Common use of Realization Upon Defaulted Mortgage Loans Clause in Contracts

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be in the best interest of Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16.

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Conventional Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In the event that any payment due under any FHA Loan becomes delinquent, the Servicer shall take all such actions as are in the best interests of the Certificateholders and permitted under any applicable FHA loss mitigation proceedings, including, but not limited to, requesting the FHA to accept an assignment of such FHA Loan, and, upon the Servicer's determination that foreclosure is in the best interest of the Certificateholders, commencing foreclosure proceedings. With respect to any defaulted Mortgage Loan, the Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including, extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the servicing standards set forth in the Fannie Mae Guide, subject including, withoxx xxxixxxion, advancing funds for the payment of taxes and insurance premiums with respect to first lien Mortgage Loans. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust Fund 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 Servicer 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: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loanthe affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 3.03 shall be advanced by the Servicer, pursuant subject to Section 5.03, and the Servicer's obligation right to make such Monthly Advances shall terminate on be reimbursed therefor from the 90th day referred to aboveCollection Account as provided in Section 3.05(ii). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, cleanup or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05(ii).

Realization Upon Defaulted Mortgage Loans. In (a) As set forth in the event that any payment due under any Standard Terms. (b) As set forth in the Standard Terms. (c) As set forth in the Standard Terms. (d) The decision of the Servicer to foreclose on a defaulted Mortgage Loan shall be subject to a determination by the Servicer that the proceeds of such foreclosure would exceed the costs and not postponed pursuant expenses of bringing such a proceeding; provided that with respect to Section 4.01 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 second-lien Mortgage Loan and such failure continues beyond any applicable grace periodLoan, the Servicer shall take may charge off such action as Mortgage Loan at the time such Mortgage Loan becomes 180 days delinquent (1) unless the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2anticipates future recoveries on such Mortgage Loan) and such Mortgage Loan shall be consistent with Accepted Servicing Practices and any Primary treated as a Liquidated Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be in the best interest of PurchaserLoan. In the event that any payment due under any Once a Mortgage Loan that is not postponed pursuant to Section 4.01 and remains 180 days delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodhas been charged off, the Servicer shall, subject will discontinue making Servicing Advances and the the Servicer will not be entitled to accrue additional servicing fees (except as provided below). Any charged off second-lien Mortgage Loan shall be released from the Trust Fund to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing Holder of the Servicer's intention Class X Certificates at the time such Mortgage Loan becomes 360 days delinquent. Any mortgage loan that is 180 days delinquent that is charged off may continue to do so, and be serviced by the Servicer shall not commence foreclosure proceedings for the certificateholders using specialized collection procedures (including foreclosure, if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priorityappropriate). The Servicer shall obtain prior approval be entitled to servicing fees or reimbursement of Purchaser expenses in connection with such second-lien Mortgage Loans serviced using specialized collection procedures after the date of charge off, but only to the extent of funds available from the aggregate amount of Recoveries on all such second-lien Mortgage Loans. Prior to the release of a charged off second-lien Mortgage Loan to the Holder of the Class X Certificates, any Recovery on such Mortgage Loan shall be applied as described in this Agreement. The income earned from the management of any REO Properties, net of reimbursement to restoration such Servicer for expenses incurred (including any property or other taxes) in connection with such management and net of applicable accrued and unpaid Servicing Fees, and unreimbursed Advances and Servicing Advances, shall be applied to the payment of principal of and interest on the related defaulted Mortgage Loans (with interest accruing as though such Mortgage Loans were still current) and all such income shall be deemed, for all purposes in this Agreement, to be payments on account of principal and interest on the related Mortgage Notes and shall be deposited into the related Collection Account. To the extent the net income received during any calendar month is in excess of one thousand dollars ($1,000). The Servicer the amount attributable to amortizing principal and accrued interest at the related Mortgage Rate on the related Mortgage Loan for such calendar month, such excess shall notify the Purchaser in writing be considered to be a partial prepayment of principal of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, Mortgage Loan. (e) As set forth in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Standard Terms.

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In With respect to any defaulted Mortgage Loan, the event that any payment due under any Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the Servicing Standard, subject to including, without limitation, advancing funds for the payment of taxes and insurance premiums. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust 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 Servicer has received the prior written consent of the NIMS Insurer and has received a prudent report prepared by a Person who regularly conducts environmental audits using customary industry standards, that: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loanthe affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 3.03 shall be advanced by the Servicer, pursuant subject to Section 5.03, and the Servicer's obligation right to make such Monthly Advances shall terminate on be reimbursed therefor from the 90th day referred to aboveTrust Collection Account as provided in Section 3.05(a)(iv). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, clean-up or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Trust Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05(a).

Realization Upon Defaulted Mortgage Loans. 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 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Seller shall notify the Purchaser in writing of the ServicerSeller's intention to do so, and the Servicer Seller shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Seller shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer In such connection, the Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.1611.05.

Realization Upon Defaulted Mortgage Loans. (a) The Interim Servicer shall use its best efforts, consistent with the procedures that the Interim Servicer 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 Subsection 11.01. The Interim Servicer 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 Interim Servicer 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 Interim Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Interim Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 ninety (90) days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Interim Servicer shall, subject to the provisions of this Agreement, shall commence foreclosure proceedings. The , provided that prior to commencing foreclosure proceedings, the Interim Servicer shall notify the Purchaser in writing of the Interim Servicer's intention to do so, and the Interim Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Interim Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The In such connection, the Interim Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 11.03, with respect to any Mortgage Loan as to which the Interim Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property the Interim Servicer 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 Interim Servicer 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 contrary contained hereinuse, 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 Subsection 11.03 shall be advanced by the Interim Servicer, subject to the Interim Servicer's right to be reimbursed therefor from the Custodial Account as provided in Subsection 11.05(v). If the Interim Servicer 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 Interim Servicer 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 Interim Servicer, subject to the Interim Servicer's right to be reimbursed therefor from the Custodial Account as provided in Subsection 11.05(v). (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 Interim Servicer for any related unreimbursed Servicing Advances, pursuant to Subsection 11.05(iii); 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 Distribution Date on which such amounts are to be distributed if not in connection with a foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by the Interim Servicer as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report interest then due and owing. The portion of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect recovery so allocated to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer unpaid Servicing Fees shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from to the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Interim Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Subsection 11.05(iii).

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Company shall take such action as (1a) the Servicer Company would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2b) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance PoliciesPractices, and (3c) the Servicer Company shall determine prudently to be in the best interest of PurchaserOwner and (d) is consistent with any related Primary Mortgage Insurance Policy. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 ninety (90) days or any other default continues for a period of 90 ninety (90) days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, Company shall commence foreclosure proceedings. The Servicer , provided that, prior to commencing foreclosure proceedings, the Company shall notify the Purchaser Owner in writing of the Servicer's Company’s intention to do so, and the Servicer Company shall not commence foreclosure proceedings if the Purchaser Owner objects to such action within three five (35) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure actionconnection, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer Company shall from its own funds make all necessary and proper Servicing Advances, ; provided, however, that the Servicer Company shall not be required to expend its own funds in connection with make any foreclosure or towards the restoration or preservation of any Mortgaged Propertysuch Advance, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser Owner after reimbursement to itself for such expenses and (b) that such expenses Advance will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.053.07) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer In the event of a determination by the Company that any such Advance previously made pursuant to this Section 3.15 shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify not be recoverable from the Purchaser in writing proceeds of the commencement of foreclosure proceedings. The Servicer related Mortgage Loan, the Company shall be responsible for entitled to reimbursement of its funds so expended pursuant to Section 3.07. Notwithstanding any provision of the Agreement, a Mortgage Loan may be deemed to be finally liquidated if substantially all costs and expenses incurred amounts expected by it the Company to be received in any such proceedings or functionsconnection with the related defaulted Mortgage Loan have been received; provided, however, that it any subsequent collections with respect to any such Mortgage Loan shall be entitled to reimbursement thereof from the related property, as contemplated in Section 4.05. Notwithstanding anything deposited to the contrary contained hereinCustodial Account. For purposes of determining the amount of any Liquidation Proceeds, Condemnation Proceeds or Insurance Proceeds, or other unscheduled collections, the Company may take into account minimal amounts of additional receipts expected to be received or any estimated additional liquidation expenses expected to be incurred in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a defaulted Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Loan.

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Conventional Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In the event that any payment due under any FHA Loan becomes delinquent, the Servicer shall take all such actions as are in the best interests of the Certificateholders and permitted under any applicable FHA loss mitigation proceedings, including, but not limited to, requesting the FHA to accept an assignment of such FHA Loan, and, upon the Servicer's determination that foreclosure is in the best interest of the Certificateholders, commencing foreclosure proceedings. With respect to any defaulted Mortgage Loan, the Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including, extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the servicing standards set forth in the Fannie Mae Guide, subject including, without limitation, advancing funds for thx xxxxexx of taxes and insurance premiums with respect to first lien Mortgage Loans. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust Fund 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 Servicer 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: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loanthe affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 3.03 shall be advanced by the Servicer, pursuant subject to Section 5.03, and the Servicer's obligation right to make such Monthly Advances shall terminate on be reimbursed therefor from the 90th day referred to aboveCollection Account as provided in Section 3.05(ii). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, cleanup or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05(ii).

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 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Seller shall notify the Purchaser in writing of the Servicer's Seller’s intention to do so, and the Servicer Seller shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Seller shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer In such connection, the Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. 11.05. (b) Notwithstanding anything 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 contrary contained hereinuse, 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 11.05(vi). 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 11.05(vi). (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 11.05(iii); 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 Distribution Date on which such amounts are to be distributed if not in connection with a foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by the Seller as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes interest then due and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16owing.

Realization Upon Defaulted Mortgage Loans. (a) The Company shall use its best efforts, consistent with the procedures that the Company 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 Exh. 5-4 payments pursuant to Subsection 11.01. The Company 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 Company shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion (i) that such restoration will increase the proceeds of liquidation of the related Mortgage Loan to the Purchaser after reimbursement to itself for such expenses, and (ii) that such expenses will be recoverable by the Company through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Company shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. If a Mortgage Loan becomes sixty (60) or more days delinquent or subject to a foreclosure proceeding, then with respect to the Servicing Rights to such Mortgage Loan the related Servicing Transfer Date shall be the close of business on the next Business Day if so requested by the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 ninety (90) days or any other default continues for a period of 90 days beyond more, and the expiration of any grace or cure periodPurchaser has not exercised its right to accelerate the related Servicing Transfer Date as described in the previous sentence, the Servicer shall, subject to the provisions of this Agreement, Company shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Company shall notify the Purchaser in writing of the ServicerCompany's intention to do so, and the Servicer Company shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Company shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer In such connection, the Company shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 11.03, with respect to any Mortgage Loan as to which the contrary contained hereinCompany has received actual notice of, in connection with or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Company shall not either (i) obtain title to such Mortgaged Property as a foreclosure result of or acceptance of a deed in lieu of foreclosureforeclosure or otherwise, in 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 event 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 Servicer meaning of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the Company has received approval from the Purchaser and has also previously determined, based on its reasonable cause to believe that judgment and a prudent report prepared by a Person who regularly conducts environmental audits using customary industry standards, that: (1) such Mortgaged Property is contaminated by 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 or toxic substances or 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 otherwise requests an to take such actions with respect to the affected Mortgaged Property. The cost of the environmental inspection audit report contemplated by this Subsection 11.03 shall be advanced by the Company, subject to the Company's right to be reimbursed therefor from the Custodial Account as provided in Subsection 11.05(vii). If the Company determines, in consultation with the Purchaser, 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 review 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 Company shall take such an inspection or review is action as it deems to be conducted by a qualified inspector at in the best economic interest of the Purchaser's expense. Upon completion The cost of any such compliance, containment, cleanup or remediation shall be advanced by the inspectionCompany, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect subject to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled Company's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Account pursuant to Section 4.05 hereof. In as provided in Subsection 11.05(vii). (c) The Company shall also promptly notify the event that a Mortgage Loan becomes part Purchaser upon learning of a REMICany state insolvency or federal bankruptcy proceedings in which any Mortgagor is seeking relief or is the defendant debtor, and becomes REO Property, such property shall be disposed or of by the Servicer in accordance with Section 4.16death or incapacity or any Mortgagor or guarantor.

Realization Upon Defaulted Mortgage Loans. (a) The Company shall use its best efforts, consistent with the procedures that the Company 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 Subsection 11.01. The Company 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 Company shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion (i) that such restoration will increase the proceeds of liquidation of the related Mortgage Loan to the Purchaser after reimbursement to itself for such expenses, and (ii) that such expenses will be recoverable by the Company through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Company shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. If a Mortgage Loan becomes sixty (60) or more days delinquent or subject to a foreclosure proceeding, then with respect to the Servicing Rights to such Mortgage Loan the related Servicing Transfer Date shall be the close of business on the next Business Day if so requested by the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 ninety (90) days or any other default continues for a period of 90 days beyond more, and the expiration of any grace or cure periodPurchaser has not exercised its right to accelerate the related Servicing Transfer Date as described in the previous sentence, the Servicer shall, subject to the provisions of this Agreement, Company shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Company shall notify the Purchaser in writing of the ServicerCompany's intention to do so, and the Servicer Company shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Company shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer In such connection, the Company shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 11.03, with respect to any Mortgage Loan as to which the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer Company has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastesreceived actual notice of, or if has actual knowledge of, the Purchaser otherwise requests an environmental inspection presence of any toxic or review of such hazardous substance on the related Mortgaged Property, the Company shall not either (i) obtain title to such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous as a result of or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and or otherwise, or (ii) otherwise acquire possession of, or take any related environmental clean up costsother action, with respect to, such Mortgaged Property if, as applicablea 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 Company has received approval from the related Liquidation ProceedsPurchaser and has also previously determined, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicerbased on its reasonable judgment and a prudent report prepared by a Person who regularly conducts environmental audits using customary industry standards, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16.that:

Realization Upon Defaulted Mortgage Loans. (a) The Interim Servicer shall use its best efforts, consistent with Accepted Servicing Practices 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 Subsection 11.01. The Interim Servicer 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 Interim Servicer 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 the Purchaser after reimbursement to itself for such expenses, and (ii) that such expenses will be recoverable by the Interim Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Interim Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Interim Servicer shall, subject to the provisions of this Agreement, shall commence foreclosure proceedings. The , provided that prior to commencing foreclosure proceedings, the Interim Servicer shall notify the Purchaser in writing of the Interim Servicer's intention to do so, and the Interim Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Interim Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The In such connection, the Interim Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 11.03, with respect to any Mortgage Loan as to which the Interim Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Interim Servicer 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 Interim Servicer has also previously determined, based on his 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 contrary contained hereinuse, 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 Subsection 11.03 shall be advanced by the Interim Servicer, subject to the Interim Servicer's right to be reimbursed therefor from the Custodial Account as provided in Subsection 11.05(vi). If the Interim Servicer 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 Interim Servicer 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 Interim Servicer, subject to the Interim Servicer's right to be reimbursed therefor from the Custodial Account as provided in Subsection 11.05(vi). (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 Interim Servicer for any related unreimbursed Servicing Advances, pursuant to Subsection 11.05(iii); 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 Distribution Date on which such amounts are to be distributed if not in connection with a foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by the Interim Servicer as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report interest then due and owing. The portion of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect recovery so allocated to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer unpaid Servicing Fees shall be reimbursed to the Interim Servicer pursuant to Subsection 11.05(iii). The portion of the recovery allocated to interest (net of unpaid Servicing Fees) and the portion of the recovery allocated to principal of the Mortgage Loan shall be applied as follows: first to reimburse the Interim Servicer for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing unreimbursed Monthly Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Subsection 11.05(ii), and second, as part of the amounts to be distributed to the Purchaser in accordance with Subsection 11.14.

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Conventional Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In the event that any payment due under any FHA Loan becomes delinquent, the Servicer shall take all such actions as are in the best interests of the Certificateholders and permitted under any applicable FHA loss mitigation proceedings, including, but not limited to, requesting the FHA to accept an assignment of such FHA Loan, and, upon the Servicer's determination that foreclosure is in the best interest of the Certificateholders, commencing foreclosure proceedings. With respect to any defaulted Mortgage Loan, the Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including, extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the servicing standards set forth in the Xxxxxx Xxx Guide, subject including, without limitation, advancing funds for the payment of taxes and insurance premiums with respect to first lien Mortgage Loans. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust Fund 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 Servicer 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: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loanthe affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 3.03 shall be advanced by the Servicer, pursuant subject to Section 5.03, and the Servicer's obligation right to make such Monthly Advances shall terminate on be reimbursed therefor from the 90th day referred to aboveCollection Account as provided in Section 3.05(ii). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, cleanup or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05(ii).

Realization Upon Defaulted Mortgage Loans. In Determination of Excess Proceeds and Realized Losses; Repurchase of Certain Mortgage Loans; Auction of Charged-off Mortgage Loans. (a) Notwithstanding the event that first sentence of Section 3.01, the Master Servicer may agree to any payment due under modification of any Mortgage Loan and not postponed pursuant to Section 4.01 is not paid when (the same becomes due and payable, or in "Modified Mortgage Loan") if (i) CHL purchases the event the Mortgagor fails to perform any other covenant or obligation under the Modified Mortgage Loan from the Trust Fund immediately following the modification as described below and such failure continues beyond any applicable grace period, the Servicer shall take such action as (1ii) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be in the best interest Stated Principal Balance of Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, when taken together with the aggregate of the Stated Principal Balances of all other Mortgage Loans that have been so modified since the Closing Date at the time of those modifications, does not exceed an amount equal to 5% of the aggregate Certificate Principal Balance of the related Certificates. Effective immediately after the modification, and, in any event, on the same Business Day on which the modification occurs, all interest of the Trustee in the Modified Mortgage Loan shall automatically be deemed transferred and assigned to CHL and all benefits and burdens of ownership thereof, including the right to accrued interest thereon from the date of modification and the risk of default thereon, shall pass to CHL. The Master Servicer shall promptly deliver to the Trustee a certification of a Servicing Officer to the effect that all requirements of this paragraph have been satisfied with respect to the Modified Mortgage Loan. For federal income tax purposes, the Trustee shall account for such purchase as a prepayment in full of the Modified Mortgage Loan. CHL shall remit the Purchase Price to the Master Servicer for deposit into the Certificate Account pursuant to Section 5.033.05 within one Business Day after the purchase of the Modified Mortgage Loan. Upon receipt by the Trustee of written notification of any such deposit signed by a Servicing Officer, the Trustee shall release to CHL or its designee the related Mortgage File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in CHL any Modified Mortgage Loan previously transferred and assigned pursuant hereto. CHL covenants and agrees to indemnify the Trust Fund against any liability for any "prohibited transaction" taxes and any related interest, additions, and the Servicer's obligation to make such Monthly Advances shall terminate penalties imposed on the 90th day referred Trust Fund established hereunder as a result of any modification of a Mortgage Loan effected pursuant to abovethis subsection (a), any holding of a Modified Mortgage Loan by the Trust Fund or any purchase of a Modified Mortgage Loan by CHL (but such obligation shall not prevent CHL or any other appropriate Person from in good faith contesting any such tax in appropriate proceedings and shall not prevent CHL from withholding payment of such tax, if permitted by law, pending the outcome of such proceedings). CHL shall have no right of reimbursement for any amount paid pursuant to the foregoing indemnification, except to the extent that the amount of any tax, interest, and penalties, together with interest thereon, is refunded to the Trust Fund or CHL. If the Master Servicer agrees to a modification of any Mortgage Loan pursuant to this Section 3.12(a), and if such Mortgage Loan carries a Prepayment Charge provision, CHL shall deliver to the Trustee the amount of the Prepayment Charge, if any, that would have been due had such Mortgage Loan been prepaid at the time of such modification, for deposit into the Certificate Account (not later than 1:00 p.m. Pacific time on the Master Servicer Advance Date immediately succeeding the date of such modification) for distribution in accordance with the terms of this Agreement. (b) The Master Servicer shall from use reasonable efforts to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments. In connection with such foreclosure or other conversion, the Master Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its own funds make all necessary general mortgage servicing activities and proper Servicing Advances, provided, however, the requirements of the insurer under any Required Insurance Policy; provided that the Master Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, property unless it shall determine in its reasonable discretion (ai) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for of such expenses and (bii) that such expenses will be recoverable by to it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Certificate Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority3.08 hereof). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Master Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, provided that it shall be entitled to reimbursement thereof from the proceeds of liquidation of the related propertyMortgaged Property and any related Subsequent Recoveries, as contemplated in Section 4.053.08 hereof. Notwithstanding anything If the Master Servicer has knowledge that a Mortgaged Property that the Master Servicer is contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is located within a one-mile radius of any site with environmental or hazardous waste risks known to the contrary contained hereinMaster Servicer, the Master Servicer will, prior to acquiring the Mortgaged Property, consider such risks and only take action in accordance with its established environmental review procedures. With respect to any REO Property, the deed or certificate of sale shall be taken in the name of the Trustee for the benefit of the Certificateholders (or the Trustee's nominee on behalf of the Certificateholders). The Trustee's name shall be placed on the title to such REO Property solely as the Trustee hereunder and not in its individual capacity. The Master Servicer shall ensure that the title to such REO Property references this Agreement and the Trustee's capacity thereunder. Pursuant to its efforts to sell such REO Property, the Master Servicer shall either itself or through an agent selected by the Master Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such REO Property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Master Servicer deems to be in the best interest of the Master Servicer and the Certificateholders for the period prior to the sale of such REO Property. The Master Servicer shall prepare for and deliver to the Trustee a statement with respect to each REO Property that has been rented showing the aggregate rental income received and all expenses incurred in connection with the management and maintenance of such REO Property at such times as is necessary to enable the Trustee to comply with the reporting requirements of the REMIC Provisions. The net monthly rental income, if any, from such REO Property shall be deposited in the Certificate Account no later than the close of business on each Determination Date. The Master Servicer shall perform the tax reporting and withholding related to foreclosures, abandonments and cancellation of indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code by preparing and filing such tax and information returns, as may be required. In the event that the Trust Fund acquires any Mortgaged Property as aforesaid or otherwise in connection with a foreclosure default or acceptance imminent default on a Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property as soon as practicable in a deed manner that maximizes the Liquidation Proceeds, but in lieu no event later than three years after its acquisition by the Trust Fund or, at the expense of foreclosurethe Trust Fund, in the Master Servicer shall request, more than 60 days prior to the day on which such three-year period would otherwise expire, an extension of the three-year grace period. In the event the Trustee shall have been supplied with an Opinion of Counsel (such opinion not to be an expense of the Trustee) to the effect that the holding by the Trust Fund of such Mortgaged Property subsequent to such three-year period will not result in the imposition of taxes on "prohibited transactions" of the Trust Fund as defined in section 860F of the Code or cause any REMIC formed hereunder to fail to qualify as a REMIC at any time that any Certificates are outstanding, and the Trust Fund may continue to hold such Mortgaged Property (subject to any conditions contained in such Opinion of Counsel) after the expiration of such three-year period. Notwithstanding any other provision of this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to continue to be rented) or otherwise used for the production of income by or on behalf of the Trust Fund in such a manner or pursuant to any terms that would (i) cause such Mortgaged Property to fail to qualify as "foreclosure property" within the meaning of section 860G(a)(8) of the Code or (ii) subject the Trust Fund to the imposition of any federal, state or local income taxes on the income earned from such Mortgaged Property under section 860G(c) of the Code or otherwise, unless the Master Servicer has reasonable cause agreed to believe indemnify and hold harmless the Trust Fund with respect to the imposition of any such taxes. The decision of the Master Servicer to foreclose on a defaulted Mortgage Loan shall be subject to a determination by the Master Servicer that the proceeds of such foreclosure would exceed the costs and expenses of bringing such a proceeding. The income earned from the management of any Mortgaged Property is contaminated by hazardous Properties acquired through foreclosure or toxic substances other judicial proceeding, net of reimbursement to the Master Servicer for expenses incurred (including any property or wastesother taxes) in connection with such management and net of unreimbursed Servicing Fees, Advances, Servicing Advances and any management fee paid or if to be paid with respect to the Purchaser otherwise requests an environmental inspection or review management of such Mortgaged Property, shall be applied to the payment of principal of, and interest on, the related defaulted Mortgage Loans (with interest accruing as though such an inspection or review is Mortgage Loans were still current) and all such income shall be deemed, for all purposes in this Agreement, to be conducted by payments on account of principal and interest on the related Mortgage Notes and shall be deposited into the Certificate Account. To the extent the income received during a qualified inspector Prepayment Period is in excess of the amount attributable to amortizing principal and accrued interest at the Purchaser's expenserelated Mortgage Rate on the related Mortgage Loan, such excess shall be considered to be a partial Principal Prepayment for all purposes hereof. Upon completion The Liquidation Proceeds from any liquidation of a Mortgage Loan and any Subsequent Recoveries, net of any payment to the Master Servicer as provided above, shall be deposited in the Certificate Account as provided in Section 3.05 for distribution on the related Distribution Date, except that any Excess Proceeds shall be retained by the Master Servicer as additional servicing compensation. The proceeds of any Liquidated Mortgage Loan, as well as any recovery resulting from a partial collection of Liquidation Proceeds or any income from an REO Property, will be applied in the following order of priority: first, to reimburse the Master Servicer for any related unreimbursed Servicing Advances and Servicing Fees, pursuant to Section 3.08(a)(vi) or this Section 3.12; second, to reimburse the Master Servicer for any unreimbursed Advances, pursuant to Section 3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid interest (to the extent no Advance has been made for such amount) on the Mortgage Loan or related REO Property, at the Net Mortgage Rate to the Due Date occurring in the month in which such amounts are required to be distributed; and fourth, as a recovery of principal of the inspectionMortgage Loan. (c) [Reserved]. (d) The Master Servicer, in its sole discretion, shall have the right to elect (by written notice sent to the Trustee) to purchase for its own account from the Trust Fund any Mortgage Loan that is 150 days or more delinquent at a price equal to the Purchase Price; provided, however, that the Master Servicer may only exercise this right on or before the last day of the calendar month in which such Mortgage Loan became 150 days delinquent (such month, the "Eligible Repurchase Month"); provided further, that any such Mortgage Loan which becomes current but thereafter becomes delinquent may be purchased by the Master Servicer pursuant to this Section in any ensuing Eligible Repurchase Month. The Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in the Certificate Account. Any purchase of a Mortgage Loan pursuant to this Section 3.12(d) shall be accomplished by remittance to the Master Servicer for deposit in the Certificate Account of the Purchase Price. The Trustee, upon receipt of certification from the Master Servicer of such deposit and a Request for File Release from the Master Servicer, shall release or cause to be released to the purchaser of such Mortgage Loan the related Mortgage File and shall execute and deliver such instruments of transfer or assignment prepared by the purchaser of such Mortgage Loan, in each case without recourse, as shall be necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto and the purchaser of such Mortgage Loan shall succeed to all the Trustee's right, title and interest in and to such Mortgage Loan and all security and documents related thereto. Such assignment shall be an assignment outright and not for security. The purchaser of such Mortgage Loan shall thereupon own such Mortgage Loan, and all security and documents, free of any further obligation to the Trustee or the Certificateholders with respect thereto. (e) The Master Servicer shall promptly provide use reasonable efforts to solicit bids on a quarterly basis from at least two unaffiliated third parties for the Purchaser with purchase of a written report Charged-off Mortgage Loan during the related Auction Period. If more than one Charged-off Mortgage Loan exists, the Master Servicer may solicit bids for a single Charged-off Mortgage Loan, a portion of the environmental inspectionoutstanding Charged-off Mortgage Loans or all of the outstanding Charged-off Mortgage Loans. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed If fewer than two bids with respect to a Charged-off Mortgage Loan are received during the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosurerelated Auction Period, the Master Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costsshall, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.12(b), use reasonable efforts to foreclose the Mortgaged Property securing the related Charged-off Mortgage Loan to the extent that the Master Servicer determines that the proceeds of such foreclosure would exceed the costs and expenses of bringing such a proceeding. If two or more bids with respect to a Charged-off Mortgage Loan are received during the related Auction Period, the Master Servicer shall arrange for the sale of the Charged-off Mortgage Loan to the highest bidder. The Master Servicer shall prepare any necessary documentation required to transfer title to the Charged-off Mortgage Loans to the related purchaser. The Master Servicer shall deduct from the proceeds of the sale or foreclosure of such Charged-off Mortgage Loan the related Charged-off Mortgage Loan Disposition Fee and any unreimbursed Servicing Advances with respect to such Charged-off Mortgage Loan in accordance with Section 3.

Realization Upon Defaulted Mortgage Loans. (a) In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action (i) as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Owner (which shall include, but not be limited to, Mortgage Loan liquidation and short sales) and (ii) that is consistent with any related PMI Policy. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for connection with a period of 90 days foreclosure or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure actionconversion, the Servicer shall not be required to make Monthly Advances exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as it customarily employs with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from mortgage loans Serviced for its own account, giving due consideration to Accepted Servicing Practices, including, without limitation, advancing funds make all necessary for the payment of taxes and proper Servicing Advancesinsurance premiums. During this period and in the administration of such defaulted Mortgage Loans, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for making all costs and expenses incurred by customary Servicing Advances. Notwithstanding anything to the contrary contained herein, in no event will the Servicer make a Servicing Advance if it in any such proceedings or functions; provideddetermines, howeverusing Accepted Servicing Practices, that such Servicing Advance would be a Nonrecoverable Advance. The determination by the Servicer that it has made a Nonrecoverable Advance or that any proposed Servicing Advance, if made would constitute a Nonrecoverable Advance, shall be entitled evidenced by an officer’s certificate of the Servicer delivered to reimbursement thereof the Owner. Servicer shall be reimbursed for all Servicing Advances made with respect to such defaulted Mortgage Loans from the related property, as contemplated in Collection Account pursuant to Section 4.05. 3.05 herein. (b) Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, wastes or if the Purchaser Mortgage Property poses any type of environmental risks or if the Owner otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is Property to be conducted by a qualified inspector inspector, the Servicer shall cause such inspection to occur solely at the Purchaser's expenseexpense of the Owner. If the Servicer shall advance or use its own money to effect such environmental inspection, the Servicer shall reimburse itself from the Collection Account. If the Collection Account fails to maintain sufficient funds to reimburse the Servicer, the Owner shall directly reimburse the Servicer of such advance within five (5) Business Days upon receipt of an invoice from the Servicer. (c) Upon completion of the an environmental inspection, the Servicer shall promptly provide the Purchaser Owner with a written report of the environmental inspectioninspection report. After reviewing the environmental inspection report, the Purchaser Owner shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (ai) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or hazardous, toxic substances or wastes or poses environmental risks of any kind, and (bii) the Purchaser Owner directs the Servicer Servicer, in writing, to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Collection Account pursuant to Section 4.05 hereof3.05 herein and in the event amounts in the Collection Account are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to reimbursement directly from the Owner within five (5) Business Days upon receipt of an invoice from the Servicer. In the event the Purchaser Owner directs the Servicer Servicer, in writing, not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Collection Account pursuant to Section 4.05 hereof. In 3.05 herein and in the event that a Mortgage Loan becomes part of a REMICamounts in the Collection Account are insufficient to fully reimburse the Servicer, and becomes REO Property, such property the Servicer shall be disposed of by entitled to reimbursement from the Servicer in accordance with Section 4.16Owner.

Realization Upon Defaulted Mortgage Loans. The Servicer shall use its best efforts, consistent with the procedures that the Servicer would use in servicing similar mortgage loans for its own account, to foreclose upon or otherwise comparably convert the ownership of such of the Mortgage Loans 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 3.01. Foreclosure or comparable proceedings shall be initiated within 120 days of default for Mortgaged Properties for which no satisfactory arrangements can be made for collection of delinquent payments. The Servicer 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 Trustee, 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 Servicer shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion (i) that such restoration will increase the proceeds of liquidation of the related Mortgage Loan to the Master Servicer after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable by the Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 3.01 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 Servicer shall take such action as (1) the Servicer would take for other institutional investors under similar circumstances with respect to a similar mortgage loan held for its own account for investmentloan, (2) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance PoliciesPractices, and (3) the Servicer shall determine prudently to be in the best interest of Purchaserthe Trust Fund, and (4) is consistent with any related PMI Policy or LPMI Policy. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 3.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, shall commence foreclosure proceedings. The , provided that prior to commencing foreclosure proceedings, the Servicer shall notify the Purchaser Master Servicer (who will notify the Trustee and the Trust Administrator) in writing of the Servicer's ’s intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser Master Servicer objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure actionconnection, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for advancing all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.04.

Realization Upon Defaulted Mortgage Loans. (a) The Servicer shall use its best efforts, consistent with the procedures that the Servicer 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 Subsection 11.01. The Servicer 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 Servicer 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 Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shallSeller shall use Accepted Servicing Practices and refer to foreclosure by the 120th day of delinquency. The Seller will notify the Purchaser of foreclosure referrals on a monthly basis, subject prior to the provisions initiation of this Agreement, commence foreclosure proceedings. The Servicer When foreclosure sale is imminent, Seller shall notify the Purchaser and obtain a property valuation and issue bidding instructions in writing of accordance with Accepted Servicing Practices and consistent with methods used for the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such noticemortgage loans held for its own portfolio. In the event the Purchaser objects to such foreclosure actionconnection, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 11.03, with respect to any Mortgage Loan as to which the Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property the Servicer 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 Servicer 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 contrary contained hereinuse, 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 Subsection 11.03 shall be advanced by the Servicer, subject to the Servicer's right to be reimbursed therefor from the Custodial Account as provided in Subsection 11.05(v). If the Servicer 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 Servicer 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 Servicer, subject to the Servicer's right to be reimbursed therefor from the Custodial Account as provided in Subsection 11.05(v). (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 Servicer for any related unreimbursed Servicing Advances, pursuant to Subsection 11.05(iii); 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 Distribution Date on which such amounts are to be distributed if not in connection with a foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event amount of such recovery will be allocated by the Servicer has reasonable cause as follows: first, to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastesunpaid Servicing Fees; and second, or if to the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report interest then due and owing. The portion of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect recovery so allocated to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer unpaid Servicing Fees shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Subsection 11.05(iii).

Realization Upon Defaulted Mortgage Loans. (a) The Servicer shall use its best efforts, consistent with the procedures that the Servicer 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 Subsection 11.01. The Servicer 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 Servicer 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 Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, shall commence foreclosure proceedings. The , provided that prior to commencing foreclosure proceedings, the Servicer shall notify the Purchaser in writing of the Servicer's ’s intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The In such connection, the Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 11.03, with respect to any Mortgage Loan as to which the Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property the Servicer 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 Servicer 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 contrary contained hereinuse, 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 Subsection 11.03 shall be advanced by the Servicer, subject to the Servicer’s right to be reimbursed therefor from the Custodial Account as provided in Subsection 11.05(v). If the Servicer 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 Servicer 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 Servicer, subject to the Servicer’s right to be reimbursed therefor from the Custodial Account as provided in Subsection 11.05(v). (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 Servicer for any related unreimbursed Servicing Advances, pursuant to Subsection 11.05(iii); 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 Distribution Date on which such amounts are to be distributed if not in connection with a foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event amount of such recovery will be allocated by the Servicer has reasonable cause as follows: first, to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastesunpaid Servicing Fees; and second, or if to the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report interest then due and owing. The portion of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect recovery so allocated to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer unpaid Servicing Fees shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Subsection 11.05(iii).

Realization Upon Defaulted Mortgage Loans. (a) In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action (i) as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Owner (which shall include, but not be limited to, Mortgage Loan liquidation and short sales) and (ii) that is consistent with any related PMI Policy. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for connection with a period of 90 days foreclosure or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure actionconversion, the Servicer shall not be required to make Monthly Advances exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as it customarily employs with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from mortgage loans serviced for its own account, giving due consideration to Accepted Servicing Practices, including, without limitation, advancing funds make all necessary for the payment of taxes and proper Servicing Advancesinsurance premiums. During this period and in the administration of such defaulted Mortgage Loans, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for making all costs and expenses incurred by customary Servicing Advances. Notwithstanding anything to the contrary contained herein, in no event will the Servicer make a Servicing Advance if it in any such proceedings or functions; provideddetermines, howeverusing Accepted Servicing Practices, that such Servicing Advance would be a Nonrecoverable Advance. The determination by the Servicer that it has made a Nonrecoverable Advance or that any proposed Servicing Advance, if made would constitute a Nonrecoverable Advance, shall be entitled evidenced by an officer’s certificate of the Servicer delivered to reimbursement thereof the Owner. Servicer shall be reimbursed for all Servicing Advances made with respect to such defaulted Mortgage Loans from the related property, as contemplated in Collection Account pursuant to Section 4.05. 3.05 herein. (b) Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, wastes or if the Purchaser Mortgage Property poses any type of environmental risks or if the Owner otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is Property to be conducted by a qualified inspector inspector, the Servicer shall cause such inspection to occur solely at the Purchaser's expenseexpense of the Owner. If the Servicer shall advance or use its own money to effect such environmental inspection, the Servicer shall reimburse itself from the Collection Account. If the Collection Account fails to maintain sufficient funds to reimburse the Servicer, the Owner shall directly reimburse the Servicer of such advance within five (5) Business Days upon receipt of an invoice from the Servicer. (c) Upon completion of the an environmental inspection, the Servicer shall promptly provide the Purchaser Owner with a written report of the environmental inspectioninspection report. After reviewing the environmental inspection report, the Purchaser Owner shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (ai) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or hazardous, toxic substances or wastes or poses environmental risks of any kind, and (bii) the Purchaser Owner directs the Servicer Servicer, in writing, to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Collection Account pursuant to Section 4.05 hereof3.05 herein and in the event amounts in the Collection Account are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to reimbursement directly from the Owner within five (5) Business Days upon receipt of an invoice from the Servicer. In the event the Purchaser Owner directs the Servicer Servicer, in writing, not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Collection Account pursuant to Section 4.05 hereof. In 3.05 herein and in the event that a Mortgage Loan becomes part of a REMICamounts in the Collection Account are insufficient to fully reimburse the Servicer, and becomes REO Property, such property the Servicer shall be disposed of by entitled to reimbursement from the Servicer in accordance with Section 4.16Owner.

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Conventional Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In the event that any payment due under any FHA Loan becomes delinquent, the Servicer shall take all such actions as are in the best interests of the Certificateholders and permitted under any applicable FHA loss mitigation proceedings, including, but not limited to, requesting the FHA to accept an assignment of such FHA Loan, and, upon the Servicer's determination that foreclosure is in the best interest of the Certificateholders, commencing foreclosure proceedings. With respect to any defaulted Mortgage Loan, the Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including, extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the servicing standards set forth in the Xxxxxx Xxx Guide, subject including, without limitation, advancing funds for the payment of taxes and insurance premiums with respect to first lien Mortgage Loans. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust Fund 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 Servicer 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: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loanthe affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 3.03 shall be advanced by the Servicer, pursuant subject to Section 5.03, and the Servicer's obligation right to make such Monthly Advances shall terminate on be reimbursed therefor from the 90th day referred to aboveCollection Account as provided in Section 3.05(ii). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that 57 If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, cleanup or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05(ii).

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Conventional Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In the event that any payment due under any FHA Loan becomes delinquent, the Servicer shall take all such actions as are in the best interests of the Certificateholders and permitted under any applicable FHA loss mitigation proceedings, including, but not limited to, requesting the FHA to accept an assignment of such FHA Loan, and, upon the Servicer's determination that foreclosure is in the best interest of the Certificateholders, commencing foreclosure proceedings. With respect to each VA Loan, the Servicer shall diligently seek to mitigate losses by utilizing all remedies available in the VA Regulations. With respect to any defaulted Mortgage Loan, the Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including, extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the servicing standards set forth in the Xxxxxx Xxx Guide, subject including, without limitation, advancing funds for the payment of taxes and insurance premiums with respect to first lien Mortgage Loans. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer shall not be required either (i) obtain title to make Monthly Advances 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 Trust Fund would be considered to hold title to, to be a mortgagee-in-possession of, or to be an owner or operator of such Mortgage LoanMortgaged Property within the meaning of the Comprehensive Environmental Response, pursuant Compensation and Liability Act of 1980, as amended from time to Section 5.03time, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advancesor any comparable law, provided, however, that unless the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertyhas also previously determined, unless it shall determine in based on its reasonable discretion (a) that judgment and a prudent report prepared by a Person who regularly conducts environmental audits using customary industry standards, that: A. such preservationMortgaged Property is in compliance with applicable environmental laws or, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverif not, that it shall would be entitled in the best economic interest of the Certificateholders to reimbursement thereof from take such actions as are necessary to bring the related property, as contemplated in Section 4.05. Notwithstanding anything Mortgaged Property into compliance therewith; and B. there are no circumstances present at such Mortgaged Property relating to the contrary contained hereinuse, in connection with a foreclosure management or acceptance disposal of a deed in lieu of foreclosureany hazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or 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 Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion best economic interest of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed Certificateholders to take such actions with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16.affected Mortgaged

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Conventional Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders and the Certificate Insurer. In the event that any payment due under any FHA Loan becomes delinquent, the Servicer shall take all such actions as are in the best interests of the Certificateholders and the Certificate Insurer and permitted under any applicable FHA loss mitigation proceedings, including, but not limited to, requesting the FHA to accept an assignment of such FHA Loan, and, upon the Servicer's determination that foreclosure is in the best interest of the Certificateholders and the Certificate Insurer, commencing foreclosure proceedings. With respect to any defaulted Mortgage Loan, the Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including, extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the servicing standards set forth in the Xxxxxx Xxx Guide, subject including, without limitation, advancing funds for the payment of taxes and insurance premiums with respect to first lien Mortgage Loans. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust Fund 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 Servicer 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: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders and the Certificate Insurer to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders and the Certificate Insurer to make Monthly Advances take such actions with respect to such Mortgage Loanthe affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 3.03 shall be advanced by the Servicer, pursuant subject to Section 5.03, and the Servicer's obligation right to make such Monthly Advances shall terminate on be reimbursed therefor from the 90th day referred to aboveCollection Account as provided in Section 3.05(ii). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders and the Certificate Insurer to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders and the Certificate Insurer. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, cleanup or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05(ii).

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In With respect to any defaulted Mortgage Loan, the event that any payment due under any Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the Servicing Standards, subject to including, without limitation, advancing funds for the payment of taxes and insurance premiums. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust 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 Servicer 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: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly take such actions with respect to the affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 3.03 shall be advanced by the Servicer, subject to the Servicer's right to be reimbursed therefor from the Collection Account as provided in Section 3.05(iv). If the Servicer determines, as described above, that it is in the best economic interest of the Certificateholders 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 Servicer shall take such action as it deems to be in the best economic interest of the Certificateholders. The cost of any such compliance, containment, clean-up or remediation shall be advanced by the Servicer, subject to the Servicer's right to be reimbursed therefor from the Collection Account as provided in Section 3.05(ii). The Servicer, in its sole discretion, may, with respect to any second lien Mortgage Loan which is greater than 120 days Delinquent and for which the related senior lien mortgage loan is not a Mortgage Loan, charge off such second lien Mortgage Loan if it has determined pursuant to its delinquency collection policies and procedures that it is not reasonably likely that (i) any further Servicing Advances will be ultimately recoverable from Liquidation Proceeds or other proceeds from the related Mortgage Loan and (ii) any further net proceeds will be received with respect to such Mortgage Loan (each such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make a "Charged-Off Mortgage Loan"). Any such Monthly Advances Charged-Off Mortgage Loan shall terminate on the 90th day referred to abovebe treated as a Liquidated Mortgage Loan. The Servicer shall from its own funds have no obligation to make all necessary any Servicing Advances with respect to any Charged-Off Mortgage Loan and proper Servicing Advances, provided, however, that the Servicer shall not be required entitled to expend its own funds the Servicing Fee with respect to such Charged-Off Mortgage Loan for the period following the date on which such second lien Mortgage Loan was charged off. Any Liquidation Proceeds received in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that recoveries received with respect to such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Charged-Off Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will shall be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from deposited in the Custodial Collection Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.04.

Realization Upon Defaulted Mortgage Loans. (a) The Company shall use its best efforts, consistent with the procedures that the Company 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 Subsection 11.01. The Company 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 Company shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion (i) that such restoration will increase the proceeds of liquidation of the related Mortgage Loan to the Purchaser after reimbursement to itself for such expenses, and (ii) that such expenses will be recoverable by the Company through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Company shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. If a Mortgage Loan becomes sixty (60) or more days delinquent or subject to a foreclosure proceeding, then with respect to the Servicing Rights to such Mortgage Loan the related Servicing Transfer Date shall be the close of business on the next Business Day if so requested by the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 ninety (90) days or any other default continues for a period of 90 days beyond more, and the expiration of any grace or cure periodPurchaser has not exercised its right to accelerate the related Servicing Transfer Date as described in the previous sentence, the Servicer shall, subject to the provisions of this Agreement, Company shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Company shall notify the Purchaser in writing of the ServicerCompany's intention to do so, and the Servicer Company shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Company shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer In such connection, the Company shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 11.03, with respect to any Mortgage Loan as to which the contrary contained hereinCompany has received actual notice of, in connection with or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Company shall not either (i) obtain title to such Mortgaged Property as a foreclosure result of or acceptance of a deed in lieu of foreclosureforeclosure or otherwise, in 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 event 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 Servicer meaning of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the Company has received approval from the Purchaser and has also previously determined, based on its reasonable cause to believe that judgment and a prudent report prepared by a Person who regularly conducts environmental audits using customary industry standards, that: (1) such Mortgaged Property is contaminated by 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 or toxic substances or 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 otherwise requests an to take such actions with respect to the affected Mortgaged Property. The cost of the environmental inspection audit report contemplated by this Subsection 11.03 shall be advanced by the Company, subject to the Company's right to be reimbursed therefor from the Custodial Account as provided in Subsection 11.05(vii). If the Company determines, in consultation with the Purchaser, 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 review 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 Company shall take such an inspection or review is action as it deems to be conducted by a qualified inspector at in the best economic interest of the Purchaser's expense. Upon completion The cost of any such compliance, containment, cleanup or remediation shall be advanced by the inspectionCompany, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect subject to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled Company's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Account pursuant to Section 4.05 hereof. In as provided in Subsection 11.05(vii). (c) The Company shall also promptly notify the event that a Mortgage Loan becomes part Purchaser upon learning of a REMICany state insolvency or federal bankruptcy proceedings in which any Mortgagor is seeking relief or is the defendant debtor, and becomes REO Property, such property shall be disposed or of by the Servicer in accordance with Section 4.16death or incapacity or any Mortgagor or guarantor.

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In With respect to any defaulted Mortgage Loan, the event that any payment due under any Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the Servicing Standard, subject to including, without limitation, advancing funds for the payment of taxes and insurance premiums. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust 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 Servicer has received the prior written consent of the NIMS Insurer and has received a prudent report prepared by a Person who regularly conducts environmental audits using customary industry standards, that: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loanthe affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 3.03 shall be advanced by the Servicer, pursuant subject to Section 5.03, and the Servicer's obligation right to make such Monthly Advances shall terminate on be reimbursed therefor from the 90th day referred to aboveCollection Account as provided in Section 3.05(a)(iv). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, clean-up or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05(a).

Realization Upon Defaulted Mortgage Loans. In (a) The Servicer shall foreclose upon or otherwise comparably convert to ownership Mortgaged Properties securing such of the event that any payment due under any Mortgage Loan Loans as come into and not postponed continue in default when, in the opinion of the Servicer based upon the practices and procedures referred to in the following sentence, no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 4.01 3.02; provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances and that the acquisition of such Mortgaged Property would not paid when be commercially reasonable, then the same becomes due and payable, Servicer will not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or in the event the Mortgagor fails to perform any similar proceeding. In connection with such foreclosure or other covenant or obligation under the Mortgage Loan and such failure continues beyond any applicable grace periodconversion, the Servicer shall take follow such action practices (including, in the case of any default on a related senior mortgage loan, the advancing of funds to correct such default) and procedures as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall deem necessary or advisable and as shall be consistent with Accepted Servicing Practices normal and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be usual in the best interest of Purchaserits general mortgage servicing activities. In the event that any payment due under any Mortgage Loan The foregoing is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation correction of any Mortgaged Property, default on a related senior mortgage loan or restoration of any property unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure expenditure will increase Net Liquidation Proceeds. The Servicer will be reimbursed out of Liquidation Proceeds for advances of its own funds to pay Liquidation Expenses before any Net Liquidation Proceeds are deposited in the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and Collection Account. (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in In the event the Servicer has reasonable cause that title to believe that a any Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with acquired in foreclosure or acceptance of a by deed in lieu of foreclosure, the deed or certificate of sale shall (i) so long as at least two of Moody's, Standard & Poor's and Fitch assign a long-term unsecured debt xxxxxx to the Servicer shall of at least "Baa3", in the case of Moody's, "BBB", in the case of Fitch and "BBB-", in the case of Standaxx & Xxor's, be reimbursed for all reasonable costs associated with such foreclosure issued in the name of the Servicer or acceptance of a deed (ii) if the rating requirements in lieu of foreclosure and any related environmental clean up costsclause (i) are not satisfied, as applicable, from be issued to the related Liquidation ProceedsTrustee, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance its nominee on behalf of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereofCertificateholders. In the event that the Trust acquires any Mortgaged Property as aforesaid or otherwise in connection with a default or imminent default on a Mortgage Loan becomes part of a REMIC, and becomes REO PropertyLoan, such property Mortgaged Property shall be disposed of by or on behalf of the Trust within three (3) years after its acquisition by the Trust unless the Trustee shall have received an Opinion of Counsel to the effect that the holding by the Trust of such Mortgaged Property subsequent to three years after its acquisition will not result in the imposition of taxes on "prohibited transactions" of the Trust as defined in Section 860F of the Code or cause the Trust to fail to qualify as a REMIC at any time that any Certificates are outstanding. If the Trustee has not otherwise disposed of any such Mortgaged Property after its acquisition by the Trust, the Servicer in accordance with Section 4.16may purchase such Mortgaged Property prior to the third anniversary of the date on which it was acquired at a price equal to its fair market value as established by an appraisal conducted by an independent appraiser, such appraisal to be at the expense of the Servicer.

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 Subsection 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 Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 ninety (90) days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Seller shall notify the Purchaser in writing of the ServicerSeller's intention to do so, and the Servicer Seller shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure actionconnection, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 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 contrary contained hereinuse, 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 Subsection 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 Subsection 11.05(vi). 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 Subsection 11.05(vi). (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 Subsection 11.05(iii); 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 Distribution Date on which such amounts are to be distributed if not in connection with a foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by the Seller as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report interest then due and owing. The portion of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect recovery so allocated to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer unpaid Servicing Fees shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from to the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account Seller pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Subsection 11.05(iv).

Realization Upon Defaulted Mortgage Loans. (a) In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Subservicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policiesand, if applicable, Agency Requirements, and (3) the Servicer with respect to Non-Agency Loans, take such action as it shall determine prudently deem to be in the best interest of Purchaserthe Owner/Servicer. In Subservicer shall maintain an active Loss Mitigation program in accordance with Applicable Law. The Owner/Servicer acknowledges and agrees that the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent Subservicer will use Subservicer’s standard Loss Mitigation waterfall for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shallNon-Agency Loans, subject to the provisions requirements of Applicable Law, Agency Requirements, Investor Guidelines, and this Agreement, including the Delegated Authority Matrix, as applicable. If the Owner/Servicer wishes to have the Subservicer implement and perform customized Loss Mitigation options on Non-Agency Loans, the Owner/Servicer will provide written requirements, policies and procedures for such options and will assume all costs incurred by the Subservicer to implement within Subservicer’s proprietary Loss Mitigation platform. (i) Notwithstanding the foregoing, with respect to Non-Agency Loans, unless otherwise agreed by the parties, the Subservicer shall not begin foreclosure proceedings unless and until it notifies the Owner/Servicer of its intention to do so no later than five (5) Business Days prior to its commencement of such foreclosure proceedings. Any notice, confirmation, instruction or objection pursuant to this Section 5.04(a) may be delivered via facsimile or other written or electronic communication as the Subservicer and the Owner/Servicer may agree to from time to time. For the avoidance of doubt, subject to this Agreement, the Owner/Servicer shall have the unilateral right to control foreclosure decisions in respect of delinquent and defaulted Mortgage Loans in accordance with Applicable Law; and (ii) With respect to Agency Loans, consistent with the terms of this Agreement, commence Accepted Servicing Practices and Agency Requirements, the Subservicer shall (A) foreclose upon or otherwise comparably convert the ownership of such Mortgaged Properties as they come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments of the related Mortgage Loans and (B) process claims for any applicable mortgage insurance and until the transfer of such Mortgaged Property to a private mortgage insurer or Agency, as applicable. The Subservicer will have title to the Mortgaged Property conveyed in the name designated by Investor. (b) In connection with any such foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer Subservicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing AdvancesAdvances consistent with Accepted Servicing Practices and, providedif applicable, howeverAgency Requirements. With respect to any Mortgaged Property subject to foreclosure proceedings or any REO Property, the Subservicer shall take appropriate actions to protect such property from waste and vandalism, consistent with Accepted Servicing Practices and, if applicable, Agency Requirements. Upon liquidation of any Mortgage Loan, the Subservicer shall provide written notice thereof to the Custodian. (c) In the event that title to any Mortgaged Property securing an Agency Loan is acquired in foreclosure or by deed in lieu of foreclosure, the Subservicer shall take title and manage such property in accordance with the applicable Investor Guidelines. In the event an Agency denies a property preservation bid, the Owner/Servicer shall not delegate to Subservicer authority to approve a bid for the necessary work up to an amount specified by the Owner/Servicer in writing, which writing may be an email. In the event the property preservation bid exceeds Subservicer’s delegated authority, the Owner/Servicer may approve the amount above the Agency allowable fee that may be necessary to complete the property preservation work upon written request from Subservicer. Further, any amounts required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertybe advanced hereunder, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer Agency allowable fee shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in Section 4.05. a Servicing Advance. (d) Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer Subservicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to Property shall be conducted by a qualified inspector at arranged by the Purchaser's expenseSubservicer in accordance with Accepted Servicing Practices and, if applicable, Agency Requirements. The cost for such inspection or review shall be deemed a Servicing Advance. Upon completion of the inspection, the Subservicer shall provide Owner/Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the such environmental inspection reportand a recommendation as how to proceed, the Purchaser shall determine how the Servicer and except as provided below, shall proceed in accordance with respect to the Mortgaged Propertyits recommendation. In the event (a) that the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) wastes, the Purchaser directs the Servicer to Subservicer shall not proceed with foreclosure or acceptance of a deed in lieu of foreclosure. In the event that the environmental inspection report is inconclusive as to the whether or not the Mortgaged Property is contaminated by hazardous or toxic substances or wastes, the Servicer Subservicer shall not, without the written direction from Owner/Servicer, proceed with foreclosure or acceptance of a deed in lieu of foreclosure. In the event the Subservicer proceeds with foreclosure or acceptance of a deed in lieu of foreclosure in accordance with this paragraph, the Subservicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up cleanup costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the applicable Custodial Account pursuant to Section 4.05 hereof5.06. In the event the Purchaser Owner/Servicer directs the Servicer Subservicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer Subservicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the applicable Custodial Account pursuant to Section 4.05 hereof5.06. In Notwithstanding any provision in this Agreement to the event that a Mortgage Loan becomes part of a REMICcontrary, with respect to Agency Loans and any Mortgaged Property for which Subservicer has reason to believe is contaminated by hazardous or toxic substances or wastes, the Subservicer shall take such actions as are consistent with Applicable Law, Agency Requirements, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Investor Guidelines.

Realization Upon Defaulted Mortgage Loans. In (a) The Master Servicer shall cause each WF Servicer (to the extent required under the related Servicing Agreement) to, and shall cause each Sub-Master Servicer (to the extent required under the related Sub-Master Servicing Agreement) to, foreclose upon, repossess or otherwise comparably convert the ownership of Mortgaged Properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments, all in accordance with the applicable Servicing Agreement. (b) Notwithstanding paragraph (a) of this Section 3.13, in the event that any payment due under any Mortgage a Foreclosure Restricted Loan and not postponed pursuant goes into foreclosure, if acquiring title to Section 4.01 is not paid when the same becomes due and payable, related Mortgaged Property by foreclosure or by deed in lieu of foreclosure would cause (i) the event adjusted basis (for federal income tax purposes) of the Mortgagor fails to perform Mortgaged Properties underlying the Foreclosure Restricted Loans that are currently owned by REMIC I after foreclosure (along with any other covenant or obligation under assets owned by REMIC I other than "qualified mortgages" and "permitted investments" within the meaning of Section 860G of the Code) plus (ii) the aggregate Scheduled Principal Balance of the Mortgage Loan and such failure continues beyond any applicable grace periodLoans listed on Exhibit L, to exceed 0.75% of the adjusted basis of the assets of REMIC I, the Master Servicer, upon notice from a Servicer that title is about to be taken to such Mortgaged Property as REO Property on behalf of the Trust Fund, shall not permit such Servicer to acquire title to such Mortgaged Property on behalf of REMIC I. Instead, the Master Servicer shall take such action notify the Seller that title is about to be taken to the related Mortgaged Property as (1) REO Property on behalf of the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance PoliciesTrust Fund, and (3) the Servicer Seller shall determine prudently to be in repurchase such Foreclosure Restricted Loan from the best interest of PurchaserTrust Fund at the Repurchase Price. In the event that any payment due under any Seller fails to repurchase such Mortgage Loan, the Master Servicer shall cause the related Servicer to dispose of the Mortgage Loan for cash in the foreclosure sale. If such Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for purchased at foreclosure sale, such Mortgage Loan will be written-off in accordance with the related Servicer's standard procedures. In addition, if the Master Servicer determines that following a period distribution on any Distribution Date (i) the adjusted bases of 90 days or the Mortgaged Properties underlying the Foreclosure Restricted Loans in foreclosure (along with any other default continues for a period assets owned by REMIC I other than "qualified mortgages" and "permitted investments" within the meaning of 90 days beyond Section 860G of the expiration Code) plus (ii) the aggregate Scheduled Principal Balance of any grace or cure periodthe Mortgaged Loan listed on Exhibit L, exceed 1.0% of the adjusted bases of the assets of REMIC I immediately after the distribution, then prior to such Distribution Date, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer Seller shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review purchase enough of such Mortgaged PropertyProperties in foreclosure, such an inspection or review is to be conducted by a qualified inspector for cash, at the Purchaser's expense. Upon completion Repurchase Price, so that the adjusted bases of (i) such Mortgaged Properties in foreclosure (along with any other assets owned by REMIC I other than "qualified mortgages" and "permitted investments" within the meaning of Section 860G of the inspection, Code) plus (ii) the Servicer shall promptly provide the Purchaser with a written report aggregate Scheduled Principal Balance of the environmental inspection. After reviewing Mortgaged Loans listed on Exhibit L, will be less than 1.0% of the environmental inspection report, adjusted bases of the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance assets of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16.REMIC I.

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Conventional Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In the event that any payment due under any FHA Loan becomes delinquent, the Servicer shall take all such actions as are in the best interests of the Certificateholders and permitted under any applicable FHA loss mitigation proceedings, including, but not limited to, requesting the FHA to accept an assignment of such FHA Loan, and, upon the Servicer’s determination that foreclosure is in the best interest of the Certificateholders, commencing foreclosure proceedings. With respect to any defaulted Mortgage Loan, the Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including, extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the servicing standards set forth in the Xxxxxx Xxx Guide, subject including, without limitation, advancing funds for the payment of taxes and insurance premiums with respect to first lien Mortgage Loans. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust Fund 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 Servicer 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: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loan, pursuant to the affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 5.03, and 3.03 shall be advanced by the Servicer's obligation , subject to make such Monthly Advances shall terminate on the 90th day referred Servicer’s right to abovebe reimbursed therefor from the Collection Account as provided in Section 3.05(ii). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, cleanup or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer’s right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05(ii).

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Conventional Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In the event that any payment due under any FHA Loan becomes delinquent, the Servicer shall take all such actions as are in the best interests of the Certificateholders and permitted under any applicable FHA loss mitigation proceedings, including, but not limited to, requesting the FHA to accept an assignment of such FHA Loan, and, upon the Servicer's determination that foreclosure is in the best interest of the Certificateholders, commencing foreclosure proceedings. With respect to any defaulted Mortgage Loan, the Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 2.01, may modify such forbearance plan; including, extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and, subject if applicable, the servicing standards set forth in the Xxxxxx Xxx Guide, including, without limitation, advancing funds for the payment of taxes and insurance premiums with respect to first lien Mortgage Loans. Notwithstanding the foregoing provisions of this AgreementSection 2.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust Fund 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 Servicer 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: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loanthe affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 2.03 shall be advanced by the Servicer, pursuant subject to Section 5.03, and the Servicer's obligation right to make such Monthly Advances shall terminate on be reimbursed therefor from the 90th day referred to aboveCollection Account as provided in Section 2.05(ii). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, cleanup or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.162.05(ii).

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 Subsection 11.01. The Seller shall use its best efforts, in good faith, 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 Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect it shall deem to a similar mortgage loan held for its own account for investment, (2) shall be consistent with Accepted Servicing Practices the servicing procedures pursuant to Subsection 11.01 and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Seller shall notify the Purchaser in writing of the ServicerSeller's intention to do so, and the Servicer Seller shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Seller shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer In such connection, the Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 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: (i) 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 (ii) there are no circumstances present at such Mortgaged Property relating to the contrary contained hereinuse, 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 Subsection 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 Subsection 11.05(v) or as set forth in Subsection 11.27. 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 Subsection 11.05(v) or as set forth in Subsection 11.27. (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 Subsections 11.05(ii) and any related unreimbursed Monthly Advances, pursuant to Subsection 11.05(vi); 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 Distribution Date on which such amounts are to be distributed if not in connection with a foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by the Seller as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report interest then due and owing. The portion of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect recovery so allocated to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer unpaid Servicing Fees shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from to the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account Seller pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Subsection 11.05(iii).

Realization Upon Defaulted Mortgage Loans. (a) The Servicer shall use its best efforts, consistent with the procedures that the Servicer 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 Servicer 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 Servicer shall not be required to expend its own funds toward the restoration of such property 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 Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Section 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, shall commence foreclosure proceedings. The , provided that prior to commencing foreclosure proceedings, the Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The In such connection, the Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. 11.05. (b) Notwithstanding anything the foregoing provisions of this Section 11.03, with respect to any Mortgage Loan as to which the Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Servicer 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 Servicer 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 contrary contained hereinuse, 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 Servicer, subject to the Servicer's right to be reimbursed therefor from the Custodial Account as provided in Section 11.05(vii). If the Servicer 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 Servicer 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 Servicer, subject to the Servicer's right to be reimbursed therefor from the Custodial Account as provided in Section 11.05(vii). (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 Servicer for any related unreimbursed or unpaid amount due to the Servicer, pursuant to Section 11.05(ii), (iii), (iv)(b), (vi) or (vii); 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 Distribution Date on which such amounts are to be distributed if not in connection with a foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Property, such an inspection or review is to recovery will be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of allocated by the Servicer in accordance with Section 4.16as follows: first, to unpaid Servicing Fees; and second, to the balance of the interest then due and owing.

Realization Upon Defaulted Mortgage Loans. The Seller shall use commercially reasonable efforts, consistent with the procedures that the Seller would use in servicing loans for its own account, Accepted Servicing Practices, any Primary Mortgage Insurance and the best interest of Purchaser, to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans 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 4.01. Foreclosure or comparable proceedings shall be initiated pursuant to Fannie Mae guidelxxxx xnx applicable state law with respect to Mortgaged Properties for which no satisfactory arrangements can be made for collection of delinquent payments. The Seller shall use its best efforts to realize upon defaulted Mortgage Loans in such 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 the Mortgaged Property shall have suffered damage, the Seller shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion (i) that such restoration will increase the proceeds of liquidation of the related Mortgage Loan to the 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 4.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action actions as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer proceedings and shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3which may be by electronic mail) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, 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 4.03 shall be advanced by the Seller, subject to the Seller's right to be reimbursed therefor from the Custodial Account as provided in Section 4.05(ix). 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 4.05(ix). 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 4.05(iii); 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 foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by the Seller as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report interest then due and owing. The portion of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect recovery so allocated to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer unpaid Servicing Fees shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from to the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account Seller pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof4.05(iii). In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer Seller, with the consent of the Purchaser as required pursuant to this Agreement, within three (3) years after becoming an REO Property, unless the Seller provides to the trustee under such REMIC an opinion of counsel to the effect that the holding of such REO Property subsequent to three (3) years after its becoming REO Property, will not result in accordance the imposition of taxes on "prohibited transactions" as defined in Section 860F of the Code, or cause the transaction to fail to qualify as a REMIC at any time that certificates are outstanding. The Seller shall manage, conserve, protect and operate each such REO Property for the certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code, or any "net income from foreclosure property" which is subject to taxation under the REMIC provisions of the Code. Pursuant to its efforts to sell such property, the Seller shall either itself or through an agent selected by the Seller, protect and conserve such property in the same manner and to such an extent as is customary in the locality where such property is located. Additionally, the Seller shall provide the Purchaser or any master servicer with Section 4.16information sufficient to perform the tax withholding and reporting related to Sections 1445 and 6050J of the Code.

Realization Upon Defaulted Mortgage Loans. In (a) Subject to the event that limitations of this Section 4.1.4 and the other terms and conditions of this Trust Agreement, Xxxxxx Xxx may agree to any payment due under modification, waiver or amendment of any term of any Mortgage Loan and not postponed pursuant to Section 4.01 is not paid when (including, without limitation, any extension of payments or 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be in the best interest of Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing Stated Maturity Date of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure forbearance or towards the restoration or preservation forgiveness of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure interest or acceptance of a deed in lieu discounted loan pay-off) without the consent of foreclosureany Certificateholder. (b) Subject to the limitations of this Section 4.1.4 and the other terms and conditions of this Trust Agreement, in the event the Servicer has reasonable cause to believe that promptly after any Mortgage Loan becomes a Mortgaged Property is contaminated by hazardous or toxic substances or wastesSpecially Serviced Mortgage Loan, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to any payment default or performance default (other than a payment default) by the Mortgaged Property. In Mortgagor thereunder, Xxxxxx Mae may initiate a dialogue with the event Mortgagor (aincluding a dialogue with respect to any modification to the Mortgage Loan Documents requested by such Mortgagor) and also may commence the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made process with respect to the related Mortgaged Property from Property. (c) Xxxxxx Xxx shall not (i) extend the Custodial Account pursuant date on which the final payment is scheduled to Section 4.05 hereof. In be due on any Mortgage Loan for more than twelve (12) months beyond the date on which it was previously due or for more than a total of thirty-six (36) months beyond its Stated Maturity Date or (ii) in the event that there is no agreement to forbear interest in connection with an extension, consent to the reduction of the Mortgage Rate or the Monthly Payment for each month during the extension period to a rate or amount, as the case may be, less than the Mortgage Rate or the Monthly Payment, respectively, due on such Mortgage Loan becomes part in the month prior to the month in which the final payment was originally scheduled to be due thereon, not taking into account any prior forbearance of interest. If Xxxxxx Mae extends the date on which the final payment is scheduled to be due on any Mortgage Loan, it shall promptly give or cause the Master Servicer to give, notice of such extension to the Rating Agency. (d) Notwithstanding any other provisions of this Agreement, Xxxxxx Xxx shall not knowingly or intentionally consent to the waiver or modification of payment of any applicable Prepayment Premium or Yield Maintenance Charge due to be paid under the terms of any Mortgage Loan, unless (A) in Xxxxxx Mae’s judgment, there is a determination that the Mortgage Loan is in default due to bona fide cash flow deficiencies and not an effort to avoid payment of a Prepayment Premium or Yield Maintenance Charge, (B) in Xxxxxx Mae’s judgment, there is a determination that there is a substantial risk that the Prepayment Premium or Yield Maintenance Charge provisions would be found unenforceable by a court with jurisdiction of the action or (C) the prepayment of the Mortgage Loan is due to a casualty loss or a condemnation. (e) Notwithstanding anything to the contrary herein, Xxxxxx Mae shall not knowingly or intentionally consent to any action in connection with any modification, waiver or amendment of any term of any Mortgage Loan that would (i) cause the Trust or the Lower-Tier REMIC to fail to qualify as a REMIC under the Code, (ii) result in the imposition of any tax on “prohibited transactions” or “contributions” under the REMIC Provisions or (iii) cause any Mortgage Loan to cease to be a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code. (f) Xxxxxx Xxx shall not consent to the Special Servicer’s initiation of foreclosure proceedings, the Special Servicer’s obtaining title to a Mortgaged Property in lieu of foreclosure or otherwise, or the Special Servicer’s taking any other action with respect to any Mortgaged Property, if, as a result of any such action, the Trustee, the Trust or the Lower-Tier REMIC 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 CERCLA or any comparable law, unless Xxxxxx Mae or the Special Servicer has previously determined, based on a current or currently updated Environmental Assessment of such Mortgaged Property performed by an Independent Person who regularly conducts Environmental Assessments of multifamily properties, that: (i) the Mortgaged Property is in compliance with applicable environmental laws and regulations or, if not, that taking such actions as are necessary to bring the Mortgaged Property in compliance therewith is reasonably likely to produce a greater recovery on a present value basis than not taking such actions and refraining from initiating foreclosure proceedings as provided herein; and (ii) there are no circumstances or conditions present at the Mortgaged Property relating to the use, management or disposal of Hazardous Materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any applicable environmental laws and regulations or, if such circumstances or conditions are present for which any such action could be required, that taking such actions with respect to such Mortgaged Property is reasonably likely to produce a greater recovery on a present value basis than not taking such actions and refraining from initiating foreclosure proceedings. (iii) If the environmental testing contemplated by the preceding paragraph establishes that either of the conditions set forth in clauses (i) and immediately above has not been satisfied with respect to any Mortgaged Property securing a Defaulted Mortgage Loan or Loans, then Xxxxxx Xxx may take, or consent to the Special Servicer taking, such action (other than proceeding to acquire title to the Mortgaged Property) as it deems to be in the best economic interest of the Trust and Lower-Tier REMIC, including selling the Defaulted Mortgage Loan or Loans. The cost of any remedial, corrective or other further action contemplated by clause (i) and/or clause immediately above may be withdrawn from the Lower-Tier Trust Account by Xxxxxx Mae as an expense of the Lower-Tier REMIC to the extent not paid pursuant to the Sale and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Servicing Agreement.

Realization Upon Defaulted Mortgage Loans. In (a) The Servicer shall, consistent with the event that any payment due under any servicing standards set forth in Section 3.01(b), foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loan Loans as come into and not postponed continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 4.01 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 3.07. In connection with realization upon defaulted Mortgage Loan and such failure continues beyond any applicable grace periodLoans, the Servicer shall take follow such action practices and procedures as (1) it shall deem necessary or advisable, as shall be normal and usual in accordance with Accepted Servicing Procedures and the Servicer would take requirements of insurers under similar circumstances any insurance policy required to be maintained hereunder with respect to a similar mortgage loan held for its own account for investment, (2) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be in the best interest of Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such related Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall such costs and expenses will be entitled to reimbursement thereof from -------- ------- recoverable as Servicing Advances by the related property, Servicer as contemplated in this Section 4.053.15. Notwithstanding anything The Servicer shall not be required to the contrary contained hereinmake any Servicing Advance, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such foreclose upon any Mortgaged Property, such or otherwise expend its own funds toward the restoration of any Mortgaged Property that shall have suffered damage from an inspection or review is to be conducted Uninsured Cause, unless it shall determine in its reasonable judgment, as evidenced by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance certificate of a deed in lieu Servicing Officer (a copy of foreclosure, the Servicer which certificate shall be reimbursed for all reasonable costs associated with delivered to each Rating Agency), that such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costsrestoration, as applicablethe case may be, from will increase the proceeds of liquidation of the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient Mortgage Loan after reimbursement to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereofitself for Servicing Advances. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Any Servicing Advances made with respect to a Mortgage Loan shall be recoverable by the Servicer only from recoveries on such Mortgage Loan except to the extent such Servicing Advance is deemed a Nonrecoverable Servicing Advance. (b) Prior to conducting any sale in a foreclosure proceeding or accepting a deed-in-lieu of foreclosure with respect to any Mortgaged Property, the Servicer shall cause a review to be performed, in accordance with Accepted Servicing Procedures, on the Mortgaged Property by a company such as Equifax, Inc. or Toxicheck, and the scope of such review shall be limited to the review of public records and documents for indications that such Mortgaged Property has on it, or is near, hazardous or toxic material or waste. If such review reveals that the Mortgaged Property has on it or under it, or is near, hazardous or toxic material or waste, or if such review reveals any other environmental problem, the Servicer shall provide a copy of the related Mortgaged Property report with an attached certification of a Responsible Officer that based on an analysis of all available information (including cleanup costs and liability claims) at the time, it is the best judgment of such Responsible Officer that such foreclosure will increase Net Recovery Proceeds to the Trustee. The Trustee shall promptly forward such report and certification to the Certificateholders. (c) The Servicer may at its option purchase from the Custodial Trust any Mortgage Loan which is 90 days or more Delinquent and which the Servicer determines in good faith will otherwise become subject to foreclosure proceedings at a price equal to the Purchase Price (evidence of such determination to be delivered in writing to the Trustee and Cityscape prior to purchase); provided, however, that the aggregate Loan Balance of Mortgage -------- ------- Loans that may be so purchased by the Servicer shall not exceed an amount equal to 10% of the Aggregate Maximum Collateral Amount. The Purchase Price for any Mortgage Loan purchased hereunder shall be deposited into the Collection Account and the Trustee, upon (i) receipt of an Officer's Certificate of the Servicer as to the making of such deposit and (ii) confirmation that such deposit has been made, shall release or cause to be released to the Servicer the related Mortgage File and shall execute and deliver such instruments of transfer or assignment as are furnished by the Servicer, in each case without recourse, as shall be necessary to vest in the Servicer title to any Mortgage Loan released pursuant hereto, and the Trustee shall have no further responsibility or liability (except as to its own acts) with regard to such Mortgage Loan. (d) Unless otherwise required pursuant to the Mortgage Note or applicable law, any Property Insurance Proceeds or Liquidation Proceeds received with respect to a Mortgage Loan or REO Property (other than any such proceeds received in connection with a purchase by the Class R Certificateholders of all the Mortgage Loans and REO Properties in the Trust Estate pursuant to Section 4.05 hereof. In 10.01) will be allocated in the event that a Mortgage Loan becomes part following order of a REMICpriority, in each case to the extent of available funds: first, to pay property taxes and assessments; second, to reimburse the Servicer or any Sub- Servicer for any related unreimbursed Servicing Advances, and becomes REO Property, such property shall be disposed of any related unreimbursed Delinquency Advances theretofore funded by the Servicer or any Sub-Servicer from its own funds, in accordance each case, with Section 4.16respect to the related Mortgage Loan; third, to accrued and unpaid interest on the Mortgage Loan, at the Mortgage Rate (or at such lesser rate as may be in effect for such Mortgage Loan pursuant to application of the Civil Relief Act) on the Loan Balance of such Mortgage Loan, to the date of the Final Recovery Determination if one has been made, or to the Due Date in the Due Period prior to the Distribution Date on which such amounts are to be distributed if a Final Recovery Determination has not been made, minus any accrued and unpaid Servicing Fees with respect to such Mortgage Loan; fourth, to the extent of the Loan Balance of the Mortgage Loan outstanding immediately prior to the receipt of such proceeds, as a recovery of principal of the related Mortgage Loan; and fifth, to any prepayment or late payment charges or penalty interest payable in connection with the receipt of such proceeds and to all other fees and charges due and payable with respect to such Mortgage Loan. (e) The Servicer shall deliver to the Trustee, Cityscape and each of the Rating Agencies on each Servicer Remittance Date a Liquidation Report in the form annexed as Exhibit H hereto as well as an electromagnetic tape in computer readable format (along with the Officers' Certificate referenced in the definition of Final Recovery Determination) with respect to each Mortgage Loan as to which the Servicer made a Final Recovery Determination during the related Due Period.

Realization Upon Defaulted Mortgage Loans. The Servicer shall use its best efforts, consistent with the procedures that the Servicer would use in servicing similar mortgage loans for its own account, to foreclose upon or otherwise comparably convert the ownership of such of the Mortgage Loans 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 3.01. Foreclosure or comparable proceedings shall be initiated within 120 days of default for Mortgaged Properties for which no satisfactory arrangements can be made for collection of delinquent payments. The Servicer 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 Trustee, 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 Servicer shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion (i) that such restoration will increase the proceeds of liquidation of the related Mortgage Loan to the Master Servicer after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable by the Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 3.01 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 Servicer shall take such action as (1) the Servicer would take for other institutional investors under similar circumstances with respect to a similar mortgage loan held for its own account for investmentloan, (2) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance PoliciesPractices, and (3) the Servicer shall determine prudently to be in the best interest of Purchaserthe Trust Fund, and (4) is consistent with any related PMI Policy or LPMI Policy. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 3.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, shall commence foreclosure proceedings. The , provided that prior to commencing foreclosure proceedings, the Servicer shall notify the Purchaser Master Servicer in writing of the Servicer's ’s intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser Master Servicer objects to such action within three five (35) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure actionconnection, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for advancing all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.04.

Realization Upon Defaulted Mortgage Loans. (a) The Seller shall use 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 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 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 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 ninety (90) days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Seller shall notify the Purchaser in writing of the Servicer's Seller’s intention to do so, and the Servicer Seller shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Seller shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer In such connection, the Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. 11.06. (b) Notwithstanding anything 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 contrary contained hereinuse, 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. (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 foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by the Seller as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes interest then due and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16owing.

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In With respect to any defaulted Mortgage Loan, the event that any payment due under any Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the Servicing Standards, subject to including, without limitation, advancing funds for the payment of taxes and insurance premiums. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust 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 Servicer 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: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loanthe affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 3.03 shall be advanced by the Servicer, pursuant subject to Section 5.03, and the Servicer's obligation right to make such Monthly Advances shall terminate on be reimbursed therefor from the 90th day referred to aboveCollection Account as provided in Section 3.05(iv). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, clean-up or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05(ii).

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In With respect to any defaulted Mortgage Loan, the event that any payment due under any Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the Servicing Standards, subject to including, without limitation, advancing funds for the payment of taxes and insurance premiums. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust 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 Servicer 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: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loanthe affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 3.03 shall be advanced by the Servicer, pursuant subject to Section 5.03, and the Servicer's obligation right to make such Monthly Advances shall terminate on be reimbursed therefor from the 90th day referred to aboveCollection Account as provided in Section 3.05(ii). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, cleanup or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05(ii).

Realization Upon Defaulted Mortgage Loans. In With respect to ----------------------------------------- each Mortgage Loan that comes into and continues in default, the event Master Servicer shall exercise its reasonable judgment to determine whether to (a) foreclose on the related Mortgaged Property, (b) write off the unpaid Principal Balance thereof as bad debt, (c) take a deed in lieu of foreclosure, (d) accept a short sale, (e) arrange for a repayment plan, (f) agree to a modification thereof in accordance with this Agreement or (g) take an unsecured note in each case subject to the rights of any related senior lienholder; provided, that in connection with the foregoing, if the Master Servicer has actual knowledge that any payment due under Mortgaged Property is affected by hazardous or toxic wastes or substances and that the acquisition of such Mortgaged Property would not be commercially reasonable, then the Master Servicer shall not cause the Issuer or the Indenture Trustee to acquire title to such Mortgaged Property in foreclosure or any Mortgage Loan similar Proceeding. In connection with such decision, the Master Servicer shall follow such practices and procedures, including, in the case of any default on a related senior mortgage loan, the advancing of funds to correct such default if deemed to be appropriate by the Master Servicer, as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities; provided, that the Master Servicer shall not postponed pursuant to Section 4.01 be liable in any respect hereunder if it is acting in connection with any such foreclosure or attempted foreclosure or other conversion that is not paid when the same becomes due and payable, or completed 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) shall be manner that is consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be in the best interest of Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, ; and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, howeverprovided further, that the Master Servicer shall not be required to in no event expend its own funds in connection with any foreclosure or attempted foreclosure that is not completed or towards the restoration or preservation correction of any Mortgaged Property, unless default on a related senior mortgage loan or restoration of any property if it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will expenditure would not increase the proceeds related Liquidation Proceeds. In the event of liquidation of a determination by the Mortgage Loan to Purchaser after reimbursement to itself for Master Servicer that any such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account expenditure previously made pursuant to this Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The will not be reimbursable from Liquidation Proceeds, the Master Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in of its funds so expended pursuant to Section 4.053.04(b). Notwithstanding anything any other provision of this Agreement, a defaulted Mortgage Loan may be deemed to be finally liquidated if substantially all amounts expected by the contrary contained hereinMaster Servicer to be received in connection therewith have been received; provided, that any subsequent collections with respect to any such Mortgage Loan shall be deposited into the Collection Account. For purposes of determining the amount of any Liquidation Proceeds or Insurance Proceeds, or other unscheduled collections, the Master Servicer may take into account amounts of additional receipts expected to be received or any estimated additional Liquidation Expenses expected to be incurred in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged PropertyMortgage Loan. In the event (a) the environmental inspection report indicates that the title to any Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with acquired in foreclosure or acceptance of a by deed in lieu of foreclosure, the Servicer deed or certificate of sale shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect issued to the related Mortgaged Property from Indenture Trustee, which shall hold the Custodial Account pursuant to Section 4.05 hereof. In same on behalf of the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer Issuer in accordance with Section 4.163.13 of the Indenture. Notwithstanding any such acquisition of title and cancellation of the related Mortgage Loan, such Mortgaged Property shall, except as otherwise expressly provided herein, be considered to be an outstanding Mortgage Loan held as part of the Trust Estate until such time as such Mortgaged Property shall be sold. Consistent with the foregoing, for purposes of all calculations hereunder, so long as such Mortgaged Property shall be considered to be an outstanding Mortgage Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Documents shall have been discharged, such Mortgage Documents in effect at the time of any such acquisition of title before any adjustment thereto by reason of any bankruptcy or similar Proceeding or any moratorium or similar waiver or grace period will remain in effect. Any proceeds from foreclosure Proceedings or the purchase or repurchase of any Mortgage Loan pursuant to the terms of this Agreement and any recovery resulting from a collection of Liquidation Proceeds or Insurance Proceeds, shall be applied in the following order of priority: (a) to reimburse the Master Servicer or the related Subservicer in accordance with this Section; (b) to pay to the Master Servicer or the related Subservicer all Servicing Fees payable therefrom; (c) as accrued and unpaid interest on such Mortgage Loan at the related Mortgage Interest Rate to the Payment Date in respect of which such amounts are to be deposited into the Trustee Collection Account; and (d) as a recovery of principal on such Mortgage Loan.

Realization Upon Defaulted Mortgage Loans. In (i) GMACM shall use its reasonable efforts, consistent with the event that any payment due under any Servicing Standard, to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loan Loans as come into and not postponed continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be in the best interest of Purchaser3.07. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer GMACM shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall such costs and expenses will be entitled to reimbursement thereof from the related property, recoverable as Servicing Advances by GMACM as contemplated in Section 4.053.11(a) and Section 3.23. Notwithstanding anything The foregoing is subject to the contrary contained hereinprovision that, in any case in which a Mortgaged Property shall have suffered damage from an Uninsured Cause, GMACM shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion that such restoration will increase the proceeds of liquidation of the related Mortgage Loan after reimbursement to itself for such expenses. (ii) With respect to any Mortgage Loan, if GMACM determines that no significant recovery is possible through foreclosure proceedings or other liquidation of the related Mortgaged Property, it will be obligated to charge off the related Mortgage Loan no later than the time such Mortgage Loan becomes 180 days Delinquent. Once a Mortgage Loan has been charged off, GMACM will discontinue making Advances, GMACM will not be entitled to any additional servicing compensation, the Charged Off Loan will give rise to a Realized Loss, and GMACM will follow the procedures described in paragraph (a)(iii) below. (iii) GMACM will not be entitled to any Servicing Fees or reimbursement of expenses in connection with such Charged Off Loans except to the extent of funds available from the aggregate amount of recoveries on such Charged Off Loan which shall be paid to GMACM as any accrued and unpaid Servicing Fees. GMACM will only be entitled to previously accrued Servicing Fees on any such Charged Off Loans and will not be entitled to receive any future unaccrued Servicing Fees or expenses from collections on such Charged Off Loans. Any recoveries on such Charged Off Loans (net of accrued and unpaid Servicing Fees) received prior to the Release Date will be treated as Liquidation Proceeds distributable to the Holders of the Class X Certificates. Any Charged Off Loan will be transferred to the Holders of the Class X Certificates, without recourse (the "Release Date"), and thereafter (i) those Holders will be entitled to any amounts subsequently received in respect of any such Charged Off Loans, (ii) the Holders of the Class X Certificates may designate any servicer to service any such Released Loan and (iii) the Holders of the Class X Certificates may sell any such Charged Off Loan to a third party. With respect to any Charged Off Loan, the Trustee, upon receipt of a Request for Release from GMACM, shall release to the Holders of the Class X Certificates the related Mortgage File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as GMACM shall furnish to it and as shall be necessary to vest in the Holders of the Class X Certificates any Released Loan and the Trustee shall have no further responsibility with regard to such Mortgage File (it being understood that the Trustee shall have no responsibility for determining the sufficiency of such assignment for its intended purpose). Notwithstanding the foregoing, the procedures described above in this subsection 3.11(a)(iii) relating to the treatment of Charged Off Loans may be modified at any time at the discretion of the Holders of the Class X Certificates, with the reasonable consent of GMACM. (b) Notwithstanding the foregoing provisions of this Section 3.16 or any other provision of this Agreement, with respect to any Mortgage Loan as to which GMACM has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, GMACM shall not, on behalf of the Trustee, either (i) obtain title to such Mortgaged Property as a result of or in lieu of foreclosure or acceptance 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 Trustee, the Trust Fund or the Certificateholders 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 GMACM has also previously determined, based on its reasonable judgment and a report prepared by a Person who regularly conducts environmental audits using customary industry standards, that: (A) such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Trust Fund to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and (B) 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 Trust Fund to take such actions with respect to the affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 3.16 shall be advanced by GMACM, subject to GMACM's right to be reimbursed therefor from the Collection Account as provided in Section 3.11(a)(vii), such right of reimbursement being prior to the rights of Certificateholders to receive any amount in the Collection Account received in respect of the affected Mortgage Loan or other Mortgage Loans. If GMACM determines, as described above, that it is in the best economic interest of the Trust Fund 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 GMACM shall take such action as it deems to be in the best economic interest of the Trust Fund; provided that any amounts disbursed by GMACM pursuant to this Section 3.16(b) shall constitute Servicing Advances, subject to Section 4.04(d). The cost of any such compliance, containment, clean-up or remediation shall be advanced by GMACM, subject to GMACM's right to be reimbursed therefor from the Collection Account as provided in Section 3.11(a)(vii), such right of reimbursement being prior to the rights of Certificateholders to receive any amount in the Collection Account received in respect of the affected Mortgage Loan or other Mortgage Loans. (c) GMACM may, at its option, purchase a Mortgage Loan which has become 90 or more days delinquent or for which GMACM has accepted a deed in lieu of foreclosure. Prior to purchase pursuant to this Section 3.16(c), GMACM shall be required to continue to make Advances pursuant to Section 4.04. If GMACM purchases any delinquent Mortgage Loans pursuant to this Section 3.16(c), it must purchase Mortgage Loans that are delinquent the greatest number of days before it may purchase any that are delinquent any fewer number of days. GMACM shall purchase such delinquent Mortgage Loan at a price equal to the Purchase Price of such Mortgage Loan. Any such purchase of a Mortgage Loan pursuant to this Section 3.16(c) shall be accomplished by deposit in the Collection Account of the amount of the Purchase Price. Upon the satisfaction of the requirements set forth in Section 3.17(a), the Trustee shall immediately deliver the Mortgage File and any related documentation to GMACM and will execute such documents provided to it as are necessary to convey the Mortgage Loan to GMACM. (d) Proceeds received in connection with any Final Recovery Determination, as well as any recovery resulting from a partial collection of Insurance Proceeds, Liquidation Proceeds or condemnation proceeds, in respect of any Mortgage Loan, will be applied in the event following order of priority: first, to unpaid Servicing Fees; second, to reimburse GMACM or any Sub-Servicer for any related unreimbursed Servicing Advances pursuant to Section 3.11(a)(iii) and Advances pursuant to Section 3.11(a)(ii); third, to accrued and unpaid interest on the Servicer has reasonable cause Mortgage Loan, to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastesthe date of the Final Recovery Determination, or if to the Purchaser otherwise requests an environmental inspection or review of Due Date prior to the Distribution Date on which such Mortgaged Property, such an inspection or review is amounts are to be conducted by distributed if not in connection with a qualified inspector at the Purchaser's expense. Upon completion Final Recovery Determination; and fourth, as a recovery of principal of the inspection, the Servicer shall promptly provide the Purchaser with a written report Mortgage Loan. The portion of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect recovery so allocated to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer unpaid Servicing Fees shall be reimbursed for all reasonable costs associated with such foreclosure to GMACM or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Sub-Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.11(a)(iii).

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 Subsection 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 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 Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shallSeller shall evaluate the Mortgagor's situation, subject provide notice to the provisions of this Agreementpurchaser and, if appropriate, propose actions, and if requested by Purchaser, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Seller shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer In such connection, the Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 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 contrary contained hereinuse, 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 Subsection 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 Subsection 11.05(vii). 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 Subsection 11.05(vii). (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 Subsection 11.05(iii); 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 Distribution Date on which such amounts are to be distributed if not in connection with a foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by the Seller as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report interest then due and owing. The portion of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect recovery so allocated to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer unpaid Servicing Fees shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from to the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account Seller pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Subsection 11.05(iv).

Realization Upon Defaulted Mortgage Loans. (a) The Seller shall use its best reasonable 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 Subsection 11.01. The Seller shall use its best reasonable 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 Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Seller shall notify the Purchaser in writing of the Servicer's Seller’s intention to do so, and the Servicer Seller shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Seller shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer In such connection, the Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 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 contrary contained hereinuse, 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 Subsection 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 Subsection 11.05(v). 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 Subsection 11.05(v). (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 or unreimbursed Monthly Advances, pursuant to Subsection 11.05(ii) or (vi), as applicable; 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 Distribution Date on which such amounts are to be distributed if not in connection with a foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by the Seller as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report interest then due and owing. The portion of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect recovery so allocated to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer unpaid Servicing Fees shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from to the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account Seller pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Subsection 11.05(iii).

Realization Upon Defaulted Mortgage Loans. (a) The Seller shall use its best efforts, consistent with the procedures that the Seller would use in servicing mortgage 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 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 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Servicing Retained Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Seller shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer In such connection, the Seller shall be responsible for advancing all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from in accordance with Section 11.05. (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 property, Mortgaged Property the Seller shall not either (i) obtain title to such Mortgaged Property as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure result of or acceptance of a deed in lieu of foreclosureforeclosure 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 event meaning of the Servicer 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 cause to believe that judgment and a prudent report prepared by a Person who regularly conducts environmental audits using customary industry standards, that: 1. such Mortgaged Property is contaminated by 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 or toxic substances or 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 otherwise requests an environmental inspection or review of 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, such an inspection or review is subject to the Seller's right to be conducted by a qualified inspector at reimbursed therefor from the Purchaser's expenseCustodial Account as provided in Section 11.05(vii). Upon completion of the inspectionenvironmental audit report, the Servicer Seller shall promptly provide provided the Purchaser with a written report of the environmental inspectioncopy thereof. After reviewing the environmental inspection reportThereafter, the Seller and Purchaser shall consult to determine how the Servicer shall to proceed with respect to the Mortgaged Property. In . (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 as follows: to reimburse the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed Seller for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costsunreimbursed Servicing Advances pursuant to Section 11.05(iii); to pay accrued and unpaid interest on the Mortgage Loan, as applicable, from to the related Liquidation Proceedsdate of the Final Recovery Determination, or if not in connection with a Final Recovery Determination, to the Liquidation Proceeds Due Date prior to the Distribution Date on which such amounts are insufficient to fully reimburse be distributed; as a recovery of delinquent principal of the ServicerMortgage Loan, and collection of Service Fees on delinquent interest. 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 Servicer shall amount of such recovery will be entitled allocated by the Seller as follows; first, to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosureunpaid Servicing Fees; and second, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part balance of a REMIC, interest then due and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16owing.

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In With respect to any defaulted Mortgage Loan, the event that any payment due under any Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the Servicing Standards, subject to including, without limitation, advancing funds for the payment of taxes and insurance premiums. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust 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 Servicer has received the prior written consent of the NIMS Insurer and has received a prudent report prepared by a Person who regularly conducts environmental audits using customary industry standards, that: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loan, pursuant to the affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 5.03, and 3.03 shall be advanced by the Servicer's obligation , subject to make such Monthly Advances shall terminate on the 90th day referred Servicer’s right to abovebe reimbursed therefor from the Collection Account as provided in Section 3.05(iv). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, clean up or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer’s right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05.

Realization Upon Defaulted Mortgage Loans. In With respect to such of the event Mortgage Loans as come into and continue in default, the Master Servicer will decide whether to foreclose upon the Mortgaged Properties securing such Mortgage Loans or write off the unpaid principal balance of the Mortgage Loans as bad debt; provided that if the Master Servicer has actual knowledge that any payment due under Mortgaged Property is affected by hazardous or toxic wastes or substances and that the acquisition of such Mortgaged Property would not be commercially reasonable, then the Master Servicer will not cause the Depositor to acquire title to such Mortgaged Property in a foreclosure or similar proceeding. In connection with such foreclosure or other conversion, the Master Servicer shall follow such practices (including, in the case of any Mortgage Loan default on a related senior mortgage loan, the advancing of funds to correct such default) and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities; PROVIDED that the Master Servicer shall not postponed pursuant to Section 4.01 be liable in any respect hereunder if the Master Servicer is acting in connection with any such foreclosure or attempted foreclosure which is not paid when the same becomes due and payable, completed or other conversion 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) shall be manner that is consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be in the best interest of Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Servicing Agreement, commence foreclosure proceedings. The Servicer shall notify foregoing is subject to the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, proviso that the Master Servicer shall not be required to expend its own funds in connection with any fore closure or attempted foreclosure which is not completed or towards the restoration or preservation correction of any Mortgaged Property, default on a related senior mortgage loan or restoration of any property unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure expenditure will increase Net Liquidation Proceeds. In the proceeds event of liquidation of a determination by the Mortgage Loan to Purchaser after reimbursement to itself for Master Servicer that any such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account expenditure previously made pursuant to this Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The 3.07 will not be reimbursable from Net Liquidation Proceeds, the Master Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in of its funds so expended pursuant to Section 4.053.03. Notwithstanding anything any provision of this Servicing Agreement, a Mortgage Loan may be deemed to be finally liquidated if substantially all amounts expected by the contrary contained herein, Master Servicer to be received in connection with a foreclosure or acceptance of a deed in lieu of foreclosurethe related defaulted Mortgage Loan have been received; PROVIDED, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastesHOWEVER, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed any subsequent collections with respect to any such Mortgage Loan shall be deposited to the Mortgaged PropertyCollection Account. For purposes of determining the amount of any Liquidation Proceeds or Insurance Proceeds, or other unscheduled collections, the Master Servicer may take into account minimal amounts of additional receipts expected to be received or any estimated additional liquidation expenses expected to be incurred in connection with the related defaulted Mortgage Loan. In the event (a) the environmental inspection report indicates that the title to any Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with acquired in foreclosure or acceptance of a by deed in lieu of foreclosure, the Servicer deed or certificate of sale shall be reimbursed for all reasonable costs associated with issued to the Depositor and the Indenture Trustee as their interests may appear, or to their respective nominee on behalf of Securityholders. Notwithstanding any such foreclosure or acceptance acquisition of a deed in lieu title and cancellation of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation ProceedsMortgage Loan, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer such Mortgaged Property shall (except as otherwise expressly provided herein) be entitled considered to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a an outstanding Mortgage Loan becomes part held as an asset of a REMIC, and becomes REO Property, the Depositor until such time as such property shall be disposed sold. Consistent with the foregoing for purposes of all calculations hereunder, so long as such Mortgaged Property shall be considered to be an outstanding Mortgage Loan it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note in effect at the time of any such acquisition of title before any adjustment thereto by reason of any bankruptcy or similar proceeding or any moratorium or similar waiver or grace period will remain in effect. Any proceeds from foreclosure proceedings or the purchase or repurchase of any Mortgage Loan pursuant to the terms of this Servicing Agreement, as well as any recovery resulting from a collection of Liquidation Proceeds or Insurance Proceeds, will be applied in the following order of priority: first, to reimburse the Master Servicer or the related Subservicer in accordance with Section 4.163.07; second, to all Servicing Fees payable therefrom; third, to the extent of accrued and unpaid interest on the related Mortgage Loan, at the Net Mortgage Rate to the Due Date prior to the Payment Date on which such amounts are to be deposited in the Payment Account; fourth, as a recovery of principal on the Mortgage Loan; and fifth, to Foreclosure Profits.

Realization Upon Defaulted Mortgage Loans. The Seller shall use commercially reasonable efforts, consistent with the procedures that the Seller would use in servicing loans for its own account, Accepted Servicing Practices, any Primary Mortgage Insurance and the best interest of Purchaser, to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans 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 4.01. Foreclosure or comparable proceedings shall be initiated pursuant to Xxxxxx Mae guidelines and applicable state law with respect to Mortgaged Properties for which no satisfactory arrangements can be made for collection of delinquent payments. The Seller shall use its best efforts to realize upon defaulted Mortgage Loans in such 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 the 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 the 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 4.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 ninety (90) days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Seller shall notify the Purchaser in writing of the Servicer's Seller’s intention to do so, and the Servicer Seller shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer Seller has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's ’s expense. Upon completion of the inspection, the Servicer Seller shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer Seller shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer Seller in accordance with Section 4.164.13.

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 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Servicing Retained Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Seller shall notify the Purchaser in writing of the Servicer's Seller’s intention to do so, and the Servicer Seller shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure actionconnection, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. 11.05. (b) Notwithstanding anything 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 contrary contained hereinuse, 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 11.05(vii). 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 11.05(vii). (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 11.05(iii); second, to pay accrued and unpaid interest on the Mortgage Loan, to the date of the Final Recovery Determination, or if not in connection with a foreclosure or acceptance Final Recovery Determination, to the Due Date prior to the Distribution Date on which such amounts are to be distributed; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by the Seller as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes interest then due and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16owing.

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any With respect to each Mortgage Loan that comes into and not postponed pursuant continues in default, the Master Servicer shall exercise its reasonable judgment to Section 4.01 is not paid when determine whether to (a) foreclose on the same becomes due and payablerelated Mortgaged Property, or (b) write off the unpaid Principal Balance thereof as bad debt, (c) take a deed in lieu of foreclosure, (d) accept a short sale, (e) arrange for a repayment plan, (f) agree to a modification thereof in accordance with this Section, (g) xxx on the event the Mortgagor fails to perform any other covenant or obligation under underlying promissory note, (h) sell the Mortgage Loan and such failure continues beyond any applicable grace period, the Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect a nonperforming asset to a similar mortgage loan held for its own account for investment, third party not an Affiliate of the Master Servicer or Depositor or (2i) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) if the Servicer shall determine prudently to be in the best interest of Purchaser. In the event that any payment due under any related Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodLiquidated Mortgage Loan, the Servicer shall, take an unsecured note in each case subject to the provisions rights of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advancesany related senior lienholder, provided, however, for purposes of this Agreement, that the any such Mortgage Loan (or portion thereof represented by said unsecured note or sold to a third party pursuant to clause (h) above), shall be treated as charged off or liquidated. The Master Servicer shall not be required to in no event expend its own funds in connection with any foreclosure or attempted foreclosure that is not completed or towards the restoration or preservation correction of any Mortgaged Property, unless default on a related senior mortgage loan or restoration of any property if it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will expenditure would not increase the proceeds related Liquidation Proceeds. In the event of liquidation a determination by the Master Servicer that any such expenditure previously made pursuant to this Section will not be reimbursable from Liquidation Proceeds, the Master Servicer shall be entitled to reimbursement of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account its funds so expended pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority3.04(c). The With respect to the Mortgage Loans in Group I and so long as the Enhancer has rights pursuant to Section 8.11 of this Agreement, the Master Servicer shall obtain prior approval may modify the Mortgage Interest Rate of Purchaser as to restoration expenses defaulted Mortgage Loans in excess of one thousand dollars ($1,000). The Servicer shall notify accordance with the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsMaster Servicer’s customary servicing practices; provided, however, that it the aggregate Principal Balances of Mortgage Loans in Group I modified by the Master Servicer pursuant to this sentence shall not exceed 5% of the Initial Aggregate Principal Balance of the Mortgage Loans in Group I without the prior written consent of the Enhancer. The Master Servicer shall notify the Enhancer when the aggregate Principal Balances of Mortgage Loans in Group I modified by the Master Servicer pursuant to the preceding sentence equals 5% of the Initial Aggregate Principal Balance of the Mortgage Loans in Group I; provided, that any modification of the Mortgage Interest Rate of Mortgage Loans in Group I after the aggregate Principal Balances of Mortgage Loans in Group I that have been modified have reached 5% of the Initial Aggregate Principal Balance of the Mortgage Loans in Group I may be made by the Master Servicer in accordance with the Master Servicer’s customary servicing practices only with the consent of the Enhancer, which consent shall not be unreasonably withheld. With respect to the Mortgage Loans in Group II, and, to the extent the Enhancer’s rights under Section 8.11 of this Agreement have terminated, the Mortgage Loans in Group I, the Master Servicer may perform rate modifications and substitute collateral in accordance with the Master Servicer’s customary servicing practices. Notwithstanding any other provision of this Agreement, a defaulted Mortgage Loan may be deemed to be finally liquidated if substantially all amounts expected by the Master Servicer to be received in connection therewith have been received; provided, that any subsequent collections with respect to any such Mortgage Loan shall be entitled deposited into the Collection Account. For purposes of determining the amount of any Liquidation Proceeds or Insurance Proceeds, or other unscheduled collections, the Master Servicer may take into account amounts of additional receipts it expects to reimbursement thereof from the related property, as contemplated in Section 4.05. Notwithstanding anything receive or any estimated additional Liquidation Expenses it expects to the contrary contained herein, incur in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged PropertyMortgage Loan. In the event (a) the environmental inspection report indicates that the title to any Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with acquired in foreclosure or acceptance of a by deed in lieu of foreclosure, the Servicer deed or certificate of sale shall be reimbursed issued to the Master Servicer, which shall hold the same on behalf of the Issuer. Notwithstanding any such acquisition of title and cancellation of the related Mortgage Loan, such Mortgaged Property shall, except as otherwise expressly provided herein, be considered to be an outstanding Mortgage Loan held as part of the Trust Estate until such time as such Mortgaged Property shall be sold. Consistent with the foregoing, for purposes of all reasonable costs associated with calculations hereunder, so long as such Mortgaged Property shall be considered to be an outstanding Mortgage Loan, it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Documents shall have been discharged, such Mortgage Documents in effect at the time of any such acquisition of title before any adjustment thereto by reason of any bankruptcy or similar Proceeding or any moratorium or similar waiver or grace period will remain in effect. Any proceeds from foreclosure Proceedings or acceptance the purchase or repurchase of a deed in lieu any Mortgage Loan pursuant to the terms of foreclosure this Agreement and any related environmental clean up costsrecovery resulting from a collection of Liquidation Proceeds or Insurance Proceeds, as applicable, from shall be applied in the following order of priority (without double counting in the case of clause (a) and (b)): (a) to reimburse the Master Servicer or the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer Subservicer in accordance with Section 4.16this Section; (b) to pay to the Master Servicer or the related Subservicer all Servicing Fees payable therefrom; (c) as accrued and unpaid interest on such Mortgage Loan at the related Mortgage Interest Rate to the Payment Date in respect of which such amounts are to be deposited into the Trustee Collection Account; and (d) as a recovery of principal on such Mortgage Loan.

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 those Mortgaged Properties securing Mortgage Loans that come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Subsection 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, in the Seller's good faith judgement, increase the proceeds of liquidation of the related Mortgage Loan to the 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 Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 ninety (90) days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Seller shall notify the Purchaser in writing of the ServicerSeller's intention to do so, and the Servicer Seller shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Seller shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer In such connection, the Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from Liquidation Proceeds or REO Disposition proceeds from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 11.03, with respect to any Mortgage Loan as to which the contrary contained hereinSeller has received actual notice of, in connection with 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 foreclosure result of or acceptance of a deed in lieu of foreclosureforeclosure or otherwise, in 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 event 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 Servicer 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 cause to believe that judgment and a prudent report prepared by a Person who regularly conducts environmental audits using customary industry standards, that: (1) such Mortgaged Property is contaminated by 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 or toxic substances or 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 otherwise requests an to take such actions with respect to the affected Mortgaged Property. The cost of the environmental inspection audit report contemplated by this Subsection 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 Subsection 11.05(vii). 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 review 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 an inspection or review is action as it deems to be conducted by a qualified inspector at in the best economic interest of the Purchaser's expense. Upon completion The cost of any such compliance, containment, cleanup or remediation shall be advanced by the inspectionSeller, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect subject to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled Seller's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Account as provided in Subsection 11.05(vii). (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 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16.Subsection

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In With respect to any defaulted Mortgage Loan, the event that any payment due under any Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including, extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the servicing standards set forth in the Xxxxxx Xxx Guide, subject including, without limitation, advancing funds for the payment of taxes and insurance premiums with respect to first lien Mortgage Loans. Notwithstanding the foregoing provisions of this AgreementSection 3.15, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust Fund 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 Servicer 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: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loanthe affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 3.15 shall be advanced by the Servicer, pursuant subject to Section 5.03, and the Servicer's obligation right to make such Monthly Advances shall terminate on be reimbursed therefor from the 90th day referred to aboveCollection Account. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, cleanup or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Collection Account.

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders, including foreclosing on any such Mortgage Loan or working out an agreement with the Mortgagor, which may involve waiving or modifying certain terms of the Mortgage Loan. In addition, the event that Servicer may write-off any payment due under any second lien Mortgage Loan that is not postponed pursuant delinquent by 180 days or more. With respect to any defaulted Mortgage Loan, the Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 4.01 and remains delinquent 3.01, may modify such forbearance plan; including, extending the Mortgage Loan repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the servicing standards set forth in the Fxxxxx Mxx Guide, subject including, without limitation, advancing funds for the payment of taxes and insurance premiums with respect to first lien Mortgage Loans. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust Fund 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 Servicer 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: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loan, pursuant to the affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 5.03, and 3.03 shall be advanced by the Servicer's obligation , subject to make such Monthly Advances shall terminate on the 90th day referred Servicer’s right to abovebe reimbursed therefor from the Collection Account as provided in Section 3.05(a)(ii). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, cleanup or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer’s right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05(a)(ii).

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 Subsection 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 Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Seller shall notify the Purchaser in writing of the Servicer's Seller’s intention to do so, and the Servicer Seller shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Seller shall notify the Purchaser in writing of the commencement of foreclosure proceedingsproceedings and shall provide monthly reports to the Purchaser or its designee regarding the status of such Mortgage Loans from the time such Mortgage Loan becomes 90 days delinquent through the liquidation of such Mortgage Loan. The Servicer Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsforeclosure proceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 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 contrary contained hereinuse, 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 Subsection 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 Subsection 11.05(vii). 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; provided that the Seller shall not expend more than $2,000 with respect to the foregoing without the consent 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 Subsection 11.05(vii). (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 Subsection 11.05(iii); second, to accrued and unpaid interest on the Mortgage Loan, to the date of the Final Recovery Determination, or if not in connection with a foreclosure or acceptance Final Recovery Determination, to the Due Date prior to the Distribution Date on which such amounts are to be distributed; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by the Seller as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report interest then due and owing. The portion of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect recovery so allocated to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer unpaid Servicing Fees shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from to the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account Seller pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Subsection 11.05(iii).

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under Determination of Excess Proceeds and Realized Losses; Repurchase of Certain Mortgage Loans. ------------------------------------------ (a) The Master Servicer may agree to a modification of any Mortgage Loan and not postponed pursuant to Section 4.01 is not paid when (the same becomes due and payable, or in "Modified Mortgage Loan") if (i) CHL purchases the event the Mortgagor fails to perform any other covenant or obligation under the Modified Mortgage Loan from the Trust Fund immediately following the modification as described below and such failure continues beyond any applicable grace period, the Servicer shall take such action as (1ii) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be in the best interest Stated Principal Balance of Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, when taken together with the aggregate of the Stated Principal Balances of all other Mortgage Loans that have been so modified since the Closing Date at the time of those modifications, does not exceed an amount equal to 5% of the aggregate Certificate Principal Balance of the related Certificates. Effective immediately after the modification, and, in any event, on the same Business Day on which the modification occurs, all interest of the Trustee in the Modified Mortgage Loan shall automatically be deemed transferred and assigned to CHL and all benefits and burdens of ownership thereof, including the right to accrued interest thereon from the date of modification and the risk of default thereon, shall pass to CHL. The Master Servicer shall promptly deliver to the Trustee a certification of a Servicing Officer to the effect that all requirements of this paragraph have been satisfied with respect to the Modified Mortgage Loan. For federal income tax purposes, the Trustee shall account for such purchase as a prepayment in full of the Modified Mortgage Loan. CHL shall remit the Purchase Price to the Master Servicer for deposit into the Certificate Account pursuant to Section 5.033.05 within one Business Day after the purchase of the Modified Mortgage Loan. Upon receipt by the Trustee of written notification of any such deposit signed by a Servicing Officer, the Trustee shall release to CHL or its designee the related Mortgage File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in CHL any Modified Mortgage Loan previously transferred and assigned pursuant hereto. CHL covenants and agrees to indemnify the Trust Fund against any liability for any "prohibited transaction" taxes and any related interest, additions, and the Servicer's obligation to make such Monthly Advances shall terminate penalties imposed on the 90th day referred Trust Fund established hereunder as a result of any modification of a Mortgage Loan effected pursuant to abovethis subsection (a), any holding of a Modified Mortgage Loan by the Trust Fund or any purchase of a Modified Mortgage Loan by CHL (but such obligation shall not prevent CHL or any other appropriate Person from in good faith contesting any such tax in appropriate proceedings and shall not prevent CHL from withholding payment of such tax, if permitted by law, pending the outcome of such proceedings). CHL shall have no right of reimbursement for any amount paid pursuant to the foregoing indemnification, except to the extent that the amount of any tax, interest, and penalties, together with interest thereon, is refunded to the Trust Fund or CHL. If the Master Servicer agrees to a modification of any Mortgage Loan pursuant to this Section 3.12(a), and if such Mortgage Loan carries a Prepayment Charge provision, CHL shall deliver to the Trustee the amount of the Prepayment Charge, if any, that would have been due had such Mortgage Loan been prepaid at the time of such modification, for deposit into the Certificate Account (not later than 1:00 p.m. Pacific time on the Master Servicer Advance Date immediately succeeding the date of such modification) for distribution in accordance with the terms of this Agreement. (b) The Master Servicer shall from use reasonable efforts to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments. In connection with such foreclosure or other conversion, the Master Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its own funds make all necessary general mortgage servicing activities and proper Servicing Advances, provided, however, the requirements of the insurer under any Required Insurance Policy; provided that the Master Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, property unless it shall determine in its reasonable discretion (ai) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for of such expenses and (bii) that such expenses will be recoverable by to it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Certificate Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority3.08 hereof). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Master Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, provided that it shall be entitled to reimbursement thereof from the proceeds of liquidation of the related propertyMortgaged Property and any related Subsequent Recoveries, as contemplated in Section 4.053.08 hereof. Notwithstanding anything If the Master Servicer has knowledge that a Mortgaged Property that the Master Servicer is contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is located within a one-mile radius of any site with environmental or hazardous waste risks known to the contrary contained hereinMaster Servicer, the Master Servicer will, prior to acquiring the Mortgaged Property, consider such risks and only take action in accordance with its established environmental review procedures. With respect to any REO Property, the deed or certificate of sale shall be taken in the name of the Trustee for the benefit of the Certificateholders (or the Trustee's nominee on behalf of the Certificateholders). The Trustee's name shall be placed on the title to such REO Property solely as the Trustee hereunder and not in its individual capacity. The Master Servicer shall ensure that the title to such REO Property references this Agreement and the Trustee's capacity thereunder. Pursuant to its efforts to sell such REO Property, the Master Servicer shall either itself or through an agent selected by the Master Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such REO Property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Master Servicer deems to be in the best interest of the Master Servicer and the Certificateholders for the period prior to the sale of such REO Property. The Master Servicer shall prepare for and deliver to the Trustee a statement with respect to each REO Property that has been rented showing the aggregate rental income received and all expenses incurred in connection with the management and maintenance of such REO Property at such times as is necessary to enable the Trustee to comply with the reporting requirements of the REMIC Provisions. The net monthly rental income, if any, from such REO Property shall be deposited in the Certificate Account no later than the close of business on each Determination Date. The Master Servicer shall perform the tax reporting and withholding related to foreclosures, abandonments and cancellation of indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code by preparing and filing such tax and information returns, as may be required. In the event that the Trust Fund acquires any Mortgaged Property as aforesaid or otherwise in connection with a foreclosure default or acceptance imminent default on a Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property as soon as practicable in a deed manner that maximizes the Liquidation Proceeds, but in lieu no event later than three years after its acquisition by the Trust Fund or, at the expense of foreclosurethe Trust Fund, in the Master Servicer shall request, more than 60 days prior to the day on which such three-year period would otherwise expire, an extension of the three-year grace period. In the event the Trustee shall have been supplied with an Opinion of Counsel (such opinion not to be an expense of the Trustee) to the effect that the holding by the Trust Fund of such Mortgaged Property subsequent to such three-year period will not result in the imposition of taxes on "prohibited transactions" of the Trust Fund as defined in section 860F of the Code or cause any REMIC formed hereunder to fail to qualify as a REMIC at any time that any Certificates are outstanding, and the Trust Fund may continue to hold such Mortgaged Property (subject to any conditions contained in such Opinion of Counsel) after the expiration of such three-year period. Notwithstanding any other provision of this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to continue to be rented) or otherwise used for the production of income by or on behalf of the Trust Fund in such a manner or pursuant to any terms that would (i) cause such Mortgaged Property to fail to qualify as "foreclosure property" within the meaning of section 860G(a)(8) of the Code or (ii) subject the Trust Fund to the imposition of any federal, state or local income taxes on the income earned from such Mortgaged Property under section 860G(c) of the Code or otherwise, unless the Master Servicer has reasonable cause agreed to believe indemnify and hold harmless the Trust Fund with respect to the imposition of any such taxes. The decision of the Master Servicer to foreclose on a defaulted Mortgage Loan shall be subject to a determination by the Master Servicer that the proceeds of such foreclosure would exceed the costs and expenses of bringing such a proceeding. The income earned from the management of any Mortgaged Property is contaminated by hazardous Properties acquired through foreclosure or toxic substances other judicial proceeding, net of reimbursement to the Master Servicer for expenses incurred (including any property or wastesother taxes) in connection with such management and net of unreimbursed Servicing Fees, Advances, Servicing Advances and any management fee paid or if to be paid with respect to the Purchaser otherwise requests an environmental inspection or review management of such Mortgaged Property, shall be applied to the payment of principal of, and interest on, the related defaulted Mortgage Loans (with interest accruing as though such an inspection or review is Mortgage Loans were still current) and all such income shall be deemed, for all purposes in this Agreement, to be conducted by payments on account of principal and interest on the related Mortgage Notes and shall be deposited into the Certificate Account. To the extent the income received during a qualified inspector Prepayment Period is in excess of the amount attributable to amortizing principal and accrued interest at the Purchaser's expenserelated Mortgage Rate on the related Mortgage Loan, such excess shall be considered to be a partial Principal Prepayment for all purposes hereof. Upon completion The Liquidation Proceeds from any liquidation of the inspectiona Mortgage Loan and any Subsequent Recoveries, the Servicer shall promptly provide the Purchaser with a written report net of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect any payment to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Master Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosureas provided above, the Servicer shall be reimbursed deposited in the Certificate Account as provided in Section 3.05 for all reasonable costs associated with such foreclosure distribution on the related Distribution Date, except that any Excess Proceeds shall be retained by the Master Servicer as additional servicing compensation. The proceeds of any Liquidated Mortgage Loan, as well as any recovery resulting from a partial collection of Liquidation Proceeds or acceptance any income from an REO Property, will be applied in the following order of a deed in lieu of foreclosure and priority: first, to reimburse the Master Servicer for any related environmental clean up costsunreimbursed Servicing Advances and Servicing Fees, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In 3.08(a)(vi) or this Section 3.12; second, to reimburse the event the Purchaser directs the Master Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosurefor any unreimbursed Advances, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid interest (to the extent no Advance has been made for such amount) on the Mortgage Loan or related REO Property, at the Net Mortgage Rate to the Due Date occurring in the month in which such amounts are required to be distributed; and fourth, as a recovery of principal of the Mortgage Loan. (c) [Reserved]. (d) The Master Servicer, in its sole discretion, shall have the right to elect (by written notice sent to the Trustee) to purchase for its own account from the Trust Fund any Mortgage Loan that is 150 days or more delinquent at a price equal to the Purchase Price; provided, however, that the Master Servicer may only exercise this right on or before the last day of the calendar month in which such Mortgage Loan became 150 days delinquent (such month, the "Eligible Repurchase Month"); provided further, that any such Mortgage Loan which becomes current but thereafter becomes delinquent may be purchased by the Master Servicer pursuant to this Section in any ensuing Eligible Repurchase Month. In The Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in the event that Certificate Account. Any purchase of a Mortgage Loan becomes part pursuant to this Section 3.12(d) shall be accomplished by remittance to the Master Servicer for deposit in the Certificate Account of the Purchase Price. The Trustee, upon receipt of certification from the Master Servicer of such deposit and a REMICRequest for File Release from the Master Servicer, shall release or cause to be released to the purchaser of such Mortgage Loan the related Mortgage File and shall execute and deliver such instruments of transfer or assignment prepared by the purchaser of such Mortgage Loan, in each case without recourse, as shall be necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto and the purchaser of such Mortgage Loan shall succeed to all the Trustee's right, title and interest in and to such Mortgage Loan and all security and documents related thereto. Such assignment shall be an assignment outright and not for security. The purchaser of such Mortgage Loan shall thereupon own such Mortgage Loan, and becomes REO Propertyall security and documents, such property shall be disposed free of by any further obligation to the Servicer in accordance Trustee or the Certificateholders with Section 4.16respect thereto.

Realization Upon Defaulted Mortgage Loans. In Determination of Excess Proceeds and Realized Losses; Repurchase of Certain Mortgage Loans. (a) Notwithstanding the event that first sentence of Section 3.01, the Master Servicer may agree to any payment due under modification of any Mortgage Loan and not postponed pursuant to Section 4.01 is not paid when (the same becomes due and payable, or in "Modified Mortgage Loan") if (i) CHL purchases the event the Mortgagor fails to perform any other covenant or obligation under the Modified Mortgage Loan from the Trust Fund immediately following the modification as described below and such failure continues beyond any applicable grace period, the Servicer shall take such action as (1ii) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be in the best interest Stated Principal Balance of Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, when taken together with the aggregate of the Stated Principal Balances of all other Mortgage Loans in the same Loan Group that have been so modified since the Closing Date at the time of those modifications, does not exceed an amount equal to 5% of the aggregate initial Certificate Principal Balance of the Certificates. Effective immediately after the modification, and, in any event, on the same Business Day on which the modification occurs, all interest of the Trustee in the Modified Mortgage Loan shall automatically be deemed transferred and assigned to CHL and all benefits and burdens of ownership thereof, including the right to accrued interest thereon from the date of modification and the risk of default thereon, shall pass to CHL. The Master Servicer shall promptly deliver to the Trustee a certification of a Servicing Officer to the effect that all requirements of this paragraph have been satisfied with respect to the Modified Mortgage Loan. For federal income tax purposes, the Trustee shall account for such purchase as a prepayment in full of the Modified Mortgage Loan. CHL shall remit the Purchase Price to the Master Servicer for deposit into the Certificate Account pursuant to Section 5.033.05 within one Business Day after the purchase of the Modified Mortgage Loan. Upon receipt by the Trustee of written notification of any such deposit signed by a Servicing Officer, the Trustee shall release to CHL or its designee the related Mortgage File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in CHL any Modified Mortgage Loan previously transferred and assigned pursuant hereto. CHL covenants 106 and agrees to indemnify the Trust Fund against any liability for any "prohibited transaction" taxes and any related interest, additions, and the Servicer's obligation to make such Monthly Advances shall terminate penalties imposed on the 90th day referred Trust Fund established hereunder as a result of any modification of a Mortgage Loan effected pursuant to abovethis subsection (a), any holding of a Modified Mortgage Loan by the Trust Fund or any purchase of a Modified Mortgage Loan by CHL (but such obligation shall not prevent CHL or any other appropriate Person from in good faith contesting any such tax in appropriate proceedings and shall not prevent CHL from withholding payment of such tax, if permitted by law, pending the outcome of such proceedings). CHL shall have no right of reimbursement for any amount paid pursuant to the foregoing indemnification, except to the extent that the amount of any tax, interest, and penalties, together with interest thereon, is refunded to the Trust Fund or CHL. If the Master Servicer agrees to a modification of any Mortgage Loan pursuant to this Section 3.12(a), and if such Mortgage Loan carries a Prepayment Charge provision, CHL shall deliver to the Trustee the amount of the Prepayment Charge, if any, that would have been due had such Mortgage Loan been prepaid at the time of such modification, for deposit into the Certificate Account (not later than 1:00 p.m. Pacific time on the Master Servicer Advance Date immediately succeeding the date of such modification) for distribution in accordance with the terms of this Agreement. (b) The Master Servicer shall from use reasonable efforts to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments. In connection with such foreclosure or other conversion, the Master Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its own funds make all necessary general mortgage servicing activities and proper Servicing Advances, provided, however, the requirements of the insurer under any Required Insurance Policy; provided that the Master Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, property unless it shall determine in its reasonable discretion (ai) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for of such expenses and (bii) that such expenses will be recoverable by to it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Certificate Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority3.08 hereof). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Master Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, provided that it shall be entitled to reimbursement thereof from the proceeds of liquidation of the related propertyMortgaged Property and any related Subsequent Recoveries, as contemplated in Section 4.053.08 hereof. Notwithstanding anything If the Master Servicer has knowledge that a Mortgaged Property that the Master Servicer is contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is located within a one-mile radius of any site with environmental or hazardous waste risks known to the contrary contained hereinMaster Servicer, the Master Servicer will, prior to acquiring the Mortgaged Property, consider such risks and only take action in accordance with its established environmental review procedures. With respect to any REO Property, the deed or certificate of sale shall be taken in the name of the Trustee for the benefit of the Certificateholders (or the Trustee's nominee on behalf of the Certificateholders). The Trustee's name shall be placed on the title to such REO Property solely as the Trustee hereunder and not in its individual capacity. The Master Servicer shall ensure that the title to such REO Property references this Agreement and the Trustee's capacity thereunder. Pursuant to its efforts to sell such REO Property, the Master Servicer shall either itself or through an agent selected by the Master Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such REO Property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Master Servicer deems to be in the best interest of the Master Servicer and the Certificateholders for the period prior to the sale of such REO Property. The Master Servicer shall prepare for and deliver to the Trustee a statement with respect to each REO Property that has been rented showing the aggregate rental income received and all expenses incurred in connection with the management and maintenance of such REO Property at such times as is necessary to enable the Trustee to comply with the reporting requirements of the REMIC Provisions. The net monthly rental income, if any, from such REO Property shall be deposited in the Certificate Account no later than the close of business on each Determination Date. The Master Servicer shall perform the tax reporting and withholding related to foreclosures, abandonments and cancellation of indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code by preparing and filing such tax and information returns, as may be required. In the event that the Trust Fund acquires any Mortgaged Property as aforesaid or otherwise in connection with a foreclosure default or acceptance imminent default on a Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property as soon as practicable in a deed manner that maximizes the Liquidation Proceeds, but in lieu no event later than three years after its acquisition by the Trust Fund or, at the expense of foreclosurethe Trust Fund, in the Master Servicer shall request, more than 60 days prior to the day on which such three-year period would otherwise expire, an extension of the three-year grace period. In the event the Trustee shall have been supplied with an Opinion of Counsel (such opinion not to be an expense of the Trustee) to the effect that the holding by the Trust Fund of such Mortgaged Property subsequent to such three-year period will not result in the imposition of taxes on "prohibited transactions" of the Trust Fund as defined in section 860F of the Code or cause any REMIC formed hereunder to fail to qualify as a REMIC at any time that any Certificates are outstanding, and the Trust Fund may continue to hold such Mortgaged Property (subject to any conditions contained in such Opinion of Counsel) after the expiration of such three-year period. Notwithstanding any other provision of this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to continue to be rented) or otherwise used for the production of income by or on behalf of the Trust Fund in such a manner or pursuant to any terms that would (i) cause such Mortgaged Property to fail to qualify as "foreclosure property" within the meaning of section 860G(a)(8) of the Code or (ii) subject the Trust Fund to the imposition of any federal, state or local income taxes on the income earned from such Mortgaged Property under section 860G(c) of the Code or otherwise, unless the Master Servicer has reasonable cause agreed to believe indemnify and hold harmless the Trust Fund with respect to the imposition of any such taxes. The decision of the Master Servicer to foreclose on a defaulted Mortgage Loan shall be subject to a determination by the Master Servicer that the proceeds of such foreclosure would exceed the costs and expenses of bringing such a proceeding. The income earned from the management of any Mortgaged Property is contaminated by hazardous Properties acquired through foreclosure or toxic substances other judicial proceeding, net of reimbursement to the Master Servicer for expenses incurred (including any property or wastesother taxes) in connection with such management and net of unreimbursed Servicing Fees, Advances, Servicing Advances and any management fee paid or if to be paid with respect to the Purchaser otherwise requests an environmental inspection or review management of such Mortgaged Property, shall be applied to the payment of principal of, and interest on, the related defaulted Mortgage Loans (with interest accruing as though such an inspection or review is Mortgage Loans were still current) and all such income shall be deemed, for all purposes in this 108 Agreement, to be conducted by payments on account of principal and interest on the related Mortgage Notes and shall be deposited into the Certificate Account. To the extent the income received during a qualified inspector Prepayment Period is in excess of the amount attributable to amortizing principal and accrued interest at the Purchaser's expenserelated Mortgage Rate on the related Mortgage Loan, such excess shall be considered to be a partial Principal Prepayment for all purposes hereof. Upon completion The Liquidation Proceeds from any liquidation of the inspectiona Mortgage Loan and any Subsequent Recoveries, the Servicer shall promptly provide the Purchaser with a written report net of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect any payment to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Master Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosureas provided above, the Servicer shall be reimbursed deposited in the Certificate Account as provided in Section 3.05 for all reasonable costs associated with such foreclosure distribution on the related Distribution Date, except that any Excess Proceeds shall be retained by the Master Servicer as additional servicing compensation. The proceeds of any Liquidated Mortgage Loan, as well as any recovery resulting from a partial collection of Liquidation Proceeds or acceptance of a deed any income from an REO Property, will be applied in lieu of foreclosure and the following order: first, to reimburse the Master Servicer for any related environmental clean up costsunreimbursed Servicing Advances and Servicing Fees, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In 3.08(a)(vi) or this Section 3.12; second, to reimburse the event the Purchaser directs the Master Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosurefor any unreimbursed Advances, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid interest (to the extent no Advance has been made for such amount) on the Mortgage Loan or related REO Property, at the Net Mortgage Rate to the Due Date occurring in the month in which such amounts are required to be distributed; and fourth, as a recovery of principal of the Mortgage Loan. (c) [Reserved]. (d) The Master Servicer, in its sole discretion, shall have the right to elect (by written notice sent to the Trustee) to purchase for its own account from the Trust Fund any Mortgage Loan that is 150 days or more delinquent at a price equal to the Purchase Price; provided, however, that the Master Servicer may only exercise this right on or before the last day of the calendar month in which such Mortgage Loan became 150 days delinquent (such month, the "Eligible Repurchase Month"); provided further, that any such Mortgage Loan which becomes current but thereafter becomes delinquent may be purchased by the Master Servicer pursuant to this Section in any ensuing Eligible Repurchase Month. In The Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in the event that Certificate Account. Any purchase of a Mortgage Loan becomes part pursuant to this Section 3.12(d) shall be accomplished by remittance to the Master Servicer for deposit in the Certificate Account of the Purchase Price. The Trustee, upon receipt of certification from the Master Servicer of such deposit and a REMICRequest for File Release from the Master Servicer, shall release or cause to be released to the purchaser of such Mortgage Loan the related Mortgage File and shall execute and deliver such instruments of transfer or assignment prepared by the purchaser of such Mortgage Loan, in each case without recourse, as shall be necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto and the purchaser of such Mortgage Loan shall succeed to all the Trustee's right, title and interest in and to such Mortgage Loan and all security and documents related thereto. Such assignment shall be an assignment outright and not for security. The purchaser of such Mortgage Loan shall thereupon own such Mortgage Loan, and becomes REO Propertyall security and documents, such property shall be disposed free of by any further obligation to the Servicer in accordance Trustee or the Certificateholders with Section 4.16.respect thereto. 109

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In With respect to any defaulted Mortgage Loan, the event that any payment due under any Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including, extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the servicing standards set forth in the Xxxxxx Xxx Guide, subject including, without limitation, advancing funds for the payment of taxes and insurance premiums with respect to first lien Mortgage Loans. Notwithstanding the foregoing provisions of this AgreementSection 3.15, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust Fund 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 Servicer 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: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loan, pursuant to the affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 5.03, and 3.15 shall be advanced by the Servicer's obligation , subject to make such Monthly Advances shall terminate on the 90th day referred Servicer’s right to abovebe reimbursed therefor from the Collection Account. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, cleanup or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer’s right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Collection Account.

Realization Upon Defaulted Mortgage Loans. The Servicer shall use its best efforts, consistent with the procedures that the Servicer would use in servicing similar mortgage loans for its own account, to foreclose upon or otherwise comparably convert the ownership of such of the Mortgage Loans 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 3.01. Foreclosure or comparable proceedings shall be initiated within 120 days of default for Mortgaged Properties for which no satisfactory arrangements can be made for collection of delinquent payments. The Servicer 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 Trustee, 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 Servicer shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion (i) that such restoration will increase the proceeds of liquidation of the related Mortgage Loan to the Master Servicer after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable by the Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 3.01 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 Servicer shall take such action as (1) the Servicer would take for other institutional investors under similar circumstances with respect to a similar mortgage loan held for its own account for investmentloan, (2) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance PoliciesPractices, and (3) the Servicer shall determine prudently to be in the best interest of Purchaserthe Trust Fund, and (4) is consistent with any related PMI Policy or LPMI Policy. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 3.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, shall commence foreclosure proceedings. The , provided that prior to commencing foreclosure proceedings, the Servicer shall notify the Purchaser Master Servicer (who will notify the Trustee and the Trust Administrator) in writing of the Servicer's ’s intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser Master Servicer objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure actionconnection, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for advancing all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05.

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In With respect to any defaulted Mortgage Loan, the event that any payment due under any Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the Servicing Standard, subject to including, without limitation, advancing funds for the payment of taxes and insurance premiums. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust 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 Servicer has received the prior written consent of the NIMS Insurer and has received a prudent report prepared by a Person who regularly conducts environmental audits using customary industry standards, that: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loan, pursuant to the affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 5.03, and 3.03 shall be advanced by the Servicer's obligation , subject to make such Monthly Advances shall terminate on the 90th day referred Servicer’s right to abovebe reimbursed therefor from the Collection Account as provided in Section 3.05(iv). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, clean-up or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer’s right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05.

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 Subsection 11.01. In addition, if an Additional Collateral Mortgage Loan becomes a defaulted Mortgage Loan, the Seller shall make all reasonable efforts to realize upon the related Additional Collateral, and any proceeds from the realization thereof, and not such Additional Collateral itself, shall be included in the related Liquidation Proceeds and deposited in the Custodial Account, net of any related Servicing Advances. 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 and any proceedings with respect to Additional Collateral. 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 Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 ninety (90) days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shallSeller shall (a) act in the best interests of the Purchaser, subject to the provisions of this Agreement, (b) commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Seller shall notify the Purchaser in writing of the Servicer's Seller’s intention to do so, and the Servicer Seller shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event notice and (c) respond to reasonable inquiries of the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by or related REO property. Notwithstanding the foregoing, the Seller may not sell a delinquent Mortgage Loan unless it either through Liquidation Proceeds (respecting which it shall have priority for purposes has obtained the consent of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority)Purchaser. The Servicer shall obtain prior approval Purchaser may instruct the Seller to commence foreclosure proceedings on any Mortgage Loan for which any payment remains delinquent for a period of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000)120 days or more. The Servicer Seller shall promptly notify the Purchaser in writing of the commencement of foreclosure proceedingsproceedings and thereafter periodically advise the Purchaser of the status of the foreclosure proceedings and follow the Purchaser’s instructions in connection therewith. The Servicer . In such connection, the Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 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 contrary contained hereinuse, 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 Subsection 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 Subsection 11.05(vi). 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 Subsection 11.05(vi). (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 Subsection 11.05(iii); 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 Distribution Date on which such amounts are to be distributed if not in connection with a foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by the Seller as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report interest then due and owing. The portion of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect recovery so allocated to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer unpaid Servicing Fees shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from to the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account Seller pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Subsection 11.05(iv).

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 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Servicing Released Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Seller shall notify the Purchaser in writing of the Servicer's Seller’s intention to do so, and the Servicer Seller shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure actionconnection, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. 11.05. (b) Notwithstanding anything 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 contrary contained hereinuse, 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 11.05(v). 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 11.05(v). (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 11.05(ii); second, to pay accrued and unpaid interest on the Mortgage Loan, to the date of the Final Recovery Determination, or if not in connection with a foreclosure or acceptance Final Recovery Determination, to the Due Date prior to the Distribution Date on which such amounts are to be distributed; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by the Seller as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report interest then due and owing. The portion of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect recovery so allocated to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer unpaid Servicing Fees shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from to the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account Seller pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.1611.05(ii).

Realization Upon Defaulted Mortgage Loans. In (i) The Servicer shall use its reasonable efforts, consistent with the event that any payment due under any Servicing Standard and the Mortgage Loan Pool Insurance Policy, to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans as come into and not postponed continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 4.01 is not paid when the same becomes due and payable, or 3.07. Title to any such property shall be taken in the event name of the Mortgagor fails to perform any other covenant Trustee or obligation under its nominee, on behalf of the Mortgage Loan and such failure continues beyond any applicable grace period, the Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be in the best interest of Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shallCertificateholders, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedingsapplicable law. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall such costs and expenses will be entitled to reimbursement thereof from recoverable as Servicing Advances by the related property, Servicer as contemplated in Section 4.053.11(a) and Section 3.23. Notwithstanding anything The foregoing is subject to the contrary contained hereinprovision that, in connection with a foreclosure or acceptance of a deed any case in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that which a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests shall have suffered damage from an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspectionUninsured Cause, the Servicer shall promptly provide not be required to expend its own funds toward the Purchaser with a written report restoration of such property unless it shall determine in its discretion that such restoration will increase the proceeds of liquidation of the environmental inspection. After reviewing related Mortgage Loan after reimbursement to itself for such expenses. (ii) With respect to any Mortgage Loan for which coverage under the environmental inspection reportMortgage Pool Insurance Policy is not available, the Purchaser shall determine how if the Servicer shall proceed with respect to determines that no significant recovery is possible through foreclosure proceedings or other liquidation of the related Mortgaged Property, it will be obligated to charge off the related Mortgage Loan no later than the time such Mortgage Loan becomes 180 days Delinquent. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of Once a deed in lieu of foreclosureMortgage Loan has been charged off, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicerwill discontinue making Advances, the Servicer shall will not be entitled to be reimbursed from amounts in any additional servicing compensation, the Custodial Account pursuant Charged Off Loan will give rise to Section 4.05 hereof. In the event the Purchaser directs a Realized Loss, and the Servicer will follow the procedures described in paragraph (a)(iii) below. (iii) Any Charged Off Loan will continue to be serviced by Servicer for the Holders of the Class X Certificates using non-foreclosure collection procedures. The Servicer will not be entitled to proceed any Servicing Fees or reimbursement of expenses in connection with foreclosure or acceptance such Charged Off Loans except to the extent of a deed in lieu funds available from the aggregate amount of foreclosure, recoveries on such Charged Off Loan which shall be paid to the Servicer shall as any accrued and unpaid Servicing Fees. The Servicer will only be reimbursed for all entitled to previously accrued Servicing Advances made with respect Fees on any such Charged Off Loans and will not be entitled to the related Mortgaged Property receive any future unaccrued Servicing Fees or expenses from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16.collections

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 The Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for use its own account for investmentbest efforts, (2) shall be consistent with Accepted Servicing Practices and Practices, procedures that the Servicer would use in servicing loans for its own account, any related Primary Mortgage Insurance PoliciesPolicy or LPMI Policy and the best interests of the Purchaser, to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Subsection 11.01. Foreclosure or comparable proceedings shall be initiated within one hundred twenty (3120) the days of default for Mortgaged Properties for which no satisfactory arrangements can be made for collection of delinquent payments. The Servicer shall determine prudently use its best efforts to be realize upon defaulted Mortgage Loans in such manner as will maximize the best receipt of principal and interest of by the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any , taking into account, among other default continues for a period of 90 days beyond the expiration of any grace or cure periodthings, the Servicer shall, timing of foreclosure proceedings. The foregoing is subject to the provisions of this Agreementthat, commence foreclosure proceedings. The Servicer in any case in which Mortgaged Property shall notify the Purchaser in writing of the Servicer's intention to do sohave suffered damage, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards toward the restoration or preservation of any Mortgaged Property, such property in excess of $2,000 unless it shall determine in its reasonable discretion (ai) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the related Mortgage Loan to the Purchaser after reimbursement to itself for such expenses expenses, and (bii) that such expenses will be recoverable by it either the Servicer through Primary Mortgage Insurance Proceeds, Other Insurance Proceeds or Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser related Mortgaged Property, as to restoration expenses contemplated in excess of one thousand dollars ($1,000)Subsection 11.05. The Servicer shall notify the Purchaser and any master servicer in writing of the commencement of foreclosure proceedings. The Such notice may be contained in the reports prepared by the Servicer and delivered to Purchaser pursuant to the terms and conditions of this Agreement. In such connection, the Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in Section 4.05Subsection 11.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's ’s expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer, with the consent of the Purchaser as required pursuant to this Agreement, within three (3) years after becoming an REO Property, unless the Servicer provides to the trustee under such REMIC an opinion of counsel to the effect that the holding of such REO Property subsequent to three years after its becoming REO Property, will not result in accordance the imposition of taxes on “prohibited transactions” as defined in Section 860F of the Code, or cause the transaction to fail to qualify as a REMIC at any time that certificates are outstanding. The Servicer shall manage, conserve, protect and operate each such REO Property for the certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such property to fail to qualify as “foreclosure property” within the meaning of Section 860F(a)(2)(E) of the Code, or any “net income from foreclosure property” which is subject to taxation under the REMIC provisions of the Code. Pursuant to its efforts to sell such property, the Servicer shall either itself or through an agent selected by the Servicer, protect and conserve such property in the same manner and to such an extent as is customary in the locality where such property is located. Additionally, the Servicer shall provide the Purchaser or any master servicer in connection with Section 4.16a Reconstitution with information sufficient for such party to comply with the tax withholding and reporting related to Sections 1445 and 6050J of the Code.

Realization Upon Defaulted Mortgage Loans. (a) Option One shall use its best efforts, in as practicable period as possible, and consistent with the procedures that Option One 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. Option One 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, Option One shall not be required to expend its own funds toward the restoration of such property 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 Option One through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Section 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Option One shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 ninety (90) days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Option One shall commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Option One shall notify the Purchaser in writing of the commencement of foreclosure proceedingsproceedings pursuant to Section 11.19. The Servicer In such connection, Option One shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. 11.05. (b) Notwithstanding anything the foregoing provisions of this Section 11.03, with respect to any Mortgage Loan as to which Option One has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property Option One 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 Option One 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 contrary contained hereinuse, 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 Option One, subject to Option One's right to be reimbursed therefor from the Custodial Account as provided in Section 11.06. If Option One 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 Option One 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 Option One, subject to Option One's right to be reimbursed therefor from the Custodial Account as provided in Section 11.06. (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 Option One 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 foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by Option One as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes interest then due and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16owing.

Realization Upon Defaulted Mortgage Loans. The Servicer shall use its best efforts, consistent with the procedures that the Servicer would use in servicing loans for its own account and the requirements of the Xxxxxx Mae Guide, to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans 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 4.01. The Servicer shall use its reasonable efforts to realize upon defaulted Mortgage Loans in such manner as will maximize the receipt of principal and interest by the Owner, 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 Servicer 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 the Owner after reimbursement to itself for such expenses, and (ii) that such expenses will be recoverable by the Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Section 4.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Owner. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, shall commence foreclosure proceedings. The , provided that prior to commencing foreclosure proceedings, the Servicer shall notify the Purchaser Owner in writing of the Servicer's ’s intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser Owner objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser Owner in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsfunctions as Servicing Advances; provided, however, that it shall be entitled to reimbursement thereof therefor from the related propertyMortgaged Property or otherwise, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser Owner otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expenseinspector. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser Owner with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall consult with the Owner in determining how to proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16.

Realization Upon Defaulted Mortgage Loans. (a) In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Owner including, but not limited to, a Modification, assumption, short sale, third party sale, deed-in-lieu transaction and acquiring title to the Mortgaged Property through foreclosure as set forth in Section 3.13. In The Servicer shall use commercially reasonable efforts, consistent with Accepted Servicing Practices, to foreclose upon or otherwise comparably convert the event that any payment due under any ownership of each Mortgaged Property for which the Mortgage Loan is not postponed and continues to be in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 4.01 3.01 and remains delinquent for a period the first sentence of 90 days or this Section 3.03. Prior to initiating foreclosure with respect to any other default continues for a period of 90 days beyond the expiration of any grace or cure periodMortgage Loan, the Servicer shall, if applicable (i) cause the removal of any Mortgage Loan from registration on the MERS System and/or (ii) correctly record the Assignment of Mortgage for such Mortgage Loan. The Servicer shall take appropriate measures to ensure the accuracy of all documents filed or otherwise utilized by the Servicer or its vendors or subcontractors (including, without limitation, foreclosure attorneys) following the Closing Date in any judicial or non-judicial foreclosure proceeding, related bankruptcy proceeding or in other foreclosure-related litigation. The Servicer covenants that all aspects of any foreclosure-related proceeding relating to any Mortgage Loan shall comply in all material respects with Applicable Law. (b) The Servicer shall use commercially reasonable efforts to realize upon defaulted Mortgage Loans in such a manner as will maximize the receipt of principal and interest by the Owner, taking into account, among other things, the timing of foreclosure proceedings. The foregoing is subject to the provisions of this Agreementthat, commence foreclosure proceedings. The Servicer in any case in which a Mortgaged Property shall notify the Purchaser in writing of the Servicer's intention to do sohave suffered damage, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure actionunless otherwise required by any federal, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loanstate or local law or regulation, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards toward the restoration or preservation of any Mortgaged Property, such property unless it shall determine in its reasonable discretion (ai) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the related Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (bii) that such expenses will be recoverable by it either the Servicer through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority)related Mortgaged Property. The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify In connection therewith, the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings foreclosure or functionscollection proceedings; provided, however, that it shall be entitled to reimbursement thereof from the related property, of such costs and expenses as Servicing Advances as contemplated in Section 4.05. 3.05. (c) Notwithstanding anything the foregoing provisions of this Section 3.03, with respect to any Mortgage Loan as to which the contrary contained hereinServicer has received actual notice of, in connection with or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property the Servicer shall not (i) cause the Owner to obtain title to such Mortgaged Property as a foreclosure result of or acceptance of a deed in lieu of foreclosureforeclosure or otherwise or (ii) otherwise cause the Owner to acquire possession of, in or take any other action with respect to, such Mortgaged Property if, as a result of any such action, the event Owner 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 Servicer has also previously determined, based on its reasonable cause to believe that judgment and an environmental report prepared by a Person who regularly conducts environmental audits using customary industry standards, that: (1) such Mortgaged Property is contaminated by in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Owner 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 or toxic substances or 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 Purchaser otherwise requests an best economic interest of the Owner to take such actions with respect to the affected Mortgaged Property. The cost of the environmental inspection audit report contemplated by this Section 3.03 shall be advanced by the Servicer and shall be deemed a Servicing Advance subject to reimbursement as provided in Section 3.05. If the Servicer determines, as described above, that it is in the best economic interest of the Owner to take such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, or review 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, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action, consistent with Accepted Servicing Practices, as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionOwner. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser containment, cleanup or remediation shall determine how be advanced by the Servicer and shall proceed be deemed a Servicing Advance, subject to reimbursement as provided in Section 3.05. (d) Proceeds received in connection with any Final Recovery Determination, as well as any recovery resulting from a partial collection of Liquidation Proceeds in respect of any Mortgage Loan, will be applied in the following order of priority (to the extent permitted by Applicable Law): first, to reimburse the Servicer for any unreimbursed Servicing Advances pursuant to Section 3.05(a)(ii) and second, with respect to the Mortgaged Propertyany Mortgage Loan, as a recovery of principal of such Mortgage Loan. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated connection with each Final Recovery Determination made by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall (i) maintain records prepared by an employee or an agent of the Servicer of each Final Recovery Determination and (ii) prepare an instrument of satisfaction and submit such instrument for recording in the appropriate public recording office. (e) After the Servicer has made a Final Recovery Determination with respect to a Mortgage Loan, and, if applicable, to the extent permitted by applicable state law relating to the collection of a deficiency balance from the related Mortgagor, the Servicer is authorized, on behalf of the Owner, to collect from the related Mortgagor any deficiency balance remaining unpaid on the applicable Mortgage Loan, or, if the related Mortgaged Property has not been foreclosed upon and sold (and therefore there is no deficiency), any outstanding balance. The Servicer may, in its sole discretion, choose to collect the deficiency balance or remaining balance either directly, or indirectly by engaging an unaffiliated or affiliated third party to collect (or by conveying to an unaffiliated or affiliated third party the right to collect) such balance from the applicable Mortgagor. Any proceeds received from such direct or indirect collection efforts, net of any expenses incurred in such collection efforts and net of a fee equal to 35% of the proceeds of such direct or indirect collection efforts, shall constitute property of the Owner and shall be entitled deposited into the Collection Account (such net proceeds, the "Recovery Proceeds"). The Servicer shall separately note in the Monthly Remittance Report any deficiency proceeds received by it and added to the amount to be reimbursed from amounts remitted to the Owner in respect of the Custodial Account pursuant to Section 4.05 hereofnext Remittance Date. In the event the Purchaser directs the Servicer not to proceed connection with foreclosure or acceptance any such liquidation of a deed in lieu of foreclosureMortgaged Property or collection efforts, the Servicer shall be reimbursed for all follow Accepted Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Practices.

Realization Upon Defaulted Mortgage Loans. (a) The Servicer shall use its best efforts, consistent with the procedures that the Servicer 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 Subsection 11.01. The Servicer 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 Servicer shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion (i) that such restoration will increase the proceeds of liquidation of the related Mortgage Loan to the Purchaser after reimbursement to itself for such expenses, and (ii) that such expenses will be recoverable by the Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. If a Mortgage Loan becomes sixty (60) or more days delinquent or subject to a foreclosure proceeding, then with respect to the Servicing Rights to such Mortgage Loan the related Servicing Transfer Date shall be the close of business on the next Business Day if so requested by the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 ninety (90) days or any other default continues for a period of 90 days beyond more, and the expiration of any grace or cure periodPurchaser has not exercised its right to accelerate the related Servicing Transfer Date as described in the previous sentence, the Servicer shall, subject to the provisions of this Agreement, shall commence foreclosure proceedings. The , provided that prior to commencing foreclosure proceedings, the Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The In such connection, the Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 11.03, with respect to any Mortgage Loan as to which the contrary contained hereinServicer has received actual notice of, in connection with or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Servicer shall not either (i) obtain title to such Mortgaged Property as a foreclosure result of or acceptance of a deed in lieu of foreclosureforeclosure or otherwise, in 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 event 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 Servicer has received approval from the Purchaser and has also previously determined, based on its reasonable cause to believe that judgment and a prudent report prepared by a Person who regularly conducts environmental audits using customary industry standards, that: (1) such Mortgaged Property is contaminated by 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 or toxic substances or 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 otherwise requests an to take such actions with respect to the affected Mortgaged Property. The cost of the environmental inspection audit report contemplated by this Subsection 11.03 shall be advanced by the Servicer, subject to the Servicer's right to be reimbursed therefor from the Custodial Account as provided in Subsection 11.05(vii). If the Servicer determines, in consultation with the Purchaser, 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 review 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, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionPurchaser. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, cleanup or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Account pursuant to Section 4.05 hereof. In as provided in Subsection 11.05(vii). (c) The Servicer shall also promptly notify the event that a Mortgage Loan becomes part Purchaser upon learning of a REMICany state insolvency or federal bankruptcy proceedings in which any Mortgagor is seeking relief or is the defendant debtor, and becomes REO Property, such property shall be disposed or of by the Servicer in accordance with Section 4.16death or incapacity or any Mortgagor or guarantor.

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 (a) The Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for use its own account for investmentbest efforts, (2) shall be consistent with Accepted Servicing Practices Practices, to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans as come into and any Primary Mortgage Insurance Policies, continue in default and (3) the Servicer shall determine prudently as to which no satisfactory arrangements can be in the best interest made for collection of Purchaser. In the event that any payment due under any Mortgage Loan is not postponed delinquent payments pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings3.06. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that such costs and expenses will be recoverable as Servicing Advances by the Servicer as contemplated in Sections 3.09 and 3.21. The foregoing is subject to the provision that, in any case in which a Mortgaged Property shall have suffered damage from an Uninsured Cause, the Servicer shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion that such restoration will increase the proceeds of liquidation of the related Mortgage Loan after reimbursement to itself for such expenses. In addition, the Servicer may charge off any second lien Mortgage Loan which is greater than 180 days delinquent and for which the related first lien is not a Mortgage Loan subject to this Agreement if it has made a Final Recovery Determination with respect to such second lien Mortgage Loan. Any such charged-off second lien Mortgage Loan shall be treated as a liquidated Mortgage Loan, giving rise to a Realized Loss. The Servicer shall have no obligation to make any Servicing Advances or P&I Advances with respect to any charged-off Mortgage Loan and shall not be entitled to reimbursement thereof from the related property, as contemplated Servicing Fee with respect to such charged-off Mortgage Loan for the period following the date on which such second lien Mortgage Loan was charged off. Any Subsequent Recoveries received with respect to any such charged-off Mortgage Loan shall be deposited in the Collection Account pursuant to Section 4.05. 3.08. (b) Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by received actual notice of, or has actual knowledge of the presence of, hazardous or toxic substances or wasteswastes on the related Mortgaged Property, or if the Purchaser Trustee otherwise requests requests, the Servicer shall cause an environmental inspection or review of such Mortgaged Property, such an inspection or review is Property to be conducted by a qualified inspector at the Purchaser's expenseinspector. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser Trustee, the Master Servicer and the Depositor with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser Master Servicer shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser Master Servicer directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean clean-up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Collection Account pursuant to Section 4.05 hereof3.09. In the event the Purchaser Master Servicer directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed from general collections for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Collection Account pursuant to Section 4.05 hereof. In 3.09. (c) The Servicer shall have the event that a right to purchase from REMIC I any defaulted Mortgage Loan becomes part that is 90 days or more delinquent, which the Servicer determines in good faith will otherwise become subject to foreclosure proceedings (evidence of such determination to be delivered in writing to the Trustee, in form and substance satisfactory to the Servicer and the Trustee, prior to purchase), at a REMICprice equal to the Purchase Price. The Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in the Collection Account, and becomes REO Propertythe Trustee, upon receipt of written certification from the Servicer of such property deposit, shall release or cause to be released to the Servicer the related Mortgage File and the Trustee shall execute and deliver such instruments of transfer or assignment, in each case without recourse, representation or warranty, as the Servicer shall furnish and as shall be disposed necessary to vest in the Servicer title to any Mortgage Loan released pursuant hereto. (d) 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 Servicer for any related unreimbursed Servicing Advances and P&I Advances, pursuant to Section 3.09(a)(ii) or (a)(iii); 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 Distribution 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 Servicer as follows: first, to unpaid Servicing Fees; and second, to the balance of the interest then due and owing. The portion of the recovery so allocated to unpaid Servicing Fees shall be reimbursed to the Servicer pursuant to Section 3.09(a)(iii). The portion of the recovery allocated to interest (net of unpaid Servicing Fees) and the portion of the recovery allocated to principal of the Mortgage Loan shall be applied as follows: first, to reimburse the Servicer for any related unreimbursed Servicing Advance or P&I Advances in accordance with Section 4.163.09(a)(ii) and any other amounts reimbursable to the Servicer pursuant to Section 3.09, and second, as part of the amounts to be transferred to the Distribution Account in accordance with Section 3.08(b).

Realization Upon Defaulted Mortgage Loans. In With respect to such of the event Mortgage Loans as come into and continue in default, the Servicer will decide whether to foreclose upon the Mortgaged Properties securing such Mortgage Loans or write off the unpaid principal balance of the Mortgage Loans as bad debt; PROVIDED that if the Servicer has actual knowledge that any payment due under any Mortgage Loan Mortgaged Property is affected by hazardous or toxic wastes or substances and that the acquisition of such Mortgaged Property would not postponed pursuant be commercially reasonable, then the Servicer will not cause the Depositor to Section 4.01 is not paid when the same becomes due and payable, acquire title to such Mortgaged Property in a foreclosure or in the event the Mortgagor fails to perform any similar proceeding. In connection with such foreclosure or other covenant or obligation under the Mortgage Loan and such failure continues beyond any applicable grace periodconversion, the Servicer shall take follow such action practices (including, in the case of any default on a related senior mortgage loan, the advancing of funds to correct such default) and procedures as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall deem necessary or advisable and as shall be consistent with Accepted Servicing Practices normal and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be usual in the best interest of Purchaser. In the event its general mortgage servicing activities; PROVIDED that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances liable in any respect hereunder if the Servicer is acting in connection with respect to any such Mortgage Loan, pursuant to Section 5.03, and foreclosure or attempted foreclosure which is not completed or other conversion in a manner that is consistent with the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to aboveprovisions of this Servicing Agreement. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any fore closure or attempted foreclosure which is not completed or towards the restoration or preservation correction of any Mortgaged Property, default on a related senior mortgage loan or restoration of any property unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure expenditure will increase Net Liquidation Proceeds. In the proceeds event of liquidation of a determination by the Mortgage Loan to Purchaser after reimbursement to itself for Servicer that any such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account expenditure previously made pursuant to this Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The 3.07 will not be reimbursable from Net Liquidation Proceeds, the Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in of its funds so expended pursuant to Section 4.053.03. Notwithstanding anything any provision of this Servicing Agreement, a Mortgage Loan may be deemed to be finally liquidated if substantially all amounts expected by the contrary contained herein, Servicer to be received in connection with a foreclosure the related defaulted Mortgage Loan have been received; PROVIDED, HOWEVER, any subsequent collections with respect to any such Mortgage Loan shall be deposited to the Collection Account. For purposes of determining the amount of any Liquidation Proceeds or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastesInsurance Proceeds, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspectionother unscheduled collections, the Servicer shall promptly provide may take into account minimal amounts of additional receipts expected to be received or any estimated additional liquidation expenses expected to be incurred in connection with the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Propertyrelated defaulted Mortgage Loan. In the event (a) the environmental inspection report indicates that the title to any Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with acquired in foreclosure or acceptance of a by deed in lieu of foreclosure, the Servicer deed or certificate of sale shall be reimbursed for all reasonable costs associated with issued to the Depositor and the Indenture Trustee as their interests may appear, or to their respective nominee on behalf of Securityholders. Notwithstanding any such foreclosure or acceptance acquisition of a deed in lieu title and cancellation of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation ProceedsMortgage Loan, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer such Mortgaged Property shall (except as otherwise expressly provided herein) be entitled considered to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a an outstanding Mortgage Loan becomes part held as an asset of a REMIC, and becomes REO Property, the Depositor until such time as such property shall be disposed sold. Consistent with the foregoing for purposes of all calculations hereunder, so long as such Mortgaged Property shall be considered to be an outstanding Mortgage Loan it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note in effect at the time of any such acquisition of title before any adjustment thereto by reason of any bankruptcy or similar proceeding or any moratorium or similar waiver or grace period will remain in effect. Any proceeds from foreclosure proceedings or the purchase or repurchase of any Mortgage Loan pursuant to the terms of this Servicing Agreement, as well as any recovery resulting from a collection of Liquidation Proceeds or Insurance Proceeds, will be applied in the following order of priority: first, to reimburse the Servicer or the related Subservicer in accordance with Section 4.163.07; second, to all Servicing Fees payable therefrom; third, to the extent of accrued and unpaid interest on the related Mortgage Loan, at the Net Mortgage Rate to the Due Date prior to the Payment Date on which such amounts are to be deposited in the Payment Account; fourth, as a recovery of principal on the Mortgage Loan; and fifth, to Foreclosure Profits.

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaser. In the event that Certificateholders, including either foreclosing on any payment due under any such Mortgage Loan is not postponed pursuant or working out an agreement with the Mortgagor, which may involve waiving or modifying certain terms of the Mortgage Loan. With respect to any defaulted Mortgage Loan, the Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 4.01 and remains delinquent 3.01, may modify such forbearance plan; including, extending the Mortgage Loan repayment date for a period of 90 days or any other default continues for a one year, which period of 90 days will not go beyond the expiration of any grace latest Final Maturity Date. In connection with a foreclosure or cure periodother conversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the servicing standards set forth in the Xxxxxx Xxx Guide, subject including, without limitation, advancing funds for the payment of taxes and insurance premiums with respect to first lien Mortgage Loans. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any 77 toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer 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 Trust Fund 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 Servicer 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: A. such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and B. 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 Certificateholders to make Monthly Advances take such actions with respect to such Mortgage Loanthe affected Mortgaged Property. The cost of the environmental audit report contemplated by this Section 3.03 shall be advanced by the Servicer, pursuant subject to Section 5.03, and the Servicer's obligation right to make such Monthly Advances shall terminate on be reimbursed therefor from the 90th day referred to aboveCollection Account as provided in Section 3.05(ii). The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that If the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Propertydetermines, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, howeverdescribed above, that it shall be entitled is in the best economic interest of the Certificateholders to reimbursement thereof from the related propertytake such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, as contemplated in Section 4.05. Notwithstanding anything or to take such action with respect to the contrary contained hereincontainment, in connection with a foreclosure clean-up or acceptance remediation of a deed in lieu of foreclosurehazardous substances, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or materials, hazardous wastes, or if the Purchaser otherwise requests an environmental inspection or review of petroleum-based materials affecting any such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, then the Servicer shall promptly provide take such action as it deems to be in the Purchaser with a written report best economic interest of the environmental inspectionCertificateholders. After reviewing the environmental inspection reportThe cost of any such compliance, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous containment, cleanup or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer remediation shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse advanced by the Servicer, subject to the Servicer shall be entitled Servicer's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Collection Account pursuant to as provided in Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.163.05(ii).

Realization Upon Defaulted Mortgage Loans. In With respect to such of the event Mortgage Loans as come into and continue in default, the Servicer will decide whether to foreclose upon the Mortgaged Properties securing such Mortgage Loans or write off the unpaid principal balance of the Mortgage Loans as bad debt; PROVIDED that if the Servicer has actual knowledge that any payment due under any Mortgage Loan Mortgaged Property is affected by hazardous or toxic wastes or substances and that the acquisition of such Mortgaged Property would not postponed pursuant be commercially reasonable, then the Servicer will not cause the Company to Section 4.01 is not paid when the same becomes due and payable, acquire title to such Mortgaged Property in a foreclosure or in the event the Mortgagor fails to perform any similar proceeding. In connection with such foreclosure or other covenant or obligation under the Mortgage Loan and such failure continues beyond any applicable grace periodconversion, the Servicer shall take follow such action practices (including, in the case of any default on a related senior mortgage loan, the advancing of funds to correct such default) and procedures as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall deem necessary or advisable and as shall be consistent with Accepted Servicing Practices normal and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be usual in the best interest of Purchaser. In the event its general mortgage servicing activities; PROVIDED that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances liable in any respect hereunder if the Servicer is acting in connection with respect to any such Mortgage Loan, pursuant to Section 5.03, and foreclosure or attempted foreclosure which is not completed or other conversion in a manner that is consistent with the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to aboveprovisions of this Servicing Agreement. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any foreclosure or attempted foreclosure which is not completed or towards the restoration or preservation correction of any Mortgaged Property, default on a related senior mortgage loan or restoration of any property unless it shall determine in its reasonable discretion (a) deter mine that such preservation, restoration and/or foreclosure expenditure will increase Net Liquidation Proceeds. In the proceeds event of liquidation of a determination by the Mortgage Loan to Purchaser after reimbursement to itself for Servicer that any such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account expenditure previously made pursuant to this Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The 3.07 will not be reimbursable from Net Liquidation Proceeds, the Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in of its funds so expended pursuant to Section 4.053.03. Notwithstanding anything any provision of this Servicing Agreement, a Mortgage Loan may be deemed to be finally liquidated if substantially all amounts expected by the contrary contained herein, Servicer to be received in connection with a foreclosure the related defaulted Mortgage Loan have been received; PROVIDED, HOWEVER, any subsequent collections with respect to any such Mortgage Loan shall be deposited to the Collection Account. For purposes of determining the amount of any Liquidation Proceeds or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastesInsurance Proceeds, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspectionother unscheduled collections, the Servicer shall promptly provide may take into account minimal amounts of additional receipts expected to be received or any estimated additional liquidation expenses expected to be incurred in connection with the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Propertyrelated defaulted Mortgage Loan. In the event (a) the environmental inspection report indicates that the title to any Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with acquired in foreclosure or acceptance of a by deed in lieu of foreclosure, the Servicer deed or certificate of sale shall be reimbursed for all reasonable costs associated with issued to the Company and the Indenture Trustee as their interests may appear, or to their respective nominee on behalf of Securityholders. Notwithstanding any such foreclosure or acceptance acquisition of a deed in lieu title and cancellation of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation ProceedsMortgage Loan, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer such Mortgaged Property shall (except as otherwise expressly provided herein) be entitled considered to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a an outstanding Mortgage Loan becomes part held as an asset of a REMIC, and becomes REO Property, the Company until such time as such property shall be disposed sold. Consistent with the foregoing for purposes of all calculations hereunder, so long as such Mortgaged Property shall be considered to be an outstanding Mortgage Loan it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note in effect at the time of any such acquisition of title before any adjustment thereto by reason of any bankruptcy or similar proceeding or any moratorium or similar waiver or grace period will remain in effect. Any proceeds from foreclosure proceedings or the purchase or repurchase of any Mortgage Loan pursuant to the terms of this Servicing Agreement, as well as any recovery resulting from a collection of Liquidation Proceeds or Insurance Proceeds, will be applied in the following order of priority: first, to reimburse the Servicer or the related Subservicer in accordance with Section 4.163.07; second, to all Servicing Fees payable therefrom; third, to the extent of accrued and unpaid interest on the related Mortgage Loan, at the Net Mortgage Rate to the Due Date prior to the Payment Date on which such amounts are to be deposited in the Payment Account; fourth, as a recovery of principal on the Mortgage Loan; and fifth, to Foreclosure Profits.

Realization Upon Defaulted Mortgage Loans. (a) With respect to each Mortgage Loan that comes into and continues in default, the Master Servicer shall exercise its reasonable judgment to determine whether to (a) foreclosure on the related Mortgaged Property, (b) write off the unpaid Scheduled Principal Balance thereof as a bad debt, (c) take a deed in lieu of foreclosure, (d) accept a short sale, (e) arrange for a repayment plan, (f) agree to a modification thereof in accordance with this Agreement, or (g) take an unsecured note in each case subject to the rights of any related senior lien holder. 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 Master Servicer shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion (i) that such restoration will increase the proceeds of liquidation of the related Mortgage Loan to the Purchaser after reimbursement to itself for such expenses, and (ii) that such expenses will be recoverable by the Master Servicer through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Master Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Seller shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The In such connection, the Master Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 11.03, with respect to any Mortgage Loan as to which the contrary contained hereinMaster Servicer has received actual notice of, in connection with or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Master Servicer shall not either (i) obtain title to such Mortgaged Property as a foreclosure result of or acceptance of a deed in lieu of foreclosureforeclosure or otherwise, in 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 event 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 Master Servicer has received approval from the Purchaser and has also previously determined, based on its reasonable cause to believe that judgment and a prudent report prepared by a Person who regularly conducts environmental audits using customary industry standards, that: (1) such Mortgaged Property is contaminated by 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 or toxic substances or 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 otherwise requests an to take such actions with respect to the affected Mortgaged Property. The cost of the environmental inspection audit report contemplated by this Subsection 11.03 shall be advanced by the Master Servicer, subject to the Master Servicer's right to be reimbursed therefor from the Custodial Account as provided in Subsection 11.05(v). If the Master Servicer determines, in consultation with the Purchaser, 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 review 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 Master Servicer shall take such an inspection or review is action as it deems to be conducted by a qualified inspector at in the best economic interest of the Purchaser's expense. Upon completion The cost of any such compliance, containment, cleanup or remediation shall be advanced by the inspectionMaster Servicer, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect subject to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Master Servicer, the Servicer shall be entitled 's right to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property therefor from the Custodial Account pursuant as provided in Subsection 11.05(v). (c) Up to Section 4.05 hereof. In and including the event that a Mortgage Loan becomes part earlier of (i) March 31, 2003 or (ii) the date of a REMICPass-Through Transfer, and becomes REO Propertythereafter only upon the request of the Purchaser, such property the Seller shall also notify the Purchaser upon learning of any state insolvency or federal bankruptcy proceedings in which any Mortgagor is seeking relief or is the defendant debtor, or of the death or incapacity or any Mortgagor or guarantor. Such notice shall be disposed of by provided to the Servicer Purchaser or its designee in accordance with the remittance report provided under Section 4.1611.05 for the applicable Distribution Date.

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 Subsection 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 Subsection 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer , provided that prior to commencing foreclosure proceedings, the Seller shall notify the Purchaser in writing of the Servicer's Seller’s intention to do so, and the Servicer Seller shall not commence foreclosure proceedings if the Purchaser objects to such action within three ten (310) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Seller shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer In such connection, the Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from the related propertyMortgaged Property, as contemplated in Section 4.05. Subsection 11.05. (b) Notwithstanding anything the foregoing provisions of this Subsection 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 contrary contained hereinuse, 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 Subsection 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 Subsection 11.05(vi). 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 Subsection 11.05(iv). (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 Subsection 11.05(iii); 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 Distribution Date on which such amounts are to be distributed if not in connection with a foreclosure or acceptance Final Recovery Determination; and third, as a recovery of a deed in lieu principal of foreclosurethe 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, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review amount of such Mortgaged Propertyrecovery will be allocated by the Seller as follows: first, such an inspection or review is to be conducted by a qualified inspector at unpaid Interim Servicing Fees; and second, to the Purchaser's expense. Upon completion balance of the inspection, the Servicer shall promptly provide the Purchaser with a written report interest then due and owing. The portion of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect recovery so allocated to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer unpaid Interim Servicing Fees shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from to the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account Seller pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16Subsection 11.05(iv).

Realization Upon Defaulted Mortgage Loans. In the event that any payment due under any Conventional Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of Purchaserthe Certificateholders. In the event that any payment due under any FHA Loan becomes delinquent, the Servicer shall take all such actions as are in the best interests of the Certificateholders and permitted under any applicable FHA loss mitigation proceedings, including, but not limited to, requesting the FHA to accept an assignment of such FHA Loan, and, upon the Servicer's determination that foreclosure is in the best interest of the Certificateholders, commencing foreclosure proceedings. With respect to any defaulted Mortgage Loan, the Servicer shall have the right to review the status of the related forbearance plan and, subject to the second paragraph of Section 3.01, may modify such forbearance plan; including, extending the Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent repayment date for a period of 90 days one year or any reducing the Mortgage Interest Rate up to 50 basis points. In connection with a foreclosure or other default continues for a period of 90 days beyond the expiration of any grace or cure periodconversion, the Servicer shallshall exercise such rights and powers vested in it hereunder and use the same degree of care and skill in its exercise as prudent mortgage servicers would exercise or use under the circumstances in the conduct of their own affairs and consistent with Applicable Regulations and the servicing standards set forth in the Fxxxxx Mxx Guide, subject including, without limitation, advancing funds for the payment of taxes and insurance premiums with respect to first lien Mortgage Loans. Notwithstanding the foregoing provisions of this AgreementSection 3.03, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention with respect to do so, and any Mortgage Loan as to which the Servicer shall not commence foreclosure proceedings if has received actual notice of, or has actual knowledge of, the Purchaser objects to such action within three (3) Business Days presence of receiving such notice. In any toxic or hazardous substance on the event the Purchaser objects to such foreclosure actionrelated Mortgaged Property, the Servicer shall not be required to make Monthly Advances with respect either (i) obtain title to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings or functions; provided, however, that it shall be entitled to reimbursement thereof from the related property, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous as a result of or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and or otherwise, or (ii) otherwise acquire possession of, or take any related environmental clean up costsother action with respect to, such Mortgaged Property if, as applicablea result of any such action, from the related Liquidation ProceedsTrust Fund would be considered to hold title to, to be a mortgagee-in-possession of, or if to be an owner or operator of such Mortgaged Property within the Liquidation Proceeds are insufficient meaning of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to fully reimburse the Servicertime, or any comparable law, unless the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosurehas also previously determined, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof. In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16.based on its reasonable judgment

Realization Upon Defaulted Mortgage Loans. (1) The Seller shall use its best efforts, consistent the procedures that the Seller would use in servicing mortgage 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 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 11.05. In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 4.01 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 Servicer Seller shall take such action as (1) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) it shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently deem to be in the best interest of the Purchaser. In the event that any payment due under any Servicing Released Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure periodmore, the Servicer shall, subject to the provisions of this Agreement, Seller shall commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make such Monthly Advances shall terminate on the 90th day referred to above. The Servicer shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine in its reasonable discretion (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer Seller shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Servicer In such connection, the Seller shall be responsible for all costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, that it shall be entitled to reimbursement thereof from in accordance with Section 11.05. (2) Notwithstanding the related propertyforegoing provisions of this Section 11.03, as contemplated in Section 4.05. Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector at the Purchaser's expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with a written report of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect to any Mortgage Loan as to which the Mortgaged Property. In Seller has received actual notice of, or has actual knowledge of, the event (a) presence of any toxic or hazardous substance on the environmental inspection report indicates that the related Mortgaged Property is contaminated by hazardous the Seller shall not either (i) obtain title to such Mortgaged Property as a result of or toxic substances or wastes and (b) the Purchaser directs the Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a deed in lieu of foreclosure and or otherwise, or (ii) otherwise acquire possession of, or take any related environmental clean up costsother action, with respect to, such Mortgaged Property if, as applicablea result of any such action, from the related Liquidation ProceedsPurchaser would be considered to hold title to, to be a mortgagee in possession of, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser directs the Servicer not to proceed with foreclosure an owner or acceptance operator of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related 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 Custodial Account pursuant to Section 4.05 hereof. In the event that Seller has also previously determined, based on its reasonable judgment and a Mortgage Loan becomes part of prudent report prepared by a REMICPerson who regularly conducts environmental audits using customary industry standards, and becomes REO Property, such property shall be disposed of by the Servicer in accordance with Section 4.16.that:

Realization Upon Defaulted Mortgage Loans. In Determination of Excess Proceeds and Realized Losses; Repurchase of Certain Mortgage Loans. (a) Notwithstanding the event that first sentence of Section 3.01, the Master Servicer may agree to any payment due under modification of any Mortgage Loan and not postponed pursuant to Section 4.01 is not paid when (the same becomes due and payable, or in "Modified Mortgage Loan") if (i) CHL purchases the event the Mortgagor fails to perform any other covenant or obligation under the Modified Mortgage Loan from the Trust Fund immediately following the modification as described below and such failure continues beyond any applicable grace period, the Servicer shall take such action as (1ii) the Servicer would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (2) shall be consistent with Accepted Servicing Practices and any Primary Mortgage Insurance Policies, and (3) the Servicer shall determine prudently to be in the best interest Stated Principal Balance of Purchaser. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Servicer shall, subject to the provisions of this Agreement, commence foreclosure proceedings. The Servicer shall notify the Purchaser in writing of the Servicer's intention to do so, and the Servicer shall not commence foreclosure proceedings if the Purchaser objects to such action within three (3) Business Days of receiving such notice. In the event the Purchaser objects to such foreclosure action, the Servicer shall not be required to make Monthly Advances with respect to such Mortgage Loan, when taken together with the aggregate of the Stated Principal Balances of all other Mortgage Loans in the same Loan Group that have been so modified since the Closing Date at the time of those modifications, does not exceed an amount equal to 5% of the aggregate initial Certificate Principal Balance of the Certificates. Effective immediately after the modification, and, in any event, on the same Business Day on which the modification occurs, all interest of the Trustee in the Modified Mortgage Loan shall automatically be deemed transferred and assigned to CHL and all benefits and burdens of ownership thereof, including the right to accrued interest thereon from the date of modification and the risk of default thereon, shall pass to CHL. The Master Servicer shall promptly deliver to the Trustee a certification of a Servicing Officer to the effect that all requirements of this paragraph have been satisfied with respect to the Modified Mortgage Loan. For federal income tax purposes, the Trustee shall account for such purchase as a prepayment in full of the Modified Mortgage Loan. CHL shall remit the Purchase Price to the Master Servicer for deposit into the Certificate Account pursuant to Section 5.033.05 within one Business Day after the purchase of the Modified Mortgage Loan. Upon receipt by the Trustee of written notification of any such deposit signed by a Servicing Officer, the Trustee shall release to CHL or its designee the related Mortgage File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in CHL any Modified Mortgage Loan previously transferred and assigned pursuant hereto. CHL covenants and agrees to indemnify the Trust Fund against any liability for any "prohibited transaction" taxes and any related interest, additions, and the Servicer's obligation to make such Monthly Advances shall terminate penalties imposed on the 90th day referred Trust Fund established hereunder as a result of any modification of a Mortgage Loan effected pursuant to abovethis subsection (a), any holding of a Modified 106 Mortgage Loan by the Trust Fund or any purchase of a Modified Mortgage Loan by CHL (but such obligation shall not prevent CHL or any other appropriate Person from in good faith contesting any such tax in appropriate proceedings and shall not prevent CHL from withholding payment of such tax, if permitted by law, pending the outcome of such proceedings). CHL shall have no right of reimbursement for any amount paid pursuant to the foregoing indemnification, except to the extent that the amount of any tax, interest, and penalties, together with interest thereon, is refunded to the Trust Fund or CHL. If the Master Servicer agrees to a modification of any Mortgage Loan pursuant to this Section 3.12(a), and if such Mortgage Loan carries a Prepayment Charge provision, CHL shall deliver to the Trustee the amount of the Prepayment Charge, if any, that would have been due had such Mortgage Loan been prepaid at the time of such modification, for deposit into the Certificate Account (not later than 1:00 p.m. Pacific time on the Master Servicer Advance Date immediately succeeding the date of such modification) for distribution in accordance with the terms of this Agreement. (b) The Master Servicer shall from use reasonable efforts to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments. In connection with such foreclosure or other conversion, the Master Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be normal and usual in its own funds make all necessary general mortgage servicing activities and proper Servicing Advances, provided, however, the requirements of the insurer under any Required Insurance Policy; provided that the Master Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, property unless it shall determine in its reasonable discretion (ai) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for of such expenses and (bii) that such expenses will be recoverable by to it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Certificate Account pursuant to Section 4.05) or through Insurance Proceeds (respecting which it shall have similar priority3.08 hereof). The Servicer shall obtain prior approval of Purchaser as to restoration expenses in excess of one thousand dollars ($1,000). The Servicer shall notify the Purchaser in writing of the commencement of foreclosure proceedings. The Master Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings or functionsproceedings; provided, however, provided that it shall be entitled to reimbursement thereof from the proceeds of liquidation of the related propertyMortgaged Property and any related Subsequent Recoveries, as contemplated in Section 4.053.08 hereof. Notwithstanding anything If the Master Servicer has knowledge that a Mortgaged Property that the Master Servicer is contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is located within a one-mile radius of any site with environmental or hazardous waste risks known to the contrary contained hereinMaster Servicer, the Master Servicer will, prior to acquiring the Mortgaged Property, consider such risks and only take action in accordance with its established environmental review procedures. With respect to any REO Property, the deed or certificate of sale shall be taken in the name of the Trustee for the benefit of the Certificateholders (or the Trustee's nominee on behalf of the Certificateholders). The Trustee's name shall be placed on the title to such REO Property solely as the Trustee hereunder and not in its individual capacity. The Master Servicer shall ensure that the title to such REO Property references this Agreement and the Trustee's capacity thereunder. Pursuant to its efforts to sell such REO Property, the Master Servicer shall either itself or through an agent selected by the Master Servicer protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such REO Property is located and may, incident to its conservation and protection of the interests of the Certificateholders, rent the same, or any part thereof, as the Master Servicer deems to be in the best interest of the Master Servicer and the Certificateholders for the period prior to the sale of such REO Property. The Master Servicer shall prepare for and deliver to the Trustee a statement 107 with respect to each REO Property that has been rented showing the aggregate rental income received and all expenses incurred in connection with the management and maintenance of such REO Property at such times as is necessary to enable the Trustee to comply with the reporting requirements of the REMIC Provisions. The net monthly rental income, if any, from such REO Property shall be deposited in the Certificate Account no later than the close of business on each Determination Date. The Master Servicer shall perform the tax reporting and withholding related to foreclosures, abandonments and cancellation of indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code by preparing and filing such tax and information returns, as may be required. In the event that the Trust Fund acquires any Mortgaged Property as aforesaid or otherwise in connection with a foreclosure default or acceptance imminent default on a Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property as soon as practicable in a deed manner that maximizes the Liquidation Proceeds, but in lieu no event later than three years after its acquisition by the Trust Fund or, at the expense of foreclosurethe Trust Fund, in the Master Servicer shall request, more than 60 days prior to the day on which such three-year period would otherwise expire, an extension of the three-year grace period. In the event the Trustee shall have been supplied with an Opinion of Counsel (such opinion not to be an expense of the Trustee) to the effect that the holding by the Trust Fund of such Mortgaged Property subsequent to such three-year period will not result in the imposition of taxes on "prohibited transactions" of the Trust Fund as defined in section 860F of the Code or cause any REMIC formed hereunder to fail to qualify as a REMIC at any time that any Certificates are outstanding, and the Trust Fund may continue to hold such Mortgaged Property (subject to any conditions contained in such Opinion of Counsel) after the expiration of such three-year period. Notwithstanding any other provision of this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to continue to be rented) or otherwise used for the production of income by or on behalf of the Trust Fund in such a manner or pursuant to any terms that would (i) cause such Mortgaged Property to fail to qualify as "foreclosure property" within the meaning of section 860G(a)(8) of the Code or (ii) subject the Trust Fund to the imposition of any federal, state or local income taxes on the income earned from such Mortgaged Property under section 860G(c) of the Code or otherwise, unless the Master Servicer has reasonable cause agreed to believe indemnify and hold harmless the Trust Fund with respect to the imposition of any such taxes. The decision of the Master Servicer to foreclose on a defaulted Mortgage Loan shall be subject to a determination by the Master Servicer that the proceeds of such foreclosure would exceed the costs and expenses of bringing such a proceeding. The income earned from the management of any Mortgaged Property is contaminated by hazardous Properties acquired through foreclosure or toxic substances other judicial proceeding, net of reimbursement to the Master Servicer for expenses incurred (including any property or wastesother taxes) in connection with such management and net of unreimbursed Servicing Fees, Advances, Servicing Advances and any management fee paid or if to be paid with respect to the Purchaser otherwise requests an environmental inspection or review management of such Mortgaged Property, shall be applied to the payment of principal of, and interest on, the related defaulted Mortgage Loans (with interest accruing as though such an inspection or review is Mortgage Loans were still current) and all such income shall be deemed, for all purposes in this Agreement, to be conducted by payments on account of principal and interest on the related Mortgage Notes and shall be deposited into the Certificate Account. To the extent the income received during a qualified inspector Prepayment Period is in excess of the amount attributable to amortizing principal and accrued 108 interest at the Purchaser's expenserelated Mortgage Rate on the related Mortgage Loan, such excess shall be considered to be a partial Principal Prepayment for all purposes hereof. Upon completion The Liquidation Proceeds from any liquidation of the inspectiona Mortgage Loan and any Subsequent Recoveries, the Servicer shall promptly provide the Purchaser with a written report net of the environmental inspection. After reviewing the environmental inspection report, the Purchaser shall determine how the Servicer shall proceed with respect any payment to the Mortgaged Property. In the event (a) the environmental inspection report indicates that the Mortgaged Property is contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the Master Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosureas provided above, the Servicer shall be reimbursed deposited in the Certificate Account as provided in Section 3.05 for all reasonable costs associated with such foreclosure distribution on the related Distribution Date, except that any Excess Proceeds shall be retained by the Master Servicer as additional servicing compensation. The proceeds of any Liquidated Mortgage Loan, as well as any recovery resulting from a partial collection of Liquidation Proceeds or acceptance of a deed any income from an REO Property, will be applied in lieu of foreclosure and the following order: first, to reimburse the Master Servicer for any related environmental clean up costsunreimbursed Servicing Advances and Servicing Fees, as applicable, from the related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account pursuant to Section 4.05 hereof. In 3.08(a)(vi) or this Section 3.12; second, to reimburse the event the Purchaser directs the Master Servicer not to proceed with foreclosure or acceptance of a deed in lieu of foreclosurefor any unreimbursed Advances, the Servicer shall be reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid interest (to the extent no Advance has been made for such amount) on the Mortgage Loan or related REO Property, at the Net Mortgage Rate to the Due Date occurring in the month in which such amounts are required to be distributed; and fourth, as a recovery of principal of the Mortgage Loan. (c) [Reserved]. (d) The Master Servicer, in its sole discretion, shall have the right to elect (by written notice sent to the Trustee) to purchase for its own account from the Trust Fund any Mortgage Loan that is 150 days or more delinquent at a price equal to the Purchase Price; provided, however, that the Master Servicer may only exercise this right on or before the last day of the calendar month in which such Mortgage Loan became 150 days delinquent (such month, the "Eligible Repurchase Month"); provided further, that any such Mortgage Loan which becomes current but thereafter becomes delinquent may be purchased by the Master Servicer pursuant to this Section in any ensuing Eligible Repurchase Month. In The Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in the event that Certificate Account. Any purchase of a Mortgage Loan becomes part pursuant to this Section 3.12(d) shall be accomplished by remittance to the Master Servicer for deposit in the Certificate Account of the Purchase Price. The Trustee, upon receipt of certification from the Master Servicer of such deposit and a REMICRequest for File Release from the Master Servicer, shall release or cause to be released to the purchaser of such Mortgage Loan the related Mortgage File and shall execute and deliver such instruments of transfer or assignment prepared by the purchaser of such Mortgage Loan, in each case without recourse, as shall be necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto and the purchaser of such Mortgage Loan shall succeed to all the Trustee's right, title and interest in and to such Mortgage Loan and all security and documents related thereto. Such assignment shall be an assignment outright and not for security. The purchaser of such Mortgage Loan shall thereupon own such Mortgage Loan, and becomes REO Propertyall security and documents, such property shall be disposed free of by any further obligation to the Servicer in accordance Trustee or the Certificateholders with Section 4.16.respect thereto. 109