EMC MORTGAGE CORPORATION Purchaser,
EMC
MORTGAGE CORPORATION
Purchaser,
MID
AMERICA
BANK, FSB
Company,
Dated
as
of February 1, 2006
(Fixed
and Adjustable Rate Mortgage Loans)
TABLE
OF CONTENTS
ARTICLE
I
| Section 1.01 |
Defined
Terms
|
ARTICLE
II
| Section 2.01 |
Agreement
to Purchase
|
| Section 2.02 |
Purchase
Price
|
| Section 2.03 |
Reserved
|
| Section 2.04 |
Record
Title and Possession of Mortgage Files;
Maintenance of Servicing
Files
|
| Section 2.05 |
Books
and Records
|
| Section 2.06 |
Transfer
of Mortgage Loans
|
| Section 2.07 |
Delivery
of Mortgage Loan Documents
|
| Section 2.08 |
Quality
Control Procedures
|
| Section 2.09 |
Near-term
Principal Prepayments;
Near
Term Payment Defaults
|
ARTICLE
III
| Section 3.01 |
Representations
and Warranties of the Company
|
| Section 3.02 |
Representations
and Warranties as to
Individual
Mortgage Loans
|
| Section 3.03 |
Repurchase;
Substitution
|
|
Section
3.04
|
Representations
and Warranties of the
Purchaser
|
ARTICLE
IV
| Section 4.01 |
Company
to Act as Servicer
|
| Section 4.02 |
Collection
of Mortgage Loan Payments
|
| Section 4.03 |
Realization
Upon Defaulted Mortgage
|
| Section 4.04 |
Establishment
of Custodial Accounts;
Deposits in Custodial
Accounts
|
| Section 4.05 |
Permitted
Withdrawals from the
Custodial
Account
|
| Section 4.06 |
Establishment
of Escrow Accounts;
Deposits
in Escrow Accounts
|
| Section 4.07 |
Permitted
Withdrawals From Escrow Account
|
| Section 4.08 |
Payment
of Taxes, Insurance and Other
Charges; Maintenance of Primary
Mortgage
InsurancePolicies;
Collections Thereunder
|
| Section 4.09 |
Transfer of
Accounts
|
|
Section
4.10
|
Maintenance
of Hazard Insurance
|
| Section 4.11 |
Maintenance
of Mortgage Impairment
Insurance
Policy
|
| Section 4.12 |
Fidelity
Bond, Errors and Omissions
Insurance
|
| Section 4.13 |
Title,
Management and Disposition of REO
Property
|
| Section 4.14 |
Notification
of Maturity Date
|
ARTICLE
V
| Section 5.01 |
Distributions
|
| Section 5.02 |
Statements
to the Purchaser
|
| Section 5.03 |
Monthly
Advances by the Company
|
| Section 5.04 |
Liquidation
Reports
|
ARTICLE
VI
| Section 6.01 |
Assumption
Agreements
|
| Section 6.02 |
Satisfaction
of Mortgages and Release
of Mortgage
Files
|
| Section 6.03 |
Servicing
Compensation
|
| Section 6.04 |
Reserved
|
| Section 6.05 |
Reserved
|
| Section 6.06 |
Purchaser’s
Right to Examine Company Records
|
ARTICLE
VII
| Section 7.01 |
Company
Shall Provide Information as Reasonably
Required
|
ARTICLE
VIII
| Section 8.01 |
Indemnification;
Third Party Claims
|
| Section 8.02 |
Merger
or Consolidation of the Company
|
| Section 8.03 |
Limitation
on Liability of the Company and
Others
|
| Section 8.04 |
Company
Not to Assign or Resign
|
| Section 8.05 |
No
Transfer of Servicing
|
ARTICLE
IX
| Section 9.01 |
Events
of Default
|
| Section 9.02 |
Waiver
of Defaults
|
ARTICLE
X
| Section 10.01 |
Termination
|
ARTICLE
XI
| Section 11.01 |
Successor
to the Company
|
| Section 11.02 |
Amendment
|
| Section 11.03 |
Reserved
|
| Section 11.04 |
Governing
Law
|
| Section 11.05 |
Notices
|
| Section 11.06 |
Severability
of Provisions
|
| Section 11.07 |
Exhibits
|
| Section 11.08 |
General
Interpretive Principles
|
| Section 11.09 |
Reproduction
of Documents
|
| Section 11.10 |
Confidentiality
of Information
|
| Section 11.11 |
Recordation
of Assignment of Mortgage
|
| Section 11.12 |
Assignment
|
| Section 11.13 |
No
Partnership
|
| Section 11.14 |
Signature
Pages/Counterparts; Successors and
Assigns
|
| Section 11.15 |
Entire
Agreement
|
| Section 11.16 |
No
Solicitation
|
| Section 11.17 |
Closing
|
| Section 11.18 |
Reserved
|
| Section 11.19 |
Monthly
Reporting with Respect to a
Reconstitution
|
EXHIBITS
| A |
Contents
of Mortgage File
|
| B |
Custodial
Account Letter Agreement
|
| C |
Escrow
Account Letter Agreement
|
| D |
Form
of Purchase, Assignment, Assumption and Recognition
Agreement
|
| E |
Form
of Trial Balance
|
| F |
[Reserved]
|
| G |
Request
for Release of Documents and
Receipt
|
| H |
Company’s
Underwriting Guidelines
|
| I |
Term
Sheet
|
| J |
Reconstituted
Mortgage Loan Reporting
|
This
is a
Purchase, Warranties and Servicing Agreement, dated as of February 1, 2006
and
is executed between EMC MORTGAGE CORPORATION, as Purchaser, with offices located
at Mac
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇,
and
Mid
America Bank, fsb, with offices located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H
:
WHEREAS,
the Purchaser has heretofore agreed to purchase from the Company and the Company
has heretofore agreed to sell to the Purchaser, from time to time, certain
Mortgage Loans on
a
servicing retained basis;
WHEREAS,
each of the Mortgage Loans is secured by a mortgage, deed of trust or other
security instrument creating a first lien on a residential dwelling located
in
the jurisdiction indicated on the Mortgage Loan Schedule, which is annexed
to
the related Term Sheet; and
WHEREAS,
the Purchaser and the Company wish to prescribe the representations and
warranties of the Company with respect to itself and the Mortgage Loans and
the
management, servicing and control of the Mortgage Loans;
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
Section
1.01 Defined
Terms.
Whenever
used in this Agreement, the following words and phrases, unless the context
otherwise requires, shall have the following meaning specified in this
Article:
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, those mortgage servicing practices (including
collection procedures) of prudent mortgage banking institutions which service
mortgage loans of the same type as such Mortgage Loan in the jurisdiction where
the related Mortgaged Property is located, and which are in accordance with
▇▇▇▇▇▇ Mae servicing practices and procedures, for MBS pool mortgages, as
defined in the ▇▇▇▇▇▇ ▇▇▇ Guides including future updates.
Adjustment
Date:
With
respect to each adjustable rate Mortgage Loan, the date on which the Mortgage
Interest Rate is adjusted in accordance with the terms of the related Mortgage
Note.
Agreement:
This
Purchase, Warranties and Servicing Agreement including all exhibits hereto,
amendments hereof and supplements hereto.
Appraised
Value:
With
respect to any Mortgaged Property, the value thereof as determined by an
appraisal made for the originator of the Mortgage Loan at the Origination Date
of the Mortgage Loan by a Qualified Appraiser.
Assignment:
An
individual 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 of record the
sale
or transfer of the Mortgage Loan.
BIF:
The
Bank Insurance Fund, or any successor thereto.
Business
Day:
Any day
other than: (i) a Saturday or Sunday, or (ii) a legal holiday in the State
of
New York or State of Illinois, or (iii) a day on which banks in the State of
New
York or State of Illinois are authorized or obligated by law or executive order
to be closed.
Closing
Date:
With
respect to any Mortgage Loan, the date stated on the related Term Sheet.
Code: The
Internal Revenue Code of 1986, or any successor statute thereto.
Company:
Mid
America Bank, fsb, its successors in interest and assigns, as permitted by
this
Agreement.
Company's
Officer's Certificate:
A
certificate signed by the Chairman of the Board, President, any Vice President,
Secretary or Treasurer of the Company stating the date by which the Company
expects to receive any missing documents sent for recording from the applicable
recording office.
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.
Confirmation:
The
trade confirmation letter between the Purchaser and the Company which relates
to
the Mortgage Loans.
Consumer
Information:
Information including, but not limited to, all personal information about
Mortgagors that is supplied to the Purchaser by or on behalf of the
Company.
Co-op
Lease:
With
respect to a Co-op Loan, the lease with respect to a dwelling unit occupied
by
the Mortgagor and relating to the stock allocated to the related dwelling
unit.
Co-op
Loan:
A
Mortgage Loan secured by the pledge of stock allocated to a dwelling unit in
a
residential cooperative housing corporation and a collateral assignment of
the
related Co-op Lease.
Current
Appraised Value: With
respect to any Mortgaged Property, the value thereof as determined by an
appraisal made for the Company (by a Qualified Appraiser) at the request of
a
Mortgagor for the purpose of canceling a Primary Mortgage Insurance Policy
in
accordance with federal, state and local laws and regulations or otherwise
made
at the request of the Company or Mortgagor.
Current
LTV: The
ratio
of the Stated Principal Balance of a Mortgage Loan to the Current Appraised
Value of the Mortgaged Property.
Custodial
Account:
Each
separate demand account or accounts created and maintained pursuant to Section
4.04 which shall be entitled "Mid America Bank, fsb, in trust for the
[Purchaser], Owner of Mortgage Loans" and shall be established in an Eligible
Account, in the name of the Person that is the "Purchaser" with respect to
the
related Mortgage Loans.
Custodian:
With
respect to any Mortgage Loan, the entity stated on the related Term Sheet,
and
its successors and assigns, as custodian for the Purchaser.
Cut-off
Date:
With
respect to any Mortgage Loan, the date stated on the related Term Sheet.
Determination
Date:
The
15th day (or if such 15th day is not a Business Day, the Business Day
immediately preceding such 15th day) of the month of the related Remittance
Date.
Due
Date:
With
respect to each Mortgage Loan, the day of the month on which the Monthly Payment
is due on a Mortgage Loan, exclusive of any days of grace, which is the first
day of the month.
Due
Period:
With
respect to any Remittance Date, the period commencing on the second day of
the
month preceding the month of such Remittance Date and ending on the first day
of
the month of the Remittance Date.
Electronic
Transmission:
As
defined in Section 11.14.
Eligible
Account:
An
account established and maintained: (i) within FDIC insured accounts created,
maintained and monitored by the Company so that all funds deposited therein
are
fully insured, or (ii) as a trust account with the corporate trust department
of
a depository institution or trust company organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
which is not affiliated with the Company (or any sub-servicer) or (iii) with
an
entity which is an institution whose deposits are insured by the FDIC, the
unsecured and uncollateralized long-term debt obligations of which shall be
rated “A2” or higher by Standard & Poor’s and “A” or higher by Fitch, Inc.
or one of the two highest short-term ratings by any applicable Rating Agency,
and which is either (a) a federal savings association duly organized, validly
existing and in good standing under the federal banking laws, (b) an institution
duly organized, validly existing and in good standing under the applicable
banking laws of any state, (c) a national banking association under the federal
banking laws, or (d) a principal subsidiary of a bank holding company, or (iv)
if ownership of the Mortgage Loans is evidenced by mortgaged-backed securities,
the equivalent required ratings of each Rating Agency, and held such that the
rights of the Purchaser and the owner of the Mortgage Loans shall be fully
protected against the claims of any creditors of the Company (or any
sub-servicer) and of any creditors or depositors of the institution in which
such account is maintained or (v) in a separate non-trust account without FDIC
or other insurance in an Eligible Institution. In the event that a Custodial
Account is established pursuant to clause (iii), (iv) or (v) of the preceding
sentence, the Company shall provide the Purchaser with written notice on the
Business Day following the date on which the applicable institution fails to
meet the applicable ratings requirements.
Eligible
Institution:
An
institution having (i) the highest short-term debt rating, and one of the two
highest long-term debt ratings of each Rating Agency; or (ii) with respect
to
any Custodial Account, an unsecured long-term debt rating of at least one of
the
two highest unsecured long-term debt ratings of each Rating Agency.
Equity
Take-Out Refinanced Mortgage Loan:
A
Refinanced Mortgage Loan the proceeds of which were in excess of the outstanding
principal balance of the existing mortgage loan as defined in the ▇▇▇▇▇▇ ▇▇▇
Guide(s).
Escrow
Account:
Each
separate trust account or accounts created and maintained pursuant to Section
4.06 which shall be entitled "Mid America Bank, fsb, in trust for the
[Purchaser], Owner of Mortgage Loans, and various Mortgagors", in the name
of
the Person that is the "Purchaser" with respect to the related Mortgage
Loans.
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 9.01.
▇▇▇▇▇▇
Mae: The
Federal National Mortgage Association, or any successor thereto.
▇▇▇▇▇▇
▇▇▇ Guide(s):
The
▇▇▇▇▇▇ Mae Selling Guide and the ▇▇▇▇▇▇ ▇▇▇ Servicing Guide and all amendments
or additions thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
FHLMC:
The
Federal Home Loan Mortgage Corporation, or any successor thereto.
FHLMC
Guide:
The
FHLMC Single Family Seller/Servicer Guide and all amendments or additions
thereto.
Fidelity
Bond:
A
fidelity bond to be maintained by the Company pursuant to Section
4.12.
FIRREA:
The
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as
amended, from time to time, and in effect.
First
Remittance Date:
With
respect to any Mortgage Loan, the Remittance Date occurring in the month
following the month in which the related Closing Date occurs.
GAAP:
Generally accepted accounting principles in the United States of America,
consistently applied.
HUD:
The
United States Department of Housing and Urban Development, or any successor
thereto.
Index:
With
respect to any adjustable rate Mortgage Loan, the index identified on the
Mortgage Loan Schedule and set forth in the related Mortgage Note for the
purpose of calculating the interest rate thereon.
Initial
Rate Cap: With
respect to
each
adjustable rate Mortgage Loan, where applicable, the maximum increase or
decrease in the Mortgage Interest Rate on the first Adjustment
Date.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
Lender
Paid Mortgage Insurance Rate:
A rate
per annum equal to the percentage shown on the Mortgage Loan
Schedule.
Lender
Primary Mortgage Insurance Policy:
Any
Primary Mortgage Insurance Policy for which premiums are paid by the Company.
Lifetime
Rate Cap:
With
respect to each adjustable rate Mortgage Loan, the maximum Mortgage Interest
Rate over the term of such Mortgage Loan.
Liquidation
Proceeds:
The
proceeds 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.
Loan-to-Value
Ratio or LTV:
With
respect to any Mortgage Loan, the ratio of the original outstanding principal
amount of the Mortgage Loan, to (i) the Appraised Value of the Mortgaged
Property with respect to a Refinanced Mortgage Loan, and (ii) the lesser of
the
Appraised Value of the Mortgaged Property or the Sales Price of the Mortgaged
Property with respect to all other Mortgage Loans.
Margin:
With
respect to each adjustable rate Mortgage Loan, the fixed percentage amount
set
forth in each related Mortgage Note which is added to the Index in order to
determine the related Mortgage Interest Rate, as set forth in the Mortgage
Loan
Schedule.
Monthly
Advance:
The
aggregate of the advances made by the Company on any Remittance Date pursuant
to
Section 5.03.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage Loan which
is
payable by a Mortgagor under the related Mortgage Note.
Mortgage:
With
respect to each Mortgage Loan, the mortgage, deed of trust or other instrument
securing a Mortgage Note which creates a first lien or first priority ownership
in an estate in fee simple in real property on the Mortgaged
Property.
Mortgage
File:
The
Mortgage Loan Documents pertaining to a particular Mortgage Loan, 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.
Mortgage
Interest Rate:
The
annual rate at which interest accrues on any Mortgage Loan, which may be
adjusted from time to time for an adjustable rate Mortgage Loan, in accordance
with the provisions of the related Mortgage Note.
Mortgage
Loan:
Each
mortgage loan originally sold to the Purchaser and subject to this Agreement
being identified on the Mortgage Loan Schedule attached to the related Term
Sheet, 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, excluding replaced or repurchased Mortgage Loans.
Mortgage
Loan Documents:
The
documents listed in Exhibit
A
hereto
pertaining to any Mortgage Loan.
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 Mortgage Interest Rate minus the
Servicing Fee Rate minus the Lender Paid Mortgage Insurance Rate.
Mortgage
Loan Schedule:
The
schedule of Mortgage Loans annexed to the related Term Sheet, such schedule
setting forth the following information with respect to each Mortgage Loan
sold
pursuant to such Term Sheet:
(1)the
Company's Mortgage Loan identifying number;
(2)the
Mortgagor's first and last name;
(3)the
street address of the Mortgaged Property including the city, state and zip
code;
(4)a
code
indicating whether the Mortgaged Property is owner-occupied, a second home
or an
investor property;
(5)the
type
of residential property constituting the Mortgaged Property;
(6)the
original months to maturity of the Mortgage Loan;
(7)the
remaining months to maturity from the related Cut-off Date, based on the
original amortization schedule and, if different, the maturity expressed
in the
same manner but based on the actual amortization schedule;
(8)the
Sales
Price, if applicable, Appraised Value and Loan-to-Value
Ratio;
(9) the
Mortgage Interest Rate as of origination and as of the related Cut-off Date;
with respect to each adjustable rate Mortgage Loan, the initial Adjustment
Date,
the next Adjustment Date immediately following the related Cut-off Date, the
Index, the Margin, the Initial Rate Cap, if any, Periodic Rate Cap, if any,
minimum Mortgage Interest Rate under the terms of the Mortgage Note and the
Lifetime Rate Cap;
(10) the
Origination Date of the Mortgage Loan;
(11) the
stated maturity date;
(12) the
amount of the Monthly Payment at origination;
(13) the
amount of the Monthly Payment as of the related Cut-off Date;
(14) the
original principal amount of the Mortgage Loan;
(15) the
scheduled Stated Principal Balance of the Mortgage Loan as of the close of
business on the related Cut-off Date, after deduction of payments of principal
due on or before the related Cut-off Date whether or not collected;
(16)
a
code
indicating the purpose of the Mortgage Loan (i.e., purchase, rate and term
refinance, Equity Take-Out Refinanced Mortgage Loan);
(17)
a
code
indicating the documentation style (i.e. full, alternative, etc.);
(18) the
number of times during the twelve (12) month period preceding the related
Closing Date that any Monthly Payment has been received after the month of
its
scheduled Due Date;
(19) the
date
on which the first payment is or was due;
(20)
a
code
indicating whether or not the Mortgage Loan is the subject of a Primary Mortgage
Insurance Policy and the name of the related insurance carrier;
(21)
a
code
indicating whether or not the Mortgage Loan is currently convertible and the
conversion spread;
(22)
the
last
Due Date on which a Monthly Payment was actually applied to the unpaid principal
balance of the Mortgage Loan.
(23)
product
type (i.e. fixed, adjustable, 3/1, 5/1, etc.);
(24)
credit
score, if applicable;
(25) a
code
indicating whether or not the Mortgage Loan is the subject of a Lender Primary
Mortgage Insurance Policy and the name of the related insurance carrier and
the
Lender Paid Mortgage Insurance Rate;
(26)
a
code
indicating whether or not the Mortgage Loan has a prepayment penalty and if
so,
the amount and term thereof;
(27)
the
Current Appraised Value of the Mortgage Loan and Current LTV, if
applicable;
(28)
whether
such Mortgage Loan is a “Home Loan”, “Covered Home Loan”, “Manufactured Housing”
or “Home Improvement Loan” as defined in the
New Jersey Home Ownership Security Act of 2002;
(29)
whether
the Mortgage Loan has
a mandatory arbitration clause;
and
(30)
whether
the Mortgage Loan is “interest-only”
“negative amortization”.
With
respect to the Mortgage Loans in the aggregate, the Mortgage Loan Schedule
attached to the related Term Sheet shall set forth the following information,
as
of the related Cut-off Date:
(1) the
number of Mortgage Loans;
(2) the
current aggregate outstanding principal balance of the Mortgage
Loans;
(3) the
weighted average Mortgage Interest Rate of the Mortgage Loans;
(4) the
weighted average maturity of the Mortgage Loans; and
(5)
the
weighted average months to next Adjustment Date;
Mortgage
Note:
The
original executed note or other evidence of the indebtedness of a Mortgagor
secured by a Mortgage.
Mortgaged
Property:
With
respect to each Mortgage Loan, the underlying real property securing repayment
of the related Mortgage Note, consisting of a single parcel of real estate
considered to be real estate under the laws of the state in which such real
property is located which may include condominium units and planned unit
developments, improved by a residential dwelling; except that with respect
to
real property located in jurisdictions in which the use of leasehold estates
for
residential properties is a widely-accepted practice, a leasehold estate of
the
Mortgage, the term of which is equal to or longer than the term of the Mortgage.
Mortgagor:
With
respect to each Mortgage Loan, the obligor on the related Mortgage Note.
Nonrecoverable
Advance:
Any
portion of a Monthly Advance or Servicing Advance previously made or proposed
to
be made by the Company pursuant to this Agreement, that, in the good faith
judgment of the Company, will not or, in the case of a proposed advance, would
not, be ultimately recoverable by it from the related Mortgagor or the related
Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds or otherwise
with respect to the related Mortgage Loan.
Officers'
Certificate:
A
certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
the President, a Senior Vice President or a Vice President or 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 party on behalf of
whom the opinion is being given, reasonably acceptable to the
Purchaser.
Origination
Date:
The
date on which a Mortgage Loan funded, which date shall not, in connection with
a
Refinanced Mortgage Loan, be the date of the funding of the debt being
refinanced, but rather the closing of the debt currently outstanding under
the
terms of the Mortgage Loan Documents.
OTS:
Office
of Thrift Supervision, or any successor thereto.
Pass-Through
Transfer:
Any
transaction involving either (1) a sale or other transfer of some or all of
the
Mortgage Loans directly or indirectly to an issuing entity in connection with
an
issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities or (2) an issuance of publicly offered or privately
placed, rated or unrated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage
Loans.
Periodic
Rate Cap:
With
respect to each adjustable rate Mortgage Loan, the maximum increase or decrease
in the Mortgage Interest Rate on any Adjustment Date, as set forth in the
related Mortgage Note and the related Mortgage Loan Schedule.
Permitted
Investments:
Any one
or more of the following obligations or securities:
(i) direct
obligations of, and obligations fully guaranteed by the United States of America
or any agency or instrumentality of the United States of America the obligations
of which are backed by the full faith and credit of the United States of
America;
|
(ii)
(a) demand or time deposits, federal funds or bankers' acceptances
issued
by any depository institu-tion or trust company incorporated under
the
laws of the United States of America or any state thereof and subject
to
supervision and examination by federal and/or state banking authorities,
provided that the commercial paper and/or the short-term deposit
rating
and/or the long-term unsecured debt obligations or deposits of such
depository institution or trust company at the time of such investment
or
contractual commitment providing for such investment are rated in
one of
the two highest rating categories by each Rating Agency and (b) any
other
demand or time deposit or certificate of deposit that is fully insured
by
the FDIC;
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(iii)
repurchase obligations with a term not to exceed thirty (30) days
and with
respect to (a) any security described in clause (i) above and entered
into
with a depository institution or trust company (acting as principal)
described in clause (ii)(a) above;
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(iv)
securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America
or
any state thereof that are rated in one of the two highest rating
categories by each Rating Agency at the time of such in-vestment
or
contractual commitment providing for such investment; provided,
however,
that securities issued by any particular corporation will not be
Permitted
Investments to the extent that investments therein will cause the
then
outstanding principal amount of secur-ities issued by such corporation
and
held as Permitted Investments to exceed 10% of the aggregate outstand-ing
principal balances of all of the Mortgage Loans and Permitted
Investments;
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(v)
commercial paper (including both non-interest-bearing discount obligations
and interest-bearing obliga-tions payable on demand or on a specified
date
not more than one year after the date of issuance there-of) which
are
rated in one of the two highest rating categories by each Rating
Agency at
the time of such investment;
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(vi)
any other demand, money market or time deposit, obligation, security
or
investment as may be acceptable to each Rating Agency as evidenced
in
writing by each Rating Agency; and
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(vii)
any money market funds the collateral of which consists of obligations
fully guaranteed by the United States of America or any agency or
instru-ment-al-ity of the United States of America the obligations
of
which are backed by the full faith and credit of the United States
of
America (which may include repurchase obligations secured by collateral
described in clause (i)) and other securities and which money market
funds
are rated in one of the two highest rating categories by each Rating
Agency;
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provided,
however,
that no
instrument or security shall be a Permitted Investment if such instrument or
security evidences a right to receive only interest payments with respect to
the
ob-li-ga-tions underlying such instrument or if such security provides for
payment of both principal and interest with a yield to matur-ity in excess
of
120% of the yield to maturity at par or if such investment or security is
purchased at a price greater than par.
Person:
Any
individual, corporation, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Prepayment
Interest Shortfall:
With
respect to any Remittance Date, for each Mortgage Loan that was the subject
of a
Principal Prepayment during the related Prepayment Period, an amount equal
to
the excess of one month’s interest at the applicable Mortgage Loan Remittance
Rate on the amount of such Principal Prepayment over the amount of interest
(adjusted to the Mortgage Loan Remittance Rate) actually paid by the related
Mortgagor with respect to such Prepayment Period.
Prepayment
Period: With
respect to any Remittance Date, the calendar month preceding the month in which
such Remittance Date occurs.
Primary
Mortgage Insurance Policy:
Each
primary policy of mortgage insurance represented to be in effect pursuant to
Section 3.02(hh), or any replacement policy therefor obtained by the Company
pursuant to Section 4.08.
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 (Northeast Edition).
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan full or partial which
is received in advance of its scheduled Due Date, including any prepayment
penalty or premium thereon and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Purchase
Price:
As
defined in Section 2.02.
Purchaser:
EMC
Mortgage Corporation, its successors in interest and assigns.
Qualified
Appraiser:
An
appraiser, duly appointed by the Company, who had no interest, direct or
indirect in the related 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 FIRREA and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
Qualified
Insurer:
A
mortgage insurance company duly authorized and licensed as such under the laws
of the states in which the related Mortgaged Property is located and approved
as
an insurer by ▇▇▇▇▇▇ Mae or FHLMC.
Rating
Agency:
Standard & Poor's, Fitch, Inc. or, in the event that some or all of the
ownership of the Mortgage Loans is evidenced by mortgage-backed securities,
the
nationally recognized rating agencies issuing ratings with respect to such
securities, if any.
Reconstituted
Mortgage Loans:
As
defined in Section 11.19.
Reconstitution:
As
defined in Section 11.18.
Reconstitution
Agreement:
As
defined in Section 11.18.
Reconstitution
Date:
As
defined in Section 11.18.
Refinanced
Mortgage Loan:
A
Mortgage Loan which was made to a Mortgagor who owned the Mortgaged Property
prior to the origination of such Mortgage Loan and the proceeds of which were
used in whole or part to satisfy an existing mortgage.
REMIC:
A "real
estate mortgage investment conduit," as such term is defined in Section 860D
of
the Code.
REMIC
Provisions:
The
provisions of the federal income tax law relating to REMICs, which appear at
Sections 860A through 860G of the Code, and the related provisions and
regulations promulgated thereunder, as the foregoing may be in effect from
time
to time.
Remittance
Date:
The
18th day of any month, beginning with the First Remittance Date, or if such
18th
day is not a Business Day, the first Business Day immediately preceding such
18th day.
REO
Disposition:
The
final sale by the Company of any REO Property.
REO
Disposition Proceeds:
Amounts
received by the Company in connection with a related REO
Disposition.
REO
Property:
A
Mortgaged Property acquired by the Company on behalf of the Purchaser as
described in Section 4.13.
Repurchase
Price:
With
respect to any Mortgage Loan, a price equal to (i) the product of the greater
of
(x) 100% or (y) the percentage of par as stated in the related Term Sheet;
multiplied by the Stated Principal Balance of such Mortgage Loan on the
repurchase date, plus (ii) interest on such Stated Principal Balance at the
Mortgage Loan Remittance Rate from the last date through which interest has
been
paid and distributed to the Purchaser to the end of the month of repurchase,
plus, (iii) reasonable and necessary third party expenses incurred in connection
with the transfer of the Mortgage Loan being repurchased; 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.
SAIF:
The
Savings Association Insurance Fund, or any successor thereto.
Sales
Price: With
respect to any Mortgage Loan the proceeds of which were used by the Mortgagor
to
acquire the related Mortgaged Property, the amount paid by the related Mortgagor
for such Mortgaged Property.
Servicing
Advances:
All
customary, reasonable and necessary "out of pocket" costs and expenses
(including reasonable attorneys' 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, administrative or judicial proceedings,
or any legal work or advice specifically related to servicing the Mortgage
Loans, including but not limited to, foreclosures, bankruptcies, condemnations,
drug seizures, elections, foreclosures by subordinate or superior lienholders,
and other legal actions incidental to the servicing of the Mortgage Loans
(provided that such expenses are reasonable and that the Company specifies
the
Mortgage Loan(s) to which such expenses relate and, upon the Purchaser’s
request, provides documentation supporting such expense (which documentation
would be acceptable to ▇▇▇▇▇▇ ▇▇▇), and provided further that any such
enforcement, administrative or judicial proceeding does not arise out of a
breach of any representation, warranty or covenant of the Company hereunder),
(c) the management and liquidation of the Mortgaged Property if the Mortgaged
Property is acquired in full or partial satisfaction of the Mortgage, (d) taxes,
assessments, water rates, sewer rates and other charges which are or may become
a lien upon the Mortgaged Property, and Primary Mortgage Insurance Policy
premiums and fire and hazard insurance coverage, (e) any expenses reasonably
sustained by the Company with respect to the liquidation of the Mortgaged
Property in accordance with the terms of this Agreement and (f) 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 Servicing Fee Rate and (b) the unpaid
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 of such Monthly Payment collected
by
the Company, or as otherwise provided under Section 4.05(iii) and in accordance
with the ▇▇▇▇▇▇ Mae Guide(s). Any fee payable to the Company for administrative
services related to any REO Property as described in Section 4.13 shall be
payable from Liquidation Proceeds of the related REO Property.
Servicing
Fee Rate:
As set
forth in the Term Sheet.
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
Purchaser and copies of the Mortgage Loan Documents listed in Exhibit
A,
the
originals of which are delivered to the Purchaser or its designee pursuant
to
Section 2.04.
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 as of any date of determination, (i) the principal balance
of
such Mortgage Loan at the Cut-off Date after giving effect to payments of
principal due on or before such date, whether or not received, minus (ii) all
amounts previously distributed to the Purchaser with respect to the Mortgage
Loan representing payments or recoveries of principal or advances in lieu
thereof.
Subservicer:
Any
subservicer which is subservicing the Mortgage Loans pursuant to a Subservicing
Agreement. Any subservicer shall meet the qualifications set forth in Section
4.01.
Subservicing
Agreement:
An
agreement between the Company and a Subservicer, if any, for the servicing
of
the Mortgage Loans.
Term
Sheet:
A
supplemental agreement in the form attached hereto as Exhibit
I
which
shall be executed and delivered by the Company and the Purchaser to provide
for
the sale and servicing pursuant to the terms of this Agreement of the Mortgage
Loans listed on Schedule I attached thereto, which supplemental agreement shall
contain certain specific information relating to such sale of such Mortgage
Loans and may contain additional covenants relating to such sale of such
Mortgage Loans.
Whole
Loan Transfer:
As
defined in Section 11.18.
ARTICLE
II
PURCHASE
OF MORTGAGE LOANS; SERVICING OF MORTGAGE LOANS;
RECORD
TITLE AND POSSESSION OF MORTGAGE FILES;
BOOKS
AND RECORDS; CUSTODIAL AGREEMENT;
DELIVERY
OF MORTGAGE LOAN DOCUMENTS
Section
2.01 Agreement
to Purchase.
From
time
to time, the Company agrees to sell and the Purchaser agrees to purchase the
Mortgage Loans having an aggregate Stated Principal Balance on the related
Cut-off Date set forth in the related Term Sheet in an amount as set forth
in
the Confirmation, or in such other amount as agreed by the Purchaser and the
Company as evidenced by the actual aggregate Stated Principal Balance of the
Mortgage Loans accepted by the Purchaser on the related Closing Date, with
servicing retained by the Company. The Company shall deliver the related
Mortgage Loan Schedule attached to the related Term Sheet for the Mortgage
Loans
to be purchased on the related Closing Date to the Purchaser at least two (2)
Business Days prior to the related Closing Date. The Mortgage Loans shall be
sold pursuant to this Agreement, and the related Term Sheet shall be executed
and delivered on the related Closing Date.
Section
2.02 Purchase
Price.
The
“Purchase Price” for each Mortgage Loan shall be the percentage of par as stated
in the related Term Sheet, multiplied by the Stated Principal Balance, as of
the
related Cut-off Date, of the Mortgage Loan listed on the related Mortgage Loan
Schedule attached to the related Term Sheet, after application of scheduled
payments of principal due on or before the related Cut-off Date whether or
not
collected.
In
addition to the Purchase Price as described above, the Purchaser shall pay
to
the Company, at closing, accrued interest on the Stated Principal Balance of
each Mortgage Loan as of the related Cut-off Date at the Mortgage Loan
Remittance Rate of each Mortgage Loan from the related Cut-off Date through
the
day prior to the related Closing Date, inclusive.
The
Purchase Price plus accrued interest as set forth in the preceding paragraph
shall be paid on the related Closing Date by wire transfer of immediately
available funds.
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 net of
applicable Servicing Fees (minus that portion of any such payment which is
allocable to the period prior to the related Cut-off Date). The Stated 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 related
Cut-off Date shall not be applied to the principal balance as of the related
Cut-off Date. Such prepaid amounts (minus the applicable Servicing Fee) shall
be
the property of the Purchaser. The Company shall deposit any such prepaid
amounts into the Custodial Account, which account is established for the benefit
of the Purchaser for subsequent remittance by the Company to the
Purchaser.
Section
2.03 [Reserved]
Section
2.04 Record
Title and Possession of Mortgage Files; Maintenance of Servicing
Files.
As
of the
related Closing Date, the Company sold, transferred, assigned, set over and
conveyed to the Purchaser, without recourse, on a servicing retained basis,
and
the Company hereby acknowledges that the Purchaser has, but subject to the
terms
of this Agreement and the related Term Sheet, all the right, title and interest
of the Company in and to the Mortgage Loans. The Company will deliver the
Mortgage Files to the Custodian designated by the Purchaser, on or before the
related Closing Date, at the expense of the Company. The Company shall maintain
a Servicing File consisting of a copy of the contents of each Mortgage File
and
the originals of the documents in each Mortgage File not delivered to the
Purchaser. The Servicing File shall contain all documents necessary to service
the Mortgage Loans. The 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. From the related Closing Date, the ownership of each
Mortgage Loan, including the Mortgage Note, the Mortgage, the contents of the
related Mortgage File and all rights, benefits, proceeds and obligations arising
therefrom or in connection therewith, has been vested in 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 and all records
or
documents with respect to the Mortgage Loans prepared by or which come into
the
possession of the Company shall be received and held by the Company in trust
for
the benefit of the Purchaser as the owner of the Mortgage Loans. Any portion
of
the Mortgage Files retained by the Company shall be appropriately identified
in
the Company's computer system to clearly reflect the ownership of the Mortgage
Loans by the Purchaser. The Company shall release its custody of the contents
of
the Mortgage Files only in accordance with written instructions of the
Purchaser, except when 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 or Loans with respect thereto pursuant to this Agreement and
the
related Term Sheet, such written instructions shall not be
required.
Section
2.05 Books
and Records.
The
sale
of each Mortgage Loan shall be reflected on the Company's balance sheet and
other financial statements 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 the Mortgage Loans that shall be appropriately identified in the
Company's computer system to clearly reflect the ownership of the 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 ▇▇▇▇▇▇ ▇▇▇ or FHLMC,
as
applicable, 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 of any condominium project as required by ▇▇▇▇▇▇ Mae or
FHLMC, 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.
The
Company shall maintain with respect to each Mortgage Loan and shall make
available for inspection by the 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.
In
addition to the foregoing, the Company shall provide to any supervisory agents
or examiners that regulate the Purchaser, including but not limited to, the
OTS,
the FDIC and other similar entities, access, during normal business hours,
upon
reasonable advance notice to the Company and without cost to the Company or
such
supervisory agents or examiners, to any documentation regarding the Mortgage
Loans that may be required by any applicable regulator.
Section
2.06. Transfer
of Mortgage Loans.
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 any Mortgage Loan unless a notice of the transfer
of such Mortgage Loan has been delivered to the Company in accordance with
this
Section 2.06 and the books and records of the Company 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 the transferee will not be deemed to be a Purchaser hereunder
binding upon the Company unless such transferee shall agree in writing to be
bound by the terms of this Agreement and an original counterpart of the
instrument of transfer in an Assignment and Assumption of this Agreement
substantially in the form of Exhibit
D
hereto
executed by the transferee shall have been delivered to the Company. 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 the previous Purchaser
shall be released from its obligations hereunder with respect to the Mortgage
Loans sold or transferred.
Section
2.07 Delivery
of Mortgage Loan Documents.
The
Company shall deliver and release to the Purchaser or its designee the Mortgage
Loan Documents in accordance with the terms of this Agreement and the related
Term Sheet. The documents enumerated as items (1), (2), (3), (4), (5), (6),
(7),
(8), (9) and (16) in Exhibit
A
hereto
shall be delivered by the Company to the Purchaser or its designee no later
than
three (3) Business Days prior to the related Closing Date pursuant to a bailee
letter agreement. All other documents in Exhibit
A
hereto,
together with all other documents executed in connection with the Mortgage
Loan
that the Company may have in its possession, shall be retained by the Company
in
trust for the Purchaser. If the Company cannot deliver the original recorded
Mortgage Loan Documents or the original policy of title insurance, including
riders and endorsements thereto, on the related Closing Date, the Company shall,
promptly upon receipt thereof and in any case not later than 150 days from
the
related Closing Date, deliver such original documents, including original
recorded documents, to the Purchaser or its designee (unless the Company is
delayed in making such delivery by reason of the fact that such documents shall
not have been returned by the appropriate recording office). If delivery is
not
completed within 150 days solely due to delays in making such delivery by reason
of the fact that such documents shall not have been returned by the appropriate
recording office, the Company shall deliver such document to Purchaser, or
its
designee, within such time period as specified in a Company's Officer's
Certificate. In the event that documents have not been received by the date
specified in the Company's Officer's Certificate, a subsequent Company's
Officer's Certificate shall be delivered by such date specified in the prior
Company's Officer's Certificate, stating a revised date for receipt of
documentation. The procedure shall be repeated until the documents have been
received and delivered. If delivery is not completed within 270 days solely
due
to delays in making such delivery by reason of the fact that such documents
shall not have been returned by the appropriate recording office, the Company
shall continue to use its best efforts to effect delivery as soon as possible
thereafter, provided that if such documents are not delivered by the 330th
day
from the date of the related Closing Date, the Company shall repurchase the
related Mortgage Loans at the Repurchase Price in accordance with Section 3.03
hereof unless the Company provides evidence that such non-delivery is solely
due
to delays by the appropriate recording office.
The
Company shall pay all initial recording fees, if any, for the assignments of
mortgage and any other fees in connection with the transfer of all original
documents to the Purchaser or its designee. The Company shall prepare, in
recordable form, all assignments of mortgage necessary to assign the Mortgage
Loans to the Purchaser, or its designee. The Company shall be responsible for
recording the assignments of mortgage as directed by the Purchaser.
The
Company shall provide an original or duplicate original of the title insurance
policy to the Purchaser or its designee within ninety (90) days of the receipt
of the recorded documents (required for issuance of such policy) from the
applicable recording office.
Any
review by the Purchaser, or its designee, of the Mortgage Files shall in no
way
alter or reduce the Company's obligations hereunder.
If
the
Purchaser or its designee discovers any defect with respect to a Mortgage File,
the Purchaser shall, or shall cause its designee to, give written specification
of such defect to the Company which may be given in the exception report
attached as an exhibit to the related Term Sheet or the certification delivered
pursuant to this Section 2.07, or otherwise in writing and the Company shall
cure or repurchase such Mortgage Loan in accordance with Section
3.03.
The
Company shall forward to the Purchaser, or its designee, 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 thirty
(30) days of their execution; provided, however, that the Company shall provide
the Purchaser, or its designee, with a certified true copy of any such document
submitted for recordation within thirty (30) 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 120 days of its submission for
recordation.
From
time
to time, the Company may have a need (other than in connection with a payment
in
full, which is described more fully in Section 6.02 herein) for Mortgage Loan
Documents to be released from the Purchaser, or its designee. The Purchaser
shall, or shall cause its designee, upon the written request of the Company
in
the form attached hereto as Exhibit
G,
within
ten (10) Business Days, deliver to the Company, any requested documentation
previously delivered to the Purchaser as part of the Mortgage File, provided
that such documentation is promptly returned to the Purchaser, or its designee,
when the Company no longer requires possession of the document, and provided
that during the time that any such documentation is held by the Company, such
possession is in trust for the benefit of the Purchaser.
Section
2.08 Quality
Control Procedures.
The
Company must have an internal quality control program that verifies, on a
regular basis, the existence and accuracy of the legal documents, credit
documents, property appraisals, and underwriting decisions. The program must
be
capable of evaluating and monitoring the overall quality of its loan production
and servicing activities. The program is to ensure that the Mortgage Loans
are
originated and serviced in accordance with prudent mortgage banking practices
and accounting principles; guard against dishonest, fraudulent, or negligent
acts; and guard against errors and omissions by officers, employees, or other
authorized persons.
Section
2.09 Near-term
Principal Prepayments; Near Term Payment Defaults.
In
the
event any Principal Prepayment in full is made by a Mortgagor on or prior to
three months (unless such other period is set forth in the related Confirmation
and Term Sheet) after the related Closing Date, the Company shall, upon written
notice thereof from the Purchaser received by the Company within sixty (60)
days
of the date of such prepayment in full, remit to the Purchaser an amount equal
to the excess, if any, of the Purchase Price Percentage over par multiplied
by
the amount of such Principal Prepayment in full. Such remittance shall be made
by the Company to the Purchaser no later than the seventh Business Day following
receipt of such notice of Principal Prepayment by the Purchaser.
In
the
event either of the first three (3) scheduled Monthly Payments (unless such
other number of Monthly Payments is set forth in the related Confirmation or
Term Sheet) which are due under any Mortgage Loan after the related Cut-off
Date
are not made during the month in which such Monthly Payments are due, then
not
later than seven (7) Business Days after written notice to the Company by the
Purchaser (and at the Purchaser’s sole option), the Company, shall repurchase
such Mortgage Loan from the Purchaser pursuant to the repurchase provisions
contained in Subsection 3.03. However, if the Company provides evidence
satisfactory to the Purchaser that the delinquency was due to a servicing set
up
error, no repurchase shall be required.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF
THE
COMPANY; REPURCHASE; REVIEW OF MORTGAGE LOANS
Section
3.01 Representations
and Warranties of the Company.
The
Company represents, warrants and covenants to the Purchaser that, as of the
related Closing Date or as of such date specifically provided
herein:
(a)
The
Company is duly organized, validly existing and in good standing under the
laws
of the jurisdiction of its organization and has all licenses necessary to carry
out its business as now being conducted, and is licensed and qualified to
transact business in and is in good standing under the laws of each state in
which any Mortgaged Property is located or is otherwise exempt under applicable
law from such licensing or qualification or is otherwise not required under
applicable law to effect such licensing or qualification and no demand for
such
licensing or qualification has been made upon the Company by any such state,
and
in any event the Company is in material compliance with the laws of any such
state to the extent necessary to ensure the enforceability of each Mortgage
Loan
and the servicing of the Mortgage Loans in accordance with the terms of this
Agreement;
(b)
The
Company has adequate power and authority and legal right to hold each Mortgage
Loan, to sell each Mortgage Loan and to execute, deliver and perform, and to
enter into and consummate all transactions contemplated by this Agreement and
the related Term Sheet. The Company has duly authorized the execution, delivery
and performance of this Agreement and the related Term Sheet and any agreements
contemplated hereby, has duly executed and delivered this Agreement and the
related Term Sheet, and any agreements contemplated hereby, and, assuming due
authorization, execution and delivery by the Purchaser, this Agreement and
the
related Term Sheet and each Assignment to the Purchaser and any agreements
contemplated hereby, constitutes a legal, valid and binding obligation of the
Company, enforceable against it in accordance with its terms, except as
enforceability thereof may be limited by bankruptcy, insolvency or
reorganization;
(c)
Neither the execution and delivery of this Agreement and the related Term Sheet,
nor the origination or purchase of the Mortgage Loans by the Company, the sale
of the Mortgage Loans to the Purchaser, the consummation of the transactions
contemplated hereby, or the fulfillment of or compliance with the terms and
conditions of this Agreement and the related Term Sheet will violate the
Company's charter or by-laws or constitute a default under or result in a
material breach or acceleration of any material agreement or instrument to
which
the Company is now a party or by which it is bound, or result in the material
violation of any law, rule, regulation, order, judgment or decree to which
the
Company or its properties are subject, or impair the ability of the Purchaser
to
enforce its rights under the Mortgage Loans.
(d)
There
is no action, suit, proceeding or investigation pending or, to the best of
the
Company’s knowledge, threatened against the Company, or any order or decree
outstanding, with respect to the Company which, either in any one instance
or in
the aggregate, could reasonably be expected to have a material adverse effect
on
the financial condition of the Company or seeks to prevent the consummation,
performance or enforceability of any of the transactions contemplated by this
Agreement.
(e)
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 related Term Sheet,
or
the consummation of the transactions contemplated by this Agreement or the
related Term Sheet, except for consents, approvals, authorizations and orders
which have been obtained;
(f)
The
consummation of the transactions contemplated by this Agreement or the related
Term Sheet is in the ordinary course of business of the Company, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages
by
the Company pursuant to this Agreement or the related Term Sheet are not subject
to bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;
(g)
The
origination and servicing practices used by the Company and any prior originator
or servicer with respect to each Mortgage Note and Mortgage have been legal
and
in accordance with applicable laws and regulations and the Mortgage Loan
Documents, and in all material respects proper and prudent in the mortgage
origination and servicing business. Each
Mortgage Loan is being (and has been) serviced in accordance with Accepted
Servicing Practices and applicable state and federal laws, including, without
limitation, the Federal Truth-In-Lending Act and other consumer protection
laws,
real estate settlement procedures, usury, equal credit opportunity and
disclosure laws. With
respect to escrow deposits and payments that the Company, on behalf of an
investor, is entitled to collect, all such payments are in the possession of,
or
under the control 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 and the provisions of the related Mortgage Note and Mortgage. As
to
any Mortgage Loan that is the subject of an escrow, escrow of funds is not
prohibited by applicable law and has been established in an amount sufficient
to
pay for every escrowed item that remains unpaid and has been assessed but is
not
yet due and payable. No escrow deposits or other charges or payments due under
the Mortgage Note have been capitalized under any Mortgage or the related
Mortgage Note;
(h)
The
Company used no selection procedures that identified the Mortgage Loans as
being
less desirable or valuable than other comparable mortgage loans in the Company's
portfolio at the related Cut-off Date;
(i)
The
Company will treat the sale of the Mortgage Loans to the Purchaser as a sale
for
reporting and accounting purposes and, to the extent appropriate, for federal
income tax purposes;
(j)
The
Company is an approved seller/servicer of residential mortgage loans for ▇▇▇▇▇▇
Mae, FHLMC and HUD, with such facilities, procedures and personnel necessary
for
the sound servicing of such mortgage loans. The Company is duly qualified,
licensed, registered and otherwise authorized under all applicable federal,
state and local laws, and regulations, if applicable, meets the minimum capital
requirements set forth by the OTS, and is in good standing to sell mortgage
loans to and service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ and FHLMC and no event has
occurred which would make the Company unable to comply with eligibility
requirements or which would require notification to either ▇▇▇▇▇▇ Mae or FHLMC;
(k)
The
Company does not believe, nor does it have any cause or reason to believe,
that
it cannot perform each and every covenant contained in this Agreement or the
related Term Sheet. 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 with the intent to hinder, delay or defraud any of the
Company's creditors;
(l)
No
statement, tape, diskette, form, report or other document prepared by, or on
behalf of, the Company pursuant to this Agreement or the related Term Sheet
or
in connection with the transactions contemplated hereby, contains or will
contain any statement that is or will be inaccurate or misleading in any
material respect;
(m)
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. In the opinion of the Company, the consideration received
by
the Company upon the sale of the Mortgage Loans to the Purchaser under this
Agreement and the related Term Sheet constitutes fair consideration for the
Mortgage Loans under current market conditions.
(n)
The
Company has delivered to the Purchaser financial statements of its parent,
for
its last two complete fiscal years as requested. All such financial information
fairly presents the pertinent results of operations and financial position
for
the period identified and has been prepared in accordance with GAAP throughout
the periods involved, except as set forth in the notes thereto. There has been
no change in the business, operations, financial condition, properties or assets
of the Company since the date of the Company’s financial information that would
have a material adverse effect on its ability to perform its obligations under
this Agreement; and
(o)
The
Company has not dealt with any broker, investment banker, agent or other person
that may be entitled to any commission or compensation in connection with the
sale of the Mortgage Loans.
Section
3.02 Representations
and Warranties as to Individual Mortgage Loans.
The
Company hereby represents and warrants to the Purchaser, as to each Mortgage
Loan, as of the related Closing Date as follows:
(a)
The
information set forth in the Mortgage Loan Schedule attached to the related
Term
Sheet is true, complete and correct in all material respects as of the related
Cut-Off Date;
(b)
The
Mortgage is a valid, existing and enforceable first lien or a first priority
ownership interest in an estate in fee simple in real property on the Mortgaged
Property securing the related Mortgage Note subject to principles of equity,
bankruptcy, insolvency and other laws of general application affecting the
rights of creditors;
(c)
All
payments due prior to the related Cut-off Date for such Mortgage Loan have
been
made; there are no material defaults under the terms of the Mortgage Loan;
the
Company has not advanced its own funds, or induced, solicited or knowingly
received any advance of funds from a party other than the owner of the related
Mortgaged Property, directly or indirectly, for the payment of any amount
required by the Mortgage Loan. All of the Mortgage Loans will have an actual
interest paid to date of their related Cut-off Date (or later) and will be
due
for the scheduled monthly payment next succeeding the Cut-off Date (or later),
as evidenced by a posting to the Company's servicing collection system. No
payment under any Mortgage Loan is delinquent nor has any scheduled payment
been
delinquent at any time during the twelve (12) months prior to the month of
the
related Closing Date. For purposes of this paragraph, a Mortgage Loan will
be
deemed delinquent if any payment due thereunder was not paid by the Mortgagor
in
the month such payment was due;
(d)
There
are no defaults by the Company in complying with the terms of the Mortgage,
and
all taxes, governmental assessments, insurance premiums, water, sewer and
municipal charges, leasehold payments or ground rents which previously became
due and owing have been paid, or escrow funds have been established in an amount
sufficient to pay for every such escrowed item which remains unpaid and which
has been assessed but is not yet due and payable;
(e)
The
terms of the Mortgage Note and the Mortgage have not been impaired, waived,
altered or modified in any respect, except by written instruments which have
been recorded to the extent any such recordation is required by law, or,
necessary to protect the interest of the Purchaser. No instrument of waiver,
alteration or modification has been executed except in connection with a
modification agreement and which modification agreement is part of the Mortgage
File and the terms of which are reflected in the related Mortgage Loan Schedule,
and no Mortgagor has been released, in whole or in part, from the terms thereof
except in connection with an assumption agreement and which assumption agreement
is part of the Mortgage File and the terms of which are reflected in the related
Mortgage Loan Schedule; the substance of any such waiver, alteration or
modification has been approved by the issuer of any related Primary Mortgage
Insurance Policy, Lender Primary Mortgage Insurance Policy and title insurance
policy, to the extent required by the related policies;
(f)
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 the Mortgage Note
or
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(g)
All
buildings or other customarily insured improvements upon the Mortgaged Property
are insured by a Qualified Insurer, against loss by fire, hazards of extended
coverage and such other hazards as are provided for in the ▇▇▇▇▇▇ ▇▇▇ or FHLMC
Guide, as well as all additional requirements set forth in Section 4.10 of
this
Agreement. All such insurance policies are in full force and effect and contain
a standard mortgagee clause naming the Company and its successors in interest
and assigns as loss payee and such clause is still in effect and all premiums
due thereon have been paid. If required by the Flood Disaster Protection Act
of
1973, as amended, the Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration which policy conforms to ▇▇▇▇▇▇ Mae or FHLMC requirements, as
well as all additional requirements set forth in Section 4.10 of this Agreement.
Such policy was issued by a Qualified Insurer. The Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the Mortgagor's cost
and
expense, and on the Mortgagor's failure to do so, authorizes the holder of
the
Mortgage to maintain such insurance at the Mortgagor's cost and expense and
to
seek reimbursement therefor from the Mortgagor. Neither the Company (nor any
prior originator or servicer of any of the Mortgage Loans) nor any Mortgagor
has
engaged in any act or omission which has impaired or would impair the coverage
of any such policy, the benefits of the endorsement provided for therein, or
the
validity and binding effect of either;
(h)
Each
Mortgage
Loan complies with, and the Company has complied with, applicable local, state
and federal laws, regulations and other requirements including, without
limitation, usury, equal credit opportunity, real estate settlement procedures,
the Federal Truth-In-Lending Act, disclosure laws and all applicable predatory
and abusive lending laws and consummation of the transactions contemplated
hereby, including without limitation, the receipt of interest by the owner
of
such Mortgage Loan, will not involve the violation of any such laws, rules
or
regulations. None of the Mortgage Loans are (a) Mortgage Loans subject to 12
CFR
Part 226.31, 12 CFR Part 226.32 or 226.34 of Regulation Z, the regulation
implementing TILA, which implements the Home Ownership and Equity Protection
Act
of 1994, as amended, or (b) except as may be provided in subparagraph (c) below,
classified and/or defined, as a “high cost”, “threshold”, “predatory” “high risk
home loan” or “covered” loan (or a similarly classified loan using different
terminology under a law imposing additional legal liability for mortgage loans
having high interest rates, points and or/fees) under any other applicable
state, federal or local law including, but not limited to, the States of
Georgia, New York, North Carolina, Arkansas, Kentucky or New Mexico, (c)
Mortgage Loans subject to the New Jersey Home Ownership Security Act of 2002
(the “Act”), unless such Mortgage Loan is a (1) “Home Loan” as defined in the
Act that is a first lien Mortgage Loan, which is not a “High Cost Home Loan” as
defined in the Act or (2) “Covered Home Loan” as defined in the Act that is a
first lien purchase money Mortgage Loan, which is not a High Cost Home Loan
under the Act, or (d) secured by Mortgaged Property in the Commonwealth of
Massachusetts with a loan application date on or after November 7, 2004 that
refinances a mortgage loan that is less than sixty (60) months old, unless
such
Mortgage Loan (1) is on an investment property, (ii) meets the requirements
set
forth in the Code of Massachusetts Regulation (“CMR”), 209 CMR 53.04(1)(b), or
(iii) meets the requirements set forth in the 209 CMR 53.04(1)(c). In addition
to and notwithstanding anything to the contrary herein, no Mortgage Loan for
which the Mortgaged Property is located in New Jersey is a Home Loan as defined
in the Act that was made, arranged, or assigned by a person selling either
a
manufactured home or home improvements to the Mortgaged Property or was made
by
an originator to whom the Mortgagor was referred by any such seller. The Company
shall maintain in its possession, available for the Purchaser’s inspection, as
appropriate, and shall deliver to the Purchaser or its designee upon demand,
evidence of compliance with all such requirements;
(i)
The
Mortgage has not been satisfied, canceled or subordinated, in whole or in part,
or rescinded, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission. The
Company has not waived the performance by the Mortgagor of any action, if the
Mortgagor’s failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Company waived any default resulting from any action
or
inaction by the Mortgagor;
(j)
The
Mortgage is a valid, existing, enforceable and perfected first lien on the
Mortgaged Property, including all improvements securing the Mortgage Note's
original principal balance subject to principles of equity, bankruptcy,
insolvency and other laws of general application affecting the rights of
creditors. The Mortgage and the Mortgage Note do not contain any evidence of
any
other security interest or other interest or right thereto. Such lien is free
and clear of all adverse claims, liens and encumbrances having priority over
the
first lien of the Mortgage subject only to (1) the lien of non-delinquent
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 which are acceptable
to
mortgage lending institutions generally and either (A) which are referred to
in
the lender’s title insurance policy delivered to the originator or otherwise
considered in the appraisal made for the originator of the Mortgage Loan, or
(B)
which do not adversely affect the residential use or Appraised Value of the
Mortgaged Property as set forth in such appraisal, and (3) 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, existing, enforceable and perfected first
lien and first priority security interest on the property described therein,
and
the Company has the full right to sell and assign the same to the
Purchaser;
(k)
The
Mortgage Note and the related Mortgage are original and genuine and each is
the
legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms subject to principles of equity, bankruptcy,
insolvency and other laws of general application affecting the rights of
creditors, and the Company has taken all action necessary to transfer such
rights of enforceability to the Purchaser (as applicable). All parties to the
Mortgage Note and the Mortgage had the legal capacity to enter into the Mortgage
Loan and to execute and deliver the Mortgage Note and the Mortgage. The Mortgage
Loan Documents are on forms acceptable to ▇▇▇▇▇▇ ▇▇▇ and FHLMC. The Mortgage
Note and the Mortgage have been duly and properly executed by such parties.
No
fraud, error, omission, misrepresentation, negligence or similar occurrence
with
respect to a Mortgage Loan has taken place on the part of the Company or the
Mortgagor, or on the part of any other party involved in the origination or
servicing of the Mortgage Loan. The proceeds of the Mortgage Loan have been
fully disbursed and there is no requirement for future advances thereunder,
and
any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have been
complied with. All costs, fees and expenses incurred in making or closing the
Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor
is
not entitled to any refund of any amounts paid or due under the Mortgage Note
or
Mortgage;
(l)
The
Company is the sole owner and holder of the Mortgage Loan and the indebtedness
evidenced by the Mortgage Note, and had full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interests, lien, pledge, charge, claim or security interest.
Upon
the sale of the Mortgage Loan to the Purchaser, the Company will retain the
Mortgage File or any part thereof with respect thereto not delivered to the
Purchaser or the Purchaser’s designee in trust only for the purpose of servicing
and supervising the servicing of the Mortgage Loan. Immediately prior to the
transfer and assignment to the Purchaser, the Mortgage Loan, including the
Mortgage Note and the Mortgage, were not subject to an assignment, sale or
pledge to any person other than the Purchaser, and the Company had good and
marketable title to and was the sole owner thereof. Following the sale of the
Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of
any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Company intends to relinquish all rights to possess,
control and monitor the Mortgage Loan, except for purposes of servicing the
Mortgage Loan as set forth in this Agreement. After the related Closing Date,
the Company will not have any right to modify or alter the terms of the sale
of
the Mortgage Loan and the Company will not have any obligation or right to
repurchase the Mortgage Loan or substitute another Mortgage Loan, except as
provided in this Agreement, or as otherwise agreed to by the Company and the
Purchaser;
(m)
Each
Mortgage Loan is covered by an ALTA lender's title insurance policy or other
generally acceptable form of policy or insurance acceptable to ▇▇▇▇▇▇ ▇▇▇ or
FHLMC (including adjustable rate endorsements), issued by a title insurer
acceptable to ▇▇▇▇▇▇ Mae or FHLMC and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to
the
exceptions contained in (j)(1), (2) and (3) above) the Company, its successors
and assigns, as to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan and, with respect to adjustable rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment in the Mortgage Interest Rate and Monthly Payment. Where required
by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. The Company, its
successors and assigns, is the sole insured of such lender's title insurance
policy, such title insurance policy has been duly and validly endorsed to the
Purchaser (to the extent necessary) or the assignment to the Purchaser of the
Company's interest therein does not require the consent of or notification
to
the insurer 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 or servicer of the related Mortgage,
including the Company, nor any Mortgagor, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance
policy;
(n)
There
is no default, breach, violation or event of acceleration existing under the
Mortgage or the related 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 any prior mortgagee, has waived any default, breach, violation
or event of acceleration;
(o)
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 law could give
rise
to such liens) affecting the related Mortgaged Property which are or may be
liens prior to or equal to the lien of the related Mortgage;
(p)
All
improvements subject to the Mortgage which were considered in determining the
appraised value of the Mortgaged Property lie wholly within the boundaries
and
building restriction lines of the Mortgaged Property (and wholly within the
project with respect to a condominium unit) and no improvements on adjoining
properties encroach upon the Mortgaged Property except those which are insured
against by the title insurance policy referred to in clause (m) above and all
improvements on the property comply with all applicable zoning and subdivision
laws and ordinances;
(q)
Each
Mortgage Loan was originated by or for the Company pursuant to, and conforms
with, the Company’s underwriting guidelines attached as Exhibit
H
hereto.
The Mortgage Loan bears interest at an adjustable rate (if applicable) as set
forth in the related Mortgage Loan Schedule, and Monthly Payments under the
Mortgage Note are due and payable on the first day of each month. The Mortgage
contains the usual and enforceable provisions of the Company at the time of
origination for the acceleration of the payment of the unpaid principal amount
of the Mortgage Loan if the related Mortgaged Property is sold without the
prior
consent of the mortgagee thereunder;
(r)
The
Mortgaged Property is not subject to any material damage. At origination of
the
Mortgage Loan there was not, since origination of the Mortgage Loan there has
not been, and there currently is no proceeding pending for the total or partial
condemnation of the Mortgaged Property. The Company has not received
notification that any such proceedings are scheduled to commence at a future
date;
(s)
The
related Mortgage contains customary and enforceable provisions such as to render
the rights and remedies of the holder thereof adequate for the realization
against the Mortgaged Property of the benefits of the security provided thereby,
including, (1) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (2) otherwise by judicial foreclosure. There is no homestead
or other exemption available to the Mortgagor which would interfere with the
right to sell the Mortgaged Property at a trustee's sale or the right to
foreclose the Mortgage;
(t)
If
the Mortgage constitutes a deed of trust, a trustee, authorized and duly
qualified if required under applicable law to act as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees
or
expenses, except as may be required by local law, are or will become payable
by
the Purchaser to the trustee under the deed of trust, except in connection
with
a trustee's sale or attempted sale after default by the Mortgagor;
(u)
The
Mortgage File contains an appraisal of the related Mortgaged Property signed
prior to the final approval of the mortgage loan application by a Qualified
Appraiser, approved 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 the appraisal and appraiser both satisfy the requirements of ▇▇▇▇▇▇
▇▇▇ or FHLMC and Title XI of the FIRREA and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated.
The
appraisal is in a form acceptable to ▇▇▇▇▇▇ Mae or FHLMC;
(v)
All
parties which have had any interest in the Mortgage, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) (A) in compliance with any and all
applicable licensing requirements of the laws of the state wherein the Mortgaged
Property is located, and (B) (1) organized under the laws of such state, or
(2)
qualified to do business in such state, or (3) federal savings and loan
associations or national banks or a Federal Home Loan Bank or savings bank
having principal offices in such state, or (4) not doing business in such
state;
(w)
The
related Mortgage Note is not and has not been secured by any collateral except
the lien of the corresponding Mortgage and the security interest of any
applicable security agreement or chattel mortgage referred to above and such
collateral does not serve as security for any other obligation;
(x)
The
Mortgagor has received and has executed, where applicable, all disclosure
materials required by applicable law with respect to the making of such mortgage
loans;
(y)
The
Mortgage Loan does not contain balloon or "graduated payment" features and
no
Mortgage Loan is subject to a buydown agreement or contains any buydown
provision;
(z)
The
Mortgagor is not in bankruptcy and, the Mortgagor is not insolvent and the
Company has no knowledge of any circumstances or conditions with respect to
the
Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor's credit
standing that could reasonably be expected to cause investors to regard the
Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or materially adversely affect the value or marketability of the
Mortgage Loan;
(aa)
Each
Mortgage Loan bears interest based upon a thirty (30) day month and a three
hundred and sixty (360) day year. The Mortgage Loans have an original term
to
maturity of not more than forty (40) years, with interest payable in arrears
on
the first day of each month. As to each adjustable rate Mortgage Loan, on each
applicable Adjustment Date, the Mortgage Interest Rate will be adjusted to
equal
the sum of the Index, plus the applicable Margin; provided, that the Mortgage
Interest Rate, on each applicable Adjustment Date, will not increase by more
than the Initial Rate Cap or Periodic Rate Cap, as applicable. Over the term
of
each adjustable rate Mortgage Loan, the Mortgage Interest Rate will not exceed
such Mortgage Loan's Lifetime Rate Cap. Unless indicated on the related Mortgage
Loan Schedule, none of the Mortgage Loans are “interest-only”
Mortgage Loans or “negative amortization” Mortgage Loans.
With
respect to each adjustable rate Mortgage Loan, each ▇▇▇▇-▇▇▇▇ Note requires
a
monthly payment which is suffi-cient (a) during the period prior to the first
adjust-ment to the Mortgage Interest Rate, to fully amortize the original
principal balance over the original term thereof and to pay interest at the
related Mortgage Interest Rate, and (b) during the period following each
Adjust-ment Date, 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. With respect to each
adjustable rate Mortgage Loan, the Mortgage Note provides that when the Mortgage
Interest Rate changes on an Adjustment Date, the then outstanding principal
balance will be reamortized over the remaining life of the Mortgage Loan. Unless
indicated on the related Mortgage Loan Schedule, no Mortgage Loan contains
terms
or provi-sions which would result in negative amortization. None of the Mortgage
Loans contain a conversion feature which would cause the Mortgage Interest
Rate
to convert to a fixed interest rate. None of the Mortgage Loans are considered
agricultural loans;
(bb)
(INTENTIONALLY LEFT BLANK)
(cc)
(INTENTIONALLY LEFT BLANK)
(dd)
(INTENTIONALLY LEFT BLANK)
(ee)
(INTENTIONALLY LEFT BLANK)
(ff)
(INTENTIONALLY LEFT BLANK)
(gg)
(INTENTIONALLY LEFT BLANK)
(hh)
In
the event the Mortgage Loan had an LTV at origination greater than 80.00%,
the
excess of the principal balance of the Mortgage Loan over 75.0% of the Appraised
Value of the Mortgaged Property with respect to a Refinanced Mortgage Loan,
or
the lesser of the Appraised Value or the Sales Price of the Mortgaged Property
with respect to a purchase money Mortgage Loan was insured as to payment
defaults by a Primary Mortgage Insurance Policy issued by a Qualified Insurer.
Any Mortgage Loan subject to a Lender Primary Mortgage Insurance Policy or
a
Primary Mortgage Insurance Policy that is also subject to the Company’s captive
reinsurance agreement with the applicable insurer shall remain subject to such
captive reinsurance agreement between the Company and the applicable insurer,
provided that such insurer is a Qualified Insurer. Unless otherwise indicated
on
the related Mortgage Loan Schedule, no Mortgage Loan has an LTV over 95%. All
provisions of such Primary Mortgage Insurance Policy have been and are being
complied with, such policy is in full force and effect, and all premiums due
thereunder have been paid. No Mortgage Loan requires payment of such premiums,
in whole or in part, by the Purchaser. No action, inaction, or event has
occurred and no state of facts exists that has, or will result in the exclusion
from, denial of, or defense to coverage. Any Mortgage Loan subject to a Primary
Mortgage Insurance Policy obligates the Mortgagor thereunder to maintain the
Primary Mortgage Insurance Policy, subject to state and federal law, and to
pay
all premiums and charges in connection therewith. No action has been taken
or
failed to be taken, on or prior to the Closing Date which has resulted or will
result in an exclusion from, denial of, or defense to coverage under any Primary
Mortgage Insurance Policy (including, without limitation, any exclusions,
denials or defenses which would limit or reduce the availability of the timely
payment of the full amount of the loss otherwise due thereunder to the insured)
whether arising out of actions, representations, errors, omissions, negligence,
or fraud of the Company or the Mortgagor, or for any other reason under such
coverage. The Mortgage Interest Rate for the Mortgage Loan as set forth on
the
related Mortgage Loan Schedule is net of any such insurance premium. Unless
otherwise indicated on the related Mortgage Loan Schedule, none of the Mortgage
Loans are subject to “lender-paid”
mortgage insurance.
Any
Mortgage Loan subject to a Lender Primary Mortgage Insurance Policy obligates
the Company to maintain the Lender Primary Mortgage Insurance Policy and to
pay
all premiums and charges in connection therewith;
(ii)
The
Assignment is in recordable form and is acceptable for recording under the
laws
of the jurisdiction in which the Mortgaged Property is located;
(jj)
None
of the Mortgage Loans are secured by an interest in a leasehold estate. The
Mortgaged Property is located in the state identified in the related Mortgage
Loan Schedule and consists of a single parcel of real property with a detached
single family residence erected thereon, or a townhouse, 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 a de minimis planned unit
development; provided, however, that no residence or dwelling is a single parcel
of real property with a manufactured home not affixed to a permanent foundation,
or a mobile home. Any
condominium unit or planned unit development conforms with the Company’s
underwriting guidelines. As
of the
Origination Date, no portion of any Mortgaged Property was used for commercial
purposes, and since the Origination Date, no portion of any Mortgaged Property
has been, or currently is, used for commercial purposes;
(kk)
Payments on the Mortgage Loan commenced no more than sixty (60) days after
the
funds were disbursed in connection with the Mortgage Loan. Each of the Mortgage
Loans will amortize fully by the stated maturity date;
(ll)
The
Mortgage Property was lawfully occupied under applicable law, and 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;
(mm)
There is no pending action or proceeding directly involving the Mortgaged
Property in which compliance with any environmental law, rule or regulation
is
an issue; there is no violation of any environmental law, rule or regulation
with respect to the Mortgaged Property; and the Company has not received any
notice of any environmental hazard on the Mortgaged Property and nothing further
remains to be done to satisfy in full all requirements of each such law, rule
or
regulation constituting a prerequisite to use and enjoyment of said
property;
(nn)
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 of 2004;
(oo)
No
Mortgage Loan is a construction or rehabilitation Mortgage Loan or was made
to
facilitate the trade-in or exchange of a Mortgaged Property;
(pp) The
Mortgagor for each Mortgage Loan is a natural person;
(qq) None
of
the Mortgage Loans are Co-op Loans;
(rr)
With
respect to each Mortgage Loan that has a prepayment penalty feature, each such
prepayment penalty is enforceable and will be enforced by the Company and each
prepayment penalty is permitted pursuant to federal, state and local law. No
Mortgage Loan will impose a prepayment penalty for a term in excess of five
years from the date such Mortgage Loan was originated. Except as otherwise
set
forth on the Mortgage Loan Schedule, with respect to each Mortgage Loan that
contains a prepayment penalty, such prepayment penalty is at least equal to
the
lesser of (A) the maximum amount permitted under applicable law and (B) six
months interest at the related Mortgage Interest Rate on the amount prepaid
in
excess of 20% of the original principal balance of such Mortgage
Loan;
(ss)
With
respect to each Mortgage Loan either (i) the fair market value of the Mortgaged
Property securing such Mortgage Loan was at least equal to 80 percent of the
original principal balance of such Mortgage Loan at the time such Mortgage
Loan
was originated or (ii) (a) the Mortgage Loan is only secured by the Mortgage
Property and (b) substantially all of the proceeds of such Mortgage Loan were
used to acquire or to improve or protect the Mortgage Property. For the purposes
of the preceding sentence, if the Mortgage Loan has been significantly modified
other than as a result of a default or a reasonable foreseeable default, the
modified Mortgage Loan will be viewed as having been originated on the date
of
the modification;
(tt)
The
Mortgage Loan was originated by a mortgagee approved by the Secretary of HUD
pursuant to Sections 203 and 211 of the National Housing Act, a savings and
loan
association, a savings bank, a commercial bank, credit union, insurance company
or similar institution which is supervised and examined by a federal or state
authority;
(uu)
None
of the Mortgage Loans are simple interest Mortgage Loans and none of the
Mortgaged Properties are timeshares;
(vv)
All
of the terms of the Mortgage pertaining to interest rate adjustments, payment
adjustments and adjustments of the outstanding principal balance are
enforceable, all such adjustments have been properly made, including the mailing
of required notices, and such adjustments do not and will not affect the
priority of the Mortgage lien. With respect to each Mortgage Loan which has
passed its initial Adjustment Date, the Company has performed an audit of the
Mortgage Loan to determine whether all interest rate adjustments have been
made
in accordance with the terms of the Mortgage Note and Mortgage;
(ww)
Each
Mortgage Note, each Mortgage, each Assignment and any other documents required
pursuant to this Agreement to be delivered to the Purchaser or its designee,
or
its assignee for each Mortgage Loan, have been, on or before the related Closing
Date, delivered to the Purchaser or its designee, or its assignee;
(xx)
There is no Mortgage Loan that was originated on or after October 1, 2002 and
before March 7, 2003, which is secured by property located in the State of
Georgia;
(yy)
No
proceeds from any Mortgage Loan were used to finance single-premium credit
insurance policies;
(zz)
No
Mortgagor was encouraged or required to select a Mortgage Loan product offered
by the Mortgage Loan’s originator which is a higher cost product designed for
less creditworthy Mortgagors, unless at the time of the Mortgage Loan’s
origination, such Mortgagor did not qualify taking into account credit history
and debt-to-income ratios for a lower-cost credit product then offered by the
Mortgage Loan’s originator or any affiliate of the Mortgage Loan’s originator.
If, at the time of loan application, the Mortgagor may have qualified for a
lower-cost credit product then offered by any mortgage lending affiliate of
the
Mortgage Loan’s originator, the Mortgage Loan’s originator referred the
Mortgagor’s application to such affiliate for underwriting
consideration;
(aaa)
The methodology used in underwriting the extension of credit for each Mortgage
Loan employs objective mathematical principles which relate the Mortgagor’s
income, assets and liabilities (except for any Mortgage Loan which does not
require statement of income or assets) to the proposed payment and such
underwriting methodology does not rely on the extent of the Mortgagor’s equity
in the collateral as the principal determining factor in approving such credit
extension. Such underwriting methodology confirmed that at the time of
origination (application/approval) the Mortgagor had a reasonable ability to
make timely payments on the Mortgage Loan;
(bbb)
With respect to any Mortgage Loan that contains a provision permitting
imposition of a premium upon a prepayment prior to maturity: (i) prior to the
loan’s origination, the Mortgagor agreed to such premium in exchange for a
monetary benefit, including but not limited to a rate or fee reduction, (ii)
prior to the loan’s origination, the Mortgagor was offered the option of
obtaining a mortgage loan that did not require payment of such a premium, (iii)
the prepayment premium is disclosed to the Mortgagor in the loan documents
pursuant to applicable state and federal law, and (iv) notwithstanding any
state
or federal law to the contrary, the Company shall not impose such prepayment
premium in any instance when the Mortgage is accelerated as the result of the
Mortgagor’s default in making the loan payments;
(ccc)
No Mortgagor was required to purchase any credit life, disability, accident
or
health insurance product as a condition of obtaining the extension of credit.
No
Mortgagor obtained a prepaid single-premium credit life, disability, accident
or
health insurance policy in connection with the origination of the Mortgage
Loan;
(ddd)
The
Company will
transmit full-file credit reporting data for each Mortgage Loan pursuant to
the
▇▇▇▇▇▇ ▇▇▇ Selling Guide and that for each Mortgage Loan, the Company agrees
it
shall report one of the following statuses each month as follows: new
origination, current, delinquent (30-, 60-, 90-days, etc.), foreclosed, or
charged-off;
(eee)
With
respect to any Mortgage Loan originated on or after August 1, 2004, neither
the
related Mortgage nor the related Mortgage Note requires the Mortgagor to submit
to arbitration to resolve any dispute arising out of or relating in any way
to
the Mortgage Loan;
(fff)
No Mortgage Loan is secured by Mortgaged Property in the Commonwealth of
Massachusetts with a loan application date on or after November 7, 2004 that
refinances a mortgage loan that is less than sixty (60) months old, unless
such
Mortgage Loan (1) is on an investment property, (ii) meets the requirements
set
forth in the Code of Massachusetts Regulation (“CMR”), 209 CMR 53.04(1)(b), or
(iii) meets the requirements set forth in the 209 CMR 53.04(1)(c);
(ggg)
For any Mortgage Loan with Mortgaged Property located in Texas which is a second
lien and the interest rate is in excess of 10% where terms of the Mortgage
Note
contain a provision for which the Mortgagor may be entitled to prepaid interest
upon payoff, no Mortgagor paid any administrative fees, points, or loan
origination fees which would actually result in any prepaid interest being
due
the Mortgagor under the terms of the Mortgage Note; and
(hhh)
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 and has conducted the requisite due diligence in
connection with the origination of each Mortgage Loan for the purposes of the
Anti-Money Laundering Laws. The Company further represents that it
takes reasonable efforts to determine whether any Mortgagor appears on any
list of blocked or prohibited parties designated by the U.S. Department of
Treasury.
Section
3.03 Repurchase;
Substitution.
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 and delivery
of the Mortgage Loan Documents to the Purchaser, or its designee, and shall
inure to the benefit of the Purchaser, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or Assignment or the examination,
or
lack of examination, of any Mortgage File. Upon discovery by either the Company
or the Purchaser of a breach of any of the foregoing representations and
warranties which materially and adversely affects the value of the Mortgage
Loans or the interest of the Purchaser in any Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other. The
Company shall have a period of sixty (60) days from the earlier of its discovery
or its receipt of notice of any such breach within which to correct or cure
such
breach. The Company hereby covenants and agrees that if any such breach is
not
corrected or cured within such sixty day period, the Company shall, at the
Purchaser's option and not later than ninety (90) days of its discovery or
its
receipt of notice of such breach, repurchase such Mortgage Loan at the
Repurchase Price or, with the Purchaser's prior consent and at Purchaser’s sole
option, substitute a Mortgage Loan as provided below. In the event that any
such
breach shall involve any representation or warranty set forth in Section 3.01,
and such breach is not cured within sixty (60) days of the earlier of either
discovery by or notice to the Company of such breach, all Mortgage Loans shall,
at the option of the Purchaser, be repurchased by the Company at the Repurchase
Price. Any such repurchase shall be accomplished by wire transfer of immediately
available funds to Purchaser in the amount of the Repurchase Price.
If
the
Company is required to repurchase any Mortgage Loan pursuant to this Section
3.03, the Company may, with the Purchaser's prior consent and at the Purchaser’s
sole option, within ninety (90) days from the related Closing Date, remove
such
defective Mortgage Loan from the terms of this Agreement and substitute another
mortgage loan for such defective Mortgage Loan, in lieu of repurchasing such
defective Mortgage Loan. Any substitute Mortgage Loan is subject to the
Purchaser acceptability. Any substituted Loans will comply with the
representations and warranties set forth in this Agreement as of the
substitution date.
The
Company shall amend the related Mortgage Loan Schedule to reflect the withdrawal
of the removed Mortgage Loan from this Agreement and the substitution of such
substitute Mortgage Loan therefor. Upon such amendment, the Purchaser shall
review the Mortgage File delivered to it relating to the substitute Mortgage
Loan. In the event of such a substitution, accrued interest on the substitute
Mortgage Loan for the month in which the substitution occurs and any Principal
Prepayments made thereon during such month shall be the property of the
Purchaser and accrued interest for such month on the Mortgage Loan for which
the
substitution is made and any Principal Prepayments made thereon during such
month shall be the property of the Company. The principal payment on a
substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property of the Company and the principal payment on the Mortgage Loan
for which the substitution is made due on such date shall be the property of
the
Purchaser.
For
any
month in which the Company is permitted to substitute one or more substitute
Mortgage Loans, the Company will determine the amount (if any) by which the
aggregate Stated Principal Balance (after application of the principal portion
of all scheduled payments due in the month of substitution) of all the
substitute Mortgage Loans in the month of substitution is less then the
aggregate Stated Principal Balance (after application of the principal portion
of the scheduled payment due in the month of substitution) of the such replaced
Mortgage Loan. An amount equal to the aggregate of such deficiencies described
in the preceding sentence for any Remittance Date shall be deposited into the
Custodial Account by the Company on the related Determination Date in the month
following the calendar month during which the substitution occurred.
It
is
understood and agreed that the obligation of the Company set forth in this
Section 3.03 to cure, repurchase or substitute for a defective Mortgage Loan,
and to indemnify the Purchaser pursuant to Section 8.01, constitute the sole
remedies of the Purchaser respecting a breach of the foregoing representations
and warranties. If the Company fails to repurchase or substitute for a defective
Mortgage Loan in accordance with this Section 3.03, or fails to cure a defective
Mortgage Loan to the Purchaser's reasonable satisfaction in accordance with
this
Section 3.03, or to indemnify the Purchaser pursuant to Section 8.01, that
failure shall be an Event of Default and the Purchaser shall be entitled to
pursue all remedies available in this Agreement as a result thereof. No
provision of this paragraph shall affect the rights of the Purchaser to
terminate this Agreement for cause, as set forth in Sections 10.01 and
11.01.
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) the earlier of discovery of such breach by the
Company or notice thereof by the Purchaser to the Company, (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.
In
the
event that any Mortgage Loan is held by a REMIC, notwithstanding any contrary
provision of this Agreement, with respect to any Mortgage Loan that is not
in
default or as to which no default is imminent, no substitution pursuant to
Subsection 3.03 shall be made after the applicable REMIC's "start up day" (as
defined in Section 860G(a) (9) of the Code), unless the Company has obtained
an
Opinion of Counsel to the effect that such substitution will not (i) result
in
the imposition of taxes on "prohibited transactions" of such REMIC (as defined
in Section 860F of the Code) or otherwise subject the REMIC to tax, or (ii)
cause the REMIC to fail to qualify as a REMIC at any time.
Section
3.04 Representations
and Warranties of the Purchaser.
The
Purchaser represents, warrants and covenants to the Company that, as of the
related Closing Date or as of such date specifically provided
herein:
(a) The
Purchaser is a corporation, dully organized validly existing and in good
standing under the laws of the State of Delaware and is qualified to transact
business in, is in good standing under the laws of, and possesses all licenses
necessary for the conduct of its business in, each state in which any Mortgaged
Property is located or is otherwise exempt or not required under applicable
law
to effect such qualification or license;
(b) The
Purchaser has full power and authority to hold each Mortgage Loan, to purchase
each Mortgage Loan pursuant to this Agreement and the related Term Sheet and
to
execute, deliver and perform, and to enter into and consummate all transactions
contemplated by this Agreement and the related Term Sheet and to conduct its
business as presently conducted, has duly authorized the execution, delivery
and
performance of this Agreement and the related Term Sheet, has duly executed
and
delivered this Agreement and the related Term Sheet;
(c) None
of
the execution and delivery of this Agreement and the related Term Sheet, the
purchase of the Mortgage Loans, the consummation of the transactions
contemplated hereby, or the fulfillment of or compliance with the terms and
conditions of this Agreement and the related Term Sheet will conflict with
any
of the terms, conditions or provisions of the Purchaser’s charter or by-laws or
materially conflict with or result in a material breach of any of the terms,
conditions or provisions
of any legal restriction or any agreement or instrument to which the Purchaser
is now a party or by which it is bound, or constitute a default or result in
an
acceleration under any of the foregoing, or result in the material violation
of
any law, rule, regulation, order, judgment or decree to which the Purchaser
or
its property is subject;
(d) There
is
no litigation, suit, proceeding or investigation pending or to the best of
the
Purchaser’s knowledge, threatened against the Purchaser, or any order or decree
with respect to the Purchaser which is reasonably likely to have a material
adverse effect on the purchase of the related Mortgage Loans, the execution,
delivery or enforceability of this Agreement and the related Term Sheet, or
which is reasonably likely to have a material adverse effect on the financial
condition of the Purchaser;
(e) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Purchaser
of
or compliance by the Purchaser with this Agreement and the related Term Sheet,
the purchase of the Mortgage Loans or the consummation of the transactions
contemplated by this Agreement and the related Term Sheet except for consents,
approvals, authorizations and orders which have been obtained;
(f) The
consummation of the transactions contemplated by this Agreement and the related
Term Sheet is in the ordinary course of business of the Purchaser;
(h) The
Purchaser will treat the purchase of the Mortgage Loans from the Company as
a
purchase for reporting, tax and accounting purposes; and
(i) The
Purchaser does not believe, nor does it have any cause or reason to believe,
that it cannot perform each and every of its covenants contained in this
Agreement and the related Term Sheet.
The
Purchaser shall indemnify the Company and hold it harmless against any claims,
proceedings, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and other costs and expenses
resulting from a breach by the Purchaser of the representations and warranties
contained in this Section 3.04. It is understood and agreed that the obligations
of the Purchaser set forth in this Section 3.04 to indemnify the Seller as
provided herein constitute the sole remedies of the Company respecting a breach
of the foregoing representations and warranties.
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
4.01 Company
to Act as Servicer.
The
Company, as independent contract servicer, shall service and administer the
Mortgage Loans in accordance with this Agreement and the related Term Sheet
and
with Accepted Servicing Practices, and shall have full power and authority,
acting alone, to do or cause to be done any and all things in connection with
such servicing and administration which the Company may deem necessary or
desirable and consistent with the terms of this Agreement and the related Term
Sheet and with Accepted Servicing Practices and exercise the same care that
it
customarily employs for its own account. Except as set forth in this Agreement
and the related Term Sheet, the Company shall service the Mortgage Loans in
strict compliance with the servicing provisions of the ▇▇▇▇▇▇ ▇▇▇ Guides
(special servicing option), which include, but are not limited to, provisions
regarding the liquidation of Mortgage Loans, the collection of Mortgage Loan
payments, the payment of taxes, insurance and other charges, the maintenance
of
hazard insurance with a Qualified Insurer, the maintenance of mortgage
impairment insurance, the maintenance of fidelity bond and errors and omissions
insurance, inspections, the restoration of Mortgaged Property, the maintenance
of Primary Mortgage Insurance Policies and Lender Primary Mortgage Insurance
Policies, insurance claims, the title, management and disposition of REO
Property, permitted withdrawals with respect to REO Property, liquidation
reports, and reports of foreclosures and abandonments of Mortgaged Property,
the
transfer of Mortgaged Property, the release of Mortgage Files, annual
statements, and examination of records and facilities. In the event of any
conflict, inconsistency or discrepancy between any of the servicing provisions
of this Agreement and the related Term Sheet and any of the servicing provisions
of the ▇▇▇▇▇▇ Mae Guides, the provisions of this Agreement and the related
Term
Sheet shall control and be binding upon the Purchaser and the Company.
Consistent
with the terms of this Agreement and the related Term Sheet, the Company may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of any such term or in any manner grant indulgence to any Mortgagor
if in the Company's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser, provided, however, that unless the Company has obtained the prior
written consent of the Purchaser, the Company shall not permit any modification
with respect to any Mortgage Loan that would change the Mortgage Interest Rate,
defer for more than ninety (90) days or forgive any payment of principal or
interest, reduce or increase the outstanding principal balance (except for
actual payments of principal) or change the final maturity date on such Mortgage
Loan. In the event of any such modification which has been agreed to in writing
by the Purchaser and which permits the deferral of interest or principal
payments on any Mortgage Loan, the Company shall, on the Business Day
immediately preceding the Remittance Date in any month in which any such
principal or interest payment has been deferred, deposit in the Custodial
Account from its own funds, in accordance with Section 4.04, the difference
between (a) such month's principal and one month's interest at the Mortgage
Loan
Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b)
the amount paid by the Mortgagor. The Company shall be entitled to reimbursement
for such advances to the same extent as for all other advances pursuant to
Section 4.05. Without limiting the generality of the foregoing, the Company
shall continue, and is hereby authorized and empowered, to prepare, 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. Notwithstanding anything herein to the contrary,
the
Company may not enter into a forbearance agreement or similar arrangement with
respect to any Mortgage Loan which runs more than 180 days after the first
delinquent Due Date. Any such agreement shall be approved by the Purchaser
and,
if required, by the Primary Mortgage Insurance Policy insurer and Lender Primary
Mortgage Insurance Policy insurer, if required.
Notwithstanding
anything in this Agreement to the contrary, if any Mortgage Loan becomes subject
to a Pass-Through Transfer, the Company (a) with respect to such Mortgage Loan,
shall not permit any modification with respect to such Mortgage Loan that would
change the Mortgage Interest Rate and (b) shall not (unless the Mortgagor is
in
default with respect to such Mortgage Loan or such default is, in the judgment
of the Company, reasonably foreseeable) make or permit any modification, waiver
or amendment of any term of such Mortgage Loan that would both (i) effect an
exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or
Treasury regulations promulgated thereunder) and (ii) cause any REMIC to fail
to
qualify as a REMIC under the Code or the imposition of any tax on “prohibited
transactions” or “contributions” after the startup date under the REMIC
Provisions.
Prior
to
taking any action with respect to the Mortgage Loans subject to a Pass-Through
Transfer, which is not contemplated under the terms of this Agreement, the
Company will obtain an Opinion of Counsel acceptable to the trustee in such
Pass-Through Transfer with respect to whether such action could result in the
imposition of a tax upon any REMIC (including but not limited to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code and the
tax
on contributions to a REMIC set forth in Section 860G(d) of the Code)(either
such event, an “Adverse REMIC Event”), and the Company shall not take any such
actions as to which it has been advised that an Adverse REMIC Event could
occur.
The
Company shall not permit the creation of any “interests” (within the meaning of
Section 860G of the Code) in any REMIC. The Company shall not enter into any
arrangement by which a REMIC will receive a fee or other compensation for
services nor permit a REMIC to receive any income from assets other than
“qualified mortgages” as defined in Section 860G(a)(3) of the Code or “permitted
investments” as defined in Section 860G(a)(5) of the Code.
In
servicing and administering the Mortgage Loans, the Company shall employ
Accepted Servicing Practices, giving due consideration to the Purchaser's
reliance on the Company. Unless a different time period is stated in this
Agreement or the related Term Sheet, the Purchaser shall be deemed to have
given
consent in connection with a particular matter if the Purchaser does not
affirmatively grant or deny consent within five (5) Business Days from the
date
the Purchaser receives a second written request for consent for such matter
from
the Company as servicer.
The
Mortgage Loans may be subserviced by a Subservicer on behalf of the Company
provided that the Subservicer is an entity that engages in the business of
servicing loans, and in either case shall be authorized to transact business,
and licensed to service mortgage loans, in the state or states where the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Subservicer to perform its obligations
hereunder and under the Subservicing Agreement, and in either case shall be
a
FHLMC or ▇▇▇▇▇▇ ▇▇▇ approved mortgage servicer in good standing, and no event
has occurred, including but not limited to a change in insurance coverage,
which
would make it unable to comply with the eligibility requirements for lenders
imposed by ▇▇▇▇▇▇ Mae or for seller/servicers imposed by ▇▇▇▇▇▇ ▇▇▇ or FHLMC,
or
which would require notification to ▇▇▇▇▇▇ Mae or FHLMC. In addition, each
Subservicer will obtain and preserve its qualifications to do business as a
foreign corporation and its licenses to service mortgage loans, in each
jurisdiction in which such qualifications and/or licenses are or shall be
necessary to protect the validity and enforceability of this Agreement, or
any
of the Mortgage Loans and to perform or cause to be performed its duties under
the related Subservicing Agreement. The Company may perform any of its servicing
responsibilities hereunder or may cause the Subservicer to perform any such
servicing responsibilities on its behalf, but the use by the Company of the
Subservicer shall not release the Company from any of its obligations hereunder
and the Company shall remain responsible hereunder for all acts and omissions
of
the Subservicer as fully as if such acts and omissions were those of the
Company. The Company shall pay all fees and expenses of the Subservicer from
its
own funds, and the Subservicer's fee shall not exceed the Servicing Fee. The
Company shall notify the Purchaser promptly in writing upon the appointment
of
any Subservicer.
At
the
cost and expense of the Company, without any right of reimbursement from the
Custodial Account, the Company shall be entitled to terminate the rights and
responsibilities of the Subservicer and arrange for any servicing
responsibilities to be performed by a successor subservicer meeting the
requirements in the preceding paragraph; provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Company, at the
Company's option, from electing to service the related Mortgage Loans itself.
In
the event that the Company's responsibilities and duties under this Agreement
are terminated pursuant to Section 4.03, 4.13, 8.04, 9.01 or 10.01 and if
requested to do so by the Purchaser, the Company shall at its own cost and
expense terminate the rights and responsibilities of the Subservicer effective
as of the date of termination of the Company. The Company shall pay all fees,
expenses or penalties necessary in order to terminate the rights and
responsibilities of the Subservicer from the Company's own funds without
reimbursement from the Purchaser.
Notwithstanding
any of the provisions of this Agreement relating to agreements or arrangements
between the Company and the Subservicer or any reference herein to actions
taken
through the Subservicer or otherwise, the Company shall not be relieved of
its
obligations to the Purchaser and shall be obligated to the same extent and
under
the same terms and conditions as if it alone were servicing and administering
the Mortgage Loans. The Company shall be entitled to enter into an agreement
with the Subservicer for indemnification of the Company by the Subservicer
and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification. The Company will indemnify and hold the Purchaser harmless
from
any loss, liability or expense arising out of its use of a Subservicer to
perform any of its servicing duties, responsibilities and obligations
hereunder.
Any
Subservicing Agreement and any other transactions or services relating to the
Mortgage Loans involving the Subservicer shall be deemed to be between the
Subservicer and the Company alone, and the Purchaser shall have no obligations,
duties or liabilities with respect to the Subservicer including no obligation,
duty or liability of the Purchaser to pay the Subservicer's fees and expenses.
For purposes of distributions and advances by the Company pursuant to this
Agreement, the Company shall be deemed to have received a payment on a Mortgage
Loan when the Subservicer has received such payment.
Section
4.02 Collection
of Mortgage Loan Payments.
Continuously
from the date hereof until the date each Mortgage Loan ceases to be subject
to
this Agreement, the Company will proceed diligently to collect all payments
due
under each Mortgage Loan when the same shall become due and payable and shall,
to the extent such procedures shall be consistent with this Agreement, Accepted
Servicing Practices, and the terms and provisions of any related Primary
Mortgage Insurance Policy and Lender Primary Mortgage Insurance Policy, follow
such collection procedures as it follows with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Further, the
Company will take special care in ascertaining and estimating annual escrow
payments, and all other charges that, as provided in the Mortgage, will become
due and payable, so that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and
payable.
In
no
event will the Company waive its right to any prepayment penalty or premium
without the prior written consent of the Purchaser and the Company will use
diligent efforts to collect same when due except as otherwise provided in the
prepayment penalty provisions provided in the Mortgage Loan Documents.
Section
4.03 Realization
Upon Defaulted Mortgage.
The
Company shall use its best efforts, consistent with the procedures that the
Company would use in servicing loans for its own account, consistent with
Accepted Servicing Practices, any Primary Mortgage Insurance Policies and Lender
Primary Mortgage Insurance Policies and the best interest of the Purchaser,
to
foreclose upon or otherwise comparably convert the ownership of properties
securing such of the Mortgage Loans as come into and continue in default and
as
to which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 4.01. Foreclosure or comparable proceedings shall
be initiated within ninety (90) days of default for Mortgaged Properties for
which no satisfactory arrangements can be made for collection of delinquent
payments, subject to state and federal law and regulation. The Company shall
use
its best efforts to realize upon defaulted Mortgage Loans in such manner as
will
maximize the receipt of principal and interest by the Purchaser, taking into
account, among other things, the timing of foreclosure proceedings. The
foregoing is subject to the provisions that, in any case in which a Mortgaged
Property shall have suffered damage, the Company shall not be required to expend
its own funds toward the restoration of such property unless it shall determine
in its discretion (i) that such restoration will increase the proceeds of
liquidation of the related Mortgage Loan to the Purchaser after reimbursement
to
itself for such expenses, and (ii) that such expenses will be recoverable by
the
Company through Insurance Proceeds or Liquidation Proceeds from the related
Mortgaged Property, as contemplated in Section 4.05. The Company shall obtain
prior approval of the Purchaser as to repair or restoration expenses in excess
of ten thousand dollars ($10,000). The Company shall notify the Purchaser in
writing of the commencement of foreclosure proceedings and not less than five
(5) days prior to the acceptance or rejection of any offer of reinstatement.
The
Company shall be responsible for all costs and expenses incurred by it in any
such proceedings or functions; provided, however, that it shall be entitled
to
reimbursement thereof from the related property, as contemplated in Section
4.05. 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 at the Purchaser's expense. Upon completion of the inspection, 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.
Notwithstanding
anything to the contrary contained herein, the Purchaser may, at the Purchaser's
sole option, terminate the Company as servicer of any Mortgage Loan which
becomes ninety (90) days or greater delinquent in payment of a scheduled Monthly
Payment, without payment of any termination fee with respect thereto, provided
that the Company shall on the date said termination takes effect be reimbursed
for any unreimbursed Monthly Advances of the Company's funds made pursuant
to
Section 5.03 and any unreimbursed Servicing Advances and Servicing Fees in
each
case relating to the Mortgage Loan underlying such delinquent Mortgage Loan
notwithstanding anything to the contrary set forth in Section 4.05. In the
event
of any such termination, the provisions of Section 11.01 hereof shall apply
to
said termination and the transfer of servicing responsibilities with respect
to
such delinquent Mortgage Loan to the Purchaser or its designee.
In
the
event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property,
such property shall be disposed of by the Company, with the consent of the
Purchaser as required pursuant to this Agreement, before the close of the third
taxable year following the taxable year in which the Mortgage Loan became an
REO
Property, unless the Company provides to the trustee under such REMIC an Opinion
of Counsel to the effect that the holding of such REO Property subsequent to
the
close of the third taxable year following the taxable year in which the Mortgage
Loan became an REO Property, will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code, or cause
the
transaction to fail to qualify as a REMIC at any time that certificates are
outstanding. The Company shall manage, conserve, protect and operate each such
REO Property for the certificateholders solely for the purpose of its prompt
disposition and sale in a manner which does not cause such property to fail
to
qualify as "foreclosure property" within the meaning of Section 860F(a)(2)(E)
of
the Code, or any "net income from foreclosure property" which is subject to
taxation under the REMIC provisions of the Code. Pursuant to its efforts to
sell
such property, the Company shall either itself or through an agent selected
by
the Company, protect and conserve such property in the same manner and to such
an extent as is customary in the locality where such property is located.
Additionally, the Company shall perform the tax withholding and reporting
related to Sections 1445 and 6050J of the Code.
Section
4.04 Establishment
of Custodial Accounts; Deposits in Custodial Accounts.
The
Company shall segregate and hold all funds collected and received pursuant
to
each Mortgage Loan separate and apart from any of its own funds and general
assets and shall establish and maintain one or more Custodial Accounts. The
Custodial Account shall be an Eligible Account. Funds shall be deposited in
the
Custodial Account within twenty-four (24) hours of receipt, and shall at all
times be insured by the FDIC up to the FDIC insurance limits, or must be
invested in Permitted Investments for the benefit of the Purchaser. Funds
deposited in the Custodial Account may be drawn on by the Company in accordance
with Section 4.05. The creation of any Custodial Account shall be evidenced
by a
letter agreement in the form shown in Exhibit
B
hereto.
The original of such letter agreement shall be furnished to the Purchaser on
the
Closing Date, and upon the request of any subsequent Purchaser.
The
Company shall deposit in the Custodial Account on a daily basis, and retain
therein the following payments and collections received or made by it subsequent
to the Cut-off Date, or received by it prior to the Cut-off Date but allocable
to a period subsequent thereto, other than in respect of principal and interest
on the Mortgage Loans due on or before the Cut-off Date:
(i) all
payments on account of principal, including Principal Prepayments, on the
Mortgage Loans;
(ii)
all
payments on account of interest on the Mortgage Loans adjusted to the Mortgage
Loan Remittance Rate;
(iii)
all
Liquidation Proceeds;
(iv)
any
amounts required to be deposited by the Company in connection with any REO
Property pursuant to Section 4.13 and in connection therewith, the Company
shall
provide the Purchaser with written detail itemizing all of such
amounts;
(v)
all
Insurance Proceeds including amounts required to be deposited pursuant to
Sections 4.08, 4.10 and 4.11, 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 Accepted Servicing Practices,
the
Mortgage Loan Documents or applicable law;
(vi)
all
Condemnation Proceeds affecting any Mortgaged Property which are not released
to
the Mortgagor in accordance with Accepted Servicing Practices, the loan
documents or applicable law;
(vii)
any
Monthly Advances;
(viii)
with
respect to each full or partial Principal Prepayment, any Prepayment Interest
Shortfalls, to the extent of the Company’s aggregate Servicing Fee received with
respect to the related Prepayment Period;
(ix)
any
amounts required to be deposited by the Company pursuant to Section 4.10 in
connection with the deductible clause in any blanket hazard insurance policy,
such deposit shall be made from the Company's own funds, without reimbursement
therefor; and
(x)
any
amounts required to be deposited in the Custodial Account pursuant to Section
4.01, 4.13 or 6.02.
The
foregoing requirements for deposit in the Custodial Account shall be exclusive,
it being understood and agreed that, without limiting the generality of the
foregoing, payments in the nature of late payment charges and assumption fees,
to the extent permitted by Section 6.01, need not be deposited by the Company
in
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(iv). The Purchaser shall not be
responsible for any losses suffered with respect to investment of funds in
the
Custodial Account.
Section
4.05 Permitted
Withdrawals From the Custodial Account.
The
Company may, from time to time, withdraw 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, 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 collections (net of the related Servicing
Fees) of principal and/or interest respecting which any such advance was made,
it being understood that, in the case of such reimbursement, the Company's
right
thereto shall be prior to the rights of the Purchaser, except that, where the
Company is required to repurchase a Mortgage Loan, pursuant to Section 3.03,
the
Company's right to such reimbursement shall be subsequent to the payment to
the
Purchaser of the Repurchase Price pursuant to such Section and all other amounts
required to be paid to the Purchaser with respect to such Mortgage
Loan;
(iii)
to
reimburse itself for unreimbursed Servicing Advances and any unpaid Servicing
Fees (or REO administration fees described in Section 4.13), the Company's
right
to reimburse itself pursuant to this subclause (iii) with respect to any
Mortgage Loan being limited to related proceeds from Liquidation Proceeds,
Condemnation Proceeds and Insurance Proceeds in accordance with the relevant
provisions of the ▇▇▇▇▇▇ ▇▇▇ Guides or as otherwise set forth in this Agreement;
any recovery shall be made upon liquidation of the REO Property;
(iv) to
pay to
itself as part of its servicing compensation (a) any interest earned on funds
in
the Custodial Account (all such interest to be withdrawn monthly not later
than
each Remittance Date), and (b) the Servicing Fee from that portion of any
payment or recovery as to interest with respect to a particular Mortgage
Loan;
(v) to
pay to
itself with respect to each Mortgage Loan that has been repurchased pursuant
to
Section 3.03 all amounts received thereon and not distributed as of the date
on
which the related Repurchase Price is determined,
(vi) to
transfer funds to another Eligible Account in accordance with Section 4.09
hereof;
(vii) to
remove
funds inadvertently placed in the Custodial Account by the Company;
(vi) to
clear
and terminate the Custodial Account upon the termination of this Agreement;
and
(vii)
to
reimburse itself for Nonrecoverable Advances to the extent not reimbursed
pursuant to clause (ii) or clause (iii).
Section
4.06 Establishment
of Escrow Accounts; Deposits in Escrow Accounts.
The
Company shall segregate and hold all funds collected and received pursuant
to
each Mortgage Loan which constitute Escrow Payments separate and apart from
any
of its own funds and general assets and shall establish and maintain one or
more
Escrow Accounts. The Escrow Account shall be an Eligible Account. Funds
deposited in each Escrow Account shall at all times be insured in a manner
to
provide maximum insurance under the insurance limitations of the FDIC, or must
be invested in Permitted Investments. Funds
deposited in the Escrow Account may be drawn on by the Company in accordance
with Section 4.07. The creation of any Escrow Account shall be evidenced by
a
letter agreement in the form shown in Exhibit
C.
The
original of such letter agreement shall be furnished to the Purchaser on the
Closing Date, and upon request to any subsequent purchaser.
The
Company shall deposit in the Escrow Account or Accounts on a daily basis, and
retain therein:
(i) all
Escrow Payments collected on account of the Mortgage Loans, for the purpose
of
effecting timely payment of any such items as required under the terms of this
Agreement;
(ii) all
Insurance Proceeds which are to be applied to the restoration or repair of
any
Mortgaged Property; and
(iii) all
Servicing Advances for Mortgagors whose Escrow Payments are insufficient to
cover escrow disbursements.
The
Company shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, and for such other purposes
as
shall be as set forth or in accordance with Section 4.07. 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 Mortgagor and, to the extent required by law, the Company
shall pay interest on escrowed funds to the Mortgagor notwithstanding that
the
Escrow Account is non-interest bearing or that interest paid thereon is
insufficient for such purposes. The
Purchaser shall not be responsible for any losses suffered with respect to
investment of funds in the Escrow Account.
Section
4.07 Permitted
Withdrawals From Escrow Account.
Withdrawals
from the Escrow Account may be made by the Company only:
(i) to
effect
timely payments of ground rents, taxes, assessments, water rates, Primary
Mortgage Insurance Policy premiums, if applicable, fire and hazard insurance
premiums, condominium assessments and comparable items;
(ii) to
reimburse the Company for any Servicing Advance made by the Company with respect
to a related Mortgage Loan but only from amounts received on the related
Mortgage Loan which represent late payments or collections of Escrow Payments
thereunder;
(iii) to
refund
to the Mortgagor any funds as may be determined to be overages;
(iv) for
transfer to the Custodial Account in accordance with the terms of this
Agreement;
(v) for
application to restoration or repair of the Mortgaged Property;
(vi) to
pay to
the Company, or to the Mortgagor to the extent required by law, any interest
paid on the funds deposited in the Escrow Account;
(vii)
to
clear
and terminate the Escrow Account on the termination of this
Agreement;
(viii)
to
pay to
the Mortgagors or other parties Insurance Proceeds deposited in accordance
with
Section 4.06; and
(viii)to
remove
funds inadvertently placed in the Escrow Account by the
Company.
Section
4.08 Payment
of Taxes, Insurance and Other Charges; Maintenance of Primary Mortgage Insurance
Policies; Collections Thereunder.
With
respect to each Mortgage Loan, the Company shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates and
other
charges which are or may become a lien upon the Mortgaged Property and the
status of primary mortgage insurance 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 and at a time appropriate for
securing maximum discounts allowable, employing for such purpose deposits of
the
Mortgagor in the Escrow Account which shall have been estimated and accumulated
by the Company in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage or applicable law. To the extent that the Mortgage does
not provide for Escrow Payments, the Company shall determine that any such
payments are made by the Mortgagor at the time they first become due. The
Company assumes full responsibility for the timely payment of all such bills
and
shall effect timely payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments.
The
Company will maintain in full force and effect Primary Mortgage Insurance
Policies or Lender Primary Mortgage Insurance Policies issued by a Qualified
Insurer with respect to each Mortgage Loan for which such coverage is herein
required. Such coverage will be terminated only with the approval of the
Purchaser, until the LTV of the related Mortgage Loan is reduced to that amount
for which ▇▇▇▇▇▇ Mae no longer requires such insurance to be maintained, or
as
required by applicable law or regulation. The Company will not cancel or refuse
to renew any Primary Mortgage Insurance Policy or Lender Primary Mortgage
Insurance Policy in effect on the Closing Date that is required to be kept
in
force under this Agreement unless a replacement Primary Mortgage Insurance
Policy or Lender Primary Mortgage Insurance Policy for such canceled or
nonrenewed policy is obtained from and maintained with a Qualified Insurer.
The
Company shall not take any action which would result in non-coverage under
any
applicable Primary Mortgage Insurance Policy or Lender Primary Mortgage
Insurance 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 Primary Mortgage
Insurance Policy or Lender Primary Mortgage Insurance Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such
policy and shall take all actions which may be required by such insurer as
a
condition to the continuation of coverage under the Primary Mortgage Insurance
Policy or Lender Primary Mortgage Insurance Policy. If such Primary Mortgage
Insurance Policy or Lender Primary Mortgage Insurance Policy is terminated
as a
result of such assumption or substitution of liability, the Company shall obtain
a replacement Primary Mortgage Insurance Policy or Lender Primary Mortgage
Insurance Policy as provided above.
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
Private Mortgage Insurance Policy in a timely fashion in accordance with the
terms of such Primary Mortgage Insurance Policy or Lender Primary Mortgage
Insurance Policy and, in this regard, to take such action as shall be necessary
to permit recovery under any Primary Mortgage Insurance Policy or Lender Primary
Mortgage Insurance Policy respecting a defaulted Mortgage Loan. Pursuant to
Section 4.04, any amounts collected by the Company under any Primary Mortgage
Insurance Policy or Lender Primary Mortgage Insurance Policy shall be deposited
in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
Section
4.09 Transfer
of Accounts.
The
Company may transfer the Custodial Account or the Escrow Account to a different
Eligible Account from time to time. Such transfer shall be made only upon
obtaining the prior written consent of the Purchaser, which consent will not
be
unreasonably withheld.
Section
4.10 Maintenance
of Hazard Insurance.
The
Company shall cause to be maintained for each Mortgage Loan fire and hazard
insurance with extended coverage as is acceptable to ▇▇▇▇▇▇ ▇▇▇ or FHLMC and
customary in the area where the Mortgaged Property is located in an amount
which
is equal to 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 and/or the mortgagee from becoming a co-insurer. If
required by the Flood Disaster Protection Act of 1973, as amended, each Mortgage
Loan shall be covered by a flood insurance policy meeting the requirements
of
the current guidelines of the Federal Insurance Administration in effect with
an
insurance carrier acceptable to ▇▇▇▇▇▇ Mae or FHLMC, in an amount representing
coverage not less than the lesser of (i) the outstanding principal balance
of
the Mortgage Loan, (ii) the maximum insurable value of the improvements securing
such Mortgage Loan or (iii) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended. If at any time
during the term of the Mortgage Loan, the Company determines in accordance
with
applicable law and pursuant to the ▇▇▇▇▇▇ ▇▇▇ Guides that a Mortgaged Property
is located in a special flood hazard area and is not covered by flood insurance
or is covered in an amount less than the amount required by the Flood Disaster
Protection Act of 1973, as amended, the Company shall notify the related
Mortgagor that the Mortgagor must obtain such flood insurance coverage, and
if
said Mortgagor fails to obtain the required flood insurance coverage within
forty-five (45) days after such notification, the Company shall immediately
force place the required flood insurance on the Mortgagor’s behalf. The Company
shall also maintain on each REO Property, fire and hazard insurance with
extended coverage in an amount which is at least equal to the maximum insurable
value of the improvements which are a part of such property, and, to the extent
required and available under the Flood Disaster Protection Act of 1973, as
amended, flood insurance in an amount as provided above. 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 Mortgaged
Property or REO Property, or released to the Mortgagor in accordance with
Accepted Servicing Practices, shall be deposited in the Custodial Account,
subject to withdrawal pursuant to Section 4.05. It is understood and agreed
that
no other additional insurance need be required by the Company of the Mortgagor
or maintained on property acquired in respect of the Mortgage Loan, other than
pursuant to this Agreement, the ▇▇▇▇▇▇ Mae Guides or such applicable state
or
federal laws and regulations as shall at any time be in force and as shall
require such additional insurance. All such policies shall be endorsed with
standard mortgagee clauses with loss payable to the Company and its successors
and/or assigns and shall provide for at least thirty (30) days prior written
notice of any cancellation, reduction in the amount or material change in
coverage to the Company. 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 Qualified Insurers.
Section
4.11 Maintenance
of Mortgage Impairment Insurance Policy.
In
the
event that the Company shall obtain and maintain a blanket policy issued by
a
Qualified Insurer insuring against hazard losses on all of the Mortgage Loans,
then, to the extent such policy provides coverage in an amount equal to the
amount required pursuant to Section 4.10 and otherwise complies with all other
requirements of Section 4.10, it shall conclusively be deemed to have satisfied
its obligations as set forth in Section 4.10, it being understood and agreed
that such policy may contain a deductible clause, in which case the Company
shall, in the event that there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with Section 4.10, and
there shall have been a loss which would have been covered by such policy,
deposit in the Custodial Account the amount not otherwise payable under the
blanket policy because of such deductible clause. In connection with its
activities as servicer of the Mortgage Loans, the Company agrees to prepare
and
present, on behalf of the Purchaser, claims under any such blanket policy in
a
timely fashion in accordance with the terms of such policy. Upon request of
the
Purchaser, the Company shall cause to be delivered to the Purchaser a certified
true copy of such policy and shall use its best efforts to obtain a statement
from the insurer thereunder that such policy shall in no event be terminated
or
materially modified without thirty (30) days' prior written notice to the
Purchaser.
Section
4.12 Fidelity
Bond, Errors and Omissions Insurance.
The
Company shall maintain, at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy, with broad coverage with responsible
companies on all officers, employees or other persons acting in any capacity
with regard to the Mortgage Loan to handle funds, money, documents and papers
relating to the Mortgage Loan. The Fidelity Bond shall be in the form of the
Financial Institution Bond Form A and shall protect and insure the Company
against losses, including forgery, theft, embezzlement and fraud of such
persons. The errors and omissions insurance shall protect and insure the Company
against losses arising out of errors and omissions and negligent acts of such
persons. Such errors and omissions insurance shall also protect and insure
the
Company against losses in connection with the failure to maintain any insurance
policies required pursuant to this Agreement and the release or satisfaction
of
a Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 4.12 requiring the Fidelity Bond
or errors and omissions insurance shall diminish or relieve the Company from
its
duties and obligations as set forth in this Agreement. The minimum coverage
under any such bond and insurance policy shall be at least equal to the
corresponding amounts required by ▇▇▇▇▇▇ ▇▇▇ in the ▇▇▇▇▇▇ Mae Guides. Upon
request by the Purchaser, the Company shall deliver to the Purchaser a
certificate from the surety and the insurer as to the existence of the Fidelity
Bond and errors and omissions insurance policy and shall obtain a statement
from
the surety and the insurer that such Fidelity Bond or insurance policy shall
in
no event be terminated or materially modified without thirty (30) days' prior
written notice to the Purchaser. The Company shall notify the Purchaser within
five (5) business days of receipt of notice that such Fidelity Bond or insurance
policy will be, or has been, materially modified or terminated. Upon request
by
the Purchaser, the Company shall provide the Purchaser with an insurance
certificate certifying coverage under this Section 4.12, and will provide an
update to such certificate upon request, or upon renewal or material
modification of coverage.
Section
4.13 Title,
Management and Disposition of REO Property.
In
the
event that title to the Mortgaged Property is acquired in foreclosure or by
deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in the
name of the Purchaser or its designee, or in the event the Purchaser or its
designee is not authorized or permitted to hold title to real property in the
state where the REO Property is located, or would be adversely affected under
the "doing business" or tax laws of such state by so holding title, the deed
or
certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an Opinion of Counsel obtained by the Company from
an
attorney duly licensed to practice law in the state where the REO Property
is
located. Any Person or Persons holding such title other than the Purchaser
shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Purchaser.
The
Company shall notify the Purchaser in accordance with the ▇▇▇▇▇▇ ▇▇▇ Guides
of
each acquisition of REO Property upon such acquisition (and, in any event,
shall
provide notice of the consummation of any foreclosure sale within three (3)
Business Days of the date the Company receives notice of such consummation),
together with a copy of the drive by appraisal or brokers price opinion of
the
Mortgaged Property obtained in connection with such acquisition, and thereafter
assume the responsibility for marketing such REO property in accordance with
Accepted Servicing Practices. Thereafter, the Company shall continue to provide
certain administrative services to the Purchaser relating to such REO Property
as set forth in this Section 4.13. No Servicing Fee shall be assessed or
otherwise accrue on any REO Property from and after the date on which it becomes
an REO Property.
The
Company shall, either itself or through an agent selected by the Company, and
in
accordance with the ▇▇▇▇▇▇ Mae Guides manage, conserve, protect and operate
each
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 cause each REO Property to be inspected promptly upon the
acquisition of title thereto and shall cause each REO Property to be inspected
at least monthly thereafter or more frequently as required by the circumstances.
The Company shall make or cause to be made a written report of each such
inspection. Such reports shall be retained in the Mortgage File and copies
thereof shall be forwarded by the Company to the Purchaser.
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 three (3) years
after title has been taken to such REO Property. No REO Property shall be
marketed for less than the Appraised Value, without the prior consent of the
Purchaser. No REO Property shall be sold for less than ninety-five percent
(95%)
of its Appraised Value, without the prior consent of Purchaser. All requests
for
reimbursement of Servicing Advances shall be in accordance with the ▇▇▇▇▇▇
▇▇▇
Guides. 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 (subject to the above conditions) only
with
the prior written consent of the Purchaser. The Company shall provide monthly
reports to the Purchaser in reference to the status of the marketing of the
REO
Properties.
Notwithstanding
anything to the contrary contained herein, the Purchaser may, at the Purchaser's
sole option, terminate the Company as servicer of any such REO Property without
payment of any termination fee with respect thereto; provided that the Company
shall on the date said termination takes effect be reimbursed for any
unreimbursed advances of the Company's funds made pursuant to Section 5.03
and
any unreimbursed Servicing Advances and Servicing Fees in each case relating
to
the Mortgage Loan underlying such REO Property notwithstanding anything to
the
contrary set forth in Section 4.05. In the event of any such termination, the
provisions of Section 11.01 hereof shall apply to said termination and the
transfer of servicing responsibilities with respect to such REO Property to
the
Purchaser or its designee. Within five (5) Business Days of any such
termination, the Company shall, if necessary convey such property to the
Purchaser and shall further provide the Purchaser with the following information
regarding the subject REO Property: the related drive by appraisal or brokers
price opinion, and copies of any related Mortgage Impairment Insurance Policy
claims. In addition, within five (5) Business Days, the Company shall provide
the Purchaser with the following information and documents regarding the subject
REO Property: the related trustee’s deed upon sale and copies of any related
hazard insurance claims, or repair bids.
Section
4.14 Notification
of Maturity Date.
With
respect to each Mortgage Loan, the Company shall execute and deliver to the
Mortgagor any and all necessary notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the maturity date
if
required under applicable law.
ARTICLE
V
PAYMENTS
TO THE PURCHASER
Section
5.01 Distributions.
On
each
Remittance Date, the Company shall distribute by wire transfer of immediately
available funds to the Purchaser (i) all amounts credited to the Custodial
Account as of the close of business on the preceding Determination Date, net
of
charges against or withdrawals from the Custodial Account pursuant to Section
4.05, plus (ii) all Monthly Advances, if any, which the Company is obligated
to
distribute pursuant to Section 5.03, plus, (iii) interest at the Mortgage Loan
Remittance Rate on any Principal Prepayment from the date of such Principal
Prepayment through the end of the month for which disbursement is made provided
that the Company’s obligation as to payment of such interest shall be limited to
the Servicing Fee earned during the month of the distribution, minus (iv) any
amounts attributable to Monthly Payments collected but due on a Due Date or
Dates subsequent to the preceding Determination Date, which amounts shall be
remitted on the Remittance Date next succeeding the Due Period for such amounts.
It is understood that, by operation of Section 4.04, the remittance on the
First
Remittance Date with respect to Mortgage Loans purchased pursuant to the related
Term Sheet is to include principal collected after the Cut-off Date through
the
preceding Determination Date plus interest, adjusted to the Mortgage Loan
Remittance Rate collected through such Determination Date exclusive of any
portion thereof allocable to the period prior to the Cut-off Date, with the
adjustments specified in clauses (ii), (iii) and (iv) above.
With
respect to any remittance received by the Purchaser after the Remittance Date,
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 (3) percentage points, but in no event greater than the maximum
amount permitted by applicable law. Such interest shall cover the period
commencing with the day following the Business Day such payment was due and
ending with the Business Day on which such payment is made to the Purchaser,
both inclusive. 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. On each Remittance Date, the Company shall provide a remittance
report detailing all amounts being remitted pursuant to this Section
5.01.
Section
5.02 Statements
to the Purchaser.
The
Company shall furnish to the Purchaser an individual loan accounting report,
as
of the last Business Day of each month, in the Company's assigned loan number
order to document Mortgage Loan payment activity on an individual Mortgage
Loan
basis. With respect to each month, the corresponding individual loan accounting
report shall be received by the Purchaser no later than the fifth Business
Day
of the following month on a disk or tape or other computer-readable format
in
such format as may be mutually agreed upon by both the Purchaser and the
Company, and no later than the fifth Business Day of the following month in
hard
copy, and shall contain the following:
(i)
With
respect to each Monthly Payment, the amount of such remittance allocable to
principal (including a separate breakdown of any Principal Prepayment, including
the date of such prepayment, and any prepayment penalties or premiums, along
with a detailed report of interest on principal prepayment amounts remitted
in
accordance with Section 4.04);
(ii)
with
respect to each Monthly Payment, the amount of such remittance allocable to
interest;
(iii)
the
amount of servicing compensation received by the Company during the prior
distribution period;
(iv)
the
aggregate Stated Principal Balance of the Mortgage Loans;
(v)
the
aggregate of any expenses reimbursed to the Company during the prior
distribution period pursuant to Section 4.05; and
(vi)
The
number and aggregate outstanding principal balances of Mortgage Loans (a)
delinquent (1) 30 to 59 days, (2) 60 to 89 days, (3) 90 days or more; (b) as
to
which foreclosure has commenced; and (c) as to which REO Property has been
acquired.
The
Company shall also provide a trial balance, sorted in the Purchaser's assigned
loan number order, in the form of Exhibit
E
hereto,
with each such Report.
The
Company shall prepare and file any and all information statements or other
filings required to be delivered to any governmental taxing authority or to
the
Purchaser pursuant to any applicable law with respect to the Mortgage Loans
and
the transactions contemplated hereby. In addition, the Company shall provide
the
Purchaser with such information concerning the Mortgage Loans as is necessary
for the Purchaser to prepare its federal income tax return as the Purchaser
may
reasonably request from time to time.
In
addition, not more than ninety (90) days after the end of each calendar year,
the Company shall furnish to each Person who was a Purchaser at any time during
such calendar year an annual statement in accordance with the requirements
of
applicable federal income tax law as to the aggregate of remittances for the
applicable portion of such year.
Section
5.03 Monthly
Advances by the Company.
Not
later
than the close of business on the Business Day preceding each Remittance Date,
the Company shall deposit in the Custodial Account an amount equal to all
payments not previously advanced by the Company, whether or not deferred
pursuant to Section 4.01, of principal (due after the Cut-off Date) and interest
not allocable to the period prior to the Cut-off Date, adjusted to the Mortgage
Loan Remittance Rate, which were due on a Mortgage Loan and delinquent at the
close of business on the related Determination 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 Remittance Date prior to the date on which
the
Mortgaged Property liquidates (including Insurance Proceeds, proceeds from
the
sale of REO Property or Condemnation Proceeds) with respect to the Mortgage
Loan
unless the Company deems such advance to be a Nonrecoverable Advance. In such
event, the Company shall deliver to the Purchaser an Officer's Certificate
of
the Company to the effect that an officer of the Company has reviewed the
related Mortgage File and has made the reasonable determination that any
additional advances are nonrecoverable.
Section
5.04 Liquidation
Reports.
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by the
Purchaser pursuant to a deed-in-lieu of foreclosure, the Company shall submit
to
the Purchaser a liquidation report with respect to such Mortgaged Property
in a
form mutually acceptable to the
Company
and the Purchaser. The Company shall also provide reports on the status of
REO
Property containing such information as the Purchaser may reasonably
require.
ARTICLE
VI
GENERAL
SERVICING PROCEDURES
Section
6.01 Assumption
Agreements.
The
Company will, to the extent it has knowledge of any conveyance or prospective
conveyance by any Mortgagor of the Mortgaged Property (whether by absolute
conveyance or by contract of sale, and whether or not the Mortgagor remains
or
is to remain liable under the Mortgage Note and/or the Mortgage), exercise
its
rights to accelerate the maturity of such Mortgage Loan under any "due-on-sale"
clause to the extent permitted by law; provided, however, that the Company
shall
not exercise any such rights if prohibited by law or the terms of the Mortgage
Note from doing so or if the exercise of such rights would impair or threaten
to
impair any recovery under the related Primary Mortgage Insurance Policy or
Lender Primary Mortgage Insurance Policy, if any. If the Company reasonably
believes it is unable under applicable law to enforce such "due-on-sale" clause,
the Company, will enter into an assumption agreement with the person to whom
the
Mortgaged Property has been conveyed or is proposed to be conveyed, pursuant
to
which such person becomes liable under the Mortgage Note and, to the extent
permitted by applicable state law, the Mortgagor remains liable thereon. Where
an assumption is allowed pursuant to this Section 6.01, the Company, with the
prior consent of the Purchaser and the primary mortgage insurer, if any, is
authorized to enter into a substitution of liability agreement with the person
to whom the Mortgaged Property has been conveyed or is proposed to be conveyed
pursuant to which the original mortgagor is released from liability and such
Person is substituted as mortgagor and becomes liable under the related Mortgage
Note. Any such substitution of liability agreement shall be in lieu of an
assumption agreement.
In
connection with any such assumption or substitution of liability, the Company
shall follow the underwriting practices and procedures of the Company. With
respect to an assumption or substitution of liability, the Mortgage Interest
Rate borne by the related Mortgage Note, the amount of the Monthly Payment
and
the maturity date may not be changed (except pursuant to the terms of the
Mortgage Note). If the credit 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. 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. All fees collected by the Company for entering into an assumption
or
substitution of liability agreement shall belong to the Company.
Notwithstanding
the foregoing paragraphs of this Section or any other provision of this
Agreement, the Company shall not be deemed to be in default, breach or any
other
violation of its obligations hereunder by reason of any assumption of a Mortgage
Loan by operation of law or any assumption which the Company may be restricted
by law from preventing, for any reason whatsoever. For purposes of this Section
6.01, the term "assumption" is deemed to also include a sale of the Mortgaged
Property subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.
Section
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 will immediately notify the Purchaser by a
certification, which certification shall include a statement to the effect
that
all amounts received or to be received in connection with such payment which
are
required to be deposited in the Custodial Account pursuant to Section 4.04
have
been or will be so deposited, of a Servicing Officer and shall request execution
of any document necessary to satisfy the Mortgage Loan and delivery to it of
the
portion of the Mortgage File held by the Purchaser or its designee. The
Purchaser shall no later than five (5) Business Days after receipt of such
certification and request, release or cause to be released to the Company,
the
related Mortgage Loan Documents and, upon its receipt of such documents, the
Company shall promptly prepare and deliver to the Purchaser the requisite
satisfaction or release. No later than five (5) Business Days following its
receipt of such satisfaction or release, the Purchaser shall deliver, or cause
to be delivered, to the Company the release or satisfaction properly executed
by
the owner of record of the applicable mortgage or its duly appointed attorney
in
fact. No expense incurred in connection with any instrument of satisfaction
or
deed of reconveyance shall be chargeable to the Custodial Account.
In
the
event the Company satisfies or releases a Mortgage without having obtained
payment in full of the indebtedness secured by the Mortgage or should it
otherwise prejudice any right the Purchaser may have under the mortgage
instruments, the Company, upon written demand, shall remit within two (2)
Business Days to the Purchaser the then outstanding principal balance of the
related Mortgage Loan by deposit thereof in the Custodial Account. The Company
shall maintain the Fidelity Bond and errors and omissions insurance 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.
From
time
to time and as appropriate for the servicing or foreclosure of the Mortgage
Loan, including for the purpose of collection under any Primary Mortgage
Insurance Policy or Lender Primary Mortgage Insurance Policy, the Purchaser
shall, upon request of the Company and delivery to the Purchaser of a servicing
receipt signed by a Servicing Officer, release the portion of the Mortgage
File
held by the Purchaser to the Company. Such servicing receipt shall obligate
the
Company to return the related Mortgage documents to the Purchaser when the
need
therefor by the Company no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been
deposited in the Custodial Account or the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or
other
proceedings for the foreclosure of the Mortgaged Property either judicially
or
non-judicially, and the Company has delivered to the Purchaser a certificate
of
a Servicing Officer certifying as to the name and address of the Person to
which
such Mortgage File or such document was delivered and the purpose or purposes
of
such delivery. Upon receipt of a certificate of a Servicing Officer stating
that
such Mortgage Loan was liquidated, the servicing receipt shall be released
by
the Purchaser to the Company.
Section
6.03 Servicing
Compensation.
As
compensation for its services hereunder, the Company shall be entitled to
withdraw from the Custodial Account (to the extent of interest payments
collected on the Mortgage Loans) or to retain from interest payments collected
on the Mortgage Loans, the amounts provided for as the Company's Servicing
Fee,
subject to payment of compensating interest on Principal Prepayments as capped
by the Servicing Fee pursuant to Section 5.01(iii). Additional servicing
compensation in the form of assumption fees, as provided in Section 6.01, and
late payment charges or otherwise 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 therefor except
as specifically provided for.
Section
6.04 [Reserved]
Section
6.05 [Reserved]
Section
6.06 Purchaser's
Right to Examine the Company Records.
The
Purchaser shall have the right to examine and audit upon reasonable notice
to
the Company, during business hours or at such other times as might be reasonable
under applicable circumstances, any and all of the books, records, documentation
or other information of the Company, or held by another for the Company or
on
its behalf or otherwise, which relates to the performance or observance by
the
Company of the terms, covenants or conditions of this Agreement.
The
Company shall provide to the Purchaser and any supervisory agents or examiners
representing a state or federal governmental agency having jurisdiction over
the
Purchaser, including but not limited to OTS, FDIC and other similar entities,
access to any documentation regarding the Mortgage Loans in the possession
of
the Company which may be required by any applicable regulations. Such access
shall be afforded without charge, upon reasonable request, during normal
business hours and at the offices of the Company, and in accordance with the
FDIC, OTS, or any other similar federal or state regulations, as
applicable.
ARTICLE
VII
REPORTS
TO BE PREPARED BY SERVICER
Section
7.01 Company
Shall Provide Information as Reasonably Required.
The
Company shall furnish to the Purchaser during the term of this Agreement, such
periodic, special or other reports, information or documentation, whether or
not
provided for herein, as shall be necessary, reasonable or appropriate in respect
to the Purchaser, or otherwise in respect to the Mortgage Loans and the
performance of the Company under this Agreement, including any reports,
information or documentation reasonably required to comply with any regulations
regarding any supervisory agents or examiners of the Purchaser all such reports
or information to be as provided by and in accordance with such applicable
instructions and directions as the Purchaser may reasonably request in relation
to this Agreement or the performance of the Company under this Agreement. The
Company agrees to execute and deliver all such instruments and take all such
action as the Purchaser, from time to time, may reasonably request in order
to
effectuate the purpose and to carry out the terms of this
Agreement.
In
connection with marketing the Mortgage Loans, the Purchaser may make available
to a prospective purchaser audited financial statements of the Company for
the
most recently completed two (2) fiscal years for which such statements are
available, as well as a Consolidated Statement of Condition at the end of the
last two (2) fiscal years covered by any Consolidated Statement of Operations.
If it has not already done so, the Company shall furnish promptly to the
Purchaser or a prospective purchaser copies of the statements specified above
if
reasonably requested.
The
Company shall make reasonably available to the Purchaser or any prospective
Purchaser a knowledgeable financial or accounting officer for the purpose of
answering questions 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.
ARTICLE
VIII
THE
SERVICER
Section
8.01 Indemnification;
Third Party Claims.
The
Company agrees to indemnify the Purchaser and hold it harmless against any
and
all claims, losses, damages, penalties, fines, forfeitures, 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
observe and perform its duties, obligations, covenants, and agreements to
service the Mortgage Loans in strict compliance with the terms of this
Agreement, including, but not limited to, the loss, damage, or misplacement
of
any documentation delivered to the Company pursuant to Section 2.07 and the
Company's
failure to perform the obligations set forth in Section 11.10.
The
Company agrees to indemnify the Purchaser and hold it harmless against any
and
all claims, losses, damages, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, fees and expenses that the
Purchaser may sustain in any way from any claim, demand, defense or assertion
based on or grounded upon, or resulting from any assertion based on, grounded
upon or resulting from a breach or alleged breach of any of the representation
or warranty set forth in Sections 3.01 or 3.02 of this Agreement. The Company
shall immediately notify the Purchaser if a claim covered by the indemnification
herein is made by a third party against the Company with respect to this
Agreement or the Mortgage Loans, assume (with the consent of the Purchaser)
the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees, whether or not such claim is settled prior to judgment,
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 shall promptly reimburse the Company for all amounts
advanced by it pursuant to the two preceding sentences except when the claim
relates to the failure of the Company to service and administer the Mortgages
in
strict compliance with the terms of this Agreement, the breach of representation
or warranty set forth in Sections 3.01 or 3.02, or the negligence, bad faith
or
willful misconduct of the Company. The provisions of this Section 8.01 shall
survive termination of this Agreement.
Section
8.02 Merger
or Consolidation of the Company.
The
Company will keep in full effect its existence, rights and franchises under
the
laws of the jurisdiction of organization except as permitted herein, and will
obtain and preserve its qualification to do business in each other 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
whether or not related to loan servicing, 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 which is
a
HUD-approved mortgagee whose primary business is in origination and servicing
of
first lien mortgage loans, and (iii) who is a ▇▇▇▇▇▇ ▇▇▇ or FHLMC approved
seller/servicer in good standing.
Section
8.03 Limitation
on Liability of the Company and Others.
Neither
the Company nor any of the 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 made in good faith; 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
liability which would otherwise be imposed by reason of negligence, bad faith
or
willful misconduct, or any breach of the terms and conditions of this Agreement.
The Company and any 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
the Purchaser 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 reasonable opinion may involve it in any
expenses 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 reasonable legal expenses and costs of such action
and any liability resulting therefrom shall be expenses, costs and liabilities
for which the Purchaser will be liable, and the Company shall be entitled to
be
reimbursed therefor from the Purchaser upon written demand.
Section
8.04 Company
Not to Assign or Resign.
The
Company shall not assign this Agreement or 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 servicing 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. 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 11.01.
Section
8.05 No
Transfer of Servicing.
With
respect to the retention of the Company to service the Mortgage Loans hereunder,
the Company acknowledges that the Purchaser has acted in reliance upon the
Company's independent status, the adequacy of its servicing facilities, plan,
personnel, records and procedures, its integrity, reputation and financial
standing and the continuance thereof. Without in any way limiting the generality
of this Section, the Company shall not either assign this Agreement or the
servicing hereunder or delegate its rights or duties hereunder or any portion
thereof, or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written approval of the Purchaser, which
consent shall be granted or withheld in the Purchaser's sole discretion, unless
the Company meets the requirements of the last sentence of Section 8.02 herein
after any such disposition.
Without
in any way limiting the generality of this Section 8.05, 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 without (i)
satisfying the requirements set forth herein or (ii) the prior written consent
of the Purchaser, then the Purchaser shall have the right to terminate this
Agreement, without any payment of any penalty or damages and without any
liability whatsoever to the Company (other than with respect to accrued but
unpaid Servicing Fees and Servicing Advances remaining unpaid) or any third
party.
ARTICLE
IX
DEFAULT
Section
9.01 Events
of Default.
In
case
one or more of the following Events of Default by the Company shall occur and
be
continuing, that is to say:
(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 receipt of written notice to the Company; or
(ii)
failure on the part of 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 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
(iii)
a
decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or liquidator
in
any insolvency, bankruptcy, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of
its
affairs, shall have been entered against the Company and such decree or order
shall have remained in force undischarged or unstayed for a period of sixty
(60)
days; or
(iv)
the
Company shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of
assets and liabilities or similar proceedings of or relating to the Company
or
of or relating to all or substantially all of its property; or
(v)
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
or
reorganization statute, make an assignment for the benefit of its creditors,
or
voluntarily suspend payment of its obligations; or
(vi)
the
Company ceases to be approved by either ▇▇▇▇▇▇ ▇▇▇ or FHLMC as a mortgage loan
seller or servicer for more than thirty (30) days; or
(vii)
the
Company attempts to assign its right to servicing compensation hereunder or
the
Company attempts, without the consent of the Purchaser, to sell or otherwise
dispose of all or substantially all of its property or assets (except as
expressly permitted hereunder) or to assign this Agreement or the servicing
responsibilities hereunder (except as expressly
permitted
hereunder) or to delegate its duties hereunder or any portion thereof;
or
(viii)
the Company ceases to be (a) licensed to service first lien residential mortgage
loans in any jurisdiction in which a Mortgaged Property is located and such
licensing is required, and (b) qualified to transact business in any
jurisdiction where it is currently so qualified, but only to the extent such
non-qualification materially and adversely affects the Company's ability to
perform its obligations hereunder; or
(ix)
the
Company fails to meet the eligibility criteria set forth in the last sentence
of
Section 8.02.
Then,
and
in each and every such case, so long as an Event of Default shall not have
been
remedied, the Purchaser, by notice in writing to the Company (except in the
case
of an Event of Default under clauses (iii), (iv) or (v) above, in which case,
automatically and without notice) the Company may, in addition to whatever
rights the Purchaser may have under Sections 3.03 and 8.01 and at law or equity
or to damages, including injunctive relief and specific performance, terminate
all the rights and obligations of the Company under this Agreement and in and
to
the Mortgage Loans and the proceeds thereof without compensating the Company
for
the same. On or after the receipt by the Company of such written notice (or,
in
the case of an Event of Default under clauses (iii), (iv) or (v) above, in
which
case, automatically and without 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
11.01. Upon written request from the Purchaser, the Company shall prepare,
execute and deliver, any and all documents and other instruments, place in
such
successor'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, 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 or any REO Property.
Section
9.02 Waiver
of Defaults.
The
Purchaser may waive only by written notice any default by the Company in the
performance of its obligations hereunder and its consequences. Upon any such
waiver of a past default, such default shall cease to exist, and any Event
of
Default arising therefrom shall be deemed to have been 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 in writing.
ARTICLE
X
TERMINATION
Section
10.01 Termination.
The
respective obligations and responsibilities of the Company shall terminate
upon:
(i) the later of the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan and the disposition of all remaining
REO Property and the remittance of all funds due hereunder; or (ii) by mutual
consent of the Company and the Purchaser in writing; or (iii) termination with
cause under the terms of this Agreement.
ARTICLE
XI
MISCELLANEOUS
PROVISIONS
Section
11.01 Successor
to the Company.
Prior
to
termination of the Company's responsibilities and duties under this Agreement
pursuant to Sections 4.03, 4.13, 8.04, 9.01, 10.01 (ii) or (iii), 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 hereof 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 the 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
the
Purchaser 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 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 Sections 3.03 and 8.01, it being understood and agreed that the provisions
of such Sections 3.01, 3.02, 3.03 and 8.01 shall be applicable to the Company
notwithstanding any such resignation or termination of the Company, or the
termination of this Agreement.
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Company and to the Purchaser an instrument accepting such appointment,
whereupon such successor shall become fully vested with all the rights, powers,
duties, responsibilities, obligations and liabilities of the 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
4.03, 4.13, 8.04, 9.01 or 10.01 shall not affect any claims that the Purchaser
may have against the Company arising prior to any such termination or
resignation.
The
Company shall promptly deliver to the successor the funds in the Custodial
Account and the Escrow Account and the Mortgage Files and related documents
and
statements held by it hereunder and the Company shall account for all funds.
The
Company shall execute and deliver such instruments and do such other things
all
as may reasonably be required to more fully and definitely vest and confirm
in
the successor all such rights, powers, duties, responsibilities, obligations
and
liabilities of the Company. The successor shall make arrangements as it may
deem
appropriate to reimburse the Company for Nonrecoverable Advances which the
successor retains hereunder and which would otherwise have been recovered by
the
Company pursuant to this Agreement but for the appointment of the successor
servicer.
Upon
a
successor's acceptance of appointment as such, the party who obtained such
successor shall notify by mail the other party of such appointment.
Section
11.02 Amendment.
This
Agreement may be amended from time to time by the Company and the Purchaser
by
written agreement signed by the Company and the Purchaser.
Section
11.03 [Reserved]
Section
11.04 Governing
Law.
This
Agreement and the related Term Sheet shall be governed by and construed in
accordance with the laws of the State of New York except to the extent preempted
by Federal law. The obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
Section
11.05 Notices.
Any
demands, notices or other communications permitted or required hereunder shall
be in writing and shall be deemed conclusively to have been given if personally
delivered at or mailed by registered mail, postage prepaid, and return receipt
requested or certified mail, return receipt requested, or transmitted by telex,
telegraph or telecopier and confirmed by a similar mailed writing, as
follows:
| (i) |
if
to the Company:
|
Mid
America Bank, fsb
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
and
with
respect to notices relating to servicing matters:
Mid
America Bank, fsb
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
| (ii) |
if
to the Purchaser:
|
EMC
Mortgage Corporation
Mac
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇,
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier
No.: (▇▇▇) ▇▇▇-▇▇▇▇
With
a
copy to:
Bear
▇▇▇▇▇▇▇ Mortgage Capital Corporation
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
or
such
other address as may hereafter be furnished to the other party by like notice.
Any such demand, notice or communication hereunder shall be deemed to have
been
received on the date delivered to or received at the premises of the addressee
(as evidenced, in the case of registered or certified mail, by the date noted
on
the return receipt).
Section
11.06 Severability
of Provisions.
Any
part,
provision, representation or warranty of this Agreement and the related Term
Sheet which is prohibited or which is held to be void or unenforceable shall
be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition
or
unenforceability without invalidating the remaining provisions hereof, and
any
such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law that prohibits or renders void or unenforceable
any
provision hereof. If the invalidity of any part, provision, representation
or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good
faith, to develop a structure the economic effect of which is nearly as possible
the same as the economic effect of this Agreement without regard to such
invalidity.
Section
11.07 Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
Section
11.08 General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(i)
the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender herein
shall be deemed to include the other gender;
(ii)
accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(iii)
references
herein to "Articles", "Sections", Subsections", "Paragraphs", and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
(iv)
a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(v)
the
words
"herein", "hereof ", "hereunder" and other words of similar import refer to
this
Agreement as a whole and not to any particular provision;
(vi)
the
term
"include" or "including" shall mean without limitation by reason of enumeration;
and
(viii)
headings
of the Articles and Sections in this Agreement are for reference purposes only
and shall not be deemed to have any substantive effect.
Section
11.09 Reproduction
of Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(i)
consents, waivers and modifications which may hereafter be executed, (ii)
documents received by any party at the closing, and (iii) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
Section
11.10 Confidentiality
of Information.
Each
party recognizes that, in connection with this Agreement, it may become privy
to
non-public information regarding the financial condition, operations and
prospects of the other party. Each party agrees to keep all non-public
information regarding the other party strictly confidential, and to use all
such
information solely in order to effectuate the purpose of the Agreement; provided
that each party may provide confidential information to its employees, agents
and affiliates who have a need to know such information in order to effectuate
the transaction. In addition, confidential information may be provided to a
regulatory authority with supervisory power over the Purchaser, provided such
information is identified as confidential non-public information.
The
Company agrees that the Company (i) shall comply with any applicable laws and
regulations regarding the privacy and security of Consumer Information
including, but not limited to the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Act, Title V, Subtitle A, 15 U.S.C. § 6801 et seq.,
(ii)
shall not use Consumer Information in any manner inconsistent with any
applicable laws and regulations regarding the privacy and security of Consumer
Information, (iii) shall not disclose Consumer Information to third parties
except at the specific written direction of the Purchaser, (iv) shall maintain
adequate physical, technical and administrative safeguards to protect Consumer
Information from unauthorized access as provided by the applicable laws and
regulations, and (v) shall immediately notify the Purchaser of any actual or
suspected breach of the confidentiality of Consumer Information that would
have
a material and adverse effect on the Purchaser.
Section
11.11 Recordation
of Assignments of Mortgage.
To
the
extent permitted by applicable law, each of the Assignments 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 by and at the Company’s
expense in the event recordation is either necessary under applicable law or
requested by the Purchaser at its sole option.
Section
11.12 Assignment.
The
Purchaser shall have the right, without the consent of the Company, 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 a Purchase, Assignment, Assumption and
Recognition Agreement substantially in the form of Exhibit
D
hereto
and the assignee or designee shall accede to the rights and obligations
hereunder of the Purchaser with respect to such Mortgage Loans. In no event
shall the Purchaser sell a partial interest in any Mortgage Loan without the
written consent of the Company, which consent shall not be unreasonably denied.
All references to the Purchaser in this Agreement shall be deemed to include
its
assignee or designee. The Company shall have the right, only with the consent
of
the Purchaser or otherwise in accordance with this Agreement, to assign, in
whole or in part, its interest under this Agreement with respect to some or
all
of the Mortgage Loans.
Section
11.13 No
Partnership.
Nothing
herein contained shall be deemed or construed to create a co-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
11.14 Signature
Pages/Counterparts; Successors and Assigns.
This
Agreement and/or any Term Sheet shall be executed by each party (i) in one
or
more fully executed copies, each of which shall constitute a fully executed
original Agreement, and/or (ii) in counterparts having one or more original
signatures, and all such counterparts containing the original signatures of
all
of the parties hereto taken together shall constitute a fully executed original
Agreement or Term Sheet, as applicable, and/or (iii) by delivery of one or
more
original signed signature pages to the other parties hereto (x) by mail or
courier, and/or (y) by electronic transmission, including without limitation
by
telecopier, facsimile or email of a scanned image (“Electronic Transmission”),
each of which as received shall constitute for all purposes an executed original
signature page of such party. The Purchaser may deliver a copy of this Agreement
and/or any Term Sheet, fully executed as provided herein, to each other party
hereto by mail and/or courier and/or Electronic Transmission, and such copy
as
so delivered shall constitute a fully executed original Agreement or Term Sheet,
as applicable, superseding any prior form of the Agreement or Term Sheet, as
applicable, that differs therefrom in any respect. This Agreement shall inure
to
the benefit of and be binding upon the Company and the Purchaser and their
respective successor and assigns.
Section
11.15 Entire
Agreement.
The
Company acknowledges that no representations, agreements or promises were made
to the Company by the Purchaser or any of its employees other than those
representations, agreements or promises specifically contained herein and in
the
Confirmation. The Confirmation and this Agreement and the related Term Sheet
sets forth the entire understanding between the parties hereto; provided,
however, only this Agreement and the related Term Sheet shall be binding upon
all successors of both parties. In the event of any inconsistency between the
Confirmation and this Agreement, this Agreement and the related Term Sheet
shall
control.
Section
11.16. No
Solicitation.
From
and
after the Closing Date, the Company agrees that it will not take any action
or
permit or cause any action to be taken by any of its agents or affiliates,
to
personally, by telephone or mail, solicit the Mortgagor under any Mortgage
Loan
to refinance the Mortgage Loan, in whole or in part, without the prior written
consent of the Purchaser. Notwithstanding the foregoing, it is understood and
agreed that (i) promotions undertaken by the Company or any affiliate of the
Company which are directed to the general public at large, or segments thereof,
provided that no segment shall consist primarily of the Mortgage Loans,
including, without limitation, mass mailing based on commercially acquired
mailing lists, newspaper, radio and television advertisements and (ii) responses
to unsolicited requests or inquiries made by a Mortgagor or an agent of a
Mortgagor, shall not constitute solicitation under this Section 11.16. This
Section 11.16 shall not be deemed to preclude the Company or any of its
affiliates from soliciting any Mortgagor for any other financial products or
services. The Company shall use its best efforts to prevent the sale of the
name
of any Mortgagor to any Person who is not affiliate of the Company.
Section
11.17. Closing.
The
closing for the purchase and sale of the Mortgage Loans shall take place on
the
related 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 shall agree.
The
closing for the Mortgage Loans to be purchased on the related Closing Date
shall
be subject to each of the following conditions:
(a) at
least
one (1) Business Day prior to the related Closing Date, the Company shall
deliver to the Purchaser a magnetic diskette, or transmit by modem, a listing
on
a loan-level basis of the information contained in the related Mortgage Loan
Schedule attached to the related Term Sheet;
(b) all
of
the representations and warranties of the Company under this Agreement shall
be
materially true and correct as of the related Closing Date and no event shall
have occurred which, with notice or the passage of time, would constitute a
material default under this Agreement;
(c) the
Purchaser shall have received, or the Purchaser's attorneys shall have received
in escrow, all documents required pursuant to this Agreement, the related Term
Sheet and an Officer Certificate (on or prior to the initial Closing Date only),
all in such forms as are agreed upon and acceptable to the Purchaser, duly
executed by all signatories other than the Purchaser as required pursuant to
the
terms hereof; and
(d) all
other
terms and conditions of this Agreement, the related Term Sheet and the
Confirmation shall have been materially complied with.
Subject
to the foregoing conditions, the Purchaser shall pay to the Company on the
related Closing Date the Purchase Price, plus accrued interest pursuant to
Section 2.02 of this Agreement, by wire transfer of immediately available funds
to the account designated by the Company.
Section
11.18. [Reserved]
Section
11.19. Monthly
Reporting with Respect to a Reconstitution.
As
long
as the Company continues to service Mortgage Loans, the Company agrees that
with
respect to any Mortgage Loan sold or transferred pursuant to a Reconstitution
as
described in Section 11.18 of this Agreement (a “Reconstituted Mortgage Loan”),
the Company, at its expense, shall provide the Purchaser with the information
set forth in Exhibit
E
attached
hereto for each Reconstituted Mortgage Loan in Excel or such electronic
delimited file format as may be mutually agreed upon by both the Purchaser
and
the Company. Such information shall be provided monthly for all Reconstituted
Mortgage Loans on the fifth (5th)
Business Day of each month for the immediately preceding monthly period, and
shall be transmitted to ▇▇▇▇.▇▇▇▇@▇▇▇▇.▇▇▇.
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.
|
EMC
MORTGAGE
CORPORATION
Purchaser
|
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| |
|
|
| By: | ||
|
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||
|
Name:
Title:
|
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|
MID
AMERICA BANK,
FSB
Company
|
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|
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| By: | ||
|
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Name:
Title:
|
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EXHIBIT
A
CONTENTS
OF 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
which shall be retained by the Company in the Servicing File or delivered to
the
Purchaser or its designee pursuant to Sections 2.04 and 2.05 of the Purchase,
Warranties and Servicing Agreement.
1.
The
original Mortgage Note endorsed "Pay to the order of _______________________,
without recourse," and signed via original signature in the name of the Company
by an authorized officer, with all intervening endorsements showing a complete
chain of title from the originator to the Company, together with any applicable
riders. In no event may an endorsement be a facsimile endorsement. If the
Mortgage Loan was acquired by the Company in a merger, the endorsement must
be
by "[Company], successor by merger to the [name of predecessor]". If the
Mortgage Loan was acquired or originated by the Company while doing business
under another name, the endorsement must be by "[Company] formerly known as
[previous name]". Mortgage Notes may be in the form of a lost note affidavit
subject to the Purchaser acceptability.
2.
The
original Mortgage (together with a standard adjustable rate mortgage rider)
with
evidence of recording thereon, or a copy thereof certified by the public
recording office in which such mortgage has been recorded or, if the original
Mortgage has not been returned from the applicable public recording office,
a
true certified copy, certified by the Company.
3.
The
original or certified copy, certified by the Company, of the Primary Mortgage
Insurance Policy, if required.
4.
The
original Assignment, from the Company to _______________________________, or
in
accordance with the Purchaser's instructions, which assignment shall, but for
any blanks requested by the Purchaser, be in form and substance acceptable
for
recording. If the Mortgage Loan was acquired or originated by the Company while
doing business under another name, the Assignment must be by "[Company] formerly
known as [previous name]". If the Mortgage Loan was acquired by the Company
in a
merger, the endorsement must be by "[Company], successor by merger to the [name
of predecessor]". None of the Assignments are blanket assignments of
mortgage.
5.
The
original policy of title insurance, including riders and endorsements thereto,
or if the policy has not yet been issued, a written commitment or interim binder
or preliminary report of title issued by the title insurance or escrow
company.
6.
Originals of all recorded intervening Assignments, or copies thereof, certified
by the public recording office in which such Assignments have been recorded
showing a complete chain of
title
from the originator to the Company, with evidence of recording thereon, or
a
copy thereof certified by the public recording office in which such Assignment
has been recorded or, if the original Assignment has not been returned from
the
applicable public recording office, a true certified copy, certified by the
Company.
7.
Originals, or copies thereof certified by the public recording office in which
such documents have been recorded, of each assumption, extension, modification,
written assurance or substitution agreements, if applicable, or if the original
of such document has not been returned from the applicable public recording
office, a true certified copy, certified by the Company.
8.
If the
Mortgage Note or Mortgage or any other material document or instrument relating
to the Mortgage Loan has been signed by a person on behalf of the Mortgagor,
the
original or copy of power of attorney or other instrument that authorized and
empowered such person to sign bearing evidence that such instrument has been
recorded, if so required in the appropriate jurisdiction where the Mortgaged
Property is located, or a copy thereof certified by the public recording office
in which such instrument has been recorded or, if the original instrument has
not been returned from the applicable public recording office, a true certified
copy, certified by the Company.
9.
Reserved.
10.
Mortgage Loan closing statement (Form HUD-1) and any other truth-in-lending
or
real estate settlement procedure forms required by law.
11.
Residential loan application.
12.
Uniform underwriter and transmittal summary (▇▇▇▇▇▇ ▇▇▇ Form 1008) or reasonable
equivalent.
13.
Credit report on the mortgagor.
14.
Business credit report, if applicable.
15.
Residential appraisal report and attachments thereto.
16.
The
original of any guarantee executed in connection with the Mortgage
Note.
17.
Verification of employment and income except for Mortgage Loans originated
under
a limited documentation program, all in accordance with Company's underwriting
guidelines.
18.
Verification of acceptable evidence of source and amount of down payment, in
accordance with the Company's underwriting guidelines.
19.
Photograph of the Mortgaged Property (may be part of appraisal)
.
20.
Survey of the Mortgaged Property, if any.
21.
Sales
contract, if applicable.
22.
If
available, termite report, structural engineer’s report, water portability and
septic certification.
23.
Any
original security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.
24.
Name
affidavit, if applicable.
Notwithstanding
anything to the contrary herein, the Company may provide one certificate for
all
of the Mortgage Loans indicating that the documents were delivered for
recording.
EXHIBIT
B
CUSTODIAL
ACCOUNT LETTER AGREEMENT
______________,
2005
To: [_______________________]
(the
"Depository")
As
"Company" under the Purchase, Warranties and Servicing Agreement, dated as
of
[_____________________] 1, 200[_] (the "Agreement"), we hereby authorize and
request you to establish an account, as a Custodial Account pursuant to Section
4.04 of the Agreement, to be designated as
"[______________________________________], in trust for the [Purchaser], Owner
of Mortgage Loans". All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Company. This letter is submitted to you in
duplicate. Please execute and return one original to us.
|
[__________________________]
|
||
| |
|
|
|
By:____________________________
|
||
|
Name:__________________________
|
||
| Title:___________________________ | ||
The
undersigned, as "Depository", hereby certifies that the above described account
has been established under Account Number [__________], at the office of the
depository indicated above, and agrees to honor withdrawals on such account
as
provided above. The full amount deposited at any time in the account will be
insured up to applicable limits by the Federal Deposit Insurance Corporation
through the Bank Insurance Fund or the Savings Association Insurance Fund or
will be invested in Permitted Investments as defined in the
Agreement.
|
[__________________________]
|
||
| |
|
|
|
By:____________________________
|
||
|
Name:__________________________
|
||
| Title:___________________________ | ||
EXHIBIT
C
ESCROW
ACCOUNT LETTER AGREEMENT
_____________,
2005
To: [_______________________]
(the
"Depository")
As
“Company” under the Purchase Warranties and Servicing Agreement, dated as of
[____________________]1, 200[_] (the "Agreement"), we hereby authorize and
request you to establish an account, as an Escrow Account pursuant to Section
4.06 of the Agreement, to be designated as "[__________________________], in
trust for the [Purchaser], Owner of Mortgage Loans, and various Mortgagors."
All
deposits in the account shall be subject to withdrawal therefrom by order signed
by the Company. This letter is submitted to you in duplicate. Please execute
and
return one original to us.
|
[__________________________]
|
||
| |
|
|
|
By:____________________________
|
||
|
Name:__________________________
|
||
| Title:___________________________ | ||
The
undersigned, as "Depository", hereby certifies that the above described account
has been established under Account Number __________, at the office of the
depository indicated above, and agrees to honor withdrawals on such account
as
provided above. The full amount deposited at any time in the account will be
insured up to applicable limits by the Federal Deposit Insurance Corporation
through the Bank Insurance Fund or the Savings Association Insurance Fund or
will be invested in Permitted Investments as defined in the
Agreement.
|
[__________________________]
|
||
| |
|
|
|
By:____________________________
|
||
|
Name:__________________________
|
||
| Title:___________________________ | ||
EXHIBIT
D
FORM
OF
PURCHASE, ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This
is a
Purchase, Assignment, Assumption and Recognition Agreement (this “PAAR
Agreement”) made as of __________, 200__, among EMC Mortgage Corporation (
“Assignor”), ___________________ ( “Assignee”), and Mid America Bank, fsb (
“Company”).
In
consideration of the mutual promises contained herein the parties hereto agree
that the residential mortgage loans (the “Assigned Loans”) listed on Attachment
1 annexed hereto (the "Assigned Loan Schedule") now serviced by Company for
Assignor and its successors and assigns pursuant to the Purchase, Warranties
and
Servicing Agreement, dated as of _________, 200__, between Assignor and Company
(the “Purchase Agreement”) shall be subject to the terms of this PAAR Agreement.
Capitalized terms used herein but not defined shall have the meanings ascribed
to them in the Purchase Agreement.
Purchase,
Assignment and Assumption
1. Assignor
hereby grants, transfers and assigns to Assignee all of the right, title and
interest of Assignor in the Assigned Loans and, as they relate to the Assigned
Loans, all of its right, title and interest in, to and under the Purchase
Agreement.
2. Simultaneously
with the execution hereof, (i) Assignee shall pay to Assignor the “Funding
Amount” as set forth in that certain letter agreement, dated as of _________
____, between Assignee and Assignor (the “Confirmation”) and (ii) Assignor, at
its expense, shall have caused to be delivered to Assignee or its designee
the
Mortgage File for each Assigned Loan in Assignor's or its custodian's
possession, as set forth in the Purchase Agreement, along with, for each
Assigned Loan, an endorsement of the Mortgage Note from the Company, in blank,
and an assignment of mortgage in recordable form from the Company, in blank.
Assignee shall pay the Funding Amount by wire transfer of immediately available
funds to the account specified by Assignor. Assignee shall be entitled to all
scheduled payments due on the Assigned Loans after ___________, 200__ and all
unscheduled payments or other proceeds or other recoveries on the Assigned
Loans
received on and after _____________, 200__.
Representations,
Warranties and Covenants
3. Assignor
warrants and represents to Assignee and Company as of the date
hereof:
(a) Attached
hereto as Attachment 2 is a true and accurate copy of the Purchase Agreement,
which agreement is in full force and effect as of the date hereof and the
provisions of which have not been waived, amended or modified in any respect,
nor has any notice of termination been given thereunder;
(b) Assignor
is the lawful owner of the Assigned Loans with full right to transfer the
Assigned Loans and any and all of its interests, rights and obligations under
the Purchase Agreement as they relate to the Assigned Loans, free and clear
from
any and all claims and encumbrances; and upon the transfer of the Assigned
Loans
to Assignee as contemplated herein, Assignee shall have good title to each
and
every Assigned Loan, as well as any and all of Assignee’s interests, rights and
obligations under the Purchase Agreement as they relate to the Assigned Loans,
free and clear of any and all liens, claims and encumbrances;
(c) There
are
no offsets, counterclaims or other defenses available to Company with respect
to
the Assigned Loans or the Purchase Agreement;
(d) Assignor
has no knowledge of, and has not received notice of, any waivers under, or
any
modification of, any Assigned Loan;
(e) Assignor
is duly organized, validly existing and in good standing under the laws of
the
jurisdiction of its incorporation, and has all requisite power and authority
to
acquire, own and sell the Assigned Loans;
(f) Assignor
has full corporate power and authority to execute, deliver and perform its
obligations under this PAAR Agreement, and to consummate the transactions set
forth herein. The consummation of the transactions contemplated by this PAAR
Agreement is in the ordinary course of Assignor’s business and will not conflict
with, or result in a breach of, any of the terms, conditions or provisions
of
Assignor’s charter or by-laws or any legal restriction, or any material
agreement or instrument to which Assignor is now a party or by which it is
bound, or result in the violation of any law, rule, regulation, order, judgment
or decree to which Assignor or its property is subject. The execution, delivery
and performance by Assignor of this PAAR Agreement and the consummation by
it of
the transactions contemplated hereby, have been duly authorized by all necessary
corporate action on part of Assignor. This PAAR Agreement has been duly executed
and delivered by Assignor and, upon the due authorization, execution and
delivery by Assignee and Company, will constitute the valid and legally binding
obligation of Assignor enforceable against Assignor in accordance with its
terms
except as enforceability may be limited by bankruptcy, reorganization,
insolvency, moratorium or other similar laws now or hereafter in effect relating
to creditors’ rights generally, and by general principles of equity regardless
of whether enforceability is considered in a proceeding in equity or at law;
(g) No
consent, approval, order or authorization of, or declaration, filing or
registration with, any governmental entity is required to be obtained or made
by
Assignor in connection with the execution, delivery or performance by Assignor
of this PAAR Agreement, or the consummation by it of the transactions
contemplated hereby; and
(h) Neither
Assignor nor anyone acting on its behalf has offered, transferred, pledged,
sold
or otherwise disposed of the Assigned Loans or any interest in the Assigned
Loans, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Assigned Loans, or any interest in the Assigned Loans or
otherwise approached or negotiated with respect to the Assigned Loans,
or
any interest in the Assigned Loans 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 Assigned
Loans under the Securities Act of 1933, as amended (the “1933 Act”) or which
would render the disposition of the Assigned Loans a violation of Section 5
of
the 1933 Act or require registration pursuant thereto.
4. Assignee
warrants and represents to, and covenants with, Assignor and Company as of
the
date hereof:
(a) Assignee
is duly organized, validly existing and in good standing under the laws of
the
jurisdiction of its organization and has all requisite power and authority
to
acquire, own and purchase the Assigned Loans;
(b) Assignee
has full corporate power and authority to execute, deliver and perform its
obligations under this PAAR Agreement, and to consummate the transactions set
forth herein. The consummation of the transactions contemplated by this PAAR
Agreement is in the ordinary course of Assignee’s business and will not conflict
with, or result in a breach of, any of the terms, conditions or provisions
of
Assignee’s charter or by-laws or any legal restriction, or any material
agreement or instrument to which Assignee is now a party or by which it is
bound, or result in the violation of any law, rule, regulation, order, judgment
or decree to which Assignee or its property is subject. The execution, delivery
and performance by Assignee of this PAAR Agreement and the consummation by
it of
the transactions contemplated hereby, have been duly authorized by all necessary
corporate action on part of Assignee. This PAAR Agreement has been duly executed
and delivered by Assignee and, upon the due authorization, execution and
delivery by Assignor and Company, will constitute the valid and legally binding
obligation of Assignee enforceable against Assignee in accordance with its
terms
except as enforceability may be limited by bankruptcy, reorganization,
insolvency, moratorium or other similar laws now or hereafter in effect relating
to creditors’ rights generally, and by general principles of equity regardless
of whether enforceability is considered in a proceeding in equity or at law;
(c) No
consent, approval, order or authorization of, or declaration, filing or
registration with, any governmental entity is required to be obtained or made
by
Assignee in connection with the execution, delivery or performance by Assignee
of this PAAR Agreement, or the consummation by it of the transactions
contemplated hereby; and
(d) Assignee
agrees to be bound as “Purchaser” by all of the terms, covenants and conditions
of the Purchase Agreement with respect to the Assigned Loans, and from and
after
the date hereof, Assignee assumes for the benefit of each of Assignor and
Company all of Assignor's obligations as “Purchaser” thereunder but solely with
respect to such Assigned Loans.
5. Company
warrants and represents to, and covenant with, Assignor and Assignee as of
the
date hereof:
(a) Attached
hereto as Attachment 2 is a true and accurate copy of the Purchase Agreement,
which agreement is in full force and effect as of the date hereof and the
provisions of which have not been waived, amended or modified in any respect,
nor has any notice of termination been given thereunder;
(b)
Company
is duly organized, validly existing and in good standing under the laws of
the
jurisdiction of its incorporation, and has all requisite power and authority
to
service the Assigned Loans and otherwise to perform its obligations under the
Purchase Agreement;
(c)
Company
has full corporate power and authority to execute, deliver and perform its
obligations under this PAAR Agreement, and to consummate the transactions set
forth herein. The consummation of the transactions contemplated by this PAAR
Agreement is in the ordinary course of Company’s business and will not conflict
with, or result in a breach of, any of the terms, conditions or provisions
of
Company’s charter or by-laws or any legal restriction, or any material agreement
or instrument to which Company is now a party or by which it is bound, or result
in the violation of any law, rule, regulation, order, judgment or decree to
which Company or its property is subject. The execution, delivery and
performance by Company of this PAAR Agreement and the consummation by it of
the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action on part of Company. This PAAR Agreement has been duly executed
and delivered by Company, and, upon the due authorization, execution and
delivery by Assignor and Assignee, will constitute the valid and legally binding
obligation of Company, enforceable against Company in accordance with its terms
except as enforceability may be limited by bankruptcy, reorganization,
insolvency, moratorium or other similar laws now or hereafter in effect relating
to creditors’ rights generally, and by general principles of equity regardless
of whether enforceability is considered in a proceeding in equity or at
law;
(d)
No
consent, approval, order or authorization of, or declaration, filing or
registration with, any governmental entity is required to be obtained or made
by
Company in connection with the execution, delivery or performance by Company
of
this PAAR Agreement, or the consummation by it of the transactions contemplated
hereby;
(e)
No
event
has occurred
from the
Closing Date to the date hereof which would render the representations and
warranties as to the related Assigned Loans made by Company in Sections 3.01
and
3.02 of the Purchase Agreement to be untrue in any material respect;
and
(f)
Neither
this PAAR Agreement nor any certification, statement, report or other agreement,
document or instrument furnished or to be furnished by Company pursuant to
this
PAAR Agreement contains or will contain any materially untrue statement of
fact
or omits or will omit to state a fact necessary to make the statements contained
therein not misleading.
Recognition
of Assignee
6. From
and
after the date hereof, Company shall recognize Assignee as owner of the Assigned
Loans and will service the Assigned Loans in accordance with the Purchase
Agreement. It is the intention of Assignor, Company and Assignee that this
PAAR
Agreement shall be binding upon and for the benefit of the respective successors
and assigns of the parties hereto. Neither Company nor Assignor shall amend
or
agree to amend, modify, waiver, or otherwise alter any of the terms or
provisions of the Purchase Agreement which amendment, modification, waiver
or
other alteration would in any way affect the Assigned Loans without the prior
written consent of Assignee.
Miscellaneous
7. All
demands, notices and communications related to the Assigned Loans, the Purchase
Agreement and this PAAR Agreement shall be in writing and shall be deemed to
have been duly given if personally delivered at or mailed by registered mail,
postage prepaid, as follows:
| (a) |
In
the case of Company,
|
Mid
America Bank, fsb
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
and
with
respect to notices relating to servicing matters:
Mid
America Bank, fsb
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
| (b) |
In
the case of Assignor,
|
____________________
____________________
____________________
____________________
____________________
| (c) |
In
the case of Assignee,
|
EMC
Mortgage Corporation
Mac
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier
No.: (▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to:
Bear,
▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopier
No.: (212) 272-[___]
8. Each
party will pay any commissions it has incurred and the fees of its attorneys
in
connection with the negotiations for, documenting of and closing of the
transactions contemplated by this PAAR Agreement.
9. This
PAAR
Agreement shall be construed in accordance with the laws of the State of New
York, without regard to conflicts of law principles, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
10. No
term
or provision of this PAAR Agreement may be waived or modified unless such waiver
or modification is in writing and signed by the party against whom such waiver
or modification is sought to be enforced.
11. This
PAAR
Agreement shall inure to the benefit of the successors and assigns of the
parties hereto. Any entity into which Assignor, Assignee or Company may be
merged or consolidated shall, without the requirement for any further writing,
be deemed Assignor, Assignee or Company, respectively, hereunder.
12. This
PAAR
Agreement shall survive the conveyance of the Assigned Loans, the assignment
of
the Purchase Agreement to the extent of the Assigned Loans by Assignor to
Assignee and the termination of the Purchase Agreement.
13. This
PAAR
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original and all such counterparts shall
constitute one and the same instrument.
14. In
the
event that any provision of this PAAR Agreement conflicts with any provision
of
the Purchase Agreement with respect to the Assigned Loans, the terms of this
PAAR Agreement shall control. In the event that any provision of this PAAR
Agreement conflicts with any provision of
the
Confirmation with respect to the Assigned Loans, the terms of this PAAR
Agreement shall control.
[Modification
of Purchase Agreement
15. Company
and Assignor hereby amend the Purchase Agreement as follows:
(a)
The
following definitions are added to Section 1.01 of the Purchase
Agreement:
Securities
Administrator:
________________________
Supplemental
PMI Insurer: ________________________
Supplemental
PMI Policy:
The
primary guarantee insurance policy of the Supplemental PMI Insurer attached
hereto as Exhibit [_], or any successor Supplemental PMI Policy given to the
Servicer by the Assignee.
Trustee: ________________________
(b)
The
following definition is amended and restated:
Insurance
Proceeds: Proceeds
of any Primary Mortgage Insurance Policy, the Supplemental PMI Policy, any
title
policy, any hazard insurance policy or any other insurance policy covering
a
Mortgage Loan or other related Mortgaged Property, including any amounts
required to be deposited in the Custodial Account pursuant to Section 4.04,
to
the extent such proceeds are not to be applied to the restoration of the related
Mortgaged Property or released to the Mortgagor in accordance with Accepted
Servicing Practices.
(c)
The
following are added as the fourth, fifth and sixth paragraphs of Section
4.08:
“In
connection with its activities as servicer, the Company agrees to prepare and
present, on behalf of itself and the Purchaser, claims to the Supplemental
PMI
Insurer with respect to the Supplemental PMI Policy and, in this regard, to
take
such action as shall be necessary to permit recovery under any Supplemental
PMI
Policy respecting a defaulted Mortgage Loan. Pursuant to Section 4.04, any
amounts collected by the Company under any Supplemental PMI Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
In
accordance with the Supplemental PMI Policy, the Company shall provide to the
Supplemental PMI Insurer any required information regarding the Mortgage
Loans.
The
Company shall provide to the [Securities Administrator] on a monthly basis
via
computer tape, or other mutually acceptable format, the unpaid principal
balance, insurer certificate number, lender loan number, and premium due the
Supplemental PMI Insurer for each Mortgage Loan covered by the Supplemental
PMI
Policy. In addition, the Company agrees to forward to the
Purchaser
and the [Securities Administrator] any statements or other reports given by
the
Supplemental PMI Insurer to the Servicer in connection with a claim under the
Supplemental PMI Policy.”
(d)
Clause
(vi) of Section 9.01 is amended to read as follows:
“Company
ceases to be approved by either ▇▇▇▇▇▇ ▇▇▇ or FHLMC as a mortgage loan seller
or
servicer for more than thirty days, or the Company fails to meet the servicer
eligibility requirements of the Supplemental PMI Insurer; or”]
IN
WITNESS WHEREOF, the parties hereto have executed this PAAR Agreement as of
the
day and year first above written.
|
EMC
MORTGAGE CORPORATION
Assignor
|
||
| |
|
|
| By: __________________________ | ||
|
Name:________________________
|
||
| Title:______________________ | ||
|
_________________________________
Assignee
|
||
| |
|
|
| By:_______________________________ | ||
| Name:_____________________________ | ||
| Title:__________________________ | ||
|
MID
AMERICA BANK, FSB
Company
|
||
| |
|
|
| By:_______________________________ | ||
| Name:_____________________________ | ||
| Title:__________________________ | ||
ATTACHMENT
1
ASSIGNED
LOAN SCHEDULE
ATTACHMENT
2
EXHIBIT
E
FORM
OF
TRIAL BALANCE
EXHIBIT
G
REQUEST
FOR RELEASE OF DOCUMENTS AND RECEIPT
RE:
Mortgage
Loan #___________________________________
BORROWER:__________________________________________________
PROPERTY:
__________________________________________________
Pursuant
to a Purchase, Warranties and Servicing Agreement (the "Agreement") between
the
Company and the Purchaser, the undersigned hereby certifies that he or she
is an
officer of the Company requesting release of the documents for the reason
specified below. The undersigned further certifies that:
(Check
one of the items below)
_____ On
_________________, the above captioned Mortgage Loan was paid in full or that
the Company has been notified that payment in full has been or will be escrowed.
The Company hereby certifies that all amounts with respect to this loan which
are required under the Agreement have been or will be deposited in the Custodial
Account as required.
_____ The
above
captioned Mortgage Loan is being repurchased pursuant to the terms of the
Agreement. The Company hereby certifies that the repurchase price has been
credited to the Custodial Account as required under the Agreement.
_____ The
above
captioned Mortgage Loan is being placed in foreclosure and the original
documents are required to proceed with the foreclosure action. The Company
hereby certifies that the documents will be returned to the Purchaser in the
event of reinstatement.
_____ Other
(explain)
_______________________________________________________
_______________________________________________________
All
capitalized terms used herein and not defined shall have the meanings assigned
to them in the Agreement.
Based
on
this certification and the indemnities provided for in the Agreement, please
release to the Company all original Mortgage Loan Documents in your possession
relating to this loan.
Dated:_________________
| By: | |||
|
|
|||
|
Signature
|
___________________________________
Title
Send
documents to: _____________________________________________
_____________________________________________
_____________________________________________
Acknowledgement:
The
Purchaser hereby acknowledges that all original documents previously released
on
the above captioned Mortgage Loan have been returned and received by the
Purchaser.
Dated:________________
By:________________________________
Signature
_______________________________
Title
EXHIBIT
H
COMPANY’S
UNDERWRITING GUIDELINES
EXHIBIT
I
TERM
SHEET
This
TERM
SHEET (the "Term Sheet") dated _____________, between Mid America Bank, fsb,
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(the
“Company”) and EMC Mortgage Corporation, a Delaware corporation, located at Mac
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the
"Purchaser") is made pursuant to the terms and conditions of that certain
Purchase, Warranties and Servicing Agreement, as amended (the "Agreement")
dated
as of February 1, 2006, between the Company and the Purchaser, the provisions
of
which are incorporated herein as if set forth in full herein, as such terms
and
conditions may be modified or supplemented hereby. All initially capitalized
terms used herein unless otherwise defined shall have the meanings ascribed
thereto in the Agreement.
The
Purchaser hereby purchases from the Company and the Company hereby sells to
the
Purchaser, all of the Company’s right, title and interest in and to the Mortgage
Loans on a servicing retained basis described on the Mortgage Loan Schedule
annexed hereto as Schedule
I,
pursuant to and in accordance with the terms and conditions set forth in the
Agreement, as same may be supplemented or modified hereby. Hereinafter, the
Company shall service the Mortgage Loans for the benefit of the Purchaser and
all subsequent transferees of the Mortgage Loans pursuant to and in accordance
with the terms and conditions set forth in the Agreement.
1. Definitions
For
purposes of the Mortgage Loans to be sold pursuant to this Term Sheet, the
following terms shall have the following meanings:
Aggregate
Principal Balance
(as
of
the Cut-Off Date):
Closing
Date:
Custodian:
Cut-off
Date:
Initial
Weighted Average
Mortgage
Loan Remittance Rate:
Mortgage
Loan:
Purchase
Price Percentage:
Servicing
Fee Rate:
Additional
Closing Conditions:
In
addition to the conditions specified in the Agreement, the obligation of each
of
the Company and the Purchaser is subject to the fulfillment, on or prior to
the
applicable Closing Date, of the following additional conditions: [None].
Additional
Loan Documents:
In
addition to the contents of the Mortgage File specified in the Agreement, the
following documents shall be delivered with respect to the Mortgage Loans:
[None].
[Additional]
[Modification] of Representations and Warranties:
[In
addition to the representations and warranties set forth in the Agreement,
as of
the date hereof, the Company makes the following additional representations
and
warranties with respect to the Mortgage Loans: [None]. [Notwithstanding anything
to the contrary set forth in the Agreement, with respect to each Mortgage Loan
to be sold on the Closing Date, the representation and warranty set forth in
Section ______ of the Agreement shall be modified to read as
follows:]
Except
as
modified herein, the Agreement shall remain in full force and effect as of
the
date hereof.
IN
WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto
by their respective duly authorized officers as of the date first above
written.
|
MID
AMERICA BANK, FSB
|
||
| |
|
|
| By:_______________________________ | ||
| Name:_____________________________ | ||
| Title:__________________________ | ||
|
EMC
MORTGAGE CORPORATION
|
||
| |
|
|
| By:_______________________________ | ||
| Name:_____________________________ | ||
| Title:__________________________ | ||
SCHEDULE
I
MORTGAGE
LOAN SCHEDULE
AMENDMENT
NUMBER ONE
to
the
Dated
as
of February 1, 2006
between
EMC
MORTGAGE CORPORATION,
as
Purchaser
and
MID
AMERICA BANK, FSB,
as
Company
This
AMENDMENT NUMBER ONE (this “Amendment”) is made and entered into this
1st
day of
February, 2006, by and between EMC Mortgage Corporation, a Delaware corporation,
as purchaser (the “Purchaser”) and Mid America Bank, fsb, as company (the
“Company”) in connection with the Purchase, Warranties and Servicing Agreement,
dated as of February 1, 2006, between the above mentioned parties (the
“Agreement”). This Amendment is made pursuant to Section 11.02 of the
Agreement.
RECITALS
WHEREAS,
the parties hereto have entered into the Agreement;
WHEREAS,
the Agreement provides that the parties thereto may enter into an amendment
to
the Agreement;
WHEREAS,
the parties hereto desire to amend the Agreement as set forth in this Amendment;
and
NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the
parties hereto agree as follows:
1.
Capitalized
terms used herein and not defined herein shall have the meanings assigned
to
such terms in the Agreement.
2. Article
I
of the Agreement is hereby amended effective as of the date hereof by adding
the
following definitions to Section 1.01:
Commission
or SEC:
The
Securities and Exchange Commission.
Delinquency
Recognition Policies:
The
delinquency recognition policies set forth in Exhibit Q.
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Pass-Through Transfer.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
Master
Servicer:
With
respect to any Pass-Through Transfer, the “master servicer,” if any, identified
in the related transaction documents.
Prepayment
Charge:
Any
prepayment premium, penalty or charge payable by a Mortgagor in connection
with
any Principal Prepayment on a Mortgage Loan pursuant to the terms of the
related
Mortgage Note.
Qualified
Correspondent:
Any Person from which the Company purchased Mortgage Loans, provided that
the
following conditions are satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement between the Company and such Person that contemplated
that such Person would underwrite mortgage loans from time to time, for sale
to
the Company, in accordance with underwriting guidelines designated by the
Company (“Designated Guidelines”) or guidelines that do not vary materially from
such Designated Guidelines; (ii) such Mortgage Loans were in fact underwritten
as described in clause (i) above and were acquired by the Company within
180
days after origination; (iii) either (x) the Designated Guidelines were,
at the
time such Mortgage Loans were originated, used by the Company in origination
of
mortgage loans of the same type as the Mortgage Loans for the Company’s own
account or (y) the Designated Guidelines were, at the time such Mortgage
Loans
were underwritten, designated by the Company on a consistent basis for use
by
lenders in originating mortgage loans to be purchased by the Company; and
(iv)
the Company employed, at the time such Mortgage Loans were acquired by the
Company, pre-purchase or post-purchase quality assurance procedures (which
may
involve, among other things, review of a sample of mortgage loans purchased
during a particular time period or through particular channels) designed
to
ensure that Persons from which it purchased mortgage loans properly applied
the
underwriting criteria designated by the Company.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as amended from time to time, and subject to such
clarification and interpretation as have been provided by the Commission
in the
adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518,
70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission,
or
as may be provided by the Commission or its staff from time to
time.
Securities
Act:
The
Securities Act of 1933, as amended.
Servicing
Criteria:
As of
any date of determination, the “servicing criteria” set forth in Item 1122(d) of
Regulation AB, or any amendments thereto, a summary of the requirements of
which
as of the date hereof is attached hereto as Exhibit
M
for
convenience of reference only. In the event of a conflict or inconsistency
between the terms of Exhibit
M
and the
text of Item 1122(d) of Regulation AB, the text of Item 1122(d) of Regulation
AB
shall control (or those Servicing Criteria otherwise mutually agreed to by
the
Purchaser, the Company and any Person that will be responsible for signing
any
certification required under the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 with respect
to a
Pass-Through Transfer in response to evolving interpretations of Regulation
AB
and incorporated into a revised Exhibit
M).
Static
Pool Information:
Static
pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation
AB.
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or
more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
Mortgage Loans under the direction or authority of the Company or a Subservicer.
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, that originated Mortgage Loans
acquired by the Company.
3. Article
I
of the Agreement is hereby amended effective as of the date hereof by deleting
in its entirety the definition of Subservicer in Section 1.01 and replacing
it
with the following:
Subservicer:
Any
Person that services Mortgage Loans on behalf of the Company or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Company under this Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB.
Any subservicer shall meet the qualifications set forth in Section
4.01.
4. Article
I
of the Agreement is hereby amended effective as of the date hereof by deleting
in its entirety the definition of Principal Prepayment in Section 1.01 and
replacing it with the following:
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan full or partial
which
is received in advance of its scheduled Due Date, including any Prepayment
Charge 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.
5. Article
III of the Agreement is hereby amended effective as of the date hereof by
revising Section 3.01(n) as follows (new text underlined):
(n) Company
has delivered to the Purchaser financial statements of its parent, for its
last
two complete fiscal years as requested. All such financial information fairly
presents the pertinent results of operations and financial position for the
period identified and has been prepared in accordance with GAAP throughout
the
periods involved, except as set forth in the notes thereto. There has been
no
change in the servicing
policies and procedures,
business, operations, financial condition, properties or assets of the Company
since the date of the Company’s financial information that would have a material
adverse effect on its ability to perform its obligations under this
Agreement;
6. Article
III of the Agreement is hereby amended effective as of the date hereof by
adding
the following new Section 3.01(p):
(p) As
of the
date of each Pass-Through Transfer, and except as has been otherwise disclosed
to the Purchaser, any Master Servicer and any Depositor: (1) no default or
servicing related performance trigger has occurred as to any other
securitization due to any act or failure to act of the Company; (2) no material
noncompliance with applicable servicing criteria as to any other securitization
has occurred, been disclosed or reported by the Company; (3) the Company
has not
been terminated as servicer in a residential mortgage loan securitization,
either due to a servicing default or to application of a servicing performance
test or trigger; (4) no material changes to the Company’s servicing policies and
procedures for similar loans has occurred in the preceding three years; (5)
there are no aspects of the Company’s financial condition that could have a
material adverse impact on the performance by the Company of its obligations
hereunder; (6) there are no legal proceedings pending, or known to be
contemplated by governmental authorities, against the Company that could
be
material to investors in the securities issued in such Pass-Through Transfer;
and (7) there are no affiliations, relationships or transactions relating
to the
Company of a type that are described under Item 1119 of Regulation
AB.
7. Article
III of the Agreement is hereby amended effective as of the date hereof by
adding
the following new Section 3.02(iii):
With
respect to each Mortgage Loan, information regarding the borrower credit
files
related to such Mortgage Loan has been furnished to credit reporting agencies
in
compliance with the provisions of the Fair Credit Reporting Act and the
applicable implementing regulations.
8. Article
IV of the Agreement is hereby amended effective as of the date hereof by
adding
this sentence after the first sentence of Section 4.01:
In
addition, the Company shall furnish information regarding the borrower credit
files related to such Mortgage Loan to credit reporting agencies in compliance
with the provisions of the Fair Credit Reporting Act and the applicable
implementing regulations.
9. Article
IV of the Agreement is hereby amended effective as of the date hereof by
deleting in its entirety the last paragraph of Section 4.02 and replacing
it
with the following:
The
Company shall not waive any Prepayment Charge unless: (i) the enforceability
thereof shall have been limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors’ rights generally,
(ii) the enforcement thereof is illegal, or any local, state or federal agency
has threatened legal action if the prepayment penalty is enforced, (iii)
the
mortgage debt has been accelerated in connection with a foreclosure or other
involuntary payment or (iv) such waiver is standard and customary in servicing
similar Mortgage Loans and relates to a default or a reasonably foreseeable
default and would, in the reasonable judgment of the Company, maximize recovery
of total proceeds taking into account the value of such Prepayment Charge
and
the related Mortgage Loan. If a Prepayment Charge is waived, but does not
meet
the standards described above, then the Company is required to pay the amount
of
such waived Prepayment Charge by remitting such amount to the Purchaser by
the
Remittance Date.
10. Article
IV of the Agreement is hereby amended effective as of the date hereof by
revising the first paragraph of Section 4.03 by adding the following after
the
first sentence:
In
determining the delinquency status of any Mortgage Loan, the Company will
use
Delinquency
Recognition Policies to be provided by EMC or
as
described to and approved by the Purchaser, and shall revise these policies
as
reasonably requested by the Purchaser from time to time.
11. Article
V
of the Agreement is hereby amended effective as of the date hereof by deleting
Section 5.02 in its entirety and replacing it with the following:
Section
5.02 Statements
to the Purchaser.
The
Company shall furnish to Purchaser an individual loan accounting report,
as of
the last Business Day of each month, in the Company's assigned loan number
order
to document Mortgage Loan payment activity on an individual Mortgage Loan
basis.
With respect to each month, the corresponding individual loan accounting
report
shall be received by the Purchaser no later than the fifth Business Day of
the
following month on a disk or tape or other computer-readable format in such
format as may be mutually agreed upon by both Purchaser and Company, and
no
later than the fifth Business Day of the following month in hard copy, and
shall
contain the following:
(i) with
respect to each Mortgage Loan and each Monthly Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any prepayment
penalties or premiums, along with a detailed report of interest on principal
prepayment amounts remitted in accordance with Section 4.04);
(ii) with
respect to each Mortgage Loan and each Monthly Payment, the amount of such
remittance allocable to interest;
(iii) with
respect to each Mortgage Loan, the amount of servicing compensation received
by
the Company during the prior distribution period;
(iv) the
Stated Principal Balance of each Mortgage Loan and the aggregate Stated
Principal Balance of all Mortgage Loans as of the first day of the distribution
period and the last day of the distribution period;
(v) with
respect to each Mortgage Loan, the current Mortgage Interest Rate;
(vi) with
respect to each Mortgage Loan, the aggregate amount of any Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds and REO Disposition Proceeds
received during the prior distribution period;
(vii) with
respect to each Mortgage Loan, the amount of any Prepayment Interest Shortfalls
paid by the Company in accordance with Section 4.04(viii) during the prior
distribution period;
(viii) the
beginning and ending balances of the Custodial Account and Escrow
Account;
(ix) the
number of Mortgage Loans as of the first day of the distribution period and
the
last day of the distribution period;
(x) with
respect to each Mortgage Loan, the Stated Principal Balance of each Mortgage
Loan (a) delinquent as grouped in the following intervals through final
liquidation of such Mortgage Loan: 30 to 59 days, 60 to 89 days, 90 days
or
more; (b) as to which foreclosure has commenced; and (c) as to which REO
Property has been acquired;
(xi) with
respect to each Mortgage Loan, the amount and severity of any realized loss
following liquidation of such Mortgage Loan;
(xii) with
respect to each Mortgage Loan, and in the aggregate for all Mortgage Loans,
the
amount of any Monthly Advances made by the Company during the prior distribution
period;
(xiii) with
respect to each Mortgage Loan, a description of any Servicing Advances made
by
the Company with respect to such Mortgage Loan including the amount, terms
and
general purpose of such Servicing Advances, and the aggregate amount of
Servicing Advances for all Mortgage Loans during the prior distribution
period;
(xiv) with
respect to each Mortgage Loan, a description of any Nonrecoverable Advances
made
by the Company with respect to such Mortgage Loan including the amount, terms
and general purpose of such Nonrecoverable Advances, and the aggregate amount
of
Nonrecoverable Advances for all Mortgage Loans during the prior distribution
period;
(xv) with
respect to each Mortgage Loan, a description of any Monthly Advances, Servicing
Advances and Nonrecoverable Advances reimbursed to the Company with respect
to
such Mortgage Loan during the prior distribution period pursuant to Section
4.05, and the source of funds for such reimbursement, and the aggregate amount
of any Monthly Advances, Servicing Advances and Nonrecoverable Advances
reimbursed to the Company for all Mortgage Loans during the prior distribution
period pursuant to Section 4.05;
(xvi) with
respect to any Mortgage Loan, a description of any material modifications,
extensions or waivers to the terms, fees, penalties or payments of such Mortgage
Loan during the prior distribution period or that have cumulatively become
material over time;
(xvii) a
description of any material breach of a representation or warranty set forth
in
Section 3.01 or Section 3.02 herein or of any other breach of a covenant
or
condition contained herein and the status of any resolution of such
breach;
(xviii)
with
respect to each Mortgage Loan, the Stated Principal Balance of any substitute
Mortgage Loan provided by the Company and the Stated Principal Balance of
any
Mortgage Loan that has been replaced by a substitute Mortgage Loan in accordance
with Section 3.03 herein; and
(xix) with
respect to each Mortgage Loan, the Stated Principal Balance of any Mortgage
Loan
that has been repurchased by the Company in accordance with Section 3.03
herein.
In
addition, the Company shall provide to the Purchaser such other information
known or available to the Company that is necessary in order to provide the
distribution and pool performance information as required under Item 1121
of
Regulation AB, as amended from time to time, as determined by the Purchaser
in
its sole discretion. The Company shall also provide a monthly report, in
the
form of Exhibit
E
hereto,
or such other form as is mutually acceptable to the Company, the Purchaser
and
any Master Servicer, Exhibit
F
with
respect to defaulted mortgage loans and Exhibit
P,
with
respect to realized losses and gains, with each such report.
The
Company shall prepare and file any and all information statements or other
filings required to be delivered to any governmental taxing authority or
to
Purchaser pursuant to any applicable law with respect to the Mortgage Loans
and
the transactions contemplated hereby. In addition, the Company shall provide
Purchaser with such information concerning the Mortgage Loans as is necessary
for Purchaser to prepare its federal income tax return as Purchaser may
reasonably request from time to time.
In
addition, not more than ninety (90) days after the end of each calendar year,
the Company shall furnish to each Person who was a Purchaser at any time
during
such calendar year an annual statement in accordance with the requirements
of
applicable federal income tax law as to the aggregate of remittances for
the
applicable portion of such year.
12. Article
VI of the Agreement is hereby amended effective as of the date hereof by
deleting Section 6.04 in its entirety and replacing it with the
following:
Section
6.04 Annual
Statement as to Compliance; Annual Certification.
(a) The
Company will deliver to the Purchaser and any Master Servicer, not later
than
March 1 of each calendar year beginning in 2007, an officers’ certificate
acceptable to the Purchaser (an “Annual Statement of Compliance”) stating, as to
each signatory thereof, that (i) a review of the activities of the Company
during the preceding calendar year and of performance under this Agreement
or
other applicable servicing agreement has been made under such officers’
supervision and (ii) to the best of such officers’ knowledge, based on such
review, the Company has fulfilled all of its obligations under this Agreement
or
other applicable servicing agreement in all material respects throughout
such
year, or, if there has been a failure to fulfill any such obligation in any
material respect, specifying each such failure known to such officer and
the
nature and status of cure provisions thereof. Such Annual Statement of
Compliance shall contain no restrictions or limitations on its use that would
prohibit the Purchaser, the Depositor or any Master Servicer to comply with
the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder, and its filing under such laws and regulations. Copies of such
statement shall be provided by the Company to the Purchaser upon request
and by
the Purchaser to any Person identified as a prospective purchaser of the
Mortgage Loans. In the event that the Company has delegated any servicing
responsibilities with respect to the Mortgage Loans to a Subservicer, the
Company shall deliver an Annual Statement of Compliance of the Subservicer
as
described above as to each Subservicer as and when required with respect
to the
Company.
(b) With
respect to any Mortgage Loans that are the subject of a Pass-Through Transfer,
by March 1 of each calendar year beginning in 2007, an officer of the Company
shall execute and deliver an officer’s certificate (an “Annual Certification”)
to the Purchaser, any Master Servicer and any related Depositor for the benefit
of each such entity and such entity’s affiliates and the officers, directors and
agents of any such entity and such entity’s affiliates, in the form attached
hereto as Exhibit
L.
In the
event that the Company has delegated any servicing responsibilities with
respect
to the Mortgage Loans to a Subservicer, the Company shall deliver an Annual
Certification of the Subservicer as described above as to each Subservicer
as
and when required with respect to the Company.
(c) If
the
Company cannot deliver the related Annual Statement of Compliance and Annual
Certification by March 1st
of such
year, the Purchaser, at its sole option, may permit a cure period for the
Company to deliver such Annual Statement of Compliance and Annual Certification,
but in no event later than March 15th
of such
year.
(d) Failure
of the Company to timely comply with this Section 6.04 shall be deemed an
Event
of Default, automatically, without notice and without any cure period, unless
otherwise agreed to by the Purchaser as set forth in 6.04(c), and Purchaser
may,
in addition to whatever rights the Purchaser may have under Sections 3.03
and
8.01 and at law or equity or to damages, including injunctive relief and
specific performance, terminate all the rights and obligations of the Company
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
without compensating the Company for the same, as provided in Section 9.01.
Such
termination shall be considered with cause pursuant to Section 10.01 of this
Agreement. This paragraph shall supercede any other provision in this Agreement
or any other agreement to the contrary.
13. Article
VI of the Agreement is hereby amended effective as of the date hereof by
deleting Section 6.05 in its entirety and replacing it with the
following:
Section
6.05 [Reserved]
14. Article
VI of the Agreement is hereby amended effective as of the date hereof by
adding
the following new Section 6.07:
Section
6.07 Assessment
of Compliance with Servicing Criteria.
On
and
after January 1, 2006, the Company shall service and administer, and shall
cause
each subservicer to servicer or administer, the Mortgage Loans in accordance
with all applicable requirements of the Servicing Criteria.
With
respect to any Mortgage Loans that are the subject of a Pass-Through Transfer,
the Company shall deliver to the Purchaser or its designee, any Master Servicer
and any Depositor on or before March 1 of each calendar year beginning in
2007,
a report (an “Assessment of Compliance”) reasonably satisfactory to the
Purchaser, any Master Servicer and any Depositor regarding the Company’s
assessment of compliance with the Servicing Criteria during the preceding
calendar year as required by Rules 13a-18 and 15d-18 of the Exchange Act
and
Item 1122 of Regulation AB or as otherwise reasonably required by the Master
Servicer, which as of the date hereof, require a report by an authorized
officer
of the Company that contains the following:
(a) A
statement by such officer of its responsibility for assessing compliance
with
the Servicing Criteria applicable to the Company;
(b) A
statement by such officer that such officer used the Servicing Criteria to
assess compliance with the Servicing Criteria applicable to the
Company;
(c) An
assessment by such officer of the Company’s compliance with the applicable
Servicing Criteria for the period consisting of the preceding calendar year,
including disclosure of any material instance of noncompliance with respect
thereto during such period, which assessment shall be based on the activities
it
performs with respect to asset-backed securities transactions taken as a
whole
involving the Company, that are backed by the same asset type as the Mortgage
Loans;
(d) A
statement that a registered public accounting firm has issued an attestation
report on the Company’s Assessment of Compliance for the period consisting of
the preceding calendar year; and
(e) A
statement as to which of the Servicing Criteria, if any, are not applicable
to
the Company, which statement shall be based on the activities it performs
with
respect to asset-backed securities transactions taken as a whole involving
the
Company, that are backed by the same asset type as the Mortgage
Loans.
Such
report at a minimum shall address each of the Servicing Criteria specified
on a
certification substantially in the form of Exhibit
O
hereto
delivered to the Company concurrently with the execution of this
Agreement.
With
respect to any Mortgage Loans that are the subject of a Pass-Through Transfer,
on or before March 1 of each calendar year beginning in 2007, the Company
shall
furnish to the Purchaser or its designee, any Master Servicer and any Depositor
a report (an “Attestation Report”) by a registered public accounting firm that
attests to, and reports on, the Assessment of Compliance made by the Company,
as
required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122(b)
of
Regulation AB or as otherwise reasonably required by the Master Servicer,
which
Attestation Report must be made in accordance with standards for attestation
reports issued or adopted by the Public Company Accounting Oversight Board.
The
Company shall cause each Subservicer, and each Subcontractor determined by
the
Company pursuant to Section 11.20 to be “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB, to deliver to the
Purchaser, any Master Servicer and any Depositor an assessment of compliance
and
accountants’ attestation as and when provided in Sections 6.07.
If
the
Company cannot deliver the related Assessment of Compliance or Attestation
Report by March 1st
of such
year, the Purchaser, at its sole option, may permit a cure period for the
Company to deliver such Assessment of Compliance or Attestation Report, but
in
no event later than March 15th
of such
year.
Failure
of the Company to timely comply with this Section 6.07 shall be deemed an
Event
of Default, automatically, without notice and without any cure period, unless
otherwise agreed to by the Purchaser as described herein, and Purchaser may,
in
addition to whatever rights the Purchaser may have under Sections 3.03 and
8.01
and at law or equity or to damages, including injunctive relief and specific
performance, terminate all the rights and obligations of the Company under
this
Agreement and in and to the Mortgage Loans and the proceeds thereof without
compensating the Company for the same, as provided in Section 9.01. Such
termination shall be considered with cause pursuant to Section 10.01 of this
Agreement. This paragraph shall supercede any other provision in this Agreement
or any other agreement to the contrary.
15. Article
VI of the Agreement is hereby amended effective as of the date hereof by
adding
the following new Section 6.08:
Section
6.08 Intent
of the Parties; Reasonableness.
The
Purchaser and the Company acknowledge and agree that a purpose of Sections
3.01(p), (q), (r) and (s), 5.02, 6.04, 6.07, 11.18 and 11.20 of this Agreement
is to facilitate compliance by the Purchaser and any Depositor with the
provisions of Regulation AB and related rules and regulations of the Commission.
None of the Purchaser, any Master Servicer or any Depositor shall exercise
its
right to request delivery of information or other performance under these
provisions other than in good faith, or for purposes other than compliance
with
the Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder. The Company acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise,
and
agrees to comply with requests made by the Purchaser or any Depositor in
good
faith for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with any Pass-Through
Transfer, the Company shall cooperate fully with the Purchaser to deliver
to the
Purchaser (including any of its assignees or designees) and any Depositor,
any
and all statements, reports, certifications, records and any other information
necessary in the good faith determination of the Purchaser or any Depositor
to
permit the Purchaser or such Depositor to comply with the provisions of
Regulation AB, together with such disclosures relating to the Company, any
Subservicer, any Third-Party Originator and the Mortgage Loans, or the servicing
of the Mortgage Loans, reasonably believed by the Purchaser or any Depositor
to
be necessary in order to effect such compliance.
16. Article
IX of the Agreement is hereby amended effective as of the date hereof by
deleting the first sentence of the last paragraph of Section 9.01 and replacing
it with the following (new text underlined):
Then,
and
in each and every such case, so long as an Event of Default shall not have
been
remedied, the Purchaser, by notice in writing to the Company (except in the
case
of an Event of Default under clauses (iii), (iv) or (v) above, or
as
otherwise stated herein,
in
which case, automatically and without notice) Company may, in addition to
whatever rights the Purchaser may have under Sections 3.03 and 8.01 and at
law
or equity or to damages, including injunctive relief and specific performance,
terminate all the rights and obligations of the Company (and
if the Company is servicing any of the Mortgage Loans in a Pass-Through
Transfer, appoint a successor servicer reasonably acceptable to any Master
Servicer for such Pass-Through Transfer)
under
this Agreement and in and to the Mortgage Loans and the proceeds thereof
without
compensating the Company for the same.
17. Article
IX of the Agreement is hereby amended effective as of the date hereof by
adding
the following at the end of the last paragraph of Section 9.01:
The
Company shall promptly reimburse the Purchaser (or any designee of the
Purchaser, such as a Master Servicer) and any Depositor, as applicable, for
all
reasonable expenses incurred by the Purchaser (or such designee) or such
Depositor, as such are incurred, in connection with the termination of the
Company as servicer and the transfer of servicing of the Mortgage Loans to
a
successor servicer. The provisions of this paragraph shall not limit whatever
rights the Purchaser or any Depositor may have under other provisions of
this
Agreement and/or any applicable Reconstitution Agreement or otherwise, whether
in equity or at law, such as an action for damages, specific performance
or
injunctive relief.
18. Article
XI of the Agreement is hereby amended effective as of the date hereof by
restating Section 11.18 in its entirety as follows:
Section
11.18. Cooperation
of Company with a Reconstitution.
The
Company and the Purchaser agree that with respect to some or all of the Mortgage
Loans, on or after the related Closing Date, on one or more dates (each a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may
effect
a sale (each, a "Reconstitution") of some or all of the Mortgage Loans then
subject to this Agreement, without recourse, to:
(a) one
or
more third party purchasers in one or more in whole loan transfers (each,
a
"Whole Loan Transfer"); or
(b) one
or
more trusts or other entities to be formed as part of one or more Pass-Through
Transfers.
The
Purchaser and the Company agree that in no event shall there be more than
three
(3) Reconstitutions per Mortgage Loan pool.
The
Company agrees to execute in connection with any agreements among the Purchaser,
the Company, and any servicer in connection with a Whole Loan Transfer, an
Assignment, Assumption and Recognition Agreement substantially in the form
of
Exhibit
D
hereto,
or, at Purchaser’s request, a seller's warranties and servicing agreement or a
participation and servicing agreement or similar agreement in form and substance
reasonably acceptable to the parties, and in connection with a Pass-Through
Transfer, a pooling and servicing agreement in form and substance reasonably
acceptable to the parties, (collectively the agreements referred to herein
are
designated, the “Reconstitution Agreements”). It is understood that any such
Reconstitution Agreements will not contain any greater obligations on the
part
of Company than are contained in this Agreement. Notwithstanding anything
to the
contrary in this Section 11.18, the Company agrees that it is required to
perform the obligations described in Exhibit
K
hereto.
With
respect to each Whole Loan Transfer and each Pass-Through Transfer entered
into
by the Purchaser, the Company agrees (1) to cooperate fully with the Purchaser
and any prospective purchaser with respect to all reasonable requests and
due
diligence procedures; (2) to execute, deliver and perform all Reconstitution
Agreements required by the Purchaser; (3) to restate the representations
and
warranties set forth in this Agreement as of the settlement or closing date
in
connection with such Reconstitution (each, a "Reconstitution Date").
In
addition, the Company shall provide to such servicer or issuer, as the case
may
be, and any other participants in such Reconstitution:
(i) any
and
all information and appropriate verification of information which may be
reasonably available to the Company, whether through letters of its auditors
and
counsel (excluding that protected by the attorney-client privilege unless
waived) or otherwise, as the Purchaser or any such other participant shall
request upon reasonable demand;
(ii) such
additional representations, warranties, covenants, letters from auditors,
and
certificates of public officials or officers of the Company as are reasonably
agreed upon by the Company and the Purchaser or any such other
participant;
(iii) within
5
Business Days after request by the Purchaser, the information with respect
to
the Company (as originator) and each Third-Party Originator of the Mortgage
Loans as required under Item 1110(a) and (b) of Regulation AB, a summary
of the
requirements of which has of the date hereof is attached hereto as Exhibit
N
for
convenience of reference only, as determined by Purchaser in its sole
discretion. If requested by the Purchaser, this will include information
about
the applicable credit-granting or underwriting criteria;
(iv) within
5
Business Days after request by the Purchaser, the Company shall provide (or,
as
applicable, cause each Third-Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Company, if the Company is an originator of Mortgage
Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information shall
be
prepared by the Company (or Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of Item 1105(a)(1)-(3)
and (c) of Regulation AB. To the extent that there is reasonably available
to
the Company (or Third-Party Originator) Static Pool Information with respect
to
more than one mortgage loan type, the Purchaser or any Depositor shall be
entitled to specify whether some or all of such information shall be provided
pursuant to this paragraph. The content of such Static Pool Information may
be
in the form customarily provided by the Company, and need not be customized
for
the Purchaser or any Depositor. Such Static Pool Information for each vintage
origination year or prior securitized pool, as applicable, shall be presented
in
increments no less frequently than quarterly over the life of the mortgage
loans
included in the vintage origination year or prior securitized pool. The most
recent periodic increment must be as of a date no later than 135 days prior
to
the date of the prospectus or other offering document in which the Static
Pool
Information is to be included or incorporated by reference. The Static Pool
Information shall be provided in an electronic format that provides a permanent
record of the information provided, such as a portable document format (pdf)
file, or other such electronic format reasonably required by the Purchaser
or
the Depositor, as applicable;
(v) within
5
Business Days after request by the Purchaser, information with respect to
the
Company (as servicer) as required by Item 1108(b) and (c) of Regulation AB,
a
summary of the requirements of which as of the date hereof is attached hereto
as
Exhibit
N
for
convenience of reference only, as determined by Purchaser in its sole
discretion. In the event that the Company has delegated any servicing
responsibilities with respect to the Mortgage Loans to a Subservicer, the
Company shall provide the information required pursuant to this clause with
respect to the Subservicer;
(vi)
within
5
Business Days after request by the Purchaser,
(a)
information regarding any legal proceedings pending (or known to be
contemplated) against the Company (as originator and as servicer) and each
other
originator of the Mortgage Loans and each Subservicer as required by Item
1117
of Regulation AB, a summary of the requirements of which as of the date hereof
is attached hereto as Exhibit N for convenience of reference only, as determined
by Purchaser in its sole discretion,
(b)
information regarding affiliations with respect to the Company (as originator
and as servicer) and each other originator of the Mortgage Loans and each
Subservicer as required by Item 1119(a) of Regulation AB, a summary of the
requirements of which as of the date hereof is attached hereto as Exhibit
N
for
convenience of reference only, as determined by Purchaser in its sole
discretion, and
(c)
information regarding relationships and transactions with respect to the
Company
(as originator and as servicer) and each other originator of the Mortgage
Loans
and each Subservicer as required by Item 1119(b) and (c) of Regulation AB,
a
summary of the requirements of which as of the date hereof is attached hereto
as
Exhibit
N
for
convenience of reference only, as determined by Purchaser in its sole
discretion;
(vii)
if
so
requested by the Purchaser, the Company shall provide (or, as applicable,
cause
each Third-Party Originator to provide), at the expense of the requesting
party
(to the extent of any additional incremental expense associated with delivery
pursuant to this Agreement), such statements and agreed-upon procedures letters
of certified public accountants reasonably acceptable to the Purchaser or
Depositor, as applicable, pertaining to Static Pool Information relating
to
prior securitized pools for securitizations closed on or after January 1,
2006
or, in the case of Static Pool Information with respect to the Company’s or
Third-Party Originator’s originations or purchases, to calendar months
commencing January 1, 2006, or to any financial information included in any
other disclosure provided under this Section 11.18, as the Purchaser or such
Depositor shall reasonably request. Such statements and letters shall be
addressed to and be for the benefit of such parties as the Purchaser or such
Depositor shall designate, which may include, by way of example, any Sponsor,
any Depositor and any broker dealer acting as underwriter, placement agent
or
initial purchaser with respect to a Pass-Through Transfer. Any such statement
or
letter may take the form of a standard, generally applicable document
accompanied by a reliance letter authorizing reliance by the addressees
designated by the Purchaser or such Depositor;
(viii)
For the purpose of satisfying the reporting obligation under the Exchange
Act
with respect to any class of asset-backed securities, the Company shall (or
shall cause each Subservicer and Third-Party Originator to) (i) within two
(2)
Business Days of the event described below, provide notice to the Purchaser,
any
Master Servicer and any Depositor in writing of (A) any material litigation
or
governmental proceedings involving the Company, any Subservicer or any
Third-Party Originator, (B) any affiliations or relationships that develop
following the closing date of a Pass-Through Transfer between the Company,
any
Subservicer or any Third-Party Originator and any of the parties specified
in
clause (D) of paragraph (a) of this Section (and any other parties identified
in
writing by the requesting party) with respect to such Pass-Through Transfer,
(C)
any Event of Default under the terms of this Agreement or any Reconstitution
Agreement, (D) any merger, consolidation or sale of substantially all of
the
assets of the Company, and (E) the Company’s entry into an agreement with a
Subservicer to perform or assist in the performance of any of the Company’s
obligations under this Agreement or any Reconstitution Agreement and (ii)
provide to the Purchaser, any Master Servicer and any Depositor a description
of
such proceedings, affiliations or relationships;
All
notification pursuant to this Section 11.18 (viii)(B) should be sent
to:
EMC
Mortgage Corporation
▇▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
Conduit Seller Approval Dept.
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
With
a
copy to:
Bear,
▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇,
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Global Credit Administration
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Notifications
pursuant to Section 11.18 (viii)(A) should be sent to:
EMC
Mortgage Corporation
Two
Mac
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Associate General Counsel for Loan Administration
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
With
copies to:
Bear,
▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇,
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Global Credit Administration
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
EMC
Mortgage Corporation
▇▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
Conduit Seller Approval Dept.
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
(ix)
As a condition to the succession to the Company or any Subservicer as servicer
or subservicer under this Agreement or any Reconstitution Agreement by any
Person (i) into which the Company or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Company
or
any Subservicer (unless such successor has been appointed by the Purchaser,
any
Master Servicer or any Depositor), the Company shall provide to the Purchaser,
any Master Servicer, and any Depositor, at least 15 calendar days prior to
the
effective date of such succession or appointment, (x) written notice to the
Purchaser and any Depositor of such succession or appointment and (y) in
writing
and in form and substance reasonably satisfactory to the Purchaser and such
Depositor, all information reasonably requested by the Purchaser or any
Depositor in order to comply with its reporting obligation under Item 6.02
of
Form 8-K with respect to any class of asset-backed securities;
(x)
In addition to such information as the Company, as servicer, is obligated
to
provide pursuant to other provisions of this Agreement, not later than ten
days
prior to the deadline for the filing of any distribution report on Form 10-D
in
respect of any Pass-Through Transfer that includes any of the Mortgage Loans
serviced by the Company or any Subservicer, the Company or such Subservicer,
as
applicable, shall, to the extent the Company or such Subservicer has knowledge,
provide to the party responsible for filing such report (including, if
applicable, the Master Servicer) notice of the occurrence of any of the
following events along with all information, data, and materials related
thereto
as may be required to be included in the related distribution report on Form
10-D (as specified in the provisions of Regulation AB referenced
below):
(A) any
material modifications, extensions or waivers of pool asset terms, fees,
penalties or payments during the distribution period or that have cumulatively
become material over time (Item 1121(a)(11) of Regulation AB);
(B) material
breaches of pool asset representations or warranties or transaction covenants
(Item 1121(a)(12) of Regulation AB); and
(C) information
regarding new asset-backed securities issuances backed by the same pool assets,
any pool asset changes (such as, additions, substitutions or repurchases),
and
any material changes in origination, underwriting or other criteria for
acquisition or selection of pool assets (Item 1121(a)(14) of Regulation AB);
and
(xi)
The Company shall provide, as requested, to the Purchaser, any Master Servicer
and any Depositor, evidence of the authorization of the person signing any
certification or statement, copies or other evidence of Fidelity Bond Insurance
and Errors and Omission Insurance policy, financial information and reports,
and
such other information related to the Company or any Subservicer or the Company
or such Subservicer’s performance hereunder.
In
the
event of a conflict or inconsistency between the terms of Exhibit N and the
text
of the applicable Item of Regulation AB as cited above, the text of Regulation
AB, its adopting release and other public statements of the SEC shall
control.
(xii) If
so
requested by the Purchaser or any Depositor on any date, the Company shall,
within five Business Days following such request, confirm in writing the
accuracy of the representations and warranties set forth in Section 3.01(p)
of
this Agreement or, if any such representation and warranty is not accurate
as of
the date of such request, provide reasonably adequate disclosure of the
pertinent facts, in writing, to the requesting party.
The
Company shall indemnify the Purchaser, each affiliate of the Purchaser, and
each
of the following parties participating in a Pass-Through Transfer: each sponsor
and issuing entity; each Person (including, but not limited to, any Master
Servicer, if applicable) responsible for the preparation, execution or filing
of
any report required to be filed with the Commission with respect to such
Pass-Through Transfer, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Pass-Through Transfer; each broker dealer acting as underwriter, placement
agent
or initial purchaser, each Person who controls any of such parties or the
Depositor (within the meaning of Section 15 of the Securities Act and Section
20
of the Exchange Act); and the respective present and former directors, officers,
employees, agents and affiliates of each of the foregoing and of the Depositor
(each, an “Indemnified Party”), and shall hold each of them harmless from and
against any claims, losses, damages, penalties, fines, forfeitures, legal
fees
and expenses and related costs, judgments, and any other costs, fees and
expenses that any of them may sustain arising out of or based upon:
(i)(A)v
any untrue statement of a material fact contained or alleged to be contained
in
any information, report, certification, data, accountants’ letter or other
material provided under this Section 11.18 by or on behalf of the Company,
or
provided under this Section 11.18 by or on behalf of any Subservicer,
Subcontractor or Third-Party Originator (collectively, the “Company
Information”), or (B) the omission or alleged omission to state in the Company
Information a material fact required to be stated in the Company Information
or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, by way
of
clarification, that clause (B) of this paragraph shall be construed solely
by
reference to the Company Information and not to any other information
communicated in connection with a sale or purchase of securities, without
regard
to whether the Company Information or any portion thereof is presented together
with or separately from such other information;
(ii)
any breach by the Company of its obligations under this Section 11.18, including
particularly any failure by the Company, any Subservicer, any Subcontractor
or
any Third-Party Originator to deliver any information, report, certification,
accountants’ letter or other material when and as required under this Section
11.18, including any failure by the Company to identify pursuant to Section
11.20 any Subcontractor “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB;
(iii)
any breach by the Company of a representation or warranty set forth in Section
3.01 or in a writing furnished pursuant to Section 3.01(q) and made as of
a date
prior to the closing date of the related Pass-Through Transfer, to the extent
that such breach is not cured by such closing date, or any breach by the
Company
of a representation or warranty in a writing furnished pursuant to Section
3.01(q) to the extent made as of a date subsequent to such closing date;
or
(iv) the
gross
negligence, bad faith or willful misconduct of the Company in connection
with
its performance under this Section
11.18;
provided,
however, that the Purchaser shall indemnify the Company and its present and
former directors, officers, and employees and hold each of them harmless
from
and against any claims, losses, damages, penalties, fines, forfeitures, legal
fees and expenses and related costs, judgments, and any other costs, fees
and
expenses that any of them may sustain from any untrue statement or alleged
untrue statement of a material fact or the omission or alleged omission to
state
a material fact required to be stated in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
contained in any prospectus or prospectus supplement containing Company
Information not arising out of or based upon the Company
Information.
If
the
indemnification provided for herein is unavailable or insufficient to hold
harmless an Indemnified Party, then the Company agrees that it shall contribute
to the amount paid or payable by such Indemnified Party as a result of any
claims, losses, damages or liabilities incurred by such Indemnified Party
in
such proportion as is appropriate to reflect the relative fault of such
Indemnified Party on the one hand and the Company on the other.
In
the
case of any failure of performance described above, the Company shall promptly
reimburse the Purchaser, any Depositor, as applicable, and each Person
responsible for the preparation, execution or filing of any report required
to
be filed with the Commission with respect to such Pass-Through Transfer,
or for
execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d)
under
the Exchange Act with respect to such Pass-Through Transfer, for all costs
reasonably incurred by each such party in order to obtain the information,
report, certification, accountants’ letter or other material not delivered as
required by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator.
This
indemnification shall survive the termination of this Agreement or the
termination of any party to this Agreement.
All
Mortgage Loans not sold or transferred pursuant to a Reconstitution shall
remain
subject to, and serviced in accordance with the terms of, this Agreement
and the
related Term Sheet, and with respect thereto this Agreement and the related
Term
Sheet shall remain in full force and effect.
The
Purchaser agrees to reimburse the Company for its reasonable out-of-pocket
expenses incurred in connection with any Reconstitution hereunder; provided,
however, such amount shall not exceed $5,000 and shall be remitted by the
Purchaser upon written request from the Company which shall be accompanied
with
receipts or bills detailing such expenses; provided, further, in the event
that
such amount exceeds $5,000, the Purchaser shall reimburse the Company if
the
Purchaser approves in writing of such expenses prior to when incurred by
the
Company.
19. Article
XI of the Agreement is hereby amended effective as of the date hereof by
adding
the following new Section 11.20:
Section
11.20. Use
of
Subservicers and Subcontractors.
(a) The
Company shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Company as servicer under this Agreement
or any Reconstitution Agreement unless the Company complies with the provisions
of paragraph (b) of this Section. The Company shall not hire or otherwise
utilize the services of any Subcontractor, and shall not permit any Subservicer
to hire or otherwise utilize the services of any Subcontractor, to fulfill
any
of the obligations of the Company as servicer under this Agreement or any
Reconstitution Agreement unless the Company complies with the provisions
of
paragraph (d) of this Section.
(b) The
Company shall cause any Subservicer used by the Company (or by any Subservicer)
for the benefit of the Purchaser and any Depositor to comply with the provisions
of this Section and with Sections 3.01(p), 3.01(s), 6.04, 6.07 and 11.18
of this
Agreement to the same extent as if such Subservicer were the Company, and
to
provide the information required with respect to such Subservicer under Section
3.01(r) of this Agreement. The Company shall be responsible for obtaining
from
each Subservicer and delivering to the Purchaser, any Master Servicer and
any
Depositor any Annual Statement of Compliance required to be delivered by
such
Subservicer under Section 6.04(a), any Assessment of Compliance and Attestation
Report required to be delivered by such Subservicer under Section 6.07 and
any
Annual Certification required under Section 6.04(b) as and when required
to be
delivered.
(c) The
Company shall promptly upon request provide to the Purchaser, any Master
Servicer and any Depositor (or any designee of the Depositor, such as an
administrator) a written description (in form and substance satisfactory
to the
Purchaser, any Master Servicer and such Depositor) of the role and function
of
each Subcontractor utilized by the Company or any Subservicer, specifying
(i)
the identity of each such Subcontractor, (ii) which (if any) of such
Subcontractors are “participating in the servicing function” within the meaning
of Item 1122 of Regulation AB, and (iii) which elements of the Servicing
Criteria will be addressed in assessments of compliance provided by each
Subcontractor identified pursuant to clause (ii) of this paragraph.
(d) As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 6.07 and 11.18 of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any Assessment of Compliance
and
Attestation Report and the other certificates required to be delivered by
such
Subservicer and such Subcontractor under Section 6.07, in each case as and
when
required to be delivered.
20. Article
XI of the Agreement is hereby amended effective as of the date hereof by
adding
the following new Section 11.21:
Section
11.21. Third
Party Beneficiary.
For
purposes of this Agreement, each Master Servicer shall be considered a
third party beneficiary to this Agreement, entitled to all the rights and
benefits hereof as if it were a direct party to this
Agreement.
21. The
Agreement is hereby amended as of the date hereof by deleting Exhibit E in
its
entirety and replacing it with the following:
EXHIBIT
E
REPORTING
DATA FOR MONTHLY REPORT
|
Standard
File Layout - Master Servicing
|
||||
|
Column
Name
|
Description
|
Decimal
|
Format
Comment
|
Max
Size
|
|
SER_INVESTOR_NBR
|
A
value assigned by the Servicer to define a group of loans.
|
|
Text
up to 10 digits
|
20
|
|
LOAN_NBR
|
A
unique identifier assigned to each loan by the investor.
|
|
Text
up to 10 digits
|
10
|
|
SERVICER_LOAN_NBR
|
A
unique number assigned to a loan by the Servicer. This may be different
than the LOAN_NBR.
|
|
Text
up to 10 digits
|
10
|
|
BORROWER_NAME
|
The
borrower name as received in the file. It is not separated by first
and
last name.
|
|
Maximum
length of 30 (Last, First)
|
30
|
|
SCHED_PAY_AMT
|
Scheduled
monthly principal and scheduled interest payment that a borrower
is
expected to pay, P&I constant.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NOTE_INT_RATE
|
The
loan interest rate as reported by the Servicer.
|
4
|
Max
length of 6
|
6
|
|
NET_INT_RATE
|
The
loan gross interest rate less the service fee rate as reported
by the
Servicer.
|
4
|
Max
length of 6
|
6
|
|
SERV_FEE_RATE
|
The
servicer's fee rate for a loan as reported by the
Servicer.
|
4
|
Max
length of 6
|
6
|
|
SERV_FEE_AMT
|
The
servicer's fee amount for a loan as reported by the
Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NEW_PAY_AMT
|
The
new loan payment amount as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NEW_LOAN_RATE
|
The
new loan rate as reported by the Servicer.
|
4
|
Max
length of 6
|
6
|
|
ARM_INDEX_RATE
|
The
index the Servicer is using to calculate a forecasted
rate.
|
4
|
Max
length of 6
|
6
|
|
ACTL_BEG_PRIN_BAL
|
The
borrower's actual principal balance at the beginning of the processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
ACTL_END_PRIN_BAL
|
The
borrower's actual principal balance at the end of the processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
BORR_NEXT_PAY_DUE_DATE
|
The
date at the end of processing cycle that the borrower's next payment
is
due to the Servicer, as reported by Servicer.
|
|
MM/DD/YYYY
|
10
|
|
SERV_CURT_AMT_1
|
The
first curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_DATE_1
|
The
curtailment date associated with the first curtailment
amount.
|
|
MM/DD/YYYY
|
10
|
|
CURT_ADJ_
AMT_1
|
The
curtailment interest on the first curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_AMT_2
|
The
second curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_DATE_2
|
The
curtailment date associated with the second curtailment
amount.
|
|
MM/DD/YYYY
|
10
|
|
CURT_ADJ_
AMT_2
|
The
curtailment interest on the second curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_AMT_3
|
The
third curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_DATE_3
|
The
curtailment date associated with the third curtailment
amount.
|
|
MM/DD/YYYY
|
10
|
|
CURT_ADJ_AMT_3
|
The
curtailment interest on the third curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PIF_AMT
|
The
loan "paid in full" amount as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PIF_DATE
|
The
paid in full date as reported by the Servicer.
|
|
MM/DD/YYYY
|
10
|
|
|
|
|
Action
Code Key: 15=Bankruptcy, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, , ▇▇▇▇▇▇, 63=Substitution,
65=Repurchase,70=REO
|
2
|
|
ACTION_CODE
|
The
standard FNMA numeric code used to indicate the default/delinquent
status
of a particular loan.
|
|||
|
INT_ADJ_AMT
|
The
amount of the interest adjustment as reported by the
Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SOLDIER_SAILOR_ADJ_AMT
|
The
Soldier and Sailor Adjustment amount, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NON_ADV_LOAN_AMT
|
The
Non Recoverable Loan Amount, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
LOAN_LOSS_AMT
|
The
amount the Servicer is passing as a loss, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_BEG_PRIN_BAL
|
The
scheduled outstanding principal amount due at the beginning of
the cycle
date to be passed through to investors.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_END_PRIN_BAL
|
The
scheduled principal balance due to investors at the end of a processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_PRIN_AMT
|
The
scheduled principal amount as reported by the Servicer for the
current
cycle -- only applicable for Scheduled/Scheduled Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_NET_INT
|
The
scheduled gross interest amount less the service fee amount for
the
current cycle as reported by the Servicer -- only applicable for
Scheduled/Scheduled Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
ACTL_PRIN_AMT
|
The
actual principal amount collected by the Servicer for the current
reporting cycle -- only applicable for Actual/Actual
Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
ACTL_NET_INT
|
The
actual gross interest amount less the service fee amount for the
current
reporting cycle as reported by the Servicer -- only applicable
for
Actual/Actual Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PREPAY_PENALTY_
AMT
|
The
penalty amount received when a borrower prepays on his loan as
reported by
the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PREPAY_PENALTY_
WAIVED
|
The
prepayment penalty amount for the loan waived by the
servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
MOD_DATE
|
The
Effective Payment Date of the Modification for the loan.
|
|
MM/DD/YYYY
|
10
|
|
MOD_TYPE
|
The
Modification Type.
|
|
Varchar
- value can be alpha or numeric
|
30
|
|
DELINQ_P&I_ADVANCE_AMT
|
The
current outstanding principal and interest advances made by
Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
22. The
Agreement is hereby amended as of the date hereof by adding the following
new
Exhibit F:
EXHIBIT
F
REPORTING
DATA FOR DEFAULTED LOANS
Standard
File Layout - Delinquency Reporting
|
Column/Header
Name
|
Description
|
Decimal
|
Format
Comment
|
|
SERVICER_LOAN_NBR
|
A
unique number assigned to a loan by the Servicer. This may be different
than the LOAN_NBR
|
|
|
|
LOAN_NBR
|
A
unique identifier assigned to each loan by the originator.
|
|
|
|
CLIENT_NBR
|
Servicer
Client Number
|
|
|
|
SERV_INVESTOR_NBR
|
Contains
a unique number as assigned by an external servicer to identify
a group of
loans in their system.
|
|
|
|
BORROWER_FIRST_NAME
|
First
Name of the Borrower.
|
|
|
|
BORROWER_LAST_NAME
|
Last
name of the borrower.
|
|
|
|
PROP_ADDRESS
|
Street
Name and Number of Property
|
|
|
|
PROP_STATE
|
The
state where the property located.
|
|
|
|
PROP_ZIP
|
Zip
code where the property is located.
|
|
|
|
BORR_NEXT_PAY_DUE_DATE
|
The
date that the borrower's next payment is due to the servicer at
the end of
processing cycle, as reported by Servicer.
|
|
MM/DD/YYYY
|
|
LOAN_TYPE
|
Loan
Type (i.e. FHA, VA, Conv)
|
|
|
|
BANKRUPTCY_FILED_DATE
|
The
date a particular bankruptcy claim was filed.
|
|
MM/DD/YYYY
|
|
BANKRUPTCY_CHAPTER_CODE
|
The
chapter under which the bankruptcy was filed.
|
|
|
|
BANKRUPTCY_CASE_NBR
|
The
case number assigned by the court to the bankruptcy
filing.
|
|
|
|
POST_PETITION_DUE_DATE
|
The
payment due date once the bankruptcy has been approved by the
courts
|
|
MM/DD/YYYY
|
|
BANKRUPTCY_DCHRG_DISM_DATE
|
The
Date The Loan Is Removed From Bankruptcy. Either by Dismissal,
Discharged
and/or a Motion For Relief Was Granted.
|
|
MM/DD/YYYY
|
|
LOSS_MIT_APPR_DATE
|
The
Date The Loss Mitigation Was Approved By The Servicer
|
|
MM/DD/YYYY
|
|
LOSS_MIT_TYPE
|
The
Type Of Loss Mitigation Approved For A Loan Such As;
|
|
|
|
LOSS_MIT_EST_COMP_DATE
|
The
Date The Loss Mitigation /Plan Is Scheduled To End/Close
|
|
MM/DD/YYYY
|
|
LOSS_MIT_ACT_COMP_DATE
|
The
Date The Loss Mitigation Is Actually Completed
|
|
MM/DD/YYYY
|
|
FRCLSR_APPROVED_DATE
|
The
date DA Admin sends a letter to the servicer with instructions
to begin
foreclosure proceedings.
|
|
MM/DD/YYYY
|
|
ATTORNEY_REFERRAL_DATE
|
Date
File Was Referred To Attorney to Pursue Foreclosure
|
|
MM/DD/YYYY
|
|
FIRST_LEGAL_DATE
|
Notice
of 1st legal filed by an Attorney in a Foreclosure Action
|
|
MM/DD/YYYY
|
|
FRCLSR_SALE_EXPECTED_DATE
|
The
date by which a foreclosure sale is expected to occur.
|
|
MM/DD/YYYY
|
|
FRCLSR_SALE_DATE
|
The
actual date of the foreclosure sale.
|
|
MM/DD/YYYY
|
|
FRCLSR_SALE_AMT
|
The
amount a property sold for at the foreclosure sale.
|
2
|
No
commas(,) or dollar signs ($)
|
|
EVICTION_START_DATE
|
The
date the servicer initiates eviction of the borrower.
|
|
MM/DD/YYYY
|
|
EVICTION_COMPLETED_DATE
|
The
date the court revokes legal possession of the property from the
borrower.
|
|
MM/DD/YYYY
|
|
LIST_PRICE
|
The
price at which an REO property is marketed.
|
2
|
No
commas(,) or dollar signs ($)
|
|
LIST_DATE
|
The
date an REO property is listed at a particular price.
|
|
MM/DD/YYYY
|
|
OFFER_AMT
|
The
dollar value of an offer for an REO property.
|
2
|
No
commas(,) or dollar signs ($)
|
|
OFFER_DATE_TIME
|
The
date an offer is received by DA Admin or by the Servicer.
|
|
MM/DD/YYYY
|
|
REO_CLOSING_DATE
|
The
date the REO sale of the property is scheduled to close.
|
|
MM/DD/YYYY
|
|
REO_ACTUAL_CLOSING_DATE
|
Actual
Date Of REO Sale
|
|
MM/DD/YYYY
|
|
OCCUPANT_CODE
|
Classification
of how the property is occupied.
|
|
|
|
PROP_CONDITION_CODE
|
A
code that indicates the condition of the property.
|
|
|
|
PROP_INSPECTION_DATE
|
The
date a property inspection is performed.
|
|
MM/DD/YYYY
|
|
APPRAISAL_DATE
|
The
date the appraisal was done.
|
|
MM/DD/YYYY
|
|
CURR_PROP_VAL
|
The
current "as is" value of the property based on brokers price opinion
or
appraisal.
|
2
|
|
|
REPAIRED_PROP_VAL
|
The
amount the property would be worth if repairs are completed pursuant
to a
broker's price opinion or appraisal.
|
2
|
|
|
If
applicable:
|
|
|
|
|
DELINQ_STATUS_CODE
|
FNMA
Code Describing Status of Loan
|
|
|
|
DELINQ_REASON_CODE
|
The
circumstances which caused a borrower to stop paying on a loan.
Code
indicates the reason why the loan is in default for this
cycle.
|
|
|
|
MI_CLAIM_FILED_DATE
|
Date
Mortgage Insurance Claim Was Filed With Mortgage Insurance
Company.
|
|
MM/DD/YYYY
|
|
MI_CLAIM_AMT
|
Amount
of Mortgage Insurance Claim Filed
|
|
No
commas(,) or dollar signs ($)
|
|
MI_CLAIM_PAID_DATE
|
Date
Mortgage Insurance Company Disbursed Claim Payment
|
|
MM/DD/YYYY
|
|
MI_CLAIM_AMT_PAID
|
Amount
Mortgage Insurance Company Paid On Claim
|
2
|
No
commas(,) or dollar signs ($)
|
|
POOL_CLAIM_FILED_DATE
|
Date
Claim Was Filed With Pool Insurance Company
|
|
MM/DD/YYYY
|
|
POOL_CLAIM_AMT
|
Amount
of Claim Filed With Pool Insurance Company
|
2
|
No
commas(,) or dollar signs ($)
|
|
POOL_CLAIM_PAID_DATE
|
Date
Claim Was Settled and The Check Was Issued By The Pool
Insurer
|
|
MM/DD/YYYY
|
|
POOL_CLAIM_AMT_PAID
|
Amount
Paid On Claim By Pool Insurance Company
|
2
|
No
commas(,) or dollar signs ($)
|
|
FHA_PART_A_CLAIM_FILED_DATE
|
Date
FHA Part A Claim Was Filed With HUD
|
|
MM/DD/YYYY
|
|
FHA_PART_A_CLAIM_AMT
|
Amount
of FHA Part A Claim Filed
|
2
|
No
commas(,) or dollar signs ($)
|
|
FHA_PART_A_CLAIM_PAID_DATE
|
Date
HUD Disbursed Part A Claim Payment
|
|
MM/DD/YYYY
|
|
FHA_PART_A_CLAIM_PAID_AMT
|
Amount
HUD Paid on Part A Claim
|
2
|
No
commas(,) or dollar signs ($)
|
|
FHA_PART_B_CLAIM_FILED_DATE
|
Date
FHA Part B Claim Was Filed With HUD
|
|
MM/DD/YYYY
|
|
FHA_PART_B_CLAIM_AMT
|
Amount
of FHA Part B Claim Filed
|
2
|
No
commas(,) or dollar signs ($)
|
|
FHA_PART_B_CLAIM_PAID_DATE
|
Date
HUD Disbursed Part B Claim Payment
|
|
MM/DD/YYYY
|
|
FHA_PART_B_CLAIM_PAID_AMT
|
Amount
HUD Paid on Part B Claim
|
2
|
No
commas(,) or dollar signs ($)
|
|
VA_CLAIM_FILED_DATE
|
Date
VA Claim Was Filed With the Veterans Admin
|
|
MM/DD/YYYY
|
|
VA_CLAIM_PAID_DATE
|
Date
Veterans Admin. Disbursed VA Claim Payment
|
|
MM/DD/YYYY
|
|
VA_CLAIM_PAID_AMT
|
Amount
Veterans Admin. Paid on VA Claim
|
2
|
No
commas(,) or dollar signs ($)
|
Exhibit
2: Standard
File Codes - Delinquency Reporting
The
Loss
Mit Type
field
should show the approved Loss Mitigation Code as follows:
| · |
ASUM-Approved
Assumption
|
| · |
BAP-Borrower
Assistance Program
|
| · |
CO-
Charge Off
|
| · |
DIL-
Deed-in-Lieu
|
| · |
FFA-
Formal Forbearance Agreement
|
| · |
MOD-
Loan Modification
|
| · |
PRE-
Pre-Sale
|
| · |
SS-
Short Sale
|
| · |
MISC-Anything
else approved by the PMI or Pool
Insurer
|
NOTE:
▇▇▇▇▇ Fargo Bank will accept alternative Loss Mitigation Types to those above,
provided that they are consistent with industry standards. If Loss Mitigation
Types other than those above are used, the Servicer must supply ▇▇▇▇▇ Fargo
Bank
with a description of each of the Loss Mitigation Types prior to sending
the
file.
The
Occupant
Code
field should show the current status of the property code as
follows:
| · |
Mortgagor
|
| · |
Tenant
|
| · |
Unknown
|
| · |
Vacant
|
The
Property
Condition
field should show the last reported condition of the property as follows:
| · |
Damaged
|
| · |
Excellent
|
| · |
Fair
|
| · |
Gone
|
| · |
Good
|
| · |
Poor
|
| · |
Special
Hazard
|
| · |
Unknown
|
Exhibit
2: Standard
File Codes - Delinquency Reporting, Continued
The
FNMA
Delinquent Reason Code
field should show the Reason for Delinquency as follows:
|
Delinquency
Code
|
Delinquency
Description
|
|
001
|
FNMA-Death
of principal mortgagor
|
|
002
|
FNMA-Illness
of principal mortgagor
|
|
003
|
FNMA-Illness
of mortgagor’s family member
|
|
004
|
FNMA-Death
of mortgagor’s family member
|
|
005
|
FNMA-Marital
difficulties
|
|
006
|
FNMA-Curtailment
of income
|
|
007
|
FNMA-Excessive
Obligation
|
|
008
|
FNMA-Abandonment
of property
|
|
009
|
FNMA-Distant
employee transfer
|
|
011
|
FNMA-Property
problem
|
|
012
|
FNMA-Inability
to sell property
|
|
013
|
FNMA-Inability
to rent property
|
|
014
|
FNMA-Military
Service
|
|
015
|
FNMA-Other
|
|
016
|
FNMA-Unemployment
|
|
017
|
FNMA-Business
failure
|
|
019
|
FNMA-Casualty
loss
|
|
022
|
FNMA-Energy
environment costs
|
|
023
|
FNMA-Servicing
problems
|
|
026
|
FNMA-Payment
adjustment
|
|
027
|
FNMA-Payment
dispute
|
|
029
|
FNMA-Transfer
of ownership pending
|
|
030
|
FNMA-Fraud
|
|
031
|
FNMA-Unable
to contact borrower
|
|
INC
|
FNMA-Incarceration
|
Exhibit
2: Standard
File Codes - Delinquency Reporting, Continued
The
FNMA
Delinquent Status Code
field should show the Status of Default as follows:
|
Status
Code
|
Status
Description
|
|
09
|
Forbearance
|
|
17
|
Pre-foreclosure
Sale Closing Plan Accepted
|
|
24
|
Government
Seizure
|
|
26
|
Refinance
|
|
27
|
Assumption
|
|
28
|
Modification
|
|
29
|
Charge-Off
|
|
30
|
Third
Party Sale
|
|
31
|
Probate
|
|
32
|
Military
Indulgence
|
|
43
|
Foreclosure
Started
|
|
44
|
Deed-in-Lieu
Started
|
|
49
|
Assignment
Completed
|
|
61
|
Second
Lien Considerations
|
|
62
|
Veteran’s
Affairs-No Bid
|
|
63
|
Veteran’s
Affairs-Refund
|
|
64
|
Veteran’s
Affairs-Buydown
|
|
65
|
Chapter
7 Bankruptcy
|
|
66
|
Chapter
11 Bankruptcy
|
|
67
|
Chapter
13 Bankruptcy
|
23. The
Agreement is hereby amended effective as of the date hereof by adding the
following new Exhibit K:
EXHIBIT
K
COMPANY’S
OBLIGATIONS IN CONNECTION
WITH
A
RECONSTITUTION
• The
Company shall (i) possess the ability to service to a securitization documents;
(ii) service on a “Scheduled/Scheduled” reporting basis (advancing through the
liquidation of an REO Property), (iii) make compensating interest payments
on
payoffs and curtailments and (iv) remit and report to a Master Servicer in
format acceptable to such Master Servicer by the 10th calendar day of each
month.
• The
Company shall provide an acceptable annual certification (officer’s certificate)
to the Master Servicer (as required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002) as
well
as any other annual certifications required under the securitization documents
(i.e. the annual statement as to compliance/annual independent certified
public
accountants’ servicing report due by March 1 of each year).
• The
Company shall allow for the Purchaser, the Master Servicer or their designee
to
perform a review of audited financials and net worth of the
Company.
• The
Company shall provide a Uniform Single Attestation Program certificate and
Management Assertion as requested by the Master Servicer or the
Purchaser.
• The
Company shall provide information on each Custodial Account as requested
by the
Master Servicer or the Purchaser, and each Custodial Accounts shall comply
with
the requirements for such accounts as set forth in the securitization
documents.
• The
Company shall maintain its servicing system in accordance with the requirements
of the Master Servicer.
24.
The
Agreement is hereby amended effective as of the date hereof by adding the
following new Exhibit L:
EXHIBIT
L
FORM
OF
COMPANY CERTIFICATION
Re: The
[ ]
agreement dated as of [ l,
200[ ]
(the “Agreement”), among [IDENTIFY PARTIES]
I,
____________________________, the _______________________ of [NAME OF COMPANY]
(the “Company”), certify to [the Purchaser], [the Depositor], and the [Master
Servicer] [Securities Administrator] [Trustee], and their officers, with
the
knowledge and intent that they will rely upon this certification,
that:
I
have
reviewed the servicer compliance statement of the Company provided in accordance
with Item 1123 of Regulation AB (the “Compliance Statement”), the report on
assessment of the Company’s compliance with the servicing criteria set forth in
Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in accordance
with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended
(the “Exchange Act”) and Item 1122 of Regulation AB (the “Servicing
Assessment”), the registered public accounting firm’s attestation report
provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act
and
Section 1122(b) of Regulation AB (the “Attestation Report”), and all servicing
reports, officer’s certificates and other information relating to the servicing
of the Mortgage Loans by the Company during 200[ ] that were delivered by
the
Company to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee] pursuant to the Agreement (collectively, the “Company Servicing
Information”);
Based
on
my knowledge, the Company Servicing Information, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in the light of the circumstances
under
which such statements were made, not misleading with respect to the period
of
time covered by the Company Servicing Information;
Based
on
my knowledge, all of the Company Servicing Information required to be provided
by the Company under the Agreement has been provided to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee];
I
am
responsible for reviewing the activities performed by the Company as servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed in
the
Compliance Statement, the Servicing Assessment or the Attestation Report,
the
Company has fulfilled its obligations under the Agreement in all material
respects; and
The
Compliance Statement required to be delivered by the Company pursuant to
this
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Company and by any Subservicer and Subcontractor pursuant
to the
Agreement, have been provided to the [Depositor] [Master Servicer]. Any material
instances of noncompliance described in such reports have been disclosed
to the
[Depositor] [Master Servicer]. Any material instance of noncompliance with
the
Servicing Criteria has been disclosed in such reports.
25.
The
Agreement is hereby amended effective as of the date hereof by adding the
following new Exhibit M:
EXHIBIT
M
SUMMARY
OF REGULATION AB
SERVICING
CRITERIA
NOTE:
This Exhibit M is provided for convenience of reference only. In the event
of a
conflict or inconsistency between the terms of this Exhibit M and the text
of
Regulation AB, the text of Regulation AB, its adopting release and other
public
statements of the SEC shall control.
Item
1122(d)
| (a) |
General
servicing considerations.
|
(1) Policies
and procedures are instituted to monitor any performance or other triggers
and
events of default in accordance with the transaction agreements.
(2) If
any
material servicing activities are outsourced to third parties, policies and
procedures are instituted to monitor the third party’s performance and
compliance with such servicing activities.
(3) Any
requirements in the transaction agreements to maintain a back-up servicer
for
the mortgage loans are maintained.
(4) A
fidelity bond and errors and omissions policy is in effect on the party
participating in the servicing function throughout the reporting period in
the
amount of coverage required by and otherwise in accordance with the terms
of the
transaction agreements.
| (b) |
Cash
collection and administration.
|
(1) Payments
on mortgage loans are deposited into the appropriate custodial bank accounts
and
related bank clearing accounts no more than two business days following receipt,
or such other number of days specified in the transaction
agreements.
(2) Disbursements
made via wire transfer on behalf of an obligor or
to an
investor are made only by authorized personnel.
(3) Advances
of funds or guarantees regarding collections, cash flows or distributions,
and
any interest or other fees charged for such advances, are made, reviewed
and
approved as specified in the transaction agreements.
(4) The
related accounts for the transaction, such as cash reserve accounts or accounts
established as a form of overcollateralization, are separately maintained
(e.g.,
with respect to commingling of cash) as set forth in the transaction
agreements.
(5) Each
custodial account is maintained at a federally insured depository institution
as
set forth in the transaction agreements. For purposes of this criterion,
“federally insured depository institution” with respect to a foreign financial
institution means a foreign financial institution that meets the requirements
of
Rule 13k-1(b)(1) of the Securities Exchange Act.
(6) Unissued
checks are safeguarded so as to prevent unauthorized access.
(7) Reconciliations
are prepared on a monthly basis for all asset-backed securities related bank
accounts, including custodial accounts and related bank clearing accounts.
These
reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar
days after the bank statement cutoff date, or such other number of days
specified in the transaction agreements; (C) reviewed and approved by someone
other than the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items are resolved
within
90 calendar days of their original identification, or such other number of
days
specified in the transaction agreements.
| (c) |
Investor
remittances and reporting.
|
(1) Reports
to investors, including those to be filed with the Commission, are maintained
in
accordance with the transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are prepared in accordance with
timeframes and other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in the transaction
agreements; (C) are filed with the Commission as required by its rules and
regulations; and (D) agree with investors’ or the trustee’s records as to the
total unpaid principal balance and number of mortgage loans serviced by the
Servicer.
(2) Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
(3) Disbursements
made to an investor are posted within two business days to the Servicer’s
investor records, or such other number of days specified in the transaction
agreements.
(4) Amounts
remitted to investors per the investor reports agree with cancelled checks,
or
other form of payment, or custodial bank statements.
| (d) |
Mortgage
Loan administration.
|
(1) Collateral
or security on mortgage loans is maintained as required by the transaction
agreements or related mortgage loan documents.
(2) Mortgage
loan and related documents are safeguarded as required by the transaction
agreements.
(3) Any
additions, removals or substitutions to the asset pool are made, reviewed
and
approved in accordance with any conditions or requirements in the transaction
agreements.
(4) Payments
on mortgage loans, including any payoffs, made in accordance with the related
mortgage loan documents are posted to the Servicer’s obligor records maintained
no more than two business days after receipt, or such other number of days
specified in the transaction agreements, and allocated to principal, interest
or
other items (e.g., escrow) in accordance with the related mortgage loan
documents.
(5) The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
(6) Changes
with respect to the terms or status of an obligor’s mortgage loans (e.g., loan
modifications or re-agings) are made, reviewed and approved by authorized
personnel in accordance with the transaction agreements and related mortgage
loan documents.
(7) Loss
mitigation or recovery actions (e.g., forbearance plans, modifications and
deeds
in lieu of foreclosure, foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the timeframes or other
requirements established by the transaction agreements.
(8) Records
documenting collection efforts are maintained during the period a mortgage
loan
is delinquent in accordance with the transaction agreements. Such records
are
maintained on at least a monthly basis, or such other period specified in
the
transaction agreements, and describe the entity’s activities in monitoring
delinquent mortgage loans including, for example, phone calls, letters and
payment rescheduling plans in cases where delinquency is deemed temporary
(e.g.,
illness or unemployment).
(9) Adjustments
to interest rates or rates of return for mortgage loans with variable rates
are
computed based on the related mortgage loan documents.
(10) Regarding
any funds held in trust for an obligor (such as escrow accounts): (A) such
funds
are analyzed, in accordance with the obligor’s mortgage loan documents, on at
least an annual basis, or such other period specified in the transaction
agreements; (B) interest on such funds is paid, or credited, to obligors
in
accordance with applicable mortgage loan documents and state laws; and (C)
such
funds are returned to the obligor within 30 calendar days of full repayment
of
the related mortgage loans, or such other number of days specified in the
transaction agreements.
(11) Payments
made on behalf of an obligor (such as tax or insurance payments) are made
on or
before the related penalty or expiration dates, as indicated on the appropriate
bills or notices for such payments, provided that such support has been received
by the Servicer at least 30 calendar days prior to these dates, or such other
number of days specified in the transaction agreements.
(12) Any
late
payment penalties in connection with any payment to be made on behalf of
an
obligor are paid from the Servicer’s funds and not charged to the obligor,
unless the late payment was due to the obligor’s error or omission.
(13) Disbursements
made on behalf of an obligor are posted within two business days to the
obligor’s records maintained by the Servicer, or such other number of days
specified in the transaction agreements.
(14) Delinquencies,
charge-offs and uncollectable accounts are recognized and recorded in accordance
with the transaction agreements.
(15) Any
external enhancement or other support, identified in Item 1114(a)(1) through
(3)
or Item 1115 of Regulation AB, is maintained as set forth in the
transaction agreements.
26. The
Agreement is hereby amended effective as of the date hereof by adding the
following new Exhibit N:
EXHIBIT
N
SUMMARY
OF APPLICABLE REGULATION AB REQUIREMENTS
NOTE:
This Exhibit N is provided for convenience of reference only. In the event
of a
conflict or inconsistency between the terms of this Exhibit N and the text
of
Regulation AB, the text of Regulation AB, its adopting release and other
public
statements of the SEC shall control.
Item
1105(a)(1)-(3) and (c)
-
Provide static pool information with respect to mortgage loans that were
originated or purchased by the Company and which are of the same type as
the
Mortgage Loans.
-
Provide static pool information regarding delinquencies, cumulative losses
and
prepayments for prior securitized pools of the Company.
-
If the Company has less than 3 years experience securitizing assets of the
same
type as the Mortgage Loans, provide the static pool information by vintage
origination years regarding loans originated or purchased by the Company,
instead of by prior securitized pool. A vintage origination year represents
mortgage loans originated during the same year.
-
Such static pool information shall be for the prior five years, or for so
long
as the Company has been originating or purchasing (in the case of data by
vintage origination year) or securitizing (in the case of data by prior
securitized pools) such mortgage loans if for less than five years.
-
The static pool information for each vintage origination year or prior
securitized pool, as applicable, shall be presented in monthly increments
over
the life of the mortgage loans included in the vintage origination year or
prior
securitized pool.
-
Provide summary information for the original characteristics of the prior
securitized pools or vintage origination years, as applicable and material,
including: number of pool assets, original pool balance, weighted average
initial loan balance, weighted average mortgage rate, weighted average and
minimum and maximum FICO, product type, loan purpose, weighted average and
minimum and maximum LTV, distribution of loans by mortgage rate, and geographic
concentrations of 5% or more.
Item
1108(b) and (c)
Provide
the following information with respect to each servicer that will service,
including interim service, 20% or more of the mortgage loans in any loan
group
in the securitization issued in the Pass-Through Transfer:
-
a description of the Company’s form of organization;
-
a description of how long the Company has been servicing residential mortgage
loans; a general discussion of the Company’s experience in servicing assets of
any type as well as a more detailed discussion of the Company’s experience in,
and procedures for the servicing function it will perform under this Agreement
and any Reconstitution Agreements; information regarding the size, composition
and growth of the Company’s portfolio of mortgage loans of the type similar to
the Mortgage Loans and information on factors related to the Company that
may be
material to any analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable, including whether any default or
servicing related performance trigger has occurred as to any other
securitization due to any act or failure to act of the Company, whether any
material noncompliance with applicable servicing criteria as to any other
securitization has been disclosed or reported by the Company, and the extent
of
outsourcing the Company uses;
-
a description of any material changes to the Company’s policies or procedures in
the servicing function it will perform under this Agreement and any
Reconstitution Agreements for mortgage loans of the type similar to the Mortgage
Loans during the past three years;
-
information regarding the Company’s financial condition to the extent that there
is a material risk that the effect on one or more aspects of servicing resulting
from such financial condition could have a material impact on the performance
of
the securities issued in the Pass-Through Transfer, or on servicing of mortgage
loans of the same asset type as the Mortgage Loans;
-
any special or unique factors involved in servicing loans of the same type
as
the Mortgage Loans, and the Company’s processes and procedures designed to
address such factors;
-
statistical information regarding principal and interest advances made by
the
Company on the Mortgage Loans and the Company’s overall servicing portfolio for
the past three years; and
-
the Company’s process for handling delinquencies, losses, bankruptcies and
recoveries, such as through liquidation of REO Properties, foreclosure, sale
of
the Mortgage Loans or workouts.
Item
1110(a)
-
Identify any originator or group of affiliated originators that originated,
or
is expected to originate, 10% or more of the mortgage loans in any loan group
in
the securitization issued in the Pass-Through Transfer.
Item
1110(b)
Provide
the following information with respect to any originator or group of affiliated
originators that originated, or is expected to originate, 20% or more of
the
mortgage loans in any loan group in the securitization issued in the
Pass-Through Transfer:
-
the Company’s form of organization; and
-
a description of the Company’s origination program and how long the Company has
been engaged in originating residential mortgage loans, which description
must
include a discussion of the Company’s experience in originating mortgage loans
of the same type as the Mortgage Loans and information regarding the size
and
composition of the Company’s origination portfolio as well as information that
may be material to an analysis of the performance of the Mortgage Loans,
such as
the Company’s credit-granting or underwriting criteria for mortgage loans of the
same type as the Mortgage Loans.
Item
1117
-
describe any legal proceedings pending against the Company or against any
of its
property, including any proceedings known to be contemplated by governmental
authorities, that may be material to the holders of the securities issued
in the
Pass-Through Transfer.
Item
1119(a)
-
describe any affiliations of the Company, each other originator of the Mortgage
Loans and each Subservicer with the sponsor, depositor, issuing entity, trustee,
any originator, any other servicer, any significant obligor, enhancement
or
support provider or any other material parties related to the Pass-Through
Transfer.
Item
1119(b)
-
describe any business relationship, agreement, arrangement, transaction or
understanding entered into outside of the ordinary course of business or
on
terms other than those obtained in an arm’s length transaction with an unrelated
third party, apart from the Pass-Through Transfer, between the Company, each
other originator of the Mortgage Loans and each Subservicer, or their respective
affiliates, and the sponsor, depositor or issuing entity or their respective
affiliates, that exists currently or has existed during the past two years,
that
may be material to the understanding of an investor in the securities issued
in
the Pass-Through Transfer.
Item
1119(c)
-
describe any business relationship, agreement, arrangement, transaction or
understanding involving or relating to the Mortgage Loans or the Pass-Through
Transfer, including the material terms and approximate dollar amount involved,
between the Company, each other originator of the Mortgage Loans and each
Subservicer, or their respective affiliates and the sponsor, depositor or
issuing entity or their respective affiliates, that exists currently or has
existed during the past two years.
27. The
Agreement is hereby amended effective as of the date hereof by adding the
following new Exhibit O:
EXHIBIT
O
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by [the Company] [Name of Subservicer]
shall address, at a minimum, the criteria identified as below as “Applicable
Servicing Criteria”:
|
Servicing
Criteria
|
Applicable
Servicing Criteria
|
|
|
Reference
|
Criteria
|
|
|
|
General
Servicing Considerations
|
|
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
X
|
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
X
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
|
|
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance
with the
terms of the transaction agreements.
|
X
|
|
|
Cash
Collection and Administration
|
|
|
1122(d)(2)(i)
|
Payments
on mortgage loans are deposited into the appropriate custodial
bank
accounts and related bank clearing accounts no more than two business
days
following receipt, or such other number of days specified in the
transaction agreements.
|
X
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
X
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction
agreements.
|
X
|
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
X
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
|
X
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized
access.
|
X
|
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities
related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their
original
identification, or such other number of days specified in the transaction
agreements.
|
X
|
|
|
Investor
Remittances and Reporting
|
|
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission,
are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
|
X
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with
timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
X
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the
Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
X
|
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank
statements.
|
X
|
|
|
Pool
Asset Administration
|
|
|
1122(d)(4)(i)
|
Collateral
or security on mortgage loans is maintained as required by the
transaction
agreements or related mortgage loan documents.
|
X
|
|
1122(d)(4)(ii)
|
Mortgage
loan and related documents are safeguarded as required by the transaction
agreements
|
X
|
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements
in the
transaction agreements.
|
X
|
|
1122(d)(4)(iv)
|
Payments
on mortgage loans, including any payoffs, made in accordance with
the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g., escrow)
in
accordance with the related mortgage loan documents.
|
X
|
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal
balance.
|
X
|
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor's mortgage loans
(e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
X
|
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
X
|
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period
a mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including, for
example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or
unemployment).
|
X
|
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for mortgage loans with variable
rates are computed based on the related mortgage loan
documents.
|
X
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period specified
in
the transaction agreements; (B) interest on such funds is paid,
or
credited, to obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are returned to the
obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction
agreements.
|
X
|
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
X
|
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
X
|
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
X
|
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
X
|
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set
forth in
the transaction agreements.
|
|
|
|
|
|
[NAME
OF COMPANY] [NAME OF SUBSERVICER]
Date: _________________________
By: _________________________
Name:
Title:
28. The
Agreement is hereby amended as of the date hereof by adding the following
new
Exhibit P:
EXHIBIT
P
REPORTING
DATA FOR REALIZED LOSSES AND GAINS
Calculation
of Realized Loss/Gain Form 332- Instruction Sheet
NOTE:
Do not net or combine items. Show all expenses individually and all credits
as
separate line items. Claim packages are due on the remittance report date.
Late
submissions may result in claims not being passed until the following month.
The
Servicer is responsible to remit all funds pending loss approval and /or
resolution of any disputed items.
1.
2. The
numbers on the 332 form correspond with the numbers listed below.
Liquidation
and Acquisition Expenses:
1.
The
Actual Unpaid Principal Balance of the Mortgage Loan. For documentation,
an
Amortization Schedule from date of default through liquidation breaking out
the
net interest and servicing fees advanced is required.
2.
The
Total
Interest Due less the aggregate amount of servicing fee that would have been
earned if all delinquent payments had been made as agreed. For documentation,
an
Amortization Schedule from date of default through liquidation breaking out
the
net interest and servicing fees advanced is required.
3.
Accrued
Servicing Fees based upon the Scheduled Principal Balance of the Mortgage
Loan
as calculated on a monthly basis. For documentation, an Amortization Schedule
from date of default through liquidation breaking out the net interest and
servicing fees advanced is required.
4-12.
Complete
as applicable. Required documentation:
*
For taxes and insurance advances - see page 2 of 332 form - breakdown required
showing period
of
coverage, base tax, interest, penalty. Advances prior to default require
evidence of servicer efforts to recover advances.
*
For escrow advances - complete payment history
(to
calculate advances from last positive escrow balance forward)
*
Other expenses - copies of corporate advance history showing all payments
*
REO repairs > $1500 require explanation
*
REO repairs >$3000 require evidence of at least 2 bids.
*
Short Sale or Charge Off require P&L supporting the decision and WFB’s
approved Officer Certificate
*
Unusual or extraordinary items may require further documentation.
13. The
total
of lines 1 through 12.
3. Credits:
14-21. Complete
as applicable. Required documentation:
*
Copy of the HUD 1 from the REO sale. If a 3rd
Party
Sale, bid instructions and Escrow Agent / Attorney
Letter
of
Proceeds Breakdown.
*
Copy of EOB for any MI or gov't guarantee
*
All other credits need to be clearly defined on the 332
form
|
22.
|
The
total of lines 14 through 21.
|
Please
Note: For
HUD/VA loans, use line (18a) for Part A/Initial proceeds and line (18b) for
Part
B/Supplemental proceeds.
Total
Realized Loss (or Amount of Any Gain)
23. The
total
derived from subtracting line 22 from 13. If the amount represents a realized
gain, show
the
amount in parenthesis ( ).
Calculation
of Realized Loss/Gain Form 332
Prepared
by: __________________ Date:
_______________
Phone:
______________________ Email Address:_____________________
|
Servicer
Loan No.
|
|
Servicer
Name
|
|
Servicer
Address
|
▇▇▇▇▇
FARGO BANK, N.A. Loan No._____________________________
Borrower's
Name: _________________________________________________________
Property
Address: _________________________________________________________
Liquidation
Type: REO Sale
3rd
Party Sale Short
Sale Charge
Off
Was
this loan granted a Bankruptcy deficiency or cramdown Yes
No
If
“Yes”,
provide deficiency or cramdown amount
_______________________________
Liquidation
and Acquisition Expenses:
|
(1)
|
Actual
Unpaid Principal Balance of Mortgage Loan
|
|
$ |
(1)
|
|||
|
(2)
|
Interest
accrued at Net Rate
|
|
(2)
|
||||
|
(3)
|
Accrued
Servicing Fees
|
|
(3)
|
||||
|
(4)
|
Attorney's
Fees
|
|
(4)
|
||||
|
(5)
|
Taxes
(see page 2)
|
|
(5)
|
||||
|
(6)
|
Property
Maintenance
|
|
(6)
|
||||
|
(7)
|
MI/Hazard
Insurance Premiums (see page 2)
|
|
(7)
|
||||
|
(8)
|
Utility
Expenses
|
|
(8)
|
||||
|
(9)
|
Appraisal/BPO
|
|
(9)
|
||||
|
(10)
|
Property
Inspections
|
|
(10)
|
||||
|
(11)
|
FC
Costs/Other Legal Expenses
|
(11)
|
|||||
|
(12)
|
Other
(itemize)
|
|
(12)
|
||||
|
Cash
for Keys
|
|
(12)
|
|||||
|
HOA/Condo
Fees
|
|
(12)
|
|||||
|
|
|
(12)
|
|||||
|
Total
Expenses
|
$ |
(13)
|
|||||
|
Credits:
|
|||||||
|
(14)
|
Escrow
Balance
|
$
|
(14)
|
||||
|
(15)
|
HIP
Refund
|
(15)
|
|||||
|
(16)
|
Rental
Receipts
|
|
(16)
|
||||
|
(17)
|
Hazard
Loss Proceeds
|
|
(17)
|
||||
|
(18)
|
Primary
Mortgage Insurance / Gov’t Insurance
|
|
(18a) | ||||
|
HUD
Part A
|
|||||||
|
HUD
Part B
|
(18b) | ||||||
|
(19)
|
Pool
Insurance Proceeds
|
|
(19)
|
||||
|
(20)
|
Proceeds
from Sale of Acquired Property
|
|
(20)
|
||||
|
(21)
|
Other
(itemize)
|
|
(21)
|
||||
|
|
|
|
(21)
|
||||
|
Total
Credits
|
$
|
(22)
|
|||||
|
Total
Realized Loss (or Amount of Gain)
|
|
|
$
|
(23)
|
|||
Escrow
Disbursement Detail
|
Type
(Tax
/Ins.)
|
Date
Paid
|
Period
of Coverage
|
Total
Paid
|
Base
Amount
|
Penalties
|
Interest
|
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
29.
The
Agreement is hereby amended as of the date hereof by adding the following
new
Exhibit Q:
EXHIBIT
Q
Delinquency
Recognition Policies
[To
be
provided by EMC and mutually agreed by the parties]
30.
Except
as
amended above, the Agreement shall continue to be in full force and effect
in
accordance with its terms.
31.
This
Amendment may be executed by one or more of the parties hereto on any number
of
separate counterparts and of said counterparts taken together shall be deemed
to
constitute one and the same instrument.
[SIGNATURE
PAGES FOLLOW]
IN
WITNESS WHEREOF, the following parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day
and
year first above written.
|
EMC
MORTGAGE CORPORATION,
as
Purchaser
|
||
| |
|
|
| By: | ||
| Name: |
|
|
| Title: | ||
|
MID
AMERICA BANK, FSB,
as
Company
|
||
| |
|
|
| By: | ||
| Name: |
|
|
| Title: | ||