Common use of Realization upon Liquidated Mortgage Loans Clause in Contracts

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage Loans, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- to four-family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion). The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder of the Class R-I Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosure, any Restricted Mortgage Loan shall be repurchased or substituted in accordance with and subject to the limitations contained in Section 2.05. Notwithstanding the foregoing, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 3% of the sum of the Original Pool Balance plus the amount of the Prefunding Account Deposit and such Mortgage Loans may be purchased only in the order of the most delinquent to the least delinquent. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve and protect each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be disposed of by the Servicer on behalf of the Trust no later than the last day of the third calendar year following the year in which the foreclosure occurred. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any REMIC Pool of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that no REMIC Pool derives any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property.

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage Loans, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- to four-family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion). The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder of the Class R-I Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosure, any Restricted Mortgage Loan shall be repurchased or substituted in accordance with and subject to the limitations contained in Section 2.05. Notwithstanding the foregoing, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 3% of the sum of the Original Pool Balance plus the amount of the Prefunding Account Deposit and such Mortgage Loans may be purchased only in the order of the most delinquent to the least delinquent. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve and protect each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be only held temporarily, actively marketed for sale and disposed of by the Servicer on behalf of the Trust no later than the last day of the third calendar year following the year in which the foreclosure occurred. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any REMIC Pool of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that no REMIC Pool derives any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property.

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage Loans, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- to four-family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion). The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder of the Class R-I Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosure, any Restricted Mortgage Loan shall be repurchased or substituted in accordance with and subject to the limitations contained in Section 2.05. Notwithstanding the foregoing, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 3% of the sum of the Original Pool Balance plus the amount of the Prefunding Account Deposit and such Mortgage Loans may be purchased only in the order of the most delinquent to the least delinquent. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve conserve, protect and protect operate each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be disposed of by the Servicer on behalf of the Trust no later than before the last day of the third calendar year following the year in which the foreclosure occurredoccurred (the "grace period") unless (i) the Servicer on behalf of the REMIC Pools has applied for and received an extension of such grace period pursuant to Code Sections 856(e)(3) and 860G(a)(8)(A), in which case the Servicer shall sell such Mortgaged Property within the applicable extension period or (ii) the Trustee shall have received an Opinion of Counsel to the effect that the holding by the Trust of such Mortgaged Property subsequent to the expiration of the grace period will not result in a tax on prohibited transactions imposed by Code Section 860F(a)(1), or otherwise subject any REMIC Pool to tax or cause any REMIC Pool to fail to qualify as a REMIC at any time that any Certificates are outstanding. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any REMIC Pool of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that no REMIC Pool derives any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property.

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage LoansProperties, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding, unless otherwise directed in writing by the Certificate Insurer. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- to four-family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion). The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder of the Class R-I R Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosure, any Restricted Mortgage Loan shall be repurchased or substituted in accordance with and subject to the limitations contained in Section 2.05. Notwithstanding the foregoinglisted on Schedule III that has not, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following after the Cut-off Date and Date, been brought current (each, a "Restricted Mortgage Loan"), or take title to any Mortgaged Property securing a Restricted Mortgage Loan (each, a "Restricted Mortgaged Property"), if, as a result of such foreclosure or taking of title, the aggregate value of the Restricted Mortgaged Properties (computed on the basis of the outstanding Principal Balance of such Restricted Mortgage Loan immediately prior to such foreclosure or taking of title) then owned by the Trust or the Trustee on behalf of the Trust would exceed 0.80% of the aggregate of the Principal Balances of the Mortgage Loans as of the preceding Determination Date. If at any time the Trust or the Trustee on behalf of the Trust holds title to Restricted Mortgaged Properties that have an aggregate value (computed on the basis of the outstanding Principal Balance of each related Restricted Mortgage Loan immediately prior to the time the Trust or the Trustee on behalf of the Trust acquired title to the related Restricted Mortgaged Property) that exceeds 0.95% of the aggregate of the Principal Balance of the Mortgage Loans as of the preceding Determination Date, then the Seller shall, on or prior to the next succeeding Deposit Date Date, purchase one or more of such Restricted Mortgaged Properties at a price equal to the Purchase Price fair market value of the related Restricted Mortgaged Property (calculated by depositing the Servicer in a manner consistent with the Servicer's customary practice of making valuation determinations in foreclosure proceedings relating to residential mortgage loans in its servicing portfolio at the time of such amount purchase) so that the aggregate value of such Restricted Mortgaged Properties (calculated as specified above) then owned by the Trust or the Trustee on behalf of the Trust after such purchase or purchases does not exceed 0.90% of the then aggregate of the Principal Balance of the Mortgage Loans. Such purchase price shall be deposited in the Certificate Account on the date of such Deposit Date pursuant purchase in the manner described in Section 2.03. For purposes of this Agreement, any purchase effected in accordance with this paragraph shall be deemed to Section 3.02; provided, however, that the aggregate Principal Balances be a prepayment of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 3% of the sum of the Original Pool Balance plus the amount of the Prefunding Account Deposit and such Mortgage Loans may be purchased only in the order of the most delinquent to the least delinquent. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve and protect each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be disposed of by the Servicer on behalf of the Trust no later than the last day of the third calendar year following the year in which the foreclosure occurred. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any REMIC Pool of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that no REMIC Pool derives any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property.related

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage LoansProperties, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding. In connection with such foreclosure or other conversion, the Servicer shall follow such practices 65 (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- to four-family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion). The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder of the Class R-I R Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosureLoan that has not, at any time after the Cut-off Date, been brought current, or take title to any Mortgaged Property securing a Restricted Mortgage Loan (each, a "Restricted Mortgaged Property"), if, as a result of such foreclosure or taking of title, the aggregate value of the Restricted Mortgaged Properties (computed on the basis of the outstanding Principal Balance of such Restricted Mortgage Loan immediately prior to such foreclosure or taking of title) then owned by the Trust or the Trustee on behalf of the Trust would exceed 0.80% of the aggregate of the Principal Balances of the Mortgage Loans as of the preceding Determination Date. If at any time the Trust or the Trustee on behalf of the Trust holds title to Restricted Mortgaged Properties that have an aggregate value (computed on the basis of the outstanding Principal Balance of each related Restricted Mortgage Loan immediately prior to the time the Trust or the Trustee on behalf of the Trust acquired title to the related Restricted Mortgaged Property) that exceeds 0.95% of the aggregate of the Principal Balance of the Mortgage Loans as of the preceding Determination Date, then the Seller shall, on or prior to the next succeeding Deposit Date, purchase one or more of such Restricted Mortgaged Properties at a price equal to the fair market value of the related Restricted Mortgaged Property (calculated by the Servicer in a manner consistent with the Servicer's customary practice of making valuation determinations in foreclosure proceedings relating to residential mortgage loans in its servicing portfolio at the time of such purchase) so that the aggregate value of such Restricted Mortgaged Properties (calculated as specified above) then owned by the Trust or the Trustee on behalf of the Trust after such purchase or purchases does not exceed 0.90% of the then aggregate of the Principal Balance of the Mortgage Loans. Such purchase price shall be repurchased or substituted deposited in the Certificate Account on the date of such purchase in the manner described in Section 2.03. For purposes of this Agreement, any purchase effected in accordance with this paragraph shall be deemed to be a prepayment of the related Restricted Mortgage Loan. Upon receipt of the related purchase price and subject written notification of 66 such deposit signed by a Servicing Officer, the Trustee shall release or cause to be released to the limitations contained Seller the related Mortgage File and other property (including any insurance policy or related present or future insurance proceeds with respect thereto) and shall execute and deliver or cause to be executed and delivered such instruments of transfer or assignment presented to it by the Seller, without recourse, as shall be necessary to vest in Section 2.05the Seller, all of the legal and beneficial ownership of each such Restricted Mortgaged Property and the Trustee shall have no further responsibility with respect to said Mortgage File. Notwithstanding the foregoing, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 35% of the sum of the Original Pool Balance plus Balance. In addition, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date occurring during the 90-day period following the Closing Date any Mortgage Loan as to which a Monthly Mortgage Payment becomes 60 or more days contractually delinquent at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Prefunding Account Deposit and such Mortgage Loans may be purchased only in by the order Servicer pursuant to the exercise of the most delinquent option granted in this sentence shall not exceed 5% of the sum of the Original Pool Balance. For purposes of this Agreement, any purchase effected in accordance with this paragraph shall be deemed to the least delinquentbe a prepayment of each Mortgage Loan so purchased. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve conserve, protect and protect operate each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be disposed of by the Servicer on behalf of the Trust no later than before the last day of the third calendar year following the year in which the foreclosure occurredoccurred unless (i) the Servicer on behalf of the REMIC Pool has applied for and received an extension of such two-year period pursuant to Code Sections 856(e)(3) and 860G(a)(8)(A), in which case the Servicer shall sell such Mortgaged Property within the applicable extension period or (ii) the Trustee shall have received an Opinion of Counsel to the effect that the holding by the Trust of such Mortgaged Property subsequent to two years after its acquisition will not result in a tax on prohibited transactions imposed by Code Section 860F(a)(1), 67 or otherwise subject the REMIC Pool to tax or cause the REMIC Pool to fail to qualify as a REMIC at any time that any Certificates are outstanding. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any the REMIC Pool of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that no the REMIC Pool derives does not derive any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property.

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage Loans, the The Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- to four-family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion). The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards 65 71 the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance principal balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to through the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder Holders of the Class R-I Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosure, any Restricted Mortgage Loan shall be repurchased or substituted in accordance with and subject to the limitations contained in Section 2.05C Certificates. Notwithstanding the foregoing, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 35% of the sum of the Original Pool Balance plus the amount of the Prefunding Purchase Account Deposit. In addition, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date occurring during the 90-day period following the Closing Date any Mortgage Loan as to which a Monthly Mortgage Payment becomes 60 or more days contractually delinquent at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans may be purchased only in by the order Servicer pursuant to the exercise of the most delinquent option granted in this sentence shall not exceed 5% of the sum of the Original Pool Balance plus the amount of the Purchase Account Deposit. For purposes of this Agreement, any purchase effected in accordance with this paragraph shall be deemed to the least delinquentbe a prepayment of each Mortgage Loan so purchased. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve conserve, protect and protect operate each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be disposed of by the Servicer on behalf of the Trust no later than within two years after its acquisition by the last day Trust unless (i) the Servicer on behalf of the third calendar related REMIC Pool has applied for and received an 66 72 extension of such two-year following the year period pursuant to Code Sections 856(e)(3) and 860G(a)(8)(A), in which case the foreclosure occurredServicer shall sell such Mortgaged Property within the applicable extension period or (ii) the Trustee shall have received an Opinion of Counsel to the effect that the holding by the Trust of such Mortgaged Property subsequent to two years after its acquisition will not result in a tax on prohibited transactions imposed by Code Section 860F(a)(1), or otherwise subject a REMIC Pool to tax or cause a REMIC Pool to fail to qualify as a REMIC at any time that any Certificates are outstanding. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any a REMIC Pool of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that no a REMIC Pool derives any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property.

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage Loans, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding, unless otherwise directed in writing by the Certificate Insurer. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- to four-family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion). The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder of the Class R-I Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosure, any Restricted Mortgage Loan shall be repurchased or substituted in accordance with and subject to the limitations contained in Section 2.05. Notwithstanding the foregoing, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; providedPROVIDED, howeverHOWEVER, that the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 3% of the sum of the Original Pool Balance plus the amount of the Prefunding Account Deposit and such Mortgage Loans may be purchased only in the order of the most delinquent to the least delinquent, unless otherwise approved by the Certificate Insurer. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve conserve, protect and protect operate each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be disposed of by the Servicer on behalf of the Trust no later than before the last day of the third calendar year following the year in which the foreclosure occurredoccurred (the "grace period") unless (i) the Servicer on behalf of the REMIC Pools has applied for and received an extension of such grace period pursuant to Code Sections 856(e)(3) and 860G(a)(8)(A), in which case the Servicer shall sell such Mortgaged Property within the applicable extension period or (ii) the Trustee and the Certificate Insurer shall have received an Opinion of Counsel to the effect that the holding by the Trust of such Mortgaged Property subsequent to the expiration of the grace period will not result in a tax on prohibited transactions imposed by Code Section 860F(a)(1), or otherwise subject any REMIC Pool to tax or cause any REMIC Pool to fail to qualify as a REMIC at any time that any Certificates are outstanding. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any REMIC Pool of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that no REMIC Pool derives any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property.

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage Loans, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding, unless otherwise directed in writing by the Certificate Insurer. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- to four-family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion). The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder of the Class R-I Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosure, any Restricted Mortgage Loan shall be repurchased or substituted in accordance with and subject to the limitations contained in Section 2.05. Notwithstanding the foregoing, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 3% of the sum of the Original Pool Balance plus the amount of the Prefunding Account Deposit and such Mortgage Loans may be purchased only in the order orders of the most delinquent to the least delinquent, unless otherwise approved by the Certificate Insurer. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve conserve, protect and protect operate each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be disposed of by the Servicer on behalf of the Trust no later than before the last day of the third calendar year following the year in which the foreclosure occurredoccurred (the "grace period") unless (i) the Servicer on behalf of the REMIC Pools has applied for and received an extension of such grace period pursuant to Code Sections 856(e)(3) and 860G(a)(8)(A), in which case the Servicer shall sell such Mortgaged Property within the applicable extension period or (ii) the Trustee and the Certificate Insurer shall have received an Opinion of Counsel to the effect that the holding by the Trust of such Mortgaged Property subsequent to the expiration of the grace period will not result in a tax on prohibited transactions imposed by Code Section 860F(a)(1), or otherwise subject any REMIC Pool to tax or cause any REMIC Pool to fail to qualify as a REMIC at any time that any Certificates are outstanding. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any REMIC Pool of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that no REMIC Pool derives any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property.

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage Loans, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding, unless otherwise directed in writing by the Certificate Insurer. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- to four-family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion). The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder of the Class R-I Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosure, any Restricted Mortgage Loan shall be repurchased or substituted in accordance with and subject to the limitations contained in Section 2.05. Notwithstanding the foregoing, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 3% of the sum of the Original Pool Balance plus the amount of the Prefunding Account Deposit and such Mortgage Loans may be purchased only in the order of the most delinquent to the least delinquent, unless otherwise approved by the Certificate Insurer. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve conserve, protect and protect operate each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be disposed of by the Servicer on behalf of the Trust no later than before the last day of the third calendar year following the year in which the foreclosure occurredoccurred (the "grace period") unless (i) the Servicer on behalf of the REMIC Pools has applied for and received an extension of such grace period pursuant to Code Sections 856(e)(3) and 860G(a)(8)(A), in which case the Servicer shall sell such Mortgaged Property within the applicable extension period or (ii) the Trustee and the Certificate Insurer shall have received an Opinion of Counsel to the effect that the holding by the Trust of such Mortgaged Property subsequent to the expiration of the grace period will not result in a tax on prohibited transactions imposed by Code Section 860F(a)(1), or otherwise subject any REMIC Pool to tax or cause any REMIC Pool to fail to qualify as a REMIC at any time that any Certificates are outstanding. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any REMIC Pool of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that no REMIC Pool derives any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property.

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage LoansProperties, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- to four-family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion)activities. The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder of the Class R-I Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosure, any Restricted Mortgage Loan shall be repurchased or substituted in accordance with and subject to the limitations contained in Section 2.05. Notwithstanding the foregoing, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 3% of the sum of the Original Pool Balance plus the amount of the Prefunding Account Deposit and such Mortgage Loans may be purchased only in the order of the most delinquent to the least delinquent. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve and protect each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be disposed of by the Servicer on behalf of the Trust no later than the last day of the third calendar year following the year in which the foreclosure occurred. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any REMIC Pool of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that no REMIC Pool derives any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property.which

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage Loans, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- one– to four-–family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion). The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder of the Class R-I R Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosure, any Restricted Mortgage Loan shall be repurchased or substituted in accordance with and subject to the limitations contained in Section 2.05. Notwithstanding the foregoing, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 3% of the sum of the Original Pool Balance plus the amount of the Prefunding Account Deposit and such Mortgage Loans may be purchased only in the order of the most delinquent to the least delinquent. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve and protect each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be only held temporarily, actively marketed for sale and disposed of by the Servicer on behalf of the Trust no later than the last day of the third calendar year following the year in which the foreclosure occurred. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "“foreclosure property" ” within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any REMIC Pool of any income from non-–permitted assets as described in Code Section 860F(a)(2)(B), and that no REMIC Pool derives any "“net income from foreclosure property" ” within the meaning of Code Section 860G(c)(2) with respect to such property.

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage LoansProperties, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- to four-family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion)activities. The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder of the Class R-I R Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosure, any Restricted Mortgage Loan shall be repurchased or substituted in accordance with and subject to the limitations contained in Section 2.05. Notwithstanding the foregoing, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 3% of the sum of the Original Pool Balance plus the amount of the Prefunding Account Deposit and such Mortgage Loans may be purchased only in the order of the most delinquent to the least delinquent. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve and protect each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be disposed of by the Servicer on behalf of the Trust no later than the last day of the third calendar year following the year in which the foreclosure occurred. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any REMIC Pool of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that no REMIC Pool derives any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property.

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage LoansProperties, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding, unless otherwise directed in writing by the Certificate Insurer. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- to four-family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion). The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance principal balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to through the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder of the Class R-I R Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosure, any Restricted Mortgage Loan shall be repurchased or substituted in accordance with and subject to the limitations contained in Section 2.05. Notwithstanding the foregoing, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 3% of the sum of the Original Pool Balance plus the amount of the Prefunding Account Deposit and such Mortgage Loans may be purchased only in the order of the most delinquent to the least delinquent. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve and protect each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be disposed of by the Servicer on behalf of the Trust no later than the last day of the third calendar year following the year in which the foreclosure occurred. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any REMIC Pool of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that no REMIC Pool derives any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property.

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage LoansProperties, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- to four-family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion)activities. The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the 74 reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder of the Class R-I Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosure, any Restricted Mortgage Loan shall be repurchased or substituted in accordance with and subject to the limitations contained in Section 2.05. Notwithstanding the foregoing, the Servicer, at its sole option, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 3% of the sum of the Original Pool Balance plus the amount of the Prefunding Account Deposit and such Mortgage Loans may be purchased only in the order of the most delinquent to the least delinquent. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve and protect each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be disposed of by the Servicer on behalf of the Trust no later than the last day of the third calendar year following the year in which the foreclosure occurred. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any REMIC Pool of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that no REMIC Pool derives any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property.

Realization upon Liquidated Mortgage Loans. Subject to the limitations set forth in this Section 3.06 with respect to Restricted Mortgage LoansProperties, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise comparably convert to ownership 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 pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances, then the Servicer shall not cause the Trust to acquire title to such Mortgaged Property in a foreclosure or similar proceeding. In connection with such foreclosure or other conversion, the Servicer shall follow such practices (including, in the case of any default on a related Senior Lien, 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 first, second and third lien one- to four-family mortgage loan servicing activities (including the procurement of a drive-by appraisal of the related Mortgaged Property prior to foreclosure or other conversion)activities. The foregoing is subject to the proviso that neither the Servicer nor the Trustee shall be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related Senior Lien or restoration of any Mortgaged Property unless, in the reasonable judgment of the Servicer, such foreclosure, correction or restoration will increase Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Amounts expended by the Servicer under this paragraph shall be considered Servicing Advances. To the extent the Net Liquidation Proceeds derived from any such foreclosure or conversion exceed the unpaid Principal Balance of the related Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate to the related due date during the Collection Period in which such foreclosure or conversion occurs (net of any related Monthly Advances or Servicing Advances that were unreimbursed prior to the receipt of such Net Liquidation Proceeds), such excess shall be paid to the Holder of the Class R-I R Certificate. Neither the Trust nor the Trustee on behalf of the Trust shall complete foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of foreclosureLoan that has not, at any time after the Cut-off Date, been brought current, or take title to any Mortgaged Property securing a Restricted Mortgage Loan (each, a "Restricted Mortgaged Property"), if, as a result of such foreclosure or taking of title, the aggregate value of the Restricted Mortgaged Properties (computed on the basis of the outstanding Principal Balance of such Restricted Mortgage Loan immediately prior to such foreclosure or taking of title) then owned by the Trust or the Trustee on behalf of the Trust would exceed 0.80% of the aggregate of the Principal Balances of the Mortgage Loans as of the preceding Determination Date. If at any time the Trust or the Trustee on behalf of the Trust holds title to Restricted Mortgaged Properties that have an aggregate value (computed on the basis of the outstanding Principal Balance of each related Restricted Mortgage Loan immediately prior to the time the Trust or the Trustee on behalf of the Trust acquired title to the related Restricted Mortgaged Property) that exceeds 0.95% of the aggregate of the Principal Balance of the Mortgage Loans as of the preceding Determination Date, then the Seller shall, on or prior to the next succeeding Deposit Date, purchase one or more of such Restricted Mortgaged Properties at a price equal to the fair market value of the related Restricted Mortgaged Property (calculated by the Servicer in a manner consistent with the Servicer's customary practice of making valuation determinations in foreclosure proceedings relating to residential mortgage loans in its servicing portfolio at the time of such purchase) so that the aggregate value of such Restricted Mortgaged Properties (calculated as specified above) then owned by the Trust or the Trustee on behalf of the Trust after such purchase or purchases does not exceed 0.90% of the then aggregate of the Principal Balance of the Mortgage Loans. Such purchase price shall be repurchased or substituted deposited in the Certificate Account on the date of such purchase in the manner described in Section 2.03. For purposes of this Agreement, any purchase effected in accordance with this paragraph shall be deemed to be a prepayment of the related Restricted Mortgage Loan. Upon receipt of the related purchase price and subject written notification of such deposit signed by a Servicing Officer, the Trustee shall release or cause to be released to the limitations contained Seller the related Mortgage File and other property (including any insurance policy or related present or future insurance proceeds with respect thereto) and shall execute and deliver or cause to be executed and delivered such instruments of transfer or assignment presented to it by the Seller, without recourse, as shall be necessary to vest in Section 2.05the Seller, all of the legal and beneficial ownership of each such Restricted Mortgaged Property and the Trustee shall have no further responsibility with respect to said Mortgage File. Notwithstanding the foregoing, the Servicer, at its sole optionwith the consent of the Financial Guaranty Insurer, may purchase from the Trust on any Deposit Date any Mortgage Loan as to which the related Mortgagor has failed to make full Monthly Mortgage Payments as required under the related Mortgage Note for three consecutive months at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to the exercise of the option granted in this sentence shall not exceed 35% of the sum of the Original Pool Balance plus the amount of and the Prefunding Account Deposit. In addition, the Servicer, with the consent of the Financial Guaranty Insurer, may purchase from the Trust on any Deposit Date occurring during the 90-day period following the Closing Date any Mortgage Loan as to which a Monthly Mortgage Payment becomes 60 or more days contractually delinquent at any time following the Cut-off Date and prior to such Deposit Date at a price equal to the Purchase Price by depositing such amount in the Certificate Account on such Deposit Date pursuant to Section 3.02; provided, however, that the aggregate Principal Balances of the Mortgage Loans may be purchased only in by the order Servicer pursuant to the exercise of the most delinquent option granted in this sentence shall not exceed 5% of the sum of the Original Pool Balance and the Prefunding Account Deposit. For purposes of this Agreement, any purchase effected in accordance with this paragraph shall be deemed to the least delinquentbe a prepayment of each Mortgage Loan so purchased. In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the Certificateholders, and the Servicer shall manage, conserve and protect each such Mortgaged Property for the Certificateholders solely for the purpose of its prompt disposition and sale. The Servicer shall use its best efforts to dispose of each such Mortgaged Property as expeditiously as possible consistent with the goal of maximizing Net Liquidation Proceeds (taking into account any unreimbursed Monthly Advances made or expected to be made with respect to such Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of any such Mortgaged Property. 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, such Mortgaged Property shall be disposed of by the Servicer on behalf of the Trust no later than the last day of the third calendar year following the year in which the foreclosure occurred. The Servicer shall further ensure that the Mortgaged Property is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of such property does not result in the receipt by any REMIC Pool of any income from non-permitted assets as described in Code Section 860F(a)(2)(B), and that no REMIC Pool derives any "net income from foreclosure property" within the meaning of Code Section 860G(c)(2) with respect to such property.on