DB STRUCTURED PRODUCTS, INC. Owner GMAC MORTGAGE CORPORATION Servicer
DB STRUCTURED PRODUCTS, INC.
Owner
GMAC MORTGAGE CORPORATION
Servicer
Dated as of April 1, 2004
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. .....................................................................................................1
ARTICLE II
SERVICING OF MORTGAGE LOANS;
POSSESSION OF SERVICING FILES;
BOOKS AND RECORDS;
DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01 Servicing of Mortgage Loans..............................................................................11
Section 2.02 Maintenance of Servicing Files. .........................................................................11
Section 2.03 Books and Records. ............................................................................................11
Section 2.04 Transfer of Mortgage Loans. ..............................................................................12
Section 2.05 Delivery of Mortgage Loan Documents. ............................................................12
Section 2.06 Quality Control Procedures.................................................................................13
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SERVICER
Section 3.01 Representations and Warranties..........................................................................13
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Servicer to Act as Servicer..................................................................................15
Section 4.02 Collection of Mortgage Loan Payments. ............................................................18
Section 4.03 Realization Upon Defaulted Mortgage Loans. ...................................................18
Section 4.04 Establishment of Custodial Accounts; Deposits in Custodial Accounts. ...........19
Section 4.05 Permitted Withdrawals From the Custodial Account. ........................................20
Section 4.06 Establishment of Escrow Accounts; Deposits in Escrow Accounts. ..................21
Section 4.07 Permitted Withdrawals From Escrow Account. .................................................22
Section 4.08 Payment of Taxes, Insurance and Other Charges; Maintenance of
Primary Mortgage Insurance Policies; Collections Thereunder. .....................23
Section 4.09 Transfer of Accounts...........................................................................................24
Section 4.10 Maintenance of Hazard Insurance. .....................................................................24
Section 4.11 Adjustments to Mortgage Interest Rate and Monthly Payment..........................25
Section 4.12 Fidelity Bond, Errors and Omissions Insurance. ................................................25
Section 4.13 Title, Management and Disposition of REO Property........................................26
ARTICLE V.......................................................................................................................................
PAYMENTS TO THE OWNER
Section 5.01 Remittances.........................................................................................................28
Section 5.02 Statements to the Owner. ....................................................................................28
Section 5.03 Monthly Advances by the Servicer.....................................................................29
Section 5.04 Real Estate Owned Reports. ...............................................................................30
Section 5.05 Liquidation Reports. ...........................................................................................30
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Assumption Agreements.....................................................................................31
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Loan Documents..............32
Section 6.03 Servicing Compensation. ....................................................................................33
Section 6.04 Annual Statement as to Compliance...................................................................33
Section 6.05 Notification of Adjustments................................................................................34
Section 6.06 Annual Independent Certified Public Accountants’ Servicing Report...............34
Section 6.07 Access to Certain Documentation.......................................................................35
Section 6.08 Reports and Returns to be Filed by the Servicer.................................................35
Section 6.09 Owner’s Right to Examine Servicer Records. ....................................................35
Section 6.10 Compliance with REMIC Provisions..................................................................36
Section 6.11 Non-solicitation...................................................................................................36
ARTICLE VII
REPORTS TO BE PREPARED BY SERVICER
Section 7.01 Servicer Shall Provide Information as Reasonably Required.............................36
ARTICLE VIII
THE SERVICER
Section 8.01 Indemnification; Third Party Claims. .................................................................37
Section 8.02 Merger or Consolidation of the Servicer. ...........................................................37
Section 8.03 Limitation on Liability of the Servicer and Others.............................................38
Section 8.04 Servicer Not to Resign........................................................................................38
Section 8.05 No Transfer of Servicing. ...................................................................................39
ARTICLE IX
DEFAULT
Section 9.01 Events of Default. ...............................................................................................39
Section 9.02 Waiver of Defaults..............................................................................................41
ARTICLE X
TERMINATION
Section 10.01 Termination.........................................................................................................41
Section 10.02 Removal of Mortgage Loans from Inclusion under this Agreement upon
a Whole Loan Transfer or a Pass-Through Transfer on One or More
Reconstitution Dates. .......................................................................................41
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Successor to the Servicer. ...................................................................................43
Section 11.02 Financial Statements ...........................................................................................44
Section 11.03 Amendment.........................................................................................................44
Section 11.04 Recordation of Agreement..................................................................................44
Section 11.05 Governing Law. ..................................................................................................45
Section 11.06 Notices. ...............................................................................................................45
Section 11.07 Severability of Provisions...................................................................................45
Section 11.08 Waivers. ..............................................................................................................46
Section 11.09 Exhibits. ..............................................................................................................46
Section 11.10 General Interpretive Principles. ..........................................................................46
Section 11.11 Reproduction of Documents. ..............................................................................47
Section 11.12 Confidentiality of Information............................................................................47
Section 11.13 Successors and Assigns.......................................................................................47
Section 11.14 No Partnership. ...................................................................................................48
Section 11.15 Execution. ...........................................................................................................48
Section 11.16 Entire Agreement................................................................................................48
Section 11.17 Further Agreements ............................................................................................48
EXHIBITS Exhibit A Form of Terms Letter Exhibit B Custodial Account Letter Agreement Exhibit C Escrow Account Letter Agreement Exhibit D Form of Request for Release Exhibit E Loan Level Scheduled-Scheduled Remittance Tape Layout Exhibit F Form of Servicer’s Officer’s Certificate
THIS IS A SERVICING AGREEMENT, dated as of April 1, 2004, and is executed between DB Structured Products, Inc. (the “Owner”) and GMAC Mortgage Corporation (the “Servicer”).
W I T N E S S E T H:
WHEREAS, the Owner will purchase, from time to time, certain first lien, adjustable-rate and fixed-rate mortgage loans (the “Mortgage Loans”) to be delivered as whole loans on a servicing released basis;
WHEREAS, the Owner desires to have the Servicer service each Mortgage Loan set forth on the Mortgage Loan Schedule attached to the related Terms Letter (as defined herein), the Servicer desires to service and administer such Mortgage Loans on behalf of the Owner, and the parties desire to provide the terms and conditions of such servicing by the Servicer;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Owner and the Servicer agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meaning specified in this Article:
Accepted Servicing Practices: With respect to any Mortgage Loan, those mortgage servicing practices (including collection procedures) of mortgage banking institutions which service mortgage loans of the same type as the Mortgage Loans and that are in accordance with servicing guidelines as set forth in the ▇▇▇▇▇▇ ▇▇▇ Guide, consistent with the manner in which the Servicer services and administers similar mortgage loans for the Servicer’s own portfolio, and in accordance with the terms of the applicable Mortgage, Mortgage Note and applicable law.
Adjustment Date: As to each ARM Loan, the date on which the Mortgage Interest Rate is adjusted in accordance with the terms of the related Mortgage Note.
Agreement: This Servicing Agreement including all exhibits hereto, amendments hereof and supplements hereto.
Annual Independent Public Accountant’s Report: Shall have the meaning set forth in Section 6.06 hereof.
Annual Statement as to Compliance: Shall have the meaning set forth in Section
6.04 hereof.
Appraised Value: The value of any Mortgaged Property, as determined by a Qualified Appraiser made for the originator of the Mortgage Loan at the time of origination of such Mortgage Loan.
ARM Loans: First lien, conventional, 1-4 family residential Mortgage Loans with interest rates which adjust from time to time in accordance with the terms of the Mortgage Note and with the related Index and are subject to Periodic Rate Caps and Lifetime Rate Caps.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a legal holiday in the States of New York, Iowa or the Commonwealth of Pennsylvania, or (iii) a day on which banks in the States of New York, Iowa or Pennsylvania are authorized or obligated by law or executive order to be closed.
Code: The Internal Revenue Code of 1986, as it may be amended from time to time, or any successor statute thereto, and applicable U.S. Department of the Treasury regulations issued pursuant thereto.
Commission: Securities and Exchange Commission.
Condemnation Proceeds: All awards, compensation or settlements in respect of a Mortgaged Property, whether permanent or temporary, partial or entire, by exercise of the power of eminent domain or condemnation, to the extent not required to be released to a Mortgagor in accordance with the terms of the related Mortgage Loan Documents.
Confirmation: With respect to each pool of Mortgage Loans to be subject to this Agreement, the letter agreement between the Owner and the Servicer (including any exhibits, schedules and attachments thereto) setting forth the terms and conditions of, amongst other items, the engagement by the Owner of the Servicer as servicer of the applicable Mortgage Loans to be serviced pursuant to this Agreement.
Custodial Account: The separate demand account or accounts created and maintained pursuant to Section 4.04 which shall be entitled “GMAC Mortgage Corporation Custodial Account, as servicer, in trust for DB Structured Products, Inc., Owner of Whole Loan Mortgages” and shall be established at a Qualified Depository, each of which accounts shall in no event contain funds in excess of the FDIC insurance limits.
Custodian: “▇▇▇▇▇ Fargo Bank Minnesota, National Association” its successor in interest or assigns, or such other custodian as Owner shall designate.
Cut-off Date: As identified on the related Terms Letter.
Depositor: Shall have the meaning set forth in Section 6.04 hereof.
Determination Date: With respect to each Remittance Date, the 15th day (or if such 15th day is not a Business Day, the Business Day immediately preceding such 15th day) of the month of such Remittance Date.
Due Date: Each day on which payments of principal and interest are required to be paid in accordance with the terms of the related Mortgage Note, exclusive of any days of grace.
Due Period: With respect to any Remittance Date, the period commencing on the second day of the month preceding the month of such Remittance Date and ending on the first day of the month of the Remittance Date.
Effective Date: The date or dates on which the Servicer becomes the owner of the Servicing Rights related to any of the Mortgage Loans, which date shall be identified on the Mortgage Loan Schedule attached to the related Terms Letter.
Escrow Account: The separate trust account or accounts created and maintained pursuant to Section 4.06 which shall be entitled “GMAC Mortgage Corporation Escrow Account, as servicer, in trust for DB Structured Products, Inc., Owner of Whole Loan Mortgages” and shall be established at a Qualified Depository, each of which accounts shall in no event contain funds in excess of the FDIC insurance limits.
Escrow Payments: With respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the Mortgagee pursuant to the Mortgage or any other document.
Event of Default: Any one of the conditions or circumstances enumerated in Section 9.01.
Excess Servicing Fee: If applicable, the amount of the annual fee the Owner shall pay to the Servicer (which annual fee is in addition to, and not in lieu of, any Servicing Fee payable on a Mortgage Loan), which shall, for a period of one full month, be equal to one-twelfth of the product of (a) the applicable Excess Servicing Fee Rate and (b) the outstanding principal balance of such Mortgage Loan. Such fee shall be payable monthly, computed on the basis of the same principal amount and period respecting which any related interest payment on a Mortgage Loan is computed. The obligation of the Owner to pay the Excess Servicing Fee is limited to, and the Excess Servicing Fee is payable solely from, the interest portion (not including recoveries of interest from Liquidation Proceeds or otherwise) of such Monthly Payment collected by the Servicer, or as otherwise provided under Section 4.05.
Excess Servicing Fee Rate: The Excess Servicing Fee Rate, if applicable, shall be a rate per annum as set forth in the Terms Letter and reflected on the related Mortgage Loan Schedule.
Exchange Act: The Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇, or any successor thereto.
▇▇▇▇▇▇ Mae Guide: The ▇▇▇▇▇▇ ▇▇▇ Selling Guide and the ▇▇▇▇▇▇ Mae Servicing Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer pursuant to Section 4.12.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended from time to time.
▇▇▇▇▇▇▇ Mac: ▇▇▇▇▇▇▇ Mac, or any successor thereto.
▇▇▇▇▇▇▇ Mac Guide: The ▇▇▇▇▇▇▇ Mac Selling Guide and the ▇▇▇▇▇▇▇ Mac Servicing Guide and all amendments or additions thereto.
GAAP: Generally accepted accounting procedures, consistently applied.
HUD: The United States Department of Housing and Urban Development or any successor.
Index: With respect to each ARM Loan, the index used to determine the Mortgage Interest Rate on each such ARM Loan on the related Adjustment Date.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of insurance policies insuring the Mortgage Loan or the related Mortgaged Property, to the extent not required to be released to a Mortgagor in accordance with the terms of the related Mortgage Loan Documents.
Lender-Paid Mortgage Insurance Policy or LPMI Policy: A policy of mortgage guaranty insurance issued by a Qualified Insurer in which the owner or servicer of the Mortgage Loan is responsible for the premiums associated with such mortgage insurance policy.
Lender-Paid Mortgage Insurance Rate: With respect to any Mortgage Loan and LPMI Policy, the per annum rate equal to the percentage set forth on the related Mortgage Loan Schedule.
Lifetime Rate Cap: With respect to each ARM Loan, the maximum Mortgage Interest Rate over the term of such Mortgage Loan, as specified in the related Mortgage Note.
Liquidation Proceeds: Cash, other than Insurance Proceeds and Condemnation Proceeds, received in connection with the liquidation of a defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage Loan, trustee’s sale, foreclosure sale or otherwise, other than amounts received following the acquisition of an REO Property pursuant to Section 4.13.
Margin: With respect to each ARM Loan, the fixed percentage amount set forth in each related Mortgage Note which is added to the Index in order to determine the related Mortgage Interest Rate.
Monthly Advance: The aggregate of the advances made by the Servicer on any Remittance Date pursuant to Section 5.03.
Monthly Payment: With respect to each Mortgage Loan, the scheduled monthly payment of principal and interest thereon which is payable by the related Mortgagor under the related Mortgage Note.
Mortgage: The mortgage, deed of trust or other instrument securing a Mortgage Note which creates a first lien on an unsubordinated estate in fee simple or leasehold estate in real property securing the Mortgage Note.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and the successors and assigns of such mortgagee or beneficiary.
Mortgage Interest Rate: The annual rate at which interest accrues on any Mortgage Loan in accordance with the provisions of the related Mortgage Note, and in the case of an ARM Loan, as adjusted from time to time on each Adjustment Date for such Mortgage Loan to equal the Index for such Mortgage Loan plus the Margin for such Mortgage Loan, and subject to the limitations on such interest rate imposed by the Periodic Rate Cap and the Lifetime Rate Cap.
Mortgage Loan: An individual Mortgage Loan described herein, and as further identified on the related Mortgage Loan Schedule, which Mortgage Loan includes without limitation the Mortgage Loan Documents, the Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds, and all other rights, benefits, proceeds and obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The original mortgage loan legal documents held by the Custodian.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the annual rate of interest remitted to the Owner, which shall be equal to the related Mortgage Interest Rate minus (i) the Servicing Fee Rate, (ii) the Lender-Paid Mortgage Insurance Rate, if applicable, and
(iii) the Excess Servicing Fee Rate, if applicable.
Mortgage Loan Schedule: With respect to each pool of Mortgage Loans to be serviced under this Agreement, the schedule of Mortgage Loans attached to each Terms Letter delivered hereunder.
Mortgage Note: The note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.
Mortgaged Property: The underlying real property securing repayment of a Mortgage Note, consisting of a single parcel of real estate or leasehold estate considered to be real estate under the laws of the State in which such real property is located, which may include condominium units and planned unit developments, improved by a residential dwelling.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverable Advance: Any advance previously made by the Servicer pursuant to Section 5.03 or any expenses incurred pursuant to Section 4.08 which, in the reasonable good faith judgment of the Servicer, may not be ultimately recoverable by the Servicer from late payments, Insurance Proceeds, Liquidation Proceeds, REO Disposition Proceeds or otherwise from the related Mortgage Loan. The determination by the Servicer that it has made a Nonrecoverable Advance, shall be evidenced by an Officer’s Certificate of the Servicer delivered to the Owner and detailing the reasons for such determination.
OCC: Office of the Comptroller of the Currency, its successors and assigns.
Officers’ Certificate: A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President, a Senior Vice President or a Vice President and by the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant Secretaries of the Servicer, and delivered to the Owner as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee of the party on behalf of whom the opinion is being given, reasonably acceptable to the Owner.
OTS: Office of Thrift Supervision, its successors and assigns.
Owner: DB Structured Products, Inc., its successors in interest and assigns.
Pass-Through Transfer: The sale or transfer of some or all of the Mortgage Loans by the Owner to a trust to be formed as part of a publicly issued or privately placed, rated or unrated mortgage pass-through transaction.
Periodic Rate Cap: With respect to each ARM Loan, the maximum increase or decrease in the Mortgage Interest Rate on any Adjustment Date.
Permitted Investments: Any one or more of the following obligations or securities:
(i) direct obligations of, and obligations fully guaranteed by the United States of America or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America; provided that obligations of ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae shall be Permitted Investments only if, at the time of investment, they are rated in one of the two highest rating categories by Standard & Poor’s Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., ▇▇▇▇▇’▇ Investors Service, Inc. and Fitch Ratings;
(ii) (a) demand or time deposits, federal funds or bankers’ acceptances issued by any depository institution or trust company incorporated under the laws of the United States of America or any State thereof and subject to supervision and examination by Federal and/or State banking authorities, provided that the commercial paper and/or the short-term deposit rating and/or the long-term unsecured debt obligations or deposits of such depository institution or trust company at the time of such investment or contractual commitment providing for such investment are rated in one of the two highest rating categories by Standard & Poor’s Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., ▇▇▇▇▇’▇ Investors Service, Inc. and Fitch Ratings and (b) any other demand or time deposit or certificate of deposit that is fully insured by the FDIC;
(iii) repurchase obligations with respect to (a) any security described in clause (i) above or (b) any other security issued or guaranteed by an 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, in either case entered into with a depository institution or trust company (acting as principal) described in clause (ii)(a) above;
(iv) securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States of America or any State thereof that are rated in one of the two highest rating categories by Standard & Poor’s Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., ▇▇▇▇▇’▇ Investors Service, Inc. and Fitch Ratings at the time of such investment or contractual commitment providing for such investment; provided, however, that securities issued by any particular corporation will not be Permitted Investments to the extent that investments therein will cause the then outstanding principal amount of securities issued by such corporation and held as Permitted Investments to exceed 10% of the aggregate outstanding principal balances and amounts of all the Permitted Investments;
(v) commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the date of issuance thereof) which are rated in one of the two highest rating categories by Standard & Poor’s Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., ▇▇▇▇▇’▇ Investors Service, Inc. and Fitch Ratings at the time of such investment;
(vi) any other demand, money market or time deposit, obligation, security or investment as may be acceptable to each of Standard & Poor’s Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇▇▇▇’▇ Investors Service, Inc. and Fitch Ratings; and
(vii) any money market funds the collateral of which consists of 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 (which may include repurchase obligations secured by collateral described in clause (i)) and other securities and which money market funds are rated in one of the two highest rating categories by Standard & Poor’s Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., ▇▇▇▇▇’▇ Investors Service, Inc. and Fitch Ratings;
provided, however, that no instrument or security shall be a Permitted Investment if such instrument or security evidences a right to receive only interest payments with respect to the obligations underlying such instrument or if such security provides for payment of both principal and interest with a yield to maturity in excess of 120% of the yield to maturity at par.
Person: Any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or government or any agency or political subdivision thereof.
Prepayment Charge: With respect to any Mortgage Loan, any prepayment penalty or premium thereon payable in connection with a principal prepayment on such Mortgage Loan pursuant to the terms of the related Mortgage Loan.
Primary Mortgage Insurance Policy: Each primary policy of mortgage insurance, or any replacement policy therefor issued by a Qualified Insurer and obtained by the Servicer pursuant to Section 4.08.
Prime Rate: The prime rate of U.S. money center banks as published from time to time in The Wall Street Journal.
Principal Prepayment: Any payment or other recovery of principal on a Mortgage Loan, full or partial, which is received in advance of its scheduled Due Date, including any Prepayment Charge and which is not accompanied by an amount of interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment.
Qualified Appraiser: An appraiser, duly appointed by the Servicer, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, which appraiser and the appraisal made by such appraiser both satisfy the requirements of ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac and the relevant provisions of FIRREA and the regulations promulgated thereunder, all as in effect on the date the appraisal of such Mortgaged Property is performed.
Qualified Depository: A depository, the accounts of which are insured by the FDIC through the BIF or the SAIF and the short term debt ratings and the long term deposit ratings of which are rated in one of the two highest rating categories by Standard & Poor’s Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., ▇▇▇▇▇’▇ Investors Service, Inc., Fitch Ratings.
Qualified Insurer: An insurance company duly qualified as such under the laws of the states in which the Mortgaged Properties are located, duly authorized and licensed in such states to transact the applicable insurance business and to write the insurance provided and approved as an insurer by ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac.
Reconstitution Agreements: The agreement or agreements entered into by the Servicer and the Owner and/or certain third parties on the Reconstitution Date or Dates with respect to any or all of the Mortgage Loans serviced hereunder, in connection with a Whole Loan Transfer or a Pass-Through Transfer as provided in Section 10.02.
Reconstitution Date: The date or dates on which any or all of the Mortgage Loans serviced under this Agreement shall be removed from this Agreement and reconstituted as part of a Whole Loan Transfer or Pass-Through Transfer pursuant to Section 10.02 hereof.
Record Date: With respect to each Remittance Date, the last Business Day of the month immediately preceding the month in which such Remittance Date occurs.
REMIC: A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.
REMIC Provisions: The provisions of the Federal income tax law relating to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1, Subtitle A of the Code, and related provisions, and, proposed, temporary and final regulations and published rulings, notices or pronouncements promulgated thereunder, as the foregoing may be in effect from time to time.
Remittance Date: The 18th day of any month, or if such 18th day is not a Business Day, the first Business Day immediately preceding such 18th day.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: Amounts received by the Servicer in connection with a related REO Disposition.
REO Property: A Mortgaged Property acquired by the Servicer on behalf of the Owner as described in Section 4.13.
SAIF: The Savings Association Insurance Fund, or any successor thereto.
Servicer: GMAC Mortgage Corporation, or any of its successors in interest or any successor under this Agreement appointed as herein provided.
Servicing Advances: All customary, reasonable and necessary “out of pocket” costs and expenses (including reasonable attorneys’ fees and disbursements) incurred prior to, on and subsequent to the related Servicing Transfer Date in the performance by the Servicer of its servicing obligations relating to each Mortgage Loan, including, but not limited to, the cost of
(a) the preservation, restoration and protection of the Mortgaged Property, (b) any enforcement, administrative or judicial proceedings, or any legal work or advice specifically related to servicing the Mortgage Loans, including but not limited to, foreclosures, bankruptcies, condemnations, drug seizures, elections, foreclosures by subordinate or superior lienholders, and other legal actions incidental to the servicing of the Mortgage Loans (provided that such expenses are reasonable and that the Servicer specifies the Mortgage Loan(s) to which such expenses relate), (c) the management and liquidation of the Mortgaged Property if the Mortgaged Property is acquired in full or partial satisfaction of the Mortgage, (d) taxes, assessments, water rates, sewer rates and other charges which are or may become a lien upon the Mortgaged Property, and Primary Mortgage Insurance Policy premiums and fire and hazard insurance coverage and (e) compliance with the obligations under Section 4.08.
Servicing Fee: With respect to each Mortgage Loan, the amount of the annual fee the Owner shall pay to the Servicer, which shall, for a period of one full month, be equal to one-twelfth of the product of (a) the applicable Servicing Fee Rate and (b) the outstanding principal balance of such Mortgage Loan. Such fee shall be payable monthly, computed on the basis of the same principal amount and period respecting which any related interest payment on a Mortgage Loan is computed. The obligation of the Owner to pay the Servicing Fee is limited to, and the Servicing Fee is payable solely from, the interest portion (including recoveries of interest from Liquidation Proceeds or otherwise) of such Monthly Payment collected by the Servicer, or as otherwise provided under Section 4.05.
Servicing Fee Rate: The Servicing Fee Rate shall be a rate per annum as set forth in the Terms Letter and reflected on the related Mortgage Loan Schedule.
Servicing File: The documents, records and other items pertaining to a particular Mortgage Loan, and any additional documents relating to such Mortgage Loan as are in, or as may from time to time come into, the Servicer’s possession.
Servicing Officer: Any officer of the Servicer 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 Servicer to the Owner upon request, as such list may from time to time be amended.
Servicing Rights: With respect to each Mortgage Loan, any and all of the following: (a) all rights to service the Mortgage Loan; (b) all rights to receive servicing fees, additional servicing compensation, including without limitation any late fees, assumption fees, penalties and Prepayment Charges to the extent set forth in the related Confirmation, or similar payments with respect to the Mortgage Loan, and income on escrow accounts or other receipts on or with respect to the Mortgage Loan), reimbursements or indemnification for servicing the Mortgage Loan, and any payments received in respect of the foregoing and proceeds thereof;
(c) the right to collect, hold and disburse escrow payments or other similar payments with respect to the Mortgage Loans and any amounts actually collected with respect thereto and to receive interest income on such amounts to the extent permitted by applicable law; (d) all accounts and other rights to payment related to any of the property described in this paragraph; (e) possession and use of any and all Servicing Files pertaining to the Mortgage Loans or pertaining to the past, present or prospective servicing of the Mortgage Loans; (f) all rights, powers and privileges incident to any of the foregoing; and (g) all agreements or documents creating, defining or evidencing any of the foregoing rights to the extent they relate to such rights.
Servicing Transfer Date: The date or dates on which the Servicer, from time to time, shall begin servicing any Mortgage Loans, which shall be identified in the related Terms Letter.
Stated Principal Balance: As to each Mortgage Loan as of any date of determination, (i) the principal balance of such Mortgage Loan after giving effect to payments of principal due, whether or not received, minus (ii) all amounts previously distributed to the Owner with respect to the Mortgage Loan representing payments or recoveries of principal or advances in lieu thereof.
Terms Letter: A letter agreement between the Owner and the Servicer, in the form attached hereto as Exhibit A, dated as of the related Servicing Transfer Date that identifies the final pool of Mortgage Loans, relating to a Confirmation, to be serviced pursuant this Agreement
Whole Loan Transfer: The sale or transfer of some or all of the ownership interest in the Mortgage Loans by the Owner to one or more third parties in whole loan or participation format, which third party may be ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
ARTICLE II
SERVICING OF MORTGAGE LOANS;
POSSESSION OF SERVICING FILES;
BOOKS AND RECORDS;
DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01 Servicing of Mortgage Loans.
On or prior to the each Servicing Transfer Date, if requested by the Owner, the Servicer shall submit to the Owner a fully executed original of an Officer’s Certificate in the form attached as Exhibit F hereto. From and after each Servicing Transfer Date, the Servicer does hereby agree to service the related Mortgage Loans, but subject to the terms of this Agreement. The rights of the Owner to receive payments with respect to the Mortgage Loans shall be as set forth in this Agreement.
Section 2.02 Maintenance of Servicing Files.
The Servicer shall maintain a Servicing File consisting of all documents necessary to service the Mortgage Loans. The possession of each Servicing File by the Servicer is for the sole purpose of servicing the Mortgage Loan, and such retention and possession by the Servicer is in a custodial capacity only. The Servicer acknowledges that the ownership of each Mortgage Loan, including the Note, the Mortgage, all other Mortgage Loan Documents and all rights, benefits, proceeds and obligations arising therefrom or in connection therewith, has been vested solely in the Owner or the appropriate designee of the Owner, as the case may be. All rights arising out of the Mortgage Loans including, but not limited to, all funds received on or in connection with the Mortgage Loans and all records or documents with respect to the Mortgage Loans prepared by or which come into the possession of the Servicer shall be received and held by the Servicer in trust for the exclusive benefit of the Owner or the assignee of the Owner, as the case may be, as the owner of the related Mortgage Loans. Any portion of the related Servicing Files retained by the Servicer shall be appropriately identified in the Servicer’s computer system to clearly reflect the ownership of the related Mortgage Loans by the Owner. The Servicer shall release its custody of the contents of the related Servicing Files only in accordance with written instructions of the Owner, except when such release is required as incidental to the Servicer’s servicing of the Mortgage Loans, such written instructions shall not be required.
Section 2.03 Books and Records.
The Servicer shall be responsible for maintaining, and shall maintain, a complete set of books and records for the Mortgage Loans which shall be appropriately identified in the Servicer’s computer system to clearly reflect the ownership of the Mortgage Loan by the Owner. In particular, the Servicer shall maintain in its possession, available for inspection by the Owner, or its designee and shall deliver to the Owner upon demand, evidence of compliance with all Federal, State and local laws, rules and regulations, and requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, as applicable, including but not limited to documentation as to the method used in determining the applicability of the provisions of the Flood Disaster Protection Act of 1973, as amended, to the Mortgaged Property, documentation evidencing insurance coverage and eligibility of any condominium project for approval by ▇▇▇▇▇▇ Mae and periodic inspection reports as required by Section 4.13. To the extent that original documents are not required for purposes of realization of Liquidation Proceeds or Insurance Proceeds, documents maintained by the Servicer may be in the form of microfilm or microfiche or such other reliable means of recreating original documents, including but not limited to, optical imagery techniques so long as the Servicer complies with the requirements of the ▇▇▇▇▇▇ ▇▇▇ Guide.
The Servicer shall maintain with respect to each Mortgage Loan and shall make available for inspection by any Owner or its designee the related Servicing File (or copies thereof) upon reasonable prior request by the Owner.
Section 2.04 Transfer of Mortgage Loans.
The Servicer shall keep at its servicing office books and records in which, subject to such reasonable regulations as it may prescribe from time to time, the Servicer 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 Servicer shall be under no obligation to deal with any person with respect to this Agreement or any Mortgage Loan unless a notice of the transfer of such Mortgage Loan has been delivered to the Servicer in accordance with this Section 2.04. The Owner may, subject to the terms of this Agreement, sell and transfer one or more of the Mortgage Loans in accordance with Sections 10.02 and 11.13, provided, however, that the transferee will not be deemed to be an Owner hereunder binding upon the Servicer unless such transferee shall agree in writing to be bound by the terms of this Agreement via an assignment and assumption of this Agreement reasonably acceptable to the Servicer. The Owner also shall advise the Servicer in writing of the transfer. Upon receipt of notice of the permitted transfer, the Servicer shall ▇▇▇▇ its books and records to reflect the ownership of the Mortgage Loans of such assignee, and shall release the previous Owner from its obligations hereunder with respect to the Mortgage Loans sold or transferred.
Section 2.05 Delivery of Mortgage Loan Documents.
The Servicer shall forward to the Custodian on behalf of the Owner original documents evidencing an assumption, modification, consolidation or extension of any Mortgage Loan entered into in accordance with Section 4.01 or 6.01 promptly after their execution; provided, however, that the Servicer shall provide the Custodian on behalf of the Owner with a certified true copy of any such document submitted for recordation promptly after its execution, and shall provide the original of any document submitted for recordation or a copy of such document certified by the appropriate public recording office to be a true and complete copy of the original within 180 days of its execution. If delivery is not completed within 180 days solely due to delays in making such delivery by reason of the fact that such documents shall not have been returned by the appropriate recording office, the Servicer shall continue to use its best efforts to effect delivery as soon as possible thereafter.
From time to time the Servicer may have a need for Mortgage Loan Documents to be released by the Custodian. If the Servicer shall require any of the Mortgage Loan Documents, the Servicer shall notify the Custodian in writing of such request in the form of the request for release attached hereto as Exhibit D. The Custodian shall deliver to the Servicer promptly, and in no event later than within five (5) Business Days, any requested Mortgage Loan Document previously delivered to the Custodian, provided that such documentation is promptly returned to the Custodian when the Servicer no longer requires possession of the document, and provided that during the time that any such documentation is held by the Servicer, such possession is in trust for the benefit of the Owner.
Section 2.06 Quality Control Procedures.
The Servicer must have an internal quality control program that verifies, on a regular basis, the existence and accuracy of the legal documents, credit documents, property appraisals, and underwriting decisions. The program must be capable of evaluating and monitoring the overall quality of its servicing activities. The purpose of the program is to ensure that the Mortgage Loans are serviced in accordance with prudent mortgage banking practices and accounting principles; guard against dishonest, fraudulent, or negligent acts; and guard against errors and omissions by officers, employees, or other authorized persons.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SERVICER
Section 3.01 Representations and Warranties.
The Servicer represents, warrants and covenants to the Owner that as of each Servicing Transfer Date or as of such date specifically provided herein:
(a) The Servicer is a duly organized, validly existing corporation in good standing under the laws of the State of its organization and is qualified to transact business in, is in good standing under the laws of, and possesses all licenses necessary for the conduct of its business in, each State in which any Mortgaged Property is located or is otherwise exempt or not required under applicable law to effect such qualification or license and no demand for such qualification or license has been made upon the Servicer by any such State, and in any event the Servicer is and will remain in compliance with the laws of each such State to the extent necessary to ensure the enforceability of each Mortgage Loan and the servicing of the Mortgage Loans in accordance with the terms of this Agreement. No licenses or approvals obtained by the Servicer have been suspended or revoked by any court, administrative agency, arbitrator or governmental body and no proceedings are pending which might result in such suspension or revocation;
(b) The Servicer has full power and authority to execute, deliver and perform, and to enter into and consummate all transactions contemplated by this Agreement and to conduct its business as presently conducted, has duly authorized the execution, delivery and performance of this Agreement, has duly executed and delivered this Agreement, and this Agreement constitutes a legal, valid and binding obligation of the Servicer, enforceable against it in accordance with its terms subject to bankruptcy laws and other similar laws of general
application affecting rights of creditors and subject to the application of the rules of equity, including those respecting the availability of specific performance;
(c) None of the execution and delivery of this Agreement, the consummation of the transactions contemplated thereby and hereby, or the fulfillment of or compliance with the terms and conditions of this Agreement will conflict with, or violate, any of the terms, conditions or provisions of the Servicer’s articles of incorporation or by-laws or materially conflict with or result in a material breach of any of the terms, conditions or provisions of any legal restriction or any agreement or instrument to which the Servicer is now a party or by which it or its assets is or are bound or may be bound, or constitute a default or result in an acceleration under any of the forgoing;
(d) The Servicer is not in violation of, and the execution and delivery of this Agreement by the Servicer and its performance and compliance with the terms of this Agreement will not constitute or result in the violation of any judgment, order or decree of any court or any, law, rule, regulation, order or decree of any federal, state, municipal or governmental agency having jurisdiction over the Servicer or its assets, which violation might have consequences that would materially and adversely affect the condition (financial or otherwise) or the operation of the Servicer or its assets or might have consequences that would materially and adversely affect the performance of its obligations and duties hereunder;
(e) There are no actions or proceedings pending or, to the Servicer’s knowledge, threatened with respect to the Servicer before any court, administrative agency or other tribunal (A) that might prohibit its entering into this Agreement, (B) seeking to prevent the consummation of the transactions contemplated by this Agreement, (C) that might prohibit or materially and adverse affect the execution, delivery, validity or enforceability, or the performance by the Servicer of its obligations under, this Agreement or (D) which are reasonably likely to have a material adverse effect on the financial condition of the Servicer;
(f) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Servicer of or compliance by the Servicer with this Agreement or the consummation of the transactions contemplated by this Agreement except for consents, approvals, authorizations and orders which have been obtained prior to the related Servicing Transfer Date;
(g) The collection and servicing practices used by the Servicer, with respect to the mortgage loans it services have been in all material respects legal and in accordance Accepted Servicing Practices. With respect to escrow deposits and payments that the Servicer collects, all such payments are in the possession of, or under the control of, the Servicer, and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. No escrow deposits or other charges or payments due under the Mortgage Note have been capitalized under any Mortgage or the related Mortgage Note;
(h) The Servicer is in good standing to service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac and is a HUD approved mortgagee pursuant to Section 2.03 of the National Housing Act, and no event has occurred, including but not limited to a change in insurance
coverage, which would make the Servicer unable to comply with eligibility requirements or which would require notification to either ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or HUD;
(i) No written statement, report or other document furnished or to be furnished pursuant to the Agreement contains or will contain any statement that is or will be inaccurate or misleading in any material respect or omits to state a material fact required to be stated therein or necessary to make the information and statements therein not misleading;
(j) No fraud or misrepresentation of a material fact with respect to the servicing of a Mortgage Loan has taken place on the part of the Servicer;
(k) Either (i) each Mortgagor has been properly notified with respect to the Servicer’s servicing of the related Mortgage Loan in accordance with the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ National Affordable Housing Act of 1990, as the same may be amended from time to time, and the regulations provided in accordance with the Real Estate Settlement Procedures Act or
(ii) such notification is not required;
(l) All applicable taxing authorities and insurance companies (including primary mortgage insurance policy insurers, if applicable) and/or agents have been notified of the transfer of the servicing of the Mortgage Loans to the Servicer, or its designee, and Servicer currently receives all related notices, tax ▇▇▇▇ sand insurance statements. Additionally, any and all costs, fees and expenses associated with the Servicer’s commencement of the servicing of the Mortgage Loans, including the costs of any insurer notifications, the transfer or implementation of tax service contracts, flood certification contracts, and any and all other servicing transfer-related costs and expenses will be paid for by the Servicer and will, in no event, be the responsibility of the Owner; and
(m) The Servicer 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.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service and administer the Mortgage Loans in accordance with this Agreement and with Accepted Servicing Practices (giving due consideration to the Owner’s reliance on the Servicer), and shall have full power and authority, acting alone, to do or cause to be done any and all things in connection with such servicing and administration which the Servicer may deem necessary or desirable and consistent with the terms of this Agreement and with Accepted Servicing Practices and shall exercise the same care that it customarily employs for its own account. Except as set forth in this Agreement, the Servicer shall service the Mortgage Loans in accordance with Accepted Servicing Practices in compliance with the servicing provisions for MBS pool mortgages, as set forth in the ▇▇▇▇▇▇ ▇▇▇ Guide, which include, but are not limited to, provisions regarding the liquidation of Mortgage Loans, the collection of Mortgage Loan payments, the payment of taxes, insurance and other charges, the maintenance of hazard insurance with a Qualified Insurer, the maintenance of fidelity bond and errors and omissions insurance, inspections, the restoration of Mortgaged Property, the maintenance of Primary Mortgage Insurance Policies, insurance claims, and title insurance, management of REO Property, permitted withdrawals with respect to REO Property, liquidation reports, and reports of foreclosures and abandonments of Mortgaged Property, the transfer of Mortgaged Property, the release of Mortgage Loan Documents, annual statements, and examination of records and facilities. In the event of any conflict, inconsistency or discrepancy between any of the servicing provisions of this Agreement and any of the servicing provisions of the ▇▇▇▇▇▇ Mae Guide, the provisions of this Agreement shall control and be binding upon the Owner and the Servicer. The Servicer will accurately and fully report to all three (3) major credit reporting agencies its credit experience with each Mortgage Loan in a timely manner. The Owner shall, upon reasonable request, deliver powers-of-attorney to the Servicer sufficient to allow the Servicer as servicer to execute all documentation requiring execution on behalf of Owner with respect to the servicing of the Mortgage Loans, including satisfactions, partial releases, modifications and foreclosure documentation or, in the alternative, shall as promptly as reasonably possible, execute and return such documentation to the Servicer.
Consistent with the terms of this Agreement, the Servicer 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 Servicer’s reasonable and prudent determination such waiver, modification, postponement or indulgence is not materially adverse to the Owner, provided, however, that unless the Servicer has obtained the prior written consent of the Owner, the Servicer 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 has been agreed to in writing by the Owner and which permits the deferral of interest or principal payments on any Mortgage Loan, the Servicer shall, on the Business Day immediately preceding the related Remittance Date in any month in which any such principal or interest payment has been deferred, deposit in the Custodial Account from its own funds, in accordance with Section 4.04 and Section 5.03, the difference between (a) such month’s principal and one month’s interest at the related Mortgage Loan Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b) the amount paid by the Mortgagor. The Servicer shall be entitled to reimbursement for such advances to the same extent as for all other advances pursuant to Section 4.05. Without limiting the generality of the foregoing, the Servicer shall continue, and is hereby authorized and empowered, to prepare, execute and deliver, all instruments of satisfaction or cancellation, or of partial or full release, discharge and all other comparable instruments, with respect to the Mortgage Loans and with respect to the Mortgaged Properties.
Notwithstanding anything in this Agreement to the contrary, in the event of a Principal Prepayment in full or in part of a Mortgage Loan, the Servicer may not waive any Prepayment Charge or portion thereof required by the terms of the related Mortgage Note unless
(i) the Servicer determines that such waiver would maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking into account the value of such Prepayment Charge, or (ii) (A) the enforceability thereof is limited (1) by bankruptcy, insolvency, moratorium, receivership, or other similar law relating to creditors’ rights generally or (2) due to acceleration in connection with a foreclosure or other involuntary payment, or (B) the enforceability is otherwise limited or prohibited by applicable law. If the Servicer waives or does not collect all or a portion of a Prepayment Charge relating to a Principal Prepayment in full due to any action or omission of the Servicer, other than as provided above, the Servicer shall deposit the amount of such Prepayment Charge (or such portion thereof as had been waived for deposit) into the Custodial Account for distribution in accordance with the terms of this Agreement.
The Servicer shall perform all of its servicing responsibilities hereunder or may, with the Owner’s prior written approval, cause a subservicer to perform any such servicing responsibilities on its behalf, but the use by the Servicer of a subservicer shall not release the Servicer from any of its obligations hereunder and the Servicer shall remain responsible hereunder for all acts and omissions of each subservicer as fully as if such acts and omissions were those of the Servicer. Any such subservicer that the Owner shall be requested to consent to must be a ▇▇▇▇▇▇ ▇▇▇ approved seller/servicer or a ▇▇▇▇▇▇▇ Mac seller/servicer in good standing and no event shall have occurred, including but not limited to, a change in insurance coverage, which would make it unable to comply with the eligibility requirements for lenders imposed by ▇▇▇▇▇▇ ▇▇▇ or for seller/servicers by ▇▇▇▇▇▇▇ Mac, or which would require notification to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac. The Servicer shall pay all fees and expenses of each subservicer from its own funds, and a subservicer’s fee shall not exceed the Servicing Fee.
At the cost and expense of the Servicer, without any right of reimbursement from the Custodial Account, the Servicer shall be entitled to terminate the rights and responsibilities of a subservicer and arrange, with the Owner’s prior written approval, for any servicing responsibilities to be performed by a successor subservicer meeting the requirements in the preceding paragraph, provided, however, that nothing contained herein shall be deemed to prevent or prohibit the Servicer, at the Servicer’s option, from electing to service the related Mortgage Loans itself. In the event that the Servicer’s responsibilities and duties under this Agreement are terminated pursuant to Section 8.04, 9.01 or 10.01, and if requested to do so by the Owner, the Servicer shall at its own cost and expense terminate the rights and responsibilities of each subservicer effective as of the date of termination of the Servicer. The Servicer shall pay all fees, expenses or penalties necessary in order to terminate the rights and responsibilities of each subservicer from the Servicer’s own funds without reimbursement from the Owner.
Notwithstanding any of the provisions of this Agreement relating to agreements or arrangements between the Servicer and a subservicer or any reference herein to actions taken through a subservicer or otherwise, the Servicer shall not be relieved of its obligations to the Owner and shall be obligated to the same extent and under the same terms and conditions as if it alone were servicing and administering the Mortgage Loans. The Servicer shall be entitled to enter into an agreement with a subservicer for indemnification of the Servicer by the subservicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification.
Any subservicing agreement and any other transactions or services relating to the Mortgage Loans involving a subservicer shall be deemed to be between such subservicer and Servicer alone, and the Owner shall have no obligations, duties or liabilities with respect to such Subservicer including no obligation, duty or liability of Owner to pay such subservicer’s fees and expenses. For purposes of distributions and advances by the Servicer pursuant to this Agreement, the Servicer shall be deemed to have received a payment on a Mortgage Loan when a subservicer has received such payment.
Section 4.02 Collection of Mortgage Loan Payments.
Continuously from each Servicing Transfer Date until the date each Mortgage Loan ceases to be subject to this Agreement, the Servicer will proceed with reasonable diligence to collect all payments due under each Mortgage Loan when the same shall become due and payable and shall, to the extent such procedures shall be consistent with this Agreement and the terms and provisions of any related Primary Mortgage Insurance Policy or LPMI Policy, follow such collection procedures as it follows with respect to mortgage loans comparable to the Mortgage Loans and held for its own account. Further, the Servicer will take reasonable care in ascertaining and estimating annual ground rents, taxes, assessments, water rates, fire and hazard insurance premiums, mortgage insurance premiums, and all other charges that, as provided in the Mortgage, will become due and payable 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 4.03 Realization Upon Defaulted Mortgage Loans.
The Servicer shall use its best efforts, consistent with the procedures that the Servicer would use in servicing loans for its own account and the requirements of the ▇▇▇▇▇▇ Mae Guide, to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 4.01. The Servicer shall use its reasonable efforts to realize upon defaulted Mortgage Loans in such manner as will maximize the receipt of principal and interest by the Owner, taking into account, among other things, the timing of foreclosure proceedings. The foregoing is subject to the provisions that, in any case in which Mortgaged Property shall have suffered damage, the Servicer shall not be required to expend its own funds toward the restoration of such property in excess of $2,000, unless it shall determine in its discretion (i) that such restoration will increase the proceeds of liquidation of the related Mortgage Loan to the Owner after reimbursement to itself for such expenses, and (ii) that such expenses will be recoverable by the Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Section 4.05. In the event that any payment due under any Mortgage Loan 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 Servicer shall take such action as it shall deem to be in the best interest of the Owner. In the event that any payment due under any Mortgage Loan remains delinquent for a period of 90 days or more, the Servicer shall commence foreclosure proceedings, provided that prior to commencing foreclosure proceedings, the Servicer shall notify the Owner in writing of the Servicer’s intention to do so, and the Servicer shall not commence foreclosure proceedings if the Owner objects to such action within ten (10) Business Days of receiving such notice. The Servicer shall notify the Owner in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions as Servicing Advances; provided, however, that it shall be entitled to reimbursement therefor from the related Mortgaged Property or otherwise, as contemplated in Section 4.05.
Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Owner otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector. Upon completion of the inspection, the Servicer shall promptly provide the Owner with a written report of the environmental inspection. After reviewing the environmental inspection report, the Servicer shall consult with the Owner in determining how to proceed with respect to the Mortgaged Property.
Section 4.04 Establishment of Custodial Accounts; Deposits in Custodial Accounts.
The Servicer shall segregate and hold all funds collected and received pursuant to each Mortgage Loan separate and apart from any of its own funds and general assets and shall establish and maintain one or more Custodial Accounts. Each Custodial Account shall be established with a Qualified Depository. To the extent such funds are not deposited in a Custodial Account, such funds may be invested in Permitted Investments for the benefit of the Owner (with any income earned thereon for the benefit of the Servicer). Funds deposited in the Custodial Account may be drawn on by the Servicer in accordance with Section 4.05. The creation of any Custodial Account shall be evidenced by a letter agreement in the form shown in Exhibit B hereto. The original of such letter agreement shall be furnished to the Owner on the initial Servicing Transfer Date. The Servicer shall give notice to the Owner prior to any change of the location of the Custodial Account. The Servicer acknowledges and agrees that the Servicer shall bear any losses incurred with respect to Permitted Investments. The amount of any such losses shall be immediately deposited by the Servicer in the Custodial Account, as appropriate, out of the Servicer’s own funds, with no right to reimbursement therefor.
The Servicer shall deposit in a mortgage clearing account (which account shall be established with a Qualified Depository) on a daily basis, and in the Custodial Account or Accounts no later than the second Business Day after receipt of funds and retain therein the following payments and collections:
(i) all payments on account of principal, including Principal Prepayments, on the Mortgage Loans received after the related Cut-off Date;
(ii) all payments on account of interest on the Mortgage Loans adjusted to the related Mortgage Loan Remittance Rate received after the related Cut-off Date, including Prepayment Charges;
(iii) all Liquidation Proceeds and REO Disposition Proceeds received after the related Cut-off Date;
(iv) any net amounts received by the Servicer after the related Cut-off Date in connection with any REO Property pursuant to Section 4.13;
(v) all Insurance Proceeds received after the related Cut-off Date including amounts required to be deposited pursuant to Sections 4.08 and 4.10, other than proceeds
to be held in the Escrow Account and applied to the restoration or repair of the Mortgaged Property or released to the Mortgagor in accordance with Accepted Servicing Practices, the Mortgage Loan Documents or applicable law;
(vi) all Condemnation Proceeds affecting any Mortgaged Property received after the related Cut-off Date other than proceeds to be held in the Escrow Account and applied to the restoration or repair of the Mortgaged Property or released to the Mortgagor in accordance with Accepted Servicing Practices, the Mortgage Loan Documents or applicable law;
(vii) any Monthly Advances as provided in Section 5.03;
(viii) any amounts received after the related Cut-off Date and required to be deposited in the Custodial Account pursuant to 6.02; and
(ix) with respect to each Principal Prepayment received after the related Cutoff Date, an amount (to be paid by the Servicer out of its own funds without reimbursement therefor) which, when added to all amounts allocable to interest received in connection with such Principal Prepayment, equals one month’s interest on the amount of principal so prepaid, at the Mortgage Loan Remittance Rate; provided, however, that in no event shall the aggregate of deposits made by the Servicer pursuant to this clause
(ix) exceed the aggregate amount of the Servicing Fee in the calendar month in which such deposits are required.
The foregoing requirements for deposit in the Custodial Account shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the nature of late payment charges and assumption fees, to the extent permitted by Section 6.01, need not be deposited by the Servicer in the Custodial Account. Any interest paid on funds deposited in the Custodial Account by the Qualified Depository shall accrue to the benefit of the Servicer and the Servicer shall be entitled to retain and withdraw such interest from the Custodial Account pursuant to Section 4.05(iv).
Section 4.05 Permitted Withdrawals From the Custodial Account.
The Servicer may, from time to time, make withdrawals from the Custodial Account for the following purposes:
(i) to make payments to the Owner in the amounts and in the manner provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances, the Servicer’s right to reimburse itself pursuant to this subclause (ii) being limited to amounts received on the related Mortgage Loan which represent late collections (net of the related Servicing Fees and Excess Servicing Fee if applicable) of principal and/or interest respecting which any such advance was made;
(iii) to reimburse itself for unreimbursed Servicing Advances and unreimbursed Monthly Advances, the Servicer’s right to reimburse itself pursuant to this subclause (iii) with respect to any Mortgage Loan being limited to Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds received after the related Cut-off Date related to such Mortgage Loan;
(iv) to pay to itself as servicing compensation (a) any interest earned on funds in the Custodial Account (all such interest to be withdrawn monthly not later than each Remittance Date) and (b) any payable Servicing Fee and Excess Servicing Fee if applicable from that portion of any payment or recovery as to interest on a particular Mortgage Loan;
(v) to reimburse itself for any Nonrecoverable Advances:
(vi) to transfer funds to another Qualified Depository in accordance with Section 4.09 hereof;
(vii) to remove funds inadvertently placed in the Custodial Account in error by the Servicer; and
(viii) to clear and terminate the Custodial Account upon the termination of this Agreement.
The Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from the Custodial Account pursuant to such subclauses (ii) - (viii) above. The Servicer shall provide written notification in the form of an Officer’s Certificate to the Owner, on or prior to the next succeeding Remittance Date, upon making any withdrawals from the Custodial Account pursuant to subclause (v) above.
Section 4.06 Establishment of Escrow Accounts; Deposits in Escrow Accounts.
The Servicer shall segregate and hold all funds collected and received pursuant to each Mortgage Loan which constitute Escrow Payments separate and apart from any of its own funds and general assets and shall establish and maintain one or more Escrow Accounts. Each Escrow Account shall be established with a Qualified Depository. To the extent such funds are not deposited in an Escrow Account, such funds may be invested in Permitted Investments. Funds deposited in an Escrow Account may be drawn on by the Servicer in accordance with Section 4.07. The creation of any Escrow Account shall be evidenced by a letter agreement in the form shown in Exhibit C. The original of such letter agreement shall be furnished to the Owner on the initial Servicing Transfer Date. The Servicer shall give notice to the Owner prior to any change of the location of the Escrow Account. The Servicer acknowledges and agrees that the Servicer shall bear any losses incurred with respect to Permitted Investments. The amount of any such losses shall be immediately deposited by the Servicer in the Escrow Account, as appropriate, out of the Servicer’s own funds, with no right to reimbursement therefor.
The Servicer shall deposit in a mortgage clearing account on a daily basis (which account shall be established with a Qualified Depository) and in the Escrow Account or Accounts no later than the second Business Day after receipt of funds and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans, for the purpose of effecting timely payment of any items as are required under the terms of this Agreement;
(ii) all Insurance Proceeds and Condemnation Proceeds which are to be applied to the restoration or repair of any Mortgaged Property; and
(iii) all Servicing Advances for Mortgagors whose Escrow Payments are insufficient to cover escrow disbursements.
The Servicer shall make withdrawals from an Escrow Account only to effect such payments as are required under this Agreement, and for such other purposes as shall be as set forth in and in accordance with Section 4.07. The Servicer shall be entitled to retain any interest paid on funds deposited in an Escrow Account by the Qualified Depository other than interest on escrowed funds required by law to be paid to the Mortgagor and, to the extent required by law, the Servicer shall pay interest on escrowed funds to the Mortgagor notwithstanding that the Escrow Account is non-interest bearing or that interest paid thereon is insufficient for such purposes.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments, water rates, fire and hazard insurance premiums, Primary Mortgage Insurance Policy premiums, if applicable, and comparable items;
(ii) to reimburse Servicer for any Servicing Advance made by Servicer with respect to a related Mortgage Loan but only from amounts received on the related Mortgage Loan which represent late payments or collections of Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds as may be determined to be overages;
(iv) for transfer to the Custodial Account in connection with an acquisition of REO Property;
(v) for application to restoration or repair of the Mortgaged Property;
(vi) to pay to the Servicer, or to the Mortgagor to the extent required by law, any interest paid on the funds deposited in the Escrow Account;
(vii) to pay to the Mortgagors or other parties (to the extent required by applicable law and Accepted Servicing Practices) Insurance Proceeds or Condemnation Proceeds deposited in accordance with Section 4.06;
(viii) to remove funds inadvertently placed in an Escrow Account in error by the Servicer; and
(ix) to clear and terminate the Escrow Account on the termination of this Agreement.
As part of its servicing duties, the Servicer shall pay to the Mortgagors interest on funds in an Escrow Account, to the extent required by law, and to the extent that interest earned on funds in the Escrow Account is insufficient, shall pay such interest from its own funds, without any reimbursement therefor.
Section 4.08 Payment of Taxes, Insurance and Other Charges; Maintenance of Primary Mortgage Insurance Policies; Collections Thereunder.
With respect to each Mortgage Loan, the Servicer shall maintain accurate records reflecting the status of ground rents, taxes, assessments, water rates and other charges which are or may become a lien upon the Mortgaged Property and the status of Primary Mortgage Insurance Policy and LPMI 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 and at a time appropriate for securing maximum discounts allowable, employing for such purpose deposits of the Mortgagor in the Escrow Account which shall have been estimated and accumulated by the Servicer in amounts sufficient for such purposes, as allowed under the terms of the Mortgage or applicable law. To the extent that the Mortgage does not provide for Escrow Payments, the Servicer shall determine that any such payments are made by the Mortgagor at the time they first become due. The Servicer assumes full responsibility for the timely payment of all such bills and shall effect timely payments of all such bills irrespective of the Mortgagor’s faithful performance in the payment of same or the making of the Escrow Payments and shall make advances from its own funds to effect such payments.
The Servicer will maintain in full force and effect Primary Mortgage Insurance Policies issued by a Qualified Insurer with respect to each Mortgage Loan for which such coverage is herein required. Such coverage will be maintained until the ratio of the current outstanding principal balance of the related Mortgage Loan to the Appraised Value of the related Mortgaged Property, based on the most recent appraisal of the Mortgaged Property performed by a Qualified Appraiser, such appraisal to be included in the Servicing File, is reduced to an amount as permitted in the ▇▇▇▇▇▇ ▇▇▇ Guide. The Servicer will not cancel or refuse to renew any Primary Mortgage Insurance Policy that is required to be kept in force under this Agreement unless a replacement Primary Mortgage Insurance Policy or LPMI Policy for such canceled or nonrenewed policy is obtained from and maintained with a Qualified Insurer. The Servicer shall not take any action which would result in noncoverage under any applicable Primary Mortgage Insurance Policy or LPMI Policy of any loss which, but for the actions of the Servicer would have been covered thereunder. In connection with any assumption or substitution agreement entered into or to be entered into pursuant to Section 6.01, the Servicer shall promptly notify the insurer under the related Primary Mortgage Insurance Policy or LPMI Policy, if any, of such assumption or substitution of liability in accordance with the terms of such policy and shall take all actions which may be required by such insurer as a condition to the continuation of coverage under the Primary Mortgage Insurance Policy or LPMI Policy. If such Primary Mortgage Insurance Policy is terminated as a result of such assumption or substitution of liability, the Servicer shall obtain a replacement Primary Mortgage Insurance Policy as provided above.
In connection with its activities as servicer, the Servicer agrees to prepare and present, on behalf of itself and the Owner, claims to the insurer under any Private Mortgage Insurance Policy or LPMI Policy in a timely fashion in accordance with the terms of such Primary Mortgage Insurance Policy or LPMI Policy and, in this regard, to take such action as shall be necessary to permit recovery under any Primary Mortgage Insurance Policy or LPMI Policy respecting a defaulted Mortgage Loan. Pursuant to Section 4.04, any amounts collected by the Servicer under any Primary Mortgage Insurance Policy or LPMI Policy shall be deposited in the Custodial Account, subject to withdrawal pursuant to Section 4.05.
Section 4.09 Transfer of Accounts.
The Servicer may transfer the Custodial Account or the Escrow Account to a different Qualified Depository from time to time with the consent of the Owner. The Servicer shall notify the Owner in writing of any such transfer fifteen (15) Business Days prior to such transfer.
Section 4.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan fire and hazard insurance with extended coverage as is customary in the area where the Mortgaged Property is located in an amount which is equal to the lesser of (i) the maximum insurable value of the improvements securing such Mortgage Loan or (ii) the greater of (a) the outstanding principal balance of the Mortgage Loan, and (b) the percentage such that the proceeds thereof shall be sufficient to prevent the Mortgagor and/or the Mortgagee from becoming a co-insurer. If the Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as being a special flood hazard area that has federally-mandated flood insurance requirements, the Servicer will cause to be maintained a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of (i) the outstanding principal balance of the Mortgage Loan, (ii) the maximum insurable value of the improvements securing such Mortgage Loan or (iii) the maximum amount of insurance which is available under the Flood Disaster Protection Act of 1973, as amended. The Servicer shall also maintain on the 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 an amount as provided above. Pursuant to Section 4.04, any amounts collected by the Servicer under any such policies other than amounts to be deposited in the Escrow Account and applied to the restoration or repair of the Mortgaged Property or REO Property, or released to the Mortgagor in accordance with Accepted Servicing Practices, shall be deposited in the Custodial Account, subject to withdrawal pursuant to Section 4.05. Any cost incurred by the Servicer in maintaining any such insurance shall not, for the purpose of calculating distributions to the Owner, be added to the unpaid principal balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit. It is understood and agreed that no other additional insurance need be required by the Servicer or the Mortgagor or maintained on property acquired in respect of the Mortgage Loans, other than pursuant to the ▇▇▇▇▇▇ Mae Guide or such applicable State or Federal laws and regulations as shall at any time be in force and as shall require such additional insurance. All such policies shall be endorsed with standard mortgagee clauses with loss payable to the Servicer and its successors and/or assigns and shall provide for at least thirty days prior written notice of any cancellation, reduction in the amount or material change in coverage to the Servicer. The Servicer shall not interfere with the Mortgagor’s freedom of choice in selecting either his insurance carrier or agent, provided, however, that the Servicer shall not accept any such insurance policies from insurance companies unless such companies currently reflect a General Policy Rating of A:VI or better in Best’s Key Rating Guide currently acceptable to ▇▇▇▇▇▇ ▇▇▇ and are licensed to do business in the State wherein the property subject to the policy is located.
Section 4.11 Adjustments to Mortgage Interest Rate and Monthly Payment.
For any ARM Loan, on each applicable Adjustment Date, the Mortgage Interest Rate shall be adjusted, in compliance with the requirements of the related Mortgage and Mortgage Note, to equal the sum of the Index plus the Margin (rounded in accordance with the related Mortgage Note) subject to the applicable Periodic Rate Cap and Lifetime Rate Cap, as set forth in the Mortgage Note. The Servicer shall execute and deliver the notices required by each Mortgage and Mortgage Note, applicable laws and regulations and Accepted Servicing Practices regarding interest rate adjustments. The Servicer shall also provide timely notification to the Owner of all applicable data and information regarding such interest rate adjustments.
Section 4.12 Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity bond and an errors and omissions insurance policy, with broad coverage with responsible companies that would meet the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac on all officers, employees or other persons acting in any capacity with regard to the Mortgage Loans and who handle funds, money, documents and papers relating to the Mortgage Loans. The Fidelity Bond and errors and omissions insurance shall be in the form of the Mortgage Banker’s Blanket Bond and shall protect and insure the Servicer against losses, including forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of such persons. Such Fidelity Bond and errors and omissions insurance shall also protect and insure the Servicer against losses in connection with the failure to maintain any insurance policies required pursuant to this Agreement and the release or satisfaction of a Mortgage Loan without having obtained payment in full of the indebtedness secured thereby. No provision of this Section 4.12 requiring the Fidelity Bond and errors and omissions insurance shall diminish or relieve the Servicer from its duties and obligations as set forth in this Agreement. The minimum coverage under any such Fidelity Bond and insurance policy shall be at least equal to the corresponding amounts required by ▇▇▇▇▇▇ Mae in the ▇▇▇▇▇▇ ▇▇▇ Guide or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ Mac Guide. The Servicer shall, upon request of Owner, deliver to the Owner a certificate from the surety and the insurer as to the existence of the Fidelity Bond and errors and omissions insurance policy and shall obtain a statement from the surety and the insurer that such Fidelity Bond or insurance policy shall in no event be terminated or materially modified without thirty days prior written notice to the Owner. The Servicer shall notify the Owner within five Business Days of receipt of notice that such Fidelity Bond or insurance policy will be, or has been, materially modified or terminated. The Owner and its successors or assigns as their interests may appear must be named as loss payees on the Fidelity Bond and as additional insured on the errors and omissions policy.
Section 4.13 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 Servicer or the Person designated by the Owner or in the event such person 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 Servicer from an attorney duly licensed to practice law in the state where the REO Property is located. Any such Person or Persons holding such title other than the Owner shall acknowledge in writing that such title is being held as nominee for the benefit of the Owner.
The Servicer shall notify the Owner in accordance with prudent servicing practices of each acquisition of REO Property upon such acquisition, and thereafter assume the responsibility for marketing such REO Property in accordance with Accepted Servicing Practices. Thereafter, the Servicer shall continue to provide certain administrative services to the Owner relating to such REO Property as set forth in this Section 4.13. The Servicer shall use its best efforts to dispose of the REO Property as soon as possible and shall sell such REO Property in any event within one year after title has been taken to such REO Property, unless (i) the Servicer determines, and gives appropriate notice to the Owner, that a longer period is necessary for the orderly liquidation of such Property or (ii) a REMIC election has been made with respect to the arrangement under which the Mortgage Loans and REO Property are held. If a REMIC election is made pursuant to paragraph (ii) above, the REO Property must be sold within three years following the end of the calendar year of the date of acquisition unless (A) the Owner shall have been supplied with an Opinion of Counsel to the effect that the holding by the related trust of such Mortgaged Property subsequent to such three-year period (and specifying the period beyond such three-year period for which the Mortgaged Property may be held) will not result in the imposition of taxes on “prohibited transactions” of the related trust as defined in Section 860F of the Code, or cause the related REMIC to fail to qualify as a REMIC, in which case the related trust may continue to hold such Mortgaged Property (subject to any conditions contained in such Opinion of Counsel), or (B) the Owner (at the Servicer’s expense) or the Servicer shall have applied for, prior to the expiration of such three-year period, an extension of such three-year period in the manner contemplated by Section 856(e)(3) of the Code, in which case the three-year period shall be extended by the applicable period. If a period longer than one year is necessary to sell any REO Property, the Servicer shall report monthly to the Owner as to progress being made in selling such REO Property.
Notwithstanding any other provision of this Agreement, if a REMIC election has been made, no Mortgaged Property held by a REMIC shall be rented (or allowed to continue to be rented) or otherwise used for the production of income by or on behalf of the related trust or sold in such a manner or pursuant to any terms that would (i) cause such Mortgaged Property to fail to qualify at any time as “foreclosure property” within a meaning of Section 860G(a)(8) of the Code, (ii) subject the related trust to the imposition of any Federal or State income taxes on “net income from foreclosure property” with respect to such Mortgaged Property within the meaning of Section 860G(c) of the Code, or (iii) cause the sale of such Mortgaged Property to result in the receipt by the related trust or any income from non-permitted assets as described in Section 860F(a) (2)(B) of the Code, unless the Servicer has agreed to indemnify and hold harmless the related trust with respect to the imposition of any such taxes.
The Servicer shall, either itself or through an agent selected by the Servicer, and in accordance with the ▇▇▇▇▇▇ Mae Guide, manage, conserve, protect and operate each REO Property in the same manner that it manages, conserves, protects and operates other foreclosed property for its own account, and in the same manner that similar property in the same locality as the REO Property is managed. Each REO Disposition shall be carried out by the Servicer at such price and upon such terms and conditions as the Servicer deems to be in the best interest of the Owner only with the prior written consent of the Owner. The REO Disposition Proceeds from the sale of the REO Property shall be promptly deposited in the Custodial Account and shall be separately identified from all other funds deposited or to be deposited in such Custodial Account. As soon as practical thereafter, the expenses of such sale shall be paid and the Servicer shall reimburse itself for any related Servicing Advances, or Monthly Advances made pursuant to Section 5.03. The Servicer shall furnish to the Owner on each Remittance Date, an operating statement for each REO Property covering the operation of each REO Property for the previous month. Such operating statement shall be accompanied by such other information as the Owner shall reasonably request.
The Servicer shall cause each REO Property to be inspected promptly upon the acquisition of title thereto and shall cause each REO Property to be inspected at least monthly thereafter or more frequently as may be required by the circumstances. The Servicer shall make or cause the inspector to make a written report of each such inspection. Such reports shall be retained in the Servicing File and copies thereof shall be forwarded by the Servicer to the Owner.
Notwithstanding anything to the contrary set forth in this Section 4.13, the parties hereto hereby agree that the Owner, at its option, shall be entitled to manage, conserve, protect and operate each REO Property for its own benefit (such option, an “REO Option”). In connection with the exercise of an REO Option, the prior two paragraphs and the related provisions of Section 4.03 and Section 4.04(iii) (such provisions, the “REO Marketing Provisions”) shall be revised as follows. Following the acquisition of any Mortgaged Property, the Servicer shall submit a detailed invoice to the Owner for all related Servicing Advances and, upon exercising the REO Option, the Owner shall promptly reimburse the Servicer for such amounts. In the event the REO Option is exercised with respect to an REO Property, Section 4.04 (iii) shall not be applicable thereto. References made in Section 4.03 with respect to the reimbursement of Servicing Advances shall, for purposes of such REO Property, be deemed to be covered by this paragraph. The Owner acknowledges that, in the event it exercises an REO Option, with respect to the related REO Property, there shall be no breach by the Servicer based upon or arising out of the Servicer’s failure to comply with the REO Marketing Provisions.
ARTICLE V
PAYMENTS TO THE OWNER
Section 5.01 Remittances.
On each Remittance Date, the Servicer shall remit to the Owner (i) all amounts credited to the Custodial Account as of the close of business on the related preceding Determination Date (net of charges against or withdrawals from the Custodial Account pursuant to Section 4.05), plus, to the extent not already deposited in the Custodial Account, (ii) all Monthly Advances, if any, which the Servicer is obligated to distribute pursuant to Section 5.03 minus (iii) any amounts attributable to Principal Prepayments collected after the related Cut-off Date but received after the last day of the calendar month immediately preceding the related Determination Date occurs, minus (iv) any amounts attributable to Monthly Payments collected after the related Cut-off Date but due on a Due Date or Dates subsequent to the last day of the related Due Period, which amounts shall be remitted on the related Remittance Date next succeeding the Due Period for such amounts.
With respect to any remittance received by the Owner after the Business Day on which such payment was due, the Servicer shall pay to the Owner 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 paid by the Servicer to the Owner on the date such late payment is made and shall cover the period commencing with the day following such Business Day and ending with the Business Day on which such payment is made, both inclusive. The payment by the Servicer of any such interest shall not be deemed an extension of time for payment or a waiver of any Event of Default by the Servicer.
All distributions made to the Owner on each Remittance Date shall be based on the Mortgage Loans owned and held by the Owner, and shall be made by wire transfer of immediately available funds to the account of the Owner at a bank or other entity having appropriate facilities therefor, if the Owner shall have so notified the Servicer or by check mailed to the address of the Owner.
Section 5.02 Statements to the Owner.
The Servicer shall furnish to the Owner an individual Mortgage Loan accounting report (a “Report”), as of the last Business Day of each month, in the Servicer’s assigned loan number order to document Mortgage Loan payment activity on an individual Mortgage Loan basis. With respect to each month, such Report shall be received by the Owner no later than the tenth day of the following month (or if such tenth day is not a Business Day, the immediately preceding Business Day) of the related Due Period on a disk or tape or other computer-readable format, in such format as may be mutually agreed upon by both the Owner and the Servicer, which Report shall contain but not necessarily be limited to, the following:
(i) with respect to each Monthly Payment, the amount of such remittance allocable to interest;
(ii) the amount of servicing compensation received by the Servicer during the prior distribution period;
(iii) the aggregate Stated Principal Balance of the Mortgage Loans;
(iv) the number and aggregate outstanding principal balances of Mortgage Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89 days, (3) 90 days or more; (b) as to which foreclosure has commenced; and (c) as to which REO Property has been acquired;
(v) the status of the Custodial Account showing, for the period covered by such statement, the aggregate amount of deposits into and withdrawals from the Custodial Account of each category of deposit specified in Section 4.04 and each category of withdrawal specified in Section 4.05; and
(vi) such other reports as may reasonably be required by the Owner.
The Servicer shall also provide a trial balance, sorted in the Owner’s assigned loan number order, and such other loan level scheduled-scheduled remittance information as described on Exhibit E, in electronic tape form, with each such Report.
The Servicer 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 Owner pursuant to any applicable law with respect to the Mortgage Loans and the transactions contemplated hereby. In addition, the Servicer shall provide the Owner with such information concerning the Mortgage Loans as is necessary for the Owner to prepare its Federal income tax return as the Owner may reasonably request from time to time.
In addition, not more than sixty (60) days after the end of each calendar year, the Servicer shall furnish to each Person who was an Owner at any time during such calendar year
(i) an annual statement in accordance with the requirements of applicable Federal income tax law as to the aggregate of remittances of principal and interest for the applicable portion of such year and (ii) a listing of the principal balances of the Mortgage Loans outstanding at the end of such calendar year.
Section 5.03 Monthly Advances by the Servicer.
Not later than the close of business on the Business Day preceding each Remittance Date, the Servicer shall deposit in the Custodial Account an amount equal to all payments not previously advanced by the Servicer, whether or not deferred pursuant to Section 4.01, of Monthly Payments, adjusted to the related Mortgage Loan Remittance Rate, which are delinquent at the close of business on the related Determination Date; provided, however, that the amount of any such deposit may be reduced by (i) the Amount Held for Future Distribution (as defined below) then on deposit in the Custodial Account, plus (ii) with respect to the initial Remittance Date, the Non-held Early Pay Amount (as defined below). Any portion of the Amount Held for Future Distribution used to pay Monthly Advances shall be replaced by the Servicer by deposit into the Custodial Account on any future Remittance Date to the extent that the funds that are available in the Custodial Account for remittance to the Owner on such Remittance Date are less than the amount of payments required to be made to the Owner on such Remittance Date.
The “Amount Held for Future Distribution” as to any Remittance Date shall be the total of the amounts held in the Custodial Account at the close of business on the preceding Determination Date which were received after the related Cut-off Date on account of
(i) Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds and Principal Prepayments received or made in the month of such Remittance Date and (ii) payments which represent early receipt of Monthly Payments due on a date or dates subsequent to the related Due Date. The “Non-held Early Pay Amount” shall be the total of the amounts then on deposit in the Custodial Account on account of payments which represent early receipt of Monthly Payments received on or prior to the related Cut-off Date.
The Servicer’s obligation to make such Monthly Advances is mandatory notwithstanding any other provision of this Agreement, and as to any Mortgage Loan, will continue through the final disposition or liquidation of the Mortgaged Property, unless the Servicer, in its reasonable good faith judgment, deems such advance to be nonrecoverable from Liquidation Proceeds, REO Disposition Proceeds, Condemnation Proceeds or Insurance Proceeds with respect to the applicable Mortgage Loan. In such latter event, the Servicer shall deliver to the Owner an Officer’s Certificate of the Servicer to the effect that an officer of the Servicer has reviewed the related Servicing File and has obtained a recent appraisal and has made the reasonable determination that any additional advances are nonrecoverable from Liquidation Proceeds or Insurance Proceeds with respect to the applicable Mortgage Loan.
Section 5.04 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 5.02, with respect to any REO Property, the Servicer shall furnish to the Owner a statement covering the Servicer’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, together with the operating statement. Such statement shall be accompanied by such other information as the Owner shall reasonably request.
Section 5.05 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof by the Owner pursuant to a deed-in-lieu of foreclosure, the Servicer shall submit to the Owner a liquidation report with respect to such Mortgaged Property in such form as the Servicer and the Owner shall agree.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Assumption Agreements.
The Servicer will, to the extent it has knowledge of any conveyance or prospective conveyance by any Mortgagor of a Mortgaged Property (whether by absolute conveyance or by contract of, sale, and whether or not the Mortgagor remains or is to remain liable under the Mortgage Note and/or the Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan under any “due-on-sale” clause to the extent permitted by law; provided, however, that the Servicer shall not exercise any such rights if prohibited by law or the terms of the Mortgage Note from doing so or if the exercise of such rights would impair or threaten to impair any recovery under the related Primary Mortgage Insurance Policy or LPMI Policy, if any. If the Servicer reasonably believes it is unable under applicable law to enforce such “due-on-sale” clause, the Servicer, with the approval of the Owner (such approval not to be unreasonably withheld), will enter into an assumption agreement with the person to whom the Mortgaged Property has been conveyed or is proposed to be conveyed, pursuant to which such person becomes liable under the Mortgage Note and, to the extent permitted by applicable State law, the Mortgagor remains liable thereon. Where an assumption is allowed pursuant to this Section 6.01, the Servicer, with the prior consent of the insurer under the Primary Insurance Policy or LPMI Policy, if any, is authorized to enter into a substitution of liability agreement with the person to whom the Mortgaged Property has been conveyed or is proposed to be conveyed pursuant to which the original mortgagor is released from liability and such Person is substituted as mortgagor and becomes liable under the related Mortgage Note. Any such substitution of liability agreement shall be in lieu of an assumption agreement.
In connection with any such assumption or substitution of liability, the Servicer shall follow the underwriting practices and procedures of the ▇▇▇▇▇▇ ▇▇▇ Guide related to “A” quality mortgage loans. With respect to an assumption or substitution of liability, the Mortgage Interest Rate borne by the related Mortgage Note, the amount of the Monthly Payment, and the final maturity date may not be changed. In addition, for ARM Loans, in no event shall the Index, Margin, Periodic Rate Cap, Adjustment Date, Lifetime Rate Cap or minimum rate be changed. The Servicer shall notify the Owner that any such substitution of liability or assumption agreement has been completed by forwarding to the Owner the original of any such substitution of liability or assumption agreement, which document shall be added to the related Mortgage Loan Documents and shall, for all purposes, be considered a part of such related mortgage file to the same extent as all other documents and instruments constituting a part thereof. All fees collected by the Servicer for entering into an assumption or substitution of liability agreement shall belong to the Servicer.
Notwithstanding the foregoing paragraphs of this section or any other provision of this Agreement, the Servicer shall not be deemed to be in default, breach or any other violation of its obligations hereunder by reason of any assumption of a Mortgage Loan by operation of law or any assumption which the Servicer may be restricted by law from preventing, for any reason whatsoever. For purposes of this Section 6.01, the term “assumption” is deemed to also include a sale of the Mortgaged Property subject to the Mortgage that is not accompanied by an assumption or substitution of liability agreement.
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Loan Documents.
Upon the payment in full of any Mortgage Loan, the Servicer will immediately notify the Custodian and the Owner with a certification and request for release by a Servicing Officer, which certification shall include a statement to the effect that all amounts received or to be received in connection with such payment which are required to be deposited in the Custodial Account pursuant to Section 4.04 have been or will be so deposited, and a request for delivery to the Servicer of the portion of the Mortgage Loan Documents held by the Custodian. Upon receipt of such certification and request, the Owner shall promptly release or cause the Custodian to promptly release the related Mortgage Loan Documents to the Servicer and the Servicer shall prepare and deliver for execution by the Owner or at the Owner’s option execute under the authority of a power of attorney delivered to the Servicer by the Owner any satisfaction or release. No expense incurred in connection with any instrument of satisfaction or deed of reconveyance shall be chargeable to the Custodial Account.
In the event the Servicer satisfies or releases a Mortgage without having obtained payment in full of the indebtedness secured by the Mortgage or should it otherwise prejudice any right the Owner may have under the mortgage instruments, the Servicer shall remit to the Owner the then outstanding principal balance of the related Mortgage Loan by deposit thereof in the Custodial Account. The Servicer shall maintain the Fidelity Bond insuring the Servicer against any loss it may sustain with respect to any Mortgage Loan not satisfied in accordance with the procedures set forth herein.
From time to time and as appropriate for the servicing or foreclosure of the Mortgage Loans, including for the purpose of collection under any Primary Mortgage Insurance Policy or LPMI Policy, upon request of the Servicer and delivery to the Custodian and the Owner of a servicing receipt signed by a Servicing Officer, the Custodian and the Owner shall release that portion of the Mortgage Loan Documents held by the Custodian and the Owner to the Servicer. Such servicing receipt shall obligate the Servicer to promptly return the related Mortgage Loan Documents to the Custodian and the Owner, when the need therefor by the Servicer no longer exists, unless the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been deposited in the Custodial Account or such documents have been delivered to an attorney, or to a public trustee or other public official as required by law, for purposes of initiating or pursuing legal action or other proceedings for the foreclosure of the Mortgaged Property either judicially or non-judicially, and the Servicer has promptly delivered to the Owner or the Custodian a certificate of a Servicing Officer certifying as to the name and address of the Person to which such documents were delivered and the purpose or purposes of such delivery. Upon receipt of a certificate of a Servicing Officer stating that such Mortgage Loan was liquidated, the servicing receipt shall be released by the Owner or the Custodian, as applicable, to the Servicer.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Servicer shall be entitled to withdraw from the Custodial Account or to retain from interest payments on the Mortgage Loans the amounts provided for as the Servicer’s Servicing Fee and Excess Servicing Fee, if applicable. Additional servicing compensation in the form of assumption fees, as provided in Section 6.01, late payment charges and other ancillary fees (other than Prepayment Charges) shall be retained by the Servicer to the extent not required to be deposited in the Custodial Account. The Servicer shall be required to pay all expenses incurred by it in connection with its servicing activities hereunder and shall not be entitled to reimbursement therefor except as specifically provided for herein.
Section 6.04 Annual Statement as to Compliance.
(a) The Servicer will deliver to the Owner not later than February 28th of each year, and with respect to any calendar year during which an annual report on Form 10-K of any entity which is a depositor of any Mortgage Loans pursuant to a Pass-Through Transfer (each, a “Depositor”) is required to be filed in accordance with the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations of the Securities and Exchange Commission (the “Commission”), the Servicer will deliver to any such Depositor and any master servicer which is master servicing any of the related Mortgage Loans (each, a “Master Servicer”) 15 calendar days before the date on which the Depositor’s annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations of the Commission (or, in each case, if such day is not a Business Day, the immediately preceding Business Day), an Officers’ Certificate (each, an “Annual Statement as to Compliance”) stating, as to each signatory thereof, that (i) a review of the activities of the Servicer during the preceding calendar year and of performance under this Agreement has been made under such officers’ supervision, and (ii) to the best of such officers’ knowledge, based on such review, the Servicer has fulfilled all of 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 officers and the nature and status thereof except for such defaults as such Officers in their good faith judgment believe to be immaterial.
(b) With respect to any calendar year during which the Depositor’s annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations of the Commission, 15 calendar days before the date on which the Depositor’s annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations of the Commission (or, in each case, if such day is not a Business Day, the immediately preceding Business Day), or at any other time upon thirty (30) days written request, an officer of the Servicer shall execute and deliver a separate Officer’s Certificate to each Master Servicer and Depositor for the benefit of such Master Servicer or Depositor, as applicable, and its officers, directors and affiliates, certifying as to the following matters:
(i)
Based on my knowledge, the information in the Annual Statement as to Compliance, the Annual Independent Public Accountant’s Report and all servicing reports, officer’s certificates and other information relating to the servicing of the Mortgage Loans
submitted to the Owner and the Master Servicer taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the date of this certification;
(ii)
The servicing information required to be provided to the Master Servicer, the Depositor and the Owner by the Servicer under the Servicing Agreement has been provided to the Master Servicer and the Owner;
(iii)
I am responsible for reviewing the activities performed by the Servicer under the Servicing Agreement and based upon the review required by the Servicing Agreement, and except as disclosed in the Annual Statement as to Compliance or the Annual Independent Public Accountant’s Report submitted to the Master Servicer and the Owner, the Servicer has, as of the date of this certification fulfilled its obligations under the Servicing Agreement; and
(iv)
I have disclosed to the Master Servicer and the Owner all significant deficiencies relating to the Servicer’s compliance with the minimum servicing standards in accordance with a review conducted in compliance with the Uniform Single Attestation Program for Mortgage Bankers or similar standard as set forth in the Servicing Agreement.
Section 6.05 Notification of Adjustments
On each Adjustment Date, the Servicer shall make interest rate adjustments for each ARM Loan in compliance with the requirements of the related Mortgage and Mortgage Note. The Servicer shall execute and deliver the notices required by each Mortgage and Mortgage Note regarding interest rate adjustments. The Servicer also shall provide timely notification to the Owner of all applicable data and information regarding such interest rate adjustments and the Servicer’s methods of implementing such interest rate adjustments. Upon the discovery by the Servicer or the Owner that the Servicer has failed to adjust a Mortgage Interest Rate or a Monthly Payment pursuant to the terms of the related Mortgage Note and Mortgage, the Servicer shall immediately deposit in the Custodial Account from its own funds the amount of any interest loss caused thereby without reimbursement therefor.
Section 6.06 Annual Independent Certified Public Accountants’ Servicing Report.
Not later than February 28th of each year, and with respect to any calendar year during which an annual report on Form 10-K of any Depositor is required to be filed in accordance with the Exchange Act and the rules and regulations of the Commission, not later than 15 calendar days before the date on which the Depositor’s annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations of the Commission (or, in each case, if such day is not a Business Day, the immediately preceding Business Day), the Servicer 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 (each, an “Annual Independent Public Accountant’s Report”) to the Owner and to each related Depositor and Master Servicer to the effect that such firm has examined certain documents and records relating to the Servicer’s servicing of mortgage loans of the same type as the Mortgage Loans pursuant to servicing agreements substantially similar to this Agreement, which agreements may include this Agreement (such statement to have attached thereto a schedule setting forth the agreements covered thereby), and that, on the basis of such an examination, conducted substantially in accordance with the Uniform Single Attestation Program for Mortgage Bankers, such firm is of the opinion that the Servicer’s servicing has been conducted in compliance with the agreements examined pursuant to this Section 6.06, 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 6.07 Access to Certain Documentation
The Servicer shall provide to the Office of Thrift Supervision, the FDIC and any other federal or state banking or insurance regulatory authority that may exercise authority over the Owner access to the documentation regarding the Mortgage Loans serviced by the Servicer required by applicable laws and regulations. Such access shall be afforded without charge, but only upon reasonable request and during normal business hours at the offices of the Servicer. In addition, access to the documentation will be provided to the Owner and any Person identified to the Servicer by the Owner without charge, upon reasonable request during normal business hours at the offices of the Servicer.
Section 6.08 Reports and Returns to be Filed by the Servicer
The Servicer shall file information reports with respect to the receipt of mortgage interest received in a trade or business, reports of foreclosures and abandonments of any Mortgaged Property and information returns relating to cancellation of indebtedness income with respect to any Mortgaged Property as required by Sections 6050H, 6050J and 6050P of the Code. Such reports shall be in form and substance sufficient to meet the reporting requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.
Section 6.09 Owner’s Right to Examine Servicer Records.
The Owner shall have the right to examine and audit, at its expense, upon reasonable notice to the Servicer, during business hours or at such other times as might be reasonable under applicable circumstances, any and all of the books, records, documentation or other information of the Servicer, or held by another for the Servicer or on its behalf or otherwise, which relate to the performance or observance by the Servicer of the terms, covenants or conditions of this Agreement.
The Servicer shall provide to the Owner and any supervisory agents or examiners representing a State or Federal governmental agency having jurisdiction over the Owner, including but not limited to the OTS, FDIC and other similar entities, access to any documentation regarding the Mortgage Loans in the possession of the Servicer which may be required by any applicable regulations. Such access shall be afforded without charge, upon reasonable request, during normal business hours and at the offices of the Servicer, and in accordance with the applicable Federal government agency, FDIC, OTS, or any other similar regulations.
Section 6.10 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under which the Mortgage Loans and REO Property, or any portion thereof, are held, the Servicer shall not take any action, cause the REMIC to take any action or fail to take (or fail to cause to be taken) any action that, under the REMIC Provisions, if taken or not taken, as the case may be could
(i) endanger the status of the REMIC as a REMIC or (ii) result in the imposition of a tax upon the REMIC (including but not limited to the tax on “prohibited transactions” as defined in Section 860F(a)(2) of the Code and the tax on “contribution” to a REMIC set forth in Section 860G(d) of the Code) unless the Servicer has received an Opinion of Counsel (at the expense of the party seeking to take such actions) to the effect that the contemplated action will not endanger such REMIC status or result in the imposition of any such tax.
Section 6.11 Non-solicitation.
From and after the date of the related Confirmation, the Servicer covenants and agrees that it will not take any action or facilitate or cause any action to be taken by any of its agents or affiliates, or by any independent contractors on the Servicer’s behalf, to personally, by telephone or mail, solicit the Mortgagor under any Mortgage Loan to refinance such Mortgage Loan, in whole or in part or provide information to any other entity to solicit the refinancing of any Mortgage Loan, in whole or in part, without the prior written consent of the Owner. Notwithstanding the foregoing, it is understood and agreed that promotions (including for the refinancing of mortgage loans) undertaken by the Servicer or any affiliates of the Servicer which are directed to the general public at large, or segments thereof, provided that no segment shall consist primarily of the Mortgage Loans, including, without limitation, mass mailing advertisements based on commercially acquired mailing lists or the Servicer’s entire servicing portfolio, and newspaper, radio and television advertisements shall not constitute solicitation under this Section 6.11. This Section 6.11 shall not be deemed to preclude the Servicer or any of its affiliates from soliciting any Mortgagor for any other financial products or services.
ARTICLE VII
REPORTS TO BE PREPARED BY SERVICER
Section 7.01 Servicer Shall Provide Information as Reasonably Required.
The Servicer shall furnish to the Owner upon request, during the term of this Agreement, 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 purposes of this Agreement. The Servicer may negotiate with the Owner for a reasonable fee for providing such report or information, unless (i) the Servicer is required to supply such report or information pursuant to any other section of this Agreement, or (ii) the report or information has been requested in connection with Internal Revenue Service, OTS, FDIC or other regulatory agency requirements. All such reports or information shall be provided by and in accordance with all reasonable instructions and directions given by the Owner. The Servicer agrees to execute and deliver all such instruments and take all such action as the Owner, from time to time, may reasonably request in order to effectuate the purpose and to carry out the terms of this Agreement.
ARTICLE VIII
THE SERVICER
Section 8.01 Indemnification; Third Party Claims.
The Servicer agrees to indemnify the Owner and hold it harmless from and against any and all claims, losses, damages, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses that the Owner may sustain in any way related to the failure of the Servicer to perform in any way its obligations under this Agreement, including but not limited to its obligation to service the Mortgage Loans in strict compliance with the terms of this Agreement and for breach of any representation, warranty or covenant of the Servicer contained herein. The Servicer shall immediately notify the Owner if a claim is made by a third party with respect to this Agreement or the Mortgage Loans, assume (with the consent of the Owner and with counsel reasonably satisfactory to the Owner) 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 Owner in respect of such claim but failure to so notify the Owner shall not limit its obligations hereunder. The Servicer agrees that it will not enter into any settlement of any such claim without the consent of the Owner unless such settlement includes an unconditional release of the Owner from all liability that is the subject matter of such claim. The provisions of this Section 8.01 shall survive termination of this Agreement. In no event will either the Owner or the Servicer be liable to the other party to this Agreement for incidental or consequential damages, including, without limitation, loss of profit or loss of business or business opportunity, regardless of the form of action whether in contract, tort or otherwise.
Section 8.02 Merger or Consolidation of the Servicer.
The Servicer will keep in full effect its existence, rights and franchises as a corporation under the laws of the State of its incorporation except as permitted herein, and will obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement or any of the Mortgage Loans and to perform its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Servicer shall be a party, or any Person succeeding to the business of the Servicer whether or not related to loan servicing, shall be the successor of the Servicer hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that the successor or surviving Person shall be an institution
(i) having a GAAP net worth of not less than $25,000,000, (ii) the deposits of which are insured by the FDIC, SAIF and/or BIF, or which is a HUD-approved mortgagee whose primary business is in origination and servicing of first lien mortgage loans, (iii) which is a ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac approved seller/servicer in good standing, and (iv) is acceptable to the Owner.
Section 8.03 Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the officers, employees or agents of the Servicer shall be under any liability to the Owner for any action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in judgment made in good faith; provided, however, that this provision shall not protect the Servicer or any such person against any breach of warranties or representations made herein, or failure to perform in any way its obligations in strict compliance with any standard of care set forth in this Agreement, or any liability which would otherwise be imposed by reason of negligence or any breach of the terms and conditions of this Agreement. The Servicer and any officer, employee or agent of the Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by the Owner respecting any matters arising hereunder. The Servicer 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 expenses or liability; provided, however, that the Servicer may, with the consent of the Owner, which consent shall not be unreasonably withheld, undertake any such action which it may deem necessary or desirable with respect to this Agreement and the rights and duties of the parties hereto. In such event, the reasonable legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities for which the Owner will be liable, and the Servicer shall be entitled to be reimbursed therefor from the Owner upon written demand, except when such expenses, costs and liabilities are subject to the Servicer’s indemnification under Section 8.01.
Section 8.04 Servicer Not to Resign.
The Servicer shall not assign this Agreement or resign from the obligations and duties hereby imposed on it except by mutual consent of the Servicer and the Owner or upon the determination that its duties hereunder are no longer permissible under applicable law and such incapacity cannot be cured by the Servicer. Any such determination permitting the resignation of the Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to the Owner which Opinion of Counsel shall be in form and substance acceptable to the Owner and which shall be provided at the cost of the Servicer. No such resignation shall become effective until a successor shall have assumed the Servicer’s responsibilities and obligations hereunder in the manner provided in Section 11.01.
Section 8.05 No Transfer of Servicing.
With respect to the retention of the Servicer to service the Mortgage Loans hereunder, the Servicer acknowledges that the Owner has acted in reliance upon the Servicer’s independent status, the adequacy of its servicing facilities, plan, personnel, records and procedures, its integrity, reputation and financial standing and the continuance thereof. Without in any way limiting the generality of this section, the Servicer shall not either assign this Agreement or the servicing hereunder or delegate its rights or duties hereunder or any portion thereof, or sell or otherwise dispose of all or substantially all of its property or assets, without the prior written approval of the Owner, which approval shall not be unreasonably withheld; provided that the Servicer may assign the Agreement and the servicing hereunder without the consent of Owner to an affiliate of the Servicer to which all servicing (including all mortgage loans serviced by the Servicer in addition to the Mortgage Loans subject to this Agreement) so long as (i) such affiliate is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved servicer and (ii) if it is intended that such affiliate be spun off to the shareholders of the Servicer, such affiliate have a GAAP net worth of at least $10,000,000 and (iii) such affiliate shall deliver to the Owner a certification pursuant to which such affiliate shall agree to be bound by the terms and conditions of this Agreement and shall certify that such affiliate is a ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac approved servicer in good standing.
ARTICLE IX
DEFAULT
Section 9.01 Events of Default.
In case one or more of the following Events of Default by the Servicer shall occur and be continuing, that is to say:
(i) any failure by the Servicer to remit to the Owner any payment required to be made under the terms of this Agreement which continues unremedied for a period of one (1) Business Day after written notice thereof (it being understood that this subparagraph shall not affect Servicer’s obligation pursuant to Section 5.01 to pay default interest on any remittance received by the Owner after the Business Day on which such payment was due); or
(ii) any failure on the part of the Servicer duly to observe or perform in any material respect any other of the covenants or agreements on the part of the Servicer set forth in this Agreement which continues unremedied for a period of thirty (30) days (except that such number of days shall be fifteen in the case of a failure to pay any premium for any insurance policy required to be maintained under this Agreement) after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Owner; or
(iii) a decree or order of a court or agency or supervisory authority having jurisdiction for the appointment of a conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Servicer and such decree or order shall have remained in force undischarged or unstayed for a period of sixty days; or
(iv) the Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to the Servicer or of or relating to all or substantially all of its property; or
(v) the Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) the Servicer ceases to be approved by either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac (to the extent such entities are then operating in a capacity similar to that in which they operate on the date of this Agreement) as a mortgage loan servicer; or
(vii) the Servicer attempts to assign its right to servicing compensation hereunder or the Servicer attempts, without the consent of the Owner, 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 except as otherwise permitted herein; or
(viii) failure by the Servicer to be in compliance with the “doing business” or licensing laws of any jurisdiction where a Mortgaged Property is located; or
(ix) failure by the Servicer to duly perform, within the required time period, its obligations under Section 6.04 or 6.06 of this Agreement, which failure continues unremedied for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Owner or by any Master Servicer
then, and in each and every such case, so long as an Event of Default shall not have been remedied, the Owner, by notice in writing to the Servicer may, in addition to whatever rights the Owner may have under Section 8.01 and at law or equity to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Servicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof without compensating the Servicer for the same. On or after the receipt by the Servicer of such written notice, all authority and power of the Servicer under this Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass to and be vested in the successor appointed pursuant to Section 11.01. Upon written request from the Owner, the Servicer shall prepare, execute and deliver, any and all documents and other instruments, place in such successor’s possession all Servicing Files, and do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Mortgage Loans and related documents, or otherwise, at the Servicer’s sole expense. The Servicer agrees to cooperate with the Owner and such successor in effecting the termination of the Servicer’s responsibilities and rights hereunder, including, without limitation, the transfer to such successor for administration by it of all cash amounts which shall at the time be credited by the Servicer to the Custodial Account or Escrow Account or thereafter received with respect to the Mortgage Loans or any REO Property.
Section 9.02 Waiver of Defaults.
The Owner may waive only by written notice any default by the Servicer in the performance of its obligations hereunder and its consequences. Upon any such waiver of a past default, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived in writing.
ARTICLE X
TERMINATION
Section 10.01 Termination.
The respective obligations and responsibilities of the Servicer shall terminate upon (i) the later of the final payment or other liquidation (or any advance with respect thereto) of the last Mortgage Loan or the disposition of all REO Property and the remittance of all funds due hereunder; (ii) by mutual consent of the Servicer and the Owner in writing; (iii) termination by the Owner of the Servicer’s obligations and responsibilities with respect to some or all of the Mortgage Loans upon payment by the Owner to the Servicer of a termination fee as set forth in a separate agreement between the Owner and the Servicer; or (iv) termination pursuant to Section 9.01. Simultaneously with any such termination and the transfer of servicing hereunder, the Servicer shall be entitled to be reimbursed for any outstanding Servicing Advances and Monthly Advances.
Section 10.02 Removal of Mortgage Loans from Inclusion under this Agreement upon a Whole Loan Transfer or a Pass-Through Transfer on One or More Reconstitution Dates.
The Servicer acknowledges and the Owner agrees that with respect to some or all of the Mortgage Loans, the Owner may effect either (1) one or more Whole Loan Transfers, or
(2) one or more Pass-Through Transfers.
The Servicer shall cooperate with the Owner in connection with any Whole Loan Transfer or Pass-Through Transfer contemplated by the Owner pursuant to this Section. In connection therewith, and without limitation, unless otherwise agreed by Servicer and Owner, the Owner shall deliver any Reconstitution Agreement or other document related to the Whole Loan Transfer or Pass-Through Transfer to the Servicer at least ten (10) days prior to such Whole Loan Transfer or Pass-Through Transfer (or twenty (20) days if such transfer is to take place in March, June, September or December) and the Servicer shall execute any such Reconstitution Agreement which contains provisions substantially similar to those herein or otherwise reasonably acceptable to the Owner and the Servicer and which restates the representations and warranties contained in Article III as of the date of transfer (except to the extent any such representation or warranty is not accurate on such date).
In addition, with respect to each Whole Loan Transfer or Pass-Through Transfer, as the case may be, entered into by the Owner, the Servicer agrees:
(1) to cooperate fully with the Owner and any prospective purchaser with respect to all reasonable requests and due diligence procedures and with respect to the preparation (including, but not limited to, the endorsement, delivery, assignment, and execution) of the Mortgage Loan Documents and other related documents, and with respect to servicing requirements reasonably requested by the rating agencies and credit enhancers;
(2) to deliver to the Owner for inclusion in any prospectus or other offering material such publicly available information regarding the Servicer, its financial condition and its mortgage loan delinquency, foreclosure and loss experience and any additional information requested by the Owner that is otherwise reasonably requested by the Owner and which the Servicer is capable of providing without unreasonable effort or expense, and to indemnify the Owner and its affiliates for material misstatements or omissions contained in such information;
(3) to deliver to the Owner and to any Person designated by the Owner, at the Owner’s expense, such statements and audit letters of reputable, certified public accountants pertaining to information provided by the Servicer pursuant to clause 2 above as shall be reasonably requested by the Owner;
(4) to deliver to the Owner, and to any Person designated by the Owner, such legal documents and in-house Opinions of Counsel as are customarily delivered by servicers and reasonably determined by the Owner to be necessary in connection with Whole Loan Transfers or Pass-Through Transfers, as the case may be, such in-house Opinions of Counsel for a Pass-Through Transfer to be in the form reasonably acceptable to the Owner, it being understood that the cost of any opinions of outside special counsel that may be required for a Whole Loan Transfer or Pass-Through Transfer, as the case may be, shall be the responsibility of the Owner;
(5) to negotiate and execute one or more custodial agreements among the Owner, the Servicer and a third party custodian/trustee which is generally considered to be a prudent custodian/trustee in the secondary mortgage market designated by the Owner in its sole discretion after consultation with the Servicer, in either case for the purpose of pooling the Mortgage Loans with other Mortgage Loans for resale or securitization; and
(6) to transfer the servicing rights to the Owner or its designee in the event of a termination of the Servicer pursuant to Section 10.01(ii),
(iii) or (iv).
With respect to each Whole Loan Transfer or Pass-Through Transfer, as the case may be, effected by the Owner, Owner (i) shall reimburse Servicer for all reasonable out-ofpocket third party costs and expenses related thereto and (ii) shall pay Servicer a reasonable amount representing time and effort expended by Servicer related thereto (which amount shall be reasonably agreed upon by Servicer and Owner prior to the expenditure of such time and effort); provided, however, that for each Whole Loan Transfer and/or Pass-Through Transfer, the sum of such amounts described in subsections (i) and (ii) above shall in no event exceed $5,000. For purposes of this paragraph, all Whole Loan Transfers and/or Pass-Through Transfers made to the same entity within the same accounting cycle shall be considered one Whole Loan Transfer or Pass-Through Transfer.
All Mortgage Loans not sold or transferred pursuant to a Whole Loan Transfer or Pass-Through Transfer shall be subject to this Agreement and shall continue to be serviced in accordance with the terms of this Agreement and with respect thereto this Agreement shall remain in full force and effect.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Successor to the Servicer.
Prior to termination of the Servicer’s responsibilities and duties under this Agreement pursuant to Sections 8.04, 9.01 or 10.01(ii), the Owner shall (i) succeed to and assume all of the Servicer’s responsibilities, rights, duties and obligations under this Agreement, or (ii) appoint a successor having the characteristics set forth in Section 8.02 hereof and which shall succeed to all rights and assume all of the responsibilities, duties and liabilities of the Servicer under this Agreement prior to the termination of the Servicer’s responsibilities, duties and liabilities under this Agreement. In connection with such appointment and assumption, the Owner may make such arrangements for the reasonable compensation of such successor out of payments on Mortgage Loans as the Owner and such successor shall agree. In the event that the Servicer’s duties, responsibilities and liabilities under this Agreement should be terminated pursuant to the aforementioned sections, the Servicer shall discharge such duties and responsibilities during the period from the date it acquires knowledge of such termination until the effective date thereof with the same degree of diligence and prudence which it is obligated to exercise under this Agreement, and shall take no action whatsoever that might impair or prejudice the rights or financial condition of its successor. The resignation or removal of the Servicer pursuant to the aforementioned sections shall not become effective until a successor shall be appointed pursuant to this section and shall in no event relieve the Servicer of the representations and warranties made pursuant to Article III and the remedies available to the Owner under Section 8.01, it being understood and agreed that the provisions of such Article III and Section 8.01 shall be applicable to the Servicer notwithstanding any such resignation or termination of the Servicer, or the termination of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge and deliver to the Servicer and to the Owner an instrument accepting such appointment, whereupon such successor shall become fully vested with all the rights, powers, duties, responsibilities, obligations and liabilities of the Servicer, with like effect as if originally named as a party to this Agreement. Any termination or resignation of the Servicer or this Agreement pursuant to Section 8.04, 9.01 or 10.01 shall not affect any claims that the Owner may have against the Servicer arising prior to any such termination or resignation.
The Servicer shall promptly deliver to the successor the funds in the Custodial Account and the Escrow Account and the Servicing Files and related documents and statements held by it hereunder and the Servicer shall account for all funds. The Servicer shall execute and deliver such instruments and do such other things all as may reasonably be required to more fully and definitely vest and confirm in the successor all such rights, powers, duties, responsibilities, obligations and liabilities of the Servicer. The successor shall make such arrangements as it may deem appropriate to reimburse the Servicer for unrecovered Servicing Advances which the successor retains hereunder and which would otherwise have been recovered by the Servicer pursuant to this Agreement but for the appointment of the successor servicer.
Upon a successor’s acceptance of appointment as such, the Servicer shall notify the Owner of such appointment.
Section 11.02 Financial Statements
The Servicer understands that in connection with the Owner’s marketing of the Mortgage Loans, the Owner shall make available to prospective purchasers the Servicer’s financial statements for the most recently completed three fiscal years respecting which such statements are available. The Servicer also shall make available any comparable interim statements to the extent any such statements have been prepared by the Servicer (and are available upon request to members or stockholders of the Servicer or the public at large). The Servicer, if it has not already done so, agrees to furnish promptly to the Owner copies of the statements specified above. The Servicer also shall make available information on its servicing performance with respect to mortgage loans serviced for others, including delinquency ratios.
The Servicer also agrees to allow access to knowledgeable financial, accounting, origination and servicing officers of the Servicer for the purpose of answering questions asked by any prospective purchaser regarding recent developments affecting the Servicer, its or servicing practices or the financial statements of the Servicer.
Section 11.03 Amendment.
This Agreement may be amended from time to time by the Servicer and the Owner by written agreement signed by the Servicer and the Owner.
Section 11.04 Recordation of Agreement.
To the extent permitted by applicable law, this Agreement 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 the properties subject to the Mortgages are situated, and in any other appropriate public recording office or elsewhere, such recordation to be effected by the Owner at the Owner’s expense on direction of the Owner accompanied by an Opinion of Counsel to the effect that such recordation materially and beneficially affects the interest of the Owner or is necessary for the administration or servicing the Mortgage Loans.
Section 11.05 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS. THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW.
Section 11.06 Notices.
Any demands, notices or other communications permitted or required hereunder shall be in writing and shall be deemed conclusively to have been given if personally delivered at or mailed by registered mail, postage prepaid, and return receipt requested or transmitted by telecopier and confirmed by a similar mailed writing, or, by other means, when received by the other party at the address as follows:
(i) if to the Servicer:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇ Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii)
if to the Owner:
DB Structured Products, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ [__________]
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telecopier No.:
or such other address as may hereafter be furnished to the other party by like notice. Any such demand, notice, or communication hereunder shall be deemed to have been received on the date delivered to or received at the premises of the address (as evidenced, in the case of registered or certified mail, by the date noted on the return receipt).
Section 11.07 Severability of Provisions.
Any part, provision, representation or warranty of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement which is prohibited or unenforceable or is held to be void or unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof. If the invalidity of any part, provision, representation or warranty of this Agreement shall deprive any party of the economic benefit intended to be conferred by this Agreement, the parties shall negotiate, in good faith, to develop a structure the economic effect of which is nearly as possible the same as the economic effect of this Agreement without regard to such invalidity.
Section 11.08 Waivers.
No term or provision of this Agreement may be waived or modified unless such waiver or modification is in writing and signed by the party against whom such waiver or modification is sought to be enforced.
Section 11.09 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.
Section 11.10 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(i) the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
(ii) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;
(iii) references herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(iv) a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
(v) the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
(vi) the term “include” or “including” shall mean without limitation by reason of enumeration.
Section 11.11 Reproduction of Documents.
This Agreement and all documents relating hereto, including, without limitation,
(i) consents, waivers and modifications which may hereafter be executed, (ii) documents received by any party at the closing, and (iii) financial statements, certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.
Section 11.12 Confidentiality of Information.
Each party recognizes that, in connection with this Agreement, it may become privy to non-public information regarding the financial condition, operations and prospects of the other party. Except as required to be disclosed by law, each party agrees to keep all non-public information regarding the other party strictly confidential, and to use all such information solely in order to effectuate the purpose of this Agreement.
Section 11.13 Successors and Assigns.
Subject to Section 8.04, this Agreement shall inure to the benefit of and be binding upon the Servicer and the Owner and their respective successors and assigns. The Owner shall have the right, without the consent of the Servicer hereof, to assign, in whole or in part, its interest under this Agreement to any Person to whom any Mortgage Loan is transferred whether pursuant to a sale or financing and to any person to whom the servicing or master servicing of any Mortgage Loan is sold or transferred. Such assignee shall execute an assignment and assumption agreement which shall be reasonably acceptable to the Servicer. Upon any such assignment, the Person to whom such assignment is made shall succeed to all rights and obligations of the Owner under this Agreement to the extent of the related Mortgage Loan or Mortgage Loans and this Agreement, to the extent of the related Mortgage Loan or Loans, shall be deemed to be a separate and distinct agreement between the Servicer and such purchaser, and a separate and distinct agreement between the Servicer and each other purchaser to the extent of the other related Mortgage Loan or Loans. In the event that this Agreement is assigned to any Person to whom the servicing or master servicing of any Mortgage Loan is sold or transferred, the rights and benefits under this Agreement which inure to the Owner shall inure to the benefit of both the Person to whom such Mortgage Loan is transferred and the Person to whom the servicing or master servicing of the Mortgage Loan has been transferred. Subject to Section 8.05, this Agreement shall not be assigned, pledged or hypothecated by the Servicer to a third party without the consent of the Owner, which consent shall not be unreasonably withheld. In no event shall the Owner sell a partial interest in any Mortgage Loan. All references to the Owner in this Agreement shall be deemed to include its assignees or designees.
Section 11.14 No Partnership.
Nothing herein contained shall be deemed or construed to create a co-partnership or joint venture between the parties hereto and the services of the Servicer shall be rendered as an independent contractor and not as agent for Owner.
Section 11.15 Execution.
This Agreement may be executed simultaneously 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.
Section 11.16 Entire Agreement.
Each of the Servicer and the Owner acknowledge that no representations, agreements or promises were made to it by the other party or any of its employees other than those representations, agreements or promises specifically contained herein. This Agreement sets forth the entire understanding between the parties hereto and shall be binding upon all successors of both parties.
Section 11.17 Further Agreements
The Servicer and the Owner each agree to execute and deliver to the other such reasonable and appropriate additional documents, instruments or agreements as may be necessary or appropriate to effectuate the purposes of this Agreement.
IN WITNESS WHEREOF, the Servicer and the Owner have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date and year first above written.
GMAC MORTGAGE CORPORATION Servicer
By: ____________________________________
Name:
Title:
DB STRUCTURED PRODUCTS, INC. Owner
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
EXHIBIT A
TERMS LETTER
Reference is hereby made to (i) the Servicing Agreement, dated as of April 1, 2004 (the “Servicing Agreement”), between DB Structured Products, Inc. (the “Owner”) and GMAC Mortgage Corporation (the “Servicer”) and (ii) the Confirmation dated [__________] between the Owner and the Servicer.
The Servicer agrees to service the mortgage loans (the “Mortgage Loans”) listed on the Mortgage Loan Schedule attached hereto as Schedule I pursuant to the Servicing Agreement as of the “Servicing Transfer Date” of ______________.
The following is a summary of certain of the characteristics of the Mortgage Loans as of _______________ (the “Cut-off Date”).
Number of Mortgage Loans: | |
Aggregate Original Principal Balance of the Mortgage Loans: | |
Aggregate Unpaid Principal Balance of the Mortgage Loans: | |
Weighted Average Mortgage Interest Rate: | |
Weighted Average Servicing Fee Rate: | |
[Weighted Average Excess Servicing Fee Rate (if any)]: | |
Weighted Average Lender-Paid Mortgage Insurance Rate (if any): | |
Weighted Average Mortgage Loan Remittance Rate: | |
For ARM Loans Only: | |
Type of ARM Loan (e.g., 3/1, 5/1, etc.): | |
Index: | |
Weighted Average Margin: | |
Weighted Average Months to Next Adjustment Date: |
SCHEDULE I TO TERMS LETTER
MORTGAGE LOAN SCHEDULE
EXHIBIT B
CUSTODIAL ACCOUNT LETTER AGREEMENT
(date)
To:______________________
_________________________
_________________________
(the “Depository”)
As “Servicer” under the Servicing Agreement, dated as of April 1, 2004, (the “Agreement”), between DB Structured Products, Inc. (the “Owner”) and GMAC Mortgage Corporation (the “Servicer”) we hereby authorize and request you to establish an account, as a Custodial Account pursuant to Section 4.04 of the Agreement, to be designated as “[Servicer] Custodial Account, in trust for [Owner], Owner of Whole Loan Mortgages.” All deposits in the account shall be subject to withdrawal therefrom by order signed by the Servicer. 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.
GMAC MORTGAGE CORPORATION
By: ____________________________________
Name:
Title:
The undersigned, as “Depository”, hereby certifies that the above described account has been established under Account Number __________, at the office of the depository indicated above, and agrees to honor withdrawals on such account as provided above. The full amount deposited at any time in the account will be insured up to applicable limits by the Federal Deposit Insurance Corporation through the Bank Insurance Fund or the Savings Association Insurance Fund or will be invested in Permitted Investments as defined in the Agreement.
[ ] (name of Depository)
By: ____________________________________
Name:
Title:
EXHIBIT C
ESCROW ACCOUNT LETTER AGREEMENT
(date)
To:______________________
_________________________
_________________________
(the “Depository”)
As “Servicer” under the Servicing Agreement, dated as of April 1, 2004 (the “Agreement”), between DB Structured Products, Inc. (the “Owner”) and GMAC Mortgage Corporation (the “Servicer”) we hereby authorize and request you to establish an account, as an Escrow Account pursuant to Section 4.06 of the Agreement, to be designated as “Escrow Account, in trust for, Owner of Whole Loan Mortgages, and various Mortgagors.” All deposits in the account shall be subject to withdrawal therefrom by order signed by the Servicer. 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.
GMAC MORTGAGE CORPORATION
By: ____________________________________
Name:
Title:
The undersigned, as “Depository”, hereby certifies that the above described account has been established under Account Number __________, at the office of the depository indicated above, and agrees to honor withdrawals on such account as provided above. The full amount deposited at any time in the account will be insured up to applicable limits by the Federal Deposit Insurance Corporation through the Bank Insurance Fund or the Savings Association Insurance Fund or will be invested in Permitted Investments as defined in the Agreement.
[ ] (name of Depository)
By: ____________________________________
Name:
Title:
EXHIBIT D
REQUEST FOR RELEASE
To: [Addressee]
Re:
Servicing Agreement, dated as of April 1, 2004, between DB Structured Products, Inc. as the Owner and GMAC Mortgage Corporation as the Servicer
In connection with the administration of the Mortgage Loans held by you as the Custodian on behalf of the Owner, we request the release, and acknowledge receipt, of the (Custodial File/[specify documents]) for the Mortgage Loan described below, for the reason indicated.
Documents to be sent to Name, Address and Phone Number
Mortgagor’s Name Address & Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
_____ 1.
Mortgage Loan Paid in Full. (The Authorized Servicer hereby certifies that all amounts received in connection therewith have been credited to the account of the Owner).
_____ 2.
Mortgage Loan Liquidated By _________________________ (The Authorized Servicer hereby certifies that all proceed of foreclosure, insurance, condemnation or other liquidation have been finally received and credited to the account of the Owner).
_____ 3. Mortgage Loan in Foreclosure _____ 4. Other (explain)
If box 1 or 2 above is checked, and if all or part of the Custodial File was previously released to us, please release to us our previous request and receipt on file with you, as well as any additional documents in your possession relating to the specified Mortgage Loan.
\
If box 3 or 4 above is checked, upon our return of all of the above documents to you as the Custodian on behalf of the Owner, please acknowledge your receipt by signing in the space indicated below, and returning this form.
GMAC MORTGAGE CORPORATION
By: ____________________________________
Name:
Title:
Date:
Acknowledgment of Documents returned to the Custodian:
By: ____________________________________
Name:
Title:
Date:
EXHIBIT E
LOAN LEVEL SCHEDULED-SCHEDULED
REMITTANCE TAPE LAYOUT
EXHIBIT F
FORM OF SERVICER’S OFFICER’S CERTIFICATE
I, ________________________, hereby certify that I am the duly elected ______________ of [SERVICER], a ______________ (the “Servicer”), and further certify, on behalf of the Servicer as follows:
a. Attached hereto as Attachment I are a true and correct copy of the Certificate of Incorporation and by-laws of the Servicer as are in full force and effect on the date hereof.
b. No proceedings looking toward merger, liquidation, dissolution or bankruptcy of the Servicer are pending or contemplated.
c. Each person who, as an officer or attorney-in-fact of the Servicer, signed (a) the Servicing Agreement (the “Servicing Agreement”), dated as of April 1, 2004 by and between the Servicer and DB Structured Products, Inc. (the “Owner”); and (b) any other document delivered prior hereto or on the date hereof in connection with the Servicing Agreement, at the respective times of such signing and delivery, and is as of the date hereof, duly elected or appointed, qualified and acting as such officer or attorney-in-fact, and the signatures of such persons appearing on such documents are their genuine signatures.
d. Attached hereto as Attachment II is a true and correct copy of the resolutions duly adopted by the board of directors of the Servicer on ____________, 200_ (the “Resolutions”) with respect to the authorization and approval of the servicing of mortgage loans pursuant to the Servicing Agreement; said Resolutions have not been amended, modified, annulled or revoked and are in full force and effect on the date hereof.
e. Attached hereto as Attachment III is a Certificate of Good Standing of the Servicer dated _____, 200_. No event has occurred since _______, 200_ which has affected the good standing of the Servicer under the laws of the State of ___________.
f. All of the representations and warranties of the Servicer contained in Subsection 3.01 of the Servicing Agreement were true and correct in all material respects as of the date of the Servicing Agreement and are true and correct in all material respects as of the date hereof.
g. The Servicer has performed all of its duties and has satisfied all the material conditions on its part to be performed or satisfied prior to the related Servicing Transfer Date pursuant to the Servicing Agreement.
All capitalized terms used herein and not otherwise defined shall have the meaning assigned to them in the Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the Servicer.
Dated: ____________________________________
[Seal]
[SERVICER]
(Servicer)
By: ___________________________________
Name: _________________________________
Title: Vice President
I, _______________________, Secretary of the Servicer, hereby certify that _________________________ is the duly elected, qualified and acting Vice President of the Servicer and that the signature appearing above is genuine.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: _______________________________
[Seal]
[SERVICER]
(Servicer)
By: __________________________________
Name: ________________________________
Title: [Assistant] Secretary