EXHIBIT 99.1
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▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE CAPITAL INC.,
SELLER
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.,
PURCHASER
MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT
Dated as of July 1, 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors Trust
(Mortgage Loan Asset-Backed Certificates, Series 2004-HE1)
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This MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT, dated as of July 1,
2004 (the "Agreement"), is executed by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Capital Inc. (the "Seller") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc. (the
"Depositor").
All capitalized terms not defined herein shall have the same meanings
assigned to such terms in that certain Pooling and Servicing Agreement (the
"Pooling Agreement"), dated as of July 1, 2004, among the Depositor, ▇▇▇▇▇ Fargo
Bank, National Association, as trustee (the "Trustee") and ▇▇▇▇▇▇ Loan Servicing
LP, as servicer (the "Servicer").
W I T N E S S E T H:
WHEREAS, pursuant to certain master mortgage loan purchase and interim
servicing agreements listed on Exhibit A hereto (collectively, the "Transfer
Agreements") between the Seller and each of the originators listed on Exhibit B
hereto (collectively, the "Transferors"), Seller has purchased or received
certain mortgage loans identified on the Mortgage Loan Schedule attached hereto
as Schedule A (the "Mortgage Loans");
WHEREAS, each Transfer Agreement is supplemented by a related letter
agreement, each dated as of July 7, 2004 among the related Transferor and the
Seller (each, a "Bring Down Letter");
WHEREAS, the Seller desires to sell, without recourse, all of its
rights, title and interest in the Mortgage Loans to the Depositor, to assign all
of its rights and interest under the Transfer Agreements and the Bring Down
Letters, and to delegate all of its obligations thereunder, to the Depositor;
and
WHEREAS, the Seller and the Depositor acknowledge and agree that the
Depositor will assign all of its rights and delegate all of its obligations
hereunder to the Trustee, and that each reference herein to the Depositor is
intended, unless otherwise specified, to mean the Depositor or the Trustee, as
assignee, whichever is the owner of the Mortgage Loans from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Seller and the Depositor agree as follows:
ARTICLE I
CONVEYANCE OF MORTGAGE LOANS
Section 1.01. Sale of Mortgage Loans. Concurrently with the execution
and delivery of this Agreement, the Seller does hereby transfer, assign, set
over, deposit with and otherwise convey to the Depositor, without recourse,
subject to Sections 1.03 and 1.04, all the right, title and interest of the
Seller in and to the Mortgage Loans identified on Schedule A hereto, having an
aggregate principal balance as of the Cut-off Date of approximately
$___________. Such conveyance includes, without limitation, the right to all
distributions of principal and interest received on or with respect to the
Mortgage Loans on or after July 1, 2004, other than payments of principal and
interest due on or before such date, and all such payments due after such date
but received prior to such date and intended by the related Mortgagors to be
applied after such date, together with all of the Seller's right, title and
interest in and to each related account and all amounts from time to time
credited to and the proceeds of such account, any REO Property and the proceeds
thereof, the Seller's rights under any Insurance Policies related to the
Mortgage
Loans, and the Seller's security interest in any collateral pledged to secure
the Mortgage Loans, including the Mortgaged Properties.
Concurrently with the execution and delivery of this Agreement, the
Seller hereby assigns to the Depositor all of its rights and interest under the
Transfer Agreements and the Bring Down Letters, other than any servicing rights
retained pursuant to the provisions of the Transfer Agreements and the Bring
Down Letters, to the extent relating to the Mortgage Loans. Concurrently with
the execution hereof, the Depositor tenders the purchase price of
$_____________. The Depositor hereby accepts such assignment, and shall be
entitled to exercise all such rights of the Seller under the Transfer Agreements
and the Bring Down Letters, as if the Depositor had been a party to such
agreement.
Section 1.02. Delivery of Documents. In connection with such transfer
and assignment of the Mortgage Loans hereunder, the Seller does hereby deliver,
or cause to be delivered, to the Depositor (or its designee) the documents or
instruments with respect to each Mortgage Loan (each a "Mortgage File") so
transferred and assigned, as specified in the Transfer Agreements.
(a) For Mortgage Loans (if any) that have been prepaid in full after
the Cut-off Date and prior to the Closing Date, the Seller, in lieu of
delivering the related Mortgage Files, herewith delivers to the Depositor an
Officer's Certificate which shall include a statement to the effect that all
amounts received in connection with such prepayment that are required to be
deposited in the account maintained by the Servicer for such purpose have been
so deposited.
Section 1.03. Review of Documentation. The Depositor, by execution and
delivery hereof, acknowledges receipt of the Mortgage Files pertaining to the
Mortgage Loans listed on the Mortgage Loan Schedule, subject to review thereof
by the trustee, ▇▇▇▇▇ Fargo Bank, N.A. (the "Trustee") for the Mortgage Loans
for the Depositor. The Trustee is required to review, within 45 days following
the Closing Date, each applicable Mortgage File. If in the course of such review
the Trustee identifies any material defect, the Seller shall be obligated to
cure such defect or to repurchase the related Mortgage Loan from the Depositor
(or, at the direction of and on behalf of the Depositor, from the Trust Fund),
or to substitute a Replacement Mortgage Loan therefor, in each case to the same
extent and in the same manner as the Depositor is obligated to the Trustee and
the Trust Fund under the Pooling Agreement.
Section 1.04. Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants to the Depositor that as
of the date hereof that:
(i) The Seller is a Delaware corporation duly organized,
validly existing and in good standing under the laws governing its
creation and existence and has full corporate power and authority to
own its property, to carry on its business as presently conducted and
to enter into and perform its obligations under this Agreement;
(ii) The execution and delivery by the Seller of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Seller; none of the execution and delivery of this
Agreement, the consummation of the transactions herein contemplated or
compliance with the provisions hereof will conflict with or result in a
breach of, or constitute a default under, any of the provisions of any
law, governmental rule, regulation, judgment, decree or order binding
on the Seller or its properties or the federal stock charter or bylaws
of the Seller;
(iii) The execution, delivery and performance by the Seller of
this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any
state, federal or other governmental authority or agency, except such
as has been obtained, given, effected or taken prior to the date
hereof;
(iv) This Agreement has been duly executed and delivered by
the Seller and, assuming due authorization, execution and delivery by
the Depositor, constitutes a valid and binding obligation of the Seller
enforceable against it in accordance with its terms except as such
enforceability may be subject to (A) applicable bankruptcy and
insolvency laws and other similar laws affecting the enforcement of the
rights of creditors generally and (B) general principles of equity
regardless of whether such enforcement is considered in a proceeding in
equity or at law; and
(v) There are no actions, suits or proceedings pending or, to
the knowledge of the Seller, threatened or likely to be asserted
against or affecting the Seller, before or by any court, administrative
agency, arbitrator or governmental body (A) with respect to any of the
transactions contemplated by this Agreement or (B) with respect to any
other matter which in the judgment of the Seller will be determined
adversely to the Seller and will if determined adversely to the Seller
materially and adversely affect it or its business, assets, operations
or condition, financial or otherwise, or adversely affect its ability
to perform its obligations under this Agreement.
(b) The representations and warranties of each Transferor with respect
to the Mortgage Loans contained in the applicable Transfer Agreement were made
as of the date of such Transfer Agreement and brought forward to the Closing
Date pursuant to the applicable Bring Down Letter. The representations and
warranties of each Transferor with respect to the Mortgage Loans contained in
the applicable Bring Down Letter are being made as of the Closing Date. To the
extent that any fact, condition or event with respect to a Mortgage Loan
constitutes a breach of both (i) a representation or warranty of a Transferor
under the applicable Transfer Agreement or Bring Down Letter and (ii) a
representation or warranty of the Seller under this Agreement, the sole right or
remedy of the Depositor with respect to a breach by the Seller of such
representation and warranty (other than a breach by the Seller of the
representations and warranties made pursuant to Sections 1.04(b)(vi) and
1.04(b)(vii)) shall be the right to enforce the obligations of the applicable
Transferor under any applicable representation or warranty made by it. The
representations made by the Seller pursuant to Sections 1.04(b)(vi) and
1.04(b)(vii) shall be direct obligations of the Seller. The Depositor
acknowledges and agrees that the representations and warranties of the Seller in
this Section 1.04(b) (other than the representations and warranties made
pursuant to Sections 1.04(b)(vi) and 1.04(b)(vii)) are applicable only to facts,
conditions or events that do not constitute a breach of any representation or
warranty made by a Transferor in the applicable Transfer Agreement or Bring Down
Letter. The Seller shall have no obligation or liability with respect to any
breach of a representation or warranty made by it with respect to the Mortgage
Loans if the fact, condition or event constituting such breach also constitutes
a breach of a representation or warranty made by a Transferor in the applicable
Transfer Agreement or Bring Down Letter, without regard to whether such
Transferor fulfills its contractual obligations in respect of such
representation or warranty; provided, however, that if such Transferor fulfills
its obligations under the provisions of the applicable Transfer Agreement and
the Bring Down Letter by substituting for the affected Mortgage Loan a mortgage
loan which is not a Replacement Mortgage Loan, the Seller shall, in exchange for
such substitute mortgage loan, provide the Depositor (a) with the applicable
Purchase Price for the affected Mortgage Loan or (b) within the two year period
following the Closing Date, with a Qualified Substitute Mortgage Loan for such
affected Mortgage Loan. Subject to the foregoing, the Seller represents and
warrants upon delivery of the Mortgage Loans to the Depositor hereunder, as to
each, that as of July 7, 2004:
(i) The information set forth with respect to the Mortgage
Loans on the Mortgage Loan Schedule provides an accurate listing of the
Mortgage Loans, and the information with
respect to each Mortgage Loan on the Mortgage Loan Schedule is true and
correct in all material respects at the date or dates respecting which
such information is given;
(ii) As of the Closing Date, no Mortgage Loan is in
foreclosure;
(iii) As of the Closing Date, each Mortgage Loan is a
"qualified mortgage" within the meaning of Section 860G of the Code (as
determined without regard to Treas. Reg. Section 1.860G-2(a)(3) or any
similar rule that treats a defective obligation as a qualified mortgage
for a temporary period);
(iv) As of the Closing Date, no Mortgage Loan provides for
interest other than at either (i) a single fixed rate in effect
throughout the term of the Mortgage Loan or (ii) a "variable rate"
(within the meaning of Treas. Reg. Section 1.860G-1(a)(3)) in effect
throughout the term of the Mortgage Loan;
(v) As of the Closing Date, the Seller would not, based on the
delinquency status of the Mortgage Loans, institute foreclosure
proceedings with respect to any of the Mortgage Loans prior to the next
scheduled payment for such Mortgage Loan;
(vi) (None of the Mortgage Loans are "high cost" as defined by
applicable predatory and abusive lending laws; No Mortgage Loan is a
High Cost Loan or Covered Loan, as applicable (as such terms are
defined in the current Standard & Poor's LEVELS(R) Glossary which is
now Version 5.6 Revised, Appendix E) and no mortgage loan originated on
or after October 1, 2002 through March 6, 2003 is governed by the
Georgia Fair Lending Act; and
(vii) Each Mortgage Loan at the time it was made complied with
all applicable local, state and federal lending laws, including, but
not limited to, all applicable predatory and abusive lending laws.
(c) In addition to the representations and warranties in Section
1.04(b) herein, the Seller hereby makes the following representations and
warranties solely with respect to the Mortgage Loans originated by Ownit
Mortgage Solutions, Inc.:
(i) The information set forth in the related Final Mortgage
Loan Schedule is complete, true and correct;
(ii) The Mortgage Loan is in compliance with all requirements
set forth in the related Trade Confirmation, and the characteristics of
the related Mortgage Loan Package as set forth in the related Trade
Confirmation are true and correct;
(iii) All payments required to be made up to the close of
business on the Closing Date for such Mortgage Loan under the terms of
the Mortgage Note have been made; the Seller has not advanced funds, or
induced, solicited or knowingly received any advance of funds from a
party other than the owner of the related Mortgaged Property, directly
or indirectly, for the payment of any amount required by the Mortgage
Note or Mortgage;
(iv) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by
written instruments, recorded in the applicable public recording office
if necessary to maintain the lien priority of the Mortgage, and which
have been delivered to the Custodian; the substance of any such waiver,
alteration or modification has been approved by the insurer under the
Primary Insurance Policy, if any, and the
title insurer, to the extent required by the related policy, and is
reflected on the related Final Mortgage Loan Schedule. No instrument of
waiver, alteration or modification has been executed, and no Mortgagor
has been released, in whole or in part, except in connection with an
assumption agreement approved by the insurer under the Primary
Insurance Policy, if any, the title insurer, to the extent required by
the policy, and which assumption agreement has been delivered to the
Custodian and the terms of which are reflected in the related Final
Mortgage Loan Schedule;
(v) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the
defense of usury, nor will the operation of any of the terms of the
Mortgage Note and the Mortgage, or the exercise of any right
thereunder, render the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect
thereto;
(vi) The Mortgage obligates the Mortgagor thereunder to
maintain all such insurance at the Mortgagor's cost and expense, and on
the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to maintain such insurance at Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor;
(vii) Any and all requirements of any federal, state or local
law including, without limitation, laws governing prepayment penalties,
usury, truth in lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity, fair housing, predatory
lending, abusive lending and disclosure laws applicable to the
origination of mortgage loans of a type similar to the Mortgage Loans
and applicable to the servicing of the Mortgage Loans through the
Servicing Transfer Date have been complied with and the consummation of
the transactions contemplated hereby will not involve the violation of
any such laws;
(viii) The related Mortgage is properly recorded and is a
valid, existing and enforceable (A) first lien and first priority
security interest with respect to each Mortgage Loan which is indicated
by the Seller to be a First Lien (as reflected on the Final Mortgage
Loan Schedule), or (B) second lien and second priority security
interest with respect to each Mortgage Loan which is indicated by the
Seller to be a Second Lien (as reflected on the Final Mortgage Loan
Schedule), in either case, on the Mortgaged Property, including all
improvements on the Mortgaged Property subject only to (a) the lien of
current real property taxes and assessments not yet due and payable,
(b) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording
being acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and which do not
adversely affect the Appraised Value of the Mortgaged Property, (c)
other matters to which like properties are commonly subject which do
not materially interfere with the benefits of the security intended to
be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property and (d) with respect to
each Mortgage Loan which is indicated by the Seller to be a Second Lien
Mortgage Loan (as reflected on the Final Mortgage Loan Schedule), a
First Lien on the Mortgaged Property. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection
with the Mortgage Loan establishes and creates a valid, existing and
enforceable (A) first lien and first priority security interest with
respect to each Mortgage Loan which is indicated by the Seller to be a
First Lien (as reflected on the Final Mortgage Loan Schedule) or (B)
second lien and second priority security interest with respect to each
Mortgage Loan which is indicated by the Seller to be a Second Lien
Mortgage Loan (as reflected on the Final Mortgage Loan Schedule), in
either case, on the property described therein and the Seller has full
right to sell and assign the same to the Purchaser. The Mortgaged
Property was not, as of
the date of origination of the Mortgage Loan, subject to a mortgage,
deed of trust, deed to secure debt or other security instrument
creating a lien subordinate to the lien of the Mortgage;
(ix) With respect to each Second Lien Mortgage Loan, where
required or customary in the jurisdiction in which the related
Mortgaged Property is located, the original lender has filed for record
a request for notice of any action by the senior lienholder under the
related First Lien, and the original lender has notified any senior
lienholder in writing of the existence of the Second Lien Mortgage Loan
and requested notification of any action to be taken against the
Mortgagor by the senior lienholder;
(x) With respect to each Second Lien Mortgage Loan, either (a)
no consent for the Second Lien Mortgage Loan is required by the holder
of the related first lien or (b) such consent has been obtained and is
contained in the Mortgage File.
(xi) The Mortgage Note and the related Mortgage are genuine
and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms;
(xii) All parties to the Mortgage Note and the Mortgage had
legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note and the Mortgage, and the Mortgage Note and
the Mortgage have been duly and properly executed by such parties. The
Mortgagor is a natural person and the identity of such natural person
was fully verified by the Seller;
(xiii) The proceeds of the Mortgage Loan have been fully
disbursed to or for the account of the Mortgagor and there is no
obligation for the Mortgagee to advance additional funds thereunder and
any and all requirements as to completion of any on-site or off-site
improvement and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making or
closing the Mortgage Loan and the recording of the Mortgage have been
paid, and the Mortgagor is not entitled to any refund of any amounts
paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage;
(xiv) All parties which have had any interest in the Mortgage
Loan, whether as originator, mortgagee, assignee, pledgee or otherwise,
are (or, during the period in which they held and disposed of such
interest, were): (A) organized under the laws of such state, or (B)
qualified to do business in such state, or (C) federal savings and loan
associations or national banks having principal offices in such state,
or (D) not doing business in such state so as to require qualification
or licensing, or (E) not otherwise required to be licensed in such
state. All parties which have had any interest in the Mortgage Loan
were in compliance with any and all applicable "doing business" and
licensing requirements of the laws of the state wherein the Mortgaged
Property is located or were not required to be licensed in such state;
(xv) The Mortgage Loan is covered by an ALTA lender's title
insurance policy (which, in the case of an Adjustable Rate Mortgage
Loan has an adjustable rate mortgage endorsement in the form of ALTA
6.0 or 6.1) acceptable to FNMA and FHLMC, issued by a title insurer
acceptable to FNMA and FHLMC and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject
to the exceptions contained above in (10)(a) and (b) and, with respect
to each Mortgage Loan which is indicated by the Seller to be a Second
Lien Mortgage Loan (as reflected on the Final Mortgage Loan Schedule)
clause (d)) the Seller, its successors and assigns as to the first
priority lien of the Mortgage in the original principal amount of the
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan,
against any loss by reason of the invalidity or unenforceability of the
lien resulting from the provisions of the
Mortgage providing for adjustment in the Mortgage Interest Rate and
Monthly Payment. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress to and from the Mortgaged
Property, and against encroachments by or upon the Mortgaged Property
or any interest therein;
(xvi) All improvements which were considered in determining
the Appraised Value of the related Mortgaged Property lay wholly within
the boundaries and building restriction lines of the Mortgaged
Property;
(xvii) The Mortgage Loan was originated by the Seller or by a
savings and loan association, a savings bank, a commercial bank or
similar banking institution which is supervised and examined by a
federal or state authority, or by a mortgagee approved as such by the
Secretary of HUD;
(xviii) Principal payments on the Mortgage Loan shall commence
(with respect to any newly originated Mortgage Loans) or commenced no
more than sixty (60) days after the proceeds of the Mortgage Loan were
disbursed. The Mortgage Loan bears interest at the Mortgage Interest
Rate. With respect to each Mortgage Loan, the Mortgage Note is payable
on the first day of each month in Monthly Payments, which, (A) in the
case of a Fixed Rate Mortgage Loan, are sufficient to fully amortize
the original principal balance over the original term thereof and to
pay interest at the related Mortgage Interest Rate, (B) in the case of
an Adjustable Rate Mortgage Loan, are changed on each Adjustment Date,
and in any case, are sufficient to fully amortize the original
principal balance over the original term thereof and to pay interest at
the related Mortgage Interest Rate and (C) in the case of a Balloon
Loan, are based on a fifteen (15) or thirty (30) year amortization
schedule, as set forth in the related Mortgage Note, and a final
monthly payment substantially greater than the preceding monthly
payment which is sufficient to amortize the remaining principal balance
of the Balloon Loan and to pay interest at the related Mortgage
Interest Rate. The Index for each Adjustable Rate Mortgage Loan is as
defined in the Final Mortgage Loan Schedule. The Mortgage Note does not
permit negative amortization. No Mortgage Loan is a Convertible
Mortgage Loan;
(xix) The origination and collection practices used by the
Seller with respect to each Mortgage Note and Mortgage have been in all
respects legal, proper, prudent and customary in the mortgage
origination and servicing industry. The Mortgage Loan has been serviced
by the Seller and any predecessor servicer in accordance with the terms
of the Mortgage Note. With respect to any Mortgage Loan which provides
for an adjustable interest rate, all rate adjustments have been
performed in accordance with the terms of the related Mortgage Note or
subsequent modifications, if any. With respect to escrow deposits and
Escrow Payments (other than with respect to each Mortgage Loan which is
indicated by the Seller to be a Second Lien Mortgage Loan and for which
the mortgagee under the First Lien is collecting Escrow Payments (as
reflected on the Final Mortgage Loan Schedule)), if any, all such
payments are in the possession of, or under the control of, the Seller
and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. No
escrow deposits or Escrow Payments or other charges or payments due the
Seller have been capitalized under any Mortgage or the related Mortgage
Note and no such escrow deposits or Escrow Payments are being held by
the Seller for any work on a Mortgaged Property which has not been
completed;
(xx) The Mortgage and related Mortgage Note contain customary
and enforceable provisions such as to render the rights and remedies of
the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby,
including, (a) in the case of a Mortgage designated as a deed of trust,
by trustee's sale, and (b) otherwise by judicial foreclosure;
(xxi) The Mortgage Loan was underwritten in accordance with
the underwriting standards of the Seller in effect at the time the
Mortgage Loan was originated which underwriting standards satisfy the
standards of prudent mortgage lenders in the secondary mortgage market;
and the Mortgage Note and Mortgage are on forms acceptable to FNMA and
FHLMC;
(xxii) The Mortgage Note is not and has not been secured by
any collateral except the lien of the corresponding Mortgage on the
Mortgaged Property and the security interest of any applicable security
agreement or chattel mortgage referred to in (10) above;
(xxiii) The Mortgage File contains an appraisal of the related
Mortgaged Property which satisfied the standards of FNMA and FHLMC and
was made and signed, prior to the approval of the Mortgage Loan
application, by a qualified appraiser, duly appointed by the Seller,
who had no interest, direct or indirect in the Mortgaged Property or in
any loan made on the security thereof, whose compensation is not
affected by the approval or disapproval of the Mortgage Loan and who
met the minimum qualifications of FNMA and FHLMC. Each appraisal of the
Mortgage Loan was made in accordance with the relevant provisions of
the Financial Institutions Reform, Recovery, and Enforcement Act of
1989;
(xxiv) In the event the Mortgage constitutes a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has
been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the
Purchaser to the trustee under the deed of trust, except in connection
with a trustee's sale after default by the Mortgagor;
(xxv) No Mortgage Loan contains provisions pursuant to which
Monthly Payments are (a) paid or partially paid with funds deposited in
any separate account established by the Seller, the Mortgagor, or
anyone on behalf of the Mortgagor, (b) paid by any source other than
the Mortgagor or (c) contains any other similar provisions which may
constitute a "buydown" provision. The Mortgage Loan is not a graduated
payment mortgage loan and the Mortgage Loan does not have a shared
appreciation or other contingent interest feature;
(xxvi) The Mortgagor has executed a statement to the effect
that the Mortgagor has received all disclosure materials required by
applicable law with respect to the making of fixed rate mortgage loans
in the case of Fixed Rate Mortgage Loans, and adjustable rate mortgage
loans in the case of Adjustable Rate Mortgage Loans and rescission
materials with respect to Refinanced Mortgage Loans, and such statement
is and will remain in the Mortgage File;
(xxvii) No Mortgage Loan was made in connection with (a) the
construction or rehabilitation of a Mortgaged Property or (b)
facilitating the trade-in or exchange of a Mortgaged Property;
(xxviii) To the best of Seller's knowledge, there exists no
circumstances or condition with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can
reasonably be expected to cause the Mortgage Loan to be an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely
affect the value of the Mortgage Loan;
(xxix) No error, omission, misrepresentation, negligence,
fraud or similar occurrence with respect to a Mortgage Loan has taken
place on the part of any person, including without limitation the
Mortgagor, any appraiser, any builder or developer, or any other party
involved in the origination of the Mortgage Loan or in the application
of any insurance in relation to such Mortgage Loan. If a mortgage
insurer fails to pay a claim submitted with respect to the related
Mortgage Loan as a result of the mortgage insurer successfully
asserting a defense based on fraud, then such failure to pay shall (i)
constitute a breach of this representation which materially and
adversely affects the interests of the owner of the Mortgage Loan and
(ii) allow the Purchaser to enforce the remedies set forth in
Subsection 7.03;
(xxx) Each original Mortgage was recorded and all subsequent
assignments of the original Mortgage (prior to the assignment to the
Purchaser) have been recorded, or are in the process of being recorded,
in the appropriate jurisdictions wherein such recordation is necessary
to perfect the lien thereof as against creditors of the Seller. The
Assignment of Mortgage is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged
Property is located;
(xxxi) Any principal advances made to the Mortgagor prior to
the Cut-off Date have been consolidated with the outstanding principal
amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is
expressly insured as having (A) first lien priority with respect to
each Mortgage Loan which is indicated by the Seller to be a First Lien
Mortgage Loan (as reflected on the Final Mortgage Loan Schedule), or
(B) second lien priority with respect to each Mortgage Loan which is
indicated by the Seller to be a Second Lien Mortgage Loan (as reflected
on the Final Mortgage Loan Schedule), in either case, by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to FNMA and
FHLMC. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(xxxii) If the Residential Dwelling on the Mortgaged Property
is a condominium unit or a unit in a planned unit development (other
than a de minimis planned unit development) such condominium or planned
unit development project meets the eligibility requirements of FNMA and
FHLMC;
(xxxiii) Each Mortgage Loan originated in the state of Texas
pursuant to Article XVI, Section 50(a)(6) of the Texas Constitution (a
"Texas Refinance Loan") has been originated in compliance with the
provisions of Article XVI, Section 50(a)(6) of the Texas Constitution,
Texas Civil Statutes and the Texas Finance Code. With respect to each
Texas Refinance Loan that is a Cash-Out Refinancing, the related
Mortgage Loan Documents state that the Mortgagor may prepay such Texas
Refinance Loan in whole or in part without incurring a Prepayment
Charge. The Seller does not collect any such Prepayment Charges in
connection with any such Texas Refinance Loan;
(xxxiv) To the extent a down payment is made by the borrower,
the source of the down payment with respect to the related Mortgage
Loan has been fully verified by the Seller;
(xxxv) Interest on each Mortgage Loan is calculated on the
basis of a 360-day year consisting of twelve 30-day months;
(xxxvi) The Seller shall, at its own expense, cause each
Mortgage Loan to be covered by a "life of loan" Tax Service Contract
which is assignable to the Purchaser or its designee at no
cost to the Purchaser or its designee; provided however, that if the
Seller fails to purchase such Tax Service Contract, the Seller shall be
required to reimburse the Purchaser for all costs and expenses incurred
by the Purchaser in connection with the purchase of any such Tax
Service Contract;
(xxxvii) Each Mortgage Loan is covered by a "life of loan"
Flood Zone Service Contract which is assignable to the Purchaser or its
designee at no cost to the Purchaser or its designee or, for each
Mortgage Loan not covered by such Flood Zone Service Contract, the
Seller agrees to purchase such Flood Zone Service Contract;
(xxxviii)None of the Adjustable Rate Mortgage Loans include an
option to convert to a Fixed Rate Mortgage Loan;
(xxxix) No selection procedures were used by the Seller that
identified the Mortgage Loans as being less desirable or valuable than
other comparable mortgage loans in the Seller's portfolio;
(xl) Each Mortgage Loan constitutes a "qualified mortgage"
under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1) assuming that the Mortgage Loan is transferred to a
REMIC in accordance with 860G(a) of the Code;
(xli) No Mortgage Loan shall (a) be subject to Section 226.32
of Regulation Z or any similar state or local law (relating to high
interest rate credit/lending transactions), (b) include any single
premium credit life or accident and health insurance or disability
insurance, or (c) contain any term or condition, or involves any loan
origination practice, that has been defined as "predatory," "covered, "
or "threshold" under applicable federal, state or local law, or which
has been expressly categorized as an "unfair" or "deceptive" term,
condition, or practice in any applicable federal, state or local law
dealing with "predatory" or "high cost" mortgage lending;
(xlii) With respect to each Mortgage Loan which is a Second
Lien, (i) the related first lien does not permit negative amortization,
and (ii) either no consent for the Mortgage Loan is required by the
holder of the first lien or such consent has been obtained and is
contained in the Mortgage File;
(xliii) The Mortgage Loan Documents with respect to each
Mortgage Loan subject to Prepayment Charges specifically authorizes
such Prepayment Charges to be collected and such Prepayment Charges are
permissible and enforceable in accordance with the terms of the related
Mortgage Loan Documents and applicable law;
(xliv) No Mortgage Loan had an LTV or a CLTV in excess of 100%
at origination;
(xlv) No Mortgage Loan had an original term to maturity of
more than thirty (30) years;
(xlvi) Each Mortgage contains a provision for the acceleration
of the payment of the unpaid principal balance of the related Mortgage
Loan in the event the related Mortgaged Property is sold without the
prior consent of the mortgagee thereunder;
(xlvii) Each Mortgage Note is comprised of one original
promissory note and each such promissory note constitutes an
"instrument" for purposes of section 9-102(a)(65) of the UCC;
(xlviii) No predatory or deceptive lending practices,
including but not limited to, the extension of credit to the mortgagor
without regard for the mortgagor's ability to repay the Mortgage Loan
and the extension of credit to the mortgagor which has no apparent
benefit to the mortgagor, were employed by the originator of the
Mortgage Loan in connection with the origination of the Mortgage Loan;
(xlix) The Seller and its agents have at all times complied
with all applicable federal, state and local anti-money laundering
laws, orders and regulations to the extent applicable to Seller or its
agent, including, without limitation, the USA PATRIOT Act of 2001
(collectively, the "Anti-Money Laundering Laws"), in respect of the
origination and servicing of each Mortgage Loan; the Seller has
established an anti-money laundering compliance program as and to the
extent required by the Anti-Money Laundering Laws, has conducted the
requisite due diligence in connection with the origination and
servicing of each Mortgage Loan for purposes of the Anti-Money
Laundering Laws to the extent applicable to Seller, and, to the extent
required by applicable law, maintains, and will maintain, either
directly or through third parties, sufficient information to identify
the applicable Mortgagor for purposes of the Anti-Money Laundering
Laws; no Mortgage Loan is subject to nullification pursuant to
Executive Order 13224 (the "Executive Order") or the regulations
promulgated by the Office of Foreign Assets Control of the United
States Department of the Treasury ("OFAC Regulations") or in violation
of the Executive Order or the OFAC Regulations, and no Mortgagor is
subject to the provisions of such Executive Order or the OFAC
Regulations nor listed as a "blocked person" for purposes of the OFAC
Regulations;
(l) No Mortgage Loan is "high cost" as defined by any
applicable federal, state or local predatory or abusive lending law;
(li) No Mortgage Loan is a "home loan" as defined by Nevada
Revised Statute Section 598D.040;
(lii) No Mortgage Loan is a "high-rate, high-fee mortgage" as
defined by Maine Revised Statute, Title 9-A, Section 8-103;
(liii) No Mortgage Loan is a "High-Cost Home Loan" as defined
in the New Jersey Home Ownership Act effective November 27, 2003
(N.J.S.A. 46:10B-22 et seq.);
(liv) No Mortgage Loan is a "High-Cost Home Loan" as defined
in the New Mexico Home Loan Protection Act effective January 1, 2004
(N.M. Stat. ▇▇▇. Sections 58-21A-1 et seq.);
(lv) No Mortgage Loan is covered by the Home Ownership and
Equity Protection Act of 1994 ("HOEPA"), no Mortgage Loan is subject to
the requirements of HOEPA and no Mortgage Loan is in violation of any
comparable state or local law. Any breach of this representation shall
be deemed to materially and adversely affect the interests of the owner
of the Mortgage Loan and shall require a repurchase of the affected
Mortgage Loans;
(lvi) No Mortgage Loan is a "High-Cost Home Loan" as defined
in the Georgia Fair Lending Act, as amended (the "Georgia Act"). No
Mortgage Loan subject to the Georgia Act and secured by owner occupied
real property or an owner occupied manufactured home located in the
State of Georgia was originated (or modified) on or after October 1,
2002 through and including March 6, 2003. Any breach of this
representation shall be deemed to materially and adversely affect the
interests of the owner of the Mortgage Loan and shall require a
repurchase of the affected Mortgage Loan;
(lvii) No Mortgage Loan is classified as a high cost mortgage
loan under HOEPA, and no Mortgage Loan is a "high cost home,"
"covered," "high risk home" or "predatory" loan under any other
applicable state, federal or local law (or a similarly classified loan
using different terminology under a law imposing heightened regulatory
scrutiny or additional legal liability for residential mortgage loans
having high interest rates, points and/or fees). Any breach of this
representation shall be deemed to materially and adversely affect the
interests of the owner of the Mortgage Loan and shall require a
repurchase of the affected Mortgage Loan;
(lviii) No proceeds from any Mortgage Loan were used to
finance single-premium credit insurance policies. Any breach of this
representation shall be deemed to materially and adversely affect the
interests of the owner of the Mortgage Loan and shall require a
repurchase of the affected Mortgage Loans;
(lix) No Mortgage Loan originated prior to October 1, 2002 has
a Prepayment Charge longer than five years after its origination; and
no Mortgage Loan originated on or after October 1, 2002 has a
Prepayment Charge longer than three years after its origination. Any
breach of this representation shall be deemed to materially and
adversely affect the interests of the owner of the Mortgage Loan and
shall require a repurchase of the affected Mortgage Loans;
(lx) Each Mortgage Loan at the time it was made complied in
all material respects with applicable local, state and federal laws,
including, but not limited to, all applicable predatory or abusive
lending laws;
(lxi) No Mortgage Loan is a "high cost," "covered" or other
similarly designated loan as defined under any state, local or federal
law, which law contains provisions that may result in liability to the
purchaser or assignee of such Mortgage Loan;
(lxii) The information set forth in the Prepayment Charge
Schedule is complete, true and correct in all material respects on the
date or dates when such information is furnished and each Prepayment
Charge is permissible and enforceable in accordance with its terms
under applicable law;
(lxiii) With respect to each purchase money Mortgage Loan
where a down payment was made by the borrower, the borrower's assets
were verified as part of the origination process;
(lxiv) With respect to each Mortgage Loan, a full appraisal
(URAR Form 1004) was obtained;
(lxv) An automated valuation model was not the sole method
used in the appraisal process of any Mortgage Loan;
(lxvi) With respect to each Mortgage Loan, the FICO score
provided is not a NextGen FICO score;
(lxvii) No Mortgage Loan is subject to Primary Mortgage
Insurance; and
(lxviii) No Mortgage Loan is a Buydown Mortgage Loan.
(d) It is understood and agreed that the representations and warranties
set forth in Sections 1.04(b) and 1.04(c) herein shall survive delivery of the
Mortgage Files and the Assignment of Mortgage of each Mortgage Loan to the
Depositor. Upon discovery by either the Seller or the Depositor of a breach
of any of the foregoing representations and warranties that adversely and
materially affects the value of the related Mortgage Loan, and, that does not
also constitute a breach of a representation or warranty of a Transferor in the
applicable Transfer Agreement or Bring Down Letter, the party discovering such
breach shall give prompt written notice to the other party. Within 60 days of
the discovery of any such breach, the Seller shall either (a) cure such breach
in all material respects, (b) repurchase such Mortgage Loan or any property
acquired in respect thereof from the Depositor at the applicable Purchase Price
or (c) within the two year period following the Closing Date, substitute a
Replacement Mortgage Loan for the affected Mortgage Loan. The Seller indemnifies
and holds the Trust Fund, the Trustee, the Depositor, the Servicer, the NIMS
Insurer and each Certificateholder harmless against any and all taxes, claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and any other costs, fees and expenses that the Trust Fund, the
Trustee, the Depositor, the Servicer, the NIMS Insurer and any Certificateholder
may sustain in connection with any actions of the Seller relating to a
repurchase of a Mortgage Loan other than in compliance with the terms of this
Section 2.03 of the Pooling Agreement and this Agreement, to the extent that any
such action causes (i) any federal or state tax to be imposed on the Trust Fund
or any REMIC provided for in the Pooling Agreement, including without
limitation, any federal tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or on "contributions after the startup date" under
Section 860(d)(1) of the Code, or (ii) any REMIC created in the Pooling
Agreement to fail to qualify as a REMIC at any time that any Certificate is
outstanding.
Section 1.05. Grant Clause. It is intended that the conveyance of the
Seller's right, title and interest in and to Mortgage Loans and other property
conveyed pursuant to this Agreement shall constitute, and shall be construed as,
a sale of such property and not a grant of a security interest to secure a loan.
However, if such conveyance is deemed to be in respect of a loan, it is intended
that: (1) the rights and obligations of the parties shall be established
pursuant to the terms of this Agreement; (2) the Seller hereby grants to the
Depositor a first priority security interest in all of the Seller's right, title
and interest in, to and under, whether now owned or hereafter acquired, such
Mortgage Loans and other property; and (3) this Agreement shall constitute a
security agreement under applicable law.
Section 1.06. Assignment by Depositor. The Depositor shall have the
right, upon notice to but without the consent of the Seller, to assign, in whole
or in part, its interest under this Agreement with respect to the Mortgage Loans
to the Trustee, and the Trustee then shall succeed to all rights of the
Depositor under this Agreement. All references to the Depositor in this
Agreement shall be deemed to include its assignee or designee, specifically
including the Trustee.
ARTICLE II
MISCELLANEOUS PROVISIONS
Section 2.01. Binding Nature of Agreement; Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 2.02. Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof.
Section 2.03. Amendment. This Agreement may be amended from time to
time by the Seller and the Depositor, without notice to or the consent of any of
the Holders, (i) to cure any ambiguity or correct any mistake, (ii) to cause the
provisions herein to conform to or be consistent with or in furtherance of the
statements made with respect to the Certificates, the Trust Fund, the Pooling
Agreement or this Agreement in any Offering Document; or to correct or
supplement any provision herein which may be inconsistent with any other
provisions herein, (iii) to make any other provisions with respect to matters or
questions arising under this Agreement or (iv) to modify, alter, amend, add to
or rescind any of the terms or provisions to the extent necessary or desirable
to comply with any requirements imposed by the Code and the REMIC Provisions. No
such amendment effected pursuant to clause (iii) of the preceding sentence shall
adversely affect in any material respect the interests of any Holder. Any such
amendment shall be deemed not to adversely affect in any material respect any
Holder, if the Trustee receives written confirmation from each Rating Agency
that such amendment will not cause such Rating Agency to reduce the then current
rating assigned to the Certificates (and any Opinion of Counsel requested by the
Trustee in connection with any such amendment may rely expressly on such
confirmation as the basis therefor).
(a) This Agreement may also be amended from time to time by the Seller
and the Depositor with the consent of the Holders of not less than 66-2/3% of
the Class Certificate Principal Amount (or Percentage Interest) of each Class of
Certificates affected thereby for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Holders; provided, however, that no
such amendment may (i) reduce in any manner the amount of, or delay the timing
of, payments received on Mortgage Loans which are required to be distributed on
any Certificate without the consent of the Holder of such Certificate or (ii)
reduce the aforesaid percentages of Class Principal Amount (or Percentage
Interest) of Certificates of each Class, the Holders of which are required to
consent to any such amendment without the consent of the Holders of 100% of the
Class Principal Amount (or Percentage Interest) of each Class of Certificates
affected thereby. For purposes of this paragraph, references to "Holder" or
"Holders" shall be deemed to include, in the case of any Class of Book-Entry
Certificates, the related Certificate Owners.
(b) It shall not be necessary for the consent of Holders under this
Section 2.03 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Holders shall be subject to such reasonable regulations as
the Trustee may prescribe.
Section 2.04. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
Section 2.05. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 2.06. Indulgences; No Waivers. Neither the failure nor any
delay on the part of a party to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
Section 2.07. Headings Not to Affect Interpretation. The headings
contained in this Agreement are for convenience of reference only, and they
shall not be used in the interpretation hereof.
Section 2.08. Benefits of Agreement. Nothing in this Agreement, express
or implied, shall give to any Person, other than the parties to this Agreement
and their successors hereunder, any benefit or any legal or equitable right,
power, remedy or claim under this Agreement.
Section 2.09. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
IN WITNESS WHEREOF, the Seller and the Depositor have caused their
names to be signed hereto by their respective duly authorized officers as of the
date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS,
INC.
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
EXHIBIT A
TRANSFER AGREEMENTS
1. Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as
of January 1, 2004, among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Capital Inc., as
Purchaser and The CIT Group/Consumer Finance, Inc., The CIT
Group/Consumer Finance, Inc. (NY) and The CIT Group/Consumer Finance,
Inc. (TN), as Seller, as amended.
2. Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as
of March 1, 2004, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Capital Inc., as
Purchaser and Fieldstone Mortgage Company, as Seller, as amended.
3. Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as
of March 1, 2004, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Capital Inc., as
Purchaser and Ownit Mortgage Solutions, Inc., as Seller, as amended.
EXHIBIT B
TRANSFERORS
1. The CIT Group/Consumer Finance, Inc.
2. Fieldstone Mortgage Company
3. Ownit Mortgage Solutions, Inc.
SCHEDULE A
MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]