Allocation of Losses Clause Samples
The Allocation of Losses clause defines how financial responsibility for damages, liabilities, or losses is distributed between the parties involved in an agreement. Typically, this clause outlines which party bears the cost for specific types of losses, such as those arising from breaches, negligence, or unforeseen events, and may set limits or exclusions on liability. Its core practical function is to clarify and manage risk exposure, ensuring that each party understands their potential financial obligations and reducing the likelihood of disputes over who is responsible for covering losses.
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Allocation of Losses. (a) Applied Loss Amounts on the Pool 1 Mortgage Loans shall be allocated by the Securities Administrator to the Certificates as follows: first, to the Class 1-B-2 Certificates, second, to the Class 1-B-1 Certificates, third, to the Class 1-M-2 Certificates, fourth, to the Class 1-M-1 Certificates and fifth, to the Pool 1 Senior Certificates, pro rata based on Class Principal Amount, in each instance until their Class Principal Amounts are reduced to zero; provided, however, that Realized Losses that would otherwise be allocated to the Class 1-A-1, Class 1-A-2, Class 1-A-3 and Class 1-A-4 Certificates will instead be allocated to the Class 1-A-5 Certificates, until the Class Principal Amount of the Class 1-A-5 Certificates has been reduced to zero.
(b) Applied Loss Amounts on the Pool 2 Mortgage Loans shall be allocated by the Securities Administrator to the Certificates as follows: first, to the Class 2-B-2 Certificates, second, to the Class 2-B-1 Certificates, third, to the Class 2-M-2 Certificates, fourth, to the Class 2-M-1 Certificates, and fifth, to the Pool 2 Senior Certificates, pro rata based on Class Principal Amount, in each instance until their Class Principal Amounts are reduced to zero; provided, however, that Realized Losses that would otherwise be allocated to the Class 2-A-1, Class 2-A-2, Class 2-A-3, Class 2-A-4, Class 2-A-5, Class 2-A-6 and Class 2-A-7 Certificates will instead be allocated to the Class 2-A-8 Certificates, until the Class Principal Amount of the Class 2-A-8 Certificates has been reduced to zero.
(c) Any allocation of a loss pursuant to this Section 5.03 to a Class of Certificates shall be achieved by reducing the Class Principal Amount thereof by the amount of such loss.
(d) If Subsequent Recoveries have been received with respect to a Liquidated Mortgage Loan, the amount of such Subsequent Recoveries will be applied sequentially, in the order of payment priority, to increase the Class Principal Amount of each Class of Certificates related to the Pool in which the Subsequent Recovery was received, but in each case by not more than the amount of unreimbursed Applied Loss Amounts (reimbursed either though previous distributions of Unpaid Realized Loss Amounts pursuant to Section 5.02(c) or 5.02(f), as applicable, or increases in the Class Principal Amount of such Class pursuant to this Section 5.03(d)) previously allocated to that Class of Certificates pursuant to this Section 5.03. Holders of such Certificates will not be ...
Allocation of Losses. Section 5.04
Allocation of Losses. (a) On or prior to each Determination Date, the Master Servicer shall determine the amount of any Realized Loss in respect of each Mortgage Loan that occurred during the immediately preceding calendar month.
(b) With respect to any Distribution Date, the principal portion of each Realized Loss (other than any Excess Loss) with respect to a Mortgage Pool shall be allocated in the following order of priority:
(i) to the Class B-6 Certificates until the Class Certificate Balance thereof has been reduced to zero;
(ii) to the Class B-5 Certificates until the Class Certificate Balance thereof has been reduced to zero;
(iii) to the Class B-4 Certificates until the Class Certificate Balance thereof has been reduced to zero;
(iv) to the Class B-3 Certificates until the Class Certificate Balance thereof has been reduced to zero;
(v) to the Class B-2 Certificates until the Class Certificate Balance thereof has been reduced to zero;
(vi) to the Class B-1 Certificates until the Class Certificate Balance thereof has been reduced to zero;
(vii) to the Classes of Senior Certificates of the related Certificate Group, pro rata, in accordance with their Class Certificate Balances.
(c) With respect to any Distribution Date, the principal portion of any Excess Loss with respect to a Mortgage Pool (other than Excess Bankruptcy Losses attributable to Debt Service Reductions) shall be allocated pro rata to each Class of Certificates of the related Certificate Group based on their respective Class Certificate Balances (in the case of the Senior Certificates) or Apportioned Principal Balances (in the case of the Subordinated Certificates).
(d) Any Realized Losses allocated to a Class of Certificates pursuant to Section 4.4(b) or (c) shall be allocated among the Certificates of such Class in proportion to their respective Certificate Principal Balances. Any allocation of Realized Losses pursuant to this paragraph (d) shall be accomplished by reducing the Certificate Principal Balances of the related Certificates on the related Distribution Date in accordance with Section 4.4(e).
(e) Realized Losses allocated in accordance with this Section 4.4 shall be allocated on the Distribution Date in the month following the month in which such loss was incurred and, in the case of the principal portion thereof, after giving effect to the distributions made on such Distribution Date.
(f) On each Distribution Date, the Master Servicer shall determine the Subordinated Certificate Writedown Amount...
Allocation of Losses. (a) On or prior to each Determination Date, the Servicer shall inform the Trustee in writing with respect to each Mortgage Loan: (1) whether any Realized Loss is a Deficient Valuation, a Debt Service Reduction, a Fraud Loss or a Special Hazard Loss, (2) of the amount of such loss or Deficient Valuation, or of the terms of such Debt Service Reduction and (3) of the total amount of Realized Losses. Based on such information, the Trustee shall determine the total amount of Realized Losses, including Excess Losses, with respect to the related Distribution Date. The principal portion of Realized Losses with respect to any Distribution Date shall be allocated as follows:
(i) the principal portion of any Realized Loss (other than an Excess Loss) shall be allocated first to the Subordinate Certificates in reverse order of their respective numerical Class designations (beginning with the Class of Subordinate Certificates then outstanding with the highest numerical Class designation) until the respective Class Certificate Balance of each such Class is reduced to zero, and second to the Senior Certificates, pro rata, on the basis of their respective Class Certificate Balances immediately prior to the related Distribution Date; and
(ii) the principal portion of any Excess Losses shall be allocated pro rata among the Senior Certificates in the aggregate on the basis of their aggregate principal balance and among the Classes of Subordinate Certificates on the basis of their respective Class Certificate Balances immediately prior to the related Distribution Date. Excess Losses allocated to the Senior Certificates will be allocated among such Classes pro rata on the basis of their respective Class Certificate Balances.
(b) The Class Certificate Balance of the Class of Subordinate Certificates then outstanding with the highest numerical Class designation shall be reduced on each Distribution Date by the amount, if any, by which the aggregate of the Class Certificate Balances of all outstanding Classes of Certificates (after giving effect to the amount to be distributed as a distribution of principal and the allocation of Realized Losses on such Distribution Date) exceeds the Adjusted Pool Amount for such Distribution Date. After the Senior Credit Support Depletion Date, the Class Certificate Balances of the Senior Certificates in the aggregate shall be reduced on each Distribution Date by the amount, if any, by which the aggregate of the Class Certificate Balances of all o...
Allocation of Losses. (a) On or prior to each Determination Date, the Master Servicer shall determine the amount of any Realized Loss in respect of each Mortgage Loan that occurred during the immediately preceding calendar month.
(b) With respect to any Certificates on any Distribution Date, the principal portion of each Realized Loss on a Mortgage Loan shall be allocated as follows: first, to the Class B-6 Certificates until the Current Principal Amount thereof has been reduced to zero; second, to the Class B-5 Certificates until the Current Principal Amount thereof has been reduced to zero; third, to the Class B-4 Certificates until the Current Principal Amount thereof has been reduced to zero; fourth, to the Class B-3 Certificates until the Current Principal Amount thereof has been reduced to zero; fifth, to the Class B-2 Certificates until the Current Principal Amount thereof has been reduced to zero; sixth, to the Class B-1 Certificates until the Current Principal Amount thereof has been reduced to zero; seventh, to the Class M Certificates until the Current Principal Amount thereof has been reduced to zero; eighth, if such loss is on a Group 1, Group 2, Group 3, Group 4, Group 5, Group 6, Group 7 or Group 8 Mortgage Loan, to the Group 1, Group 2, Group 3, Group 4, Group 5, Group 6, Group 7 or Group 8 Senior Certificates, respectively; and ninth, to the Senior Certificates, on a pro rata basis.
(c) Notwithstanding the foregoing clause (b), no such allocation of any Realized Loss shall be made on a Distribution Date to any Class of Certificates to the extent that such allocation would result in the reduction of the aggregate Current Principal Amounts of all the Certificates as of such Distribution Date, after giving effect to all distributions and prior allocations of Realized Losses on such date, to an amount less than the aggregate Scheduled Principal Balance of all of the Mortgage Loans as of the first day of the month of such Distribution Date (such limitation, the "Loss Allocation Limitation").
(d) Any Realized Losses allocated to a Class of Certificates shall be allocated among the Certificates of such Class in proportion to their respective Current Principal Amounts. Any allocation of Realized Losses shall be accomplished by reducing the Current Principal Amount of the related Certificates on the related Distribution Date.
(e) Realized Losses shall be allocated on the Distribution Date in the month following the month in which such loss was incurred and, in the case ...
Allocation of Losses. On each Distribution Date, the Class Principal Amounts of the Subordinate Certificates will be reduced by the amount of any Applied Loss Amount for such date, in the following order of priority:
(i) to the Class B2 Certificates, until the Class Principal Amount thereof has been reduced to zero;
(ii) to the Class B1 Certificates, until the Class Principal Amount thereof has been reduced to zero;
(iii) to the Class M9 Certificates, until the Class Principal Amount thereof has been reduced to zero;
(iv) to the Class M8 Certificates, until the Class Principal Amount thereof has been reduced to zero;
(v) to the Class M7 Certificates, until the Class Principal Amount thereof has been reduced to zero;
(vi) to the Class M6 Certificates, until the Class Principal Amount thereof has been reduced to zero;
(vii) to the Class M5 Certificates, until the Class Principal Amount thereof has been reduced to zero;
(viii) to the Class M4 Certificates, until the Class Principal Amount thereof has been reduced to zero;
(ix) to the Class M3 Certificates, until the Class Principal Amount thereof has been reduced to zero;
(x) to the Class M2 Certificates, until the Class Principal Amount thereof has been reduced to zero; and
(xi) to the Class M1 Certificates, until the Class Principal Amount thereof has been reduced to zero.
Allocation of Losses. (i) The Group 1 Certificates. On each Distribution Date, the Trust Administrator shall determine the total of the Applied Loss Amount, if any, for such Distribution Date. The Applied Loss Amount for any Distribution Date shall be applied by reducing the Class Principal Balance of each Class of Group 1 Subordinate Certificates (other than the Class 1-X Certificates) beginning with the Class of Group 1 Subordinate Certificates then outstanding with the lowest relative payment priority, in each case until the respective Class Principal Balance thereof is reduced to zero. Any Applied Loss Amount allocated to a Class of Group 1 Subordinate Certificates shall be allocated among the Group 1 Subordinate Certificates of such Class in proportion to their respective Percentage Interests. Group 1 Senior Certificates shall not be allocated Applied Loss Amounts.
(ii) With respect to any Class of Group 1 Subordinate Certificates to which an Applied Loss Amount has been allocated (including any such Class for which the related Class Principal Balance has been reduced to zero), the Class Principal Balance of such Class will be increased on any Distribution Date by the amount of related Recoveries for such Distribution Date, beginning with the Class of Group 1 Subordinate Certificates with the highest relative payment priority, up to the amount of the Deferred Amount for that Class. Any increase in a Class Principal Balance on a Distribution Date pursuant to this Section 4.02(a)(ii) shall be made prior to giving effect to distributions on that Distribution Date. Any increase to the Class Principal Balance of a Class of Group 1 Subordinate Certificates shall increase the Certificate Balance of the related Class pro rata in accordance with each Percentage Interest.
(b) The Group 2, Group 3, Group 4, and Group C-B Certificates. Realized Losses on the Group 2, Group 3 and Group 4 Mortgage Loans with respect to any Distribution Date shall be allocated by the Trust Administrator to the Classes of Group 2, Group 3, Group 4, and Group C-B Certificates as follows:
(i) except as provided in the parenthetical below, any Realized Loss on a Group 2, Group 3 or Group 4 Mortgage Loan, other than an Excess Loss, shall be allocated first, to the Group C-B Certificates in decreasing order of their alphanumerical Class designations (beginning with the Class C-B-6 Certificates), until the respective Class Principal Balance of each such Class is reduced to zero, and second, to the Senior Certif...
Allocation of Losses. (a) On each Distribution Date, the Trustee shall determine the total of the Applied Loss Amount, if any, for such Distribution Date. The Applied Loss Amount for any Distribution Date shall be applied by reducing the Class Principal Balance of each Class of Subordinate Certificates beginning with the Class of Subordinate Certificates then outstanding with the lowest relative payment priority, in each case until the respective Class Principal Balance thereof is reduced to zero. Any Applied Loss Amount allocated to a Class of Subordinate Certificates shall be allocated among the Subordinate Certificates of such Class in proportion to their respective Percentage Interests.
Allocation of Losses. (a) Realized Losses on the Mortgage Loans in each of Loan Group I, Loan Group II, Loan Group III, Loan Group IV and Loan Group V incurred during a calendar month shall be allocated by the Trust Administrator as provided in the Preliminary Statement for each uncertificated REMIC Interest set forth therein and to the Classes of Certificates on the Distribution Date in the next calendar month as follows:
(i) any Realized Loss, other than an Excess Loss, shall be allocated first, to the Group C-B Certificates, in decreasing order of their alphanumerical Class designations (beginning with the Class C-B-6 Certificates), until the respective Class Principal Balance of each such Class is reduced to zero, and second, to the Senior Certificates of the related Certificate Group, pro rata, on the basis of their respective Class Principal Balances; and
(ii) Excess Losses for Mortgage Loans in Loan Group I, Loan Group II, Loan Group III, Loan Group IV and Loan Group V will be allocated pro rata among all Group I, Group II, Group III, Group IV, Group V and the Group C-B Certificates, pro rata based on their respective Class Principal Balances.
(b) On each Distribution Date, if the aggregate Class Principal Balance of all Group I, Group II, Group III, Group IV, Group V and Group C-B Certificates exceeds the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group I, Loan Group II, Loan Group III, Loan Group IV and Loan Group V (after giving effect to distributions of principal and the allocation of all losses to such Certificates on such Distribution Date), such excess will be deemed a principal loss and will be allocated by the Trust Administrator to the most junior Class of Group C-B Certificates then outstanding.
(c) Any Realized Loss allocated to a Class of Certificates or any reduction in the Class Principal Balance of a Class of Certificates pursuant to Section 4.02(A)(b) shall be allocated by the Trust Administrator among the Certificates of such Class in proportion to their respective Certificate Balances.
(d) Any allocation by the Trust Administrator of Realized Losses to a Certificate or any reduction in the Certificate Balance of a Certificate pursuant to Section 4.02(A)(b) shall be accomplished by reducing the Certificate Balance thereof, immediately following the distributions made on the related Distribution Date in accordance with the definition of “Certificate Balance.”
(B) On each Distribution Date, the Trust Administrator shall determine th...
Allocation of Losses. (a) On each Distribution Date, the Trustee shall determine the total of the Applied Loss Amount, if any, for such Distribution Date. The Applied Loss Amount for any Distribution Date shall be applied by reducing the Class Principal Balance of each Class of Subordinate Certificates beginning with the Class of Subordinate Certificates then outstanding with the lowest relative payment priority, in each case until the respective Class Principal Balance thereof is reduced to zero. Any Applied Loss Amount allocated to a Class of Subordinate Certificates shall be allocated among the Subordinate Certificates of such Class in proportion to their respective Percentage Interests.
(b) With respect to any Class of Subordinate Certificates to which an Applied Loss Amount has been allocated (including any such Class for which the related Class Principal Balance has been reduced to zero), the Class Principal Balance of such Class will be increased on any Distribution Date by the amount of related Recoveries for such Distribution Date, beginning with the Class of Subordinate Certificates with the highest relative payment priority, up to the amount of the Deferred Amount for that Class. Any increase in a Class Principal Balance on a Distribution Date pursuant to this Section 4.03(b) shall be made prior to giving effect to distributions on that Distribution Date. Any increase to the Class Principal Balance of a Class of Subordinate Certificates shall increase the Certificate Balance of the related Class pro rata in accordance with each Percentage Interest.