Exhibit 99.8
FLOW INTERIM SERVICING AGREEMENT
between
▇▇▇▇▇▇ Brothers Bank, FSB,
Purchaser
and
SIB Mortgage Corp.,
Seller/Interim Servicer
Dated as of June 10, 2002
CONVENTIONAL FIXED AND ADJUSTABLE RATE RESIDENTIAL MORTGAGE LOANS
Group No. 2002-2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. All capitalized terms not otherwise defined herein have the respective meanings set
forth in the Purchase Agreement. The following terms are defined as follows (except as otherwise
agreed by the parties). 1
ARTICLE II
SERVICING
Section 2.01 Seller to Act as Servicer. With respect to the Mortgage Loans in each Mortgage Loan Package
purchased by the Purchaser, from and after the related Closing. 4
Section 2.01 Date, the Seller, as an independent contractor, shall service and administer the Mortgage Loans
during the related Interim Period, by execution and delivery of the related Acknowledgement
Agreement, which shall contain the related Closing Date and Transfer Dates therein, in the form
attached hereto as Exhibit 6, and shall have full power and authority, acting alone, to do any and
all things in connection with such servicing and administration which the Seller may deem necessary
or desirable, consistent with the terms of this Agreement and with Accepted Servicing Practices. 5
Section 2.02 Liquidation of Mortgage Loans. In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 2.01 is not paid when the same becomes due and payable, or in the
event the Mortgagor fails to perform any other covenant or obligation under the Mortgage Loan and
such failure continues beyond any applicable grace period, the Seller shall take such action as (1)
the Seller would take under similar circumstances with respect to a similar mortgage loan held for
its own account for investment, (2) shall be consistent with Accepted Servicing Practices, (3) the
Seller shall determine prudently to be in the best interest of Purchaser, and (4) is consistent with
any related PMI Policy. In the event that any payment due under any Mortgage Loan is not postponed
pursuant to Section 2.01 and remains delinquent for a period of 90 days or any other default
continues for a period of 90 days beyond the expiration of any grace or cure period, the Seller
shall commence foreclosure proceedings, provided that, prior to commencing foreclosure proceedings,
the Seller shall notify the Purchaser in writing of the Seller's intention to do so,
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and the Seller shall not commence foreclosure proceedings if the Purchaser objects to such action
within 10 Business Days of receiving such notice. In such connection, the Seller shall from its own
funds make all necessary and proper Servicing Advances, provided, however, that the Seller shall not
be required to expend its own funds in connection with any foreclosure or towards the restoration or
preservation of any Mortgaged Property, unless it shall determine (a) that such preservation,
restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to
Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be
recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account pursuant to Section 2.05) or through Insurance
Proceeds (respecting which it shall have similar priority). 6
Section 2.03 Collection of Mortgage Loan Payments. Continuously from the date hereof until the related Transfer
Date the Seller shall proceed diligently to collect all payments due under each of the Mortgage
Loans when the same shall become due and payable and shall take special care in ascertaining and
estimating Escrow Payments and all other charges that will become due and payable with respect to
the Mortgage Loans and each related Mortgaged Property, to the end that the installments payable by
the Mortgagors will be sufficient to pay such charges as and when they become due and payable. 6
Section 2.04 Establishment of and Deposits to Custodial Account. The Seller shall segregate and hold all funds
collected and received pursuant to the Mortgage Loans separate and apart from any of its own funds
and general assets and shall establish and maintain one or more Custodial Accounts, in the form of
time deposit or demand accounts, titled "SIB Mortgage Corp. in trust for ▇▇▇▇▇▇ Brothers Bank, FSB,
Residential Fixed and Adjustable Rate Mortgage Loans, Group No. 2002-2 and various Mortgagors." The
Custodial Account shall be established with a Qualified Depository acceptable to the Purchaser. Any
funds deposited in the 6
Section 2.04 Custodial Account shall at all times be fully insured to the full extent permitted under applicable
law. Funds deposited in the Custodial Account may be drawn on by the Seller in accordance with
Section 2.05. The creation of any Custodial Account shall be evidenced by a certification in the
form of Exhibit 2 hereto, in the case of an account established with the Seller, or by a letter
agreement in the form of Exhibit 3 hereto, in the case of an account held by a depository other than
the Seller. A copy of such certification or letter agreement shall be furnished to the Purchaser
and, upon request, to any subsequent Purchaser. 7
Section 2.05 Permitted Withdrawals From Custodial Account. The Seller shall, from time to time, withdraw funds
from the Custodial Account for the following purposes: 8
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Section 2.06 Establishment of and Deposits to Escrow Account. The Seller shall segregate and hold all funds
collected and received pursuant to a Mortgage Loan constituting Escrow Payments separate and apart
from any of its own funds and general assets and shall establish and maintain one or more Escrow
Accounts, in the form of time deposit or demand accounts, titled, "SIB Mortgage Corp., in trust for
▇▇▇▇▇▇ Brothers Bank, FSB Residential Fixed and Adjustable Rate Mortgage Loans, Group No. 2002-2,
and various Mortgagors". The Escrow Accounts shall be established with a Qualified Depository, in a
manner which shall provide maximum available insurance thereunder. Funds deposited in the Escrow
Account may be drawn on by the Seller in accordance with Section 2.07. The creation of any Escrow
Account shall be evidenced by a certification in the form of Exhibit 4 hereto, in the case of an
account established with the Seller, or by a letter agreement in the form of Exhibit 5 hereto, in
the case of an account held by a depository other than the Seller. A copy of such certification
shall be furnished to the Purchaser and, upon request, to any subsequent Purchaser. 8
Section 2.07 Permitted Withdrawals From Escrow Account. Withdrawals from the Escrow Account or Accounts may be
made by the Seller only: 9
Section 2.08 Payment of Taxes, Insurance and Other Charges. With respect to each Mortgage Loan, the Seller shall
maintain accurate records reflecting the status of ground rents, taxes, assessments, water rates,
sewer rents, and other charges which are or may become a lien upon the Mortgaged Property and the
status of PMI Policy premiums and fire and hazard insurance coverage and shall obtain, from time to
time, all bills for the payment of such charges (including renewal premiums) and shall effect
payment thereof prior to the applicable penalty or termination date, employing for such purpose
deposits of the Mortgagor in the Escrow Account which shall have been estimated and accumulated by
the Seller in amounts sufficient for such purposes, as allowed under the terms of the Mortgage. To
the extent that a Mortgage does not provide for Escrow Payments, the Seller shall determine that any
such payments are made by the Mortgagor at the time they first become due. The Seller assumes full
responsibility for the timely payment of all such bills and shall effect timely payment of all such
charges irrespective of each Mortgagor's faithful performance in the payment of same or the making
of the Escrow Payments, and the Seller shall make advances from its own funds to effect such
payments. 10
Section 2.09 PMI Obligations. The Servicer shall comply with all provisions of applicable state and federal law
relating to the cancellation of, or collection of premiums with respect to, PMI Policies, including,
but not limited to, the provisions of the Homeowners Protection Act of 1998, and all regulations
promulgated thereunder, as amended from time to time. If the Mortgagor fails to pay any PMI Policy
premium, the Seller shall be obligated to make such premium payments. 10
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Section 2.10 Protection of Accounts. The Seller may transfer the Custodial Account or the Escrow Account to a
different Qualified Depository from time to time. Such transfer shall be made only upon obtaining
the consent of the Purchaser, which consent shall not be withheld unreasonably. 10
Section 2.11 Maintenance of Hazard Insurance. The Seller shall cause to be maintained for each Mortgage Loan,
hazard insurance such that all buildings upon the Mortgaged Property are insured by a generally
acceptable insurer rated A:VI or better in the current Best's Key Rating Guide ("Best's") against
loss by fire, hazards of extended coverage and such other hazards as are customary in the area where
the Mortgaged Property is located, in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements securing such Mortgage Loan and (ii) the greater of (a)
the outstanding principal balance of the Mortgage Loan and (b) an amount such that the proceeds
thereof shall be sufficient to prevent the Mortgagor or the loss payee from becoming a co-insurer. 11
Section 2.12 Maintenance of Mortgage Impairment Insurance. In the event that the Seller shall obtain and maintain
a blanket policy insuring against losses arising from fire and hazards covered under extended
coverage on all of the Mortgage Loans, then, to the extent such policy provides coverage in an
amount equal to the amount required pursuant to Section 2.11 and otherwise complies with all other
requirements of Section 2.11, it shall conclusively be deemed to have satisfied its obligations as
set forth in Section 2.11. Any amounts collected by the Seller under any such policy relating to a
Mortgage Loan shall be deposited in the Custodial Account subject to withdrawal pursuant to Section
2.05. Such policy may contain a deductible clause, in which case, in the event that there shall not
have been maintained on the related Mortgaged Property a policy complying with Section 2.11, and
there shall have been a loss which would have been covered by such policy, the Seller shall deposit
in the Custodial Account at the time of such loss the amount not otherwise payable under the blanket
policy because of such deductible clause, such amount to be deposited from the Seller's funds,
without reimbursement therefor. Upon request of the Purchaser, the Seller shall cause to be
delivered to the Purchaser a certified true copy of such policy and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially modified without 30 days'
prior written notice to the Purchaser. 12
Section 2.13 Maintenance of Fidelity Bond and Errors and Omissions Insurance. The Seller shall maintain with
responsible companies, at its own expense, a blanket Fidelity Bond and an Errors and Omissions
Insurance Policy, with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, 12
Section 2.13 money, documents or papers relating to the Mortgage Loans ("Seller Employees"). Any such Fidelity
Bond and Errors and Omissions
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Insurance Policy shall be in the form of the Mortgage Banker's Blanket Bond and shall protect and
insure the Seller against losses, including forgery, theft, embezzlement, fraud, errors and
omissions and negligent acts of such Seller Employees. Such Fidelity Bond and Errors and Omissions
Insurance Policy also shall protect and insure the Seller against losses in connection with the
release or satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 2.13 requiring such Fidelity Bond and
Errors and Omissions Insurance Policy shall diminish or relieve the Seller from its duties and
obligations as set forth in this Agreement. The minimum coverage under any such bond and insurance
policy shall be at least equal to the corresponding amounts required by ▇▇▇▇▇▇ ▇▇▇ in the ▇▇▇▇▇▇ Mae
Guides or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' & Servicers' Guide. Upon the request of the
Purchaser, the Seller shall cause to be delivered to the Purchaser a certified true copy of such
fidelity bond and insurance policy and a statement from the surety and the insurer that such
fidelity bond and insurance policy shall in no event be terminated or materially modified without 30
days' prior written notice to the Purchaser. 13
Section 2.14 Inspections. The Seller shall inspect the Mortgaged Property as often as deemed necessary by the
Seller to assure itself that the value of the Mortgaged Property is being preserved. In addition, if
any Mortgage Loan is more than 60 days delinquent, the Seller immediately shall inspect the
Mortgaged Property and shall conduct subsequent inspections in accordance with Accepted Servicing
Practices or as may be required by the primary mortgage guaranty insurer. The Seller shall keep a
written report of each such inspection. 13
Section 2.15 Restoration of Mortgaged Property. The Seller need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied to the
restoration or repair of the Mortgaged Property if such release is in accordance with Accepted
Servicing Practices. At a minimum, the Seller shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation Proceeds: 13
Section 2.16 Maintenance of PMI Policy; Claims. Except where disclosed to the Purchaser on the related Mortgage
Loan Schedule, with respect to each Mortgage Loan with a LTV in excess of 80%, the Seller shall,
without any cost to the Purchaser, maintain or cause the Mortgagor to maintain in full force and
effect a PMI Policy insuring that portion of the Mortgage Loan in excess of 75% of value, and shall
pay or shall cause the Mortgagor to pay the premium thereon on a timely basis, until the LTV of such
Mortgage Loan is reduced to 80%. In the event that such PMI Policy shall be terminated, the Seller
shall obtain from another Qualified Insurer a comparable replacement policy, with a total coverage
equal to the remaining coverage of such terminated PMI
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Policy. If the insurer shall cease to be a Qualified Insurer, the Seller shall determine whether
recoveries under the PMI Policy are jeopardized for reasons related to the financial condition of
such insurer, it being understood that the Seller shall in no event have any responsibility or
liability for any failure to recover under the PMI Policy for such reason. If the Seller determines
that recoveries are so jeopardized, it shall notify the Purchaser and the Mortgagor, if required,
and obtain from another Qualified Insurer a replacement insurance policy. The Seller shall not take
any action which would result in noncoverage under any applicable PMI Policy of any loss which, but
for the actions of the Seller would have been covered thereunder. In connection with any assumption
or substitution agreement entered into or to be entered into pursuant to Section 4.01, the Seller
shall promptly notify the insurer under the related PMI Policy, if any, of such assumption or
substitution of liability in accordance with the terms of such PMI Policy and shall take all actions
which may be required by such insurer as a condition to the continuation of coverage under such PMI
Policy. If such PMI Policy is terminated as a result of such assumption or substitution of
liability, the Seller shall obtain a replacement PMI Policy as provided above. 14
Section 2.17 Title, Management and Disposition of REO Property. In the event that title to any Mortgaged Property
is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall
be taken in the name of the Purchaser, or in the event the Purchaser is not authorized or permitted
to hold title to real property in the state where the REO Property is located, or would be adversely
affected under the "doing business" or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of such Person or Persons as shall be consistent with
an Opinion of Counsel obtained by the Seller from any attorney duly licensed to practice law in the
state where the REO Property is located. The Person or Persons holding such title other than the
Purchaser shall acknowledge in writing that such title is being held as nominee for the Purchaser. 14
Section 2.18 Permitted Withdrawals with respect to REO Property. The Seller shall withdraw REO funds on deposit
in the Custodial Account with respect to each related REO Property necessary for the proper
operation, management and maintenance of the REO Property, including the cost of maintaining any
hazard insurance pursuant to Section 2.11 and the fees of 15
Section 2.18 any managing agent acting on behalf of the Seller. The Seller shall make monthly distributions on
each Remittance Date to the Purchaser of the net cash flow from the REO Property (which shall equal
the revenues from such REO Property net of the expenses described in Section 2.17 and of any
reserves reasonably required from time to time to be maintained to satisfy anticipated liabilities
for such expenses). 16
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Section 2.19 Real Estate Owned Reports. Together with the statement furnished pursuant to Section 2.20, the
Seller shall furnish to the Purchaser on or before the 15th day of each month a statement with
respect to any REO Property covering the operation of such REO Property for the previous month and
the Seller's efforts in connection with the sale of such REO Property and any rental of such REO
Property incidental to the sale thereof for the previous month. That statement shall be accompanied
by such other information as the Purchaser shall reasonably request 16
Section 2.20 Liquidation Reports. Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof
by the Purchaser pursuant to a deed in lieu of foreclosure, the Seller shall submit to the Purchaser
a liquidation report with respect to such Mortgaged Property 16
Section 2.21 Notification of Adjustments. With respect to each ARM Mortgage Loan, the Seller shall adjust the
Mortgage Interest Rate on the related Interest Rate Adjustment Date in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note. The Seller shall execute
and deliver any and all necessary notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Interest Rate adjustments. The Seller shall
promptly, upon written request therefor, deliver to the Purchaser such notifications and any
additional applicable data regarding such adjustments and the methods used to calculate and
implement such adjustments. Upon the discovery by the Seller or the receipt of notice from the
Purchaser that the Seller has failed to adjust a Mortgage Interest Rate in accordance with the terms
of the related Mortgage Note, the Seller shall immediately deposit in the Custodial Account from its
own funds the amount of any interest loss or deferral caused the Purchaser thereby 16
Section 2.22 Reports of Foreclosures and Abandonments of Mortgaged Property. Following the foreclosure sale or
abandonment of any Mortgaged Property, the Seller shall report such foreclosure or abandonment as
required pursuant to Section 6050J of the Code. 16
ARTICLE III
PAYMENTS TO PURCHASER
Section 3.01 Remittances. On each Remittance Date the Seller shall remit by wire transfer of immediately
available funds to the Purchaser (a) all amounts deposited in the Custodial Account as of the close
of business on the Determination Date (net of charges against or withdrawals from the Custodial
Account pursuant to Section 2.05), plus (b) all amounts, if any, which the Seller is obligated to
distribute pursuant to Section 2.03. 16
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Section 3.02 Statements to Purchaser. On or prior to the earlier to occur of the 3rd Business Day or the 5th
calendar day of each month, the Seller shall furnish to the Purchaser a Monthly Remittance Advice,
with a trial balance report attached thereto, in the form of Exhibit 1 annexed hereto in hard copy
and electronic medium mutually acceptable to the parties as to the preceding calendar month. 17
Section 3.03 Principal and Interest Advances by Seller. The Seller shall have no obligation to advance any
amounts constituting delinquent principal and interest payments. 17
ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property. The Seller shall use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by the person to whom
the Mortgaged Property has been or is about to be sold whether by absolute conveyance or by contract
of sale, and whether or not the Mortgagor remains liable on the Mortgage and the Mortgage Note. When
the Mortgaged Property has been conveyed by the Mortgagor, the Seller shall, to the extent it has
knowledge of such conveyance, exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause applicable thereto, provided, however, that the Seller shall not
exercise such rights if 17
Section 4.01 prohibited by law from doing so or if the exercise of such rights would impair or threaten to impair
any recovery under the related PMI Policy, if any. 18
Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files. Upon the payment in full of any Mortgage
Loan, or the receipt by the Seller of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Seller shall notify the Purchaser in the Monthly Remittance
Advice as provided in Section 3.02, and may request the release of any Mortgage Loan Documents from
the Purchaser or its designee in accordance with this Section 4.02 hereof. 18
Section 4.03 Servicing Compensation. As consideration for servicing the Mortgage Loans during the period from the
related Closing Date up to but not including the related Transfer Date, the Seller shall retain a
Servicing Fee with respect to each Mortgage Loan in the amount of $7.00 per month, which amount
shall be prorated for any portion of a month during which the Mortgage Loan is serviced by the
Seller pursuant to this Agreement. The obligation of the Purchaser to pay the Servicing Fee is
limited to, and the Servicing Fee is payable solely from, the interest portion (including recoveries
with respect to interest from Liquidation Proceeds, to the extent permitted by Section 2.02), of
such
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Section 4.04 Monthly Payment collected by the Seller, or as otherwise provided under Section 2.03. 19
Annual Statement as to Compliance. The Seller shall deliver to the Purchaser, on or before March 31
each year beginning March 31, 2002, and on the related Transfer Date an Officer's Certificate,
stating that (i) a review of the activities of the Seller during the preceding calendar year and of
performance under this Agreement has been made under such officer's supervision, and (ii) the Seller
has complied fully with the provisions of Article II and Article IV, and (iii) to the best of such
officer's knowledge, based on such review, the Seller has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature and status thereof and
the action being taken by the Seller to cure such default. 19
Section 4.05 Annual Independent Public Accountants' Servicing Report. On or before March 31st of each year
beginning March 31, 2003, the Seller, at its expense, shall cause a firm of independent public
accountants which is a member of the American Institute of Certified Public Accountants to furnish a
statement to each Purchaser to the effect that such firm has examined certain documents and records
relating to the servicing of the Mortgage Loans and this Agreement and that such firm is of the
opinion that the provisions of Article II and Article III have been complied with, and that, on the
basis of such examination conducted substantially in compliance with the Single Audit Program for
Mortgage Bankers, nothing has come to their attention which would indicate that such servicing has
not been conducted in compliance therewith, except for (i) such exceptions as such firm shall
believe to be immaterial, and (ii) such other exceptions as shall be set forth in such statement. 19
Section 4.06 Right to Examine Seller Records. The Purchaser shall have the right to examine and audit any and all
of the books, records, or other information of the Seller, whether held by the Seller or by another
on its behalf, with respect to or concerning this Agreement or the Mortgage Loans, during business
hours or at such other times as may be reasonable under applicable circumstances, upon reasonable
advance notice. 19
ARTICLE V
SELLER TO COOPERATE
Section 5.01 Provision of Information. During the term of this Agreement, the Seller shall furnish to the
Purchaser such periodic, special, or other reports or information, whether or not provided for
herein, as shall be necessary, reasonable, or appropriate with respect to the Purchaser or the
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Section 5.02 purposes of this Agreement. All such reports or information shall be provided by and in accordance
with all reasonable instructions and directions which the Purchaser may give. 20
Financial Statements; Servicing Facilities. In connection with marketing the Mortgage Loans, the
Purchaser may make available to a prospective Purchaser a Consolidated Statement of Operations of
the Seller for the most recently completed three fiscal years for which such a statement is
available, as well as a Consolidated Statement of Condition at the end of the last two fiscal years
covered by such Consolidated Statement of Operations. The Seller also shall make available any
comparable interim statements to the extent any such statements have been prepared by or on behalf
of the Seller (and are available upon request to members or stockholders of the Seller or to the
public at large). If it has not already done so, the Seller shall furnish promptly to the Purchaser
copies of the statement specified above. 20
ARTICLE VI
TERMINATION
Section 6.01 Agency Suspension. Should the Seller at any time during the term of this Agreement have its right to
service temporarily or permanently suspended by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac or otherwise cease to be
an approved seller/servicer of conventional residential mortgage loans for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac, then the Purchaser may immediately terminate this Agreement and accelerate performance of the
provisions of the Purchase Agreement to require immediate transfer of the Servicing Rights. 20
Section 6.02 Damages. The Purchaser shall have the right at any time to seek and recover from the Seller any
damages or losses suffered by it as a result of any failure by the Seller to observe or perform any
duties, obligations, covenants or agreements herein contained or 20
contained in the Purchase Agreement, or as a result of a party's failure to remain an approved
Section 6.02 ▇▇▇▇▇▇ Mae mortgage servicer. 21
Section 6.03 Termination Upon Transfer of Servicing; Termination Procedures. This Agreement shall terminate with
respect to the Mortgage Loans or portion thereof transferred on the related Transfer Date. 21
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the Transfer Date. Prior to the related Transfer Date, the
contents of each Servicing File are and shall be held in trust by the Seller for the benefit of the
Purchaser as the
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owner thereof. The Seller shall maintain in the Servicing File 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 possession of the Servicing File by the Seller is at the will of the Purchaser for
the sole purpose of servicing the related Mortgage Loan, pursuant to this Agreement, and such
retention and possession by the Seller is in its capacity as Servicer only and at the election of
the Purchaser. The Seller shall release its custody of the contents of any Servicing File only in
accordance with written instructions from the Purchaser, unless such release is required as
incidental to the Seller's servicing of the Mortgage Loans pursuant to this Agreement, or is in
connection with a repurchase of any Mortgage Loan pursuant to Section 8 of the Purchase Agreement. 22
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification. The Seller agrees to indemnify the Purchaser and hold it harmless against any and all
claims, losses, damages, penalties, fines, and forfeitures, including, but not limited to reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and expenses that the
Purchaser may sustain in any way related to the failure of Seller to (a) perform its duties and service
the Mortgage Loans in strict compliance with the terms of this Agreement and/or (b) comply with
applicable law. The Seller immediately shall notify the Purchaser if a claim is made by a third party
with respect to this Agreement, assume (with the prior written consent of the Purchaser) the defense of
any such claim and pay all expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or the Purchaser in respect
of such claim. The Seller shall follow any written instructions received from the Purchaser in
connection with such claim. The Purchaser promptly shall reimburse the Seller for all amounts advanced
by it pursuant to the preceding sentence except when the claim is in any way related to the Seller's
indemnification pursuant to Section 8 of the Purchase Agreement, or the failure of the Seller to (a)
service and administer the Mortgage Loans in strict compliance with the terms of this Agreement and/or
(b) comply with applicable law. 23
Section 8.02 Limitation on Liability of Seller and Others. Neither the Seller nor any of the directors, officers,
employees or agents of the Seller shall be under any liability to the Purchaser for any action taken or
for refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in
judgment, provided, however, that this provision shall not protect the Seller or any such person against
any
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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 any breach of the terms and conditions of this Agreement. The
Seller and any director, officer, employee or agent of the Seller may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Seller shall not be under any obligation to appear in, prosecute or
defend any legal action which is not incidental to its duties to service the Mortgage Loans in
accordance with this Agreement and which in its opinion may involve it in any expense or liability,
provided, however, that the Seller may, with the consent of the Purchaser, undertake any such action
which it may deem necessary or desirable in respect to this Agreement and the rights and duties of
the parties hereto. In such event, the Seller shall be entitled to reimbursement from the Purchaser
of the reasonable legal expenses and costs of such action. 23
Section 8.03 Limitation on Resignation and Assignment by Seller. The Purchaser has entered into this Agreement
with the Seller and subsequent Purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Seller, and the representations as to the adequacy of its servicing
facilities, plant, personnel, records and procedures, its integrity, reputation and financial
standing, and the continuance thereof. Therefore, the Seller shall neither assign this Agreement or
the servicing hereunder or delegate its rights or duties hereunder or any portion hereof or sell or
otherwise dispose of all or 23
Section 8.03 substantially all of its property or assets without the prior written consent of the Purchaser,
which consent shall be granted or withheld in the sole discretion of the Purchaser. 24
Section 8.04 Assignment by Purchaser. The Purchaser shall have the right, without the consent of the Seller, to
assign, in whole or in part, its interest under this Agreement with respect to some or all of the
Mortgage Loans, and designate any person to exercise any rights of the Purchaser hereunder, by
executing an Assignment and Assumption Agreement substantially in the form of Exhibit G to the
Purchase Agreement. Upon such assignment of rights and assumption of obligations, the assignee or
designee shall accede to the rights and obligations hereunder of the Purchaser with respect to such
Mortgage Loans and the Purchaser as assignor shall be released from all obligations hereunder with
respect to such Mortgage Loans from and after the date of such assignment and assumption. All
references to the Purchaser in this Agreement shall be deemed to include its assignee or designee. 24
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ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
Section 9.01 Authority and Capacity. The execution, delivery and performance by the Purchaser of this Agreement
has been and will remain duly and validly authorized by all necessary corporate action. This
Agreement constitutes and will continue to constitute a legal, valid and enforceable obligation of
the Purchaser. 24
Section 9.02 Assistance. To the extent possible, the Purchaser shall cooperate with and assist the Seller as
requested by the Seller, in carrying out Seller's covenants, agreements duties and responsibilities
under the Purchase Agreement and in connection 24
Section 9.02 therewith shall execute and deliver all such papers, documents and instruments as may be necessary
and appropriate in furtherance thereof. 25
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 10.01 Due Organization and Authority. The Seller is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation and has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified and in good standing in each
state where a Mortgaged Property is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary to ensure the
enforceability of the related Mortgage Loan in accordance with the terms of this Agreement; the
Seller has the full corporate power and authority to execute and deliver this Agreement and to
perform in accordance herewith; the execution, delivery and performance of this Agreement (including
all instruments or transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of the Seller; and all requisite
corporate action has been taken by the Seller to make this Agreement valid and binding upon the
Seller in accordance with its terms; 25
Section 10.02 Ordinary Course of Business. The consummation of the transactions contemplated by this Agreement are
in the ordinary course of business of the Seller; 25
Section 10.03 No Conflicts. Neither the execution and delivery of this Agreement, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms,
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conditions or provisions of the Seller's charter or by-laws or any legal restriction or any
agreement or instrument to which the Seller is now a party or by which it is bound, or constitute a
default or result in an acceleration under any of the foregoing, or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Seller or its property is subject, or
impair the ability of the Purchaser to realize on the Mortgage Loans, or impair the value of the
Mortgage Loans; 25
Section 10.04 Ability to Service. The Seller is an approved seller/servicer of conventional residential mortgage
loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, with the facilities, procedures, and experienced personnel
necessary for the sound servicing of mortgage loans of the same type as the Mortgage Loans. The
Seller is in good standing to sell mortgage loans to and service mortgage loans for ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac, and no event has occurred, including but not limited to a change in insurance coverage,
which would make the Seller unable to comply with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility requirements
or which would require notification to either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac; 25
Section 10.05 Ability to Perform. The Seller does not believe, nor does it have any reason or cause to believe,
that it cannot perform each and every covenant contained in this Agreement; 26
Section 10.06 No Litigation Pending. There is no action, suit, proceeding or investigation pending or threatened
against the Seller which, either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or assets of the Seller,
or in any material impairment of the right or ability of the Seller to carry on its business
substantially as now conducted, or in any material liability on the part of the Seller, or which
would draw into question the validity of this Agreement or the Mortgage Loans or of any action taken
or to be taken in connection with the obligations of the Seller contemplated herein, or which would
be likely to impair materially the ability of the Seller to perform under the terms of this
Agreement; 26
Section 10.07 No Consent Required. No consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance by the Seller of or
compliance by the Seller with this Agreement or the servicing of the Mortgage Loans as evidenced by
the consummation of the transactions contemplated by this Agreement, or if required, such approval
has been obtained prior to the initial Closing Date; 26
Section 10.08 No Untrue Information. Neither this Agreement nor any statement, report or other document furnished
or to be furnished pursuant to this Agreement or in connection with the transactions contemplated
hereby contains any untrue statement of fact or omits to state a fact necessary to make the
statements contained therein not misleading. 26
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ARTICLE XI
DEFAULT
Section 11.01 Events of Default. The following shall constitute an Event of Default under this Agreement on the
part of the Seller: 26
Section 11.02 Waiver of Defaults. By a written notice, the Purchaser may waive any default by the Seller in the
performance of its obligations hereunder and its consequences. Upon any waiver of a past default,
such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the extent expressly so
waived. 27
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Notices. All notices, requests, demands and other communications which are required or permitted to
be given under this Agreement shall be in writing and shall be deemed to have been duly given upon
the delivery or mailing thereof, as the case may be, sent by registered or certified mail, return
receipt requested: 27
Section 12.02 Waivers. Either the Seller or Purchaser may upon consent of all parties, by written notice to the
others: 28
Section 12.03 Entire Agreement; Amendment. This Agreement and the Purchase Agreement constitute the entire
agreement between the parties with respect to servicing of the Mortgages during the Interim Period.
This Agreement may be amended and any provision hereof waived, but, only in writing signed by the
party against whom such enforcement is sought. 28
Section 12.04 Execution; Binding Effect. This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so executed, shall be deemed
to be an original; such counterparts, together, shall constitute one and the same agreement. Subject
to Section 8.03, this Agreement shall inure to the benefit of and be binding upon the Seller and the
Purchaser and their respective successors and assigns. 28
Section 12.05 Headings. Headings of the Articles and Sections in this Agreement are for reference purposes only
and shall not be deemed to have any substantive effect. 28
Section 12.06 Applicable Law. This Agreement shall be construed in accordance with the laws of the State of New
York. 28
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Section 12.07 Relationship of Parties. Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties. The duties and 28
Section 12.07 responsibilities of the Seller shall be rendered by them as independent contractors and not as an
agent of Purchaser. The Seller shall have full control of all of its acts, doings, proceedings,
relating to or requisite in connection with the discharge of its duties and responsibilities under
this Agreement. 29
Section 12.08 Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement. 29
Section 12.09 Recordation of Assignments of Mortgage. To the extent permitted by applicable law, each of the
Assignments of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected at the Seller's expense in the event recordation is
either necessary under applicable law or requested by the Purchaser at its sole option. 29
Section 12.10 Appointment and Designation of Master Servicer. The Purchaser hereby appoints and designates Aurora
Loan Services, Inc. as its master servicer (the "Master Servicer") for the Mortgage Loans subject to
this Agreement. The Seller is hereby authorized and instructed to take any and all instructions with
respect to servicing the Mortgage Loans hereunder as if the Master Servicer were the Purchaser
hereunder. The authorization and instruction set forth herein shall remain in effect until such time
as the Seller shall receive written instruction from the Purchaser that such authorization and
instruction is terminated. 29
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INVNUM
EXHIBITS
EXHIBIT 1 FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT 2 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 3 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 4 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 6 FORM OF ACKNOWLEDGMENT AGREEMENT
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FLOW INTERIM SERVICING AGREEMENT
This Flow Interim Servicing Agreement (the "Agreement") is entered into as
of the tenth day of June, 2002 by and between SIB Mortgage Corp. (the "Seller"),
a New Jersey corporation and ▇▇▇▇▇▇ Brothers Bank, FSB, a federal savings bank
(the "Purchaser").
WHEREAS, the Purchaser and Seller entered into a Flow Mortgage Loan
Purchase and Warranties Agreement dated as of the date hereof (the "Purchase
Agreement") pursuant to which from time to time the Purchaser purchased from the
Seller certain conventional, residential, fixed and adjustable rate first
mortgage loans (the "Mortgage Loans") delivered as whole loans servicing
released; and
WHEREAS, the Purchaser desires to have the Seller service the Mortgage
Loans in each Mortgage Loan Package during the period between the related
Closing Date and the related Transfer Date (the "Interim Period"), the Seller
desires to service and administer such Mortgage Loans on behalf of the Purchaser
during the Interim Period, and the parties desire to provide the terms and
conditions of such interim servicing by the Seller.
NOW, THEREFORE, in consideration of the mutual covenants made herein and
for other good and valuable consideration the sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. All capitalized terms not otherwise defined
herein have the respective meanings set forth in the Purchase Agreement. The
following terms are defined as follows (except as otherwise agreed by the
parties).
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Agreement: This agreement between the Purchaser and the Seller for the
interim servicing and administration of the Mortgage Loans.
Appropriate Federal Banking Agency: Appropriate Federal Banking Agency
shall have the meaning ascribed to it by Section 1813(q) of Title 12 of the
United States Code, as amended from time to time.
Custodial Account: The separate account or accounts created and maintained
pursuant to Section 2.04.
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.
Eligible Investments: Any one or more of the obligations and securities
listed below which investment provides for a date of maturity not later than the
Determination Date in each month:
(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; and
(ii) federal funds, demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution
or trust company incorporated or organized 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, so long as at the
time of such investment or contractual commitment providing for such
investment the commercial paper or other short-term debt obligations of
such depository institution or trust company (or, in the case of a
depository institution or trust company which is the principal subsidiary
of a holding company, the commercial paper or other short-term debt
obligations of such holding company) are rated "P-1" by ▇▇▇▇▇'▇ Investors
Service, Inc. and the long-term debt obligations of such holding company)
are rated "P-1" by ▇▇▇▇▇'▇ Investors Service, Inc. and the long-term debt
obligations of such depository institution or trust company (or, in the
case of a depository institution or trust company which is the principal
subsidiary of a holding company, the long-term debt obligations of such
holding company) are rated at least "Aa" by ▇▇▇▇▇'▇ Investors Service, Inc.
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 2.06.
Escrow Payment: With respect to any Mortgage Loan, the amounts constituting
ground rents, taxes, assessments, water rates, sewer rents, municipal charges,
mortgage insurance premiums, fire and hazard insurance premiums, condominium
charges, and any other payments required to be escrowed by the Mortgagor with
the mortgagee pursuant to the Mortgage or any other document.
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Event of Default: Any one of the conditions or circumstances enumerated in
Section 11.01.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ Selling Guide and the ▇▇▇▇▇▇ Mae
Servicing Guide and all amendments or additions thereto.
Fidelity Bond: A fidelity bond to be maintained by the Seller pursuant to
Section 2.13.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall have
the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interim Period: With respect to any Mortgage Loan, the period between the
related Closing Date and the related Transfer Date.
Liquidation Proceeds: Cash received in connection with the liquidation of a
defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage
Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the related
Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage Loan.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 2.12.
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.
PMI Policy: A policy of primary mortgage guaranty insurance issued by a
Qualified Insurer, as required by this Agreement with respect to certain
Mortgage Loans.
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.
Purchase Agreement: The Flow Mortgage Loan Purchase and Warranties
Agreement between the Purchaser and the Seller related to the purchase of the
Mortgage Loans dated as of the date hereof.
Qualified Depository: Staten Island Bank or such other depository the
accounts of which are insured by the FDIC through the BIF or the SAIF.
Qualified Insurer: A mortgage guaranty insurance company duly authorized
and licensed where required by law to transact mortgage guaranty insurance
business and approved as an insurer by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
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Remittance Date: The 10th day (or if such 10th day is not a Business Day,
the first Business Day immediately following) of any month, beginning with the
first Remittance Date.
REO Disposition: The final sale by the Seller of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 2.17.
REO Property: A Mortgaged Property acquired by the Seller on behalf of the
Purchaser through foreclosure or by deed in lieu of foreclosure, as described in
Section 2.17.
SAIF: The Savings Association Insurance Fund, or any successor thereto.
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 Seller of its servicing obligations,
including, but not limited to, the cost of (a) the preservation, restoration and
protection of the Mortgaged Property, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of the
Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage and (d) compliance with the obligations under Section 2.08.
Servicing Fee: With respect to each Mortgage Loan, an amount equal to $7.00
per month. Such fee shall be payable monthly and shall be pro rated for any
portion of a month during which the Mortgage Loans is serviced pursuant to this
Agreement. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to the
extent permitted by Section 2.05) of such Monthly Payment collected by the
Seller, or as otherwise provided under Section 2.05.
Servicing File: With respect to each Mortgage Loan, the file retained by
the Seller 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 on Exhibit B to the Purchase Agreement.
Servicing Officer: Any officer of the Seller 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 Seller to the Purchaser upon
request, as such list may from time to time be amended.
Transfer Date: Shall have the meaning provided in Section 6.03 hereof.
ARTICLE II
SERVICING
Section 2.01 Seller to Act as Servicer. With respect to the Mortgage Loans
in each Mortgage Loan Package purchased by the Purchaser, from and after the
related Closing
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Date, the Seller, as an independent contractor, shall service and administer the
Mortgage Loans during the related Interim Period, by execution and delivery of
the related Acknowledgement Agreement, which shall contain the related Closing
Date and Transfer Dates therein, in the form attached hereto as Exhibit 6, and
shall have full power and authority, acting alone, to do any and all things in
connection with such servicing and administration which the Seller may deem
necessary or desirable, consistent with the terms of this Agreement and with
Accepted Servicing Practices.
Consistent with the terms of this Agreement, the Seller may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if in the Seller's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser, provided, however, that unless the Seller has obtained the prior
written consent of the Purchaser, the Seller shall not permit any modification
with respect to any Mortgage Loan that would change the Mortgage Interest Rate,
defer or forgive the 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 permits the deferral of interest or principal payments on any
Mortgage Loan, the Seller 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 2.04, 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 Seller shall be entitled to reimbursement for such advances to
the same extent as for all other advances made pursuant to Section 2.05. Without
limiting the generality of the foregoing, the Seller shall continue, and is
hereby authorized and empowered, to execute and deliver on behalf of itself and
the Purchaser, all instruments of satisfaction or cancellation, or of partial or
full release, discharge and all other comparable instruments, with respect to
the Mortgage Loans and with respect to the Mortgaged Properties. If reasonably
required by the Seller, the Purchaser shall furnish the Seller with any powers
of attorney and other documents necessary or appropriate to enable the Seller to
carry out its servicing and administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Seller shall employ
procedures (including collection procedures) and exercise the same care that it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
and the Purchaser's reliance on the Seller.
The Seller shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe, the Seller 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, Seller shall be under no obligation to deal with any Person with
respect to this Agreement or the Mortgage Loans unless the Seller has been
notified of such transfers as provided in this Section 2.01. The Purchaser may
sell and transfer, in whole or in part, the Mortgage Loans, provided that no
such sale and transfer shall be binding upon Seller unless such transferee shall
agree in writing in the form of the Assignment and
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Assumption Agreement attached to the Purchase Agreement as Exhibit G, to be
bound by the terms of this Agreement and the Purchase Agreement, and an executed
copy of the same shall have been delivered to the Seller. Upon receipt thereof,
Seller shall ▇▇▇▇ its books and records to reflect the ownership of the Mortgage
Loans by such assignee, and the previous Purchaser shall be released from its
obligations hereunder. This Agreement shall be binding upon and inure to the
benefit of the Purchaser and Seller and their permitted successors, assignees
and designees.
Section 2.02 Liquidation of Mortgage Loans. In the event that any payment
due under any Mortgage Loan and not postponed pursuant to Section 2.01 is not
paid when the same becomes due and payable, or in the event the Mortgagor fails
to perform any other covenant or obligation under the Mortgage Loan and such
failure continues beyond any applicable grace period, the Seller shall take such
action as (1) the Seller would take under similar circumstances with respect to
a similar mortgage loan held for its own account for investment, (2) shall be
consistent with Accepted Servicing Practices, (3) the Seller shall determine
prudently to be in the best interest of Purchaser, and (4) is consistent with
any related PMI Policy. In the event that any payment due under any Mortgage
Loan is not postponed pursuant to Section 2.01 and remains delinquent for a
period of 90 days or any other default continues for a period of 90 days beyond
the expiration of any grace or cure period, the Seller shall commence
foreclosure proceedings, provided that, prior to commencing foreclosure
proceedings, the Seller shall notify the Purchaser in writing of the Seller's
intention to do so, and the Seller shall not commence foreclosure proceedings if
the Purchaser objects to such action within 10 Business Days of receiving such
notice. In such connection, the Seller shall from its own funds make all
necessary and proper Servicing Advances, provided, however, that the Seller
shall not be required to expend its own funds in connection with any foreclosure
or towards the restoration or preservation of any Mortgaged Property, unless it
shall determine (a) that such preservation, restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan to Purchaser after
reimbursement to itself for such expenses and (b) that such expenses will be
recoverable by it either through Liquidation Proceeds (respecting which it shall
have priority for purposes of withdrawals from the Custodial Account pursuant to
Section 2.05) or through Insurance Proceeds (respecting which it shall have
similar priority).
Section 2.03 Collection of Mortgage Loan Payments. Continuously from the
date hereof until the related Transfer Date the Seller shall proceed diligently
to collect all payments due under each of the Mortgage Loans when the same shall
become due and payable and shall take special care in ascertaining and
estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loans and each related Mortgaged Property,
to the end that the installments payable by the Mortgagors will be sufficient to
pay such charges as and when they become due and payable.
Section 2.04 Establishment of and Deposits to Custodial Account. The Seller
shall segregate and hold all funds collected and received pursuant to the
Mortgage Loans separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Custodial Accounts, in the form of
time deposit or demand accounts, titled "SIB Mortgage Corp. in trust for ▇▇▇▇▇▇
Brothers Bank, FSB, Residential Fixed and Adjustable Rate Mortgage Loans, Group
No. 2002-2 and various Mortgagors." The Custodial Account shall be established
with a Qualified Depository acceptable to the Purchaser. Any funds deposited in
the
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Custodial Account shall at all times be fully insured to the full extent
permitted under applicable law. Funds deposited in the Custodial Account may be
drawn on by the Seller in accordance with Section 2.05. The creation of any
Custodial Account shall be evidenced by a certification in the form of Exhibit 2
hereto, in the case of an account established with the Seller, or by a letter
agreement in the form of Exhibit 3 hereto, in the case of an account held by a
depository other than the Seller. A copy of such certification or letter
agreement shall be furnished to the Purchaser and, upon request, to any
subsequent Purchaser.
The Seller shall deposit in the Custodial Account on a daily basis, and
retain therein, the following collections received by the Seller after the
related Cut-off Date:
(i) all payments on account of principal 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) all Insurance Proceeds including amounts required to be deposited
pursuant to Section 2.11 (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 Section 2.15), Section 2.12
and Section 2.16;
(v) all Condemnation Proceeds which are not applied to the restoration
or repair of the Mortgaged Property or released to the Mortgagor in
accordance with Section 2.15;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 2.01, 2.10, 2.17, 4.01 or 4.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Section 8 of the Purchase Agreement; and
(viii) any amounts required to be deposited by the Seller pursuant to
Section 2.11 in connection with the deductible clause in any blanket hazard
insurance policy.
The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 4.01, need not be deposited by the
Seller into the Custodial Account. Any interest paid on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit of
the Seller and the Seller shall be entitled to retain and withdraw such interest
from the Custodial Account pursuant to Section 2.05.
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Section 2.05 Permitted Withdrawals From Custodial Account. The Seller
shall, from time to time, withdraw funds from the Custodial Account for the
following purposes:
(i) to make payments to the Purchaser in the amounts and in the manner
provided for in Section 3.01;
(ii) to reimburse itself for unreimbursed Servicing Advances, any
unpaid Servicing Fees and for unreimbursed advances of Seller funds made
pursuant to Section 2.17, the Seller's right to reimburse itself pursuant
to this subclause (iii) with respect to any Mortgage Loan being limited to
related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and
such other amounts as may be collected by the Seller from the Mortgagor or
otherwise relating to the Mortgage Loan, it being understood that, in the
case of any such reimbursement, the Seller's right thereto shall be prior
to the rights of the Purchaser except that, where the Seller is required to
repurchase a Mortgage Loan pursuant to Section 8 of the Purchase Agreement
or Section 4.02 of this Agreement, the Seller's right to such reimbursement
shall be subsequent to the payment to the Purchaser of the Repurchase Price
pursuant to such sections and all other amounts required to be paid to the
Purchaser with respect to such Mortgage Loan;
(iii) to pay itself interest on funds deposited in the Custodial
Account;
(iv) to reimburse itself for expenses incurred and reimbursable to it
pursuant to Section 4.03;
(v) to clear and terminate the Custodial Account upon the termination
of this Agreement; and
(vi) to withdraw funds deposited in error.
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Seller shall withdraw all funds from the Custodial Account
except for those amounts which, pursuant to Section 3.01, the Seller is not
obligated to remit on such Remittance Date. The Seller may use such withdrawn
funds only for the purposes described in this Section 2.05.
Section 2.06 Establishment of and Deposits to Escrow Account. The Seller
shall segregate and hold all funds collected and received pursuant to a Mortgage
Loan constituting Escrow Payments separate and apart from any of its own funds
and general assets and shall establish and maintain one or more Escrow Accounts,
in the form of time deposit or demand accounts, titled, "SIB Mortgage Corp., in
trust for ▇▇▇▇▇▇ Brothers Bank, FSB Residential Fixed and Adjustable Rate
Mortgage Loans, Group No. 2002-2, and various Mortgagors". The Escrow Accounts
shall be established with a Qualified Depository, in a manner which shall
provide maximum available insurance thereunder. Funds deposited in the Escrow
Account may be drawn on by the Seller in accordance with Section 2.07. The
creation of any Escrow Account shall be evidenced by a certification in the form
of Exhibit 4 hereto, in the case of an account established with the Seller, or
by a letter agreement in the form of Exhibit 5 hereto, in the case of an account
held by a depository other than the Seller. A copy of such certification shall
be furnished to the Purchaser and, upon request, to any subsequent Purchaser.
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The Seller 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; and
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property.
The Seller shall make withdrawals from the Escrow Account only to effect
such payments as are required under this Agreement, as set forth in Section
2.07. The Seller shall be entitled to retain any interest paid on funds
deposited in the Escrow Account by the depository institution, other than
interest on escrowed funds required by law to be paid to the Mortgagor. To the
extent required by law, the Seller shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes.
Section 2.07 Permitted Withdrawals From Escrow Account. Withdrawals from
the Escrow Account or Accounts may be made by the Seller only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments for
the related Mortgage;
(ii) to reimburse the Seller for any Servicing Advance made by the
Seller pursuant to Section 2.08 with respect to a related Mortgage Loan,
but only from amounts received on the related Mortgage Loan which represent
late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan;
(iv) for transfer to the Custodial Account and application to reduce
the principal balance of the Mortgage Loan in accordance with the terms of
the related Mortgage and Mortgage Note;
(v) for application to restoration or repair of the Mortgaged Property
in accordance with the procedures outlined in Section 2.15;
(vi) to pay to the Seller, or any Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow Account;
(vii) to clear and terminate the Escrow Account on the termination of
this Agreement; and
(viii) to withdraw funds deposited in error.
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Section 2.08 Payment of Taxes, Insurance and Other Charges. With respect to
each Mortgage Loan, the Seller shall maintain accurate records reflecting the
status of ground rents, taxes, assessments, water rates, sewer rents, and other
charges which are or may become a lien upon the Mortgaged Property and the
status of PMI Policy premiums and fire and hazard insurance coverage and shall
obtain, from time to time, all bills for the payment of such charges (including
renewal premiums) and shall effect payment thereof prior to the applicable
penalty or termination date, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and accumulated
by the Seller in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage. To the extent that a Mortgage does not provide for Escrow
Payments, the Seller shall determine that any such payments are made by the
Mortgagor at the time they first become due. The Seller assumes full
responsibility for the timely payment of all such bills and shall effect timely
payment of all such charges irrespective of each Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments, and the
Seller shall make advances from its own funds to effect such payments.
Section 2.09 PMI Obligations. The Servicer shall comply with all provisions
of applicable state and federal law relating to the cancellation of, or
collection of premiums with respect to, PMI Policies, including, but not limited
to, the provisions of the Homeowners Protection Act of 1998, and all regulations
promulgated thereunder, as amended from time to time. If the Mortgagor fails to
pay any PMI Policy premium, the Seller shall be obligated to make such premium
payments.
Section 2.10 Protection of Accounts. The Seller may transfer the Custodial
Account or the Escrow Account to a different Qualified Depository from time to
time. Such transfer shall be made only upon obtaining the consent of the
Purchaser, which consent shall not be withheld unreasonably.
The Seller shall bear any expenses, losses or damages sustained by the
Purchaser because the Custodial Account and/or the Escrow Account are not demand
deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow Account may at
the option of the Seller be invested in Eligible Investments; provided that in
the event that amounts on deposit in the Custodial Account or the Escrow Account
exceed the amount fully insured by the FDIC (the "Insured Amount") the Seller
shall be obligated to invest the excess amount over the Insured Amount in
Eligible Investments on the same Business Day as such excess amount becomes
present in the Custodial Account or the Escrow Account. Any such Eligible
Investment shall mature no later than the Determination Date next following the
date of such Eligible Investment, provided, however, that if such Eligible
Investment is an obligation of a Qualified Depository (other than the Seller)
that maintains the Custodial Account or the Escrow Account, then such Eligible
Investment may mature on such Remittance Date. Any such Eligible Investment
shall be made in the name of the Seller in trust for the benefit of the
Purchaser. All income on or gain realized from any such Eligible Investment
shall be for the benefit of the Seller and may be withdrawn at any time by the
Seller. Any losses incurred in respect of any such investment shall be deposited
in the Custodial Account or the Escrow Account, by the Seller out of its own
funds immediately as realized.
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Section 2.11 Maintenance of Hazard Insurance. The Seller shall cause to be
maintained for each Mortgage Loan, hazard insurance such that all buildings upon
the Mortgaged Property are insured by a generally acceptable insurer rated A:VI
or better in the current Best's Key Rating Guide ("Best's") against loss by
fire, hazards of extended coverage and such other hazards as are customary in
the area where the Mortgaged Property is located, in an amount which is at least
equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the proceeds
thereof shall be sufficient to prevent the Mortgagor or the loss payee from
becoming a co-insurer.
If upon origination of the Mortgage Loan, the related Mortgaged Property
was located in an area identified in the Federal Register by the Flood Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available) a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect with a
generally acceptable insurance carrier rated A:VI or better in Best's in an
amount representing coverage equal to the lesser of (i) the minimum amount
required, under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. If at any time during the term of the
Mortgage Loan, the Seller 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 Seller 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 thirty (30) days after
such notification, the Seller shall immediately force place the required flood
insurance on the Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project, the Seller
shall verify that the coverage required of the owner's association, including
hazard, flood, liability, and fidelity coverage, is being maintained in
accordance with then current ▇▇▇▇▇▇ Mae requirements, and secure from the
owner's association its agreement to notify the Seller promptly of any change in
the insurance coverage or of any condemnation or casualty loss that may have a
material effect on the value of the Mortgaged Property as security.
The Seller shall cause to be maintained on each Mortgaged Property
earthquake or such other or additional insurance as may be required pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance, or pursuant to the requirements of any
private mortgage guaranty insurer, or as may be required to conform with
Accepted Servicing Practices.
In the event that the Purchaser or the Seller shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and risks
not covered by the insurance required to be maintained by the Mortgagor pursuant
to the terms of the Mortgage, the Seller shall communicate and consult with the
Mortgagor with respect to the need for such
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insurance and bring to the Mortgagor's attention the desirability of
protection of the Mortgaged Property.
All policies required hereunder shall name the Seller as loss payee and
shall be endorsed with standard or New York mortgagee clauses, without
contribution, which shall provide for at least 30 days prior written notice of
any cancellation, reduction in amount or material change in coverage.
The Seller shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent, provided, however, that the
Seller shall not accept any such insurance policies from insurance companies
unless such companies are rated A:VI or better in Best's and are licensed to do
business in the jurisdiction in which the Mortgaged Property is located. The
Seller shall determine that such policies provide sufficient risk coverage and
amounts, that they insure the property owner, and that they properly describe
the property address. The Seller shall furnish to the Mortgagor a formal notice
of expiration of any such insurance in sufficient time for the Mortgagor to
arrange for renewal coverage by the expiration date.
Pursuant to Section 2.04, any amounts collected by the Seller under any
such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Seller's normal servicing procedures as
specified in Section 2.15) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 2.05.
Section 2.12 Maintenance of Mortgage Impairment Insurance. In the event
that the Seller shall obtain and maintain a blanket policy insuring against
losses arising from fire and hazards covered under extended coverage on all of
the Mortgage Loans, then, to the extent such policy provides coverage in an
amount equal to the amount required pursuant to Section 2.11 and otherwise
complies with all other requirements of Section 2.11, it shall conclusively be
deemed to have satisfied its obligations as set forth in Section 2.11. Any
amounts collected by the Seller under any such policy relating to a Mortgage
Loan shall be deposited in the Custodial Account subject to withdrawal pursuant
to Section 2.05. Such policy may contain a deductible clause, in which case, in
the event that there shall not have been maintained on the related Mortgaged
Property a policy complying with Section 2.11, and there shall have been a loss
which would have been covered by such policy, the Seller shall deposit in the
Custodial Account at the time of such loss the amount not otherwise payable
under the blanket policy because of such deductible clause, such amount to be
deposited from the Seller's funds, without reimbursement therefor. Upon request
of the Purchaser, the Seller shall cause to be delivered to the Purchaser a
certified true copy of such policy and a statement from the insurer thereunder
that such policy shall in no event be terminated or materially modified without
30 days' prior written notice to the Purchaser.
Section 2.13 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. The Seller shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds,
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money, documents or papers relating to the Mortgage Loans ("Seller Employees").
Any such Fidelity Bond and Errors and Omissions Insurance Policy shall be in the
form of the Mortgage Banker's Blanket Bond and shall protect and insure the
Seller against losses, including forgery, theft, embezzlement, fraud, errors and
omissions and negligent acts of such Seller Employees. Such Fidelity Bond and
Errors and Omissions Insurance Policy also shall protect and insure the Seller
against losses in connection with the release or satisfaction of a Mortgage Loan
without having obtained payment in full of the indebtedness secured thereby. No
provision of this Section 2.13 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Seller from its duties
and obligations as set forth in this Agreement. The minimum coverage under any
such bond and insurance policy shall be at least equal to the corresponding
amounts required by ▇▇▇▇▇▇ Mae in the ▇▇▇▇▇▇ ▇▇▇ Guides or by ▇▇▇▇▇▇▇ Mac in the
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' & Servicers' Guide. Upon the request of the Purchaser, the
Seller shall cause to be delivered to the Purchaser a certified true copy of
such fidelity bond and insurance policy and a statement from the surety and the
insurer that such fidelity bond and insurance policy shall in no event be
terminated or materially modified without 30 days' prior written notice to the
Purchaser.
Section 2.14 Inspections. The Seller shall inspect the Mortgaged Property
as often as deemed necessary by the Seller to assure itself that the value of
the Mortgaged Property is being preserved. In addition, if any Mortgage Loan is
more than 60 days delinquent, the Seller immediately shall inspect the Mortgaged
Property and shall conduct subsequent inspections in accordance with Accepted
Servicing Practices or as may be required by the primary mortgage guaranty
insurer. The Seller shall keep a written report of each such inspection.
Section 2.15 Restoration of Mortgaged Property. The Seller need not obtain
the approval of the Purchaser prior to releasing any Insurance Proceeds or
Condemnation Proceeds to the Mortgagor to be applied to the restoration or
repair of the Mortgaged Property if such release is in accordance with Accepted
Servicing Practices. At a minimum, the Seller shall comply with the following
conditions in connection with any such release of Insurance Proceeds or
Condemnation Proceeds:
(i) the Seller shall receive satisfactory independent verification of
completion of repairs and issuance of any required approvals with respect
thereto;
(ii) the Seller shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens;
(iii) the Seller shall verify that the Mortgage Loan is not in
default; and
(iv) pending repairs or restoration, the Seller shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the Seller is hereby
empowered to endorse any loss draft issued in respect of such a claim in the
name of the Purchaser.
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Section 2.16 Maintenance of PMI Policy; Claims. Except where disclosed to
the Purchaser on the related Mortgage Loan Schedule, with respect to each
Mortgage Loan with a LTV in excess of 80%, the Seller shall, without any cost to
the Purchaser, maintain or cause the Mortgagor to maintain in full force and
effect a PMI Policy insuring that portion of the Mortgage Loan in excess of 75%
of value, and shall pay or shall cause the Mortgagor to pay the premium thereon
on a timely basis, until the LTV of such Mortgage Loan is reduced to 80%. In the
event that such PMI Policy shall be terminated, the Seller shall obtain from
another Qualified Insurer a comparable replacement policy, with a total coverage
equal to the remaining coverage of such terminated PMI Policy. If the insurer
shall cease to be a Qualified Insurer, the Seller shall determine whether
recoveries under the PMI Policy are jeopardized for reasons related to the
financial condition of such insurer, it being understood that the Seller shall
in no event have any responsibility or liability for any failure to recover
under the PMI Policy for such reason. If the Seller determines that recoveries
are so jeopardized, it shall notify the Purchaser and the Mortgagor, if
required, and obtain from another Qualified Insurer a replacement insurance
policy. The Seller shall not take any action which would result in noncoverage
under any applicable PMI Policy of any loss which, but for the actions of the
Seller would have been covered thereunder. In connection with any assumption or
substitution agreement entered into or to be entered into pursuant to Section
4.01, the Seller shall promptly notify the insurer under the related PMI Policy,
if any, of such assumption or substitution of liability in accordance with the
terms of such PMI Policy and shall take all actions which may be required by
such insurer as a condition to the continuation of coverage under such PMI
Policy. If such PMI Policy is terminated as a result of such assumption or
substitution of liability, the Seller shall obtain a replacement PMI Policy as
provided above.
In connection with its activities as servicer, the Seller agrees to prepare
and present, on behalf of itself and the Purchaser, claims to the insurer under
any PMI Policy in a timely fashion in accordance with the terms of such PMI
Policy and, in this regard, to take such action as shall be necessary to permit
recovery under any PMI Policy respecting a defaulted Mortgage Loan. Pursuant to
Section 2.04, any amounts collected by the Seller under any PMI Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
2.05.
Section 2.17 Title, Management and Disposition of REO Property. In the
event that title to any Mortgaged Property is acquired in foreclosure or by deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in the
name of the Purchaser, or in the event the Purchaser is not authorized or
permitted to hold title to real property in the state where the REO Property is
located, or would be adversely affected under the "doing business" or tax laws
of such state by so holding title, the deed or certificate of sale shall be
taken in the name of such Person or Persons as shall be consistent with an
Opinion of Counsel obtained by the Seller from any attorney duly licensed to
practice law in the state where the REO Property is located. The Person or
Persons holding such title other than the Purchaser shall acknowledge in writing
that such title is being held as nominee for the Purchaser.
The Seller shall manage, conserve, protect and operate each REO Property
for the Purchaser solely for the purpose of its prompt disposition and sale. The
Seller, either itself or through an agent selected by the Seller, shall manage,
conserve, protect and operate the REO Property in the same manner that it
manages, conserves, protects and operates other foreclosed
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property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Seller shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
the Seller deems to be in the best interest of the Purchaser.
The Seller shall use its best efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event within one year
after title has been taken to such REO Property, unless the Seller determines,
and gives an appropriate notice to the Purchaser to such effect, that a longer
period is necessary for the orderly liquidation of such REO Property. If a
period longer than one year is permitted under the foregoing sentence and is
necessary to sell any REO Property, (i) the Seller shall report monthly to the
Purchaser as to the progress being made in selling such REO Property and (ii)
if, with the written consent of the Purchaser, a purchase money mortgage is
taken in connection with such sale, such purchase money mortgage shall name the
Seller as mortgagee, and such purchase money mortgage shall not be held pursuant
to this Agreement, but instead a separate participation agreement among the
Seller and Purchaser shall be entered into with respect to such purchase money
mortgage.
The Seller 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,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
The disposition of REO Property shall be carried out by the Seller at such
price, and upon such terms and conditions, as the Seller deems to be in the best
interests of the Purchaser. The proceeds of sale of the REO Property shall be
promptly deposited in the Custodial Account. As soon as practical thereafter the
expenses of such sale shall be paid and the Seller shall reimburse itself for
any related unreimbursed Servicing Advances, unpaid Servicing Fees and
unreimbursed advances made pursuant to this Section, and on the Remittance Date
immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Purchaser.
With respect to each REO Property, the Seller shall hold all funds
collected and received in connection with the operation of the REO Property in
the Custodial Account. The Seller shall cause to be deposited on a daily basis
upon the receipt thereof in each Custodial Account all revenues received with
respect to the conservation and disposition of the related REO Property.
Notwithstanding the foregoing, at any time and from time to time, the
Purchaser may at its election terminate this Agreement with respect to one or
more REO Properties as provided by Section 6.03(d).
Section 2.18 Permitted Withdrawals with respect to REO Property. The Seller
shall withdraw REO funds on deposit in the Custodial Account with respect to
each related REO Property necessary for the proper operation, management and
maintenance of the REO Property, including the cost of maintaining any hazard
insurance pursuant to Section 2.11 and the fees of
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any managing agent acting on behalf of the Seller. The Seller shall make monthly
distributions on each Remittance Date to the Purchaser of the net cash flow from
the REO Property (which shall equal the revenues from such REO Property net of
the expenses described in Section 2.17 and of any reserves reasonably required
from time to time to be maintained to satisfy anticipated liabilities for such
expenses).
Section 2.19 Real Estate Owned Reports. Together with the statement
furnished pursuant to Section 2.20, the Seller shall furnish to the Purchaser on
or before the 15th day of each month a statement with respect to any REO
Property covering the operation of such REO Property for the previous month and
the Seller's efforts in connection with the sale of such REO Property and any
rental of such REO Property incidental to the sale thereof for the previous
month. That statement shall be accompanied by such other information as the
Purchaser shall reasonably request.
Section 2.20 Liquidation Reports. Upon the foreclosure sale of any
Mortgaged Property or the acquisition thereof by the Purchaser pursuant to a
deed in lieu of foreclosure, the Seller shall submit to the Purchaser a
liquidation report with respect to such Mortgaged Property.
Section 2.21 Notification of Adjustments. With respect to each ARM Mortgage
Loan, the Seller shall adjust the Mortgage Interest Rate on the related Interest
Rate Adjustment Date in compliance with the requirements of applicable law and
the related Mortgage and Mortgage Note. The Seller shall execute and deliver any
and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Interest Rate
adjustments. The Seller shall promptly, upon written request therefor, deliver
to the Purchaser such notifications and any additional applicable data regarding
such adjustments and the methods used to calculate and implement such
adjustments. Upon the discovery by the Seller or the receipt of notice from the
Purchaser that the Seller has failed to adjust a Mortgage Interest Rate in
accordance with the terms of the related Mortgage Note, the Seller shall
immediately deposit in the Custodial Account from its own funds the amount of
any interest loss or deferral caused the Purchaser thereby.
Section 2.22 Reports of Foreclosures and Abandonments of Mortgaged
Property. Following the foreclosure sale or abandonment of any Mortgaged
Property, the Seller shall report such foreclosure or abandonment as required
pursuant to Section 6050J of the Code.
ARTICLE III
PAYMENTS TO PURCHASER
Section 3.01 Remittances. On each Remittance Date the Seller shall remit by
wire transfer of immediately available funds to the Purchaser (a) all amounts
deposited in the Custodial Account as of the close of business on the
Determination Date (net of charges against or withdrawals from the Custodial
Account pursuant to Section 2.05), plus (b) all amounts, if any, which the
Seller is obligated to distribute pursuant to Section 2.03.
With respect to any remittance received by the Purchaser after the second
Business Day following the Business Day on which such payment was due, the
Seller shall pay
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to the Purchaser interest on any such late payment at an annual rate equal to
the Prime Rate, adjusted as of the date of each change, plus three percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be deposited in the Custodial Account by the Seller on
the date such late payment is made and shall cover the period commencing with
the day following such second Business Day and ending with the Business Day on
which such payment is made, both inclusive. Such interest shall be remitted
along with the distribution payable on the next succeeding Remittance Date. The
payment by the Seller of any such interest shall not be deemed an extension of
time for payment or a waiver of any Event of Default by the Seller.
Section 3.02 Statements to Purchaser. On or prior to the earlier to occur
of the 3rd Business Day or the 5th calendar day of each month, the Seller shall
furnish to the Purchaser a Monthly Remittance Advice, with a trial balance
report attached thereto, in the form of Exhibit 1 annexed hereto in hard copy
and electronic medium mutually acceptable to the parties as to the preceding
calendar month.
In addition, not more than 60 days after the end of each calendar year, the
Seller 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.
Such obligation of the Seller shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the Seller
pursuant to any requirements of the Internal Revenue Code as from time to time
are in force.
The Seller shall prepare and file any and all tax returns, 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 Seller
shall provide the Purchaser with such information concerning the Mortgage Loans
as is necessary for the Purchaser to prepare its federal income tax return as
the Purchaser may reasonably request from time to time.
Section 3.03 Principal and Interest Advances by Seller. The Seller shall
have no obligation to advance any amounts constituting delinquent principal and
interest payments.
ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property. The Seller shall use its best
efforts to enforce any "due-on-sale" provision contained in any Mortgage or
Mortgage Note and to deny assumption by the person to whom the Mortgaged
Property has been or is about to be sold whether by absolute conveyance or by
contract of sale, and whether or not the Mortgagor remains liable on the
Mortgage and the Mortgage Note. When the Mortgaged Property has been conveyed by
the Mortgagor, the Seller shall, to the extent it has knowledge of such
conveyance, exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause applicable thereto, provided, however, that the
Seller shall not exercise such rights if
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prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related PMI Policy, if any.
If the Seller reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, the Seller shall enter into (i) an assumption
and modification agreement with the person to whom such property has been
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and the original Mortgagor remains liable thereon or (ii) in the event the
Seller is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note and the Seller has the prior consent of
the primary mortgage guaranty insurer, a substitution of liability agreement
with the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged Property
is substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Seller for entering into an assumption
agreement, a portion of such fee, up to an amount equal to one-half of one
percent (0.5%) of the outstanding principal balance of the related Mortgage
Loan, will be retained by the Seller as additional servicing compensation, and
any portion thereof in excess of one-half of one percent (0.5%) shall be
deposited in the Custodial Account for the benefit of the Purchaser. In
connection with any such assumption, neither the Mortgage Interest Rate borne by
the related Mortgage Note, the term of the Mortgage Loan nor the outstanding
principal amount of the Mortgage Loan shall be changed.
To the extent that any Mortgage Loan is assumable, the Seller shall inquire
diligently into the creditworthiness of the proposed transferee, and shall use
the underwriting criteria for approving the credit of the proposed transferee
which are used by the Seller with respect to underwriting mortgage loans of the
same type as the Mortgage Loans. If the credit of the proposed transferee does
not meet such underwriting criteria, the Seller diligently shall, to the extent
permitted by the Mortgage or the Mortgage Note and by applicable law, accelerate
the maturity of the Mortgage Loan.
Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files. Upon
the payment in full of any Mortgage Loan, or the receipt by the Seller of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Seller shall notify the Purchaser in the Monthly Remittance
Advice as provided in Section 3.02, and may request the release of any Mortgage
Loan Documents from the Purchaser or its designee in accordance with this
Section 4.02 hereof.
If the Seller satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Seller otherwise prejudice any rights the Purchaser may have under the
mortgage instruments, upon written demand of the Purchaser, the Seller shall
repurchase the related Mortgage Loan at the Repurchase Price by deposit thereof
in the Custodial Account within 2 Business Days of receipt of such demand by the
Purchaser. The Seller shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 2.13 insuring the Seller against any
loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
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Section 4.03 Servicing Compensation. As consideration for servicing the
Mortgage Loans during the period from the related Closing Date up to but not
including the related Transfer Date, the Seller shall retain a Servicing Fee
with respect to each Mortgage Loan in the amount of $7.00 per month, which
amount shall be prorated for any portion of a month during which the Mortgage
Loan is serviced by the Seller pursuant to this Agreement. The obligation of the
Purchaser to pay the Servicing Fee is limited to, and the Servicing Fee is
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds, to the extent permitted by Section 2.02), of
such Monthly Payment collected by the Seller, or as otherwise provided under
Section 2.03.
Additional servicing compensation in the form of assumption fees, to the
extent provided in Section 4.01, and late payment charges shall be retained by
the Seller to the extent not required to be deposited in the Custodial Account.
The Seller shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
Section 4.04 Annual Statement as to Compliance. The Seller shall deliver to
the Purchaser, on or before March 31 each year beginning March 31, 2002, and on
the related Transfer Date an Officer's Certificate, stating that (i) a review of
the activities of the Seller during the preceding calendar year and of
performance under this Agreement has been made under such officer's supervision,
and (ii) the Seller has complied fully with the provisions of Article II and
Article IV, and (iii) to the best of such officer's knowledge, based on such
review, the Seller has fulfilled all its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof and the action being taken by the Seller to cure such
default.
Section 4.05 Annual Independent Public Accountants' Servicing Report. On or
before March 31st of each year beginning March 31, 2003, the Seller, at its
expense, shall cause a firm of independent public accountants which is a member
of the American Institute of Certified Public Accountants to furnish a statement
to each Purchaser to the effect that such firm has examined certain documents
and records relating to the servicing of the Mortgage Loans and this Agreement
and that such firm is of the opinion that the provisions of Article II and
Article III have been complied with, and that, on the basis of such examination
conducted substantially in compliance with the Single Audit Program for Mortgage
Bankers, nothing has come to their attention which would indicate that such
servicing has not been conducted in compliance therewith, except for (i) such
exceptions as such firm shall believe to be immaterial, and (ii) such other
exceptions as shall be set forth in such statement.
Section 4.06 Right to Examine Seller Records. The Purchaser shall have the
right to examine and audit any and all of the books, records, or other
information of the Seller, whether held by the Seller or by another on its
behalf, with respect to or concerning this Agreement or the Mortgage Loans,
during business hours or at such other times as may be reasonable under
applicable circumstances, upon reasonable advance notice.
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ARTICLE V
SELLER TO COOPERATE
Section 5.01 Provision of Information. During the term of this Agreement,
the Seller shall furnish to the Purchaser such periodic, special, or other
reports or information, whether or not provided for herein, as shall be
necessary, reasonable, or appropriate with respect to the Purchaser or the
purposes of this Agreement. All such reports or information shall be provided by
and in accordance with all reasonable instructions and directions which the
Purchaser may give.
The Seller shall execute and deliver all such instruments and take all such
action as the Purchaser may reasonably request from time to time, in order to
effectuate the purposes and to carry out the terms of this Agreement.
Section 5.02 Financial Statements; Servicing Facilities. In connection with
marketing the Mortgage Loans, the Purchaser may make available to a prospective
Purchaser a Consolidated Statement of Operations of the Seller for the most
recently completed three fiscal years for which such a statement is available,
as well as a Consolidated Statement of Condition at the end of the last two
fiscal years covered by such Consolidated Statement of Operations. The Seller
also shall make available any comparable interim statements to the extent any
such statements have been prepared by or on behalf of the Seller (and are
available upon request to members or stockholders of the Seller or to the public
at large). If it has not already done so, the Seller shall furnish promptly to
the Purchaser copies of the statement specified above.
The Seller shall make available to the Purchaser or any prospective
Purchaser a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Seller or the
financial statements of the Seller, and to permit any prospective Purchaser to
inspect the Seller's servicing facilities for the purpose of satisfying such
prospective Purchaser that the Seller have the ability to service the Mortgage
Loans as provided in this Agreement.
ARTICLE VI
TERMINATION
Section 6.01 Agency Suspension. Should the Seller at any time during the
term of this Agreement have its right to service temporarily or permanently
suspended by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac or otherwise cease to be an approved
seller/servicer of conventional residential mortgage loans for ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac, then the Purchaser may immediately terminate this Agreement and
accelerate performance of the provisions of the Purchase Agreement to require
immediate transfer of the Servicing Rights.
Section 6.02 Damages. The Purchaser shall have the right at any time to
seek and recover from the Seller any damages or losses suffered by it as a
result of any failure by the Seller to observe or perform any duties,
obligations, covenants or agreements herein contained or
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contained in the Purchase Agreement, or as a result of a party's failure to
remain an approved ▇▇▇▇▇▇ Mae mortgage servicer.
Section 6.03 Termination Upon Transfer of Servicing; Termination
Procedures. This Agreement shall terminate with respect to the Mortgage Loans or
portion thereof transferred on the related Transfer Date.
The Purchaser may elect to terminate this Agreement and transfer the
servicing from the Seller prior to the related Transfer Date with respect to all
or any portion of the Mortgage Loans by providing written notice to the Seller
at least 30 days prior to the date on which it intends to transfer the servicing
of its intent to transfer the servicing from the Seller. On or before the date
specified by the Purchaser in accordance with this paragraph for the transfer of
servicing from the Seller, the Seller shall prepare, execute and deliver to the
successor entity designated by the Purchaser any and all documents and other
instruments, place in such successor's possession all Mortgage Loan Documents
necessary or appropriate to effect the purposes of such notice of termination,
including but not limited to the transfer and endorsement or assignment of the
Mortgage Loans and related documents, at the Seller's sole expense. The Seller
shall cooperate with the Purchaser and such successor in effecting the
termination of the Seller's responsibilities and rights hereunder.
On the related Transfer Date, the Seller shall comply with all of the
provisions of Section 5 of the Purchase Agreement to effect a complete transfer
of the Servicing Rights. On the related Transfer Date for each Mortgage Loan,
this Agreement, except for Articles VI, VIII, IX and X which shall survive the
related Transfer Date, shall terminate.
(a) Mortgage Loans in Foreclosure. The servicing with respect to Mortgage
Loans in foreclosure on or before the related Transfer Date shall not be
transferred from the Seller to the Purchaser or the successor servicer, as the
case may be, and such Mortgage Loans shall continue to be serviced by the Seller
pursuant to the terms of this Agreement. However, if the Purchaser so elects,
the Purchaser may waive the provisions of this paragraph (b) and accept transfer
of servicing of such Mortgage Loans and all amounts received by the Seller
thereunder.
(b) Servicing Advances. Notwithstanding the fact that the related Transfer
Date has occurred, the Seller shall not be reimbursed for any Servicing Advances
with respect to any Mortgage Loan until the Seller or the successor servicer
receives a Monthly Payment or Liquidation Proceeds with respect to such Mortgage
Loan. At such time, the Seller shall be entitled to be reimbursed for all
unreimbursed Servicing Advances with respect to such Mortgage Loan on a first
priority basis (but subject to any successor servicer's rights to reimbursement
with respect to Servicing Advances) from the Monthly Payment or Liquidation
Proceeds received with respect to such Mortgage Loan. This Section 6.03(c) shall
survive each Transfer Date.
(c) Additional Termination Provisions. Notwithstanding and in addition to
the foregoing, in the event that (i) a Mortgage Loan becomes delinquent for a
period of 90 days or more (a "Delinquent Mortgage Loan") or (ii) a Mortgage Loan
becomes an REO Property, the Purchaser may at its election terminate this
Agreement with respect to such Delinquent Mortgage Loan or REO Property, upon 15
days' written notice to the Seller.
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ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the Transfer Date.
Prior to the related Transfer Date, the contents of each Servicing File are and
shall be held in trust by the Seller for the benefit of the Purchaser as the
owner thereof. The Seller shall maintain in the Servicing File 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 possession of the Servicing
File by the Seller is at the will of the Purchaser for the sole purpose of
servicing the related Mortgage Loan, pursuant to this Agreement, and such
retention and possession by the Seller is in its capacity as Servicer only and
at the election of the Purchaser. The Seller shall release its custody of the
contents of any Servicing File only in accordance with written instructions from
the Purchaser, unless such release is required as incidental to the Seller's
servicing of the Mortgage Loans pursuant to this Agreement, or is in connection
with a repurchase of any Mortgage Loan pursuant to Section 8 of the Purchase
Agreement.
The Seller shall be responsible for maintaining, and shall maintain, a
complete set of books and records for each Mortgage Loan which shall be marked
clearly to reflect the ownership of each Mortgage Loan by the Purchaser. In
particular, the Seller shall maintain in its possession, available for
inspection by the Purchaser or its designee, and shall deliver to the Purchaser
or its designee upon demand, evidence of compliance with all federal, state and
local laws, rules and regulations, and requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac, including but not limited to documentation as to the method used in
determining the applicability of the provisions of the Flood Disaster Protection
Act of 1973, as amended, to the Mortgaged Property, documentation evidencing
insurance coverage and eligibility of any condominium project for approval by
▇▇▇▇▇▇ Mae and periodic inspection reports as required by Section 2.14.
The Seller shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe, the Seller 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 Seller shall be under no obligation to deal with any person
with respect to this Agreement or the Mortgage Loans unless the books and
records show such person as the owner of the Mortgage Loan. The Purchaser may,
subject to the terms of this Agreement, sell or 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 Seller 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 and an assignment and assumption of
this Agreement executed by the transferee shall have been delivered to the
Seller. The Purchaser also shall advise the Seller of the transfer. Upon receipt
of notice of the transfer, the Seller shall ▇▇▇▇ its books and records to
reflect the ownership of the Mortgage Loans of such assignee, and shall release
the previous Purchaser from its obligations hereunder with respect to the
Mortgage Loans sold or transferred.
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ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification. The Seller agrees to indemnify the Purchaser
and hold it harmless against any and all claims, losses, damages, penalties,
fines, and forfeitures, including, but not limited to reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Purchaser may sustain in any way related to the failure of Seller to
(a) perform its duties and service the Mortgage Loans in strict compliance with
the terms of this Agreement and/or (b) comply with applicable law. The Seller
immediately shall notify the Purchaser if a claim is made by a third party with
respect to this Agreement, assume (with the prior written consent of the
Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim. The Seller shall follow any written instructions received from
the Purchaser in connection with such claim. The Purchaser promptly shall
reimburse the Seller for all amounts advanced by it pursuant to the preceding
sentence except when the claim is in any way related to the Seller's
indemnification pursuant to Section 8 of the Purchase Agreement, or the failure
of the Seller to (a) service and administer the Mortgage Loans in strict
compliance with the terms of this Agreement and/or (b) comply with applicable
law.
Section 8.02 Limitation on Liability of Seller and Others. Neither the
Seller nor any of the directors, officers, employees or agents of the Seller
shall be under any liability to the Purchaser for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment, provided, however, that this provision
shall not protect the Seller or any such person against any breach of warranties
or representations made herein, or failure to perform its obligations in strict
compliance with any standard of care set forth in this Agreement, or any
liability which would otherwise be imposed by reason of any breach of the terms
and conditions of this Agreement. The Seller and any director, officer, employee
or agent of the Seller may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Mortgage Loans in accordance with this Agreement and which in its
opinion may involve it in any expense or liability, provided, however, that the
Seller may, with the consent of the Purchaser, undertake any such action which
it may deem necessary or desirable in respect to this Agreement and the rights
and duties of the parties hereto. In such event, the Seller shall be entitled to
reimbursement from the Purchaser of the reasonable legal expenses and costs of
such action.
Section 8.03 Limitation on Resignation and Assignment by Seller. The
Purchaser has entered into this Agreement with the Seller and subsequent
Purchasers will purchase the Mortgage Loans in reliance upon the independent
status of the Seller, and the representations as to the adequacy of its
servicing facilities, plant, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore, the
Seller shall neither assign this Agreement or the servicing hereunder or
delegate its rights or duties hereunder or any portion hereof or sell or
otherwise dispose of all or
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substantially all of its property or assets without the prior written consent of
the Purchaser, which consent shall be granted or withheld in the sole discretion
of the Purchaser.
The Seller shall not resign from the obligations and duties hereby imposed
on it except by mutual consent of the Seller and the Purchaser or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Seller. Any such
determination permitting the resignation of the Seller shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Seller's responsibilities and obligations hereunder in the manner provided in
Section 6.03.
Without in any way limiting the generality of this Section 8.03, in the
event that the Seller either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof or sell or otherwise dispose of all or substantially all of its property
or assets, without the prior written consent of the Purchaser, then the
Purchaser shall have the right to terminate this Agreement upon notice given as
set forth in Section 6.03, without any payment of any penalty or damages and
without any liability whatsoever to the Seller or any third party.
Section 8.04 Assignment by Purchaser. The Purchaser shall have the right,
without the consent of the Seller, to assign, in whole or in part, its interest
under this Agreement with respect to some or all of the Mortgage Loans, and
designate any person to exercise any rights of the Purchaser hereunder, by
executing an Assignment and Assumption Agreement substantially in the form of
Exhibit G to the Purchase Agreement. Upon such assignment of rights and
assumption of obligations, the assignee or designee shall accede to the rights
and obligations hereunder of the Purchaser with respect to such Mortgage Loans
and the Purchaser as assignor shall be released from all obligations hereunder
with respect to such Mortgage Loans from and after the date of such assignment
and assumption. All references to the Purchaser in this Agreement shall be
deemed to include its assignee or designee.
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
The Purchaser warrants and represents to, and covenants and agrees with,
the Seller as follows:
Section 9.01 Authority and Capacity. The execution, delivery and
performance by the Purchaser of this Agreement has been and will remain duly and
validly authorized by all necessary corporate action. This Agreement constitutes
and will continue to constitute a legal, valid and enforceable obligation of the
Purchaser.
Section 9.02 Assistance. To the extent possible, the Purchaser shall
cooperate with and assist the Seller as requested by the Seller, in carrying out
Seller's covenants, agreements duties and responsibilities under the Purchase
Agreement and in connection
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therewith shall execute and deliver all such papers, documents and instruments
as may be necessary and appropriate in furtherance thereof.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller warrants and represents to, and covenants and agrees with, the
Purchaser as follows:
Section 10.01 Due Organization and Authority. The Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
state of its incorporation and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good standing
in each state where a Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the type
conducted by the Seller, and in any event the Seller is in compliance with the
laws of any such state to the extent necessary to ensure the enforceability of
the related Mortgage Loan in accordance with the terms of this Agreement; the
Seller has the full corporate power and authority to execute and deliver this
Agreement and to perform in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments or transfer to be
delivered pursuant to this Agreement) by the Seller and the consummation of the
transactions contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of the Seller;
and all requisite corporate action has been taken by the Seller to make this
Agreement valid and binding upon the Seller in accordance with its terms;
Section 10.02 Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller;
Section 10.03 No Conflicts. Neither the execution and delivery of this
Agreement, nor the fulfillment of or compliance with the terms and conditions of
this Agreement, will conflict with or result in a breach of any of the terms,
conditions or provisions of the Seller's charter or by-laws or any legal
restriction or any agreement or instrument to which the Seller is now a party or
by which it is bound, or constitute a default or result in an acceleration under
any of the foregoing, or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Seller or its property is subject, or
impair the ability of the Purchaser to realize on the Mortgage Loans, or impair
the value of the Mortgage Loans;
Section 10.04 Ability to Service. The Seller is an approved seller/
servicer of conventional residential mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac, with the facilities, procedures, and experienced personnel necessary for
the sound servicing of mortgage loans of the same type as the Mortgage Loans.
The Seller is in good standing to sell mortgage loans to and service mortgage
loans for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, and no event has occurred, including but
not limited to a change in insurance coverage, which would make the Seller
unable to comply with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac eligibility requirements or
which would require notification to either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
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Section 10.05 Ability to Perform. The Seller does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
Section 10.06 No Litigation Pending. There is no action, suit, proceeding
or investigation pending or threatened against the Seller which, either in any
one instance or in the aggregate, may result in any material adverse change in
the business, operations, financial condition, properties or assets of the
Seller, or in any material impairment of the right or ability of the Seller to
carry on its business substantially as now conducted, or in any material
liability on the part of the Seller, or which would draw into question the
validity of this Agreement or the Mortgage Loans or of any action taken or to be
taken in connection with the obligations of the Seller contemplated herein, or
which would be likely to impair materially the ability of the Seller to perform
under the terms of this Agreement;
Section 10.07 No Consent Required. No consent, approval, authorization or
order of any court or governmental agency or body is required for the execution,
delivery and performance by the Seller of or compliance by the Seller with this
Agreement or the servicing of the Mortgage Loans as evidenced by the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the initial Closing Date;
Section 10.08 No Untrue Information. Neither this Agreement nor any
statement, report or other document furnished or to be furnished pursuant to
this Agreement or in connection with the transactions contemplated hereby
contains any untrue statement of fact or omits to state a fact necessary to make
the statements contained therein not misleading.
ARTICLE XI
DEFAULT
Section 11.01 Events of Default. The following shall constitute an Event of
Default under this Agreement on the part of the Seller:
(a) any failure by the Seller to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of five days after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to the Seller
by the Purchaser; or
(b) the failure by the Seller duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Seller set
forth in this Agreement which continues unremedied for a period of 30 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller by the Purchaser; or
(c) a decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Seller and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or
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(d) the Seller shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Seller or of
or relating to all or substantially all of its property; or
(e) the Seller shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) the Seller ceases to meet the qualifications of a ▇▇▇▇▇▇ Mae servicer;
or
(g) the Seller fails to maintain a minimum net worth of $15,000,000; or
(h) the Seller attempts to assign its right to servicing compensation
hereunder or the Seller attempts, without the consent of the Purchaser, to sell
or otherwise dispose of all or substantially all of its property or assets or to
assign this Agreement or the servicing responsibilities hereunder or to delegate
its duties hereunder or any portion thereof.
In each and every such case, so long as an Event of Default shall not have
been remedied, in addition to whatever rights the Purchaser may have at law or
equity to damages, including injunctive relief and specific performance, the
Purchaser, by notice in writing to the Seller, may terminate all the rights and
obligations of the Seller under this Agreement and in and to the Mortgage Loans
and the proceeds thereof.
Upon receipt by the Seller of such written notice, all authority and power
of the Seller 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 6.03.
Section 11.02 Waiver of Defaults. By a written notice, the Purchaser may
waive any default by the Seller in the performance of its obligations hereunder
and its consequences. Upon any waiver of a past default, such default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Notices. All notices, requests, demands and other
communications which are required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given upon the
delivery or mailing thereof, as the case may be, sent by registered or certified
mail, return receipt requested:
(a) If to Purchaser to:
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▇▇▇▇▇▇ Brothers Bank, FSB
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Contract Finance
(b) If to Seller to:
SIB Mortgage Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Section 12.02 Waivers. Either the Seller or Purchaser may upon consent of
all parties, by written notice to the others:
(a) Waive compliance with any of the terms, conditions or covenants
required to be complied with by the others hereunder; and
(b) Waive or modify performance of any of the obligations of the others
hereunder.
The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other subsequent
breach.
Section 12.03 Entire Agreement; Amendment. This Agreement and the Purchase
Agreement constitute the entire agreement between the parties with respect to
servicing of the Mortgages during the Interim Period. This Agreement may be
amended and any provision hereof waived, but, only in writing signed by the
party against whom such enforcement is sought.
Section 12.04 Execution; Binding Effect. This Agreement may be executed in
one or more counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed to be an
original; such counterparts, together, shall constitute one and the same
agreement. Subject to Section 8.03, this Agreement shall inure to the benefit of
and be binding upon the Seller and the Purchaser and their respective successors
and assigns.
Section 12.05 Headings. 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 12.06 Applicable Law. This Agreement shall be construed in
accordance with the laws of the State of New York.
Section 12.07 Relationship of Parties. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the
parties. The duties and
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responsibilities of the Seller shall be rendered by them as independent
contractors and not as an agent of Purchaser. The Seller shall have full control
of all of its acts, doings, proceedings, relating to or requisite in connection
with the discharge of its duties and responsibilities under this Agreement.
Section 12.08 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 12.09 Recordation of Assignments of Mortgage. To the extent
permitted by applicable law, each of the Assignments of Mortgage is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere, such recordation to be effected at the Seller's expense in
the event recordation is either necessary under applicable law or requested by
the Purchaser at its sole option.
Section 12.10 Appointment and Designation of Master Servicer. The Purchaser
hereby appoints and designates Aurora Loan Services, Inc. as its master servicer
(the "Master Servicer") for the Mortgage Loans subject to this Agreement. The
Seller is hereby authorized and instructed to take any and all instructions with
respect to servicing the Mortgage Loans hereunder as if the Master Servicer were
the Purchaser hereunder. The authorization and instruction set forth herein
shall remain in effect until such time as the Seller shall receive written
instruction from the Purchaser that such authorization and instruction is
terminated.
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IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the date and year first above written.
▇▇▇▇▇▇ BROTHERS BANK, FSB
(the Purchaser)
By:______________________
Name:
Title:
SIB MORTGAGE CORP.
(the Seller)
By:______________________
Name:
Title:
EXHIBIT 1
FORM OF MONTHLY REMITTANCE ADVICE
FIELD NAME DESCRIPTION FORMAT
---------- ----------- ------
INVNUM INVESTOR LOAN NUMBER Number no decimals
SERVNUM SERVICER LOAN NUMBER, REQUIRED Number no decimals
BEGSCHEDBAL BEGINNING SCHEDULED BALANCE FOR SCHED/SCHED Number two decimals
BEGINNING TRAIL BALANCE FOR ACTUAL/ACTUAL, REQUIRED
SCHEDPRIN SCHEDULED PRINCIPAL AMOUNT FOR SCHEDULED/SCHEDULED ACTUAL Number two decimals
PRINCIPAL COLLECTED FOR ACTUAL/ACTUAL, REQUIRED, .00 IF NO COLLECTIONS
CURT1 CURTAILMENT 1 ▇▇▇▇▇▇, .▇▇ IF NOT APPLICABLE Number two decimals
CURT1DATE CURTAILMENT 1 DATE, BLANK IF NOT APPLICABLE DD-MMM-YY
CURT1ADJ CURTAILMENT 1 ADJUSTMENT, .00 IF NOT APPLICABLE Number two decimals
CURT2 CURTAILMENT 2 ▇▇▇▇▇▇, .▇▇ IF NOT APPLICABLE Number two decimals
CURT2DATE CURTAILMENT 2 DATE, BLANK IF NOT APPLICABLE DD-MMM-YY
CURT2ADJ CURTAILMENT 2 ADJUSTMENT, .00 IF NOT APPLICABLE Number two decimals
LIQPRIN PAYOFF, LIQUIDATION PRINCIPAL, .00 IF NOT APPLICABLE Number two decimals
OTHPRIN OTHER PRINCIPAL, .00 IF NOT APPLICABLE Number two decimals
PRINREMIT TOTAL PRINCIPAL REMITTANCE AMOUNT, .00 IF NOT APPLICABLE Number two decimals
INTREMIT NET INTEREST REMIT, INCLUDE PAYOFF INTEREST, .00 IF NOT APPLICABLE Number two decimals
TOTREMIT TOTAL REMITTANCE AMOUNT, .00 IF NOT APPLICABLE Number two decimals
ENDSCHEDBAL ENDING SCHEDULED BALANCE FOR SCHEDULED/SCHEDULED ENDING TRIAL BALANCE FOR Number two decimals
ACTUAL/ACTUAL .00 IF PAIDOFF, LIQUIDATED OR FULL CHARGEOFF
ENDACTBAL ENDING TRIAL BALANCE .00 IF PAIDOFF, LIQUIDATED OR FULL CHARGEOFF Number two decimals
ENDDUEDATE ENDING ACTUAL DUE DATE, NOT LAST PAID INSTALLMENT DD-MMM-YY
ACTCODE 60 IF PAIDOFF, BLANK IF NOT APPLICABLE Number no decimals
ACTDATE ACTUAL PAYOFF DATE, BLANK IF NOT APPLICABLE DD-MMM-YY
INTRATE INTEREST RATE, REQUIRED Number seven decimals
Example .0700000 for 7.00%
SFRATE SERVICE FEE RATE, REQUIRED Number seven decimals
Example .0025000 for .25%
PTRATE PASS THRU RATE, REQUIRED Number seven decimals
Example .0675000 for 6.75%
PIPMT P&I CONSTANT, REQUIRED .00 IF PAIDOFF Number two decimals
ANCILLARY ANCILLARY FEES TO BE REMITTED Number two decimals
1-1
EXHIBIT 2
FORM OF CUSTODIAL ACCOUNT CERTIFICATION
_______ __, 200_
SIB Mortgage Corp. hereby certifies that it has established the account
described below as a Custodial Account pursuant to Section 2.04 of the Flow
Interim Servicing Agreement, dated as of June 10, 2002, Fixed and Adjustable
Rate Mortgage Loans, Group 2002-2.
Title of Account: "SIB Mortgage Corp., in trust for the registered
Purchaser, Group 2002-2."
Account Number:_____________________
Address of office or branch
of the Seller at
which Account is maintained:________
SIB MORTGAGE CORP.
Seller
By:_____________________
Name:
Title:
2-1
EXHIBIT 3
FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 200_
To _______________________________
_______________________________
_______________________________
(the "Depository")
As Seller under the Flow Interim Servicing Agreement, dated as of June 10,
2002, Fixed and Adjustable Rate Mortgage Loans, Group 2002-2 (the "Agreement"),
we hereby authorize and request you to establish an account, as a Custodial
Account pursuant to Section 2.04 of the Agreement, to be designated as "SIB
Mortgage Corp., in trust for the Fixed and Adjustable Rate Mortgage Loans -
Group 2002-2." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Seller. You may refuse any deposit which would
result in violation of the requirement that the account be fully insured as
described below. This letter is submitted to you in duplicate. Please execute
and return one original to us.
SIB MORTGAGE CORP.
Seller
By:______________________
Name:
Title:
Date:
3-1
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 by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
_________________________
Depository
By:______________________
Name:
Title:
Date:
3-2
EXHIBIT 4
FORM OF ESCROW ACCOUNT CERTIFICATION
_________ ___, 200_
SIB Mortgage Corp. hereby certifies that it has established the account
described below as an Escrow Account pursuant to Section 2.06 of the Flow
Interim Servicing Agreement, dated as of June 10, 2002, Fixed and Adjustable
Rate Mortgage Loans, Group 2002-2.
Title of Account: "SIB Mortgage Corp. in trust for the Purchaser of the
Fixed and Adjustable Rate Mortgage Loans, Group 2002-2 and various Mortgagors."
Account Number:_____________________
Address of office or branch
of the Seller at
which Account is maintained:________
SIB MORTGAGE CORP.
Seller
By:______________________
Name:
Title:
Date:
4-1
EXHIBIT 5
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
_______ __, 200_
To _______________________________
_______________________________
_______________________________
(the "Depository")
As Seller under the Flow Interim Servicing Agreement, dated as of June 10,
2002, Fixed and Adjustable Rate Mortgage Loans, Group 2002-2 (the "Agreement"),
we hereby authorize and request you to establish an account, as an Escrow
Account pursuant to Section 2.06 of the Agreement, to be designated as "SIB
Mortgage Corp., in trust for the Purchasers of Fixed and Adjustable Rate
Mortgage Loans - Group 2002-2." All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Seller. You may refuse any deposit
which would result in violation of the requirement that the account be fully
insured as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
SIB MORTGAGE CORP.
Seller
By:______________________
Name:
Title:
Date:
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 by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
_________________________
Depository
By:______________________
Name:
Title:
Date:
EXHIBIT 6
ACKNOWLEDGMENT AGREEMENT
On this ____ day of ____________, 200_, ▇▇▇▇▇▇ Brothers Bank, FSB, (the
"Purchaser") as the Purchaser under that certain Flow Interim Servicing
Agreement dated as of June 10, 2002, (the "Agreement"), does hereby contract
with SIB Mortgage Corp. (the "Seller") as Seller under the Agreement, for the
servicing responsibilities related to the Mortgage Loans listed on the Mortgage
Loan Schedule attached hereto. The Seller hereby accepts the servicing
responsibilities transferred hereby and on the date hereof assumes all servicing
responsibilities related to the Mortgage Loans identified on the attached
Mortgage Loan Schedule all in accordance with the Agreement. The contents of
each Servicing File required to be delivered to service the Mortgage Loans
pursuant to the Agreement have been or shall be delivered to the Seller by the
Purchaser in accordance with the terms of the Agreement.
With respect to the Mortgage Loans made subject to the Agreement hereby,
the Closing Date shall be ___________________ .
All other terms and conditions of this transaction shall be governed by the
Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
This Acknowledgment 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.
IN WITNESS WHEREOF, the Purchaser and the Seller have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
PURCHASER:
▇▇▇▇▇▇ BROTHERS BANK, FSB
By:______________________
Name:____________________
Title:___________________
SELLER:
SIB MORTGAGE CORP.
By:______________________
Name:____________________
Title:___________________
AMENDMENT NO. 1
TO THE FLOW INTERIM SERVICING AGREEMENT
This is Amendment No. 1 (the "Amendment No. 1"), dated as of October ___,
2002 (the "Amendment Date"), by and between ▇▇▇▇▇▇ Brothers Bank, FSB (the
"Purchaser"), and SIB Mortgage Corp. (the "Seller") to that certain Flow Interim
Servicing Agreement dated as of June 10, 2002 by and between the Seller and the
Purchaser (the "Existing Servicing Agreement", as amended by this Amendment 1,
the "Servicing Agreement").
W I T N E S S E T H
WHEREAS, the Seller and the Purchaser have agreed, subject to the terms and
conditions of this Amendment No. 1 that the Existing Servicing Agreement be
amended to reflect certain agreed upon revisions to the terms of the Existing
Servicing Agreement.
Accordingly, the Seller and the Purchaser hereby agree, in consideration of
the mutual premises and mutual obligations set forth herein, that the Existing
Servicing Agreement is hereby amended as follows:
(1) The Existing Servicing Agreement is hereby amended by adding the
following language as a new Section 2.23:
Section 2.23 Credit Reporting. From and after the date on which
the Purchaser notifies the Seller that it will require ongoing
credit reporting, for each Mortgage Loan, the Seller shall
accurately and fully furnish, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and
complete information on its borrower credit files to each of the
following credit repositories: Equifax Credit Information
Services, Inc., TransUnion, LLC and Experian Information
Solution, Inc. on a monthly basis.
(2) Effective Date. This Amendment shall become effective on the date (the
"Amendment Effective Date") on which the following conditions
precedent shall have been satisfied:
(a) On the Amendment Effective Date, the Purchaser shall have
received the following, each of which shall be satisfactory to
the Purchaser:
(i) this Amendment, executed and delivered by a duly authorized
officer of the Seller and the Purchaser;
(ii) such other documents as the Purchaser or counsel to the
Purchaser may reasonably request.
(b) On the Amendment Effective Date, (i) the Seller shall be in
compliance with all the representations and warranties set forth
in Article X of the Servicing Agreement, as amended by this
Amendment No. 1, on its part to be observed or performed, (ii) no
default shall have occurred and be continuing on such date.
(3) Except as expressly amended and modified by this Amendment, the
Existing Servicing Agreement shall continue to be, and shall remain,
in full force and effect in accordance with its terms.
(4) This Amendment No. 1 shall be construed in accordance with the laws of
the State of New York, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
(5) This Amendment No. 1 may be executed in one or more counterparts and
by different parties hereto on separate counterparts, each of which,
when so executed, shall constitute one and the same agreement.
(6) This Amendment No. 1 shall inure to the benefit of and be binding upon
the Purchaser and the Seller under the Existing Servicing Agreement,
and their respective successors and permitted assigns.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the 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.
▇▇▇▇▇▇ BROTHERS BANK, FSB
Purchaser
By:______________________
Name:____________________
Title:___________________
SIB MORTGAGE CORP.
Seller
By:______________________
Name:____________________
Title:___________________
5-1