Exhibit 99.3
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MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC.
Purchaser
COUNTRYWIDE HOME LOANS, INC.
Seller and Servicer
Dated as of February 1, 2007
Fixed and Adjustable Rate Mortgage Loans
First Liens/Second Liens
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TABLE OF CONTENTS
Page
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SECTION 1. Definitions................................................ 1
SECTION 2. Agreement to Purchase...................................... 19
SECTION 3. Mortgage Loan Schedules.................................... 19
SECTION 4. Purchase Price............................................. 19
SECTION 5. Examination of Mortgage Files.............................. 19
SECTION 6. Conveyance from Seller to Initial Purchaser................ 20
SECTION 7. Representations, Warranties and Covenants of the Seller:
Remedies for Breach........................................ 22
SECTION 8. Closing.................................................... 35
SECTION 9. Closing Documents.......................................... 36
SECTION 10. Costs...................................................... 36
SECTION 11. Seller's Servicing Obligations............................. 37
SECTION 12. Removal of Mortgage Loans from Inclusion under This
Agreement Upon a Whole Loan Transfer or a Securitization
Transaction on One or More Reconstitution Dates............ 37
SECTION 12A Compliance with Regulation AB.............................. 39
SECTION 13. The Seller................................................. 51
SECTION 14. Default.................................................... 53
SECTION 15. Termination................................................ 55
SECTION 16. Successor to the Seller.................................... 55
SECTION 17. Financial Statements....................................... 56
SECTION 18. Mandatory Delivery......................................... 57
SECTION 19. Notices.................................................... 57
SECTION 20. Severability Clause........................................ 57
SECTION 21. Counterparts............................................... 58
SECTION 22. Governing Law.............................................. 58
SECTION 23. Intention of the Parties................................... 58
SECTION 24. Successors and Assigns..................................... 58
SECTION 25. Waivers.................................................... 59
SECTION 26. Exhibits................................................... 59
SECTION 27. Nonsolicitation............................................ ▇▇
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▇▇▇▇▇▇▇ ▇▇. General Interpretive Principles............................ 60
SECTION 29. Reproduction of Documents.................................. 60
SECTION 30. Further Agreements......................................... 60
SECTION 31. Protection of Confidential Information..................... 60
SECTION 32. Survival................................................... 61
SECTION 33. Conflicts.................................................. 61
EXHIBITS
EXHIBIT 1 SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 2 [RESERVED]
EXHIBIT 3 SECURITY RELEASE CERTIFICATION
EXHIBIT 4 FORM OF WARRANTY ▇▇▇▇ OF SALE
EXHIBIT 5 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 6 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 7 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 8 SERVICING ADDENDUM
EXHIBIT 9 FORM OF TRADE CONFIRMATION
EXHIBIT 10 ANNUAL CERTIFICATION
EXHIBIT 11 SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
SCHEDULE I FINAL MORTGAGE LOAN SCHEDULE
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MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
This is a MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT (the
"Agreement"), dated as of February 1, 2007, by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Lending, Inc., having an office at 4 World Financial Center, New York,
New York 10080 (the "Initial Purchaser", and the Initial Purchaser or the
Person, if any, to which the Initial Purchaser has assigned its rights and
obligations hereunder as Purchaser with respect to a Mortgage Loan pursuant to
this Agreement, and each of their respective permitted successors and assigns,
the "Purchaser") and Countrywide Home Loans, Inc., having an office at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Seller").
WITNESSETH:
WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to time, from the
Seller, certain conventional fixed and adjustable rate residential first lien
mortgage loans, (the "Mortgage Loans") as described herein on a
servicing-retained basis, and which shall be delivered in groups of whole loans
on various dates as provided in the related Trade Confirmation (each, a "Closing
Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust or
other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the Final Mortgage Loan Schedule for
the related Mortgage Loan Package, which is to be annexed hereto on each Closing
Date as Schedule I;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner of
the conveyance, servicing and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the Seller,
the Purchaser desires to sell some or all of the Mortgage Loans to one or more
purchasers as a whole loan transfer in a whole loan or participation format or a
public or private mortgage-backed securities transaction;
NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Seller agree
as follows:
SECTION 1. Definitions. For purposes of this Agreement the following
capitalized terms shall have the respective meanings set forth below.
Adjustable Rate Mortgage Loan: A Mortgage Loan which provides for the
adjustment of the Mortgage Interest Rate payable in respect thereto.
Adjustment Date: With respect to each Adjustable Rate Mortgage Loan,
the date set forth in the related Mortgage Note on which the Mortgage Interest
Rate on such Adjustable Rate Mortgage Loan is adjusted in accordance with the
terms of the related Mortgage Note.
Agency Transfer: The transfer or sale by the Purchaser of some or all
of the Mortgage Loans to FNMA or FHLMC.
Agreement: This Master Mortgage Loan Purchase and Servicing Agreement
including all exhibits, schedules, amendments and supplements hereto.
Appraised Value: With respect to any Mortgaged Property, the lesser of
(i) the value thereof as determined by an appraisal made for the originator of
the Mortgage Loan at the time of origination of the Mortgage Loan by an
appraiser who met the minimum requirements of FNMA or FHLMC, and (ii) the
purchase price paid for the related Mortgaged Property by the Mortgagor with the
proceeds of the Mortgage Loan, provided, however, in the case of a Refinanced
Mortgage Loan, such value of the Mortgaged Property is based solely upon the
value determined by an appraisal made for the originator of such Refinanced
Mortgage Loan at the time of origination of such Refinanced Mortgage Loan by an
appraiser who met the minimum requirements of FNMA or FHLMC.
Assignment of Mortgage: An individual assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form, sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property is located
to give record notice of the sale of the Mortgage to the Purchaser.
Balloon Loan: A Mortgage Loan identified on the Mortgage Loan Schedule
as a balloon mortgage loan.
Business Day: Any day other than a Saturday or Sunday, or a day on
which banking and savings and loan institutions in the State of California, or
the state in which the Seller's servicing operations are located, or the State
of New York are authorized or obligated by law or executive order to be closed.
Buydown Mortgage Loan: A Mortgage Loan in which buydown funds are used
to pay a portion of the interest payable on the Mortgage Loan for a specified
period of time.
Cash-Out Refinancing: A Refinanced Mortgage Loan the proceeds of which
were in excess of the principal balance of any existing first mortgage on the
related Mortgaged Property and related closing costs, and were used to pay any
such existing first mortgage, related closing costs and subordinate mortgages on
the related Mortgaged Property.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase and the Seller from time to time shall sell to the
Purchaser, the Mortgage Loans listed on the related Final Mortgage Loan Schedule
with respect to the related Mortgage Loan Package.
Closing Documents: With respect to any Closing Date, the documents
required pursuant to Section 9.
Code: The Internal Revenue Code of 1986, or any successor statute
thereto.
Combined Loan-to-Value Ratio or CLTV: With respect to any Mortgage
Loan, the fraction, expressed as a percentage, the numerator of which is the sum
of (a) the original principal balance of the Mortgage Loan, plus (b) the unpaid
principal balance of any related subordinate mortgage loan or loans secured by
the Mortgaged Property, and the denominator of which is the Appraised Value of
the related Mortgaged Property.
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Condemnation Proceeds: All awards, compensation and settlements in
respect of a taking of all or part of a Mortgaged Property by exercise of the
power of condemnation or the right of eminent domain.
Commission: The United States Securities and Exchange Commission.
Convertible Mortgage Loan: A Mortgage Loan that by its terms and
subject to certain conditions contained in the related Mortgage or Mortgage Note
allows the Mortgagor to convert the adjustable Mortgage Interest Rate on such
Mortgage Loan to a fixed Mortgage Interest Rate.
Credit Score: The credit score of the Mortgagor provided by an
organization providing credit scores at the time of the origination of a
Mortgage Loan. If two credit scores are obtained, the Credit Score shall be the
lower of the two credit scores. If three credit scores are obtained, the Credit
Score shall be the middle of the three credit scores.
Custodial Account: One or more accounts created and maintained
pursuant to Exhibit 8, which accounts shall be held as a special deposit by the
depository institution maintaining such accounts in a fiduciary capacity,
separate and apart from its funds or general assets and shall not be held in any
capacity that would create a debtor-creditor relationship between the depository
institution maintaining the accounts and the Seller or Purchaser.
Custodial Agreement: The agreement between the Initial Purchaser and
the Custodian, governing the retention of the originals of the Mortgage Loan
Documents.
Custodian: The custodian designated by the Initial Purchaser under the
Custodial Agreement, or its successor in interest or assigns, or any successor
to the Custodian under the Custodial Agreement.
Cut-off Date: The first day of the month in which the related Closing
Date occurs or as otherwise set forth in the related Trade Confirmation.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Qualified Substitute Mortgage Loan.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Determination Date: With respect to each Remittance Date, the
fifteenth (15th) day of the calendar month in which such Remittance Date occurs
or, if such fifteenth (15th) day is not a Business Day, the Business Day
immediately following such fifteenth (15th) day.
Due Date: The day of the calendar month on which the Monthly Payment
is due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of the Remittance
Date and ending on the first day of the month of the Remittance Date.
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Eligible Account: A Custodial Account maintained with a depository
institution whose deposits are insured by the Bank Insurance Fund or the Savings
Association Insurance Fund of the FDIC, the unsecured and uncollateralized debt
obligations of which shall be rated "AA" or better by S&P and "Aa2" or better by
Moody's or in one of the two (2) highest short-term rating categories by S&P or
by Moody's, as applicable, and which is either (i) a federal savings and loan
association duly organized, validly existing and in good standing under the
federal banking laws, (ii) an institution duly organized, validly existing and
in good standing under the applicable banking laws of any state; or (iii) a
national banking association duly organized, validly existing and in good
standing under the federal banking laws.
Eligible Investment: Any one or more of the obligations and securities
listed below which investment provides for a date of maturity not later than the
Remittance Date in each month:
(1) direct obligations of or obligations fully guaranteed by, (i) the
United States of America, or (ii) any agency or instrumentality of the
United States of America, the obligations of which are backed by the
full faith and credit of the United States of America;
(2) federal funds, demand, money market, or time deposits in,
certificates of deposits of, or banker's acceptances issued by any
depository institution or trust company incorporated or organized
under the laws of the United States of America or any state thereof,
subject to supervision and examination by federal and/or state banking
authorities, and, at the time of such investment or contractual
commitment providing for such investment, whose commercial paper or
other short-term debt obligations (or, in the case of a depository
institution or trust company that is a subsidiary of a holding
company, the commercial paper or other short-term debt obligations of
such holding company) is rated "P-1" by Moody's and "A-1" by S&P and
whose long-term debt obligations (or, in the case of a depository
institution that is a subsidiary of a holding company, the long-term
debt obligations of such holding company) are rated at least "Aa2" by
Moody's and "AA" by S&P (collectively, with all other rating
categories set out in this paragraph, the "Investment Ratings").
Notwithstanding the foregoing, Eligible Investments shall not include
(i) "stripped securities," (ii) any investments which contractually may return
less than the unpaid principal balance therefor, or (iii) a direct purchase of
commercial paper from the issuer.
Escrow Account: One or more accounts created and maintained pursuant
to Exhibit 8.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments, water charges, sewer rents, Primary Insurance Policy premiums, fire
and hazard insurance premiums and other payments required to be escrowed by the
Mortgagor with the Mortgagee pursuant to the terms of any Mortgage Note or
Mortgage.
Event of Default: Any one of the events enumerated in Subsection
14.01.
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Exchange Act: The Securities Exchange Act of 1934, as amended.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation or any successor
thereto.
Final Mortgage Loan Schedule: With respect to each Mortgage Loan
Package, the schedule of Mortgage Loans to be annexed hereto as Schedule I (or a
supplement thereto) on each Closing Date for the Mortgage Loan Package delivered
on such Closing Date in both hard copy and floppy disk, such schedule setting
forth the following information with respect to each Mortgage Loan in the
Mortgage Loan Package:
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's first and last name;
(3) the street address of the Mortgaged Property including the state
and zip code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied;
(5) the type of Residential Dwelling constituting the Mortgaged
Property;
(6) the original months to maturity;
(7) the original date of the Mortgage Loan and the remaining months
to maturity from the Cut-off Date, based on the original
amortization schedule;
(8) the Loan-to-Value Ratio or Combined Loan-to-Value Ratio, if
applicable, at origination;
(9) the Mortgage Interest Rate in effect immediately following the
Cut-off Date;
(10) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(11) the stated maturity date;
(12) the amount of the Monthly Payment at origination;
(13) the amount of the Monthly Payment as of the Cut-off Date;
(14) the last Due Date on which a Monthly Payment was actually applied
to the unpaid Stated Principal Balance;
(15) the original principal amount of the Mortgage Loan;
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(16) the Stated Principal Balance of the Mortgage Loan as of the close
of business on the Cut-off Date;
(17) with respect to each Adjustable Rate Mortgage Loan, the first
Mortgage Interest Rate Adjustment Date and the number of months
between each Adjustment Date thereafter;
(18) with respect to each Adjustable Rate Mortgage Loan, the number of
days prior to the origination date and each Adjustment Date
thereafter, whereby the Index is determined;
(19) with respect to each Adjustable Rate Mortgage Loan, the Gross
Margin;
(20) with respect to each Adjustable Rate Mortgage Loan, the Periodic
Rate Cap;
(21) with respect to each Adjustable Rate Mortgage Loan, the Initial
Rate Cap;
(22) a code indicating the purpose of the loan (i.e., purchase
financing, Rate/Term Refinancing, Cash-Out Refinancing);
(23) with respect to each Adjustable Rate Mortgage Loan, the Maximum
Mortgage Interest Rate under the terms of the Mortgage Note;
(24) with respect to each Adjustable Rate Mortgage Loan, the Minimum
Mortgage Interest Rate under the terms of the Mortgage Note;
(25) the Mortgage Interest Rate at origination;
(26) with respect to each Adjustable Rate Mortgage Loan, the first
Adjustment Date immediately following the Cut-off Date;
(27) with respect to each Adjustable Rate Mortgage Loan, the Index and
the number of decimal places to which the Index is rounded;
(28) a code indicating whether the Mortgage Loan is an Adjustable Rate
Mortgage Loan or a Fixed Rate Mortgage Loan;
(29) a code indicating the documentation style (i.e., full,
alternative or reduced);
(30) a code indicating if the Mortgage Loan is subject to a Primary
Insurance Policy or LPMI Policy;
(31) a code indicating whether the Mortgage Loan is a Buydown Mortgage
Loan;
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(32) a code indicating the product type of the Mortgage Loan (e.g.,
3/1, 5/1, 7/1, 10/1, 15 year fixed, 30 year fixed, 15/30 balloon,
Negative Amortization Mortgage Loan, etc.);
(33) code indicating whether the Mortgage Loan is subject to a
Prepayment Charge and the term of such Prepayment Charge;
(34) the Appraised Value of the Mortgaged Property;
(35) the sale price of the Mortgaged Property, if applicable;
(36) a code indicating whether the Mortgaged Property is subject to a
second lien at origination of the First Lien Mortgage Loan;
(37) the Credit Score of the Mortgagor;
(38) the Mortgagor's debt to income ratio;
(39) the risk grade for each Mortgage Loan;
(40) with respect to each Adjustable Rate Mortgage Loan, the date on
which the Monthly Payment is changed to the extent that it is
different than the Adjustment Date;
(41) with respect to each Adjustable Rate Mortgage Loan, to the extent
that such Mortgage Loan is an Interest Only Mortgage Loan, the
number of months/years whereby the scheduled payment payable by a
Mortgagor under the related Mortgage Note on each Due Date
includes only interest payments; and
(42) the total amount of Negative Amortization, if any, as of the
related Cut-off Date.
With respect to the Mortgage Loan Package in the aggregate, the Final Mortgage
Loan Schedule shall set forth the following information, as of the related
Cut-off Date:
(43) the number of Mortgage Loans;
(44) the current principal balance of the Mortgage Loans;
(45) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and
(46) the weighted average maturity of the Mortgage Loans.
Schedule I hereto shall be supplemented as of each Closing Date to reflect the
addition of the Final Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller
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pursuant to this Agreement), a determination made by the Seller that all
Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which
the Seller, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Seller shall maintain
records, prepared by a servicing officer of the Seller, of each Final Recovery
Determination.
First Lien: With respect to each Mortgaged Property, the lien of the
mortgage, deed of trust or other instrument securing a Mortgage Note which
creates a first lien on the Mortgaged Property.
Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for the term of
such Mortgage Loan.
Flood Zone Service Contract: A transferable contract maintained for
the Mortgaged Property with a nationally recognized flood zone service provider
for the purpose of obtaining the current flood zone status relating to such
Mortgaged Property.
FNMA: ▇▇▇▇▇▇ ▇▇▇ or any successor thereto.
Gross Margin: With respect to any Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note that is added to
the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note to determine the new Mortgage Interest Rate for such Mortgage
Loan.
HUD: The United States Department of Housing and Urban Development or
any successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
set forth in the related Mortgage Note for the purpose of calculating the
interest rate thereon.
Initial Closing Date: The Closing Date on which the Initial Purchaser
purchases and the Seller sells the first Mortgage Loan Package hereunder.
Initial Purchaser: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., or any
successor.
Initial Rate Cap: With respect to each Adjustable Rate Mortgage Loan
and the initial Adjustment Date therefor, a number of percentage points per
annum that is set forth in the related Mortgage Note, which is the amount by
which the Mortgage Interest Rate for such Adjustable Rate Mortgage Loan may
increase or decrease on the initial Adjustment Date.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Only Mortgage Loan: A Mortgage Loan wherein only monthly
payments of interest accruing on the unpaid principal balance of such Mortgage
Loan are due for a period of time as set forth on the related Mortgage Note, and
the unpaid principal balance is amortized for the remaining term of the Mortgage
Loan.
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Liquidation Proceeds: Amounts, other than Insurance Proceeds and
Condemnation Proceeds, received in connection with the liquidation of a
defaulted Mortgage Loan through trustee's sale, foreclosure sale or otherwise,
other than amounts received following the acquisition of REO Property.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan as of
any date of determination, the ratio on such date of the outstanding principal
amount of the Mortgage Loan, to the Appraised Value of the Mortgaged Property.
LPMI Fee: With respect to an LPMI Loan, the LPMI Fee Rate for such
LPMI Loan times the Stated Principal Balance of the LPMI Loan as of any date of
determination.
LPMI Fee Rate: The portion of the Mortgage Interest Rate relating to
an LPMI Loan, which is set forth on the related Final Mortgage Loan Schedule, to
be retained by the Seller to pay the premium due on the LPMI Policy with respect
to such LPMI Loan.
LPMI Loan: Any Mortgage Loan with respect to which the Seller is
responsible for paying the premium due on the related LPMI Policy with the
proceeds generated by the LPMI Fee relating to such Mortgage Loan, as set forth
on the related Final Mortgage Loan Schedule.
LPMI Policy: A policy of private mortgage guaranty insurance relating
to a Mortgage Loan paid by the lender.
Master Servicer: With respect to any Securitization Transaction, the
"master servicer," if any, identified in the related transaction documents.
Maximum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Final Mortgage Loan
Schedule and in the related Mortgage Note and is the maximum interest rate to
which the Mortgage Interest Rate on such Mortgage Loan may be increased on any
Adjustment Date.
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 mortgages
electronically maintained by MERS
Minimum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Final Mortgage Loan
Schedule and in the related Mortgage Note and is the minimum interest rate to
which the Mortgage Interest Rate on such Mortgage Loan may be decreased on any
Adjustment Date.
MIN: The Mortgage Identification Number for any MERS Loan.
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MOM Loan: Any Loan as to which MERS is acting as mortgagee, solely as
nominee for the originator of such Loan and its successors and assigns.
Monthly Advance: The aggregate of the advances made by the Seller on
any Distribution Date pursuant to Subsection 11.22 of the Servicing Addendum.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
combined payment of principal and interest payable by a Mortgagor under the
related Mortgage Note on each Due Date or, in the case of an Interest Only
Mortgage Loan, as set forth on the related Final Mortgage Loan Schedule, the
scheduled monthly payment of principal and/or interest as set forth in the
related Mortgage Note.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on Mortgaged Property securing the Mortgage Note.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and the
successors and assigns of such mortgagee or beneficiary.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit 5 annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement or the related Trade
Confirmation.
Mortgage Interest Rate: With respect to each Fixed Rate Mortgage Loan,
the fixed annual rate of interest provided for in the related Mortgage Note and,
with respect to each Adjustable Rate Mortgage Loan, the annual rate that
interest accrues on such Adjustable Rate Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note.
Mortgage Loan: Each first lien, residential mortgage loan, sold,
assigned and transferred to the Purchaser pursuant to this Agreement and the
related Trade Confirmation and identified on the Final Mortgage Loan Schedule
annexed to this Agreement on such Closing Date, which Mortgage Loan includes
without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The following documents:
(1) The original Mortgage Note endorsed, "Pay to the order of
______________, without recourse" and signed in the name of the Seller by
an authorized officer of the Seller. If the Mortgage Loan was acquired by
the Seller in a merger or other type of acquisition, the endorsement must
be by "[Seller], successor [by merger to or in interest to, as applicable]
[name of predecessor]"; and if the Mortgage Loan was acquired or originated
by the Seller while doing business under another name, the endorsement must
be by "[Seller], successor in interest to [previous name]." The
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Mortgage Note shall include all intervening endorsements showing a complete
chain of title from the originator to the Seller;
(2) Except as provided below and for each Mortgage Loan that is not a
MERS Loan, the original recorded Mortgage, with evidence of recording
thereon, or, if the original Mortgage has not yet been returned from the
recording office, a copy of the original Mortgage certified by the Seller
to be a true copy of the original of the Mortgage that has been delivered
for recording in the appropriate recording office of the jurisdiction in
which the Mortgaged Property is located and in the case of each MERS Loan,
the original Mortgage, noting the presence of the MIN of the Loan and
either language indicating that the Mortgage Loan is a MOM Loan or if the
Mortgage Loan was not a MOM Loan at origination, the original Mortgage and
the assignment thereof to MERS, with evidence of recording indicated
thereon, or a copy of the Mortgage certified by the public recording office
in which such Mortgage has been recorded;
(3) In the case of each Mortgage Loan that is not a MERS Loan, the
original Assignment of each Mortgage, executed in blank. If the Mortgage
Loan was acquired by the Seller in a merger or other type of acquisition,
the assignment must be by "[Seller], successor [by merger to or in interest
to, as applicable] [name of predecessor]"; and in the event that the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the assignment must be by "[Seller], successor in
interest to [previous name]";
(4) The original policy of title insurance (or a preliminary title
report if the original title insurance policy has not been received from
the title insurance company);
(5) Originals of any intervening assignments of the Mortgage, with
evidence of recording thereon or, if the original intervening assignment
has not yet been returned from the recording office, a copy of such
assignment certified to be a true copy of the original of the assignment
which has been sent for recording in the appropriate jurisdiction in which
the Mortgaged Property is located;
(6) With respect to a Mortgage Loan that, according to the Final
Mortgage Loan Schedule, is covered by a primary mortgage insurance policy,
the original or a copy of the policy of primary mortgage insurance; and
(7) Originals of all assumption and modification agreements, if any.
Mortgage Loan Package: The Mortgage Loans listed on a Final Mortgage
Loan Schedule, delivered to the Custodian and the Purchaser at least five (5)
Business Days prior to the related Closing Date and attached to this Agreement
as Schedule I on the related Closing Date.
Mortgage Note: The original executed note or other evidence of the
Mortgage Loan indebtedness of a Mortgagor.
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Mortgaged Property: The Mortgagor's real property securing repayment
of a related Mortgage Note, consisting of a fee simple interest in a single or
contiguous parcel of real property improved by a Residential Dwelling.
Mortgagor: The obligor on a Mortgage Note, the owner of the Mortgaged
Property and the grantor or mortgagor named in the related Mortgage and such
grantor's or mortgagor's successor's in title to the Mortgaged Property.
Negative Amortization: With respect to each Negative Amortization
Mortgage Loan, that portion of interest accrued at the Net Mortgage Interest
Rate in any month which exceeds the Monthly Payment on the related Mortgage Loan
for such month and which, pursuant to the terms of the related Mortgage Note, is
added to the principal balance of the Mortgage Loan.
Negative Amortization Mortgage Loan: Each Adjustable Rate Mortgage
Loan that is identified on the related Mortgage Loan Schedule as a Mortgage Loan
that may be subject to Negative Amortization.
Net Mortgage Interest Rate: With respect to any Mortgage Loan (or the
related REO Property), as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Interest Rate for such Mortgage
Loan minus the Servicing Fee Rate and the LPMI Fee Rate, if applicable.
Nonrecoverable Monthly Advance: Any Monthly Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Seller, will not, or, in the case of a
proposed Monthly Advance, would not be, ultimately recoverable from related late
payments, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or
REO Property as provided herein.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Person on behalf of whom such certificate is being
delivered.
Opinion of Counsel: A written opinion of counsel, who may be salaried
counsel for the Person on behalf of whom the opinion is being given, reasonably
acceptable to each Person to whom such opinion is addressed.
Payment Adjustment Date: With respect to each Negative Amortization
Mortgage Loan, the date on which an adjustment to the Monthly Payment pursuant
to the related Mortgage Note becomes effective.
Payment Clearing Account: An Eligible Account created and maintained
pursuant to Exhibit 8.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan
and any Adjustment Date therefor, a number of percentage points per annum that
is set forth in the related Mortgage Note, which is the maximum amount by which
the Mortgage Interest Rate for
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such Adjustable Rate Mortgage Loan may increase (without regard to the Maximum
Mortgage Interest Rate) or decrease (without regard to the Minimum Mortgage
Interest Rate) on such Adjustment Date from the Mortgage Interest Rate in effect
immediately prior to such Adjustment Date.
Person: An individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Preliminary Mortgage Loan Schedule:
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's first and last name;
(3) the Mortgage Interest Rate at origination;
(4) the Mortgage Interest Rate in effect immediately following the
Cut-off Date;
(5) the original months to maturity;
(6) the original date of the Mortgage Loan and the remaining months
to maturity from the Cut-off Date, based on the original
amortization schedule;
(7) the stated maturity date;
(8) the amount of the Monthly Payment at origination;
(9) the amount of the Monthly Payment as of the Cut-off Date;
(10) the Stated Principal Balance of the Mortgage Loan as of the close
of business on the Cut-off Date;
(11) a code indicating whether the Mortgaged Property is
owner-occupied;
(12) a code indicating the documentation style;
(13) a code indicating whether the Mortgaged Property is subject to a
second lien at origination of the First Lien Mortgage Loan;
(14) the debt to income ratio; and
(15) the Credit Score.
Preliminary Servicing Period: With respect to any Mortgage Loans, the
period commencing on the related Closing Date and ending on the date the Seller
enters into Reconstitution Agreements which amend or restate the servicing
provisions of this Agreement.
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Prepayment Charge: With respect to any Mortgage Loan, any prepayment
penalty or premium thereon payable in connection with a principal prepayment on
such Mortgage Loan pursuant to the terms of the related Mortgage Note.
Prepayment Interest Shortfall Amount: With respect to any Remittance
Date and Mortgage Loan that was subject to a Principal Prepayment in full or in
part during the related Principal Prepayment Period, which Principal Prepayment
was applied to such Mortgage Loan in such calendar month preceding the
Remittance Date related to the Principal Prepayment Period, the amount of
interest (at the Net Mortgage Interest Rate) that would have accrued on the
amount of such Principal Prepayment during the period commencing on the date as
of which such Principal Prepayment was applied to such Mortgage Loan and ending
on the last day of the Principal Prepayment Period, inclusive.
Primary Insurance Policy: A policy of primary mortgage guaranty
insurance issued by a Qualified Insurer.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any Prepayment Charge, which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment Period: As to any Remittance Date, the calendar
month preceding the month of such Remittance Date.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller pursuant to the related Trade Confirmation in exchange
for the Mortgage Loans purchased on such Closing Date as calculated as provided
in Section 4.
Qualified Correspondent: Any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were either (x) originated pursuant to an agreement between the
Seller and such Person that contemplated that such Person would underwrite
mortgage loans from time to time, for sale to the Seller, in accordance with
underwriting guidelines designated by the Seller ("Designated Guidelines") or
guidelines that do not vary materially from such Designated Guidelines or (y)
individually re-underwritten by the Seller to the Designated Guidelines at the
time such Mortgage Loans were acquired by the Seller; (ii) either (x) the
Designated Guidelines were, at the time such Mortgage Loans were originated,
used by the Seller in origination of mortgage loans of the same type as the
Mortgage Loans for the Seller's own account or (y) the Designated Guidelines
were, at the time such Mortgage Loans were underwritten, designated by the
Seller on a consistent basis for use by lenders in originating mortgage loans to
be purchased by the Seller; and (iii) the Seller employed, at the time such
Mortgage Loans were acquired by the Seller, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review of a
sample of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that either Persons from which it
purchased mortgage loans properly applied the underwriting criteria designated
by the Seller or the Mortgage Loans purchased by the Seller substantially
complied with the Designated Guidelines.
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Qualified Depository: Any institution offering an Eligible Account.
Qualified Insurer: Any insurer which meets the requirements of FNMA or
FHLMC.
Qualified Substitute Mortgage Loan: A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on the
date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest due during or
prior to the month of substitution, not in excess of the Stated Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, (ii) have a Mortgage Interest Rate not
less than (and not more than one percentage point in excess of) the Mortgage
Interest Rate of the Deleted Mortgage Loan, (iii) have a net Mortgage Interest
Rate not less than (and not more than one percentage point in excess of) the net
Mortgage Interest Rate of the Deleted Mortgage Loan, (iv) have a remaining terms
to maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan, (v) have the same Due Date as the Due Date on the Deleted
Mortgage Loan, (vi) have a Loan-to-Value Ratio as of the date of substitution
equal to or lower than the Loan-to-Value Ratio of the Deleted Mortgage Loan as
of such date, (vii) be covered under a Primary Insurance Policy if such
Qualified Substitute Mortgage Loan has a Loan-to-Value Ratio in excess of 80%,
(viii) conform to each representation and warranty set forth in Subsection 7.02
of this Agreement and (ix) be the same type of mortgage loan (i.e. fixed or
adjustable rate with the same Gross Margin and Index as the Deleted Mortgage
Loan). In the event that one or more mortgage loans are substituted for one or
more Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the Mortgage Interest
Rates described in clause (ii) hereof shall be determined on the basis of
weighted average Mortgage Interest Rates, the Net Mortgage Rates described in
clause (iii) hereof shall be satisfied as to each such mortgage loan, the terms
described in clause (iv) shall be determined on the basis of weighted average
remaining terms to maturity, the Loan-to-Value Ratios described in clause (vi)
hereof shall be satisfied as to each such mortgage loan and, except to the
extent otherwise provided in this sentence, the representations and warranties
described in clause (viii) hereof must be satisfied as to each Qualified
Substitute Mortgage Loan or in the aggregate, as the case may be.
Rate/Term Refinancing: A Refinanced Mortgage Loan, the proceeds of
which are not in excess of the existing first mortgage loan on the related
Mortgaged Property and related closing costs, and were used exclusively to
satisfy the then existing first mortgage loan of the Mortgagor on the related
Mortgaged Property and to pay related closing costs.
Reconstitution: Any Agency Transfer, Securitization Transaction or
Whole Loan Transfer.
Reconstitution Agreements: The agreement or agreements entered into by
the Seller and the Purchaser and/or certain third parties on the Reconstitution
Date or Dates with respect to any or all of the Mortgage Loans serviced
hereunder, in connection with a Whole Loan Transfer or a Securitization
Transaction as provided in Section 12.
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Reconstitution Date: The date or dates on which any or all of the
Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and reconstituted as part of a Whole Loan Transfer or Securitization
Transaction pursuant to Section 12 hereof.
Record Date: With respect to each Remittance Date, the last Business
Day of the month immediately preceding the month in which such Remittance Date
occurs.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. Section 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, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
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
REMICs, which appear in Sections 860A through 860G 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.
Remittance Date: The eighteenth (18th) day of each month, commencing
on the eighteenth day of the month next following the month in which the related
Cut-off Date occurs, or if such eighteenth (18th) day is not a Business Day, the
first Business Day immediately following such eighteenth (18th) day.
REO Disposition: The final sale by the Seller of any REO Property.
REO Property: A Mortgaged Property acquired as a result of the
liquidation of a Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan, a price equal to
(i) the Stated Principal Balance of such Mortgage Loan, plus (ii) interest on
such Stated Principal Balance at the Mortgage Interest Rate from and including
the last Due Date through which interest has been paid by or on behalf of the
Mortgagor to the first day of the month following the date of repurchase, less
amounts received in respect of such repurchased Mortgage Loan which are being
held in the Custodial Account for distribution in connection with such Mortgage
Loan.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a FNMA or FHLMC eligible condominium project, or
(iv) a detached one-family dwelling in a planned unit development, none of which
is a cooperative, mobile or manufactured home.
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Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: The sale or transfer of some or all of the
Mortgage Loans to a trust to be formed as part of a publicly-issued, rated,
mortgage pass-through transaction.
Seller Information: As defined in Section 12A.07(a).
Servicer: As defined in Section 12A.03(c).
Servicing Addendum: The terms and conditions attached hereto as
Exhibit 8 which will govern the servicing of the Mortgage Loans by Seller during
the Preliminary Servicing Period.
Servicing Advances: All customary, reasonable and necessary
"out-of-pocket" costs and expenses incurred by the Seller in the performance of
its servicing obligations, including, but not limited to, the cost of (i)
preservation, restoration and repair of a Mortgaged Property, (ii) any
enforcement or judicial proceedings with respect to a Mortgage Loan, including
foreclosure actions, (iii) the management and liquidation of REO Property, and
(iv) compliance with the obligations under this Agreement.
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: With respect to each Mortgage Loan, the amount of the
annual servicing fee the Purchaser shall pay to the Seller, which shall, for
each month, be equal to one-twelfth of the product of (a) the Servicing Fee Rate
and (b) the unpaid principal balance of the Mortgage Loan. Such fee shall be
payable monthly, computed on the basis of the same principal amount and period
respectively which any related interest payment on a Mortgage Loan is computed.
The obligation of the Purchaser to pay the Servicing Fee is limited to, and
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds and other proceeds, to the extent permitted
by Section 11.5) of related Monthly Payment collected by the Seller, or as
otherwise proved under Section 11.5. If the Preliminary Servicing Period
includes any partial month, the Servicing Fee for such month shall be pro rated
at a per diem rate based upon a 30-day month.
Servicing Fee Rate: The per annum rate set forth in the related Trade
Confirmation at which the Servicing Fee accrues.
Servicing File: With respect to each Mortgage Loan, the file retained
by the Seller consisting of originals of all documents in the Mortgage File
which are not delivered to the Purchaser or the Custodian and copies of the
Mortgage Loan Documents.
S&P: Standard & Poor's Ratings Services, a Division of the ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. or its successor in interest.
Stated Principal Balance: As to each Mortgage Loan as of any date of
determination, (i) the principal balance of the Mortgage Loan as of the Cut-off
Date after giving
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effect to payments of principal received on or before such date, minus (ii) all
amounts previously distributed to the Purchaser with respect to the related
Mortgage Loan representing payments or recoveries of principal, plus (iii) the
cumulative amount of any Negative Amortization.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the Seller
or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Seller or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Seller under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB; provided, however, that the term "Subservicer" shall
not include any master servicer, or any special servicer engaged at the request
of a Depositor, purchaser or investor in a Securitization Transaction, nor any
"back-up servicer" or trustee performing servicing functions on behalf of a
Securitization Transaction.
Sub-Servicing Agreement: The written contract between the Seller and a
Subservicer relating to servicing and administration of certain Mortgage Loans
as provided in Subsection 11.31 of this Agreement.
Tax Service Contract: A transferable contract maintained for the
Mortgaged Property with a tax service provider for the purpose of obtaining
current information from local taxing authorities relating to such Mortgaged
Property.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Seller.
Trade Confirmation: With respect to any Mortgage Loan Package
purchased and sold on any Closing Date, the letter agreement between the
Purchaser and the Seller, in the form annexed hereto as Exhibit 9 (including any
exhibits, schedules and attachments thereto), setting forth the terms and
conditions of such transaction and describing the Mortgage Loans to be purchased
by the Purchaser on such Closing Date. A Trade Confirmation may relate to more
than one Mortgage Loan Package to be purchased on one or more Closing Dates
hereunder.
Warranty ▇▇▇▇ of Sale: A Warranty ▇▇▇▇ of Sale with respect to the
Mortgage Loans purchased on a Closing Date in the form annexed hereto as Exhibit
4.
Whole Loan Transfer: The sale or transfer of some or all of the
Mortgage Loans to third parties pursuant to a Reconstitution Agreement, other
than a Securitization Transaction or an Agency Transfer.
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SECTION 2. Agreement to Purchase. The Seller agrees to sell, and the
Purchaser agrees to purchase, from time-to-time, Mortgage Loans having an
aggregate principal balance on the related Cut-off Date in an amount as set
forth in the related Trade Confirmation, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on the related Closing
Date. The obligation of the Purchaser to purchase any Mortgage Loan from the
Seller on any particular Closing Date shall be subject to the satisfaction of
the conditions precedent to the Purchaser's obligation to purchase set forth in
Section 8.
SECTION 3. Mortgage Loan Schedules. Prior to the date on which the
Seller and the Purchaser execute a Trade Confirmation, the Seller shall provide
the Purchaser with the Preliminary Mortgage Loan Schedule. The Seller shall
deliver the Final Mortgage Loan Schedule for a Mortgage Loan Package to be
purchased on a particular Closing Date to the Purchaser on or prior to the
related Closing Date.
SECTION 4. Purchase Price. The Purchase Price for each Mortgage Loan
listed on the related Final Mortgage Loan Schedule shall be the percentage of
par as stated in the related Trade Confirmation (subject to adjustment as
provided therein), multiplied by its Stated Principal Balance as of the related
Cut-off Date. If so provided in the related Trade Confirmation, portions of the
Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Initial
Purchaser shall pay to the Seller, at closing, accrued interest on the Stated
Principal Balance of each Mortgage Loan as of the related Cut-off Date at the
Net Mortgage Interest Rate from the related Cut-off Date through the day prior
to the related Closing Date, both inclusive.
The Purchaser shall own and be entitled to receive with respect to
each Mortgage Loan purchased, (1) all scheduled principal due after the related
Cut-off Date, (2) all other recoveries of principal collected after the related
Cut-off Date (provided, however, that all scheduled payments of principal due on
or before the related Cut-off Date and collected by the Seller after the related
Cut-off Date shall belong to the Seller), and (3) all payments of interest on
the Mortgage Loans net of the Servicing Fee (minus that portion of any such
interest payment that is allocable to the period prior to the related Cut-off
Date). The Stated Principal Balance of each Mortgage Loan as of the related
Cut-off Date is determined after application to the reduction of principal of
payments of principal due on or before the related Cut-off Date whether or not
collected. Therefore, for the purposes of this Agreement, payments of scheduled
principal and interest prepaid for a Due Date beyond the related Cut-off Date
shall not be applied to the principal balance as of the related Cut-off Date.
Such prepaid amounts (minus the applicable Servicing Fee) shall be the property
of the Purchaser. The Seller shall deposit any such prepaid amounts into the
Custodial Account, which account is established for the benefit of the
Purchaser, for remittance by the Seller to the Purchaser on the first related
Remittance Date. All payments of principal and interest, less the applicable
Servicing Fee, due on a Due Date following the related Cut-off Date shall belong
to the Purchaser.
SECTION 5. Examination of Mortgage Files. In addition to the rights
granted to the Initial Purchaser under the related Trade Confirmation to
underwrite the Mortgage Loans and review the Mortgage Files prior to the Closing
Date, prior to the related Closing Date, the Seller
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shall (a) deliver to the Custodian in escrow, for examination with respect to
each Mortgage Loan to be purchased on such Closing Date, the related Mortgage
File, including the Assignment of Mortgage, pertaining to each Mortgage Loan, or
(b) make the related Mortgage File available to the Initial Purchaser for
examination at the Seller's offices or such other location as shall otherwise be
agreed upon by the Initial Purchaser and the Seller. Such examination may be
made by the Initial Purchaser or its designee at any reasonable time before or
after the related Closing Date. If the Initial Purchaser makes such examination
prior to the related Closing Date and identifies any Mortgage Loans that do not
conform to the terms of the related Trade Confirmation, such Mortgage Loans may,
at the Initial Purchaser's option, be rejected for purchase by the Initial
Purchaser. If not purchased by the Initial Purchaser, such Mortgage Loans shall
be deleted from the related Final Mortgage Loan Schedule and may be replaced by
a Qualified Substitute Mortgage Loan pursuant to Section 7. The Initial
Purchaser may, at its option and without notice to the Seller, purchase all or
part of any Mortgage Loan Package without conducting any partial or complete
examination. The fact that the Initial Purchaser has conducted or has determined
not to conduct any partial or complete examination of the Mortgage Files shall
not affect the Initial Purchaser's (or any of its successors') rights to demand
repurchase or other relief or remedy provided for in this Agreement.
SECTION 6. Conveyance from Seller to Initial Purchaser.
Subsection 6.01. Conveyance of Mortgage Loans; Possession of Servicing
Files.
The Seller, simultaneously with the payment of the Purchase Price,
shall execute and deliver to the Initial Purchaser a Warranty ▇▇▇▇ of Sale with
respect to the related Mortgage Loan Package in the form attached hereto as
Exhibit 4. The Servicing File retained by the Seller with respect to each
Mortgage Loan pursuant to this Agreement shall be appropriately identified in
the Seller's computer system to reflect clearly the sale of such related
Mortgage Loan to the Purchaser. The Seller shall release from its custody the
contents of any Servicing File retained by it only in accordance with this
Agreement, except when such release is required in connection with a repurchase
of any such Mortgage Loan pursuant to Subsection 7.03 or 7.04.
In addition, in connection with the assignment of any MERS Loan, the
Seller agrees that on or prior to each Closing Date it will cause, at its own
expense, the MERS System to indicate that the related Mortgage Loans have been
assigned by the Seller to the Purchaser in accordance with this Agreement by
including in such computer files the information required by the MERS System to
identify the Purchaser as owner of such Mortgage Loans.
Subsection 6.02. Books and Records.
Record title to each Mortgage and the related Mortgage Note as of the
related Closing Date shall be in the name of the Seller, the Purchaser, the
Custodian or one or more designees of the Purchaser, as the Purchaser shall
designate. Notwithstanding the foregoing, beneficial ownership of each Mortgage
and the related Mortgage Note shall be vested solely in the Purchaser or the
appropriate designee of the Purchaser, as the case may be. Except with respect
to the servicing rights related to the Mortgage Loans, which is retained by the
Seller, all rights arising out of the Mortgage Loans including, but not limited
to, all funds received by the Seller after the related Cut-off Date on or in
connection with a Mortgage Loan as provided in Section 4 shall be vested in the
Purchaser or one or more designees of the Purchaser; provided, however, that all
such funds received on or in connection with a Mortgage Loan as provided in
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Section 4 shall be received and held by the Seller in trust for the benefit of
the Purchaser or the assignee of the Purchaser, as the case may be, as the owner
of the Mortgage Loans pursuant to the terms of this Agreement.
It is the express intention of the parties that the transactions
contemplated by this Agreement be, and be construed as, a sale of the Mortgage
Loans by the Seller and not a pledge of the Mortgage Loans by the Seller to the
Purchaser to secure a debt or other obligation of the Seller. Consequently, the
sale of each Mortgage Loan shall be reflected as a sale on the Seller's business
records, tax returns and financial statements.
Subsection 6.03. Delivery of Mortgage Loan Documents.
The Seller shall from time to time in connection with each Closing
Date, at least five (5) Business Days prior to such Closing Date, or such other
period as agreed to by the Seller and the Purchaser, deliver in escrow to the
Custodian the Mortgage Loan Documents with respect to each Mortgage Loan to be
purchased and sold on the related Closing Date and set forth on the related
Preliminary Mortgage Loan Schedule delivered with such Mortgage Loan Documents.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents for the related Closing Date, pursuant to an initial custody receipt
and initial certification of the Custodian.
The Seller shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks of
their execution, provided, however, that the Seller shall provide the Custodian
with a certified true copy of any such document submitted for recordation within
two weeks of its execution, and shall provide the original of any document
submitted for recordation or a copy of such document certified by the Seller to
be a true and complete copy of the original within one hundred and eighty (180)
days of its submission for recordation. To the extent that the Seller cannot
deliver any original documents within the time specified due to a delay in the
recording office, Seller may deliver an Officer's Certificate describing the
additional time expected to receive such documents from the recording office.
Notwithstanding the foregoing, the Seller shall not be deemed to be in breach of
this Agreement if its failure to deliver to the Purchaser any missing Mortgage
Loan Document within the time specified above is due solely to (i) the failure
of the applicable recorder's office to return a missing Mortgage Loan Document
that was sent for recording or (ii) the failure of the title insurer to issue
and deliver the original mortgagee title policy, except where such refusal to
issue the policy is based on a claim that the title insurer is under no
obligation to issue such policy.
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SECTION 7. Representations, Warranties and Covenants of the Seller:
Remedies for Breach.
Subsection 7.01. Representations and Warranties Respecting the Seller.
The Seller represents, warrants and covenants to the Purchaser as of
the date hereof and as of each respective Closing Date or as of such date
specifically provided herein or in the applicable Warranty ▇▇▇▇ of Sale:
(i) The Seller is duly organized, validly existing and in good
standing under the laws of the state of New York and is in good standing under
the laws of each state in which any Mortgaged Property is located to the extent
necessary to ensure the enforceability of each Mortgage Loan and the servicing
of the Mortgage Loan in accordance with the terms of this Agreement or is
otherwise exempt under applicable law from such qualification or is otherwise
not required under applicable law to effect such qualification. No licenses or
approvals obtained by the Seller have been suspended or revoked by any court,
administrative agency, arbitrator or governmental body and no proceedings are
pending which might result in such suspension or revocation;
(ii) The Seller has the full power and authority to hold each Mortgage
Loan, to sell each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate, all transactions contemplated by this Agreement. The
Seller has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement, and this Agreement,
assuming due authorization, execution and delivery by the Purchaser, constitutes
a legal, valid and binding obligation of the Seller, enforceable against it in
accordance with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization;
(iii) The execution and delivery of this Agreement by the Seller and
the performance of and compliance with the terms of this Agreement will not
violate the Seller's articles of incorporation or by-laws or constitute a
default under or result in a breach or acceleration of, any material contract,
agreement or other instrument to which the Seller is a party or which may be
applicable to the Seller or its assets;
(iv) The Seller is not in violation of, and the execution and delivery
of this Agreement by the Seller and its performance and compliance with the
terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;
(v) The Seller is an approved seller/servicer for FNMA or FHLMC in
good standing and is a HUD approved mortgagee pursuant to Section 203 of the
National Housing Act. No event has occurred, including but not limited to a
change in insurance coverage, which
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would make the Seller unable to comply with FNMA, FHLMC or HUD eligibility
requirements or which would require notification to FNMA, FHLMC or HUD;
(vi) The Seller does not believe, nor does it have any reason or cause
to believe, that it cannot perform each and every covenant contained in this
Agreement;
(vii) There are no actions or proceedings against, or investigations
of, the Seller before any court, administrative agency or other tribunal (A)
that prohibit its entering into this Agreement, (B) seeking to prevent the sale
of the Mortgage Loans or the consummation of the transactions contemplated by
this Agreement or (C) that prohibit or materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement;
(viii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations or orders, if any, that have been
obtained prior to the related Closing Date;
(ix) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller pursuant to this Agreement are not subject to the bulk transfer or
any similar statutory provisions;
(x) Neither this Agreement nor any written statement, report or other
document prepared and furnished by the Seller pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any untrue
statement of material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading;
(xi) The consideration received by the Seller upon the sale of the
Mortgage Loans constitutes fair consideration and reasonably equivalent value
for such Mortgage Loans;
(xii) The Seller is solvent and will not be rendered insolvent by the
consummation of the transactions contemplated hereby. The Seller is not
transferring any Mortgage Loan with any intent to hinder, delay or defraud any
of its creditors; and
(xiii) The Seller is in good standing, and will comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the MERS Loans for as long as such Mortgage Loans are registered with MERS.
Subsection 7.02. Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as to
each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(i) The information set forth in the related Final Mortgage Loan
Schedule is complete, true and correct in all material respects;
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(ii) The Mortgage Loan is in compliance with all requirements set
forth in the related Trade Confirmation, and the characteristics of the related
Mortgage Loan Package as set forth in the related Trade Confirmation are true
and correct;
(iii) All payments required to be made up to and excluding the related
Cut-off Date for such Mortgage Loan under the terms of the Mortgage Note have
been made; the Seller has not advanced funds, or induced, solicited or knowingly
received any advance of funds from a party other than the owner of the related
Mortgaged Property, directly or indirectly, for the payment of any amount
required by the Mortgage Note or Mortgage; and there has been no more than one
delinquency of thirty (30) days, exclusive of any period of grace, in any
payment by the Mortgagor thereunder during the last twelve months;
(iv) There are no delinquent taxes, ground rents, water charges, sewer
rents, assessments, insurance premiums, leasehold payments, including
assessments payable in future installments or other outstanding charges
affecting the related Mortgaged Property;
(v) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage, and which have been delivered to the
Custodian, the Purchaser, or the Purchaser's designee; the substance of any such
waiver, alteration or modification has been approved by the insurer under the
Primary Insurance Policy or LPMI Policy, if any, and the title insurer, to the
extent required by the related policy, and is reflected on the related Final
Mortgage Loan Schedule. No instrument of waiver, alteration or modification has
been executed, and no Mortgagor has been released, in whole or in part, except
in connection with an assumption agreement approved by the insurer under the
Primary Insurance Policy or LPMI Policy, if any, the title insurer, to the
extent required by the policy, and which assumption agreement has been delivered
to the Custodian and the terms of which are reflected in the related Final
Mortgage Loan Schedule;
(vi) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(vii) All buildings upon the Mortgaged Property are insured by an
insurer acceptable to FNMA or FHLMC against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the Mortgaged
Property is located, pursuant to insurance policies conforming to the
requirements of the Servicing Addendum. All such insurance policies contain a
standard mortgagee clause naming the Seller, its successors and assigns as
mortgagee and all premiums thereon have been paid. If the Mortgaged Property is
in an area identified on a Flood Hazard Map or Flood Insurance Rate Map issued
by the Federal Emergency Management Agency as having special flood hazards (and
such flood insurance has been made available) a flood insurance policy meeting
the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to the requirements of FNMA or
FHLMC. The Mortgage obligates the Mortgagor thereunder to maintain all such
-24-
insurance at the Mortgagor's cost and expense, and on the Mortgagor's failure to
do so, authorizes the holder of the Mortgage to maintain such insurance at
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor;
(viii) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, fair housing,
disclosure laws and all applicable predatory and abusive lending laws applicable
to the origination and servicing of mortgage loans of a type similar to the
Mortgage Loans have been complied with;
(ix) The Mortgage has not been satisfied, cancelled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such satisfaction, cancellation, subordination,
rescission or release;
(x) The related Mortgage is properly recorded and is a valid, existing
and enforceable (A) first lien and first priority security interest with respect
to each Mortgage Loan which is indicated by the Seller to be a First Lien (as
reflected on the Final Mortgage Loan Schedule), , on the Mortgaged Property,
including all improvements on the Mortgaged Property subject only to (a) the
lien of current real property taxes and assessments not yet due and payable, (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of the public record as of the date of recording being acceptable to
mortgage lending institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of the Mortgage Loan
and which do not adversely affect the Appraised Value of the Mortgaged Property,
and (c) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, existing and enforceable (A) first lien and
first priority security interest with respect to each Mortgage Loan which is
indicated by the Seller to be a First Lien (as reflected on the Final Mortgage
Loan Schedule on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser. Except as set forth on the
Preliminary Mortgage Loan Schedule and Final Mortgage Loan Schedule, the
Mortgaged Property was not, as of the date of origination of the Mortgage Loan,
subject to a mortgage, deed of trust, deed to secure debt or other security
instrument creating a lien subordinate to the lien of the Mortgage;
(xi) The Mortgage Note and the related Mortgage are genuine and each
is the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms;
(xii) At origination, all parties to the Mortgage Note and the
Mortgage had legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note and the Mortgage, and the Mortgage Note and the
Mortgage have been duly and properly executed by such parties. The Mortgagor is
a natural person;
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(xiii) The proceeds of the Mortgage Loan have been fully disbursed to
or for the account of the Mortgagor and there is no obligation for the Mortgagee
to advance additional funds thereunder and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage;
(xiv) The Seller is the sole legal, beneficial and equitable owner of
the Mortgage Note and the Mortgage. The Seller has full right and authority
under all governmental and regulatory bodies having jurisdiction over such
Seller, subject to no interest or participation of, or agreement with, any
party, to transfer and sell the Mortgage Loan to the Purchaser pursuant to this
Agreement free and clear of any encumbrance or right of others, equity, lien,
pledge, charge, mortgage, claim, participation interest or security interest of
any nature (collectively, a "Lien"); and immediately upon the transfers and
assignments herein contemplated, the Seller shall have transferred and sold all
of its right, title and interest in and to each Mortgage Loan and the Purchaser
will hold good, marketable and indefeasible title to, and be the owner of, each
Mortgage Loan subject to no Lien;
(xv) All parties which have had any interest in the Mortgage Loan,
whether as originator, mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were): (A)
organized under the laws of such state, or (B) qualified to do business in such
state, or (C) federal savings and loan associations or national banks having
principal offices in such state, or (D) not doing business in such state so as
to require qualification or licensing, or (E) not otherwise required to be
licensed in such state;
(xvi) The Mortgage Loan is covered by a lender's title insurance
policy generally acceptable to FNMA or FHLMC, issued by a Qualified Insurer
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring (subject to the exceptions contained above in (x)(a) and (d))
the Seller, its successors and assigns as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan and, with respect
to any Adjustable Rate Mortgage Loan, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment in the Mortgage Interest Rate and Monthly
Payment and Negative Amortization provisions of the related Mortgage Note, if
any. Additionally, such lender's title insurance policy affirmatively insures
ingress and egress to and from the Mortgaged Property, and against encroachments
by or upon the Mortgaged Property or any interest therein. The Seller is the
sole insured of such lender's title insurance policy, and such lender's title
insurance policy is in full force and effect and will be in full force and
effect upon the consummation of the transactions contemplated by this Agreement.
No claims have been made under such lender's title insurance policy, and no
prior holder of the related Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy;
(xvii) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note and no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach,
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violation or event of acceleration, and the Seller has not waived any default,
breach, violation or event of acceleration;
(xviii) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
law could give rise to such lien) affecting the related Mortgaged Property which
are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(xix) All improvements which were considered in determining the
Appraised Value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged Property;
(xx) The Mortgage Loan was originated by the Seller or by a savings
and loan association, a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a federal or state authority, or
by a mortgagee approved as such by the Secretary of HUD, or by a mortgage banker
or mortgage broker which was, at the time of origination of the Mortgage Loan,
duly organized, validly existing, licensed and otherwise qualified to originate
mortgage loans and to transact business in and was in good standing under the
laws of the state where the related Mortgage Loan was originated and such
Mortgage Loan conforms with the Seller's underwriting guidelines;
(xxi) Payments on the Mortgage Loan shall commence (with respect to
any newly originated Mortgage Loans) or commenced no more than sixty (60) days
after the proceeds of the Mortgage Loan were disbursed. The Mortgage Loan bears
interest at the Mortgage Interest Rate. With respect to each Mortgage Loan, the
Monthly Payments are (A) in the case of a Fixed Rate Mortgage Loan, sufficient
to fully amortize the original principal balance over the original term thereof
and to pay interest at the related Mortgage Interest Rate, (B) in the case of an
Adjustable Rate Mortgage Loan, changed on each Adjustment Date, and in any case,
are sufficient to fully amortize the original principal balance over the
original term thereof and to pay interest at the related Mortgage Interest Rate,
(C) in the case of a Balloon Loan, are based on a fifteen (15) or thirty (30)
year amortization schedule, as set forth in the related Mortgage Note, and a
final monthly payment substantially greater than the preceding monthly payment
which is sufficient to amortize the remaining principal balance of the Balloon
Loan and to pay interest at the related Mortgage Interest Rate, (D) in the case
of an Interest Only Mortgage Loan as set forth on the Final Mortgage Loan
Schedule, after the initial interest only period as set forth on the related
Mortgage Note, such Interest Only Mortgage Loan requires Monthly Payments
sufficient to fully amortize the unpaid principal balance of the Mortgage Loan
over the remaining term of the Mortgage Loan, [and (E) in the case of a Negative
Amortization Mortgage Loan, a Monthly Payment that is sufficient during the
period following each Payment Adjustment Date, to fully amortize the outstanding
principal balance as of the first day of such period over the then remaining
terms of such Mortgage Note] [Need to Discuss]. The Index for each Adjustable
Rate Mortgage Loan is as set forth in the related Mortgage Note. No Mortgage
Loan is a Convertible Mortgage Loan;
(xxii) The origination and collection practices used by the Seller
with respect to each Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary
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in the mortgage origination and servicing industry. The Mortgage Loan has been
serviced by the Seller and any predecessor servicer in accordance with the terms
of the Mortgage Note. With respect to any Mortgage Loan which provides for an
adjustable interest rate, all rate adjustments have been performed in accordance
with the terms of the related Mortgage Note or subsequent modifications, if any.
With respect to escrow deposits and Escrow Payments, if any, all such payments
are in the possession of, or under the control of, the Seller and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or Escrow Payments or
other charges or payments due the Seller have been capitalized under any
Mortgage or the related Mortgage Note and no such escrow deposits or Escrow
Payments are being held by the Seller for any work on a Mortgaged Property which
has not been completed;
(xxiii) The Mortgaged Property is free of damage and waste and there
is no proceeding pending or, to the best of the Seller's knowledge, threatened
for the total or partial condemnation thereof nor is such a proceeding currently
occurring;
(xxiv) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (a) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b) otherwise by
judicial foreclosure. At the time of origination of the Mortgage Loan and as of
the Closing Date, the Mortgaged Property has not and is not subject to any
bankruptcy proceeding or foreclosure proceeding, and the Mortgagor has not filed
for protection under applicable bankruptcy laws. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage.
(xxv) The Mortgagor has not notified the Seller and the Seller has no
knowledge of any relief requested or allowed to the Mortgagor under the
Servicemembers Civil Relief Act;
(xxvi) The Mortgage Loan was underwritten in accordance with the
underwriting standards of the Seller in effect at the time the Mortgage Loan was
originated; and the Mortgage Note and Mortgage are on forms acceptable to FNMA
or FHLMC;
(xxvii) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (x) above;
(xxviii) The Mortgage File contains an appraisal of the related
Mortgaged Property which satisfied the standards of FNMA or FHLMC and was made
and signed, prior to the approval of the Mortgage Loan application, by a
qualified appraiser, duly appointed by the Seller, who had no interest, direct
or indirect in the Mortgaged Property or in any loan made on the security
thereof, whose compensation is not affected by the approval or disapproval of
the Mortgage Loan and who met the minimum qualifications of FNMA or FHLMC. Each
appraisal of the Mortgage Loan was made in accordance with the relevant
provisions of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989;
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(xxix) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee under the
deed of trust, except in connection with a trustee's sale after default by the
Mortgagor;
(xxx) No Mortgage Loan contains provisions pursuant to which Monthly
Payments are (a) paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, (b) paid by any source other than the Mortgagor or (c) contains any
other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(xxxi) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of fixed rate mortgage loans in the
case of Fixed Rate Mortgage Loans, and adjustable rate mortgage loans in the
case of Adjustable Rate Mortgage Loans and rescission materials with respect to
Refinanced Mortgage Loans;
(xxxii) No Mortgage Loan was made in connection with (a) the
construction or rehabilitation of a Mortgaged Property or (b) facilitating the
trade-in or exchange of a Mortgaged Property;
(xxxiii) No Mortgage Loan is (a) a Section 32 Mortgage Loan under the
provisions of the Homeownership and Equity Protection Act of 1994, as amended,
or (b) a "high cost", "abusive", "predatory", "home loan", "Oklahoma Section 10"
or "high risk" mortgage loan (or a similarly designated loan using different
terminology) under any applicable federal, state or local law. No Mortgage Loan
is a High Cost Loan or Covered Loan, as applicable (as such terms are defined in
the then current Standard & Poor's LEVELS(R) Glossary which is now Version
5.6(d) Revised, Appendix E);
(xxxiv) Each Mortgage Loan with an LTV at origination in excess of 80%
is and will be subject to a Primary Mortgage Insurance Policy, issued by a
Qualified Insurer, which insures that portion of the Mortgage Loan in excess of
the portion of the Appraised Value of the Mortgaged Property required by FNMA.
All provisions of such Primary Insurance Policy have been and are being complied
with, such policy is in full force and effect, and all premiums due thereunder
have been paid. Any Mortgage subject to any such Primary Insurance Policy
obligates the Mortgagor thereunder to maintain such insurance and to pay all
premiums and charges in connection therewith. The Mortgage Interest Rate for the
Mortgage Loan does not include any such insurance premium;
(xxxv) At origination, the Mortgaged Property was lawfully occupied
under applicable law; all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the Mortgaged Property
and, with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting certificates, have
been made or obtained from the appropriate authorities. At origination, no
improvement located on or being part of any Mortgaged Property is in violation
of any applicable zoning law or regulation;
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(xxxvi) No error, omission, misrepresentation, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the part of the
Seller, or to the best of Seller's knowledge, any other person, including
without limitation the Mortgagor, any appraiser, any builder or developer, or
any other party involved in the origination of the Mortgage Loan or in the
application of any insurance in relation to such Mortgage Loan;
(xxxvii) Each original Mortgage was recorded or is in the process of
being recorded, in the appropriate jurisdictions wherein such recordation is
necessary to perfect the lien thereof as against creditors of the Seller. All
intervening assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded, or are in the process of being recorded, in
the appropriate jurisdictions wherein such recordation is necessary to perfect
the lien thereof as against creditors of the Seller. The Assignment of Mortgage
is in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;
(xxxviii) Any principal advances made to the Mortgagor prior to the
Cut-off Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as having first
lien priority with respect to each Mortgage Loan which is indicated by the
Seller to be a First Lien (as reflected on the Final Mortgage Loan Schedule), by
a title insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to FNMA or FHLMC.
The consolidated principal amount does not exceed the original principal amount
of the Mortgage Loan;
(xxxix) If the Residential Dwelling on the Mortgaged Property is a
condominium unit or a unit in a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project meets the eligibility requirements of FNMA or FHLMC;
(xl) Each Mortgage Loan originated in the state of Texas pursuant to
Article XVI, Section 50(a)(6) of the Texas Constitution (a "Texas Refinance
Loan") has been originated in compliance with the provisions of Article XVI,
Section 50(a)(6) of the Texas Constitution, Texas Civil Statutes and the Texas
Finance Code. With respect to each Texas Refinance Loan that is a Cash-Out
Refinancing, the related Mortgage Loan Documents state that the Mortgagor may
prepay such Texas Refinance Loan in whole or in part without incurring a
Prepayment Charge. The Seller does not collect any such Prepayment Charges in
connection with any such Texas Refinance Loan;
(xli) To the extent required by the Seller's underwriting guidelines,
the source of the down payment with respect to each Mortgage Loan has been fully
verified by the Seller;
(xlii) Interest on each Mortgage Loan is calculated on the basis of a
360-day year consisting of twelve 30-day months;
(xliii) To the best of the Seller's knowledge, the Mortgaged Property
is in material compliance with all applicable environmental laws pertaining to
environmental hazards
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including, without limitation, asbestos, and neither the Seller nor, to the
Seller's knowledge, the related Mortgagor, has received any notice of any
violation or potential violation of such law;
(xliv) The Seller shall, at its own expense, cause each Mortgage Loan
to be covered by a "life of loan" Tax Service Contract which is assignable to
the Purchaser or its designee at no cost to the Purchaser or its designee;
provided however, that if the Seller fails to purchase such Tax Service
Contract, the Seller shall be required to reimburse the Purchaser for all costs
and expenses incurred by the Purchaser in connection with the purchase of any
such Tax Service Contract;
(xlv) Each Mortgage Loan is covered by a "life of loan" Flood Zone
Service Contract which is assignable to the Purchaser or its designee at no cost
to the Purchaser or its designee or, for each Mortgage Loan not covered by such
Flood Zone Service Contract, the Seller agrees to purchase such Flood Zone
Service Contract;
(xlvi) None of the Adjustable Rate Mortgage Loans include an option to
convert to a Fixed Rate Mortgage Loan;
(xlvii) The Mortgage Loan was selected from among the outstanding
first or second lien mortgage loans of similar type in the Seller's portfolio on
the related Closing Date and such selection was not made in a manner so as to
affect materially and adversely the interests of the Purchaser, except that this
representation shall not apply to any particular Mortgage Loan for which
Purchaser has requested the inclusion of, or exclusion from, a Mortgage Loan
Package, or with respect to the Purchaser's criteria for purchasing the Mortgage
Loans;
(xlviii) Each Mortgage Loan constitutes a "qualified mortgage" under
Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1);
(xlix) No Mortgagor was required to purchase any single premium credit
insurance policy (e.g., life, mortgage, disability, accident, unemployment, or
health insurance product) or debt cancellation agreement as a condition of
obtaining the extension of credit;
(l) The Mortgage Loan Documents with respect to each Mortgage Loan
subject to Prepayment Charges specifically authorizes such Prepayment Charges to
be collected and such Prepayment Charges are permissible and enforceable in
accordance with the terms of the related Mortgage Loan Documents and applicable
law (except to the extent that the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws relating
to creditors' rights generally or the collectability thereof may be limited due
to acceleration in connection with a foreclosure);
(li) No Mortgage Loan had an LTV or a CLTV in excess of 100% at
origination;
(lii) [Reserved];
(liii) No Mortgage Loan made on or after October 1, 2002 and prior to
March 7, 2003 is subject to the Georgia Fair Lending Act (OGCA Sections 7 6A 1,
et. seq.);
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(liv) No Mortgage Loan had an original term to maturity of more than
thirty (30) years;
(lv) Each Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the related Mortgage Loan in the
event the related Mortgaged Property is sold without the prior consent of the
mortgagee thereunder;
(lvi) The Seller and any predecessor servicer has fully furnished, 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 (three of the credit repositories), on a monthly basis;
(lvii) Each Mortgage Note is comprised of one original promissory note
and each such promissory note constitutes an "instrument" for purposes of
section 9-102(a)(65) of the UCC;
(lviii) No predatory or deceptive lending practices, including but not
limited to, the extension of credit to the mortgagor without regard for the
mortgagor's ability to repay the Mortgage Loan and the extension of credit to
the mortgagor which has no apparent benefit to the mortgagor, were employed by
the originator of the Mortgage Loan in connection with the origination of the
Mortgage Loan; and
(lix) The Seller has complied with all applicable anti-money
laundering laws and regulations, including without limitation the Bank Secrecy
Act, as amended by the USA Patriot Act of 2001 (collectively, the "Anti-Money
Laundering Laws"). With respect to the Mortgage Loans originated by the Seller,
the Seller has established an anti-money laundering compliance program as
required by the applicable Anti-Money Laundering Laws, has conducted the
requisite due diligence in connection with the origination of each Mortgage Loan
by the Seller for purposes of the applicable Anti-Money Laundering Laws,
including with respect to the legitimacy of the applicable Mortgagor and the
origin of the assets used by the said Mortgagor to purchase the property in
question, and maintains, and will maintain, sufficient information to identify
and verify the identification of the applicable Mortgagor for purposes of the
applicable Anti-Money Laundering Laws.
Subsection 7.03. Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 7.01 and 7.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or lack of examination of any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties which materially and adversely
affects the value of the Mortgage Loans or the interest of the Purchaser (or
which materially and adversely affects the interests of the Purchaser in the
related Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan), the party discovering such breach shall give prompt
written notice to the other.
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Within sixty (60) days of the earlier of either discovery by or notice
to the Seller of any breach of a representation or warranty which materially and
adversely affects the value of a Mortgage Loan or the Mortgage Loans, the Seller
shall use its best efforts promptly to cure such breach in all material respects
and, if such breach cannot be cured, the Seller shall, at the Purchaser's
option, repurchase such Mortgage Loan at the Repurchase Price. In the event that
a breach shall involve any representation or warranty set forth in Subsection
7.01 and such breach cannot be cured within sixty (60) days of the earlier of
either discovery by or notice to the Seller of such breach, all of the Mortgage
Loans shall, at the Purchaser's option, be repurchased by the Seller at the
Repurchase Price. The Seller may, assuming that Seller has a Qualified
Substitute Mortgage Loan, rather than repurchase the Mortgage Loan as provided
above, remove such Mortgage Loan and substitute in its place a Qualified
Substitute Mortgage Loan or Loans; provided that such substitution shall not
violate any REMIC Provisions. If the Seller has no Qualified Substitute Mortgage
Loan, it shall repurchase the deficient Mortgage Loan. Any repurchase of a
Mortgage Loan(s) pursuant to the foregoing provisions of this Subsection 7.03
shall occur on a date designated by the Purchaser and shall be accomplished by
wire transfer of the amount of the Repurchase Price to an account designated by
the Purchaser in writing.
At the time of repurchase of any deficient Mortgage Loan, the
Purchaser and the Seller shall arrange for the reassignment of the repurchased
Mortgage Loan to the Seller and the delivery to the Seller of any documents held
by the Custodian relating to the repurchased Mortgage Loan. In the event the
Repurchase Price is deposited in the Custodial Account, the Seller shall,
simultaneously with such deposit, give written notice to the Purchaser that such
deposit has taken place. Upon such repurchase the related Final Mortgage Loan
Schedule shall be amended to reflect the withdrawal of the repurchased Mortgage
Loan from this Agreement.
As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, the Seller shall effect such
substitution by delivering to the Purchaser for such Qualified Substitute
Mortgage Loan or Loans the Mortgage Loan Documents with the Mortgage Note
endorsed as required herein. The Seller shall deposit in the Custodial Account
the Monthly Payment less the Servicing Fee due on such Qualified Substitute
Mortgage Loan or Loans in the month following the date of such substitution.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution will be retained by the Seller. For the month of
substitution, distributions to the Purchaser will include the Monthly Payment
due on such Deleted Mortgage Loan in the month of substitution, and the Seller
shall thereafter be entitled to retain all amounts subsequently received by the
Seller in respect of such Deleted Mortgage Loan. The Seller shall give written
notice to the Purchaser that such substitution has taken place and shall amend
the Final Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage
Loan from the terms of this Agreement and the substitution of the Qualified
Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall be subject to the terms of this Agreement in all
respects, and the Seller shall be deemed to have made with respect to such
Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the
covenants, representations and warranties set forth in Subsections 7.01 and
7.02.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Seller
will determine the amount (if any) by which the aggregate principal balance of
all such Qualified Substitute Mortgage
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Loans as of the date of substitution is less than the aggregate Stated Principal
Balance of all such Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). An amount equal to the
product of the amount of such shortfall multiplied by the Repurchase Price shall
be distributed by the Seller in the month of substitution pursuant to the
Servicing Addendum. Accordingly, on the date of such substitution, the Seller
will deposit from its own funds into the Custodial Account an amount equal to
such amount.
In addition to such cure, repurchase and substitution obligation, the
Seller shall indemnify the Purchaser and hold it harmless against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and other costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or resulting from, a
breach of the Seller's representations and warranties contained in Subsections
7.01 and 7.02. It is understood and agreed that the obligations of the Seller
set forth in this Subsection 7.03 to cure, substitute for or repurchase a
defective Mortgage Loan and to indemnify the Purchaser as provided in this
Subsection 7.03 constitute the sole remedies of the Purchaser respecting a
breach of the foregoing representations and warranties.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 7.01 or
7.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with the
relevant provisions of this Agreement.
Subsection 7.04. Representations and Warranties Respecting the
Purchaser.
The Purchaser represents, warrants and covenants to the Seller as of
the date hereof and as of each respective Closing Date or as of such date
specifically provided herein or in the applicable Warranty ▇▇▇▇ of Sale:
(i) The Purchaser has all requisite power and authority to enter into
and perform the obligations to be performed by it under this and any other
documents necessary to effectuate the purchase of the Mortgage Notes by the
Purchaser, and to consummate the transactions contemplated hereby and thereby,
including, without limitation, full authority to buy, assume, and accept from
the Seller the Mortgage Loans;
(ii) This Agreement constitutes the legal, valid and binding
obligation of the Purchaser enforceable against the Purchaser in accordance with
its terms (subject to bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditor's rights generally); and
(iii) Neither the execution, delivery and performance of this
Agreement nor the consummation of the transactions contemplated hereby is
prohibited by, or requires the Purchaser to obtain any consent, authorization,
approval or registration under any law, statute, rule, regulation, judgment,
order writ, injunction or decree which is binding upon Purchaser.
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Subsection 7.05. Indemnification by the Purchaser.
The Purchaser shall indemnify the Seller and hold it harmless against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach of the Purchaser's representations and warranties
contained in Subsection 7.05 above.
SECTION 8. Closing. The closing for each Mortgage Loan Package shall
take place on the related Closing Date. At the Purchaser's option, the closing
shall be either: by telephone, confirmed by letter or wire as the parties shall
agree, or conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(a) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the related
Closing Date and no event shall have occurred which, with notice
or the passage of time, would constitute a default under this
Agreement, the related Trade Confirmation or the related Warranty
▇▇▇▇ of Sale;
(b) the Initial Purchaser shall have received, or the Initial
Purchaser's attorneys shall have received in escrow, all Closing
Documents as specified in Section 9, in such forms as are agreed
upon and acceptable to the Purchaser, duly executed by all
signatories other than the Purchaser as required pursuant to the
terms hereof;
(c) the Seller shall have delivered and released the Mortgage Loan
Documents to the Custodian;
(d) all other terms and conditions of this Agreement shall have been
complied with; and
(e) all of the representations and warranties of the Purchaser under
this Agreement shall be true and correct as of the related
Closing Date and no event shall have occurred which, with notice
or the passage of time, would constitute a default under this
Agreement.
Subject to the foregoing conditions, the Initial Purchaser shall pay
to the Seller on the related Closing Date the Purchase Price, plus accrued
interest pursuant to Section 4, by wire transfer of immediately available funds
to the account designated by the Seller.
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SECTION 9. Closing Documents.
(a) On or before the Initial Closing Date, the Seller shall submit to
the Initial Purchaser fully executed originals of the following documents:
1. this Agreement, in four counterparts;
2. a Custodial Account Certification in the form attached as
Exhibit 6 hereto;
3. as Escrow Account Certification in the form attached as
Exhibit 7 hereto;
4. evidence of the existence of the Payment Clearing Account;
5. an Officer's Certificate, in the form of Exhibit 1 hereto,
including all attachments thereto; and
6. the Seller's underwriting guidelines.
(b) The Closing Documents for the Mortgage Loans to be purchased on
each Closing Date shall consist of fully executed originals of the following
documents:
1. the related Trade Confirmation;
2. the related Final Mortgage Loan Schedule;
3. an Officer's Certificate, in the form of Exhibit 1 hereto,
including all attachments thereto;
4. a Security Release Certification, in the form of Exhibit 3
hereto executed by any Person, as requested by the Initial
Purchaser, if any of the Mortgage Loans are subject to any
security interest immediately prior to the related Closing
Date, pledge or hypothecation for the benefit of such
Person;
5. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present
name, if applicable; and
6. a Warranty ▇▇▇▇ of Sale in the form of Exhibit 4 hereto.
SECTION 10. Costs. The Purchaser shall pay any commissions due its
salesmen and the legal fees and expenses of its attorneys. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans, including without limitation
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recording fees, fees for title policy endorsements and continuations, fees for
recording Assignments of Mortgage and the Seller's attorney's fees, shall be
paid by the Seller.
SECTION 11. Seller's Servicing Obligations. The Seller, as independent
contract servicer, shall service and administer the Mortgage Loans during the
Preliminary Servicing Period in accordance with the terms and provisions set
forth in the Servicing Addendum attached as Exhibit 8, which Servicing Addendum
is incorporated herein by reference.
SECTION 12. Removal of Mortgage Loans from Inclusion under This
Agreement Upon a Whole Loan Transfer or a Securitization Transaction on One or
More Reconstitution Dates.
The Seller and the Initial Purchaser agree that with respect to some
or all of the Mortgage Loans, the Initial Purchaser may effect no more than
three (3) of either:
(1) Whole Loan Transfers; and/or
(2) Securitization Transactions.
With respect to each Whole Loan Transfer or Securitization
Transaction, as the case may be, entered into by the Initial Purchaser, the
Seller agrees:
(1) to cooperate reasonably with the Purchaser and any prospective
purchaser with respect to all reasonable requests and due
diligence procedures including participating in meetings with
rating agencies, bond insurers and such other parties as the
Purchaser shall designate and participating in meetings with
prospective purchasers of the Mortgage Loans or interests therein
and providing information reasonably requested by such
purchasers;
(2) to execute all Reconstitution Agreements provided that (i) such
Reconstitution Agreements are reasonably acceptable to the
Seller, and (ii) each of the Seller and the Purchaser is given an
opportunity to review and reasonably negotiate in good faith the
content of such documents not specifically referenced or provided
for herein, and (iii) such Reconstitution Agreements do not
materially diminish Seller' rights or materially increase the
Seller's responsibilities as stated in this Agreement;
(3) with respect to any Whole Loan Transfer or Securitization
Transaction, the Seller shall make the representations and
warranties regarding the Seller if such Whole Loan Transfer or
Securitization Transaction occurs within 12 months of the related
Closing Date;
(4) to deliver to the Purchaser for inclusion in any prospectus or
other offering material such publicly available information
regarding the Seller, its financial condition and its most
recently publicly disclosed mortgage loan delinquency,
foreclosure and loss experience as shall be requested by the
Purchaser and any additional information which the Seller is
capable of
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providing without unreasonable effort or expense and the Seller
shall indemnify and hold harmless the Purchaser, each affiliate
designated by the Purchaser and each person who controls the
Purchaser or such affiliate from and against any and all losses,
claims, damages and liabilities arising from, with respect to
information provided by the Seller pursuant to this Section 12,
information on the Final Mortgage Loan Schedule and information
that is otherwise correctly derived from or based on such Final
Mortgage Loan Schedule (collectively, the "Seller Information"),
any untrue statement or alleged untrue statement of a material
fact contained in the Seller Information, or caused by any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading; provided however, the Seller shall not
indemnify the Purchaser for any error, omission, misstatement, or
other errors in Seller Information that are attributable to or
caused by the Purchaser or its agents; provided further, that the
Purchaser, shall indemnify and hold harmless the Seller, each
affiliate designated by the Seller and each person who controls
the Seller or such affiliate from and against any and all losses,
claims, damages and liabilities arising from, with respect to
information that is not Seller Information, any untrue statement
or alleged untrue statement of a material fact contained in any
information in the related offering documents, or caused by any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading;
(5) to deliver to the Purchaser and to any Person designated by the
Purchaser, at the Purchaser's expense, such statements and audit
letters of reputable, certified public accountants pertaining to
information provided by the Seller pursuant to clause 4 above as
shall be reasonably requested by the Purchaser;
(6) to deliver to the Purchaser, and to any Person designated by the
Purchaser, such documents and Opinions of Counsel as are
customarily delivered by originators or servicers, as the case
may be, and reasonably determined by the Purchaser to be
necessary in connection with Whole Loan Transfers or
Securitization Transactions, as the case may be, such Opinions of
Counsel for a Securitization Transaction to be in the form
reasonably acceptable to the Purchaser, it being understood that
the cost of any opinions of outside special counsel that may be
required for a Whole Loan Transfer or Securitization Transaction,
as the case may be, shall be the responsibility of the Purchaser;
(7) to negotiate and execute one or more subservicing agreements,
including an assignment, assumption and recognition agreement,
between the Seller and any Master Servicer which is generally
considered to be a prudent
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master servicer in the secondary mortgage market, designated by
the Purchaser after reasonable consultation with the Seller
provided that the Seller is given a reasonable opportunity to
review and reasonably negotiate such subservicing agreements and
such subservicing agreements do not materially diminish the
Seller's rights or materially increase the Seller's
responsibilities as stated in this Agreement and/or one or more
custodial and servicing agreements among the Purchaser, the
Seller and a third party custodian/trustee which is generally
considered to be a prudent custodian/trustee in the secondary
mortgage market designated by the Purchaser after reasonable
consultation with the Seller, in either case for the purpose of
pooling the Mortgage Loans with other Mortgage Loans for resale
or securitization; and
(9) Purchaser shall receive prior written notice of any assignment of
the servicing obligations following the closing of a
Securitization Transaction.
All Mortgage Loans not sold or transferred pursuant to a Whole Loan
Transfer or Securitization Transaction shall be subject to this Agreement and
shall continue to be serviced for the remainder of the Preliminary Servicing
Period in accordance with the terms of this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
SECTION 12A Compliance with Regulation AB.
Subsection 12A.01. Intent of the Parties; Reasonableness.
The Purchaser and the Seller acknowledge and agree that the purpose of
Section 12A of this Agreement is to facilitate compliance by the Purchaser and
any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Neither the Purchaser nor any Depositor shall
exercise its right to request delivery of information or other performance under
these provisions other than in good faith, or for purposes other than compliance
with the Securities Act, the Exchange Act and, the rules and regulations of the
Commission thereunder and Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act as set forth
herein. Although Regulation AB is applicable by its terms only to offerings of
asset-backed securities that are registered under the Securities Act, the
parties acknowledge that investors in privately offered securities may require
that the Purchaser or any Depositor provide comparable disclosure in
unregistered offerings. The parties agree over time to negotiate in good faith
with respect to the provision of comparable disclosure in private offerings. The
Seller 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 or reasonable advice of counsel acceptable to the
Purchaser and Seller agrees to negotiate in good faith with the Purchaser or any
Depositor with regard to any reasonable requests for delivery of information
under these provisions on the basis of established and evolving interpretations
of Regulation AB. In connection with any Securitization Transaction, the Seller
shall cooperate fully with the Purchaser to deliver to the Purchaser (including
any of its assignees or designees) and any Depositor, any and all statements,
reports, certifications, records and any other information necessary to permit
the Purchaser or such Depositor to comply with the provisions of Regulation AB,
together with such disclosures relating to the Seller, any Subservicer, any
Third-Party
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Originator and the Mortgage Loans, or the servicing of the Mortgage Loans,
necessary in order to effect such compliance. In the event of any conflict
between Section 12A and any other term or provision in this Agreement, the
provisions of Section 12A shall control.
The Purchaser (including any of its assignees or designees) agrees
that it will cooperate with the Seller by providing sufficient and timely notice
of any information requirements pertaining to a Securitization Transaction. The
Purchaser will make all reasonable efforts to limit requests for information,
reports or any other materials to items required for compliance with Regulation
AB, and shall not request information which is not required for such compliance.
Subsection 12A.02. Additional Representations and Warranties of the
Seller.
(a) The Seller hereby represents to the Purchaser and to any
Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Subsection 12A.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date: (i) the Seller is
not aware and has not received notice that any default, early amortization or
other performance triggering event has occurred as to any other securitization
due to any act or failure to act of the Seller; (ii) the Seller has not been
terminated as servicer in a residential mortgage loan securitization, either due
to a servicing default or to application of a servicing performance test or
trigger; (iii) no material noncompliance with the applicable servicing criteria
with respect to other securitizations of residential mortgage loans involving
the Seller as servicer has been disclosed or reported by the Seller; (iv) no
material changes to the Seller's policies or procedures with respect to the
servicing function it will perform under this Agreement and any Reconstitution
Agreement for mortgage loans of a type similar to the Mortgage Loans have
occurred during the three-year period immediately preceding the related
Securitization Transaction; (v) there are no aspects of the Seller's financial
condition that could have a material adverse effect on the performance by the
Seller of its servicing obligations under this Agreement or any Reconstitution
Agreement; (vi) there are no material legal or governmental proceedings pending
(or known to be contemplated) against the Seller, any Subservicer or any
Third-Party Originator; and (vii) there are no affiliations, relationships or
transactions required to be disclosed under Item 1119 between the Seller, any
Subservicer and any Third-Party Originator and any of the parties listed in
Subsection 12A.03(a)(D)(1)-(9) which are identified in writing by the Purchaser
or Depositor in advance of the Securitization Transaction pursuant to Subsection
12A.03(a)(D).
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Subsection 12A.03, the Seller shall, within five (5)
Business Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Subsection or,
if any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
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Subsection 12A.03. Information to Be Provided by the Seller.
In connection with any Securitization Transaction the Seller shall (i)
within five (5) Business Days following request by the Purchaser or any
Depositor, provide to the Purchaser and such Depositor (or, as applicable, cause
each Third-Party Originator and each Subservicer to provide), in writing
reasonably required for compliance with Regulation AB, (i) the information and
materials specified in paragraphs (a), (b), (c) and (g) of this Subsection, and
(ii) as promptly as practicable following notice to or discovery by the Seller,
provide to the Purchaser and any Depositor (as required under Regulation AB) the
information specified in paragraph (d) of this Subsection.
(a) If so requested by the Purchaser or any Depositor, the Seller
shall provide such information regarding (i) the Seller, as originator of the
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) as applicable, each Third-Party Originator, and (iii) as
applicable, each Subservicer, as is requested for the purpose of compliance with
Items 1103(a)(1), 1105 (subject to paragraph (b) below), 1110, 1117 and 1119 of
Regulation AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) to the extent material, a description of the originator's
origination program and how long the originator has been engaged in
originating residential mortgage loans, which description shall include a
discussion of the originator's experience in originating mortgage loans of
a similar type as the Mortgage Loans; if material, information regarding
the size and composition of the originator's origination portfolio; and
information that may be material, to an analysis of the performance of the
Mortgage Loans, including the originators' credit-granting or underwriting
criteria for mortgage loans of similar type(s) as the Mortgage Loans and
such other information as the Purchaser or any Depositor may reasonably
request for the purpose of compliance with Item 1110(b)(2) of Regulation
AB;
(C) a brief description of any material legal or governmental
proceedings pending (or known to be contemplated by a governmental
authority) against the Seller, each Third-Party Originator and each
Subservicer; and
(D) a description of any affiliation or relationship between the
Seller, each Third-Party Originator, each Subservicer and any of the
following parties to a Securitization Transaction, as such parties are
identified to the Seller by the Purchaser or any Depositor in writing
within ten (10) days in advance of such Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
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(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) If so requested by the Purchaser or any Depositor, the Seller
shall provide (or, as applicable, cause each Third-Party Originator to provide)
Static Pool Information with respect to the mortgage loans (of a similar type as
the Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Seller, if the Seller is an originator of Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information shall be
prepared by the Seller (or the Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of Item 1105(a)(1)-(3)
of Regulation AB. To the extent that there is reasonably available to the Seller
(or Third-Party Originator) Static Pool Information with respect to more than
one mortgage loan type, the Purchaser or any Depositor shall be entitled to
specify whether some or all of such information shall be provided pursuant to
this paragraph. The content of such Static Pool Information may be in the form
customarily provided by the Seller, and need not be customized for the Purchaser
or any Depositor. Such Static Pool Information for each vintage origination year
or prior securitized pool, as applicable, shall be presented in increments no
less frequently than quarterly over the life of the mortgage loans included in
the vintage origination year or prior securitized pool. The most recent periodic
increment must be as of a date no later than one hundred thirty-five (135) days
prior to the date of the prospectus or other offering document in which the
Static Pool Information is to be included or incorporated by reference. The
Static Pool Information shall be provided in an electronic format that provides
a permanent record of the information provided, such as a portable document
format (pdf) file, or other such electronic format.
Promptly following notice or discovery of a material error in Static
Pool Information, as determined in the Seller's judgment, provided pursuant to
the immediately preceding paragraph (including an omission to include therein
information required to be provided pursuant to such paragraph), the Seller
shall provide corrected Static Pool Information to the Purchaser or any
Depositor, as applicable, in the same format in which Static Pool Information
was previously provided to such party by the Seller.
If so requested by the Purchaser or any Depositor, the Seller shall
provide (or, as applicable, cause each Third-Party Originator to provide), at
the expense of the requesting party (to the extent of any additional incremental
expense associated with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants pertaining to Static Pool
Information relating to prior securitized pools for securitizations closed on or
after January 1, 2006 or, in the case of Static Pool Information with respect to
the Seller's or Third-Party Originator's originations or purchases, to calendar
months commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such letters shall be addressed to and be for the benefit of
such parties as the Purchaser or such Depositor shall designate, which shall be
limited to any Sponsor, any Depositor, any broker dealer acting as underwriter,
placement agent or initial purchaser with respect to a Securitization
Transaction or any other party that is reasonably and customarily entitled to
receive such letters in a Securitization Transaction. Any such statement or
letter may take the form of a standard, generally applicable
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document accompanied by a reliance letter authorizing reliance by the addressees
designated by the Purchaser or such Depositor.
(c) If reasonably requested by the Purchaser or any Depositor, the
Seller shall provide such information regarding the Seller, as servicer of the
Mortgage Loans, and each Subservicer (each Seller and each Subservicer, for
purposes of this paragraph, a "Servicer"), as is reasonably requested for the
purpose of compliance with Items 1108, 1117 and 1119 of Regulation AB. Such
information shall include, at a minimum:
(A) the Servicer's form of organization;
(B) a description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the Servicer's
experience in servicing assets of any type as well as a more detailed
discussion of the Servicer's experience in, and procedures for, the
servicing function it will perform under this Agreement and any
Reconstitution Agreements; information regarding the size, composition and
growth of the Servicer's portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on factors related to the
Servicer that may be material, to any analysis of the servicing of the
Mortgage Loans or the related asset-backed securities, as applicable,
including, without limitation:
(1) whether any prior securitizations of mortgage loans of a
type similar to the Mortgage Loans involving the Servicer have
defaulted or experienced an early amortization or other performance
triggering event because of servicing during the three-year period
immediately preceding the related Securitization Transaction;
(2) the extent of outsourcing the Servicer utilizes;
(3) whether there has been previous disclosure of material
noncompliance with the applicable servicing criteria with respect to
other securitizations of residential mortgage loans involving the
Servicer as a servicer during the three-year period immediately
preceding the related Securitization Transaction;
(4) whether the Servicer has been terminated as servicer in
a residential mortgage loan securitization, either due to a servicing
default or to application of a servicing performance test or trigger;
and
(5) such other information as the Purchaser or any Depositor
may reasonably request for the purpose of compliance with Item
1108(b)(2) of Regulation AB;
(C) a description of any material changes during the three-year
period immediately preceding the related Securitization Transaction to the
Servicer's policies or procedures with respect to the servicing function it
will perform under this Agreement and any Reconstitution Agreements for
mortgage loans of a type similar to the Mortgage Loans;
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(D) information regarding the Servicer's financial condition, to
the extent that there is a material risk that an adverse financial event or
circumstance involving the Servicer could have a material adverse effect on
the performance by the Seller of its servicing obligations under this
Agreement or any Reconstitution Agreement;
(E) information regarding advances made by the Servicer on the
Mortgage Loans and the Servicer's overall servicing portfolio of
residential mortgage loans for the three-year period immediately preceding
the related Securitization Transaction, which may be limited to a statement
by an authorized officer of the Servicer to the effect that the Servicer
has made all advances required to be made on residential mortgage loans
serviced by it during such period, or, if such statement would not be
accurate, information regarding the percentage and type of advances not
made as required, and the reasons for such failure to advance;
(F) a description of the Servicer's processes and procedures
designed to address any special or unique factors involved in servicing
loans of a similar type as the Mortgage Loans;
(G) a description of the Servicer's processes for handling
delinquencies, losses, bankruptcies and recoveries, such as through
liquidation of mortgaged properties, sale of defaulted mortgage loans or
workouts;
(H) information as to how the Servicer defines or determines
delinquencies and charge-offs, including the effect of any grace period,
re-aging, restructuring, partial payments considered current or other
practices with respect to delinquency and loss experience;
(I) a brief description of any material legal or governmental
proceedings pending (or known to be contemplated by a governmental
authority) against the Servicer; and
(J) a description of any affiliation or relationship between the
Servicer and any of the following parties to a Securitization Transaction,
as such parties are identified to the Servicer by the Purchaser or any
Depositor in writing in advance of such Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
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(d) For the purpose of assisting the Depositor in satisfying its
reporting obligations under the Exchange Act with respect to any class of
asset-backed securities, the Seller shall (or shall cause each Subservicer and,
if applicable, any Third-Party Originator to) provide (i) prompt notice to the
Purchaser, any Master Servicer and any Depositor in writing of (A) any merger,
consolidation or sale of substantially all of the assets of the Seller, (B) the
Seller's entry into an agreement with a Subservicer or Participating Entity to
perform or assist in the performance of any of the Seller's obligations under
this Agreement or any Reconstitution Agreement that qualifies as an "entry into
a material definitive agreement" under Item 1.01 of Form 8-K under the Exchange
Act, (C) any Event of Default under the terms of this Agreement or any
Reconstitution Agreement to the extent not known by the Purchaser or any
applicable Master Servicer or Depositor, and (D) any material litigation or
governmental proceedings pending against the Seller, any Subservicer or any
Third-Party Originator and (ii) a brief description of the events in clauses
(A), (B), (C), and (D) as set forth herein.
(e) As a condition to the succession to the Seller or any Subservicer
as servicer or subservicer under this Agreement or any applicable Reconstitution
Agreement related thereto by any Person (i) into which the Seller or such
Subservicer may be merged or consolidated, or (ii) which may be appointed as a
successor to the Seller or any Subservicer, the Seller shall provide to the
Purchaser and any Depositor, at least 15 calendar days prior to the effective
date of such succession or appointment, (x) written notice to the Purchaser and
any Depositor of such succession or appointment and (y) in writing, all
information reasonably requested by the Purchaser or any Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect to
any class of asset-backed securities.
(f) Not later than ten days prior to the deadline for the filing of
any distribution report on Form 10-D in respect of any Securitization
Transaction that includes any of the Mortgage Loans serviced by the Seller or
any Subservicer, the Seller or such Subservicer, as applicable, shall, to the
extent the Servicer or such Subservicer has knowledge, provide to the party
responsible for filing such report (including, if applicable, the Master
Servicer) notice of the occurrence of any of the following events along with all
information, data, and materials related thereto as may be required to be
included in the related distribution report on Form 10-D (as specified in the
provisions of Regulation AB referenced below):
(i) any material modifications, extensions or waivers of Mortgage
Loan terms, fees, penalties or payments during the distribution period or
that have cumulatively become material over time (Item 1121(a)(11) of
Regulation AB);
(ii) material breaches of Mortgage Loan representations or
warranties or transaction covenants under this Agreement (Item 1121(a)(12)
of Regulation AB); and
(iii) information regarding Mortgage Loan changes (such as,
additions, substitutions or repurchases), and any material changes in
origination, underwriting or other criteria for acquisition or selection of
pool assets (Item 1121(a)(14) of Regulation AB).
(g) The Seller shall provide to the Purchaser, Master Servicer and any
Depositor a description of any affiliation or relationship required to be
disclosed under Item 1119
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between the Seller, Subservicer, Third-Party Originator and any of the parties
listed in Items 1119(a)(1)-(6) of Regulation AB that develops following the
closing date of a Securitization Transaction (other than any affiliation or
relationship that the Purchaser, the Depositor or the issuing entity is required
to disclose under Item 1119 of Regulation AB) no later than 15 calendar days
prior to the date the Depositor is required to file its Form 10-K disclosing
such affiliation or relationship. For purposes of the foregoing, the Seller (A)
shall be entitled to assume that the parties to the Securitization Transaction
with whom affiliations or relations must be disclosed are the same as on the
closing date if it provides a written request (which may be made by e-mail) to
the Depositor or Master Servicer, as applicable, requesting such confirmation
and either obtains such confirmation or receives no response within three (3)
Business Days, (B) shall not be obligated to disclose any affiliations or
relationships that may develop after the closing date for the Securitization
Transaction with any parties not identified to the Seller pursuant to Subsection
12A.03(a)(D), and (C) shall be entitled to rely upon any written identification
of parties provided by the Depositor, the Purchaser or any Master Servicer.
(h) If reasonably requested by the Purchaser or any Depositor, the
Seller shall provide to the Purchaser, any Master Servicer or any Depositor,
evidence of the authorization of the person signing any certification or
statement pursuant to Subsections 12A.04 and 12A.05 of this Agreement.
Subsection 12A.04. Servicer Compliance Statement.
On or before March 5 of each calendar year, commencing in 2008, the
Seller shall deliver to the Purchaser, any Master Servicer and any Depositor a
statement of compliance addressed to the Purchaser, such Master Servicer and
such Depositor and signed by an authorized officer of the Seller, to the effect
that (i) a review of the Seller's activities during the immediately preceding
calendar year (or applicable portion thereof) and of its performance under the
servicing provisions of this Agreement and any applicable Reconstitution
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 Seller
has fulfilled all of its servicing obligations under this Agreement and any
applicable Reconstitution 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.
Subsection 12A.05. Report on Assessment of Compliance and Attestation.
(a) On or before March 5 of each calendar year, commencing in 2008,
the Seller shall:
(i) deliver to the Purchaser, the Master Servicer and the
Depositor a report regarding the Seller'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 Purchaser, such Master
Servicer and such Depositor and signed by an authorized officer of the
Seller, and shall address each of the "Applicable Servicing Criteria"
specified on Exhibit 11 hereto (wherein "investor" shall mean the Master
Servicer);
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(ii) deliver to the Purchaser, the Master Servicer and the
Depositor a report of a registered public accounting firm that attests to,
and reports on, the assessment of compliance made by the Seller 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) if required by Regulation AB, cause each Subservicer, and
each Subcontractor determined by the Seller pursuant to Subsection
12A.06(b) to be "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB (each, a "Participating Entity"), to
deliver to the Purchaser, the Master Servicer and the Depositor an
assessment of compliance and accountants' attestation as and when provided
in paragraphs (a) and (b) of this Subsection 12A.05; and
(iv) deliver or, if required by Regulation AB, cause each
Subservicer and Subcontractor described in Subsection 12A.05(iii) above to
deliver to the Purchaser, the Master Servicer, the Depositor or 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 a Securitization
Transaction in the form attached hereto as Exhibit 10; provided that such
certification delivered by the Seller may not be filed as an exhibit to, or
included in, any filing with the Commission.
The Seller acknowledges that the party identified in clause (a)(iv)
above may rely on the certification provided by the Seller pursuant to such
clause in signing a Sarbanes Certification and filing such with the Commission.
Neither the Purchaser, any Depositor nor any Master Servicer will request
delivery of a certification under clause (a)(iv) above unless a Depositor is
required under the Exchange Act to file an annual report on Form 10-K or any
amendment thereto with respect to an issuing entity whose asset pool includes
Mortgage Loans.
(b) Each assessment of compliance provided by a Subservicer pursuant
to Subsection 12A.05(a)(i) shall address each of the applicable Servicing
Criteria specified on Exhibit 11 hereto (wherein "investor" shall mean the
Master Servicer) delivered to the Purchaser concurrently with the execution of
this Agreement or, in the case of a Subservicer subsequently appointed as such,
on or prior to the date of such appointment. An assessment of compliance
provided by a Participating Entity pursuant to Subsection 12A.05(a)(iii) need
not address any elements of the Servicing Criteria other than those specified by
the Seller pursuant to Subsection 12A.06.
Subsection 12A.06. Use of Subservicers and Subcontractors.
The Seller shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Seller as servicer under
this Agreement or any related Reconstitution Agreement unless the Seller
complies with the provisions of paragraph (a) of this Subsection. The Seller
shall not hire or otherwise utilize the services of any Subcontractor, and shall
not permit any Subservicer to hire or otherwise utilize the services of any
Subcontractor, to fulfill any of the obligations of the Seller as servicer under
this Agreement or any Reconstitution Agreement unless the Seller complies with
the provisions of paragraph (b) of this Subsection.
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(a) It shall not be necessary for the Seller to seek the consent of
the Purchaser, any Master Servicer or any Depositor to the utilization of any
Subservicer. If required by Regulation AB, the Seller shall cause any
Subservicer used by the Seller (or by any Subservicer) for the benefit of the
Purchaser and any Depositor to comply with the provisions of this Subsection and
with Subsections 12A.02, 12A.03(c), (e) and (f), 12A.04, and 12A.05 of this
Agreement, and to provide the information required with respect to such
Subservicer under Subsection 12A.03(d) of this Agreement. The Seller shall be
responsible for obtaining from each Subservicer and delivering to the Purchaser
and any Depositor any servicer compliance statement required to be delivered by
such Subservicer under Subsection 12A.04, any assessment of compliance and
attestation required to be delivered by such Subservicer under Subsection 12A.05
and any certification required to be delivered to the Person that will be
responsible for signing the Sarbanes Certification under Subsection 12A.05 as
and when required to be delivered.
(b) It shall not be necessary for the Seller to seek the consent of
the Purchaser, any Master Servicer or any Depositor to the utilization of any
Subcontractor. If required by Regulation AB, the Seller shall promptly upon
request provide to the Purchaser, any Master Servicer and any Depositor (or any
designee of the Depositor, such as a master servicer or administrator) a written
description of the role and function of each Subcontractor utilized by the
Seller or any Subservicer, specifying (i) the identity of each such
Subcontractor, (ii) which (if any) of such Subcontractors are a Participating
Entities and (iii) which elements of the Servicing Criteria will be addressed in
assessments of compliance provided by each Participating Entity identified
pursuant to clause (ii) of this paragraph.
(c) The Seller shall cause any such Participating Entity used by the
Seller (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Subsections 12A.05 of this Agreement.
The Seller shall be responsible for obtaining from each Participating Entity and
delivering to the Purchaser and any Depositor assessment of compliance and
attestation required to be delivered by such, Participating Entity under
Subsection 12A.05, in each case as and when required to be delivered.
Subsection 12A.07. Indemnification; Remedies.
(a) The Seller shall indemnify the Purchaser and each of the following
parties participating in a Securitization Transaction: each sponsor and issuing
entity; the Depositor; each Person responsible for the 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 such
Securitization Transaction; each broker dealer acting as underwriter, placement
agent or initial purchaser, each Person who controls any of such parties (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 and employees of
each of the foregoing and shall hold each of them harmless from and against any
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:
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(i)(A) any untrue statement of a material fact contained or
alleged to be contained in any written information, written report,
certification or other material provided under this Agreement by or on
behalf of the Seller or provided under this Agreement by or on behalf of
any Subservicer, Participating Entity or, if applicable, Third-Party
Originator (collectively, the "Company Information"), or (B) the omission
or alleged omission to state in the Company Information a material fact
required to be stated in the Company Information or necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, by way of clarification, that
clause (B) of this paragraph shall be construed solely by reference to the
Company Information and not to any other information communicated in
connection with a sale or purchase of securities, without regard to whether
the Company Information or any portion thereof is presented together with
or separately from such other information;
(ii) any failure by the Seller, any Subservicer, any
Participating Entity or any Third-Party Originator to deliver any
information, report, certification, accountants' letter or other material
when and as required under this Section 12A, including failure by the
Seller to identify pursuant to Subsection 12A.06(b) any Participating
Entity; or
(iii) any breach by the Seller of a representation or warranty
set forth in Subsection 12A.02(a) or in a writing furnished pursuant to
Subsection 12A.02(b) and made as of a date prior to the closing date of the
related Securitization Transaction, to the extent that such breach is not
cured by such closing date, or any breach by the Seller of a representation
or warranty in a writing furnished pursuant to Subsection 12A.02(b) to the
extent made as of a date subsequent to such closing date.
In the case of any failure of performance described in clause (a)(ii)
of this Subsection, the Seller shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the 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 such
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 Seller, any Subservicer, any
Participating Entity or any Third-Party Originator.
(b) (i) Any failure by the Seller, any Subservicer, any Participating
Entity or any Third-Party Originator to deliver any information, report,
certification, accountants' letter or other material when and as required under
this Section 12A, which continues unremedied for three Business Days after
receipt by the Seller and the applicable Subservicer, Subcontractor, or
Third-Party Originator of written notice of such failure from the Purchaser, the
Master Servicer or Depositor shall, except as provided in clause (ii) of this
paragraph (b), constitute an Event of Default with respect to the Seller under
this Section 12A and any applicable Reconstitution Agreement, and shall entitle
the Purchaser, the Master Servicer or Depositor, as applicable, in its sole
discretion to terminate the rights and obligations of the Seller as servicer
under this Section 12A and/or any applicable Reconstitution Agreement related
thereto without payment (notwithstanding anything in this Agreement or any
applicable Reconstitution Agreement related
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thereto to the contrary) of any compensation to the Seller (and if the Seller is
servicing any of the Mortgage Loans in a Securitization Transaction, appoint a
successor servicer reasonably acceptable to any Master Servicer for such
Securitization Transaction); provided, however, it is understood that the Seller
shall remain entitled to receive reimbursement for all unreimbursed Monthly
Advances and Servicing Advances made by the Seller under this Agreement and/or
any Reconstitution Agreement. Notwithstanding anything to the contrary set forth
herein, to the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Seller as servicer, such provision
shall be given effect.
(ii) Any failure by the Seller, any Subservicer or any
Participating Entity to deliver any information, report, certification or
accountants' letter when and as required under Subsection 12A.04 or 12A.05,
including any failure by the Seller to identify a Participating Entity,
which continues unremedied for nine (9) calendar days after receipt by the
Seller of written notice of such failure from the Purchaser, any Master
Servicer or Depositor shall constitute an Event of Default with respect to
the Seller under this Agreement and any applicable Reconstitution
Agreement, and shall entitle the Purchaser, any Master Servicer or
Depositor, as applicable, in its sole discretion to terminate the rights
and obligations of the Seller as servicer under this Agreement and/or any
applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement to the contrary) of any compensation to the
Seller; provided, however it is understood that the Seller shall remain
entitled to receive reimbursement for all unreimbursed Monthly Advances and
Servicing Advances made by the Seller under this Agreement and/or any
applicable Reconstitution Agreement. Notwithstanding anything to the
contrary set forth herein, to the extent that any provision of this
Agreement and/or any applicable Reconstitution Agreement expressly provides
for the survival of certain rights or obligations following termination of
the Seller as servicer, such provision shall be given effect.
(iii) The Seller shall promptly reimburse the Purchaser and any
Depositor, as applicable, for all reasonable expenses incurred by the
Purchaser (or such designee) or such Depositor, as such are incurred, in
connection with the termination of the Seller as servicer and the transfer
of servicing of the Mortgage Loans to a successor servicer. The provisions
of this paragraph shall not limit whatever rights the Seller, Purchaser or
any Depositor may have under other provisions of this Agreement and/or any
applicable Reconstitution Agreement or otherwise, whether in equity or at
law, such as an action for damages, specific performance or injunctive
relief.
The Purchaser agrees to indemnify and hold harmless the Seller, any Subservicer,
any Participating Entity, and, if applicable, any Third-Party Originator, each
Person who controls any of such parties (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 and employees of each of the foregoing from and
against any 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 any untrue statement
or alleged untrue statement of any material fact contained in any filing with
the Commission or the omission or alleged omission to state in any filing with
the Commission a material fact required to be stated or necessary to be
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stated in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement, alleged untrue
statement, omission, or alleged omission relates to any filing with the
Commission other than the Company Information.
(iv) If the indemnification provided for herein is unavailable or
insufficient to hold harmless the indemnified party, then the indemnifying
party 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
uncured 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 indemnifying party on the other.
(v) The indemnifications provided for herein shall survive the
termination of this Agreement or the termination of any party to this
Agreement.
(vi) The Master Servicer shall be considered a third-party
beneficiary of Subsections 12A.04, 12A.05 and 12A.07 of this Agreement
(with regard to Subsection 12A.07, solely with respect to noncompliance
under Subsections 12A.04 and 12A.05 of this Agreement), entitled to all the
rights and benefits hereof as if it were a direct party to this Agreement.
SECTION 13. The Seller.
Subsection 13.01. Additional Indemnification by the Seller.
In addition to the indemnification provided in Subsection 7.03, the
Seller shall indemnify the Purchaser and hold the Purchaser harmless against any
and all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that the Purchaser may sustain in any way related to the failure of the
Seller to service and administer the Mortgage Loans in strict compliance with
the terms of this Agreement. Notwithstanding the foregoing, the Purchaser shall
indemnify the Seller 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 Seller
may sustain in any way related to (a) actions or inactions of the Seller which
were taken or omitted upon the instruction or direction of the Purchaser, or (b)
the failure of the Purchaser to perform its obligations under this Agreement,
including the provisions of Subsection 13.03.
Notwithstanding the foregoing, in the event that Seller assigns the
servicing rights to Countrywide Home Loans Servicing LP, from the date of such
assignment and thereafter, the Purchaser shall only be entitled to seek
indemnification from Countrywide Home Loans Servicing LP with respect to the
servicing obligations pursuant to such assignment. Countrywide Home Loans
Servicing LP shall indemnify the Purchaser and hold it harmless against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and other costs and expenses resulting from
any claim, demand, defense or assertion based on or grounded upon, or resulting
from, a breach of its servicing obligations pursuant
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thereto including its obligations to service and administer the Mortgage Loans
in compliance with the terms of this Agreement.
Subsection 13.02. Merger or Consolidation of the Seller.
The Seller shall keep in full force and effect its existence, rights
and franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and shall obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of any of the Mortgage Loans, and to enable the Seller to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Seller shall be a party, or any Person succeeding to the business of the Seller,
shall be the successor of the Seller hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall be an institution whose deposits are insured
by the FDIC or a company whose business is the origination and servicing of
mortgage loans, shall be a FNMA or FHLMC approved seller/servicer and shall
satisfy any requirements of Section 16 with respect to the qualifications of a
successor to the Seller.
Subsection 13.03. Limitation on Liability of the Seller and Others.
Neither the Seller nor any of the officers, employees or agents of the
Seller shall be under any liability to the Purchaser for any action taken or for
refraining from the taking of any action in good faith in connection with the
servicing of the Mortgage Loans pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Seller or
any such person against any breach of warranties or representations made herein,
or failure to perform its obligations in compliance with any standard of care
set forth in this Agreement, or any liability which would otherwise be imposed
by reason of any breach of the terms and conditions of this Agreement. The
Seller and any officer, employee or agent of the Seller may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. To the extent the Purchaser
records with the recording office an Assignment of Mortgage which designates the
Purchaser as the holder of record of the Mortgage, the Purchaser agrees that it
shall (i) provide the Seller with immediate notice of any action with respect to
the Mortgage or the related Mortgaged Property and ensure that the proper
department or person at the Seller, designated in writing from the Seller to the
Purchaser, receives such notice; and (ii) immediately complete, sign and return
to the Seller any document reasonably requested by the Seller to comply with its
servicing obligations, including without limitation, any instrument required to
release the Mortgage upon payment in full of the obligation or take any other
action reasonably required by the Seller. The Purchaser further agrees that the
Seller shall have no liability for the Purchaser's failure to comply with
subsections (i) or (ii) in the foregoing sentence. The Seller shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to its obligation to sell or duty to service the Mortgage Loans in
accordance with this Agreement and which in its opinion may result in its
incurring any expenses or liability; provided, however, that the Seller may,
with the consent of the Purchaser, undertake any such action which it may deem
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necessary or desirable in respect to this Agreement and the rights and duties of
the parties hereto. In such event, the legal expenses and costs of such action
and any liability resulting therefrom shall be expenses, costs and liabilities
for which the Purchaser shall be liable, and the Seller shall be entitled to
reimbursement therefor from the Purchaser upon written demand except when such
expenses, costs and liabilities are subject to the Seller's indemnification
under Subsections 7.03 or 13.01.
Subsection 13.04. Seller Not to Resign.
The Seller shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Seller and the Purchaser or upon the determination that its servicing duties
hereunder are no longer permissible under applicable law and such incapacity
cannot be cured by the Seller in which event the Seller may resign as servicer.
Any such determination permitting the resignation of the Seller as servicer
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Purchaser which Opinion of Counsel shall be in form and substance reasonably
acceptable to the Purchaser and which shall be provided at the cost of the
Seller. No such resignation shall become effective until a successor shall have
assumed the Seller's responsibilities and obligations hereunder in the manner
provided in Section 16.
Subsection 13.05. No Transfer of Servicing.
The Seller acknowledges that the Purchaser has acted in reliance upon
the Seller's independent status, the adequacy of its servicing facilities, plan,
personnel, records and procedures, its integrity, reputation and financial
standing and the continuance thereof. Without in any way limiting the generality
of this Section, the Seller shall not either assign this Agreement or the
servicing hereunder or delegate its rights or duties hereunder or any portion
thereof, or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written approval of the Purchaser, which
consent will not be unreasonably withheld. Nothing in this Agreement shall
prohibit or limit the right of the Seller to assign the servicing rights
hereunder to Countrywide Home Loans Servicing LP.
SECTION 14. Default.
Subsection 14.01. Events of Default.
In case one or more of the following Events of Default by the Seller
shall occur and be continuing, that is to say:
(i) any failure by the Seller to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of two Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Seller by the Purchaser; or
(ii) failure on the part of the Seller duly to observe or perform in
any material respect any other of the covenants or agreements on the part of the
Seller set forth in this Agreement which continues unremedied for a period of
thirty (30) days after the date on which
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written notice of such failure, requiring the same to be remedied, shall have
been given to the Seller by the Purchaser; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Seller and such
decree or order shall have remained in force undischarged or unstayed for a
period of sixty (60) days; or
(iv) the Seller shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Seller or relating to all or substantially all of its property; or
(v) the Seller shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) any failure by the Seller to maintain its license to service a
Mortgage Loan in the jurisdiction where the related Mortgaged Property is
located, if such license is required, which materially and adversely affects the
servicing and enforceability of such Mortgage Loan and which failure continues
unremedied for a period of thirty (30) days (or, in the event the Seller in good
faith is attempting to remedy the failure, such other additional time as
mutually agreed upon by the Purchaser and the Seller) shall constitute an Event
of Default solely for the affected Mortgage Loan; or
(vii) the Seller ceases to meet the qualifications of either a FNMA or
FHLMC seller/servicer which continues unremedied for a period of thirty (30)
days; or
(viii) subject to the provisions of this Agreement, the Seller
attempts, without the consent of the Purchaser, to sell or otherwise dispose of
all or substantially all of its property or assets or to assign this Agreement
or the servicing responsibilities hereunder or to delegate its duties hereunder
or any portion thereof; or
(ix) failure by the Seller to duly perform, within the required time
period, its obligations under Sections 11.25 and 11.26 of the Servicing Addendum
which failure continues unremedied for a period of ten (10) days after the date
on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Seller by any party to this Agreement or by any
Master Servicer responsible for master servicing the Mortgage Loans pursuant to
a securitization of such Mortgage Loans;
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Purchaser, by notice in writing to the Seller may, in
addition to whatever rights the Purchaser may have at law or equity to damages,
including injunctive relief and specific performance, terminate all the rights
and obligations of the Seller as servicer under this Agreement. On or after the
receipt by the Seller of such written notice, all authority and power of
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the Seller to service the Mortgage Loans under this Agreement shall on the date
set forth in such notice pass to and be vested in the successor appointed
pursuant to Section 16.
Subsection 14.02. Waiver of Defaults.
The Purchaser may waive any default by the Seller in the performance
of its obligations hereunder and its consequences. Upon any such waiver of a
past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.
SECTION 15. Termination. The respective obligations and
responsibilities of the Seller, as servicer, shall terminate upon the
distribution to the Purchaser of the final payment or liquidation with respect
to the last Mortgage Loan (or advances of same by the Seller) or the disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure with
respect to the last Mortgage Loan and the remittance of all funds due hereunder
unless terminated with respect to all or a portion of the Mortgage Loans on an
earlier date at the option of the Purchaser pursuant to Section 14. Upon written
request from the Purchaser in connection with any such termination, the Seller
shall prepare, execute and deliver, any and all documents and other instruments,
place in the Purchaser's possession all Mortgage Files, and do or accomplish all
other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise, at the
Seller's sole expense. The Seller agrees to cooperate with the Purchaser and
such successor in effecting the termination of the Seller's responsibilities and
rights hereunder as servicer, including, without limitation, the transfer to
such successor for administration by it of all cash amounts which shall at the
time be credited by the Seller to the Custodial Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
SECTION 16. Successor to the Seller. Prior to termination of the
Seller's responsibilities and duties under this Agreement pursuant to Section
13.04, 14 or 15, the Purchaser shall (i) succeed to and assume all of the
Seller's responsibilities, rights, duties and obligations under this Agreement,
or (ii) appoint a successor which shall succeed to all rights and assume all of
the responsibilities, duties and liabilities of the Seller as servicer under
this Agreement. In connection with such appointment and assumption, the
Purchaser may make such arrangements for the compensation of such successor out
of payments on Mortgage Loans as it and such successor shall agree. In the event
that the Seller's duties, responsibilities and liabilities as servicer under
this Agreement should be terminated pursuant to the aforementioned Sections, the
Seller shall discharge such duties and responsibilities during the period from
the date it acquires knowledge of such termination until the effective date
thereof with the same degree of diligence and prudence which it is obligated to
exercise under this Agreement, and shall take no action whatsoever that might
impair or prejudice the rights or financial condition of the Purchaser or such
successor. The termination of the Seller as servicer pursuant to the
aforementioned Sections shall not become effective until a successor shall be
appointed pursuant to this Section 16 and shall in no event relieve the Seller
of the representations and warranties made pursuant to Subsections 7.01 and 7.02
and the remedies available to the Purchaser under Subsection 7.03 or 7.04, it
being understood and agreed that the provisions of such Subsections
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7.01, 7.02, 7.03 and 7.04 shall be applicable to the Seller notwithstanding any
such resignation or termination of the Seller, or the termination of this
Agreement.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Seller and to the Purchaser an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Seller, with like effect as if originally named as a party to this Agreement
provided, however, that such successor shall not assume, any and all liabilities
arising out of the Seller's acts as servicer. Any termination of the Seller as
servicer pursuant to Section 13.04, 14 or 15 shall not affect any claims that
the Purchaser may have against the Seller arising prior to any such termination
or resignation or remedies with respect to such claims.
If any of the Mortgage Loans are MERS Loans, in connection with the
termination or resignation of the Seller hereunder, either (i) the successor
shall represent and warrant that it is a member of MERS in good standing and
shall agree to comply in all material respects with the rules and procedures of
MERS in connection with the servicing of the Mortgage Loans that are registered
with MERS, or (ii) the Seller shall cooperate with the successor either (x) in
causing MERS to execute and deliver an assignment of Mortgage in recordable form
to transfer the Mortgage from MERS to the Purchaser and to execute and deliver
such other notices, documents and other instruments as may be necessary or
desirable to effect a transfer of such Loan or servicing of such Mortgage Loan
on the MERS System to the successor or (y) in causing MERS to designate on the
MERS System the successor as the servicer of such Mortgage Loan.
The Seller shall timely deliver to the successor the funds in the
Custodial Account and the Escrow Account and the Mortgage Files and related
documents and statements held by it hereunder and the Seller shall account for
all funds. The Seller shall execute and deliver such instruments and do such
other things all as may reasonably be required to more fully and definitely vest
and confirm in the successor all such rights, powers, duties, responsibilities,
obligations and liabilities of the Seller as servicer. The successor shall
reimburse the Seller for amounts the Seller actually expended as servicer
pursuant to this Agreement which would otherwise have been recovered by the
Seller pursuant to this Agreement but for the appointment of the successor
servicer.
SECTION 17. Financial Statements. The Seller understands that in
connection with the Purchaser's marketing of the Mortgage Loans, the Purchaser
shall make available to prospective purchasers financial statements of the
Seller and the Seller's parent company, if applicable, for the most recently
completed three fiscal years respecting which such statements are available. The
Seller also shall make available any comparable interim statements to the extent
any such statements have been prepared by the Seller (and are available to the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
also shall make available information on its servicing performance with respect
to mortgage loans in its servicing portfolio, including delinquency ratios.
The Seller also agrees to allow reasonable access to knowledgeable
financial, accounting, origination and servicing officers of the Seller for the
purpose of answering
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questions asked by any prospective purchaser regarding recent developments
affecting the Seller, its loan origination or servicing practices or the
financial statements of the Seller.
SECTION 18. Mandatory Delivery. The sale and delivery of each Mortgage
Loan on or before the related Closing Date is mandatory from and after the date
of the execution of the related Trade Confirmation, it being specifically
understood and agreed that each Mortgage Loan is unique and identifiable on the
date hereof and that an award of money damages would be insufficient to
compensate the Initial Purchaser for the losses and damages incurred by the
Initial Purchaser (including damages to prospective purchasers of the Mortgage
Loans) in the event of the Seller's failure to deliver (i) each of the related
Mortgage Loans, (ii) one or more Qualified Substitute Mortgage Loans delivered
pursuant to Section 7, or (iii) one or more Mortgage Loans otherwise acceptable
to the Initial Purchaser on or before the related Closing Date. All rights and
remedies of the Purchaser under this Agreement are distinct from, and cumulative
with, any other rights or remedies under this Agreement or afforded by law or
equity and all such rights and remedies may be exercised concurrently,
independently or successively.
SECTION 19. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed, by
registered or certified mail, return receipt requested, or, if by other means,
when received by the other party at the address as follows:
(i) if to the Purchaser:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Mortgage Finance
(ii) if to the Seller:
Countrywide Home Loans, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, Vice President
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 20. Severability Clause. Any part, provision, representation
or warranty of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part,
provision, representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction
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shall be ineffective, as to such jurisdiction, to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
SECTION 21. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original, and all such counterparts shall constitute one and the same
instrument.
SECTION 22. Governing Law. The Agreement shall be construed in
accordance with the laws of the State of New York without regard to any
conflicts of law provisions and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with the laws of the State
of New York, except to the extent preempted by Federal law.
SECTION 23. Intention of the Parties. It is the intention of the
parties that the Initial Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans and not a debt instrument of the Seller or another security.
Accordingly, the parties hereto each intend to treat the transaction for Federal
income tax purposes as a sale by the Seller, and a purchase by the Purchaser, of
the Mortgage Loans. The Initial Purchaser shall have the right to review the
Mortgage Loans and the related Mortgage File to determine the characteristics of
the Mortgage Loans which shall affect the Federal income tax consequences of
owning the Mortgage Loans and the Seller shall cooperate with all reasonable
requests made by the Initial Purchaser in the course of such review.
SECTION 24. Successors and Assigns. This Agreement shall bind and
inure to the benefit of and be enforceable by the Seller and the Purchaser and
the respective successors and assigns of the Seller and the Purchaser. The
Purchaser may, subject to the terms of this Agreement, sell and transfer one or
more of the Mortgage Loans; provided, however, that the transferee will not be
deemed to be the "Purchaser" hereunder unless such transferee shall agree in
writing to be bound by the terms of this Agreement and an original counterpart
of the document evidencing such agreement shall have been executed by the
Purchaser and the transferee and delivered to the Seller. Notwithstanding the
foregoing, no transfer shall be effective if such transfer would result in there
being more than three (3) "Purchasers" outstanding hereunder with respect to any
Mortgage Loan Package.
Seller acknowledges that the Purchaser acts in reliance upon Seller's
independent status, the adequacy of its servicing facilities, plant, personnel,
records and procedures, its integrity, reputation and financial standing and the
continuance thereof. Without in any way limiting the generality of this Section
24, Seller may, in its sole discretion, assign this Agreement or the servicing
rights hereunder, without the prior written approval of the Purchaser, to any of
its affiliates including, but not limited to, Countrywide Home Loans Servicing
LP; however,
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Seller shall not assign this Agreement or the servicing rights hereunder to any
other entity without the prior written consent of the Purchaser, which consent
may not be unreasonably withheld. In connection with an assignment of this
Agreement or the servicing rights hereunder to Countrywide Home Loans Servicing
LP or any other affiliate of the Seller, such party will be deemed to have
assumed all of the rights, liabilities and obligations of the Seller as servicer
hereunder.
SECTION 25. Waivers. No term or provision of this Agreement may be
waived or modified unless such waiver or modification is in writing and signed
by the party against whom such waiver or modification is sought to be enforced.
SECTION 26. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
SECTION 27. Nonsolicitation. The Seller shall not take any action or
cause any action to be taken by any of its employees, agents or affiliates, or
by any independent contractors acting on the Seller's behalf, to solicit any
borrower in any manner whatsoever, including but not limited to, soliciting a
borrower to prepay or refinance a Mortgage Loan. Furthermore, neither the Seller
nor any of its affiliates shall directly or indirectly provide information to
any third party for purposes of soliciting the borrowers related to the Mortgage
Loans. It is understood that promotions undertaken by the Seller or its
affiliates which are directed to the general public at large (i.e., newspaper
advertisements, radio or T.V. ads, etc.) and not specifically directed to the
borrowers related to the Mortgage Loans shall not constitute a breach of this
section. From and after the Closing Date, Seller hereby agrees that Seller will
not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors or independent mortgage
brokerage companies on Seller's behalf, to personally, by telephone or mail,
solicit the borrower under any Mortgage Loan for the purpose of refinancing such
Mortgage Loan; provided, that Seller may solicit any borrower for whom Seller
has received a request for verification of mortgage, a request for demand for
payoff, a borrower initiated written or verbal communication indicating a desire
to prepay the related Mortgage Loan, or the borrower initiates a title search,
provided further, it is understood and agreed that promotions undertaken by
Seller or any of its affiliates which concern optional insurance products or
other additional products shall not constitute solicitation nor is Seller
prohibited from responding to unsolicited requests or inquiries made by a
borrower or an agent of a borrower. Notwithstanding the foregoing, the following
solicitations, if undertaken by Seller or any affiliate of Seller, shall not be
prohibited: (i) solicitations or promotions that are directed to the general
public at large, including, without limitation, mass mailings based on
commercially acquired mailing lists and newspaper, radio, television and other
mass media advertisements and (ii) borrower messages included on, and statement
inserts provided with, the monthly statements sent to borrowers; provided,
however, that similar messages and inserts are sent to all other borrowers of
similar type mortgage loans serviced by Seller and such affiliates, including,
but not limited to, those mortgage loans serviced for the Seller's and/or such
affiliates own account; and (iii) solicitations made to any borrower who has an
economic incentive to refinance resulting from changes in market conditions, the
mortgagor's financial standing, or impending changes in the related Mortgage,
provided, that such solicitations are made to borrowers of mortgage loans
serviced by Seller and such affiliates with respect to mortgage loans meeting
such defined parameters,
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including, but not limited to, those mortgage loans serviced for the Seller's
and/or such affiliates own account.
SECTION 28. General Interpretive Principles. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
SECTION 29. Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation, (a) consents, waivers
and modifications which may hereafter be executed, (b) documents received by any
party at the closing, and (c) financial statements, certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 30. Further Agreements. The Seller and the Purchaser each
agree to execute and deliver to the other such reasonable and appropriate
additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement.
SECTION 31. Protection of Confidential Information. The Seller will
keep confidential and will not, without the Purchaser's written consent, divulge
to any party the Purchase Price of the Mortgage Loans, except to the extent that
it is appropriate to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies.
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SECTION 32. Survival. The Seller agrees that the representations,
warranties and agreements made by the Seller herein and in any certificate or
other instrument delivered pursuant hereto shall be deemed to be relied upon by
the Purchaser, notwithstanding any investigation heretofore or hereafter made by
the Purchaser or on the Purchaser's behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery and payment for the Mortgage
Loans for each Transaction.
SECTION 33. Conflicts. The Purchaser and the Seller agree that in the
event of a conflict between this Agreement and the related Trade Confirmation,
the related Trade Confirmation shall control. In the event of a breach of any
term in the related Trade Confirmation the Purchaser and the Seller shall be
entitled to all remedies set forth in this Agreement.
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
COUNTRYWIDE HOME LOANS, INC.
(Seller)
By:
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC.
(Initial Purchaser)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT 1
SELLER'S OFFICER'S CERTIFICATE
I, ________________________, hereby certify that I am the duly elected
______________ of Countrywide Home Loans, Inc., a California corporation (the
"Seller"), and further certify, on behalf of the Seller as follows:
1. Attached hereto as Attachment I are a true and correct copy of the
Certificate of Incorporation and by-laws of the Seller as are in full force
and effect on the date hereof.
2. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of the Seller are pending or contemplated.
3. Each person who, as an officer or attorney-in-fact of the Seller,
signed (a) the Master Mortgage Loan Purchase and Servicing Agreement (the
"Purchase Agreement"), dated as of February 1, 2007, by and between the
Seller and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc. (the "Purchaser"); (b) the
Trade Confirmation, dated _____________ 2007, between the Seller and the
Purchaser (the "Trade Confirmation"); and (c) any other document delivered
prior hereto or on the date hereof in connection with the sale and
servicing of the Mortgage Loans in accordance with the Purchase Agreement
and the Trade Confirmation was, at the respective times of such signing and
delivery, and is as of the date hereof, duly elected or appointed,
qualified and acting as such officer or attorney-in-fact, and the
signatures of such persons appearing on such documents are their genuine
signatures.
4. Attached hereto as Attachment II is a true and correct copy of the
resolutions duly adopted by the board of directors of the Seller (the
"Resolutions") with respect to the authorization and approval of the sale
and servicing of the Mortgage Loans; said Resolutions have not been
amended, modified, annulled or revoked and are in full force and effect on
the date hereof.
5. Attached hereto as Attachment III is a Certificate of Good Standing
of the Seller. No event has occurred since which has affected the good
standing of the Seller under the laws of the State of New York.
6. All of the representations and warranties of the Seller contained
in Subsections 7.01 and 7.02 of the Purchase Agreement were true and
correct in all material respects as of the date of the Purchase Agreement
and are true and correct in all material respects as of the date hereof.
7. The Seller has performed all of its duties and has satisfied all
the material conditions on its part to be performed or satisfied prior to
the related Closing Date pursuant to the Purchase Agreement and the related
Trade Confirmation.
All capitalized terms used herein and not otherwise defined shall have
the meaning assigned to them in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Seller.
Dated:
------------------------------
Seal]
COUNTRYWIDE HOME LOANS, INC.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title: [____________________________]
I, _______________________, Secretary of the Seller, hereby certify
that _________________________ is the duly elected, qualified and acting Vice
President of the Seller and that the signature appearing above is genuine.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:
---------------------
Seal]
COUNTRYWIDE HOME LOANS, INC.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title: [Assistant] Secretary
EXHIBIT 2
[RESERVED]
EXHIBIT 3
SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
___________________________, hereby relinquishes any and all right,
title and interest it may have in and to the Mortgage Loans described in Exhibit
A attached hereto upon purchase thereof by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc.
named below pursuant to that certain Master Mortgage Loan Purchase and Servicing
Agreement, dated as of February 1, 2007, as of the date and time of receipt by
______________________________ of $__________ for such Mortgage Loans (the "Date
and Time of Sale"), and certifies that all notes, mortgages, assignments and
other documents in its possession relating to such Mortgage Loans have been
delivered and released to the Seller named below or its designees as of the Date
and Time of Sale.
Name and Address of Financial Institution
-----------------------------------------
(Name)
-----------------------------------------
(Address)
By:
-------------------------------------
II. Certification of Release
The Seller named below hereby certifies to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Lending, Inc. that, as of the Date and Time of Sale of the above mentioned
Mortgage Loans to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc., the security interests
in the Mortgage Loans released by the above named corporation comprise all
security interests relating to or affecting any and all such Mortgage Loans. The
Seller warrants that, as of such time, there are and will be no other security
interests affecting any or all of such Mortgage Loans.
COUNTRYWIDE HOME LOANS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT 4
WARRANTY ▇▇▇▇ OF SALE
On this _______ day of ________, 2007, Countrywide Home Loans, Inc.
("Seller") as the Seller under that certain Master Mortgage Loan Purchase and
Servicing Agreement, dated as of February 1, 2007 (the "Agreement") does hereby
sell, transfer, assign, set over and convey to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending,
Inc. as Purchaser under the Agreement, without recourse, but subject to the
terms of the Agreement, all rights, title and interest of the Seller in and to
the Mortgage Loans listed on the Final Mortgage Loan Schedule attached hereto,
together with the related Mortgage Files and all rights and obligations arising
under the documents contained therein. Pursuant to Subsection 6.03 of the
Agreement, the Seller has delivered to the Custodian the documents for each
Mortgage Loan to be purchased as set forth in the Agreement. The contents of
each related Servicing File required to be retained by the Seller to service the
Mortgage Loans pursuant to the Agreement and thus not delivered to the Purchaser
are and shall be held in trust by the Seller for the benefit of the Purchaser as
the owner thereof. The Seller's possession of any portion of each such Servicing
File is at the will of the Purchaser for the sole purpose of facilitating
servicing of the related Mortgage Loan pursuant to the Agreement, and such
retention and possession by the Seller shall be in a custodial capacity only.
The ownership of each Mortgage Note, Mortgage, and the contents of the Mortgage
File and Servicing File is vested in the Purchaser and the ownership of all
records and documents with respect to the related Mortgage Loan prepared by or
which come into the possession of the Seller shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by the Seller at the
will of the Purchaser in such custodial capacity only.
The Seller confirms to the Purchaser that the representation and
warranties set forth in Subsections 7.01 and 7.02 of the Agreement and in the
Trade Confirmation are true and correct as of the date hereof, and that all
statements made in the Seller's Officer's Certificates and all Attachments
thereto remain complete, true and correct in all respects as of the date hereof,
and makes the following additional representations and warranties to the
Purchaser, which additional representations and warranties are hereby
incorporated into Subsection 7.02 of the Agreement:
(1) When measured by aggregate Stated Principal Balance as of the
Cut-off Date, no more than ____________ percent (__%) of the
Mortgage Loans are Rate/Term Refinancings and no more than
_____________ percent (__%) of the Mortgage Loans are Cash-Out
Refinancings.
(2) When measured by aggregate Stated Principal Balance as of the
Cut-off Date, (i) no less than ______________ percent (__%) of
the Mortgage Loans are secured by detached one-family dwellings
or detached one-family dwellings in planned unit developments,
(ii) no more than ____________ percent (__%) of the Mortgage
Loans are secured by attached one-family dwellings in a planned
unit development, (iii) no more than ______ percent (__%) of the
Mortgage Loans are secured by individual condominium units, and
(iv) no more than _____ percent (__%)
of the Mortgage Loans are secured by detached two-to-four family
dwellings;
(3) When measured by aggregate Stated Principal Balance as of the
Cut-off Date, no more than ______ percent (__%) of the Mortgage
Loans had Loan-to-Value Ratio at origination in excess of 80%,
and the weighted average Loan-to-Value Ratio for all Mortgage
Loans at origination did not exceed __%;
(4) With respect to all of the Mortgage Loans, at the time that the
Mortgage Loan was made, the Mortgagor represented that the
Mortgagor would occupy the Mortgaged Property as the Mortgagor's
primary residence;
(5) No Mortgage Loan had a principal balance at origination in excess
of $______ and the average principal balance of the Mortgage
Loans on the Cut-off Date was not in excess of $______. When
measured by the aggregate Stated Principal Balance as of the
Cut-off Date, no more than _____ percent __% of the Mortgage
Loans had a principal balance at origination in excess of
$_________;
(6) Each Mortgage Loan has a Mortgage Interest Rate of at least _____
percent ____%. The Mortgage Loans have a weighted average
Mortgage Interest Rate of ______% as of the Cut-off Date;
(7) All of the Mortgage Loans had an original term to maturity of 30
years; and
(8) When measured by aggregate Closing Date Principal Balance as of
the Cut-off Date, no more than five percent (5%) of the Mortgage
Loans are secured by Mortgaged Properties located in the same
United States postal zip code.
2
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
COUNTRYWIDE HOME LOANS, INC.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT 5
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and which shall be retained by the Seller or delivered to the
Custodian and it is understood and agreed that the following can be provided in
an electronic copy:
(1) Mortgage Loan Documents.
(2) Residential loan application.
(3) Mortgage Loan closing statement.
(4) Verification of employment and income.
(5) Verification of acceptable evidence of source and amount of
downpayment.
(6) Credit report on Mortgagor.
(7) Residential appraisal report.
(8) Photograph of the Mortgaged Property.
(9) Survey of the Mortgaged Property.
(10) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title
policy, i.e., map or plat, restrictions, easements, sewer
agreements, home association declarations, etc.
(11) All required disclosure statements and statement of Mortgagor
confirming receipt thereof.
(12) If available, termite report, structural engineer's report, water
potability and septic certification.
(13) Sales Contract, if applicable.
(14) Hazard insurance policy.
(15) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files,
correspondence, current and historical computerized data files,
and all other processing, underwriting and closing papers and
records which are customarily contained in a mortgage loan file
and which are required to document the Mortgage Loan or to
service the Mortgage Loan.
(16) Amortization schedule, if available.
EXHIBIT 6
CUSTODIAL ACCOUNT CERTIFICATION
____________________ __, 2007
To:
-----------------------------------
-----------------------------------
-----------------------------------
(the "Depository")
As Seller under the Master Mortgage Loan Purchase and Servicing
Agreement, (the "Agreement") dated as of February 1, 2007, we hereby authorize
and request you to establish an account, as a Custodial Account, to be
designated as "Countrywide Home Loans, Inc., as Servicer, in trust for ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Lending, Inc." All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Seller in accordance with the
Agreement. You may refuse any deposit which would result in violation of the
requirement that the account be fully insured as described below. This letter is
submitted to you in duplicate. Please execute and return one original to us.
COUNTRYWIDE HOME LOANS, INC.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
The undersigned, as Depository, hereby certifies that the
above-described account has been established as a Custodial Account pursuant to
the Agreement under Account Number ___________ at the office of the Depository
indicated above, and agrees to honor withdrawals on such account as provided
above. The full amount deposited at any time in the account will be insured by
the Federal Deposit Insurance Corporation through the Bank Insurance Fund
("BIF") or the Savings Association Insurance Fund ("SAIF").
----------------------------------------
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
EXHIBIT 7
ESCROW ACCOUNT CERTIFICATION
__________ __, 2007
To:
-----------------------------------
-----------------------------------
-----------------------------------
(the "Depository")
As Seller under the Master Mortgage Loan Purchase and Servicing
Agreement, (the "Agreement") dated as of February 1, 2007, we hereby authorize
and request you to establish an account, as an Escrow Account, to be designated
as "Countrywide Home Loans, Inc., in trust for the Purchaser and various
Mortgagors, Fixed and Adjustable Rate Mortgage Loans." All deposits in the
account shall be subject to withdrawal therefrom by order signed by the Seller
in accordance with the Agreement. You may refuse any deposit which would result
in violation of the requirement that the account be fully insured as described
below. This letter is submitted to you in duplicate. Please execute and return
one original to us.
COUNTRYWIDE HOME LOANS, INC.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
The undersigned, as Depository, hereby certifies that the
above-described account has been established as an Escrow Account pursuant to
the Agreement under Account Number ___________ at the office of the Depository
indicated above, and agrees to honor withdrawals on such account as provided
above. The full amount deposited at any time in the account will be insured by
the Federal Deposit Insurance Corporation through the Bank Insurance Fund
("BIF") or the Savings Association Insurance Fund ("SAIF").
----------------------------------------
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
EXHIBIT 8
SERVICING ADDENDUM
Section 11.01. Seller to Act as Servicer.
The Seller, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and shall have
full power and authority, acting alone or through the utilization of a
Subservicer or a Subcontractor, to do or cause to be done any and all things in
connection with such servicing and administration which the Seller may deem
necessary or desirable and consistent with the terms of this Agreement.
Consistent with the terms of this Agreement, the Seller may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Seller's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser; provided, however, that the Seller shall not, without the prior
written consent of the Purchaser, permit any modification with respect to any
Mortgage Loan that would change the Mortgage Interest Rate, defer or forgive the
payment thereof or of any principal or interest payments, reduce the outstanding
principal amount (except for actual payments of principal), make additional
advances of additional principal or extend the final maturity date on such
Mortgage Loan. Without limiting the generality of the foregoing, the Seller
shall continue, and is hereby authorized and empowered, to execute and deliver
on behalf of itself, and the Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Property. If reasonably required by the Seller, the Purchaser shall
furnish the Seller with any powers of attorney and other documents necessary or
appropriate to enable the Seller to carry out its servicing and administrative
duties under this Agreement.
In servicing and administering the Mortgage Loans, the Seller shall
employ procedures including collection procedures and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted mortgage
servicing practices of prudent lending institutions and the Purchaser's reliance
on the Seller.
The Servicer has in place, and will maintain throughout the term of
this Agreement, a procedure by which it confirms, on an ongoing basis, that no
Mortgage Loan is subject to nullification pursuant to Executive Order 13224 (the
"Executive Order") or regulations promulgated by the Office of Foreign Assets
Control of the United States Department of the Treasury (the "OFAC Regulations")
or in violation of the Executive Order or the OFAC Regulations, and no Mortgagor
is subject to the provisions of such Executive Order or the OFAC Regulations nor
listed as a "specially designated national or blocked person" for purposes of
the OFAC Regulations.
Notwithstanding anything in this Agreement to the contrary, in the
event of a Principal Prepayment in full or in part of a Mortgage Loan, the
Seller may not waive any Prepayment Charge or portion thereof required by the
terms of the related Mortgage Note, unless
required to do so pursuant to any law or regulation in effect at the time of the
prepayment. The Seller shall collect any Prepayment Charge required to be paid
by the Mortgagor under the terms of any Mortgage Note for the account of the
Purchaser. The Seller shall remit the amount of such Prepayment Charge to the
Purchaser on the Remittance Date immediately following the date of collection of
such Prepayment Charge. If the Seller 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 Seller, the Seller shall deposit the
amount of such Prepayment Charge (or such portion thereof as had been waived for
deposit) into the Custodial Account for distribution in accordance with the
terms of this Agreement.
Section 11.02. Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on
all Mortgage Loans serviced by Seller are paid in full, the Seller shall proceed
diligently to collect all payments due under each Mortgage Loan serviced by
Seller when the same shall become due and payable and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any related Primary Insurance Policy or LPMI Policy, follow such collection
procedures as it follows with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Further, the Seller shall take
special care in ascertaining and estimating annual ground rents, taxes,
assessments, water rates, fire and hazard insurance premiums, mortgage insurance
premiums, and all other charges that, as provided in the Mortgage, will become
due and payable to the end that the installments payable by the Mortgagors will
be sufficient to pay such charges as and when they become due and payable.
Section 11.03. Realization Upon Defaulted Mortgage Loans.
(a) The Seller shall use its best efforts, consistent with the
procedures that the Seller would use in servicing loans for its own account, to
foreclose upon or otherwise comparably convert the ownership of such Mortgaged
Properties as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 11.01. The Seller shall use its best efforts to realize upon defaulted
Mortgage Loans in such a manner as will maximize the receipt of principal and
interest by the Purchaser, taking into account, among other things, the timing
of foreclosure proceedings. The foregoing is subject to the provisions that, in
any case in which Mortgaged Property shall have suffered damage, the Seller
shall not be required to expend its own funds toward the restoration of such
property in excess of $2,000 unless it shall determine in its discretion (i)
that such restoration will increase the proceeds of liquidation of the related
Mortgage Loan to Purchaser after reimbursement to itself for such expenses, and
(ii) that such expenses will be recoverable by the Seller through Insurance
Proceeds or Liquidation Proceeds from the related Mortgaged Property, as
contemplated in Section 11.06. In the event that any payment due under any
Mortgage Loan is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period, the
Seller shall take such action as it shall deem to be in the best interest of the
Purchaser. In the event that any payment due under any Mortgage Loan remains
delinquent for a period of ninety (90) days or more, the Seller shall commence
foreclosure proceedings and obtain a property inspection and provide a report of
such inspection to the Purchaser within fifteen (15) days following the Mortgage
Loan becoming
2
ninety (90) days delinquent. Thereafter, Seller shall obtain a property
inspection report on a monthly basis and deliver such report to Purchaser so
long as the Mortgage Loan remains ninety (90) days delinquent. The Seller shall
notify the Purchaser in writing of the commencement of foreclosure proceedings.
In such connection, the Seller shall be responsible for all costs and expenses
incurred by it in any such proceedings; provided, however, that it shall be
entitled to reimbursement thereof from the related Mortgaged Property, as
contemplated in Section 11.06.
(b) Notwithstanding the foregoing provisions of this Section 11.03,
with respect to any Mortgage Loan as to which the Seller has received actual
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the related Mortgaged Property the Seller shall not either (i)
obtain title to such Mortgaged Property as a result of or in lieu of foreclosure
or otherwise, or (ii) otherwise acquire possession of, or take any other action,
with respect to, such Mortgaged Property if, as a result of any such action, the
Purchaser would be considered to hold title to, to be a mortgagee-in-possession
of, or to be an owner or operator of such Mortgaged Property within the meaning
of the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Seller has
also previously determined, based on its reasonable judgment and a prudent
report prepared by a Person who regularly conducts environmental audits using
customary industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Purchaser to take such actions as are necessary to
bring the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based
materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any federal, state or
local law or regulation, or that if any such materials are present for
which such action could be required, that it would be in the best
economic interest of the Purchaser to take such actions with respect
to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 11.03 shall be advanced by the Seller, subject to the Seller's right to
be reimbursed therefor from the Custodial Account as provided in Section 11.06.
If the Seller determines, as described above, that it is in the best
economic interest of the Purchaser to take such actions as are necessary to
bring any such Mortgaged Property into compliance with applicable environmental
laws, or to take such action with respect to the containment, clean-up or
remediation of hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials affecting any such Mortgaged Property, then the Seller
shall take such action as it deems to be in the best economic interest of the
Purchaser. The cost of any such compliance, containment, cleanup or remediation
shall be advanced by the Seller, subject to the Seller's right to be reimbursed
therefor from the Custodial Account as provided in Section 11.06.
3
(c) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds in respect of any Mortgage Loan, will
be applied in the following order of priority: first, to reimburse the Seller
for any related unreimbursed Servicing Advances, pursuant to Section 11.06;
second, to accrued and unpaid interest on the Mortgage Loan, to the date of the
Final Recovery Determination, or to the Due Date prior to the Remittance Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Seller as follows: first, to unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
Section 11.04. Establishment of Payment Clearing Accounts.
The Seller shall maintain one or more Payment Clearing Accounts for
the deposit of all funds collected in connection with the Mortgage Loans. The
Seller shall deposit in the Payment Clearing Account prior to the opening of
business on the Business Day following the day on which such amounts are
received by the Seller, all payments and collections received in connection with
the Mortgage Loans subsequent to the Cut-off Date or prior to the Cut-off Date
but allocable to a period subsequent to such date. The funds deposited and held
in the Payment Clearing Account may be commingled with other funds, including
the proceeds of other mortgage loans or funds serviced for other investors or
for the Seller's own portfolio. The Seller shall transfer funds deposited into
the Payment Clearing Account to the Custodial Accounts and Escrow Accounts, as
provided in Sections 11.05 and 11.07, within two (2) Business Days.
The Seller's account agreement for the Payment Clearing Account shall
provide that such account is a special deposit, required to be segregated and
held by the depository institution maintaining such account in a fiduciary
capacity, separate and apart from the institution's own funds and general assets
and that the account shall not be held in any capacity that would create a
debtor-creditor relationship between the institution and the Seller or the
Purchaser. At all times, Purchaser shall be the sole beneficial owner of the
funds in the Payment Clearing Accounts received in connection with the Mortgage
Loans and Seller's possession or control of any such funds shall be solely in
Seller's capacity as collecting agent for Purchaser.
Section 11.05 Establishment of Custodial Accounts; Deposits in
Custodial Accounts.
(a) The Seller shall establish and maintain one or more Custodial
Accounts for the deposit of funds specified in Section 11.05(b) collected in
connection with the Mortgage Loans.
(b) The Seller shall transfer the following funds into the applicable
Custodial Account within two (2) Business Days of receipt:
(i) all payments on account of principal on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans;
4
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Sections 11.11 and 11.12, other than
proceeds to be held in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or released to
the Mortgagor in accordance with the Seller's normal servicing
procedures, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged Property
which are not released to the Mortgagor in accordance with the
Seller's normal servicing procedures, the loan documents or
applicable law;
(vi) all Monthly Advances;
(vii) all proceeds of any Mortgage Loan repurchased in accordance
with Subsections 7.03 and 7.04 and all amounts required to be
deposited by the Seller in connection with shortfalls in
principal amount of Qualified Substitute Mortgage Loans pursuant
to Subsection 7.03;
(viii) any amounts required to be deposited by the Seller
pursuant to Section 11.12 in connection with the deductible
clause in any blanket hazard insurance policy. Such deposit shall
be made from the Seller's own funds, without reimbursement
therefor;
(ix) any amounts required to be deposited by the Seller in
connection with any REO Property pursuant to Section 11.14;
(x) any amounts required to be deposited in the Custodial Account
pursuant to Sections 11.20 or 11.21;
(xi) with respect to each Principal Prepayment, the Prepayment
Interest Shortfall Amount (to be paid by the Seller out of its
own funds without reimbursement therefor) which shall not exceed
the aggregate Servicing Fee actually received for such month; and
(xii) all Prepayment Charges.
The foregoing requirements for deposit in the Custodial Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
Prepayment Charges, assumption fees and similar fees and charges, to the extent
permitted by Section 11.01, need not be deposited by the Seller in the Custodial
Account. Each Custodial Account shall be an Eligible Account. The Seller shall
give notice to the Purchaser of the location of the Custodial Account when
established and prior to any change thereto.
Any amounts held in the Custodial Account may be, but are not required
to be, invested by the Seller. Any such investment by the Seller must be in
Eligible Investments. Any interest or other income on Eligible Investments shall
accrue to the benefit of the Seller and the
5
Seller shall be entitled to retain and withdraw such funds from the Custodial
Account pursuant to Section 11.06. Other than such interest or other income
received on Eligible Investments, no other amounts may be commingled in the
Custodial Account. The Seller shall promptly deposit in the Custodial Account
from its own funds, without any right of reimbursement, the full amount of any
losses on its investment of funds in the Custodial Account.
(c) Without limiting the foregoing, the funds in the Custodial
Accounts shall at all times be segregated and held separate and apart from the
Seller's own funds and general assets and from any other funds or assets
collected or held by the Seller on behalf of third parties. The Seller's account
agreement for each Custodial Account shall provide that such account is a
special deposit, required to be segregated and held by the depository
institution maintaining such account in a fiduciary capacity, separate and apart
from the institution's own funds and general assets and that the account shall
not be held in any capacity that would create a debtor-creditor relationship
between the institution and the Seller or the Purchaser. Each Custodial Account
shall be evidenced by a Custodial Account Certification in the form of Exhibit 6
and shall be entitled "Countrywide Home Loans, Inc., as servicer, in trust for
the Purchaser". At all times, the Purchaser shall be the sole beneficial owner
of all funds in the Custodial Accounts. Seller's possession or control of any
such funds shall be solely in Seller's capacity as collecting agent for the
Purchaser.
Section 11.06 Withdrawals From Custodial Accounts.
The Seller may, from time to time, withdraw from the Custodial Account
for the following purposes:
(i) to make distributions to the Purchaser in the amounts and in the
manner provided for in Section 11.15;
(ii) to reimburse itself for Monthly Advances, the Seller's right to
reimburse itself pursuant to this subclause (ii) being limited to amounts
received on the related Mortgage Loan which represent late collections (net of
the related Servicing Fee and LPMI Fee, if applicable) respecting which any such
advance was made it being understood that, in the case of such reimbursement,
the Seller's right thereto shall be prior to the rights of Purchaser, except
that, where the Seller is required to repurchase a Mortgage Loan, pursuant to
Subsection 7.03, the Seller's right to such reimbursement shall be subsequent to
the payment to the Purchaser of the Repurchase Price pursuant to Subsection
7.03, and all other amounts required to be paid to the Purchaser with respect to
such Mortgage Loans;
(iii) to reimburse itself for unreimbursed Servicing Advances, the
Seller's right to reimburse itself pursuant to this subclause (iii) with respect
to any Mortgage Loan being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds and such other amounts as may be collected by the
Seller from the Mortgagor or otherwise relating to the Mortgage Loan, it being
understood that, in the case of such reimbursement, the Seller's right thereto
shall be prior to the rights of the Purchaser, except that, where the Seller is
required to repurchase a Mortgage Loan, pursuant to Subsection 7.03, the
Seller's right to such reimbursement shall be subsequent to the payment to the
Purchaser of the Repurchase Price
6
pursuant to Subsection 7.03 and all other amounts required to be paid to the
Purchaser with respect to such Mortgage Loans;
(iv) to pay to itself pursuant to Section 11.23 as servicing
compensation (a) any interest earned on funds in the Custodial Account (all such
interest to be withdrawn monthly not later than each Remittance Date), and (b)
the Servicing Fee and the LPMI Fee, if applicable, from that portion of any
payment or recovery attributable to interest on a particular Mortgage Loan;
(v) to pay to itself with respect to each Mortgage Loan that has been
repurchased pursuant to Subsection 7.03, all amounts received thereon and not
distributed as of the date on which the related Repurchase Price is determined;
(vi) to reimburse the Seller for any Monthly Advance previously made
which the Seller has determined to be a Nonrecoverable Monthly Advance;
(vii) to pay, or to reimburse itself for advances in respect of,
expenses incurred in connection with any Mortgage Loan pursuant to Section
11.03(b), but only to the extent of amounts received in respect of the Mortgage
Loans to which such expense is attributable;
(viii) to clear and terminate the Custodial Account on the termination
of this Agreement; and
(ix) to reimburse itself for any amounts deposited in the Custodial
Account in error.
The Seller shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Custodial Account pursuant to such subclauses (ii) - (vii) above.
Section 11.07. Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
(a) The Seller shall establish one or more Escrow Accounts for the
deposit of Escrow Payments. Seller shall segregate and hold all funds collected
and received in connection with the Mortgage Loans which constitute Escrow
Payments separate and apart from any of its own funds and general assets and
from any other funds or amounts collected or held by the Seller on behalf of
third parties.
(b) The Seller shall transfer into the applicable Escrow Account
within two (2) Business Days of receipt thereof, and retain therein the
following payments and collections:
(i) Mortgagors' Escrow Payments collected in connection with the
Mortgage Loans, for the purpose of effecting timely payment of any
such items as required under the terms of this Agreement; and
(ii) all Insurance Proceeds which are to be applied to the restoration
or repair of any Mortgaged Property.
7
The Seller shall make withdrawals therefrom only to effect such
payments as are required under this Agreement, and for such other purposes as
shall be as set forth or in accordance with Section 11.08.
(c) Each Escrow Account will be maintained at the expense of the
Seller at a Qualified Depository. Such accounts may be interest-bearing accounts
provided that such accounts comply with all federal state or local laws, any
other requirements of any government or any agency or instrumentality thereof
applicable to the origination and servicing of the Mortgage Loans, the
management of the Mortgage Property, and the provision of services hereunder by
the Seller as well as all local, state and federal laws and regulations
governing interest-bearing accounts and borrower escrow accounts. Each Escrow
Account shall be evidenced by an Escrow Account Certification, in the form of
Exhibit 7 and shall be entitled "Countrywide Home Loans, Inc., as servicer, in
trust for the Purchaser and various Mortgagors, Fixed and Adjustable Rate
Mortgage Loans." The Seller shall ensure that all interest credited to any
account that is not due the respective Mortgager is removed by the Seller within
thirty (30) days of receipt of such interest.
Section 11.08. Withdrawals From Escrow Accounts.
The Seller shall make withdrawals from the applicable Escrow Account
for the following:
(i) to effect timely payments of Mortgagors' Escrow Payments;
(ii) to reimburse the Seller for any Servicing Advance made by
the Seller with respect to a related Mortgage Loan but only from
amounts received on the related Mortgage Loan that represent late
payments or collections of Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds determined to be
overages;
(iv) for transfer to the Custodial Account in accordance with the
terms of this Agreement;
(v) for application to restoration or repair of the Mortgaged
Property;
(vi) to pay to the Seller, or to the Mortgagor, to the extent
required by law, any interest paid on the funds deposited in the
Escrow Account;
(vii) to clear and terminate the Escrow Account on the
termination of this Agreement; and
(viii) to reimburse itself for any amounts deposited in the
Escrow Account in error.
The Seller shall be entitled to retain any interest paid on funds
deposited in the Escrow Account by the depository institution other than
interest on escrowed funds required by law to be paid to the Mortgagor and, to
the extent required by law, the Seller shall pay interest on
8
escrowed funds to the Mortgagor notwithstanding that the Escrow Account is
non-interest bearing or that interest paid thereon is insufficient for such
purposes. If Seller elects or is required by law to deposit a Mortgagor's Escrow
funds into an interest-bearing account, the Seller shall remain obligated to pay
the Mortgagor's taxes and insurance premiums when due, even if the Mortgagor's
Escrow funds are not withdrawable on demand.
Section 11.09. Payment of Taxes, Insurance and Other Charges;
Maintenance of Primary Insurance Policies and LPMI Policies; Collections
Thereunder.
With respect to each Mortgage Loan, the Seller shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates
and other charges which are or may become a lien upon the Mortgaged Property and
the status of Primary Insurance Policy and LPMI Policy premiums and fire and
hazard insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges, including insurance renewal premiums and shall effect
payment thereof prior to the applicable penalty or termination date and at a
time appropriate for securing maximum discounts allowable, employing for such
purpose deposits of the Mortgagor in the Escrow Account which shall have been
estimated and accumulated by the Seller in amounts sufficient for such purposes,
as allowed under the terms of the Mortgage and applicable law. To the extent
that the Mortgage does not provide for Escrow Payments, the Seller shall
determine that any such payments are made by the Mortgagor at the time they
first become due. The Seller assumes full responsibility for the timely payment
of all such bills and shall effect timely payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make advances from its own funds to
effect such payments.
If applicable, the Seller shall maintain in full force and effect, a
Primary Insurance Policy, issued by a Qualified Insurer, with respect to each
Mortgage Loan for which such coverage is required. Such coverage shall be
maintained until the Loan-to-Value Ratio of the related Mortgage Loan is reduced
to that amount for which FNMA no longer requires such insurance to be
maintained. The Seller will not cancel or refuse to renew any Primary Insurance
Policy in effect on the Closing Date that is required to be kept in force under
this Agreement unless a replacement Primary Insurance Policy or LPMI Policy for
such cancelled or non-renewed policy is obtained from and maintained with a
Qualified Insurer. The Seller shall not take any action which would result in
non-coverage under any applicable Primary Insurance Policy or LPMI Policy of any
loss which, but for the actions of the Seller, would have been covered
thereunder. In connection with any assumption or substitution agreement entered
into or to be entered into pursuant to Section 11.20, the Seller shall promptly
notify the insurer under the related Primary Insurance Policy or LPMI Policy, if
any, of such assumption or substitution of liability in accordance with the
terms of such policy and shall take all actions which may be required by such
insurer as a condition to the continuation of coverage under the Primary
Insurance Policy or LPMI Policy. If such Primary Insurance Policy or LPMI Policy
is terminated as a result of such assumption or substitution of liability, the
Seller shall obtain a replacement Primary Insurance Policy or LPMI Policy as
provided above.
In connection with its activities as servicer, the Seller agrees to
prepare and present, on behalf of itself, and the Purchaser, claims to the
insurer under any Primary Insurance Policy or LPMI Policy, if applicable, in a
timely fashion in accordance with the terms of such
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policies and, in this regard, to take such action as shall be necessary to
permit recovery under any Primary Insurance Policy or LPMI Policy respecting a
defaulted Mortgage Loan. Pursuant to Section 11.04, any amounts collected by the
Seller under any Primary Insurance Policy or LPMI Policy shall be deposited in
the Custodial Account, subject to withdrawal pursuant to Section 11.06.
Section 11.10 Transfer of Accounts.
The Seller may transfer the Payment Clearing Account, Custodial
Account or the Escrow Account and all funds and investments therein to a
different Qualified Depository from time to time. Such transfer shall be made
only upon prior written notice to the Purchaser. In any case, the Payment
Clearing Account, Custodial Account and Escrow Account shall be Eligible
Accounts.
If any one of the Investment Ratings of a Qualified Depository holding
funds or Eligible Investments in the Payment Clearing Account, Custodial Account
or Escrow Account as an Eligible Account is downgraded by the issuing rating
agency, the Seller shall, within three (3) Business Days of receipt of notice of
the downgrading, transfer all such accounts, funds and Eligible Investments to a
different Qualified Depository in accordance with this Agreement.
Section 11.11 Maintenance of Hazard Insurance.
The Seller shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is customary in the area where
the Mortgaged Property is located in an amount which is at least equal to the
lesser of (i) the amount necessary to fully compensate for any damage or loss to
the improvements which are a part of such property on a replacement cost basis
or (ii) the outstanding principal balance of the Mortgage Loan, in each case in
an amount not less than such amount as is necessary to prevent the Mortgagor
and/or the Mortgagee from becoming a co-insurer. If the Mortgaged Property is in
an area identified on a Flood Hazard Boundary Map or Flood Insurance Rate Map
issued by the Flood Emergency Management Agency as having special flood hazards
and such flood insurance has been made available, the Seller will cause to be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the lesser
of (i) the outstanding principal balance of the Mortgage Loan or (ii) the
maximum amount of insurance which is available under the National Flood
Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended.
The Seller also shall maintain on any REO Property, fire and hazard insurance
with extended coverage in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage Loan
at the time it became an REO Property plus accrued interest at the Mortgage
Interest Rate and related Servicing Advances, liability insurance and, to the
extent required and available under the National Flood Insurance Act of 1968 or
the Flood Disaster Protection Act of 1973, as amended, flood insurance in an
amount as provided above. Pursuant to Section 11.04, any amounts collected by
the Seller under any such policies other than amounts to be deposited in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or REO Property, or released to the Mortgagor in accordance with the
Seller's normal servicing procedures, shall be deposited in the Custodial
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Account, subject to withdrawal pursuant to Section 11.06. Any cost incurred by
the Seller in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Purchaser, be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake or other
additional insurance need be required by the Seller or the Mortgagor or
maintained on property acquired in respect of the Mortgage Loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. All such policies shall be
endorsed with standard mortgagee clauses with loss payable to the Seller, or
upon request to the Purchaser, and shall provide for at least thirty (30) days
prior written notice of any cancellation, reduction in the amount of, or
material change in, coverage to the Seller. The Seller shall not interfere with
the Mortgagor's freedom of choice in selecting either his insurance carrier or
agent, provided, however, that the Seller shall not accept any such insurance
policies from insurance companies unless such companies are acceptable to FNMA
or FHLMC and are licensed to do business in the state wherein the property
subject to the policy is located.
Section 11.12 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Seller shall obtain and maintain a mortgage
impairment or blanket policy issued by an issuer acceptable to FNMA or FHLMC
insuring against hazard losses on all of Mortgaged Properties securing the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 11.11 and otherwise complies
with all other requirements of Section 11.11, the Seller shall conclusively be
deemed to have satisfied its obligations as set forth in Section 11.11, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Seller shall, in the event that there shall not have been maintained on
the related Mortgaged Property or REO Property a policy complying with Section
11.11, and there shall have been one or more losses which would have been
covered by such policy, deposit in the Custodial Account the amount not
otherwise payable under the blanket policy because of such deductible clause. In
connection with its activities as servicer of the Mortgage Loans, the Seller
agrees to prepare and present, on behalf of the Purchaser, claims under any such
blanket policy in a timely fashion in accordance with the terms of such policy.
Upon request of the Purchaser, the Seller shall cause to be delivered to the
Purchaser a certified true copy of such policy and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without thirty (30) days prior written notice to the Purchaser.
Section 11.13 Fidelity Bond, Errors and Omissions Insurance.
The Seller shall maintain, at its own expense, a blanket fidelity bond
and an errors and omissions insurance policy, with broad coverage with
responsible companies that would meet the requirements of FNMA or FHLMC on all
officers, employees or other persons acting in any capacity with regard to the
Mortgage Loans to handle funds, money, documents and papers relating to the
Mortgage Loans. The fidelity bond and errors and omissions insurance shall be in
the form of the Mortgage Banker's Blanket Bond and shall protect and insure the
Seller against losses, including forgery, theft, embezzlement, fraud, errors and
omissions and negligent acts of such persons. Such fidelity bond shall also
protect and insure the Seller against losses in connection with the failure to
maintain any insurance policies required pursuant to this
11
Agreement and the release or satisfaction of a Mortgage Loan without having
obtained payment in full of the indebtedness secured thereby. No provision of
this Section 11.13 requiring the fidelity bond and errors and omissions
insurance shall diminish or relieve the Seller from its duties and obligations
as set forth in this Agreement. The minimum coverage under any such bond and
insurance policy shall be at least equal to the corresponding amounts required
by FNMA in the FNMA Servicing Guide or by FHLMC in the FHLMC Sellers' and
Servicers' Guide. Upon request of the Purchaser, the Seller shall cause to be
delivered to the Purchaser a certified true copy of the fidelity bond and
insurance policy and a statement from the surety and the insurer that such
fidelity bond or insurance policy shall in no event be terminated or materially
modified without thirty (30) days' prior written notice to the Purchaser.
Section 11.14 Title, Management and Disposition of REO Property.
In the event that title to the Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Seller, as servicer, or in the event such
person is not authorized or permitted to hold title to real property in the
state where the REO Property is located, or would be adversely affected under
the "doing business" or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an opinion of counsel obtained by the Seller from an
attorney duly licensed to practice law in the state where the REO Property is
located. Any Person or Persons holding such title other than the Purchaser shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Purchaser.
The Seller shall either itself or through an agent selected by the
Seller, manage, conserve, protect and operate each REO Property (and may
temporarily rent the same) in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the
same manner that similar property in the same locality as the REO Property is
managed. If a REMIC election is or is to be made with respect to the arrangement
under which the Mortgage Loans and any REO Property are held, the Seller shall
manage, conserve, protect and operate each REO Property in a manner which does
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code or result in the receipt by such
REMIC of any "income from non- permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" within
the meaning of Section 860G(c)(2) of the Code. The Seller shall cause each REO
Property to be inspected promptly upon the acquisition of title thereto and
shall cause each REO Property to be inspected at least annually thereafter. The
Seller shall make or cause to be made a written report of each such inspection.
Such reports shall be retained in the Mortgage File and copies thereof shall be
forwarded by the Seller to the Purchaser. The Seller shall use its best efforts
to dispose of the REO Property as soon as possible and shall sell such REO
Property in any event within one year after title has been taken to such REO
Property, unless the Seller determines, and gives appropriate notice to the
Purchaser, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than one year is necessary to sell any REO
property, (i) the Seller shall report monthly to the Purchaser as to the
progress being made in selling such REO Property and (ii) if, with the written
consent of the Purchaser, a purchase money mortgage is taken in connection with
such sale, such purchase money mortgage shall name the Seller as mortgagee, and
a separate servicing agreement between the Seller and the Purchaser shall be
entered into with respect to such purchase money mortgage.
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Notwithstanding the foregoing, if a REMIC election is made with respect to the
arrangement under which the Mortgage Loans and the REO Property are held, such
REO Property shall be disposed of within two years or such other period as may
be permitted under Section 860G(a)(8) of the Code.
The Seller shall deposit or cause to be deposited, within two (2)
business days in each Custodial Account all revenues received with respect to
the related REO Property and shall withdraw therefrom funds necessary for the
proper operation, management and maintenance of the REO Property, including the
cost of maintaining any hazard insurance pursuant to Section 11.11 hereof and
the fees of any managing agent acting on behalf of the Seller. The Seller shall
maintain separate records with respect to each REO Property identifying all
deposits and withdrawals from the Custodial Account for each REO Property.
The Seller shall furnish to the Purchaser on each Remittance Date, an
operating statement for each REO Property covering the operation of each REO
Property for the previous month. Such operating statement shall be accompanied
by such other information as the Purchaser shall reasonably request.
Each REO Disposition shall be carried out by the Seller at such price
and upon such terms and conditions as the Seller deems to be in the best
interest of the Purchaser only with the prior written consent of the Purchaser.
If as of the date title to any REO Property was acquired by the Seller there
were outstanding unreimbursed Servicing Advances and unpaid servicing fees with
respect to the REO Property, the Seller, upon an REO Disposition of such REO
Property, shall be entitled to reimbursement for any related unreimbursed
Servicing Advances and unpaid servicing fees from proceeds received in
connection with such REO Disposition. The proceeds from the REO Disposition, net
of any payment to the Seller as provided above, shall be deposited in the
Custodial Account and shall be transferred to the Custodial Account on the
Determination Date in the month following receipt thereof for distribution on
the succeeding Remittance Date in accordance with Section 11.15.
With respect to each REO Property, the Seller shall segregate and hold
all funds collected and received in connection with the operation of the REO
Property separate and apart from its own funds or general assets and shall
maintain separate records and reports with respect to the funds received and
distributed on an REO Property by REO Property basis.
Section 11.15 Distributions.
On each Remittance Date, the Seller shall distribute to the Purchaser
(i) all amounts credited to the Custodial Account as of the close of business on
the preceding Determination Date, net of charges against or withdrawals from the
Custodial Account pursuant to Section 11.06;. plus (ii) all Monthly Advances, if
any, which the Seller is obligated to distribute pursuant to Section 11.22,
minus (iii) any amounts attributable to Principal Prepayments received after the
last day of the Calendar month immediately preceding the related Remittance Date
and (iv) any amounts attributable to Monthly Prepayments collected but due on a
Due Date or Dates subsequent to the preceding Determination Date.
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All distributions made to the Purchaser on each Remittance Date will
be made to the Purchaser of record on the preceding Record Date, and shall be
based on the Mortgage Loans owned and held by the Purchaser, and shall be made
by wire transfer of immediately available funds to the account of the Purchaser
at a bank or other entity having appropriate facilities therefor.
With respect to any remittance received by the Purchaser on or after
the second Business Day following the Business Day on which such payment was
due, the Seller shall pay to the Purchaser interest on any such late payment at
an annual rate equal to the rate of interest as is publicly announced from time
to time at its principal office by JPMorgan, New York, New York, as its prime
lending rate, adjusted as of the date of each change, plus one percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be paid by the Seller to the Purchaser on the date such
late payment is made and shall cover the period commencing with the day
following such second Business Day and ending with the Business Day on which
such payment is made, both inclusive. Such interest shall be remitted along with
such late payment. The payment by the Seller of any such interest shall not be
deemed an extension of time for payment or a waiver of any Event of Default by
the Seller.
Section 11.16 Remittance Reports.
No later than the fifth Business Day of each month, the Seller shall
furnish to the Purchaser or its designee an electronic copy of the determination
data with respect to the related Remittance Date, together with such other
information with respect to the Mortgage Loans as the Purchaser may reasonably
require to allocate distributions made pursuant to this Agreement and provide
appropriate statements with respect to such distributions. In addition to the
information set forth in the Remittance Report, such report shall also set
forth, for each Mortgage Loan, (i) the Mortgage Interest Rate; (ii) the amount
of any shortfall in the Servicing Fee due to delinquencies; (iii) the amount of
any delinquency in the scheduled payment of principal and interest delineated at
30 days, 60 days and greater than 90 days past due; and (iv) such other
information as may be reasonably requested by the Purchaser.
Section 11.17 Statements to the Purchaser.
The Seller shall provide the Purchaser with such information
concerning the Mortgage Loans as is necessary for the Purchaser to prepare its
federal income tax return and as the Purchaser may reasonably request from time
to time. The Purchaser agrees to pay for all reasonable out-of-pocket expenses
incurred by the Seller in connection with complying with any request made by the
Purchaser hereunder if such information is not customarily provided by the
Purchaser in the ordinary course of servicing mortgage loans similar to the
Mortgage Loans.
Section 11.18 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 11.14, with
respect to any REO Property, the Seller shall furnish to the Purchaser a
statement covering the Seller's efforts in connection with the sale of such REO
Property and any rental of such REO Property incidental to the sale thereof for
the previous month, together with the operating statement. Such
14
statement shall be accompanied by such other information as the Purchaser shall
reasonably request.
Section 11.19 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Purchaser pursuant to a deed-in-lieu of foreclosure, the Seller
shall submit to the Purchaser a liquidation report with respect to such
Mortgaged Property.
Section 11.20 Assumption Agreements.
The Seller shall, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of the Mortgaged Property (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause applicable thereto; provided, however, that the Seller
shall not exercise any such rights if prohibited by law from doing so or if the
exercise of such rights would impair or threaten to impair any recovery under
the related Primary Insurance Policy or LPMI Policy, if any. If the Seller
reasonably believes it is unable under applicable law to enforce such
"due-on-sale" clause, the Seller shall enter into an assumption agreement with
the person to whom the Mortgaged Property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. Where an assumption is allowed pursuant to this Section 11.20,
the Seller, with the prior written consent of the insurer under the Primary
Insurance Policy or LPMI Policy, if any, is authorized to enter into a
substitution of liability agreement with the person to whom the Mortgaged
Property has been conveyed or is proposed to be conveyed pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the related Mortgage Note. Any such
substitution of liability agreement shall be in lieu of an assumption agreement.
In connection with any such assumption or substitution of liability,
the Seller shall follow the underwriting practices and procedures of prudent
mortgage lenders in the state in which the related Mortgaged Property is
located. With respect to an assumption or substitution of liability, the
Mortgage Interest Rate, the amount of the Monthly Payment, and the final
maturity date of such Mortgage Note may not be changed. The Seller shall notify
the Purchaser that any such substitution of liability or assumption agreement
has been completed by forwarding to the Purchaser the original of any such
substitution of liability or assumption agreement, which document shall be added
to the related Mortgage File and shall, for all purposes, be considered a part
of such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Any fee collected by the Seller for entering into
an assumption or substitution of liability agreement in excess of 1% of the
outstanding principal balance of the Mortgage Loan shall be deposited in the
Custodial Account pursuant to Section 11.05.
Notwithstanding the foregoing paragraphs of this Section or any other
provision of this Agreement, the Seller 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
15
or any assumption which the Seller may be restricted by law from preventing, for
any reason whatsoever. For purposes of this Section 11.20, the term "assumption"
is deemed to also include a sale of the Mortgaged Property subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 11.21 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Seller of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Seller will immediately notify the Purchaser by
a certification of a servicing officer of the Seller (a "Servicing Officer"),
which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required to
be deposited in the Custodial Account pursuant to Section 11.05 have been or
will be so deposited, and shall request execution of any document necessary to
satisfy the Mortgage Loan and delivery to it the portion of the Mortgage File
held by the Purchaser or the Purchaser's designee. Upon receipt of such
certification and request, the Purchaser shall within five (5) Business Days
release the related mortgage documents to the Seller and the Seller shall
prepare and process any satisfaction or release. No expense incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Custodial Account or the Purchaser. Notwithstanding the
foregoing, in the event that the Purchaser fails to release or cause to be
released to the Seller the related Mortgage Loan Documents within five (5)
Business Days of the Seller's written request therefor, the Purchaser shall be
liable to the Seller for any additional expenses or costs, including, but not
limited to, outsourcing fees and penalties, incurred by the Seller resulting
from such failure.
In the event the Seller satisfies or releases a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage or
should it otherwise prejudice any right the Purchaser may have under the
mortgage instruments, the Seller, upon written demand, shall remit to the
Purchaser the then outstanding principal balance of the related Mortgage Loan by
deposit thereof in the Custodial Account. The Seller shall maintain the fidelity
bond insuring the Seller against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth herein.
From time to time and as appropriate for the servicing or foreclosure
of the Mortgage Loan, including for this purpose collection under any Primary
Insurance Policy or LPMI Policy, the Purchaser shall, upon request of the Seller
and delivery to the Purchaser of a servicing receipt signed by a Servicing
Officer, release the requested portion of the Mortgage File held by the
Purchaser to the Seller. Such servicing receipt shall obligate the Seller to
return the related Mortgage documents to the Purchaser when the need therefor by
the Seller no longer exists, unless the Mortgage Loan has been liquidated and
the Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the Custodial Account or the Mortgage File or such document has been delivered
to an attorney, or to a public trustee or other public official as required by
law, for purposes of initiating or pursuing legal action or other proceedings
for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Seller has delivered to the Purchaser a certificate of a
Servicing Officer certifying as to the name and address of the Person to which
such Mortgage File or such document was delivered and the purpose or purposes of
such delivery. Upon receipt of a certificate of a Servicing Officer stating
16
that such Mortgage Loan was liquidated, the servicing receipt shall be released
by the Purchaser to the Seller.
Section 11.22 Monthly Advances by the Seller.
(a) Not later than the close of business on the Business Day preceding
each Remittance Date, the Seller shall deposit in the Custodial Account an
amount equal to all payments not previously advanced by the Seller, whether or
not deferred pursuant to Section 11.01, of principal (due after the Cut-off
Date) and interest not allocable to the period prior to the Cut-off Date, at the
Mortgage Interest Rate net of the Servicing Fee, which were due on a Mortgage
Loan and delinquent at the close of business on the related Determination Date.
(b) The obligation of the Seller to make such Monthly Advances is
mandatory, notwithstanding any other provision of this Agreement, and, with
respect to any Mortgage Loan or REO Property, shall continue until a Final
Recovery Determination in connection therewith; provided that, notwithstanding
anything herein to the contrary, no Monthly Advance shall be required to be made
hereunder by the Seller if such Monthly Advance would, if made, constitutes a
Nonrecoverable Monthly Advance. The determination by the Seller that it has made
a Nonrecoverable Monthly Advance or that any proposed Monthly Advance, if made,
would constitute a Nonrecoverable Monthly Advance, shall be evidenced by an
Officers' Certificate delivered to the Purchaser.
Section 11.23 Servicing Compensation.
As compensation for its services hereunder, the Seller shall, subject
to Section 11.05(xi), be entitled to withdraw from the Custodial Account or to
retain from interest payments on the Mortgage Loans the amounts provided for as
the Seller's Servicing Fee. Additional servicing compensation in the form of
assumption fees, as provided in Section 11.20, interest earned from the
investment in Eligible Investments of amounts held in Custodial Accounts
pursuant to Section 11.05, Prepayment Charges, and late payment charges and
similar fees and charges shall be retained by the Seller to the extent not
required to be deposited in the Custodial Account. The Seller shall be required
to pay all expenses incurred by it in connection with its servicing activities
hereunder and shall not be entitled to reimbursement therefor except as
specifically provided for.
Section 11.24 Notification of Adjustments.
On each Adjustment Date, the Seller shall make interest rate
adjustments for each Adjustable Rate Mortgage Loan in compliance with the
requirements of the related Mortgage and Mortgage Note. The Seller shall execute
and deliver the notices required by each Mortgage and Mortgage Note regarding
interest rate adjustments. The Seller also shall provide timely notification to
the Purchaser of all applicable data and information regarding such interest
rate adjustments and the Seller's methods of implementing such interest rate
adjustments. Upon the discovery by the Seller or the Purchaser that the Seller
has failed to adjust a Mortgage Interest Rate or a Monthly Payment pursuant to
the terms of the related Mortgage Note and Mortgage, the Seller shall
immediately deposit in the Custodial Account from its own funds the amount of
any interest loss caused thereby without reimbursement therefor.
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Section 11.25 Statement as to Compliance.
The Seller will deliver to the Purchaser not later than March 5th of
each year, beginning with March 5, 2008, an Officers' Certificate (each, an
"Annual Statement of Compliance") stating, as to each signatory thereof, that
(i) a review of the activities of the Seller during the preceding year and of
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers' knowledge, based on such review, the
Seller has fulfilled all of its obligations under this Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof.
Section 11.26 Independent Public Accountants' Servicing Report.
On or before March 15th of each year, beginning with March 5, 2008,
the Seller at its expense shall cause a firm of independent public accountants
(which may also render other services to the Seller) which is a member of the
American Institute of Certified Public Accountants (a "USAP Report") to furnish
a statement to the Purchaser or its designee to the effect that such firm has
examined certain documents and records relating to servicing of mortgage loans
by the Seller generally that may include a sampling of the Mortgage Loans and
that, on the basis of such an examination conducted substantially in compliance
with the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Program for Mortgages serviced for FHLMC, such firm confirms that such servicing
has been conducted in compliance with this Agreement, except for exceptions as
such firm shall believe to be immaterial or such significant exceptions or
errors in records that, in the opinion of such firm, the Uniform Single
Attestation Program for Mortgage Bankers or the Audit Program for Mortgages
serviced for FHLMC requires it to report.
Notwithstanding the foregoing, the Seller's obligation to deliver a
USAP Report under this Subsection, as to the Seller or any Subservicer, as to
any calendar year, beginning with the report required in March 2008, shall be
satisfied if an assessment of compliance and attestation report is delivered in
compliance with Subsection 12A.05 for such calendar year with respect to that
entity.
Section 11.27 [Reserved].
Section 11.28 Access to Certain Documentation.
The Seller shall provide to the Office of Thrift Supervision, the FDIC
and any other federal or state banking or insurance regulatory authority that
may exercise authority over the Purchaser access to the documentation regarding
the Mortgage Loans serviced by the Seller required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Seller. In addition, access to the documentation will be provided to the
Purchaser and any Person identified to the Seller by the Purchaser without
charge, upon reasonable request during normal business hours at the offices of
the Seller.
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Section 11.29 Reports and Returns to be Filed by the Seller.
The Seller shall file information reports with respect to the receipt
of mortgage interest received in a trade or business, reports of foreclosures
and abandonments of any Mortgaged Property and information returns relating to
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
Section 11.30 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement
under which the Mortgage Loans and REO Property are held, the Seller shall not
take any action, cause the REMIC to take any action or fail to take (or fail to
cause to be taken) any action that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (i) endanger the status of the REMIC as a REMIC
or (ii) result in the imposition of a tax upon the REMIC (including but not
limited to the tax on "prohibited transactions" as defined in Section 860F(a)(2)
of the Code and the tax on "contributions" to a REMIC set forth in Section
860G(d) of the Code) unless the Seller has received an Opinion of Counsel (at
the expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such REMIC status or result in the
imposition of any such tax.
Section 11.31 Sub-Servicing Agreements Between the Seller and
Subservicers.
The Seller, as servicer, may arrange for the subservicing of any
Mortgage Loan by a Subservicer pursuant to a Sub-Servicing Agreement; provided
that such sub-servicing arrangement and the terms of the related Sub-Servicing
Agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with Subsection 12A.06 and the servicing arrangements contemplated
hereunder. Each Subservicer shall be (i) authorized to transact business in the
state or states where the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Sub-Servicing
Agreement and (ii) a FHLMC or FNMA approved mortgage servicer. Notwithstanding
the provisions of any Sub-Servicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Seller or a
Subservicer or reference to actions taken through the Seller or otherwise, the
Seller shall remain obligated and liable to the Purchaser and its successors and
assigns 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 Sub-Servicing Agreements or arrangements or by
virtue of indemnification from the Subservicer and to the same extent and under
the same terms and conditions as if the Seller alone were servicing and
administering the Mortgage Loans. Every Sub-Servicing Agreement entered into by
the Seller shall contain a provision giving the successor servicer the option to
terminate such agreement in the event a successor servicer is appointed. All
actions of each Subservicer performed pursuant to the related Sub-Servicing
Agreement shall be performed as an agent of the Seller with the same force and
effect as if performed directly by the Seller.
19
For purposes of this Agreement, the Seller shall be deemed to have
received any collections, recoveries or payments with respect to the Mortgage
Loans that are received by a Subservicer regardless of whether such payments are
remitted by the Subservicer to the Seller.
Section 11.32 Successor Subservicers.
Any Sub-Servicing Agreement shall provide that the Seller shall be
entitled to terminate any Sub-Servicing Agreement and to either itself directly
service the related Mortgage Loans or enter into a Sub-Servicing Agreement with
a successor Subservicer which qualifies under Subsection 11.31. Any
Sub-Servicing Agreement shall include the provision that such agreement may be
immediately terminated by any successor to the Seller without fee, in accordance
with the terms of this Agreement, in the event that the Seller (or any successor
to the Seller) shall, for any reason, no longer be the servicer of the related
Mortgage Loans (including termination due to an Event of Default).
Section 11.33 No Contractual Relationship Between Subservicer and
Purchaser.
Any Sub-Servicing Agreement and any other transactions or services
relating to the Mortgage Loans involving a Subservicer shall be deemed to be
between the Subservicer and the Seller alone and the Purchaser shall not be
deemed a party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to any Subservicer except as set forth in Subsection
11.06.
Section 11.34 Assumption or Termination of Sub-Servicing Agreement by
Successor Servicer.
In connection with the assumption of the responsibilities, duties and
liabilities and of the authority, power and rights of the Seller hereunder by a
successor servicer pursuant to Section 16 of this Agreement, it is understood
and agreed that the Seller's rights and obligations under any Sub-Servicing
Agreement then in force between the Seller and a Subservicer shall be assumed
simultaneously by such successor servicer without act or deed on the part of
such successor servicer; provided, however, that any successor servicer may
terminate the Subservicer.
The Seller shall, upon the reasonable request of the Purchaser, but at
its own expense, deliver to the assuming party documents and records relating to
each Sub-Servicing Agreement and an accounting of amounts collected and held by
it and otherwise use its best efforts to effect the orderly and efficient
transfer of the Sub-Servicing Agreements to the assuming party.
The Servicing Fee payable to any such successor servicer shall be
payable from payments received on the Mortgage Loans in the amount and in the
manner set forth in this Agreement.
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EXHIBIT 9
FORM OF TRADE CONFIRMATION
EXHIBIT 10
ANNUAL CERTIFICATION
Re: [_______________] (the "Trust"), Mortgage Pass-Through
Certificates, Series [_____], issued pursuant to the Pooling and
Servicing Agreement, dated as of [_____], 200__ (the "Pooling and
Servicing Agreement"), among [_____], as depositor (the
"Depositor"), [_____], as trustee (the "Trustee"), [_____], as
servicer (the "Servicer"), and [_____], as [depositor] [Master
Servicer] [trustee].
I, [identify the certifying individual], certify to the Depositor and the
Trustee, and their officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:
(i) Based on my knowledge, the information in the Annual Statement of
Compliance and the Annual Independent Public Accountant's
Servicing Report delivered pursuant to the Master Seller's
Warranties and Servicing Agreement dated as of February 1, 2007
between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Lending, Inc. and Countrywide Home
Loans Inc. (the "Master Seller's Warranties and Servicing
Agreement"), and all servicing reports, officer's certificates
and other information relating to the servicing of the Mortgage
Loans submitted to the Master Servicer taken as a whole, does not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading as of the date of this certification;
(ii) The servicing information required to be provided to the Master
Servicer by the Seller under this Master Seller's Warranties and
Servicing Agreement has been provided to the Master Servicer;
(iii) I am responsible for reviewing the activities performed by the
Seller under the Master Seller's Warranties and Servicing
Agreement and based upon the review required by this Master
Seller's Warranties and Servicing Agreement, and except as
disclosed in the Annual Statement of Compliance or the Annual
Independent Public Accountant's Servicing Report submitted to the
Master Servicer, the Seller has, as of the date of this
certification fulfilled its obligations under this Master
Seller's Warranties and Servicing Agreement; and
(iv) I have disclosed to the Master Servicer all significant
deficiencies relating to the Seller's compliance with the minimum
servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar standard as set forth in the Master
Seller's Warranties and Servicing Agreement.
Date:
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[Signature]
----------------------------------------
[Title]:
EXHIBIT 11
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Seller] [Name of
Subservicer] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":
Applicable
Servicing
Servicing Criteria Criteria
------------------------------------------------------------------------------------------------------- ----------
Reference Criteria
---------------- ------------------------------------------------------------------------------------
General Servicing Considerations
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance or other triggers X
and events of default in accordance with the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third parties, policies and X
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 on the party X
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 custodial bank X
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 or to an investor are X
made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or distributions, X
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 reserve accounts or accounts X
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 depository institution X
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 access. X
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all asset-backed securities X
related bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate; (B) prepared within
30 calendar days
Applicable
Servicing
Servicing Criteria Criteria
------------------------------------------------------------------------------------------------------- ----------
Reference Criteria
---------------- ------------------------------------------------------------------------------------
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 Commission, are X
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 accordance with timeframes, X
distribution priority and other terms set forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within two business days to the X
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 with cancelled checks, X
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 required by the X
transaction agreements or related mortgage loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as required by the transaction X
agreements.
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made, reviewed and X
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 accordance with the X
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 with the Servicer's X
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 mortgage loans (e.g., X
loan modifications or re-agings) are made, reviewed and approved by authorized
personnel in accordance with the transaction agreements and related pool asset
documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, modifications and X
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.
2
Applicable
Servicing
Servicing Criteria Criteria
------------------------------------------------------------------------------------------------------- ----------
Reference Criteria
---------------- ------------------------------------------------------------------------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained during the period a mortgage X
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 loans with variable X
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 escrow accounts): (A) such X
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 insurance payments) are made X
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 be made on behalf of an X
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 two business days to X
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 recognized and recorded in X
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.
3
SCHEDULE ONE
FINAL MORTGAGE LOAN SCHEDULE