FLOW MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT MORGAN STANLEY MORTGAGE CAPITAL INC., Purchaser NEW CENTURY MORTGAGE CORPORATION, Seller Dated as of November 1, 2005 Conventional, Fixed and Adjustable Rate Residential Mortgage Loans
Exhibit
99.10b
EXECUTION
COPY
FLOW
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
▇▇▇▇▇▇
▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.,
Purchaser
NEW
CENTURY MORTGAGE CORPORATION,
Seller
|
|
Dated
as
of November 1, 2005
Conventional,
Fixed
and
Adjustable Rate Residential Mortgage Loans
TABLE
OF
CONTENTS
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Page
|
||
|
SECTION
1.
|
DEFINITIONS.
|
1
|
|
SECTION
2.
|
AGREEMENT
TO PURCHASE.
|
19
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|
SECTION
3.
|
MORTGAGE
SCHEDULES.
|
19
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|
SECTION
4.
|
PURCHASE
PRICE.
|
20
|
|
SECTION
5.
|
EXAMINATION
OF MORTGAGE FILES.
|
20
|
|
SECTION
6.
|
CONVEYANCE
FROM SELLER TO PURCHASER.
|
22
|
|
SECTION
7.
|
SERVICING
OF THE MORTGAGE LOANS.
|
24
|
|
SECTION
8.
|
TRANSFER
OF SERVICING.
|
24
|
|
SECTION
9.
|
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE SELLER; REMEDIES FOR BREACH.
|
28
|
|
SECTION
10.
|
CLOSING.
|
55
|
|
SECTION
11.
|
CLOSING
DOCUMENTS.
|
56
|
|
SECTION
12.
|
COSTS.
|
58
|
|
SECTION
13.
|
COOPERATION
OF SELLER WITH A RECONSTITUTION.
|
58
|
|
SECTION
14.
|
THE
SELLER.
|
62
|
|
SECTION
15.
|
FINANCIAL
STATEMENTS.
|
63
|
|
SECTION
16.
|
MANDATORY
DELIVERY; GRANT OF SECURITY INTEREST.
|
63
|
|
SECTION
17.
|
NOTICES.
|
65
|
|
SECTION
18.
|
SEVERABILITY
CLAUSE.
|
65
|
|
SECTION
19.
|
COUNTERPARTS.
|
66
|
|
SECTION
20.
|
GOVERNING
LAW.
|
66
|
|
SECTION
21.
|
INTENTION
OF THE PARTIES.
|
66
|
|
SECTION
22.
|
SUCCESSORS
AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.
|
▇▇
|
-▇-
|
▇▇▇▇▇▇▇
▇▇.
|
WAIVERS.
|
67
|
|
SECTION
24.
|
EXHIBITS.
|
67
|
|
SECTION
25.
|
GENERAL
INTERPRETIVE PRINCIPLES.
|
67
|
|
SECTION
26.
|
REPRODUCTION
OF DOCUMENTS.
|
67
|
|
SECTION
27.
|
FURTHER
AGREEMENTS.
|
69
|
|
SECTION
28.
|
RECORDATION
OF ASSIGNMENTS OF MORTGAGE.
|
69
|
|
SECTION
29.
|
NO
SOLICITATION.
|
69
|
|
SECTION
30.
|
WAIVER
OF TRIAL BY JURY.
|
69
|
|
SECTION
31.
|
SUBMISSION
TO JURISDICTION; WAIVERS.
|
70
|
|
SECTION
32.
|
COMPLIANCE
WITH REGULATION AB.
|
70
|
-ii-
EXHIBITS
|
EXHIBIT
A
|
CONTENTS
OF EACH MORTGAGE FILE
|
|
EXHIBIT
B
|
[RESERVED]
|
|
EXHIBIT
C
|
FORM
OF SELLER’S OFFICER’S CERTIFICATE
|
|
EXHIBIT
D
|
FORM
OF OPINION OF COUNSEL TO THE SELLER AND ORIGINATOR
|
|
EXHIBIT
E
|
FORM
OF SECURITY RELEASE CERTIFICATION
|
|
EXHIBIT
F
|
FORM
OF SECURITY RELEASE CERTIFICATION
|
|
EXHIBIT
G
|
UNDERWRITING
GUIDELINES
|
|
EXHIBIT
H
|
FORM
OF ASSIGNMENT AND CONVEYANCE
AGREEMENT
|
-iii-
FLOW
MORTGAGE LOAN
PURCHASE
AND WARRANTIES AGREEMENT
This
FLOW
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the “Agreement”),
dated
as of November 1, 2005, by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.,
a
New York corporation, having an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the “Purchaser”)
and
New Century Mortgage Corporation, a California corporation, 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 and second-lien
mortgage loans (the “Mortgage
Loans”)
on a
servicing released basis as described herein, and which shall be delivered
in
pools of whole loans (each, a “Mortgage
Loan Package”)
on
various dates as provided herein (each, a “Closing
Date”);
WHEREAS,
each Mortgage Loan is secured by a mortgage, deed of trust or other security
instrument creating a first lien or second-lien on a residential dwelling
located in the jurisdiction indicated on the Mortgage Loan Schedule for the
related Mortgage Loan Package;
WHEREAS,
the Purchaser and the Seller wish to prescribe the manner of the conveyance,
servicing by the Interim Servicer 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 or a public or private, rated or unrated mortgage
Securitization 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.
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, those mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the same type
as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property
is
located and incorporating the Delinquency Collection Policies and
Procedures.
-1-
Act:
The
National Housing Act, as amended from time to time.
Adjustable
Rate Mortgage Loan:
An
adjustable rate Mortgage Loan purchased pursuant to this Agreement.
Affiliate:
With
respect to any specified Person, any other Person controlling or controlled
by
or under common control with such specified Person. For the purposes of this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or
otherwise and the terms “controlling” and “controlled” have meanings correlative
to the foregoing.
Agency
Transfer:
A
▇▇▇▇▇▇ ▇▇▇ Transfer or a ▇▇▇▇▇▇▇ Mac Transfer.
Agreement:
This
Flow Mortgage Loan Purchase and Warranties Agreement and all amendments hereof
and supplements hereto.
ALTA:
The
American Land Title Association or any successor thereto.
Ancillary
Income:
All
late charges, assumption fees, escrow account benefits, reinstatement fees,
and
similar types of fees arising from or in connection with any Mortgage, to the
extent not otherwise payable to the Mortgagor under applicable law or pursuant
to the terms of the related Mortgage Note.
Appraised
Value:
The
value set forth in an appraisal made in connection with the origination of
the
related Mortgage Loan as the value of the Mortgaged Property.
Assignment
and Conveyance Agreement:
As
defined in Subsection 6.01.
Assignment
of Mortgage:
An
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the sale of the Mortgage to
the
Purchaser.
Balloon
Mortgage Loan:
Any
Mortgage Loan which by its original terms or any modifications thereof provides
for amortization beyond its scheduled maturity date.
BIF:
The
Bank Insurance Fund, or any successor thereto.
Business
Day:
Any day
other than (i) a Saturday or Sunday, (ii) a day on which banking and
savings and loan institutions, in the State of New York or the State in which
the Originator’s servicing operations are located or (iii) the state in
which the Custodian’s operations are located, are authorized or obligated by law
or executive order to be closed.
Cash-Out
Refinance:
A
Refinanced Mortgage Loan in which the proceeds received were in excess of the
amount of funds required to repay the principal balance of any existing first
mortgage on the related Mortgaged Property, pay related closing costs and
satisfy any outstanding subordinate mortgages on the related Mortgaged Property
and which provided incidental cash to the related Mortgagor of more than 1%
of
the original principal balance of such Mortgage Loan.
-2-
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, the Mortgage Loans listed on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
CLTV:
As of
any date and as to any Second Lien Loan, the ratio, expressed as a percentage,
of the (a) sum of (i) the outstanding principal balance of the Second Lien
Loan
and (ii) the outstanding principal balance as of such date of any mortgage
loan
or mortgage loans that are senior or equal in priority to the Second Lien Loan
and which are secured by the same Mortgaged Property to (b) the Appraised Value
as determined pursuant to the Underwriting Guidelines of the related Mortgaged
Property as of the origination of the Second Lien Loan.
Code:
Internal Revenue Code of 1986, as amended.
Commission:
The
United States Securities and Exchange Commission.
Condemnation
Proceeds: All
awards or settlements in respect of a Mortgaged Property, whether permanent
or
temporary, partial or entire, by exercise of the power of eminent domain or
condemnation, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Mortgage Loan Documents.
Convertible
Mortgage Loan:
Any
individual Adjustable Rate Mortgage Loan purchased pursuant to this Agreement
which contains a provision whereby the Mortgagor is permitted to convert the
Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan in accordance with
the terms of the related Mortgage Note.
Covered
Loan:
A
Mortgage Loan categorized as Covered pursuant to Appendix E of Standard &
Poor’s Glossary.
Custodial
Account:
The
separate trust account created and maintained pursuant to Section 2.04 of the
Servicing Agreement (with respect to each Mortgage Loan, as specified
therein).
Custodial
Agreement:
The
agreement(s) governing the retention of the originals of each Mortgage Note,
Mortgage, Assignment of Mortgage and other Mortgage Loan Documents. If more
than
one Custodial Agreement is in effect at any given time, all of the individual
Custodial Agreements shall collectively be referred to as the “Custodial
Agreement”.
Custodian:
Deutsche Bank Trust Company Americas, or the Custodian’s successor in interest
or permitted assigns, or any successor to the Custodian under the Custodial
Agreement as therein provided.
Cut-off
Date:
The
date or dates designated as such on the related Mortgage Loan Schedule with
respect to the related Mortgage Loan Package.
-3-
Deleted
Mortgage Loan:
A
Mortgage Loan that is repurchased or replaced or to be replaced with a Qualified
Substitute Mortgage Loan by the Seller in accordance with the terms of this
Agreement.
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Determination
Date: The
date
specified in the Servicing Agreement (with respect to each Mortgage Loan, for
an
interim period, as specified therein).
Due
Date:
The day
of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive
of any days of grace.
Due
Period:
With
respect to each Remittance Date and any Mortgage Loan, the period commencing
on
the day immediately succeeding the Due Date for such Mortgage Loan occurring
in
the month preceding the month of the Remittance Date and ending on the next
Due
Date.
Equity
Take-Out Refinanced Mortgage Loan:
A
Mortgage Loan used to refinance an existing mortgage loan, the proceeds of
which
were in excess of the outstanding principal balance of the existing mortgage
loan.
Escrow
Account:
The
separate account created and maintained pursuant to Section 2.06 of the
Servicing Agreement (with respect to each Mortgage Loan, as specified
therein).
Escrow
Payments:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and any
other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage or any other document.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇
▇▇▇:
▇▇▇▇▇▇
▇▇▇, f/k/a the Federal National Mortgage Association, or any successor
thereto.
▇▇▇▇▇▇
Mae Guides:
The
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇’ Guide and the ▇▇▇▇▇▇ Mae Servicers’ Guide and all amendments
or additions thereto.
▇▇▇▇▇▇
▇▇▇ Transfer:
As
defined in Section
13
hereof.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
FHA:
The
Federal Housing Administration, an agency within the United States Department
of
Housing and Urban Development, or any successor thereto and including the
Federal Housing Commissioner and the Secretary of Housing and Urban Development
where appropriate under the FHA Regulations.
-4-
FHA
Approved Mortgagee:
A
corporation or institution approved as a mortgagee by the FHA under the Act,
and
applicable HUD regulations, and eligible to own and service mortgage loans
such
as the FHA mortgage loans.
First
Lien Loan:
A
Mortgage Loan secured by a first lien Mortgage on the related Mortgaged
Property.
Fitch:
Fitch,
Inc., or its successor in interest.
Fixed
Rate Mortgage Loan:
A fixed
rate mortgage loan purchased pursuant to this Agreement.
▇▇▇▇▇▇▇
Mac:
▇▇▇▇▇▇▇
Mac, f/k/a the Federal Home Loan Mortgage Corporation, or any successor
thereto.
▇▇▇▇▇▇▇
Mac Transfer:
As
defined in Section
13
hereof.
Gross
Margin:
With
respect to each Adjustable Rate Mortgage Loan, the fixed percentage amount
set
forth in the related Mortgage Note which amount is added to the Index in
accordance with the terms of the related Mortgage Note to determine on each
Interest Rate Adjustment Date the Mortgage Interest Rate for such Mortgage
Loan.
High
Cost Loan:
A
Mortgage Loan (a) covered by the Home Ownership and Equity Protection Act of
1994, (b) classified as a “high cost home,” “threshold,” “covered,” (excluding
New Jersey “Covered Home Loans” as that term was defined in clause (1) of the
definition of that term in the New Jersey Home Ownership Security Act of 2002
that were originated between November 26, 2003 and July 7, 2004), “high risk
home,” “predatory” or similar loan under any other applicable state, federal or
local law (or a similarly classified loan using different terminology under
a
law imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees)
or
(c) a Mortgage Loan categorized as High Cost pursuant to Appendix E of Standard
& Poor’s Glossary. For avoidance of doubt, the parties agree that this
definition shall apply to any law regardless of whether such law is presently,
or in the future becomes, the subject of judicial review or
litigation.
Home
Loan:
A
Mortgage Loan categorized as Home Loan pursuant to Appendix E of Standard &
Poor’s Glossary.
HUD:
The
Department of Housing and Urban Development, or any federal agency or official
thereof which may from time to time succeed to the functions thereof with regard
to FHA Mortgage Insurance. The term “HUD,”
for
purposes of this Agreement, is also deemed to include subdivisions thereof
such
as the FHA and Government National Mortgage Association.
Index:
The
index indicated in the related Mortgage Note for each Adjustable Rate Mortgage
Loan.
-5-
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
Insured
Depository Institution:
Insured
Depository Institution shall have the meaning ascribed to such term by Section
1813(c)(2) of Title 12 of the United States Code, as amended from time to
time.
Interest
Rate Adjustment Date:
With
respect to each Adjustable Rate Mortgage Loan, the date, specified in the
related Mortgage Note and the related Mortgage Loan Schedule, on which the
Mortgage Interest Rate is adjusted.
Lifetime
Rate Cap:
The
provision of each Mortgage Note related to an Adjustable Rate Mortgage Loan
which provides for an absolute maximum Mortgage Interest Rate thereunder. The
Mortgage Interest Rate during the terms of each Adjustable Rate Mortgage Loan
shall not at any time exceed the Mortgage Interest Rate at the time of
origination of such Adjustable Rate Mortgage Loan by more than the Lifetime
Rate
Cap set forth as an amount per annum on the related Mortgage Loan
Schedule.
Limited
Documentation Program:
The
guidelines under which the Originator generally originates Mortgage Loans
principally on the basis of the Loan-to-Value Ratio of the related Mortgage
Loan
and the creditworthiness of the Mortgagor.
Liquidation
Proceeds:
Cash
received in connection with the liquidation of a defaulted Mortgage Loan,
whether through the sale or assignment of such Mortgage Loan, trustee’s sale,
foreclosure sale or otherwise or the sale of the related Mortgaged Property
if
the Mortgaged Property is acquired in satisfaction of the Mortgage
Loan.
Loan-to-Value
Ratio
or
LTV:
With
respect to any Mortgage Loan, the ratio (expressed as a percentage) of the
outstanding principal amount of the Mortgage Loan as of the related Cut-off
Date
(unless otherwise indicated), to the lesser of (a) the Appraised Value of
the Mortgaged Property at origination and (b) if the Mortgage Loan was made
to finance the acquisition of the related Mortgaged Property, the purchase
price
of the Mortgaged Property.
Manufactured
Home:
A
single family residential unit that is constructed in a factory in sections
in
accordance with the Federal Manufactured Home Construction and Safety Standards
adopted on July 15, 1976, by the Department of Housing and Urban Development
(“HUD
Code”),
as
amended in 2000, which preempts state and local building codes. Each unit is
identified by the presence of a HUD Plate/Compliance Certificate label. The
sections are then transported to the site and joined together and affixed to
a
pre-built permanent foundation (which satisfies the manufacturer’s requirements
and all state, county, and local building codes and regulations). The
manufactured home is built on a non-removable, permanent frame chassis that
supports the complete unit of walls, floors, and roof. The underneath part
of
the home may have running gear (wheels, axles, and brakes) that enable it to
be
transported to the permanent site. The wheels and hitch are removed prior to
anchoring the unit to the permanent foundation. The manufactured home must
be
classified as real estate and taxed accordingly. The permanent foundation may
be
on land owned by the Mortgagor or may be on leased land.
-6-
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage
Loan.
Moody’s:
▇▇▇▇▇’▇
Investors Service, Inc., and any successor thereto.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a first lien, in the case of a First Lien Loan, or a second lien, in
the
case of a Second Lien Loan, on an unsubordinated estate in fee simple in real
property securing the Mortgage Note; except that with respect to real property
located in jurisdictions in which the use of leasehold estates for residential
properties is a widely-accepted practice, the mortgage, deed of trust or other
instrument securing the Mortgage Note may secure and create, with respect to
a
First Lien Loan, a first lien, and with respect to a Second Lien Loan, a second
lien, in each case, upon a leasehold estate of the Mortgagor.
Mortgage
File:
The
items pertaining to a particular Mortgage Loan referred to in Exhibit A
annexed
hereto, and any additional documents required to be added to the Mortgage File
pursuant to this Agreement.
Mortgage
Interest Rate:
The
annual rate of interest borne on a Mortgage Note with respect to each Mortgage
Loan.
Mortgage
Interest Rate Cap:
With
respect to an Adjustable Rate Mortgage Loan, the limit on each Mortgage Interest
Rate adjustment as set forth in the related Mortgage Note.
Mortgage
Loan:
An
individual Mortgage Loan which is the subject of this Agreement, each Mortgage
Loan originally sold and subject to this Agreement being identified on the
applicable Mortgage Loan Schedule, which Mortgage Loan includes without
limitation the Mortgage File, the Monthly Payments, Principal Prepayments,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, Servicing
Rights and all other rights, benefits, proceeds and obligations arising from
or
in connection with such Mortgage Loan, excluding replaced or repurchased
mortgage loans.
Mortgage
Loan Documents:
The
documents required to be delivered to the Custodian pursuant to Subsection 6.03
hereof
with respect to any Mortgage Loan.
Mortgage
Loan Package:
Each
pool of Mortgage Loans, which shall be purchased by the Purchaser from the
Seller from time to time on each Closing Date.
Mortgage
Loan Schedule:
The
schedule of Mortgage Loans setting forth the following information with respect
to each Mortgage Loan in the related Mortgage Loan Package: (1) the
Seller’s Mortgage Loan identifying number; (2) the Mortgagor’s name;
(3) the social security number of the Mortgagor; (4) a code indicating
whether the Mortgagor’s race and/or ethnicity is (i) native American or
Alaskan native, (ii) Asian/Pacific islander, (iii) African American,
(iv) white, (v) Hispanic or Latino, (vi) other minority,
(vii) not provided by the Mortgagor, (viii) not applicable (if the
Mortgagor is an entity) and (ix) unknown or missing; (5) the street
address of the Mortgaged Property including the city, state and zip code;
(6) a code indicating whether the Mortgagor is self-employed; (7) a
code indicating whether the Mortgaged Property is owner-occupied, investment
property or a second home; (8) a code indicating the number and type of
residential units constituting the Mortgaged Property (e.g. single family
residence, two-family residence, three-family residence, four-family residence,
multifamily residence, condominium, manufactured housing, mixed-use property,
raw land and other non-residential properties, planned unit development or
cooperative stock in a cooperative housing corporation);
-7-
(9) the
original months to maturity or the remaining months to maturity from the related
Cut-off Date, in any case based on the original amortization schedule and,
if
different, the maturity expressed in the same manner but based on the actual
amortization schedule; (10) the LTV or CLTV, as applicable, at origination;
(11) the Mortgage Interest Rate as of the related Cut-off Date;
(12) the date on which the first Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in effect,
the Due Date; (13) the stated maturity date; (14) the amount of the
Monthly Payment as of the related Cut-off Date; (15) whether the Mortgage
Loan has Monthly Payments that are interest-only for a period of time, and
the
interest-only period, if applicable (and with respect to each Second Lien Loan,
whether the related first lien mortgage loan has monthly payments that are
interest-only for a period of time, and the interest-only period, if
applicable); (16) the last payment date on which a payment was actually
applied to the outstanding principal balance; (17) the schedule of the
payment delinquencies in the prior 12 months; (18) the Servicing Fee Rate;
(19) the original principal amount of the Mortgage Loan; (20) the
principal balance of the Mortgage Loan as of the close of business on the
related Cut-off Date, after deduction of payments of principal due and collected
on or before the related Cut-off Date; (21) with respect to each Mortgage
Loan with a second lien behind it, the combined principal balance of the
Mortgage Loan and the applicable second lien loan, at origination, (22) a
code indicating whether there is a simultaneous second; (23) with respect
to Adjustable Rate Mortgage Loans, the Interest Rate Adjustment Date;
(24) with respect to Adjustable Rate Mortgage Loans, the Gross Margin;
(25) with respect to Adjustable Rate Mortgage Loans, the Lifetime Rate Cap
under the terms of the Mortgage Note; (26) with respect to Adjustable Rate
Mortgage Loans, a code indicating the type of Index, including the methodology
for rounding (e.g. rounded upward, if necessary, to the nearest ten thousandth
(.0001)) and the applicable time frame for determining the Index; (27) the
product type of Mortgage Loan (i.e., Fixed Rate, Adjustable Rate, First Lien
Loan or Second Lien Loan), and with respect to each Second Lien Loan, the
product type of the related first lien loan; (28) a code indicating the
purpose of the loan (i.e., purchase, Rate/Term Refinance or Cash-Out Refinance);
(29) a code indicating the documentation style (i.e. no documents, full,
alternative, reduced, no income/no asset, stated income, no ration, reduced
or
NIV); (30) asset verification (Y/N); (31) the loan credit
classification (as described in the Underwriting Guidelines); (32) whether
such Mortgage Loan provides for a Prepayment Penalty; (33) the Prepayment
Penalty period of such Mortgage Loan, if applicable; (34) a description of
the Prepayment Penalty, if applicable; (35) the Mortgage Interest Rate as
of origination; (36) the credit risk score (FICO score); (37) the date
of origination; (38) with respect to Adjustable Rate Mortgage Loans, the
Mortgage Interest Rate adjustment period; (39) with respect to Adjustable
Rate Mortgage Loans, the Mortgage Interest Rate adjustment percentage;
(40) with respect to Adjustable Rate Mortgage Loans, the Mortgage Interest
Rate floor; (41) the Mortgage Interest Rate calculation method (i.e.,
30/360, simple interest, other); (42) with respect to Adjustable Rate
Mortgage Loans, the Periodic Rate Cap as of the first Interest Rate Adjustment
Date; (43) with respect to each Adjustable Rate Mortgage Loan, a code
indicating whether the Mortgage Loan provides for negative amortization;
(44) a code indicating whether the Mortgage Loan has negative amortization
and the maximum of such negative amortization; (45) a code indicating
whether the Mortgage Loan is a Balloon Mortgage Loan; (46) a code
indicating whether the Mortgage Loan by its original terms or any modifications
thereof provides for amortization beyond its scheduled maturity date;
(47) the original Monthly Payment due; (48) the Appraised Value;
(49) appraisal type; (50) appraisal date; (51) a code indicating
whether the Mortgage Loan is covered by a PMI Policy and, if so, identifying
the
PMI Policy provider; (54) the certificate number of the PMI Policy, if
applicable; (52) the amount of coverage of the PMI Policy, if applicable;
(53) in connection with a condominium unit, a code indicating whether the
condominium project where such unit is located is low-rise or high-rise;
(54) a code indicating whether the Mortgaged Property is a leasehold
estate; (55) with respect to the related Mortgagor, the debt-to-income
ratio; (56) sales price; (57) automated valuation model (AVM);
(58) a code indicating whether the Mortgage Loan is a MERS Designated
Mortgage Loan and the MERS Identification Number, if applicable; (59) a
field indicating whether such Mortgage Loan is a Home Loan; and (60) the DU
or LP number, if applicable. With respect to the Mortgage Loans in the
aggregate, the related Mortgage Loan Schedule shall set forth the following
information, as of the related Cut-off Date: (1) the number of Mortgage
Loans; (2) the current aggregate outstanding principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the
Mortgage Loans; (4) the weighted average maturity of the Mortgage Loans;
(5) the average principal balance of the Mortgage Loans; (6) the
applicable Cut-off Date; and (7) the applicable Closing Date.
-8-
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.
Mortgaged
Property:
With
respect to each Mortgage Loan, the real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by the related Mortgage
Note.
Mortgagor:
The
obligor on a Mortgage Note.
Non-Convertible
Mortgage Loan:
Any
individual Adjustable Rate Mortgage Loan purchased pursuant to this Agreement
which does not contain a provision pursuant to which the Mortgagor may convert
the Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan.
Nonrecoverable
Advance:
Any
advance previously made or proposed to be made in respect of a Mortgage Loan
which, in the good faith judgment of the Originator, will not or, in the case
of
a proposed advance, would not, be ultimately recoverable from related Insurance
Proceeds, Liquidation Proceeds or otherwise. The determination by the Originator
that it has made a Nonrecoverable Advance or that any proposed advance of
principal and interest, if made, would constitute a Nonrecoverable Advance,
shall be evidenced by an Officers’ Certificate delivered to the
Purchaser.
OCC:
Office
of the Comptroller of the Currency, and any successor thereto.
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board or the Vice Chairman of the
Board or a President or a Vice President and by the Treasurer or the Secretary
or one of the Assistant Treasurers or Assistant Secretaries of the Seller,
and
delivered to the Purchaser as required by this Agreement.
-9-
Opinion
of Counsel:
A
written opinion of counsel, who may be counsel for the Seller, reasonably
acceptable to the Purchaser, provided that any Opinion of Counsel relating
to
(a) the qualification of any account required to be maintained pursuant to
this Agreement as an Eligible Account, (b) qualification of the Mortgage
Loans in a REMIC or (c) compliance with the REMIC Provisions, must be
(unless otherwise stated in such Opinion of Counsel) an opinion of counsel
who
(i) is in fact independent of the Seller and any servicer of the Mortgage
Loans, (ii) does not have any material direct or indirect financial
interest in the Seller or any servicer of the Mortgage Loans or in an Affiliate
of either and (iii) is not connected with the Seller or any servicer of the
Mortgage Loans as an officer, employee, director or person performing similar
functions.
Originator:
New
Century Mortgage Corporation, its successors in interest and
assigns.
Periodic
Rate Cap:
The
provision of each Mortgage Note related to an Adjustable Rate Mortgage Loan
which provides for an absolute maximum amount by which the Mortgage Interest
Rate therein may increase or decrease on an Interest Rate Adjustment Date above
or below the Mortgage Interest Rate previously in effect. The Periodic Rate
Cap
for each Adjustable Rate Mortgage Loan is the rate set forth as such on the
related Mortgage Loan Schedule.
Person:
Any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
PMI
Policy:
A
policy of primary mortgage guaranty insurance issued by an insurer acceptable
under the Underwriting Guidelines and qualified to do business in the
jurisdiction where the Mortgaged Property is located.
Preliminary
Mortgage Schedule:
As
defined in Section
3.
Prepayment
Penalty:
With
respect to each Mortgage Loan, the amount of any premium or penalty required
to
be paid by the Mortgagor if the Mortgagor prepays such Mortgage Loan as provided
in the related Mortgage Note or Mortgage.
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date, including any prepayment penalty or premium
thereon and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent
to
the month of prepayment.
Purchase
Price:
The
price paid on the related Closing Date by the Purchaser to the Seller in
exchange for the Mortgage Loans purchased on such Closing Date as calculated
in
Section
4
of this
Agreement.
-10-
Purchase
Price and Terms Agreement:
Those
certain agreements setting forth the general terms and conditions of the
transactions consummated herein and identifying the Mortgage Loans to be
purchased from time to time hereunder, by and between the Seller, the Originator
and the Purchaser.
Purchaser:
▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Capital Inc., or its successor in interest or assigns or any
successor to the Purchaser under this Agreement as herein provided.
Qualified
Appraiser:
An
appraiser, duly appointed by the Seller or the Originator, who had no interest,
direct or indirect, in the Mortgaged Property or in any loan made on the
security thereof, and whose compensation was not affected by the approval or
disapproval of the Mortgage Loan, and such appraiser and the appraisal made
by
such appraiser both satisfied the requirements of Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified
Correspondent:
Any
Person from which the Seller purchased Mortgage Loans, provided that the
following conditions are satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement between the Seller and such Person that contemplated
that such Person would underwrite mortgage loans from time to time, for sale
to
the Seller, in accordance with underwriting guidelines designated by the Seller
(“Designated
Guidelines”)
or
guidelines that do not vary materially from such Designated Guidelines; (ii)
such Mortgage Loans were in fact underwritten as described in clause (i) above
and were acquired by the Seller within 180 days after origination; (iii) either
(x) the Designated Guidelines were, at the time such Mortgage Loans were
originated, used by the Seller in origination of mortgage loans of the same
type
as the Mortgage Loans for the Seller’s own account or (y) the Designated
Guidelines were, at the time such Mortgage Loans were underwritten, designated
by the Seller on a consistent basis for use by lenders in originating mortgage
loans to be purchased by the Seller; and (iv) the Seller employed, at the time
such Mortgage Loans were acquired by the Seller, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review
of a
sample of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that Persons from which it purchased
mortgage loans properly applied the underwriting criteria designated by the
Seller.
Qualified
Insurer:
An
insurance company duly qualified as such under the laws of the states in which
the Mortgaged Properties are located, duly authorized and licensed in such
states to transact the applicable insurance business and to write the insurance
provided, approved as an insurer by ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and whose claims
paying ability is rated in the highest rating category by any of the Rating
Agencies with respect to primary mortgage insurance and in the two highest
rating categories by Best’s with respect to hazard and flood insurance (or such
other rating as may be required by a Rating Agency in connection with a
Securitization Transaction in order to achieve the desired ratings for the
securities to be issued in connection with such Securitization
Transaction).
Qualified
Substitute Mortgage Loan:
A
mortgage loan eligible to be substituted by the Seller for a Deleted Mortgage
Loan which must, on the date of such substitution, (i) have an outstanding
principal balance, after deduction of all scheduled payments due in the month
of
substitution (or in the case of a substitution of more than one mortgage loan
for a Deleted Mortgage Loan, an aggregate principal balance), not in excess
of
the outstanding principal balance of the Deleted Mortgage Loan (the amount
of
any shortfall will be deposited in the Custodial Account by the Seller in the
month of substitution); (ii) have a Mortgage Interest Rate not less than
and not more than 1% greater than the Mortgage Interest Rate of the Deleted
Mortgage Loan; (iii) have a remaining term to maturity not greater than and
not more than one year less than that of the Deleted Mortgage Loan; (iv) be
of the same type as the Deleted Mortgage Loan (i.e., fixed rate or adjustable
rate with same Mortgage Interest Rate Caps); and (v) comply with each
representation and warranty (respecting individual Mortgage Loans) set forth
in
Section
9
hereof.
-11-
Rate/Term
Refinance:
A
Refinanced Mortgage Loan, in which the proceeds received were not in excess
of
the amount of funds required to repay the principal balance of any existing
first mortgage loan on the related Mortgaged Property, pay related closing
costs
and satisfy any outstanding subordinate mortgages on the related Mortgaged
Property and did not provide incidental cash to the related Mortgagor of more
than one percent (1%) of the original principal balance of such Mortgage
Loan.
Rating
Agency:
Any of
Fitch, ▇▇▇▇▇’▇ or Standard & Poor’s, or their respective successors
designated by the Purchaser.
Reconstitution:
A Whole
Loan Transfer or a Securitization Transaction.
Reconstitution
Agreements:
The
agreement or agreements entered into by the Seller and/or the Originator and
the
Purchaser and/or certain third parties on the Reconstitution Date or Dates
with
respect to any or all of the Mortgage Loans sold hereunder, in connection with
a
Whole Loan Transfer, Agency Transfer or a Securitization Transaction pursuant
to
Section 13,
including, but not limited to, a seller’s warranties and servicing agreement
with respect to a Whole Loan Transfer, and a pooling and servicing agreement
and/or seller/servicer agreements and related custodial/trust agreement and
documents with respect to a Securitization Transaction.
Reconstitution
Date:
As
defined in Section
13.
Refinanced
Mortgage Loan:
A
Mortgage Loan the proceeds of which were not used to purchase the related
Mortgaged Property.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of the
Code.
-12-
REMIC
Provisions:
Provisions of the federal income tax law relating to a REMIC, which appear
at
Section 860A through 860G of Subchapter M of Chapter 1, Subtitle A of the Code,
and related provisions and regulations, rulings or pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time.
Remittance
Date:
The
date specified in the Servicing Agreement (with respect to each Mortgage Loan,
as specified therein).
Repurchase
Price:
With
respect to any Mortgage Loan, a price equal to the sum of: (i) the product
of
(a) par (or, with respect to any Mortgage Loan required to be repurchased on
or
prior to the first anniversary of the related Closing Date, the greater of
(x)
par and (y) the excess of the applicable Purchase Price Percentage over par
multiplied by a fraction equal to (1) 360 minus the number of days from but
excluding the related Closing Date, up through and including the date of such
repurchase, divided by (2) 360) and (b) the outstanding principal balance of
such Mortgage Loan, (ii) accrued interest thereon at the applicable Mortgage
Interest Rate from the last “interest paid to” date through the date of such
repurchase, (iii) the amount of any outstanding advances owed to any servicer,
and (iv) all costs and expenses incurred by the Purchaser or any servicer
arising out of or based upon such breach, including without limitation costs
and
expenses incurred in the enforcement of the Seller’s repurchase obligation
hereunder.
RESPA:
Real
Estate Settlement Procedures Act, as amended from time to time.
Second
Lien Loan:
A
Mortgage Loan secured by a second lien Mortgage on the related Mortgaged
Property.
Securities
Act:
The
Securities Act of 1933, as amended.
Securitization
Transaction:
Any
transaction involving either (1) a sale or other transfer of some or all of
the
Mortgage Loans directly or indirectly to an issuing entity in connection with
an
issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities or (2) an issuance of publicly offered or privately
placed, rated or unrated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage
Loans.
Seller:
New
Century Mortgage Corporation, its successors in interest and
assigns.
Seller
Information:
As
defined in Subsection
32.04(a).
Servicing
Agreement:
The
servicing agreement, dated as of November 1, 2005, between the Purchaser and
the
Originator, providing for the Originator to service the Mortgage Loans as
specified in the Servicing Agreement.
Servicing
Fee:
With
respect to each Mortgage Loan subject to the Servicing Agreement, a fee payable
monthly equal to one-twelfth of the product of (a) the Servicing Fee Rate
and (b) the outstanding principal balance of such Mortgage Loan. Such fee
shall be payable monthly and shall be pro-rated for any portion of a month
during which the Mortgage Loan is serviced by the Originator under the Servicing
Agreement. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to
the
extent permitted by this Agreement) of such Monthly Payment collected by the
Originator, or as otherwise provided under this Agreement.
-13-
Servicing
Fee Rate:
An
amount per annum as set forth in the Servicing Agreement.
Servicing
File:
With
respect to each Mortgage Loan, the file retained by the Originator consisting
of
originals of all documents in the Mortgage File which are not delivered to
the
Purchaser or the Custodian and copies of the Mortgage Loan Documents set forth
in Section 2 of the Custodial Agreement.
Servicing
Rights:
Any and
all of the following: (a) any and all rights to service the Mortgage Loans;
(b) any payments to or monies received by the Seller for servicing the
Mortgage Loans; (c) any late fees, penalties or similar payments with
respect to the Mortgage Loans; (d) all agreements or documents creating,
defining or evidencing any such servicing rights to the extent they relate
to
such servicing rights and all rights of the Seller thereunder; (e) Escrow
Payments or other similar payments with respect to the Mortgage Loans and any
amounts actually collected by the Seller with respect thereto; (f) all
accounts and other rights to payment related to any of the property described
in
this paragraph; and (g) any and all documents, files, records, servicing
files, servicing documents, servicing records, data tapes, computer records,
or
other information pertaining to the Mortgage Loans or pertaining to the past,
present or prospective servicing of the Mortgage Loans.
Sponsor:
The
sponsor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Standard
& Poor’s:
Standard & Poor’s Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies
Inc., and any successor thereto.
Standard
& Poor’s Glossary:
The
Standard & Poor’s LEVELS® Glossary, as may be in effect from time to
time.
Stated
Principal Balance:
As to
each Mortgage Loan on any date of determination, (i) the principal balance
of such Mortgage Loan at the related Cut-off Date after giving effect to
payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Purchaser
with respect to the related Mortgage Loan representing payments or recoveries
of
principal on such Mortgage Loan.
Static
Pool Information:
Static
pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation
AB.
Successor
Servicer:
Any
servicer of one or more Mortgage Loans designated by the Purchaser as being
entitled to the benefits of the indemnifications set forth in Sections
9.03 and 14.01.
-14-
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, that originated Mortgage Loans
acquired by the Seller.
Transfer
Date:
The
date on which the Purchaser, or its designee, shall receive the transfer of
servicing responsibilities and begin to perform the servicing of the Mortgage
Loans with respect to the related Mortgage Loan Package, and the Seller shall
cease all servicing responsibilities. Such date shall occur on the day indicated
by the Purchaser to the Seller in accordance with the Servicing
Agreement.
Underwriting
Guidelines:
The
underwriting guidelines of the Originator, a copy of which is attached hereto
as
Exhibit G
and a
then-current copy of which shall be attached as an exhibit to the related
Assignment and Conveyance.
VA
Approved Lender:
Those
lenders which are approved by the VA to act as a lender in connection with
the
origination of VA mortgage loans.
Whole
Loan Agreement:
Any
Reconstitution Agreement in respect of a Whole Loan Transfer.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans, other than a
Securitization Transaction.
SECTION
2. Agreement
to Purchase.
The
Seller agrees to sell from time to time, and the Purchaser agrees to purchase
from time to time, Mortgage Loans having an aggregate actual unpaid principal
balance on the related Cut-off Date in an amount as set forth in the related
Purchase Price and Terms Agreement, or in such other amount as agreed by the
Purchaser and the Seller as evidenced by the actual aggregate actual unpaid
principal balance of the Mortgage Loans accepted by the Purchaser on each
Closing Date.
SECTION
3. Mortgage
Schedules.
The
Seller from time to time shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on
each
Closing Date in accordance with the related Purchase Price and Terms Agreement
and this Agreement (each, a “Preliminary
Mortgage Schedule”).
The
Seller is obligated to deliver those Mortgage Loans owned by the Seller and
funded by the Originator pursuant to the original terms of the Originator’s
commitment to the mortgagor. The Seller shall deliver the related Mortgage
Loan
Schedule for the Mortgage Loans to be purchased on a particular Closing Date
to
the Purchaser at least two (2) Business Days prior to the related Closing Date.
The related Mortgage Loan Schedule shall be the related Preliminary Mortgage
Schedule with those Mortgage Loans which have not been funded prior to the
related Closing Date deleted.
-15-
SECTION
4. Purchase
Price.
The
Purchase Price for each Mortgage Loan shall be the percentage of par as stated
in the related Purchase Price and Terms Agreement (subject to adjustment as
provided therein), multiplied by the aggregate actual unpaid principal balance,
as of the related Cut-off Date, of the Mortgage Loans listed on the related
Mortgage Loan Schedule, after application of scheduled payments of principal
due
on or before the related Cut-off Date, but only to the extent such payments
were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate actual unpaid principal balance of the Mortgage Loans,
so
computed as of the related Cut-off date. If so provided in the related Purchase
Price and Terms Agreement, portions of the Mortgage Loans shall be priced
separately.
In
addition to the Purchase Price as described above, the Purchaser shall pay
to
the Seller, at closing, accrued interest from the last “interest paid to” date
through the day immediately preceding the related Closing Date, inclusive,
on
the aggregate actual unpaid on the current principal amount of the related
Mortgage Loans as of the related Cut-off Date at the weighted average Mortgage
Interest Rate of those Mortgage Loans. The Purchase Price plus accrued interest
as set forth in the preceding paragraph shall be paid to the Seller by wire
transfer of immediately available funds to an account designated by the Seller
in writing.
The
Purchaser shall be entitled to (l) all scheduled principal due after the
related Cut-off Date, (2) all other recoveries of principal collected on or
after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion of any
such
payment which is allocable to the period prior to the related Cut-off Date).
The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such Cut-off Date, but to be applied on a Due Date beyond the related Cut-off
Date shall not be applied to the principal balance as of the related Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by
the
Seller to the Purchaser.
SECTION
5. Examination
of Mortgage Files.
At
least
three (3) Business Days prior to the related Closing Date, the Seller shall
(a) deliver to the Purchaser or its designee in escrow, for examination
with respect to each Mortgage Loan to be purchased, the related Mortgage File,
including a copy of the Assignment of Mortgage, pertaining to each Mortgage
Loan, or (b) make the related Mortgage File available to the Purchaser for
examination at such other location as shall otherwise be acceptable to the
Purchaser. Such examination may be made by the Purchaser or its designee at
any
reasonable time before or after the related Closing Date. If the Purchaser
makes
such examination prior to the related Closing Date and determines, in its sole
discretion, that any Mortgage Loans are unacceptable to the Purchaser for any
reason, such Mortgage Loans shall be deleted from the related Mortgage Loan
Schedule, and may be replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the Purchaser. The Purchaser may, at its option and without notice
to the Seller, purchase some or all of the Mortgage Loans without conducting
any
partial or complete examination. The fact that the Purchaser or its designee
has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the Purchaser’s (or any of its successor’s)
rights to demand repurchase, substitution or other relief as provided
herein.
-16-
SECTION
6. Conveyance
from Seller to Purchaser.
Subsection
6.01 Conveyance
of Mortgage Loans; Possession of Servicing Files.
The
Seller, simultaneously with the delivery of the Mortgage Loan Schedule with
respect to the related Mortgage Loan Package to be purchased on each Closing
Date, shall execute and deliver an Assignment and Conveyance Agreement in the
form attached hereto as Exhibit H
(the
“Assignment
and Conveyance Agreement”).
The
Seller
shall cause the Servicing File retained by the Originator pursuant to this
Agreement to be appropriately identified in the Seller’s computer system and/or
books and records, as appropriate, to clearly reflect the sale of the related
Mortgage Loan to the Purchaser. The Seller shall cause the Originator to release
from its custody the contents of any Servicing File retained by it only in
accordance with this Agreement or the Servicing Agreement, except when such
release is required in connection with a repurchase of any such Mortgage Loan
pursuant to Subsection 9.03.
Subsection
6.02 Books
and Records.
Record
title to each Mortgage as of the related Closing Date shall be in the name
of
the Seller, an Affiliate of the Seller, the Purchaser or one or more designees
of the Purchaser, as the Purchaser shall select. Notwithstanding the foregoing,
each Mortgage and related Mortgage Note shall be possessed solely by the
Purchaser or the appropriate designee of the Purchaser, as the case may be.
All
rights arising out of the Mortgage Loans including, but not limited to, all
funds received by the Seller or the Originator after the related Cut-off Date
on
or in connection with a Mortgage Loan shall be vested in the Purchaser or one
or
more designees of the Purchaser; provided, however, that all funds received
on
or in connection with a Mortgage Loan shall be received and held by the Seller
or the Originator in trust for the benefit of the Purchaser or the appropriate
designee of the Purchaser, as the case may be, as the owner of the Mortgage
Loans pursuant to the terms of this Agreement.
The
sale
of each Mortgage Loan shall be reflected on the Seller’s balance sheet and other
financial statements as a sale of assets by the Seller.
The
Seller shall or shall cause the Originator to be responsible for maintaining,
and shall maintain, a complete set of books and records for each Mortgage Loan
which shall be marked clearly to reflect the ownership of each Mortgage Loan
by
the Purchaser. In particular, the Seller shall or shall cause the Originator
to
maintain in its possession, available for inspection by the Purchaser, and
shall
deliver to the Purchaser upon demand, evidence of compliance with all federal,
state and local laws, rules and regulations, and requirements of ▇▇▇▇▇▇ ▇▇▇
or
▇▇▇▇▇▇▇ Mac, including but not limited to documentation as to the method used
in
determining the applicability of the provisions of the National Flood Insurance
Act of 1968, as amended, to the Mortgaged Property, documentation evidencing
insurance coverage and periodic inspection reports, as required by the ▇▇▇▇▇▇
Mae Guides. To the extent that original documents are not required for purposes
of realization of Liquidation Proceeds or Insurance Proceeds, documents
maintained by the Seller or Originator may be in the form of microfilm or
microfiche so long as the Seller or Originator complies with the requirements
of
the ▇▇▇▇▇▇ ▇▇▇ Guides.
-17-
Subsection
6.03 Delivery
of Mortgage Loan Documents.
The
Seller shall deliver and release to the Custodian no later than three (3)
Business Days prior to the related Closing Date those Mortgage Loan Documents
set forth on Exhibit A
hereto
as required by the Custodial Agreement with respect to each Mortgage Loan set
forth on the related Mortgage Loan Schedule.
The
Custodian shall certify its receipt of all such Mortgage Loan Documents required
to be delivered pursuant to the Custodial Agreement for the related Closing
Date, as evidenced by the Initial Certification of the Custodian in the form
annexed to the Custodial Agreement. The Seller shall comply with the terms
of
the Custodial Agreement and the Purchaser shall pay all fees and expenses of
the
Custodian.
The
Seller shall or shall cause the Originator to forward to the Custodian, or
to
such other Person as the Purchaser shall designate in writing, original
documents evidencing an assumption, modification, consolidation or extension
of
any Mortgage Loan entered into in accordance with this Agreement within two
weeks of their execution, provided, however, that the Seller shall provide
the
Custodian, or to such other Person as the Purchaser shall designate in writing,
with a certified true copy of any such document submitted for recordation within
two weeks of its execution, and shall promptly provide the original of any
document submitted for recordation or a copy of such document certified by
the
appropriate public recording office to be a true and complete copy of the
original within ninety days of its submission for recordation.
In
the
event any document required to be delivered to the Custodian in the Custodial
Agreement, including an original or copy of any document submitted for
recordation to the appropriate public recording office, is not so delivered
to
the Custodian, or to such other Person as the Purchaser shall designate in
writing, within 90 days following the related Closing Date (other than with
respect to the Assignments of Mortgage which shall be delivered to the Custodian
in blank and recorded subsequently by the Purchaser or its designee), and in
the
event that the Seller does not cure such failure within 30 days of discovery
or
receipt of written notification of such failure from the Purchaser, the related
Mortgage Loan shall, upon the request of the Purchaser, be repurchased by the
Seller at the price and in the manner specified in Subsection
9.03.
The
foregoing repurchase obligation shall not apply in the event that the Seller
cannot deliver an original document submitted for recordation to the appropriate
public recording office within the specified period due to a delay caused by
the
recording office in the applicable jurisdiction; provided that the Seller shall
instead deliver a recording receipt of such recording office or, if such
recording receipt is not available, an officer’s certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue and deliver to the Purchaser or its designee said officer’s
certificate.
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The
Seller shall pay all initial recording fees, if any, for the assignments of
mortgage and any other fees or costs in transferring all original documents
to
the Custodian or, upon written request of the Purchaser, to the Purchaser or
the
Purchaser’s designee. The Purchaser or the Purchaser’s designee shall be
responsible for recording the Assignments of Mortgage and shall be reimbursed
by
the Seller for the costs associated therewith pursuant to the preceding
sentence.
Subsection
6.04 Quality
Control Procedures.
The
Seller shall, or shall cause the Originator to, have an internal quality control
program that verifies, on a regular basis, the existence and accuracy of the
legal documents, credit documents, property appraisals, and underwriting
decisions. The program shall include evaluating and monitoring the overall
quality of the Originator’s loan production and the servicing activities of the
Originator. The program is to ensure that the Mortgage Loans are originated
and
serviced in accordance with Accepted Servicing Standards and the Underwriting
Guidelines; guard against dishonest, fraudulent, or negligent
acts; and guard against errors and omissions by officers, employees, or other
authorized persons.
SECTION
7. Servicing
of the Mortgage Loans.
The
Mortgage Loans have been sold by the Seller to the Purchaser on a servicing
released basis. Subject to, and upon the terms and conditions of this Agreement
and the Servicing Agreement (with respect to each Mortgage Loan, for an interim
period, as specified therein), the Seller hereby sells, transfers, assigns,
conveys and delivers to the Purchaser the Servicing Rights. The Purchaser shall
retain the Originator as independent contract servicer of the Mortgage Loans
pursuant to and in accordance with the terms and conditions contained in the
Servicing Agreement. Pursuant to the Servicing Agreement, the Originator shall
begin servicing the Mortgage Loans on behalf of the Purchaser and shall be
entitled to the Servicing Fee and any Ancillary Income with respect to such
Mortgage Loans from the related Closing Date until the termination of the
Servicing Agreement with respect to any of the Mortgage Loans as set forth
in
the Servicing Agreement. The Seller shall cause the Originator to service the
Mortgage Loans in accordance with the terms of the Servicing
Agreement.
SECTION
8. Transfer
of Servicing.
On
the
applicable Transfer Date, the Purchaser, or its designee, shall assume all
servicing responsibilities related to, and the Seller shall cause the Originator
to cease all servicing responsibilities related to the related Mortgage Loans
subject to such Transfer Date. The Transfer Date shall be the date determined
in
accordance with Section 6.03 of the Servicing Agreement (with respect to
each Mortgage Loan, for an interim period, as specified therein).
On
or
prior to the applicable Transfer Date, the Seller shall cause the Originator
shall, at its sole cost and expense, take such steps as may be necessary or
appropriate to effectuate and evidence the transfer of the servicing of the
related Mortgage Loans to the Purchaser, or its designee, including but not
limited to the following:
(a) Notice
to Mortgagors.
The
Seller shall cause the Originator to mail to the Mortgagor of each related
Mortgage Loan a letter advising such Mortgagor of the transfer of the servicing
of the related Mortgage Loan to the Purchaser, or its designee, in accordance
with the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ National Affordable Housing Act of 1990; provided,
however, the content and format of the letter shall have the prior approval
of
the Purchaser. The Seller shall cause the Originator to provide the Purchaser
with copies of all such related notices no later than the Transfer
Date.
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(b) Notice
to Taxing Authorities and Insurance Companies.
The
Seller shall cause the Originator to transmit to the applicable taxing
authorities and insurance companies (including primary mortgage insurance policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions to deliver all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the related Transfer Date. The Seller shall cause
the
Originator to provide the Purchaser with copies of all such notices no later
than such Transfer Date.
(c) Delivery
of Servicing Records.
The
Seller shall cause the Originator to forward to the Purchaser, or its designee,
all servicing records and the Servicing File in the Originator’s possession
relating to each related Mortgage Loan including the information enumerated
in
the Servicing Agreement (with respect to each such Mortgage Loan, for an interim
period, as specified therein).
(d) Escrow
Payments.
The
Seller shall cause the Originator to provide the Purchaser, or its designee,
with immediately available funds by wire transfer in the amount of the net
Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Seller shall cause the Originator to
provide the Purchaser with an accounting statement of Escrow Payments and
suspense balances and loss draft balances sufficient to enable the Purchaser
to
reconcile the amount of such payment with the accounts of the Mortgage Loans.
Additionally, the Seller shall cause the Originator to wire transfer to the
Purchaser the amount of any agency, trustee or prepaid Mortgage Loan payments
and all other similar amounts held by the Originator.
(e) Payoffs
and Assumptions.
The
Seller shall cause the Originator to provide to the Purchaser, or its designee,
copies of all assumption and payoff statements generated by the Originator
on
the related Mortgage Loans from the related Cut-off Date to the Transfer
Date.
(f) Mortgage
Payments Received Prior to Transfer Date.
Prior
to the Transfer Date all payments received by the Originator on each related
Mortgage Loan shall be properly applied by the Originator to the account of
the
particular Mortgagor.
(g) Mortgage
Payments Received After Transfer Date.
The
Seller shall cause the amount of any related Monthly Payments received by the
Originator after the Transfer Date to be forwarded to the Purchaser by overnight
mail on the date of receipt. The Seller shall cause the Originator to notify
the
Purchaser of the particulars of the payment, which notification requirement
shall be satisfied if the Originator forwards with its payment sufficient
information to permit appropriate processing of the payment by the Purchaser.
The Seller shall cause the Originator to assume full responsibility for the
necessary and appropriate legal application of such Monthly Payments received
by
the Originator after the Transfer Date with respect to related Mortgage Loans
then in foreclosure or bankruptcy; provided, for purposes of this Agreement,
necessary and appropriate legal application of such Monthly Payments shall
include, but not be limited to, endorsement of a Monthly Payment to the
Purchaser with the particulars of the payment such as the account number, dollar
amount, date received and any special Mortgagor application instructions and
the
Seller shall comply with the foregoing requirements with respect to all Monthly
Payments received by the it after the Transfer Date.
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(h) Misapplied
Payments.
Misapplied payments shall be processed as follows:
(1) All
parties shall cooperate in correcting misapplication errors;
(2) The
party
receiving notice of a misapplied payment occurring prior to the applicable
Transfer Date and discovered after such Transfer Date shall immediately notify
the other party;
(3) If
a
misapplied payment which occurred prior to the Transfer Date cannot be
identified and said misapplied payment has resulted in a shortage in a Custodial
Account or Escrow Account, the Seller shall or the Seller shall cause the
Originator to be liable for the amount of such shortage. The Seller shall or
the
Seller shall cause the Originator to reimburse the Purchaser for the amount
of
such shortage within thirty (30) days after receipt of written demand
therefor from the Purchaser;
(4) If
a
misapplied payment which occurred prior to the Transfer Date has created an
improper Purchase Price as the result of an inaccurate outstanding principal
balance, a check shall be issued to the party shorted by the improper payment
application within five (5) Business Days after notice thereof by the other
party; and
(5) Any
check
issued under the provisions of this Section 8(h) shall be accompanied by a
statement indicating the corresponding Seller and/or the Purchaser Mortgage
Loan
identification number and an explanation of the allocation of any such
payments.
(i) Books
and Records.
On the
Transfer Date, the books, records and accounts of the Originator with respect
to
the related Mortgage Loans shall be in accordance with all applicable Purchaser
requirements.
(j) Reconciliation.
The
Seller shall or shall cause the Originator to, on or before the Transfer Date,
reconcile principal balances and make any monetary adjustments required by
the
Purchaser. Any such monetary adjustments will be transferred between the Seller,
the Originator and the Purchaser as appropriate.
(k) IRS
Forms.
The
Seller shall or shall cause the Originator to file all IRS forms 1099,
1099A, 1098 or 1041 and K-1 which are required to be filed on or before the
Transfer Date in relation to the servicing and ownership of the related Mortgage
Loans. The Seller or Originator shall provide copies of such forms to the
Purchaser upon request and shall reimburse the Purchaser for any costs or
penalties incurred by the Purchaser due to the Seller’s or Originator’s failure
to comply with this paragraph.
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SECTION
9. Representations,
Warranties and Covenants of the Seller; Remedies for Breach.
Subsection
9.01 Representations
and Warranties Regarding the Seller.
The
Seller represents, warrants and covenants to the Purchaser that as of the date
hereof and as of each Closing Date:
(a) Due
Organization and Authority.
The
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the state of California and has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified and
in
good standing in each state wherein it owns or leases any material properties
or
where a Mortgaged Property is located, if the laws of such state require
licensing or qualification in order to conduct business of the type conducted
by
the Seller, and in any event the Seller is in compliance with the laws of any
such state to the extent necessary to ensure the enforceability of the related
Mortgage Loan and the servicing of such Mortgage Loan in accordance with the
terms of this Agreement and the Servicing Agreement; the Seller has the full
corporate power, authority and legal right to hold, transfer and convey the
Mortgage Loans and to execute and deliver this Agreement and to perform its
obligations hereunder and thereunder; the execution, delivery and performance
of
this Agreement (including all instruments of transfer to be delivered pursuant
to this Agreement) by the Seller and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized; this
Agreement and all agreements contemplated hereby have been duly executed and
delivered and constitute the valid, legal, binding and enforceable obligations
of the Seller, regardless of whether such enforcement is sought in a proceeding
in equity or at law; and all requisite corporate action has been taken by the
Seller to make this Agreement and all agreements contemplated hereby valid
and
binding upon the Seller in accordance with their terms;
(b) Ordinary
Course of Business.
The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Seller, and the transfer, assignment and
conveyance of the Mortgage Notes and the Mortgages by the Seller pursuant to
this Agreement are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction;
(c) No
Conflicts.
Neither
the execution and delivery of this Agreement, the acquisition or origination
of
the Mortgage Loans by the Seller, the sale of the Mortgage Loans to the
Purchaser, the consummation of the transactions contemplated hereby and thereby,
nor the fulfillment of or compliance with the terms and conditions of this
Agreement, will conflict with or result in a breach of any of the terms,
conditions or provisions of the Seller’s charter or by-laws or any legal
restriction or any agreement or instrument to which the Seller is now a party
or
by which it is bound, or constitute a default or result in an acceleration
under
any of the foregoing, or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Seller or its property is subject, or
result in the creation or imposition of any lien, charge or encumbrance that
would have an adverse effect upon any of its properties pursuant to the terms
of
any mortgage, contract, deed of trust or other instrument, or impair the ability
of the Purchaser to realize on the Mortgage Loans, impair the value of the
Mortgage Loans, or impair the ability of the Purchaser to realize the full
amount of any insurance benefits accruing pursuant to this
Agreement;
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(d) Ability
to Service.
Originator has the facilities, procedures, and experienced personnel necessary
for the sound servicing of mortgage loans of the same type as the Mortgage
Loans. The Originator is duly qualified, licensed, registered and otherwise
authorized under all applicable federal, state and local laws, and regulations,
if applicable, meets the minimum capital requirements set forth by HUD, the
OTS,
the OCC or the FDIC, if applicable, and is in good standing to enforce,
originate, sell mortgage loans to, and service mortgage loans in each
jurisdiction wherein the Mortgaged Properties are located;
(e) Reasonable
Servicing Fee.
The
Originator acknowledges and agrees that the Servicing Fee, represents reasonable
compensation for performing such services and that the entire Servicing Fee
shall be treated by the Originator, for accounting and tax purposes, as
compensation for the servicing and administration of the Mortgage Loans pursuant
to this Agreement and the Servicing Agreement;
(f) Ability
to Perform; Solvency.
The
Seller does not believe, nor does it have any reason or cause to believe, that
it cannot perform each and every covenant contained in this Agreement. The
Seller is solvent and the sale of the Mortgage Loans will not cause the Seller
to become insolvent. The sale of the Mortgage Loans is not undertaken with
the
intent to hinder, delay or defraud any of Seller’s creditors;
(g) No
Litigation Pending.
There
is no action, suit, proceeding or investigation pending or threatened against
the Seller, before any court, administrative agency or other tribunal asserting
the invalidity of this Agreement, seeking to prevent the consummation of any
of
the transactions contemplated by this Agreement or which, either in any one
instance or in the aggregate, may result in any material adverse change in
the
business, operations, financial condition, properties or assets of the Seller,
or in any material impairment of the right or ability of the Seller to carry
on
its business substantially as now conducted, or in any material liability on
the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(h) No
Consent Required.
No
consent, approval, authorization or order of, or registration or filing with,
or
notice to any court or governmental agency or body including HUD, the FHA or
the
Department of Veterans Affairs is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this Agreement
or
the Mortgage Loans, the delivery of a portion of the Mortgage Files to the
Custodian or the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement, or if required, such approval
has
been obtained prior to the related Closing Date;
(i) Selection
Process.
The
Mortgage Loans were selected from among the outstanding one- to four-family
mortgage loans in the Seller’s portfolio at the related Closing Date as to which
the representations and warranties set forth in Subsection
9.02
could be
made and such selection was not made in a manner so as to affect adversely
the
interests of the Purchaser;
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(j) Delivery
to the Custodian.
The
Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents
required to be delivered with respect to each Mortgage Loan pursuant to the
Custodial Agreement, shall be delivered to the Custodian all in compliance
with
the specific requirements of the Custodial Agreement. With respect to each
Mortgage Loan, the Seller will be in possession of a complete Mortgage File
in
compliance with Exhibit A
hereto,
except for such documents as will be delivered to the Custodian;
(k) Mortgage
Loan Characteristics.
The
characteristics of the related Mortgage Loan Package are as set forth on the
description of the pool characteristics for the applicable Mortgage Loan Package
delivered pursuant to Section 11
on the
related Closing Date in the form attached as Exhibit B
to each
related Assignment and Conveyance Agreement;
(l) No
Untrue Information.
Neither
this Agreement nor any information, statement, tape, diskette, report, form,
or
other document furnished or to be furnished pursuant to this Agreement or any
Reconstitution Agreement or in connection with the transactions contemplated
hereby (including any Securitization Transaction or Whole Loan Transfer)
contains or will contain any untrue statement of fact or omits or will omit
to
state a fact necessary to make the statements contained herein or therein not
misleading;
(m) Financial
Statements.
The
Seller has delivered to the Purchaser financial statements as to its last three
complete fiscal years and any later quarter ended more than 60 days prior to
the
execution of this Agreement. All such financial statements fairly present the
pertinent results of operations and changes in financial position for each
of
such periods and the financial position at the end of each such period of the
Seller and its subsidiaries and have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as set forth in the notes thereto. In addition, the Seller
has
delivered information as to its loan gain and loss experience in respect of
foreclosures and its loan delinquency experience for the immediately preceding
three-year period, in each case with respect to mortgage loans owned by it
and
such mortgage loans serviced for others during such period, and all such
information so delivered shall be true and correct in all material respects.
There has been no change in the business, operations, financial condition,
properties or assets of the Seller since the date of the Seller’s financial
statements that would have a material adverse effect on its ability to perform
its obligations under this Agreement. The Seller has completed any forms
requested by the Purchaser in a timely manner and in accordance with the
provided instructions;
(n) No
Brokers.
The
Seller has not dealt with any broker, investment banker, agent or other person
that may be entitled to any commission or compensation in connection with the
sale of the Mortgage Loans;
(o) Sale
Treatment.
The
Seller intends to reflect the transfer of the Mortgage Loans as a sale on the
books and records of the Seller and the Seller has determined that the
disposition of the Mortgage Loans pursuant to this Agreement will be afforded
sale treatment for tax and accounting purposes;
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(p) Owner
of Record.
The
Seller is the owner of record of each Mortgage and the indebtedness evidenced
by
each Mortgage Note, except for the Assignments of Mortgage which have been
sent
for recording, and upon recordation the Seller will be the owner of record
of
each Mortgage and the indebtedness evidenced by each Mortgage Note, and upon
the
sale of the Mortgage Loans to the Purchaser, the Seller will retain the Mortgage
Files with respect thereto in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan;
(q) Origination.
The
Originator’s decision to originate any mortgage loan or to deny any mortgage
loan application is an independent decision based upon Originator’s Underwriting
Guidelines, and is in no way made as a result of Purchaser’s decision to
purchase, or not to purchase, or the price Purchaser may offer to pay for,
any
such mortgage loan, if originated;
(r) Compliance
with Anti-Money Laundering Laws.
The
Seller has complied with all applicable anti-money laundering laws and
regulations, including, without limitation, the USA Patriot Act of 2001
(collectively, the “Anti-Money
Laundering Laws”);
and
(s) Credit
Reporting.
The
Seller shall cause the Originator, as servicer, to fully furnish, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information (e.g., favorable and unfavorable) on its borrower
credit files to Equifax, Experian and Trans Union Credit Information Company
(three of the credit repositories), on a monthly basis. Additionally, the Seller
shall cause the Originator, as servicer, to transmit full-file credit reporting
data for each Mortgage Loan pursuant to ▇▇▇▇▇▇ ▇▇▇ Guide Announcement 95-19
and
that for each Mortgage Loan, the Seller shall cause the Originator, as servicer,
to report one of the following statuses each month as follows: new origination,
current, delinquent (30-, 60-, 90-days, etc.), foreclosed, or
charged-off.
Subsection
9.02 Representations
and Warranties Regarding Individual Mortgage Loans.
The
Seller hereby represents and warrants to the Purchaser that, as to each Mortgage
Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage
Loans as Described.
The
information set forth in the related Mortgage Loan Schedule is complete, true
and correct;
(b) Payments
Current.
All
payments required to be made up to the related Closing Date for the Mortgage
Loan under the terms of the Mortgage Note, other than payments not yet 30 days
delinquent, have been made and credited. No payment required under the Mortgage
Loan is 30 days or more delinquent nor has any payment under the Mortgage Loan
been 30 days or more delinquent at any time since the origination of the
Mortgage Loan. The first Monthly Payment shall be made with respect to the
Mortgage Loan on its related Due Date or within the grace period, all in
accordance with the terms of the related Mortgage Note;
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(c) No
Outstanding Charges.
There
are no defaults in complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. The Seller has not advanced funds,
or
induced, solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan, except for interest accruing from the date
of
the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the related Due
Date of the first installment of principal and interest;
(d) Original
Terms Unmodified.
The
terms of the Mortgage Note and Mortgage have not been impaired, waived, altered
or modified in any respect, from the date of origination except by a written
instrument which has been recorded, if necessary to protect the interests of
the
Purchaser, and which has been delivered to the Custodian or to such other Person
as the Purchaser shall designate in writing, and the terms of which are
reflected in the related Mortgage Loan Schedule. The substance of any such
waiver, alteration or modification has been approved by the issuer of any
related PMI Policy and the title insurer, if any, to the extent required by
the
policy, and its terms are reflected on the related Mortgage Loan Schedule,
if
applicable. No Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement, approved by the issuer of any related
PMI Policy and the issuer of the title insurer, to the extent required by the
policy, and which assumption agreement is part of the Mortgage Loan File
delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing and the terms of which are reflected in the related
Mortgage Loan Schedule;
(e) No
Defenses.
The
Mortgage Loan is not subject to any right of rescission, set-off, counterclaim
or defense, including without limitation the defense of usury, nor will the
operation of any of the terms of the Mortgage Note or the Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto, and
no
Mortgagor was a debtor in any state or Federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated;
(f) Hazard
Insurance.
Pursuant to the terms of the Mortgage, all buildings or other improvements
upon
the Mortgaged Property are insured by a generally acceptable insurer against
loss by fire, hazards of extended coverage and such other hazards as are
provided for in the ▇▇▇▇▇▇ ▇▇▇ Guides or by ▇▇▇▇▇▇▇ Mac, as well as all
additional requirements set forth in Section 2.10 of the Servicing Agreement.
If
required by the National Flood Insurance Act of 1968, as amended, each Mortgage
Loan is covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect which
policy conforms to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac, as well as all additional
requirements set forth in Section 2.10 of the Servicing Agreement. All
individual insurance policies contain a standard mortgagee clause naming the
Seller and its successors and assigns as mortgagee, and all premiums thereon
have been paid. The Mortgage obligates the Mortgagor thereunder to maintain
the
hazard insurance policy at the Mortgagor’s cost and expense, and on the
Mortgagor’s failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at such Mortgagor’s cost and expense, and to seek
reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier
of
the required hazard insurance, provided the policy is not a “master”
or
“blanket”
hazard
insurance policy covering a condominium, or any hazard insurance policy covering
the common facilities of a planned unit development. The hazard insurance policy
is the valid and binding obligation of the insurer, is in full force and effect,
and will be in full force and effect and inure to the benefit of the Purchaser
upon the consummation of the transactions contemplated by this Agreement. The
Seller has not engaged in, and has no knowledge of the Mortgagor’s having
engaged in, any act or omission which would impair the coverage of any such
policy, the benefits of the endorsement provided for herein, or the validity
and
binding effect of either including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received, retained or
realized by the Seller;
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(g) Compliance
with Applicable Laws.
Any and
all requirements of any federal, state or local law including, without
limitation, usury, truth-in-lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity, disclosure and all predatory and
abusive lending laws applicable to the Mortgage Loan, including, without
limitation, any provisions relating to the Illinois Interest Act and prepayment
penalties, have been complied with, the consummation of the transactions
contemplated hereby will not involve the violation of any such laws or
regulations, and the Seller shall maintain in its possession, available for
the
Purchaser’s inspection, and shall deliver to the Purchaser upon demand, evidence
of compliance with all such requirements;
(h) No
Satisfaction of Mortgage.
The
Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission. The
Seller has not waived the performance by the Mortgagor of any action, if the
Mortgagor’s failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Seller waived any default resulting from any action
or
inaction by the Mortgagor;
(i) Location
and Type of Mortgaged Property.
The
Mortgaged Property is located in the state identified in the Mortgage Loan
Schedule and consists of real property with a detached single family residence
erected thereon, or a two- to four-family dwelling, or an individual condominium
unit in a low-rise condominium project, or an individual unit in a planned
unit
development or a de minimis planned unit development which is in each case
four
stories or less, provided, however, that any mobile home (double wide only)
or
manufactured dwelling shall conform with the applicable ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇
Mac requirements regarding such dwellings and that no Mortgage Loan is secured
by a single parcel of real property with a cooperative housing corporation,
a
log home or, except as described in Exhibit B
to the
related Assignment and Conveyance Agreement, a mobile home erected thereon
or by
a mixed-use property, a property in excess of 10 acres, or other unique property
types. As of the date of origination, no portion of the Mortgaged Property
was
used for commercial purposes, and since the date of origination, no portion
of
the Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. In the case of a Manufactured
Home, (i) the related manufactured dwelling and the related land are
subject to a Mortgage properly filed in the appropriate public recording office
and naming Seller as mortgagee, (ii) the applicable laws of the jurisdiction
in
which the related Mortgaged Property is located will deem the manufactured
dwelling located on such Mortgaged Property to be a part of the real property
on
which such dwelling is located, and (iii) such Manufactured Home Mortgage
Loan is (x) a qualified mortgage under Section 860G(a)(3)
of the Internal Revenue Code of 1986, as amended and (y) secured by manufactured
housing treated as a single family residence under Section 25(e)(10) of the
Code;
-27-
(j) Valid
First or Second Lien.
The
Mortgage is a valid, subsisting, enforceable and perfected, first lien (with
respect to a First Lien Loan) or a second lien (with respect to a Second Lien
Loan) on the Mortgaged Property, including all buildings and improvements on
the
Mortgaged Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems located in or annexed to such buildings,
and all additions, alterations and replacements made at any time with respect
to
the foregoing. The lien of the Mortgage is subject only to:
(1) with
respect to a Second Lien Loan only, the lien of the first mortgage on the
Mortgaged Property;
(2) the
lien
of current real property taxes and assessments not yet due and
payable;
(3) covenants,
conditions and restrictions, rights of way, easements and other matters of
the
public record as of the date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the lender’s title
insurance policy delivered to the originator of the Mortgage Loan and
(A) specifically referred to or otherwise considered in the appraisal made
for the originator of the Mortgage Loan or (B) which do not adversely
affect the Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(4) 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.
Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser.;
-28-
(k) Validity
of Mortgage Documents.
The
Mortgage Note and the Mortgage and any other agreement executed and delivered
by
a Mortgagor in connection with a Mortgage Loan are genuine, and each is the
legal, valid and binding obligation of the maker thereof enforceable in
accordance with its terms (including, without limitation, any provisions therein
relating to prepayment penalties). All parties to the Mortgage Note, the
Mortgage and any other such related agreement had legal capacity to enter into
the Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage
and
any such agreement, and the Mortgage Note, the Mortgage and any other such
related agreement have been duly and properly executed by other such related
parties. No fraud, error, omission, misrepresentation, negligence 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. The Seller has reviewed all of the documents constituting the Servicing
File and has made such inquiries as it deems necessary to make and confirm
the
accuracy of the representations set forth herein;
(l) Full
Disbursement of Proceeds.
The
Mortgage Loan has been closed and the proceeds of the Mortgage Loan have been
fully disbursed and there is no requirement for future advances 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 were paid, and the Mortgagor is not entitled
to
any refund of any amounts paid or due under the Mortgage Note or
Mortgage;
(m) Ownership.
The
Seller is the sole owner of record and holder of the Mortgage Loan and the
indebtedness evidenced by each Mortgage Note and upon the sale of the Mortgage
Loans to the Purchaser, the Seller will retain the Mortgage Files or any part
thereof with respect thereto not delivered to the Custodian, the Purchaser
or
the Purchaser’s designee, in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan. The Mortgage Loan is not
assigned or pledged, and the Seller has good, indefeasible and marketable title
thereto, and has full right to transfer and sell the Mortgage Loan to the
Purchaser free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest, and has full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to this Agreement
and following the sale of each Mortgage Loan, the Purchaser will own such
Mortgage Loan free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest. The Seller intends to
relinquish all rights to possess, control and monitor the Mortgage Loan. After
the related Closing Date, the Seller will have no right to modify or alter
the
terms of the sale of the Mortgage Loan and the Seller will have no obligation
or
right to repurchase the Mortgage Loan or substitute another Mortgage Loan,
except as provided in this Agreement;
(n) Doing
Business.
All
parties which have had any interest in the Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) (1) in compliance with any and all
applicable licensing requirements of the laws of the state wherein the Mortgaged
Property is located, and (2) either (i) organized under the laws of
such state, or (ii) qualified to do business in such state, or (iii) a
federal savings and loan association, a savings bank or a national bank having
a
principal office in such state, or (3) not doing business in such
state;
-29-
(o) CLTV;
LTV and PMI Policy.
No
Mortgage Loan that is a Second Lien Loan has a CLTV greater than 100% and no
Mortgage Loan has an LTV greater than 100%. Any Mortgage Loan that had at the
time of origination an LTV in excess of 80% is insured as to payment defaults
by
a PMI Policy. Any PMI Policy in effect covers the related Mortgage Loan for
the
life of such Mortgage Loan. All provisions of such PMI Policy have been and
are
being complied with, such policy is in full force and effect, and all premiums
due thereunder have been paid. No action, inaction, or event has occurred and
no
state of facts exists that has, or will result in the exclusion from, denial
of,
or defense to coverage. Any Mortgage Loan subject to a PMI Policy obligates
the
Mortgagor thereunder to maintain the PMI Policy and to pay all premiums and
charges in connection therewith. The Mortgage Interest Rate for the Mortgage
Loan as set forth on the related Mortgage Loan Schedule is net of any such
insurance premium if the related PMI Policy is lender-paid;
(p) Title
Insurance.
The
Mortgage Loan is covered by an ALTA lender’s title insurance policy, or with
respect to any Mortgage Loan for which the related Mortgaged Property is located
in California a CLTA lender’s title insurance policy, or other generally
acceptable form of policy or insurance acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac
and each such title insurance policy is issued by a title insurer acceptable
to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified to do business in the jurisdiction
where
the Mortgaged Property is located, insuring the Seller, its successors and
assigns, as to the first (with respect to a First Lien Loan) or second (with
respect to a Second Lien Loan) priority lien of the Mortgage in the original
principal amount of the Mortgage Loan (or to the extent a Mortgage Note provides
for negative amortization, the maximum amount of negative amortization in
accordance with the Mortgage), subject only to the exceptions contained in
clauses (1), (2) and (3) of Paragraph (j) of this Subsection 9.02,
and in
the case of Adjustable Rate Mortgage Loans, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of
the
Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly
Payment. Where required by state law or regulation, the Mortgagor has been
given
the opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender’s title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged Property or
any
interest therein. The Seller, its successor and assigns, are the sole insureds
of such lender’s title insurance policy, and such lender’s title insurance
policy is valid and remains in full force and effect and will be in force and
effect upon the consummation of the transactions contemplated by this Agreement.
No claims have been made under such lender’s title insurance policy, and no
prior holder of the related Mortgage, including the Seller, has done, by act
or
omission, anything which would impair the coverage of such lender’s title
insurance policy, including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will
be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(q) No
Defaults.
Other
than payments due but not yet 30 days or more delinquent, there is no default,
breach, violation or event which would permit acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time
or
with notice and the expiration of any grace or cure period, would constitute
a
default, breach, violation or event which would permit acceleration, and neither
the Seller nor any of its affiliates nor any of their respective predecessors,
have waived any default, breach, violation or event which would permit
acceleration;
-30-
(r) No
Mechanics’ Liens.
There
are no mechanics’ or similar liens or claims which have been filed for work,
labor or material (and no rights are outstanding that under the law could give
rise to such liens) affecting the related Mortgaged Property which are or may
be
liens prior to, or equal or coordinate with, the lien of the related
Mortgage;
(s) Location
of Improvements; No Encroachments.
All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property, and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part
of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;
(t) Origination;
Payment Terms.
Either
(a) the Mortgage Loan was originated by a mortgagee approved by the Secretary
of
Housing and Urban Development pursuant to Sections 203 and 211 of the
National Housing Act, a savings and loan association, a savings bank, a
commercial bank, credit union, insurance company or other similar institution
which is supervised and examined by a federal or state authority, or (b) the
following requirements have been met with respect to the Mortgage Loan: the
Seller meets the requirements set forth in clause (a), and (i) such Mortgage
Loan was underwritten in accordance with standards established by the Seller,
using application forms and related credit documents approved by the Seller,
(ii) the Seller approved each application and the related credit documents
before a commitment by the correspondent was issued, and no such commitment
was
issued until the Seller agreed to fund such Mortgage Loan, (iii) the closing
documents for such Mortgage Loan were prepared on forms approved by the Seller,
and (iv) such Mortgage Loan was actually funded by the Seller and was purchased
by the Seller at closing or soon thereafter. The documents, instruments and
agreements submitted for loan underwriting were not falsified and contain no
untrue statement of material fact or omit to state a material fact required
to
be stated therein or necessary to make the information and statements therein
not misleading. Principal payments on the Mortgage Loan commenced no more than
sixty days after funds were disbursed in connection with the Mortgage Loan.
The
Mortgage Interest Rate as well as, with respect to Adjustable Rate Mortgage
loans, the Lifetime Rate Cap and the Periodic Cap, are as set forth on the
related Mortgage Loan Schedule. The Mortgage Note is payable in equal monthly
installments of principal and interest, which installments of interest, with
respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment
Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgage Loan is payable
on
the first day of each month. There are no Convertible Mortgage Loans which
contain a provision allowing the Mortgagor to convert the Mortgage Note from
an
adjustable interest rate Mortgage Note to a fixed interest rate Mortgage
Note;
(u) Customary
Provisions.
The
Mortgage contains 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, (i) in the case of a Mortgage designated as a deed of trust, by
trustee’s sale, and (ii) otherwise by judicial foreclosure. Upon default by
a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the
Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a Mortgagor
which would interfere with the right to sell the Mortgaged Property at a
trustee’s sale or the right to foreclose the Mortgage, subject to applicable
federal and state laws and judicial precedent with respect to bankruptcy and
right of redemption or similar law;
-31-
(v) Conformance
with Agency and Underwriting Guidelines.
The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines.
The Mortgage Note and Mortgage are on forms acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇
Mae and neither the Seller nor the Originator has made any representations
to a
Mortgagor that are inconsistent with the mortgage instruments used;
(w) Occupancy
of the Mortgaged Property.
As of
the related Closing Date the Mortgaged Property is lawfully occupied under
applicable law. All inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of the Mortgaged Property and,
with respect to the use and occupancy of the same, including but not limited
to
certificates of occupancy and fire underwriting certificates, have been made
or
obtained from the appropriate authorities;
(x) No
Additional Collateral.
The
Mortgage Note is not and has not been secured by any collateral except the
lien
of the corresponding Mortgage and the security interest of any applicable
security agreement or chattel mortgage referred to in Paragraph (j)
above;
(y) Deeds
of Trust.
In the
event the Mortgage constitutes a deed of trust, a trustee, authorized and 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;
(z) Acceptable
Investment.
There
are no circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor, the Mortgage File or the Mortgagor’s credit standing
that can reasonably be expected to cause private institutional investors who
invest in prime mortgage loans similar to the Mortgage Loan to regard the
Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or adversely affect the value or marketability of the Mortgage
Loan,
or cause the Mortgage Loans to prepay during any period materially faster or
slower than the mortgage loans originated by the Seller generally;
(aa) Delivery
of Mortgage Documents.
The
Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents
required to be delivered under the Custodial Agreement for each Mortgage Loan
have been delivered to the Custodian. The Seller is in possession of a complete,
true and accurate Mortgage File in compliance with Exhibit A
hereto,
except for such documents the originals of which have been delivered to the
Custodian;
-32-
(bb) Condominiums/Planned
Unit Developments.
If the
Mortgaged Property is a condominium unit or a planned unit development (other
than a de minimis planned unit development) such condominium or planned unit
development project such Mortgage Loan was originated in accordance with, and
the Mortgaged Property meets the guidelines set forth in the Originator’s
Underwriting Guidelines;
(cc) Transfer
of Mortgage Loans.
The
Assignment of Mortgage with respect to each Mortgage Loan is in recordable
form
and is acceptable for recording under the laws of the jurisdiction in which
the
Mortgaged Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale.
With
respect to each Fixed Rate Mortgage Loan, the Mortgage contains an enforceable
provision for the acceleration of the payment of the unpaid principal balance
of
the Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee thereunder,
and
such provision is enforceable;
(ee) Assumability.
With
respect to each Adjustable Rate Mortgage Loan, the Mortgage Loan Documents
provide that after the related first Interest Rate Adjustment Date, a related
Mortgage Loan may only be assumed if the party assuming such Mortgage Loan
meets
certain credit requirements stated in the Mortgage Loan Documents;
(ff) No
Buydown Provisions; No Graduated Payments or Contingent
Interests.
The
Mortgage Loan does not contain provisions pursuant to which Monthly Payments
are
paid or partially paid with funds deposited in any separate account established
by the Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid
by
any source other than the Mortgagor nor does it contain 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;
(gg) Consolidation
of Future Advances.
Any
future 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 first (with respect to a First
Lien Loan) or a second (with respect to a Second Lien Loan) lien priority by
a
title insurance policy, an endorsement to the policy insuring the mortgagee’s
consolidated interest or by other title evidence acceptable to ▇▇▇▇▇▇ ▇▇▇ and
▇▇▇▇▇▇▇ Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged
Property Undamaged; No Condemnation Proceedings.
There
is no proceeding pending or threatened for the total or partial condemnation
of
the Mortgaged Property. The Mortgaged Property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other casualty so
as
to affect adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended and each Mortgaged
Property is in good repair. There have not been any condemnation proceedings
with respect to the Mortgaged Property and the Seller has no knowledge of any
such proceedings in the future;
-33-
(ii) Collection
Practices; Escrow Deposits; Interest Rate Adjustments.
The
origination, servicing and collection practices used by the Seller and the
Originator with respect to the Mortgage Loan have been in all respects in
compliance with Accepted Servicing Practices, applicable laws and regulations,
and have been in all respects legal and proper. With respect to escrow deposits
and Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller or the Originator and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof
have
not been made. All Escrow Payments have been collected in full compliance with
state and federal law and the provisions of the related Mortgage Note and
Mortgage. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that remains unpaid
and has been assessed but is not yet due and payable. No escrow deposits or
Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate
adjustments have been made in strict compliance with state and federal law
and
the terms of the related Mortgage and Mortgage Note on the related Interest
Rate
Adjustment Date. If, pursuant to the terms of the Mortgage Note, another index
was selected for determining the Mortgage Interest Rate, the same index was
used
with respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related Mortgage
Note.
The Seller or the Originator executed and delivered any and all notices required
under applicable law and the terms of the related Mortgage Note and Mortgage
regarding the Mortgage Interest Rate and the Monthly Payment adjustments. Any
interest required to be paid pursuant to state, federal and local law has been
properly paid and credited;
(jj) Conversion
to Fixed Interest Rate.
With
respect to Adjustable Rate Mortgage Loans, the Mortgage Loan is not a
Convertible Mortgage Loan;
(kk) Other
Insurance Policies.
No
action, inaction or event has occurred and no state of facts exists or has
existed that has resulted or will result in the exclusion from, denial of,
or
defense to coverage under any applicable, special hazard insurance policy,
or
bankruptcy bond, irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No
Violation of Environmental Laws.
There
is no pending action or proceeding directly involving the Mortgaged Property
in
which compliance with any environmental law, rule or regulation is an issue;
there is no violation of any environmental law, rule or regulation with respect
to the Mortgage Property; and nothing further remains to be done to satisfy
in
full all requirements of each such law, rule or regulation constituting a
prerequisite to use and enjoyment of said property;
-34-
(mm) Servicemembers
Civil Relief Act.
The
Mortgagor has not notified the Seller, and the Seller has no knowledge of any
relief requested or allowed to the Mortgagor under the Servicemembers Civil
Relief Act or any similar state statute;
(nn) Appraisal.
The
Mortgage File contains an appraisal of the related Mortgaged Property signed
prior to the approval of the Mortgage Loan application by a Qualified Appraiser,
duly appointed by the Seller or the Originator, who had no interest, direct
or
indirect in the Mortgaged Property or in any loan made on the security thereof,
and whose compensation is not affected by the approval or disapproval of the
Mortgage Loan, and the appraisal and appraiser both satisfy the requirements
of
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure
Materials.
The
Mortgagor has executed a statement to the effect that the Mortgagor has received
all disclosure materials required by, and the Originator has complied with,
all
applicable law with respect to the making of the Mortgage Loans. The Seller
shall cause the Originator to maintain such statement in the Mortgage
File;
(pp) Construction
or Rehabilitation of Mortgaged Property.
No
Mortgage Loan was made in connection with the construction or rehabilitation
of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(qq) Value
of Mortgaged Property.
The
Seller has no knowledge of any circumstances existing that could reasonably
be
expected to adversely affect the value or the marketability of any Mortgaged
Property or Mortgage Loan or to cause the Mortgage Loans to prepay during any
period materially faster or slower than similar mortgage loans held by the
Seller generally secured by properties in the same geographic area as the
related Mortgaged Property;
(rr) No
Defense to Insurance Coverage.
No
action has been taken or failed to be taken, no event has occurred and no state
of facts exists or has existed on or prior to the related Closing Date (whether
or not known to the Seller on or prior to such date) which has resulted or
will
result in an exclusion from, denial of, or defense to coverage under any primary
mortgage insurance (including, without limitation, any exclusions, denials
or
defenses which would limit or reduce the availability of the timely payment
of
the full amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions, negligence, or
fraud
of the Seller, the related Mortgagor or any party involved in the application
for such coverage, including the appraisal, plans and specifications and other
exhibits or documents submitted therewith to the insurer under such insurance
policy, or for any other reason under such coverage, but not including the
failure of such insurer to pay by reason of such insurer’s breach of such
insurance policy or such insurer’s financial inability to pay;
(ss) Escrow
Analysis.
With
respect to each Mortgage, the Seller or the Originator has within the last
twelve months (unless such Mortgage was originated within such twelve month
period) analyzed the required Escrow Payments for each Mortgage and adjusted
the
amount of such payments so that, assuming all required payments are timely
made,
any deficiency will be eliminated on or before the first anniversary of such
analysis, or any overage will be refunded to the Mortgagor, in accordance with
RESPA and any other applicable law;
-35-
(tt) Prior
Servicing.
Each
Mortgage Loan has been serviced in all material respects in strict compliance
with Accepted Servicing Practices;
(uu) No
Default Under First Lien.
With
respect to each Second Lien Loan, the related First Lien Loan related thereto
is
in full force and effect, and there is no default, breach, violation or event
which would permit acceleration existing under such first Mortgage or Mortgage
Note, and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default, breach,
violation or event which would permit acceleration thereunder;
(vv) Right
to Cure First Lien.
With
respect to each Second Lien Loan, the related first lien Mortgage contains
a
provision which provides for giving notice of default or breach to the mortgagee
under the Mortgage Loan and allows such mortgagee to cure any default under
the
related first lien Mortgage;
(ww) No
Failure to Cure Default.
The
Seller has not received a written notice of default of any senior mortgage
loan
related to the Mortgaged Property which has not been cured;
(xx) Credit
Information.
As to
each consumer report (as defined in the Fair Credit Reporting Act, Public Law
91-508) or other credit information furnished by the Seller to the Purchaser,
that Seller has full right and authority and is not precluded by law or contract
from furnishing such information to the Purchaser and the Purchaser is not
precluded from furnishing the same to any subsequent or prospective purchaser
of
such Mortgage. The Seller shall hold the Purchaser harmless from any and all
damages, losses, costs and expenses (including attorney’s fees) arising from
disclosure of credit information in connection with the Purchaser’s secondary
marketing operations and the purchase and sale of mortgages or Servicing Rights
thereto;
(yy) Leaseholds.
If the
Mortgage Loan is secured by a long-term residential lease, (1) the lessor
under the lease holds a fee simple interest in the land; (2) the terms of
such lease expressly permit the mortgaging of the leasehold estate, the
assignment of the lease without the lessor’s consent and the acquisition by the
holder of the Mortgage of the rights of the lessee upon foreclosure or
assignment in lieu of foreclosure or provide the holder of the Mortgage with
substantially similar protections; (3) the terms of such lease do not
(a) allow the termination thereof upon the lessee’s default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease
in the event of damage or destruction as long as the Mortgage is in existence,
(c) prohibit the holder of the Mortgage from being insured (or receiving
proceeds of insurance) under the hazard insurance policy or policies relating
to
the Mortgaged Property or (d) permit any increase in rent other than
pre-established increases set forth in the lease; (4) the original term of
such lease is not less than 15 years; (5) the term of such lease does not
terminate earlier than five years after the maturity date of the Mortgage Note;
and (6) the Mortgaged Property is located in a jurisdiction in which the
use of leasehold estates in transferring ownership in residential properties
is
a widely accepted practice;
-36-
(zz) Prepayment
Penalty.
Each
Mortgage Loan that is subject to a Prepayment Penalty as provided in the related
Mortgage Note is identified on the related Mortgage Loan Schedule. With respect
to Mortgage Loans originated prior to October 1, 2002, no such Prepayment
Penalty may be imposed for a term in excess of five (5) years following
origination. With respect to Mortgage Loans originated on or after October
1,
2002, no such Prepayment Penalty may be imposed for a term in excess of three
(3) years following origination;
(aaa) Predatory
Lending Regulations.
No
Mortgage
Loan is a High Cost Loan or Covered Loan, as applicable. No Mortgage Loan is
covered by the Home Ownership and Equity Protection Act of 1994 and no Mortgage
Loan is in violation of any comparable state or local law. The Mortgaged
Property is not located in a jurisdiction where a breach of this representation
with respect to the related Mortgage Loan may result in additional assignee
liability to the Purchaser, as determined by Purchaser in its reasonable
discretion;
(bbb) Single-premium
credit life insurance policy.
No
Mortgagor was required to purchase any single premium credit insurance policy
(e.g., life, disability, property, accident, unemployment or health insurance
product) or debt cancellation agreement as a condition of obtaining the
extension of credit. No Mortgagor obtained a prepaid single-premium credit
insurance policy (e.g., life, disability, property, accident, unemployment,
mortgage or health insurance) in connection with the origination of the Mortgage
Loan. No proceeds from any Mortgage Loan were used to purchase single premium
credit insurance policies as part of the origination of, or as a condition
to
closing, such Mortgage Loan;
(ccc) Qualified
Mortgage.
The
Mortgage Loan is a “qualified mortgage” within the meaning of
Section 860G(a)(3) of the Code;
(ddd) [Reserved];
(eee) Fair
Credit Reporting Act.
The
Seller has, in its capacity as servicer for each Mortgage Loan, fully furnished,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian
and
Trans Union Credit Information Company (three of the credit repositories),
on a
monthly basis;
(fff) ▇▇▇▇▇▇
▇▇▇ Guides Anti-Predatory Lending Eligibility.
Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility
for
purchase requirements of ▇▇▇▇▇▇ Mae Guides;
(ggg) Mortgagor
Selection.
No
Mortgagor was encouraged or required to select a Mortgage Loan product offered
by the Originator which is a higher cost product designed for less creditworthy
mortgagors, unless at the time of the Mortgage Loan’s origination, such
Mortgagor did not qualify taking into account credit history and debt to income
ratios for a lower cost credit product then offered by the Originator or any
Affiliate of the Originator. If, at the time of loan application, the Mortgagor
may have qualified for a lower cost credit product then offered by any mortgage
lending Affiliate of the Originator, the Originator referred the related
Mortgagor’s application to such Affiliate for underwriting
consideration;
-37-
(hhh) Underwriting
Methodology.
The
methodology used in underwriting the extension of credit for each Mortgage
Loan
employs objective mathematical principles which relate the related Mortgagor’s
income, assets and liabilities to the proposed payment and such underwriting
methodology does not rely on the extent of the related Mortgagor’s equity in the
collateral as the principal determining factor in approving such credit
extension. Such underwriting methodology confirmed that at the time of
origination (application/approval) the related Mortgagor had a reasonable
ability to make timely payments on the Mortgage Loan;
(iii) Mortgage
Loans with Prepayment Premiums.
With
respect to any Mortgage Loan that contains a provision permitting imposition
of
a premium upon a prepayment prior to maturity: (i) prior to the Mortgage Loan’s
origination, the related Mortgagor agreed to such premium in exchange for a
monetary benefit, including but not limited to a rate or fee reduction, (ii)
prior to the Mortgage Loan’s origination, the related Mortgagor was offered the
option of obtaining a mortgage loan that did not require payment of such a
premium, (iii) the prepayment premium is disclosed to the related Mortgagor
in
the Mortgage Loan documents pursuant to applicable state and federal law, and
(iv) notwithstanding any state or federal law to the contrary, the Originator,
as servicer, shall not impose such prepayment premium in any instance when
the
mortgage debt is accelerated as the result of the related Mortgagor’s default in
making the Mortgage Loan payments;
(jjj) [Reserved];
(kkk) Points
and Fees.
All
points and fees related to each Mortgage Loan were disclosed in writing to
the
Mortgagor in accordance with applicable state and federal law and regulation.
Except in the case of a Mortgage Loan in an original principal amount of less
than $60,000 which would have resulted in an unprofitable origination, no
Mortgagor was charged “points and fees” (whether or not financed) in an amount
greater than 5% of the principal amount of such Mortgage Loan, such 5%
limitation is calculated in accordance with ▇▇▇▇▇▇ Mae’s anti-predatory lending
requirements as set forth in the ▇▇▇▇▇▇ Mae Guides;
(lll) Disclosure
of Fees and Charges.
All
fees and charges (including finance charges), whether or not financed, assessed,
collected or to be collected in connection with the origination and servicing
of
each Mortgage Loan, have been disclosed in writing to the Mortgagor in
accordance with applicable state and federal law and regulation;
(mmm) No
Arbitration.
No
Mortgagor with respect to any Mortgage Loan originated on or after August 1,
2004 agreed to submit to arbitration to resolve any dispute arising out of
or
relating in any way to the mortgage loan transaction;
(nnn) Flood
Service Contract.
Each
Mortgage Loan is covered by a paid in full, life of loan, flood service contract
issued by either First American Flood Data Services or Fidelity, and such
contract is transferable. If no such flood service contract is in place, or
if
such flood service contract is issued by an insurer other than First American
Flood Data Services or Fidelity, then on the related Closing Date, the Seller
shall remit to the Purchaser a placement fee of ten dollars ($10.00) for each
such Mortgage Loan;
-38-
(ooo) Negative
Amortization.
Unless
otherwise disclosed in the Mortgage Loan Schedule, no Mortgage Loan is subject
to negative amortization;
(ppp) No
Negative Amortization of Related First Lien Loan.
With
respect to each Second Lien Loan, the related first lien loan does not permit
negative amortization;
(qqq) Request
for Notice; No Consent Required.
With
respect to any Second Lien Loan, where required or customary in the jurisdiction
in which the Mortgaged Property is located, the original lender has filed for
record a request for notice of any action by the related senior lienholder,
and
the Seller has notified such senior lienholder in writing of the existence
of
the Second Lien Loan and requested notification of any action to be taken
against the Mortgagor by such senior lienholder. Either (a) no consent for
the
Second Lien Loan is required by the holder of the related first lien loan or
(b)
such consent has been obtained and is contained in the related Mortgage File;
and
(rrr) Mortgagor
Bankruptcy.
On or
prior to the date 60 days after the related Closing Date, the Mortgagor has
not
filed and will not file a bankruptcy petition or has not become the subject
and
will not become the subject of involuntary bankruptcy proceedings or has not
consented to or will not consent to the filing of a bankruptcy proceeding
against it or to a receiver being appointed in respect of the related Mortgaged
Property.
Subsection
9.03 Remedies
for Breach of Representations and Warranties.
It
is
understood and agreed that the representations and warranties set forth in
Subsections 9.01
and 9.02
shall
survive the sale of the Mortgage Loans to the Purchaser and shall inure to
the
benefit of the Purchaser, notwithstanding any restrictive or qualified
endorsement on any Mortgage Note or Assignment of Mortgage or the examination
or
failure to examine any Mortgage File. Upon discovery by either the Seller or
the
Purchaser of a breach of any of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice to the
other.
Within
60
days of the earlier of either discovery by or notice to the Seller of any such
breach of a representation or warranty, which materially and adversely affects
the value of the Mortgage Loans or the interest of the Purchaser therein (or
which materially and adversely affects the value of the applicable Mortgage
Loan
or the interest of the Purchaser therein in the case of a representation and
warranty relating to a particular Mortgage Loan), the Seller shall use its
best
efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, the Seller shall, at the Purchaser’s option, repurchase
such Mortgage Loan at the Repurchase Price. Notwithstanding the above sentence,
within 60 days of the earlier of either discovery by, or notice to, the Seller
of any breach of the representations or warranties set forth in
Paragraph (zz), (aaa), (bbb), (ccc), (eee), (fff), (ggg), (hhh), (iii),
(kkk), (lll) and (mmm) of Subsection 9.02,
the
Seller shall repurchase such Mortgage Loan at the Repurchase Price. In the
event
that a breach shall involve any representation or warranty set forth in
Subsection 9.01,
and
such breach cannot be cured within 60 days of the earlier of either discovery
by
or notice to the Seller of such breach, all of the Mortgage Loans affected
by
such breach shall, at the Purchaser’s option, be repurchased by the Seller at
the Repurchase Price. However, if the breach shall involve a representation
or
warranty set forth in Subsection 9.02
(except
as provided in the second sentence of this paragraph with respect to certain
breaches for which no substitution is permitted) and the Seller discovers or
receives notice of any such breach within 120 days of the related Closing
Date, the Seller shall, at the Purchaser’s option and provided that the Seller
has a Qualified Substitute Mortgage Loan, rather than repurchase the Mortgage
Loan as provided above, remove such Mortgage Loan (a “Deleted
Mortgage Loan”)
and
substitute in its place a Qualified Substitute Mortgage Loan or Loans, provided
that any such substitution shall be effected not later than 120 days after
the related Closing Date. If the Seller has no Qualified Substitute Mortgage
Loan, it shall repurchase the deficient Mortgage Loan at the Repurchase Price.
Any repurchase of a Mortgage Loan or Loans pursuant to the foregoing provisions
of this Subsection
9.03
shall be
accomplished by either (a) if the Servicing Agreement has been entered into
and is in effect, deposit in the Custodial Account of the amount of the
Repurchase Price for distribution to the Purchaser on the next scheduled
Remittance Date, after deducting therefrom any amount received in respect of
such repurchased Mortgage Loan or Loans and being held in the Custodial Account
for future distribution or (b) if the Servicing Agreement has not been
entered into or is no longer in effect, by direct remittance of the Repurchase
Price to the Purchaser or its designee in accordance with the Purchaser’s
instructions.
-39-
At
the
time of repurchase or substitution, the Purchaser and the Seller shall arrange
for the reassignment of the Deleted Mortgage Loan to the Seller and the delivery
to the Seller of any documents held by the Custodian relating to the Deleted
Mortgage Loan. In the event of a repurchase or substitution, the Seller shall,
simultaneously with such reassignment, give written notice to the Purchaser
that
such repurchase or substitution has taken place, amend the Mortgage Loan
Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this
Agreement, and, in the case of substitution, identify a Qualified Substitute
Mortgage Loan and amend the related Mortgage Loan Schedule to reflect the
addition of such Qualified Substitute Mortgage Loan to this Agreement. In
connection with any such substitution, the Seller shall be deemed to have made
as to such Qualified Substitute Mortgage Loan the representations and warranties
set forth in this Agreement except that all such representations and warranties
set forth in this Agreement shall be deemed made as of the date of such
substitution. The Seller shall effect such substitution by delivering to the
Custodian or to such other party as the Purchaser may designate in writing
for
such Qualified Substitute Mortgage Loan the documents required by Subsection 6.03
and the
Custodial Agreement, with the Mortgage Note endorsed as required by Subsection 6.03
and the
Custodial Agreement. No substitution will be made in any calendar month after
the Determination Date for such month. The Seller shall cause the Originator
to
remit directly to the Purchaser, or its designee in accordance with the
Purchaser’s instructions the Monthly Payment less the Servicing Fee due, if any,
on such Qualified Substitute Mortgage Loan or Loans in the month following
the
date of such substitution. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution shall be retained by
the
Seller. For the month of substitution, distributions to the Purchaser shall
include the Monthly Payment due on any Deleted Mortgage Loan in the month of
substitution, and the Seller shall thereafter be entitled to retain all amounts
subsequently received by the Seller in respect of such Deleted Mortgage
Loan.
For
any
month in which the Seller substitutes a Qualified Substitute Mortgage Loan
for a
Deleted Mortgage Loan, the Seller shall determine the amount (if any) by which
the aggregate principal balance of all Qualified Substitute Mortgage Loans
as of
the date of substitution is less than the aggregate Stated Principal Balance
of
all Deleted Mortgage Loans (after application of scheduled principal payments
due in the month of substitution). The amount of such shortfall shall be
distributed by the Seller directly to the Purchaser or its designee in
accordance with the Purchaser’s instructions within two (2) Business Days of
such substitution.
-40-
In
addition to such repurchase or substitution obligation, the Seller shall
indemnify the Purchaser and the Successor Servicer and hold such parties
harmless against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller representations and
warranties contained in this Agreement or any Reconstitution Agreement. It
is
understood and agreed that the obligations of the Seller set forth in this
Subsection
9.03
to cure,
substitute for or repurchase a defective Mortgage Loan and to indemnify the
Purchaser and the Successor Servicer as provided in this Subsection
9.03
constitute the sole remedies of the Purchaser and the Successor Servicer
respecting a breach of the foregoing representations and
warranties.
Any
cause
of action against the Seller relating to or arising out of the breach of any
representations and warranties made in Subsections
9.01 and 9.02
shall
accrue as to any Mortgage Loan upon (i) discovery of such breach by the
Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance
with this Agreement.
Subsection
9.04 [RESERVED].
Subsection
9.05 Repurchase
of Mortgage Loans With Early Payment Defaults.
If
any
Mortgagor is delinquent with respect to any of the related Mortgage Loan’s first
three (3) Monthly Payments at any time either (i) after the origination of
such
Mortgage Loan, or (ii) after the related Closing Date, the Seller shall, at
the
Purchaser’s option, repurchase such Mortgage Loan from the Purchaser at the
Repurchase Price within thirty (30) days of request for repurchase.
Subsection
9.06 Premium
Recapture.
With
respect to any Mortgage Loan without Prepayment Penalties that prepays in full
during the first six months following the related Closing Date, and with respect
to any Mortgage Loan that is repurchased pursuant to Subsection
9.05,
the
Seller shall pay the Purchaser, within three (3) Business Days after such
prepayment in full or repurchase, an amount equal to the excess of the Purchase
Price Percentage for such Mortgage Loan over par, multiplied by the outstanding
principal balance of such Mortgage Loan as of the related Cut-off
Date.
SECTION
10. Closing.
The
closing for the purchase and sale of each Mortgage Loan Package shall take
place
on the related Closing Date. At the Purchaser’s option, each Closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree,
or
conducted in person, at such place as the parties shall agree.
-41-
The
closing for the Mortgage Loans to be purchased on each Closing Date shall be
subject to each of the following conditions:
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(i)
|
at
least two Business Days prior to the related Closing Date, the Seller
shall deliver to the Purchaser a magnetic diskette, or transmit by
modem,
a listing on a loan-level basis of the necessary information to compute
the Purchase Price of the Mortgage Loans delivered on such Closing
Date
(including accrued interest), and prepare a Mortgage Loan
Schedule;
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(ii)
|
all
of the representations and warranties of the Seller under this Agreement
and of the Originator under the Servicing Agreement (with respect
to each
Mortgage Loan, as specified therein) shall be true and correct as
of the
related Closing Date and no event shall have occurred which, with
notice
or the passage of time, would constitute a default under this Agreement
or
an Event of Default under the Servicing
Agreement;
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(iii)
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the
Purchaser shall have received, or the Purchaser’s attorneys shall have
received in escrow, all closing documents as specified in Section
11
of
this Agreement, in such forms as are agreed upon and acceptable to
the
Purchaser, duly executed by all signatories other than the Purchaser
as
required pursuant to the terms
hereof;
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(iv)
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the
Seller shall have delivered and released to the Custodian all documents
required pursuant to the Custodial Agreement;
and
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(v)
|
all
other terms and conditions of this Agreement and the related Purchase
Price and Terms Agreement shall have been complied
with.
|
Subject
to the foregoing conditions, the Purchaser shall pay to the Seller on the
related Closing Date the Purchase Price, plus accrued interest pursuant to
Section
4
of this
Agreement, by wire transfer of immediately available funds to the account
designated by the Seller.
SECTION
11. Closing
Documents.
The
Closing Documents for the Mortgage Loans to be purchased on each Closing Date
shall consist of fully executed originals of the following
documents:
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1.
|
this
Agreement (to be executed and delivered only for the initial Closing
Date);
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2.
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the
related Mortgage Loan Schedule (one copy to be attached to the Custodian’s
counterpart of the Custodial Agreement in connection with the initial
Closing Date, and one copy to be attached to the related Assignment
and
Conveyance as the Mortgage Loan Schedule
thereto);
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3.
|
a
Custodian’s Certification, as required under the Custodial Agreement, in
the form of Exhibit 2
to
the Custodial Agreement;
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-42-
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4.
|
with
respect to the initial Closing Date, an Officer’s Certificate, in the form
of Exhibit C
hereto with respect to each of the Seller and the Originator, including
all attachments thereto; with respect to subsequent Closing Dates,
an
Officer’s Certificate upon request of the
Purchaser;
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5.
|
with
respect to the initial Closing Date, an Opinion of Counsel of the
Seller
(who may be an employee of the Seller), in the form of Exhibit D
hereto (“Opinion
of Counsel of the Seller”);
with respect to subsequent Closing Dates, an Opinion of Counsel of
the
Seller upon request of the
Purchaser;
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6.
|
with
respect to the initial Closing Date, an Opinion of Counsel of the
Custodian (who may be an employee of the Custodian), in the form
of an
exhibit to the Custodial Agreement;
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7.
|
a
Security Release Certification, in the form of Exhibit E
or F, as applicable,
hereto executed by any person, as requested by the Purchaser, if
any of
the Mortgage Loans have at any time been subject to any security
interest,
pledge or hypothecation for the benefit of such
person;
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8.
|
a
certificate or other evidence of merger or change of name, signed
or
stamped by the applicable regulatory authority, if any of the Mortgage
Loans were acquired by the Seller by merger or acquired or originated
by
the Seller while conducting business under a name other than its
present
name, if applicable;
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9.
|
with
respect to the initial Closing Date, the Underwriting Guidelines
to be
attached hereto as Exhibit G;
and
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10.
|
Assignment
and Conveyance Agreement in the form of Exhibit H
hereto, and all exhibits thereto.
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The
Seller shall bear the risk of loss of the closing documents until such time
as
they are received by the Purchaser or its attorneys.
SECTION
12. Costs.
The
Purchaser shall pay any commissions due its salesmen and the legal fees and
expenses of its attorneys and custodial fees. All other costs and expenses
incurred in connection with the transfer and delivery of the Mortgage Loans
and
the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage,
and
the Seller’s attorney’s fees, shall be paid by the Seller.
SECTION
13. Cooperation
of Seller with a Reconstitution.
The
Seller and the Purchaser agree that with respect to some or all of the Mortgage
Loans, after each Closing Date, on one or more dates (each, a “Reconstitution
Date”)
at the
Purchaser’s sole option, the Purchaser may effect a sale (each a “Reconstitution”)
of
some or all of the Mortgage Loans then subject to this Agreement, without
recourse, to:
-43-
|
(i)
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▇▇▇▇▇▇
▇▇▇ under its Cash Purchase Program or MBS Program (Special Servicing
Option) (each, a “▇▇▇▇▇▇
Mae Transfer”);
or
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|
(ii)
|
▇▇▇▇▇▇▇
Mac (the “▇▇▇▇▇▇▇
Mac Transfer”);
or
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(iii)
|
one
or more third party purchasers in one or more Whole Loan Transfers;
or
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(iv)
|
one
or more trusts or other entities to be formed as part of one or more
Securitization Transactions.
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The
Seller agrees to execute in connection with any Agency Transfer, any and all
pool purchase contracts, and/or agreements reasonably acceptable to the Seller
among the Purchaser, the Seller, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac (as the case may
be)
and any servicer in connection with a Whole Loan Transfer, a seller’s warranties
and servicing agreement or a participation and servicing agreement in form
and
substance reasonably acceptable to the Seller, and in connection with a
Securitization Transaction, a pooling and servicing agreement in form and
substance reasonably acceptable to the Seller (collectively the agreements
referred to herein are designated, the “Reconstitution
Agreements”).
With
respect to each Whole Loan Transfer and each Securitization Transaction entered
into by the Purchaser, the Seller agrees (1) to cooperate fully with the
Purchaser and any prospective purchaser with respect to all reasonable requests
and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; and (3) to restate the
representations and warranties set forth in this Agreement and the Servicing
Agreement as of the settlement or closing date in connection with such
Reconstitution that occurs on or prior to the date which is six (6) months
following the related Closing Date and in connection with any Reconstitution
on
or after the date which is six (6) months following the related Closing
Date, to restate the representations and warranties set forth in this Agreement
as of the Closing Date (each, a “Reconstitution
Date”)
or
make the representations and warranties set forth in the related
selling/servicing guide of the master servicer or issuer, as the case may be,
in
connection with such Reconstitution. The Seller shall use its reasonable best
efforts to provide to such master servicer or issuer, as the case may be, and
any other participants in such Reconstitution: (i) any and all information
and appropriate verification of information which may be reasonably available
to
the Seller or its affiliates, whether through letters of its auditors and
counsel or otherwise, as the Purchaser or any such other participant shall
request; (ii) such additional representations, warranties, covenants,
opinions of counsel, letters from auditors, and certificates of public officials
or officers of the Seller or the Originator as are reasonably believed necessary
by the Purchaser or any such other participant; and (iii) to execute,
deliver and satisfy all conditions set forth in any indemnity agreement required
by the Purchaser or any such participant. The Seller shall indemnify the
Purchaser, each Affiliate designated by the Purchaser and each Person who
controls the Purchaser or such Affiliate and hold each of them harmless from
and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees
and
expenses that each of them may sustain in any way related to any information
provided by or on behalf of the Seller or the Originator regarding the Seller,
the Originator, the Seller’s and Originator’s servicing practices or
performance, the Mortgage Loans or the Underwriting Guidelines set forth in
any
offering document prepared in connection with any Reconstitution. For purposes
of the previous sentence, “Purchaser” shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
“Purchasers” under this Agreement. Moreover, the Seller agrees to cooperate with
all reasonable requests made by the Purchaser to effect such Reconstitution
Agreements.
-44-
In
the
event the Purchaser has elected to have the Seller or the Originator hold record
title to the Mortgages, prior to the Reconstitution Date, the Seller shall
prepare an assignment of mortgage in blank or to the prospective purchaser
or
trustee, as applicable, from the Seller or the Originator, as applicable,
acceptable to the prospective purchaser or trustee, as applicable, for each
Mortgage Loan that is part of the Reconstitution and shall pay all preparation
and recording costs associated therewith. In connection with the Reconstitution,
the Seller shall execute or shall cause the Originator to execute each
assignment of mortgage, track such Assignments of Mortgage to ensure they have
been recorded and deliver them as required by the prospective purchaser or
trustee, as applicable, upon the Seller’s receipt thereof. Additionally, the
Seller shall prepare and execute or shall cause the Originator to execute,
at
the direction of the Purchaser, any note endorsement in connection with any
and
all seller/servicer agreements.
All
Mortgage Loans not sold or transferred pursuant to a Reconstitution shall remain
subject to this Agreement and, if the Servicing Agreement shall remain in effect
with respect to the related Mortgage Loan Package, shall continue to be serviced
in accordance with the terms of this Agreement and the Servicing Agreement
and
with respect thereto this Agreement shall remain in full force and
effect.
SECTION
14. The
Seller.
Subsection
14.01 Additional
Indemnification by the Seller; Third Party Claims.
The
Seller shall indemnify the Purchaser and the Successor Servicer and hold such
parties 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 such parties may sustain in any
way
related to the failure of the Seller to perform its duties and the Originator
to
service the Mortgage Loans in strict compliance with the terms of this Agreement
or any Reconstitution Agreement entered into pursuant to Section 13.
The
Seller immediately shall notify the Purchaser if a claim is made by a third
party with respect to this Agreement or any Reconstitution Agreement or the
Mortgage Loans, assume (with the prior written consent of the Purchaser) the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment
or
decree which may be entered against it or the Purchaser in respect of such
claim. The Purchaser promptly shall reimburse the Seller for all amounts
advanced by it pursuant to the preceding sentence, except when the claim is
in
any way related to the Seller’s indemnification pursuant to Section 9,
or is
in any way related to the failure of the Originator or the Seller to service
and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement.
-45-
Subsection
14.02 Merger
or Consolidation of the Seller.
The
Seller will keep in full effect its existence, rights and franchises as a
corporation under the laws of the state of its incorporation except as permitted
herein, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or
shall
be necessary to protect the validity and enforceability of this Agreement,
or
any of the Mortgage Loans and to perform its duties under this
Agreement.
Any
Person into which the 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 have a net worth of at least $25,000,000.
SECTION
15. Financial
Statements.
The
Seller understands that in connection with the Purchaser’s marketing of the
Mortgage Loans, the Purchaser shall make available to prospective purchasers
audited financial statements of the Seller for the most recently completed
three
fiscal years respecting which such statements are available, as well as a
Consolidated Statement of Condition of the Seller at the end of the last two
fiscal years covered by such Consolidated Statement of Operations. The Seller
shall also make available any comparable interim statements to the extent any
such statements have been prepared by the Seller (and are available upon request
to members or stockholders of the Seller or the public at large). The Seller,
if
it has not already done so, agrees to furnish promptly to the Purchaser copies
of the statements specified above. The Seller shall also make available
information on its servicing performance with respect to loans serviced for
others, including delinquency ratios.
The
Seller also agrees to allow reasonable access to a knowledgeable financial
or
accounting officer for the purpose of answering questions asked by any
prospective purchaser regarding recent developments affecting the Seller or
the
financial statements of the Seller.
SECTION
16. Mandatory
Delivery; Grant of Security Interest.
The
sale
and delivery on the related Closing Date of the Mortgage Loans described on
the
related Mortgage Loan Schedule is mandatory from and after the date of the
execution of the related Purchase Price and Terms Agreement, it being
specifically understood and agreed that each Mortgage Loan is unique and
identifiable on the date hereof and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred
by
the Purchaser (including damages to prospective purchasers of the Mortgage
Loans) in the event of the Seller’s failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage
Loans or (iii) one or more Mortgage Loans otherwise acceptable to the
Purchaser on or before the related Closing Date. The Seller hereby grants to
the
Purchaser a lien on and a continuing security interest in each Mortgage Loan
and
each document and instrument evidencing each such Mortgage Loan to secure the
performance by the Seller of its obligations under the related Purchase Price
and Terms Agreement, and the Seller agrees that it shall hold such Mortgage
Loans in custody for the Purchaser subject to the Purchaser’s (a) right to
reject any Mortgage Loan (or Qualified Substitute Mortgage Loan) under the
terms
of this Agreement and to require another Mortgage Loan (or Qualified Substitute
Mortgage Loan) to be substituted therefor, and (b) obligation to pay the
Purchase Price for the Mortgage Loans. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights
or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or
successively.
-46-
SECTION
17. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed, by registered or certified mail,
return receipt requested, or, if by other means, when received by the other
party at the address as follows:
|
(i)
|
if
to the Seller:
|
New
Century Mortgage Corporation
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇. ▇▇▇▇▇ ▇▇▇▇▇
|
(ii)
|
if
to the Purchaser:
|
1221
Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Whole Loan Operations Manager
Fax:
▇▇▇-▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
or
such
other address as may hereafter be furnished to the other party by like notice.
Any such demand, notice or communication hereunder shall be deemed to have
been
received on the date delivered to or received at the premises of the addressee
(as evidenced, in the case of registered or certified mail, by the date noted
on
the return receipt).
SECTION
18. Severability
Clause.
Any
part,
provision representation or warranty of this Agreement which is prohibited
or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition
or
unenforceability without invalidating the remaining provisions hereof, and
any
such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable
any
provision hereof. If the invalidity of any part, provision, representation
or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
-47-
SECTION
19. Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts shall
constitute one and the same instrument.
SECTION
20. Governing
Law.
This
Agreement shall be deemed in effect when a fully executed counterpart thereof
is
received by the Purchaser in the State of New York and shall be deemed to have
been made in the State of New York. The 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
the
substantive laws of the State of New York (without regard to conflicts of laws
principles), except to the extent preempted by Federal law.
SECTION
21. Intention
of the Parties.
It
is the
intention of the parties that the Purchaser is purchasing, and the Seller is
selling the Mortgage Loans and not a debt instrument of the Seller or another
security. Accordingly, the parties hereto each intend to treat the transaction
for Federal income tax purposes as a sale by the Seller, and a purchase by
the
Purchaser, of the Mortgage Loans. Moreover, the arrangement under which the
Mortgage Loans are held shall be consistent with classification of such
arrangement as a grantor trust in the event it is not found to represent direct
ownership of the Mortgage Loans. The Purchaser shall have the right to review
the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income
tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such
review.
SECTION
22. Successors
and Assigns; Assignment of Purchase Agreement.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective permitted successors and assigns
of
the Seller and the successors and assigns of the Purchaser. This Agreement
shall
not be assigned, pledged or hypothecated by the Seller to a third party without
the consent of the Purchaser. This Agreement may be assigned, pledged or
hypothecated by the Purchaser without the consent of the Seller. In the event
the Purchaser assigns this Agreement, and the assignee assumes any of the
Purchaser’s obligations hereunder, the Seller acknowledges and agrees to look
solely to such assignee, and not to the Purchaser, for performance of the
obligations so assumed and the Purchaser shall be relieved from any liability
to
the Seller with respect thereto.
-48-
SECTION
23. Waivers.
No
term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced.
SECTION
24. Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
SECTION
25. General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(a) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender herein
shall be deemed to include the other gender;
(b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(c) references
herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
(d) reference
to a Subsection without further reference to a Section is a reference to such
Subsection as contained in the same Section in which the reference appears,
and
this rule shall also apply to Paragraphs and other subdivisions;
(e) the
words
“herein,” “hereof,” “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(f) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
SECTION
26. Reproduction
of Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(a) consents, waivers and modifications which may hereafter be executed,
(b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the
original itself in any judicial or administrative proceeding, whether or not
the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile
or
further reproduction of such reproduction shall likewise be admissible in
evidence.
-49-
SECTION
27. Further
Agreements.
The
Seller and the Purchaser each agree to execute and deliver to the other such
reasonable and appropriate additional documents, instruments or agreements
as
may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION
28. Recordation
of Assignments of Mortgage.
To
the
extent permitted by applicable law, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or their comparable jurisdictions in which any
or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected at the
Seller’s expense in the event recordation is either necessary under applicable
law or requested by the Purchaser at its sole option.
SECTION
29. No
Solicitation.
From
and
after the related Closing Date, the Seller agrees that it will not take any
action or permit or cause any action to be taken by any of its agents or
affiliates, or by any independent contractors on the Seller’s behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) written notice from the related borrower or obligor
under a Mortgage Loan of such party’s intention to refinance such Mortgage Loan.
It is understood and agreed that all rights and benefits relating to the
solicitation of any Mortgagors and the attendant rights, title and interest
in
and to the list of such Mortgagors and data relating to their Mortgages
(including insurance renewal dates) shall be transferred to the Purchaser
pursuant hereto on the related Closing Date and the Seller shall take no action
to undermine these rights and benefits. Notwithstanding the foregoing, it is
understood and agreed that promotions undertaken by the Seller or any affiliate
of the Seller which are directed to the general public at large, including,
without limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this Section
29.
SECTION
30. Waiver
of Trial by Jury.
THE
SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
-50-
SECTION
31. Submission
To Jurisdiction; Waivers.
The
Seller hereby irrevocably and unconditionally:
(A) SUBMITS
FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE
OF
NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS
THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE
EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE
TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
PLEAD OR CLAIM THE SAME;
(C) AGREES
THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY
MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY
SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH HEREIN OR
AT
SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN NOTIFIED;
AND
(D) AGREES
THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN
ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO ▇▇▇ IN ANY OTHER
JURISDICTION.
|
SECTION
32.
|
Compliance
With Regulation AB.
|
|
Subsection
32.01
|
Intent
of the Parties;
Reasonableness.
|
The
Purchaser and the Seller acknowledge and agree that the purpose of Section 32
of this
Agreement is to facilitate compliance by the Purchaser and any Depositor with
the provisions of Regulation AB and related rules and regulations of the
Commission. Neither the Purchaser nor any Depositor shall exercise its right
to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder. The Seller acknowledges that interpretations of the requirements
of
Regulation AB may change over time, whether due to interpretive guidance
provided by the Commission or its staff, consensus among participants in the
asset-backed securities markets, advice of counsel, or otherwise, and agrees
to
comply with requests made by the Purchaser or any Depositor in good faith for
delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. In connection with any Securitization
Transaction, the Seller shall cooperate fully with the Purchaser to deliver
to
the Purchaser (including any of its assignees or designees) and any Depositor,
any and all statements, reports, certifications, records and any other
information necessary in the good faith determination of the Purchaser or any
Depositor to permit the Purchaser or such Depositor to comply with the
provisions of Regulation AB, together with such disclosures relating to the
Seller, any Third-Party Originator and the Mortgage Loans, or the servicing
of
the Mortgage Loans, reasonably believed by the Purchaser or any Depositor to
be
necessary in order to effect such compliance.
-51-
Subsection
32.02 Additional
Representations and Warranties of the Seller.
(a) The
Seller shall be deemed to represent to the Purchaser and to any Depositor,
as of
the date on which information is first provided to the Purchaser or any
Depositor under Subsection
32.03
that,
except as disclosed in writing to the Purchaser or such Depositor prior to
such
date: (i) the Seller is not aware and has not received notice that any default,
early amortization or other performance triggering event has occurred as to
any
other securitization due to any act or failure to act of the Seller; (ii) the
Interim Servicer has not been terminated as servicer in a residential mortgage
loan securitization, either due to a servicing default or to application of
a
servicing performance test or trigger; (iii) no material noncompliance with
the
applicable servicing criteria with respect to other securitizations of
residential mortgage loans involving the Interim Servicer as servicer has been
disclosed or reported by the Seller; (iv) no material changes to the Interim
Servicer’s policies or procedures with respect to the servicing function it will
perform under the Interim Servicing Agreement and any Reconstitution Agreement
for mortgage loans of a type similar to the Mortgage Loans have occurred during
the three-year period immediately preceding the related Securitization
Transaction; (v) there are no aspects of the Interim Servicer’s financial
condition that could have a material adverse effect on the performance by the
Interim Servicer of its servicing obligations under the Interim Servicing
Agreement or any Reconstitution Agreement; (vi) there are no material legal
or
governmental proceedings pending (or known to be contemplated) against the
Seller, Interim Servicer, any Subservicer or any Third-Party Originator; and
(vii) there are no affiliations, relationships or transactions relating to
the
Seller, Interim Servicer, any Subservicer or any Third-Party Originator with
respect to any Securitization Transaction and any party thereto identified
by
the related Depositor of a type described in Item 1119 of Regulation
AB.
(b) If
so
requested by the Purchaser or any Depositor on any date following the date
on
which information is first provided to the Purchaser or any Depositor under
Subsection
32.03,
the
Seller shall, within five Business Days following such request, confirm in
writing the accuracy of the representations and warranties set forth in
paragraph (a) of this Section or, if any such representation and warranty is
not
accurate as of the date of such request, provide reasonably adequate disclosure
of the pertinent facts, in writing, to the requesting party.
Subsection
32.03 Information
to Be Provided by the Seller.
In
connection with any Securitization Transaction the Seller shall (i) within
five
Business Days following request by the Purchaser or any Depositor, provide
to
the Purchaser and such Depositor (or, as applicable, cause each Third-Party
Originator to provide), in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor, the information and materials
specified in paragraphs (a) and (b) of this Section, and (ii) as promptly as
practicable following notice to or discovery by the Seller, provide to the
Purchaser and any Depositor (in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor) the information specified
in
paragraph (d) of this Section.
-52-
(a) If
so
requested by the Purchaser or any Depositor, the Seller shall provide such
information regarding (i) the Seller, as originator of the Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
or
(ii) each Third-Party Originator, as is requested for the purpose of compliance
with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation AB. Such
information shall include, at a minimum:
(A) the
originator’s form of organization;
(B) a
description of the originator’s origination program and how long the originator
has been engaged in originating residential mortgage loans, which description
shall include a discussion of the originator’s experience in originating
mortgage loans of a similar type as the Mortgage Loans; information regarding
the size and composition of the originator’s origination portfolio; and
information that may be material, in the good faith judgment of the Purchaser
or
any Depositor, to an analysis of the performance of the Mortgage Loans,
including the originators’ credit-granting or underwriting criteria for mortgage
loans of similar type(s) as the Mortgage Loans and such other information as
the
Purchaser or any Depositor may reasonably request for the purpose of compliance
with Item 1110(b)(2) of Regulation AB;
(C) a
description of any material legal or governmental proceedings pending (or known
to be contemplated) against the Seller and each Third-Party Originator;
and
(D) a
description of any affiliation or relationship between the Seller, each
Third-Party Originator and any of the following parties to a Securitization
Transaction, as such parties are identified to the Seller by the Purchaser
or
any Depositor in writing in advance of such Securitization
Transaction:
|
(1)
|
the
sponsor;
|
|
|
(2)
|
the
depositor;
|
|
|
(3)
|
the
issuing entity;
|
|
|
(4)
|
any
servicer;
|
|
|
(5)
|
any
trustee;
|
|
|
(6)
|
any
originator;
|
|
|
(7)
|
any
significant obligor;
|
|
|
(8)
|
any
enhancement or support provider; and
|
|
|
(9)
|
any
other material transaction
party.
|
(b) If
so
requested by the Purchaser or any Depositor, the Seller shall provide (or,
as
applicable, cause each Third-Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Seller, if the Seller is an originator of Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information shall
be
prepared in form and substance reasonably satisfactory to the Purchaser by
the
Seller (or Third-Party Originator) on the basis of its reasonable, good faith
interpretation of the requirements of Item 1105(a)(1)-(3) of Regulation AB.
To
the extent that there is reasonably available to the Seller (or Third-Party
Originator) Static Pool Information with respect to more than one mortgage
loan
type, the Purchaser or any Depositor shall be entitled to specify whether some
or all of such information shall be provided pursuant to this paragraph. Such
Static Pool Information for each vintage origination year or prior securitized
pool, as applicable, shall be presented in increments no less frequently than
quarterly over the life of the mortgage loans included in the vintage
origination year or prior securitized pool. The most recent periodic increment
must be as of a date no later than 135 days prior to the date of the prospectus
or other offering document in which the Static Pool Information is to be
included or incorporated by reference. The Static Pool Information shall be
provided in an electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf) file, or other
such electronic format reasonably required by the Purchaser or the Depositor,
as
applicable.
-53-
If
so
requested by the Purchaser or any Depositor, the Seller shall provide (or,
as
applicable, cause each Third-Party Originator to provide), at the expense of
the
requesting party (to the extent of any additional incremental expense associated
with delivery pursuant to this Agreement), such agreed-upon procedures letters
of certified public accountants reasonably acceptable to the Purchaser or
Depositor, as applicable, pertaining to Static Pool Information relating to
prior securitized pools for securitizations closed on or after January 1, 2006
or, in the case of Static Pool Information with respect to the Seller’s or
Third-Party Originator’s originations or purchases, to calendar months
commencing January 1, 2006, as the Purchaser or such Depositor shall reasonably
request. Such statements and letters shall be addressed to and be for the
benefit of such parties as the Purchaser or such Depositor shall designate,
which may include, by way of example, any Sponsor, any Depositor and any broker
dealer acting as underwriter, placement agent or initial purchaser with respect
to a Securitization Transaction. Any such statement or letter may take the
form
of a standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
(c) [Reserved].
(d) If
so
requested by the Purchaser or any Depositor for the purpose of satisfying its
reporting obligation under the Exchange Act with respect to any class of
asset-backed securities, the Seller shall (or shall cause each Third-Party
Originator to) (i) notify the Purchaser and any Depositor in writing of (A)
any
material litigation or governmental proceedings pending against the Seller
or
any Third-Party Originator and (B) any affiliations or relationships that
develop following the closing date of a Securitization Transaction between
the
Seller or any Third-Party Originator and any of the parties specified in clause
(D) of paragraph (a) of this Section (and any other parties identified in
writing by the requesting party) with respect to such Securitization
Transaction, and (ii) provide to the Purchaser and any Depositor a description
of such proceedings, affiliations or relationships.
Subsection
32.04 Indemnification;
Remedies.
(a) Seller
shall indemnify the Purchaser, each affiliate of the Purchaser, and each of
the
following parties participating in a Securitization Transaction: each sponsor
and issuing entity; each Person responsible for the preparation, execution
or
filing of any report required to be filed with the Commission with respect
to
such Securitization Transaction, or for execution of a certification pursuant
to
Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction; each broker dealer acting as underwriter, placement
agent or initial purchaser, each Person who controls any of such parties or
the
Depositor (within the meaning of Section 15 of the Securities Act and Section
20
of the Exchange Act); and the respective present and former directors, officers,
employees and agents of each of the foregoing and of the Depositor, and shall
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain arising out
of
or based upon:
-54-
(1)(a) any
untrue statement of a material fact contained or alleged to be contained in
any
information, report, certification, accountants’ letter or other material
provided under this Section 32
by or on
behalf of the Seller, or provided under this Section 32
by or on
behalf of any Third-Party Originator (collectively, the “Seller
Information”),
or
(b)
the
omission or alleged omission to state in the Seller Information a material
fact
required to be stated in the Seller Information or necessary in order to make
the statements therein, in the light of the circumstances under which they
were
made, not misleading; provided, by way of clarification, that clause (B) of
this
paragraph shall be construed solely by reference to the Seller Information
and
not to any other information communicated in connection with a sale or purchase
of securities, without regard to whether the Seller Information or any portion
thereof is presented together with or separately from such other
information;
(2) any
failure by the Seller or any Third-Party Originator to deliver any information,
report, certification, accountants’ letter or other material when and as
required under this Section 32;
or
(3) any
breach by the Seller of a representation or warranty set forth in Subsection
32.02(a)
or in a
writing furnished pursuant to Subsection
32.02(b)
and made
as of a date prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by such closing date,
or any breach by the Seller of a representation or warranty in a writing
furnished pursuant to Subsection
32.02(b)
to the
extent made as of a date subsequent to such closing date.
In
the
case of any failure of performance described in clause (a)(ii) of this Section,
the Seller shall promptly reimburse the Purchaser, any Depositor, as applicable,
and each Person responsible for the preparation, execution or filing of any
report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to
Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by the Seller or any Third-Party
Originator.
(b) Any
failure by the Seller or any Third-Party Originator to deliver any information,
report, certification, accountants’ letter or other material when and as
required under this Section 32,
or any
breach by the Seller of a representation or warranty set forth in Subsection
32.02(a)
or in a
writing furnished pursuant to Subsection
32.02(b)
and made
as of a date prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by such closing date,
or any breach by the Seller of a representation or warranty in a writing
furnished pursuant to Subsection
32.02(b)
to the
extent made as of a date subsequent to such closing date, shall immediately
and
automatically, without notice or grace period, constitute an Event of Default
with respect to the Seller under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or Depositor, as
applicable, in its sole discretion to terminate the rights and obligations
of
the Interim Servicer as servicer under the Interim Servicing Agreement and/or
any applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement or any applicable Reconstitution Agreement to the
contrary) of any compensation to the Interim Servicer; provided that to the
extent that any provision of this Agreement and/or any applicable Reconstitution
Agreement expressly provides for the survival of certain rights or obligations
following termination of the Interim Servicer as servicer, such provision shall
be given effect.
-55-
[Signatures
Commence on Following Page]
-56-
IN
WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
date first above written.
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC. (Purchaser) |
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
|
NEW
CENTURY MORTGAGE CORPORATION
(Seller) |
|
By:
|
||
|
Name:
|
||
|
Title:
|
Exhibit
A
EXHIBIT
A
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Purchaser and
any prospective Purchaser, and which shall be delivered to the Custodian, or
to
such other Person as the Purchaser shall designate in writing, pursuant to
Section 6 of the Flow Mortgage Loan Purchase and Warranties Agreement to which
this Exhibit is attached (the “Agreement”):
(c) the
original Mortgage Note bearing all intervening endorsements, endorsed “Pay to
the order of _________, without recourse” and signed in the name of the last
endorsee (the “Last
Endorsee”)
by an
authorized officer. To the extent that there is no room on the face of the
Mortgage Notes for endorsements, the endorsement may be contained on an allonge,
if state law so allows and the Custodian is so advised by the Seller that state
law so allows. If the Mortgage Loan was acquired by the Seller in a merger,
the
endorsement must be by “[Last Endorsee], successor by merger to [name of
predecessor]”. If the Mortgage Loan was acquired or originated by the Last
Endorsee while doing business under another name, the endorsement must be by
“[Last Endorsee], formerly known as [previous name]”;
(d) the
original of any guarantee executed in connection with the Mortgage
Note;
(e) the
original Mortgage with evidence of recording thereon. If in connection with
any
Mortgage Loan, the Seller cannot deliver or cause to be delivered the original
Mortgage with evidence of recording thereon on or prior to the Closing Date
because of a delay caused by the public recording office where such Mortgage
has
been delivered for recordation or because such Mortgage has been lost or because
such public recording office retains the original recorded Mortgage, the Seller
shall deliver or cause to be delivered to the Custodian, a photocopy of such
Mortgage, together with (i) in the case of a delay caused by the public
recording office, an Officer’s Certificate of the Seller (or certified by the
title company, escrow agent, or closing attorney) stating that such Mortgage
has
been dispatched to the appropriate public recording office for recordation
and
that the original recorded Mortgage or a copy of such Mortgage certified by
such
public recording office to be a true and complete copy of the original recorded
Mortgage will be promptly delivered to the Custodian upon receipt thereof by
the
Seller; or (ii) in the case of a Mortgage where a public recording office
retains the original recorded Mortgage or in the case where a Mortgage is lost
after recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete copy of
the
original recorded Mortgage;
(f) the
originals of all assumption, modification, consolidation or extension
agreements, if any, with evidence of recording thereon;
(g) the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording. The Assignment of Mortgage must be duly recorded
only
if recordation is either necessary under applicable law or commonly required
by
private institutional mortgage investors in the area where the Mortgaged
Property is located or on direction of the Purchaser as provided in this
Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage shall
be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by “[Seller], successor by merger to [name of predecessor]”. If the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the Assignment of Mortgage must be by “[Seller], formerly
known as [previous name]”;
A-1
(h) the
originals of all intervening assignments of mortgage (if any) evidencing a
complete chain of assignment from the Originator to the Last Endorsee with
evidence of recording thereon, or if any such intervening assignment has not
been returned from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of mortgage,
the Seller shall deliver or cause to be delivered to the Custodian, a photocopy
of such intervening assignment, together with (i) in the case of a delay
caused by the public recording office, an Officers Certificate of the Seller
(or
certified by the title company, escrow agent, or closing attorney) stating
that
such intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening assignment
of
mortgage certified by the appropriate public recording office to be a true
and
complete copy of the original recorded intervening assignment of mortgage will
be promptly delivered to the Custodian upon receipt thereof by the Seller;
or
(ii) in the case of an intervening assignment where a public recording
office retains the original recorded intervening assignment or in the case
where
an intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public recording
office to be a true and complete copy of the original recorded intervening
assignment;
(i) the
original mortgagee policy of title insurance or, in the event such original
title policy is unavailable, a certified true copy of the related policy binder
or commitment for title certified to be true and complete by the title insurance
company;
(j) the
original or, if unavailable, a copy of any security agreement, chattel mortgage
or equivalent document executed in connection with the Mortgage;
and
(k) if
any of
the above documents has been executed by a person holding a power of attorney,
an original or photocopy of such power certified by the Seller to be a true
and
correct copy of the original.
In
the
event an Officer’s Certificate of the Seller is delivered to the Purchaser
because of a delay caused by the public recording office in returning any
recorded document, the Seller shall deliver to the Purchaser, within 90 days
of
the Closing Date, an Officer’s Certificate which shall (i) identify the
recorded document, (ii) state that the recorded document has not been
delivered to the Custodian due solely to a delay caused by the public recording
office, (iii) state the amount of time generally required by the applicable
recording office to record and return a document submitted for recordation,
and
(iv) specify the date the applicable recorded document will be delivered to
the Custodian. An extension of the date specified in clause (iv) above may
be requested from the Purchaser, which consent shall not be unreasonably
withheld.
A-2
Exhibit
B
EXHIBIT
B
[RESERVED]
B-1
Exhibit
C
EXHIBIT
C
SELLER’S
OFFICER’S CERTIFICATE
I,
____________________, hereby certify that I am the duly elected [Vice] President
of ________________ [COMPANY], a [state] [federally] chartered institution
organized under the laws of the [state of ____________] [United States] (the
“Company”)
and
further as follows:
1. Attached
hereto as Exhibit
1
is a
true, correct and complete copy of the charter of the Company which is in full
force and effect on the date hereof and which has been in effect without
amendment, waiver, rescission or modification since ___________.
2. Attached
hereto as Exhibit
2
is a
true, correct and complete copy of the bylaws of the Company which are in effect
on the date hereof and which have been in effect without amendment, waiver,
rescission or modification since ___________.
3. Attached
hereto as Exhibit
3
is an
original certificate of good standing of the Company issued within ten days
of
the date hereof, and no event has occurred since the date thereof which would
impair such standing.
4. Attached
hereto as Exhibit
4
is a
true, correct and complete copy of the corporate resolutions of the Board of
Directors of the Company authorizing the Company to execute and deliver the
Flow
Mortgage Loan Purchase and Warranties Agreement, dated as of _______ __, 200_,
by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. (the “Purchaser”)
and
the Company (the “Purchase
Agreement”),
[and
to endorse the Mortgage Notes and execute the Assignments of Mortgages by
original [or facsimile] signature], and such resolutions are in effect on the
date hereof and have been in effect without amendment, waiver, rescission or
modification since ____________.
5. Either
(i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the Purchase
Agreement,, [the sale of the mortgage loans] or the consummation of the
transactions contemplated by the agreements; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
6. Neither
the consummation of the transactions contemplated by, nor the fulfillment of
the
terms of the Purchase Agreement conflicts or will conflict with or results
or
will result in a breach of or constitutes or will constitute a default under
the
charter or by-laws of the Company or, to the best of my knowledge, the terms
of
any indenture or other agreement or instrument to which the Company is a party
or by which it is bound or to which it is subject, or any statute or order,
rule, regulations, writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject or by which it
is
bound.
C-1
7. To
the
best of my knowledge, there is no action, suit, proceeding or investigation
pending or threatened against the Company which, in my judgment, either in
any
one instance or in the aggregate, may result in any material adverse change
in
the business, operations, financial condition, properties or assets of the
Company or in any material impairment of the right or ability of the Company
to
carry on its business substantially as now conducted or in any material
liability on the part of the Company or which would draw into question the
validity of the Purchase Agreement, or the mortgage loans or of any action
taken
or to be taken in connection with the transactions contemplated hereby, or
which
would be likely to impair materially the ability of the Company to perform
under
the terms of the Purchase Agreement.
8. Each
person listed on Exhibit
5
attached
hereto who, as an officer or representative of the Company, signed (a) the
Purchase Agreement, and (b) any other document delivered or on the date
hereof in connection with any purchase described in the agreements set forth
above was, at the respective times of such signing and delivery, and is now,
a
duly elected or appointed, qualified and acting officer or representative of
the
Company, who holds the office set forth opposite his or her name on Exhibit
5,
and the
signatures of such persons appearing on such documents are their genuine
signatures.
9. The
Company is duly authorized to engage in the transactions described and
contemplated in the Purchase Agreement.
C-2
IN
WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal]
Title: [Vice]
President
I,
________________________, an [Assistant] Secretary of ______________[COMPANY],
hereby certify that ____________ is the duly elected, qualified and acting
[Vice] President of the Company and that the signature appearing above is [her]
[his] genuine signature.
IN
WITNESS WHEREOF, I have hereunto signed my name.
|
Dated:
|
By:
|
||
|
Name:
|
|||
|
Title:
|
[Assistant] Secretary |
C-3
EXHIBIT
5
to
Company’s
Officer’s Certificate
|
NAME
|
TITLE
|
SIGNATURE
|
|||||
C-4
Exhibit
D
EXHIBIT
D
FORM
OF OPINION OF COUNSEL TO THE SELLER AND ORIGINATOR
(date)
▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Capital Inc.
1221
Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear
Sirs:
You
have
requested [our] [my] opinion, as [Assistant] General Counsel to
___________________ (the “Company”),
with
respect to certain matters in connection with the sale by the Company of the
Mortgage Loans pursuant to that certain Flow Mortgage Loan Purchase and
Warranties Agreement by and between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc. (the “Purchaser”),
dated
as of _________ __, 200_ (the “Agreement”)
which
sale is in the form of whole loans. Capitalized terms not otherwise defined
herein have the meanings set forth in the Purchase Agreement and the Servicing
Agreement.
[We]
[I]
have examined the following documents:
| 1. |
the
Agreement;
|
| 2. |
the
form of Assignment of Mortgage;
|
| 3. |
the
form of endorsement of the Mortgage Notes;
and
|
|
4.
|
such
other documents, records and papers as we have deemed necessary and
relevant as a basis for this
opinion.
|
To
the
extent [we] [I] have deemed necessary and proper, [we] [I] have relied upon
the
representations and warranties of the Company and the Originator contained
in
the Agreement. [We] [I] have assumed the authenticity of all documents submitted
to [us] [me] as originals, the genuineness of all signatures, the legal capacity
of natural persons and the conformity to the originals of all
documents.
Based
upon the foregoing, it is [our] [my] opinion that:
|
1.
|
The
Company and the Originator are [type of entity] duly organized, validly
existing and in good standing under the laws of the [United States]
and
are qualified to transact business in, and is in good standing under,
the
laws of [the state of
incorporation].
|
|
2.
|
Each
of the Company and the Originator has the power to engage in the
transactions contemplated by the Agreement and all requisite power,
authority and legal right to execute and deliver the Agreement and
to
perform and observe the terms and conditions of the
Agreement.
|
D-1
|
3.
|
The
Agreement has been duly authorized, executed and delivered by the
Company
and the Originator, as applicable, and is a legal, valid and binding
agreement enforceable in accordance with its terms against the Company
and
the Originator, as applicable, subject to bankruptcy laws and other
similar laws of general application affecting rights of creditors
and
subject to the application of the rules of equity, including those
respecting the availability of specific performance, none of which
will
materially interfere with the realization of the benefits provided
thereunder or with the Purchaser’s ownership of the Mortgage
Loans.
|
|
4.
|
Each
of the Company and the Originator has been duly authorized to allow
any of
its officers to execute any and all documents by original signature
in
order to complete the transactions contemplated by the
Agreement.
|
|
[5.
|
The
Company has been duly authorized to allow any of its officers to
execute
by original [or facsimile] signature the endorsements to the Mortgage
Notes and the Assignments of Mortgages, and the original [or facsimile]
signature of the officer at the Company executing the endorsements
to the
Mortgage Notes and the Assignments of Mortgages represents the legal
and
valid signature of said officer of the
Company].
|
|
6.
|
Either
(i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and
performance by the Company or the Originator of or compliance by
the
Company or the Originator with the Agreement and the sale of the
Mortgage
Loans by the Company or the consummation of the transactions contemplated
by the Agreement or (ii) any required consent, approval,
authorization or order has been obtained by the Company or the
Originator.
|
|
7.
|
Neither
the consummation of the transactions contemplated by, nor the fulfillment
of the terms of, the Agreement conflicts or will conflict with or
results
or will result in a breach of or constitutes or will constitute a
default
under the charter or by-laws of the Company or the Originator, as
applicable, or, to the best of my knowledge, the material terms of
any
indenture or other agreement or instrument to which the Company or
the
Originator is a party or by which it is bound or to which it is subject,
or violates any statute or order, rule, regulations, writ, injunction
or
decree of any court, governmental authority or regulatory body to
which
the Company or the Originator is subject or by which it is
bound.
|
|
8.
|
There
is no action, suit, proceeding or investigation pending or, to the
best of
[our] [my] knowledge, threatened against the Company or the Originator
which, in [our] [my] judgment, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Company
or
the Originator or in any material impairment of the right or ability
of
the Company or the Originator to carry on its business substantially
as
now conducted or in any material liability on the part of the Company
or
the Originator or which would draw into question the validity of
the
Agreement or the Mortgage Loans or of any action taken or to be taken
in
connection with the transactions contemplated thereby, or which would
be
likely to impair materially the ability of the Company or the Originator
to perform under the terms of the
Agreement.
|
D-2
|
9.
|
The
sale of each Mortgage Note and Mortgage as and in the manner contemplated
by the Agreement, is sufficient to fully transfer to the Purchaser
all
right, title and interest of the Company thereto as noteholder and
mortgagee.
|
|
10.
|
The
Mortgages have been duly assigned and the Mortgage Notes have been
duly
endorsed as provided in the Custodial Agreement. The Assignments
of
Mortgage are in recordable form, except for the insertion of the
name of
the assignee, and upon the name of the assignee being inserted, are
acceptable for recording under the laws of the state where each related
Mortgaged Property is located. The endorsement of the Mortgage Notes,
the
delivery to the Purchaser, or its designee, of the Assignments of
Mortgage, and the delivery of the original endorsed Mortgage Notes
to the
Purchaser, or its designee, are sufficient to permit the Purchaser
to
avail itself of all protection available under applicable law against
the
claims of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment, pledge
or
hypothecation of the Mortgages and the Mortgage Notes by the Company
from
being enforceable.
|
Except
as
otherwise set forth in the Agreement, I assume no obligation to revise this
opinion or alter its conclusions to update or support this letter to reflect
any
facts or circumstances that may hereafter develop.
This
opinion is given to you for your sole benefit, and no other person or entity
is
entitled to rely hereon except that the purchaser or purchasers to which you
initially and directly resell the Mortgage Loans may rely on this opinion as
if
it were addressed to them as of the date of this opinion.
Very
truly yours,
_____________________________
[Name]
[Assistant]
General Counsel
D-3
Exhibit
E
EXHIBIT
E
FORM
OF SECURITY RELEASE CERTIFICATION
___________________,
200__
[Federal
Home Loan Bank of
______
(the “Association”)]
________________________
________________________
________________________
|
Attention:
|
|
|
|
Re:
|
Notice
of Sale and Release of
Collateral
|
Dear
Sirs:
This
letter serves as notice that ________________________ [COMPANY] a [type of
entity], organized pursuant to the laws of [the State of incorporation] (the
“Company”)
has
committed to sell to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. under the Flow
Mortgage Loan Purchase and Warranties Agreement, dated as of ______ __, 200_,
certain mortgage loans originated by the Association. The Company warrants
that
the mortgage loans to be sold to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. are in
addition to and beyond any collateral required to secure advances made by the
Association to the Company.
The
Company acknowledges that the mortgage loans to be sold to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc. shall not be used as additional or substitute collateral
for advances made by the Association. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
understands that the balance of the Company’s mortgage loan portfolio may be
used as collateral or additional collateral for advances made by the
Association, and confirms that it has no interest therein.
Execution
of this letter by the Association shall constitute a full and complete release
of any security interest, claim, or lien which the Association may have against
the mortgage loans to be sold to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital
Inc.
E-1
Very
truly yours,
____________________________
By:__________________________
Name:________________________
Title:_________________________
Date:_________________________
Acknowledged
and approved:
[FEDERAL
HOME LOAN BANK OF]
__________________________
By:______________________________
Name:___________________________
Title:____________________________
Date:____________________________
E-2
Exhibit
F
EXHIBIT
F
FORM
OF SECURITY RELEASE CERTIFICATION
I. Release
of Security Interest
The
financial institution named below hereby relinquishes any and all right, title,
interest, lien or claim of any kind it may have in all mortgage loans described
on the attached Schedule
A
(the
“Mortgage
Loans”),
to be
purchased by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. from the company named on
the
next page (the “Company”)
pursuant to that certain Flow Mortgage Loan Purchase and Warranties Agreement,
dated as of ______ __, 200_, and certifies that all notes, mortgages,
assignments and other documents in its possession relating to such Mortgage
Loans have been delivered and released to the Company or its designees, as
of
the date and time of the sale of such Mortgage Loans to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc. Such release shall be effective automatically without any further
action by any party upon payment in one or more installments, in immediately
available funds, of $_____________, in accordance with the wire instructions
set
forth below.
Name
and
Address and Wire Instructions of Financial Institution
________________________________
(Name)
________________________________
(Address)
By:_____________________________
F-1
II. Certification
of Release
The
Company named below hereby certifies to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
that, as of the date and time of the sale of the above-mentioned Mortgage Loans
to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. the security interests in the Mortgage
Loans released by the above-named financial institution comprise all security
interests relating to or affecting any and all such Mortgage Loans. The Company
warrants that, as of such time, there are and will be no other security
interests affecting any or all of such Mortgage Loans.
_____________________________
By:__________________________
Title:_________________________
Date:_________________________
F-2
Exhibit
G
EXHIBIT
G
UNDERWRITING
GUIDELINES
G-1
Exhibit
H
EXHIBIT
H
FORM
OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On
this
___ day of __________, ____, ___________________ NC Capital Corporation
(“Seller”),
as
the Seller under (i) that certain Purchase Price and Terms Agreement, dated
as of ___________, _____ (the “PPTA”),
and
(ii) that certain Flow Mortgage Loan Purchase and Warranties Agreement,
dated as of ________, ____ (the “Purchase
Agreement”),
does
hereby sell, transfer, assign, set over and convey to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc. (“Purchaser”)
as the
Purchaser under the Agreements (as defined below), without recourse, but subject
to the terms of the Agreements, all right, title and interest of, in and to
the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as
Exhibit A
(the
“Mortgage
Loans”),
together with the Servicing Rights, and the Mortgage Files and all rights and
obligations arising under the documents contained therein. Each Mortgage Loan
subject to the Agreements was underwritten in accordance with, and conforms
to,
the Underwriting Guidelines attached hereto as Exhibit
C.
Pursuant to Section 6 of the Purchase Agreement, the Seller has delivered
to the Custodian the documents for each Mortgage Loan to be purchased as set
forth in the Purchase Agreement. The contents of each Servicing File required
to
be retained by ______________________ (“Servicer”),
as
Originator/Servicer under that certain Servicing Agreement, dated as of
________, ____ (the “Servicing
Agreement”)
to
service the Mortgage Loans pursuant to the Servicing Agreement and thus not
delivered to the Purchaser are and shall be held in trust by the Servicer for
the benefit of the Purchaser as the owner thereof. The Servicer’s possession of
any portion of the Servicing File is at the will of the Purchaser for the sole
purpose of facilitating servicing of the related Mortgage Loan pursuant to
the
Servicing Agreement, and such retention and possession by the Servicer shall
be
in a custodial capacity only. The ownership of each Mortgage Note, Mortgage,
the
Servicing Rights and the contents of the Mortgage File and Servicing File is
vested in the Purchaser and the ownership of all records and documents with
respect to the related Mortgage Loan prepared by or which come into the
possession of the Seller or the Servicer shall immediately vest in the Purchaser
and shall be retained and maintained, in trust, by the Seller at the will of
the
Purchaser in such custodial capacity only. The PPTA, the Purchase Agreement
and
the Servicing Agreement shall collectively be referred to as the “Agreements”
herein.
The
Mortgage Loan Package characteristics of the Mortgage Loans subject hereto
are
set forth on Exhibit B
hereto.
In
accordance with Section 6 of the Purchase Agreement, the Purchaser accepts
the Mortgage Loans listed on Exhibit A
attached
hereto. Notwithstanding the foregoing the Purchaser does not waive any rights
or
remedies it may have under the Agreements.
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Purchase Agreement.
[SIGNATURE
PAGE FOLLOWS]
H-1
[SELLER]
____________________________
By:__________________________
Name:________________________
Title:_________________________
[SERVICER]
____________________________
By:__________________________
Name:________________________
Title:_________________________
Accepted
and Agreed:
▇▇▇▇▇▇
▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:______________________________
Name:___________________________
Title:____________________________
H-2
EXHIBIT
A
TO
ASSIGNMENT AND CONVEYANCE AGREEMENT
THE
MORTGAGE LOANS
H-3
EXHIBIT
B
TO
ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS
AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF EACH MORTGAGE LOAN
PACKAGE
Pool
Characteristics of the Mortgage Loan Package as delivered on the related Closing
Date:
No
Mortgage Loan has: (1) an outstanding principal balance less than
$_________; (2) an origination date earlier than __ months prior to the
related Cut-off Date; (3) a CLTV of greater than _____%; (4) a FICO
Score of less than ___; or (5) a debt-to-income ratio of more than __%.
Each Mortgage Loan has a Mortgage Interest Rate of at least ___% per annum
and
an outstanding principal balance less than $_________. Each Adjustable Rate
Mortgage Loan has an Index of [_______].
H-4
EXHIBIT
C
TO
ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING
GUIDELINES
H-5