Exhibit 99.4
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MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK, USA
Purchaser
COUNTRYWIDE HOME LOANS, INC.
Seller and Servicer
Dated as of November 1, 2004
Conventional Fixed and Adjustable Rate "A" Quality Mortgage Loans
[_________________________________________________________ 2004]
First Liens
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TABLE OF CONTENTS
Page
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SECTION 1. Definitions............................................................................ 1
[SECTIONS 2 THROUGH 10 HAVE BEEN INTENTIONALLY OMITTED]
SECTION 11. Seller's Servicing Obligations ........................................................ 34
SECTION 12. Removal of Mortgage Loans from Inclusion under This Agreement Upon a
Whole Loan Transfer or a Pass-Through Transfer on One or
More Reconstitution Dates.............................................................. 34
SECTION 13. The Seller............................................................................. 36
SECTION 14. Default................................................................................ 38
SECTION 15. Termination............................................................................ 40
SECTION 16. Successor to the Seller ............................................................... 40
[SECTIONS 17 THROUGH 32 HAVE BEEN INTENTIONALLY OMITTED]
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EXHIBITS
EXHIBIT 1 [INTENTIONALLY OMITTED]
EXHIBIT 2 [INTENTIONALLY OMITTED]
EXHIBIT 3 [INTENTIONALLY OMITTED]
EXHIBIT 4 [INTENTIONALLY OMITTED]
EXHIBIT 5 [INTENTIONALLY OMITTED]
EXHIBIT 6 [INTENTIONALLY OMITTED]
EXHIBIT 7 [INTENTIONALLY OMITTED]
EXHIBIT 8 SERVICING ADDENDUM
EXHIBIT 9 [INTENTIONALLY OMITTED]
SCHEDULE I [INTENTIONALLY OMITTED]
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MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
This is a MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT (the
"Agreement"), dated as of November 1, 2004, by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank,
USA, having an office at 4 World Financial Center, 9th floor, New York, New York
10080 (the "Initial Purchaser", and the Initial Purchaser or the Person, if any,
to which the Initial Purchaser has assigned its rights and obligations hereunder
as Purchaser with respect to a Mortgage Loan, and each of their respective
successors and assigns, the "Purchaser") and Countrywide Home Loans, Inc.,
having an office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Seller").
W I T N E S S E T H :
WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to time, from the
Seller, certain conventional fixed and adjustable rate residential first lien
mortgage loans, (the "Mortgage Loans") as described herein on a
servicing-retained basis, and which shall be delivered in groups of whole loans
on various dates as provided in the related Trade Confirmation (each, a "Closing
Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the Final Mortgage Loan Schedule for
the related Mortgage Loan Package, which is to be annexed hereto on each Closing
Date as Schedule I;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance, servicing and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer in a whole loan or participation
format or a public or private mortgage-backed securities transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions. For purposes of this Agreement the following
capitalized terms shall have the respective meanings set forth below.
Agreement: This Master Mortgage Loan Purchase and Servicing
Agreement including all exhibits, schedules, amendments and supplements hereto.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase and the Seller from time to time shall sell to the
Purchaser, the Mortgage Loans listed on the related Final Mortgage Loan Schedule
with respect to the related Mortgage Loan Package.
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Custodial Account: One or more accounts created and maintained
pursuant to Exhibit 8, which accounts shall be held as a special deposit by the
depository institution maintaining such accounts in a fiduciary capacity,
separate and apart from its funds or general assets and shall not be held in any
capacity that would create a debtor-creditor relationship between the depository
institution maintaining the accounts and the Seller or Purchaser.
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Escrow Account: One or more accounts created and maintained pursuant
to Exhibit 8.
Event of Default: Any one of the events enumerated in Subsection
14.01.
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FHLMC: The Federal Home Loan Mortgage Corporation or any successor
thereto.
Final Mortgage Loan Schedule: With respect to each Mortgage Loan
Package, the schedule of Mortgage Loans to be annexed hereto as Schedule I (or a
supplement thereto) on each Closing Date for the Mortgage Loan Package delivered
on such Closing Date in both hard copy and floppy disk, such schedule setting
forth the following information with respect to each Mortgage Loan in the
Mortgage Loan Package:
(1) the Seller's Mortgage Loan identifying number; the Mortgagor's
first and last name;
(2) the street address of the Mortgaged Property including
(3) the state and zip code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied;
(5) the type of Residential Dwelling constituting the Mortgaged
Property;
(6) the original months to maturity;
(7) the original date of the Mortgage Loan and the remaining
months to maturity from the Cut-off Date, based on the
original amortization schedule;
(8) the Loan-to-Value Ratio or Combined Loan-to-Value Ratio, if
applicable, at origination;
(9) the Mortgage Interest Rate in effect immediately following the
Cut-off Date;
(10) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(11) the stated maturity date;
(12) the amount of the Monthly Payment at origination;
(13) the amount of the Monthly Payment as of the Cut-off Date;
(14) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(15) the original principal amount of the Mortgage Loan;
(16) the Stated Principal Balance of the Mortgage Loan as of the
close of business on the Cut-off Date;
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(17) with respect to each Adjustable Rate Mortgage Loan, the first
Mortgage Interest Rate Adjustment Date and the number of
months between each Adjustment Date thereafter;
(18) with respect to each Adjustable Rate Mortgage Loan, the number
of days prior to the origination date and each Adjustment Date
thereafter, whereby the Index is determined;
(19) with respect to each Adjustable Rate Mortgage Loan, the Gross
Margin;
(20) with respect to each Adjustable Rate Mortgage Loan, the
Periodic Rate Cap;
(21) with respect to each Adjustable Rate Mortgage Loan, the
Initial Rate Cap;
(22) a code indicating the purpose of the loan (i.e., purchase
financing, Rate/Term Refinancing, Cash-Out Refinancing);
(23) with respect to each Adjustable Rate Mortgage Loan, the
Maximum Mortgage Interest Rate under the terms of the Mortgage
Note;
(24) with respect to each Adjustable Rate Mortgage Loan, the
Minimum Mortgage Interest Rate under the terms of the Mortgage
Note;
(25) the Mortgage Interest Rate at origination;
(26) with respect to each Adjustable Rate Mortgage Loan, the first
Adjustment Date immediately following the Cut-off Date;
(27) with respect to each Adjustable Rate Mortgage Loan, the Index
and the number of decimal places to which the Index is
rounded;
(28) a code indicating whether the Mortgage Loan is an Adjustable
Rate Mortgage Loan or a Fixed Rate Mortgage Loan;
(29) a code indicating the documentation style (i.e., full,
alternative or reduced);
(30) a code indicating if the Mortgage Loan is subject to a Primary
Insurance Policy;
(31) a code indicating whether the Mortgage Loan is a Buydown
Mortgage Loan;
(32) a code indicating the product type of the Mortgage Loan (e.g.,
3/1, 5/1, 7/1, 10/1, 15 year fixed, 30 year fixed, 15/30
balloon, etc.);
(33) code indicating whether the Mortgage Loan is subject to a
Prepayment Charge and the term of such Prepayment Charge;
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(34) the Appraised Value of the Mortgaged Property;
(35) the sale price of the Mortgaged Property, if applicable;
(36) a code indicating whether the Mortgaged Property is subject to
a second lien at origination of the First Lien Mortgage Loan;
(37) the Credit Score of the Mortgagor;
(38) the Mortgagor's debt to income ratio;
(39) the risk grade for each Mortgage Loan;
(40) with respect to each Adjustable Rate Mortgage Loan, the date
on which the Monthly Payment is changed to the extent that it
is different than the Adjustment Date; and
(41) with respect to each Adjustable Rate Mortgage Loan, to the
extent that such Mortgage Loan is an interest only loan, the
number of months/years whereby the scheduled payment payable
by a Mortgagor under the related Mortgage Note on each Due
Date includes only interest payments.
With respect to the Mortgage Loan Package in the aggregate, the Final Mortgage
Loan Schedule shall set forth the following information, as of the related
Cut-off Date:
(42) the number of Mortgage Loans;
(43) the current principal balance of the Mortgage Loans;
(44) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and
(45) the weighted average maturity of the Mortgage Loans.
Schedule I hereto shall be supplemented as of each Closing Date to reflect the
addition of the Final Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
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FNMA: ▇▇▇▇▇▇ ▇▇▇ or any successor thereto.
Initial Purchaser: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA, or any successor.
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MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto. MERS Loan: Any Mortgage Loan registered with MERS on the MERS System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit 5 annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement or the related Trade
Confirmation.
Mortgage Loan: Each first lien, residential mortgage loan, sold,
assigned and transferred to the Purchaser pursuant to this Agreement and the
related Trade Confirmation and identified on the Final Mortgage Loan Schedule
annexed to this Agreement on such Closing Date, which Mortgage Loan includes
without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
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Proceeds, REO Disposition proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The following documents:
(1) The original Mortgage Note endorsed, "Pay to the order of
------------------------------, without recourse" and signed in the name
of the Seller by an authorized officer of the Seller. If the Mortgage Loan
was acquired by the Seller in a merger or other type of acquisition, the
endorsement must be by "[Seller], successor [by merger to or in interest
to, as applicable] [name of predecessor]"; and if the Mortgage Loan was
acquired or originated by the Seller while doing business under another
name, the endorsement must be by "[Seller], successor in interest to
[previous name]." The Mortgage Note shall include all intervening
endorsements showing a complete chain of title from the originator to the
Seller;
(2) Except as provided below and for each Mortgage Loan that is not
a MERS Loan, the original recorded Mortgage, with evidence of recording
thereon, or, if the original Mortgage has not yet been returned from the
recording office, a copy of the original Mortgage certified by the Seller
to be a true copy of the original of the Mortgage that has been delivered
for recording in the appropriate recording office of the jurisdiction in
which the Mortgaged Property is located and in the case of each MERS Loan,
the original Mortgage, noting the presence of the MIN of the Loan and
either language indicating that the Mortgage Loan is a MOM Loan or if the
Mortgage Loan was not a MOM Loan at origination, the original Mortgage and
the assignment thereof to MERS, with evidence of recording indicated
thereon, or a copy of the Mortgage certified by the public recording
office in which such Mortgage has been recorded;
(3) In the case of each Mortgage Loan that is not a MERS Loan, the
original Assignment of each Mortgage, executed in blank. If the Mortgage
Loan was acquired by the Seller in a merger or other type of acquisition,
the assignment must be by "[Seller], successor [by merger to or in
interest to, as applicable] [name of predecessor]"; and in the event that
the Mortgage Loan was acquired or originated by the Seller while doing
business under another name, the assignment must be by "[Seller],
successor in interest to [previous name]";
(4) The original policy of title insurance (or a preliminary title
report if the original title insurance policy has not been received from
the title insurance company);
(5) Originals of any intervening assignments of the Mortgage, with
evidence of recording thereon or, if the original intervening assignment
has not yet been returned from the recording office, a copy of such
assignment certified to be a true copy of the original of the assignment
which has been sent for recording in the appropriate jurisdiction in which
the Mortgaged Property is located;
(6) With respect to a Mortgage Loan that, according to the Final
Mortgage Loan Schedule is covered by a primary mortgage insurance policy,
the original or a copy of the policy of primary mortgage insurance; and
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(7) Originals of all assumption and modification agreements, if any.
Mortgaged Property: The Mortgagor's real property securing repayment
of a related Mortgage Note, consisting of a fee simple interest in a single
parcel of real property improved by a Residential Dwelling.
Opinion of Counsel: A written opinion of counsel, who may be
salaried counsel for the Person on behalf of whom the opinion is being given,
reasonably acceptable to each Person to whom such opinion is addressed.
Pass-Through Transfer: The sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a trust to be formed as part of a publicly
issued or privately placed mortgage-backed securities transaction.
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Preliminary Servicing Period: With respect to any Mortgage Loans,
the period commencing on the related Closing Date and ending on the date the
Seller enters into Reconstitution Agreements which amend or restate the
servicing provisions of this Agreement.
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Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser 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 Pass-Through
Transfer as provided in Section 12.
Reconstitution Date: The date or dates on which any or all of the
Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and reconstituted as part of a Whole Loan Transfer or Pass-Through
Transfer pursuant to Section 12 hereof.
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Servicing Addendum: The terms and conditions attached hereto as
Exhibit 8 which will govern the servicing of the Mortgage Loans by Seller during
the Preliminary Servicing Period.
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Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a third party, which sale or transfer is not
a Pass-Through Transfer.
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SECTION 11. Seller's Servicing Obligations. The Seller, as
independent contract servicer, shall service and administer the Mortgage Loans
during the Preliminary Servicing Period in accordance with the terms and
provisions set forth in the Servicing Addendum attached as Exhibit 8, which
Servicing Addendum is incorporated herein by reference.
SECTION 12. Removal of Mortgage Loans from Inclusion under This
Agreement Upon a Whole Loan Transfer or a Pass-Through Transfer on One or More
Reconstitution Dates.
The Seller and the Initial Purchaser agree that with respect to some
or all of the Mortgage Loans, the Initial Purchaser may effect no more than
three (3) of either:
Whole Loan Transfers; and/or Pass-Through
(1) Transfers.
(2) With respect to each Whole Loan Transfer or Pass-Through
Transfer, as the case may be, entered into by the Initial
Purchaser, the Seller agrees:
(1) to cooperate reasonably with the Purchaser and any prospective
purchaser with respect to all reasonable requests and due
diligence procedures including participating in meetings with
rating agencies, bond insurers and such other parties as the
Purchaser shall designate and participating in meetings with
prospective purchasers of the Mortgage Loans or interests
therein and providing information reasonably requested by such
purchasers;
(2) to execute all Reconstitution Agreements provided that (i)
such Reconstitution Agreements are reasonably acceptable to
the Seller, and (ii) each of the Seller and the Purchaser is
given an opportunity to review and reasonably negotiate in
good faith the content of such documents not specifically
referenced or provided for herein, and (iii) such
Reconstitution Agreements do not materially diminish Seller'
rights or materially increase the Seller's responsibilities as
stated in this Agreement;
(3) with respect to any Whole Loan Transfer or Pass-Through
Transfer, the Seller shall make the representations and
warranties regarding the Seller if such Whole Loan Transfer or
Pass-Through Transfer occurs within 12 months of the related
Closing Date;
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(4) to deliver to the Purchaser for inclusion in any prospectus or
other offering material such publicly available information
regarding the Seller, its financial condition and its most
recently publicly disclosed mortgage loan delinquency,
foreclosure and loss experience as shall be requested by the
Purchaser and any additional information which the Seller is
capable of providing without unreasonable effort or expense
and the Seller shall indemnify and hold harmless the
Purchaser, each affiliate designated by the Purchaser and each
person who controls the Purchaser or such affiliate from and
against any and all losses, claims, damages and liabilities
arising from, with respect to information provided by the
Seller pursuant to this Section 12, information on the Final
Mortgage Loan Schedule and information that is otherwise
correctly derived from or based on such Final Mortgage Loan
Schedule (collectively, the "Seller Information"), any untrue
statement or alleged untrue statement of a material fact
contained in the Seller Information, or caused by any omission
or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading; provided however, the Seller shall not
indemnify the Purchaser for any error, omission, misstatement,
or other errors in Seller Information that are attributable to
or caused by the Purchaser or its agents; provided further,
that the Purchaser, shall indemnify and hold harmless the
Seller, each affiliate designated by the Seller and each
person who controls the Seller or such affiliate from and
against any and all losses, claims, damages and liabilities
arising from, with respect to information that is not Seller
Information, any untrue statement or alleged untrue statement
of a material fact contained in any information in the related
offering documents, or caused by any omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading;;
(5) to deliver to the Purchaser and to any Person designated by
the Purchaser, at the Purchaser's expense, such statements and
audit letters of reputable, certified public accountants
pertaining to information provided by the Seller pursuant to
clause 4 above as shall be reasonably requested by the
Purchaser;
(6) to deliver to the Purchaser, and to any Person designated by
the Purchaser, such documents and Opinions of Counsel as are
customarily delivered by originators or servicers, as the case
may be, and reasonably determined by the Purchaser to be
necessary in connection with Whole Loan Transfers or
Pass-Through Transfers, as the case may be, such Opinions of
Counsel for a Pass-Through Transfer to be in the form
reasonably acceptable to the Purchaser, it being understood
that the cost of any opinions of outside special counsel that
may be required for a Whole Loan Transfer or Pass-
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Through Transfer, as the case may be, shall be the
responsibility of the Purchaser;
(7) to negotiate and execute one or more subservicing agreements
between the Seller and any master servicer which is generally
considered to be a prudent master servicer in the secondary
mortgage market, designated by the Purchaser after reasonable
consultation with the Seller provided that the Seller is given
a reasonable opportunity to review and reasonably negotiate
such subservicing agreements and such subservicing agreements
do not materially diminish the Seller's rights or materially
increase the Seller's responsibilities as stated in this
Agreement and/or one or more custodial and servicing
agreements among the Purchaser, the Seller and a third party
custodian/trustee which is generally considered to be a
prudent custodian/trustee in the secondary mortgage market
designated by the Purchaser after reasonable consultation with
the Seller, in either case for the purpose of pooling the
Mortgage Loans with other Mortgage Loans for resale or
securitization; and
(8) in connection with any securitization of any Mortgage Loans,
to execute a pooling and servicing agreement, provided that
such pooling and servicing agreement does not materially
diminish the Seller' rights or materially increase the
Seller's responsibilities as stated in this Agreement.
All Mortgage Loans not sold or transferred pursuant to a Whole Loan
Transfer or Pass-Through Transfer shall be subject to this Agreement and shall
continue to be serviced for the remainder of the Preliminary Servicing Period in
accordance with the terms of this Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION 13. The Seller.
Subsection 13.01. Additional Indemnification by the Seller.
In addition to the indemnification provided in Subsection 7.03, the
Seller shall indemnify the Purchaser and hold the Purchaser 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 Purchaser may sustain in any way related to the failure of the
Seller to service and administer the Mortgage Loans in strict compliance with
the terms of this Agreement. Notwithstanding the foregoing, the Purchaser shall
indemnify the Seller 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 Seller
may sustain in any way related to (a) actions or inactions of the Seller which
were taken or omitted upon the instruction or direction of the Purchaser, or (b)
the failure of the Purchaser to perform its obligations under this Agreement,
including the provisions of Subsection 13.03.
Subsection 13.02. Merger or Consolidation of the Seller.
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The Seller shall keep in full force and effect its existence, rights
and franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and shall obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of any of the Mortgage Loans, and to enable the Seller to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall be an institution whose deposits are insured
by the FDIC or a company whose business is the origination and servicing of
mortgage loans, shall be a FNMA or FHLMC approved seller/servicer and shall
satisfy any requirements of Section 16 with respect to the qualifications of a
successor to the Seller.
Subsection 13.03. Limitation on Liability of the Seller and Others.
Neither the Seller nor any of the officers, employees or agents of
the Seller shall be under any liability to the Purchaser for any action taken or
for refraining from the taking of any action in good faith in connection with
the servicing of the Mortgage Loans pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Seller or
any such person against any breach of warranties or representations made herein,
or failure to perform its obligations in compliance with any standard of care
set forth in this Agreement, or any liability which would otherwise be imposed
by reason of any breach of the terms and conditions of this Agreement. The
Seller and any officer, employee or agent of the Seller may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. To the extent the Purchaser
records with the recording office an Assignment of Mortgage which designates the
Purchaser as the holder of record of the Mortgage, the Purchaser agrees that it
shall (i) provide the Seller with immediate notice of any action with respect to
the Mortgage or the related Mortgaged Property and ensure that the proper
department or person at the Seller, designated in writing from the Seller to the
Purchaser, receives such notice; and (ii) immediately complete, sign and return
to the Seller any document reasonably requested by the Seller to comply with its
servicing obligations, including without limitation, any instrument required to
release the Mortgage upon payment in full of the obligation or take any other
action reasonably required by the Seller. The Purchaser further agrees that the
Seller shall have no liability for the Purchaser's failure to comply with
subsections (i) or (ii) in the foregoing sentence. The Seller shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to its obligation to sell or duty to service the Mortgage Loans in
accordance with this Agreement and which in its opinion may result in its
incurring any expenses or liability; provided, however, that the Seller may,
with the consent of the Purchaser, 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 legal expenses and costs of such action
and any liability resulting therefrom shall be expenses, costs and liabilities
for which the Purchaser shall be liable, and the Seller shall be entitled to
reimbursement therefor from the Purchaser upon written demand except when such
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expenses, costs and liabilities are subject to the Seller's indemnification
under Subsections 7.03 or 13.01.
Subsection 13.04. Seller Not to Resign.
The Seller shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Seller and the Purchaser or upon the determination that its servicing duties
hereunder are no longer permissible under applicable law and such incapacity
cannot be cured by the Seller in which event the Seller may resign as servicer.
Any such determination permitting the resignation of the Seller as servicer
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Purchaser which Opinion of Counsel shall be in form and substance reasonably
acceptable to the Purchaser and which shall be provided at the cost of the
Seller. No such resignation shall become effective until a successor shall have
assumed the Seller's responsibilities and obligations hereunder in the manner
provided in Section 16.
Subsection 13.05. No Transfer of Servicing.
The Seller acknowledges that the Purchaser has acted in reliance
upon the Seller's independent status, the adequacy of its servicing facilities,
plan, personnel, records and procedures, its integrity, reputation and financial
standing and the continuance thereof. Without in any way limiting the generality
of this Section, the Seller shall not either assign this Agreement or the
servicing hereunder or delegate its rights or duties hereunder or any portion
thereof, or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written approval of the Purchaser, which
consent will not be unreasonably withheld. Nothing in this Agreement shall
prohibit or limit the right of the Seller to assign the servicing rights
hereunder to Countrywide Home Loans Servicing LP.
SECTION 14. Default. Subsection
14.01. Events of Default.
In case one or more of the following Events of Default by the Seller
shall occur and be continuing, that is to say:
(i) any failure by the Seller to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of two Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Seller by the Purchaser; or
(ii) failure on the part of the Seller duly to observe or perform in
any material respect any other of the covenants or agreements on the part of the
Seller set forth in this Agreement 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 Seller by the
Purchaser; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency,
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bankruptcy, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Seller and such decree or order shall have
remained in force undischarged or unstayed for a period of sixty (60) days; or
(iv) the Seller shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Seller or relating to all or substantially all of its property; or
(v) the Seller shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) failure by the Seller to be in compliance with the "doing
business" or licensing laws of any jurisdiction where a Mortgaged Property is
located which continues unremedied for a period of thirty (30) days; or
(vii) the Seller ceases to meet the qualifications of either a FNMA
or FHLMC seller/servicer which continues unremedied for a period of thirty (30)
days; or
(viii) subject to the provisions of this Agreement, the Seller
attempts, without the consent of the Purchaser, to sell or otherwise dispose of
all or substantially all of its property or assets or to assign this Agreement
or the servicing responsibilities hereunder or to delegate its duties hereunder
or any portion thereof; or
(ix) failure by the Seller to duly perform, within the required time
period, its obligations under Sections 11.25, 11.26 and 11.27 of the Servicing
Addendum which failure continues unremedied for a period of thirty (30) days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller by any party to this Agreement or
by any master servicer responsible for master servicing the Mortgage Loans
pursuant to a securitization of such Mortgage Loans;
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Purchaser, by notice in writing to the Seller may, in
addition to whatever rights the Purchaser may have at law or equity to damages,
including injunctive relief and specific performance, terminate all the rights
and obligations of the Seller as servicer under this Agreement. On or after the
receipt by the Seller of such written notice, all authority and power of the
Seller to service the Mortgage Loans under this Agreement shall on the date set
forth in such notice pass to and be vested in the successor appointed pursuant
to Section 16.
Subsection 14.02. Waiver of Defaults.
The Purchaser may waive any default by the Seller in the performance
of its obligations hereunder and its consequences. Upon any such waiver of a
past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been
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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.
SECTION 15. Termination. The respective obligations and
responsibilities of the Seller, as servicer, shall terminate upon the
distribution to the Purchaser of the final payment or liquidation with respect
to the last Mortgage Loan (or advances of same by the Seller) or the disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure with
respect to the last Mortgage Loan and the remittance of all funds due hereunder
unless terminated with respect to all or a portion of the Mortgage Loans on an
earlier date at the option of the Purchaser pursuant to Section 14. Upon written
request from the Purchaser in connection with any such termination, the Seller
shall prepare, execute and deliver, any and all documents and other instruments,
place in the Purchaser's possession all Mortgage Files, and do or accomplish all
other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise, at the
Seller's sole expense. The Seller agrees to cooperate with the Purchaser and
such successor in effecting the termination of the Seller's responsibilities and
rights hereunder as servicer, including, without limitation, the transfer to
such successor for administration by it of all cash amounts which shall at the
time be credited by the Seller to the Custodial Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
SECTION 16. Successor to the Seller. Prior to termination of the
Seller's responsibilities and duties under this Agreement pursuant to Section
12, 13, 14 or 15, the Purchaser shall (i) succeed to and assume all of the
Seller's responsibilities, rights, duties and obligations under this Agreement,
or (ii) appoint a successor which shall succeed to all rights and assume all of
the responsibilities, duties and liabilities of the Seller as servicer under
this Agreement. In connection with such appointment and assumption, the
Purchaser may make such arrangements for the compensation of such successor out
of payments on Mortgage Loans as it and such successor shall agree. In the event
that the Seller's duties, responsibilities and liabilities as servicer under
this Agreement should be terminated pursuant to the aforementioned Sections, the
Seller shall discharge such duties and responsibilities during the period from
the date it acquires knowledge of such termination until the effective date
thereof with the same degree of diligence and prudence which it is obligated to
exercise under this Agreement, and shall take no action whatsoever that might
impair or prejudice the rights or financial condition of the Purchaser or such
successor. The termination of the Seller as servicer pursuant to the
aforementioned Sections shall not become effective until a successor shall be
appointed pursuant to this Section 16 and shall in no event relieve the Seller
of the representations and warranties made pursuant to Subsections 7.01 and 7.02
and the remedies available to the Purchaser under Subsection 7.03 or 7.04, it
being understood and agreed that the provisions of such Subsections 7.01, 7.02,
7.03 and 7.04 shall be applicable to the Seller notwithstanding any such
resignation or termination of the Seller, or the termination of this Agreement.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Seller and to the Purchaser an instrument
accepting such appointment, whereupon such successor shall become fully vested
with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Seller, with like effect as if originally named as a party to
this Agreement provided, however, that such successor shall not assume, any and
all liabilities arising out of the Seller's acts as servicer. Any termination of
the Seller as servicer pursuant to
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Section 12, 13, 14 or 15 shall not affect any claims that the Purchaser may have
against the Seller arising prior to any such termination or resignation or
remedies with respect to such claims.
If any of the Mortgage Loans are MERS Loans, in connection with the
termination or resignation of the Seller hereunder, either (i) the successor
shall represent and warrant that it is a member of MERS in good standing and
shall agree to comply in all material respects with the rules and procedures of
MERS in connection with the servicing of the Mortgage Loans that are registered
with MERS, or (ii) the Seller shall cooperate with the successor either (x) in
causing MERS to execute and deliver an assignment of Mortgage in recordable form
to transfer the Mortgage from MERS to the Purchaser and to execute and deliver
such other notices, documents and other instruments as may be necessary or
desirable to effect a transfer of such Loan or servicing of such Mortgage Loan
on the MERS System to the successor or (y) in causing MERS to designate on the
MERS System the successor as the servicer of such Mortgage Loan.
The Seller shall timely deliver to the successor the funds in the
Custodial Account and the Escrow Account and the Mortgage Files and related
documents and statements held by it hereunder and the Seller shall account for
all funds. The Seller shall execute and deliver such instruments and do such
other things all as may reasonably be required to more fully and definitely vest
and confirm in the successor all such rights, powers, duties, responsibilities,
obligations and liabilities of the Seller as servicer. The successor shall
reimburse the Seller for amounts the Seller actually expended as servicer
pursuant to this Agreement which would otherwise have been recovered by the
Seller pursuant to this Agreement but for the appointment of the successor
servicer.
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EXHIBIT 8
SERVICING ADDENDUM Section
11.01. Seller to Act as Servicer.
The Seller, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and shall have
full power and authority, acting alone, to do or cause to be done any and all
things in connection with such servicing and administration which the Seller may
deem necessary or desirable and consistent with the terms of this Agreement.
Consistent with the terms of this Agreement, the Seller may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Seller's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser; provided, however, that the Seller shall not, without the prior
written consent of the Purchaser, permit any modification with respect to any
Mortgage Loan that would change the Mortgage Interest Rate, defer or forgive the
payment thereof or of any principal or interest payments, reduce the outstanding
principal amount (except for actual payments of principal), make additional
advances of additional principal or extend the final maturity date on such
Mortgage Loan. Without limiting the generality of the foregoing, the Seller
shall continue, and is hereby authorized and empowered, to execute and deliver
on behalf of itself, and the Purchaser, 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 Property. If reasonably required by the Seller, the Purchaser shall
furnish the Seller with any powers of attorney and other documents necessary or
appropriate to enable the Seller to carry out its servicing and administrative
duties under this Agreement.
In servicing and administering the Mortgage Loans, the Seller shall
employ procedures including collection procedures and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted mortgage
servicing practices of prudent lending institutions and the Purchaser's reliance
on the Seller.
Section 11.02. Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest
on all Mortgage Loans serviced by Seller are paid in full, the Seller shall
proceed diligently to collect all payments due under each Mortgage Loan serviced
by Seller when the same shall become due and payable and shall, to the extent
such procedures shall be consistent with this Agreement and the terms and
provisions of any related Primary Insurance Policy, follow such collection
procedures as it follows with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Further, the Seller shall take
special care in ascertaining and estimating annual ground rents, taxes,
assessments, water rates, fire and hazard insurance premiums, mortgage insurance
premiums, and all other charges that, as provided in the Mortgage, will
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become due and payable 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 11.03. Realization Upon Defaulted Mortgage Loans.
(a) The Seller shall use its best efforts, consistent with the
procedures that the Seller would use in servicing loans for its own account, to
foreclose upon or otherwise comparably convert the ownership of such Mortgaged
Properties as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 11.01. The Seller shall use its best efforts to realize upon defaulted
Mortgage Loans in such a manner as will maximize the receipt of principal and
interest by the Purchaser, taking into account, among other things, the timing
of foreclosure proceedings. The foregoing is subject to the provisions that, in
any case in which Mortgaged Property shall have suffered damage, the Seller
shall not be required to expend its own funds toward the restoration of such
property in excess of $2,000 unless it shall determine in its discretion (i)
that such restoration will increase the proceeds of liquidation of the related
Mortgage Loan to Purchaser after reimbursement to itself for such expenses, and
(ii) that such expenses will be recoverable by the Seller through Insurance
Proceeds or Liquidation Proceeds from the related Mortgaged Property, as
contemplated in Section 11.06. In the event that any payment due under any
Mortgage Loan is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period, the
Seller shall take such action as it shall deem to be in the best interest of the
Purchaser. In the event that any payment due under any Mortgage Loan remains
delinquent for a period of ninety (90) days or more, the Seller shall commence
foreclosure proceedings. The Seller shall notify the Purchaser in writing of the
commencement of foreclosure proceedings. In such connection, the Seller shall be
responsible for all costs and expenses incurred by it in any such proceedings;
provided, however, that it shall be entitled to reimbursement thereof from the
related Mortgaged Property, as contemplated in Section 11.06.
(b) Notwithstanding the foregoing provisions of this Section 11.03,
with respect to any Mortgage Loan as to which the Seller has received actual
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the related Mortgaged Property the Seller shall not either (i)
obtain title to such Mortgaged Property as a result of or in lieu of foreclosure
or otherwise, or (ii) otherwise acquire possession of, or take any other action,
with respect to, such Mortgaged Property if, as a result of any such action, the
Purchaser would be considered to hold title to, to be a mortgagee-in-possession
of, or to be an owner or operator of such Mortgaged Property within the meaning
of the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Seller has
also previously determined, based on its reasonable judgment and a prudent
report prepared by a Person who regularly conducts environmental audits using
customary industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Purchaser to take such actions as are necessary to
bring the Mortgaged Property into compliance therewith; and
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(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any
hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required
under any federal, state or local law or regulation, or that if any
such materials are present for which such action could be required,
that it would be in the best economic interest of the Purchaser to
take such actions with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 11.03 shall be advanced by the Seller, subject to the Seller's right to
be reimbursed therefor from the Custodial Account as provided in Section 11.06.
If the Seller determines, as described above, that it is in the best
economic interest of the Purchaser to take such actions as are necessary to
bring any such Mortgaged Property into compliance with applicable environmental
laws, or to take such action with respect to the containment, clean-up or
remediation of hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials affecting any such Mortgaged Property, then the Seller
shall take such action as it deems to be in the best economic interest of the
Purchaser. The cost of any such compliance, containment, cleanup or remediation
shall be advanced by the Seller, subject to the Seller's right to be reimbursed
therefor from the Custodial Account as provided in Section 11.06.
(c) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds in respect of any Mortgage Loan, will
be applied in the following order of priority: first, to reimburse the Seller
for any related unreimbursed Servicing Advances, pursuant to Section 11.06;
second, to accrued and unpaid interest on the Mortgage Loan, to the date of the
Final Recovery Determination, or to the Due Date prior to the Remittance Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Seller as follows: first, to unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
Section 11.04. Establishment of Payment Clearing Accounts.
(a) The Seller shall maintain one or more Payment Clearing Accounts for
the deposit of all funds collected in connection with the Mortgage Loans. The
Seller shall deposit in the Payment Clearing Account prior to the opening of
business on the Business Day following the day on which such amounts are
received by the Seller, all payments and collections received in connection with
the Mortgage Loans subsequent to the Cut-off Date or prior to the Cut-off Date
but allocable to a period subsequent to such date. The funds deposited and held
in the Payment Clearing Account may be commingled with other funds, including
the proceeds of other mortgage loans or funds serviced for other investors or
for the Seller's own portfolio. The Seller shall transfer funds deposited into
the Payment Clearing Account to the Custodial Accounts and Escrow Accounts, as
provided in Sections 11.05 and 11.07, within two (2) Business Days.
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The Seller's account agreement for the Payment Clearing Account shall
provide that such account is a special deposit, required to be segregated and
held by the depository institution maintaining such account in a fiduciary
capacity, separate and apart from the institution's own funds and general assets
and that the account shall not be held in any capacity that would create a
debtor-creditor relationship between the institution and the Seller or the
Purchaser. At all times, Purchaser shall be the sole beneficial owner of the
funds in the Payment Clearing Accounts received in connection with the Mortgage
Loans and Seller's possession or control of any such funds shall be solely in
Seller's capacity as collecting agent for Purchaser.
Section 11.05 Establishment of Custodial Accounts; Deposits in
Custodial Accounts.
(a) The Seller shall establish and maintain one or more Custodial
Accounts for the deposit of funds specified in Section 11.05(b) collected in
connection with the Mortgage Loans. (b) The Seller shall transfer the following
funds into the applicable Custodial Account within two (2) Business Days of
receipt:
(i) all payments on account of principal on the Mortgage
Loans; (ii) all payments on account of interest on the
Mortgage Loans; (iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Sections 11.11 and 11.12, 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 the Seller's normal servicing
procedures, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged Property
which are not released to the Mortgagor in accordance with the
Seller's normal servicing procedures, the loan documents or
applicable law;
(vi) all Monthly Advances;
(vii) all proceeds of any Mortgage Loan repurchased in
accordance with Subsections 7.03 and 7.04 and all amounts
required to be deposited by the Seller in connection with
shortfalls in principal amount of Qualified Substitute
Mortgage Loans pursuant to Subsection 7.03;
(viii) any amounts required to be deposited by the Seller
pursuant to Section 11.12 in connection with the deductible
clause in any blanket hazard insurance policy. Such deposit
shall be made from the Seller's own funds, without
reimbursement therefor;
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(ix) any amounts required to be deposited by the Seller in
connection with any REO Property pursuant to Section 11.14;
(x) any amounts required to be deposited in the Custodial
Account pursuant to Sections 11.20 or 11.21; and
(xi) with respect to each Principal Prepayment, an amount (to
be paid by the Seller out of its own funds without
reimbursement therefor) which, when added to all amounts
allocable to interest received in connection with such
Principal Prepayment, equals one month's interest on the
amount of principal so prepaid at the Mortgage Interest Rate.
The foregoing requirements for deposit in the Custodial Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
Prepayment Charges, assumption fees and similar fees and charges, to the extent
permitted by Section 11.01, need not be deposited by the Seller in the Custodial
Account. Each Custodial Account shall be an Eligible Account. The Seller shall
give notice to the Purchaser of the location of the Custodial Account when
established and prior to any change thereto.
Any amounts held in the Custodial Account may be, but are not
required to be, invested by the Seller. Any such investment by the Seller must
be in Eligible Investments. Any interest or other income on Eligible Investments
shall accrue to the benefit of the Seller and the Seller shall be entitled to
retain and withdraw such funds from the Custodial Account pursuant to Section
11.06. Other than such interest or other income received on Eligible
Investments, no other amounts may be commingled in the Custodial Account. The
Seller shall promptly deposit in the Custodial Account from its own funds,
without any right of reimbursement, the full amount of any losses on its
investment of funds in the Custodial Account.
(c) Without limiting the foregoing, the funds in the Custodial
Accounts shall at all times be segregated and held separate and apart from the
Seller's own funds and general assets and from any other funds or assets
collected or held by the Seller on behalf of third parties. The Seller's account
agreement for each Custodial Account shall provide that such account is a
special deposit, required to be segregated and held by the depository
institution maintaining such account in a fiduciary capacity, separate and apart
from the institution's own funds and general assets and that the account shall
not be held in any capacity that would create a debtor-creditor relationship
between the institution and the Seller or the Purchaser. Each Custodial Account
shall be evidenced by a Custodial Account Certification in the form of Exhibit 6
and shall be entitled "Countrywide Home Loans, Inc., as servicer, in trust for
the Purchaser". At all times, the Purchaser shall be the sole beneficial owner
of all funds in the Custodial Accounts. Seller's possession or control of any
such funds shall be solely in Seller's capacity as collecting agent for the
Purchaser.
Section 11.06 Withdrawals From Custodial Accounts.
The Seller may, from time to time, withdraw from the Custodial
Account for the following purposes:
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(i) to make distributions to the Purchaser in the amounts and in the
manner provided for in Section 11.15;
(ii) to reimburse itself for Monthly Advances, the Seller's right to
reimburse itself pursuant to this subclause (ii) being limited to amounts
received on the related Mortgage Loan which represent late collections (net of
the related Servicing Fees) respecting which any such advance was made it being
understood that, in the case of such reimbursement, the Seller's right thereto
shall be prior to the rights of Purchaser, except that, where the Seller is
required to repurchase a Mortgage Loan, pursuant to Subsection 7.03, the
Seller's right to such reimbursement shall be subsequent to the payment to the
Purchaser of the Repurchase Price pursuant to Subsection 7.03, and all other
amounts required to be paid to the Purchaser with respect to such Mortgage
Loans;
(iii) to reimburse itself for unreimbursed Servicing Advances, the
Seller'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
Seller from the Mortgagor or otherwise relating to the Mortgage Loan, it being
understood that, in the case of such reimbursement, the Seller's right thereto
shall be prior to the rights of the Purchaser, except that, where the Seller is
required to repurchase a Mortgage Loan, pursuant to Subsection 7.03, the
Seller's right to such reimbursement shall be subsequent to the payment to the
Purchaser of the Repurchase Price pursuant to Subsection 7.03 and all other
amounts required to be paid to the Purchaser with respect to such Mortgage
Loans;
(iv) to pay to itself pursuant to Section 11.23 as servicing
compensation (a) any interest earned on funds in the Custodial Account (all such
interest to be withdrawn monthly not later than each Remittance Date), and (b)
the Servicing Fee from that portion of any payment or recovery attributable to
interest on a particular Mortgage Loan;
(v) to pay to itself with respect to each Mortgage Loan that has
been repurchased pursuant to Subsection 7.03, all amounts received thereon and
not distributed as of the date on which the related Repurchase Price is
determined;
(vi) to reimburse the Seller for any Monthly Advance previously made
which the Seller has determined to be a Nonrecoverable Monthly Advance;
(vii) to pay, or to reimburse itself for advances in respect of,
expenses incurred in connection with any Mortgage Loan pursuant to Section
11.03(b), but only to the extent of amounts received in respect of the Mortgage
Loans to which such expense is attributable;
(viii) to clear and terminate the Custodial Account on the
termination of this Agreement; and
(ix) to reimburse itself for any amounts deposited in the Custodial
Account in error.
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The Seller shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Custodial Account pursuant to such subclauses (ii) - (vii)
above.
Section 11.07. Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
(a) The Seller shall establish one or more Escrow Accounts for the
deposit of Escrow Payments. Seller shall segregate and hold all funds collected
and received in connection with the Mortgage Loans which constitute Escrow
Payments separate and apart from any of its own funds and general assets and
from any other funds or amounts collected or held by the Seller on behalf of
third parties.
(b) The Seller shall transfer into the applicable Escrow Account
within two (2) Business Days of receipt thereof, and retain therein the
following payments and collections:
(i) Mortgagors' Escrow Payments collected in connection with
the Mortgage Loans, for the purpose of effecting timely
payment of any such items as required under the terms of this
Agreement; and
(ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property.
The Seller shall make withdrawals therefrom only to effect such
payments as are required under this Agreement, and for such other purposes as
shall be as set forth or in accordance with Section 11.08.
(c) Each Escrow Account will be maintained at the expense of the
Seller at a Qualified Depository. Such accounts may be interest-bearing accounts
provided that such accounts comply with all federal state or local laws, any
other requirements of any government or any agency or instrumentality thereof
applicable to the origination and servicing of the Mortgage Loans, the
management of the Mortgage Property, and the provision of services hereunder by
the Seller as well as all local, state and federal laws and regulations
governing interest-bearing accounts and borrower escrow accounts. Each Escrow
Account shall be evidenced by an Escrow Account Certification, in the form of
Exhibit 7 and shall be entitled "Countrywide Home Loans, Inc., as servicer, in
trust for the Purchaser and various Mortgagors, Fixed and Adjustable Rate
Mortgage Loans." The Seller shall ensure that all interest credited to any
account that is not due the respective Mortgager is removed by the Seller within
thirty (30) days of receipt of such interest.
Section 11.08. Withdrawals From Escrow Accounts.
The Seller shall make withdrawals from the applicable Escrow Account
for the following:
(i) to effect timely payments of Mortgagors' Escrow Payments;
(ii) to reimburse the Seller for any Servicing Advance made by
the Seller with respect to a related Mortgage Loan but only
from amounts
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received on the related Mortgage Loan that represent late
payments or collections of Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds determined to be
overages;
(iv) for transfer to the Custodial Account in accordance with
the terms of this Agreement;
(v) for application to restoration or repair of the Mortgaged
Property;
(vi) to pay to the Seller, or to the Mortgagor, to the extent
required by law, any interest paid on the funds deposited in
the Escrow Account;
(vii) to clear and terminate the Escrow Account on the
termination of this Agreement; and (viii) to reimburse itself
for any amounts deposited in the Escrow Account in error.
The Seller 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 and, to
the extent required by law, the Seller shall pay interest on escrowed funds to
the Mortgagor notwithstanding that the Escrow Account is non-interest bearing or
that interest paid thereon is insufficient for such purposes. If Seller elects
or is required by law to deposit a Mortgagor's Escrow funds into an
interest-bearing account, the Seller shall remain obligated to pay the
Mortgagor's taxes and insurance premiums when due, even if the Mortgagor's
Escrow funds are not withdrawable on demand.
Section 11.09. Payment of Taxes, Insurance and Other Charges;
Maintenance of Primary Insurance Policies; Collections Thereunder.
With respect to each Mortgage Loan, the Seller shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates and other charges which are or may become a lien upon the Mortgaged
Property and the status of Primary Insurance Policy premiums and fire and hazard
insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges, including insurance renewal premiums and shall effect
payment thereof prior to the applicable penalty or termination date and at a
time appropriate for securing maximum discounts allowable, employing for such
purpose deposits of the Mortgagor in the Escrow Account which shall have been
estimated and accumulated by the Seller in amounts sufficient for such purposes,
as allowed under the terms of the Mortgage and applicable law. To the extent
that the Mortgage does not provide for Escrow Payments, the Seller shall
determine that any such payments are made by the Mortgagor at the time they
first become due. The Seller assumes full responsibility for the timely payment
of all such bills and shall effect timely payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make advances from its own funds to
effect such payments.
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If applicable, the Seller shall maintain in full force and effect, a
Primary Insurance Policy, issued by a Qualified Insurer, with respect to each
Mortgage Loan for which such coverage is required. Such coverage shall be
maintained until the Loan-to-Value Ratio of the related Mortgage Loan is reduced
to that amount for which FNMA no longer requires such insurance to be
maintained. The Seller will not cancel or refuse to renew any Primary Insurance
Policy in effect on the Closing Date that is required to be kept in force under
this Agreement unless a replacement Primary Insurance Policy for such cancelled
or non-renewed policy is obtained from and maintained with a Qualified Insurer.
The Seller shall not take any action which would result in non-coverage under
any applicable Primary Insurance Policy of any loss which, but for the actions
of the Seller, would have been covered thereunder. In connection with any
assumption or substitution agreement entered into or to be entered into pursuant
to Section 11.20, the Seller shall promptly notify the insurer under the related
Primary Insurance Policy, if any, of such assumption or substitution of
liability in accordance with the terms of such policy and shall take all actions
which may be required by such insurer as a condition to the continuation of
coverage under the Primary Insurance Policy. If such Primary Insurance Policy is
terminated as a result of such assumption or substitution of liability, the
Seller shall obtain a replacement Primary Insurance Policy as provided above.
In connection with its activities as servicer, the Seller agrees to
prepare and present, on behalf of itself, and the Purchaser, claims to the
insurer under any Primary Insurance Policy, if applicable, in a timely fashion
in accordance with the terms of such policies and, in this regard, to take such
action as shall be necessary to permit recovery under any Primary Insurance
Policy respecting a defaulted Mortgage Loan. Pursuant to Section 11.04, any
amounts collected by the Seller under any Primary Insurance Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
11.06.
Section 11.10 Transfer of Accounts.
The Seller may transfer the Payment Clearing Account, Custodial
Account or the Escrow Account and all funds and investments therein to a
different Qualified Depository from time to time. Such transfer shall be made
only upon prior written notice to the Purchaser. In any case, the Payment
Clearing Account, Custodial Account and Escrow Account shall be Eligible
Accounts.
If any one of the Investment Ratings of a Qualified Depository
holding funds or Eligible Investments in the Payment Clearing Account, Custodial
Account or Escrow Account as an Eligible Account is downgraded by the issuing
rating agency, the Seller shall, within three (3) Business Days of receipt of
notice of the downgrading, transfer all such accounts, funds and Eligible
Investments to a different Qualified Depository in accordance with this
Agreement.
Section 11.11 Maintenance of Hazard Insurance.
The Seller shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is customary in the area where
the Mortgaged Property is located in an amount which is at least equal to the
lesser of (i) the amount necessary to fully compensate for any damage or loss to
the improvements which are a part of such property on a replacement cost basis
or (ii) the outstanding principal balance of the Mortgage Loan, in each
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case in an amount not less than such amount as is necessary to prevent the
Mortgagor and/or the Mortgagee from becoming a co-insurer. If the Mortgaged
Property is in an area identified on a Flood Hazard Boundary Map or Flood
Insurance Rate Map issued by the Flood Emergency Management Agency as having
special flood hazards and such flood insurance has been made available, the
Seller will cause to be maintained a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
with a generally acceptable insurance carrier, in an amount representing
coverage not less than the lesser of (i) the outstanding principal balance of
the Mortgage Loan or (ii) the maximum amount of insurance which is available
under the National Flood Insurance Act of 1968 or the Flood Disaster Protection
Act of 1973, as amended. The Seller also shall maintain on any REO Property,
fire and hazard insurance with extended coverage in an amount which is at least
equal to the lesser of (i) the maximum insurable value of the improvements which
are a part of such property and (ii) the outstanding principal balance of the
related Mortgage Loan at the time it became an REO Property plus accrued
interest at the Mortgage Interest Rate and related Servicing Advances, liability
insurance and, to the extent required and available under the National Flood
Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended,
flood insurance in an amount as provided above. Pursuant to Section 11.04, any
amounts collected by the Seller under any such policies other than amounts to be
deposited in the Escrow Account and applied to the restoration or repair of the
Mortgaged Property or REO Property, or released to the Mortgagor in accordance
with the Seller's normal servicing procedures, shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 11.06. Any cost
incurred by the Seller in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Purchaser, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance need be required by the Seller or the Mortgagor or
maintained on property acquired in respect of the Mortgage Loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. All such policies shall be
endorsed with standard mortgagee clauses with loss payable to the Seller, or
upon request to the Purchaser, and shall provide for at least thirty (30) days
prior written notice of any cancellation, reduction in the amount of, or
material change in, coverage to the Seller. The Seller shall not interfere with
the Mortgagor's freedom of choice in selecting either his insurance carrier or
agent, provided, however, that the Seller shall not accept any such insurance
policies from insurance companies unless such companies are acceptable to FNMA
or FHLMC and are licensed to do business in the state wherein the property
subject to the policy is located.
Section 11.12 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Seller shall obtain and maintain a mortgage
impairment or blanket policy issued by an issuer acceptable to FNMA or FHLMC
insuring against hazard losses on all of Mortgaged Properties securing the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 11.11 and otherwise complies
with all other requirements of Section 11.11, the Seller shall conclusively be
deemed to have satisfied its obligations as set forth in Section 11.11, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Seller shall, in the event that there shall not have been maintained on
the related Mortgaged Property or REO Property a policy complying with Section
11.11, and there shall have been one or more
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losses which would have been covered by such policy, deposit in the Custodial
Account the amount not otherwise payable under the blanket policy because of
such deductible clause. In connection with its activities as servicer of the
Mortgage Loans, the Seller agrees to prepare and present, on behalf of the
Purchaser, claims under any such blanket policy in a timely fashion in
accordance with the terms of such policy. Upon request of the Purchaser, the
Seller shall cause to be delivered to the Purchaser a certified true copy of
such policy and a statement from the insurer thereunder that such policy shall
in no event be terminated or materially modified without thirty (30) days prior
written notice to the Purchaser.
Section 11.13 Fidelity Bond, Errors and Omissions Insurance.
The Seller shall maintain, at its own expense, a blanket fidelity
bond and an errors and omissions insurance policy, with broad coverage with
responsible companies that would meet the requirements of FNMA or FHLMC on all
officers, employees or other persons acting in any capacity with regard to the
Mortgage Loans to handle funds, money, documents and papers relating to the
Mortgage Loans. The fidelity bond and errors and omissions insurance shall be in
the form of the Mortgage Banker's Blanket Bond and shall protect and insure the
Seller against losses, including forgery, theft, embezzlement, fraud, errors and
omissions and negligent acts of such persons. Such fidelity bond shall also
protect and insure the Seller against losses in connection with the failure to
maintain any insurance policies required pursuant to this Agreement and the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Section 11.13
requiring the fidelity bond and errors and omissions insurance shall diminish or
relieve the Seller from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such bond and insurance policy shall
be at least equal to the corresponding amounts required by FNMA in the FNMA
Servicing Guide or by FHLMC in the FHLMC Sellers' and Servicers' Guide. Upon
request of the Purchaser, the Seller shall cause to be delivered to the
Purchaser a certified true copy of the fidelity bond and insurance policy and a
statement from the surety and the insurer that such fidelity bond or insurance
policy shall in no event be terminated or materially modified without thirty
(30) days' prior written notice to the Purchaser.
Section 11.14 Title, Management and Disposition of REO Property.
In the event that title to the 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 Seller, as servicer, or in the event such
person is not authorized or permitted to hold title to real property in the
state where the REO Property is located, or would be adversely affected under
the "doing business" or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an opinion of counsel obtained by the Seller from an
attorney duly licensed to practice law in the state where the REO Property is
located. Any Person or Persons holding such title other than the Purchaser shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Purchaser.
The Seller shall either itself or through an agent selected by the
Seller, manage, conserve, protect and operate each REO Property (and may
temporarily rent the same) in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the
same manner that similar property in the same locality as the REO
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Property is managed. If a REMIC election is or is to be made with respect to the
arrangement under which the Mortgage Loans and any REO Property are held, the
Seller shall manage, conserve, protect and operate each REO Property in a manner
which does not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code or result in the
receipt by such REMIC of any "income from non- permitted assets" within the
meaning of Section 860F(a)(2)(B) of the Code or any "net income from foreclosure
property" within the meaning of Section 860G(c)(2) of the Code. The Seller shall
cause each REO Property to be inspected promptly upon the acquisition of title
thereto and shall cause each REO Property to be inspected at least annually
thereafter. The Seller shall make or cause to be made a written report of each
such inspection. Such reports shall be retained in the Mortgage File and copies
thereof shall be forwarded by the Seller to the Purchaser. The Seller shall use
its best efforts to dispose of the REO Property as soon as possible and shall
sell such REO Property in any event within one year after title has been taken
to such REO Property, unless the Seller determines, and gives appropriate notice
to the Purchaser, that a longer period is necessary for the orderly liquidation
of such REO Property. If a period longer than one year is necessary to sell any
REO property, (i) the Seller shall report monthly to the Purchaser as to the
progress being made in selling such REO Property and (ii) if, with the written
consent of the Purchaser, a purchase money mortgage is taken in connection with
such sale, such purchase money mortgage shall name the Seller as mortgagee, and
a separate servicing agreement between the Seller and the Purchaser shall be
entered into with respect to such purchase money mortgage. Notwithstanding the
foregoing, if a REMIC election is made with respect to the arrangement under
which the Mortgage Loans and the REO Property are held, such REO Property shall
be disposed of within two years or such other period as may be permitted under
Section 860G(a)(8) of the Code.
The Seller shall deposit or cause to be deposited, within two (2)
business days in each Custodial Account all revenues received with respect to
the related REO Property and shall withdraw therefrom funds necessary for the
proper operation, management and maintenance of the REO Property, including the
cost of maintaining any hazard insurance pursuant to Section 11.11 hereof and
the fees of any managing agent acting on behalf of the Seller. The Seller shall
maintain separate records with respect to each REO Property identifying all
deposits and withdrawals from the Custodial Account for each REO Property.
The Seller shall furnish to the Purchaser on each Remittance Date,
an operating statement for each REO Property covering the operation of each REO
Property for the previous month. Such operating statement shall be accompanied
by such other information as the Purchaser shall reasonably request.
Each REO Disposition shall be carried out by the Seller at such
price and upon such terms and conditions as the Seller deems to be in the best
interest of the Purchaser only with the prior written consent of the Purchaser.
If as of the date title to any REO Property was acquired by the Seller there
were outstanding unreimbursed Servicing Advances and unpaid servicing fees with
respect to the REO Property, the Seller, upon an REO Disposition of such REO
Property, shall be entitled to reimbursement for any related unreimbursed
Servicing Advances and unpaid servicing fees from proceeds received in
connection with such REO Disposition. The proceeds from the REO Disposition, net
of any payment to the Seller as provided above, shall be deposited in the
Custodial Account and shall be transferred to the
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Custodial Account on the Determination Date in the month following receipt
thereof for distribution on the succeeding Remittance Date in accordance with
Section 11.15.
With respect to each REO Property, the Seller shall segregate and
hold all funds collected and received in connection with the operation of the
REO Property separate and apart from its own funds or general assets and shall
maintain separate records and reports with respect to the funds received and
distributed on an REO Property by REO Property basis.
Section 11.15 Distributions.
On each Remittance Date, the Seller shall distribute to the
Purchaser (i) all amounts credited to the Custodial Account as of the close of
business on the preceding Determination Date, net of charges against or
withdrawals from the Custodial Account pursuant to Section 11.06;. plus (ii) all
Monthly Advances, if any, which the Seller is obligated to distribute pursuant
to Section 11.22, minus (iii) any amounts attributable to Principal Prepayments
received after the last day of the Calendar month immediately preceding the
related Remittance Date and (iv) any amounts attributable to Monthly Prepayments
collected but due on a Due Date or Dates subsequent to the preceding
Determination Date.
All distributions made to the Purchaser on each Remittance Date will
be made to the Purchaser of record on the preceding Record Date, and shall be
based on the Mortgage Loans owned and held by the Purchaser, and shall be made
by wire transfer of immediately available funds to the account of the Purchaser
at a bank or other entity having appropriate facilities therefor.
With respect to any remittance received by the Purchaser on or after
the second Business Day following the Business Day on which such payment was
due, the Seller shall pay to the Purchaser interest on any such late payment at
an annual rate equal to the rate of interest as is publicly announced from time
to time at its principal office by JPMorgan, New York, New York, as its prime
lending rate, adjusted as of the date of each change, plus one percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be paid by the Seller to the Purchaser 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
such late payment. The payment by the Seller of any such interest shall not be
deemed an extension of time for payment or a waiver of any Event of Default by
the Seller.
Section 11.16 Remittance Reports.
No later than the fifth Business Day of each month, the Seller shall
furnish to the Purchaser or its designee an electronic copy of the determination
data with respect to the related Remittance Date, together with such other
information with respect to the Mortgage Loans as the Purchaser may reasonably
require to allocate distributions made pursuant to this Agreement and provide
appropriate statements with respect to such distributions. In addition to the
information set forth in the Remittance Report, such report shall also set
forth, for each Mortgage Loan, (i) the Mortgage Interest Rate; (ii) the amount
of any shortfall in the Servicing Fee due to delinquencies; (iii) the amount of
any delinquency in the scheduled payment of principal and
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interest delineated at 30 days, 60 days and greater than 90 days past due; and
(iv) such other information as may be reasonably requested by the Purchaser.
Section 11.17 Statements to the Purchaser.
The Seller shall provide the Purchaser with such information
concerning the Mortgage Loans as is necessary for the Purchaser to prepare its
federal income tax return and as the Purchaser may reasonably request from time
to time. The Purchaser agrees to pay for all reasonable out-of-pocket expenses
incurred by the Seller in connection with complying with any request made by the
Purchaser hereunder if such information is not customarily provided by the
Purchaser in the ordinary course of servicing mortgage loans similar to the
Mortgage Loans.
Section 11.18 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 11.14,
with respect to any REO Property, the Seller shall furnish to the Purchaser a
statement covering the Seller'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, together with the operating statement. Such statement shall
be accompanied by such other information as the Purchaser shall reasonably
request.
Section 11.19 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Purchaser pursuant to a deed-in-lieu of foreclosure,
the Seller shall submit to the Purchaser a liquidation report with respect to
such Mortgaged Property.
Section 11.20 Assumption Agreements.
The Seller shall, to the extent it has knowledge of any conveyance
or prospective conveyance by any Mortgagor of the Mortgaged Property (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause applicable thereto; provided, however, that the Seller
shall not exercise any 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 Primary Insurance Policy, if any. If the Seller reasonably believes
it is unable under applicable law to enforce such "due-on-sale" clause, the
Seller shall enter into an assumption agreement with the person to whom the
Mortgaged Property has been conveyed or is proposed to be conveyed, pursuant to
which such person becomes liable under the Mortgage Note and, to the extent
permitted by applicable state law, the Mortgagor remains liable thereon. Where
an assumption is allowed pursuant to this Section 11.20, the Seller, with the
prior written consent of the insurer under the Primary Insurance Policy, if any,
is authorized to enter into a substitution of liability agreement with the
person to whom the Mortgaged Property has been conveyed or is proposed to be
conveyed pursuant to which the original Mortgagor is released from liability and
such Person is substituted as Mortgagor and becomes liable under the related
Mortgage Note. Any such substitution of liability agreement shall be in lieu of
an assumption agreement.
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In connection with any such assumption or substitution of liability,
the Seller shall follow the underwriting practices and procedures of prudent
mortgage lenders in the state in which the related Mortgaged Property is
located. With respect to an assumption or substitution of liability, the
Mortgage Interest Rate, the amount of the Monthly Payment, and the final
maturity date of such Mortgage Note may not be changed. The Seller shall notify
the Purchaser that any such substitution of liability or assumption agreement
has been completed by forwarding to the Purchaser the original of any such
substitution of liability or assumption agreement, which document shall be added
to the related Mortgage File and shall, for all purposes, be considered a part
of such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Any fee collected by the Seller for entering into
an assumption or substitution of liability agreement in excess of 1% of the
outstanding principal balance of the Mortgage Loan shall be deposited in the
Custodial Account pursuant to Section 11.05.
Notwithstanding the foregoing paragraphs of this Section or any
other provision of this Agreement, the Seller shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by reason of
any assumption of a Mortgage Loan by operation of law or any assumption which
the Seller may be restricted by law from preventing, for any reason whatsoever.
For purposes of this Section 11.20, the term "assumption" is deemed to also
include a sale of the Mortgaged Property subject to the Mortgage that is not
accompanied by an assumption or substitution of liability agreement.
Section 11.21 Satisfaction of Mortgages and Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Seller of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Seller will immediately notify the Purchaser by
a certification of a servicing officer of the Seller (a "Servicing Officer"),
which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required to
be deposited in the Custodial Account pursuant to Section 11.05 have been or
will be so deposited, and shall request execution of any document necessary to
satisfy the Mortgage Loan and delivery to it the portion of the Mortgage File
held by the Purchaser or the Purchaser's designee. Upon receipt of such
certification and request, the Purchaser shall promptly release the related
mortgage documents to the Seller and the Seller shall prepare and process any
satisfaction or release. No expense incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account or the Purchaser.
In the event the Seller satisfies or releases a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage or
should it otherwise prejudice any right the Purchaser may have under the
mortgage instruments, the Seller, upon written demand, shall remit to the
Purchaser the then outstanding principal balance of the related Mortgage Loan by
deposit thereof in the Custodial Account. The Seller shall maintain the fidelity
bond insuring the Seller against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth herein.
From time to time and as appropriate for the servicing or
foreclosure of the Mortgage Loan, including for this purpose collection under
any Primary Insurance Policy, the Purchaser shall, upon request of the Seller
and delivery to the Purchaser of a servicing receipt
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signed by a Servicing Officer, release the requested portion of the Mortgage
File held by the Purchaser to the Seller. Such servicing receipt shall obligate
the Seller to return the related Mortgage documents to the Purchaser when the
need therefor by the Seller no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Custodial Account or the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Seller has delivered to the Purchaser a certificate of a
Servicing Officer certifying as to the name and address of the Person to which
such Mortgage File or such document was delivered and the purpose or purposes of
such delivery. Upon receipt of a certificate of a Servicing Officer stating that
such Mortgage Loan was liquidated, the servicing receipt shall be released by
the Purchaser to the Seller.
Section 11.22 Monthly Advances by the Seller.
(a) Not later than the close of business on the Business Day
preceding each Remittance Date, the Seller shall deposit in the Custodial
Account an amount equal to all payments not previously advanced by the Seller,
whether or not deferred pursuant to Section 11.01, of principal (due after the
Cut-off Date) and interest not allocable to the period prior to the Cut-off
Date, at the Mortgage Interest Rate net of the Servicing Fee, which were due on
a Mortgage Loan and delinquent at the close of business on the related
Determination Date.
(b) The obligation of the Seller to make such Monthly Advances is
mandatory, notwithstanding any other provision of this Agreement, and, with
respect to any Mortgage Loan or REO Property, shall continue until a Final
Recovery Determination in connection therewith; provided that, notwithstanding
anything herein to the contrary, no Monthly Advance shall be required to be made
hereunder by the Seller if such Monthly Advance would, if made, constitute a
Nonrecoverable Monthly Advance. The determination by the Seller that it has made
a Nonrecoverable Monthly Advance or that any proposed Monthly Advance, if made,
would constitute a Nonrecoverable Monthly Advance, shall be evidenced by an
Officers' Certificate delivered to the Purchaser.
Section 11.23 Servicing Compensation.
As compensation for its services hereunder, the Seller shall,
subject to Section 11.05(xi), be entitled to withdraw from the Custodial Account
or to retain from interest payments on the Mortgage Loans the amounts provided
for as the Seller's Servicing Fee. Additional servicing compensation in the form
of assumption fees, as provided in Section 11.20, interest earned from the
investment in Eligible Investments of amounts held in Custodial Accounts
pursuant to Section 11.05, Prepayment Charges, and late payment charges and
similar fees and charges shall be retained by the Seller to the extent not
required to be deposited in the Custodial Account. The Seller shall be required
to pay all expenses incurred by it in connection with its servicing activities
hereunder and shall not be entitled to reimbursement therefor except as
specifically provided for.
Section 11.24 Notification of Adjustments.
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On each Adjustment Date, the Seller shall make interest rate
adjustments for each Adjustable Rate Mortgage Loan in compliance with the
requirements of the related Mortgage and Mortgage Note. The Seller shall execute
and deliver the notices required by each Mortgage and Mortgage Note regarding
interest rate adjustments. The Seller also shall provide timely notification to
the Purchaser of all applicable data and information regarding such interest
rate adjustments and the Seller's methods of implementing such interest rate
adjustments. Upon the discovery by the Seller or the Purchaser that the Seller
has failed to adjust a Mortgage Interest Rate or a Monthly Payment pursuant to
the terms of the related Mortgage Note and Mortgage, the Seller shall
immediately deposit in the Custodial Account from its own funds the amount of
any interest loss caused thereby without reimbursement therefor.
Section 11.25 Statement as to Compliance.
The Seller will deliver to the Purchaser on or before March 15th of
each year, beginning with March 15, 2005, an Officers' Certificate stating, as
to each signatory thereof, that (i) a review of the activities of the Seller
during the preceding calendar year and of performance under this Agreement has
been made under such officers' supervision and (ii) to the best of such
officers' knowledge, based on such review, the Seller has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof.
Section 11.26 Independent Public Accountants' Servicing Report.
On or before March 1st of each year, beginning with March 15, 2005,
the Seller at its expense shall cause a firm of independent public accountants
(which may also render other services to the Seller) which is a member of the
American Institute of Certified Public Accountants to furnish a statement to the
Purchaser or its designee to the effect that such firm has examined certain
documents and records relating to servicing of mortgage loans by the Seller
generally that may include a sampling of the Mortgage Loans and that, on the
basis of such an examination conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FHLMC, such firm confirms that such servicing has been
conducted in compliance with this Agreement, except for exceptions as such firm
shall believe to be immaterial or such significant exceptions or errors in
records that, in the opinion of such firm, the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages serviced for
FHLMC requires it to report.
Section 11.27 Securitization Certifications.
(a) For so long as (1) the Mortgage Loans are being master serviced
by a master servicer in a Pass-Through Transfer (the "Master Servicer") or
serviced by the Seller in a securitization transaction and (2) an annual
certification is required to be provided by Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act of 2002, by March 15, 2005 and by March 1st of each year thereafter (or if
not a Business Day, the immediately preceding Business Day), an officer of the
Seller shall execute and deliver an Officer's Certificate to either the Master
Servicer the depositor or trustee of such securitization for the benefit of
either the Master Servicer, depositor or trustee and its officers, directors and
affiliates, certifying as to the following matters:
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(i) Based on such officer's knowledge, the information in the Annual
Statement of Compliance, the Annual Independent Public Accountant's
Servicing Report and all servicing reports, officer's certificates
and other information relating to the servicing of the Mortgage
Loans submitted to either the Master Servicer, the depositor or the
trustee taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading as of the date of this
certification;
(ii) Based on such officer's knowledge, the servicing information
required to be provided to either the Master Servicer, the depositor
or the trustee by the Seller under this Agreement has been provided
to either the Master Servicer, the depositor or the trustee;
(iii) Such officer is responsible for reviewing the activities
performed by the Seller under this Agreement and based upon such
officer's knowledge and the review required by this Agreement, and
except as disclosed in the Annual Statement of Compliance, the
Annual Independent Public Accountant's Servicing Report and all
servicing reports, officer's certificates and other information
relating to the servicing of the Mortgage Loans submitted to either
the Master Servicer, the depositor or the trustee, the Seller has,
as of the date of this certification fulfilled its obligations under
this Agreement; and
(iv) Such officer has disclosed to the Master Servicer, the
depositor or the trustee all significant deficiencies relating to
the Seller's compliance with the minimum servicing standards in
accordance with a review conducted in compliance with the Uniform
Single Attestation Program for Mortgage Bankers or similar standard
as set forth in this Agreement.
(b) The Seller shall indemnify and hold harmless either the Master
Servicer, the depositor and the trustee of a securitization and its officers,
directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Seller or any of its officers, directors, agents or affiliates of its
obligations under this Section 11.27, or Sections 11.25 and 11.26 or the bad
faith or willful misconduct of the Seller in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless either the Master Servicer, the depositor or the trustee then the
Seller agrees that it shall contribute to the amount paid or payable by either
the Master Servicer, the depositor or the trustee as a result of the losses,
claims, damages or liabilities of either the Master Servicer, the depositor or
the trustee in such proportion as is appropriate to reflect the relative fault
of either the Master Servicer, the depositor or the trustee on the one hand and
the Seller on the other in connection with a breach of the Seller's obligations
under this Section 11.27, Sections 11.25 and 11.26 or the Seller's bad faith or
willful misconduct in connection therewith; provided, however, that the Seller
shall not be obligated to indemnify or hold harmless the Master Servicer and its
officers, directors, agents and affiliates from or against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses
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arising out of or based upon the bad faith or willful misconduct of such Master
Servicer and its officers, directors, agents and affiliates.
Section 11.28 Access to Certain Documentation.
The Seller shall provide to the Office of Thrift Supervision, the
FDIC and any other federal or state banking or insurance regulatory authority
that may exercise authority over the Purchaser access to the documentation
regarding the Mortgage Loans serviced by the Seller required by applicable laws
and regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Seller. In addition, access to the documentation will be provided to the
Purchaser and any Person identified to the Seller by the Purchaser without
charge, upon reasonable request during normal business hours at the offices of
the Seller.
Section 11.29 Reports and Returns to be Filed by the Seller.
The Seller shall file information reports with respect to the
receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and information returns
relating to cancellation of indebtedness income with respect to any Mortgaged
Property as required by Sections 6050H, 6050J and 6050P of the Code. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.
Section 11.30 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 Seller 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 Seller 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.
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FINAL MORTGAGE LOAN SCHEDULE