BANC OF AMERICA MORTGAGE CAPITAL CORPORATION Purchaser and SUNTRUST MORTGAGE, INC. Company FLOW SALE AND SERVICING AGREEMENT Dated as of February 1, 2004 Residential Mortgage Loans
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Execution
Copy
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BANC
OF AMERICA MORTGAGE CAPITAL CORPORATION
Purchaser
and
SUNTRUST
MORTGAGE, INC.
Company
Dated
as of February 1, 2004
Residential
Mortgage Loans
TABLE
OF CONTENTS
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ARTICLE
I DEFINITIONS
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1
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ARTICLE
II AGREEMENT TO PURCHASE; PURCHASE PRICE; CONVEYANCE OF MORTGAGE
LOANS;
POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL AGREEMENT;
DELIVERY OF DOCUMENTS
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12
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Section
2.01
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Agreement
to Purchase; Purchase Price.
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12
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Section
2.02
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Books
and Records; Transfers of Mortgage Loans.
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13
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Section
2.03
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Custodial
Agreement; Delivery of Documents; Closing Conditions.
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14
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ARTICLE
III REPRESENTATIONS AND WARRANTIES REMEDIES AND
BREACH
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17
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Section
3.01
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Company
Representations and Warranties.
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17
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Section
3.02
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Representations
and Warranties Regarding Individual Mortgage Loans.
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20
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Section
3.03
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Repurchase.
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33
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Section
3.04
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Repurchase
of Mortgage Loans With First Payment Defaults.
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35
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Section
3.05
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Purchase
Price Protection.
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35
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Section
3.06
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Review
of Mortgage Loans.
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35
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ARTICLE
IV ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
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36
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Section
4.01
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Company
to Act as Servicer.
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36
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Section
4.02
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Liquidation
of Mortgage Loans.
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37
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Section
4.03
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Collection
of Mortgage Loan Payments.
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38
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Section
4.04
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Establishment
of and Deposits to Custodial Account.
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39
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Section
4.05
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Permitted
Withdrawals From Custodial Account.
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40
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Section
4.06
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Establishment
of and Deposits to Escrow Account.
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42
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Section
4.07
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Permitted
Withdrawals From Escrow Account.
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42
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Section
4.08
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Payment
of Taxes, Insurance and Other Charges.
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43
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Section
4.09
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Transfer
of Accounts.
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43
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Section
4.10
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Maintenance
of Hazard Insurance.
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43
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Section
4.11
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Maintenance
of Mortgage Impairment Insurance.
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45
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Section
4.12
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Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
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45
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Section
4.13
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Inspections.
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46
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Section
4.14
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Restoration
of Mortgaged Property.
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46
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Section
4.15
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Maintenance
of PMI Policy; Claims.
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46
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Section
4.16
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Title,
Management and Disposition of REO Property.
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47
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Section
4.17
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Real
Estate Owned Reports.
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48
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Section
4.18
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Liquidation
Reports.
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49
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Section
4.19
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Reports
of Foreclosures and Abandonments of Mortgaged Property.
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49
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Section
4.20
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RESERVED.
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49
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Section
4.21
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Modifications,
Waivers, Amendments and Consents.
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49
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Section
4.22
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Disaster
Recovery/Business Continuity Plan.
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50
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Section
4.23
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Fair
Credit Reporting Act.
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50
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ARTICLE
V PAYMENTS TO PURCHASER
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51
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Section
5.01
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Remittances.
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51
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Section
5.02
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Automated
Servicing Systems and Statements to Purchaser.
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51
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Section
5.03
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Monthly
Advances by Company.
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52
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ARTICLE
VI GENERAL SERVICING PROCEDURES
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52
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Section
6.01
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Due-on-Sale
Provision and Assumptions.
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52
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Section
6.02
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Satisfaction
of Mortgages and Release of Mortgage Files.
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53
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Section
6.03
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Servicing
Compensation.
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54
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Section
6.04
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Annual
Statement as to Compliance.
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54
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Section
6.05
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Annual
Independent Public Accountants’ Servicing Report.
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54
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Section
6.06
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Right
to Examine Company Records.
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55
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Section
6.07
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Compliance
with REMIC Provisions.
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55
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ARTICLE
VII COMPANY TO COOPERATE
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55
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Section
7.01
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Provision
of Information.
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55
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Section
7.02
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Financial
Statements; Servicing Facility.
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56
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Section
7.03
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Cooperation
with Third-party Service Providers.
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56
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ARTICLE
VIII THE COMPANY
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57
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Section
8.01
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Indemnification;
Third Party Claims.
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57
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Section
8.02
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Merger
or Consolidation of the Company.
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57
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Section
8.03
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Limitation
on Liability of Company and Others.
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57
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Section
8.04
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Limitation
on Resignation and Assignment by Company.
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58
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ARTICLE
IX PASS-THROUGH AND WHOLE LOAN TRANSFERS
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59
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Section
9.01
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Removal
of Mortgage Loans from Inclusion Under this Agreement.
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59
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ARTICLE
X DEFAULT
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61
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Section
10.01
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Events
of Default.
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61
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Section
10.02
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Waiver
of Defaults.
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62
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ARTICLE
▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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▇▇
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Section
11.01
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Termination.
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62
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Section
11.02
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Termination
Without Cause.
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63
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ARTICLE
XII MISCELLANEOUS PROVISIONS
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63
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Section
12.01
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Successor
to Company.
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63
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Section
12.02
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Amendment.
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64
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Section
12.03
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Governing
Law.
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65
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Section
12.04
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Arbitration.
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65
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Section
12.05
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Duration
of Agreement.
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65
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Section
12.06
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Notices.
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65
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Section
12.07
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Severability
of Provisions.
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66
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Section
12.08
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Relationship
of Parties.
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66
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Section
12.09
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Execution;
Successors and Assigns.
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66
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Section
12.10
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Recordation
of Assignments of Mortgage.
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66
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Section
12.11
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Assignment
by Purchaser.
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66
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Section
12.12
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Solicitation
of Mortgagor.
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67
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Section
12.13
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Further
Agreements.
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67
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Section
12.14
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Confidential
Information.
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67
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Section
12.15
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Exhibits.
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68
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EXHIBITS
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Exhibit
A
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Form
of Mortgage Loan Schedule
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Exhibit
B
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Contents
of Each Mortgage File
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Exhibit
C
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Custodial
Agreement
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Exhibit
D
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Form
of Assignment, Assumption and Recognition Agreement
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Exhibit
E
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Underwriting
Guidelines
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Exhibit
F
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Form
of Remittance Report
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Exhibit
G
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Form
of Opinion of Counsel
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Exhibit
H
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Purchase
Price and Terms Letter
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Exhibit
I
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Form
of Memorandum of Sale
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Exhibit
J
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Servicer
Requirements
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This
is a
Flow Sale and Servicing Agreement for residential first mortgage loans, dated
and effective as of May 1, 2002, and is executed between Banc of America
Mortgage Capital Corporation, as purchaser (the “Purchaser”), and SunTrust
Mortgage, Inc., as seller and servicer (the “Company”).
WITNESSETH
WHEREAS,
the Purchaser has agreed to purchase from time to time from the Company and
the
Company has agreed to sell from time to time to the Purchaser first lien jumbo
and conforming fixed rate mortgage loans;
WHEREAS,
the Mortgage Loans will be sold by the Company and purchased by the Purchaser
as
pools or groups of whole loans, servicing-retained (each, a “Mortgage Loan
Package”) on the various Closing Dates as provided herein; and
WHEREAS,
each of the Mortgage Loans as of the related Closing Date will be secured by
a
mortgage, deed of trust or other security instrument creating a first lien
on a
residential dwelling located in the jurisdiction indicated on the related
Mortgage Loan Schedule for the related Mortgage Loan Package, which will be
annexed to a Memorandum of Sale (as defined herein) on the related Closing
Date;
and
WHEREAS,
the Purchaser and the Company wish to prescribe the manner of purchase of the
Mortgage Loans and the conveyance, servicing and control of the Mortgage Loans;
and
WHEREAS,
following any purchase of the Mortgage Loans from the Company, the Purchaser
may
desire to sell some or all of the Mortgage Loans to one or more purchasers
as a
whole loan transfer, agency transfer or a public or private, rated or unrated
mortgage pass-through transaction;
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and
for other good and valuable consideration, the receipt and adequacy of which
is
hereby acknowledged, the Purchaser and the Company agree as
follows:
ARTICLE
I
DEFINITIONS
Whenever
used herein, the following words and phrases, unless the content otherwise
requires, shall have the following meanings:
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, procedures (including collection procedures)
that
comply with applicable federal, state and local law and that the Servicer
customarily employs and exercises in servicing and administering mortgage loans
for its own account and that are in accordance with the ▇▇▇▇▇▇ ▇▇▇ Single Family
Servicing Guide and the accepted mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the same type
as
the Mortgage Loans in the jurisdiction where the related Mortgaged Property
is
located.
1
Agreement:
This
Flow Sale and Servicing Agreement and all amendments hereof and supplements
hereto.
ALTA:
The
American Land Title Association or any successor thereto.
Appraisal:
A
written appraisal of a Mortgage Property made by a Qualified Appraiser, which
appraisal must be written, in form and substance, to FDIC, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac standards, and must meet the appraisal standards of the Uniform Standards
of
Professional Appraisal Practice.
Appraised
Value:
With
respect to any Mortgage Loan, the lesser of (i) the value set forth on the
Appraisal made in connection with the origination of the related Mortgage Loan
as the value of the related Mortgaged Property, or (ii) the purchase price
paid
for the Mortgaged Property, provided, however, that in the case of a refinanced
Mortgage Loan, such value shall be based solely on the Appraisal made in
connection with the origination of such Mortgage Loan.
Approved
Flood Policy Insurer:
An
insurer that meets the guidelines of the Federal Insurance
Administration.
Assignment,
Assumption and Recognition Agreement:
The
agreement substantially in the form of Exhibit
D
attached
hereto.
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.
BIF:
The
Bank Insurance Fund, or any successor thereto.
BPO:
A
broker’s price opinion with respect to a Mortgaged Property.
Business
Day:
Any day
other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings
and loan institutions in the Commonwealth of Virginia are authorized or
obligated by law or executive order to be closed.
Buydown
Agreement:
An agreement between the Company and a Mortgagor, or an agreement among the
Company, a Mortgagor and a seller of a Mortgaged Property or a third party
with
respect to a Mortgage Loan which provides for the application of Buydown
Funds.
Buydown
Funds:
In respect of any Buydown Mortgage Loan, any amount contributed by the seller
of
a Mortgaged Property subject to a Buydown Mortgage Loan, the buyer of such
property, the Company or any other source, plus interest earned thereon, in
order to enable the Mortgagor to reduce the payments required to be made from
the mortgagor’s funds in the early years of a Mortgage Loan.
Buydown
Mortgage Loan:
Any Mortgage Loan in respect of which, pursuant to a Buydown Agreement, (i)
the
Mortgagor pays less than the full monthly payments specified in the Mortgage
Note for a specified period, and (ii) the difference between the payments
required under such Buydown Agreement and the Mortgage Note is provided from
Buydown Funds.
2
Buydown
Period:
The period of time when a Buydown Agreement is in effect with respect to a
related Buydown Mortgage Loan.
Closing
Date:
The
date or dates, set forth in the related Purchase Price and Terms Letter, on
which the Purchaser will purchase and the Company will sell the Mortgage Loans
identified therein.
Code:
The
Internal Revenue Code of 1986, as it may be amended from time to time or any
successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.
Company:
SunTrust Mortgage, Inc., or its successor in interest or assigns, or any
successor to the Company under this Agreement appointed as herein
provided.
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.
Consumer
Information:
Information including, but not limited to, all personal information about the
Mortgagors that is supplied to the Company on behalf of the
Mortgagors.
Co-op
Shares:
Shares
issued by private non-profit housing corporations.
Custodial
Account:
The
separate account or accounts created and maintained pursuant to Section
4.04.
Custodial
Agreement:
The
agreement governing the retention of the originals of each Mortgage Note,
Mortgage, Assignment of Mortgage and other Mortgage Loan Documents, a form
of
which is annexed hereto as Exhibit
C.
Custodian:
The
custodian under the Custodial Agreement, or its successor in interest or
assigns, or any successor to the Custodian under the Custodial Agreement as
provided therein.
Cut-off
Date:
With
respect to each Mortgage Loan, the first day of the month of the related Closing
Date as set forth in the related Purchase Price and Terms Letter.
Deleted
Mortgage Loan:
A
Mortgage Loan which is repurchased by the Company in accordance with the terms
of this Agreement and which is, in the case of a substitution pursuant to
Section 3.03, replaced or to be replaced with a Qualified Substitute Mortgage
Loan.
Determination
Date:
The
fifteenth calendar day of each month (or if such fifteenth day is not a Business
Day, the first Business Day immediately following).
Due
Date:
The
first day of the month on which the Monthly Payment is due on a Mortgage Loan,
exclusive of any days of grace.
3
Due
Period:
With
respect to each Remittance Date, the period commencing on the second day of
the
month preceding the month of the Remittance Date and ending on the first day
of
the month of the Remittance Date.
Errors
and Omissions Insurance Policy:
An
errors and omissions insurance policy to be maintained by the Company pursuant
to Section 4.12.
Escrow
Account:
The
separate account or accounts created and maintained pursuant to Section
4.06.
Escrow
Payments:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and any
other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage or any other related document.
Event
of Default:
Any one
of the conditions or circumstances enumerated in
Section 10.01.
▇▇▇▇▇▇
▇▇▇:
The
entity formerly known as Federal National Mortgage Association (FNMA), or any
successor thereto.
▇▇▇▇▇▇
Mae Guides:
The
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇’ Guide and the ▇▇▇▇▇▇ Mae Single Family Servicing Guide and
all amendments and additions thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity
Bond:
A
fidelity bond to be maintained by the Company pursuant to Section
4.12.
First
Remittance Date:
March
18, 2004.
▇▇▇▇▇▇▇
Mac:
The
entity formerly known as the Federal Home Loan Mortgage Corporation (FHLMC),
or
any successor thereto.
▇▇▇▇▇▇▇
Mac Guide:
The
▇▇▇▇▇▇▇ Mac Single Family Seller/Servicer Guide and all amendments and additions
thereto.
GAAP:
General
accepted accounting procedures, consistently applied.
Holding
Period:
As to
each Mortgage Loan, the period beginning on the related Closing Date and ending
on the last day of the third calendar month thereafter.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
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.
4
Loan-to-Value
Ratio or LTV:
With
respect to any Mortgage Loan, the ratio of the original loan amount of the
Mortgage Loan at its origination (unless otherwise indicated) to the Appraised
Value of the Mortgaged Property.
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 mortgager or may be on leased land.
MERS:
Mortgage Electronic Registration Systems, Inc.
Memorandum
of Sale:
With
respect to each Mortgage Loan and the Mortgage Loan Package, the memorandum
of
sale, substantially in the form of Exhibit
I
attached
hereto, confirming the sale by Company and the purchase by Purchaser of the
Mortgage Loan Package on the related Closing Date.
Monthly
Advance:
The
portion of each Monthly Payment that is delinquent at the close of business
on
the Determination Date with respect to each Mortgage Loan required to be
advanced by the Company pursuant to Section 5.03 on the Business Day immediately
preceding the Remittance Date of the related month.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage
Loan.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a first lien on an unsubordinated estate in fee simple in real property
securing the Mortgage Note.
Mortgage
File:
The
items pertaining to a particular Mortgage Loan referred to in Exhibit B
annexed
hereto, and any additional documents required to be added to the Mortgage File
pursuant to this Agreement.
Mortgage
Impairment Insurance Policy:
A
mortgage impairment or blanket hazard insurance policy as described in Section
4.11.
5
Mortgage
Interest Rate:
The
annual rate of interest borne on a Mortgage Note in accordance with the
provisions of the 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
Mortgage Loan Schedule annexed to the related Memorandum of Sale, which Mortgage
Loan includes without limitation the Mortgage File, the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and all other rights, benefits, proceeds
and
obligations arising from or in connection with such Mortgage Loan.
Mortgage
Loan Documents:
The
documents referred to in Exhibit
B
as items
1 through 11 and 16.
Mortgage
Loan Package:
The
pool or group of whole loans purchased on a Closing Date, as described in the
Mortgage Loan Schedule annexed to the related Memorandum of Sale.
Mortgage
Loan Remittance Rate:
With
respect to each Mortgage Loan, the annual rate of interest remitted to the
Purchaser, which shall be equal to the related Mortgage Interest Rate minus
the
Servicing Fee Rate.
Mortgage
Loan Schedule:
With
respect to each Mortgage Loan Package, the schedule of Mortgage Loans
substantially in the form attached as Exhibit
A
hereto
and annexed to the related Memorandum of Sale (and delivered in electronic
format to the Purchaser), such schedule setting forth the following information
with respect to each Mortgage Loan in the related Mortgage Loan
Package:
| (1) |
the
Company’s Mortgage Loan number;
|
| (2) |
Mortgagor’s
name (including any co-mortgagors);
|
| (3) |
the
full ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇ and zip code of the Mortgaged
Property;
|
| (4) |
a
code indicating whether the Mortgaged Property is a single family
residence, two-family residence, three-family residence, four-family
residence, PUD or Condominium or secured by Co-op
Shares;
|
| (5) |
Mortgage
Interest Rate;
|
| (6) |
Mortgage
Loan Remittance Rate;
|
| (7) |
Monthly
Payment;
|
| (8) |
the
original term to maturity;
|
| (9) |
the
scheduled maturity date;
|
| (10) |
the
origination date of the Mortgage
Loan;
|
6
| (11) |
the
principal balance of the Mortgage Loan as of the Cut-off Date after
deduction of payments of principal due on or before the Cut-off Date
whether or not collected;
|
| (12) |
the
Loan-to-Value Ratio;
|
| (13) |
a
code indicating the name of the issuer of the PMI Policy, if
any;
|
| (14) |
the
Appraised Value;
|
| (15) |
the
date on which the first Monthly Payment was
due;
|
| (16) |
the
last payment date on which a payment was
applied;
|
| (17) |
the
documentation level (full, alternative,
limited);
|
| (18) |
loan
purpose;
|
| (19) |
a
code indicating the payment status of the Mortgage Loan (i.e.,
bankruptcy, foreclosure, REO);
|
| (20) |
a
code indicating whether such Mortgage Loan provides for a Prepayment
Penalty and, if applicable, the Prepayment Penalty period for such
loan;
|
| (21) |
a
code indicating whether the Mortgaged Property is owner-occupied
or
investor property;
|
| (22) |
a
code indicating whether the Mortgage Loan is a Buydown Mortgage Loan;
and
|
| (23) |
the
FICO score with respect to the Mortgage
Loan.
|
With
respect to the Mortgage Loans in the aggregate in the related Mortgage Loan
Package, the respective Mortgage Loan Schedule shall set forth the following
information, as of the Cut-off Date:
(i) the
number of Mortgage Loans;
(ii) the
current aggregate outstanding principal balance of the Mortgage
Loans;
(iii) the
weighted average Mortgage Interest Rate of the Mortgage Loans; and
(iv) the
weighted average months to maturity of the Mortgage Loans.
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a
Mortgage.
Mortgaged
Property:
The
real property, including any improvements, securing repayment of the debt
evidenced by a Mortgage Note.
7
Mortgagor:
The
obligor on a Mortgage Note.
Negative
Amortization:
A
gradual increase in the mortgage debt that occurs when the monthly fixed
installment is not sufficient for full application to both principal and
interest. The interest shortage is added to the unpaid principal balance to
create “negative” amortization.
Nonrecoverable
Monthly Advance:
Any
Monthly Advance previously made by the Company pursuant to Section 5.03 which,
in the good faith judgment of the Company, may not be ultimately recoverable
by
the Company under Section 4.05(ii). The determination by the Company that it
has
made a Nonrecoverable Monthly Advance shall be evidenced by a certificate signed
by two officers of the Company and delivered to the Purchaser.
OCC:
The
Office of the Comptroller of the Currency.
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board or the Vice Chairman of the
Board or the President or a Vice President or an Assistant Vice President and
by
the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Company, and delivered to the Purchaser as required by this
Agreement.
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the Company, reasonably
acceptable to the Purchaser.
Originator:
With
respect to any Mortgage Loan, the entity that (i) took the Mortgagor’s loan
application (ii) processed the Mortgagor’s loan application, or (iii) closed
and/or funded the Mortgagor’s Mortgage Loan.
Pass-Through
Transfer:
Either
(i) the sale or transfer of some or all of the Mortgage Loans by the Purchaser
to a trust to be formed as part of a publicly issued or privately placed
mortgage-backed securities transaction or (ii) a synthetic securitization in
which some or all of the Mortgage Loans are included as part of the reference
portfolio relating to such securitization.
Person:
Any
individual, corporation, partnership, joint venture, limited liability company,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
PMI
Policy:
A
policy of primary mortgage guaranty insurance issued by a Qualified Insurer,
as
required by this Agreement with respect to certain Mortgage Loans.
Prepayment
Interest Shortfall:
As to
any Remittance Date and each Mortgage Loan subject to a Principal Prepayment
received during the calendar month preceding such Remittance Date, the amount,
if any, by which one month’s interest at the related Mortgage Loan Remittance
Rate on such Principal Prepayment exceeds the amount of interest paid in
connection with such Principal Prepayment.
Prepayment
Premium:
Payments received on a Mortgage Loan as a result of a Principal Prepayment
hereon, not otherwise due thereon in respect of principal or interest, which
are
intended to be a disincentive to prepayment.
8
Prepayment
Premium Loan:
A
Mortgage Loan with respect to which the Mortgagor must pay a Prepayment Premium
in connection with a Principal Prepayment.
Prime
Rate:
The
prime rate announced to be in effect from time to time, as published as the
average rate in The
Wall Street Journal.
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date, including any prepayment penalty or premium
thereon and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent
to
the month of prepayment.
Principal
Prepayment Period:
The
month preceding the month in which the related Remittance Date
occurs.
Purchase
Price:
The
price paid on the Closing Date by the Purchaser to the Company for the Mortgage
Loans, as calculated as set forth in the Purchase Price and Terms
Letter.
Purchase
Price and Terms Letter:
The
letter agreement between the Company and the Purchaser, dated January 14, 2004,
or any subsequent dates prior to the related Closing Date relating to the sale
of one or more Mortgage Loan Packages.
Purchaser:
Banc of
America Mortgage Capital Corporation, or its successor in interest or any
successor or assignee to the Purchaser under this Agreement as herein
provided.
Qualified
Appraiser:
An
appraiser, duly appointed by the Company, 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 such appraiser and the appraisal made by such appraiser
both
satisfy the requirements of Title XI of Financial Institution Reform, Recovery,
and Enforcement Act and the regulations promulgated thereunder, all as in effect
on the date the Mortgage Loan was originated.
Qualified
Depository:
Any of
(i) an account or accounts maintained with a federal or state chartered
depository institution or trust company the short-term unsecured debt
obligations of which (or, in the case of a depository institution or trust
company that is the principal subsidiary of a holding company, the debt
obligations of such holding company) have the highest short-term ratings of
each
Rating Agency at the time any amounts are held on deposit therein, or (ii)
a
trust account or accounts maintained with the trust department of a federal
or
state chartered depository institution or trust company, acting in its fiduciary
capacity.
Qualified
Insurer:
A
mortgage guaranty insurance company duly authorized and licensed where required
by law to transact mortgage guaranty insurance business and approved as an
insurer by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
Qualified
Substitute Mortgage Loan:
A
mortgage loan eligible to be substituted by the Company for a Deleted Mortgage
Loan which must, on the date of such substitution be approved by the Purchaser
and (i) have an outstanding principal balance, after deduction or 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 Stated Principal Balance of the Deleted Mortgage
Loan; (ii) have a Mortgage Loan Remittance Rate not less than, and not more
than
2% greater than, the Mortgage Loan Remittance 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) comply with each
representation and warranty set forth in Sections 3.01 and 3.02; and (v) be
of
the same type as the Deleted Mortgage Loan.
9
Rating
Agency:
Each of
Fitch, Inc., ▇▇▇▇▇’▇ Investors Service, Inc., and Standard & Poor’s, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor
thereto.
Reconstitution
Date:
The
date on which any or all of the Mortgage Loans serviced under this Agreement
shall be removed from this Agreement and reconstituted as part of a Pass-Through
Transfer or Whole Loan Transfer pursuant to Section 9.01 hereof. The
Reconstitution Date shall be such date which the Purchaser and the subsequent
purchaser or transferee of the related Mortgage Loans shall designate, provided,
however, that the Purchaser shall have given the Company at least ten (10)
Business Days’ prior notice. On such date, the Mortgage Loans transferred shall
cease to be covered by this Agreement and the Company’s servicing
responsibilities shall cease under this Agreement with respect to the related
transferred Mortgage Loans.
Record
Date:
The
close of business of the last Business Day of the month preceding the month
of
the related Remittance Date.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of
the Code.
REMIC
Provisions:
Provisions of the federal income tax law relating to a REMIC, which appear
at
Section 860A through 860G of Subchapter M of Chapter 1, Subtitle A of the Code,
and related provisions, and regulations, rulings or pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time.
Remittance
Date:
The
18th day (or if such 18th
day is
not a Business Day, the first Business Day immediately following such
18th
day) of
any month, beginning with the First Remittance Date.
REO
Disposition:
The
final sale by the Company of any REO Property.
REO
Disposition Proceeds:
All
amounts received with respect to an REO Disposition pursuant to Section
4.16.
REO
Property:
A
Mortgaged Property acquired by the Company on behalf of the Purchaser through
foreclosure or by deed in lieu of foreclosure, as described in Section
4.16.
Repurchase
Price:
With
respect to any Mortgage Loan, a price equal to (i) (A) prior to the date which
is twelve (12) months following the Closing Date, the product of the Stated
Principal Balance of such Mortgage Loan times the greater of (x) the Purchase
Price Percentage (as set forth in the related Purchase Price and Terms Letter)
or (y) 100%, and (B) thereafter, the Stated Principal Balance of the Mortgage
Loan plus (ii) interest on such Stated Principal Balance at the Mortgage Loan
Remittance Rate from the date on which interest has last been paid and
distributed to the Purchaser through the last day of the month in which such
repurchase takes place, less amounts received or advanced in respect of such
repurchased Mortgage Loan which are being held in the Custodial Account for
distribution in the month of repurchase plus the amount of any advances owed
to
any servicer, plus 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 Company’s repurchase
obligation hereunder plus (iii) with respect to any Mortgage Loan subject to
a
Pass-Through Transfer, any costs and damages incurred by the related trust
in
connection with any violation by such Mortgage Loan of any predatory or abusive
lending law.
10
SAIF:
The
Savings Association Insurance Fund, or any successor thereto.
Securities
Act of 1933 or the 1933 Act:
The
Securities Act of 1933, as amended.
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses other
than Monthly Advances (including reasonable attorney’s fees and disbursements)
incurred in the performance by the Company of its servicing obligations,
including, but not limited to, the cost of (a) the preservation, restoration
and
protection of the Mortgaged Property, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of
any
REO Property and (d) compliance with the obligations under Section
4.08.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee the Purchaser shall
pay to the Company, which shall, for a period of one full month, be equal to
one-twelfth of the product of (a) the applicable Servicing Fee Rate and (b)
the
outstanding principal balance of such Mortgage Loan. Such fee shall be payable
monthly, computed on the basis of the same principal amount and period
respecting which any related interest payment on a Mortgage Loan is computed.
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
Section 4.05) of such Monthly Payment collected by the Company, or as otherwise
provided under Section 4.05.
Servicing
Fee Rate:
With
respect to each Mortgage Loan, 0.25% per annum.
Servicing
File:
With
respect to each Mortgage Loan, the file retained by the Company consisting
of
originals of all documents in the Mortgage File which are not delivered to
the
Custodian and copies of the Mortgage Loan Documents listed in the Custodial
Agreement the originals of which are delivered to the Custodian pursuant to
Section 2.03.
Servicing
Officer:
Any
officer of the Company involved in or responsible for the administration and
servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished by the Company to the Purchaser upon request, as such list
may from time to time be amended.
Stated
Principal Balance:
As to
each Mortgage Loan, (i) the principal balance of the Mortgage Loan at the
related Cut-off Date after giving effect to payments of principal due on or
before such date, whether or not received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal or advances in lieu
thereof.
11
Subservicer:
Any
Person with which the Company has entered into a Subservicing Agreement,
provided that such Person is a ▇▇▇▇▇▇ ▇▇▇ approved seller/servicer or a ▇▇▇▇▇▇▇
Mac approved seller/servicer in good standing and no event has occurred,
including but not limited to a change in insurance coverage, that would make
it
unable to comply with the eligibility for seller/servicers imposed by ▇▇▇▇▇▇
▇▇▇
or ▇▇▇▇▇▇▇ Mac.
Subservicing
Agreement:
Any
subservicing agreement (which, in the event the Subservicer is an affiliate
of
the Company, need not be in writing) between the Company and any Subservicer
relating to servicing and/or administration of certain Mortgage Loans as
provided in Section 3.01(b).
Underwriting
Guidelines:
The
Underwriting Guidelines of the Company attached hereto as Exhibit
E.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans by the Purchaser to a
third party, which sale or transfer is not a Pass-Through Transfer.
ARTICLE
II
AGREEMENT
TO PURCHASE; PURCHASE PRICE; CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF
MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF
DOCUMENTS
Section
2.01 Agreement
to Purchase; Purchase Price.
(A) Agreement
to Purchase
The
Company agrees to sell and the Purchaser agrees to purchase, on a
servicing-retained basis, the Mortgage Loans in a Mortgage Loan Package having
an aggregate scheduled principal balance on the related Cut-off Date in an
amount as set forth in the related Purchase Price and Terms Letter, or in such
other amount as agreed by the Purchaser and the Company as evidenced by the
aggregate scheduled principal balance of the Mortgage Loan Package accepted
by
the Purchaser on the related Closing Date. The Company shall deliver the
Mortgage Loan Schedule for the Mortgage Loan Package to be purchased on the
related Closing Date to the Purchaser at least five (5) Business Days prior
to
such Closing Date.
(B) Purchase
Price
The
Purchase Price for each Mortgage Loan Package shall be the percentage of par
as
stated in or as otherwise calculated pursuant to the related Purchase Price
and
Terms Letter (subject to adjustment as provided therein), plus accrued interest
on the aggregate scheduled principal balance of the Mortgage Loan Package at
the
weighted average Mortgage Loan Remittance Rate from the related Cut-off Date
through the day prior to the related Closing Date, inclusive. The initial
principal amount of the Mortgage Loans shall be the aggregate principal balance
of the Mortgage Loans, so computed as of the related Cut-off Date, after
application of scheduled payments of principal due on or before the related
Cut-off Date, whether or not collected. Such payments shall be made to the
account designated by the Company by wire transfer to immediately available
funds.
12
The
Purchaser shall be entitled to (1) 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 (provided, however, that all scheduled payments of
principal due on or before the related Cut-off Date and collected by the Company
or any successor servicer after the related Cut-off Date shall belong to the
Company), and (3) all payments of interest on the Mortgage Loans at the Mortgage
Loan Remittance Rate (minus that portion of any such payment that is allocable
to the period prior to the related Cut-off Date). The scheduled 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
whether or not collected together with any unscheduled principal prepayments
collected prior to the related Cut-off Date, provided, however, that payments
of
scheduled principal and interest prepaid for a Due Date beyond the Cut-off
Date
shall not be applied to the principal balance as of the Cut-off Date. Such
prepaid amounts (minus interest at the Servicing Fee Rate) shall be the property
of the Purchaser. The Company shall deposit any such prepaid amounts into the
Custodial Account for the benefit of the Purchaser.
The
contents of each Servicing File are and shall be held in trust by the Company
for the benefit of the Purchaser as the owner thereof. Possession of each
Servicing File by the Company is at the will of the Purchaser for the sole
purpose of servicing the related Mortgage Loan, and such retention and
possession by the Company is in a custodial capacity only. Upon the sale of
the
Mortgage Loans the ownership of each Mortgage Note, the related Mortgage and
the
related Mortgage File and Servicing File shall vest immediately 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
Company shall vest immediately in the Purchaser and shall be retained and
maintained by the Company, in trust, at the will of the Purchaser and only
in
such custodial capacity. The Company shall release its custody of the contents
of any Servicing File only in accordance with written instructions from the
Purchaser, unless such release is required as incidental to the Company’s
servicing of the Mortgage Loans or is in connection with a repurchase of any
Mortgage Loan pursuant to Section 3.03 or 6.02. All such costs associated with
the release, transfer and re-delivery to the Company shall be the responsibility
of the Purchaser.
Section
2.02 Books
and Records; Transfers of Mortgage Loans.
From
and
after the sale of the Mortgage Loans to the Purchaser all rights arising out
of
the Mortgage Loans, including, but not limited to, all funds received on or
in
connection with the Mortgage Loans, shall be received and held by the Company
in
trust for the benefit of the Purchaser as owner of the Mortgage Loans, and
the
Company shall retain record title to the related Mortgages for the sole purpose
of facilitating the servicing and the supervision of the servicing of the
Mortgage Loans.
13
The
sale
of each Mortgage Loan shall be reflected on the Company’s balance sheet and
other financial statements, tax returns and business records as a sale of assets
by the Company. The Company shall 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 Company shall maintain in its possession,
available for inspection by the Purchaser, or its designee, and shall deliver
to
the Purchaser upon demand, evidence of compliance with all federal, state and
local laws, rules and regulations, and requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, including but not limited to documentation as to the method used in
determining the applicability of the provisions of the Flood Disaster Protection
Act of 1973, as amended, to the Mortgaged Property, documentation evidencing
insurance coverage and eligibility of any condominium project for approval
by
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and periodic inspection reports as required by Section
4.13. To the extent that original documents are not required for purposes of
realization of Liquidation Proceeds or Insurance Proceeds, documents maintained
by the Company may be in the form of microfilm or microfiche or such other
reliable means of recreating original documents, including but not limited
to,
optical imagery techniques so long as the Company complies with the requirements
of the ▇▇▇▇▇▇ Mae Guides or the ▇▇▇▇▇▇▇ Mac Guide.
The
Company shall maintain with respect to each Mortgage Loan and shall make
available for inspection by any Purchaser or its designee the related Servicing
File during the time the Purchaser retains ownership of a Mortgage Loan and
thereafter in accordance with applicable laws and regulations.
The
Company shall keep at its servicing office books and records in which, subject
to such reasonable regulations as it may prescribe, the Company shall note
transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made unless
such transfer is in compliance with the terms hereof. For the purposes of this
Agreement, the Company shall be under no obligation to deal with any person
with
respect to this Agreement or the Mortgage Loans unless the books and records
show such person as the owner of the Mortgage Loan. The Purchaser may, subject
to the terms of this Agreement, sell and transfer one or more of the Mortgage
Loans, provided, however, that in no event shall there be more than five (5)
Persons at any given time for whom the Company is servicing the Mortgage Loans.
The Purchaser also shall advise the Company of the transfer. Upon receipt of
notice of the transfer, the Company shall ▇▇▇▇ its books and records to reflect
the ownership of the Mortgage Loans of such assignee, and shall release the
previous Purchaser from its obligations hereunder with respect to the Mortgage
Loans sold or transferred. If the Company receives notification of a transfer
less than five (5) Business Days before the last calendar day of the month,
the
Company’s duties to remit and report as required by Section 5 shall begin with
the next Due Period.
Section
2.03 Custodial
Agreement; Delivery of Documents; Closing Conditions.
Pursuant
to the related Custodial Agreement the Company will, with respect to each
Mortgage Loan, deliver and release to the Custodian the Mortgage Loan Documents
at least five (5) Business Days prior to the related Closing Date.
The
Company shall cause the Custodian to certify its receipt of the Mortgage Loan
Documents at least one (1) Business Day prior to the related Closing Date,
as
evidenced by the initial certification of the Custodian in the form annexed
to
the Custodial Agreement. The Company shall be responsible for recording the
Assignments of Mortgage, if necessary, in accordance with Accepted Servicing
Practices and this Agreement. The Purchaser shall be responsible for the initial
and on-going fees and expenses of the Custodian.
14
Except
as
otherwise provided in this Section 2.03, upon discovery or receipt of notice
of
any materially defective Mortgage Loan Document, or that a Mortgage Loan
Document is missing, the Company shall have ninety (90) days to cure such defect
or deliver such missing document to the Custodian. If the Company does not
cure
such defect or deliver such missing document within such time period, the
Company shall either repurchase or substitute for such Mortgage Loan in
accordance with Section 3.03.
The
Company shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 or 6.01 within one week of their
execution, provided, however, that the Company shall provide the Custodian
with
a certified true copy of any such document submitted for recordation within
ten
(10) days of its execution, and shall provide the original of any document
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within sixty (60) days of its submission for recordation.
In
the
event the public recording office is delayed in returning any original document,
the Company shall deliver to the Custodian within 180 days of its submission
for
recordation, a copy of such document and an Officer’s Certificate, which shall
(i) identify the recorded document; (ii) state that the recorded document has
not been delivered to the Custodian due solely to a delay by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will
be
delivered to the Custodian. The Company will be required to deliver the document
to the Custodian by the date specified in (iv) above. An extension of the date
specified in (iv) above may be requested from the Purchaser, which consent
shall
not be unreasonably withheld. However, if the Company cannot deliver such
original or clerk-certified copy of any document submitted for recordation
to
the appropriate public recording office within the specified time for any
reason, within thirty (30) days after receipt of written notification of such
failure from the Purchaser, the Company shall repurchase the related Mortgage
Loan at the price and in the manner specified in Section 3.03.
The
closing for the purchase and sale of each Mortgage Loan Package shall take
place
on the respective Closing Date. The 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 may agree.
The
closing for each Mortgage Loan Package shall be subject to the satisfaction
of
each of the following conditions:
(a) with
respect to the Purchaser’s obligations to close:
(i) the
Company shall have delivered to the Purchaser and the Custodian the related
Mortgage Loan Schedule and a magnetic diskette, or transmitted by modem, a
listing on a loan-level basis of the information contained therein;
15
(ii) all
of
the representations and warranties of the Company under this Agreement shall
be
true and correct as of the related Closing Date (or, with respect to
Section 3.02, such other date specified therein) in all material respects
and no default shall have occurred hereunder which, with notice or the passage
of time or both, would constitute an Event of Default hereunder;
(iii) the
Purchaser and its counsel shall have received an opinion from the Company’s
counsel, substantially in the form of Exhibit
G
attached
hereto (with respect to the initial closing only);
(iv) the
Purchaser shall have received from the Custodian an initial certification with
respect to its receipt of the Mortgage Loan Documents for the related Mortgage
Loans;
(v) the
Purchaser shall have received originals of the related Memorandum of Sale,
the
related Purchase Price and Terms Letter and a funding memorandum setting forth
the Purchase Price(s), and the accrued interest thereon, for the Mortgage Loan
Package, in each case executed on behalf of the Company;
(vi) all
other
terms and conditions of this Agreement, the related Memorandum of Sale and
the
related Purchase Price and Terms Letter to be satisfied by the Company shall
have been complied with in all material respects; and
(b) with
respect to the Company’s obligations to close:
(i) all
of
the representations and warranties herein of the Purchaser shall be true and
correct in all material respects as of such Closing Date;
(ii) the
Company shall have received a copy of the initial certification of the Custodian
with respect to its receipt of the Mortgage Loan Documents for the related
Mortgage Loans;
(iii) the
Company has received originals of the related Memorandum of Sale, the related
Purchase Price and Terms Letter and a funding memorandum setting forth the
Purchase Price(s), and accrued interest thereon, for the Mortgage Loan Package,
in each case executed on behalf of the Purchaser; and
(iv) all
terms
and conditions of this Agreement, the related Memorandum of Sale and the related
Purchase Price and Terms Letter to be satisfied by the Purchaser shall have
been
materially complied with.
Upon
satisfaction of the foregoing conditions, the Purchaser shall pay to the Company
on such Closing Date the Purchase Price for the related Mortgage Loan Package,
plus accrued interest pursuant to Section 2.01 of this Agreement.
16
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES REMEDIES AND BREACH
Section
3.01 Company
Representations and Warranties.
The
Company hereby represents and warrants to the Purchaser that, as of the related
Closing Date:
(a) Due
Organization and Authority.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Virginia and has all licenses necessary
to
carry on its business as now being conducted and is licensed, qualified and
in
good standing in each state where a Mortgaged Property is located if the laws
of
such state require licensing or qualification in order to conduct business
of
the type conducted by the Company, and in any event the Company is in compliance
with the laws of any such state to the extent necessary to ensure the
enforceability of the related Mortgage Loan and the servicing of such Mortgage
Loan in accordance with the terms of this Agreement; the Company has the full
corporate power and authority to execute and deliver this Agreement and to
perform in accordance herewith; the execution, delivery and performance of
this
Agreement (including all instruments of transfer to be delivered pursuant to
this Agreement) by the Company and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the Company; and
all
requisite corporate action has been taken by the Company to make this Agreement
valid and binding upon the Company in accordance with its terms;
(b) Ordinary
Course of Business.
The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Company, which is in the business of selling
and servicing loans, and the transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Company 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 of the Mortgage
Loans by the Company, the sale of the Mortgage Loans to the Purchaser or the
transactions contemplated hereby, nor the fulfillment of or compliance with
the
terms and conditions of this Agreement will conflict with or result in a breach
of any of the terms, articles of incorporation or by-laws or any legal
restriction or any agreement or instrument to which the Company is now a party
or by which it is bound, or constitute a default or result in the violation
of
any law, rule, regulation, order, judgment or decree to which the Company or
its
property is subject, or impair the ability of the Purchaser to realize on the
Mortgage Loans, or impair the value of the Mortgage Loans;
17
(d) Ability
to Service.
The
Company is an approved seller/servicer of conventional residential mortgage
loans for ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac, with the facilities, procedures, and
experienced personnel necessary for the sound servicing of mortgage loans of
the
same type as the Mortgage Loans. The Company is a HUD approved mortgagee
pursuant to Section 203 of the National Housing Act and is in good standing
to
sell mortgage loans to and service mortgage loans for ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇
Mac, and no event has occurred, including but not limited to a change in
insurance coverage, which would make the Company unable to comply with ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac eligibility requirements or which would require notification
to either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(e) Reasonable
Servicing Fee; Fair Consideration.
The
Company 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 Company, for accounting and tax purposes, as
compensation for the servicing and administration of the Mortgage Loans pursuant
to this Agreement. The consideration received by the Company upon the sale
of
the Mortgage Loans under this Agreement shall constitute fair consideration
and
reasonably equivalent value for the Mortgage Loans;
(f) Ability
to Perform.
The
Company 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
Company is solvent and the sale of the Mortgage Loans will not cause the Company
to become insolvent. The sale of the Mortgage Loans is not undertaken to hinder,
delay or defraud any of the Company’s creditors;
(g) No
Litigation Pending.
There
is
no action, suit, proceeding or investigation pending or threatened against
the
Company 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 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 this Agreement or the Mortgage Loans
or
of any action taken or to be contemplated herein, or which would be likely
to
impair materially the ability of the Company to perform under the terms of
this
Agreement;
(h) No
Consent Required.
18
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 this Agreement or the sale of the Mortgage
Loans as evidenced by the consummation of the transactions contemplated by
this
Agreement, or if required, such approval has been obtained prior to the Closing
Date;
(i) Selection
Process.
The
Mortgage Loans will be selected on such Closing Date from among the outstanding
fixed rate one- to four-family mortgage loans in the Company’s portfolio at such
Closing Date as to which the representations and warranties set forth in Section
3.03 could be made and the terms of the related Purchase Price and Term Letter
satisfied and such selection will not be made in a manner so as to affect
adversely the interests of the Purchaser;
(j) No
Untrue Information.
Neither
this Agreement nor any statement, report or other document furnished or to
be
furnished pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of fact or omits to state
a
fact necessary to make the statements contained therein not
misleading;
(k) Sale
Treatment.
The
Company has determined that the disposition of the Mortgage Loans pursuant
to
this Agreement will be afforded sale treatment for accounting and tax
purposes;
(l) No
Material Change.
There
has
been no material adverse change in the business, operations, financial condition
or assets of the Company since the date of the Company’s most recent financial
statements; and
(m) No
Brokers’ Fees.
The
Company has not dealt with any broker, investment banker, agent or other Person
that may be entitled to any commission or compensation in the connection with
the sale of the Mortgage Loans.
(n) Anti-Money
Laundering Law Compliance.
The
Company 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”); the Company has established an
anti-money laundering compliance program as required by the Anti-Money
Laundering Laws, has conducted the requisite due diligence in connection with
the origination of each Mortgage Loan for purposes of the Anti-Money Laundering
Laws, including with respect to the legitimacy of the applicable Mortgagor
and
the origin of the assets used by the said Mortgagor to purchase the property
in
question, and maintains, and will maintain, sufficient information to identify
the applicable Mortgagor for purposes of the Anti-Money Laundering Laws;
and
19
(o) Securities
Law Compliance.
Neither
the Company nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of any Mortgage Loans, any interest
in
any Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security with, any person in any manner, or made
any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act of 1933 or which would render the disposition
of
any Mortgage Loans a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, nor will it act, nor has it authorized or will
it
authorize any person to act, in such manner with respect to the Mortgage
Loans.
Section
3.02 Representations
and Warranties Regarding Individual Mortgage Loans.
As
to
each Mortgage Loan, the Company hereby represents and warrants to the Purchaser
that as of the related Closing Date:
(a) Mortgage
Loans as Described.
The
information set forth in the Mortgage Loan Schedule annexed to the related
Memorandum of Sale and the information contained on the related electronic
data
file delivered to the Purchaser is complete, true and correct;
(b) Payments
Current.
All
payments required to be made prior to the related Cut-off Date for the Mortgage
Loan under the terms of the Mortgage Note have been made and credited. No
payment under any Mortgage Loan has ever been 30 days or more
delinquent;
(c) [Reserved.]
(d) [Reserved.]
(e) No
Outstanding Charges.
There
are
no defaults in complying with the terms of the Mortgages, and there are no
delinquent taxes, governmental assessments, insurance premiums, leasehold
payments, ground rents, water, sewer and municipal charges, including
assessments payable in future installments or any other charge affecting the
lien priority of the related Mortgaged Property. The Company has not advanced
funds, or induced, or solicited directly or indirectly, 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 later, to the day which precedes by one month the Due Date of
the
first installment of principal and interest;
20
(f) Original
Terms Unmodified.
The
terms
of the Mortgage Note and Mortgage have not been impaired, waived, altered or
modified in any respect, except by a written instrument which has been recorded,
if necessary, to protect the interests of the Purchaser and maintain the lien
priority of the Mortgage and which has been delivered to the Custodian. The
substance of any such waiver, alteration or modification has been approved
by
the issuer of any related PMI Policy and the title insurer, to the extent
required by the policy, and its terms are reflected on the Mortgage Loan
Schedule. No instrument of waiver, alteration of modification has been executed,
and no Mortgagor has been released, in whole or in part, except in connection
with an assumption agreement approved by the issuer of any related PMI Policy
and the title insurer, to the extent required by the policy, and which
assumption agreement is part of the Mortgage File delivered to the Custodian
and
the terms of which are reflected on the related Mortgage Loan
Schedule;
(g) No
Defenses.
The
Mortgage Note and the Mortgage are 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, or subject to any
right
of rescission, set-off, counterclaim or defense, including without limitation
the defense of usury, 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;
(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 satisfaction, release, cancellation, subordination or
rescission;
(i) Validity
of Mortgage Documents.
21
The
Mortgage Note and the Mortgage and related documents are genuine, and each
is
the legal, valid and binding obligation of the maker thereof enforceable in
accordance with its terms. All parties to the Mortgage Note and the Mortgage
had
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have
been
duly and properly executed by such parties;
(j) No
Fraud.
No
error,
omission, misrepresentation, negligence, fraud or similar occurrence with
respect to a Mortgage Loan has taken place on the part of any Person involved
in
the origination of the Mortgage Loan or in the application of any insurance
in
relation to such Mortgage Loan;
(k) 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, predatory and abusive lending, equal credit opportunity
or
disclosure laws applicable to the origination and servicing of the Mortgage
Loan
have been complied with. The Mortgagor received all disclosure materials
required by applicable law with respect to the making of mortgage loans of
the
same type as the Mortgage Loan and, if the Mortgage Loan is a refinanced
Mortgage Loan, rescission materials required by applicable laws, and the Company
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. 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;
(l) Fair
Credit Reporting Act.
The
Company has fully furnished, in accordance with the Fair Credit Reporting Act
and its implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on the related Mortgagor’s credit files to Equifax,
Experian, and Trans Union Credit Information Company (three of the credit
repositories), on a monthly basis.
(m) Location
and Type of Mortgaged Property.
The
Mortgaged Property is located in the state identified in the Mortgage Loan
Schedule and consists of a contiguous parcel 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 condominium project, or an individual unit
in a planned unit development, or, in the case of a Mortgage Loan secured by
a
Co-op Share, leases or occupancy agreements, provided, however, that any
condominium project or planned unit development shall conform with the
applicable ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac requirements regarding such dwellings.
None
of the Mortgaged Properties are Manufactured Homes, log homes, mobile homes,
geodesic domes or other unique property types. As of the respective appraisal
date for each Mortgaged Property, no portion of the Mortgaged Property was
being
used for commercial purposes and, to the Company’s knowledge, since the date of
such Appraisal, no portion of the Mortgaged Property has been used for
commercial purposes. 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 meets
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility requirements or is located in a
condominium or planned unit development project which has received ▇▇▇▇▇▇ Mae
or
▇▇▇▇▇▇▇ Mac project approval and the representations and warranties required
by
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac with respect to such condominium or planned unit
development have been made and remain true and correct in all respects. If
the
Mortgaged Property is next to another Mortgaged Property, such “row houses” do
not, in the aggregate for all the Mortgage Loans in the Mortgage Loan Package,
represent more than 1.0% of the aggregate principal balance of such Mortgage
Loans;
22
(n) Valid
First Lien.
The
Mortgage is a valid, subsisting and enforceable first lien on the Mortgaged
Property, including all buildings 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) |
the
lien of current real property taxes and assessments not yet due and
payable;
|
| (2) |
covenants,
conditions and restrictions, rights of way, easements and other matters
of
the public record as of the date of recording acceptable to mortgage
lending institutions generally and specifically referred to in the
lender’s title insurance policy delivered to the Originator of the
Mortgage Loan and (i) referred to or otherwise considered in the
Appraisal
made for the Originator of the Mortgage Loan and (ii) which do not
adversely affect the Appraised Value of the Mortgaged Property set
forth
in such Appraisal;
|
| (3) |
if
the Mortgaged Property consists of Co-op Shares, any lien for amounts
due
to the cooperative housing corporation for unpaid assessments or
charges
or any lien of any assignment of rents or maintenance expenses secured
by
the real property owned by the cooperative housing corporation;
and
|
23
| (4) |
other
matters to which like properties are commonly subject which do not
individually or in the aggregate, 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 and enforceable first lien and first priority security interest
on
the property described therein and the Company has full right to sell and assign
the same to the Purchaser. The Mortgaged Property was not, as of the date of
origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed
to
secured debt or other security instrument creating a lien subordinate to the
lien of the Mortgage;
(o) Full
Disbursement of Proceeds.
The
proceeds of the Mortgage Loan have been fully disbursed to or for the account
of
the Mortgagor, and there is no requirement for future advances thereunder.
Any
and all requirements as to completion of any on-site or off-site improvements
and any and all requirements as to disbursements of escrow funds for such
improvements 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;
(p) Consolidation
of Future Advances.
Any
future advances made prior to the related 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 reflected on the Mortgage Loan Schedule. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as having first
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
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac; the consolidated principal amount does not exceed
the
original principal amount of the Mortgage Loan; the Company shall not make
future advances after the related Cut-off Date;
(q) Ownership.
The
Company is the sole owner and holder of the Mortgage Loan, and the related
Mortgage Note and the Mortgage are not assigned or pledged, and the Company
has
good and marketable title thereto and has full right and authority to transfer
and sell the Mortgage Loan to the Purchaser. The Company is transferring the
Mortgage Loan free and clear of any and all encumbrances, liens, pledges,
equities, participation interests, claims, agreements with other parties to
sell
or otherwise transfer the Mortgage Loan, charges or security interests of any
nature encumbering such Mortgage Loan;
24
(r) Origination/Doing
Business.
The
Mortgage Loan was originated by a savings and loan association, a savings bank,
a commercial bank, a credit union, an insurance company, or similar institution
which is supervised and examined by a federal or state authority or by a
mortgagee approved by the Secretary of Housing and Urban Development pursuant
to
Sections 203 and 211 of the National Housing Act. All parties that 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 (A) organized under the laws of such state, (B) qualified to
do
business in such state, (C) federal savings and loan associations or national
banks having principal offices in such state, or (D) not doing business in
such
state;
(s) LTV,
PMI Policy.
No
Mortgage Loan has a LTV greater than 95%. If a Mortgage Loan had an original
LTV
of 80% or greater, the excess over 75% is and will be insured as to payment
defaults by a PMI Policy until terminated pursuant to the Homeowners Protection
Act of 1998, 12 USC §4901, et seq. 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. The Qualified Insurer has a claims
paying ability acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. 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;
(t) Title
Insurance.
The
Mortgage Loan is covered by an ALTA lender’s title insurance policy, acceptable
to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, or other generally acceptable form of policy
of
insurance acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, 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 Company,
its
successors and assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan, subject only to the exceptions
contained in clauses (1), (2) and (3) of Paragraph (m) of this Section 3.02.
The
Company is the sole insured of the lender’s title insurance policy for each
Mortgage Loan, and such lender’s title insurance policy is in full force and
effect and will be in full 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 Mortgage, including
the Company, has done, by act or omission, anything which would impair the
coverage of such lender’s title insurance policy. In connection with the
issuance of such lender’s title insurance policy, 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
Company;
25
(u) No
Defaults.
There
is
no default, breach, violation or event of 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 of acceleration, and neither the Company
nor
its predecessors have waived any default, breach, violation or event of
acceleration;
(v) 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;
(w) 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;
(x) Payment
Terms.
Principal
payments commenced no more than 60 days after the funds were disbursed to the
Mortgagor in connection with the Mortgage Loan. The Mortgage Loans have an
original term to maturity of not more than 30 years, with interest payable
in
arrears on the first day of each month. Each Mortgage Note requires a monthly
payment which is sufficient, during the period prior to the first adjustment
to
the Mortgage Interest Rate, to fully amortize the outstanding principal balance
as of the first day of such period over the then remaining term of such Mortgage
Note and to pay interest at the related Mortgage Interest Rate;
(y) Customary
Provisions.
The
Mortgage and related Mortgage Note contain customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate for
the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (i) in the case of a Mortgage designated as a
deed
of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure. There
is no homestead or other exemption (other than under the Servicemembers Civil
Relief Act, as amended) 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;
26
(z) Occupancy
of the Mortgaged Property.
As
of the
date of origination, the Mortgaged Property was lawfully occupied under
applicable law and to the best of the Company’s knowledge, the Mortgaged
Property is lawfully occupied as of the Closing Date;
(aa) No
Additional Collateral.
The
Mortgage Note is not and has not been secured by any collateral, pledged account
or other security except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred
to in
Paragraph (n) above;
(bb) Deeds
of Trust.
In
the
event the Mortgage constitutes a deed of trust, a trustee, duly qualified under
applicable law to serve as such, has been properly designated and currently
so
serves and is named in the Mortgage, and no fees or expenses are or will become
payable by the Mortgagee to the trustee under the deed of trust, except in
connection with a trustee’s sale after default by the Mortgagor;
(cc) Acceptable
Investment.
The
Company has no knowledge of any circumstances or conditions with respect to
the
Mortgage Loan, the Mortgaged Property, the Mortgagor or the Mortgagor’s credit
standing that can reasonably be expected to cause private institutional
investors 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;
(dd) Transfer
of Mortgage Loans.
With
respect to each Mortgage that is not recorded in the name of MERS or its
designee, the Assignment of Mortgage, upon the insertion of the name of the
assignee, is in recordable form and is acceptable for recording under the laws
of the jurisdiction in which the Mortgaged Property is located;
(ee) Mortgaged
Property Undamaged.
The
Mortgaged Property is in good repair and 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;
27
(ff) Collection
Practices; Escrow Deposits.
The
origination, servicing and collection practices used with respect to the
Mortgage Loan have been in accordance with Accepted Servicing Practices, and
the
terms of the Mortgage Note and have been in all material respects legal and
proper. With respect to escrow deposits and Escrow Payments, all such payments
are in the possession of the Company 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. No escrow deposits or Escrow Payments or other charges
or
payments due the Company have been capitalized under the Mortgage
Note;
(gg) No
Condemnation.
There
is
no proceeding pending or to the best of the Company’s knowledge threatened for
the total or partial condemnation of the related Mortgaged
Property;
(hh) The
Appraisal.
The
Mortgage Loan Documents contain an Appraisal of the related Mortgaged Property
in a form acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac. The appraisal was made and
signed, prior to the approval of the Mortgage Loan application, by a Qualified
Appraiser (1) who had no interest, direct or indirect, in the Mortgaged Property
or in any loan made on the security thereof, (2) whose compensation is not
affected by the approval or disapproval of the Mortgage Loan, and (3) who met
the minimum qualifications of ▇▇▇▇▇▇ Mae 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;
(ii) Insurance.
All
buildings on the Mortgaged Property are insured by an insurer generally
acceptable to prudent mortgage lending institutions (and to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac) against loss by fire and such hazards as are covered under a
standard extended coverage endorsement and such other hazards as are customary
in the area where the Mortgaged Property is located pursuant to insurance
policies conforming to Accepted Servicing Practices and the requirements of
Section 4.10, in an amount which is not less than the lesser of 100% of the
insurable value of the Mortgaged Property and the outstanding principal balance
of the Mortgage Loan, but in no event less than the minimum amount necessary
to
fully compensate for any damage or loss on a replacement cost basis. If the
Mortgaged Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the project. If the improvements on the
Mortgaged Property are in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, then a
flood insurance policy meeting the requirements of the current guidelines of
the
Federal Insurance Administration is in effect with a generally acceptable
insurance carrier and such policy conforms to the requirements of ▇▇▇▇▇▇ Mae
or
▇▇▇▇▇▇▇ Mac is in effect. Such flood insurance policy is in an amount
representing coverage not less than the least of (A) the outstanding principal
balance of the Mortgage Loan, (B) the full insurable value and (C) the maximum
amount of insurance which was available under the Flood Disaster Protection
Act
of 1973, as amended. All individual insurance policies contain a standard
mortgagee clause naming the Company and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain a 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. Each such
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 Company has not acted or failed to act so as to impair the
coverage of any such insurance policy or the validity, binding effect and
enforceability thereof;
28
(jj) Servicemembers
Civil Relief Act.
The
Mortgagor has not notified the Company, and the Company has no knowledge of
any
relief requested or allowed to the Mortgagor under the Servicemembers Civil
Relief Act, as amended;
(kk) No
Balloon Payments, Graduated Payments or Contingent Interests.
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. No
Mortgage Loan has a balloon payment feature;
(ll) No
Construction Loans.
No
Mortgage Loan was made in connection with (i) the construction or rehabilitation
of a Mortgaged Property or (ii) facilitating the trade-in or exchange of a
Mortgaged Property other than a construction-to-permanent loan which has
converted to a permanent Mortgage Loan;
(mm) Underwriting.
Each
Mortgage Loan was underwritten in accordance with the underwriting guidelines
of
the Company attached as Exhibit
E;
and the
Mortgage Note, the Mortgage and all other documents contained in the Mortgage
Loan Files are on ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac uniform instruments or are on forms
acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ ▇▇▇;
29
(nn) Buydown
Mortgage Loans.
The
Mortgage Loan is not a Buydown Mortgage Loan:
(oo) Delivery
of Mortgage Files.
The
Mortgage Loan Documents for the related Mortgage Loans have been delivered
to
the Custodian. The Company is in possession of a complete Mortgage File for
each
Mortgage Loan in compliance with Exhibit
B,
except
for such documents the originals of which have been delivered to the
Custodian;
(pp) No
Violation of Environmental Laws.
The
Mortgaged Property is free from any and all toxic or hazardous substances and
there exists no violation of any local, state or federal environmental law,
rule
or regulation. There is no pending action or proceeding directly involving
any
Mortgaged Property of which the Company is aware in which compliance with any
environmental law, rule or regulation is an issue; and to the best of the
Company’s knowledge, 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;
(qq) No
Bankruptcy.
No
Mortgagor was a debtor in any state or federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated and, to the best of
the
Company’s knowledge, following the date of origination of the Mortgage Loan, the
Mortgagor with respect to the Mortgage Loan was not a debtor in any state or
federal bankruptcy or insolvency proceeding, and the Mortgaged Property has
not
been subject to any bankruptcy or foreclosure proceedings;
(rr) Texas
Refinance Mortgage Loans.
Article
XVI, Section 50(a)(6) of the Texas Constitution is not applicable to the
Mortgage Loan or the origination thereof. If the Mortgage Loan was originated
in
Texas, it is not a cash-out refinancing;
(ss) The
Mortgagor.
The
Mortgagor is one or more natural persons and/or trustees for an Illinois land
trust or a trustee under a “living trust” and such “living trust” is in
compliance with the ▇▇▇▇▇▇ Mae Guides or the ▇▇▇▇▇▇▇ Mac Guide. In the event
the
Mortgagor is a trustee, the borrower is a natural person;
30
(tt) Homeownership
and Equity Protection Act.
No
Mortgage Loan is (a) a “high cost” loan under the Home Ownership and Equity
Protection Act of 1994 as amended, or (b) a “high cost,” “threshold,”
“predatory,” “abusive,” or similarly defined loan, including refinance loans,
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), provided that any Mortgage
Loan
secured by a Mortgaged Property in Illinois characterized as a “threshold” loan
shall not be a “high cost” loan unless it is characterized as “predatory” under
applicable local law; the Seller has implemented and conducted compliance
procedures to determine if each Mortgage Loan is "high-cost” home loan under the
applicable laws and performed a review of the disclosure provided to the related
Mortgagor in accordance with such laws and the related Mortgage Note in order
to
determine that such Mortgage Loan, if subject to any such law, does not violate
any such law;
(uu) Georgia
Mortgage Loans.
No
Mortgage Loan secured by property located in Georgia and originated on or after
October 1, 2002 and prior to March 7, 2003 meets the definition of a “home loan”
under the Georgia Fair Lending Act;
(vv) Kentucky
Mortgage Loans.
No
Mortgage Loan secured by property located in the Commonwealth of Kentucky and
originated on or after June 24, 2003 had an original principal amount of
$200,000 or less;
(ww) Oakland,
California Mortgage Loans.
No
Mortgage Loan is subject to Ordinance No. 12361 passed by the City of Oakland,
California;
(xx) New
Jersey Mortgage Loans.
Each
Mortgage Loan secured by property located within the State of New Jersey and
subject to the provisions of the New Jersey Home Ownership Security Act of
2002
(the “NJ Act”) (i) is either a purchase money mortgage loan or a rate-term
refinancing and (ii) does not meet definition of a (A) “Covered Home Loan,”
except for a Mortgage Loan that is (x) a purchase money mortgage loan and (y)
neither a “High-Cost Home Loan” nor a “Manufactured Home Loan” under the NJ Act,
(B) “High-Cost Home Loan,” (C) “Home Improvement Loan” or (D) “Manufactured
Housing Loan” under the NJ Act;
31
(yy) New
Mexico Loans.
No
Mortgage Loan secured by property located in the State of New Mexico and
originated on or after January 1, 2004 meets the definition of a “home loan”
under The Home Loan Protection Act;
(zz) Qualified
Mortgages.
Each
Mortgage Loan is a “qualified mortgage” within Section 860G(a)(3) of the
Code;
(aaa) Leaseholds.
The
Mortgage Loan is not secured by a leasehold estate;
(bbb) FICO
Scores.
Each
Mortgage Loan has a non-zero FICO score and a minimum FICO score of
620;
(ccc) No
Prepayment Penalties.
No
Mortgage Loan provides for the payment of a Prepayment Premium or charge in
connection with a Principal Prepayment;
(ddd) Interest
Calculation.
Interest
on each Mortgage Loan is calculated on the basis of a 360-day year consisting
of
twelve 30-day months;
(eee) Due
on
Sale.
The
Mortgage contains an enforceable provision, to the extent not prohibited by
federal law as of the date of such Mortgage, 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;
(fff) Flood
Certification Contract.
The
Company has obtained a life of loan, transferable flood certification contract
with an Approved Flood Policy Insurer acceptable to Purchaser in its sole
discretion for each Mortgage Loan and such contract is assignable without
penalty, premium or cost to the Purchaser;
(ggg) Single
Premium Credit Life Insurance.
None
of
the proceeds of the Mortgage Loan were used to finance single premium credit
life insurance policies; and
32
(hhh) Tax
Service Contracts.
The
Company has obtained a life of loan, transferable real estate Tax Service
Contract on each Mortgage Loan with an Approved Tax Servicer Contract Provider
and such contract is assignable without penalty, premium or cost to the
Purchaser.
Section
3.03 Repurchase.
It
is
understood and agreed that the representations and warranties set forth in
Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to the
Purchaser and the delivery of the Mortgage Loan Documents to the Custodian
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 Company or the Purchaser of any materially defective Mortgage Loan Document
(“Defective Document”) or a breach of any of the foregoing representations and
warranties that materially and adversely affects the value of a Mortgage Loan
or
the interest of the Purchaser (or that materially and adversely affects the
interests of Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such Defective Document or a breach shall give prompt written notice
to the other. Any such breach or Defective Document that causes a Mortgage
Loan
not to be a “qualified mortgage” within the meaning of Section 860G(a)(3) of the
Code shall be deemed to materially and adversely affect the interests of the
Purchaser.
Within
30
days of the earlier of either discovery by or notice to the Company of any
Defective Document or a breach of a representation or warranty which materially
and adversely affects the value of a Mortgage Loan or the interest of the
Purchaser therein, the Company shall use its best efforts promptly to cure
such
breach in all material respects and, if such Defective Document or breach cannot
be cured, the Company shall, at the Purchaser’s option, repurchase such Mortgage
Loan at the Repurchase Price. In the event that a breach shall involve any
representation or warranty set forth in Section 3.01, and such breach
cannot be cured within ninety (90) days of the earlier of either discovery
by or
notice to the Company of such breach, all of the Mortgage Loans shall, at the
Purchaser’s option, be repurchased by the Company at the Repurchase Price.
However, if the breach or Defective Document shall involve a representation
or
warranty set forth in Section 3.02 and the Company discovers or receives notice
of any such breach within ninety (90) days of the related Closing Date, the
Company shall, if the breach or Defective Document cannot be cured, at the
Company’s option, 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 one hundred twenty (120) days
after the related Closing Date. Notwithstanding any of the foregoing, if a
breach would cause the Mortgage Loan to be other than a “qualified mortgage,” as
defined in Section 860G(a)(3) of the Code, any such repurchase or substitution
must occur within sixty (60) days from the date the breach or Defective Document
was discovered unless such breach or Defective Document is cured during such
period.
33
If
the
Company has no Qualified Substitute Mortgage Loan, it shall repurchase the
deficient Mortgage Loan within sixty (60) days after the written notice of
the
breach or Defective Document. Notwithstanding the above sentence, within sixty
(60) days after the earlier of either discovery by, or notice to, the Company
of
any breach of the representations or warranties set forth in Section 3.02
related to a predatory or abusive lending law, the Company shall repurchase
such
Mortgage Loan at the Repurchase Price. Any repurchase of a Mortgage Loan or
Loans pursuant to the foregoing provisions of this Section 3.03 shall occur
on a
date designated by the Purchaser and shall be accomplished by 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 Mortgage Loans
and being held in the Custodial Account for future distribution.
At
the
time of repurchase or substitution, the Purchaser and the Company shall arrange
for the reassignment of the Deleted Mortgage Loan to the Company and the
delivery to the Company of any documents held by the Custodian relating to
the
Deleted Mortgage Loan. In the event of a repurchase or substitution, the Company
shall, simultaneously with such reassignment, give written notice to the
Purchaser that such repurchase or substitution has taken place, amend the
related 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 Company 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 Company shall effect such substitution by delivering to the
Custodian for such Qualified Substitute Mortgage Loan the documents required
by
Section 2.03, with the Mortgage Note endorsed as required by Section 2.03.
No
substitution will be made in any calendar month after the Determination Date
for
such month. The Company shall deposit in the Custodial Account the Monthly
Payment less the Servicing Fee due 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 Company. With respect to any Deleted Mortgage Loan,
distributions to the Purchaser shall include the Monthly Payment due on any
Deleted Mortgage Loan in the month of substitution, and the Company shall
thereafter be entitled to retain all amounts subsequently received by the
Company in respect of such Deleted Mortgage Loan.
For
any
month in which the Company substitutes one or more Qualified Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the amount (if any) by which
the
aggregate principal balance of all such Qualified Substitute Mortgage Loans
as
of the date of substitution is less than the aggregate Stated Principal Balance
of all such Deleted Mortgage Loans (after application of the principal portion
of the Monthly Payments due in the month of substitution) shall be deposited
into the Custodial Account by the Company on or before the Remittance Date
in
the month succeeding the calendar month during which the related Mortgage Loan
is required to be purchased or replaced hereunder.
34
In
addition to such repurchase or substitution obligation, the Company shall
indemnify the Purchaser and hold it 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 representations and warranties of the Company contained in this Agreement.
It is understood and agreed that the obligations of the Company set forth in
this Section 3.03 to cure, substitute for or repurchase a defective Mortgage
Loan and to indemnify the Purchaser as provided in this Section 3.03 constitute
the sole remedies of the Purchaser respecting a breach of the foregoing
representations and warranties.
Any
cause
of action against the Company relating to or arising out of the breach of any
representations and warranties made in Sections 3.01 and 3.02 shall accrue
as to
any Mortgage Loan upon (i) discovery of such breach by the Purchaser or notice
thereof by the Company to the Purchaser, (ii) failure by the Company to cure
such breach or repurchase such Mortgage Loan as specified above, and (iii)
demand upon the Company by the Purchaser for compliance with this
Agreement.
Section
3.04 Repurchase
of Mortgage Loans With First Payment Defaults.
If
the
related Mortgagor is thirty (30) days or more delinquent with respect to a
Monthly Payment under a Mortgage Loan at any time prior to the expiration of
the
Holding Period for such Mortgage Loan, the Company shall, at the Purchaser’s
option, repurchase such Loan from the Purchaser in accordance with Section
3.03
hereof; provided that the Company shall not be required to repurchase such
Mortgage Loan if it can demonstrate to the Purchaser’s reasonable satisfaction
within thirty (30) days of such reported delinquency that the related Mortgagor
timely made all payments required of the Mortgagor but such payment was
otherwise misapplied.
Section
3.05 Purchase
Price Protection.
With
respect to any Mortgage Loan that prepays in full at any time prior to the
expiration of the Holding Period for such Mortgage Loan, the Company shall
reimburse the Purchaser, within thirty (30) days following the prepayment in
full of such Mortgage Loan, the amount (if any) by which the portion of the
Purchase Price paid by the Purchaser to the Company for such Mortgage Loan
exceeded 100% of the outstanding scheduled principal balance of the Mortgage
Loan as of the related Cut-off Date, provided,
that
the Purchaser shall provide to the Company a statement of the amount to be
reimbursed hereunder no later than sixty (60) days after the Company provides
written notice of such prepayment to the Purchaser.
Section
3.06 Review
of Mortgage Loans.
From
the
related Closing Date until the date thirty (30) days after the related Closing
Date, the Purchaser shall have the right to review the Mortgage Files and obtain
BPOs on the Mortgaged Properties relating to the Mortgage Loans purchased on
the
related Closing Date, with the results of such BPO reviews to be communicated
to
the Company for a period up to thirty (30) days after the related Closing Date.
In addition, the Purchaser shall have the right to reject any Mortgage Loan
which in the Purchaser’s sole determination (i) fails to conform to the
Underwriting Guidelines, (ii) NIV/NAC has no credit report or FICO Score, or
(iii) the value of the Mortgaged Property pursuant to any BPO varies by more
than plus or minus 15% from the lesser of (A) the original appraised value
of
the Mortgaged Property or (B) the purchase price of the Mortgaged Property
as of
the date of origination of the related Mortgage Loan. In the event that the
Purchaser so rejects any Mortgage Loan, the Company shall repurchase the
rejected Mortgage Loan at the Repurchase Price in the manner prescribed in
Section 3.03 upon receipt of notice from the Purchaser of the rejection of
such
Mortgage Loan. Any rejected Mortgage Loan shall be removed from the terms of
this Agreement. The Company shall make available all files required by Purchaser
in order to complete its review, including all CRA/HMDA required data fields.
To
the extent that during the course of the Purchaser’s initial review, the
Purchaser discovers that the Mortgage Loans do not otherwise meet the
Underwriting Guidelines or the terms of this Agreement, the Purchaser shall
have
the right to carry out additional due diligence reviews, which additional due
diligence shall be at the expense of the Company. Purchaser’s decision to
increase its due diligence review or obtain additional BPO’s or other property
evaluations is at its sole discretion. The additional review may be for any
reason including but not limited to credit quality, property valuations, and
data integrity. Any review performed by the Purchaser prior to the Closing
Date
shall not limit the Purchaser’s rights or the Company’s obligations under this
section.
35
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
4.01 Company
to Act as Servicer.
(a) The
Company, as an independent contractor, shall service and administer the Mortgage
Loans, all in accordance with the terms of this Agreement, Accepted Servicing
Practices, applicable law and the terms of the Mortgage Notes and Mortgages.
In
connection with such servicing and administration, the Company shall have full
power and authority, acting alone or through Subservicers, to do or cause to
be
done any and all things in connection with such servicing and administration
which the Company may deem necessary or desirable, including, without
limitation, the power and authority (1) to execute and deliver, on behalf of
the
Purchaser, customary consents or waivers and other instruments and documents,
(2) to consent, with respect to the Mortgage Loans it services, to transfers
of
any Mortgaged Property and assumptions of the Mortgage Notes and related
Mortgages (but only in the manner provided in this Agreement), (3) to collect
any Insurance Proceeds and other Liquidation Proceeds relating to the Mortgage
Loans it services, and (4) to effectuate foreclosure or other conversion of
the
ownership of the Mortgaged Property securing any Mortgage Loan it services.
The
Servicer shall represent and protect the interests of the Purchaser in the
same
manner as it protects its own interests in mortgage loans in its own portfolio
in any claim, proceeding or litigation regarding a Mortgage Loan and shall
not
make or permit any modification, waiver or amendment of any term of any Mortgage
Loan, except as provided pursuant to Section 4.21. Without limiting the
generality of the foregoing, the Company shall continue, and is hereby
authorized and empowered, to execute and deliver on behalf of itself and the
Purchaser, all instruments of satisfaction or cancellation, or of partial or
full release, discharge and all other comparable instruments, with respect
to
the Mortgage Loans and with respect to the Mortgaged Properties. If reasonably
required by the Company, the Purchaser shall furnish the Company with any powers
of attorney and other documents necessary or appropriate to enable the Company
to carry out its servicing and administrative duties under this
Agreement.
36
(b) The
Company may arrange for the subservicing of any Mortgage Loan it services by
a
Subservicer pursuant to a Subservicing Agreement; provided,
however,
that
such subservicing arrangement and the terms of the related Subservicing
Agreement must provide for the servicing of such Mortgage Loan in a manner
consistent with the servicing arrangements contemplated hereunder. The Company
shall be solely liable for all fees owed to the Subservicer under the
Subservicing Agreement, regardless whether the Company’s compensation hereunder
is adequate to pay such fees. Notwithstanding the provisions of any Subservicing
Agreement, any of the provisions of this Agreement relating to agreements or
arrangements between the Company and a Subservicer or reference to actions
taken
through a Subservicer or otherwise, the Company shall remain obligated and
liable to the Purchaser for the servicing and administration of the Mortgage
Loans it services in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue of such Subservicing
Agreements or arrangements or by virtue of indemnification from the Subservicer
and to the same extent and under the same terms and conditions as if the Company
alone were servicing and administering those Mortgage Loans. All actions of
each
Subservicer performed pursuant to the related Subservicing Agreement shall
be
performed as agent of the Company with the same force and effect as if performed
directly by the Company. For purposes of this Agreement, the Company shall
be
deemed to have received any collections, recoveries or payments with respect
to
the Mortgage Loans it services that are received by a Subservicer regardless
of
whether such payments are remitted by the Subservicer to the Company. Any
Subservicing Agreement entered into by the Company shall provide that it may
be
assumed or terminated by the Purchaser, if the Purchaser has assumed the duties
of the Company, or by any successor servicer, at the Purchaser’s or successor
servicer’s option, as applicable, without cost or obligation to the assuming or
terminating party or its assigns. Any Subservicing Agreement, and any other
transactions or services relating to the Mortgage Loans involving a Subservicer,
shall be deemed to be between the Company and such Subservicer alone, and the
Purchaser shall not be deemed parties thereto and shall have no claims or rights
of action against, rights, obligations, duties or liabilities to or with respect
to the Subservicer or its officers, directors or employees, except as set forth
in Section 4.01(a).
Section
4.02 Liquidation
of Mortgage Loans.
In
the
event that any payment due under any Mortgage Loan and not postponed pursuant
to
Section 4.01 is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period,
the
Company shall take such action as (1) the Company would take under similar
circumstances with respect to a similar mortgage loan held for its own account
for investment, (2) shall be consistent with Accepted Servicing Practices,
(3)
the Company shall determine prudently to be in the best interest of Purchaser,
and (4) is consistent with any related PMI Policy. In the event that any payment
due under any Mortgage Loan is not postponed pursuant to Section 4.01 and
remains delinquent for a period of 90 days or any other default continues for
a
period of 90 days beyond the expiration of any grace or cure period, the Company
shall commence foreclosure proceedings, the Company shall first notify the
Purchaser in writing of the Company’s intention to do so and shall provide such
information regarding the Mortgage Loan as the Purchaser may reasonably request,
provided that the Company shall not commence foreclosure proceedings if the
Purchaser objects to such action within three (3) Business Days of receiving
such notice. The Company shall follow any written directions of the Purchaser
with respect to the servicing of such Mortgage Loan, as long as such directions
do not violate applicable law. In the event the Purchaser objects to such
foreclosure action, the Company shall not be required to make Monthly Advances
with respect to such Mortgage Loan, pursuant to Section 5.03, and the Company’s
obligation to make such Monthly Advances shall terminate on the 90th day
referred to above. In such connection, the Company shall from its own funds
make
all necessary and proper Servicing Advances, provided, however, that the Company
shall not be required to expend its own funds in connection with any foreclosure
or towards the restoration or preservation of any Mortgaged Property, unless
it
shall determine (a) that such preservation, restoration and/or foreclosure
will
increase the proceeds of liquidation of the Mortgage Loan to Purchaser after
reimbursement to itself for such expenses and (b) that such expenses will be
recoverable by it either through Liquidation Proceeds (respecting which it
shall
have priority for purposes of withdrawals from the Custodial Account pursuant
to
Section 4.05) or through Insurance Proceeds (respecting which it shall have
similar priority).
37
Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure
or
acceptance of a deed in lieu of foreclosure, in the event the Company has
reasonable cause to believe that a Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, or if the Purchaser otherwise requests
an environmental inspection or review of such Mortgaged Property, such an
inspection or review is to be conducted by a qualified inspector. The cost
for
such inspection or review shall be borne by the Purchaser. Upon completion
of
the inspection or review, the Company shall promptly provide the Purchaser
with
a written report of the environmental inspection.
After
reviewing the environmental inspection report, the Purchaser shall determine
how
the Company shall proceed with respect to the Mortgaged Property. In the event
(a) the environmental inspection report indicates that the Mortgaged Property
is
contaminated by hazardous or toxic substances or wastes and (b) the Purchaser
directs the Company to proceed with foreclosure or acceptance of a deed in
lieu
of foreclosure, the Company shall be reimbursed for all reasonable costs
associated with such foreclosure or acceptance of a deed in lieu of foreclosure
and any related environmental clean up costs, as applicable, from the related
Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully
reimburse the Company, the Company shall be entitled to be reimbursed from
amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event
the Purchaser directs the Company not to proceed with foreclosure or acceptance
of a deed in lieu of foreclosure, the Company shall be reimbursed for all
Servicing Advances made with respect to the related Mortgaged Property from
the
Custodial Account pursuant to Section 4.05 hereof.
Section
4.03 Collection
of Mortgage Loan Payments.
Continuously
from the date hereof until the principal and interest on all Mortgage Loans
are
paid in full, in accordance with this Agreement and Accepted Servicing
Standards, the Company shall proceed diligently to collect all payments due
under each of the Mortgage Loans when the same shall become due and payable
and
shall take special care in ascertaining and estimating Escrow Payments and
all
other charges that will become due and payable with respect to the Mortgage
Loan
and the Mortgaged Property, to the end that the installments payable by the
Mortgagors will be sufficient to pay such charges as and when they become due
and payable.
38
Consistent
with the foregoing, the Company may in its discretion (i) waive any late payment
charge or any prepayment charge or penalty interest in connection with the
prepayment of a Mortgage Loan it services and (ii) extend the due dates for
payments due on a Mortgage Note for a period not greater than 120 days;
provided,
however,
that
the Company cannot extend the maturity of any such Mortgage Loan past the date
on which the final payment is due on the latest maturing Mortgage Loan as of
the
related Cut-off Date. In the event of any such arrangement, the Company shall
make Monthly Advances on the related Mortgage Loan in accordance with the
provisions of Section 5.03 during the scheduled period in accordance with the
amortization schedule of such Mortgage Loan without modification thereof by
reason of such arrangements. The Company shall not be required to institute
or
join in litigation with respect to collection of any payment (whether under
a
Mortgage, Mortgage Note or otherwise or against any public or governmental
authority with respect to a taking or condemnation) if it reasonably believes
that enforcing the provision of the Mortgage or other instrument pursuant to
which such payment is required is prohibited by applicable law.
Section
4.04 Establishment
of and Deposits to Custodial Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Custodial Accounts, in the form
of
time deposit or demand accounts, titled “SunTrust Mortgage, Inc., in trust for
Banc of America Mortgage Capital Corporation and/or subsequent purchasers of
Mortgage Loans, and various Mortgagors - P & I.” The Custodial Account shall
be established with a Qualified Depository. Upon request of the Purchaser and
within ten (10) days thereof, the Company shall provide the Purchaser with
written confirmation of the existence of such Custodial Account. Any funds
deposited in the Custodial Account shall at all times be insured to the fullest
extent allowed by applicable law. Funds deposited in the Custodial Account
may
be drawn on by the Company in accordance with Section 4.05.
The
Company shall deposit in the Custodial Account within one Business Day of
Company’s receipt, and retain therein, the following collections received by the
Company and payments made by the Company after the related Cut-off Date, other
than payments of principal and interest due on or before the related Cut-off
Date, or received by the Company prior to the related Cut-off Date but allocable
to a period subsequent thereto:
| (i) |
all
payments on account of principal on the Mortgage Loans, including
all
Principal Prepayments;
|
| (ii) |
all
payments on account of interest on the Mortgage Loans adjusted to
the
Mortgage Loan Remittance Rate;
|
| (iii) |
all
Liquidation Proceeds;
|
| (iv) |
all
Insurance Proceeds including amounts required to be deposited pursuant
to
Section 4.10 (other than proceeds to be held in the Escrow Account
and
applied to the restoration or repair of the Mortgaged Property or
released
to the Mortgagor in accordance with Section 4.14), Section 4.11 and
Section 4.15;
|
39
| (v) |
all
Condemnation Proceeds which are not applied to the restoration or
repair
of the Mortgaged Property or released to the Mortgagor in accordance
with
Section 4.14;
|
| (vi) |
any
amount required to be deposited in the Custodial Account pursuant
to
Section 3.05, 4.01, 4,10, 5.03, 6.01 or
6.02;
|
| (vii) |
any
amounts payable in connection with the repurchase of or substitution
for
any Mortgage Loan pursuant to Section 3.03 or
3.04;
|
| (viii) |
with
respect to each Principal Prepayment an amount (to be paid by the
Company
out of its funds) which, when added to all amounts allocable to interest
received in connection with the Principal Prepayment, equals one
month’s
interest on the amount of principal so prepaid at the Mortgage Loan
Remittance Rate; provided,
however,
that in no event shall the aggregate of deposits made by the Company
pursuant to this clause (viii) exceed the aggregate amount of the
Servicing Fee for the related calendar month, whether or not received
from
the Mortgagor;
|
| (ix) |
any
amounts required to be deposited by the Company pursuant to Section
4.11
in connection with the deductible clause in any blanket hazard insurance
policy; and
|
| (x) |
any
amounts received with respect to or related to any REO Property and
all
REO Disposition Proceeds pursuant to Section
4.16.
|
The
foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Company into the Custodial Account. Any interest paid on funds deposited in
the
Custodial Account by the depository institution shall accrue to the benefit
of
the Company and the Company shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.05. The Company shall
maintain adequate records with respect to all deposits and withdrawals made
pursuant to this Section 4.04 and Section 4.05. All funds required to be
deposited in the Custodial Account shall be held in trust for the Purchaser
until withdrawn in accordance with Section 4.05.
Section
4.05 Permitted
Withdrawals From Custodial Account.
The
Company shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
| (i) |
to
make payments to the Purchaser in the amounts and in the manner provided
for in Section 5.01;
|
| (ii) |
to
reimburse itself for Monthly Advances of the Company’s funds made pursuant
to Section 5.03, the Company’s right to reimburse itself pursuant to this
subclause (ii) being limited to amounts received on the related Mortgage
Loan which represent late payments of principal and/or interest respecting
which any such advance was made, it being understood that, in the
case of
any such reimbursement, the Company’s right thereto shall be prior to the
rights of Purchaser, except that, where the Company is required to
repurchase a Mortgage Loan pursuant to Section 3.03, 3.04 or 6.02,
the
Company’s right to such reimbursement shall be subsequent to the payment
to the Purchaser of the Repurchase Price pursuant to such sections
and all
other amounts required to be paid to the Purchaser with respect to
such
Mortgage Loan;
|
40
| (iii) |
to
reimburse itself for unreimbursed Servicing Advances, and for any
unpaid
Servicing Fees, the Company’s right to reimburse itself pursuant to this
subclause (iii) with respect to any Mortgage Loan being limited to
related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and
such
other amounts as may be collected by the Company from the Mortgagor
or
otherwise relating to the Mortgage Loan, it being understood that,
in the
case of any such reimbursement, the Company’s right thereto shall be prior
to the rights of Purchaser, except that where the Company is required
to
repurchase a Mortgage Loan pursuant to Section 3.03, 3.04 or 6.02,
in
which case the Company’s right to such reimbursement shall be subsequent
to the payment to the Purchaser of the Repurchase Price pursuant
to such
sections and all other amounts required to be paid to the Purchaser
with
respect to such Mortgage Loan;
|
| (iv) |
to
pay itself as part of its servicing compensation interest on funds
deposited in the Custodial Account;
|
| (v) |
to
reimburse itself for expenses incurred and reimbursable to it pursuant
to
Section 8.01;
|
| (vi) |
to
pay any amount required to be paid pursuant to Section 4.16 related
to any
REO Property, it being understood that, in the case of any such
expenditure or withdrawal related to a particular REO Property, the
amount
of such expenditure or withdrawal from the Custodial Account shall
be
limited to amounts on deposit in the Custodial Account with respect
to the
related REO Property;
|
| (vii) |
to
reimburse itself for any Servicing Advances or REO expenses after
liquidation of the Mortgaged Property not otherwise reimbursed
above;
|
| (viii) |
to
remove funds inadvertently placed in the Custodial Account by the
Company;
and
|
| (ix) |
to
clear and terminate the Custodial Account upon the termination of
this
Agreement.
|
In
the
event that the Custodial Account is interest bearing, on each Remittance Date,
the Company shall withdraw all funds from the Custodial Account except for
those
amounts which, pursuant to Section 5.01, the Company is not obligated to remit
on such Remittance Date. The Company may use such withdrawn funds only for
the
purposes described in this Section 4.05.
The
Company shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Custodial Account.
41
Section
4.06 Establishment
of and Deposits to Escrow Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan constituting Escrow Payments separate and apart from any of its
own funds and general assets and shall establish and maintain one or more Escrow
Accounts, in the form of time deposit or demand accounts, titled, “SunTrust
Mortgage, Inc., in trust for Banc of America Mortgage Capital Corporation and/or
subsequent purchasers of Mortgage Loans, and various Mortgagors - T & I.”
The Escrow Accounts shall be established with a Qualified Depository, in a
manner which shall provide maximum available insurance thereunder. Upon request
of the Purchaser and within ten (10) days thereof, the Company shall provide
the
Purchaser with written confirmation of the existence of such Escrow Account.
Funds deposited in the Escrow Account may be drawn on by the Company in
accordance with Section 4.07.
The
Company shall deposit in the Escrow Account or Accounts within two (2) Business
Days of Company’s receipt, and retain therein:
| (i) |
all
Escrow Payments collected on account of the Mortgage Loans, for the
purpose of effecting timely payment of any such items as required
under
the terms of this Agreement; and
|
| (ii) |
all
amounts representing Insurance Proceeds or Condemnation Proceeds
which are
to be applied to the restoration or repair of any Mortgaged
Property.
|
The
Company shall be entitled to retain any interest paid on funds deposited in
the
Escrow Account by the depository institution, other than interest on escrowed
funds required by law to be paid to the related Mortgagor. To the extent
required by law, the Company shall pay interest on escrowed funds to the related
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing
or
that interest paid thereon is insufficient for such purposes.
Section
4.07 Permitted
Withdrawals From Escrow Account.
The
Company shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in this Section
4.07.
Withdrawals
from the Escrow Account or Accounts may be made by the Company
only:
| (i) |
to
effect timely payments of ground rents, taxes, assessments, water
rates,
mortgage insurance premiums, condominium charges, fire and hazard
insurance premiums or other items constituting Escrow Payments for
the
related Mortgage;
|
| (ii) |
to
reimburse the Company for any Servicing Advances made by the Company
pursuant to Section 4.08 with respect to a related Mortgage Loan,
but only
from amounts received on the related Mortgage Loan which represent
late
collections of Escrow Payments
thereunder;
|
| (iii) |
to
refund to any Mortgagor any funds found to be in excess of the amounts
required under the terms of the related Mortgage
Loan;
|
42
| (iv) |
for
transfer to the Custodial Account and application to reduce the principal
balance of the Mortgage Loan in accordance with the terms of the
related
Mortgage and Mortgage Note;
|
| (v) |
for
application to the restoration or repair of the Mortgaged Property
in
accordance with the procedures outlined in Section
4.14;
|
| (vi) |
to
pay to the Company, or any Mortgagor to the extent required by law,
any
interest paid on the funds deposited in the Escrow
Account;
|
| (vii) |
to
remove funds inadvertently placed in the Escrow Account by the Company;
and
|
| (viii) |
to
clear and terminate the Escrow Account on the termination of this
Agreement.
|
Section
4.08 Payment
of Taxes, Insurance and Other Charges.
With
respect to each Mortgage Loan, the Company shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates, sewer
rents, and other charges which are or may become a lien upon the related
Mortgaged Property and the status of PMI Policy premiums and fire and hazard
insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges (including renewal premiums) and shall effect payment
thereof prior to the applicable penalty or termination date, employing for
such
purpose deposits of the Mortgagor in the Escrow Account which shall have been
estimated and accumulated by the Company in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage. The Company assumes full
responsibility for the timely payment of all such bills and shall effect timely
payment of all such charges irrespective of each Mortgagor’s faithful
performance in the payment of same of the making of the Escrow Payments, and
the
Company shall make advances from its own funds to effect such payments, which
advances shall constitute Servicing Advances hereunder; provided that the
Company shall be required to so advance only to the extent that the Company,
in
its good faith judgment, believes the Servicing Advance to be recoverable from
Insurance Proceeds or Liquidation Proceeds or otherwise. The costs incurred
by
the Company, if any, in effecting the timely payments of taxes and assessments
on the Mortgaged Properties and related insurance premiums shall not be added
to
the Stated Principal Balances of the related Mortgage Loans, notwithstanding
that the terms of such Mortgage Loans so permit.
Section
4.09 Transfer
of Accounts.
The
Company may transfer the Custodial Account or the Escrow Account to a different
Qualified Depository from time to time; provided that the Company shall give
notice to the Purchaser of any proposed change of the location of either Account
not later than 30 days and not more than 45 days prior to any change
thereof.
Section
4.10 Maintenance
of Hazard Insurance.
43
The
Company shall cause to be maintained for each Mortgage Loan hazard insurance
such that all buildings upon the Mortgaged Property are insured by an insurer
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac against loss by fire, hazards of
extended coverage and such other hazards as are customary or required by law
in
the area where the Mortgaged Property is located, in an amount which is at
least
equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the proceeds
thereof shall be sufficient to prevent the Mortgagor or the loss payee from
becoming a co-insurer. In the event a hazard insurance policy shall be in danger
of being terminated, or in the event the insurer shall cease to be acceptable
to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, the Company shall notify the Purchaser and the
related Mortgagor, and shall use its best efforts, as permitted by applicable
law, to obtain from another qualified insurer a replacement hazard insurance
policy substantially and materially similar in all respects to the original
policy. In no event, however, shall a Mortgage Loan be without a hazard
insurance policy at any time, subject only to Section 4.11 hereof.
If
upon
origination of the Mortgage Loan, the related Mortgaged Property was located
in
an area identified by the Flood Emergency Management Agency as having special
flood hazards (and such flood insurance has been made available) a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect with a generally acceptable
insurance carrier acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac in an amount
representing coverage equal to the lesser of (i) the minimum amount required,
under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended.
If
a
Mortgage is secured by a unit in a condominium project, the Company shall verify
that the coverage required of the owner’s association, including hazard, flood,
liability, and fidelity coverage, is being maintained in accordance with then
current ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac requirements, and secure from the owner’s
association its agreement to notify the Company promptly of any change in the
insurance coverage or of any condemnation or casualty loss that may have a
material effect on the value of the Mortgaged Property as security.
In
the
event that any Purchaser or the Company shall determine that the Mortgaged
Property should be insured against loss or damage by hazards and risks not
covered by the insurance required to be maintained by the Mortgagor pursuant
to
the terms of the Mortgage, the Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor’s attention the desirability of protection of the Mortgaged
Property.
All
policies required hereunder shall name the Company as loss payee and shall
be
endorsed with standard or union mortgagee clauses, without contribution, which
shall provide for at least 30 days prior written notice of any cancellation,
reduction in amount or material change in coverage.
The
Company shall not interfere with the Mortgagor’s freedom of choice in selecting
either his insurance carrier or agent, provided, however, that the Company
shall
not accept any such insurance policies from insurance companies unless such
companies are acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and are licensed to do
business in the jurisdiction in which the Mortgaged Property is located. The
Company shall determine that such policies provide sufficient risk coverage
and
amounts, that they insure the property owner, and that they properly describe
the property address.
44
Pursuant
to Section 4.04, any amounts collected by the Company under any such policies
(other than amounts to be deposited in the Escrow Account and applied to the
restoration or repair of the related Mortgaged Property, or property acquired
in
liquidation of the Mortgage Loan, or to be released to the Mortgagor, in
accordance with the Company’s normal servicing procedures as specified in
Section 4.14) shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.05.
Section
4.11 Maintenance
of Mortgage Impairment Insurance.
In
the
event that the Company shall obtain and maintain a blanket policy insuring
against losses arising from fire and hazards covered under extended coverage
on
all of the Mortgage Loans, then, to the extent such policy (1) names the Company
as loss payee, (2) provides coverage in an amount equal to the amount required
pursuant to Section 4.10 without coinsurance, and (3) otherwise complies with
Accepted Servicing Practices and all other requirements of Section 4.10, it
shall conclusively be deemed to have satisfied its obligations as set forth
in
Section 4.10. The Company shall prepare and make any claims on the blanket
policy as deemed necessary by the Company in accordance with prudent servicing
practices. Any amounts collected by the Company under any such policy relating
to a Mortgage Loan shall be deposited in the Custodial Account subject to
withdrawal pursuant to Section 4.05. Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained
on
the related Mortgaged Property a policy complying with Section 4.10, and there
shall have been a loss which would have been covered by such policy, the Company
shall deposit in the Custodial Account at the time of such loss the amount
not
otherwise payable under the blanket policy because of such deductible clause,
such amount to be deposited from the Company’s funds, without reimbursement
therefor. Upon request of any Purchaser, the Company shall cause to be delivered
to such Purchaser a certified true copy of such policy and a statement from
the
insurer thereunder that such policy shall in no event be terminated or
materially modified without 30 days’ prior written notice to such
Purchaser.
Section
4.12 Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
The
Company shall maintain with responsible companies, at its own expense, a blanket
Fidelity Bond and an Errors and Omissions Insurance Policy, with broad coverage
on all officers, employees or other persons acting in any capacity requiring
such persons to handle funds, money, documents or papers relating to the
Mortgage Loans (“Company Employees”). Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker’s Blanket
Bond and shall protect and insure the Company against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
Company Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy
also shall protect and insure the Company against losses in connection with
the
release or satisfaction of a Mortgage Loan without having obtained payment
in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the Company from its duties and obligations as set forth
in
this Agreement. The minimum coverage under any such Fidelity Bond and Errors
and
Omissions Insurance Policy shall be at least equal to the amounts acceptable
to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. Upon the request of any Purchaser, the Company shall
cause to be delivered to such Purchaser a certificate of insurance for such
Fidelity Bond and Errors and Omissions Insurance Policy and a statement from
the
surety and the insurer that such Fidelity Bond and Errors and Omissions
Insurance Policy shall in no event be terminated or materially modified without
30 days’ prior written notice to the Purchaser.
45
Section
4.13 Inspections.
If
any
Mortgage Loan is more than 60 days delinquent, the Company immediately shall
inspect the Mortgaged Property and shall conduct subsequent inspections in
accordance with Accepted Servicing Practices or as may be required by the
primary mortgage guaranty insurer. The Company shall keep a written report
of
each such inspection.
Section
4.14 Restoration
of Mortgaged Property.
The
Company need not obtain the approval of the Purchaser prior to releasing any
Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to
the restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. For claims greater than $15,000,
at a minimum the Company shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation
Proceeds:
| (i) |
the
Company shall receive satisfactory independent verification of completion
of repairs and issuance of any required approvals with respect
thereto;
|
| (ii) |
the
Company shall take all steps necessary to preserve the priority of
the
lien of the Mortgage, including, but not limited to requiring waivers
with
respect to mechanics’ and materialmen’s
liens;
|
| (iii) |
the
Company shall verify that the Mortgage Loan is not in default;
and
|
| (iv) |
pending
repairs or restoration, the Company shall place the Insurance Proceeds
or
Condemnation Proceeds in the Escrow
Account.
|
If
the
Purchaser is named as an additional loss payee, the Company is hereby empowered
to endorse any loss draft issued in respect of such a claim in the name of
the
Purchaser.
Section
4.15 Maintenance
of PMI Policy; Claims.
If
a
Mortgage Loan has original LTV of 80% or greater, the Company shall, without
any
cost to the Purchaser maintain or cause the Mortgagor to maintain in full force
and effect a PMI Policy insuring the portion over 75% until terminated pursuant
to the Homeowners Protection Act of 1998, 12 USC §4901, et seq. In the event
that such PMI Policy shall be terminated other than as required by law, the
Company shall obtain from another Qualified Insurer a comparable replacement
policy, with a total coverage equal to the remaining coverage of such terminated
PMI Policy. If the insurer shall cease to be a Qualified Insurer, the Company
shall determine whether recoveries under the PMI Policy are jeopardized for
reasons related to the financial condition of such insurer, it being understood
that the Company shall in no event have any responsibility or liability for
any
failure to recover under the PMI Policy for such reason. If the Company
determines that recoveries are so jeopardized, it shall notify the Purchaser
and
the Mortgagor, if required, and obtain from another Qualified Insurer a
replacement insurance policy. The Company shall not take any action which would
result in noncoverage under any applicable PMI Policy of any loss which, but
for
the actions of the Company would have been covered thereunder. In connection
with any assumption or substitution agreement entered into or to be entered
into
pursuant to Section 6.01, the Company shall promptly notify the insurer under
the related PMI Policy, if any, of such assumption or substitution of liability
in accordance with the terms of such PMI Policy and shall take all actions
which
may be required by such insurer as a condition to the continuation of coverage
under such PMI Policy. If such PMI Policy is terminated as a result of such
assumption or substitution of liability, the Company shall obtain a replacement
PMI Policy as provided above.
46
In
connection with its activities as servicer, the Company agrees to prepare and
present, on behalf of itself and the Purchaser, claims to the insurer under
any
PMI Policy in a timely fashion in accordance with the terms of such PMI Policy
and, in this regard, to take such action as shall be necessary to permit
recovery under any PMI Policy respecting a defaulted Mortgage Loan. Pursuant
to
Section 4.04, any amounts collected by the Company under any PMI Policy shall
be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
Section
4.16 Title,
Management and Disposition of REO Property.
In
the
event that title to any Mortgaged Property is acquired in foreclosure or by
deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in the
name of the Purchaser or, upon the written request of the Purchaser, the name
of
the Purchaser’s nominee, who shall have all rights of the Purchaser herein with
respect to such REO Property. The Person or Persons holding such title other
than the Purchaser shall acknowledge in writing that such title is being held
as
nominee for the Purchaser.
The
Company shall manage, conserve, protect and operate each REO Property for the
Purchaser solely for the purpose of its prompt disposition and sale. However,
the Purchaser shall have the option to manage and operate the REO Property
provided the Purchaser gives written notice of its intention to do so within
sixty (60) days after such REO Property is acquired in foreclosure or by deed
in
lieu of foreclosure. The election by the Purchaser to manage the REO Property
shall not constitute a termination of any rights and obligations of the Company
pursuant to Section 11.02.
If
the
Purchaser does not elect to manage and operate the REO Property, the Company
shall manage, conserve, protect and operate each REO Property for the Purchaser
solely for the purpose of its prompt disposition and sale. The Company, either
itself or through an agent selected by the Company, shall manage, conserve,
protect and operate the REO Property in the same manner that it manages,
conserves, protects and operates other foreclosed property for its own account,
and in the same manner that similar property in the same locality as the REO
Property is managed. The Company shall attempt to sell the same (and may
temporarily rent the same for a period not greater than one year, except as
otherwise provided below) on such terms and conditions as the Company deems
to
be in the best interest of the Purchaser.
47
The
Company shall use its best efforts to dispose of the REO Property as soon as
possible and shall sell such REO Property in any event within one year after
title has been taken to such REO Property, unless (i) a REMIC election has
not
been made with respect to the arrangement under which the Mortgage Loans and
the
REO Property are held, and (ii) the Company determines, and gives an appropriate
notice to the Purchaser to such effect, that a longer period is necessary for
the orderly liquidation of such REO Property. If a period longer than one year
is permitted under the foregoing sentence and is necessary to sell any REO
Property, (i) the Company shall report monthly to the Purchaser as to the
progress being made in selling such REO Property and (ii) if, with the written
consent of the Purchaser, a purchase money mortgage is taken in connection
with
such sale, such purchase money mortgage shall name the Company as mortgagee,
and
such purchase money mortgage shall not be held pursuant to this Agreement,
but
instead a separate participation agreement among the Company and Purchaser
shall
be entered into with respect to such purchase money mortgage.
The
Company shall also maintain on each REO Property fire and hazard insurance
with
extended coverage in amount which is at least equal to the maximum insurable
value of the improvements which are a part of such property, liability insurance
and, to the extent required and available under the Flood Disaster Protection
Act of 1973, as amended, flood insurance in the amount required
above.
The
disposition of REO Property shall be carried out by the Company at such price,
and upon such terms and conditions, as the Company deems to be in the best
interests of the Purchaser. The proceeds of sale of the REO Property shall
be
promptly deposited in the Custodial Account. As soon as practical thereafter
the
expenses of such sale shall be paid and the Company shall reimburse itself
for
any related unreimbursed Servicing Advances, unpaid Servicing Fees and
unreimbursed advances made pursuant to Section 5.03. On the Remittance Date
immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Purchaser.
The
Company shall withdraw from the Custodial Account funds necessary for the proper
operation, management and maintenance of the REO Property, including the cost
of
maintaining any hazard insurance pursuant to Section 4.10 and the fees of any
managing agent of the Company. Any REO management fee shall be an amount that
is
reasonable and customary in the area where the Mortgaged Property is located.
The Company shall make monthly distributions on each Remittance Date to the
Purchaser of the net cash flow from the REO Property (which shall equal the
revenues from such REO Property net of the expenses described in this Section
4.16 and of any reserves reasonably required from time to time to be maintained
to satisfy anticipated liabilities for such expenses).
Section
4.17 Real
Estate Owned Reports.
Together
with the statement furnished pursuant to Section 5.02, the Company shall furnish
to the Purchaser on or before the Remittance Date each month a statement with
respect to any REO Property covering the operation of such REO Property for
the
previous month and the Company’s efforts in connection with the sale of such REO
Property and any rental of such REO Property incidental to the sale thereof
for
the previous month. That statement shall be accompanied by such other
information as the Purchaser shall reasonably request.
48
Section
4.18 Liquidation
Reports.
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by the
Company pursuant to a deed in lieu of foreclosure, the Company shall submit
to
the Purchaser a liquidation report with respect to such Mortgaged
Property.
Section
4.19 Reports
of Foreclosures and Abandonments of Mortgaged Property.
Following
the foreclosure sale or abandonment of any Mortgaged Property, the Company
shall
report such foreclosure or abandonment as required pursuant to Section 6050J
of
the Code. The Company shall file information reports with respect to the receipt
of mortgage interest received in a trade or business, reports of foreclosures
and abandonments of any Mortgaged Property and information returns relating
to
cancellation of indebtedness income with respect to any Mortgaged Property
as
required by the Code. Such reports shall be in form and substance sufficient
to
meet the reporting requirements imposed by the Code.
Section
4.20 RESERVED.
Section
4.21 Modifications,
Waivers, Amendments and Consents.
(a) Subject
to this Section 4.21, the Company may agree to any modification, waiver,
forbearance, or amendment of any term of any Mortgage Loan without the consent
of the Purchaser. All modifications, waivers, forbearances or amendments of
any
Mortgage Loan shall be in writing and shall be consistent with Accepted
Servicing Practices.
(b) The
Company shall not agree to enter into, and shall not enter into, any
modification, waiver, forbearance or amendment of any term of any Mortgage
Loan
if such modification, waiver, forbearance, or amendment would:
(i) affect
the amount or timing of any related payment of principal, interest or other
amount payable thereunder;
(ii) in
the
Company’s judgment, materially impair the security for such Mortgage Loan or
reduce the likelihood of timely payment of amounts due thereon; or
(iii) otherwise
constitutes a “significant modification” within the meaning of Treasury
Regulations Section 1.860G-2(b);
unless,
in each case, (A) such Mortgage Loan is 90 days or more past due or (B) the
Company delivers to the Purchaser an Opinion of Counsel to the effect that
such
modification, waiver, forbearance or amendment would not affect the REMIC status
of the Trust Estate and, in either case, such modification, waiver, forbearance
or amendment is reasonably likely to produce a greater recovery with respect
to
such Mortgage Loan than would liquidation. Subject to Accepted Servicing
Practices, the Company may permit a forbearance for a Mortgage Loan which,
in
the Company’s judgment, is subject to imminent default.
49
(c) Any
payment of interest, which is deferred pursuant to any modification, waiver,
forbearance or amendment permitted hereunder, shall not, for purposes hereof,
be
added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan or such modification,
waiver or amendment so permit.
(d) The
Company may, as a condition to granting any request by a Mortgagor for consent,
modification, waiver, forbearance or amendment, the granting of which is within
the Company’s discretion pursuant to the Mortgage Loan and is permitted by the
terms of this Agreement, require that such Mortgagor pay to the Company, as
additional servicing compensation, a reasonable or customary fee for the
additional services performed in connection with such request, together with
any
related costs and expenses incurred by the Company, which amount shall be
retained by the Company as additional servicing compensation.
(e) The
Company shall notify the Purchaser, in writing, of any modification, waiver,
forbearance or amendment of any term of any Mortgage Loan and the date thereof,
and shall deliver to the Purchaser (or, at the direction of the Purchaser,
the
Custodian) for deposit in the related Mortgage File, an original counterpart
of
the agreement relating to such modification, waiver, forbearance or amendment,
promptly (and in any event within ten Business Days) following the execution
thereof; provided,
however,
that if
any such modification, waiver, forbearance or amendment is required by
applicable law to be recorded, the Company (i) shall deliver to the Purchaser
a
copy thereof and (ii) shall deliver to the Purchaser such document, with
evidence of notification upon receipt thereof from the public recording
office.
Section
4.22 Disaster
Recovery/Business Continuity Plan.
The
Company shall establish and maintain contingency plans, recovery plans and
proper risk controls to ensure Company’s continued performance under this
Agreement. The plans must be in place within thirty (30) calendar days after
the
date of this Agreement and shall include, but not be limited to, testing,
control functions, accountability and corrective actions to be immediately
implemented, if necessary. The Company agrees to make copies or summaries of
the
plans available to the Purchaser or its regulators upon request.
Section
4.23 Fair
Credit Reporting Act.
The
Company shall furnish, in accordance with the Fair Credit Reporting Act and
its
implementing regulations, accurate and complete information (i.e., favorable
and
unfavorable) on each Mortgagor’s credit files to Equifax, Experian, and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis.
50
ARTICLE
V
PAYMENTS
TO PURCHASER
Section
5.01 Remittances.
On
each
Remittance Date the Company shall remit by wire transfer of immediately
available funds to the Purchaser (a) all amounts deposited in the Custodial
Account as of the close of business on the Determination Date (net of charges
against or withdrawals from the Custodial Account pursuant to Section 4.05),
plus (b) all amounts, if any, which the Company is obligated to distribute
pursuant to Section 5.03, minus (c) any amounts attributable to Principal
Prepayments received after the applicable Principal Prepayment Period which
amounts shall be remitted on the following Remittance Date, together with any
additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 4.04(viii);
minus (d) any amounts attributable to Monthly Payments collected but due on
a
Due Date or Dates subsequent to the first day of the month of the Remittance
Date, which amounts shall be remitted on the Remittance Date next succeeding
the
Due Period for such amounts.
With
respect to any remittance received by the Purchaser after the Remittance Date
on
which such payment was due, the Company shall pay to the Purchaser interest
on
any such late payment at an annual rate equal to the Prime Rate, adjusted as
of
the date of each change, plus three percentage points, but in no event greater
than the maximum amount permitted by applicable law. Such interest shall be
deposited in the Custodial Account by the Company on the date such late payment
is made and shall cover the period commencing with the day following the
Business Day on which such payment was due and ending with the Business Day
on
which such payment is made, both inclusive. Such interest shall be remitted
along with the distribution payable on the next succeeding Remittance Date.
The
payment by the Company of any such interest shall not be deemed an extension
of
time for payment or a waiver of any Event of Default by the
Company.
Section
5.02 Automated
Servicing Systems and Statements to Purchaser.
The
Company shall setup, format, maintain and transmit to the Purchaser the
Company’s Servicing File and other electronic data storage and transmission
systems related to the Mortgage Loans (collectively, the “Servicing Systems”) in
accordance with the guidelines and requirements set forth in Exhibit
J
attached
hereto (the “Servicer Requirements”), and the Company shall cooperate with the
Purchaser to receive data from the Purchaser that is to be incorporated in
the
Servicing Systems in accordance with the Servicer Requirements.
Not
later
than the third (3rd) Business Day of each month, the Company shall furnish
to
the Purchaser, with respect to the preceding month, a monthly collection report,
a monthly paid in full report that summarizes Mortgage Loans paid in full during
the Due Period and a monthly trial balance report that provides a trial balance
as of the last day of the month preceding such Remittance Date in electronic
format agreed upon by the Company and the Purchaser.
51
Not
later
than the fifth (5th) Business Day of each month, the Company shall furnish
to
the Purchaser a delinquency report and a monthly remittance advice, including
the information set forth in Exhibit
F,
in both
a physical form and a mutually agreeable electronic format, as to the remittance
on such Remittance Date and as to the period ending on the last day of the
month
preceding such Remittance Date.
Section
5.03 Monthly
Advances by Company.
No
later
than the close of business on the Business Day preceding each Remittance Date,
the Company shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution an amount equal to all Monthly Payments
(with interest adjusted to the Mortgage Loan Remittance Rate) which were due
on
the Mortgage Loans during the applicable Due Period and which were delinquent
at
the close of business on the related Determination Date or which were deferred
pursuant to Section 4.01. Any amounts held for future distribution and so used
shall be replaced by the Company by deposit in the Custodial Account on or
before any future Remittance Date if funds in the Custodial Account on such
Remittance Date shall be less than payments to the Purchaser required to be
made
on such Remittance Date. The Company’s obligation to make such Monthly Advances
as to any Mortgage Loan will continue through the last Monthly Payment due
prior
to the payment in full of the Mortgage Loan, or through the earlier of: (i)
the
last Remittance Date prior to the Remittance Date for the distribution of all
Liquidation Proceeds and other payments or recoveries (including Insurance
Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan; and
(ii)
the Remittance Date prior to the date the Mortgage Loan is converted to REO
Property, provided however, that if requested by a Rating Agency in connection
with a securitization, the Company shall be obligated to make such advances
through the Remittance Date prior to the date on which cash is received in
connection with the liquidation of REO Property; and provided further, however,
that any such obligation under this Section 5.03 shall cease if the Company
determines, in its sole reasonable opinion, that any Monthly Advances would
be
Nonrecoverable Monthly Advances if made. In the event that the Company
determines that any such advances would be Nonrecoverable Monthly Advances,
the
Company shall provide the Purchaser with a certificate signed by two officers
of
the Company evidencing such determination.
ARTICLE
VI
GENERAL
SERVICING PROCEDURES
Section
6.01 Due-on-Sale
Provision and Assumptions.
The
Company shall use its best efforts to enforce any “due-on-sale” provision
contained in any Mortgage or Mortgage Note and to deny assumption by the person
to whom the Mortgaged Property has been or is about to be sold whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note. When the Mortgaged
Property has been conveyed by the Mortgagor, the Company shall, to the extent
it
has knowledge of such conveyance, exercise its rights to accelerate the maturity
of such Mortgage Loan under the “due-on-sale” clause applicable thereto,
provided, however, that the Company shall not exercise such rights if prohibited
by law from doing so or if the exercise of such rights would impair or threaten
to impair any recovery under the related PMI Policy, if any.
52
If
the
Company reasonably believes it is unable under applicable law to enforce such
“due-on-sale” clause or that either a decision not to exercise the “due-on-sale”
provision or a decision to permit an assumption of the Mortgage Loan is in
the
best interest of the Purchaser, the Company shall enter into (i) an assumption
and modification agreement with the person to whom such property has been
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and the original Mortgagor remains liable thereon or (ii) in the event the
Company is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note and the Company has the prior consent
of
the primary mortgage guaranty insurer, a substitution of liability agreement
with the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged Property
is substituted as Mortgagor and becomes liable under the Mortgage Note. The
Company shall notify the Purchaser that any such substitution of liability
or
assumption agreement has been completed by forwarding to the Purchaser the
original of any such substitution of liability or assumption agreement, which
document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as
all
other documents and instruments constituting a part thereof. If an assumption
fee is collected by the Company for entering into an assumption agreement such
fee will be retained by the Company as additional servicing compensation. In
connection with any such assumption, neither the Mortgage Interest Rate borne
by
the related Mortgage Note, the term of the Mortgage Loan, the outstanding
principal amount of the Mortgage Loan nor any other material terms shall be
changed without Purchaser’s consent.
To
the
extent that any Mortgage Loan is assumable, the Company shall inquire diligently
into the credit worthiness of the proposed transferee, and shall use the
underwriting criteria for approving the credit of the proposed transferee which
are used by ▇▇▇▇▇▇ ▇▇▇ with respect to underwriting mortgage loans of the same
type as the Mortgage Loans. If the credit worthiness of the proposed transferee
does not meet such underwriting criteria, the Company diligently shall, to
the
extent permitted by the Mortgage or the Mortgage Note and by applicable law,
accelerate the maturity of the Mortgage Loan.
Section
6.02 Satisfaction
of Mortgages and Release of Mortgage Files.
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Company of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Company immediately shall notify the Purchaser and shall
request the release of any Mortgage Loan Documents.
If
the
Company satisfies or releases a Mortgage without first having obtained payment
in full of the indebtedness secured by the Mortgage or should the Company
otherwise prejudice any rights the Purchaser may have under the mortgage
instruments, upon written demand of the Purchaser, the Company shall repurchase
the related Mortgage Loan at the Repurchase Price by deposit thereof in the
Custodial Account within one Business Day of receipt of such demand by the
Purchaser. The Company shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 4.12 insuring the Company against
any loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
53
Section
6.03 Servicing
Compensation.
As
compensation for its services hereunder, the Company shall be entitled to retain
the Servicing Fee from interest payments on the related Mortgage Loans or to
withdraw from the Custodial Account the amount of the Servicing Fee with respect
to the related Mortgage Loans pursuant to Section 4.05. The Servicing Fee shall
be payable monthly and shall be computed on the basis of the same unpaid
scheduled principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is computed. The obligation of the Purchaser
to pay the Servicing Fee is limited to, and payable solely from, the interest
portion of such Monthly Payments. Notwithstanding the foregoing, with respect
to
the payment of the Servicing Fee for any month, the aggregate Servicing Fee
shall be reduced (but not below zero) by an amount equal to the Prepayment
Interest Shortfall for the related Due Period.
Additional
servicing compensation in the form of assumption fees, to the extent provided
in
Section 6.01, late payment charges and other ancillary income shall be retained
by the Company to the extent not required to be deposited in the Custodial
Account. The Company shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled
to
reimbursement thereof except as specifically provided for herein.
Section
6.04 Annual
Statement as to Compliance.
The
Company shall deliver to the Purchaser, not later than the earlier of March
15
of each year or the fifteenth (15th)
day
prior to the date the Purchaser is required to make its annual report to the
Securities and Exchange Commission (in each case, if such day is not a Business
Day, the next succeeding Business Day), an Officer’s Certificate, stating that
(i) a review of the activities of the Company during the preceding calendar
year
and of performance under this Agreement or similar agreements has been made
under such officer’s supervision, and (ii) to the best of such officer’s
knowledge, based on such review, the Company has fulfilled all its obligations
under, and complied fully with the provisions of, this Agreement throughout
such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and the action being taken by the Company to cure such
default.
Section
6.05 Annual
Independent Public Accountants’ Servicing Report.
Not
later
than the earlier of March 15 of each year or the fifteenth (15th)
day
prior to the date the Purchaser is required to make its annual report to the
Securities and Exchange Commission (in each case, if such day is not a Business
Day, the next succeeding Business Day), the Company, at its expense, shall
cause
a firm of independent public accountants which is a member of the American
Institute of Certified Public Accountants to furnish a statement to the
Purchaser to the effect that such firm has examined certain documents and
records relating to the servicing of residential mortgage loans by the Company
during the last fiscal year and that such firm is of the opinion that the
provisions of this or similar Agreements have been complied with, and that,
on
the basis of such examination conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers, nothing has come to
their attention which would indicate that such servicing has not been conducted
in compliance therewith, except for (i) such exceptions as such firm shall
believe to be immaterial, and (ii) such other exceptions as shall be set forth
in such statement. By providing the Purchaser a copy of a Uniform Single
Attestation Program Report from their independent public accountant’s on an
annual basis, the Company shall be considered to have fulfilled its obligations
under this Section 6.05.
54
Section
6.06 Right
to Examine Company Records.
The
Purchaser, or its designee, shall have the right to examine and audit any and
all of the related books, records, or other information of the Company, whether
held by the Company or by another on its behalf, with respect to or concerning
this Agreement or the Mortgage Loans, during business hours or at such other
times as may be reasonable under applicable circumstances, upon reasonable
advance notice. The Purchaser shall pay its own travel expenses associated
with
such examination.
Section
6.07 Compliance
with REMIC Provisions.
If
a
REMIC election has been made with respect to the arrangement under which the
Mortgage Loans and REO Property are held, the Company shall not take any action,
cause the REMIC to take any action or fail to take (or fail to cause to be
taken) any action that, under the REMIC Provisions, if taken or not taken,
as
the case may be, could (i) endanger the status of the REMIC as a REMIC or (ii)
result in the imposition of a tax upon the REMIC (including but not limited
to
the tax on “prohibited transactions” as defined in Section 860 (a) (2) of the
Code and the tax on “contributions” to a REMIC set forth in Section 860(d) of
the Code) unless the Company has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
ARTICLE
VII
COMPANY
TO COOPERATE
Section
7.01 Provision
of Information.
During
the term of this Agreement, the Company shall furnish to the Purchaser such
periodic, special, or other reports or information, and copies or originals
of
any documents contained in the Servicing File for each Mortgage Loan provided
for herein. All such reports, documents or information shall be provided by
and
in accordance with all reasonable instructions and directions which the
Purchaser may give. Upon request from the Purchaser, the Company shall deliver
no later than thirty (30) days after such request any Servicing File or document
therein, or copies thereof, to the Purchaser at the direction of the Purchaser.
The Purchaser shall return any original Servicing File or document therein
delivered pursuant to this Section no later than ten (10) days after receipt
thereof. In the event that the Company fails to make delivery of the requested
Servicing File or document therein, or copies thereof, as required under this
Section, the Company shall repurchase, pursuant to Section 3.03 of this
Agreement, the related Mortgage Loan within thirty (30) days of a request to
do
so by the Purchaser.
55
In
addition, during the term of this Agreement, the Company shall provide to the
OCC and to comparable regulatory authorities supervising the Purchaser or any
of
Purchaser’s assigns (including beneficial owners of securities issued in
Pass-Through Transfers backed by the Mortgage Loans) and the examiners and
supervisory agents of the OCC and such other authorities, access to the
documentation required by applicable regulations of the OCC and other comparable
regulatory authorities supervising the Purchaser or any of is assigns with
respect to the Mortgage Loans. Such access shall be afforded without charge,
so
long as the expense of providing such reports, documents or information is
reasonable, but only upon reasonable and prior written request and during normal
business hours at the offices designated by the Company.
The
Company shall execute and deliver all such instruments and take all such action
as the Purchaser may reasonably request from time to time, in order to
effectuate the purposes and to carry out the terms of this
Agreement.
Section
7.02 Financial
Statements; Servicing Facility.
In
connection with marketing the Mortgage Loans, the Purchaser may make available
to a prospective purchaser the audited financial statements of the Company,
which shall include information relating to the Company, for the most recently
completed two fiscal years for which such financial statements are available,
as
well as a Consolidated Statement of Condition at the end of the last two fiscal
years covered by such Consolidated Statement of Operations. The Company also
shall make available any comparable interim statements to the extent any such
statements have been prepared by or on behalf of the Company (and are available
upon request to members or stockholders of the Company or to the public at
large).
The
Company also shall make available to the Purchaser or prospective purchaser
a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Company or the financial
statements of the Company, and to permit any prospective purchaser to inspect
the Company’s servicing facilities for the purpose of satisfying such
prospective purchaser that the Company has the ability to service the Mortgage
Loans as provided in this Agreement.
Section
7.03 Cooperation
with Third-party Service Providers.
The
Company shall cooperate with the Purchaser in servicing the Mortgage Loans
in
accordance with the usual and customary requirements of any credit enhancement,
risk management and other service providers and shall otherwise cooperate with
the Purchaser in
connection with such third-party service providers and the provision of
third-party services; provided,
however,
that
such requirements are reasonably acceptable to the Company and pose no greater
risk, obligation or expense to the Company than otherwise set forth in this
Agreement. Any additional costs and/or expenses will be paid by the
requesting party.
56
ARTICLE
VIII
THE
COMPANY
Section
8.01 Indemnification;
Third Party Claims.
The
Company shall indemnify the Purchaser and hold it harmless against any and
all
claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Purchaser may sustain in any way related to the failure of the Company
to perform its duties and service the Mortgage Loans in strict compliance with
the terms of this Agreement. The Company immediately shall notify the Purchaser
if a claim is made by a third party with respect to this Agreement or the
Mortgage Loans, assume (with the prior written consent of the 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 Company shall follow any written instructions received from the
Purchaser in connection with such claim. The Purchaser promptly shall reimburse
the Company for all amounts advanced by it pursuant to the preceding sentence
except when the claim is in any way related to the Company’s indemnification
pursuant to Section 3.03, or the failure of the Company to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement. The provisions of this Section 8.01(a) shall survive termination
of
this Agreement.
Section
8.02 Merger
or Consolidation of the Company.
The
Company shall keep in full effect its existence, rights and franchises as a
corporation, and shall obtain and preserve its qualification to do business
as a
foreign corporation in each jurisdiction in which such qualification is or
shall
be necessary to protect the validity and enforceability of this Agreement or
any
of the Mortgage Loans and to perform its duties under this
Agreement.
Any
person into which the Company may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Company
shall be a party, or any Person succeeding to the business of the Company,
shall
be the successor of the Company hereunder, without the execution or filing
of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided, however, that the successor
or
surviving Person shall be an institution (i) having a GAAP net worth of not
less
than $25,000,000, (ii) the deposits of which are insured by the FDIC, SAIF
and/or BIF and (iii) who is a ▇▇▇▇▇▇ Mae/▇▇▇▇▇▇▇ Mac-approved company in good
standing. Furthermore, in the event the Company transfers or otherwise disposes
of all or substantially all of its assets to an affiliate of the Company, such
affiliate shall satisfy the condition above, and shall also be fully liable
to
the Purchaser for all of the Company’s obligations and liabilities
hereunder.
Section
8.03 Limitation
on Liability of Company and Others.
57
Neither
the Company nor any of the directors, officers, employees or agents of the
Company shall be under any liability to the Purchaser for any action taken
or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment, provided, however, that this provision
shall not protect the Company or any such person against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with any standard of care set forth in this Agreement
or
any other liability which would otherwise be imposed under this Agreement.
The
Company and any director, officer, employee or agent of the Company may rely
in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Company
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans
in
accordance with this Agreement and which in its opinion may involve it in any
expense or liability, provided, however, that the Company may, with the consent
of the Purchaser, undertake any such action which it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto. In such event, the Company shall be entitled to reimbursement from
the
Purchaser of the reasonable legal expenses and costs of such action, unless
any
such costs result from a breach of the Company’s representations and warranties
made herein or its failure to perform its obligations in compliance with this
Agreement.
Section
8.04 Limitation
on Resignation and Assignment by Company.
The
Purchaser has entered into this Agreement with the Company and subsequent
purchasers will purchase the Mortgage Loans in reliance upon the independent
status of the Company, and the representations as to the adequacy of its
servicing facilities, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore,
the
Company shall neither assign this Agreement or the servicing hereunder or
delegate its rights or duties hereunder or any portion hereof (except as
permitted by Section 4.01(b)) or sell or otherwise dispose of all of its
property or assets without the prior written consent of the Purchaser, which
consent shall not be unreasonably withheld.
Except
to
the extent provided in Section 4.01 and 8.02, the Company shall not resign
from
the obligations and duties hereby imposed on it except by mutual consent of
the
Company and the Purchaser or upon the determination that its duties hereunder
are no longer permissible under applicable law and such incapacity cannot be
cured by the Company. Any such determination permitting the resignation of
the
Company shall be evidenced by an Opinion of Counsel to such effect delivered
to
the Purchaser which Opinion of Counsel shall be in form and substance acceptable
to the Purchaser. No such resignation shall become effective until a successor
shall have assumed the Company’s responsibilities and obligations hereunder in
the manner provided in Section 12.01.
Without
in any way limiting the generality of this Section 8.04, in the event that
the
Company either shall assign this Agreement or the servicing responsibilities
hereunder or delegate its duties hereunder or any portion thereof or sell or
otherwise dispose of all or substantially all of its property or assets, without
the prior written consent of the Purchaser, then the Purchaser shall have the
right to terminate this Agreement upon notice given as set forth in Section
10.01, without any payment of any penalty or damages and without any liability
whatsoever to the Company or any third party.
58
ARTICLE
IX
PASS-THROUGH
AND WHOLE LOAN TRANSFERS
Section
9.01 Removal
of Mortgage Loans from Inclusion Under this Agreement.
The
Purchaser and the Company agree that with respect to some or all of the Mortgage
Loans, the Purchaser, at its sole option, may effect one or more Whole Loan
Transfers or Pass-Through Transfers, retaining the Company as the servicer
thereof or subservicer if a master servicer is employed, or as applicable the
“seller/servicer.” On the Reconstitution Date, the Mortgage Loans transferred
shall cease to be serviced by the Company pursuant to this Agreement; provided,
however, that, in the event that any Mortgage Loan transferred pursuant to
this
Section 9.01 is rejected by the transferee, the Company shall continue to
service such rejected Mortgage Loan on behalf of the Purchaser in accordance
with the terms and provisions of this Agreement.
The
Company shall cooperate with the Purchaser in connection with each Whole Loan
Transfer or Pass-Through Transfer in accordance with this Section 9.01. In
connection therewith the Company shall:
| (a) |
make
all representations and warranties made herein with respect to the
Mortgage Loans as of the related Closing Date and with respect to
the
Company itself as of the closing date of each Whole Loan Transfer
or
Pass-Through Transfer and, in the event of a Pass-Through Transfer
occurring with 12 months of the related Closing Date or such later
period
as specified in the related Purchase Price and Terms Letter, the
representations and warranties set forth in Section 3.02 of this
Agreement
with respect to the Mortgage Loans subject to such Pass-Through Transfer
as of the date of such Pass-Through Transfer, modified to the extent
necessary to accurately reflect the pool statistics of the Mortgage
Loans
as of the date of such Pass-Through Transfer and any events or
circumstances existing subsequent to the related Closing
Date(s);
|
| (b) |
if
necessary, execute an Assignment, Assumption and Recognition Agreement
or
at the option of the Purchaser, negotiate in good faith and execute
any
pooling and servicing agreement or similar agreements necessary to
effectuate the foregoing provided such agreements create no greater
obligation or cost on the part of the Company than otherwise set
forth in
this Agreement or materially and adversely alters the Company’s rights
hereunder;
|
| (c) |
make
representations and warranties (1) that the Company has serviced
the
Mortgage Loans in accordance with the terms of this Agreement, provided
accurate statements to the Purchaser pursuant to Section 5.02 of
this
Agreement, and otherwise complied with all covenants and obligations
hereunder and (2) that the Company has taken no action nor omitted
to take
any required action the omission of which would have the effect of
impairing any mortgage insurance or guarantee on the Mortgage Loans,
and
(3) regarding the accuracy of the information provided to the Purchaser
by
the Company on or before the closing date of the applicable Whole
Loan
Transfer or Pass-Through Transfer;
|
59
| (d) |
provide
as applicable:
|
| (i) |
any
and all information and appropriate verification of information which
may
be reasonably available to the Company, including information regarding
the Company’s foreclosure, delinquency and loss experience and the
Company’s underwriting standards, whether through letters of its auditors
and counsel or otherwise, as the Purchaser shall request;
and
|
| (ii) |
such
additional opinions of counsel, letters from auditors, and certificates
of
public officials or officers of the Company as are reasonably believed
necessary by the trustee, any rating agency or any credit enhancement
provider, as the case may be, in connection with Whole-Loan Transfers
or
Pass-Through Transfers; provided, however, that the Purchaser shall
pay
the reasonable third-party costs associated with the preparation
of the
foregoing information;
|
| (e) |
indemnify
the Purchaser for any material misstatements or omissions contained
in the
information provided pursuant to (d) above;
and
|
| (f) |
with
respect to any Mortgage Loans that are subject to a Pass-Through
Transfer,
unless otherwise provided in the related pooling and servicing agreement
or similar agreement, the Company shall (i) cause the servicing officer
in
charge of servicing for the Company to execute and deliver a certification
(the “SEC Certification”) in the format attached hereto as Exhibit
K,
which at Purchaser’s option shall be (A) attached to any Form 10-K’s filed
with the Securities and Exchange Commission (“SEC”) in connection with the
related securitization trust (or similar transaction) or (B) provided
to the Purchaser and such other Persons as are specified in the pooling
and servicing agreement or similar agreement, and (ii) indemnify
the
Purchaser for losses in connection with or relating to the inaccuracy
of
the SEC Certification provided by the
Company.
|
In
the
event the Purchaser has elected to have the Company hold record title to the
Mortgages, prior to the Reconstitution Date the Company shall prepare an
Assignment of Mortgage in blank or to the trustee from the Company acceptable
to
the Purchaser or the trustee for each Mortgage Loan that is part of the Whole
Loan Transfers or Pass-Through Transfers. The Company shall pay all preparation
and recording costs associated therewith if the Assignments of Mortgage have
not
been previously prepared and recorded in Purchaser’s name. The Company shall
execute each Assignment of Mortgage and record or deliver them as required
by
the Purchaser or the trustee. Additionally, the Company shall prepare and
execute, at the direction of the Purchaser, any note endorsements in connection
with any pooling and servicing agreements.
60
All
Mortgage Loans not sold or transferred pursuant to Whole Loan Transfers or
Pass-Through Transfers shall remain subject to this Agreement and shall continue
to be serviced in accordance with the terms of this Agreement and with respect
thereto this Agreement shall remain in full force and effect. It is understood
that the Company shall not be required to service the Mortgage Loans included
in
any Mortgage Loan Package for more than five (5) separate purchasers at any
one
time.
ARTICLE
X
DEFAULT
Section
10.01 Events
of Default.
Each
of
the following shall constitute an Event of Default on the part of the
Company:
| (i) |
any
failure by the Company to remit to the Purchaser any payment required
to
be made under the terms of this Agreement which continues unremedied
for a
period of one (1) Business Day after the date upon which written
notice of
such failure, requiring the same to be remedied, shall have been
given to
the Company by the Purchaser or, the Company first becomes aware
of such
failure; or
|
| (ii) |
failure
by the Company duly to observe or perform in any material respect
any
other of the covenants or agreements on the part of the Company set
forth
in this Agreement, including but not limited to breach by the Company
of
any one or more of the representations, warranties and covenants
of the
Company as set forth in Section 3.01 of this Agreement which continues
unremedied for a period of thirty (30) days after the date on which
written notice of such failure, requiring the same to be remedied,
shall
have been given to the Company by the Purchaser or by the Custodian;
or
|
| (iii) |
failure
by the Company to maintain its license to do business in any jurisdiction
where the Mortgaged Property is located if such license is required;
or
|
| (iv) |
a
decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for
the
winding-up or liquidation of its affairs, shall have been entered
against
the Company and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days;
or
|
| (v) |
the
Company shall consent to the appointment of a conservator or receiver
or
liquidator in any insolvency, readjustment of debt, marshaling of
assets
and liabilities or similar proceedings of or relating to the Company
or of
or relating to all or substantially all of its assets;
or
|
| (vi) |
the
Company shall admit in writing its inability to pay its debts generally
as
they become due, file a petition to take advantage of any applicable
insolvency, bankruptcy or reorganization statute, make an assignment
for
the benefit of its creditors, voluntarily suspend payment of its
obligations or cease its normal business operations for three Business
Days; or
|
61
| (vii) |
the
Company ceases to meet the servicer eligibility qualifications of
a ▇▇▇▇▇▇
▇▇▇ or ▇▇▇▇▇▇▇ Mac; or
|
| (viii) |
the
Company attempts to assign its right to servicing compensation hereunder
or to assign this Agreement or the servicing responsibilities hereunder
or
to delegate its duties hereunder or any portion thereof in violation
of
Section 8.04.
|
If
the
Company obtains knowledge of an Event of Default, the Company shall promptly
notify the Purchaser. In each and every such case, so long as an Event of
Default shall not have been remedied, in addition to whatever rights the
Purchaser may have at law or equity to damages, including injunctive relief
and
specific performance, the Purchaser, by notice in writing to the Company, may
terminate all the rights and obligations of the Company under this Agreement
and
in and to the Mortgage Loans and the proceeds thereof.
Upon
receipt by the Company of such written notice, all authority and power of the
Company under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant
to
Section 12.01. Upon written request from the Purchaser, the Company shall,
at
its expense, prepare, execute and deliver to the successor entity designated
by
the Purchaser any and all documents and other instruments, place in such
successor’s possession all Mortgage Files, and do or cause to be done all other
acts or things necessary or appropriate to effect the purposes of such notice
of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Company’s sole
expense. The Company shall cooperate with the Purchaser and such successor
in
effecting the termination of the Company’s responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by
the Company to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
Section
10.02 Waiver
of Defaults.
By
a
written notice, the Purchaser may waive any default by the Company in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so
waived.
ARTICLE
XI
TERMINATION
Section
11.01 Termination.
This
Agreement shall terminate upon either: (i) the later of the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or the disposition of any REO Property with respect to the last Mortgage
Loan and the remittance of all funds due hereunder; or (ii) mutual consent
of
the Company and the Purchaser in writing. The representations and warranties
and
indemnification provisions contained herein shall survive the termination of
this Agreement.
62
Upon
written request from the Purchaser in connection with any such termination,
the
Company shall prepare, execute and deliver, any and all documents and other
instruments, place in the Purchaser’s possession all Mortgage Files, and do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise, at the Company’s sole expense. The Company agrees to cooperate with
the Purchaser and such successor in effecting the termination of the Company’s
responsibilities and rights hereunder as servicer, including, without
limitation, the transfer to such successor for administration by it of all
cash
amounts which shall at the time be credited by the Company to the Custodial
Account or Escrow Account or thereafter received with respect to the Mortgage
Loans.
Section
11.02 Termination
Without Cause.
The
Purchaser may terminate, at its sole option, any rights the Company may have
hereunder with respect to any Mortgage Loan Package, without cause as provided
in this Section 11.02. Any such notice of termination shall be in writing
and delivered to the Company by registered mail as provided in Section
12.05.
In
the
event the servicing rights with respect to a Mortgage Loan Package are
terminated pursuant to this Section 11.02, the Company shall be entitled to
receive, as liquidated damages, upon the transfer of the servicing rights,
an
amount equal to the fair market value of such servicing rights based on the
aggregate outstanding principal amount of the Mortgage Loans as of the
termination date, plus all reasonable costs and expenses incurred by the Company
in managing the transfer of the servicing. The fair market value of the
servicing rights shall be determined based on the average of three bids made
by
experienced evaluators unaffiliated to the Purchaser and the Company and chosen
as follows: one by the Purchaser, one by the Company and one by mutual
agreement. In addition, the Purchaser shall reimburse the Company in such event
for all reasonable costs associated with the transfer of the servicing
rights
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
Section
12.01 Successor
to Company.
Prior
to
termination of the Company’s responsibilities and duties under this Agreement
pursuant to Sections 8.04, 10.01, 11.01(ii) or pursuant to Section 11.02, the
Purchaser shall, (i) succeed to and assume all of the Company’s
responsibilities, rights, duties and obligations under this Agreement, or (ii)
appoint a successor having the characteristics set forth in Section 8.02
and which shall succeed to all rights and assume all of the responsibilities,
duties and liabilities of the Company under this Agreement prior to the
termination of Company’s responsibilities, duties and liabilities under this
Agreement. In connection with such appointment and assumption, the Purchaser
may
make such arrangements for the compensation of such successor out of payments
on
Mortgage Loans as it and such successor shall agree. In the event that the
Company’s duties, responsibilities and liabilities under this Agreement should
be terminated pursuant to the aforementioned sections, the Company shall
discharge such duties and responsibilities during the period from the date
it
acquires knowledge of such termination until the effective date thereof with
the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor. The resignation
or
removal of the Company pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01
and shall in no event relieve the Company of the representations and warranties
made pursuant to Sections 3.01 and 3.02 and the remedies available to the
Purchaser under Section 3.03, it being understood and agreed that the provisions
of such Sections 3.01, 3.02, and 3.03 shall be applicable to the Company
notwithstanding any such sale, assignment, resignation or termination of the
Company, or the termination of this Agreement.
63
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Company and to the Purchaser an instrument accepting such appointment,
wherein the successor shall make the representations and warranties set forth
in
Section 3.01, except for subsections (h), (i) and (k) thereof, whereupon such
successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Company, with like effect
as if originally named as a party to this Agreement. Any termination or
resignation of the Company or termination of this Agreement pursuant to Section
8.04, 10.01, 11.01 or 11.02 shall not affect any claims that any Purchaser
may
have against the Company arising out of the Company’s actions or failure to act
prior to any such termination or resignation.
The
Company shall deliver promptly to the successor servicer the funds in the
Custodial Account and Escrow Account and all Mortgage Files and related
documents and statements held by it hereunder and the Company shall account
for
all funds and shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and definitively vest in
the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Company.
Unless
the Company is terminated pursuant to Section 11.02, the Purchaser shall be
entitled to be reimbursed from the Company for all costs associated with the
transfer of servicing, including, without limitation, any costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Purchaser to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Purchaser to service the Mortgage Loans properly and
effectively.
Upon
a
successor’s acceptance of appointment as such, the Company shall notify by mail
the Purchaser of such appointment in accordance with the procedures set forth
in
Section 12.05.
Section
12.02 Amendment.
This
Agreement may be amended from time to time by the Company and by written
agreement signed by the Company and the Purchaser.
64
Section
12.03 Governing
Law.
This
Agreement shall be construed in accordance with the laws of the State of New
York and the obligations, rights and remedies of the parties hereunder shall
be
determined in accordance with such laws.
Each
of
the Company and the Purchaser hereby knowingly, voluntarily and intentionally
waives any and all rights it may have to a trial by jury in respect or any
litigation based on, or arising out of, under, or in connection with, this
Agreement, or any other documents and instruments executed in connection
herewith, or any course of conduct, course of dealing, statements (whether
oral
or written), or actions of the Company or the Purchaser. This provision is
a
material inducement for the Purchaser to enter into this Agreement.
Section
12.04 Arbitration.
In
the
event a claim or controversy arises concerning the interpretation or enforcement
of the terms of this Agreement, the parties hereto agree that such claim or
controversy may be settled by final, binding arbitration if the parties hereto,
as applicable, consent to such arbitration at the time such claim or controversy
arises which consent may be withheld by any party hereto in its sole
discretion.
Section
12.05 Duration
of Agreement.
This
Agreement shall continue in existence and effect until terminated as herein
provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.
Section
12.06 Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
| (i) |
if
to the Company:
|
SunTrust
Mortgage, Inc.
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
or
such
other address as may hereafter be furnished to the Purchaser in writing by
the
Company;
| (ii) |
if
to Purchaser:
|
65
Banc
of
America Mortgage Capital Corporation
Hearst
Tower
NC1-027-21-04
▇▇▇
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Managing Director
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
or
such
other address as may hereafter be furnished to the Company in writing by the
Purchaser.
Section
12.07 Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this
Agreement.
Section
12.08 Relationship
of Parties.
Nothing
herein contained shall be deemed or construed to create a partnership or joint
venture between the parties hereto and the services of the Company shall be
rendered as an independent contractor and not as agent for the
Purchaser.
Section
12.09 Execution;
Successors and Assigns.
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. Subject to Sections 8.02 and 8.04, this Agreement shall
inure to the benefit of and be binding upon the Company and the Purchaser and
their respective successors and assigns.
Section
12.10 Recordation
of Assignments of Mortgage.
To
the
extent permitted by applicable law, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any
or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected at the
Company’s expense, in the event recordation is either necessary or advisable in
accordance with Acceptable Servicing Practices or under applicable law or is
requested by the Purchaser at its sole option.
Section
12.11 Assignment
by Purchaser.
The
Purchaser shall have the right, without the consent of the Company but subject
to the limits set forth in Section 2.02 and Section 9.01 hereof, to assign,
in
whole or in part, its interest under this Agreement with respect to some or
all
of the Mortgage Loans, and designate any person to exercise any rights of the
Purchaser hereunder, by executing an Assignment, Assumption and Recognition
Agreement, and the assignee or designee shall accede to the rights and
obligations hereunder of the Purchaser with respect to such Mortgage Loans.
All
references to the Purchaser in this Agreement shall be deemed to include its
assignee or designee.
66
Section
12.12 Solicitation
of Mortgagor.
The
Company agrees that, after the Closing Date, it will not take any action to
solicit the refinancing of any Mortgage Loan. It is understood and agreed that
promotions undertaken by the Company or any affiliate of the Company which
are
directed to the general public at large, including, without limitation, mass
mailings based upon commercially acquired mailing lists, newspaper, radio or
television advertisements, shall not constitute solicitation under this
Section.
Section
12.13 Further
Agreements.
The
Purchaser and the Company each agree to execute and deliver to the other such
additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement; provided
that
such documents, instruments or agreements create no greater obligation or cost
on the part of the Company than otherwise set forth in this Agreement or
materially and adversely alter the Company’s rights hereunder.
Section
12.14 Confidential
Information.
The
Company shall keep confidential and shall not divulge to any party, without
the
Purchaser’s prior written consent, the price paid by the Purchaser for the
Mortgage Loans, except to the extent that it is reasonable and necessary for
the
Company to do so in working with legal counsel, auditors, taxing authorities
or
other governmental agencies. Under no circumstances shall the Purchase Price
relating specifically to this Transaction be considered to constitute the tax
treatment or the tax structure of the Transaction.
The
Purchaser and the Company agree they (i) shall comply with all applicable laws
and regulations regarding the privacy or security of Consumer Information,
(ii)
shall not collect, create, use, store, access, disclose or otherwise handle
Consumer Information in any manner inconsistent with any applicable laws or
regulations regarding the privacy or security of Consumer Information, (iii)
shall not disclose Consumer Information to any affiliated or non-affiliated
third party except to enforce or preserve its rights, as otherwise permitted
or
required by applicable law (or by regulatory authorities having jurisdiction
in
the premises) or, in the case of the Company, at the specific written direction
of the Purchaser, (iv) shall maintain appropriate administrative, technical
and
physical safeguards to protect the security, confidentiality and integrity
of
Consumer Information, including maintaining security measures designed to meet
the Interagency Guidelines Establishing Standards for Safeguarding Consumer
Information published in final form on February 1, 2001, 66 Fed. Reg. 8616,
and
the rules promulgated thereunder and (v) shall promptly notify the other party
in writing upon becoming aware of any actual breach and of any suspected breach
of this section. The Company shall promptly provide the Purchaser’s regulators
information regarding such security measures upon the reasonable request of
the
Purchaser, which information shall include, but not be limited to, any SAS
70 or
similar independent audit reports, summaries of test results or equivalent
measures taken by the Company with respect to its security measures, as agreed
upon by the parties. Each party shall indemnify and defend the other party
against, and shall hold the other party harmless from, any cost, expense, loss,
claim or other liability that such other party may suffer as a result of or
in
connection with its failure to comply with or perform the obligations set forth
in this section. The restrictions set forth herein shall survive the termination
of this Agreement.
67
Section
12.15 Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
[Intentionally
Blank - Next Page Signature Page]
68
IN
WITNESS WHEREOF, the Company and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
day and year first above written.
|
BANC OF AMERICA MORTGAGE
CAPITAL CORPORATION
Purchaser
|
SUNTRUST MORTGAGE, INC.
Company
|
||
| /s/ ▇▇▇▇▇ ▇. Good | /s/ ▇▇▇▇ ▇▇▇▇▇▇ | ||
|
|
|
||
|
Name:
▇▇▇▇▇ ▇. Good
Title: Vice President
|
Name:
▇▇▇▇
▇▇▇▇▇▇ Title: Vice President |
STATE
OF
NORTH CAROLINA )
) ss:
COUNTY
OF
MECKLENBURG )
On
the
12th day of February 2004 before me, a Notary Public in and for said State,
personally appeared ▇▇▇▇▇ ▇. Good, known to me to be Vice President of Banc
of
America Mortgage Capital Corporation, the corporation that executed the within
instrument and also known to me to be the person who executed it on behalf
of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
/s/
▇▇▇▇▇▇▇▇▇ ▇. Siejke
Notary
Public
My
Commission expires: ▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ )
) ss:
CITY OF
RICHMOND
)
On
the
11 day of February 2004 before me, a Notary Public in and for said State,
personally appeared ▇▇▇▇ ▇▇▇▇▇▇ , known to me to be the Vice
President of SunTrust Mortgage, Inc., the corporation that executed the
within instrument and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
/s/
▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Notary
Public
My
Commission expires: 6-30-2004
EXHIBIT
A
FORM
OF
MORTGAGE LOAN SCHEDULE
[Attached
hereto]
A-1
EXHIBIT
B
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 retained by the Company in the
Servicing File or delivered to the Custodian pursuant to Sections 2.01, 2.02
and
2.03 of the Flow Sale and Servicing Agreement to which this Exhibit is attached
(the “Agreement”):
|
1.
|
The
original Mortgage Note endorsed “Pay to the order of _____________,
without recourse” and signed in the name of the Company by an authorized
officer (provided that, in the event that the Mortgage Loan was acquired
by the Company in a merger, the signature must be in the following
form:
“[Company], successor by merger to [name of predecessor]”; and in the
event that the Mortgage Loan was acquired or originated by the Company
while doing business under another name, the signature must be in
the
following form: “[Company], formerly known as [previous name]”). The
Mortgage Note must contain all necessary intervening endorsements
showing
a complete chain of endorsement from the Originator (each such endorsement
being sufficient to transfer all right, title and interest of the
party so
endorsing, as noteholder or assignee thereof, in and to that Mortgage
Note);
|
|
2.
|
The
original of any guarantee executed in connection with the Mortgage
Note
(if any).
|
|
3.
|
The
original Mortgage, with evidence of recording thereon, except as
follows:
If in connection with any Mortgage Loan, the Company 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 Company
shall
deliver or cause to be delivered to the Custodian, a photocopy of
such
Mortgage, together with (i) in the case of a delay caused by the
public
recording office, an Officer’s Certificate of the Company stating that
such Mortgage has been dispatched to the appropriate public recording
office for recordation and that the original recorded Mortgage or
a copy
of such Mortgage certified by such public recording office to be
a true
and complete copy of the original recorded Mortgage will be promptly
delivered to the Custodian upon receipt thereof by the Company; 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 or by the title insurance
company that issued the title policy to be a true and complete copy
of the
original recorded Mortgage.
|
B-1
|
4.
|
The
originals or certified true copies of any document sent for recordation
of
all assumption, modification, consolidation or extension agreements,
with
evidence of recording thereon.
|
|
5.
|
The
original Assignment of Mortgage, in blank, for each Mortgage Loan,
in form
and substance acceptable for recording (except for the insertion
of the
name of the assignee and recording information). If the Mortgage
Loan was
acquired by the Company in a merger, the Assignment of Mortgage must
be
made by “[Company], successor by merger to [name of predecessor].” If the
Mortgage Loan was acquired or originated by the Company while doing
business under another name, the Assignment of Mortgage must be by
“[Company], formerly known as [previous name].” Subject to the foregoing
and where permitted under the applicable laws of the jurisdiction
wherein
the Mortgaged Property is located, such Assignments of Mortgage may
be
made by blanket assignments for Mortgage Loans secured by the Mortgaged
Properties located in the same county. If the related Mortgage has
been
recorded in the name of Mortgage Electronic Registration Systems,
Inc.
(“MERS”) or its designee, no Assignment of Mortgage will be required to
be
prepared or delivered and instead, the Company shall take all actions
as
are necessary to cause the Purchaser to be shown as the owner of
the
related Mortgage Loan on the records of MERS for purposes of the
system of
recording transfers of beneficial ownership of mortgages maintained
by
MERS.
|
|
6.
|
For
any Mortgage Loan not recorded in the name of MERS, originals or
certified
true copies of documents sent for recordation of all intervening
assignments of the Mortgage with evidence of recording thereon, or
if any
such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office
retains the original recorded assignments of mortgage, the Company
shall
deliver or cause to be delivered to the Custodian, a photocopy of
such
intervening assignment, together with (i) in the case of a delay
caused by
the public recording office, an Officer’s Certificate of the Company
stating that such intervening assignment of mortgage has been dispatched
to the appropriate public recording office for recordation and that
such
original recorded intervening assignment of mortgage or a copy of
such
intervening assignment of mortgage certified by the appropriate public
recording office or by the title insurance company that issued the
title
policy to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian
upon
receipt thereof by the Company; 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.
|
|
7.
|
The
original PMI Policy or certificate of insurance, where required pursuant
to the Agreement.
|
|
8.
|
The
original mortgagee policy of title insurance or evidence of
title.
|
B-2
|
9.
|
Any
security agreement, chattel mortgage or equivalent executed in connection
with the Mortgage.
|
|
10.
|
For
each Mortgage Loan which is secured by a residential long-term lease,
if
any, a copy of the lease with evidence of recording indicated thereon,
or,
if the lease is in the process of being recorded, a photocopy of
the
lease, certified by an officer of the respective prior owner of such
Mortgage Loan or by the applicable title insurance company,
closing/settlement/escrow agent or company or closing attorney to
be a
true and correct copy of the lease transmitted for
recordation.
|
|
11.
|
For
each Mortgage Loan secured by Co-op Shares, the originals of the
following
documents or instruments:
|
(A) the
stock
certificate;
(B) the
stock
power executed in blank;
(C) the
executed proprietary lease;
(D) the
executed recognition agreement;
(E) the
executed assignment of recognition agreement;
(F) the
executed UCC-1 financing statement with evidence of recording thereon;
and
(G) executed
UCC-3 financing statements or other appropriate UCC financing statements
required by state law, evidencing a complete and unbroken line from the
mortgagee to the Trustee with evidence of recording thereon (or in a form
suitable for recordation)
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items to the extent in the possession of the Company or in the
possession of the Company’s agent(s):
|
12.
|
The
original hazard insurance policy and, if required by law, flood insurance
policy, in accordance with Section 4.10 of the
Agreement.
|
|
13.
|
Residential
loan application.
|
|
14.
|
Mortgage
Loan closing statement.
|
|
15.
|
Verification
of employment and income.
|
|
16.
|
Verification
of acceptable evidence of source and amount of down
payment.
|
|
17.
|
Credit
report on the Mortgagor.
|
|
18.
|
Residential
appraisal report.
|
B-3
|
19.
|
Photograph
of the Mortgaged Property.
|
|
20.
|
Survey
of the Mortgage property, if required by the title company or applicable
law.
|
|
21.
|
Copy
of each instrument necessary to complete identification of any exception
set forth in the exception schedule in the title policy, i.e. map
or plat,
restrictions, easements, sewer agreements, home association declarations,
etc.
|
|
22.
|
All
required disclosure statements.
|
|
23.
|
If
available, termite report, structural engineer’s report, water potability
and septic certification.
|
|
24.
|
Sales
contract, if applicable.
|
|
25.
|
Evidence
of payment of taxes and insurance premiums, insurance claim files,
correspondence, current and historical computerized data files, and
all
other processing, underwriting and closing papers and records which
are
customarily contained in a mortgage file and which are required to
document the Mortgage Loan or to service the Mortgage
Loan.
|
|
26.
|
Amortization
schedule, if available.
|
|
27.
|
Original
power of attorney, if applicable.
|
In
the
event an Officer’s Certificate of the Company is delivered to the Custodian
because of a delay caused by the public recording office in returning any
recorded document, the Company shall deliver to the Custodian, within 180 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. The Company shall be required to deliver to the Custodian the
applicable recorded document by the date specified in (iv) above. An extension
of the date specified in (iv) above may be requested form the Purchaser, which
consent shall not be unreasonably withheld.
B-4
EXHIBIT
C
FORM
OF
CUSTODIAL AGREEMENT
[Attached
hereto]
C-1
EXHIBIT
D
FORM
OF
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
[DATE
OF
ASSIGNMENT]
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT dated ___________________, among
_________________, (“Assignor”), _________________, (“Assignee”) and SUNTRUST
MORTGAGE, INC. (the “Company”):
For
and
in consideration of the sum of one dollar ($1.00) and other valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
and
of the mutual covenants herein contained, the parties hereto hereby agree as
follows:
1. With
respect to the Mortgage Loans listed on Exhibit A hereto, the Assignor hereby
grants, transfers and assigns to Assignee all of the right, title and interest
of Assignor, as Purchaser, in, to and under that certain Flow Sale and Servicing
Agreement (the “Flow Sale and Servicing Agreement”), dated as of [INSERT DATE OF
AGREEMENT], and the Memorandum of Sale dated [INSERT DATE] (together with the
Flow Sale and Servicing Agreement, the “Flow Sale Agreement”), each by and
between Banc of America Mortgage Capital Corporation (the “Purchaser”), and the
Company, and the Mortgage Loans delivered thereunder by the Company to the
Assignor, and that certain Custodial Agreement, (the “Custodial Agreement”),
dated as of [INSERT DATE OF AGREEMENT], by and among the Company, the Purchaser
and _________________ (the “Custodian”).
2. The
Assignor warrants and represents to, and covenants with, the Assignee
that:
a. The
Assignor is the lawful owner of the Mortgage Loans with the full right to
transfer the Mortgage Loans free from any and all claims and encumbrances
whatsoever;
b. The
Assignor has not received notice of, and has no knowledge of, any offsets,
counterclaims or other defenses available to the Company with respect to the
Flow Sale Agreement or the Mortgage Loans;
c. The
Assignor has not waived or agreed to any waiver under, or agreed to any
amendment or other modification of, the Flow Sale Agreement, the Custodial
Agreement or the Mortgage Loans, including without limitation the transfer
of
the servicing obligations under the Flow Sale Agreement. The Assignor has no
knowledge of, and has not received notice of, any waivers under or amendments
or
other modifications of, or assignments of rights or obligations under, the
Flow
Sale Agreement or the Mortgage Loans; and
d. Neither
the Assignor nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of the Mortgage Loans, any interest
in
the Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security with, any person in any manner, or made
any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act of 1933, as amended (the “Securities Act”) or
which would render the disposition of the Mortgage Loans a violation of Section
5 of the Securities Act or require registration pursuant thereto.
D-1
3. That
Assignee warrants and represent to, and covenants with, the Assignor and the
Company pursuant to Section 12.11 of the Flow Sale Agreement that:
a. The
Assignee agrees to be bound, as Purchaser, by all of the terms, covenants and
conditions of the Flow Sale Agreement, the Mortgage Loans and the Custodial
Agreement, and from and after the date hereof, the Assignee assumes for the
benefit of each of the Company and the Assignor all of the Assignor’s
obligations as purchaser thereunder;
b. The
Assignee understands that the Mortgage Loans have not been registered under
the
Securities Act or the securities laws of any state;
c. The
purchase price being paid by the Assignee for the Mortgage Loans is in excess
of
$250,000.00 and will be paid by cash remittance of the full purchase price
within 60 days of the sale;
d. The
Assignee is acquiring the Mortgage Loans for investment for its own account
only
and not for any other person. In this connection, neither the Assignee nor
any
person authorized to act therefor has offered to sell the Mortgage Loans by
means of any general advertising or general solicitation within the meaning
of
Rule 502(c) Regulation D promulgated under the Securities Act;
e. The
Assignee considers itself a substantial sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
f. The
Assignee has been furnished with all information regarding the Mortgage Loans
that it has requested from the Assignor or the Company;
g. Neither
the Assignee nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or
accepted a transfer, pledge or other disposition of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security from, or otherwise
approached or negotiated with respect to the Mortgage Loans, any interest in
the
Mortgage Loans or any other similar security with, any person in any manner
which would constitute a distribution of the Mortgage Loans under the Securities
Act or which would render the disposition of the Mortgage Loans a violation
of
Section 5 of the Securities Act or require registration pursuant thereto, nor
will it act, nor has it authorized or will it authorize any person to act,
in
such manner with respect to the Mortgage Loans; and
h. Either
(1) the Assignee is not an employee benefit plan (“Plan”) within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) or a plan (“Plan”) within the meaning of section 4975(e)(1) of the
Internal Revenue Code of 1986 (“Code”), and the Assignee is not directly or
indirectly purchasing the Mortgage Loans on behalf of, investment manager of,
as
named fiduciary of, as trustee of, or with assets of, a Plan; or (2) the
Assignee’s purchase of the Mortgage Loans will not result in a prohibited
transaction under section 406 of ERISA or section 4975 of the Code.
D-2
i. The
Assignee’s address for purposes of all notices and correspondence related to the
Mortgage Loans and the Flow Sale Agreement is:
[NAME
AND
ADDRESS OF ASSIGNEE]
Attention:
Telephone:
Fax:
The
Assignee’s wire transfer instructions for purposes of all remittances and
payments related to the Mortgage Loans and the Flow Sale Agreement
is:
For
the
account of [NAME OF ASSIGNEE]
A/C#:
ABA#:
Attn:
Taxpayer
ID#:
4. Accuracy
of the Servicing Agreement.
The
Company and the Assignor represent and warrant to the Assignee that (i) attached
hereto as Exhibit B is a true, accurate and complete copy of the Flow Sale
Agreement, the Custodial Agreement and all amendments and modifications, if
any,
thereto, (ii) neither the Flow Sale Agreement nor the Custodial Agreement has
been amended or modified in any respect, except as set forth in this Agreement,
and (iii) no notice of termination has been given to the Company under the
Flow
Sale Agreement. The Company represents and warrants that through the date hereof
the Company has serviced the Mortgage Loans in accordance with the terms of
the
Flow Sale Agreement.
5. Recognition
of Assignee.
From
and
after the date hereof, the Company shall note the transfer of the Mortgage
Loans
to the Assignee in its books and records, the Company shall recognize the
Assignee as the owner of the Mortgage Loans and the Company shall service the
Mortgage Loans for the benefit of the Assignee pursuant to the Flow Sale
Agreement, the terms of which are incorporated herein by reference. It is the
intention of the Assignor, the Company and the Assignee that the Flow Sale
Agreement and the Custodial Agreement shall be binding upon and inure to the
benefit of the Company and the Assignee and their respective successors and
assigns.
[Signatures
Follow]
D-3
IN
WITNESS WHEREOF, the parties have caused this Assignment, Assumption and
Recognition Agreement be executed by their duly authorized officers as of the
date first above written.
|
[NAME OF ASSIGNOR]
Assignor
|
[NAME OF ASSIGNEE]
Assignee
|
||
| By: /s/ | By: /s/ | ||
|
|
|
||
| Name: Its: Tax Payer Identification No.: |
Name: Its: Tax Payer Identification No.: |
|
SUNTRUST
MORTGAGE, INC.
Company
|
|||
| By: /s/ | |||
|
|
|||
| Name: Its: |
D-4
EXHIBIT
A
to
the
Assignment, Assumption and Recognition Agreement
MORTGAGE
LOAN SCHEDULE
D-5
EXHIBIT
B
to
the
Assignment, Assumption and Recognition Agreement
EXECUTION
COPIES OF FLOW SALE AND SERVICING AGREEMENT
AND
MEMORANDUM OF SALE
D-6
EXHIBIT
E
UNDERWRITING
GUIDELINES
[Attached
hereto]
E-1
EXHIBIT
F
INFORMATION
IN REMITTANCE REPORTS
[Need
to
list all required fields]
F-1
EXHIBIT
G
FORM
OF
OPINION OF COUNSEL
Banc
of
America Mortgage Capital Corporation
Hearst
Tower
▇▇▇
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
Managing Director
Re: SunTrust
Mortgage, Inc.
Dear
Sir/Madam:
I
am
[general counsel] of SunTrust Mortgage, Inc. (the “Company”), with respect to
certain matters in connection with the sale by the Company of certain mortgage
loans (the “Mortgage Loans”) pursuant to that certain Flow Sale and Servicing
Agreement by and between the Company and Banc of America Mortgage Capital
Corporation (the “Purchaser”), dated as of [MONTH OF CLOSING] 1, [YEAR OF
CLOSING], (the “Agreement”), which sale is in the form of whole Mortgage Loans.
Capitalized terms not otherwise defined herein have the meanings set forth
in
the Agreement.
I
have
examined the following documents:
|
1.
|
the
Agreement;
|
|
2.
|
the
Custodial Agreement;
|
|
3.
|
the
form of endorsement of the Mortgage Notes;
and
|
|
4.
|
such
other documents, records and papers as I have deemed necessary and
relevant as a basis for this
opinion.
|
To
the
extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Agreement. I
have
assumed the authenticity of all documents submitted to me as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents.
Based
upon the foregoing, it is my opinion that;
|
1.
|
The
Company is a corporation duly organized, validly existing and in
good
standing under the laws of the state of [____________] [STATE OF
COMPANY’S
INCORPORATION].
|
G-1
|
2.
|
The
Company has the power to engage in the transactions contemplated
by the
Agreements, the Custodial Agreement and all requisite power, authority
and
legal right to execute and deliver the Agreement, the Custodial Agreement
and the Mortgage Loans, and to perform and observe the terms and
conditions of such instruments.
|
|
3.
|
Each
person who, as an officer or attorney-in-fact of the Company, signed
(a)
the Agreement and the Custodial Agreement, and (b) any other document
delivered prior hereto or on the date hereof in connection with the
sale
and servicing of the Mortgage Loans in accordance with the Agreement
and
the person was, at the respective times of such signing and delivery,
and
is, as of the date hereof, duly elected or appointed, qualified and
acting
and as such officer or attorney-in-fact, and the signatures of such
persons appearing on such documents are their genuine
signatures.
|
|
4.
|
Each
of the Agreement, the Custodial Agreement, and the Mortgage Loans,
has
been duly authorized, executed and delivered by the Company and is
a
legal, valid and binding agreement enforceable in accordance with
its
terms, 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.
|
|
5.
|
The
Company 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 and the Custodial Agreement,
and by original or facsimile signature in order to execute the
endorsements to the Mortgage Notes and the assignments of the Mortgages,
and the original or facsimile signature of the officer at the Company
executing the endorsements to the Mortgage Notes and the assignments
of
the 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 of or compliance by the Company with the
Agreement, the Custodial Agreement or the sale and delivery of the
Mortgage Loans or the consummation of the transactions contemplated
by the
Agreement, and the Custodial Agreement; or (ii) any required consent,
approval, authorization or order has been obtained by the
Company.
|
|
7.
|
Neither
the consummation of the transactions contemplated by, nor the fulfillment
of the terms of the Agreement and the Custodial Agreement, will conflict
with or results in or will result in a breach of or constitutes or
will
constitute a default under the charter or by-laws of the Company,
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
violates 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.
|
|
8.
|
There
is no action, suit, proceeding or investigation pending or, to the
best of
my knowledge, threatened against the Company which, in my opinion,
either
in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition,
properties or assets of the 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 Agreement or the
Custodial Agreement, 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 to perform under the
terms of
the Agreement and the Custodial
Agreement.
|
G-2
|
9.
|
The
sale of each Mortgage Note and Mortgage as and in the manner contemplated
by the Agreement is sufficient fully to transfer all right, title
and
interest of the Company thereto as noteholder and mortgagee, apart
from
the rights to service the Mortgage Loans pursuant to the
Agreement.
|
|
10.
|
The
form of endorsement that is to be used with respect to the Mortgage
Loans
is legally valid and sufficient to duly endorse the Mortgage Notes
to the
Purchaser. Upon the completion of the endorsement of the Mortgage
Notes
and the completion of the assignments of the Mortgages, and the recording
thereof, the endorsement of the Mortgage Notes, the delivery to the
Custodian of the completed assignments of the Mortgages, and the
delivery
of the original endorsed Mortgage Notes to the Custodian would be
sufficient to permit the entity to which such Mortgage Note is initially
endorsed at the Purchaser’s direction, and to whom such assignment of
Mortgages is initially assigned at the Purchaser’s direction, to avail
itself of all protection available under applicable law against the
claims
of any present or future creditors of the Company, and would be sufficient
to prevent any other sale, transfer, assignment, pledge or hypothecation
of the Mortgages and the Mortgage Notes by the Company from being
enforceable.
|
This
opinion is given to you for your sole benefit, and no other person or entity
is
entitled to rely hereon except that the purchaser or purchasers to which you
initially and directly resell the Mortgage Loans may rely on this opinion as
if
it were addressed to them as of its date.
Sincerely,
G-3
EXHIBIT
H
Purchase
Price and Terms Letter
H-1
EXHIBIT
I
FORM
OF MEMORANDUM OF SALE
CLOSING
DATE:
This
Memorandum of Sale (this “Memorandum”), dated as of _______ (the “Closing
Date”), confirms the sale by SunTrust Mortgage, Inc. (“Company”), to Banc of
America Mortgage Capital Corporation (the “Purchaser”), and the purchase by the
Purchaser from the Company, of the first lien fixed rate residential mortgage
loans on a servicing-retained basis described on the Mortgage Loan Schedule
attached as Schedule I hereto (the “Mortgage Loans”), pursuant to the terms of
the Flow Sale and Servicing Agreement (the “Flow Sale and Servicing Agreement”),
dated as of _____________, by and between the Purchaser and the
Company.
For
good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company does hereby bargain, sell, convey, assign and transfer
to Purchaser without recourse, except as provided in the Flow Sale and Servicing
Agreement, and on a servicing retained basis, all right, title and interest
of
the Company in and to each of the Mortgage Loans, together with all documents
maintained as part of the related Mortgage Files, all Mortgaged Properties
which
secure any Mortgage Loan but are acquired by foreclosure, deed in lieu of
foreclosure after the Cut-off Date or otherwise, all payments of principal
and
interest received on the Mortgage Loans after the Cut-off Date, all other
unscheduled collections collected in respect of the Mortgage Loans after the
Cut-off Date, and all proceeds of the foregoing, subject, however, to the rights
of the Company under the Flow Sale and Servicing Agreement.
The
Company has delivered to the Custodian prior to the date hereof the documents
with respect to each Mortgage Loan required to be delivered under the Flow
Sale
and Servicing Agreement.
Capitalized
terms that are used herein but are not defined herein shall have the respective
meanings set forth in the Flow Sale and Servicing Agreement.
I-1
IN
WITNESS WHEREOF, the parties hereto, by the hands of their duly authorized
officers, execute this Memorandum as of the Closing Date referred to
above.
|
BANC
OF AMERICA MORTGAGE CAPITAL CORPORATION
|
SUNTRUST
MORTGAGE, INC.
as
Company
|
|
as
Purchaser
|
|
|
By:
|
By:
|
|
Name:
|
Name:
|
|
Its:
|
Its:
|
I-2
SCHEDULE
I
MORTGAGE
LOAN SCHEDULE
I-1
EXHIBIT
J
SERVICER
REQUIREMENTS
Loading/Updating
Investor Headers
| 1. |
The
Purchaser will provide investor header matrix for input on MSP by
Company.
Updates/additions will occur monthly, including new investor header
detail
for each new deal that is settled.
|
| 2. |
The
Company will load investor headers upon receipt or before month end.
The
following fields will need to be updated on IN03: MS OPT, MS INV
CNTRL NO,
MS MO DELQ, and MS JUST FL.
|
| 3. |
The
Company will update the investor headers on the first business day
of the
next/following month to ensure that the correct loan accounts will
appear
on the corresponding 413 file that will represent the new month's
activity.
|
Loading
Account Numbers
| 1. |
Upon
receipt of a funding schedule, the Purchaser will deliver a cross
reference of Company-to-Purchaser account numbers to the Company.
The
account numbers will be delivered in the ▇▇▇▇ 55 layout for loading
in the
next Company MSP cycle.
|
| 2. |
The
Company will load account numbers on or before the first business
day of
the month to ensure that the correct the Purchaser account numbers
will
appear on the corresponding 413 file that will represent the new
month's
activity.
|
Automated
Monetary Transaction File - 413
| 1. |
Call
Fidelity PowerCell and request installation of IP
770
|
| 2. |
On
the first business day of the month, the financial transactions for
the
LSBO portfolio will transmit from the Company MSP system to the Purchaser
MSP system.
|
Monthly
Company File - Automated
| 1. |
Call
Fidelity PowerCell and initiate an SSR for the installation of IP
1804 and
the interchange set-up required to host and transmit this file. This
enhancement will provide an automated month-end feed from the Company
to
the Purchaser for the LSBO portfolio identified by the corresponding
investor headers. The feed will include all new loans purchased by
the
Purchaser in the previous month, as well as a maintenance file for
all
existing loans in the LSBO
portfolio
|
| 2. |
Once
installed, populate XX flag on the IN03 screen. This flag will assist
with
synchronizing the feeds received in the Monthly Company File and
the
corresponding 413 file.
|
| 3. |
Bank
of America will receive and process the electronic file on the first
business day of the month for the previous month-end file. Note:
This file comes from the Company automatically with the installation
of
the IP.
|
J-1
Monthly
Company File - Manual
For
testing purposes, and in the event that the IP is not installed prior to initial
conversion, a manual process is in place to provide the Monthly Company File
data feed for remote
MSP clients.
| 1. |
The
Company will load/update investor header information received from
the
Purchaser.
|
| 2. |
The
Company will send an email granting permission to Fidelity to provide
the
manual feed of accounts in the assigned investor headers identified.
The
email will contain the MSP client and corresponding investor/categories
to
be included in the feed.
|
| 3. |
Bank
of America will receive and process the file on the first business
day of
the month for the previous month-end
file.
|
Note:
For
licensed
MSP
clients, the Company will install and use the existing work-around EZTrieve
process. (This will require the installation, testing, and implementation of
the
EZTrieve until the IP is ready.) The Company will be required to develop a
test
file and production files until the IP is available.
Reporting
Requirements
Required
reports for the LSBO project are as follows:
| · |
S215
- Report summarizes the collections made during the reporting
period
|
| · |
S214
- Report summarizes paid in full loans made during the reporting
period
|
| · |
P139
- Monthly
statement of mortgage accounts or a trial balance as of the cutoff
date
|
| · |
Scheduled
Remittance Reports
- Companys send on a monthly basis. We would like this report by
the
5th
business day.
|
| · |
Delinquency
Report
- Report from the Company to be sent by the 5th
business day. If the Company is a Fidelity client, we would like
a P4DL
report. Otherwise, a similar report will suffice. LSBO would like
this
report sent via e-mail or fax.
|
Note:
These
S215, S214, and P139 reports will be provided in an electronic format. These
reports are automatically generated when the 951/139 cutoff is calendared.
The
reports are required for the LSBO project; reports in addition to these may
be
required.
J-2
EXHIBIT
K
SEC
CERTIFICATION
I,
[identify the senior officer in charge of servicing], certify [to [name of
depositor] (the “Depositor”), and its officers, directors and affiliates, and
with the knowledge and intent that they will rely upon this certification,]
that:
(A) I
have
reviewed the information required to be delivered to the trustee by the servicer
pursuant to the pooling and servicing agreement (the “Servicing
Information”);
(B) Based
on
my knowledge, the Servicing Information, taken as a whole, does not contain
erroneous or incomplete information required to be provided to the trustee
by
the servicer under the pooling and servicing agreement;
(C) Based
on
my knowledge, the Servicing Information required to be provided to the trustee
by the servicer under the pooling and servicing agreement has been provided
to
the trustee;
(D) I
am
responsible for reviewing the activities performed by the servicer under the
pooling and servicing agreement and based upon the review required under the
pooling and servicing agreement, and except as disclosed in the report, the
servicer has fulfilled its obligations under the pooling and servicing
agreement; and
(E) I
have
disclosed to [the Depositor’s certificate public accountants][the servicer’s
certified public accountants] all significant deficiencies relating to the
servicer’s compliance with the minimum servicing standards in accordance with a
review conducted in compliance with the Uniform Single Attestation Program
for
Mortgage Bankers or similar standard as set forth in the pooling and servicing
agreement.
Date:
[Signature]
[Title]
K-1