Common use of Breach of Section 3 Clause in Contracts

Breach of Section 3. 04. Within the ten (10) month period after the Servicing Transfer Date, Purchaser or the New Servicer shall conduct an affirmative investigation as to whether there is a breach of any of HUD’s representations and warranties contained in Section 3.04. All breaches of Sections 3.04 (excluding Section 3.04(m), 3.04(n) and 3.04(w)) will be determined without reference to HUD’s knowledge. Notwithstanding any qualification in the representation or warranty with regard to HUD’s knowledge, the remedies available under this section for breach shall also be available upon the development of a condition or occurrence of any event described in Section 3.04(m), 3.04(n) and 3.04(w)) (hereinafter included in the term ―breach‖). Upon discovery by Purchaser or the New Servicer with respect to any Mortgage Loan of a breach of any of the representations or warranties in Section 3.04, provided the Mortgage Loan has not been modified on or after the Claim Date, Purchaser or New Servicer shall give prompt written notice to HUD and identify, in such notice, in reasonable detail, the nature of the breach (including the representations or warranties breached) and, include with such notice, documentation evidencing or supporting the alleged breach. Such notice shall also include the information required by Item 1 on Exhibit D. No breach shall be asserted regarding any typographical errors unless Purchaser demonstrates that such typographical error will have a material and adverse impact on the value of the Mortgage Loan or the benefits of the security intended to be provided by the Mortgaged Property for the Mortgage Loan. Within seventy-five (75) calendar days of its receipt of notice of any such breach, HUD shall notify Purchaser that HUD either has accepted the notice as to a Mortgage Loan or does not accept the notice as giving sufficient evidence of the asserted breach. If HUD accepts the notice as to a Mortgage Loan, HUD shall, as set forth in detail below, (x) cure such breach in all material respects, or (y) repurchase such Mortgage Loan. HUD shall have sole and absolute discretion to make the final determination as to whether a breach is curable. (i) If HUD elects to cure a breach in all material respects, it shall advise Purchaser in writing of that fact as well as the cure it intends to implement and, upon implementation of such cure, deliver to Purchaser documentation effecting or evidencing such cure. (ii) If HUD elects to repurchase such Mortgage Loan, HUD shall pay Purchaser the Repurchase Price. (iii) In the event of a repurchase, on or prior to the Initial Repurchase Date, the information required by Item 2 of Exhibit D shall be delivered to HUD.