Common use of Rate Adjustment Clause in Contracts

Rate Adjustment. As to each Adjustable Rate Mortgage Loan, the Servicer shall make periodic Mortgage Interest Rate and Monthly Payment adjustments, as applicable, in strict compliance with (i) the terms of the Mortgage and Mortgage Note, (ii) all applicable law, and (iii) Customary Servicing Procedures. Servicer shall establish procedures to monitor the Index in order to ensure that it uses the appropriate value for the Index in determining an interest rate change. Servicer shall execute all and deliver all appropriate notices required by (i) the terms of the Mortgage and Mortgage note, (ii) all applicable law, and (iii) Customary Servicing Procedures regarding such Mortgage Interest Rate adjustments and Monthly Payment adjustments. Upon request by the Owner, Servicer shall deliver to the Owner copies of such adjustment notification, and shall describe the values and methods used to calculate and implement such adjustments. If Servicer fails to make a timely and correct Mortgage Interest Rate adjustment or Monthly Payment adjustment, Servicer shall deposit in the Custodial Account out of its own funds any amounts necessary to satisfy any shortage in the Mortgagor’s Monthly Payment for so long as such shortage continues. In the event the Index, as specified in the related Mortgage Note, becomes unavailable for any reason, Servicer shall select an alternative index, in accordance with the terms of the Mortgage Note provide written notice to the Owner of such alternative index, and such alternative index shall thereafter be the Index for such Mortgage Loan unless otherwise directed by the Owner to select a specified index in accordance with the terms of the Mortgage Loan. The Servicer shall use any alternative index as specified by the Owner so long as such index is in accordance with the terms of the Mortgage Note.