, to the extent that such breach
is not
cured by such closing date, or any breach by the Company of a
representation or warranty in a writing furnished pursuant to Section
9.01(e)(vi)(B) to the extent made as of a date subsequent to such closing
date.
|
In
the
case of any failure of performance described in sub-clause (ii) of this Section
9.01(f), the Servicer shall promptly reimburse the Owner, any Depositor, as
applicable, and each Person responsible for the preparation, execution or filing
of any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to
Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by the Seller/Servicer, any
Subservicer, any Subcontractor or any Third-Party Originator.
|
(g)
|
The
Owner and each Person who controls the Owner (within the meaning
of
Section 15 of the Securities Act and Section 20 of the Exchange Act)
shall
indemnify the Servicer, each affiliate of the Servicer, each Person
who
controls any of such parties or the Servicer (within the meaning
of
Section 15 of the Securities Act and Section 20 of the Exchange Act)
and
the respective present and former directors, officers, employees
and
agents of each of the foregoing and of the Servicer, and shall hold
each
of them harmless from and against any losses, damages, penalties,
fines,
forfeitures, legal fees and expenses and related costs, judgments,
and any
other costs, fees and expenses that any of them may sustain arising
out of
or based upon:
|
(i)
(A) any
untrue statement of a material fact contained or alleged to be contained in
any
offering materials related to a Securitization Transaction, including without
limitation the registration statement, prospectus, prospectus supplement, any
private placement memorandum, any computational materials, and any amendments
or
supplements to the foregoing (collectively, the “Securitization Materials”) or
(B) the omission or alleged omission to state in the Securitization Materials
a
material fact required to be stated in the Securitization Materials or necessary
in order to make the statements therein, in the light of the circumstances
under
which they were made, not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission is other
than a statement or omission arising out of, resulting from, or based upon
the
Servicer Information.
The
Owner
and the Servicer acknowledge and agree that the purpose of Section 9.01(e)
is to
facilitate compliance by the Owner and any Depositor with the provisions of
Regulation AB and related rules and regulations of the Commission. Neither
the
Owner nor any Depositor shall exercise its right to request delivery of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the Securities Act, the
Exchange Act and the rules and regulations of the Commission thereunder. The
Servicer acknowledges that interpretations of the requirements of Regulation
AB
may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Owner or any Depositor in good faith for delivery of
information under these provisions on the basis of evolving interpretations
of
Regulation AB. In connection with any Securitization Transaction, the Servicer
shall cooperate fully with the Owner to deliver to the Owner (including any
of
its assignees or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Owner or any Depositor to permit the Owner or such
Depositor to comply with the provisions of Regulation AB, together with such
disclosures relating to the Servicer (as Seller or Servicer), any Subservicer,
any Third-Party Originator and the Mortgage Loans, or the servicing of the
Mortgage Loans, reasonably believed by the Owner or any Depositor to be
necessary in order to effect such compliance.
In
the
event the Owner has elected to have the Servicer hold record title to the
Mortgages, prior to the Reconstitution Date the Servicer shall prepare an
Assignment of Mortgage in blank or to the trustee from the Servicer acceptable
to the trustee for each Mortgage Loan that is part of the Whole Loan Transfers,
Agency Sales or Securitization Transactions. The Owner shall pay all preparation
and recording costs associated therewith, if the Assignments of Mortgage have
not been previously prepared and recorded in the name of the Owner or its
designee. The Servicer shall execute each Assignment of Mortgage, track such
Assignments of Mortgage to ensure they have been recorded and deliver them
as
required by the trustee upon the Servicer's receipt thereof. Additionally,
the
Servicer shall prepare and execute, at the direction of the Owner, any note
endorsements in connection with any and all seller/servicer agreements. If
required at any time by a Rating Agency, Owner or successor owner in connection
with any Whole Loan Transfer, Agency Sale or Securitization Transaction, the
Servicer shall deliver such additional documents from its Retained Mortgage
File
within fifteen (15) Business Days, upon receipt of request by the Owner, to
the
Custodian, successor owner or other designee of the Owner as said Rating Agency,
Owner or successor owner may require.
All
Mortgage Loans (i) not sold or transferred pursuant to Whole Loan Transfers,
Agency Sales or Securitization Transactions or (ii) that are subject to a
Securitization Transaction for which the related trust is terminated for any
reason, shall remain subject to this Agreement and shall continue to be serviced
in accordance with the terms of this Agreement and with respect thereto this
Agreement shall remain in full force and effect.
ARTICLE
X
DEFAULT
Section
10.01 Events
of Default.
Each
of
the following shall constitute an Event of Default on the part of the
Servicer:
|
(i)
|
any
failure by the Servicer to remit to the Owner any payment required
to be
made under the terms of this Agreement which continues unremedied
for a
period of two (2) Business Days after the date upon which written
notice
of such failure, requiring the same to be remedied, shall have been
given
to the Servicer by the Owner; or
|
|
(ii)
|
failure
by the Servicer duly to observe or perform in any material respect
any
other of the covenants or agreements on the part of the Servicer
set forth
in this Agreement or in the Custodial Agreement which continues unremedied
for a period of thirty (30) days after the date on which written
notice of
such failure, requiring the same to be remedied, shall have been
given to
the Servicer by the Owner or by the Custodian; provided the Servicer
shall
have additional time to remedy such failure if reasonably requested
by the
Servicer, and upon proof by the Servicer that it is diligently seeking
to
remedy such failure; provided that such initial and additional cure
period
shall not exceed sixty (60) days in the aggregate;
or
|
|
(iii)
|
failure
by the Servicer to maintain its license to do business in any jurisdiction
where the Mortgaged Property is located if such license is required;
or
|
|
(iv)
|
a
decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for
the
winding-up or liquidation of its affairs, shall have been entered
against
the Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of sixty (60) days;
or
|
|
(v)
|
the
Servicer shall consent to the appointment of a conservator or receiver
or
liquidator in any insolvency, readjustment of debt, marshaling of
assets
and liabilities or similar proceedings of or relating to the Servicer
or
of or relating to all or substantially all of its property;
or
|
|
(vi)
|
the
Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency, bankruptcy or reorganization statute, make an assignment
for
the benefit of its creditors, voluntarily suspend payment of its
obligations or cease its normal business operations for three Business
Days; or
|
|
(vii)
|
the
Servicer ceases to meet the qualifications of a ▇▇▇▇▇▇ ▇▇▇/▇▇▇▇▇▇▇
Mac
servicer; or
|
| (viii) |
the
Servicer attempts to assign its right to servicing compensation hereunder
or to assign this Agreement or the servicing responsibilities hereunder
or
to delegate its duties hereunder or any portion thereof in violation
of
Section 8.04; or
|
| (ix) |
failure
by the Servicer to duly perform, within the required time period, its
obligations under Sections 6.04, 6.05, 6.06 or 9.01(c), which failure
continues unremedied for a period of fifteen (15) days after the date
on
which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the
Owner.
|
In
each
and every such case, so long as an Event of Default shall not have been
remedied, in addition to whatever rights the Owner may have at law or equity
to
damages, including injunctive relief and specific performance, the Owner, by
notice in writing to the Servicer, may terminate all the rights and obligations
of the Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof.
Upon
receipt by the Servicer of such written notice, all authority and power of
the
Servicer under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant
to
Section 12.01. Upon written request from any Owner, the Servicer shall prepare,
execute and deliver to the successor entity designated by the Owner any and
all
documents and other instruments, place in such successor's possession all
Retained Mortgage Files, and do or cause to be done all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
including but not limited to the transfer and endorsement or assignment of
the
Mortgage Loans and related documents, at the Servicer's sole expense. The
Servicer shall cooperate with the Owner and such successor in effecting the
termination of the Servicer's responsibilities and rights hereunder, including
without limitation, the transfer to such successor for administration by it
of
all cash amounts which shall at the time be credited by the Servicer to the
Custodial Account, Subsidy Account or Escrow Account or thereafter received
with
respect to the Mortgage Loans.
Section
10.02 Waiver
of Defaults.
By
a
written notice, the Owner may waive any default by the Servicer in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so
waived.
ARTICLE
XI
TERMINATION
Section
11.01 Termination.
This
Agreement shall terminate upon either: (i) the later of the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or the disposition of any REO Property with respect to the last Mortgage
Loan and the remittance of all funds due hereunder; or (ii) mutual consent
of
the Servicer and the Owner in writing.
Section
11.02 Termination
Without Cause.
The
Owner
may terminate, at its sole option, any rights the Servicer may have hereunder,
without cause as provided in this Section 11.02. Any such notice of termination
shall be in writing and delivered to the Servicer by registered mail as provided
in Section 12.05.
The
Servicer shall be entitled to receive, as such liquidated damages, upon the
transfer of the servicing rights, an amount equal to: (i) 2.75% of the aggregate
outstanding principal amount of the Mortgage Loans as of the termination date
paid by the Owner to the Servicer with respect to all of the Mortgage Loans
for
which a servicing fee rate of .25% is paid per annum, (ii) 3.25% of the
aggregate outstanding principal amount of the Mortgage Loans as of the
termination date paid by the Owner to the Servicer with respect to all of the
Mortgage Loans for which a servicing fee rate of .375% is paid per annum, and
(iii) 3.75% of the aggregate outstanding principal amount of the Mortgage Loans
as of the termination date paid by the Owner to the Servicer with respect to
all
of the Mortgage Loans for which a servicing fee rate of .44% or greater is
paid
per annum.
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
Section
12.01 Successor
to Servicer.
Prior
to
termination of the Servicer's responsibilities and duties under this Agreement
pursuant to Sections 8.04, 10.01, 11.01(ii) or Section 11.02 the Owner shall,
(i) succeed to and assume all of the Servicer's responsibilities, rights, duties
and obligations under this Agreement, or (ii) appoint a successor having the
characteristics set forth in Section 8.02 and which shall succeed to all rights
and assume all of the responsibilities, duties and liabilities of the Servicer
under this Agreement prior to the termination of Servicer's responsibilities,
duties and liabilities under this Agreement. In connection with such appointment
and assumption, the Owner may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor shall
agree. In the event that the Servicer's duties, responsibilities and liabilities
under this Agreement should be terminated pursuant to the aforementioned
sections, the Servicer shall discharge such duties and responsibilities during
the period from the date it acquires knowledge of such termination until the
effective date thereof with the same degree of diligence and prudence which
it
is obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition
of
its successor. The resignation or removal of the Servicer pursuant to the
aforementioned sections shall not become effective until a successor shall
be
appointed pursuant to this Section 12.01 and shall in no event relieve the
Servicer of the representations and warranties made pursuant to Section 3.01
of
this Agreement or the Seller of the representations and warranties made in
the
Master Mortgage Loan Purchase Agreement and the remedies available to the Owner
under Section 3.02 and 8.01 of this Agreement or under the Master Mortgage
Loan
Purchase Agreement, it being understood and agreed that the provisions of
Sections 3.01, 3.02 and 8.01 of this Agreement and the representations and
warranty and remedy sections of the Master Mortgage Loan Purchase Agreement
shall be applicable to the Servicer and the Seller, as applicable,
notwithstanding any such sale, assignment, resignation or termination of the
Servicer, or the termination of this Agreement.
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Servicer and to the Owner an instrument accepting such appointment, wherein
the successor shall make the representations and warranties set forth in Section
3.01, whereupon such successor shall become fully vested with all the rights,
powers, duties, responsibilities, obligations and liabilities of the Servicer,
with like effect as if originally named as a party to this Agreement. Any
termination or resignation of the Servicer or termination of this Agreement
pursuant to Section 8.04, 10.01, 11.01 or 11.02 shall not affect any claims
that
any Owner may have against the Servicer arising out of the Servicer's actions
or
failure to act prior to any such termination or resignation.
The
Servicer shall deliver promptly to the successor servicer the funds in the
Custodial Account, Subsidy Account and Escrow Account and all Retained Mortgage
Files, Servicing Files and related documents and statements held by it hereunder
and the Servicer shall account for all funds and shall execute and deliver
such
instruments and do such other things as may reasonably be required to more
fully
and definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer.
Upon
a
successor's acceptance of appointment as such, the Servicer shall notify by
mail
the Owner of such appointment in accordance with the procedures set forth in
Section 12.05.
Section
12.02 Amendment.
This
Agreement may be amended from time to time by written agreement signed by the
Servicer and the Owner.
Section
12.03 Governing
Law.
This
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
12.04 Duration
of Agreement.
This
Agreement shall continue in existence and effect until terminated as herein
provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Owner.
Section
12.05 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
registered mail, postage prepaid, addressed as follows:
| (i) |
if
to the Servicer:
|
▇▇▇▇▇
Fargo Bank, N.A.
1
Home
▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇, MAC X2401-042
Fax:
515/▇▇▇-▇▇▇▇
In
each
instance, with a copy to:
▇▇▇▇▇
Fargo Bank, N.A.
1
Home
Campus
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
General Counsel MAC X2401-06T
or
such
other address as may hereafter be furnished to the Owner in writing by the
Servicer;
(ii) if
to
Owner:
Citigroup
Global Markets Realty Corp.
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
or
such
other address as may hereafter be furnished to the Servicer in writing by the
Owner;
Section
12.06 Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this
Agreement.
Section
12.07 Relationship
of Parties.
Nothing
herein contained shall be deemed or construed to create a partnership or joint
venture between the parties hereto and the services of the Servicer shall be
rendered as an independent contractor and not as agent for the
Owner.
Section
12.08 Execution;
Successors and Assigns.
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. Subject to Section 8.04, this Agreement shall inure
to
the benefit of and be binding upon the Servicer and the Owner and their
respective successors and assigns.
Section
12.09 Recordation
of Assignments of Mortgage.
To
the
extent permitted by applicable law, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any
or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected at the
Servicer's expense in the event recordation is either necessary under applicable
law or requested by the Owner at its sole option.
Section
12.10 Assignment
by Owner.
The
Owner
shall have the right, without the consent of the Servicer to assign, in whole
or
in part, its interest under this Agreement with respect to some or all of the
Mortgage Loans, and designate any person to exercise any rights of the Owner
hereunder, by executing an Assignment, Assumption and Recognition Agreement
substantially in the form attached as Exhibit F, and the assignee or designee
shall accede to the rights and obligations hereunder of the Owner with respect
to such Mortgage Loans. All references to the Owner in this Agreement shall
be
deemed to include its assignee or designee.
Section
12.11 Solicitation
of Mortgagor.
Neither
party shall, after the Servicing Date, take any action to solicit the
refinancing of any Mortgage Loan. It is understood and agreed that neither
(1)
promotions undertaken by either party or any affiliate which are directed to
the
general public at large, including, without limitation, mass mailings based
upon
commercially acquired mailing lists, newspaper, radio, television advertisements
nor (ii) serving the refinancing needs of a Mortgagor who, without solicitation,
contacts either party in connection with the refinance of such Mortgage or
Mortgage Loan, shall constitute solicitation under this Section.
Section
12.12 Further
Agreements.
The
Owner
and the Servicer each agree to execute and deliver to the other such additional
documents, instruments or agreements as may be necessary or appropriate to
effectuate the purposes of this Agreement.
Section
12.13 Third
Party Beneficiary.
For
purposes of this Agreement, any master servicer shall be considered a third
party beneficiary to this Agreement entitled to all the rights and benefits
accruing to any master servicer herein as if it were a direct party to this
Agreement.
Section
12.14 Opinion
of Counsel.
Upon
execution of this Agreement, and upon reasonable request by the Owner, on each
Servicing Date, the Servicer shall provide an Opinion of Counsel in the form
attached hereto as Exhibit G.
[Intentionally
Blank - Next Page Signature Page]
IN
WITNESS WHEREOF, the Servicer and the Owner have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day
and
year first above written.
|
CITIGROUP
GLOBAL MARKETS REALTY CORP.
Owner
|
▇▇▇▇▇
FARGO BANK, N.A.
Servicer
|
|||
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
|
By:
|
/s/
▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
|
Name:
|
▇▇▇▇
▇▇▇▇▇▇
|
|
|
Title:
|
Authorized
Agent
|
Title:
|
Assistant
Vice President
|
|
|
)
|
||
|
)
|
ss.:
|
|
|
COUNTY
OF___________
|
)
|
On
the
_____ day of _______________, 20___ before me, a Notary Public in and for said
State, personally appeared _________, known to me to be _________ of ▇▇▇▇▇
Fargo
Bank, N.A., the national banking association that executed the within instrument
and also known to me to be the person who executed it on behalf of said bank,
and acknowledged to me that such bank executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
|
Notary
Public
My
Commission expires
_________________
|
|
STATE
OF
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF___________
|
)
|
On
the
_____ day of _______________, 20___ before me, a Notary Public in and for said
State, personally appeared _____________________________________, known to
me to
be the ______________________________ of Citigroup Global Markets Realty Corp.,
the corporation that executed the within instrument and also known to me to
be
the person who executed it on behalf of said corporation, and acknowledged
to me
that such corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
|
Notary
Public
My
Commission expires
_________________
|
EXHIBIT
A
FORM
OF
ACKNOWLEDGMENT AGREEMENT
THIS
ACKNOWLEDGMENT AGREEMENT, dated as of _____________, (the “Closing Date”),
between @, (“Owner”), and @, (“Servicer”), (together, the
“Parties”).
W
I T N E S S E T H:
WHEREAS,
Owner has purchased certain mortgage loans [on
a servicing released basis] [on a servicing retained basis]
identified
on Schedule I attached hereto, (the “Mortgage Loans”).
WHEREAS,
the Owner desires to retain Servicer to service and provide management and
disposition services for the Mortgage Loans on behalf of the Owner pursuant
to
the terms of that certain Amended and Restated Flow Servicing Agreement by
and
between the Owner and the Servicer dated as March 1, 2006 (the “Servicing
Agreement”);
NOW
THEREFORE, for and in consideration of the mutual premises set forth herein
and
other good and valuable consideration the receipt and sufficiency of which
hereby are acknowledged, and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. Unless
otherwise amended by this Acknowledgment Agreement, all provisions of the
Servicing Agreement shall apply to the servicing of the Mortgage
Loans.
2. The
Servicing Fee Rate with respect to the Mortgage Loans shall be @%.
3. The
Cut-off Date with respect to the Mortgage Loans shall be _________,
20__.
4. Capitalized
terms not otherwise defined herein shall have the meanings assigned under the
Servicing Agreement.
5. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without regard to principals of conflicts of law other than
Section 5-1401 of the New York General Obligations Law which shall
govern.
6. This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but all of which together shall constitute one
instrument.
[SIGNATURES
APPEAR ON NEXT PAGE]
IN
WITNESS WHEREOF, the parties hereto have caused this Acknowledgment Agreement
to
be duly executed on their behalf by the undersigned, duly authorized, as of
the
day and year first above written.
|
@.
|
|
|
Owner
|
|
|
By:_______________________________
|
|
|
Name:
|
|
|
Title:
|
|
|
▇▇▇▇▇
FARGO BANK, N.A.
|
|
|
Servicer
|
|
|
By:_______________________________
|
|
|
Name:
|
|
|
Title:
|
Schedule
I
EXHIBIT
B
With
respect to each Mortgage Loan, the Retained Mortgage File and Custodial Mortgage
File shall include each of the following items, which shall be available for
inspection by the Owner and any prospective owner, and which shall be retained
by the Servicer in the Retained Mortgage File or Servicing File or delivered
to
the Custodian pursuant to Sections 2.01 and 2.03 of the Amended and Restated
Flow Servicing Agreement to which this Exhibit is attached (the
"Agreement"):
With
respect to each Custodial Mortgage File:
1.
(a) The
original Mortgage Note bearing all intervening endorsements, endorsed "Pay
to
the order of
without
recourse" and signed in the name of the Servicer by an authorized officer (in
the event that the Mortgage Loan was acquired by the Servicer in a merger,
the
signature must be in the following form: "[Servicer], successor by merger to
[name of predecessor]"; and in the event that the Mortgage Loan was acquired
or
originated by the Servicer while doing business under another name, the
signature must be in the following form: "[Servicer], formerly known as
[previous name]"); or
(b) If
applicable, a certified copy of the Mortgage Note (endorsed as provided above)
together with a lost note affidavit, providing indemnification to the holder
thereof for any losses incurred due to the fact that the original Mortgage
Note
is missing.
|
2.
|
The
originals or certified true copies of any document sent for recordation
of
all assumption, modification, consolidation or extension agreements,
with
evidence of recording thereon.
|
| 3. |
The
original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording (except for the insertion of the
name
of the assignee and recording information). The Assignment of Mortgage
must be duly recorded only if recordation is either necessary under
applicable law or commonly required by private institutional mortgage
investors in the area where the Mortgaged Property is located or on
direction of the Owner. If the Assignment of Mortgage is to be recorded,
the Mortgage shall be assigned to the Owner. If the Assignment of Mortgage
is not to be recorded, the Assignment of Mortgage shall be delivered
in
blank. If the Mortgage Loan was acquired by the Servicer in a merger,
the
Assignment of Mortgage must be made by "[Servicer], successor by merger
to
[name of predecessor]." If the Mortgage Loan was acquired or originated
by
the Servicer while doing business under another name, the Assignment
of
Mortgage must be by "[Servicer], formerly know as [previous name]."
Subject to the foregoing and where permitted under the applicable laws
of
the jurisdiction wherein the Mortgaged property is located, such
Assignments of Mortgage may be made by blanket assignments for Mortgage
Loans secured by the Mortgaged Properties located in the same county.
If
the related Mortgage has been recorded in the name of Mortgage Electronic
Registration Systems, Inc. (“MERS”) or its designee, no Assignment of
Mortgage will be required to be prepared or delivered and instead,
the
Servicer shall take all actions as are necessary to cause the Owner
to be
shown as the owner of the related Mortgage Loan on the records of MERS
for
purposes of the system of recording transfers of beneficial ownership
of
mortgages maintained by MERS.
|
|
4.
|
The
original of any guarantee executed in connection with the Mortgage
Note.
|
|
5.
|
Original
or certified copy of power of attorney, if
applicable.
|
With
respect to each Retained Mortgage File:
|
6.
|
The
original Mortgage, with evidence of recording thereon or a certified
true
and correct copy of the Mortgage sent for recordation. If in connection
with any Mortgage Loan, the Servicer cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon
on or
prior to the Servicing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation
or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the Servicer shall
deliver
or cause to be delivered to the Custodian, a photocopy of such Mortgage,
together with (i) in the case of a delay caused by the public recording
office, an Officer’s Certificate of the Company stating that such Mortgage
has been dispatched to the appropriate public recording office for
recordation and that the original recorded Mortgage or a copy of
such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly
delivered
to the Custodian upon receipt thereof by the Servicer; or (ii) in
the case
of a Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
will be
promptly delivered to the Custodian upon receipt thereof by the
Servicer.
|
For
each
MERS Mortgage Loan, the original Mortgage, noting the presence of the MIN for
that Mortgage Loan and either language indicating that the Mortgage Loan was
originated in the name of MERS, or if the Mortgage Loan was not originated
in
the name of MERS, the original Mortgage and the assignment to MERS, with
evidence of recording thereon. Further, with respect to MERS Mortgage Loans,
(a)
the Mortgage names MERS as the Mortgagee and (b) the requirements set forth
in
the Electronic Tracking Agreement have been satisfied, with a conformed recorded
copy to follow as soon as the same is received by the Servicer.
|
7.
|
For
any Mortgage Loan not recorded in the name of MERS, originals or
certified
true copies of documents sent for recordation of all intervening
assignments of the Mortgage with evidence of recording thereon, or
if any
such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office
retains the original recorded assignments of mortgage, the Servicer
shall
deliver or cause to be delivered to the Custodian, a photocopy of
such
intervening assignment, together with (i) in the case of a delay
caused by
the public recording office, an Officer’s Certificate of the Company
stating that such intervening assignment of mortgage has been dispatched
to the appropriate public recording office for recordation and that
the
original recorded intervening assignment of mortgage or a copy of
such
intervening assignment of mortgage certified by the appropriate public
recording office or by the title insurance company tht issued the
title
policy to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian
upon
receipt thereof by the Servicer; or (ii) in the case of an intervening
assignment where a public recording office retains the original recorded
intervening assignment or in the case where an intervening assignment
is
lost after recordation in a public recording office, a copy of such
intervening assignment will be promptly delivered to the Custodian
upon
receipt thereof by the Servicer.
|
|
8.
|
The
electronic form of PMI Policy as identified by certificate
number.
|
|
9.
|
The
original mortgagee policy of title insurance or other evidence of
title
such as a copy of the title commitment or copy of the preliminary
title
commitment.
|
|
10.
|
Any
security agreement, chattel mortgage or equivalent executed in connection
with the Mortgage.
|
|
11.
|
For
each Cooperative Loan, the original or a seller certified true copy
of the
following:
|
The
original Pledge Agreement entered into by the Mortgagor with respect to such
Cooperative Loan;
UCC-3
assignment in blank (or equivalent instrument), sufficient under the laws of
the
jurisdiction where the related Cooperative Apartment is located to reflect
of
record the sale and assignment of the Cooperative Loan to the
Owner;
Original
assignment of Pledge Agreement in blank showing a complete chain of assignment
from the originator of the related Cooperative Loan to the
Servicer;
Original
Form UCC-1 and any continuation statements with evidence of filing thereon
with
respect to such Cooperative Loan;
Cooperative
Shares with a Stock Certificate in blank attached;
Original
Proprietary Lease;
Original
Assignment of Proprietary Lease, in blank, and all intervening assignments
thereof;
Original
recognition agreement of the interests of the mortgagee with respect to the
Cooperative Loan by the Cooperative, the stock of which was pledged by the
related Mortgagor to the originator of such Cooperative Loan; and
Originals
of any assumption, consolidation or modification agreements relating to any
of
the items specified above.
With
respect to each Mortgage Loan, the Servicing File shall include each of the
following items to the extent in the possession of the Servicer or in the
possession of the Servicer’s agent(s):
|
12.
|
The
original hazard insurance policy and, if required by law, flood insurance
policy, in accordance with Section 4.10 of the
Agreement.
|
|
13.
|
Residential
loan application.
|
|
14.
|
Mortgage
Loan closing statement.
|
|
15.
|
Verification
of employment and income, unless originated under the Servicer's
Limited
Documentation program, ▇▇▇▇▇▇ ▇▇▇ Timesaver
Plus.
|
|
16.
|
Verification
of acceptable evidence of source and amount of down payment, including
any
related asset verification, if
applicable.
|
|
17.
|
Credit
report on the Mortgagor.
|
|
18.
|
Residential
appraisal report, including the related completion certificate, if
applicable.
|
|
19.
|
Photograph
of the Mortgaged Property.
|
|
20.
|
Survey
of the Mortgage property, if required by the title company or applicable
law.
|
|
21.
|
Copy
of each instrument necessary to complete identification of any exception
set forth in the exception schedule in the title policy, i.e. map
or plat,
restrictions, easements, sewer agreements, home association declarations,
etc.
|
|
22.
|
All
required disclosure statements.
|
|
23.
|
If
available, termite report, structural engineer's report, water potability
and septic certification.
|
|
24.
|
Sales
contract, if applicable.
|
|
25.
|
Evidence
of payment of taxes and insurance premiums, insurance claim files,
correspondence, current and historical computerized data files, and
all
other processing, underwriting and closing papers and records which
are
customarily contained in a mortgage loan file and which are required
to
document the Mortgage Loan or to service the Mortgage
Loan.
|
|
26.
|
Amortization
schedule, if available.
|
|
27.
|
Payment
history for any Mortgage Loan that has been closed for more than
90
days.
|
28. Original
power of attorney, if applicable.
In
the
event an Officer's Certificate of the Servicer is delivered to the Custodian
because of a delay caused by the public recording office in returning any
recorded document, the Servicer shall deliver to the Custodian, within 240
days
of the Servicing Date, an Officer's Certificate which shall (i) identify the
recorded document, (ii) state that the recorded document has not been delivered
to the Custodian due solely to a delay caused by the public recording office,
(iii) state the amount of time generally required by the applicable recording
office to record and return a document submitted for recordation, and (iv)
specify the date the applicable recorded document will be delivered to the
Custodian. The Servicer shall be required to deliver to the Custodian the
applicable recorded document by the date specified in (iv) above. An extension
of the date specified in (iv) above may be requested from the Purchaser, which
consent shall not be unreasonably withheld.
EXHIBIT
C
SERVICING
CRITERIA TO BE ADDRESSED
IN
ASSESSMENT OF COMPLIANCE
|
Reg
AB Reference
|
Servicing
Criteria
|
Applicable
Servicing Criteria
|
Inapplicable
Servicing Criteria
|
|
General
Servicing Considerations
|
|||
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
X
|
|
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
X
|
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
|
X
|
|
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance with
the
terms of the transaction agreements.
|
X
|
|
|
Cash
Collection and Administration
|
|||
|
1122(d)(2)(i)
|
Payments
on mortgage loans are deposited into the appropriate custodial bank
accounts and related bank clearing accounts no more than two business
days
following receipt, or such other number of days specified in the
transaction agreements.
|
X
|
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
X
|
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction agreements.
|
X
|
|
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
X
|
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
|
X
|
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
|
X
|
|
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.
|
X
|
|
|
Investor
Remittances and Reporting
|
|||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the Servicer.
|
X
|
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
X
|
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
X
|
|
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
|
X
|
|
|
Pool
Asset Administration
|
|||
|
1122(d)(4)(i)
|
Collateral
or security on mortgage loans is maintained as required by the transaction
agreements or related mortgage loan documents.
|
X
|
|
|
1122(d)(4)(ii)
|
Mortgage
loan and related documents are safeguarded as required by the transaction
agreements
|
X
|
|
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements in
the
transaction agreements.
|
X
|
|
|
1122(d)(4)(iv)
|
Payments
on mortgage loans, including any payoffs, made in accordance with
the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
|
X
|
|
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
|
X
|
|
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor's mortgage loans
(e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
X
|
|
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
X
|
|
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period a
mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including, for
example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).
|
X
|
|
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for mortgage loans with variable
rates are computed based on the related mortgage loan documents.
|
X
|
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period specified
in
the transaction agreements; (B) interest on such funds is paid, or
credited, to obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are returned to the
obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction agreements.
|
X
|
|
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
X
|
|
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the Servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
X
|
|
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
X
|
|
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
X
|
|
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth
in
the transaction agreements.
|
X
|
EXHIBIT
D
FORM
OF
SARBANES CERTIFICATION
|
Re:
|
The
[ ] agreement dated as of [ ], 200[ ] (the “Agreement”), among
[IDENTIFY PARTIES]
|
I,
________________________________, the _______________________ of [Name of
Servicer] (the “Servicer”), certify to [the Owner], [the Depositor], and the
[Master Servicer] [Securities Administrator] [Trustee], and their officers,
with
the knowledge and intent that they will rely upon this certification,
that:
(1) I
have
reviewed the servicer compliance statement of the Servicer provided in
accordance with Item 1123 of Regulation AB (the “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”), provided
in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of
1934, as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the
“Servicing Assessment”), the registered public accounting firm’s attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB (the “Attestation Report”), and all
servicing reports, officer’s certificates and other information relating to the
servicing of the Mortgage Loans by the Servicer during 200[ ] that were
delivered by the Servicer to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the “Servicer
Servicing Information”);
(2) Based
on
my knowledge, the Servicer Servicing Information, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in the light of the circumstances under
which such statements were made, not misleading with respect to the period
of
time covered by the Servicer Servicing Information;
(3) Based
on
my knowledge, all of the Servicer Servicing Information required to be provided
by the Servicer under the Agreement has been provided to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee];
(4) I
am
responsible for reviewing the activities performed by the Servicer under the
Agreement, and based on my knowledge and the compliance review conducted in
preparing the Compliance Statement and except as disclosed in the Compliance
Statement, the Servicing Assessment or the Attestation Report, the Servicer
has
fulfilled its obligations under the Agreement; and
(5) The
Compliance Statement required to be delivered by the Servicer pursuant to the
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Servicer and by each Subservicer and Subcontractor pursuant
to
the Agreement have been provided to the [Depositor] [Master Servicer]. Any
material instances of noncompliance described in such reports have been
disclosed to the [Depositor] [Master Servicer]. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
|
Date:
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
EXHIBIT
E
[RESERVED]
EXHIBIT
F
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT
____________,
20__
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT, dated ___________________, 20__ between
_________________, a _________________ corporation having an office at
_________________ ("Assignor") and _________________, having an office at
_________________ ("Assignee"):
For
and
in consideration of the sum of one dollar ($1.00) and other valuable
consideration the receipt and sufficiency of which are hereby acknowledge,
and
of the mutual covenants herein contained, the parties hereto hereby agree as
follows:
1. The
Assignor hereby grants, transfers and assigns to Assignee all of the right,
title and interest of Assignor, as Owner, in, to and under that certain Master
Mortgage Loan Purchase Agreement and the Servicing Agreement, (the "Servicing
Agreement"), each dated as of _________________, by and between
_________________ (the "Owner"), and _________________ (the "Servicer"), and
the
Mortgage Loans delivered thereunder by the Servicer to the Assignor, and that
certain Custodial Agreement, (the "Custodial Agreement"), dated as of
_________________, by and among the Servicer, the Owner and _________________
(the "Custodian").
2. The
Assignor warrants and represents to, and covenants with, the Assignee
that:
a. The
Assignor is the lawful owner of the Mortgage Loans with the full right to
transfer the Mortgage Loans free from any and all claims and encumbrances
whatsoever;
b. The
Assignor has not received notice of, and has no knowledge of, any offsets,
counterclaims or other defenses available to the Servicer with respect to the
Servicing Agreement or the Mortgage Loans;
c. The
Assignor has not waived or agreed to any waiver under, or agreed to any
amendment or other modification of, the Servicing Agreement, the Custodial
Agreement or the Mortgage Loans, including without limitation the transfer
of
the servicing obligations under the Servicing Agreement. The Assignor has no
knowledge of, and has not received notice of, any waivers under or amendments
or
other modifications of, or assignments of rights or obligations under, the
Servicing Agreement or the Mortgage Loans; and
d. Neither
the Assignor nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of the Mortgage Loans, any interest
in
the Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security with, any person in any manner, or made
any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act of 1933 (the "33 Act") or which would render
the
disposition of the Mortgage Loans a violation of Section 5 of the 33 Act or
require registration pursuant thereto.
3. That
Assignee warrants and represent to, and covenants with, the Assignor and the
Servicer pursuant to Section 12.10 of the Servicing Agreement that:
a. The
Assignee agrees to be bound, as Owner, by all of the terms, covenants and
conditions of the Servicing Agreement, the Mortgage Loans and the Custodial
Agreement, and from and after the date hereof;
b. The
Assignee understands that the Mortgage Loans have not been registered under
the
33 Act or the securities laws of any state;
c. The
Assignee is acquiring the Mortgage Loans for investment for its own account
only
and not for any other person. In this connection, neither the Assignee nor
any
person authorized to act therefor has offered to sell the Mortgage Loans by
means of any general advertising or general solicitation within the meaning
of
Rule 502(c) of US Securities and Exchange Commission Regulation D, promulgated
under the 1933 Act;
d. The
Assignee considers itself a substantial sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
e. The
Assignee has been furnished with all information regarding the Mortgage Loans
that it has requested from the Assignor or the Servicer;
f. The
Assignee's address for purposes of all notices and correspondence related to
the
Mortgage Loans and the Servicing Agreements is:
Attention:
_________________
The
Assignee's wire transfer instructions for purposes of all remittances and
payments related to the Mortgage Loans and the Servicing Agreement
is:
Attention:
_________________
4. From
and
after the date hereof, the Servicer shall note the transfer of the Mortgage
Loans to the Assignee in its books and records, the Servicer shall recognize
the
Assignee as the owner of the Mortgage Loans and the Servicer shall service
the
Mortgage Loans for the benefit of the Assignee pursuant to the Servicing
Agreement, the terms of which are incorporated herein by reference. It is the
intention of the Assignor, the Servicer and the Assignee that the Servicing
Agreement shall be binding upon and inure to the benefit of the Servicer and
the
Assignee and their respective successors and assigns.
[Signatures
Follow]
IN
WITNESS WHEREOF, the parties have caused this Assignment, Assumption and
Recognition Agreement to be executed by their duly authorized officers as of
the
date first above written.
|
Assignor
|
Assignee
|
|||
|
By:
|
By:
|
|||
|
Name:
|
Name:
|
|||
|
Its:
|
Its:
|
|||
|
Tax
Payer Identification No.:
|
Tax
Payer Identification No.:
|
|||
EXHIBIT
G
FORM
OF
OPINION OF COUNSEL
@
@
@
@
|
Re:
|
▇▇▇▇▇
Fargo Bank, N.A.
|
|
Mortgage
Loan [Series/Pool] @
|
Dear
Sir/Madam:
I
am @ of
▇▇▇▇▇ Fargo Bank, N.A. and have acted as counsel to ▇▇▇▇▇ Fargo Bank, N.A.
(the
“Servicer”), with respect to certain matters in connection with the servicing by
the Servicer of the mortgage loans (the “Mortgage Loans”) pursuant to that
certain Flow Servicing Agreement by and between the Servicer and Citigroup
Global Markets Realty Corp. (the “Owner”), dated as of March 1, 2006, (the
“Servicing Agreement”). Capitalized terms not otherwise defined herein have the
meanings set forth in the Servicing Agreement.
I
have
examined the following documents:
1.
the
Servicing Agreement;
2.
the
Commitment Letter; and
3.
such
other documents, records and papers as I have deemed necessary and relevant
as a
basis for this opinion (collectively with the Servicing Agreement and Commitment
Letter, the “Agreements”).
To
the
extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Servicer contained in the Agreements.
I
have assumed the authenticity of all documents submitted to me as originals,
the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents.
Based
upon the foregoing, it is my opinion that:
|
1.
|
The
Servicer is a national banking association duly organized, validly
existing and in good standing under the laws of the United States.
|
|
2.
|
The
Servicer has the power to engage in the transactions contemplated
by the
Agreements and all requisite power, authority and legal right to
execute
and deliver the Agreements and to perform and observe the terms and
conditions of such instruments.
|
|
3.
|
Each
person who, as an officer or attorney-in-fact of the Servicer, signed
(a)
the Agreements, by and between the Servicer and the Owner, and (b)
any
other document delivered prior hereto or on the date hereof in connection
with the servicing of the Mortgage Loans in accordance with the Agreements
was, at the respective times of such signing and delivery, and is,
as of
the date hereof, duly elected or appointed, qualified and acting
as such
officer or attorney-in-fact, and the signatures of such persons appearing
on such documents are their genuine
signatures.
|
|
4.
|
Each
of the Agreements has been duly authorized, executed and delivered
by the
Servicer and is a legal, valid and binding agreement enforceable
in
accordance with its terms, subject to the effect of insolvency,
liquidation, conservatorship and other similar laws administered
by the
Federal Deposit Insurance Corporation affecting the enforcement of
contract obligations of insured banks and subject to the application
of
the rules of equity, including those respecting the availability
of
specific performance, none of which will materially interfere with
the
realization of the benefits provided
thereunder.
|
|
5.
|
The
Servicer has been duly authorized to allow any of its officers to
execute
any and all documents by original or facsimile signature in order
to
complete the transactions contemplated by the Agreements and in order
to
execute the endorsements to the Mortgage Notes and the assignments
of the
Mortgages, and the original or facsimile signature of the officer
at the
Servicer executing the Agreements and the assignments of the Mortgages
represents the legal and valid signature of said officer of the
Servicer.
|
|
6.
|
Either
(i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and
performance by the Servicer of or compliance by the Servicer with
the
Agreements or the consummation of the transactions contemplated by
the
Agreements; or (ii) any required consent, approval, authorization
or order
has been obtained by the Servicer.
|
|
7.
|
Neither
the consummation of the transactions contemplated by, nor the fulfillment
of the terms of the Agreements, will conflict with or results in
or will
result in a breach of or constitutes or will constitute a default
under
the charter or by-laws of the Servicer, the terms of any indenture
or
other agreement or instrument to which the Servicer is a party or
by which
it is bound or to which it is subject, or violates any statute or
order,
rule, regulations, writ, injunction or decree of any court, governmental
authority or regulatory body to which the Servicer is subject or
by which
it is bound.
|
|
8.
|
There
is no action, suit, proceeding or investigation pending or, to the
best of
my knowledge, threatened against the Servicer which, in my opinion,
either
in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition,
properties or assets of the Servicer or in any material impairment
of the
right or ability of the Servicer to carry on its business substantially
as
now conducted or in any material liability on the part of the Servicer
or
which would draw into question the validity of the Agreements, or
of any
action taken or to be taken in connection with the transactions
contemplated thereby, or which would be likely to impair materially
the
ability of the Servicer to perform under the terms of the
Agreements.
|
|
9.
|
For
purposes of the foregoing, I have not regarded any legal or governmental
actions, investigations or proceedings to be "threatened" unless
the
potential litigant or governmental authority has manifested to the
legal
department of the Servicer or an employee of the Servicer responsible
for
the receipt of process a present intention to initiate such proceedings;
nor have I regarded any legal or governmental actions, investigations
or
proceedings as including those that are conducted by state or federal
authorities in connection with their routine regulatory
activities.
|
This
opinion is given to you for your sole benefit, and no other person or entity
is
entitled to rely hereon except that the purchaser or purchasers to which you
initially and directly resell the Mortgage Loans may rely on this opinion as
if
it were addressed to them as of its date.
Sincerely,
@
@
@/@