EXHIBIT 99.8
SERVICING AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.,
Depositor
and
WILSHIRE CREDIT CORPORATION,
Servicer
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SERVICING AGREEMENT
Dated as of May 1, 2007
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▇▇▇▇▇▇▇ ▇▇▇▇▇ ALTERNATIVE NOTE ASSET TRUST, SERIES 2007-AF1
TABLE OF CONTENTS
PAGE
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ARTICLE I. DEFINITIONS................................................... 1
ARTICLE II. REPRESENTATIONS, WARRANTIES AND COVENANTS.................... 17
2.01. Warranties and Representations of the Depositor................. 17
2.02. Warranties and Representations of the Servicer.................. 18
2.03. Covenants of the Servicer....................................... 19
2.03. Amendment of Pooling and Servicing Agreement.................... 19
ARTICLE III. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.............. 20
3.01. Servicer to Service Mortgage Loans.............................. 20
3.02. Servicing and Subservicing; Enforcement of the Obligations of
Servicer........................................................ 21
3.03. Rights of the Depositor and the Trustee in Respect of the
Servicer........................................................ 22
3.04. Master Servicer to Act as Servicer.............................. 22
3.05. Collection of Mortgage Loan Payments; Collection Account........ 23
3.06. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts........................................................ 25
3.07. Access to Certain Documentation and Information Regarding the
Mortgage Loans.................................................. 26
3.08. Permitted Withdrawals from the Collection Account and Master
Servicer Collection Account..................................... 26
3.09. [RESERVED]...................................................... 28
3.10. Maintenance of Hazard Insurance................................. 28
3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements....... 29
3.12. Realization Upon Defaulted Mortgage Loans; Determination of
Excess Proceeds; Special Loss Mitigation........................ 30
3.13. Release of Mortgage Files....................................... 33
3.14. Documents, Records and Funds in Possession of Servicer to be
Held for the Trustee............................................ 34
3.15. Servicing Compensation.......................................... 34
3.16. Access to Certain Documentation................................. 35
3.17. Subordination of Liens.......................................... 35
3.18. Information to the Master Servicer.............................. 35
3.19. Indemnification................................................. 35
3.20. Solicitation.................................................... 36
3.21. High Cost Mortgage Loans........................................ 36
ARTICLE IV. DISTRIBUTIONS................................................ 36
4.01. Advances........................................................ 36
4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.................................. 38
ARTICLE V. THE DEPOSITOR AND THE SERVICER................................ 38
5.01. Respective Liabilities of the Depositor and the Servicer........ 38
5.02. Merger or Consolidation of the Depositor or the Servicer........ 38
5.03. Limitation on Liability of the Depositor, the Servicer and
Others.......................................................... 38
5.04. Limitation on Resignation of Servicer........................... 39
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TABLE OF CONTENTS
(Continued)
PAGE
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5.05. Errors and Omissions Insurance; Fidelity Bonds.................. 39
5.06. Special Servicing Agreements.................................... 40
ARTICLE VI. DEFAULT; TERMINATION OF SERVICER............................. 40
6.01. Events of Default............................................... 40
6.02. Master Servicer to Act; Appointment of Successor................ 41
ARTICLE VII. MISCELLANEOUS PROVISIONS.................................... 42
7.01. Amendment....................................................... 42
7.02. Counterparts.................................................... 42
7.03. Governing Law................................................... 42
7.04. Notices......................................................... 43
7.05. Severability of Provisions...................................... 43
7.06. Assignment...................................................... 43
7.07. Inspection and Audit Rights..................................... 45
7.08. Waiver.......................................................... 45
7.09. Termination..................................................... 45
ARTICLE VIII. ........................................................... 45
8.01. Intent of the Parties; Reasonableness........................... 45
8.02. Subservicing Agreements......................................... 46
8.03. Information to Be Provided by the Servicer...................... 46
8.04. Servicer Compliance Statement................................... 47
8.05. Report on Assessment of Compliance and Attestation.............. 47
8.06. Use of Sub-Servicers and Subcontractors......................... 48
8.07. Indemnification; Remedies....................................... 49
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EXHIBIT A FORM OF REQUEST FOR RELEASE
EXHIBIT B FORM OF SERVICER'S ANNUAL CERTIFICATION
EXHIBIT C-1 FORM OF MASTER SERVICER REPORT
EXHIBIT C-2 FORM OF DELINQUENCIES REPORTING
EXHIBIT C-3 CALCULATION OF REALIZED LOSS/GAIN
EXHIBIT D FORM OF SERVICING CRITERIA
SCHEDULE I MORTGAGE LOAN SCHEDULE
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This SERVICING AGREEMENT, dated as of May 1, 2007 (the "Agreement"), is
between ▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC., a Delaware corporation, as
depositor (the "Depositor"), and WILSHIRE CREDIT CORPORATION, a Nevada
corporation, as servicer (the "Servicer"). Capitalized terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
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 Depositor and the Servicer hereby agree as follows:
ARTICLE I.
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: The Servicer's normal servicing practices,
which will conform to the mortgage servicing practices of prudent mortgage
lending institutions which service for their own account mortgage loans of the
same type as the Mortgage Loans in the jurisdictions in which the related
Mortgaged Properties are located.
Accountant's Attestation: A report from a nationally or regionally
recognized firm of independent registered public accountants which is a member
of the American Institute of Certified Public Accountants to the effect that (i)
it has obtained a representation regarding certain matters from the management
of the Servicer, which includes an assertion as to whether the Servicer has
complied with the applicable Servicing Criteria, and (ii) on the basis of an
examination conducted by such firm in accordance with standards for attestation
engagements issued or adopted by the PCAOB, it is expressing an opinion as to
whether the Servicer's compliance with the applicable Servicing Criteria was
fairly stated in all material respects, or it cannot express an overall opinion
regarding the Servicer's assessment of compliance with the Servicing Criteria.
Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate that is adjustable.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by the Servicer
with respect to any Distribution Date pursuant to Section 4.01, the amount of
any such advances being equal to the sum of the aggregate of payments of
principal and interest (or, with respect to interest-only Mortgage Loans,
payments of scheduled interest) (net of the Servicing Fee) on the related
Mortgage Loans that were due during the applicable Due Period and not received
as of the close of business on the related Determination Date, less the
aggregate amount of any such Delinquent payments that the Servicer has
determined would constitute a Non-Recoverable Advance were an advance to be made
with respect thereto; provided, however, that with respect to (i) any Mortgage
Loan that is 150 days delinquent or more (whether or not the Mortgage Loan has
been converted to an REO Property), (ii) shortfalls in principal and interest
due to bankruptcy proceedings or the application of the Relief Act or similar
laws, or modifications as provided in Section 3.05 and (iii) the principal
portion of any amount paid on a Balloon Loan, there will be no obligation to
make advances and, provided further, however, that with respect to any Mortgage
Loan that has been converted to an REO Property which is less than 150 days
delinquent, the obligation to make
Advances shall only be to payments of interest (subject to the exceptions
described above and net of the Servicing Fees), to be calculated after taking
into account rental income.
Advance Facility: A financing or other facility as described in Section
7.06.
Advancing Person: A Person to whom the Servicer's rights under this
Agreement to be reimbursed for any Advances or Servicing Advances have been
assigned pursuant to Section 7.06.
Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Servicing Agreement, dated as of May 1, 2007, by and
between the Depositor and the Servicer and any and all amendments or supplements
hereto made in accordance with the terms herein.
Appraised Value: For any Mortgaged Property related to a Mortgage Loan, the
amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.
Assessment of Compliance: An officer's assessment of its compliance with
the Servicing Criteria during the preceding calendar year as required by Rules
13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction where the related Mortgaged Property is located to reflect of
record the sale and assignment of the Mortgage Loan to the Trustee, which
assignment, notice of transfer or equivalent instrument may, if permitted by
law, be in the form of one or more blanket assignments covering Mortgages
secured by Mortgaged Properties located in the same county.
Balloon Loan: A Mortgage Loan having an original term to stated maturity of
approximately 15 or 30 years which provides for level monthly payments of
principal and interest generally based on a 30-, 40- or 50-year amortization
schedule, with a balloon payment of the remaining outstanding principal balance
due on such Mortgage Loan at its stated maturity.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) with
respect to Wilshire only, a day on which the New York Stock Exchange is closed
or (iii) a day on which banking institutions in the State of Illinois, State of
California, State of Texas, State of Oregon, State of Maryland, State of
Minnesota or the City of New York, New York are authorized or obligated by law
or executive order to be closed.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
Certificateholder or Holder: As defined in the Pooling and Servicing
Agreement.
Closing Date: May 30, 2007.
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Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to Section 3.05(d) in the name of the
Trustee for the benefit of the Certificateholders and designated, "Wilshire
Credit Corporation, as servicer, for ▇▇▇▇▇ Fargo Bank, N.A., as Securities
Administrator, in trust for registered holders of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Alternative Note
Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-AF1." Funds in the
Collection Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Combined Loan-to-Value Ratio: For any Mortgage Loan in a second lien
position, the fraction, expressed as a percentage, the numerator of which is the
sum of (1) the original principal balance of the related Mortgage Loan and (2)
any outstanding principal balances of Mortgage Loans the liens on which are
senior to the lien on such related Mortgage Loan (such sum calculated at the
date of origination of such related Mortgage Loan) and the denominator of which
is the lesser of (A) the Appraised Value of the related Mortgaged Property and
(B) the sales price of the related Mortgaged Property at time of origination.
Commission: The Securities and Exchange Commission.
Compensating Interest: For any Distribution Date and all Principal
Prepayments in full in respect of a Mortgage Loan that are received during the
period from the first day of the related Prepayment Period through the last day
of the calendar month preceding such Distribution Date, a payment made by the
Servicer in an amount not to exceed the product of (a) 0.50 divided by 12, (b)
the Servicing Fee Rate and (c) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date, equal to the amount of interest at
the Net Mortgage Rate for that Mortgage Loan from the date of prepayment through
the 30th day of such preceding calendar month; provided that any month
consisting of less than 30 days shall be deemed to consist of 30 days.
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released either to a Mortgagor in accordance with the terms of the related
mortgage loan documents or to the holder of a senior lien on the Mortgaged
Property.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
Cut-off Date: May 1, 2007.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the calendar day
immediately preceding the Cut-off Date after application of all payments of
principal due on or prior to the Cut-off Date, whether or not received, and all
Principal Prepayments received prior to the Cut-off Date, but without giving
effect to any installments of principal received in respect of Due Dates after
the Cut-off Date.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon is
not made pursuant to the terms of such Mortgage Loan by the close of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such
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payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month. With
respect to any Mortgage Loan due on any day other than the first day of the
month, such Mortgage Loan shall be deemed to be due on the first day of the
immediately succeeding month. Similarly for "60 days delinquent," "90 days
delinquent" and so on.
Depositor: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., a Delaware corporation,
or any successor in interest.
Determination Date: With respect to any Distribution Date, the last
Business Day of the calendar month preceding the month of such Distribution
Date.
Distribution Account The separate Eligible Account created and maintained
by the Securities Administrator and as defined in the Pooling and Servicing
Agreement.
Distribution Date: The 25th day of each calendar month after the initial
issuance of the Certificates, or if such 25th day is not a Business Day, the
next succeeding Business Day, commencing on the date specified in the Pooling
and Servicing Agreement.
Due Date: With respect to any Distribution Date and any Mortgage Loan, the
day during the related Due Period on which a Scheduled Payment is due.
Due Period: With respect to any Distribution Date, the period beginning on
the second day of the calendar month preceding the calendar month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a federal
or state chartered depository institution (A) the short-term obligations of
which are rated A-1 or better by S&P and P-1 by Moody's at the time of any
deposit therein or (B) insured by the FDIC (to the limits established by such
Corporation), the uninsured deposits (as evidenced in writing by the Rating
Agencies that use of any such account as the Distribution Account will not have
an adverse effect on the then-current ratings assigned to the Classes of
Certificates then rated by the Rating Agencies) in which account are otherwise
secured such that, as evidenced by an Opinion of Counsel (obtained by the Person
requesting that the account be held pursuant to this clause (i)) delivered to
the Securities Administrator prior to the establishment of such account, the
Certificateholders will have a claim with respect to the funds in such account
and a perfected first priority security interest against any collateral (which
shall be limited to Permitted Investments, each of which shall mature not later
than the Business Day immediately preceding the Distribution Date next following
the date of investment in such collateral or the Distribution Date if such
Permitted Investment is an obligation of the institution that maintains the
Distribution Account) securing such funds that is superior to claims of any
other depositors or general creditors of the depository institution with which
such account is maintained, (ii) a segregated trust account or accounts
maintained with a federal or state chartered depository institution or trust
company with trust powers acting in its fiduciary capacity or (iii) a segregated
account or accounts of a depository institution acceptable to the Rating
Agencies (as evidenced in writing by the Rating Agencies that use of any such
account as the Distribution Account will not have an adverse effect on the
then-current ratings assigned to the Classes of the Certificates then rated by
the Rating Agencies). Eligible Accounts may bear interest.
Escrow Account: As defined in Section 3.06 hereof.
Event of Default: As defined in Section 6.01 hereof.
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Excess Proceeds: With respect to any Liquidated Mortgage Loan, any
Liquidation Proceeds that are in excess of the sum of (1) the unpaid principal
balance of such Liquidated Mortgage Loan as of the date of such liquidation plus
(2) interest at the Mortgage Rate from the Due Date as to which interest was
last paid or advanced to Certificateholders (and not reimbursed to the Servicer)
up to the Due Date in the month in which such Liquidation Proceeds are required
to be distributed on the unpaid principal balance of such Liquidated Mortgage
Loan outstanding during each Due Period as to which such interest was not paid
or advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇ ▇▇▇: A federally chartered and privately owned corporation organized
and existing under the Federal National Mortgage Association Charter Act, or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fixed Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage Loan
Schedule as having a Mortgage Rate which is fixed.
▇▇▇▇▇▇▇ Mac: A corporate instrumentality of the United States created and
existing under Title III of the Emergency Home Finance Act of 1970, as amended,
or any successor thereto.
Gross Margin: The percentage set forth in the related Mortgage Note for
each of the Adjustable Rate Mortgage Loans which is to be added to the
applicable index for use in determining the Mortgage Rate on each Adjustment
Date and which is set forth in the Mortgage Loan Schedule for each Adjustable
Rate Mortgage Loan.
Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan, the first
Adjustment Date following the origination of such Mortgage Loan.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.
Insurance Policy: With respect to any Mortgage Loan, any standard hazard
insurance policy, flood insurance policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance Policy
covering any Mortgage Loan or Mortgaged Property other than amounts required to
be paid over to the Mortgagor pursuant to law or the related Mortgage Note or
Security Instrument and other than amounts used to repair or restore the
Mortgaged Property or to reimburse insured expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Funds: With respect to any Distribution Date, the sum, without
duplication, of (1) all scheduled interest due during the related Due Period and
received before the related Servicer Remittance Date less the Servicing Fee, (2)
all Advances relating to interest with respect to the Mortgage Loans, (3) all
Compensating Interest with respect to the Mortgage Loans, (4) Liquidation
Proceeds with respect to the Mortgage Loans (to the extent such Liquidation
Proceeds relate to interest) collected during the related Prepayment Period, (5)
proceeds of any Mortgage Loan purchased by the Depositor or any transferor under
the Pooling and Servicing Agreement during the related Prepayment Period for
document defects, breach of a representation or warranty, realization upon
default or optional termination (to the
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extent such proceeds relate to interest) and (6) all Prepayment Charges received
with respect to the Mortgage Loans during the related Prepayment Period, less
(A) all Non-Recoverable Advances relating to interest, (B) lender paid mortgage
insurance premiums and (C) other amounts reimbursable to the Servicer, the
Securities Administrator, the Master Servicer and a custodian pursuant to this
Agreement.
Issuing Entity: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Alternative Note Asset Trust, Series
2007-AF1.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that either (a) has been liquidated through deed-in-lieu
of foreclosure, foreclosure sale, trustee's sale or other realization as
provided by applicable law governing the real property subject to the related
Mortgage and any security agreements and as to which the Servicer has certified
(in accordance with Section 3.12) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such liquidation
or (b) is not a first lien Mortgage Loan and is delinquent 180 days or longer,
as to which the Servicer has certified in a certificate of an officer of the
Servicer delivered to the Depositor and to the Securities Administrator that it
does not believe that there is a reasonable likelihood that any further net
proceeds will be received or recovered with respect to such Mortgage Loan.
Liquidation Proceeds: Amounts, including Condemnation Proceeds and
Insurance Proceeds, received in connection with the partial or complete
liquidation of Mortgage Loans, whether through trustee's sale, foreclosure sale,
sale by the Servicer pursuant to this Agreement or otherwise or amounts received
in connection with any condemnation or partial release of a Mortgaged Property
and any other proceeds received in connection with an REO Property, less the sum
of related unreimbursed Advances, Servicing Fees, Servicing Advances and any
other expenses related to such Mortgage Loan.
Losses: Any losses, claims, damages, liabilities or expenses collectively.
Master Servicer: ▇▇▇▇▇ Fargo Bank. N.A.
Master Servicer Collection Account: The separate Eligible Account created
and maintained by the Master Servicer pursuant to the Pooling and Servicing
Agreement in the name of the Master Servicer for the benefit of the
Certificateholders and designated "▇▇▇▇▇ Fargo Bank, N.A., as Master Servicer,
in trust for registered holders of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Alternative Note Asset Trust,
Mortgage Loan Asset-Backed Certificates, Series 2007-AF1." Funds in the Master
Servicer Collection Account shall be held in trust for the Certificateholders
for the uses and purposes set forth in the Pooling and Servicing Agreement.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the maximum rate of interest set forth as such in the related Mortgage Note and
with respect to each Fixed Rate Mortgage Loan, the rate of interest set forth in
the related Mortgage Note.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS System.
MERS System: The system of recording transfers of mortgage electronically
maintained by MERS.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the minimum rate of interest set forth as such in the related Mortgage Note.
Minimum Payment: The minimum Monthly Payment required to be paid by a
Mortgagor.
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MIN: The loan number for any MERS Loan.
MLML: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., a Delaware corporation, or its
successors in interest.
Monthly Payment: With respect to any Mortgage Loan, the scheduled monthly
payment of principal and interest on such Mortgage Loan which is payable by the
related Mortgagor from time to time under the related Mortgage Note, determined:
(a) after giving effect to the Mortgagor's choice of payment to the extent
permitted by the Mortgage Note, (b) after giving effect to (i) any Deficient
Valuation and/or Debt Service Reduction with respect to such Mortgage Loan and
(ii) any reduction in the amount of interest collectible from the related
Mortgagor pursuant to the Relief Act; (c) without giving effect to any extension
granted or agreed to by the Servicer pursuant to this Agreement; and (d) on the
assumption that all other amounts, if any, due under such Mortgage Loan are paid
when due.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or any successor in interest.
Mortgage: With respect to a Mortgage Loan, the mortgage, deed of trust or
other instrument creating a first lien or a first priority ownership interest in
an estate in fee simple in real property securing a Mortgage Note.
Mortgage File: The mortgage documents pertaining to a particular Mortgage
Loan and any additional documents delivered to the Trustee to be added to the
Mortgage File pursuant to this Agreement.
Mortgage Loan Schedule: The lists of Mortgage Loans (as from time to time
amended by the Trustee to reflect the deletion of Deleted Mortgage Loans and the
addition of Replacement Mortgage Loans pursuant to the provisions of this
Agreement) transferred to the Trustee as part of the Trust Fund (for
clarification purposes, the Custodian named in the Pooling and Servicing
Agreement has physical possession of the Mortgage Files) and from time to time
subject to this Agreement, attached to the Reconstituted Servicing Agreement,
setting forth the following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) borrower name and address;
(iii) the unpaid principal balance of the Mortgage Loans;
(iv) the Initial Mortgage Rate;
(v) the original maturity date and the months remaining before
maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment due date of the Mortgage Loan;
(ix) the Loan-to-Value Ratio at origination with respect to a first
lien Mortgage Loan, or the Combined Loan-to-Value Ratio with
respect to a second lien Mortgage Loan;
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(x) a code indicating whether the residential dwelling at the time of
origination was represented to be owner-occupied;
(xi) a code indicating the property type;
(xii) with respect to each Adjustable Rate Mortgage Loan;
(A) the frequency of each Adjustment Date;
(B) the next Adjustment Date;
(C) the Maximum Mortgage Rate;
(D) the Minimum Mortgage Rate;
(E) the Mortgage Rate as of the Cut-off Date;
(F) the related Periodic Rate Cap;
(G) the Gross Margin;
(xiii) location of the related Mortgaged Property;
(xiv) a code indicating whether a Prepayment Charge is applicable and,
if so,
(A) the period during which such Prepayment Charge is in effect;
(B) the amount of such Prepayment Charge;
(C) any limitations or other conditions on the enforceability of
such Prepayment Charge; and
(D) any other information pertaining to the Prepayment Charge
specified in the related Mortgage Note; and
(xv) the Credit Score and date obtained.
Mortgage Loans: Such of the mortgage loans transferred and assigned to the
Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property. Any mortgage loan
that was intended by the parties hereto to be transferred to the Trust Fund as
indicated by such Mortgage Loan Schedule which is in fact not so transferred for
any reason shall continue to be a Mortgage Loan hereunder until the Purchase
Price with respect thereto has been paid to the Issuing Entity.
Mortgage Note: The original executed note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan and all
amendments, modifications and attachments thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule set out on Schedule I.
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Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
time to time.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per annum
rate equal to the then current Mortgage Rate less the Servicing Fee Rate.
Net Rate: With respect to any interest in any REMIC and any Distribution
Date, the product of (x) the weighted average Net Mortgage Rate for the Mortgage
Loans calculated based on the respective Net Mortgage Rates and the Stated
Principal Balances of such Mortgage Loans as of the preceding Distribution Date
(or, in the case of the first Distribution Date, as of the Cut-off Date) and (y)
a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days in the related Accrual Period for such interest.
Non-Recoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not or, in the case of a current delinquency, would not, be
ultimately recoverable by the Servicer from the related Mortgagor, related
Liquidation Proceeds or otherwise related to the Mortgage Loans.
Non-Recoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by the Servicer that, in the good faith
judgment of the Servicer, will not or, in the case of a current Servicing
Advance, would not, be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise related to the Mortgage
Loans.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Officer's Certificate: A certificate (1) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor, the
Servicer or the Securities Administrator (or any other officer customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with a
particular subject) or (2), if provided for in this Agreement, signed by a
Servicing Officer, as the case may be, and delivered to the Depositor, the
Servicer, the Master Servicer or the Securities Administrator, as the case may
be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate determined by
the Securities Administrator on the related Interest Determination Date on the
basis of (a) the offered rates for one-month United States dollar deposits, as
such rates appear on Telerate page 3750, as of 11:00 a.m. (London time) on such
Interest Determination Date or (b) if such rate does not appear on Telerate Page
3750 as of 11:00 a.m. (London time), the offered rates of the Reference Banks
for one-month United States dollar deposits, as such rates appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest Determination
Date. If One-Month LIBOR is determined pursuant to clause (b) above, on each
Interest Determination Date, One-Month LIBOR for the related Accrual Period will
be established by the Securities Administrator as follows:
(i) If on such Interest Determination Date two or more Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall
9
be the arithmetic mean of such offered quotations (rounded
upwards if necessary to the nearest whole multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the higher of (i) One-Month LIBOR
as determined on the previous Interest Determination Date and
(ii) the Reserve Interest Rate.
Opinion of Counsel: A written opinion of counsel who is or are acceptable
to the Trustee and who, unless required to be Independent (an "Opinion of
Independent Counsel"), may be internal counsel for the Master Servicer or the
Depositor.
OTS: The Office of Thrift Supervision.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage Loan
which, prior to such Due Date, was not the subject of a Principal Prepayment in
full, did not become a Liquidated Mortgage Loan and was not purchased or
replaced.
Ownership Interest: As to any Certificate, any ownership or security
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
PCAOB: The Public Company Accounting Oversight Board.
Periodic Rate Cap: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof, provided
the timely payment of such obligations is backed by the full
faith and credit of the United States;
(ii) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency rating the
Certificates;
(iii) commercial or finance company paper, other than commercial or
finance company paper issued by the Depositor, the Trustee or any
of their Affiliates, which is then receiving the highest
commercial or finance company paper rating of each such Rating
Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances (other than banker's acceptances issued by the
Trustee or any of its Affiliates) issued by any depository
institution or trust company incorporated under the laws of the
United States or of any state thereof and subject to supervision
and examination by federal and/or state banking authorities,
provided that the commercial paper and/or long term unsecured
debt obligations of such depository institution or trust company
are then rated one of the two highest long-term and the highest
short-term ratings of each such Rating Agency for such
securities;
10
(v) demand or time deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that
such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation rated in the two highest long-term
or the highest short-term ratings of each Rating Agency
containing, at the time of the issuance of such agreements, such
terms and conditions as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by any
such Rating Agency as evidenced by a letter from each Rating
Agency;
(vii) repurchase obligations with respect to any security described in
clauses (i) and (ii) above, in either case entered into with a
depository institution or trust company (acting as principal)
described in clause (v) above;
(viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the
face amount thereof) bearing interest or sold at a discount
issued by any corporation, other than the Trustee or any of its
Affiliates, incorporated under the laws of the United States or
any state thereof which, at the time of such investment, have one
of the two highest long term ratings of each Rating Agency;
(ix) interests in any money market fund (including those managed or
advised by the Trustee or its Affiliates), which at the date of
acquisition of the interests in such fund and throughout the time
such interests are held in such fund has the highest applicable
long term rating by at least one Rating Agency and the highest
applicable long term rating of each Rating Agency rating such
fund, if so rated; and
(x) short term investment funds sponsored by any trust company or
national banking association incorporated under the laws of the
United States or any state thereof, other than the Trustee or any
of its Affiliates, which on the date of acquisition has been
rated by each such Rating Agency in their respective highest
applicable rating category;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or above par or (iii) is purchased at a deep discount; provided,
further, that no such instrument shall be a Permitted Investment (A) if such
instrument evidences principal and interest payments derived from obligations
underlying such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, or (B) if it may be redeemed at
a price below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause (ix) above); and
provided, further, (I) that no amount beneficially owned by any REMIC
(including, without limitation, any amounts collected by the Servicer but not
yet deposited in the Collection Account) may be invested in investments (other
than money market funds) treated as equity interests for Federal income tax
purposes, unless the Servicer shall receive an Opinion of Counsel, at the
expense of the party requesting that such investment be made, to the effect that
such investment will not adversely affect the status of the any REMIC provided
for herein as a REMIC under the Code or result in imposition of a tax on the
Issuing Entity or any REMIC provided for herein and (II) each such investment
must be a "permitted investment"
11
within the meaning of Section 860G(a)(5) of the Code. Permitted Investments that
are subject to prepayment or call may not be purchased at a price in excess of
par.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Pooling and Servicing Agreement: The pooling and servicing agreement, dated
as of May 1, 2007, by and among the Depositor, the Master Servicer, the
Securities Administrator and the Trustee.
Prepayment Charge: Any prepayment premium or charge payable by a Mortgagor
in connection with any Principal Prepayment on a Mortgage Loan pursuant to the
terms of the related Mortgage Note or Mortgage, as applicable.
Prepayment Interest Shortfall: As to any Distribution Date and any Mortgage
Loan (other than a Mortgage Loan relating to an REO Property) that was the
subject of (a) a Principal Prepayment in Full during the portion of the related
Prepayment Period beginning on the first day of such Prepayment Period through
the last day of the month immediately preceding such Distribution Date, an
amount equal to the excess of one month's interest at the Net Mortgage Rate on
the Stated Principal Balance of such Mortgage Loan over the amount of interest
(adjusted to the Net Mortgage Rate) paid by the Mortgagor for such Prepayment
Period to the date of such Principal Prepayment in Full or (b) a Curtailment
during the prior calendar month, an amount equal to the shortfall in interest
resulting from the receipt of principal prior to the next Due Date.
Prepayment Period: As to any Distribution Date, the calendar month
preceding the month of such Distribution Date.
Principal Distribution Amount: With respect to each Distribution Date, the
sum of (i) the Principal Funds for such Distribution Date and (ii) any Extra
Principal Distribution Amount for such Distribution Date.
Principal Funds: With respect to any Distribution Date and the Mortgage
Loans, the sum, without duplication, of (1) the principal due during the related
Due Period and received before the related Servicer Remittance Date or advanced
by the Servicer as an Advance on or before the related Servicer Remittance Date,
(2) Principal Prepayments in Full collected in the related Prepayment Period,
(3) the Stated Principal Balance of each Mortgage Loan that was purchased by the
Depositor or the Servicer during the related Prepayment Period or, in the case
of a purchase in connection with an optional termination, on the Business Day
prior to such Distribution Date, (4) the amount, if any, by which the aggregate
unpaid principal balance of any replacement Mortgage Loans is less than the
aggregate unpaid principal balance of any Mortgage Loans delivered by the
Sponsor in connection with a substitution of a Mortgage Loan, (5) all
Liquidation Proceeds collected during the related Prepayment Period (to the
extent such Liquidation Proceeds related to principal), (6) all Subsequent
Recoveries applicable to the related Prepayment Period, (7) all other
collections and recoveries in respect of principal applicable to the related
Prepayment Period less (A) all non-recoverable Advances relating to principal
and all non-recoverable Servicing Advances reimbursed during the related
Prepayment Period, (B) indemnification amounts and expenses reimbursable to the
Trustee, Securities Administrator, Master Servicer and the Servicer hereunder
and (C) the lesser of (i) the aggregate amount of items (2), (3), (4) and (5)
above collected during the related Prepayment Period and (ii) the aggregate
amount of Negative Amortization during the related Prepayment Period.
12
Principal Prepayment: Any Principal Prepayment in Full or Curtailment or
other recovery of principal on a Mortgage Loan which is received in advance of
its scheduled Due Date to the extent that it is not accompanied by an amount as
to interest representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment, including Insurance
Proceeds and Repurchase Proceeds, but excluding the principal portion of Net
Liquidation Proceeds.
Principal Prepayment in Full: Any Principal Prepayment made by a Mortgagor
of the entire unpaid principal balance of the Mortgage Loan.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by this Agreement, and as confirmed by
an Officers' Certificate from the Master Servicer to the Trustee, an amount
equal to the sum of (i) 100% of the Stated Principal Balance thereof as of the
date of purchase (or such other price as provided herein), (ii) accrued interest
on such Stated Principal Balance at the applicable Mortgage Interest Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or an advance by the Servicer or Master Servicer,
which payment or advance had as of the date of purchase been distributed to
Certificateholders, through the end of the calendar month in which the purchase
is to be effected less any unreimbursed Advances and any unpaid Servicing Fees
payable to the purchaser of the Mortgage Loan and (iii) any costs and damages
incurred by the Issuing Entity in connection with any violation by such Mortgage
Loan or REO Property of any predatory or abusive-lending law.
Rating Agency: Either of S&P or ▇▇▇▇▇'▇. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to (1) a Liquidated Mortgage Loan, the amount,
if any, by which the Stated Principal Balance and accrued interest thereon at
the Net Mortgage Rate exceeds the amount actually recovered by the Servicer with
respect thereto (net of reimbursement of Advances and Servicing Advances) at the
time such Mortgage Loan became a Liquidated Mortgage Loan or (2) with respect to
a Mortgage Loan that is not a Liquidated Mortgage Loan, any amount of principal
that the Mortgagor is no longer legally required to pay (except for the
extinguishment of debt that results from the exercise of remedies due to default
by the Mortgagor).
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A., Citibank,
N.A., ▇▇▇▇▇ Fargo Bank, N.A. and NatWest, N.A.; provided that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Trustee which are engaged in transactions in Eurodollar
deposits in the international Eurocurrency market (i) with an established place
of business in London, England, and (ii) whose quotations appear on the Reuters
Screen LIBO Page on the relevant Interest Determination Date.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed Reg. 1,506, 1.631 (Jan. 7, 2005)) or by the staff of
the Commission, or as may be provided by the Commission or its staff from time
to time.
Relief Act: The Servicemembers Civil Relief Act or any similar state or
local law.
13
Relief Act Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest or principal collectible
on such Mortgage Loan for the most recently ended calendar month as a result of
the application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at sections 860A through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions, and proposed,
temporary and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time as
well as provisions of applicable state laws.
REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by a Sponsor for a
Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit A (1)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (2)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (A) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (B) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (C) have the same index and Periodic Rate Cap as that of
the Deleted Mortgage Loan and a Gross Margin not more than 1% per annum higher
or lower than that of the Deleted Mortgage Loan; (D) not permit conversion of
the related Mortgage Rate to a fixed Mortgage Rate and (F) currently be accruing
interest at a rate not more than 1% per annum higher or lower than that of the
Deleted Mortgage Loan; (3) have a similar or higher FICO score or credit grade
than that of the Deleted Mortgage Loan; (4) have a Loan-to-Value Ratio (or
Combined Loan-to-Value Ratio, in the case of the Mortgage Loans in a second lien
position) no higher than that of the Deleted Mortgage Loan; (5) have a remaining
term to maturity no greater than (and not more than one year less than) that of
the Deleted Mortgage Loan; (6) provide for a Prepayment Charge on terms
substantially similar to those of the Prepayment Charge, if any, of the Deleted
Mortgage Loan; (7) have the same lien priority as the Deleted Mortgage Loan; (8)
constitute the same occupancy type as the Deleted Mortgage Loan; and (9) comply
with each representation and warranty set forth in Section 2.03 hereof.
Request for Release: A request for release in the form attached hereto as
Exhibit A.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance
policy which is required to be maintained from time to time under this Agreement
with respect to such Mortgage Loan.
Reuters Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace such LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or
any successor in interest.
14
Scheduled Payment: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note or, in the case of REO Property, would otherwise have
been payable under the related Mortgage Note as a Minimum Payment.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: ▇▇▇▇▇ Fargo Bank, N.A.
Servicer: Wilshire Credit Corporation, a Nevada corporation, or its
successor in interest.
Servicer Advance Date: As to any Distribution Date, the related Servicer
Remittance Date.
Servicer Information: As defined in Section 8.07(i)(a).
Servicer Remittance Date: With respect to any Distribution Date, the 18th
day (or if such day is not a Business Day, the immediately preceding Business
Day) of the month in which such Distribution Date occurs.
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses incurred in the performance by the Servicer of its servicing
obligations hereunder, including, but not limited to, the cost of (1) the
preservation, inspection, restoration and protection of a Mortgaged Property,
including without limitation advances in respect of prior liens, real estate
taxes and assessments; (2) any collection, enforcement or judicial proceedings,
including without limitation foreclosures, collections and liquidations; (3) the
conservation, management, sale and liquidation of any REO Property; (4)
executing and recording instruments of satisfaction, deeds of reconveyance,
substitutions of trustees on deeds of trust or Assignments of Mortgage to the
extent not otherwise recovered from the related Mortgagors or payable under this
Agreement; (5) correcting errors of prior servicers, tax tracking, title
research, flood certifications, and lender paid mortgage insurance; (6)
obtaining or correcting any legal documentation required to be included in the
Mortgage Files and reasonably necessary for the Servicer to perform its
obligations under this Agreement; and (7) compliance with the obligations under
Sections 3.01 and 3.10.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to the product of (x) the Servicing Fee Rate and (y) the Stated
Principal Balance of such Mortgage Loan as of the preceding Distribution Date
or, in the event of any payment of interest that accompanies a Principal
Prepayment in full made by the Mortgagor, interest at the Servicing Fee Rate on
the Stated Principal Balance of such Mortgage Loan as of the preceding
Distribution Date for the period covered by such payment of interest.
Servicing Fee Rate: 0.25% per annum.
Servicing Officer: Any officer of the Servicer involved in, or responsible
for, the administration and servicing of the Mortgage Loans whose name and
facsimile signature appear on a list of servicing officers furnished to the
Trustee and the Master Servicer by the Servicer on the Closing Date pursuant to
this Agreement, as such lists may from time to time be amended.
15
Servicing Transfer Costs: In the event that the Servicer does not reimburse
the Master Servicer under this Agreement, all costs associated with the transfer
of servicing from the predecessor Servicer, including, without limitation, any
costs or expenses associated with the termination of the predecessor Servicer,
the appointment of a successor servicer, the complete transfer of all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by the Master Servicer or any successor servicer to correct any
errors or insufficiencies in the servicing data or otherwise to enable the
Master Servicer or successor servicer to service the Mortgage Loans properly and
effectively.
Sponsor: MLML, or its successors in interest.
Stated Principal Balance: With respect to any Mortgage Loan and
Distribution Date, the unpaid principal balance of such Mortgage Loan as of the
Due Date in the related Due Period, as specified in the amortization schedule at
the time relating thereto (before any adjustment to such amortization schedule
by reason of any moratorium or similar waiver or grace period), after giving
effect to any previous partial prepayments and Net Liquidation Proceeds received
and to the payment of principal due on such Due Date and irrespective of any
delinquency in payment by the related Mortgagor and as increased by the amounts
of any Negative Amortization with respect to such Mortgage Loan after the
Cut-off Date through the Due Date in the related Due Period.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect to
more than 5% of the Mortgage Loans under the direction or authority of the
Servicer (or a Sub-Servicer of the Servicer), the Master Servicer, the Trustee,
the Custodian or the Securities Administrator.
Subsequent Recovery: Any amount received on a Mortgage Loan (net of amounts
reimbursed to the Servicer related to Liquidated Mortgage Loans) subsequent to
such Mortgage Loan being determined to be a Liquidated Mortgage Loan.
Sub-Servicer: Any Person that services Mortgage Loans on behalf of the
Servicer pursuant to a subservicing agreement and is responsible for the
performance of the material servicing functions required to be performed by the
Servicer under this Agreement that are identified in Item 1122(d) of Regulation
AB and meets any of the criteria of Item 1108(a)(2)(i) through (iii) under the
direction or authority of the Servicer (measured by aggregate Stated Principal
Balance of the Mortgage Loans, annually at the commencement of the calendar year
prior to the year in which an Assessment of Compliance is required to be
delivered, multiplied by a fraction, the numerator of which is the number of
months during which such Sub-Servicer services the related Mortgage Loans and
the denominator of which is 12, or, in the case of the year in which the Closing
Date occurs, the number of months elapsed in such calendar year). Any
Sub-Servicer shall meet the qualifications set forth in Section 3.02. For
classification purposes, the Securities Administrator shall not be deemed a
Sub-Servicer.
Subservicing Agreement: As defined in Section 3.02(a).
Transfer: Any direct or indirect transfer or sale of any Ownership Interest
in a Certificate.
Trust Fund: The corpus of the Issuing Entity.
Trustee: HSBC Bank USA, National Association, a national banking
association, not in its individual capacity, but solely in its capacity as
trustee for the benefit of the Certificateholders under this Agreement, and any
successor thereto, and any corporation or national banking association resulting
from
16
or surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee as may from time to time be serving as successor
trustee hereunder.
United States Person: (i) A citizen or resident of the United States, (ii)
a corporation, partnership or other entity treated as a corporation or
partnership for federal income tax purposes organized in or under the laws of
the United States or any state thereof or the District of Columbia (unless, in
the case of a partnership, Treasury regulations provide otherwise), (iii) an
estate the income of which is includible in gross income for United States tax
purposes regardless of its source or (iv) a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have authority to control all
substantial decisions of the trust. Notwithstanding the preceding sentence, to
the extent provided in Treasury regulations, certain trusts in existence on
August 20, 1996, and treated as United States persons prior to such date, that
elect to continue to be treated as United States persons will also be United
States Persons.
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS
2.01. Warranties and Representations of the Depositor
Depositor warrants and represents to, and covenants with, the Servicer that
as of the date hereof:
(a) the Depositor is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation;
(b) Depositor has full corporate power and authority to execute, deliver
and perform its obligations under this Agreement, and to consummate the
transactions set forth herein. The consummation of the transactions contemplated
by this Agreement is in the ordinary course of Depositor's business and will not
conflict with, or result in a breach of, any of the terms, conditions or
provisions of Depositor's charter or by-laws or any legal restriction, or any
material agreement or instrument to which Depositor is now a party or by which
it is bound, or result in the violation of any law, rule, regulation, order,
judgment or decree to which Depositor or its property is subject. The execution,
delivery and performance by Depositor of this Agreement and the consummation by
it of the transactions contemplated hereby, have been duly authorized by all
necessary corporate action on the part of the Depositor. This Agreement has been
duly executed and delivered by the Depositor and, upon the due authorization,
execution and delivery by the Servicer, will constitute the valid and legally
binding obligation of the Depositor enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
bankruptcy, reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by general
principles of equity regardless of whether enforceability is considered in a
proceeding in equity or at law; and
(c) No consent, approval, order or authorization of, or declaration, filing
or registration with, any governmental entity is required to be obtained or made
by Depositor in connection with the execution, delivery or performance by
Depositor of this Agreement, or the consummation by it of the transactions
contemplated hereby.
2.02. Warranties and Representations of the Servicer.
The Servicer warrants and represents to, and covenants with, Depositor that
as of the date hereof:
17
(a) The Servicer is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation;
(b) The Servicer has full corporate power and authority to execute, deliver
and perform its obligations under this Agreement, and to consummate the
transactions set forth herein. The consummation of the transactions contemplated
by this Agreement is in the ordinary course of the Servicer's business and will
not conflict with, or result in a breach of, any of the terms, conditions or
provisions of the Servicer's charter or by-laws or any legal restriction, or any
material agreement or instrument to which the Servicer is now a party or by
which it is bound, or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Servicer or its property is subject. The
execution, delivery and performance by the Servicer of this Agreement and the
consummation by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on part of the Servicer. This
Agreement has been duly executed and delivered by the Servicer and, upon the due
authorization, execution and delivery by Depositor, will constitute the valid
and legally binding obligation of the Servicer enforceable against the Servicer
in accordance with its terms except as enforceability may be limited by
bankruptcy, reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by general
principles of equity regardless of whether enforceability is considered in a
proceeding in equity or at law; and
(c) No consent, approval, order or authorization of, or declaration, filing
or registration with, any governmental entity is required to be obtained or made
by the Servicer in connection with the execution, delivery or performance by the
Servicer of this Agreement, or the consummation by it of the transactions
contemplated hereby.
(d) The Servicer is duly authorized and qualified to transact any and all
business contemplated by this Agreement to be conducted by the Servicer in any
state in which a Mortgaged Property is located or is otherwise not required
under applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to ensure its ability to enforce each Mortgage Loan, to service the
Mortgage Loans in accordance with the terms of this Agreement and to perform any
of its other obligations under this Agreement in accordance with the terms
hereof.
(e) The Servicer is an approved servicer of mortgage loans for ▇▇▇▇▇▇ ▇▇▇
and is an approved servicer of mortgage loans for ▇▇▇▇▇▇▇ Mac.
(f) No litigation is pending or, to the best of the Servicer's knowledge,
threatened, against the Servicer that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or the ability of the
Servicer to service the Mortgage Loans or to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
2.03. Covenants of the Servicer.
The Servicer hereby covenants to each of the other parties to this
Agreement as follows:
(a) the Servicer shall comply in the performance of its obligations
under this Agreement with all reasonable rules and requirements of the insurer
under each Required Insurance Policy;
(b) [no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, Master
Servicer or the Trustee, any Affiliate of the Depositor, Master Servicer or the
Trustee and prepared by the Servicer pursuant to this Agreement will be
inaccurate
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in any material respect, provided, however, that the Servicer shall not be
responsible for inaccurate information provided to it by third parties and
provided further that this covenant 2.03(b) shall not be breached if the
Servicer corrects such material inaccuracy to the reasonable satisfaction of the
applicable Depositor, Master Servicer or the Trustee or Affiliate thereof,
within five (5) Business Days of receiving written notice of or a Responsible
Servicing Officer's actual knowledge of such inaccuracy, and the Servicer shall
be responsible for any direct damages, costs, liabilities or expenses arising
from a breach that occurs prior to the Servicer's correction thereof.]
(c) the Servicer will fully furnish (for the period it services the
Mortgage Loans), in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and Trans Union
Credit Information Company on a monthly basis, except as the Servicer believes
is reasonably prudent to resolve disputes or potential disputes with Mortgagors.
(d) the Servicer acknowledges that ▇▇▇▇▇ Fargo Bank, N.A.(the "Master
Servicer" and "Securities Administrator") has been appointed as the master
servicer of the Mortgage Loans pursuant to the Pooling and Servicing Agreement,
dated as of May 1, 2007, by and among the Depositor, the Master Servicer, the
Securities Administrator and HSBC Bank USA, National Association (the "Pooling
and Servicing Agreement"). The Servicer shall deliver all reports required to be
delivered under this Agreement to:
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Alternative Note Asset Trust, Series 2007-AF1
(e) the Servicer hereby acknowledges that the Master Servicer has the
right to enforce all obligations of the Servicer under this Agreement acting on
behalf of the MANA 2007-AF1 trust formed pursuant to the Pooling and Servicing
Agreement, as owner of the Mortgage Loans. Such rights will include, without
limitation, the right to terminate the Servicer, as servicer under this
Agreement upon the occurrence of an Event of Default hereunder, the right to
receive all remittances required to be made by the Servicer under this
Agreement, the right to receive all monthly reports and other data required to
be delivered by the Servicer under this Agreement, the right to examine the
books and records of the Servicer and the right to exercise certain rights of
consent and approval of the "Trustee" under this Agreement. Notwithstanding the
foregoing, it is understood that the Servicer shall not be obligated to defend
and indemnify and hold harmless the Master Servicer and the Depositor from and
against any losses, damages, penalties, fines, forfeitures, judgments and any
related costs including, without limitation, reasonable and necessary legal
fees, resulting from (i) actions or inactions of the Servicer which were taken
or omitted upon the instruction or direction of the Master Servicer or (ii) the
failure of the Master Servicer to perform the obligations of the "Trustee" under
this Agreement and this Agreement only to the extent that the Master Servicer
has any obligations of the "Trustee". In addition, the Depositor shall indemnify
the Servicer and hold it harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that the Servicer may
sustain in any way related to (a) actions or inactions of the Servicer which
were taken or omitted upon the instruction or direction of the Securities
Administrator or Master Servicer, as applicable, or (b) the failure of the
Securities Administrator or the Master Servicer, as applicable, to perform the
obligations of the "Trustee" under this Agreement. The Servicer shall make all
distributions under this Agreement to the Master Servicer by wire transfer of
immediately available funds to:
▇▇▇▇▇ Fargo Bank, N.A.
ABA Number: #▇▇▇-▇▇▇-▇▇▇
Account Name: Corporate Trust Clearing
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Account Number: ▇▇▇▇▇▇▇▇▇▇
For further credit to: MANA 2007-AF1
Distribution Account Number: ▇▇▇▇▇▇▇▇
2.04. Amendment of Pooling and Servicing Agreement
The Depositor shall not agree to any modification or amendment of the
Pooling and Servicing Agreement that may adversely affect the Servicer without
the written consent of the Servicer.
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
3.01. Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall service and
administer the Mortgage Loans in accordance with the Accepted Servicing
Practices. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through Sub-Servicers,
as provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds and (iv) subject to Section 3.12(a), to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan; provided that, subject to Section 5.03, the
Servicer shall not take any action that is inconsistent with or prejudices the
interests of the Trust Fund or the Certificateholders in any Mortgage Loan
serviced by it under this Agreement or the rights and interests of the other
parties to this Agreement except as otherwise required by this Agreement or by
law. Notwithstanding anything in this Agreement to the contrary, the Servicer
shall not make or permit any modification, waiver or amendment of any term of
any Mortgage Loan that would cause any of the REMICs provided for in the Pooling
and Servicing Agreement, to fail to qualify as a REMIC or result in the
imposition of any tax under Section 860G(a) or 860G(d) of the Code. The Servicer
shall represent and protect the interest of the Trust Fund in the same manner as
it currently protects its own interest in mortgage loans in its own portfolio in
any claim, proceeding or litigation regarding a Mortgage Loan, but in any case
not in any manner that is a lesser standard than that provided in the first
sentence of this Section 3.01. Without limiting the generality of the foregoing,
the Servicer, in its own name or in the name of the Depositor and the Trustee,
is hereby authorized and empowered by the Depositor and the Trustee, when the
Servicer believes it appropriate in its reasonable judgment, to execute and
deliver, on behalf of the Trustee, the Depositor, the Certificateholders or any
of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, subordinations and all other comparable
instruments, with respect to the Mortgage Loans, and with respect to the
Mortgaged Properties held for the benefit of the Certificateholders. The
Servicer shall prepare and deliver to the Depositor and/or the Trustee such
documents requiring execution and delivery by any or all of them as are
necessary or appropriate to enable the Servicer to service and administer the
Mortgage Loans, to the extent that the Servicer is not permitted to execute and
deliver such documents pursuant to the preceding sentence. Upon receipt of such
documents, the Depositor and/or the Trustee shall execute such documents and
deliver them to the Servicer. For purposes of this Section 3.01, the Trustee
hereby grants to the Servicer a limited power of attorney to execute and file
any and all documents necessary to fulfill the obligations of the Servicer under
this Section 3.01.
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The Servicer shall not be required to make any Servicing Advance with
respect to a Mortgage Loan that is 150 days or more delinquent.
The Servicer shall deliver a list of Servicing Officers to the Trustee by
the Closing Date.
The Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to ▇▇▇▇▇▇ ▇▇▇ Guide Announcement 97-02, and for each
Mortgage Loan, the Servicer agrees that it shall report one of the following
statuses each month as follows: current, delinquent (30-, 60-, 90-days, etc.),
foreclosed or charged-off, except as the Servicer deems prudent for the
prevention or resolution of disputes with Mortgagors.
The Servicer further is authorized and empowered by the Trustee, on behalf
of the Certificateholders and the Trustee, in its own name or in the name of the
Sub-Servicer, when the Servicer or the Sub-Servicer, as the case may be,
believes it is appropriate in its best judgment to register any Mortgage Loan on
the MERS System, or cause the removal from the registration of any Mortgage Loan
on the MERS System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording of
a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns. Any reasonable expenses incurred in connection with the
actions described in the preceding sentence or as a result of MERS discontinuing
or becoming unable to continue operations in connection with the MERS System,
shall be subject to withdrawal by the Servicer from the Collection Account
(provided that such expenses constitute "unanticipated expenses" within the
meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)).
3.02. Servicing and Subservicing; Enforcement of the Obligations of
Servicer.
(a) The Servicer may arrange for the subservicing of any Mortgage Loan
by a Sub-Servicer, which may be an Affiliate (each, a "Sub-Servicer") pursuant
to a subservicing agreement (each, a "Subservicing Agreement"); provided,
however, that (i) such subservicing arrangement and the terms of the related
subservicing agreement must provide for the servicing of such Mortgage Loans in
a manner consistent with the servicing arrangements contemplated hereunder and
(ii) that such agreement would not result in a withdrawal or downgrading by any
Rating Agency of the ratings of any Certificates evidenced by a letter to that
effect delivered by each Rating Agency to the Depositor. Notwithstanding the
provisions of any subservicing agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Servicer and a
Sub-Servicer or reference to actions taken through a Sub-Servicer or otherwise,
the Servicer shall remain obligated and liable to the Depositor, the Master
Servicer and the Certificateholders for the servicing and administration of the
Mortgage Loans in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue of such subservicing
agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering the Mortgage Loans. Every
subservicing agreement entered into by the Servicer shall contain a provision
giving any successor servicer the option to terminate such agreement in the
event a successor servicer is appointed. All actions of the each Sub-Servicer
performed pursuant to the related subservicing agreement shall be performed as
an agent of the Servicer with the same force and effect as if performed directly
by the Servicer. The Servicer shall deliver to the Master Servicer copies of all
subservicing agreements. The Master Servicer shall have no obligations, duties
or liabilities with respect to a Sub-Servicer, including without limitation, any
obligation, duty or liability to monitor such Sub-Servicer or to pay a
Sub-Servicer's fees and expenses.
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(b) For purposes of this Agreement, the Servicer shall be deemed to
have received any collections, recoveries or payments with respect to the
related Mortgage Loans that are received by a Sub-Servicer regardless of whether
such payments are remitted by the Sub-Servicer to the Servicer.
(c) The Servicer shall not permit a Sub-Servicer that would be
required under this Agreement or any sub-servicing agreement to deliver an
Annual Statement of Compliance, an Assessment of Compliance and an Accountant's
Attestation to perform any servicing responsibilities hereunder with respect to
the Mortgage Loans unless that Sub-Servicer first agrees in writing with the
Servicer to deliver an Annual Statement of Compliance, an Assessment of
Compliance and an Accountant's Attestation in such manner and at such times that
permits that Servicer to comply with Sections 8.04 and 8.05 of this Agreement.
3.03. Rights of the Depositor and the Trustee in Respect of the Servicer.
Neither the Trustee nor the Depositor shall have any responsibility or
liability for any action or failure to act by the Servicer, and neither of them
is obligated to supervise the performance of the Servicer hereunder or
otherwise.
3.04. Master Servicer to Act as Servicer.
Subject to Sections 5.04 and 6.02, in the event that the Servicer shall for
any reason no longer be the Servicer hereunder (including by reason of an Event
of Default), the Master Servicer or its designee shall, within a period of time
not to exceed ninety (90) days from the date of notice of termination or
resignation, thereupon assume all of the rights and obligations of the Servicer
hereunder arising thereafter (except that the Master Servicer shall not be (i)
liable for losses of the Servicer pursuant to Section 3.10 hereof or any acts or
omissions of such predecessor Servicer hereunder, (ii) obligated to make
Advances or Servicing Advances if it is prohibited from doing so by applicable
law, (iii) obligated to effectuate repurchases or substitutions of Mortgage
Loans hereunder, (iv) responsible for any expenses of the Servicer or (v) deemed
to have made any representations and warranties hereunder, including pursuant to
Section 2.02 or the first paragraph of Section 5.02 hereof; provided, however
that the Master Servicer (subject to clause (ii) above) or its designee, in its
capacity as the successor servicer, shall immediately assume the terminated or
resigning Servicer's obligation to make Advances and Servicing Advances). No
such termination or resignation shall affect any obligation of the Servicer to
pay amounts owed under this Agreement and to perform its duties under this
Agreement until its successor assumes all of its rights and obligations
hereunder. If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Master Servicer (or any other
successor servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any subservicing agreement in accordance with the terms
thereof; provided, however, that the Master Servicer (or any other successor
servicer) shall not incur any liability or have any obligations in its capacity
as servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising prior to
the date of such succession. To the extent any costs or expenses, including
without limitation, Servicing Transfer Costs incurred by the Master Servicer in
connection with this Section 3.04, are not paid by the Servicer pursuant to this
Agreement within 30 days of the date of the Master Servicer's invoice thereof,
such amounts shall be payable to the Master Servicer pursuant to the Pooling and
Servicing Agreement; provided that if the Servicer has been terminated by reason
of an Event of Default, the terminated Servicer shall reimburse the Issuing
Entity for any such expense incurred by the Issuing Entity upon receipt of a
reasonably detailed invoice evidencing such expenses. If the Master Servicer is
unwilling or unable to act as servicer, the Master Servicer shall seek to
appoint a successor servicer that is eligible in accordance with the criteria
specified in this Agreement.
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The Servicer shall, upon request of the Master Servicer, but at the expense
of the Servicer if the Servicer has been terminated by reason of an Event of
Default, deliver to the assuming party all documents and records relating to
each subservicing agreement and the Mortgage Loans then being serviced and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
3.05. Collection of Mortgage Loan Payments; Collection Account.
(a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Servicer may in
its discretion (i) waive any late payment charge or, if applicable, any default
interest charge, or (ii) subject to Section 3.01, extend the due dates for
payments due on a Mortgage Note for a period not greater than 180 days;
provided, however, that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, subject to Section 4.01, the Servicer
shall make any Advances on the related Mortgage Loan during the scheduled period
in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with the standards set forth in Section 3.01 and not subject to the
requirement to make Advances pursuant to Section 4.01, may also waive, modify or
vary any term of such Mortgage Loan (including modifications that would change
the Mortgage Rate, forgive the payment of principal or interest or extend the
final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance as defined in the
Pooling and Servicing Agreement, in final satisfaction of such Mortgage Loan, or
consent to the postponement of strict compliance with any such term or otherwise
grant indulgence to any Mortgagor (any and all such waivers, modifications,
variances, forgiveness of principal or interest, postponements, or indulgences
collectively referred to herein as "forbearance"), provided, however, that in
determining which course of action permitted by this sentence it shall pursue,
the Servicer shall adhere to the standards of Section 3.01. The Servicer's
analysis supporting any forbearance and the conclusion that any forbearance
meets the standards of Section 3.01 shall be reflected in writing in the
Mortgage File.
With respect to Mortgage Loans affected by a hurricane or other natural
disaster, if the Mortgaged Property is located in public and individual
assistance counties, as designated by the Federal Emergency Management Agency
(as set forth on its website ▇▇▇.▇▇▇▇.▇▇▇), the Servicer (or the related
Subservicer, if applicable) may, at its sole option, cease collection
activities, charging late fees and credit reporting activity for all Mortgagors
in such counties for a period of time and, if reasonably prudent, may extend
such period as long as it deems necessary. In addition, the Servicer (or the
related Subservicer, if applicable), may suspend all foreclosure and bankruptcy
activity relating to such Mortgage Loans for a period of time and, if reasonably
prudent, may extend such period as long as it deems necessary.
(b) The Servicer will not waive any Prepayment Charge or portion
thereof unless, (i) the enforceability thereof shall have been limited by
bankruptcy, insolvency, moratorium, receivership or other similar laws relating
to creditors' rights generally or is otherwise prohibited by law, or (ii) the
collectability thereof shall have been limited due to acceleration in connection
with a foreclosure or other involuntary payment, or (iii) the Servicer has not
been provided with information sufficient to enable it to collect the Prepayment
Charge, or (iv) in the Servicer's reasonable judgment as described in Section
3.01 hereof, (x) such waiver relates to a default or a reasonably foreseeable
default and (y) such waiver would maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and related
23
Mortgage Loan, (v) the collection of such Prepayment Charge or portion thereof,
or of a similar type of Prepayment Charge, would be considered "predatory" or
"illegal" pursuant to written guidance published by any applicable federal,
state or local regulatory authority having jurisdiction over such matters or has
been challenged by any such authority or (vi) there is a certificated class
action in which a similar type of prepayment charge is being challenged. Except
as provided in the preceding sentence, in no event will the Servicer waive a
Prepayment Charge in connection with a refinancing of a Mortgage Loan that is
not related to a default or a reasonably foreseeable default. If the Servicer
waives or does not collect all or a portion of a Prepayment Charge relating to a
Principal Prepayment in full or in part 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 Collection Account for distribution in accordance with the terms of
this Agreement.
(c) The Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with
respect to a taking or condemnation) if it reasonably believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.
(d) The Servicer shall establish and initially maintain, on behalf of
the Certificateholders, a Collection Account. The Servicer shall deposit into
such Collection Account daily, within two Business Days of receipt thereof, in
immediately available funds, the following payments and collections received or
made by it on and after the Cut-off Date with respect to the Mortgage Loans:
(i) all payments on account of principal, including
Principal Prepayments, on the Mortgage Loans, other than principal due
on the Mortgage Loans on or prior to the Cut-off Date;
(ii) all payments on account of interest on the Mortgage
Loans net of the related Servicing Fee permitted under Section 3.15,
other than interest due on the Mortgage Loans on or prior to the
Cut-off Date;
(iii) all Liquidation Proceeds, other than proceeds to be
applied to the restoration or repair of the Mortgaged Property or
released to the Mortgagor in accordance with the Servicer's normal
servicing procedures;
(iv) all Subsequent Recoveries;
(v) all Compensating Interest;
(vi) any amount required to be deposited by the Servicer
pursuant to Section 3.05(g) in connection with any losses on Permitted
Investments;
(vii) any amounts required to be deposited by the Servicer
pursuant to Section 3.10 hereof;
(viii) all Advances made by the Servicer pursuant to Section
4.01;
(ix) all Prepayment Charges; and
(x) any other amounts required to be deposited hereunder.
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The foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, all servicing-related fees
including late payment charges, insufficient funds charges and payments in the
nature of assumption fees (i.e., fees related to the assumption of a Mortgage
Loan upon the purchase of the related Mortgaged Property, modification fees,
extension fees and other similar ancillary fees and charges (other than
Prepayment Charges)) if collected, need not be remitted by the Servicer. Rather,
such fees and charges may be retained by the Servicer as additional servicing
compensation. In the event that the Servicer shall remit any amount not required
to be remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time withdraw or direct the Master Servicer, or such other
institution maintaining the Collection Account, to withdraw such amount from the
Collection Account, any provision herein to the contrary notwithstanding. The
Servicer shall maintain adequate records with respect to all withdrawals made
pursuant to this Section. All funds deposited in the Collection Account shall be
held in trust for the Certificateholders until withdrawn in accordance with
Section 3.08. In no event shall the Master Servicer incur liability for
withdrawals from the Collection Account at the direction of the Servicer.
The Servicer shall give notice to the Master Servicer of the location of
the Collection Account maintained by it when established and prior to any change
thereof. Upon request, the Servicer shall forward to the Master Servicer the
most current available bank statement for the Collection Account.
(e) Each institution that maintains the Collection Account may invest
the funds in each such account, as directed by the Servicer, in writing, in
Permitted Investments, which shall mature not later than the Business Day
preceding the related Servicer Remittance Date (except that if such Permitted
Investment is an obligation of the institution that maintains such Collection
Account or is otherwise immediately available, then such Permitted Investment
shall mature not later than the Servicer Remittance Date) and shall not be sold
or disposed of prior to its maturity. All such Permitted Investments shall be
made in the name of the Trustee for the benefit of the Certificateholders. All
income and gain net of any losses realized from amounts on deposit in the
Collection Account shall be for the benefit of the Servicer as servicing
compensation and shall be remitted to it monthly as provided herein. The amount
of any losses incurred in the Collection Account in respect of any such
investments shall be deposited by the Servicer in the Collection Account out of
the Servicer's own funds immediately as realized.
3.06. Collection of Taxes, Assessments and Similar Items; Escrow Accounts.
To the extent required by the related Mortgage Note, the Servicer shall
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Servicer to compel a Mortgagor to establish an Escrow Account in
violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be made
only to effect timely payment of taxes, assessments, hazard insurance premiums,
condominium or PUD association dues, or comparable items, to reimburse the
Servicer out of related collections for any payments made pursuant to Sections
3.01 hereof (with respect to taxes and assessments and insurance premiums,
condominium or PUD association dues or comparable items) and 3.10 hereof (with
respect to hazard insurance), to refund to any Mortgagors any sums as may be
determined to be overages, to pay interest, if required by law or the terms of
the related Mortgage or Mortgage Note, to Mortgagors on balances in the Escrow
Account to withdraw funds deposited in error or amounts previously deposited but
returned as unpaid due to a "not sufficient funds" or other denial by the
related Mortgagor's banking institution or to clear and terminate the Escrow
Account at the termination of the Pooling and Servicing Agreement. The Escrow
Accounts shall not be a part of the Trust Fund.
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3.07. Access to Certain Documentation and Information Regarding the
Mortgage Loans.
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder that is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided, that the Servicer shall be entitled to
be reimbursed by each such Certificateholder for actual expenses incurred by the
Servicer in providing such reports and access.
The Servicer may from time to time provide the Depositor, the Master
Servicer and any Person designated by the Depositor, with reports and
information regarding the Mortgage Loans, including without limitation,
information requested by the Depositor or an originator of the Mortgage Loans
for required institutional risk control. In addition, subject to limitations of
applicable privacy laws, the Servicer may make public information regarding
performance of the Mortgage Loans.
3.08. Permitted Withdrawals from the Collection Account and Master Servicer
Collection Account.
(a) The Servicer may from time to time, make withdrawals from the
Collection Account for the following purposes:
(i) to pay to the Servicer (to the extent not previously paid to
or withheld by the Servicer), as servicing compensation in accordance with
Section 3.15, that portion of any payment of interest that equals the
Servicing Fee for the period with respect to which such interest payment
was made, and, as additional servicing compensation, those other amounts
set forth in Section 3.15;
(ii) to reimburse the Servicer for Advances made by it (or to
reimburse the Advance Financing Person for Advances made by it) with
respect to the Mortgage Loans, such right of reimbursement pursuant to this
subclause (ii) being limited to amounts received on particular Mortgage
Loan(s) (including, for this purpose, Condemnation Proceeds, Insurance
Proceeds, Liquidation Proceeds) that represent late recoveries of payments
of principal and/or interest on such particular Mortgage Loan(s) in respect
of which any such Advance was made;
(iii) to reimburse the Servicer for any Non-Recoverable Advance
previously made and any Non-Recoverable Servicing Advances previously made
to the extent that, in the case of Non-Recoverable Servicing Advances,
reimbursement therefor constitutes "unanticipated expenses" within the
meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii);
(iv) to pay to the Servicer earnings on or investment income with
respect to funds in or credited to the Collection Account;
(v) to reimburse the Servicer from Insurance Proceeds for Insured
Expenses covered by the related Insurance Policy;
(vi) [reserved];
(vii) to pay to the Servicer any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances (to the extent that
reimbursement for Servicing Advances would constitute an "unanticipated
expense" within the meaning of Treasury Regulation Section
26
1.860-1(b)(3)(ii)), the Servicer's right to reimbursement of Servicing
Advances pursuant to this subclause (vi) with respect to any Mortgage Loan
being limited to amounts received on particular Mortgage Loan(s)(including,
for this purpose, Liquidation Proceeds and purchase and repurchase
proceeds) that represent late recoveries of the payments for which such
advances were made pursuant to Section 3.01 or Section 3.06;
(viii) to pay the Servicer any unpaid Servicing Fees for any
Mortgage Loan upon such Mortgage Loan being charged off and upon
termination of the obligations of the Servicer;
(ix) to pay to the Depositor or the Servicer, as applicable, with
respect to each Mortgage Loan or property acquired in respect thereof that
has been purchased pursuant to Section 3.12, all amounts received thereon
and not taken into account in determining the related Stated Principal
Balance of such repurchased Mortgage Loan;
(x) to reimburse the Servicer, the Trustee or the Depositor for
expenses incurred by any of them in connection with the Mortgage Loans or
Certificates and reimbursable pursuant to Section 3.04, Section 3.19 or
Section 4.04 hereof provided that reimbursement therefor would constitute
"unanticipated" expenses within the meaning of Treasury Regulation Section
1.860G-1(b)(3)(ii);
(xi) to reimburse the Trustee for enforcement expenses reasonably
incurred in respect of a breach or defect giving rise to the purchase
obligation in Article II of the Pooling and Servicing Agreement that were
incurred in the Purchase Price of the Mortgage Loans including any expenses
arising out of the enforcement of the purchase obligation; provided that
any such expenses will be reimbursable under this subclause (xi) only to
the extent that such expenses would constitute "unanticipated expenses"
within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii) if
paid by one of the REMICs provided for herein;
(xii) [reserved];
(xiii) to withdraw pursuant to Section 3.05 any amount deposited
in the Collection Account that was incorrectly deposited or not required to
be deposited therein, or amounts previously deposited but returned as
unpaid due to insufficient funds or other denial by the related Mortgagor's
banking institution; and
(xiv) to clear and terminate the Collection Account upon
termination of the Pooling and Servicing Agreement.
In addition, the Servicer will withdraw from the Protected Account by no
later than [2:30 p.m.] Eastern Time on the Servicer Remittance Date, the
Interest Funds and the Principal Funds (for this purpose only, neither Interest
Funds nor Principal Funds shall include a deduction for any amount reimbursable
to the Trustee unless such amounts have actually been reimbursed from such funds
at the discretion of the Servicer and the calculation of the Interest Funds and
Principal Funds shall not include item (C) of the definition of Principal
Funds), to the extent on deposit, and such amount shall be deposited in the
Master Servicer Collection Account; provided, however, if the Master Servicer
does not receive such Interest Funds and Principal Funds by 3:00 p.m. Eastern
Time, such Interest Funds and Principal Funds may be deposited in the Master
Servicer Collection Account on the next Business Day. In the event such funds
are not remitted by the Servicer to the Master Servicer by 3:00 p.m. Eastern
Time on the Servicer Remittance Date and the Master Servicer did not deposit
such funds on the Servicer Remittance Date, the Servicer shall pay, out of its
own funds, interest on such amount at a rate equal to
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the then current "prime rate" (as published by ▇▇▇▇▇ Fargo Bank, N.A.) for each
date or part thereof until such amount is paid in full.
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 Collection Account.
The Servicer shall provide written notification to the Master Servicer on
or prior to the next succeeding Servicer Remittance Date upon making any
withdrawals from the Collection Account pursuant to subclauses (iii) and (vii)
above.
Unless otherwise specified, any amounts reimbursable to the Servicer from
amounts on deposit in the Collection Account shall be deemed to come from first,
Interest Funds, and thereafter, Principal Funds for the related Distribution
Date.
3.09. [RESERVED]
3.10. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained, for each Mortgage Loan secured
by a first lien, fire and hazard insurance with extended coverage in an amount,
to the extent permitted by applicable law, that is at least equal to the lesser
of (i) the estimated replacement value of the improvements that are part of such
Mortgaged Property (which may be the last known coverage) and (ii) the greater
of (a) the outstanding principal balance of the Mortgage Loan and (b) an amount
such that the proceeds of such policy shall be sufficient to prevent the related
Mortgagor and/or mortgagee from becoming a co-insurer. Each such policy of
standard hazard insurance shall contain, or have an accompanying endorsement
that contains, a standard mortgagee clause. The Servicer shall also cause flood
insurance to be maintained on property acquired upon foreclosure or deed in lieu
of foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 3.05 hereof, any amounts collected by the Servicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property or property thus acquired or amounts released to
the Mortgagor in accordance with the Servicer's normal servicing procedures)
shall be deposited in the Collection Account. Any cost incurred by the Servicer
in maintaining any such insurance shall not, for the purpose of calculating
monthly distributions to the Certificateholders or remittances to the Master
Servicer for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Servicer as a Servicing Advance to the extent
provided in Section 3.08(a)(vii) hereof. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor or
maintained on property acquired in respect of a Mortgage other than pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. If the Mortgaged Property with respect
to a Mortgage Loan secured by a first lien is located at the time of origination
of the Mortgage Loan in a federally designated special flood hazard area and
such area is participating in the national flood insurance program, the Servicer
shall cause flood insurance to be maintained with respect to such Mortgage Loan.
Such flood insurance shall be in an amount equal to the lesser of (i) the
outstanding principal balance of the related Mortgage Loan, (ii) the estimated
replacement value of the improvements that are part of such Mortgaged Property
(which may be the last known coverage), or (iii) the maximum amount of such
insurance available for the related Mortgaged Property under the Flood Disaster
Protection Act of 1973, as amended.
In the event that the Servicer shall obtain and maintain a blanket policy
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.10, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and
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maintained by comparable servicers. If such policy contains a deductible clause,
the Servicer shall, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with the first sentence of
this Section 3.10, and there shall have been a loss that would have been covered
by such policy, deposit in the Collection Account the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as servicer of the Mortgage Loans, the Servicer
agrees to present, on behalf of itself, the Depositor and the Master Servicer
for the benefit of the Certificateholders, claims under any such blanket policy.
3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements.
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, except as set forth below, to the extent it has
knowledge of such conveyance or prospective conveyance, exercise its rights to
accelerate the maturity of the related Mortgage Loan under any "due-on-sale"
clause contained in the related Mortgage or Mortgage Note; provided, however,
that the Servicer shall not exercise any such right if the "due-on-sale" clause,
in the reasonable belief of the Servicer, is not enforceable under applicable
law; provided, further, that the Servicer shall not take any action in relation
to the enforcement of any "due-on-sale" clause that would adversely affect or
jeopardize coverage under any Required Insurance Policy. An Opinion of Counsel
at the expense of the Servicer (which expense shall constitute a Servicing
Advance) delivered to the Master Servicer and the Depositor shall conclusively
establish the reasonableness of the Servicer's belief that any "due-on-sale"
clause is not enforceable under applicable law, but which shall not be required.
In such event, the Servicer shall make reasonable efforts to enter into an
assumption and modification agreement with the Person to whom such property has
been or is about to be conveyed, pursuant to which such Person becomes liable
under the Mortgage Note and, unless prohibited by applicable law or the
Mortgage, the Mortgagor remains liable thereon. If the foregoing is not
permitted under applicable law, the Servicer is authorized to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Note. In addition to the foregoing, the
Servicer shall not be required to enforce any "due-on-sale" clause or take any
of the above actions if the Servicer believes the collections and other
recoveries in respect of the Mortgage Loan would be maximized if the Mortgage
Loan were not accelerated and such actions not taken. The Mortgage Loan, as
assumed, shall conform in all respects to the requirements, representations and
warranties of this Agreement. The Servicer shall notify the Master Servicer and
the Trustee that any such assumption or substitution agreement has been
completed by forwarding to the Trustee the original copy of such assumption or
substitution agreement (indicating the Mortgage File to which it relates), which
copy shall be added by the Trustee to the related Mortgage File and which shall,
for all purposes, be considered a part of such Mortgage File to the same extent
as all other documents and instruments constituting a part thereof. The Servicer
shall be responsible for recording any such assumption or substitution
agreements. In connection with any such assumption or substitution agreement,
the Monthly Payment on the related Mortgage Loan shall not be changed but shall
remain as in effect immediately prior to the assumption or substitution, the
stated maturity or outstanding principal amount of such Mortgage Loan shall not
be changed nor shall any required monthly payments of principal or interest be
deferred or forgiven. Any fee collected by the Servicer for consenting to any
such conveyance or entering into an assumption or substitution agreement shall
be retained by or paid to the Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph 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.
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3.12. Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds; Special Loss Mitigation.
(a) The Servicer shall use reasonable efforts consistent with the
servicing standard set forth in Section 3.01 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. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable and as shall be
normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with the restoration of any property that shall have suffered damage
due to an uninsured cause unless it shall determine (i) that such restoration
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Collection Account pursuant to
Section 3.08 hereof). The Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the proceeds of liquidation of
the related Mortgaged Property, and, if applicable, as a Non-Recoverable
Servicing Advance, as contemplated in Section 3.08 hereof. If the Servicer has
received written notice that a Mortgaged Property that it is contemplating
acquiring in foreclosure or by deed-in-lieu of foreclosure is located within a
one-mile radius of any site with environmental or hazardous waste risks known to
the Servicer, the Servicer will, prior to acquiring the Mortgaged Property,
consider such risks and only take action in accordance with Accepted Servicing
Practices.
With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Trustee or its nominee (which nominee shall not be the
Servicer). Pursuant to its efforts to sell such REO Property, the Servicer shall
either itself or through an agent selected by the Servicer protect and conserve
such REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Certificateholders, rent the
same, or any part thereof, as the Servicer deems to be in the best interest of
itself and the Certificateholders for the period prior to the sale of such REO
Property. The Servicer or an Affiliate thereof may receive usual and customary
real estate referral fees for real estate brokers in connection with the listing
and disposition of REO Property. The Servicer shall prepare a statement with
respect to each REO Property that has been rented showing the aggregate rental
income received and all expenses incurred in connection with the management and
maintenance of such REO Property at such times as is necessary to enable the
Servicer to comply with the reporting requirements of the REMIC Provisions. The
net monthly rental income, if any, from such REO Property shall be deposited in
the Collection Account no later than the close of business on each Determination
Date. The Servicer shall perform the tax reporting and withholding related to
foreclosures, abandonments and cancellation of indebtedness income as specified
by Sections 1445, 6050J and 6050P of the Code by preparing and filing such tax
and information returns, as may be required.
In the event that the Issuing Entity acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer make reasonable efforts to sell any REO Property for
its fair market value. In any event, the Servicer shall dispose of such REO
Property prior to the expiration of three years from the end of the year of its
acquisition by the Issuing Entity or, at the expense of the Issuing Entity,
obtain, in accordance with applicable procedures for obtaining an automatic
extension of the grace period, no later than 33 months after the acquisition by
the Issuing Entity, an extension of the three-year grace period, in which case
such property must be disposed of prior to the end of such extension, unless the
Trustee, the Master Servicer and the Securities Administrator shall have been
supplied with an Opinion of Counsel (such Opinion of Counsel not to be an
30
expense of the Trustee, the Master Servicer and the Securities Administrator),
to the effect that the holding by the Issuing Entity of such Mortgaged Property
subsequent to such three-year period or extension will not (i) result in the
imposition of taxes on "prohibited transactions" of the Issuing Entity or any of
the REMICs provided for in the Pooling and Servicing Agreement as defined in
section 860F of the Code or in the imposition of any other federal or state tax
on the Issuing Entity or any of the REMICs provided in the Pooling and Servicing
Agreement or (ii) cause any of the REMICs provided for in the Pooling and
Servicing Agreement to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Issuing Entity may continue to
hold such Mortgaged Property (subject to any conditions contained in such
Opinion of Counsel). If such an extension has not been received and the
Depositor or the Servicer, acting on behalf of the Issuing Entity hereunder, is
unable to sell the REO Property within 33 months after its acquisition by the
Issuing Entity or if such an extension, has been received and the Depositor or
the Servicer is unable to sell the REO Property within the period ending three
months before the close of the Extended Period, the Depositor shall cause the
Servicer, before the end of the three year period or the Extended Period, as
applicable, to (i) purchase such REO Property at a price equal to the REO
Property's fair market value or (ii) auction the REO Property to the highest
bidder (which may be the Servicer) in an auction reasonably designed to produce
a fair price prior to the expiration of the three-year period or the Extended
Period, as the case may be.
Notwithstanding any other provision of this Agreement, no Mortgaged
Property acquired by the Issuing Entity shall be held, rented (or allowed to
continue to be rented) or otherwise used for the production of income by or on
behalf of the Issuing Entity in such a manner or pursuant to any terms that
would (i) cause such Mortgaged Property to fail to qualify as "foreclosure
property" within the meaning of section 860G(a)(8) of the Code or (ii) subject
the Issuing Entity or any REMIC provided for in the Pooling and Servicing
Agreement to the imposition of any federal, state or local income taxes on the
income earned from such Mortgaged Property under section 860G(c) of the Code or
otherwise, unless the Servicer or the Depositor has agreed to indemnify and hold
harmless the Issuing Entity with respect to the imposition of any such taxes.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure are expected to substantially exceed the costs and expenses of
bringing such a proceeding. The income earned from the management of any
Mortgaged Properties acquired through foreclosure or other judicial proceeding,
net of reimbursement to the Servicer for expenses incurred (including any
property or other taxes) in connection with such management and net of
unreimbursed Servicing Fees, Advances, Servicing Advances and any management fee
paid or to be paid with respect to the management of such Mortgaged Property,
shall be applied to the payment of principal of, and interest on, the related
defaulted Mortgage Loans (with interest accruing as though such Mortgage Loans
were still current) and all such income shall be deemed, for all purposes in
this Agreement, to be payments on account of principal and interest on the
related Mortgage Notes and shall be deposited into the Collection Account. To
the extent the income received during a Prepayment Period is in excess of the
amount attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related Mortgage Loan, such excess shall be considered to
be a partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net of
any payment to the Servicer as provided above, shall be deposited in the
Collection Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date.
The proceeds of any Liquidated Mortgage Loan, as well as any recovery
resulting from a partial collection of Liquidation Proceeds will be applied as
between the parties in the following order of priority: first, to reimburse the
Servicer for any related Servicing Advances and unpaid Servicing Fees, pursuant
to Section 3.08(a)(vi) or this Section 3.12; second, to reimburse the Servicer
for any
31
unreimbursed Advances, pursuant to Section 3.08(a)(ii) or this Section
3.12; third, to accrued and unpaid interest (to the extent no Advance has been
made for such amount) on the Mortgage Loan, at the Net Mortgage Rate to the Due
Date occurring in the month in which such amounts are required to be
distributed; fourth, as a recovery of principal of the Mortgage Loan; and fifth,
to any Prepayment Charges.
The proceeds of any net income from an REO Property, will be applied as
between the parties in the following order of priority: first, to reimburse the
Servicer for any related unreimbursed Servicing Advances and Servicing Fees,
pursuant to Section 3.08(a)(vi) or this Section 3.12; second, to reimburse the
Servicer for any unreimbursed Advances, pursuant to Section 3.08(a)(ii) or this
Section 3.12; third, as a recovery of principal; and fourth, to accrued and
unpaid interest (to the extent no Advance has been made for such amount) on the
related REO Property, at the applicable Net Mortgage Rate to the Due Date
occurring in the month in which such amounts are required to be distributed.
(b) On each Determination Date, the Servicer shall determine the
respective aggregate amounts of Excess Proceeds, if any, that occurred in the
related Prepayment Period.
(c) The Servicer, in its sole discretion, shall have the right to
elect (by written notice sent to the Securities Administrator) to purchase for
its own account from the Issuing Entity any Mortgage Loan that is 91 days or
more Delinquent at a price equal to the Purchase Price. The Purchase Price for
any Mortgage Loan purchased hereunder shall be delivered to the Securities
Administrator for deposit to the Distribution Account (as defined in the Pooling
and Servicing Agreement) and the Securities Administrator (or its custodian, as
applicable) upon receipt of such confirmation of deposit and a Request for
Release from the Servicer in the form of Exhibit A hereto, shall release to the
Servicer the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by the Servicer, in each case
without recourse, as shall be necessary to vest in the Servicer any Mortgage
Loan released pursuant hereto and the Servicer shall succeed to all the
Securities Administrator's right, title and interest in and to such Mortgage
Loan and all security and documents related thereto. Such assignment shall be an
assignment outright and not for security. The Servicer shall thereupon own such
Mortgage Loan, and all security and documents, free of any further obligation to
the Certificateholders with respect thereto.
(d) With respect to such of the Mortgage Loans as come into and
continue in default, the Servicer will decide, in its reasonable business
judgment, whether to (i) foreclose upon the Mortgaged Properties securing those
Mortgage Loans pursuant to Section 3.12(a), (ii) write off the unpaid principal
balance of the Mortgage Loans as bad debt (provided that the Servicer has
determined that no reasonable net recovery is likely through foreclosure
proceedings or other liquidation of the related Mortgaged Property), (iii) take
a deed in lieu of foreclosure, (iv) accept a short sale or short refinance; (v)
arrange for a repayment plan or refinance, or (vi) agree to a modification of
such Mortgage Loan. As to any Mortgage Loan that becomes 120 days delinquent,
the Servicer will be required to have obtained or to obtain a broker's price
opinion, the cost of which will be reimbursable as a Servicing Advance. After
obtaining the broker's price opinion, the Servicer will determine, in its
reasonable business judgment, whether a net recovery is possible through
foreclosure proceedings or other liquidation of the related Mortgage Property.
If the Servicer determines that no such recovery is possible, it must charge off
the related Mortgage Loan at the time it becomes 180 days delinquent. Once a
Mortgage Loan has been charged off, the Servicer will discontinue making
Advances, the Servicer will not be entitled to future Servicing Fees with
respect to such Mortgage Loan except as provided below, and the Mortgage Loan
will be treated as a Liquidated Mortgage Loan. If the Servicer determines that
such net recovery is possible through foreclosure proceedings or other
liquidation of the related Mortgaged Property on a Mortgage Loan that becomes
180 days delinquent, the Servicer need not charge off the Mortgage Loan and may
continue making Advances, the Servicer will continue to be entitled to Servicing
Fees and the Servicer continue to report the Mortgage Loan to the Master
Servicer as being serviced by the Servicer.
32
(e) Any Mortgage Loan that is charged off, pursuant to (d) above, may
continue to be serviced by the Servicer for the Certificateholders using
specialized collection procedures (including foreclosure, if appropriate). The
Servicer will be entitled to Servicing Fees and reimbursement of expenses in
connection with such Mortgage Loans after the date of charge off, only to the
extent of funds available from any recoveries on any such Mortgage Loans. Any
such Mortgage Loans serviced in accordance with the specialized collection
procedures shall be serviced for approximately six months. Any net recoveries
received on such Mortgage Loans during such six month period will be treated as
Subsequent Recoveries. On the date which is six months after the date on which
the Servicer begins servicing such Mortgage Loans using the specialized
collection procedures, unless specific net recoveries are anticipated by the
Servicer on a particular Mortgage Loan, such charged-off loan will be released
to the majority holder of the Class A-R Certificate as defined in the Pooling
and Servicing Agreement and thereafter such majority holder of the Class A-R
Certificate (i) as identified with contact information in writing to the
Servicer by the Depositor, will be entitled to any amounts subsequently received
in respect of any such charged off Mortgage Loan, subject to the Servicer's fees
described below, (ii) may designate any servicer to service any such charged off
Mortgage Loan, (iii) may sell any such charged off Mortgage Loan to a third
party and (iv) to the extent the servicing of such charged off Mortgage Loan is
not transferred from the Servicer, the servicing of such charged off Mortgage
Loan and the fees therefore shall be governed by the most current servicing
agreement between the Servicer and the Depositor.
3.13. Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Custodian by
delivering a Request for Release substantially in the form of Exhibit A. The
Servicer is authorized to cause the removal from the registration on the MERS
System of any such Mortgage if applicable, and the Servicer, on behalf of the
Trustee shall execute and deliver the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Mortgage together with the Mortgage Note with written evidence
of cancellation thereon. Expenses incurred by the Servicer in connection with
any instrument of satisfaction or deed of reconveyance shall be chargeable to
the Mortgagor to the extent permitted by law, and otherwise to the Issuing
Entity to the extent such expenses constitute "unanticipated expenses" within
the meaning of Treasury Regulations Section 1.860G-(1)(b)(3)(ii). Subject to the
further limitations set forth below, the Servicer shall cause the Mortgage File
or documents so released to be returned to the Trustee or its designee when the
need therefor by the Servicer no longer exists, unless the Mortgage Loan is
liquidated and the proceeds thereof are deposited in the Collection Account.
Each Request for Release may be delivered to the Trustee or the Custodian
(i) via mail or courier, (ii) via facsimile or (iii) by such other means,
including, without limitation, electronic or computer readable medium, as the
Servicer and the Trustee or the Custodian shall mutually agree.
On each day that the Servicer remits to the Master Servicer or the
Custodian Requests for Releases pursuant to clauses (ii) or (iii) above, the
Servicer shall also submit to the Master Servicer or the Custodian a summary of
the total number of such Requests for Releases requested on such day by the same
method as described in such clauses (ii) and (iii).
If the Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Agreement, the Servicer
may deliver or cause to be delivered to the Trustee or the Custodian, for
signature, as appropriate or on behalf of the Trustee, execute any court
pleadings, requests for trustee's sale or other documents necessary to
effectuate such foreclosure or any legal action brought to obtain judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to obtain a
deficiency judgment or to enforce any other remedies or rights provided by the
Mortgage Note or the
33
Mortgage or otherwise available at law or in equity. Notwithstanding the
foregoing, the Servicer shall cause possession of any Mortgage File or of the
documents therein that shall have been released by the Trustee or the Custodian
to be returned to the Trustee or the Custodian promptly after possession thereof
shall have been released by the Trustee or the Custodian unless (i) the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Collection Account, and the Servicer shall have
delivered to the Trustee or the Custodian a Request for Release in the form of
Exhibit A or (ii) the Mortgage File or document shall 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 and the Servicer shall have delivered to
the Trustee or the Custodian an Officer's Certificate of a Servicing Officer
certifying as to the name and address of the Person to which the Mortgage File
or the documents therein were delivered and the purpose or purposes of such
delivery. The Servicer shall have no liability for and shall be excused from its
performance hereunder to the extent its non-performance is caused by the failure
of the Custodian under the Custodial Agreement or the Trustee to release or
execute the documents as requested by the Servicer pursuant to a Request for
Release or a request for the execution of the documents.
3.14. Documents, Records and Funds in Possession of Servicer to be Held for
the Trustee.
All Mortgage Files and funds collected or held by, or under the control of,
the Servicer in respect of any Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds, including but not
limited to, any funds on deposit in the Collection Account, shall be held by the
Servicer for and on behalf of the Trustee and shall be and remain the sole and
exclusive property of the Issuing Entity, subject to the applicable provisions
of this Agreement. The Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the Collection
Account, the Master Servicer Collection Account, the Distribution Account (as
defined in the Pooling and Servicing Agreement) or in any Escrow Account, or any
funds that otherwise are or may become due or payable to the Master Servicer or
the Securities Administrator for the benefit of the Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of set
off against any Mortgage File or any funds collected on, or in connection with,
a Mortgage Loan, except, however, that the Servicer shall be entitled to set off
against and deduct from any such funds any amounts that are properly due and
payable to the Servicer under this Agreement.
3.15. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account out of each payment
of interest on a Mortgage Loan included in the Trust Fund an amount equal to
interest at the applicable Servicing Fee Rate on the Stated Principal Balance of
the related Mortgage Loan as of the immediately preceding Distribution Date.
Additional servicing compensation in the form of any Excess Proceeds, late
payment fees, assumption fees (i.e., fees related to the assumption of a
Mortgage Loan upon the purchase of the related Mortgaged Property), modification
fees, extension fees and similar fees and charges payable by the Mortgagor, and
all income and gain net of any losses realized from Permitted Investments,
together with other benefits received from amounts in the Collection Account,
shall be retained by the Servicer to the extent not required to be deposited in
the Collection Account pursuant to Sections 3.05, or 3.12(a) hereof. 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 in this Agreement. In no event shall
the Master Servicer be liable for any Servicing Fee or for any differential
between the Servicing Fee and the amount necessary to induce a successor
servicer to act as successor servicer under this Agreement.
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3.16. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates and the examiners
and supervisory agents of the OTS, the FDIC and such other authorities, as
applicable, access to the documentation regarding the Mortgage Loans required by
applicable regulations of the OTS and the FDIC. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices of the Servicer designated by it provided,
that the Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by the Servicer in providing such
reports and access. Nothing in this Section shall limit the obligation of the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Servicer to provide access as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section.
3.17. Subordination of Liens. In connection with any governmental program
under which a Mortgagor may obtain a benefit in the event the related Mortgaged
Property is subject to a disaster provided that the Mortgagor files a covenant
or other lien against the Mortgaged Property and is required to obtain the
subordination thereto of the Mortgage, the Servicer may cause such subordination
to be executed and filed provided that either (i) the related Mortgage Loan is
in default or default with respect to such Mortgage Loan is imminent or (ii)
such subordination and participation in such governmental program will not
result in a change in payment expectations with respect to such Mortgage Loan.
For purposes of the preceding sentence, a change in payment expectations occurs
if, as a result of such subordination and participation in such governmental
program, (1) there is a substantial enhancement of the Mortgagor's capacity to
meet the payment obligations under the Mortgage Loan and that capacity was
primarily speculative prior to such subordination and participation in such
governmental program and is adequate after such subordination and participation
in such governmental program or (2) there is a substantial impairment of the
Mortgagor's capacity to meet the payment obligations under the Mortgage Loan and
that capacity was adequate prior to such subordination and participation in such
governmental program and is primarily speculative after such subordination and
participation in such governmental program. The preceding sentence and clause
(ii) of the second preceding sentence are intended to comply with Treasury
Regulations Section 1.1001-3(e)(4) and shall be interpreted in accordance
therewith.
3.18. Information to the Master Servicer.
No later than the tenth (10th) calendar day of each month (or if such tenth
day is not a Business Day, the Business Day immediately succeeding such tenth
day), the Servicer shall forward to the Master Servicer reports in the format
set forth in Exhibit C-1, Exhibit C-2 and Exhibit C-3 hereto, with respect to
monthly remittances, defaulted Mortgage Loans and realized loss calculations,
respectively.
3.19. Indemnification.
The Servicer shall indemnify the Sponsor, the Issuing Entity, the Master
Servicer, the Depositor and their officers, directors, employees and agents and
hold each of them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of such
parties may sustain in any way related to the negligence, willful misfeasance or
bad faith of the Servicer in the performance of its duties or by reason of
reckless disregard of its obligations and duties hereunder. The Servicer
promptly shall notify the Sponsor, the Trustee, the Master Servicer and the
Depositor or any other relevant party if a claim is made by a third party with
respect to such party and this Agreement or the Mortgage Loans and, if subject
to this indemnification obligation, assume (with the prior written consent of
the indemnified party, which consent shall not be unreasonably withheld or
delayed) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
35
judgment or decree which may be entered against it or any of such parties in
respect of such claim. The Servicer shall provide the Depositor, the Master
Servicer and the Trustee with a written report of all expenses and advances
incurred by the Servicer pursuant to this Section 3.19, and the Servicer shall
promptly reimburse itself from the assets of the Issuing Entity in the
Collection Account for all amounts advanced by it pursuant to the preceding
sentence except when and to the extent a determination has been made that the
claim in any way relates to the gross negligence, bad faith or willful
misconduct of the Servicer. The provisions of this paragraph shall survive the
termination of this Agreement and the payment of the outstanding Certificates.
3.20. Solicitation.
For as long as the Servicer services the Mortgage Loans, the Servicer
covenants that it will not, and that it will ensure that its Affiliates and
agents will not, directly or indirectly solicit or provide information for any
other party to solicit for prepayment or refinancing of any of the Mortgage
Loans by the related Mortgagors, except as permitted in Section 3.12.
It is understood that the promotions undertaken by the Servicer or its
Affiliates or agents which are directed to the general public at large, or
certain segments thereof, shall not constitute solicitation as that term is used
in this Section 3.20. However, the Servicer is permitted to solicit Mortgagors
for additional products, including, without limitation, credit cards and credit
life; provided that the Servicer does not use any of the names of the other
parties to this Agreement and any such solicitation is in compliance with all
laws, including telephone solicitation laws.
3.21. High Cost Mortgage Loans.
In the event that the Servicer reasonably determines that a Mortgage Loan
may be a "high cost mortgage loan," "high cost home," "covered," "high cost,"
"high risk home," "predatory" or similarly classified loan under any applicable
state, federal or local law, the Servicer may notify the Depositor, the Master
Servicer and the Trustee thereof; the Servicer may terminate its servicing
thereof; and such determination shall be deemed to materially and adversely
affect the interests of the Certificateholders in such Mortgage Loan, and the
Sponsor will repurchase the Mortgage Loan within a 30 day period from the date
of the notice in the manner described in the Pooling and Servicing Agreement.
ARTICLE IV.
DISTRIBUTIONS
4.01. Advances.
(a) Subject to the conditions of this Article IV, the Servicer, as
required below, shall make an Advance and deposit such Advance in the Collection
Account. Each such Advance shall be remitted to the Collection Account no later
than 4:00 p.m. Eastern time, on the Servicer Advance Date in immediately
available funds. The Servicer shall be obligated to make any such Advance only
to the extent that such advance would not be a Non-Recoverable Advance. If the
Servicer shall have determined that it has made a Non-Recoverable Advance or
that a proposed Advance or a lesser portion of such Advance would constitute a
Non-Recoverable Advance, the Servicer shall deliver (i) to the Master Servicer
for the benefit of the Certificateholders, funds constituting the remaining
portion of such Advance, if applicable, and (ii) to [the Depositor, each Rating
Agency and] the Master Servicer an Officer's Certificate setting forth the basis
for such determination. The Servicer may, in its sole discretion, make an
Advance with respect to the principal portion of the final Scheduled Payment on
a Balloon Loan, but the Servicer is under no obligation to do so; provided,
however, that nothing in this sentence shall affect the Servicer's
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obligation under this Section 4.01 to Advance the interest portion of the final
Scheduled Payment with respect to a Balloon Loan based on the Minimum Payment.
If a Mortgagor does not pay its final Scheduled Payment on a Balloon Loan when
due, the Servicer shall advance (unless it determines in its good faith judgment
that such amounts would constitute a Non-Recoverable Advance) a full month of
interest (net of the Servicing Fee) on the Stated Principal Balance (as defined
in the Pooling and Servicing Agreement) thereof each month until its Stated
Principal Balance (as defined in the Pooling and Servicing Agreement) is reduced
to zero.
In lieu of making all or a portion of such Advance from its own funds, the
Servicer may (i) cause to be made an appropriate entry in its records relating
to the Collection Account that any amount held for future distribution has been
used by the Servicer in discharge of its obligation to make any such Advance and
(ii) transfer such funds from the Collection Account to the Master Servicer
Collection Account. In addition, the Servicer shall have the right to reimburse
itself for any such Advance from amounts held from time to time in the
Collection Account to the extent such amounts are not then required to be
distributed. Any funds so applied and transferred pursuant to the previous two
sentences shall be replaced by the Servicer by deposit in the Collection Account
no later than the close of business on the Servicer Advance Date on which such
funds are required to be distributed pursuant to this Agreement. The Servicer
shall be entitled to be reimbursed from the Collection Account for all Advances
of its own funds made pursuant to this Section as provided in Section 3.08. The
obligation to make Advances with respect to any Mortgage Loan shall continue
until the earlier of (i) such Mortgage Loan is paid in full, (ii) the related
Mortgaged Property or related REO Property has been liquidated or until the
purchase or repurchase thereof (or substitution therefor) from the Master
Servicer, the Securities Administrator or the Issuing Entity pursuant to any
applicable provision of this Agreement, except as otherwise provided in this
Section 4.01, (iii) the Servicer determines in its good faith judgment that such
amounts would constitute a Non-Recoverable Advance as provided in the preceding
paragraph or (iv) the date on which such Mortgage Loan becomes 150 days
delinquent as set forth below.
(b) Notwithstanding anything in this Agreement to the contrary
(including, but not limited to, Sections 3.01 and 4.01(a) hereof), no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
Advance or Servicing Advance would, if made, constitute a Non-Recoverable
Advance or a Non-Recoverable Servicing Advance. The determination by the
Servicer that it has made a Non-Recoverable Advance or a Non-Recoverable
Servicing Advance or that any proposed Advance or Servicing Advance, if made,
would constitute a Non-Recoverable Advance or a Non-Recoverable Servicing
Advance, respectively, shall be evidenced by an Officer's Certificate of the
Servicer delivered to the Depositor and the Master Servicer. In addition, the
Servicer shall not be required to advance any Relief Act Shortfalls.
(c) Notwithstanding the foregoing, the Servicer shall not be required
to make any Advances for any Mortgage Loan after such Mortgage Loan becomes 150
days delinquent. The Servicer shall identify such delinquent Mortgage Loans in
the Servicer Statement referenced in Section 3.18. In addition, the Servicer
shall provide the Master Servicer with an Officer's Certificate listing such
delinquent Mortgage Loans and certifying that such loans are 150 days or more
delinquent.
4.02. Reduction of Servicing Compensation in Connection with Prepayment
Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment Interest
Shortfall, the Servicer shall, from amounts in respect of the Servicing Fee for
such Distribution Date, deposit into the Collection Account, as a reduction of
the Servicing Fee for such Distribution Date, no later than the Servicer Advance
Date immediately preceding such Distribution Date, an amount up to the
Prepayment Interest Shortfall; provided that the amount so deposited with
respect to any Distribution Date shall be limited to the product of (x) one
twelfth of 0.25% per annum and (y) the aggregate Stated Principal Balance of the
37
Mortgage Loans. In case of such deposit, the Servicer shall not be entitled to
any recovery or reimbursement from the Depositor, the Trustee, the Master
Servicer, the Securities Administrator, the Issuing Entity or the
Certificateholders. With respect to any Distribution Date, to the extent that
the Prepayment Interest Shortfall exceeds Compensating Interest (such excess, a
"Non-Supported Interest Shortfall"), such Non-Supported Interest Shortfall shall
reduce the Current Interest with respect to each Class of Certificates, pro rata
based upon the amount of interest each such Class would otherwise be entitled to
receive on such Distribution Date. Notwithstanding the foregoing, there shall be
no reduction of the Servicing Fee in connection with Prepayment Interest
Shortfalls related to the Relief Act or bankruptcy proceedings and the Servicer
shall not be obligated to pay Compensating Interest with respect to Prepayment
Interest Shortfalls related to the Relief Act or bankruptcy proceedings.
ARTICLE V.
THE DEPOSITOR AND THE SERVICER
5.01. Respective Liabilities of the Depositor and the Servicer.
The Depositor and the Servicer shall each be liable in accordance herewith
only to the extent of the obligations specifically and respectively imposed upon
and undertaken by them herein.
5.02. Merger or Consolidation of the Depositor or the Servicer.
Except as provided in the next paragraph, the Depositor and the Servicer
will each keep in full effect its existence, rights and franchises as a
corporation or banking association under the laws of the United States or under
the laws of one of the States thereof and will each 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 respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any Person succeeding to the
business of the Depositor or the Servicer, shall be the successor of the
Depositor or the Servicer, as the case may be, 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 (except for the
execution of an assumption agreement where such succession is not effected by
operation of law); provided, however, that the successor or surviving Person to
the Servicer shall be qualified to sell mortgage loans to, and to service
mortgage loans on behalf of, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
5.03. Limitation on Liability of the Depositor, the Servicer and Others.
None of the Depositor, the Servicer nor any of the directors, officers,
employees or agents of the Depositor or the Servicer shall be under any
liability to the Issuing Entity or the Certificateholders for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Servicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor or the Servicer and any director, officer,
employee or agent of the Depositor or the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor or the Servicer and any
director, officer, employee or agent of the Depositor or the Servicer
38
shall be indemnified by the Issuing Entity and held harmless against any loss,
liability or expense, incurred in connection with the performance of their
duties under this Agreement or incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense (i) incurred by reason of willful misfeasance,
bad faith or negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder or (ii) which does not
constitute an "unanticipated expense" within the meaning of Treasury Regulation
Section 1.860G-1(b)(3)(ii). Neither the Depositor nor the Servicer shall be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its respective duties hereunder and that in its opinion may
involve it in any expense or liability; provided, however, that either of the
Depositor or the Servicer in its discretion may undertake any such action that
it may deem necessary or desirable in respect of this Agreement and the rights
and duties of the parties hereto and the interests of the Securities
Administrator and the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall
be, expenses, costs and liabilities of the Issuing Entity, and the Depositor and
the Servicer shall be entitled to be reimbursed therefor out of the Collection
Account as provided by Section 3.08 hereof.
5.04. Limitation on Resignation of Servicer.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Master Servicer. No such resignation shall become
effective until the Master Servicer or a successor servicer reasonably
acceptable to the Master Servicer is appointed and has assumed the Servicer's
responsibilities, duties, liabilities and obligations hereunder. Any such
resignation shall not relieve the Servicer of any of the obligations specified
in Section 6.01 and 6.02 as obligations that survive the resignation or
termination of the Servicer.
5.05. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac for the Servicer.
The Servicer shall provide the Master Servicer, upon request, with copies of
such policies and fidelity bond or a certification from the insurance provider
evidencing such policies and fidelity bond. In the event that any such policy or
bond ceases to be in effect, the Servicer shall use its reasonable commercial
efforts to obtain a comparable replacement policy or bond from an insurer or
issuer meeting the requirements set forth above as of the date of such
replacement.
5.06. Special Servicing Agreements.
The Servicer may enter into a special servicing advisory agreement with an
unaffiliated holder of the Class A-R Certificate, as defined in the Pooling and
Servicing Agreement and/or one or more other classes of subordinated
certificates or an advisor thereto designated by such holder. Pursuant to such
agreement, the Servicer may provide such holder or advisor, in its capacity as
special servicing advisor, with loan-level information with respect to the
Mortgage Loans, and such holder or advisor may advise the Servicer with respect
to the commencement of foreclosure proceedings or other actions to liquidate
delinquent Mortgage Loans and/or any other efforts to maximize recoveries with
respect to such Mortgage Loans.
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ARTICLE VI.
DEFAULT; TERMINATION OF SERVICER
6.01. Events of Default.
(a) "Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Servicer to deposit in the Collection
Account, Master Servicer Collection Account, or the Distribution Account
(as defined in the Pooling and Servicing Agreement) or remit to the Master
Servicer (a) any payment (excluding Advances) required to be made under the
terms of this Agreement, which failure shall continue unremedied for three
(3) Business Days or (b) Advances required to be made under Section 4.01
hereof, which failure shall continue unremedied as of 3:00 p.m. New York
City Time on the Distribution Account Deposit Date (as defined in the
Pooling and Servicing Agreement); or
(ii) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Servicer contained in this Agreement or any representation or warranty
shall prove to be untrue, which failure or breach shall continue unremedied
for a period of 60 days after the date on which written notice of such
failure shall have been given to the Servicer by the Master Servicer; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer
and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 consecutive days; or
(iv) consent by the Servicer to the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings of or relating to the Servicer or
all or substantially all of the property of the Servicer; or
(v) admission by the Servicer in writing of its inability to pay
its debts generally as they become due, file a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) Any failure by the Servicer, any Sub-Servicer or any
Subcontractor to deliver any information, report, certification or
accountants' letter when and as required under Section 8.04, 8.05 or 8.06
which continues unremedied for a period of fourteen calendar days after the
date upon which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer, or any failure by the
Servicer to identify pursuant to Section 8.06(b) any Subcontractor
"participating in the servicing function" within the meaning of Item 1122
of Regulation AB, shall constitute an Event of Default with respect to the
Servicer under this Agreement, and shall entitle the Master Servicer and/or
the Depositor, as applicable, to terminate the rights and obligations of
the Servicer as servicer under this Agreement in accordance with Section
6.01 hereof; provided that to the extent that any provision of this
Agreement expressly provides for the survival of certain rights or
obligations following termination of the Servicer as servicer, such
provision shall be given effect;
40
(vii) any failure by the Servicer, any Sub-Servicer or any
Subcontractor to duly perform, within the required time period, its
obligations under Section 8.03 of this Agreement.
If an Event of Default shall occur with respect to the Servicer pursuant to
subsection (i) of this Section 6.01, the Master Servicer shall by notice in
writing to the Servicer (with a copy to each Rating Agency), terminate all of
the rights and obligations of the Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof. If an Event of Default shall occur
with respect to the Servicer pursuant to subsection (ii) - (vi) of this Section
6.01, then, and in each and every such case, so long as such Event of Default
shall not have been remedied within the applicable grace period, if any, the
Master Servicer may, by notice in writing to the Servicer (with a copy to each
Rating Agency), terminate all of the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof.
On or after the receipt by the Servicer of any such written notice, all
authority and power of the Servicer hereunder, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the Master Servicer.
To the extent the Event of Default resulted from the failure of the Servicer to
make a required Advance, the Master Servicer shall thereupon make any Advance
described in Section 4.01 hereof subject to Section 3.04 hereof. The Master
Servicer is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to 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. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Servicer to pay
amounts owed pursuant to Article III. The Servicer agrees to cooperate with the
Master Servicer in effecting the termination of the Servicer's responsibilities
and rights hereunder, including, without limitation, the transfer to the Master
Servicer of all cash amounts which shall at the time be credited to the
Collection Account, or thereafter be received with respect to the Mortgage
Loans. The Servicer and the Master Servicer shall promptly notify the Rating
Agencies of the occurrence of an Event of Default or an event that, with notice,
passage of time, other action or any combination of the foregoing would be an
Event of Default, such notice to be provided in any event within two Business
Days of such occurrence.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan that was due prior to the notice
terminating the Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which the Servicer would
have been entitled pursuant to Section 3.08(a), and any other amounts payable to
the Servicer hereunder the entitlement to which arose prior to the termination
of its activities hereunder. Notwithstanding anything herein to the contrary,
upon termination of the Servicer hereunder, any liabilities of the Servicer
which accrued prior to such termination shall survive such termination.
6.02. Master Servicer to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 6.01 hereof, the Master Servicer shall, when and to the
extent provided in Section 3.04, be the successor to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof and applicable law including the obligation to make advances pursuant to
Section 4.01. As compensation therefor, subject to the last paragraph of Section
6.01, the Master Servicer shall be entitled to all fees, compensation and
reimbursement for costs and expenses that the Servicer would have been entitled
to hereunder if the Servicer had continued to act hereunder. Notwithstanding the
foregoing, if the Master Servicer has become the successor to the Servicer in
accordance with Section 6.01 hereof, the Master Servicer may, if it shall be
unwilling to so act, or shall, if
41
it is prohibited by applicable law from making Advances pursuant to Section 4.01
hereof or if it is otherwise unable to so act, appoint, or petition a court of
competent jurisdiction to appoint, any established mortgage loan servicing
institution as the successor to the Servicer hereunder in the assumption of all
or any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Any successor Servicer shall be an institution that is a ▇▇▇▇▇▇ ▇▇▇
and ▇▇▇▇▇▇▇ Mac approved seller/servicer in good standing, that has a net worth
of at least $15,000,000, and that is willing to service the Mortgage Loans and
executes and delivers to the Master Servicer an agreement accepting such
delegation and assignment, that contains an assumption by such Person of the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer (other than liabilities of the Servicer under Section 5.03 hereof
incurred prior to termination of the Servicer under Section 6.01), with like
effect as if originally named as a party to this Agreement. No appointment of a
successor to the Servicer hereunder shall be effective until the Master Servicer
shall have consented thereto and written notice of such proposed appointment
shall have been provided by the Master Servicer to each Certificateholder. The
Master Servicer shall not resign as servicer until a successor servicer has been
appointed and has accepted such appointment. Pending appointment of a successor
to the Servicer hereunder, the Master Servicer, unless the Master Servicer is
prohibited by law from so acting, shall, subject to Section 3.04 hereof, act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the Master Servicer may make such arrangements for the compensation
of such successor out of payments on Mortgage Loans as it and such successor
shall agree; provided, however, that no such compensation shall be in excess of
that permitted the Servicer hereunder. The Master Servicer and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Master Servicer nor any other
successor servicer shall be deemed to be in default hereunder by reason of any
failure to make, or any delay in making, any distribution hereunder or any
portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 5.05.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
7.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Servicer and the Master Servicer by written agreement.
7.02. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
7.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND
42
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
7.04. Notices.
All demands, notices and communications related to the Mortgage Loans and
this Servicing Agreement shall be in writing and shall be deemed to have been
duly given if personally delivered at or mailed by registered mail, postage
prepaid, as follows:
(a) In the case of the Servicer:
Wilshire Credit Corporation
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - Client Services
(b) In the case of Depositor:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: MANA 2007-AF1
(c) In the case of the Master Servicer or the Securities
Administrator:
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Manager MANA 2007-AF1
7.05. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
7.06. Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Master Servicer and Depositor;
provided, however, the Servicer is hereby authorized to enter into an Advance
Facility under which (l) the Servicer sells, assigns or pledges to an Advancing
Person the Servicer's rights under this Agreement to be reimbursed for any
Advances or Servicing Advances and/or (2) an Advancing Person agrees to fund
some or all Advances or Servicing Advances required to be made by the Servicer
pursuant to this Agreement. No consent of the Trustee, Certificateholders or any
other party is required before the Servicer may enter into an Advance Facility.
Notwithstanding the existence of any Advance Facility under which an Advancing
Person agrees to fund Advances and/or Servicing
43
Advances on the Servicer's behalf, the Servicer shall remain obligated pursuant
to this Agreement to make Advances and Servicing Advances pursuant to and as
required by this Agreement, and shall not be relieved of such obligations by
virtue of such Advance Facility.
Reimbursement amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the Servicer would be permitted to reimburse itself in accordance with
this Agreement, assuming the Servicer had made the related Advance(s) and/or
Servicing Advance(s).
The Servicer shall maintain and provide to any successor Servicer a
detailed accounting on a loan by loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.
An Advancing Person who purchases or receives an assignment or pledge of
the rights to be reimbursed for Advances and/or Servicing Advances, and/or whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the criteria for qualification of a
Sub-Servicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require that such
reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first in, first out"
(FIFO) basis. Such documentation shall also require the Servicer to provide to
the related Advancing Person or its designee loan by loan information with
respect to each such reimbursement amount distributed to such Advancing Person
or Advance Facility trustee on each Distribution Date, to enable the Advancing
Person or Advance Facility trustee to make the FIFO allocation of each such
reimbursement amount with respect to each Mortgage Loan. The Servicer shall
remain entitled to be reimbursed by the Advancing Person or Advance Facility
trustee for all Advances and Servicing Advances funded by the Servicer to the
extent the related rights to be reimbursed therefor have not been sold, assigned
or pledged to an Advancing Person.
Any amendment to this Section 7.06 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 7.06, including amendments to
add provisions relating to a successor Servicer, may be entered into by the
Trustee and the Servicer, without the consent of any Certificateholder
notwithstanding anything to the contrary in this Agreement, upon receipt by the
Trustee of an Opinion of Counsel that such amendment has no material adverse
effect on the Certificateholders or written confirmation from the Rating
Agencies that such amendment will not adversely affect the ratings on the
Certificates. Prior to entering into an Advance Facility, the Servicer shall
notify the lender under such facility in writing that: (a) the Advances financed
by and/or pledged to the lender are obligations owed to the Servicer on a non
recourse basis payable only from the cash flows and proceeds received under this
Agreement for reimbursement of Advances only to the extent provided herein, and
the Trustee, the Master Servicer, the Securities Administrator and the Issuing
Entity are not otherwise obligated or liable to repay any Advances financed by
the lender; (b) the Servicer will be responsible for remitting to the lender the
applicable amounts collected by it as reimbursement for Advances funded by the
lender, subject to the restrictions and priorities created in this Agreement;
and (c) the Master Servicer, the Securities Administrator and the Trustee shall
not have any responsibility to track or monitor the administration of the
financing arrangement between the Servicer and the lender.
44
7.07. Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will permit any
representative of the Depositor, subject to a reasonable confidentiality
agreement, or the Master Servicer during the Servicer's normal business hours,
to examine all the books of account, records, reports and other papers of the
Servicer relating to the Mortgage Loans to make copies and extracts therefrom,
to cause such books to be audited by independent certified public accountants
selected by the Depositor or the Master Servicer and to discuss its affairs,
finances and accounts relating to the Mortgage Loans with its officers,
employees, agents, counsel and independent public accountants (and by this
provision the Servicer hereby authorizes such accountants to discuss with such
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense
incident to the exercise by the Depositor or the Master Servicer of any right
under this Section 7.07 shall be borne by the party requesting such inspection
(except in the case of the Securities Administrator, in which case such expenses
shall be borne by the requesting Certificateholder(s)); all other such expenses
shall be borne by the Servicer.
7.08. Waiver
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.
7.09. Termination
This Agreement shall terminate upon a clean-up call of the Trust governed
by the Pooling and Servicing Agreement.
ARTICLE VIII.
COMPLIANCE WITH REGULATION AB
8.01. Intent of the Parties; Reasonableness.
The Depositor and the Servicer acknowledge and agree that the purpose of
Article VIII of this Agreement is to facilitate compliance by the Master
Servicer and the Depositor with the provisions of Regulation AB and related
rules and regulations of the Commission. Neither the Master Servicer nor the
Depositor shall exercise its right to request delivery of information or other
performance under these provisions other than in good faith, or for purposes
other than compliance with the Securities Act, the Exchange Act and the rules
and regulations of the Commission thereunder. The Servicer acknowledges that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the Master
Servicer or the Depositor in good faith for delivery of information required
under these provisions on the basis of evolving interpretations of Regulation
AB. The Servicer shall cooperate reasonably with the Master Servicer to deliver
to the Securities Administrator, the Master Servicer (including any of its
assignees or designees) and the Depositor, any and all statements, reports,
certifications, records and any other information necessary to permit the
Securities Administrator, the Master Servicer or the Depositor to comply with
the provisions of Regulation AB, together with such disclosures relating to the
Servicer, any Sub-Servicer, or the servicing of the Mortgage Loans, to be
necessary in order to effect such compliance. The Servicer, however, shall only
be required to comply with this Article VIII with respect to the time period in
which it serviced the Mortgage Loans.
45
8.02. Subservicing Agreements. On or before March 1 of each year, the
Servicer shall deliver to the Master Servicer a copy of any subservicing
agreement executed by the Servicer not previously provided.
8.03. Information to Be Provided by the Servicer.
The Servicer shall, as promptly as practicable following notice to or
discovery by the Servicer, provide to the Master Servicer and the Depositor (in
writing and in form and substance reasonably satisfactory to the Master Servicer
and the Depositor) the information specified in paragraph (a) of this Section.
(a) For the purpose of satisfying the reporting obligation under the
Exchange Act with respect to any class of asset-backed securities, the Servicer
shall (or shall cause each Sub-Servicer to) (i) provide prompt notice to the
Master Servicer and the Depositor in writing of (A) any material litigation or
governmental proceedings involving the Servicer or any Sub-Servicer, (B) any
affiliations or relationships as set forth in Items 1119(b) and (c) of
Regulation AB that develop following the Closing Date between the Servicer, any
Sub-Servicer or and any of the parties specified in Item 1119 of Regulation AB,
(C) any Event of Default under the terms of this Agreement, (D) any merger,
consolidation or sale of substantially all of the assets of the Servicer, and
(E) the Servicer's entry into an agreement with a Sub-Servicer to perform or
assist in the performance of any of the Servicer's obligations under this
Agreement and (ii) provide to the Master Servicer and the Depositor a
description of such proceedings, affiliations or relationships, as set forth in
Sections 1119(b) and (c) of Regulation AB.
(b) As a condition to the succession to the Servicer or any Sub-Servicer as
servicer or subservicer under this Agreement by any Person (i) into which the
Servicer or such Sub-Servicer may be merged or consolidated, or (ii) which may
be appointed as a successor to the Servicer or any Sub-Servicer, the Servicer
shall provide to the Master Servicer and the Depositor, at least 15 calendar
days prior to the effective date of such succession or appointment, (x) written
notice to the Master Servicer and the Depositor of such succession or
appointment and (y) in writing and in form and substance reasonably satisfactory
to the Master Servicer and the Depositor, all information reasonably requested
by the Master Servicer or the Depositor in order to comply with its reporting
obligation under Item 6.02 of Form 8-K with respect to any class of asset-backed
securities.
(c) In addition to such information as the Servicer, as servicer, is
obligated to provide pursuant to other provisions of this Agreement, not later
than ten days prior to the deadline for the filing of any distribution report on
Form 10-D in respect of the securitization transaction, the Servicer or such
Sub-Servicer, as applicable, shall, to the extent the Servicer or such
Sub-Servicer has knowledge, provide to the party responsible for filing such
report (including, if applicable, the Master Servicer) notice of the occurrence
of any of the following events that have not already been disclosed to such
party through the Servicer's prior notice or regular servicing data along with
all information, data, and materials related thereto as may be required to be
included in the related distribution report on Form 10-D (as specified in the
provisions of Regulation AB referenced below):
(i) any material modifications, extensions or waivers of pool asset
terms, fees, penalties or payments during the distribution period or that
have cumulatively become material over time (Item 1121(a)(11) of Regulation
AB); and
(ii) material breaches of pool asset representations or warranties or
transaction covenants (Item 1121(a)(12) of Regulation AB).
46
(d) The Servicer shall provide to the Master Servicer and the Depositor,
evidence of the authorization of the person signing any certification or
statement, copies or other evidence of Fidelity Bond Insurance and Errors and
Omission Insurance policy, financial information and reports as required
pursuant to this Agreement, and, upon reasonable request, such other information
related to the Servicer or any Sub-Servicer or the Servicer or such
Sub-Servicer's performance hereunder.
8.04. Servicer Compliance Statement.
On or before March 1 of each calendar year, commencing in 2008, the
Servicer shall deliver to the Master Servicer and the Depositor a statement of
compliance addressed to the Master Servicer and the Depositor and signed by an
authorized officer of the Servicer, to the effect that (i) a review of the
Servicer's activities during the immediately preceding calendar year (or
applicable portion thereof) and of its performance under this Agreement during
such period has been made under such officer's 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 in all material respects throughout
such calendar year (or applicable portion thereof) or, if there has been a
failure to fulfill any such obligation in any material respect, specifically
identifying each such failure known to such officer and the nature and the
status thereof.
8.05. Report on Assessment of Compliance and Attestation.
(a) On or before March 1 of each calendar year, commencing in 2008, the
Servicer shall:
(i) deliver to the Master Servicer and the Depositor a report (in form
and substance reasonably satisfactory to the Master Servicer and the
Depositor) regarding the Servicer's assessment of compliance with the
Servicing Criteria during the immediately preceding calendar year, as
required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. Such report shall be addressed to the Master Servicer and
the Depositor and signed by an authorized officer of the Servicer, and
shall address each of the "Applicable Servicing Criteria" specified on
Exhibit D hereto. Solely for the purpose of Section 1122(d)(3)(iii) of
Exhibit D, the term "investor" shall mean the Master Servicer;
(ii) deliver to the Master Servicer and the Depositor a report of a
registered public accounting firm reasonably acceptable to the Master
Servicer and the Depositor that attests to, and reports on, the assessment
of compliance made by the Servicer and delivered pursuant to the preceding
paragraph. Such attestation shall be in accordance with Rules 1 02(a)(3)
and 2-02(g) of Regulation S-X under the Securities Act and the Exchange
Act;
(iii) cause each Sub-Servicer, and each Subcontractor determined by
the Servicer pursuant to Section 8.06(b) to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, if
any, and deliver to the Master Servicer and the Depositor an assessment of
compliance and accountants' attestation as and when provided in paragraphs
(a) and (b) of this Section; and
(iv) deliver, and cause each Sub-Servicer and Subcontractor described
in clause (iii), if any, to provide, to the Depositor, the Master Servicer
and any other Person that will be responsible for signing the certification
(a "Sarbanes Certification") required by Rules 13a-14(d) and 15d-14(d)
under the Exchange Act (pursuant to Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
of 2002) on behalf of an asset-backed issuer with respect to the
47
securitization transaction a certification, signed by the appropriate
officer of the Servicer, in the form attached hereto as Exhibit B.
The Servicer acknowledges that the parties identified in clause (a)(iv) above
may rely on the certification provided by the Servicer pursuant to such clause
in signing a Sarbanes Certification and filing such with the Commission.
(b) Each assessment of compliance provided by a Sub-Servicer pursuant to
Section 8.05(a)(i) shall address each of the Servicing Criteria specified on a
certification substantially in the form of Exhibit D hereto delivered to the
Master Servicer concurrently with the execution of this Agreement or, in the
case of a Sub-Servicer subsequently appointed as such, on or prior to the date
of such appointment. An assessment of compliance provided by a Subcontractor
pursuant to Section 8.05(a)(iii) need not address any elements of the Servicing
Criteria other than those specified by the Servicer pursuant to Section 8.06.
8.06. Use of Sub-Servicers and Subcontractors.
The Servicer shall not hire or otherwise utilize the services of any
Sub-Servicer to fulfill any of the obligations of the Servicer as servicer under
this Agreement unless the Servicer complies with the provisions of paragraph (a)
of this Section. The Servicer shall not hire or otherwise utilize the services
of any Subcontractor, and shall not permit any Sub-Servicer to hire or otherwise
utilize the services of any Subcontractor, to fulfill any of the obligations of
the Servicer as servicer under this Agreement unless the Servicer complies with
the provisions of paragraph (b) of this Section.
(a) It shall not be necessary for the Servicer to seek the consent of the
Securities Administrator, the Master Servicer or the Depositor to the
utilization of any Sub-Servicer. The Servicer shall cause any Sub-Servicer used
by the Servicer (or by any Sub-Servicer) for the benefit of the Master Servicer
and the Depositor to comply with the provisions of this Section and with
Sections 8.03(b), (c) and (d), 8.04, 8.05 and 8.07 of this Agreement to the same
extent as if such Sub-Servicer were the Servicer, and to provide the information
required with respect to such Sub-Servicer under Section 8.03(d) of this
Agreement. The Servicer shall be responsible for obtaining from each
Sub-Servicer and delivering to the Master Servicer and the Depositor any
servicer compliance statement required to be delivered by such Sub-Servicer
under Section 8.04, any assessment of compliance and attestation required to be
delivered by such Sub-Servicer under Section 8.05 and any certification required
to be delivered to the Person that will be responsible for signing the Sarbanes
Certification under Section 8.05 as and when required to be delivered.
(b) It shall not be necessary for the Servicer to seek the consent of the
Securities Administrator, the Master Servicer or the Depositor to the
utilization of any Subcontractor. The Servicer shall promptly upon request
provide to the Master Servicer and the Depositor (or any designee of the
Depositor, such as an administrator) a written description (in form and
substance reasonably satisfactory to the Depositor and the Master Servicer) of
the role and function of each such Subcontractor utilized by the Servicer or any
Sub-Servicer, specifying (i) the identity of each such Subcontractor, (ii) which
(if any) of such Subcontractors are "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB, and (iii) which elements of
the Servicing Criteria will be (x) addressed in assessments of compliance
provided by each Subcontractor identified pursuant to clause (ii) of this
paragraph or (y) provided by the Servicer in accordance with Regulation AB
telephone interpretation 17.06.
As a condition to the utilization of any Subcontractor determined by the
Servicer to be "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB, the Servicer shall cause any such Subcontractor used
by the Servicer (or by any Sub-Servicer) for the benefit of the Master Servicer
and the Depositor to comply with the provisions of Sections 8.05 and 8.07 of
this
48
Agreement to the same extent as if such Subcontractor were the Servicer for
those criteria in Exhibit D for which the Subcontractor is responsible. The
Servicer shall be responsible for obtaining from each Subcontractor and
delivering to the Master Servicer and the Depositor any assessment of compliance
and attestation and the other certifications required to be delivered by such
Subcontractor under Section 8.05, in each case as and when required to be
delivered.
8.07. Indemnification; Remedies.
The Servicer shall indemnify the Master Servicer, each affiliate of the
Master Servicer, the Sponsor and the Issuing Entity; each Person (including, but
not limited to, the Master Servicer if applicable) responsible for the
preparation, execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or for execution of
a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to the securitization transaction; each broker dealer acting as
underwriter, placement agent or initial purchaser, each Person who controls any
of such parties or the Depositor (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); and the respective present
and former directors, officers, employees, agents and affiliates of each of the
foregoing and of the Depositor (each, an "Indemnified Party"), and shall hold
each of them harmless from and against any claims, losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain arising out of
or based upon:
(i)(A) any untrue statement of a material fact contained or alleged to
be contained in any information, report, certification, data, accountants'
letter or other material provided under this Article VIII by or on behalf
of the Servicer, or provided under this Article VIII by or on behalf of any
Sub-Servicer or Subcontractor (collectively, the "Servicer Information"),
or (B) the omission or alleged omission to state in the Servicer
Information a material fact required to be stated in the Servicer
Information or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this paragraph shall
be construed solely by reference to the Servicer Information and not to any
other information communicated in connection with a sale or purchase of
securities, without regard to whether the Servicer Information or any
portion thereof is presented together with or separately from such other
information;
(ii) any breach by the Servicer of its obligations under this Article
VIII, including particularly any failure by the Servicer, any Sub-Servicer
or any Subcontractor to deliver any information, report, certification,
accountants' letter or other material when and as required under this
Article VIII, including any failure by the Servicer to identify pursuant to
Section 8.06(b) any Subcontractor "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB; or
(iii) the negligence bad faith or willful misconduct of the Servicer
in connection with its performance under this Article VIII.
If the indemnification provided for herein is unavailable or insufficient
to hold harmless an Indemnified Party, then the Servicer agrees that it shall
contribute to the amount paid or payable by such Indemnified Party as a result
of any claims, losses, damages or liabilities incurred by such Indemnified Party
in such proportion as is appropriate to reflect the relative fault of such
Indemnified Party on the one hand and the Servicer on the other.
49
In the case of any failure of performance described in Sections 8.03, 8.04
or 8.05 of this Agreement, the Servicer shall promptly reimburse the Master
Servicer and the Depositor, as applicable, and each Person responsible for the
preparation, execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or for execution of
a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to the securitization transaction, for all costs reasonably
incurred by each such party in order to obtain the information, report,
certification, accountants' letter or other material not delivered as required
by the Servicer, any Sub-Servicer or any Subcontractor.
This indemnification shall survive the termination of this Agreement or the
termination of any party to this Agreement.
50
IN WITNESS WHEREOF, the Depositor, the Trustee and the Servicer have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
WILSHIRE CREDIT CORPORATION,
as Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.,
as Depositor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Acknowledged and Agreed:
▇▇▇▇▇ FARGO BANK, N.A.,
as Master Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Acknowledged and Agreed:
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT A
REQUEST FOR RELEASE OF DOCUMENTS
To: ▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ______________________
Re: Custodial Agreement, dated as of May 1, 2007, among HSBC Bank USA,
National Association, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc. and ▇▇▇▇▇
Fargo Bank, N.A.
In connection with the administration of the Mortgage Loans held by you as
Custodian for the Owner pursuant to the above-captioned Custodial Agreement, we
request the release, and hereby acknowledge receipt, of the Custodian's Mortgage
File for the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
______________ 1. Mortgage Paid in
full
______________ 2. Foreclosure
______________ 3. Substitution
______________ 4. Other Liquidation
(Repurchases, etc.)
______________ 5. Nonliquidation Reason: _______________________
By:
------------------------------------
(authorized signer)
Issuer:
--------------------------------
Address:
-------------------------------
Date:
----------------------------------
A-1
Custodian
▇▇▇▇▇ Fargo Bank, N.A.
Please acknowledge the execution of the above request by your signature and
date below:
Please acknowledge the execution of the above request by your signature and
date below:
------------------------------------- ------------------------------
Signature Date
Documents returned to Custodian:
------------------------------------- ------------------------------
Custodian Date
A-2
EXHIBIT B
FORM OF ANNUAL CERTIFICATION
Re: The Servicing Agreement dated as of May 1, 2007, (the "Agreement"),
among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc. and Wilshire Credit
Corporation
I, ____________________________, the _______________________ of [NAME
OF COMPANY] (the "Company"), certify to [the Purchaser], [the Depositor], and
the [Master Servicer] [Securities Administrator] [Trustee], and their officers,
with the knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed, or persons under my supervision have reviewed,
the servicer compliance statement of the Company provided in accordance
with Item 1123 of Regulation AB (the "Compliance Statement"), the report on
assessment of the Company's compliance with the servicing criteria set
forth in Item 1122(d) of Regulation AB (the "Servicing Criteria"), provided
in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of
1934, as amended (the "Exchange Act") and Item 1122 of Regulation AB (the
"Servicing Assessment"), the registered public accounting firm's
attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the
"Attestation Report"), and all servicing reports, officer's certificates
and other information relating to the servicing of the Mortgage Loans by
the Company during 200[ ] that were delivered by the Company to the
[Depositor] [Master Servicer] [Securities Administrator] [Trustee] pursuant
to the Agreement (collectively, the "Company Servicing Information");
(2) Based on my knowledge, the Company Servicing Information, taken as
a whole, does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in the
light of the circumstances under which such statements were made, not
misleading with respect to the period of time covered by the Company
Servicing Information;
(3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee];
(4) I am responsible for reviewing the activities performed by the
Company as servicer under the Agreement, and based on my knowledge and the
compliance review conducted in preparing the Compliance Statement and
except as disclosed in the Compliance Statement, the Servicing Assessment
or the Attestation Report, the Company has fulfilled its obligations under
the Agreement in all material respects; and
(5) The Compliance Statement required to be delivered by the Company
pursuant to this Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Company and by any Sub-Servicer and
Subcontractor pursuant to the Agreement, have been provided to the
[Depositor] [Master Servicer]. Any material instances of noncompliance
described in such reports have been disclosed to the [Depositor] [Master
Servicer]. Any material instance of noncompliance with the Servicing
Criteria has been disclosed in such reports.
B-1
Date:
----------------------------------
BY:
------------------------------------
NAME:
----------------------------------
TITLE:
---------------------------------
B-2
EXHIBIT C-1
STANDARD FILE LAYOUT - MASTER SERVICING
COLUMN NAME DESCRIPTION DECIMAL FORMAT COMMENT MAX SIZE
----------- ------------------------------------------- ------- ---------------------------------- --------
SER_INVESTOR_NBR A value assigned by the Servicer to define Text up to 10 digits 20
a group of loans.
LOAN_NBR A unique identifier assigned to each loan Text up to 10 digits 10
by the investor.
SERVICER_LOAN_NBR A unique number assigned to a loan by the Text up to 10 digits 10
Servicer. This may be different than the
LOAN_NBR.
BORROWER_NAME The borrower name as received in the file. Maximum length of 30 (Last, First) 30
It is not separated by first and last name.
SCHED_PAY_AMT Scheduled monthly principal and scheduled 2 No commas(,) or dollar signs ($) 11
interest payment that a borrower is
expected to pay, P&I constant.
NOTE_INT_RATE The loan interest rate as reported by the 4 Max length of 6 6
Servicer.
NET_INT_RATE The loan gross interest rate less the 4 Max length of 6 6
service fee rate as reported by the
Servicer.
SERV_FEE_RATE The servicer's fee rate for a loan as 4 Max length of 6 6
reported by the Servicer.
SERV_FEE_AMT The servicer's fee amount for a loan as 2 No commas(,) or dollar signs ($) 11
reported by the Servicer.
NEW_PAY_AMT The new loan payment amount as reported by 2 No commas(,) or dollar signs ($) 11
the Servicer.
NEW_LOAN_RATE The new loan rate as reported by the 4 Max length of 6 6
Servicer.
ARM_INDEX_RATE The index the Servicer is using to 4 Max length of 6 6
calculate a forecasted rate.
ACTL_BEG_PRIN_BAL The borrower's actual principal balance at 2 No commas(,) or dollar signs ($) 11
the beginning of the processing cycle.
ACTL_END_PRIN_BAL The borrower's actual principal balance at 2 No commas(,) or dollar signs ($) 11
the end of the processing cycle.
BORR_NEXT_PAY_DUE_DATE The date at the end of processing cycle MM/DD/YYYY 10
that the borrower's next payment is due to
the Servicer, as reported by Servicer.
SERV_CURT_AMT_1 The first curtailment amount to be applied. 2 No commas(,) or dollar signs ($) 11
C-1-1
SERV_CURT_DATE_1 The curtailment date associated with the MM/DD/YYYY 10
first curtailment amount.
CURT_ADJ_ AMT_1 The curtailment interest on the first 2 No commas(,) or dollar signs ($) 11
curtailment amount, if applicable.
SERV_CURT_AMT_2 The second curtailment amount to be 2 No commas(,) or dollar signs ($) 11
applied.
SERV_CURT_DATE_2 The curtailment date associated with the MM/DD/YYYY 10
second curtailment amount.
CURT_ADJ_ AMT_2 The curtailment interest on the second 2 No commas(,) or dollar signs ($) 11
curtailment amount, if applicable.
SERV_CURT_AMT_3 The third curtailment amount to be applied. 2 No commas(,) or dollar signs ($) 11
SERV_CURT_DATE_3 The curtailment date associated with the MM/DD/YYYY 10
third curtailment amount.
CURT_ADJ_AMT_3 The curtailment interest on the third 2 No commas(,) or dollar signs ($) 11
curtailment amount, if applicable.
PIF_AMT The loan "paid in full" amount as reported 2 No commas(,) or dollar signs ($) 11
by the Servicer.
PIF_DATE The paid in full date as reported by the MM/DD/YYYY 10
Servicer.
ACTION_CODE The standard FNMA numeric code used to Action Code Key: 15=Bankruptcy, 2
indicate the default/delinquent status of a 30=Foreclosure, , 60=PIF,
particular loan. 63=Substitution, 65=Repurchase,
70=REO
INT_ADJ_AMT The amount of the interest adjustment as 2 No commas(,) or dollar signs ($) 11
reported by the Servicer.
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, 2 No commas(,) or dollar signs ($) 11
if applicable.
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if 2 No commas(,) or dollar signs ($) 11
applicable.
LOAN_LOSS_AMT The amount the Servicer is passing as a 2 No commas(,) or dollar signs ($) 11
loss, if applicable.
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount 2 No commas(,) or dollar signs ($) 11
due at the beginning of the cycle date to
be passed through to investors.
SCHED_END_PRIN_BAL The scheduled principal balance due to 2 No commas(,) or dollar signs ($) 11
investors at the end of a processing cycle.
SCHED_PRIN_AMT The scheduled principal amount as reported 2 No commas(,) or dollar signs ($) 11
by the Servicer for the current cycle --
only applicable for Scheduled/Scheduled
Loans.
C-1-2
SCHED_NET_INT The scheduled gross interest amount less 2 No commas(,) or dollar signs ($) 11
the service fee amount for the current
cycle as reported by the Servicer -- only
applicable for Scheduled/Scheduled Loans.
ACTL_PRIN_AMT The actual principal amount collected by 2 No commas(,) or dollar signs ($) 11
the Servicer for the current reporting
cycle -- only applicable for Actual/Actual
Loans.
ACTL_NET_INT The actual gross interest amount less the 2 No commas(,) or dollar signs ($) 11
service fee amount for the current
reporting cycle as reported by the Servicer
-- only applicable for Actual/Actual Loans.
PREPAY_PENALTY_ AMT The penalty amount received when a borrower 2 No commas(,) or dollar signs ($) 11
prepays on his loan as reported by the
Servicer.
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the loan 2 No commas(,) or dollar signs ($) 11
waived by the servicer.
MOD_DATE The Effective Payment Date of the MM/DD/YYYY 10
Modification for the loan.
MOD_TYPE The Modification Type. Varchar - value can be alpha or 30
numeric
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and 2 No commas(,) or dollar signs ($) 11
interest advances made by Servicer.
[BREACH FLAG] [Flag to indicate if the repurchase of a [Y-Breach]
loan is due to a breach of Representations [N-NO Breach]
and Warranties] [Let blank if N/A]
C-1-3
EXHIBIT C-2
STANDARD FILE LAYOUT - DELINQUENCY REPORTING
* The column/header names in BOLD are the minimum fields ▇▇▇▇▇ Fargo must
receive from every Servicer
COLUMN/HEADER NAME DESCRIPTION DECIMAL FORMAT COMMENT
------------------ ------------------------------------------------------------------- ------- ----------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer. This may be
different than the LOAN_NBR
LOAN_NBR A unique identifier assigned to each loan by the originator.
CLIENT_NBR Servicer Client Number
SERV_INVESTOR_NBR Contains a unique number as assigned by an external servicer to
identify a group of loans in their system.
BORROWER_FIRST_NAME First Name of the Borrower.
BORROWER_LAST_NAME Last name of the borrower.
PROP_ADDRESS Street Name and Number of Property
PROP_STATE The state where the property located.
PROP_ZIP Zip code where the property is located.
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next payment is due to the servicer at MM/DD/YYYY
the end of processing cycle, as reported by Servicer.
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
BANKRUPTCY_CASE_NBR The case number assigned by the court to the bankruptcy filing.
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been approved by the MM/DD/YYYY
courts
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From Bankruptcy. Either by Dismissal, MM/DD/YYYY
Discharged and/or a Motion For Relief Was Granted.
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The Servicer MM/DD/YYYY
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan Such As;
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is Scheduled To End/Close MM/DD/YYYY
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the servicer with instructions MM/DD/YYYY
to begin foreclosure proceedings.
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue Foreclosure MM/DD/YYYY
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a Foreclosure Action MM/DD/YYYY
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is expected to occur. MM/DD/YYYY
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure sale. 2 No commas(,) or
dollar signs ($)
EVICTION_START_DATE The date the servicer initiates eviction of the borrower. MM/DD/YYYY
EVICTION_COMPLETED_DATE The date the court revokes legal possession of the property from MM/DD/YYYY
the borrower.
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,) or
dollar signs ($)
LIST_DATE The date an REO property is listed at a particular price. MM/DD/YYYY
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,) or
dollar signs ($)
OFFER_DATE_TIME The date an offer is received by DA Admin or by the Servicer. MM/DD/YYYY
REO_CLOSING_DATE The date the REO sale of the property is scheduled to close. MM/DD/YYYY
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
OCCUPANT_CODE Classification of how the property is occupied.
PROP_CONDITION_CODE A code that indicates the condition of the property.
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
CURR_PROP_VAL The current "as is" value of the property based on brokers price 2
opinion or appraisal.
REPAIRED_PROP_VAL The amount the property would be worth if repairs are completed 2
pursuant to a broker's price opinion or appraisal.
IF APPLICABLE:
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
DELINQ_REASON_CODE The circumstances which caused a borrower to stop paying on a loan.
Code indicates the reason why the loan is in default for this
cycle.
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With Mortgage Insurance MM/DD/YYYY
Company.
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,) or
dollar signs ($)
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim Payment MM/DD/YYYY
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,) or
dollar signs ($)
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,) or
dollar signs ($)
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By The Pool Insurer MM/DD/YYYY
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,) or
dollar signs ($)
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,) or
dollar signs ($)
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,) or
dollar signs ($)
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,) or
dollar signs ($)
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,) or
dollar signs ($)
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,) or
dollar signs ($)
C-2-2
MOTION_FOR_RELIEF_DATE The date the Motion for Relief was filed 10 MM/DD/YYYY
FRCLSR_BID_AMT The foreclosure sale bid amount 11 No commas(,) or
dollar signs ($)
FRCLSR_SALE_TYPE The foreclosure sales results: REO, Third Party, Conveyance to
HUD/VA
REO_PROCEEDS The net proceeds from the sale of the REO property. No commas(,) or
dollar signs ($)
BPO_DATE The date the BPO was done.
CURRENT_FICO The current FICO score
HAZARD_CLAIM_FILED_DATE The date the Hazard Claim was filed with the Hazard Insurance 10 MM/DD/YYYY
Company.
HAZARD_CLAIM_AMT The amount of the Hazard Insurance Claim filed. 11 No commas(,) or
dollar signs ($)
HAZARD_CLAIM_PAID_DATE The date the Hazard Insurance Company disbursed the claim payment. 10 MM/DD/YYYY
HAZARD_CLAIM_PAID_AMT The amount the Hazard Insurance Company paid on the claim. 11 No commas(,) or
dollar signs ($)
ACTION_CODE Indicates loan status Number
NOD_DATE MM/DD/YYYY
NOI_DATE MM/DD/YYYY
ACTUAL_PAYMENT_PLAN_START_DATE MM/DD/YYYY
ACTUAL_PAYMENT_ PLAN_END_DATE
ACTUAL_REO_START_DATE MM/DD/YYYY
REO_SALES_PRICE Number
[REALIZED_LOSS/GAIN] [As defined in the Servicing Agreement] [Number]
STANDARD FILE CODES - DELINQUENCY REPORTING
The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
- ASUM- Approved Assumption
- BAP- Borrower Assistance Program
- CO- Charge Off
- DIL- Deed-in-Lieu
- FFA- Formal Forbearance Agreement
- MOD- Loan Modification
- PRE- Pre-Sale
- SS- Short Sale
- MISC- Anything else approved by the PMI or Pool Insurer
NOTE: ▇▇▇▇▇ Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply ▇▇▇▇▇
Fargo Bank with a description of each of the
C-2-3
Loss Mitigation Types prior to sending the file.
The OCCUPANT CODE field should show the current status of the property code as
follows:
- Mortgagor
- Tenant
- Unknown
- Vacant
The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
- Damaged
- Excellent
- Fair
- Gone
- Good
- Poor
- Special Hazard
- Unknown
The FNMA DELINQUENT REASON CODE field should show the Reason for Delinquency as
follows:
DELINQUENCY CODE DELINQUENCY DESCRIPTION
---------------- -----------------------
001 FNMA-Death of principal mortgagor
002 FNMA-Illness of principal mortgagor
003 FNMA-Illness of mortgagor's family member
004 FNMA-Death of mortgagor's family member
005 FNMA-Marital difficulties
006 FNMA-Curtailment of income
007 FNMA-Excessive Obligation
008 FNMA-Abandonment of property
009 FNMA-Distant employee transfer
011 FNMA-Property problem
012 FNMA-Inability to sell property
013 FNMA-Inability to rent property
014 FNMA-Military Service
015 FNMA-Other
016 FNMA-Unemployment
017 FNMA-Business failure
019 FNMA-Casualty loss
022 FNMA-Energy environment costs
023 FNMA-Servicing problems
026 FNMA-Payment adjustment
027 FNMA-Payment dispute
C-2-4
029 FNMA-Transfer of ownership pending
030 FNMA-Fraud
031 FNMA-Unable to contact borrower
INC FNMA-Incarceration
C-2-5
STANDARD FILE CODES - DELINQUENCY REPORTING
The FNMA DELINQUENT STATUS CODE field should show the Status of Default as
follows:
STATUS CODE STATUS DESCRIPTION
----------- ------------------
09 Forbearance
17 Pre-foreclosure Sale Closing Plan Accepted
24 Government Seizure
26 Refinance
27 Assumption
28 Modification
29 Charge-Off
30 Third Party Sale
31 Probate
32 Military Indulgence
43 Foreclosure Started
44 Deed-in-Lieu Started
49 Assignment Completed
61 Second Lien Considerations
62 Veteran's Affairs-No Bid
63 Veteran's Affairs-Refund
64 Veteran's Affairs-Buydown
65 Chapter 7 Bankruptcy
66 Chapter 11 Bankruptcy
67 Chapter 13 Bankruptcy
C-2-6
EXHIBIT C-3
CALCULATION OF REALIZED LOSS/GAIN FORM 332- INSTRUCTION SHEET
NOTE: DO NOT NET OR COMBINE ITEMS. SHOW ALL EXPENSES INDIVIDUALLY AND ALL
CREDITS AS SEPARATE LINE ITEMS. CLAIM PACKAGES ARE DUE ON THE REMITTANCE
REPORT DATE. LATE SUBMISSIONS MAY RESULT IN CLAIMS NOT BEING PASSED UNTIL
THE FOLLOWING MONTH. THE SERVICER IS RESPONSIBLE TO REMIT ALL FUNDS PENDING
LOSS APPROVAL AND /OR RESOLUTION OF ANY DISPUTED ITEMS.
The numbers on the 332 form correspond with the numbers listed below.
LIQUIDATION AND ACQUISITION EXPENSES:
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees advanced
is required.
2. The Total Interest Due less the aggregate amount of servicing fee that
would have been earned if all delinquent payments had been made as
agreed. For documentation, an Amortization Schedule from date of
default through liquidation breaking out the net interest and
servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of
the Mortgage Loan as calculated on a monthly basis. For documentation,
an Amortization Schedule from date of default through liquidation
breaking out the net interest and servicing fees advanced is required.
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form -
breakdown required showing period
of coverage, base tax, interest, penalty. Advances prior to
default require evidence of servicer efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing all
payments
* REO repairs > $1500 require explanation
* REO repairs > $3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and
WFB's approved Officer Certificate
* Unusual or extraordinary items may require further documentation.
C-3-1
13. The total of lines 1 through 12.
(A) CREDITS:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, bid
instructions and Escrow Agent / Attorney
Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332 form
22. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial proceeds
and line (18b) for Part B/Supplemental proceeds.
TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)
23. The total derived from subtracting line 22 from 13. If the amount
represents a realized gain, show the amount in parenthesis (_____).
C-3-2
CALCULATION OF REALIZED LOSS/GAIN FORM 332
Prepared by: _____________________________ Date: ____________________
Phone: ___________________________________ Email Address: ____________________
Servicer Loan No. Servicer Name Servicer Address
▇▇▇▇▇ FARGO BANK, N.A. LOAN NO._____________________________
Borrower's Name: _________________________________________________________
Property Address: _________________________________________________________
LIQUIDATION TYPE: REO SALE 3RD PARTY SALE SHORT SALE CHARGE OFF
WAS THIS LOAN GRANTED A BANKRUPTCY DEFICIENCY OR CRAMDOWN YES NO
If "Yes", provide deficiency or cramdown amount _______________________________
LIQUIDATION AND ACQUISITION EXPENSES:
(1) Actual Unpaid Principal Balance of Mortgage Loan $________________(1)
(2) Interest accrued at Net Rate ________________(2)
(3) Accrued Servicing Fees ________________(3)
(4) Attorney's Fees ________________(4)
(5) Taxes (see page 2) ________________(5)
(6) Property Maintenance ________________(6)
(7) MI/Hazard Insurance Premiums (see page 2) ________________(7)
(8) Utility Expenses ________________(8)
(9) Appraisal/BPO ________________(9)
(10) Property Inspections ________________(10)
(11) FC Costs/Other Legal Expenses ________________(11)
(12) Other (itemize) ________________(12)
Cash for Keys__________________________ ________________(12)
HOA/Condo Fees_________________________ ________________(12)
_______________________________________ ________________(12)
TOTAL EXPENSES $________________(13)
CREDITS:
(14) Escrow Balance $________________(14)
(15) HIP Refund ________________(15)
(16) Rental Receipts ________________(16)
(17) Hazard Loss Proceeds ________________(17)
(18) Primary Mortgage Insurance / Gov't Insurance ________________(18a)
HUD Part A
________________(18b)
HUD Part B
C-3-3
(19) Pool Insurance Proceeds ________________(19)
(20) Proceeds from Sale of Acquired Property ________________(20)
(21) Other (itemize) ________________(21)
__________________________________________ ________________(21)
TOTAL CREDITS $________________(22)
TOTAL REALIZED LOSS (OR AMOUNT OF GAIN) $________________(23)
C-3-4
ESCROW DISBURSEMENT DETAIL
TYPE DATE PERIOD TOTAL BASE
(TAX /INS.) PAID OF COVERAGE PAID AMOUNT PENALTIES INTEREST
----------- ---- ----------- ----- ------ --------- --------
C-3-5
EXHIBIT D
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
(RMBS UNLESS OTHERWISE NOTED)
The assessment of compliance to be delivered by [the Company] [Name of
Sub-Servicer] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":
SERVICING CRITERIA APPLICABLE
-------------------------------------------------------------------------------- SERVICING
REFERENCE CRITERIA CRITERIA
---------------- ------------------------------------------------------------- ----------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to monitor any X
performance or other triggers and events of default in
accordance with the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third X
parties, policies and procedures are instituted to monitor
the third party's performance and compliance with such
servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a
back-up servicer for the mortgage loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect X
on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of the
transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate X
custodial bank accounts and related bank clearing accounts no
more than two business days following receipt, or such other
number of days specified in the transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor X
or to an investor are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash X
flows or distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved as
specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such as cash X
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a federally insured X
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized X
access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all X
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing
D-1
SERVICING CRITERIA APPLICABLE
-------------------------------------------------------------------------------- SERVICING
REFERENCE CRITERIA CRITERIA
---------------- ------------------------------------------------------------- ----------
accounts. These reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar days after the bank
statement cutoff date, or such other number of days specified
in the transaction agreements; (C) reviewed and approved by
someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling
items. These reconciling items are resolved within 90
calendar days of their original identification, or such other
number of days specified in the transaction agreements.
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be filed with the X
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance
with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C)
are filed with the Commission as required by its rules and
regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number
of mortgage loans serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in X
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within two X**
business days to the Servicer's investor records, or such
other number of days specified in the transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree X
with cancelled checks, or other form of payment, or custodial
bank statements.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as X
required by the transaction agreements or related mortgage
loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as X
required by the transaction agreements.
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool X
are made, reviewed and approved in accordance with any
conditions or requirements in the transaction agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in X
accordance with the related mortgage loan documents are
posted to the Servicer's obligor records maintained no more
than two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated
to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree X
with the Servicer's records with respect to an obligor's
unpaid principal balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's X
mortgage loans (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and
D-2
SERVICING CRITERIA APPLICABLE
-------------------------------------------------------------------------------- SERVICING
REFERENCE CRITERIA CRITERIA
---------------- ------------------------------------------------------------- ----------
related pool asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, X
modifications and deeds in lieu of foreclosure, foreclosures
and repossessions, as applicable) are initiated, conducted
and concluded in accordance with the timeframes or other
requirements established by the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are maintained during X
the period a mortgage loan is delinquent in accordance with
the transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity's activities
in monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling plans
in cases where delinquency is deemed temporary (e.g., illness
or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage X
loans with variable rates are computed based on the related
mortgage loan documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as X
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's mortgage loan documents, on at least an
annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with applicable
mortgage loan documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar days of full
repayment of the related mortgage loans, or such other number
of days specified in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or X
insurance payments) are made on or before the related penalty
or expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has
been received by the servicer at least 30 calendar days prior
to these dates, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with any payment to X
be made on behalf of an obligor are paid from the servicer's
funds and not charged to the obligor, unless the late payment
was due to the obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within X
two business days to the obligor's records maintained by the
servicer, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are X
recognized and recorded in accordance with the transaction
agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
maintained as set forth in the transaction agreements.
** Solely for the purpose of Section 1122(d)(3)(iii), the term "investor"
shall mean the Master Servicer.
D-3
SCHEDULE I
MORTGAGE LOAN SCHEDULE
D-1