Common use of Claim for FHA Insurance and Foreclosure Clause in Contracts

Claim for FHA Insurance and Foreclosure. (a) (x) If any Monthly Payment due under any FHA Loan is not paid when the same becomes due and payable, or if the Obligor fails to perform any other covenant or obligation under such FHA Loan and such failure continues beyond any applicable grace period, the Master Servicer shall take such action (consistent with Title I, including efforts to cure the default of such FHA Loan pursuant to 24 C.F.R. Section 201.50) as it shall deem to be in the best interest of the Trust. If the maturity of the related Note has been accelerated pursuant to the requirements under Title I following the Master Servicer's efforts to cure the default of such FHA Loan (and such FHA Loan is not required to be purchased pursuant to Section 68 73 2.04(b)), and (i) if an FHA Insurance Coverage Insufficiency does not exist at the time, the Claims Administrator shall initiate, on behalf of the Trust and the Contract of Insurance Holder, a claim under the Contract of Insurance for reimbursement for loss on such FHA Loan pursuant to Title I (see 24 C.F.R. Section 201.54), or (ii) if an FHA Insurance Coverage Insufficiency exists at the time, the Master Servicer shall determine within 90 days in accordance with Section 4.12(c) whether or not to proceed against the Property securing such FHA Loan, if such FHA Loan is a Mortgage Loan or against the Obligor, if such FHA Loan is unsecured, and if thereafter an FHA Insurance Coverage Insufficiency does not exist, the Claims Administrator may submit a claim under the Contract of Insurance with respect to such FHA Loan if it has obtained the prior approval of the Secretary of HUD pursuant to 24 C.F.R. Section 201.51; or (y) if any Monthly Payment due under any Non-FHA Loan is not paid when the same is due and payable, or if the Obligor fails to perform any other covenant or obligation under such Non-FHA Loan and such failure continues beyond any applicable grace period, the Master Servicer shall take such action as it shall deem to be in the best interest of the Trust; including but not limited to proceeding against the Property securing such Non-FHA Loan. In the event that in accordance with clauses (a)(x)(ii) and (y) above the Master Servicer determines not to proceed against the Property or Obligor, as applicable, on or before the Determination Date following such determination the Master Servicer shall determine in good faith in accordance with customary servicing practices that all amounts which it expects to receive with respect to such Loan have been received. If the Master Servicer makes such a determination, it shall give notice to such effect pursuant to Section 4.03(e)(xiv). (b) If the Claims Administrator initiates a claim for reimbursement for loss on any FHA Loan under this Section, the Claims Administrator shall comply with applicable provisions of Title I and diligently pursue such claim and, in any event, shall initiate such claim no later than the last day permitted under Title I (see 24 C.F.R. Section 201.54(b)). For purposes of this Agreement, the term "initiate a claim for reimbursement" shall mean the filing of the claim application pursuant to the requirements set forth in 24 C.F.R. Section 201.54, including the filing of all related assignments and documents and materials required for file review. For the purposes of such filing, the Claims Administrator shall request, and the Co-Owner Trustee within 5 calendar days of request shall deliver to the Claims Administrator, the Note and the related Mortgage for such FHA Loan and each other item in the related File necessary to make such claim. Each Securityholder hereby consents to the assignment of such FHA Loan for the sole purpose of initiating a claim under the Contract of Insurance for reimbursement with respect to such FHA Loan. Pursuant to Section 4.12(i), the Contract of Insurance Holder shall furnish the Claims Administrator a power of attorney to file claims under the Contract of Insurance. The Co-Owner Trustee and Contract of Insurance Holder agree to execute and deliver to the Claims Administrator, within 5 Business Days of receipt from the Claims Administrator, all documents, if any, necessary to initiate and file a claim under the Contract of Insurance for such FHA Loan, which documents shall be prepared by the Claims Administrator. If any claim to the FHA becomes a Rejected Claim, upon receipt of the FHA's rejection notice by the Claims Administrator directly from the FHA or 69 74 from the Contract of Insurance Holder pursuant to Section 4.12(e) and a determination by the Claims Administrator that the rejection was not due to clerical error, then the Claims Administrator shall promptly notify the Contract of Insurance Holder (if such notice has not already been given), the Indenture Trustee and the Securities Insurer of the notice of a Rejected Claim. If the FHA indicates in writing that the claim is a Rejected Claim due to reasons other than a failure to service the related FHA Loan in accordance with Title I after the Closing Date, Mego shall repurchase the FHA Loan on or before the Monthly Cut-Off Date next following the date of such notice from the Claims Administrator to repurchase such FHA Loan, either directly from FHA or from the Trust, for the Purchase Price. If FHA indicates in writing that the claim is a Rejected Claim due to a failure to service such FHA Loan in accordance with Title I after the Closing Date, the Claims Administrator shall immediately notify Mego, the Master Servicer, the Contract of Insurance Holder, the Trust, the Indenture Trustee and the Securities Insurer of such determination, and the Master Servicer shall on or before the later to occur of (i) the next succeeding Monthly Cut-Off Date and (ii) ten Business Days from the date on which such rejection notice is received by the Claims Administrator, purchase such FHA Loan either directly from FHA or from the Trust, for the Purchase Price. In the event that the FHA fails to indicate in writing why the claim is a Rejected Claim, the Claims Administrator shall determine why the claim is a Rejected Claim. If the Claims Administrator determines that the claim is a Rejected Claim for reasons other than a servicing failure that occurred after the Closing Date, Mego shall be obligated to repurchase such FHA Loan for the Purchase Price. If the Claims Administrator determines that the claim is a Rejected Claim due to a servicing failure that occurred after the Closing Date, the Master Servicer shall be obligated to repurchase such FHA Loan for the Purchase Price. Notwithstanding any provisions herein to the contrary, neither Mego nor the Master Servicer shall be required to repurchase or purchase, as applicable, any FHA Loan subject to a Rejected Claim as a result of the depletion of the amount of the FHA Insurance Coverage Reserve Account as shown in the Insurance Record. (c) In accordance with the criteria for proceeding against the Property set forth in Section 4.12(a), with respect to an FHA Loan that is a Mortgage Loan that has been accelerated pursuant to the requirements of Title I following the Master Servicer's efforts to cure the default of the FHA Loan, and with respect to a Non-FHA Loan that is a Mortgage Loan, unless otherwise prohibited by applicable law or court or administrative order, the Master Servicer, on behalf of the Trust and the Indenture Trustee, may, at any time, institute foreclosure proceedings, exercise any power of sale to the extent permitted by law, obtain a deed in lieu of foreclosure, or otherwise acquire possession of or title to the related Property, by operation of law or otherwise. In accordance with the criteria for proceeding against the Property set forth in Section 4.12(a), with respect to FHA Loans that are Mortgage Loans and with respect to the Non-FHA Loans, the Master Servicer shall institute foreclosure proceedings, repossess, exercise any power of sale to the extent permitted by law, obtain a deed in lieu of foreclosure, or 70 75 otherwise acquire possession of or title to any Property, by operation of law or otherwise only in the event that in the Master Servicer's reasonable judgement such action is likely to result in a positive economic benefit to the Trust by creating net liquidation proceeds (after reimbursement of all amounts owed with respect to such Home Loan to the Master Servicer or the Servicer) and provided that, with respect to any Property, prior to taking title thereto, the Master Servicer has requested that the Indenture Trustee obtain, and the Indenture Trustee shall have obtained, an environmental review to be performed on such Property by a company with recognized expertise, the scope of which is limited to the review of public records and documents for information regarding whether such Property has on it, under it or is near, hazardous or toxic material or waste. If such review reveals that such Property has on it, under it or is near hazardous or toxic material or waste or reveals any other environmental problem, the Indenture Trustee shall provide a copy of the related report to the Master Servicer and the Securities Insurer and title shall be taken to such Property only after obtaining the written consent of the Securities Insurer. In connection with any foreclosure proceeding on an FHA Loan, the Master Servicer shall comply with the requirements under Title I, shall follow such practices and procedures in a manner which is consistent with the Master Servicer's procedure for foreclosure with respect to similar FHA Title I loans held in the Master Servicer's portfolio for its own account or, if there are no such loans, FHA Title I loans serviced by the Master Servicer for others. To the extent required by Section 4.08, the Master Servicer shall advance all necessary and proper Foreclosure Advances until final disposition of the Foreclosed Property and shall manage such Foreclosed Property pursuant to Section 4.14. If, in following such foreclosure procedures, title to the Foreclosed Property is acquired, the deed or certificate of sale shall be issued to the Co-Owner Trustee and the Indenture Trustee. (d) With respect to any FHA Loan, each of the Co-Owner Trustee, Owner Trustee, Indenture Trustee and the Contract of Insurance Holder shall deposit in the Note Distribution Account on the day of receipt all amounts received from the FHA or any other Person with respect to such FHA Loans or any other assets of the Trust and shall transmit by facsimile, or such other method requested by the Master Servicer, Claims Administrator or the Securities Insurer, to the Master Servicer, Claims Administrator and the Securities Insurer on each such day the letter of transmittal received from the FHA and any other documents with respect to such receipt. Each of the Co-Owner Trustee, Owner Trustee, Indenture Trustee and the Contract of Insurance Holder shall also promptly deliver to the Claims Administrator copies of any other correspondence received from the FHA or sent to the FHA by the Co-Owner Trustee, Owner Trustee, Indenture Trustee or the Contract of Insurance Holder, as the case may be, including, but not limited to, any correspondence regarding the balance of the FHA Insurance Coverage Reserve Account, premiums due and claims rejected. (e) If, prior to the Termination Date, the FHA rejects an insurance claim, in whole or part, under the Contract of Insurance after previously paying such insurance claim and the FHA demands that the Contract of Insurance Holder repurchase such FHA Loan, the Claims Administrator shall pursue such appeals with the FHA as are reasonable. If the FHA

Claim for FHA Insurance and Foreclosure. (a) (x) If any Monthly Payment due under any FHA Loan is not paid when the same becomes due and payable, or if the Obligor fails to perform any other covenant or obligation under such FHA Loan and such failure continues beyond any applicable grace period, the Master Servicer shall take such action (consistent with Title I, including efforts to 62 68 cure the default of such FHA Loan pursuant to 24 C.F.R. Section 201.50) as it shall deem to be in the best interest of the Trust. If the maturity of the related Note has been accelerated pursuant to the requirements under Title I following the Master Servicer's efforts to cure the default of such FHA Loan (and such FHA Loan is not required to be purchased pursuant to Section 68 73 2.04(b)), and (i) if an FHA Insurance Coverage Insufficiency does not exist at the time, the Claims Administrator shall initiate, on behalf of the Trust and the Contract of Insurance Holder, a claim under the Contract of Insurance for reimbursement for loss on such FHA Loan pursuant to Title I (see 24 C.F.R. Section 201.54), or (ii) if an FHA Insurance Coverage Insufficiency exists at the time, the Master Servicer shall determine within 90 days in accordance with Section 4.12(c3.12(c) whether or not to proceed against the Property securing such FHA Loan, if such FHA Loan is a Mortgage Loan or against the Obligor, if such FHA Loan is unsecured, and if thereafter an FHA Insurance Coverage Insufficiency does not exist, the Claims Administrator may submit a claim under the Contract of Insurance with respect to such FHA Loan if it has obtained the prior approval of the Secretary of HUD pursuant to 24 C.F.R. Section 201.51; or (y) if any Monthly Payment due under any Non-FHA Loan is not paid when the same is due and payable, or if the Obligor fails to perform any other covenant or obligation under such Non-FHA Loan and such failure continues beyond any applicable grace period, the Master Servicer shall take such action as it shall deem to be in the best interest of the Trust; including but not limited to proceeding against the Property securing such Non-FHA Loan. In the event that in accordance with clauses (a)(x)(ii) and (y) above the Master Servicer determines not to proceed against the Property or Obligor, as applicable, on or before the Determination Date following such determination the Master Servicer shall determine in good faith in accordance with customary servicing practices that all amounts which it expects to receive with respect to such Loan have been received. If the Master Servicer makes such a determination, it shall give notice to such effect pursuant to Section 4.03(e)(xiv3.03(e)(xiv). (b) If the Claims Administrator initiates a claim for reimbursement for loss on any FHA Loan under this Section, the Claims Administrator shall comply with applicable provisions of Title I and diligently pursue such claim and, in any event, shall initiate such claim no later than the last day permitted under Title I (see 24 C.F.R. Section 201.54(b)). For purposes of this Agreement, the term "initiate a claim for reimbursement" shall mean the filing of the claim application pursuant to the requirements set forth in 24 C.F.R. Section 201.54, including the filing of all related assignments and documents and materials required for file review. For the purposes of such filing, the Claims Administrator shall request, and the Co-Owner Trustee within 5 calendar days of request shall deliver to the Claims Administrator, the Note and the related Mortgage for such FHA Loan and each other item in the related File necessary to make such claim. Each Securityholder Certificateholder hereby consents to the assignment of such FHA Loan for the sole purpose of initiating a claim under the Contract of Insurance for reimbursement with respect to such FHA Loan. Pursuant to Section 4.12(i3.12(i), the Contract of Insurance Holder shall furnish the Claims Administrator a power of attorney to file claims under the Contract of Insurance. The Co-Owner Trustee and Contract of Insurance Holder agree to execute and deliver to the Claims Administrator, within 5 Business Days of receipt from the Claims Administrator, all documents, if any, necessary to initiate and file a claim under the Contract of Insurance for such FHA Loan, which documents shall be prepared by the Claims Administrator. If any claim to the FHA becomes a Rejected Claim, upon receipt of the FHA's rejection notice by the Claims Administrator directly from the FHA or 69 74 from the Contract of Insurance Holder pursuant to Section 4.12(e3.12(e) and a determination by the Claims Administrator that the rejection was not due to clerical error, then the Claims Administrator shall promptly notify the Contract of Insurance Holder (if such notice has not already been given), the Indenture Trustee and the Securities Insurer of the notice of a Rejected Claim. If the FHA indicates in writing that the claim is a Rejected Claim due to reasons other than a failure to service the related FHA Loan in accordance with Title I after the Closing Date, Mego shall repurchase the FHA Loan on or before the Monthly Cut-Off Date next following the date of such notice from the Claims Administrator to repurchase such FHA Loan, either directly from FHA or from the Trust, for the Purchase Price. If FHA indicates in writing that the claim is a Rejected Claim due to a failure to service such FHA Loan in accordance with Title I after the Closing Date, the Claims Administrator shall immediately notify Mego, the Master Servicer, the Contract of Insurance Holder, the Trust, the Indenture Trustee and the Securities Insurer of such determination, and the Master Servicer shall on or before the later to occur of (i) the next succeeding Monthly Cut-Off Date and (ii) ten Business Days from the date on which such rejection notice is received by the Claims Administrator, purchase such FHA Loan either directly from FHA or from the Trust, for the Purchase Price. In the event that the FHA fails to indicate in writing why the claim is a Rejected Claim, the Claims Administrator shall determine why the claim is a Rejected Claim. If the Claims Administrator determines that the claim is a Rejected Claim for reasons other than a servicing failure that occurred after the Closing Date, Mego shall be obligated to repurchase such FHA Loan for the Purchase Price. If the Claims Administrator determines that the claim is a Rejected Claim due to a servicing failure that occurred after the Closing Date, the Master Servicer shall be obligated to repurchase such FHA Loan for the Purchase Price. Notwithstanding any provisions herein to the contrary, neither Mego nor the Master Servicer shall be required to repurchase or purchase, as applicable, any FHA Loan subject to a Rejected Claim as a result of the depletion of the amount of the FHA Insurance Coverage Reserve Account as shown in the Insurance Record. (c) In accordance with the criteria for proceeding against the Property set forth in Section 4.12(a), with respect to an FHA Loan that is a Mortgage Loan that has been accelerated pursuant to the requirements of Title I following the Master Servicer's efforts to cure the default of the FHA Loan, and with respect to a Non-FHA Loan that is a Mortgage Loan, unless otherwise prohibited by applicable law or court or administrative order, the Master Servicer, on behalf of the Trust and the Indenture Trustee, may, at any time, institute foreclosure proceedings, exercise any power of sale to the extent permitted by law, obtain a deed in lieu of foreclosure, or otherwise acquire possession of or title to the related Property, by operation of law or otherwise. In accordance with the criteria for proceeding against the Property set forth in Section 4.12(a), with respect to FHA Loans that are Mortgage Loans and with respect to the Non-FHA Loans, the Master Servicer shall institute foreclosure proceedings, repossess, exercise any power of sale to the extent permitted by law, obtain a deed in lieu of foreclosure, or 70 75 otherwise acquire possession of or title to any Property, by operation of law or otherwise only in the event that in the Master Servicer's reasonable judgement such action is likely to result in a positive economic benefit to the Trust by creating net liquidation proceeds (after reimbursement of all amounts owed with respect to such Home Loan to the Master Servicer or the Servicer) and provided that, with respect to any Property, prior to taking title thereto, the Master Servicer has requested that the Indenture Trustee obtain, and the Indenture Trustee shall have obtained, an environmental review to be performed on such Property by a company with recognized expertise, the scope of which is limited to the review of public records and documents for information regarding whether such Property has on it, under it or is near, hazardous or toxic material or waste. If such review reveals that such Property has on it, under it or is near hazardous or toxic material or waste or reveals any other environmental problem, the Indenture Trustee shall provide a copy of the related report to the Master Servicer and the Securities Insurer and title shall be taken to such Property only after obtaining the written consent of the Securities Insurer. In connection with any foreclosure proceeding on an FHA Loan, the Master Servicer shall comply with the requirements under Title I, shall follow such practices and procedures in a manner which is consistent with the Master Servicer's procedure for foreclosure with respect to similar FHA Title I loans held in the Master Servicer's portfolio for its own account or, if there are no such loans, FHA Title I loans serviced by the Master Servicer for others. To the extent required by Section 4.08, the Master Servicer shall advance all necessary and proper Foreclosure Advances until final disposition of the Foreclosed Property and shall manage such Foreclosed Property pursuant to Section 4.14. If, in following such foreclosure procedures, title to the Foreclosed Property is acquired, the deed or certificate of sale shall be issued to the Co-Owner Trustee and the Indenture Trustee. (d) With respect to any FHA Loan, each of the Co-Owner Trustee, Owner Trustee, Indenture Trustee and the Contract of Insurance Holder shall deposit in the Note Distribution Account on the day of receipt all amounts received from the FHA or any other Person with respect to such FHA Loans or any other assets of the Trust and shall transmit by facsimile, or such other method requested by the Master Servicer, Claims Administrator or the Securities Insurer, to the Master Servicer, Claims Administrator and the Securities Insurer on each such day the letter of transmittal received from the FHA and any other documents with respect to such receipt. Each of the Co-Owner Trustee, Owner Trustee, Indenture Trustee and the Contract of Insurance Holder shall also promptly deliver to the Claims Administrator copies of any other correspondence received from the FHA or sent to the FHA by the Co-Owner Trustee, Owner Trustee, Indenture Trustee or the Contract of Insurance Holder, as the case may be, including, but not limited to, any correspondence regarding the balance of the FHA Insurance Coverage Reserve Account, premiums due and claims rejected. (e) If, prior to the Termination Date, the FHA rejects an insurance claim, in whole or part, under the Contract of Insurance after previously paying such insurance claim and the FHA demands that the Contract of Insurance Holder repurchase such FHA Loan, the Claims Administrator shall pursue such appeals with the FHA as are reasonable. If the FHA

Claim for FHA Insurance and Foreclosure. (a) (x) If any Monthly Payment due under any FHA Loan is not paid when the same becomes due and payable, or if the Obligor fails to perform any other covenant or obligation under such FHA Loan and such failure continues beyond any applicable grace period, the Master Servicer shall take such action (consistent with Title I, including efforts to cure the default of such FHA Loan pursuant to 24 C.F.R. Section 201.50) as it shall deem to be in the best interest of the Trust. If the maturity of the related Note Debt Instrument has been accelerated pursuant to the requirements under Title I following the Master Servicer's efforts to cure the default of such FHA Loan (and such FHA Loan is not required to be purchased pursuant to Section 68 73 2.04(b)2.06), and (i) if an FHA ------------ Insurance Coverage Insufficiency does not exist at the time, the Claims Administrator Administrator, unless not in the best interests of the Trust, shall initiate, on behalf of the Trust and the Contract of Insurance Holder, a claim under the Contract of Insurance for reimbursement for loss on such FHA Loan pursuant to Title I (see 24 C.F.R. Section 201.54), or (ii) if an FHA Insurance Coverage Insufficiency exists at the time, the Master Servicer shall determine within 90 days in accordance with Section 4.12(c) whether or not --------------- to proceed against the Mortgaged Property securing such FHA Loan, if such FHA Loan is a Mortgage Loan or against the Obligor, if such FHA Loan is unsecured, and if thereafter an FHA Insurance Coverage Insufficiency does not exist, the Claims Administrator may submit a claim under the Contract of Insurance with respect to such FHA Loan if it has obtained the prior approval of the Secretary of HUD pursuant to 24 C.F.R. Section 201.51; or (y) if any Monthly Payment monthly payment due under any Non-FHA Loan is not paid when the same is due and payable, or if the Obligor fails to perform any other covenant or obligation under such Non-FHA Loan and such failure continues beyond any applicable grace period, the Master Servicer shall take such action as it shall deem to be in the best interest of the Trust; including but not limited to proceeding against the Property securing such Non-FHA Loan. In the event that in accordance with clauses (a)(x)(ii) and (y) above the Master Servicer determines not to proceed against the Mortgaged Property or Obligor, as applicable, on or before the Determination Date following such determination the Master Servicer shall determine in good faith in accordance with customary servicing practices that all amounts which it expects to receive with respect to such Home Loan have been received. If the Master Servicer makes such a determination, it shall give notice to such effect pursuant to Section 4.03(e)(xiv). (b) If the Claims Administrator initiates a claim for reimbursement for loss on any FHA Loan under this Section, the Claims Administrator shall comply with applicable provisions of Title I and diligently pursue such claim and, in any event, shall initiate such claim no later than the last day permitted under Title I (see 24 C.F.R. Section 201.54(b))------- 5.05. For purposes of this Agreement, the term "initiate a claim for reimbursement" shall mean the filing of the claim application pursuant to the requirements set forth in 24 C.F.R. Section 201.54, including the filing of all related assignments and documents and materials required for file review. For the purposes of such filing, the Claims Administrator shall request, and the Co-Owner Trustee within 5 calendar days of request shall deliver to the Claims Administrator, the Note and the related Mortgage for such FHA Loan and each other item in the related File necessary to make such claim. Each Securityholder hereby consents to the assignment of such FHA Loan for the sole purpose of initiating a claim under the Contract of Insurance for reimbursement with respect to such FHA Loan. Pursuant to Section 4.12(i), the Contract of Insurance Holder shall furnish the Claims Administrator a power of attorney to file claims under the Contract of Insurance. The Co-Owner Trustee and Contract of Insurance Holder agree to execute and deliver to the Claims Administrator, within 5 Business Days of receipt from the Claims Administrator, all documents, if any, necessary to initiate and file a claim under the Contract of Insurance for such FHA Loan, which documents shall be prepared by the Claims Administrator. If any claim to the FHA becomes a Rejected Claim, upon receipt of the FHA's rejection notice by the Claims Administrator directly from the FHA or 69 74 from the Contract of Insurance Holder pursuant to Section 4.12(e) and a determination by the Claims Administrator that the rejection was not due to clerical error, then the Claims Administrator shall promptly notify the Contract of Insurance Holder (if such notice has not already been given), the Indenture Trustee and the Securities Insurer of the notice of a Rejected Claim. If the FHA indicates in writing that the claim is a Rejected Claim due to reasons other than a failure to service the related FHA Loan in accordance with Title I after the Closing Date, Mego shall repurchase the FHA Loan on or before the Monthly Cut-Off Date next following the date of such notice from the Claims Administrator to repurchase such FHA Loan, either directly from FHA or from the Trust, for the Purchase Price. If FHA indicates in writing that the claim is a Rejected Claim due to a failure to service such FHA Loan in accordance with Title I after the Closing Date, the Claims Administrator shall immediately notify Mego, the Master Servicer, the Contract of Insurance Holder, the Trust, the Indenture Trustee and the Securities Insurer of such determination, and the Master Servicer shall on or before the later to occur of (i) the next succeeding Monthly Cut-Off Date and (ii) ten Business Days from the date on which such rejection notice is received by the Claims Administrator, purchase such FHA Loan either directly from FHA or from the Trust, for the Purchase Price. In the event that the FHA fails to indicate in writing why the claim is a Rejected Claim, the Claims Administrator shall determine why the claim is a Rejected Claim. If the Claims Administrator determines that the claim is a Rejected Claim for reasons other than a servicing failure that occurred after the Closing Date, Mego shall be obligated to repurchase such FHA Loan for the Purchase Price. If the Claims Administrator determines that the claim is a Rejected Claim due to a servicing failure that occurred after the Closing Date, the Master Servicer shall be obligated to repurchase such FHA Loan for the Purchase Price. Notwithstanding any provisions herein to the contrary, neither Mego nor the Master Servicer shall be required to repurchase or purchase, as applicable, any FHA Loan subject to a Rejected Claim as a result of the depletion of the amount of the FHA Insurance Coverage Reserve Account as shown in the Insurance Record. (c) In accordance with the criteria for proceeding against the Property set forth in Section 4.12(a), with respect to an FHA Loan that is a Mortgage Loan that has been accelerated pursuant to the requirements of Title I following the Master Servicer's efforts to cure the default of the FHA Loan, and with respect to a Non-FHA Loan that is a Mortgage Loan, unless otherwise prohibited by applicable law or court or administrative order, the Master Servicer, on behalf of the Trust and the Indenture Trustee, may, at any time, institute foreclosure proceedings, exercise any power of sale to the extent permitted by law, obtain a deed in lieu of foreclosure, or otherwise acquire possession of or title to the related Property, by operation of law or otherwise. In accordance with the criteria for proceeding against the Property set forth in Section 4.12(a), with respect to FHA Loans that are Mortgage Loans and with respect to the Non-FHA Loans, the Master Servicer shall institute foreclosure proceedings, repossess, exercise any power of sale to the extent permitted by law, obtain a deed in lieu of foreclosure, or 70 75 otherwise acquire possession of or title to any Property, by operation of law or otherwise only in the event that in the Master Servicer's reasonable judgement such action is likely to result in a positive economic benefit to the Trust by creating net liquidation proceeds (after reimbursement of all amounts owed with respect to such Home Loan to the Master Servicer or the Servicer) and provided that, with respect to any Property, prior to taking title thereto, the Master Servicer has requested that the Indenture Trustee obtain, and the Indenture Trustee shall have obtained, an environmental review to be performed on such Property by a company with recognized expertise, the scope of which is limited to the review of public records and documents for information regarding whether such Property has on it, under it or is near, hazardous or toxic material or waste. If such review reveals that such Property has on it, under it or is near hazardous or toxic material or waste or reveals any other environmental problem, the Indenture Trustee shall provide a copy of the related report to the Master Servicer and the Securities Insurer and title shall be taken to such Property only after obtaining the written consent of the Securities Insurer. In connection with any foreclosure proceeding on an FHA Loan, the Master Servicer shall comply with the requirements under Title I, shall follow such practices and procedures in a manner which is consistent with the Master Servicer's procedure for foreclosure with respect to similar FHA Title I loans held in the Master Servicer's portfolio for its own account or, if there are no such loans, FHA Title I loans serviced by the Master Servicer for others. To the extent required by Section 4.08, the Master Servicer shall advance all necessary and proper Foreclosure Advances until final disposition of the Foreclosed Property and shall manage such Foreclosed Property pursuant to Section 4.14. If, in following such foreclosure procedures, title to the Foreclosed Property is acquired, the deed or certificate of sale shall be issued to the Co-Owner Trustee and the Indenture Trustee. (d) With respect to any FHA Loan, each of the Co-Owner Trustee, Owner Trustee, Indenture Trustee and the Contract of Insurance Holder shall deposit in the Note Distribution Account on the day of receipt all amounts received from the FHA or any other Person with respect to such FHA Loans or any other assets of the Trust and shall transmit by facsimile, or such other method requested by the Master Servicer, Claims Administrator or the Securities Insurer, to the Master Servicer, Claims Administrator and the Securities Insurer on each such day the letter of transmittal received from the FHA and any other documents with respect to such receipt. Each of the Co-Owner Trustee, Owner Trustee, Indenture Trustee and the Contract of Insurance Holder shall also promptly deliver to the Claims Administrator copies of any other correspondence received from the FHA or sent to the FHA by the Co-Owner Trustee, Owner Trustee, Indenture Trustee or the Contract of Insurance Holder, as the case may be, including, but not limited to, any correspondence regarding the balance of the FHA Insurance Coverage Reserve Account, premiums due and claims rejected. (e) If, prior to the Termination Date, the FHA rejects an insurance claim, in whole or part, under the Contract of Insurance after previously paying such insurance claim and the FHA demands that the Contract of Insurance Holder repurchase such FHA Loan, the Claims Administrator shall pursue such appeals with the FHA as are reasonable. If the FHA----